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Oral Answers to Questions
(3 years, 8 months ago)
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Janet Daby (Lewisham East) (Lab)
Rushanara Ali (Bethnal Green and Bow) (Lab)
The Minister for Housing (Christopher Pincher)
Buildings below 18 metres in height will not carry the same inherent risk as a building above 18 metres. However, some will need remediation. To give residents in lower-rise buildings peace of mind, we are establishing a generous scheme to ensure that, where required, cladding can be remediated on buildings between 11 metres and 18 metres. Leaseholders will be asked to pay no more than £50 a month, protecting them against these unaffordable costs. We will work at pace to develop the details of the scheme and communicate them to the House as quickly as possible.
Janet Daby [V]
No one needs reminding that we are nearly at the four-year anniversary of the Grenfell disaster, yet many of my constituents remain trapped in dangerous homes and, because of this Government’s arbitrary decision to only help those in buildings above 18 metres, they feel hopeless and invisible. Does the Secretary of State agree that no leaseholder should have to pay for fire safety problems that are simply not their fault, and that people should not be required to pay even £50 or less a month, regardless of whether their building is 7 metres, 18 metres or even lower?
Christopher Pincher
The hon. Lady is right; great progress has been made over the last four years to ensure that the remediation of high-rise properties is undertaken, because that is where we have been guided by official advice. I can tell the House that remediation has either been completed or is under way in 95% of aluminium composite material-clad buildings. We are clear that buildings below 18 metres also need help, which is why we have tabled this generous package of support where otherwise there would be no support. It is also clear that developers and building owners are stepping up to the plate and remediating the buildings for which they are responsible, and are providing funds so to do.
Rushanara Ali [V]
Many leaseholders have spent their third lockdown stuck in buildings with serious safety defects and are unsure when the works will be completed. The Minister talks about providing a generous scheme for blocks of 18 metres or less. Can he explain to the House how generous that programme is, how much is being committed and when our constituents can expect the works to be completed—both for blocks under 18 metres and blocks over 18 metres that require remedial works—so that people do not have to continue to live in potential death traps?
Christopher Pincher
With respect to buildings over 18 metres, the hon. Lady will know that we set aside funds of £1 billion using the building safety fund in order to deal with properties with non-ACM dangerous cladding material. Some 106 buildings have already begun that work and we estimate that a further 338 will begin the work by September, which was the date that we set for work using BSF funds to be undertaken. With respect to buildings below 18 metres, we want to ensure that we are prioritising affordability and accelerating remediation where it is required. It is a complex set of challenges, but we are determined to meet them and to get this right, which is why we will bring forward further information as soon as we are able to do so.
Mike Amesbury (Weaver Vale) (Lab)
Can the Minister explain why three quarters of cladding systems on new medium-rise buildings have used combustible insulation materials despite a proposed Government ban on them? That is 51 out of 66 residential blocks of 11 to 18 metres in height built in 2019 and 2020 that are now liable for the imposition of unwanted Government loans. There is the nightmare of EWS1 forms, inflated insurance premium costs, service charges and much, much more. At what stage are the ministerial team going to get a grip of this chaos?
Christopher Pincher
The hon. Gentleman knows full well the work that the Government have undertaken to ensure that we address this complicated issue, which involves buildings, building owners, warranty providers, insurers and leaseholders themselves. We have brought forward a very generous set of schemes. More than £5.1 billion of public money has already been allocated to remediate taller high-rise buildings. We have proposed a generous scheme to support people living in leasehold properties between 11 and 18 metres. We will announce further details of that scheme shortly so that the people living in them can have peace of mind that they have a way out too.
Jessica Morden (Newport East) (Lab)
The Minister for Regional Growth and Local Government (Luke Hall)
The UK shared prosperity fund will help to level up and create opportunity across the United Kingdom. The spending review 2020 set out the main strategic elements of the UKSPF in the heads of terms, and we will publish a UK-wide investment framework in 2021 and confirm a multi-year funding profile at the next spending review. We are providing an additional £220 million through the UK community renewal fund to help those areas to prepare for the introduction of the UKSPF.
Jessica Morden [V]
Wales received £375 million a year under the EU structural funds but this Government’s levelling-up fund is giving Wales only £30 million a year, while the community renewal fund’s pilot projects split £220 million across the four nations. Can the Minister see why my constituents are already sceptical that this Government will fulfil their promise that Wales will receive “not a penny less”?
Luke Hall
Levels of investment from EU structural funds will be higher across the United Kingdom in ’21-22 than they were in ’20-21. We are also finding additional UK funding to support our communities to pilot programmes and new approaches. The hon. Lady mentions the levelling-up fund. Her local authority will receive £150,000 capacity funding support with that bidding process. As we set out in the spending review, funding for the UKSPF will ramp up so that total domestic UK-wide funding will at least match EU receipts, reaching £1.5 billion a year. These funds will have a real, lasting impact on communities that will make a significant difference to tackling deprivation and inequality, and binding together our precious United Kingdom.
Kate Hollern (Blackburn) (Lab) [V]
I thank the Minister for recognising when I met him last week that the UK shared prosperity fund will need to be more transparent in a way that the towns fund clearly was not. If he intends to keep this promise of more transparency, when will he consult on the UK shared prosperity fund that his Department committed to three years ago, and will his Department publish how much funding English regions will get?
Luke Hall
The point that I made to the hon. Lady last week is that we have published all the details in the technical note that is set out on gov.uk. We thought that was the right thing to do. At the spending review last year, we set out the main strategic elements of the UKSPF in the heads of terms. The funding profile will be set out at the next spending review and we will publish further details in a UK-wide investment framework later this year. In the meantime, the community renewal fund will deliver real, lasting change into communities right across the country. It will tackle inequality and deprivation in some of the communities that need it the most and were neglected for so long by Labour, and of course one of its key aims will be to work to bind together our precious Union.
Ms Karen Buck (Westminster North) (Lab)
The Minister for Housing (Christopher Pincher)
In 2018 and 2019 we saw the highest and the second-highest number of first-time buyers since 2007. With the effect of covid, 2020 saw a 14% decrease from the 2019 total. The Government are now redoubling their efforts to assist first-time buyers. That is why today we launched the mortgage guarantee scheme offering a 95% loan-to-value mortgage, developing first homes and enabling first-time buyers to purchase new-build homes locally with at least a 30% discount—a determined effort to support buyers.
Ms Buck [V]
For many first-time buyers, especially in cities, the options are mainly new-build and leasehold properties, but many of them are walking into a new nightmare of costs. Inside Housing is today reporting on purchasers buying properties as safe only to discover almost immediately that the ratings are changing, leaving them with huge bills for waking watch, and unsaleable properties. Does the Minister know how many first-time buyers are affected by this, and why is the only truly blameless party, the purchaser, the one who is still left carrying the can and the risk?
Christopher Pincher
There are a suite of options for first-time buyers. They can purchase a home using the Help to Buy scheme. They can take advantage of our shared ownership scheme, whereby, under the new proposals, failings and defects will be fixed by the developer for the first 10 years. As I said, the mortgage guarantee scheme that we announced today allows first-time buyers and others to purchase homes with as little as 5% deposit.
We are determined to ensure that first-time buyers are able to achieve their dream and get on to the property ladder. That is a world away from the campaign that the hon. Lady chairs—the campaign of Sadiq Khan, who promised to build 116,000 homes in London but has thus far managed to deliver only 28,000. I wonder whether that is why the housing pledge, which was at the top of his campaign in 2016, is now second from bottom in 2021. I think that that says a lot about Labour and its priority for housing.
Thangam Debbonaire (Bristol West) (Lab)
That was quite staggering. I do not know whether the Minister was listening to my hon. Friend the Member for Westminster North (Ms Buck). He avoided answering her, and he previously avoided answering my hon. Friend the Member for Weaver Vale (Mike Amesbury), so I will give him another go. Will the Minister please tell us what on earth the justification is for allowing new buildings to be built with dangerous cladding and other fire safety defects? What will he do to ensure that the number of first-time buyers moving into homes with dangerous cladding is zero?
Christopher Pincher
I am grateful to the hon. Lady for giving me a second go. I point out that she has no policies of her own. We are quite prepared to let her borrow some of ours, because we have a lot of them. We are determined to make sure, through the building safety regime that we will introduce, that we have a world-class building safety programme. We have consulted on the challenge of combustible products, which is a very complicated one, and we will make our announcements on those in due course. But make no mistake, Mr Speaker: we are determined to support buyers, we are determined to get more people on to the property ladder and we are determined to build better-quality homes—things that the Labour party talks about, we are doing.
Kirsten Oswald (East Renfrewshire) (SNP)
The Minister for Regional Growth and Local Government (Luke Hall)
Along with the Secretary of State, I met the Minister for Trade, Innovation and Public Finance in the Scottish Government last month to discuss the levelling-up fund and the UK shared prosperity fund. We will continue to engage with the devolved Administrations and, importantly, with local authorities and communities in Scotland directly and wider public and private sector organisations to ensure that funding is used to best effect and to support citizens right across the country.
Kirsten Oswald [V]
A joint statement by Ministers from the Scottish, Welsh and Northern Irish Governments criticised the UK Government for using the United Kingdom Internal Market Act 2020 to bypass devolved Administrations. Is it not the case that the UK Government intend to use levelling-up funding to shore up support for the Union and to undermine the very basis of devolution? If not, what are the Minister’s plans to devolve the funding within the framework of the devolution settlement?
Luke Hall
I can confirm that we want to do everything possible to enhance and protect our precious Union. We will work with communities directly in Scotland, Wales and Northern Ireland to deliver this important funding. We have already committed to providing capacity funding to local authorities in all the devolved Administrations, to get them started on preparing for these funds. We are excited about working with them, and they are excited about working with us on delivering these funds. We have had huge interest from councils and communities that want to work with us to deliver real and lasting change for their communities, and that is why there is such a high level of enthusiasm and engagement.
Patricia Gibson (North Ayrshire and Arran) (SNP)
Sixty-six per cent. of Scots are deeply concerned about the way that the United Kingdom Internal Market Act seeks to undermine Scotland’s Parliament. Alongside the unilateral decision making of the UK Government regarding the shared prosperity fund and the levelling-up fund, despite what the Minister just said, this is being used to aggressively assert Unionism in Scotland and bypass Scotland’s Parliament. Meanwhile, 33 of the last 41 polls show majority support for independence in Scotland. Does the Minister think that this aggressive and assertive Unionism, trampling all over Scotland’s Parliament, is endearing the people of Scotland to the Union?
Luke Hall
I urge the Scottish nationalist party to trust their local councils and local communities, which are so passionately engaging in this project and working with us, using the capacity funding we have committed to them to start this process. They will work with us on delivering these funds, which will tackle deprivation and enhance communities right across Scotland, and we look forward to working with them with determination and enthusiasm in the weeks, months and years ahead.
Fleur Anderson (Putney) (Lab)
The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Eddie Hughes)
The simple answer to the hon. Lady’s question is that lots of discussions have been had. This Department works very closely with the Department for Business, Energy and Industrial Strategy to set us on the path to ensuring that all homes and buildings meet that national net zero target. As no doubt you know, Mr Speaker, this is part of the Prime Minister’s 10-point plan to build back greener post pandemic and ensure we achieve net zero emissions by 2050.
Fleur Anderson [V]
Heating the UK’s draughty homes makes up 14% of the country’s carbon emissions. Many of my constituents in Putney wanted to apply for the green homes grant, but cannot because it has been scrapped. The Labour Government set out the original plans for zero-carbon homes in 2006, which set a goal of achieving zero-carbon homes by 2016. Why was this ambition abandoned by this Government in 2016, why was the green homes grant scrapped this month by this Government and what will be replacing it?
Eddie Hughes
The green homes grant is of course a BEIS initiative, but I can tell the hon. Lady that although it was making encouraging progress—with over 96,000 applications, and 39,000 vouchers had been issued via the scheme—given the fact that it was not progressing quickly enough, we have taken stock and decided to reconsider our approach. Last month, the Secretary of State for BEIS announced £300 million of extra funding for green home upgrades through the local authority delivery element of the green homes grant scheme and the social housing decarbonisation fund. This brings the total spending on energy efficiency to £1.3 billion.
Caroline Nokes (Romsey and Southampton North) (Con)
Matt Vickers (Stockton South) (Con)
The Secretary of State for Housing, Communities and Local Government (Robert Jenrick)
Last week, we saw friends and families reunited, our favourite shops, pubs and cafés reopened and an injection of sunny optimism into hospitality and our high streets as we move to the next stage on our road map out of the lockdown. To help these measures, my Department has introduced crucial planning easements, including fast-track pavement licences, which are helping to make al fresco dining a reality, enabling communities to hold popular outdoor events such as markets and allowing pubs to set up marquees in their gardens for the whole of the summer—all without the need for costly planning permissions.
Caroline Nokes [V]
In Romsey and the surrounding villages, much use has been made of the planning easements by pubs, cafés and restaurants to install temporary awnings, marquees, gazebos and so on. Please can my right hon. Friend reassure me that plenty of time will be given to pubs and so on before these structures have to be removed? In many cases, they will continue to provide additional capacity even when indoor socialising is allowed, and our hospitality sector has had a very tough year.
Robert Jenrick
I am delighted to hear that my right hon. Friend’s constituents, like millions of others across the country, are making use of these easements to enjoy the summer sunshine and to support local pubs, cafés and restaurants. When the first lockdown began, we inherited a planning rule called the 28-day rule, which enabled a business to set up a marquee or another temporary structure for just one month without seeking planning permission. We doubled that, and now we are bringing forward the legislation to ensure that that will remain in place for at least the whole of the summer, and I hope perhaps significantly longer. That will enable small businesses the length and breadth of the land, like those in my right hon. Friend’s constituency, to put up those marquees and gazebos, and get the full benefit of them.
Matt Vickers [V]
Our town centres lie at the heart of our communities. They should be a source of pride and be attractive to visitors, but vacant buildings have become a blight in many of them. Can my right hon. Friend confirm that he is taking steps to make it easier for vacant buildings to be repurposed or demolished, so that we can make sure our town centres are attractive places that people want to visit?
Robert Jenrick
My hon. Friend is absolutely right. Our high streets have been hit hard by the pandemic, but the market forces have been amplified and magnified. These are very long-standing issues and ones that we have been focused on for some time. We need to make some fundamental changes to ensure that we have a flexible planning regime so that businesses can adapt and evolve, for instance by turning a café into a hairdressers or a yoga studio into an office, all without the need for costly planning permissions, and where businesses and buildings are sat empty and derelict, then to be able do the logical thing and turn them into something else, particularly homes. That is exactly why a few weeks ago we brought forward the planning changes to do that, and I hope that will see hundreds, if not thousands, of homes being created in our town centres and on our high streets over the course of this year.
Naz Shah (Bradford West) (Lab)
The Secretary of State’s Department is bringing forward further permitted development rights that will allow gyms, crèches and offices, as well as shops, banks and restaurants, to be converted into homes without going through planning permission. Has the Department conducted an impact assessment of how many cafés, pharmacies and corner shops will be lost from our high streets, never to return?
Robert Jenrick
The hon. Lady will be aware that we have approached this issue with great caution and due consideration. We have consulted on those matters and received thousands of responses, and we have made our proposals on the back of that, so they have been carefully thought out to consider some of the issues she has raised. We made a number of changes, to protect, for example, nurseries and to provide further protections for conservation areas, but the Opposition’s approach, which could be characterised as the ostrich’s head in the sand, is not the one that we have chosen to take. We think that high streets and town centres are undergoing the biggest transformation not just in our lifetime but at least since the second world war and that we need to introduce measures that are proportionate to the scale of the challenge. That is why we are making billions of pounds of investment through our towns and high streets and levelling-up funds, and that is why we are pursuing the planning reforms that the hon. Lady refers to, and I think most reasonable people across the country would agree. I note that in her own constituency Mike Cartwright, who runs the Bradford chamber of commerce, seems to agree. He says:
“Having unused space is bad for the economy,”
and
“buildings remaining empty for years is to no one’s benefit.”
We agree; that is why we are taking action.
Justin Madders (Ellesmere Port and Neston) (Lab)
The Minister for Housing (Christopher Pincher)
Planning policy is clear: it is for local authorities to identify the size, type and tenure of the housing needed for different groups in the community, including those who require affordable housing. We are committed to increasing the supply of affordable housing and are investing over £12 billion in the affordable housing programme over the next five years, the largest investment in affordable housing in over a decade.
Justin Madders
Many of my constituents cannot afford to buy a house of their own and are finding that private sector landlords are using various devices to block access to that market as well, such as through guarantees and bond requirements, so council housing or social housing is the only option, but demand is outstripping supply, and, according to the Chartered Institute of Housing, outside London only a third of all the social housing needed will actually be built in the next five years. So what does the Minister say to my constituents who find themselves with no housing options at all at the moment?
Christopher Pincher
Over the last 10 years around 150,000 new homes for social rent have been built. We have made it easier for local authorities to build their own council homes by changing the rules around the housing revenue account and by making it easier for them to get cheap loans through the Public Works Loan Board. Our new affordable homes programme, investing £12 billion-plus in new homes over the next five years, will double the number of socially rentable homes built to 32,000. I rather hope the hon. Gentleman’s local authority will take advantage of the reforms that we have undertaken and the powers we have given local authorities, because in 2019-20, before the covid emergency, it built no social houses at all.
Richard Thomson (Gordon) (SNP)
Stephen Flynn (Aberdeen South) (SNP)
The Minister for Regional Growth and Local Government (Luke Hall)
The levelling-up fund will be allocated competitively and is open to all local areas. As we set out in the prospectus published at Budget, the index used for the levelling-up fund places areas in category 1, 2 or 3 based on their need for economic recovery and growth, improved transport connectivity, and regeneration.
Richard Thomson
If the Minister does not mind my saying so, that index seems to be working in a rather curious way. It has not escaped anyone’s attention that some Tory target areas in England seem to have done extraordinarily well out of this fund, yet areas such as mine in the north-east of Scotland—Aberdeen City Council and Aberdeenshire Council—are languishing in levels 2 and 3 of the fund, despite being forecast to be hit hardest by Brexit. We know there was a power grab with the United Kingdom Internal Market Act 2020. Is not the truth that we are now seeing a corresponding cash grab, because the Conservative Government know that not even all the rhetoric in the world about shared prosperity and precious Unions can spare their party from the hiding it is set to get from Scottish voters on 6 May?
Luke Hall
It is hard to see how the £150,000 per local authority that we have already committed to is a cash grab from Scottish communities. We are investing directly in Scottish communities, with £125,000 in capacity funding already. This is a bidding process, and rightly so, but we are providing that capacity funding, and for the first round of funding at least 9% of the UK allocations will be in Scotland. As I said earlier, we are hugely excited about the opportunities we have now to work directly with communities in Scotland. We have already been in touch, of course, with Aberdeen City Council and Aberdeenshire Council to ensure that they have a good understanding of the levelling-up fund, including, importantly, securing support from Members of Parliament. I very much hope that the hon. Gentleman will play a full part in that process.
Stephen Flynn
I am afraid that answer simply is not good enough. Not only are the Tories seeking to bypass devolution; they are also seeking to bypass the needs of Aberdeen. One hundred and twenty-three local authorities have been placed in pot 1, yet Aberdeen has been dumped in pot 2. The consequence of that is clear for all to see: it means that we will not have access to the funding that we need at this moment in time. Aberdeen accounts for a third of all job redundancies in Scotland since the start of the pandemic. If that is not a criterion for funding, what is?
Luke Hall
It is published fully and frankly on the Government website. The hon. Gentleman can have a look at it; I would advise him to do so. Authorities are already receiving capacity funding, so it is not true in any way to infer that every single Scottish local authority will not receive support through this initiative. We are hugely excited about the opportunities this presents us with. We are going to be investing directly into communities. There is huge support for this funding. I strongly urge the hon. Gentleman both to read the documentation on the website and to get involved in playing a full part in the process.
Jeremy Wright (Kenilworth and Southam) (Con)
The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Eddie Hughes)
The future homes standard will ensure that new homes produce 75% less carbon than those being built today. Those properties will be future-proofed, with low-carbon heating and high levels of energy efficiency, and they will not need any further retrofit to become net zero in line with the electricity supply. That is what building back greener looks like.
Jeremy Wright
I am grateful to my hon. Friend for what he has said. As he knows, building regulations are one tool we can use to improve the environmental performance of new homes, and I am conscious that the Government are consulting on how those regulations might be reformed. However, as he also knows, the regulations in place at the moment require compliance by developers to a design standard rather than a performance-in-use standard. Is his Department considering whether that should change? In any event, when does he expect revised and improved building regulations to be in place to compel that improved environmental performance?
Eddie Hughes
My right hon. and learned Friend will be delighted to know that we will update the regulations relating to fuel, power and ventilation this year, in advance of the introduction of the future homes standard in 2025. But we are not waiting for 2025; in the short term, our priority will be to implement an interim 2021 part L uplift. That sounds a bit esoteric, but it means that there will be a 31% reduction in carbon production compared with the 2013 standard. With regard to the point that he makes about performance standard versus design standard, I would be delighted to meet him and his constituent to discuss that further.
Patricia Gibson (North Ayrshire and Arran) (SNP)
The SNP plans, during the next Parliament, to put £1.6 billion into decarbonising the way buildings are heated in Scotland. Ambitiously, that equates to one third of homes by 2030. Why are the UK Government failing to match Scotland’s level of ambition to decarbonise our homes?
Eddie Hughes
I am grateful to the hon. Lady for her question. I am slightly disappointed, though. I thought she was going to rise to congratulate us on the social housing decarbonisation demonstrator fund, which has three excellent projects that are being progressed in Scotland. We on the Government Benches have no shortage of ambition to reach our net zero target by 2050. I look forward to working with Opposition Members to ensure we achieve that.
Rob Butler (Aylesbury) (Con)
Miriam Cates (Penistone and Stocksbridge) (Con)
Giles Watling (Clacton) (Con)
Dr Kieran Mullan (Crewe and Nantwich) (Con)
The Secretary of State for Housing, Communities and Local Government (Robert Jenrick)
Infrastructure underpins our economy and improves people’s everyday lives. Over the next five years, the Government plan to deliver over £600 billion in public investment, the highest sustained level since the 1970s as a proportion of GDP. My Department is playing a leading role in that mission by making the biggest changes in the way we support local economic growth in a decade, with around £5 billion of investment through the levelling-up fund and community renewal fund, and our ongoing investment through the £3.6 billion towns fund. At the same time, we are reforming our planning system to build more homes, and ensuring that developers pay their fair share through a simpler, faster and more transparent infrastructure levy.
Rob Butler
Aylesbury has seen unprecedented housing growth over the past 25 years and we will see much more in the years to come. Our infrastructure is currently at breaking point, with traffic congestion a real problem for local people. One way of alleviating that would be approval of the Aylesbury spur of East West Rail. What steps can my right hon. Friend take to work across Government, in particular with the Treasury, to secure funding for that vital link to ensure that housing development is matched by the appropriate infrastructure?
Robert Jenrick
My hon. Friend is right to highlight the need for transport infrastructure investment in the Milton Keynes-Oxford-Cambridge arc, which is one of the fastest growing and most economically dynamic parts of the country. I understand how important the connection is to his constituents. I know he has met the Chief Secretary of the Treasury and the rail Minister to make the case for connecting Aylesbury to East West Rail, an overall project of which I have been a long-term supporter. He is right that more homes require more infrastructure. That is why we have a £7 billion national homebuilding fund, alongside the new infrastructure levy proposed to capture more of the land value uplift and ensure that when homes are built, they are built with the appropriate infrastructure as well.
Miriam Cates [V]
It has been a privilege to co-chair the Stocksbridge towns fund board and work with the local community to develop our plans to regenerate the town with £24.1 million of Government investment. However, there are other towns in my constituency, such as Penistone and Chapeltown, that would also benefit from a co-ordinated community-led approach. What plans does my right hon. Friend have to encourage local councils to support communities to develop their own local infrastructure development strategies?
Robert Jenrick
I enjoyed visiting Stocksbridge just over a year ago with my hon. Friend and was delighted to see its £24.1 million town deal announced by my right hon. Friend the Chancellor at the Budget. I very much look forward to seeing its exciting proposals come to life, including a new visitor centre for a gateway to the Peak district. I recognise the point she makes. She represents many other towns, such as Penistone and Chapeltown. We want to ensure that they, too, can benefit from much needed regeneration funding. That is why bidding is now open for our levelling-up fund, worth £4.8 billion, which will deliver genuine local priorities by putting local support, including that of a Member of Parliament, at the heart of its mission. When I visited Stocksbridge, the birthplace of the modern umbrella, my hon. Friend kindly gave me an umbrella. With the new local town deal and an excellent MP, I am hopeful that the sun will keep shining on her constituency for many years to come.
Giles Watling [V]
I thank my right hon. Friend for his earlier answer. Back in 2017, a £200 million funding gap was identified for infrastructure projects in Tendring. As the Secretary of State knows, there is ongoing work to address areas of greatest need, such as roads, hospitals and a personal campaign of mine to upgrade rail services to Clacton and Walton, but our most significant funding gap, as we look to deliver new housing, remains the reported £100 million hole in our adult social care budget. What is my right hon. Friend’s Department doing to address that?
Robert Jenrick
I thank my hon. Friend for his question. This year, local councils will have access to an additional £1 billion for social care, on top of continuing all existing social care funding. He is right to raise the point that new housing requires new social infrastructure as much as it does hard infrastructure, in terms of roads and railways. That is why we are bringing forward the infrastructure levy, which will capture more of the land value uplift and ensure that developers pay a fair share. It is also why we are working with local authorities, including Essex County Council, to ensure that they can access the housing infrastructure fund and our new house building fund to get billions of pounds of investment into their communities.
Dr Mullan [V]
Along with the rest of the Crewe town board, I was very pleased to submit our bid for investment earlier this year to help Crewe to build back better. I campaigned for us to get a town deal and I know what a positive impact it can have. Will the Secretary of State update me on when we can expect to hear what I hope will be positive news for Crewe?
Robert Jenrick
I was delighted to receive Crewe’s town investment plan in January. Having visited my hon. Friend’s constituency many times over the years, I am excited to see the ambitious plans that have been developed for the town centre to welcome visitors and shoppers and creating an integrated High Speed 2 hub station. The plans are very well developed. My officials are currently conducting assessments and I look forward to making an announcement in due course.
John Howell (Henley) (Con)
The Minister for Regional Growth and Local Government (Luke Hall)
We have so far allocated over £9 billion directly to councils since the start of the pandemic and local authorities are expected to receive over £3 billion of additional support in 2021-22, responding both to expenditure pressures and loss of income. This takes the total support that we have committed to councils in England to tackle the impacts of covid-19 to over £12 billion.
Mr Clive Betts (Sheffield South East) (Lab)
On 11 November, I and other representatives from Sheffield met the Minister to express concern that the loss of income to leisure centres in Sheffield was not being refunded to the council because the centres are managed by an arm’s length trust. I understand now from the council that the Government have recognised that the extra expenditure given from the council to the leisure trust to compensate for loss of income has been refunded —at least significantly—by the Government. I thank the Minister for that and for the help that he has given. Unfortunately, locally the Lib Dems have tried to claim that some of this money has gone from the council to the trust not to fund services in Sheffield, but to fund leisure centres in Scarborough. Will the Minister reassure me and residents in Sheffield that the money that he has given to Sheffield City Council has gone properly to fund services in Sheffield and nowhere else, and indeed, as the chair of the trust has confirmed, that all the money given to the trust by Sheffield City Council is funding leisure centres in Sheffield and nowhere else?
Luke Hall
I thank the Chair of the Housing, Communities and Local Government Committee for that question. I was grateful to meet him and Julie Dore last year, and I know how important this matter is to the hon. Gentleman and his community in Sheffield. We have provided councils with a range of support for covid pressures on local leisure services, including unring-fenced grants, income compensation and the specific national leisure recovery fund. In all cases, Sheffield will comply with the funding conditions. My expectation would be that all that funding should be used locally to support local services in Sheffield and—he is absolutely right—not be transferred to other areas.
Nick Fletcher (Don Valley) (Con)
The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Eddie Hughes)
Houses in multiple occupation are a valuable part of the housing market and play an important role in delivering affordable accommodation, which is often vital in the communities that they serve. Most HMOs provide accommodation that is decent and safe for those living in it. Where HMOs may pose a risk to the wellbeing of their inhabitants or to the local area, we have given local councils robust powers to regulate standards and management of HMOs. If necessary, local planning authorities can also limit the proliferation of HMOs by consulting to remove the national permitted development right.
Nick Fletcher
I am sure my hon. Friend would agree that, while most residents in HMOs are law-abiding individuals, there is no escaping the fact that very often the residents in such premises lead extremely different lifestyles from those of their neighbours. This has been a particular issue in the towns of Rossington and Conisbrough, where residents have complained that the increase in the number of HMOs has caused a spike in antisocial behaviour and a loss of community spirit. Despite this, I have not seen the Government mention the necessity of combating this phenomenon in the planning White Paper. What reassurances can my hon. Friend give my constituents that the Government recognise the issues caused by HMOs in small towns and villages, and what work is his Department doing, in conjunction with local authorities, to ensure that such residents are located in more appropriate areas?
Eddie Hughes
I feel a huge degree of sympathy with the constituents of Rossington and Conisbrough who may have suffered antisocial behaviour as a result of HMOs in their area. I understand that my hon. Friend is working assiduously on behalf of his constituents to tackle this. We have given local authorities robust powers to regulate the standards and management of existing HMOs, including HMO licensing, penalties of up to £30,000 for breaches of the law and, for the worst offenders, banning orders. I urge my hon. Friend to press Doncaster Council to exercise those powers if appropriate.
Dame Diana Johnson (Kingston upon Hull North) (Lab)
The Secretary of State for Housing, Communities and Local Government (Robert Jenrick)
One of the biggest divides in our country has been between those who can afford their own home and those who cannot, and that is why I am pleased today to see the Government launch our new mortgage guarantee scheme as we strengthen our commitment to build back better from this pandemic. Today’s 95% mortgages will help families and young people to get on to the property ladder without the excessive burden of a large deposit, helping to turn generation rent into generation buy.
As we cautiously reopen the economy and return to a semblance of normality, we are ready to grasp the economic lifeline that comes from getting out and supporting local businesses, returning to pubs, restaurants and cafés and providing our local economies with the love and support that they need as we continue down the recovery road map. As we seize this economic boost, we will ensure that prosperity is shared across all the UK’s nations and regions, having announced the details of our landmark new levelling-up fund, the community ownership fund and the community renewal fund at Budget.
Dame Diana Johnson [V]
Can the Secretary of State explain why local people in Hull and the East Riding of Yorkshire were not trusted to be asked about what they wanted devolution to look like locally and to help to shape those plans, rather than just being told by Whitehall what they must have, with permanent changes to local government in return for vague and, to date, unspecified promises of regeneration?
Robert Jenrick
I am not sure what the right hon. Lady is referring to there. When we approach the local government reorganisation, we do so only in circumstances where there is a good deal of local support. We have taken forward a small number of proposals this year, including in North Yorkshire. Those are then subject to a consultation exercise where we notify stakeholders and take great care to take note of the opinions of the local population. It then comes to a Minister under the Act for the ultimate decision. Were local government reorganisation or a devolution deal to be negotiated in the right hon. Lady’s part of the world—I know that there is some local interest—we would of course follow all those legal requirements.
Dr Kieran Mullan (Crewe and Nantwich) (Con)
Robert Jenrick
I am very happy to join my hon. Friend in thanking all the volunteers he mentions for their hard work. As lockdown lifts, we want the countryside to look its glorious best this spring and summer, and he is absolutely right to say that councils should be using the powers that are available to them. Littering not only blights local communities but is ultimately a criminal offence. We have raised the maximum penalty for littering to £150, and we have published guidance for local authorities on the use of their powers.
Steve Reed (Croydon North) (Lab/Co-op)
There has been a 400% increase in donations to the Conservative party from developers under the current Prime Minister. In the interests of transparency, and to allay growing concerns about sleaze at the heart of government, will the Secretary of State publish notes of all the meetings that he, his advisers or representatives of No. 10 have held with any of those developers about changing the planning system and what they asked for?
Robert Jenrick
All ministerial engagements are already published through our regular official engagement notifications and all donations to political parties, whether that be the Labour party or the Conservative party, over the statutory amount are also published. Of course planning decisions and the production of Government policy have nothing to do with donations made to political parties and there is a complete separation of the two.
Steve Reed
The Campaign to Protect Rural England, the National Trust, the Town and Country Planning Association, the Royal Institute of British Architects, the Royal Town Planning Institute and others have all condemned the Secretary of State’s planning reforms for handing too much control to developers and blocking communities from objecting to individual applications in areas zoned for growth or for renewal. Given their increased donations to the Conservative party, is he paying back developers by selling out communities?
Robert Jenrick
Once again, the hon. Gentleman makes a low point. What we are doing is getting people on to the housing ladder. Once, the Labour party cared about young people, people on low incomes and people on social housing waiting lists, but those days are long gone. The Conservative party is the party of home ownership. This is the party standing up for the millions of people whose jobs depend on housing and construction. This is the party supporting the brickies and the electricians—the people out there trying to earn a good day’s living. The hon. Gentleman needs to get his priorities straight and support people who are working hard, trying to get on the housing ladder and trying to get this country going again after the pandemic.
Peter Gibson (Darlington) (Con) [V]
Robert Jenrick
My hon. Friend is absolutely right. The changes being seen on our high streets up and down the country are seismic. They require fundamental reforms to our planning system and that is exactly what this Government are doing. What a contrast that is with what the Labour party is doing. As far as I can tell, its only policy is to create a review led by somebody whom we asked to do a review 11 years ago. I have a great deal of respect for Mary Portas and I enjoy listening to her views, but we have already taken forward most of her recommendations. We are taking action. The Labour party is doing nothing and is letting the towns and cities across this country go into neglect.
Mr Virendra Sharma (Ealing, Southall) (Lab [V])
Robert Jenrick
I am disappointed to hear those remarks from the hon. Gentleman. Casting aspersions about the integrity of Dame Alison Nimmo is a new low for the Opposition. Alison is one of the most respected women in business today. She led The Crown Estate impeccably for many years, and now we are fortunate to benefit from her experience, commitment and public service. I think it is completely wrong that the hon. Gentleman—no doubt handed a question by the Labour Whips that he does not know anything of—
Robert Jenrick
None the less, it is very poor that the hon. Gentleman would cast aspersions on a great public servant, whom I am proud to have working with me at the Department.
Mr Speaker
I do not think the Secretary of State needs to cast aspersions on where the hon. Gentleman got his question from; I think it relates to his own constituency.
Andrew Percy (Brigg and Goole) (Con) [V]
Robert Jenrick
I was pleased to receive Goole’s town investment plan in January. It includes ambitious plans to diversify, to repurpose the town centre and to revitalise Goole’s economy. My officials are conducting their assessment in the usual way and I look forward to making an announcement in due course, which, if it is a positive one, will build on the excellent news we had at the Budget of a freeport in the Humber, bringing jobs and regeneration to the whole region.
Bambos Charalambous (Enfield, Southgate) (Lab)
Robert Jenrick
The hon. Gentleman raises an extremely important point, as 53% of people sleeping rough on our streets are ex-offenders, so a crucial component of our strategy to end rough sleeping must be ensuring that more offenders, whether male or female, leave prisons to good-quality, secure accommodation, whether it is in the private rental sector or in social housing. I am working very closely with my right hon. and learned Friend the Lord Chancellor; we put in a bid together to the spending review, to which the hon. Gentleman refers. I will be able to update him on those plans in due course. The Ministry of Justice will be an integral part of our strategy.
Jason McCartney (Colne Valley) (Con) [V]
Robert Jenrick
I was pleased to read of the Woodland Trust’s recent campaign. My Department received over 10,000 postcards from supporters of the trust, which I have had the pleasure of looking over in recent months. We have proposed changes to the national planning policy framework to set an expectation that all new residential streets will be lined with trees. This builds on previous changes to the framework whereby we strengthened protections for ancient woods and trees. My right hon. Friend the Environment Secretary will shortly publish further details of our wider cross-Government commitment.
Caroline Ansell (Eastbourne) (Con) [V]
Robert Jenrick
My hon. Friend is a doughty campaigner for her constituency. If I heard her question correctly, she asks about the support we provided for renters during the pandemic. We wanted to strike the right balance between helping tenants in need—that is why we increased the welfare provision, increased discretionary housing payments and increased the local housing allowance to 30% of local market costs—and ensuring that landlords have access to justice. As we transition out of the road map to recovery, we will be providing some further details on the next steps that we envisage to protect renters and ensure landlords get the best service and the help they need.
Douglas Chapman (Dunfermline and West Fife) (SNP) [V]
Robert Jenrick
I met representatives of the Scottish Government two weeks ago.
Gareth Davies (Grantham and Stamford) (Con)
Robert Jenrick
As champions of freedom and democracy, we are living up to our historical responsibilities to the people of Hong Kong. I have made it the mission of my Department to ensure that all BNO status holders and their families have the very best start as soon as they arrive here. That includes an additional £43 million package across all UK nations to provide targeted support for new arrivals, including English language tuition where necessary and help with housing costs for those who need it. We are creating 12 welcome hubs across the UK to give practical support for everything from applying for a school place and registering with a GP to setting up a business. This month, I met four Hong Kong families who have recently arrived in the UK, and their profound sense of optimism about the future reaffirmed my belief that this programme will enrich our country for generations to come.
Mr Speaker
I am sorry to the Members who did not get in, but unfortunately the questions seem to have taken a long time to answer. I am now suspending the House for a few minutes to enable the necessary arrangements for the next business.
Covid-19 Update
(3 years, 8 months ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
The Secretary of State for Health and Social Care (Matt Hancock)
With your permission, Mr Speaker, I will make a statement on coronavirus.
This virus is diminished, but not defeated. Cases, hospitalisations and deaths are back to the levels we saw in September. Throughout the crisis, we have protected the NHS, and there are now 2,186 people in hospital with covid across the UK—down 94% from the peak. The average number of daily deaths is 25—down 98%. Because of this brighter picture, we have been able to take step 2 on our road map, and it is brilliant to see the high streets bustling with life once again and to hear a real-life crowd back in Wembley this weekend—especially if one is a Leicester City supporter.
Now, with fewer covid patients in hospital, the NHS is already turning to focus on the work to tackle the covid backlog. Step by step, we are returning this country towards normal life, and we are on track to meet the road map set out by the Prime Minister. Last week, we hit our target to offer a vaccine to priority groups 1 to 9, and we are on track to offer a vaccine to all adults by the end of July. However, we must be vigilant, cautious and careful throughout, because we want this road to be a one-way street.
The vaccine uptake has been astonishingly high. For all over-50s, uptake is 94%. Enthusiasm among those in their late 40s was so high that they briefly overloaded the website when we opened up the booking system last week. We can see the result of that uptake in the real world. The latest data show that 98% of people aged between 70 and 84 now have covid-19 antibodies, which are crucial to the body’s ability to fight the disease—98%. That is the protection our vaccination programme is spreading across the whole United Kingdom. Uptake among all ethnic minority groups continues to increase. Public Health England estimates that the vaccination programme prevented over 10,000 deaths up to the end of March, and it will protect many more as the roll-out continues.
We know that the first dose gives significant protection, but the second dose is crucial to make people as safe as possible. On Friday and Saturday, we saw record numbers of second doses—over 499,000 on each day—and I am delighted to tell the House that, as of midnight last night, we have now given second doses to over 10 million people across the United Kingdom. Three quarters of over-75s have now had both jabs, rising to four fifths of over-80s. The vaccine is our way out of this pandemic, and I am delighted that it is being taken up in such huge numbers.
We will do everything in our power to drive uptake, especially when it comes to protecting the most vulnerable. The vaccination rate among care home staff is currently below 80% in over half of all local authority areas. Many care homes have called for vaccinations to be required for those who work in such settings. We have therefore launched a consultation into whether we should require care home providers that care for older adults to deploy only workers who have received their covid-19 vaccination, unless they have a medical exemption. We all know that older people living in care homes are at the greatest risk from this virus, and we have a duty of care to protect the most vulnerable, so we will consider all options to keep people safe.
As we deliver on stage 2 of the vaccination programme—to vaccinate all remaining adults in the UK—we must also turn our attention to what comes next. The biggest risk to our progress here in the UK is a new variant that the vaccine does not work as well against. We know from our response to other viruses, such as flu, that we need updated vaccines to tackle mutated viruses. I can tell the House that as we complete the programme for first and second jabs, we are ramping up plans for a booster shot to make sure that our vaccines stay ahead of the virus. We have already procured enough vaccine doses to begin the booster shots later this year. We will be working with our current vaccine suppliers and new suppliers such as the CureVac partnership to work out which vaccines will be effective as a booster shot and to design new vaccines specifically targeted at the variants of concern, such as the variant first found in South Africa.
Our goal is to ensure that the vaccine protects against this dreadful disease whatever it throws at us, to keep us safe and protect our much cherished return to a normal way of life. The booster shot is important because it will help protect against new variants, but until then we must remain vigilant in case a new variant renders the vaccines less protective. New variants can jeopardise the progress that we have made here in the UK.
Thanks to our early investment in covid genomic sequencing, we have in this country one of the best systems to spot and supress new variants wherever we find them through a combination of tough measures at the border, our genomic sequencing capability and a massive testing system. I would like to inform the House of another new development in our testing system. We have been piloting Pharmacy Collect, a system in which people can go and pick up tests for free from a pharmacy. I am delighted to tell the House that following the successful pilot, we have now rolled out Pharmacy Collect to over nine in 10 pharmacies, meaning that the universal testing offer, through which everyone can get tested up to twice a week, is now freely and easily accessible to anyone who wants it. You just have to go to your local pharmacy, Mr Speaker.
I would also like to update the House on our response to two new variants. One is the variant of concern first identified in South Africa. We have now detected a total of 557 cases of this variant since it was first identified in December. We have seen a cluster of cases in south London, predominantly in the London Boroughs of Wandsworth, Lambeth and Southwark, and identified single cases over the last week in Barnet, Birmingham and Sandwell. Around two thirds of these cases are related to international travel and have been picked up by the day two and day eight testing for international arrivals. However, we have seen a small amount of community transmission, too.
As soon as those cases were discovered, we acted quickly to put in place enhanced testing, tracing and sequencing in Lambeth and Wandsworth. We have brought in 19 mobile testing units in our largest surge-testing operation to date, and we are distributing test kits to housing estates, secondary schools, places of worship and workplaces. I would urge everyone who lives in these areas, whether they have symptoms or not, to get tested regularly and help us keep the variant under control.
Secondly, we have recently seen a new variant, first identified in India. We have now detected 103 cases of this variant, of which, again, the vast majority have links to international travel and have been picked up by our testing at the border. We have been analysing samples from those cases to see whether the variant has any concerning characteristics such as greater transmissibility or resistance to treatments and vaccines, meaning that it needs to be listed as a variant of concern.
After studying the data and on a precautionary basis, we have made the difficult but vital decision to add India to the red list. That means that anyone who is not a UK or Irish resident or a British citizen cannot enter the UK if they have been in India in the previous 10 days. UK and Irish residents and British citizens who have been in India in the 10 days before their arrival will need to complete hotel quarantine for 10 days from the time of arrival. These rules will come into force at 4 am on Friday. India is a country I know well and love. Between our two countries we have ties of friendship and family. I understand the impact of this decision, but I hope that the House will concur that we must act, because we must protect the progress that we have made in this country in tackling this awful disease.
Another way that we have kept the country safe is through maintaining a strong supply of personal protective equipment. At a time of massive global demand, we secured supply lines, created a stockpile to see us through the winter and created onshore manufacturing capacity here in the UK. I am pleased to inform the House that since February last year, we have distributed more than 10 billion items of PPE to protect people working in the NHS, social care and public services right across the country. Delivering so much PPE at such speed and scale has been an extraordinary effort that has not only helped us through the crisis, but provided a lasting legacy for the future.
Let me make two further points. I would like to inform the House that today we have appointed Professor Lucy Chappell as the chief scientific adviser to the Department of Health and Social Care. Professor Chappell has a stellar track record in science and research, including leading on the work on vaccinations in pregnancy. She has worked closely with our National Institute for Health Research, for which she will now be responsible. I am sure that the whole House will join me in congratulating Professor Chappell on her appointment.
Finally, last month we laid before the House our one-year status report on the Coronavirus Act 2020. I am sorry to say that the report contains an error relating to section 24 of the Act, which concerns Home Office measures on data held for national security purposes. Full details are set out in a written ministerial statement being laid today. The error does not change the substance of the report, as we will be laying the regulations to expire section 24 alongside other provisions as soon as parliamentary time allows.
In summary, we are moving down our road to recovery, vaccinations are rising and the pressure on our NHS is falling. As we enjoy the freedoms that are returning, let us take each step safely. We must hold our nerve and follow the rules while the vaccinators do their vital work. I commend this statement to the House.
Jonathan Ashworth (Leicester South) (Lab/Co-op)
I thank the Secretary of State for advance sight of his statement. Let me start by saying that I have no doubt that Downing Street was reluctant to cancel the Prime Minister’s trip to India. As a Member of Parliament for Leicester, I am immensely proud of our deep ties and bonds with India, but it was the correct thing to do in the circumstances, because we must always be vigilant and driven by the data, and variants are the biggest threat to our progress.
Tackling the variants demands that vaccination continues to be rolled out successfully; I again pay tribute to all involved. Uptake levels are improving, as the Secretary of State said, but they are still too low in some minority ethnic communities. Will he provide extra resources to the local communities that need them to drive up vaccination rates?
We will look carefully at the details for vaccinating social care staff, but the Secretary of State will know that every attempt throughout history to force mandatory vaccination has proved counterproductive. Why does he think this attempt will be any different?
Even with high levels of vaccination across the population, there will be significant groups who are unvaccinated—children, for example. The virus will be endemic, as the chief medical officer has recently confirmed. Papers from the Scientific Advisory Group for Emergencies model a third wave this summer. How do we avoid that? May I suggest to the Secretary of State that one way that we could do that would be to pay higher sick pay and expand its scope? Some of the poorest and the lowest paid will continue to suffer and be left exposed to the virus unless we fix that. We should not just glibly accept these health inequities; it could mean that urban areas are left behind, remaining under restrictions with higher infection rates. For the millionth time of asking, will he please fix sick pay?
Let me turn to India, which has the most cases in the world at the moment—more than 250,000 confirmed cases a day, I think, and going up. That is one of the world’s steepest surges, right now. Uploads of Indian sequencing to the global open access database show that the new double mutant B1617 variant has become dominant in India in the past few weeks, out-competing our home-grown Kent strain. As of today, COVID-19 Genomics UK reports 135 cases of B1617 in the UK and 115 in the last 28 days. It has been the fastest growing variant in the UK in the last three weeks. Most of those variants are imported, so we welcome the Secretary of State’s announcement about adding India to the red list, although I hope that there will be support and help in place for constituents such as mine who are legally in India and want to return.
We also now have cases in the community that are not linked to international travel. I understand that the Secretary of State is carrying out analysis of those samples, but surely we now need to start surge testing and designate B1617 as a variant of concern. How long will it take before we have more definitive evidence that it is more infectious or immune-escape? We already know that this variant carries mutations of concern in other variants. If we have learnt anything in the past 12 months, it is that this virus ruthlessly exploits ambiguity and that we must act fast when the situation is controllable, because in a few weeks’ time, it might not be.
The Secretary of State did not mention vaccine passports in his statement. Does he anticipate that vaccine passports will soon be needed for football games or concerts? As he said, Leicester City have made it to the FA cup final, and they are a team challenging for Europe on merit who always put fans first. Many who are anticipating going to a football match later this year will be wondering this: if they need a vaccine passport, will it be based on one dose or two? He may have seen data from Israel or the Centres for Disease Control and Prevention in the US which suggests that people are still infectious after one vaccine dose, so can he update us on that front?
Finally, I turn to the latest Sunday Times revelations about the lobbying by Greensill and Cameron of the Secretary of State and the very highest NHS officials about the payday financing scheme. This was not an act of altruism to staff in a pandemic but an investment plan to package up loans to sell to investors, with the former Prime Minister, not nurses, in line for a payday windfall. Cameron wrote in one of his emails:
“As you can imagine, Matt Hancock”
is
“extremely positive about this innovative offer.”
They sought a partnership with NHS Shared Business Services, which is jointly owned by the Department. They sought access to the personal and financial data of thousands of NHS staff. They wanted their electronic records for their own commercial gain. Their plan was to expand into the social care sector, where staff are on low pay or zero-hours contracts, and because the market is fragmented and made up of private providers, the supposed non-profit offer would presumably not apply.
There were meetings and communications with a parade of the most senior NHS officials, including former Health Minister Lord Prior and Baroness Harding. At least 30 trusts may have spent valuable time considering the adoption of this untested payday lending scheme, and it is all because the Secretary of State succumbed to the lobbying of his old boss Cameron. So again I ask him, will he publish all the text messages, all the emails and all the correspondence with David Cameron? Can he tell us how many NHS leaders and officials Cameron and Greensill lobbied and met? How many NHS trusts in total were approached about this expensive, unneeded scheme?
While we are on the issue of NHS Shared Business Services, can the Secretary of State also tell us why he never declared his own links to Topwood, the confidential document shredding firm which was still on Friday night, until it was curiously taken down, using the NHS logo on its website to promote itself? With so many accusations and allegations of sleaze and cronyism, these are basic questions that deserve clear answers. NHS staff deserve a pay rise and support, not these payday loan apps forced on the NHS by speculators trying to make money out of the pandemic. How can he possibly defend it?
Matt Hancock
Let me address the final point first. As I said to the House last week, my approach was and is that local NHS employers are best placed to decide whether to take up offers of pay flexibilities, and Ministers are not involved in decision taking in NHS Shared Business Services. When it comes to the other matter that the right hon. Gentleman raised in terms of my declarations—which are known to him and to everybody else only because I have followed the rules in letter and spirit and made that declaration—I agree with the Leader of the Opposition, rather than him, who said that he was not suggesting that any rules were broken.
I turn to the covid-related matters. I welcome the right hon. Gentleman’s support of the decision to put India on the red list, which is not one that we take lightly. He is right to ask about surge testing, to make sure that we limit the spread as much as possible of the variant first found in India, and I can confirm that we will be doing that.
I welcome the right hon. Gentleman’s support for vaccinations, which he has demonstrated at all turns. It is partly because of the unanimity across the House among all parties on the importance of vaccination that we have this absolutely spectacular level of uptake. He says that every attempt at mandatory vaccination is counterproductive. I gently point him to the fact that surgeons needs to have a vaccine against hepatitis B. Vaccination that is tied to work in fact has a longstanding precedent in this country.
The right hon. Gentleman asks many questions about certification, but he knows that a review of it is under way at the moment, being led by my right hon. Friend the Chancellor of the Duchy of Lancaster, who I am sure will have heard his representations and questions, and will be able to address them in the review.
Finally, the right hon. Gentleman says that we must avoid a third wave by sticking to the rules, and he is right. We should avoid a third wave if we can, and the way that we can do it is by sticking to the rules and getting the jab. That is why the vaccination programme is so important. It is why the road map is cautious and, we hope, irreversible. That is the plan, and with the 10 million second vaccines and the progress in the vaccination programme that we have seen in the last few days, weeks and months, I am very pleased to say that we are on track.
Jeremy Hunt (South West Surrey) (Con)
It is a pleasure to see you face to face, Mr Speaker, after some time.
The Health Secretary is absolutely right to put India on the red list and to explore mandatory vaccination of certain frontline workers, however difficult and sensitive that decision may be, but he will know that in the last week NHS waiting lists have risen to nearly 5 million people, which is nearly one in 12 of the population of England—the true cost of the pandemic. It is equally true that we have had capacity problems in the NHS for some time. That is partly why we have opened five new medical schools.
Does my right hon. Friend agree with the letter that he recently received from the three main health think-tanks, which says that Health Education England should be given a statutory duty to publish regular, transparent, independent, objective workforce projections, so that we can ensure that we really are training enough doctors and nurses? That approach is strongly supported by the Health and Social Care Committee and the Academy of Medical Royal Colleges. I hope that he will support it too.
Matt Hancock
We will certainly consider that. I have seen the letter. We have discussed the question. I would add that we have a record number of doctors in this country, in part thanks to the work that my right hon. Friend put in place when he was in my shoes. We have a record number of nurses—more than 300,000 for the first time in the history of the NHS. We do need, of course, to look to the future and ensure that we are preparing for it, as the letter suggests. We also need to ensure that we keep driving the project of delivering 50,000 more nurses in the NHS over this Parliament. I look forward to giving him a more substantive response, but I hear his encouragement to ensure that we take steps in that direction.
Dr Philippa Whitford (Central Ayrshire) (SNP) [V]
While the vaccine programmes across the UK are going well, vaccine-resistant variants remain a major threat. I welcome that the Prime Minister has now called off his visit to India due to its devastating surge in covid. Cases of the B1617 Indian variant in the UK are still very low, but they have been doubling every week, despite lockdown, suggesting that like the Kent variant it is much more infectious than the original virus. I therefore welcome India’s being added to the red list to reduce further importation.
Will the Secretary of State not now consider extending hotel quarantine to all arrivals, as travellers from red list countries can currently avoid it by coming via a third country? We have already seen increased numbers of the South African and Brazilian variants in European countries, from where travellers are not placed in hotel quarantine, and more infectious or vaccine-resistant variants could emerge in any country. We simply would not know about it until it was too late.
The pandemic is still accelerating, and as well as causing appalling suffering and death in other countries it clearly poses a threat to the people of the UK. Does the Secretary of State not recognise the need for a more co-operative, global response to covid if we are to bring the pandemic under control and allow a safer return to international travel and commerce?
Matt Hancock
I certainly agree with the hon. Lady on her final point, on international collaboration and working together, which, along with the Foreign Secretary and the Prime Minister, we are working incredibly hard on. We are using the UK’s presidency of the G7 and the enthusiasm of the new Administration in Washington to try to drive international collaboration, in particular collaboration among like-minded democracies in favour of an open and transparent, science-led response to pandemics. I hope that she will concur with that approach.
On the new variants of concern, it is important when looking at the numbers to distinguish between community spread and spread connected to travel. By taking the action that I have just announced to put India on the red list, we are restricting yet further the likelihood of incursion from India of somebody with a new variant. However, the majority of the cases that we have seen already in this country have been picked up by the testing that we have in place now for every single passenger entering this country. That is a sign of the system working, and it is now being strengthened.
Bob Blackman (Harrow East) (Con) [V]
I am delighted to say that I have had my second dose of the Oxford AstraZeneca vaccine and, so far, no ill effects. In Harrow, we have had surge testing because we have had a relatively small number of cases of the South African variant discovered. Literally thousands of people have been tested, but one of the most frustrating things is that these tests then have to be sent off and there appears to be an extremely long turnaround time before we get the results. What can the Secretary of State do to speed up getting the results of these tests? Otherwise, people will not be aware of whether they have the variant or whether they should take particular actions.
Matt Hancock
My hon. Friend is absolutely right to raise this important issue. I know that this is an important announcement for him and his constituents, representing as he does a significant number of constituents from the Indian diaspora. We have managed to reduce somewhat the turnaround time for the sequencing of positive tests, but we are also introducing a new type of test that can detect not just whether someone is positive but whether they have one of the known variants without having to go through a full sequence. That can give us a snapshot much, much faster—within a matter of hours—of whether a positive result has one of the known variants, before sending it off to sequencing so that we can see any new variant that we do not know about. We are introducing that technology. It is starting in the Lighthouse lab testing facility in Glasgow and we are rolling it out across the system. It is an important tool to make sure that we can get the turnaround time of spotting the variants down faster.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
It is quite astonishing that the Secretary of State’s statement had absolutely nothing to say about the Government’s plans for vaccine ID cards—something that has apparently been trialled. Only last week, the Equality and Human Rights Commission told us that vaccine ID cards, and possibly even the mandatory vaccination scheme that he is trumpeting today, could be unlawful, yet this House has had no opportunity to express a view on them at all. When are the Government going to come clean and share their plans for vaccine ID cards with this House?
Matt Hancock
I refer the right hon. Gentleman to my previous answer, which is that the Chancellor of the Duchy of Lancaster is leading a review on this area that will report in due course.
Mrs Pauline Latham (Mid Derbyshire) (Con)
I congratulate my right hon. Friend on the phenomenal roll-out of the vaccine programme, which has been astonishing. I, too, have had my second vaccine, which makes me feel much happier.
We have been told regularly that we are following the data, not the dates, but sadly it seems to be the other way round—that we are following the dates, not the data. We know that in Derbyshire, for instance, there are huge swathes of villages and towns with no covid whatsoever, and that is repeated over all sorts of areas of the country. Last week I managed to go out on several nights because I could—which was great, and the atmosphere was fantastic—but we need to start getting businesses back to normal. We need to get hospitality businesses operating, fully functioning, and using their indoor spaces. Some of the outdoor spaces I have been in are quite enclosed, so can we not go indoors as well now?
Matt Hancock
I am delighted that my hon. Friend, along with my hon. Friend the Member for Harrow East (Bob Blackman), is among the 10 million who have had their second jab; that is really good to see. The hope and cheer that the vaccine brings links to the second part of her question, about the speed of the road map. The reason for the timing set out in the road map is that we want to see the impact of one step before we take the next step. We are but one week on since we took step 2. That is a significant reopening, as we have no doubt all seen in our constituencies and around the country. We want to see the impact of that on the data before taking the next step, so we can have confidence that this is an irreversible path—a one-way street, as I put it. That is the reason for the way that we have set this out, and that is how we are planning to proceed.
Jim Shannon (Strangford) (DUP)
Along with others, I welcome the roll-out of the vaccine, as that is very important, but few would deny that it is now time to look at waiting lists, and I shall put one on record. What steps have been taken to get routine operations such as hip replacements and tonsil operations back on the table to address the eye-wateringly long waiting lists? That is vastly concerning, especially when we hear, for instance, of children who were on waiting lists for tonsils and adenoids to be removed last year; due to dips in oxygen levels they were considered urgent at that time, but that now appears to be okay. That is very worrying.
Matt Hancock
The hon. Gentleman raises a very important point. The waiting list issue is very significant; it has built up because of covid, but we must tackle it and we are absolutely determined to do so. He, like me, will have seen the figures last week on the increase in the waiting list in England, but the waiting list has increased in all parts of the UK. We have put in extra funding, an extra £7 billion in total for next year in England and, through the Barnett consequentials, to the three devolved Administrations. That is there to make sure we can get through this backlog while also of course dealing with covid and the infection prevention and control needed to tackle covid. This is a vital task, the hon. Gentleman is right to raise it, and we are working very hard to address it.
Damian Green (Ashford) (Con)
My right hon. Friend is rightly proud of the stunning performance of the vaccination teams across the country, and of course I pay tribute to those who have been engaged in that in and around Ashford. I am sure he agrees that it is particularly important for care workers to be vaccinated, and not just care home workers but domiciliary care workers who go from house to house providing essential care. What is he doing to encourage take-up among care workers, to get as close to 100% as possible?
Matt Hancock
It is incredibly important that all care workers take up the jab if they possibly can, unless they have a vital medical reason not to, because the jab of course not only protects us, but protects people we are close to, and care workers are close to people who are vulnerable—that is in the nature of the job. That is why I think it is right to consider saying that people can be deployed in a care home only if they have had the jab, and we are looking into that. We have not said that for those who work in domiciliary care—caring for people in their own homes, rather than in a care home—because those in care homes are at the highest risk of all, but I would absolutely urge anybody who is a carer, whether they work in social care or are an unpaid carer, who has not already got the jab to please do get it, to protect not just them, but those to whom they have a duty of care.
Debbie Abrahams (Oldham East and Saddleworth) (Lab) [V]
As the UK rolls back lockdown restrictions, the global death toll has reached 3 million, and the World Health Organisation is warning that the world is approaching the highest rate of infection so far. With three new variants in three continents, all these variants now in the UK and the reduced efficacy of the different covid vaccinations against these variants, it is clear that the UK’s success in fully emerging from this pandemic is co-dependent on how well the rest of the world is doing. I asked the Health Secretary about global co-ordination of surveillance of new variants back in February, and the World Health Organisation is now consulting on this, so can he update the House on our response to this consultation?
Matt Hancock
This is an incredibly important subject. I agree with the substance of what the hon. Lady asked in the question, and she is quite right to raise this. We have put in place the new variant assessment platform, allowing any country around the world to use our enormous genomic sequencing capability if they want to sequence positive cases to discover what is happening in their countries, but our borders testing system, in which all positives are sequenced, also means that we in fact get a survey from around the world through those who have travelled to the UK, and we can relay that data back to individual countries so that they understand that better. Of course, it would be far better if something like the new variant assessment platform was run on a multilateral basis globally—for instance, by an organisation such as the WHO. We are engaged with the WHO on making sure that it is available, but my view was that we needed to get on and offer this to everybody and then build a network of labs around the world that can make such an offer so that sequencing can be available in every country, because it is currently far too patchy.
Harriett Baldwin (West Worcestershire) (Con) [V]
May I add my congratulations to the team that has managed to give two vaccinations to over 10 million people? That is fantastic news. Given the risk of variants, I welcome the difficult decision that the Secretary of State has made to add India to the red list. What research he has commissioned on those, such as my hon. Friends the Members for Mid Derbyshire (Mrs Latham) and for Harrow East (Bob Blackman), who have had two vaccinations, and what possibility there might be that people who have had two vaccinations are able to go about their daily lives with fewer restrictions than those who have not?
Matt Hancock
The latter question is really a question tied to the certification work. We have not hitherto, as my hon. Friend well knows, said that the rules for people who are vaccinated should be different from those for people who are non-vaccinated, but we know that some other countries are proposing to say that that will be case for international travel, so we do need to have a way of showing or proving it. However, we have not yet come to any conclusions about how we should do that and whether we should do that domestically. That is a matter for the Chancellor of the Duchy of Lancaster.
On measuring how effective a second dose is, we have tests in the field right now to follow a sample of people who have had both tests, having them tested regularly—weekly, typically—to check whether they test positive, and therefore testing the effectiveness of both of the vaccines in the field. So far, we have published the results of that after one jab. Very early results are coming through after two jabs, and in the next couple of weeks we will have some really rich data on that, I should hope, because we have now seen a significant number of second jabs—10 million as of midnight last night.
Feryal Clark (Enfield North) (Lab) [V]
The vaccination roll-out for the majority of the country has been nothing short of amazing, and I would like to thank the local NHS providers in Enfield and across the country for their herculean efforts. Sadly, for some parts of the country, including many parts of my constituency of Enfield North, a postcode lottery appears to be emerging, whereby vaccination rates are stubbornly low and falling behind the rest of the country. What is being done to combat this, and what additional support will the Department be providing to areas with consistently low vaccine rates?
Matt Hancock
We have a huge amount of work on to tackle exactly the phenomenon that the hon. Lady describes. I thank people in Enfield who have been working on the vaccination programme, because they have done incredibly well, but there is much more to do. We have to ensure that we make the vaccine more accessible—that it is easy to access—and that people have reassurances if they are hesitant. The Minister for Covid Vaccine Deployment, my hon. Friend the Member for Stratford-on-Avon (Nadhim Zahawi), is leading on these efforts, including with innovative approaches that we are currently trialling, such as allowing multigenerational households to be vaccinated at once, to see how we can drive up uptake in those groups in which we have not seen such high uptake. As I said, overall uptake among over-50s is 94%, which is far higher than my best possible hopes just a couple of months ago, but if we can reduce that final 6%, for every percentage point that comes off it, the safer we all get.
Stephen Hammond (Wimbledon) (Con) [V]
I refer the House to my entry in the Register of Members’ Financial Interests. I thank my right hon. Friend for his statement and for the extraordinary roll-out, which is still continuing, and I thank all the health workers across Wimbledon and south-west London.
In his statement, my right hon. Friend was right to identify the risk of new variants and to mention genomic sequencing and boosters. Will he confirm that there will be availability of rapid testing, with tests that provide results quickly and identify new variants, and that the booster programme will be rolled out on a similar basis to the vaccine programme, which has been so successfully rolled out?
Matt Hancock
Yes, absolutely. The booster shot programme will be rolled out in a similar way to the first two jabs. There will of course be some differences, not least because of the interaction of an autumn covid vaccination programme with the autumn-winter flu vaccination programme. We still need the final clinical results on their interaction to see whether someone can have both at the same time, which would obviously be logistically easier. Those matters need to be resolved. The reason for the announcement today is that we want to be absolutely clear that a booster shot programme will happen this autumn—later this year—and we are determined to make it as efficacious as possible, because, ultimately, dealing with these new variants will require booster shots, especially for the most vulnerable.
Imran Hussain (Bradford East) (Lab) [V]
Over the last week, several serious concerns have been raised with me about the managed quarantine hotel system, with harrowing stories of families with young children stranded in airports because they cannot contact the booking provider to arrange accommodation, and others in quarantine hotels left without food for days on end. Will the Health Secretary tell me just what he is doing to urgently resolve the frankly shambolic situation with the booking system, and what he is doing to end the inhumane treatment of quarantine hotel guests by ensuring that food is not only provided on time but meets the faith and dietary requirements of travellers, particularly those fasting during Ramadan?
Matt Hancock
I am afraid I do not agree with the prognosis. We are, of course, very careful to ensure that the vast majority of people who go through the managed quarantine service—hotel quarantine—have a good experience. Of course, they have to be in a hotel when often they would rather not be, so it is an unusual situation, but it has been put in place with great sensitivity and I am very grateful to all those who have worked so hard on it, not just in my Department but among the hotels, the airports and the carriers. However, the hon. Gentleman clearly has some significant individual concerns, and I would be very happy to ensure that the Minister for Public Health, my hon. Friend the Member for Bury St Edmunds (Jo Churchill), meets him to hear those individual concerns and to try to make sure that they are resolved—in particular the point about ensuring that food provision is appropriate for those fasting at Ramadan, which of course is very important.
Julian Sturdy (York Outer) (Con) [V]
Given that the seven-day rolling average of covid deaths is now 24.9, with just 10 yesterday, and that in normal times the daily cancer death toll averages over 450—a figure sadly likely to rise due to delayed treatment and the disruption of the pandemic—what are the Government doing to catch up with the cancer screening and operations backlog and get the health service back towards other medical conditions so that the death toll from non-covid cases does not become the worst legacy of this emergency?
Matt Hancock
My hon. Friend is quite right to ask about that; it is an incredibly important topic. I am pleased to say that, over the second peak this winter, the amount of cancer work—surgery and treatment—continued much closer to normal. He is quite right that, in the first peak, it was reduced significantly. We are very focused on the backlog that has been created by the pandemic, but I am pleased that the death toll from covid is coming down. In fact, the very latest data, published today, shows that the number of deaths recorded with covid after 28 days is four. Those numbers tend to be lower at the weekend, and we mourn each of them, but that nevertheless reinforces his point that it is vital that we get on with getting through the backlog that has been created by the pandemic.
Dave Doogan (Angus) (SNP)
I want to challenge the Secretary of State about the inexplicable delay in adding India to the red list of countries. I welcome the announcement that it will now be included on that list, and I hope very sincerely that this will not be another stable door moment in the Government’s response to the coronavirus pandemic. The Secretary of State knows that the SNP has committed to increase NHS funding in Scotland by 20%. Will he commit to a similar uplift for NHS England in order to help drive the recovery of the NHS after coronavirus and truly build back better?
Matt Hancock
I recently saw the figures for the proposed increase for NHS spending in Scotland. The proposed increase is lower than in England; it is lower than the money that has been passed over to the Scottish Government from UK taxpayers to spend on the NHS in Scotland. My question is: what has happened to the money for the NHS in Scotland that was given to the SNP Government in Holyrood? They have not spent it on the NHS. We know that they have many wasteful projects. Thankfully, we work very closely together on important things such as the vaccination effort, which has been a true UK success story, but this question of the missing millions for the NHS in Scotland is one that we need answers to from the Government in Holyrood.
Robin Millar (Aberconwy) (Con) [V]
I thank my right hon. Friend for the foresight and the early investment decisions made on vaccines 12 months ago. Here in Aberconwy, the result is falling infection rates and a tangible sense of hope, albeit one coloured with frustration as we watch businesses in England open ahead of us. We have the second-oldest demographic in Wales, and it is right that their environment is protected to ensure their wellbeing. That is properly a priority. However, can my right hon. Friend give the elderly and the vulnerable, and their loved ones, assurances that they will one day be able to leave their accommodation to visit family, resume employment and otherwise pick up their old routines?
Matt Hancock
Yes, of course. We want to get back to normal for care home residents—of course we do. We are taking steps in the right direction in England. I cannot comment on the situation in Wales; that is rightly a responsibility for the Cardiff Administration. As we progress down the road map, I hope we will be able to make further progress.
Kerry McCarthy (Bristol East) (Lab) [V]
At today’s meeting of the all-party group on myalgic encephalomyelitis, we discussed the overlaps between ME and chronic fatigue syndrome and long covid. Obviously, there are some striking similarities. What assessment has the Secretary of State made of the impact that contracting covid can have on people with ME/CFS? Given their vulnerability, will he now do a bit of a U-turn and make them a priority for vaccination?
Matt Hancock
Of course, the prioritisation for vaccination when it comes to those who are vulnerable is clinically determined. I know that this question has been looked into. We are also looking into work on the links between ME and long covid, which share some similarities but are different conditions. It is an area that needs further work and further research—there is no doubt about that. If there is an update to the clinical advice on prioritisation and whether those with ME need to be in category 6 or category 4, I will update the hon. Lady. Thus far, however, we are following the clinical advice and that is the approach we have taken overall.
Caroline Nokes (Romsey and Southampton North) (Con) [V]
I was really pleased to hear my right hon. Friend reference the appointment of Professor Lucy Chappell and the work on vaccines in pregnancy. Will he please update the House on what is being done to reassure young women that there is no plausible way that vaccination can affect fertility? Will he also let us know how quickly he expects pregnant women, who we know might be immunosuppressed, to be called forward for their vaccination, or will they have to wait for the age band that is appropriate?
Matt Hancock
I was absolutely delighted that on Friday, following the work of Professor Chappell and others, we were able to make the announcement with respect to the vaccination for those who are pregnant. The prioritisation remains as with people who are not pregnant, so it will essentially be by age unless there is another reason that one might be in a higher group, for instance if you are a social care worker. It does not affect the prioritisation. Hitherto the advice had been understandably cautious, because clinical trials are not done on people who are pregnant. However, there is now very clear advice for those who are pregnant: when it is your turn, come forward and take advice. Have a discussion about your individual circumstances with your clinician. They can then, subject to that individual circumstance, which is of course appropriate in pregnancy, be vaccinated. I am grateful to my right hon. Friend for raising this issue. It was a really important announcement on Friday. Mr Speaker, I probably should have included it in my original statement, but unfortunately it was already rather long. I am absolutely delighted that Professor Chappell and the whole team—it was a big team effort—were able to ensure we made this progress.
Sir Edward Leigh (Gainsborough) (Con)
Scott Morrison, the Australian Prime Minister, has just announced that he has no plans to open up his borders. Of course, he is absolutely right. I am speaking—I apologise—completely with the benefit of hindsight, but I am sure everybody would agree that if we had done what Australia had done, we could have opened up our economy months ago. It has had only 910 deaths and only 29,000 infections. What I want to hear from the Secretary of State is that he will resist the very powerful lobbyists from the travel and airline industries and from airports, and that he will be absolutely determined to follow the evidence, not allow unnecessary travel—we do not know what variants are out there in the world—and be really tough with the red list.
Matt Hancock
That is the approach we have taken so far since the introduction of the red list and the hotel quarantine. Through the testing of every single passenger who comes here, we essentially now have a survey of the world. We can see where the new variants are from the people coming through the testing regime. I am grateful for my right hon. Friend’s wise counsel.
Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)
The Health Secretary is clearly right to put India on the red list and to safeguard the vaccine programme from new variants. However, the India variant has been under investigation for three weeks, and other neighbouring countries with lower and slower covid rates were put on the red list 10 days ago. This week, Hong Kong identified 47 covid cases on a single Delhi flight. Before Friday, we still had 16 direct flights from India and many more indirect ones. Can he explain, contrary to his previous answer, why India was not put on a red list 10 days ago, when other countries were? Can he publish the Joint Biosecurity Centre’s assessments, recommendations and criteria and also publish a full genomic analysis of which countries all the new variant cases are arriving from, so that we can see where the border gaps still are in the measures that he has in place and make sure that we do not keep having these delays?
Matt Hancock
We keep all these decisions for each country under constant review. The challenge of the genomic data is that some countries have excellent coverage of genomic sequencing and others do not. Actually, that is not particularly correlated with their income. For instance, South Africa, a middle-income country, has excellent genomic sequencing. We take the decisions very rapidly when we need to. We keep all this under constant review and I am glad that she welcomes the decision to put India on the red list today.
Mr Mark Harper (Forest of Dean) (Con)
May I add my congratulations to all those who have been involved in the fantastic vaccine roll-out that the Secretary of State set out in his statement? It is obviously breaking the link between cases, hospitalisations and deaths, as we are seeing dramatically from the figures. Many members of the public and businesses, having looked at the road map, which he also mentioned, will have seen that as of 21 June, the Government and the public are expecting the country to be broadly back to normal, but, of course, there is the small print about the reviews on social distancing. Will he confirm to the House and the public that as of 21 June, he expects us to be broadly back to normal, without social distancing? If that is not the case, will he set out what the evidence base will be for that decision?
Matt Hancock
Any decisions like that would be based on the evidence, and we have far more evidence now than we did when making these decisions previously. I fully expect that there will be some areas of life, without the need for laws in this place, where people will behave more cautiously than previously. The wearing of masks is one—before this pandemic, wearing a mask in public in this country was extremely unusual. I imagine that some people will wear masks, and choose to wear masks, for some time to come. Our goal is to manage this virus and the pandemic that it has caused more like flu—in fact, like flu. Flu comes through each year. We do take action to deal with flu—we take action on nosocomial infection in hospitals and through the flu vaccine programme—but we do not stop normal life as we know it. That is the overall attitude and approach. My right hon. Friend mentions that four reviews were set out as part of the road map and they will, of course, have to conclude. But that is my hope because, as he knows, I very firmly believe that this vaccine is breaking that link. We can see it in the data every single day and in the way that the country is responding. It is uplifting.
Barbara Keeley (Worsley and Eccles South) (Lab) [V]
I add my praise to the team rolling out vaccines in Salford, led by Salford Primary Care Together, which is doing a remarkable job. The current guidance on visits out from care homes says that any resident who makes a visit outside a care home must self-isolate for 14 days on their return, even if all they have done on their visit is to sit outside with a family member. This is longer than people have to quarantine when returning from red list countries, including India, which has the most cases in the world. This is clearly disproportionate, so will the Secretary of State set out what he is doing to enable regular testing to be used to cut this self-isolation requirement for care home residents?
Matt Hancock
The hon. Lady raises an important point on a subject that she knows extremely well. If I may, could I give her the respect of considering the question and writing to her with a full reply, because it is a very important question and I want to make sure that we get it right? Maybe we can then have a correspondence to make sure that we get to the right result.
Dr Liam Fox (North Somerset) (Con)
The UK’s vaccination programme has been an international trailblazer, the strategic aim of preventing the NHS from being overwhelmed has clearly been met, and I am delighted that my right hon. Friend, who has done a tremendous job as Secretary of State throughout the pandemic, appears determined not to allow a shift in the goalposts and to follow the cautious pathway out of lockdown. But can we please, and can he please, ensure that we have a rational and balanced discussion about viral variants? Viruses always mutate and there will be an unavoidable level of risk that we will have to get used to post pandemic, unless we are to become a perpetually frightened, introspective nation—the opposite of global Britain?
Matt Hancock
My right hon. Friend has deep experience in this area, and I am very grateful for what he said—that was very kind. He is absolutely right about the fact that viruses always mutate, and we can rise to that—we can respond to that—as we do with flu. This is another area in which the parallel with how we manage flu as a country is the right one, because the flu virus mutates most years. We work out, observing the Australian winter, what is the most likely variant we will get in our winter, we adjust the vaccines to that variant and then we roll them out over the autumn. That sort of programme is likely to be needed in this country for some time to come. We will start later this year with the booster shots, and we will make progress after that according to the evidence as we see it. I hope he was not trying to make a point of something; I always try to be rational, but it is sometimes hard.
Lilian Greenwood (Nottingham South) (Lab) [V]
I hope I do not still sound like a robot, Madam Deputy Speaker. The gradual easing of restrictions in recent weeks has come as a great relief and is very welcome, but we know that the pandemic has caused a colossal backlog of unmet healthcare need, including dental care. Many people have been unable to access any treatment for dental problems, and check-ups have simply not been happening for more than a year now. Will the Secretary of State set out the steps he is taking to enable dentists to begin to clear that backlog of treatment? When there is already huge inequality in oral health and so many people are facing financial hardship, what is he doing to ensure that people do not miss out on vital preventive check-ups because they cannot afford them?
Matt Hancock
The hon. Lady is right to raise this issue. We have maintained access to urgent dental treatment throughout the pandemic. We put in place dental centres to be able to do that in the first peak and dentistry was not closed in the second peak—indeed, we have put in place an incentive to get dental practices really motoring. Of course there is infection prevention and control that needs to be updated as the prevalence of the disease comes down, but making sure that we have those check-ups is incredibly important, because it is one of the most important preventive measures there is, especially for children. Given her interest in and enthusiasm for this subject, I hope she will support the proposals for much more widespread fluoridation of water, which we are proposing to put into legislation when parliamentary time allows and which was part of the White Paper we published in February, because that is one of the biggest steps we can take to protect dental health.
Ellie Reeves (Lewisham West and Penge) (Lab) [V]
The NHS has had its busiest and most crucial year ever, fighting the pandemic and delivering the vaccine roll-out, and all while continuing to provide routine care and treatment. We owe our NHS workers so much, yet this Government are proposing just a 1% pay increase, not even the 2.1% previously promised. Can the Secretary of State not see that after the year we have had, this is an insult to their heroic efforts? Will he commit to getting a pay rise for staff that truly reflects the value of their work?
Matt Hancock
The admiration in which I hold NHS staff holds no bounds. The question of pay is rightly one for the independent pay review body, and I look forward to its publication.
Robert Halfon (Harlow) (Con) [V]
On Friday I visited the vaccination centre at the Harlow Leisurezone to see the extraordinary work it is doing. Will my right hon. Friend thank the remarkable NHS staff and volunteers at the Harlow Leisurezone and at Lister House for vaccinating 40,000 residents in Harlow with their first jab? Given what he has said previously about Public Health England and the move to Harlow, will he meet me and colleagues to discuss the move and the exciting proposals for Public Health England, to ensure that Harlow and the surrounding area of west Essex becomes the public health science capital of England?
Matt Hancock
May I add my praise for those at the vaccination centre at Harlow Leisurezone? They have been working incredibly hard and we are all very grateful. I would add Essex County Council to my right hon. Friend’s long list, which I fully endorse. The council has leaned into the vaccination effort right across Essex. I am always happy to meet him, and with the recent announcement on the UK Health Security Agency, I think now is a good time to have a discussion on this topic.
Munira Wilson (Twickenham) (LD) [V]
I have been contacted by several constituents who ordered very expensive tests from companies recommended on the Government’s website as part of the test to release scheme. Some never received their tests, some never received their results, and some received their tests late and feared being in breach of the rules. They have had to battle for refunds, and we have heard of others having to leave home to get their tests, which undermines the whole scheme. What vetting, if any, does the Department undertake before listing these companies, especially as demand will no doubt increase, given that the Government are so keen to open up international travel again?
Matt Hancock
The hon. Lady is quite right to raise this. We have kicked two suppliers off the list of approved suppliers for testing for international travel, and we are quite prepared to do more if suppliers do not meet the service obligations that they sign up to. If she wants to send in the individual evidence, we will absolutely look at it. We keep this constantly and vigilantly under review. The companies that provide tests must meet their obligations in terms of timeliness and of treating their customers fairly and reasonably. As I say, two of them did not continue to meet those specifications, so we took them off the list of available testing suppliers. We are quite prepared to do more if that is what it takes.
Madam Deputy Speaker (Dame Rosie Winterton)
This session is supposed to finish in three minutes’ time, but we have 12 more questioners. I would like to be able to get everybody in, and a fair number are in the Chamber. I am sure that everyone will be co-operative in keeping their questions very short, and I ask the Secretary of State to be equally brief with his responses.
Angela Richardson (Guildford) (Con) [V]
Following the important announcement last week, I know that many expectant mothers in Guildford and around the country will welcome the certainty that they can safely come forward for a vaccine when it is offered. Can my right hon. Friend confirm that he will continue to take every precaution to ensure that pregnant women have the support that they need to make an informed decision about what is right for them and their health?
Matt Hancock
Absolutely. This decision was taken on the basis of the best possible science and significant amounts of data from pregnant women who have already been vaccinated, so people can have the confidence to come forward and get the advice that they need for their specific circumstances and then get the protection of the jab.
Patricia Gibson (North Ayrshire and Arran) (SNP) [V]
The Scottish Government and the First Minister have commitment to a full public inquiry later this year into all aspects of the handling of the pandemic, including care homes. Will the Secretary of State confirm that he supports a full public inquiry into the UK Government’s handling of all aspects of the pandemic in England as well?
Matt Hancock
This is obviously a matter for powers greater than the Health Department. It is something that the Prime Minister has clearly set out his views on, and that is what I will stick by.
Holly Mumby-Croft (Scunthorpe) (Con)
Along with the chair of the all-party parliamentary group on brain tumours, my hon. Friend the Member for St Ives (Derek Thomas), I have previously raised the issue of residents who travel abroad for medical treatment having to pay hundreds of pounds for covid tests to travel out and to return. This is affecting my constituent, David Hopkins, and others across the country. Will the Health Secretary work with the Secretary of State for Transport urgently to find a way to allow patients such as David to use free NHS tests for medical travel purposes?
Matt Hancock
My hon. Friend raises an important point, and I am happy to look into it. I am also pleased that the cost of the tests that are needed for travel is coming down, and an important piece of work is under way to see how we can get that down further. Nevertheless, my hon. Friend makes a strong case for her constituent.
Bambos Charalambous (Enfield, Southgate) (Lab)
Face coverings are likely to remain a feature to protect against covid-19, but people with hidden disabilities who cannot wear such coverings will face abuse. Despite raising the matter on previous occasions, including once with the Prime Minister, and having been promised an awareness campaign, nothing has happened. Will the Secretary of State tell me when that campaign will happen?
Matt Hancock
Yes, an awareness campaign is under way, and I am grateful for advance notice of this question. I will write to the hon. Gentleman with the full details. He may say to me, “Sorry, Matt; more needs to be done,” in which case I will look into it, but he makes an important point on which I essentially agree with him.
John Redwood (Wokingham) (Con) [V]
I congratulate my right hon. Friend on the big reductions, based on the vaccinations, in case and death numbers. Will he briefly update us on better air extraction, cleaning and other measures to control infection in hospitals to reassure the many patients who now need non-covid treatment?
Matt Hancock
My right hon. Friend has asked about this many times, and he is quite right to, because it is not just about cleaning. We have learned a lot during the pandemic about the importance of good ventilation, and that is now embedded in infection prevention and control. As cases in hospitals come down, hospitals across the country are separating, as much as is possible, those who might or do have covid from people who are coming to hospital having been tested and knowing that they do not have covid. That is incredibly important to reassure people that if they are asked to come to hospital by a clinician, it is the best place for them.
Mr Kevan Jones (North Durham) (Lab)
In response to my right hon. Friend the Member for Leicester South (Jonathan Ashworth), the Secretary of State said that it was up to local NHS trusts to decide whether to take up the Greensill payday loan app, but The Sunday Times yesterday published an email between David Cameron and Matthew Gould, the head of NHSX, on 23 April. It reads:
“As you can imagine, Matt Hancock, David Prior [NHS England chairman], Simon Stevens [NHS chief executive], as well as the many trust CEOs, are extremely positive about this innovative offer.”
Is that email correct? Was the Secretary of State “extremely positive” about the Greensill app? Does he not think there is something morally wrong with using poorly paid and struggling NHS staff to allow a private company to construct a financial bond to be traded on the international money markets?
Matt Hancock
As I said to the right hon. Member for Leicester South (Jonathan Ashworth), my approach was and is that local NHS employers are best placed to decide.
Mark Pawsey (Rugby) (Con) [V]
Rugby’s primary care network-led vaccination centre at Locke House has provided over 34,000 first and 11,000 second doses to JCVI groups 1 to 9 through a fantastic team of staff and volunteers. The GPs, however, have chosen not to take part in phase 2 of the programme, and the centre is expected to close in mid-July as a consequence. Our local doctors would prefer to vaccinate groups 10 to 12 in their own surgeries, although that option is not currently available to them. What can the Secretary of State do to facilitate that approach to the important task of vaccinating the under-50s?
Matt Hancock
I will look into that question, which has not been raised before. Generally, the use of a primary care network—a group of GP practices—to come together to offer one centre has worked really well. That is the first I have heard of that concern, so I will take it away and ensure that it is looked at properly.
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
The Prime Minister today cancelled his planned trip to India this week, and the Health Secretary has just announced that India has been placed on the Government’s travel red list amid a devastating surge in coronavirus cases, with well over 200,000 detected on a daily basis. A new double-mutation variant is reportedly more potent, and dozens of cases have been detected here in the UK, too. To assuage community concerns, will the Health Secretary clarify that our vaccines are effective against this new variant?
Matt Hancock
We simply do not know that. We are acting on a precautionary basis. I cannot give the hon. Gentleman that assurance, but we are looking into that question as fast as possible. The core of my concern about the variant first found in India is that the vaccines may be less effective in terms of transmission and of reducing hospitalisation and death. It is the same concern that we have with the variant first found in South Africa and is the core reason why we took the decision today.
Nigel Mills (Amber Valley) (Con) [V]
May I add my thanks to the NHS in Amber Valley, which has been moving through the vaccines so fast that it had even done more than 70% of the 40 to 50 age group by last week? What is my right hon. Friend’s message, though, to those who are saying that, based on media reports, we have now reached the herd immunity level and therefore this problem has all gone away?
Rob Butler (Aylesbury) (Con) [V]
Stoke Mandeville Hospital in my constituency is home to the National Spinal Injuries Centre. Despite continuing to do excellent work throughout the pandemic, a particular challenge arose when it came to providing support to relatives of patients who need to learn together how to adapt when back at home. Can my right hon. Friend assure me that planning for a third wave of covid-19 will give full consideration to the needs of spinal injuries patients and their families?
Matt Hancock
Yes, of course, I will give that matter consideration. I also make the case that while, as we open up, there may be more transmission, I very much hope that that does not lead—in fact we know from the data that that is highly unlikely to lead—to the same impact in terms of hospitalisations and deaths, because we know that the vaccine is incredibly effective against the variants that are at large here in this country. That is another reason to be cautious against the incursion of new variants for which we cannot give that assurance.
Dr James Davies (Vale of Clwyd) (Con)
Lateral flow testing is really important in our continued fight against the pandemic. I am really pleased that many of my constituents have been able to access asymptomatic testing since Friday of last week, but, for residents in Wales, these tests are not yet available to order online through the gov.uk portal. Will my right hon. Friend confirm whether that will be the case shortly?
Matt Hancock
We are working closely with the Welsh Government to ensure that the testing offer in Wales is as rich and as easily accessible as the testing offer in England. Testing has been a UK-wide programme, but, of course, the more we get it into local communities, the more it must be delivered through the NHS locally—for instance, through pharmacies, as announced today. That needs to be done by the Welsh Government. We are working closely together to try to make sure that people can get access to these tests as easily as saying “Jack rabbit”, wherever they live in the United Kingdom.
Madam Deputy Speaker (Dame Rosie Winterton)
I thank the Secretary of State for his statement. We will now have a three-minute suspension for cleaning purposes.
European Football Proposal
Monday 19th April 2021
(3 years, 8 months ago)
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The Secretary of State for Digital, Culture, Media and Sport (Oliver Dowden)
With permission, Madam Deputy Speaker, I should like to make a statement. Football is in our national DNA. We invented it, we helped to export it around the world, and it has been at the heart of British life for over a century. Football clubs, of course, are not just businesses but define communities across the country, so along with almost every Member of the House, I suspect, I was appalled by the announcement made late last night that a handful of clubs are proposing to form their own breakaway European league.
These six clubs announced that decision without any consultation with football authorities or with Government. Worst of all, they did it without any dialogue whatsoever with their own fans. It was a tone-deaf proposal, but the owners of those clubs will not have been able to ignore the near universal roar of outrage from all parts of the football community over the past 24 hours.
This move goes against the very spirit of the game. This is a sport where a team such as Leicester City can ascend from league one to the premier league title in under a decade, earning the right to go toe to toe against European heavyweights in the champions league. Instead, a small handful of owners want to create a closed shop of elite clubs at the top of the game—a league based on wealth and brand recognition rather than merit. We will not stand by and watch football be cravenly stripped of the things that make millions across the country love it.
As a Conservative, I believe passionately in defending our nation’s institutions and our rich heritage. They are central to our identity and help to build a sense of solidarity between people of every generation and every background. Just as the Government would not hesitate to act when other treasured areas of our national life are under threat, nor will we hesitate to protect one of our greatest national institutions: football.
This is, of course, for football authorities to handle first, and today I have met with the Premier League, the Football Association and the president of UEFA, while the Sports Minister has had another series of meetings with the Football Supporters’ Association. The football authorities have robust rules in place to deal with this, and I know from my conversations with them today that they are rightly considering a wide range of sanctions and measures to stop this move in its tracks. My message to them was clear: they have our full backing. However, be in no doubt that if they cannot act, we will.
We will put everything on the table to prevent this from happening. We are examining every option, from governance reform to competition law and mechanisms that allow football to take place. Put simply, we will review everything that the Government do to support these clubs to play. I have discussed those options with the Prime Minister this morning, and we are working at pace across Government and with the football authorities. I reassure this House of a very robust response. We will do whatever it takes to protect our national game.
However, it is clearer than ever that we need a proper examination of the long-term future of football. To many fans in this country, the game is now almost unrecognisable from a few decades ago. Season after season, year after year, football fans demonstrate unwavering loyalty and passion by sticking by their clubs, but their loyalty is being abused by a small number of individuals who wield an incredible amount of power and influence. If the past year has taught us anything, it is that football is nothing without its fans. These owners should remember that they are only temporary custodians of their clubs, and they forget fans at their peril. That is why, over the past few months, I have been meeting with fans and representative organisations to develop our proposals for a fan-led review. I had always been clear that I did not want to launch this until football had returned to normal following the pandemic. Sadly, these clubs have made it clear that I have no choice. They have decided to put money before fans, so today I have been left with no choice but to formally trigger the launch of our fan-led review of football.
The review will be chaired by my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch) and will be a root-and-branch examination of football in this country. It will cover the financial sustainability of the men’s and women’s game, governance and regulation and the merits of an independent regulator. Crucially, in the light of this weekend’s proposal, it will also consider how fans can have an even greater say in the oversight of the game and the models that might best achieve that.
We are the people’s Government. We are unequivocally on the side of fans, and their voices have to be heard when it comes to the future of our national game. It starts with fans, and it ends with fans. In the meantime, we have thrown our full weight behind the football authorities and stand ready to do whatever is necessary to represent fans and protect their interests. I commend this statement to the House.
Jo Stevens (Cardiff Central) (Lab)
I thank the Secretary of State for advance sight of parts of his statement. This is a watershed moment for our national game, and this statement is welcomed, as is the chair of the review, but it is short on detail and on the urgency that this situation merits; fans will have noted that. The Secretary of State tweeted last night extolling the virtues of the football pyramid, but if anything exposed the Government’s lack of understanding of our broken football system, that tweet summed it up. Tory trickle-down economics does not work, and it especially does not work in football.
Football governance is broken, football finance is broken and football fans, whichever club we support, are ignored. The hedge fund owners and billionaires who treat football clubs like any of their other commodities have no care for the history of our football, for the role it plays in villages, towns and cities up and down our country, and especially for the fans who are the beating heart of it. They should understand their role as custodians, rather than cartel chiefs. The future of our national game and all our clubs depends on it.
Labour has repeatedly called for the reform of the governance and finances of football by the Government. Government intervention is needed to fix this broken system. That is why we pledged in all four of our manifestos going back to 2010 to take action, and it is why I and the shadow Sports Minister, my hon. Friend the Member for Wirral South (Alison McGovern), repeatedly urged the Government to get on with their promised fan-led review of football—a promise that they made in 2019. It is nearly a year since our letter to the Sports Minister offering support and help with 16 questions that the review should focus on. We know that Members across the House have supported reform for the past 11 years of Conservative-led Governments, so it is time for the Government to get off the subs bench and show some leadership on the pitch, because we need reform of football.
It is not as if there has been a blockage in Parliament preventing the Government from taking action to sort out the problems. Former Conservative Sports Minister, the hon. Member for Maidstone and The Weald (Mrs Grant), has said:
“no one is speaking for the football world with the independence and authority needed to address the big issues.”—[Official Report, 26 January 2021; Vol. 688, c. 207.]
She is right. The former Conservative Chair of the Digital, Culture, Media and Sport Committee, the hon. Member for Folkestone and Hythe (Damian Collins), has said:
“We should have long ago reformed the governance of football”.
He is right as well. The current Conservative Chair of the Select Committee, the hon. Member for Solihull (Julian Knight), has said:
“What’s needed is a fan-led review of football with real teeth and here we have more evidence to strengthen the case for it.”
I welcome the review, but why the long delay? Why create the vacuum that has allowed these super-league proposals the space and ability to become a reality? Eleven years have been wasted when a small amount of Government time could have been found to bring primary legislation to the House to sort out the problems. Instead, it has been all punditry and no progress on the pitch, and in that time, clubs and fans have suffered disasters. Fans in Bury know only too well the importance of reforming the way in which football is governed, and supporters in Liverpool, Edinburgh, Manchester, my city of Cardiff, Portsmouth and most football towns and cities have seen the damage done to clubs when profit outstrips the role of supporters in our game.
We are in a global pandemic and the owners of the six clubs behind this proposal think that now is the time to ride roughshod over their fans and endanger the future of football, on the back of a year when fans have been at the heart of supporting communities up and down the country. What a contrast! These proposals have been carved out behind closed doors without consultation with fans or players, and they have at their heart a plan that is anti-football—a super league from which teams can never be relegated and in which they are always guaranteed a place because of their wealth. That represents a fundamental attack on the integrity of sporting competitions.
It is very rare that an issue unites football fans and organisations across the rivalries and divides, but this super league proposal has managed to do just that. From supporters trusts and groups, including the Football Supporters’ Association, to the Professional Footballers’ Association, the Football Association, UEFA, the Premier League, the League Managers Association and the European Clubs Association—I could go on—it has been universally rejected as the greedy, obscene and selfish proposal that it is.
Let us act urgently. It is already too late for some clubs and their supporters, so I ask the Secretary of State when the review will be launched, what the terms of reference will be, who will take part and when it will report. What exactly will the Government do to stop the European super league decimating our national game? They should explore every option, and I hope that they will, whether that is a super-tax on revenue or investigating whether the proposal breaches the clear rules that govern markets and competition in this country.
For football fans up and down the country, our message is clear: Labour stands ready to do whatever it takes to stop this plan, and I hope that the Government will make exactly the same commitment.
Oliver Dowden
I thank the hon. Lady for her questions and I think hidden in there somewhere was a welcome for the approach the Government are taking and for the fan-led review.
The hon. Lady asks what we have been doing for the past year, and I will tell her a few of things we have been doing. We have been working to get football back behind closed doors, and we were one of the first leagues in Europe to achieve that. We acted to get a third of games free to view with Project Restart, including the first ever premier league games on the BBC. We acted to stop clubs going bust, with hundreds of millions of pounds through covid support schemes, and ensured that the big clubs looked after the smaller ones with the £250 million boost from the Premier League. We acted to keep football going through the pandemic, including through secure protocols to enable travel between the UK and elsewhere. Indeed, that was sometimes in the face of opposition from Labour, saying that we should stop the sport behind closed doors. Now, crucially, we are working to get fans back into stadiums. This weekend, Members will have seen that for the first time, which was very welcome, at the FA cup semi-finals. We are working and making good progress towards a further return of fans at stage 3 of the road map.
Alongside all that, we have continued to engage on the fan-led review. The Minister responsible for sport, my hon. Friend the Member for Mid Worcestershire (Nigel Huddleston), and I have engaged extensively with, to list a few names, Anton Ferdinand, Jordan Henderson, Karen Carney, the FA, the Premier League, the English Football League, the PFA, the national league, the Football Supporters’ Association, Kick It Out, Women in Football, David Bernstein and Gary Neville. The hon. Lady referred to my hon. Friends the Members for Folkestone and Hythe (Damian Collins) and for Maidstone and The Weald (Mrs Grant), and I have discussed the matter with them and with the Chair of the Select Committee. All this work has been essential in ensuring that we get to the point where we can launch the review today.
As I said in my statement, I would much rather that we had waited until fans were fully back and the game had been stabilised, but because of the actions that took place over this weekend we have launched the review now. The hon. Lady will have seen from my statement that it will be led by my hon. Friend the Member for Chatham and Aylesford. I hope that my hon. Friend will command support from both sides of the House; she was an excellent sports Minister, is a fan and is passionately committed to the game. We will shortly publish the terms of reference for the review and will work at speed. As the hon. Lady will have seen from my statement—I am happy to repeat it from the Dispatch Box—we will do whatever it takes to protect our game and we will examine every single option. We are doing that right now.
Julian Knight (Solihull) (Con) [V]
Just when we thought the beautiful game could not get any uglier, along come the big six and show that they could not care less for the fans up and down the country. Will the Secretary of State please outline to the House what specific levers he can pull to ensure that football authorities come to the negotiating table rather than indulge in this unseemly civil war? Does this involve, for example, a windfall tax on these clubs? I welcome my right hon. Friend’s commitment to a fan-led review and pay testament to the work that he has done in order to ensure that football was one of the first sports to return last year. I also welcome the further meat on the bones. But will he tell the big six today that this review will have the power to recommend that their nascent super league could be given the red card and be legislated out of existence if they insist on pressing ahead?
Oliver Dowden
It is worth bearing in mind that there are two parts to this. In the medium term, we are working on the fan-led review that has been launched, but that should not prevent us from us taking action now to stop this proposal going ahead. My hon. Friend highlighted some of the measures that we might consider taking. I assure him that we are looking at all those options and at competition law. In essence, we are looking at what the Government do to facilitate matches and those clubs, and asking whether we should continue to provide that support, because it does not strike me that the Government should be providing that support in the face of this proposal.
Gavin Newlands (Paisley and Renfrewshire North) (SNP) [V]
I thank the Secretary of State for advance sight of his statement. I think it is the first time that I have agreed with every single word of his statement—provided, of course, that he meant Scotland when he said, “We invented it.”
It must be made clear to the clubs and owners involved that no quarter will be given and that there will be no concessions whatever in the current arrangements. It is well past time that a line was drawn in the sand. There is already a huge and unhealthy imbalance in the game, with the big clubs in the big leagues with the big TV deals holding huge sums. This insatiable thirst for more—this greed—must not stand.
Club football in countries beyond England, Spain and Italy faces being left even further behind. Clubs in Scotland—such as Rangers, Celtic, and league cup winners and Scotland’s second most successful club in the last decade, St Johnstone—are not involved, but this has not stopped the widespread condemnation. Scottish Professional Football League chief exec Neil Doncaster said:
“These proposals, or any like them, would have an enormously damaging impact on the very fabric of our sport at all levels… We believe that any such ‘competition’ would dramatically undermine the global appeal of football and would be financially catastrophic for all but a very tiny minority. The proposals…assembled by a small, self-selected group of very wealthy clubs, appear to be a cynical and very worrying attempt to thwart the core principle of sporting merit which rightly underpins European football. They represent a clear and present danger to the sport we all love.”
The public are exhausted by the sleaze and greed associated with the elites at the top of our society. How do this Tory Government plan to eradicate greed and corruption at the heart of politics and business, and, in doing so, to protect football for the fans? Or does the Secretary of State agree with the Prime Minister that greed is good? Some overseas owners are from countries with concerning human rights records and links to dubious regimes, and may use their ownership of popular teams to sportswash their image. What actions do the Government plan to counter this?
Oliver Dowden
I am tempted to thank the hon. Gentleman for the first line of his question and then to stop there; from my perspective, it all went a bit downhill after that. He is absolutely right to say that we should—and the Government will—stand up to greed and stand up for the fans, and to identify that even though it is English teams that are proposed for this league, it will have a severely damaging effect on all clubs in all parts of our United Kingdom. The game is, of course, as central to Scottish, Welsh and Northern Irish identity as it is to English identity. It is a sport for the whole of our United Kingdom and it is right that we work together as a United Kingdom to stop this dreadful proposal.
Damian Collins (Folkestone and Hythe) (Con) [V]
I welcome the Secretary of State’s statement and the decision to launch the fan-led review but, as he said, this is a review for the medium term, and decisions about the super league will need to be taken in the coming weeks and months. If, judging by what he said today, it is clear that, under existing competition law and existing powers of the premier league and the FA, nothing can be done to stop these six clubs joining the super league, are the Government prepared to amend the law to give those bodies the powers they need, in particular to prevent clubs from joining competitions that have not been sanctioned by either the FA or UEFA?
Oliver Dowden
I pay tribute to my hon. Friend for all the work he has done, which has helped to shape the fan-led review we have announced. On competition law, we are already engaging with BEIS on our response. As I said, we rule out nothing. I know from my conversations with the premier league and UEFA that they are already proposing to take some pretty draconian steps to stop this, but we stand ready to act. We will not allow anything to stop us in terms of timing; we will get on with it as soon as we need to.
Tim Farron (Westmorland and Lonsdale) (LD) [V]
This is a devastating attack on the English game, as a shameless, arrogant and desperate elite seek to make millions at the expense of the millions of us who love the game and love our clubs. The statement contained some rhetoric that I found good and urgent, and detail that was ponderous and thin, so as well as a lengthy review, will the Secretary of State fast-track legislation that will force any club seeking to break away and join a new league to first ballot its fans and be mandated to abide by the outcome of the ballot; and will he make sure that the legislation is retrospective and active from the beginning of the current football season? Those who wish to steal and destroy the English game must be stopped. English football must be saved. This Parliament has the power to do it, not just to review it.
Oliver Dowden
I assure the hon. Gentleman that we will be doing three things. First, we are backing the actions by the football governing authorities. Secondly, at the same time, we are looking at all options—he raised some important further options—and we will proceed at the fastest pace required to deliver a result. Thirdly, these events give rise to major questions, which have become ever more apparent to me. We had the promise in our manifesto. My dealings with football over the past years, as we have sought to negotiate the support that the game requires, have demonstrated again the need for governance reform and the need to look at finance and whether an independent regulator is required. All these things will now be examined by my hon. Friend the Member for Chatham and Aylesford.
Alun Cairns (Vale of Glamorgan) (Con) [V]
I congratulate the Secretary of State on his statement and on the announcement of the fan-led review. Does he agree that the pyramid structure of the English football league gives focus to football clubs right across the country to compete and progress to the highest level based on performance and competition? Does he recognise that it also provides the opportunity for community links and rivalry across the country, even between Wales and England, when clubs such as Swansea, Cardiff, Newport and Wrexham choose to compete in and are welcomed into the English football structure? Will the review he has announced also consider the interests of those clubs that are not in England but compete in the English football league?
Oliver Dowden
As almost always, I agree with every word that my right hon. Friend has said. I am happy to give him precisely that assurance. He is absolutely right to highlight the two biggest problems with this super league: it removes a large element of the competition and the joy of the game, and it risks taking money away from grassroots football, which is central to the game.
Lucy Powell (Manchester Central) (Lab/Co-op) [V]
I thank the Secretary of State for his clear statement. It was not that long ago that I watched my club, Manchester City, which I now represent, beat Gillingham in the second division playoff final. We are now in what might be called our glory days, but those of us who remember the Gillingham game know that the glory days do not always last. Does the Secretary of State agree that a closed-shop league, where there are no bad days and no glory days, is no league at all and has no place in our national game? British football fans are rightly outraged by that notion, which goes against our deeply held culture of fair and open competition and backing the underdog. It is an American export that we just do not want.
Oliver Dowden
I completely agree with the hon. Lady. We cannot have money and brand triumphing and trumping the colour and joy of the game. Football would be massively damaged by this move.
Gareth Bacon (Orpington) (Con)
I have been a supporter of Manchester United for 42 years and held a season ticket at the club for more than a decade, so I am aghast that the owners of my club have signed up to this proposal. It is wholly unnecessary and will be deeply damaging, on the altar of pure greed. It betrays the management, players, fans, history and tradition of not just my club but the wider game as a whole. So I congratulate my right hon. Friend on his statement today and the tone of the statement he made yesterday. Will he reassure us that the Government will move at speed to do everything within their legal power to prevent this ghastly plan from seeing light?
Oliver Dowden
I thank my hon. Friend for his question. His reaction, as a loyal fan of that club, has been replicated: I have heard messages from many loyal fans of all six of those clubs, who share the same sense of deep frustration. I assure him not only that we will act at speed but that we have acted at speed. All of Sunday, I had meetings on actions and today we are moving at pace. I am engaging closely with No. 10 Downing Street and the Prime Minister to make sure we do whatever is required.
Ian Byrne (Liverpool, West Derby) (Lab)
In the light of the shocking news that six of our national football clubs—it is heartbreaking to see Liverpool football club among them—are looking to break away from the football pyramid in England at a time when, collectively, we should be working together to rebuild our football communities from the ravages of covid, the anger across the country is palpable. I welcome the long overdue fan-led review, but can the Secretary of State outline how the Government will act to stop capitalism and corporate greed destroying a game that millions in this country love, and economically many communities rely on?
Oliver Dowden
The hon. Gentleman is absolutely right to highlight that. It seems extraordinary, at a time when most stadiums remain completely empty and clubs are under tremendous financial pressure, that, rather than focusing on the rebuilding of the game and getting fans back into stadiums, these six clubs are distracted by something that is not in the interests of the game. It is right that we look at competition law. We need to look at the range of things that Government do to help games happen, to help clubs participate in the league, and say, “Why should we be doing this anymore for those six clubs?” That is precisely the work that we are undertaking.
Chi Onwurah (Newcastle upon Tyne Central) (Lab) [V]
Newcastle United fans have long suffered from the greed and self-interest that drive premiership owners, but this attempt to turn our national game into the cash cow of a narrow elite shows just how morally bankrupt the premiership has become and how little Government care. There seem to be more rules to prevent the removal of a window frame in a listed building than the wholesale destruction of this jewel of working-class culture. Can the Secretary of State believe that the owners of these six clubs meet the fit and proper person test?
Oliver Dowden
The hon. Lady will have seen from my statement—I am happy to repeat it—that I completely agree with her. This is absolutely central to our heritage. These clubs are as much a part of our heritage as the great castles, stately homes, cathedrals and orchestras of England and the rest of the United Kingdom. We stand ready to do whatever it takes to support this. On the fit and proper person test, that is precisely why we have set up the fan-led group and it will be one of the things my hon. Friend will be looking at as we go forward. In the short term, we need to stop this in its tracks. We do that by working with the leagues—I gave the president of UEFA my 100% support for the measures that he outlined today, and similarly we will see measures coming forward from the Premier League—and then, if that does not work, the Government themselves stand ready to take steps to prevent this from happening.
Huw Merriman (Bexhill and Battle) (Con) [V]
Down here on the Sussex south coast, we are very proud of Brighton and Hove Albion. Ten years ago, it was playing at the local athletics stadium; tomorrow it plays in our world-leading premier league against Chelsea, one of the six clubs that are doing their best to destroy it. These six clubs are not currently or historically the most successful six clubs, yet, acting as a cartel, they use their clout to undermine competition. If the six clubs refuse to back down in totality, will the Secretary of State look to introduce legislation to immediately break up their ownership structures and bring in the German model, where 51% of the club is owned by the fans and custodians of their club?
Oliver Dowden
My hon. Friend is absolutely right to highlight the central risk, which is that this creates a closed shop—it freezes in perpetuity what is only a snapshot of the game at this moment and makes the game so much poorer for it. We have examined the German model very closely. It is interesting to note that German teams are not participating in this. That rather makes the case for the fan-led review looking at the German model and I can assure him that it will do so. In terms of other measures we may take, we have not ruled out legislative measures, if those are required, but the first line of action needs to be with the football leagues themselves.
Tony Lloyd (Rochdale) (Lab) [V]
People like my own father, who was one of those who supported Manchester United in the ’20s and the ’30s, would not have recognised the stranglehold that the corporate greedy have got around the windpipe of football already. The words that the Secretary of State has spoken today are very helpful, but the corporate greedy have corporate lawyers, and he needs to guarantee that they will not tie the Government —and, in the end, football and its supporters—in knots, so we need to see action from him quickly if legislation is needed. Is he talking to his opposite numbers in Spain and in Italy, because it is important that we have not just a global response but a European response to what is not simply an English or a British problem?
Oliver Dowden
I can assure the hon. Gentleman that those meetings will be happening this week; we are in the process of setting them up. I have already discussed with Her Majesty’s ambassador to Paris having a meeting with my French opposite number later this week, and I will be seeking meetings with my Spanish and Italian opposite numbers as well.
Antony Higginbotham (Burnley) (Con)
In forming these proposals, the six premier league clubs involved have shown no regard for the impact on clubs such as Burnley in my constituency, but also no regard for the fans who offer their unwavering loyalty season after season. I therefore welcome the Secretary of State’s announcement of a fan-led review that will put supporters front and centre. Will he confirm that the Government will do everything possible to protect top-flight football in this country, which provides so many economic benefits to communities, including in Burnley and Padiham?
Oliver Dowden
I am happy to give my hon. Friend that assurance. I often say, as Secretary of State for Digital, Culture, Media and Sport, that the two things that people around the world know about the United Kingdom and instantly mention, whether I am speaking to an opposite number in east Asia, in North America or in Europe, are the royal family and the premier league. It is a jewel in the crown of the United Kingdom and we will do what is required to defend it.
Alex Davies-Jones (Pontypridd) (Lab)
As a football fan and a usually proud Liverpool supporter, I am now ashamed of my club and heartbroken at this outrageous European super league proposal, which is just another example of the fundamental structural flaws at the heart of our beautiful game. It is clear from contributions here today that our country’s proud and rich history and love of the game cut across the political divide, and I am gutted that we find ourselves coming together to push the Secretary of State, once again, for some urgent answers. It is also concerning to note that we have heard nothing from the Government on the potential impact of these proposals on the women’s game. The strength of feeling across the House and across the country could not be clearer. Time and again, this Government have failed football fans. Will the Secretary of State do whatever it takes to stop the European super league from going ahead?
Oliver Dowden
The short answer is yes. The hon. Lady is absolutely right to highlight the impact on the women’s game, which I mentioned in my statement. That is part of how the pyramid works, as she will well know. The finances that have helped the women’s game to go from strength to strength in recent years—it is wonderful to see the strength of the game—come from the pyramid supporting it. If that failed to happen, that would be another big cost of this proposal.
James Cartlidge (South Suffolk) (Con)
This is an outrageous proposal, so I strongly welcome the robust set of measures that my right hon. Friend has announced today. On the point of competition law, these clubs will have very powerful legal teams, and they have huge financial resources. Whatever the current legal advice, does he accept in principle that, where a league operates on the basis of not having relegation and is basically based on the wealth that the clubs have, it must be a cartel?
Oliver Dowden
My hon. Friend raises a very important point. That is a very valid interpretation of the effect of this proposal. Clearly, I will be working with BEIS and competition lawyers to get greater clarity and definition on that, but I can tell him that I have already discussed it with the Premier League and the FA. We are well aware that competition is going to come into play in this scenario, and we stand ready to work with them and take measures that may be required.
Kevin Brennan (Cardiff West) (Lab)
My hon. Friend the Member for Pontypridd (Alex Davies-Jones), who is my constituency neighbour, can always come next door and support Cardiff City if she wants a real club.
This super league proposal is the sporting equivalent of a billionaires’ gated community, with a football favela for everyone else on the other side of the fence. Could the very robust response that the Secretary of State says he wants from the Government include the Prime Minister ringing up, or perhaps even texting, the former No. 10 spin doctor Katie Perrior, who also worked on his mayoral campaign and whose public affairs agency is promoting the super league launch? Will the Prime Minister tell her that this is one occasion when insider connections will not win any traction with the Government, and that this betrayal of football fans and the ethos of fair competition in sport will be blocked by the UK Government using urgent legislation in the forthcoming Queen’s Speech?
Oliver Dowden
I am very happy to give the hon. Gentleman an assurance that we will take the robust action that is necessary. In fact, I think the best place to start—it is where I started—is speaking to the president of UEFA and the leadership of the Premier League and the FA. I hope that their actions can stop the proposal in its tracks, and I think we will see some very robust action from them. I have been clear, and I am happy to be clear again, that if that does not work, the Government stand ready to act. We will not wait for it not to work; we are working through the options for measures now and stand ready to take them at the appropriate juncture.
Jack Brereton (Stoke-on-Trent South) (Con) [V]
I very much support what my right hon. Friend has said. Does he agree that the survival of clubs such as Stoke City in my constituency is the No. 1 priority for fans, and that Labour’s cynical move to try to stop football carrying on behind closed doors twice over recent months would have been catastrophic for clubs and therefore fans? Will he confirm that sport continuing throughout the pandemic has been, and always will be, a priority for this Government?
Oliver Dowden
My hon. Friend is absolutely right. We have worked tirelessly to ensure that the game has continued behind closed doors, and I am happy to give the assurance that I will work tirelessly until we reach the end of the road map and we have every single seat taken in stadiums so that we can get football back on its feet. It is only at that point that we should be considering those wider questions of the governance of the game. It is a source of deep sadness to me that we are having this distraction rather than getting on with getting the game back.
Mr Gregory Campbell (East Londonderry) (DUP) [V]
The Northern Ireland women’s football team, with amateur players, qualified for the Euros for the first time ever. That demonstrates what football is about. Many people regard the announcement today as a tactical move against UEFA. Whatever it is, will the Secretary of State back up his rhetoric today, which I welcome, with action, along with the football authorities, to ensure that the views of billions of fans worldwide prevail over the views and tactics of the billionaire financiers?
Oliver Dowden
May I begin by sharing in the hon. Gentleman’s congratulations to the Northern Ireland women’s football team? That was a fantastic result and I was very cheered to see it.
The hon. Gentleman is absolutely right that this is not confined to the UK. The premier league and English football are loved globally, and we can see the reactions in France, Spain and Italy: it is not just here in the United Kingdom that we feel dismayed at the proposals that have been put forward—that feeling is near-universal.
James Daly (Bury North) (Con) [V]
Does my right hon. Friend agree that this proposal is motivated by greed and shows contempt for fans and the footballing pyramid? Does he also find it sad that while the boards at Manchester United and Manchester City were negotiating this proposal to make millions of pounds for their owners, they and others did nothing to save their local neighbour Bury FC, whose fans were also betrayed by an owner who had attempted to profit from its heritage and history?
Oliver Dowden
I am sympathetic to the concerns raised by my hon. Friend, and I would also note that many clubs, including some that are seeking to break away with the announcement last night, have benefited enormously from Government and taxpayer support, and they should think carefully about the duty they owe to taxpayers in return and whether they are discharging it with these proposals.
Chris Stephens (Glasgow South West) (SNP) [V]
I thank the Secretary of State for his statement and the announcement of a review. Do the Government agree that tougher rules are now needed on who can buy major sports clubs in the United Kingdom? May I add my voice to those of other colleagues in the House asking for the Government to look at the German model, because it is vitally important that we have a model of pre-agreed conditions requiring a minimum percentage of each club to be owned by everyday supporters and fans?
Oliver Dowden
The hon. Gentleman is right to highlight the German model; it has merits and it is right that the fan-led review should look at it. I should also note, however, on the flip side of this that foreign investment in the Premier League and the English Football League has brought tremendous benefits to the game: it has meant that we have had very strong games played up and down the country every night of the week with some of the finest players in the world. I am not against foreign investment in our game per se, but that cannot be against the wider interests of the competition and ensuring that we have a rich and diverse game, and these proposals are, at their heart, putting that at risk.
Lee Anderson (Ashfield) (Con) [V]
Football fans in Ashfield think that common sense in football is in short supply these days: inside grounds we have billionaire bosses plotting to sell our beautiful game to the highest bidder, and meanwhile, outside Wembley stadium, we have the brother of the ex-Labour leader talking nonsense about vaccinations while fellow protestors shout abuse at genuine football fans. I have a simple solution: keep these greedy football club owners as far away from our football grounds as possible, and the same goes for Piers Corbyn. Please will my right hon. Friend tell the football fans in Ashfield what the Government’s plans are to protect our beautiful game inside and outside the stadiums?
Oliver Dowden
I do not think I can add a great deal to my hon. Friend’s remarks. I was somewhat bemused when observing the protest outside the game yesterday, and I can also assure my hon. Friend and all his constituents that the Government will not hesitate in taking robust action to ensure this does not happen.
Jeff Smith (Manchester, Withington) (Lab)
My 50-plus years of watching Man City has brought me a lot of emotions—pain, despair, misery and, more recently, a lot of elation and joy—but always pride, whatever tier we were in, until last night, when the overriding emotion was shame and anger at my club being part of this. In, in effect, ending competition by merit at the top of the pyramid, this ends hope for clubs throughout the pyramid, and it is absolute anathema to the values of a lot of sport in this country. So I welcome the tone of the Secretary of State’s statement, and I want to ask him three things. When he speaks to the clubs, will he try to convey the anger in this Parliament and across the country at this proposal? When he speaks to the Premier League, will he encourage it to take the strongest possible action against these clubs, including my beloved Man City? Finally, a review will take time, but does he recognise that there is a will in this Parliament to take strong action quickly, if necessary?
Oliver Dowden
I think the hon. Gentleman spoke very eloquently. Indeed, what he has said is shared by, sadly, so many supporters of those six clubs. I will of course be conveying that anger, and I am sure that that will be reflected in the coverage of this statement. I have already met the Premier League, and I have said that we will support it in taking the strongest possible action. I can also give the hon. Gentleman the assurance that if the actions by the Premier League and UEFA are not sufficient to stop this in its tracks, I have noted the level of support in the House for taking further measures, and it gives me confidence that we will be able to get any measures through should those be necessary.
Damian Hinds (East Hampshire) (Con)
Being a top premiership club is not a franchise; it is to be part of the contestable apex of the whole sport. In turn, that whole sport is part of our culture, part of our heritage and part of who we are. So I strongly welcome my right hon. Friend’s robustness in his statement and in bringing forward the fan-led review. Can he assure me that both his immediate response and the fan-led review will be far-ranging, with nothing off the table?
Oliver Dowden
Yes, I am very happy to give my right hon. Friend that assurance: nothing will be off the table. He is absolutely right when he talks about the heritage of these clubs. The owners are but temporary custodians of something that is precious to our national identity, and they really should take that responsibility seriously.
John Spellar (Warley) (Lab)
Interestingly, only one of these six clubs has always been in the top division in English football, and now they want permanent status. The Secretary of State’s announcement of a review is welcome, if slightly overdue, but, frankly, has been met by contemptuously indifference by these arrogant oligarchs. The only thing they understand is power, and the Government should be using the power of the state with full force and co-ordinating with other countries. Will he rapidly refer them to the competition authorities, cut them off from any further public funds and look at the tax status of image rights—just for a start—and, quite frankly, drive these sharks out of British football?
Oliver Dowden
Somewhat unusually—although not that unusually, to be fair to the right hon. Gentleman—I agree with pretty much everything he said, and I can assure him that we will be looking at all of those options. To reassure the House, we will take robust action when it is required. We will not wait for the outcome of the fan- led review, and all the things he is talking about are the sort of things we are discussing internally in Government.
Clive Efford (Eltham) (Lab)
Football’s governing bodies must stand firm against this European super league, and I welcome the statement from the Secretary of State that he is not going to leave any stone unturned in assisting with that. We now control our own borders, having left the European Union, so this will be a major test for our new powers over our borders, whereby we can prevent people from entering the country if they are not playing matches sanctioned by the sport’s governing bodies. On the fans’ review, will the fans be able to lead it wherever they wish to go—for instance, on the right to buy shares at a time of transfer of ownership or on fans being elected to the boards of football clubs? Will the fans really be able to lead and to go where they want to go with this review?
Oliver Dowden
The hon. Gentleman is right to highlight the point about controlling our borders. I can assure him that we will be considering those powers if it is necessary, and those discussions are happening. The review will be able to go wherever it needs to go. My hon. Friend the Sports Minister and I have already engaged a lot with fans, and indeed it is worth noting that, at the Budget recently, the Chancellor announced proposals to allow fans to take stakes in and take control of their own clubs, so we are already moving in that direction.
Madam Deputy Speaker (Dame Rosie Winterton)
I thank the Secretary of State for his statement. I suspend the House for three minutes for cleaning purposes.
The First Deputy Chairman of Ways and Means (Dame Rosie Winterton)
Before I ask the Clerk to read the title of the Bill, I should explain that in these exceptional circumstances although the Chair of the Committee would normally sit in the Clerk’s Chair during Committee stage, in order to comply with social distancing requirements I will remain in the Speaker’s Chair, even though I will be carrying out the role not of Deputy Speaker but of Chairman of the Committee. We should be addressed as Chairs of the Committee, rather than as Deputy Speakers.
Finance (No. 2) Bill
Monday 19th April 2021
(3 years, 8 months ago)
Commons ChamberRead Full debate Finance Act 2021 View all Finance Act 2021 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Committee of the whole House Amendments as at 19 April 2021 - large print - (19 Apr 2021)
19:23 - The Committee divided: - Ayes: 356 / Noes: 224 - Question accordingly agreed to.
19:35 - The Committee divided: - Ayes: 261 / Noes: 367 - Question accordingly negatived.
19:43 - The Committee divided: - Ayes: 269 / Noes: 358 - Question accordingly negatived.
21:22 - divided: - Ayes: 260 / Noes: 365 - Question accordingly negatived.
21:33 - The Committee divided: - Ayes: 260 / Noes: 365 - Question accordingly negatived.
23:08 - The Committee divided: - Ayes: 260 / Noes: 366 - Question accordingly negatived.
The First Deputy Chairman of Ways and Means (Dame Rosie Winterton)
With this, it will be convenient to discuss the following:
Clauses 2 to 4 stand part.
Amendment 2, in clause 5, page 2, line 16, leave out “2022-23”.
This amendment would mean that the freezing of tax thresholds at 2021-22 levels did not apply until 2023-24.
Amendment 3, page 2, line 18, leave out “2022-23”.
See the explanatory statement for Amendment 2.
Amendment 4, page 2, line 25, leave out “2022-23”.
See the explanatory statement for Amendment 2.
Clause 5 stand part.
Clauses 24 and 25 stand part.
Amendment 93, in clause 26, page 19, line 3, at end insert—
“, or for the presence of antibodies to SARS-CoV-2”.
This amendment would extend the income tax exemption for payments to employees in respect of the cost of obtaining antigen coronavirus tests to cover antibody coronavirus tests too.
Clause 26 stand part.
Clause 28 stand part.
Amendment 92, in clause 31, page 20, line 13, at end insert—
“, where the person who received the payment is not a qualifying person by virtue of Paragraph 5 of the direction given by the Treasury under section 76 of the Coronavirus Act 2020”.
This amendment would ensure that the one-off £500 payment to certain working households in receipt of tax credits could only be recovered where it is found that the individual was not entitled to the payment because they were knowingly concerned in underlying fraud either in relation to their tax credit award or the one-off payment.
Amendment 15, page 20, line 13, at end insert—
“(4) The Chancellor of the Exchequer must, no later than 5 April 2022, lay before the House of Commons an equalities impact assessment of the provisions of this section, which must cover the impact of the provisions on—
(a) households at different levels of income,
(b) people with protected characteristics (within the meaning of the Equality Act 2010),
(c) the Treasury’s compliance with the public sector equality duty under section 149 of the Equality Act 2010,
(d) equality in different parts of the United Kingdom and different regions of England, and
(e) child poverty.”
Clauses 31 to 33 stand part.
Clause 40 stand part.
Clause 86 stand part.
New clause 7—Assessment of revenue effects of supplementary income tax rate—
“(none) The Chancellor of the Exchequer must, no later than 31 October 2021, lay before the House of Commons an assessment of the effects on tax revenues of introducing a supplementary rate of income tax, charged at a rate of 55%, above a threshold of £200,000.”
This new clause would require the Government to publish an assessment of the effect on tax revenues of introducing a 55% income tax rate on income over £200,000.
New clause 8—Equalities impact assessment and distributional analysis of tax thresholds—
“The Chancellor of the Exchequer must, no later than 5 April 2022, lay before the House of Commons an equalities impact assessment of existing income tax thresholds and a distributional analysis of—
(a) the effect of reducing the income tax threshold for the additional rate to £80,000, and
(b) the effect of introducing a supplementary rate of income tax, charged at a rate of 50%, above a threshold of £125,000.”
New clause 10—Review of changes to coronavirus support payments etc—
“(1) The Chancellor of the Exchequer must review the impact on investment in parts of the United Kingdom and regions of England of the changes made to coronavirus support payments etc by sections 31, 32 and 33 of this Act and lay a report of that review before the House of Commons within six months of the passing of this Act.
(2) A review under this section must consider the effects of the provisions on—
(a) business investment,
(b) employment,
(c) productivity,
(d) GDP growth, and
(e) poverty.
(3) A review under this section must consider the following scenarios—
(a) the coronavirus job retention scheme and the self-employment income support scheme are continued until 30th September 2021, and
(b) the coronavirus job retention scheme and self- employment income support scheme are continued until 31st December 2021.
(4) In this section—
“parts of the United Kingdom” means—
(a) England,
(b) Scotland,
(c) Wales, and
(d) Northern Ireland;
and “regions of England” has the same meaning as that used by the Office for National Statistics.”
This new clause would require a report comparing the effect of (a) the coronavirus job retention scheme and the self-employment income support scheme being continued until 30 September 2021, and (b) the coronavirus job retention scheme and self-employment income support scheme being continued until 31 December 2021 on various economic indicators
New clause 11—Review of changes relating to cycles and cyclist’s safety equipment—
“(1) The Chancellor of the Exchequer must review the impact on investment in parts of the United Kingdom and regions of England of the changes made by section 25 and lay a report of that review before the House of Commons within six months of the passing of this Act.
(2) A review under this section must consider the effects of the provisions on—
(a) business investment,
(b) employment,
(c) productivity,
(d) GDP growth,
(e) poverty, and
(f) carbon emissions.
(3) A review under this section must consider the following scenarios—
(a) the cost of a cycle is made an allowable expense on self-assessment tax return forms, and
(b) the cost of a cycle is not an allowable expense on self-assessment tax return forms.
(4) In this section—
“parts of the United Kingdom” means—
(a) England,
(b) Scotland,
(c) Wales, and
(d) Northern Ireland;
and “regions of England” has the same meaning as that used by the Office for National Statistics.”
This new clause would require a report comparing the impact of the impact of (a) making the cost of a cycle an allowable expense on self-assessment tax return forms and (b) not doing so on various economic indicators.
New clause 12—Review of impact of section 40 on equalities—
“(1) The Chancellor of the Exchequer must conduct an equality impact assessment of section 40 and lay this before the House of Commons within six months of Royal Assent.
(2) This assessment must consider the expected impact of section 40 on individuals and groups with protected characteristics under the Equality Act 2010.”
This new clause would require the Chancellor of the Exchequer to review the impact of Clause 40 on equalities.
New clause 22—Review of impact of section 40—
“(1) The Chancellor of the Exchequer must review the impact of section 40 and lay a report of that review before the House of Commons within six months of the passing of this Act.
(2) A review under this section must consider the effects of the provisions on—
(a) the regional distribution of capital gains in the UK, and
(b) projected receipts.
(3) A review under this section must consider the following scenarios—
(a) capital gains tax rates are changed so as to be equal to those of income tax, and
(b) capital gains tax rates remain at the level in this Act.”
This new clause seeks a report on the impact of equalising capital gains tax and income tax on (a)the regional distribution of capital gains in the UK, and (b) projected receipts.
New clause 23—Equality impact analysis—
“(1) The Chancellor of the Exchequer must review the equality impact of sections 1 to 5, 24 to 26, 28, 31 to 33, 40 and 86 of this Act and lay a report of that review before the House of Commons within six months of the passing of this Act.
(2) A review under this section must consider—
(a) the impact of those sections on households at different levels of income,
(b) the impact of those sections on people with protected characteristics (within the meaning of the Equality Act 2010),
(c) the impact of those sections on the Treasury’s compliance with the public sector equality duty under section 149 of the Equality Act 2010, and
(d) the impact of those sections on equality in different parts of the United Kingdom and different regions of England.
(3) A review under this section must give a separate analysis in relation to the following matters—
(a) income tax,
(b) employment income,
(c) coronavirus support payments,
(d) pension schemes,
(e) investments, and
(f) inheritance tax.
(4) In this section—
“parts of the United Kingdom” means—
(a) England,
(b) Scotland,
(c) Wales, and
(d) Northern Ireland;
and “regions of England” has the same meaning as that used by the Office for National Statistics.”
This new clause requires the Chancellor of the Exchequer to carry out and publish a review of the effects of clauses 1 to 5, 24 to 26, 28, 31 to 33, 40 and 86 of the Bill on equality in relation to households with different levels of income, people with protected characteristics, the Treasury’s public sector equality duty and on a regional basis.
The Financial Secretary to the Treasury (Jesse Norman)
The Government have delivered an unparalleled package of support during the covid-19 pandemic, providing over £352 billion for public services, workers and businesses. This response has been fair and balanced, with the poorest households benefiting the most from the Government’s interventions. It is now necessary to take steps to ensure the sustainability of the public finances and continue to fund our excellent public services. Our approach to fixing the public finances will therefore also be fair and balanced. The fairest way to put the public finances on a more sustainable footing is to ask all taxpayers to play their part, as well as asking those people able to contribute more to do so. That is why, in these parts of the Bill, the Government are legislating for freezes to the personal allowance, higher rate thresholds, the inheritance tax thresholds, the pensions lifetime allowance and the annual exempt amount in capital gains tax. The Government are also making sensible changes to the tax treatment of coronavirus support payments and exemption-related adjustments to account for the impact of the pandemic.
Given the number of speakers and amendments, I will try to keep my remarks relatively brief. Before I turn to the changes announced at Budget, let me touch on clauses 1 to 4. These are legislated for every year and are essential for the Government to be able to collect the right amount of income tax for the tax year 2021-22.
I come now to the clauses that legislate to maintain thresholds. These clauses are an essential part of a fair and responsible fiscal approach to fixing the public finances. Clause 5 maintains the income tax personal allowance and the basic rate limit at their 2021-22 levels from April 2022 until April 2026. This is a universal, progressive and fair measure being taken to fund public services and rebuild the public finances, and it ensures that the highest-earning households will contribute more. Indeed, the top 20% of highest-income households will contribute 15 times that of the bottom 20% of lowest-income households.
I shall now respond to amendments 2 to 4 and new clause 7, which relates to clause 5. Amendments 2, 3 and 4 seek to delay the decision to maintain the income tax personal allowance and higher rate threshold until April 2023. The Office for Budget Responsibility forecast that UK GDP will reach its pre-virus peak by the second quarter of 2022. The Bank of England forecast that it will happen at the beginning of 2022. In the light of those estimates, it is reasonable and fair for the Government to uphold the start of this policy from April 2022. Nobody’s take-home pay will be less as a result of this decision. For most taxpayers, any real-terms loss will be very small in 2022-23. I therefore urge the right hon. Member for Hayes and Harlington (John McDonnell) not to press the amendments to a vote.
New clauses 12 and 23 would require the Government to publish equalities impact assessments for all the measures in this debate, and new clause 8 would require the Government to publish an equalities assessment of existing income tax thresholds. New clause 8 would also require the Government to publish distributional analysis on two changes that do not constitute Government policy—namely, reducing the additional rate threshold to £80,000 and introducing a supplementary 50% rate of income tax for income above £125,000.
The Treasury carefully considers the equality impacts of the individual measures announced at fiscal events on those who share protected characteristics, in line with both its legal obligations under the public sector equality duty and its strong commitment to issues of equality. The Treasury already publishes comprehensive assessments of income tax threshold changes. Alongside the Budget, the Government have published detailed distributional analysis of the decision to maintain income tax thresholds, both at a household and on an individual basis. The new clauses therefore do little to provide meaningful additional analysis further to the Government’s existing comprehensive publications, and I therefore urge Members not to press them to a vote.
Clause 28 makes changes to maintain the pensions lifetime allowance at £1,073,100 until April 2026. This will limit the pensions tax relief available to those with the largest pension pots and supports the Government’s objective of a system of pensions tax relief that is fair, affordable and sustainable. Clause 40 maintains the capital gains tax annual exempt amount at its 2020-21 level of £12,300 for individuals and personal representatives and £6,150 for most trustees of settlements for the tax years 2021-22 up to and including 2025-26. Maintaining the annual exempt amount at a 2020-21 level is a responsible decision, consistent with the decisions that the Government have taken to maintain the value of the other main allowances over the same period.
Clause 86 maintains inheritance tax thresholds at their 2020-21 levels until April 2026. This means that the nil rate band will remain at £325,000 and that the residence nil rate band will remain at £175,000. The tapering of the residence nil rate band will continue to start when the net value of an estate is more than £2 million. Maintaining these thresholds is forecast to contribute almost £1 billion over the next five years to help to rebuild the public finances, but this approach still ensures that more than 94% of estates will not be liable for inheritance tax in each of the next five years. Taken together, this Government’s approach to thresholds across the tax system is clear evidence of a fair and consistent fiscal strategy to repair the public finances while continuing to invest in public services.
Clauses 24 to 26 make minor adjustments to exemptions to account for the impact the coronavirus pandemic has had on businesses and workers. Let me also address one proposal relating to clauses 25 and 26. New clause 11 would commission a review of the changes relating to the employer-provided cycles exemption. I am happy to reassure the Committee that the terms of that exemption have not changed and only a minor time-limited easement is introduced by this Bill. It is not therefore necessary to review the changes. Clauses 31 to 33 relate to the Government’s package of support payments for individuals and businesses during the pandemic. Clause 31 makes changes to ensure that the one-off £500 payment to eligible working tax credit claimants announced at Budget 2021 is not subject to income tax. This will ensure that the recipients of the tax credit benefit in full and that the payment meets its objective of providing additional support to low-income working households.
Jim Shannon (Strangford) (DUP)
Has the Minister had any discussion with the Low Incomes Tax Reform Group, which has indicated to me some of its concerns about how Her Majesty’s Revenue and Customs required claims from individuals? It is a delicate matter, but there is problem there. Has he had an opportunity to discuss it with the LITRG?
Jesse Norman
The hon. Gentleman will be pleased to know that I maintain a strong dialogue, through officials, and from time to time in person, with the LITRG and I have no doubt that the input it has given has been carefully considered in this regard. If he would care to write to me with his specific concern, I would be happy to pick that up as well.
It is right that HMRC has powers to tackle fraud and abuse of the self-employment income support scheme and that the Government provide legal clarity that SEISS grants are liable for income tax in the year of receipt. Clauses 31 and 32 will allow payments made in support of individuals and businesses by the Government to meet their objectives as far as is possible. Opposition amendments 15 and 92 are already comprehensively addressed by existing policy, and I ask that Members do not press them to a vote. Clause 33 makes changes to ensure that the repayments of business rates relief are deductible for corporation tax and income tax purposes. This ensures that any repayments of support are dealt with appropriately.
Taken together, these measures will help the Government to continue to support individuals and businesses through the coronavirus pandemic, and they will also begin to put the public finances on a sustainable footing as we continue to move out of the pandemic. I therefore ask that clauses 1 to 5, 24 to 26, 28, 31 to 33, 40 and 86 stand part of the Bill.
James Murray (Ealing North) (Lab/Co-op)
I rise to speak to the provisions standing in my name and those of the Leader of the Opposition and my right hon. and hon. Friends. On behalf of the Opposition, I will begin our detailed scrutiny of this Bill today by considering the impact it will have most immediately and most widely on people across the UK through its cuts to the money that families, in all their many forms, have in their pockets.
The opening clauses, 1 to 5, focus on income tax, with clause 5 freezing the personal allowance from 2022-23 through to 2025-26. That is no small change; the effect of the clause will be to make half of all people in the UK pay more tax from next year, and that is not the only measure the Government are taking that raids their pockets. We know that this Bill will make families pay more through the income tax changes next year, but it also does nothing to stop the sharp council tax rise that the Government are forcing councils to implement right now, it supports the Chancellor’s plan to cut £20 a week from social security this autumn for some of those who need help most, and of course it comes as the Government are choosing, in this year of all years, to take money from the pockets of NHS workers.
Sammy Wilson (East Antrim) (DUP)
Does the shadow Minister accept that the total take in income tax from individuals across the United Kingdom as a result of that one measure in one year will be £10 billion, and the total take over the next five years will increase by 25%? On the basis of the tax paid now, 25% more income tax will be paid collectively by individuals as a result of simply freezing thresholds.
James Murray
I thank the hon. Member for setting out some of the figures about the impacts of the Bill. I can add to that by saying that if we take the freezes to the personal allowances, along with the cuts to NHS workers’ pay, the council tax hike and the cut to universal credit, the real scale of the impact of the Government’s decisions becomes clear. A newly qualified nurse living with their partner and two children in rented accommodation will lose more than £1,100 a year. It is plain wrong to hit families across the country in that way, but that sense of injustice is made all the more acute by the fact that that increase of costs to families comes years before any rise in corporation tax. At the same time, through the Bill the Government are letting tech giants stop paying tax altogether.
Last week, we voted against the Bill on Second Reading. Our reasoned amendment made it clear that key to the decision was its effect on family finances, through what it does and what it does nothing to stop. Today, we have the chance to stop the measure in the Bill that will make every income tax payer in the country pay more next year. We will seek a vote on clause 5, and I urge Conservative Members to join us in knocking this attack on families out of the Bill. By doing so, we would allow the Government to come back in their next Finance Bill with a fairer approach—one that does not put a misguided tax break for big business ahead of the money that families have in their pockets.
The other clauses that are being debated concern a range of other matters. Clauses 24 to 26 relate to the impact of covid on those benefiting from enterprise management incentives, cycle-to-work schemes and employer-provided coronavirus tests. Meanwhile, clause 31 exempts those receiving tax credits from paying income tax on the one-off covid-19 support scheme payment. Clause 32 clarifies the tax treatment of payments made under the self-employed income support scheme. Clause 33 provides for a relief where businesses repay covid support payments that are no longer required. Finally, clause 28 freezes the standard lifetime allowances for pensions immediately until 2025-26, while clause 40 does the same for the capital gains tax annual exempt amount and clause 86 does the same for inheritance tax thresholds.
Through our new clause 23, we ask that all the measures being considered today are considered for their effects on the finances of different households across the UK. We want to see a fair, progressive tax system in this country, so we want the Government to be transparent about the effect that their changes will have on people’s lives. The question of how changes affect the people of this country should always be the Government’s overriding concern when introducing changes to the tax system.
That is why our new clause would require that the Government analyse, review and be transparent about how their changes will affect households at different levels of income. It would further require Ministers to set out how the changes would affect people on the basis of age, disability, race, sex and other protected characteristics, and how they would affect people living in different nations and regions of the UK. There is significant evidence that women, those from black, Asian and ethnic minority communities, young people and disabled people have been disproportionately affected throughout the pandemic. The Budget report itself says:
“The economic impact of restrictions has not been felt equally. Staff in the hardest hit, largely consumer-facing sectors, such as hospitality, are more likely to be young, female, from an ethnic minority, and lower paid.”
It is therefore indefensible that not one of many supporting documents to last month’s Budget statement, nor the Bill, was an equality impact assessment.
Our new clause gives the Government a chance to right that wrong, but while that analysis is vital in setting out how different people will be affected by the Government’s choices, we know already that the biggest and most immediate impact of the changes in the Bill—and of the Government’s wider policy choices, on which the Bill is silent—will be to take money from the pockets of people across the country this month, this autumn and next year.
Andrew Griffith (Arundel and South Downs) (Con)
We hear from the hon. Gentleman that his party seeks to strike out the single largest intervention that will help the recovery, in the form of the super-deduction, which businesses have already told me is mobilising incremental investment. I would be fascinated to hear his view of new clause 7, which was put forward by many of his recent colleagues, including many of those who were on the Front Bench, to increase the rate of income tax to 55%. What does he think of that?
James Murray
The hon. Gentleman spoke about the super-deduction, but as that will be picked up in the next debate, I will focus now on the changes that are the subject of this debate.
Although we know that the Government will be making changes that affect different communities differently, the crucial point is that we know already what impact the Government’s policies will have this month, this autumn and next year. This month, households will feel the hit as the Government force local authorities to raise council tax in the middle of a pandemic, having broken their promise to give councils whatever was needed to help support people through the covid crisis.
This autumn, some of those families who need help will see the Government cut £20 a week off their universal credit, hitting them just as other covid support schemes are due to be winding down. This hit will come just when the Office for Budget Responsibility has predicted that unemployment will peak at 6.5%—2.2 million people—and this cut takes out-of-work support to its lowest level since the 1990s.
Next year, more than 30 million people in this country, including those earning only just enough to pay tax at all, will be forced to pay more as the freeze to income tax and personal allowances kick in. It tells us all we need to know about this Chancellor’s priorities that families will feel the impact of the Government’s choices years before businesses face an increase in corporation tax and at the very same time that some of the biggest firms in this country are offered a tax break that the Chancellor himself has boasted represents the biggest tax cut in modern British history.
We on the Labour Benches believe that our country needs a fair progressive tax system. We want to see greater investment in jobs, growth and addressing the long-term challenges that we face. We want to see families protected, not forced by this Government to shoulder the burden while tech giants see their tax bills reduced to nil. It is not just the Opposition who oppose the Government’s approach. Major international economic bodies such as the International Monetary Fund and the OECD agree that these tax rises on families are wrong. The hit to household finance is not only unfair but economically illiterate. Taking money out of people’s pockets now means that they will not spend it in small businesses or in local high streets, damaging the prospect of a recovery.
We will be voting for the Government to be clear and transparent about the effects of the measures in this Bill on all the different families and households across this country. While Conservative Members may not want to support all of our points, I would not be surprised if some did not feel deeply uncomfortable at the prospect of making families pay more through this Bill. We therefore hope to offer them a chance to join us in rejecting clause 5, halting this Bill’s plans to make all income tax payers pay more from next year and forcing the Government to think again about the fairer tax system our country needs.
Andrew Jones (Harrogate and Knaresborough) (Con)
I am aware that time is short, so I will keep my remarks brief.
All of us will have been dealing with constituents facing real financial challenges over the past year. The past months have been unprecedented in their impact on family finances. People have lost jobs, been on furlough, and faced great uncertainty. It has been genuinely hard. Yet some sectors have done very well and seen growth, so the economic impact of the pandemic has fallen very unevenly. The economic consequences have also landed very quickly, but the response from the Treasury was equally quick. We are now facing the next stages of the crisis. Over the months ahead, we will be getting the economy moving again as quickly as possible, safely, so that we can get people back into work, and considering how the Government will pay for all the extra costs they have incurred.
As my right hon. Friend the Financial Secretary to the Treasury said, economists have predicted that the economy will have fully restarted by April next year. I think that that is right, based on my own business experience and on conversations with businesses in my constituency and beyond. It therefore makes sense to start the recovery of the public finances then, and that is what some of the measures in this Bill do. The question for me, though, is how to do this fairly and without choking off the recovery.
Let me focus on one measure: personal allowances. The increases that we have seen in personal allowances over the past decade have been a key ingredient in helping some of the least well-off in our society. The allowance has nearly doubled and is one of the most generous in the world. It has been part of the broader initiative, which has been a hallmark of the past 10 years, about making work pay. It is with some caution that we should consider changes, but I will be backing these changes and urge Members to reject the Opposition amendment on this measure. It is worth remembering that nobody’s take-home pay will be less than it is now, and that this is a measure that builds over time, as will the pace of the recovery. I note that the right hon. Member for Wolverhampton South East (Mr McFadden), who is not in his place, commented that it is a fairer way to raise revenue than some others, and I agree with his analysis.
The crisis support packages have been necessary and welcome, but they come with a huge cost. There is no compassion in letting debts build up for future generations to pay off. There is no stability for Governments in failing to tackle deficits.
Sammy Wilson
While I think we all accept that the current level of debt cannot continue, does the hon. Gentleman accept that, first, by taking £10 billion from consumers in the next year as a result of these tax allowance freezes and, secondly, because we do not know what will happen to unemployment once the furlough scheme finishes, there is a risk that the freezes this year will impact on the short-term recovery of the economy? Are they not therefore inappropriate, and ought not the Government to wait to see what happens?
Andrew Jones
The right hon. Gentleman makes a good point, as he always does. I have considered that point, and I know that the Government have also considered it, but this is about striking a balance between encouraging the recovery and choking it off. Part of that recovery is ensuring that we have sound public finances. We have had two supposed once-in-a-century events in just over 10 years, and the lesson we should draw is that financial responsibility allows Governments to respond to crises at scale. That is what we have just seen here, and that has helped the finances of families across our nation when they needed it most.
That is also why the economic recovery, with its focus on growth and investment and on households and Government, cannot be put off. The personal allowance measure in the Bill should proceed. We should not listen to the Labour party because, quite frankly, its Members have voted against all the personal allowance increases in Budget measures over the past 10 years. We need to get the focus that we have had on saving lives back on to recovering livelihoods.
Alison Thewliss (Glasgow Central) (SNP)
I will speak to new clause 10. This UK Government said they would be led by data, not dates, and the Chancellor has stood in the Chamber on several occasions and said he will do whatever it takes to ensure recovery, yet in this Finance Bill he has seen fit to put an arbitrary date on ending the furlough scheme. The Labour shadow Chancellor has been critical of the Government’s previous dithering on extending the job retention scheme, so I hope her colleagues will support the SNP’s new clause, which will protect jobs and workers across the UK.
New clause 10 would introduce a reporting requirement to compare the effect of continuing the coronavirus job retention scheme and the self-employment income support scheme until both 30 September 2021 and 31 December 2021. Reports would be required on the specific impacts of continuing to both dates on business investment, employment, productivity, GDP growth, and poverty. SNP Members believe that the furlough and self-employment support schemes should be continued for as long as our economy requires them. It is economic recklessness to confidently predict the end of a pandemic that has thrown us curveballs time and again. Any winding down of support schemes should be linked to the numbers of covid cases in the population, with proper care taken to make sure that no badly hit areas are left behind.
We have seen the potential of new variants such as the Kent and South African variants, with the Indian variant causing the country to be added to the red list and prompting the Prime Minister to cancel his travel plans just this week. On the variants and support for people who need tests, I welcome the change to exempt coronavirus tests from income tax, but SNP amendment 93 would seek to extend the income tax exemption for payments to employees in respect of the cost of obtaining antigen coronavirus tests to cover specific antibody coronavirus tests, too. There is a wider argument for broadening the provision to future proof the Bill for future pandemics and other such incidents, so I hope Ministers will give the proposal some consideration.
Businesses have found themselves in a position of having to make payments on VAT deferred last year in the first week of the crisis while we are still in lockdown in the second peak of the crisis, and now the biggest lifeline supporting our economy is being pulled away without any due consideration for the impact on jobs.
Mrs Flick Drummond (Meon Valley) (Con) [V]
Like all Conservative Governments, this is one who believe that people should be encouraged to create wealth and invest it wisely without undue interference from the state, bureaucracy or taxation for taxation’s sake. The fundamentals of our economy were strong nationally and in the Meon Valley as we headed into the coronavirus pandemic, and I am confident enough that we are well set to emerge from it and carry on with good growth. Although it is not the topic of this segment of the debate, I must welcome the announcement in the Budget of the Solent freeport, which will bring jobs and investment to the whole region, which includes my constituency.
I want to speak to clauses 5 and 28. The pandemic has created a major challenge for state finances, and I recognise that the Treasury must cover the cost of the measures it has taken to support jobs and society. The two long-running strands of policy covered in these clauses are the reform of personal income tax allowances and the lifetime allowance in pension fund accrual.
The commitment to a £12,500 personal allowance featured in the Conservative party’s 2015 election manifesto, and I am pleased that we are achieving it a year early. Since 2010, the personal allowance has grown more quickly than average earnings, and a huge number of workers have benefited. In announcing a freeze between now and 2026, we will see some of that eroded—around £8 billion of income flowing back into the Treasury by 2025-26—and I hope that Ministers will ensure that we direct the benefits of recovery at the groups on the lowest incomes, whom we have done so much to help in government already. Needless to say, I will not be supporting the Opposition amendment to clause 5.
Another area where I hope Ministers can keep an open mind is simplification of our pensions system in the future, but today I would like to concentrate on the lifetime allowance in clause 28. As many other Members will have seen in their postbag, this has been affecting doctors in the NHS, senior teachers and others in the public sector who have taken or considered early retirement to avoid breaching the cap. As well as creating a situation where the Treasury does not see some of its forecast tax take coming in, it means that in some cases, people have gone back to work as contractors or locums, sometimes filling gaps that have been created by this policy on pensions.
The intention behind the lifetime allowance when it was introduced in 2006 was to simplify a large number of regimes. However, freezing it at just over £1 million without the tie to the consumer prices index means that we are seeing some complex reworkings of remuneration schemes, and we will see more unintended consequences as growing numbers of people look to find ways to avoid the cap. The British Medical Association’s survey of GPs indicated that almost half of doctors would consider early retirement to protect their earnings after retirement. While the Budget forecast states that by 2025-26 there will be an additional £300 million of revenue, it does not account for other costs that the policy could contribute to.
Pension policy generally encourages people to forego current consumption, so that they can enjoy a higher standard of living later in life. However, the trade-off here is different, and we risk public services having to cope without staff or pay for them because they are contractors or locums if we carry on eroding the value of the lifetime allowance. I hope the Treasury will look creatively at how we can balance ensuring that people on higher incomes pay their rightful share of tax with the need to ensure that skilled and experienced workers continue to contribute to the wider public good throughout their working lives.
Stephen Timms (East Ham) (Lab) [V]
Clause 31 relates to the decision to cut the £20 a week uplift in universal credit and working tax credit in six months. I want to focus my brief remarks on that decision, highlighted by my hon. Friend the Member for Ealing North (James Murray), because it will be key in the impact analyses in new clause 23 and amendment 15. A Work and Pensions Committee report in February drew attention to the Joseph Rowntree Foundation’s finding that withdrawing the temporary increase
“will risk sweeping 700,000 more people, including 300,000 more children, into poverty”,
and that
“500,000 more people could end up in deep poverty (more than 50% below the poverty line).”
It goes on to explain that
“people who were already more likely to be in poverty were most affected by the economic storm caused by COVID-19: workers in low-wage sectors or part-time jobs, people living in areas with higher rates of deprivation, families with children, disabled people, or those from BAME backgrounds…around 60% of the families who lose out being in the bottom 30% of the income distribution.”
It goes on to say that
“60% of all single parent families in the UK will experience this overnight cut to their incomes”
when the £20 a week is removed.
Under the Government’s plans, the cut will happen just as unemployment is forecast to peak. The last time anything like this happened in such circumstances was 90 years ago under the national Government of Ramsay MacDonald. It will devastate the finances of a large number of struggling families. Ministers will find it extremely hard to justify, so I particularly welcome today’s reported call by more than 100 Conservative MPs to make the £20 a week uplift permanent.
The Resolution Foundation’s “Living Standards Outlook 2021” in January said that rising unemployment and removing the £20 uplift would push 800,000 adults and 400,000 children into relative poverty—the biggest annual poverty rise since the 1980s. A Northern Ireland woman told the Joseph Rowntree Foundation:
“The £20 uplift to Universal Credit has meant I have just about managed to keep my head just above water. I’m living day to day trying to pay my bills and keep my house warm for my child. Taking this away now or in six months means I will be drowning in debt.”
A London woman said:
“We’ve relied heavily on food banks…That £20 is often the difference between light and heat or no light and heat. If you don’t have gas, you can’t cook.”
A Leeds man said:
“I am aware of the extra—if it wasn’t for that I don’t know how I would survive. Living on Universal Credit is hard; it’s extremely hard. It is literally living day to day and working out where my next food is coming from.”
Twenty pounds a week should not be taken away from people like that just as unemployment peaks. Iain Porter of Joseph Rowntree told the Select Committee that the current benefit level without the £20 uplift is
“at the lowest level since around 1990 in real terms”,
and that as a proportion of average earnings, it is the lowest ever. Inflicting that just as unemployment is peaking is indefensible.
The principal policy manager at Citizens Advice told the Select Committee:
“At the very least, if the uplift is not made permanent, we think it needs to be in place for at least 12 months while we go through the tricky part of recovery from this crisis.”
I hope Ministers will reflect and, having done so, decide after all not to make this cut in September.
Huw Merriman (Bexhill and Battle) (Con) [V]
Thank you very much indeed for allowing me to contribute to this afternoon’s proceedings, Dame Rosie. I want to talk about clause 5, on the freezing of personal allowance for four years from 2021-22, the resulting amendments, which would push the freeze back by a year, and the general position across the proceedings this afternoon with regard to allowances and the freezing or otherwise of them.
In the six years that I have been a Member of Parliament, it has been a matter of great pride that we have reduced the personal tax allowance. It was half the level that it is now, since it was raised to £12,500. That is the highest basic personal tax allowance across all G20 countries and means that a typical taxpayer is saving £1,200 in tax. More importantly, it has really sent out the message that work pays. It is no coincidence that, as well as the increase in personal allowance and the introduction of the national living wage levels that we have, we have seen record levels of employment and record lows in unemployment. It is a great success story. The covid pandemic has put all that at risk, though,which is why I find myself in the bizarre position of supporting the personal allowances freeze and intending to vote against any amendment tabled by those on the left to delay that freeze for a year. Ultimately, if we do not do something about our finances, we will do the country a great disservice and end up costing individual taxpayers—or non-taxpayers —even more by mismanaging our national debt.
John McDonnell (Hayes and Harlington) (Lab)
With the greatest respect for the previous speaker, I think there is a view across the House and in all parties that we need to manage the economy effectively in the interests of everybody. That means addressing the debt to GDP ratio—of course it does—but the question always arises, “Who bears the burden? Who carries the heaviest burden?” I believe that the Bill shifts too much of the burden on to those who are the least able to bear it. That is where we disagree, and it is an honest disagreement.
I will speak to oppose clause 5 standing part and to support amendment 2, and consequential amendments 3 and 4, which stand in my name and those of a number of my colleagues. Some of this is about confidence in politics, which at the moment is receiving a bit of a drubbing.
In the last general election, the Conservative manifesto pledged:
“We promise not to raise the rates of income tax…This is a tax guarantee that will protect the incomes of hard-working families across the next Parliament.”
Clause 5 breaches that pledge; incomes are not protected. More of people’s incomes will be hit by income tax. It is especially harsh on the millions of public sector workers who have faced from this Government: first, a pay freeze; a 5% rise in council tax; and now a stealth rise in their income tax. These people are low earners who struggle to make ends meet as it is. Low earners are heavily indebted. Some have been furloughed, losing 20% of their income for a year. Now they are being hit by a stealth rise in income tax that was not pledged at the last election and that any fair reading of the Conservative manifesto would have thought was completely ruled out.
The Labour party also stood on a manifesto that said there would be no rise in income tax for 90% of earners, and has recently said that now is not the time for tax rises. I hope that Members across the whole House will stand by their commitments at the last general election and oppose clause 5. This would allow the threshold to rise with inflation, as legislated for way back under the last Labour Government in the Income Tax Act 2007.
Low pay is endemic in our society. In 2015, the then Chancellor, George Osborne, promised a £9 minimum wage by 2020. It is 2021 and the minimum wage is still below that level. Let us look at an example. We know that half of all care workers earn less than the real living wage and the majority of children are living in working households. What does that say about low wages? The last thing any Government should be doing is raising taxes on low-paid workers, especially when that Government have broken their promises on raising wages and have failed to reach the target they set for the minimum wage.
Some Members may recall the Rooker-Wise amendment; it was a long time ago—44 years ago. That amendment overturned a similar proposal from the Callaghan Government. With many low-paid workers not getting a pay rise and facing mounting household debts, we should not be taking more of their income in tax. With high street retail needing an urgent stimulus, there cannot be a worse policy than removing demand from the economy at this time. That demand is really created by the people—these are the people who will spend, not hoard.
If the House is not minded to leave out clause 5, perhaps the Government can compromise and accept amendments 2, 3 and 4 in my name and those of other hon. and right hon. Members. These amendments would ensure that the stealth tax on working people was delayed until 2023-24—the same year that the corporation tax rise kicks in. Low-paid workers should not be hit with an extra year of tax that the corporations are not hit with.
Another point that I hope the Government will consider incorporating into the Bill before Report stage is the case for equalising capital gains tax rates with income tax rates. Ahead of the Budget, I was heavily briefed that this was being considered by the Chancellor. It is manifestly unfair that income derived from wealth is taxed at a lower level than income derived from work. I hope that the Government will look at this issue ahead of Report stage. I urge the Government to consider accepting amendments 2, 3 and 4 at a bare minimum—better still, leave out clause 5 altogether. Do not force the lowest paid in our economy to shoulder what could be the heaviest burden.
Sarah Olney (Richmond Park) (LD) [V]
I wish to speak to clause 5 relating to the changes in personal income tax allowances and to clause 28 relating to the freezing of the lifetime allowance on pension pots.
There is no doubt that the last year has made unprecedented demands on the public purse, and it is right that the Government should be prepared to take difficult decisions on taxation as we move forward, as we all very much hope, out of the pandemic and into the changed world beyond. However, the Government made clear commitments in their 2019 manifesto that they would not raise income tax on working families and they have broken that commitment in this Bill. The freezing of the personal allowance and the higher tax bands means that more working people will pay tax and at higher rates than they would otherwise have expected.
Clearly the Government are banking on a consumer-led recovery and this tax burden on working families will reduce the amount of discretionary spend available to households, limiting their ability to spend on consumer goods. As housing costs increase to their highest ever levels, household budgets will continue to be squeezed, and piling additional tax charges on top will create an enormous burden for those who are already struggling to make ends meet. It is a particular insult to those in our NHS, who have sacrificed so much to keep us all safe this year and have been told to expect only a 1% pay increase for their trouble. Our nurses will have to give back more of that 1% in tax than previously despite all that they have already given. This is particularly galling when compared with the Government’s decision to delay a corporation tax increase. The Government have chosen to tax hard-pressed frontline workers first and large, profitable corporations later. Only those companies that have remained profitable throughout the pandemic would be paying corporation tax next year, which is why an immediate increase in corporation tax could have captured the windfalls or excess profits of those who found their revenues increased as a result of the unusual trading conditions of the last year. This would have been a far more equitable route to raising income than putting the burden on hard-working families.
On clause 28, I urge the Chancellor to carefully consider the impact on NHS pensions of freezing the lifetime pension allowance. I have heard a few stories from constituents about how this measure interacts with their final salary scheme. While a figure of a little over £1 million would rightly strike most as more than sufficient as a tax-free pension pot, senior doctors in the NHS are finding it extremely difficult to assess whether or not their overtime will result in their yearly calculation of their lifetime allowance being tipped over the threshold and result in a current tax bill. The British Medical Association estimates that the number of GPs taking early retirement has tripled over the past decade and puts this down partly to the uncertainty about their tax bills.
It is worth noting that when the lifetime allowance was first introduced in 2006, it was set at £1.5 million, rising to £1.8 million in the financial year 2010-11. Since the Conservatives came to power, it has reduced every year to the current level of only just above £1 million. Like the freezing of the personal allowance, this has the impact of catching more ordinary people in the taxation net, and again we see that the Chancellor wants to raise money off the back of hard-working NHS frontline workers while protecting profitable corporations.
This issue has been a problem for doctors for the last few years, so the Government have no excuse for not knowing that the freezing of the pension lifetime allowance would make the situation worse. Have the Government carried out an impact assessment of the measure on NHS retention of senior staff? I am extremely concerned, at this time when our senior NHS staff are exhausted and facing a huge backlog of elective surgery, that skilled staff should not feel compelled to take early retirement because of an unintended and avoidable tax consequence.
The Finance Bill seeks to tax hard-working families and penalise those who have been working so hard to keep us all safe this year, and the Liberal Democrats cannot support these measures.
Matt Rodda (Reading East) (Lab)
I want to offer my support to the shadow Minister, my hon. Friend the Member for Ealing North (James Murray), who put his case very fairly. I want to illustrate what that means in my constituency of Reading East and perhaps develop some of the points he made.
I particularly want to raise the growth in the use of food banks, which has been very significant across the country, and our area is typical in so many ways, as indeed it is in many instances. The growth in the use of food banks illustrates why the Budget was such a complete failure, because the Government failed to offer real help to many families. In particular they offered very little to those in the greatest need, as we heard from the shadow Minister, and very little to those who are self-employed and have recently set up a small business. Indeed, the3million campaign group rightly pointed out that, although a small number will benefit from some measures offering further support for recently set-up small businesses, most will not, and that has been widely recognised in my constituency.
Before going into the detail of local food banks, I want to thank all the volunteers at our local council in Reading and many others, both businesses and individuals, who have helped support food banks by generously giving their time and putting the community and others first at what is a very difficult time for so many people. I have tried to keep in touch with the pressures by going to help myself and to receive regular briefings from food banks and other charities, and I want to describe to colleagues what this is like.
The First Deputy Chairman
We are having some difficulty hearing Seema Malhotra, I am afraid. Do you want to try again, Seema?
The First Deputy Chairman
I think what we should probably do is go to our next speaker and come back to Seema. We will go now to Sir John Redwood.
John Redwood (Wokingham) (Con) [V]
Dame Rosie, I have declared my business interests in the register.
Of course, I am not going to vote against this Budget and I wish the Government well with it, but I would like them to pause a little, think through where we are and recognise that they may need to revisit some of these decisions in the months ahead. My worry is that they are being too tough in their tax measures and too tough on people’s incomes at a time when we need to build confidence and recovery, and they are doing so at a time when it is really impossible for their expert advisers and other economic forecasters to give them a clear steer of what the public finances will look like in two years’ time, let alone in three or four years’ time.
The Government seem to think that their experts can define a given amount of money that will be a shortfall in order to hit their longer-term Government targets, and therefore say that we need to make these tax changes for the next few years in order to fill the alleged black hole. It may be that they are trying to fill a hole that does not exist. It may be that we will have a much better recovery than the forecasters are thinking. It may be that the economy responds much better over the next two or three years or, indeed, over the next two or three months, as the relaxations kick in.
We can see the difficulty that the official forecasters have if we look at the numbers they gave us as recently as November 2020. Then, the OBR, forecasting the budget deficit—the amount of extra borrowing—for the year 2020-21, said that it would be £394 billion, an enormous amount. Bear in mind that it was having to forecast for only four months, as two thirds of the year had already gone. When we got the 11-month figures, up to February, recently, we discovered that they had come in at just £278 billion and so, subject to what happened in March, it may be that the OBR was the best part of £100 billion out on the deficit for the year in question when it tried to forecast, already knowing quite a lot of what had happened. It was, of course, massively too pessimistic. It is great news that we will have borrowed so much less than we feared, although clearly we are still borrowing far too much on an unsustainable basis, which is why we need to promote a strong recovery to get the deficit down.
I therefore say to the Government: let us show a little humility. The experts and advisers are not able to give us anything like accurate figures—I can sympathise with them, because extreme things have happened in response to the pandemic—so are we sure that we need to make these moves over the next three or four years?
There is also a case for showing a bit of humility and thinking ahead about whether we might need to show a bit more flexibility because the Government themselves have rightly said, now that we are out of the European Union and the economic world has been stood on its head, that they want to set out a new framework for guiding the economy. I encourage them to do that, and I hope it is a framework that promotes growth and considers real issues such as the increase in the number of jobs, the rise in real incomes and the productivity growth that can be achieved.
We need to get away from the Maastricht criteria, which have governed our policy for many years and still seem to be behind the architecture of this Bill. We seem to be driven by the need to get state debt falling as a percentage of our national output by the end of the period that we are talking about today for the tax changes. State debt is now a pretty useless figure to try to target in the way that the Maastricht criteria did. We now live in this age of monetary experimentation, where great banks such as the Bank of England, as well as the European Central Bank, have bought in very large quantities of state debt—indeed, they still are doing so. Surely, where that happens in a single sovereign country with its own central bank, owned on behalf of the taxpayers by the state, we should treat the debt that we have bought back in rather differently from the debt on which we owe money by way of interest to people outside—some our own citizens, some foreigners—who have been financing the Government. That makes state debt a very difficult number to use to guide the economy. Of course, the future system must have some control over the build-up of actual interest charges that we have to pay to third parties, but it should concentrate much more on promoting growth.
May we therefore have just a few words from the Government, accepting that these numbers are very difficult and that the current forecasts are likely to be very wrong? No one can say exactly how wrong they are going to be, because so many things will happen over the next two or three years and nobody has been through a bounce back of the kind of pace that is possible from such a big hole in our economy, created by necessary health measures to cure the pandemic.
We need a policy that is very supportive of more jobs, of higher incomes and of encouraging investment, enterprise, saving and, above all, self-employment and more small business activity. My worry is that the Government are being a bit mean with people and with small businesses in the name of controlling state debt at a time when we have no idea what the state debt will be in two or three years’ time, and when the state debt number is now very different because of the purchase of state debt by the state itself.
I would hope that the Government recognise that we may need to revisit all this, and I would want them to be on the side of people keeping more of the money they earn and, above all, of a much better deal for small business and the self-employed, where I think they are too tough.
The First Deputy Chairman
We are having one or two technical issues, so we will go straight to Richard Burgon.
Richard Burgon (Leeds East) (Lab) [V]
I wish to speak to my new clause 7, which would require the Government to publish an assessment of the effect on tax revenues of introducing a 55% income tax rate on income over £200,000.
The coronavirus crisis has not only shone a spotlight on the deep inequalities in our society and their deadly consequences, but deepened them. Deep inequalities scar our nation. As we come out of this pandemic, if we are to learn the lessons and build a more equal, less divided and more inclusive society, then we need to address decades of failing tax policy. Ensuring higher taxes on those on the very highest incomes has an important role to play in building that fairer society. Since Thatcher, the Tory mantra has been that low taxes on the rich benefit everyone, but years of keeping taxes low for the very rich did not in fact boost economic growth; instead, it allowed inequality to run completely out of control. That has been proven by new research by the London School of Economics and King’s College London showing that reducing taxes on the rich leads to higher income inequality that has an insignificant effect, in any positive fashion, on economic growth or unemployment.
In short, trickle-down economics has been a lie. Now is the time to acknowledge that and address it by creating a fairer tax system. My amendment calling for a new 55% income tax rate would target those on very high incomes of over £200,000 per year—the richest part of the top 1%, or about 300,000 people. The current highest income tax rate is just 45% for those earning above £150,000—not much more than for those earning £50,000. Yet 40 years ago the average top income tax rate for the wealthy OECD member countries was 62%. The top income tax was 60% even under Margaret Thatcher, so perhaps even the Thatcherites on the Government Benches will consider offering their support for the amendment. This increase would affect less than 1% of the population—about 200,000 people, according to HMRC.
There has been huge suffering in our society over the past year, yet the very wealthiest in our society—the billionaires and the super-rich—have exploited this crisis to further line their pockets. We cannot go on layering inequality on top of inequality. Now is the time to act. Publishing an assessment of the effect on tax revenues of introducing a 55% income tax rate on income over £200,000 would be an important stepping-stone towards building a fairer and better society. That is why I would like to press my new clause 7 to a vote.
Bell Ribeiro-Addy (Streatham) (Lab) [V]
I speak in support of amendment 15 and new clause 8 in my name, and amendments and new clauses in the names of my right hon. Friend the Member for Hayes and Harlington (John McDonnell) and my hon. Friend the Member for Leeds East (Richard Burgon).
My amendment 15 is tabled with the aim of highlighting the importance of the so-called £20 uplift for tax credit recipients from the covid-19 support scheme, and the damage that the Government’s decision to not continue this beyond September will cause. In March 2020, the Chancellor announced a temporary uplift of £20 per week to universal credit via the standard allowance of the working tax credit basic element for the 2020-21 financial year. A one-off payment is being made to tax credit recipients to cover a six-month period from April to September 2021 to continue this support.
As Members will know, payments from the covid-19 support scheme for working households receiving tax credits are being introduced under the Coronavirus Act 2020. Clause 31 introduces an exemption from income tax for payments made to tax credit recipients. My amendment 15 would require the Government to publish an equalities impact assessment of the provisions of clause 31, which must cover the impact of the provisions on households at different levels of income, people’s protected characteristics, equality in different parts of the United Kingdom and regions of England, and child poverty. That is because while the £20 per week top-up will temporarily be retained, helping some 6.5 million families for a further six months, this does not allay the fears that families will have going into next winter. Rather, it is clear to almost everyone—Action for Children, Child Poverty Action Group, Save the Children, the Joseph Rowntree Foundation, the trade union movement and so on—apart from the Government that the £20 increase and the associated tax relief, as per clause 31, should be made permanent and paid to all claimants, given that poverty levels were already too high pre-pandemic. Extending the £20 uplift is vital because struggling families cannot keep afloat without it, but that will be as true in six months as it is now.
Seema Malhotra [V]
In my limited remarks, I want to support the arguments made by my hon. Friend the Member for Ealing North (James Murray), and to speak in support of Labour’s new clause 23, to which I have added my name, seeking an equality impact assessment of the measures in the Bill that affect family incomes. This includes the impact of specified sections of the legislation on households at different levels of income, on people with protected characteristics, and across the regions and nations of the UK.
About 700,000 people have lost their jobs since February last year, and many more families have seen a drop in their household income. Over 39,000 are now on universal credit in Hounslow alone, and we have seen a huge rise in the use of food banks. There is no doubt about the importance of financial inclusion at this time. The Financial Inclusion Commission, on which I sit, has highlighted how there are now millions more people facing economic hardship as a result of the covid-19 pandemic. However, the UK entered the crisis with half its population financially vulnerable: 12 million categorised as financially struggling or generally on low incomes, and 13 million as financially squeezed. Covid has laid bare existing weaknesses, vulnerabilities and structural inequalities, and StepChange research shows that 10% of people say they will certainly or probably be unable to pay for essentials in the next 12 months.
We know child poverty, already extremely high, is rising, so it is inexplicable, when the Government themselves have said in the Budget report that the
“economic impact of restrictions has not been felt equally”,
that they have not themselves published an impact assessment. It should not be for the Opposition to table this vital amendment. It seems that instead of taking action to boost our community recoveries, the Conservatives are choosing to reward families up and down the country for their sacrifices with council tax hikes, the freeze to the personal allowance from next April a whole year before corporation tax rises kick in, a real-terms pay cut for key workers and cuts to universal credit later this year, a move now even opposed 100 Tory MPs.
Even when the Chancellor has done the right thing, such as extending furlough, as Labour called for, these moves need to be underpinned by a strong social security system that provides support when people need it. People need to be protected from financial exclusion and families need a clear route out of financial difficulty when they are struggling. The Chancellor could also look at how Sadiq Khan is working to promote financial inclusion through partnership with the financial sector, social enterprises and credit unions, and at his plans for a new team dedicated to economic fairness.
But instead of economic fairness, what we know is coming is the £20-a-week cut to universal credit for millions of families within six months, just when the OBR predicts that unemployment will peak. It is a cut that takes out-of-work support to its lowest levels since the 1990s. That is why Labour has also called for urgent social security measures, including converting universal credit advances to grants instead of loans, ending the five-week wait, suspending the benefits cap and uprating legacy benefits to match the increase in universal credit. About 2.2 million people on legacy benefits have been deprived of the uplift, and given that three quarters of those claimants are disabled and on employment and support allowance, this has created a two-tier social security system that has left many struggling to cope. Evidence from the Disability Benefits Consortium found that 67% of disabled claimants have had to go without some essential items at points during the pandemic.
Minority ethnic communities have been hardest hit by both the health and economic crisis. The Resolution Foundation found that, at the end of last year, unemployment among young black graduates had risen to 34%, up from 22% before the pandemic, and almost three times that of young white graduates during the same period. StepChange research also shows that those from an ethnic minority are twice as likely, compared with the GB average, to say that they have experienced hardship, borrowed to make ends meet or have run down savings.
In conclusion, the Chancellor is hitting families up and down the country, with a quadruple hammer blow of council tax rises, cuts to universal credit, real pay cuts for key workers and the freeze to the personal allowance. If the Chancellor wants to work for a fairer Britain and build a more inclusive and financially inclusive economy, he needs to know who his policies are helping and who they are not. That is why we need an impact assessment, as called for in new clause 23, and the Government should support it today.
Rebecca Long Bailey (Salford and Eccles) (Lab) [V]
I speak to oppose clause 5 stand part, and in support of amendments 2, 3 and 4 in the name of my right hon. Friend the Member for Hayes and Harlington (John McDonnell) and others, as well as amendments in the name of my hon. Friend the Member for Streatham (Bell Ribeiro-Addy) and amendments from the Labour Front Bench.
The Chancellor committed to doing whatever is necessary to support people and businesses through the coronavirus pandemic. I want to believe him, but the £20 a week covid uplift to universal credit will be cut just at the time when the OBR has predicted that unemployment will peak. There has been no uplift at all, as we have heard, in covid support for those on legacy benefits or affected by the benefit cap. At the same time, an equivalent cut in working tax credit for households that have not yet made the move to universal credit will be imposed.
Further councils, whose budgets have been decimated over recent years, will be forced to increase council tax by up to 5%, pressuring household budgets even further, so the Bill is already sorely deficient in honouring the Chancellor’s original promise. However, in clause 5—the proposal to freeze the personal tax allowance—the promise is sadly contradicted entirely. The reality of the clause is that, if there is wage inflation over the next five years, someone earning just under the threshold now, for example, who then receives an inflationary pay increase for 2022-23 will start to pay tax.
As the Resolution Foundation has found, the poorest fifth of households are twice as likely to have seen their debts rise rather than fall during the crisis, so taking some of those lowest earners beyond the personal allowance threshold as their wages might slightly increase with inflation could result in their financial devastation. I therefore supported calls to remove clause 5, or at the very least for the Government to compromise and delay the changes.
I will also briefly mention clause 32 on self-employment income support. I do not disagree with the sentiment of the clause but, as the Government know, the support still does not go far enough. More than 2 million remain excluded from any Government support at all and, as I have repeatedly told this House, some have sadly taken their own lives as a result. I once again urge the Government to provide an immediate emergency grant to those affected, install new monthly arrangements while restrictions remain in place in complete parity with the extension of the coronavirus job retention scheme and the self-employment income support scheme, and remove the hard edges to eligibility criteria. Finally, they should backdate payments for a full and final settlement to deliver parity and fairness for those excluded from meaningful support.
Jim Shannon
It is a pleasure to serve under your chairmanship, Ms McDonagh. I very much welcomed the Minister’s response when I asked him about the Low Incomes Tax Reform Group. I will send him all the information that I am concerned about, which I hope he will be able to answer.
Clause 31 ensures that the one-off £500 payment for certain working households receiving tax credit is not taxable, which is welcome. The problem arises when a person receives a payment that they were not entitled to under the rules. As the payment is made automatically by HMRC without requiring a claim from the individual, if HMRC mistakenly makes a payment to someone who is not entitled to one under the direction and it is not subsequently repaid, it appears that the tax credit claimant will automatically be subject to a tax charge under the Finance Act 2020. That triggers notification requirements for the individual, assessing powers for HMRC and potential penalties.
I would like to understand whether consideration has been, or will be, given to ensuring that HMRC will set the bar high in terms of what constitutes fraud, and whether it will be limited to those people who fall under section 35 of the Tax Credits Act 2002, in relation to their underlying tax credit award. Over the last period, you, Ms McDonagh, I and everyone in this House has seen young families on the brink of financial collapse—in particular, in my office, due to the inconsistencies of the working tax credit as between those who are self-employed and those whose annual pay packs are constant.
Briefly on clause 32, I highlight the fact that taxpayers who have made amendments to their self-assessment tax returns on or after 3 March 2021 may have to pay back some or all of the grants that they have claimed. There is a real concern, which I share, that unrepresented taxpayers may not be aware of their obligations to notify HMRC and, accordingly, may face penalties, inadvertently and perhaps without right. Minister, how will we ensure that HMRC will take steps to ensure that taxpayers become aware of any obligation to repay in time to avoid such penalties? In particular, it is unsatisfactory that taxpayers who have made amendments on or after 3 March 2021 but prior to the date of the claim appear to be obliged to pay back some or all of the grant immediately upon receipt. Some may be unaware that they have to do so, but they face harsh penalties, which were originally aimed at fraudulent claims or for failing to do this on a timely basis. So I am concerned that innocent participants in this process may find themselves in difficult times.
Jesse Norman
It has been a good debate and I thank all Members who have taken part. Let me pick up some of the key themes that were described, one of which is the impact on taxpayers of the measures the Government have taken to address and fix concerns about the public finances.
The hon. Member for Ealing North (James Murray) raised this issue. As he will be aware from wider conversation and scrutiny, the Bill places a burden of £40 a year on the average basic rate taxpayer and no increment in take home pay. We think that a balanced and fair approach is one that is widely based and progressive. As I indicated, the top 20% of tax-paying households pay 15 times that of the bottom 20%. He was asked by my hon. Friend the Member for Arundel and South Downs (Andrew Griffith) whether he supported new clause 7, which would raise tax to 55%, and his was an eloquent silence in response. I would be interested to hear in the next debate whether he does support new clause 7’s bid to raise the top rate of income tax to 55%, but I will come to that later.
The hon. Member for Glasgow Central (Alison Thewliss) raised the question of antibody tests. As she will be aware, antigen tests, which are subject to the relief in the Bill, are connected to employment, whereas antibody tests are not, which is why the relief does not extend to them. It is, however, fully open to the Scottish Government, who have capacity to raise tax revenue themselves, to fund antibody tests if they so choose. She has raised the issue and we can assess whether the Scottish Government wish to follow her lead in funding those tests.
The right hon. Member for Hayes and Harlington (John McDonnell) described the tax measures in the Bill as a stealth tax rise. It is an interesting version of a stealth tax rise that is announced in a Budget statement at the Dispatch Box in the House of Commons. He was right when he said earlier that there was an honest disagreement here, and that is what there is. The Government’s view is that there should be a progressive, broad-based approach to fixing the public finances that begins at an appropriate time once the recovery is under way, and that remains the case.
The hon. Member for Richmond Park (Sarah Olney) declaimed the delay in the corporate tax rise. I remind her, since everyone is widely quoting the Resolution Foundation, that it said that the Government
“rightly sought to boost the recovery before turning to fixing the public finances”—
and it was right. She was opposed to the measures relating to the freeze on pensions in the Bill and appealed to the experience of ordinary people. Since the amount in question is over £1 million and the average financial savings in this country are something under £7,000, and since the lifetime allowance is itself seven times the median pension pot, I think that she is not using a definition of ordinary people that will be shared by Members of this House.
My right hon. Friend the Member for Wokingham (John Redwood) talked about the uncertainty involved, and he is right. We are coming out of a pandemic. There is a degree of uncertainty in the economic situation. That is why the Government have delayed, in the way that the Resolution Foundation has applauded, raising tax on corporations in order to start to restore the public finances. That is why it is right that we have taken a fair and balanced approach to this topic.
The hon. Member for Leeds East (Richard Burgon) spoke in support of his 55% tax rate—not a view shared by the Labour Front Bench. I remind him that HMRC ran a study of the 50% tax rate a few years ago and discovered that it was inefficient, raised far less than had been expected and was distorting tax behaviour. That is not a good recipe.
The hon. Member for Streatham (Bell Ribeiro-Addy) was concerned about the progressivity of these measures, but, as she will see if she looks closely, both the UK tax system at the moment and the changes themselves are highly progressive.
The hon. Member for Strangford (Jim Shannon) raised the question about the risk of fraud in schemes. Of course, he is right to note that. He had some concerns about reclaims in the self-employment income support scheme. All I would say is that the scheme is well understood. It is very widely publicised. Guidance has been available on the internet and in many independent bodies for many months. If people have claimed income support through that scheme for which they are in fact not eligible, it is appropriate to reclaim the sum overpaid. That is the principle that we seek to apply elsewhere in the tax system because it, too, is a fair and equitable one.
Question put and agreed to.
Clause 1 accordingly ordered to stand part of the Bill.
Clauses 2 to 4 ordered to stand part of the Bill.
Clause 5
Basic rate limit and personal allowance for future tax years
Question put, That the clause stand part of the Bill.
The Temporary Chair (Siobhain McDonagh)
With this it will be convenient to discuss the following:
Clause 6 stand part.
Clause 7 stand part.
Clause 8 stand part.
Amendment 11, in clause 9, page 3, line 35, leave out “130%” and insert “18%”.
This amendment would reduce the level of the capital allowance super-deductions to the current rate of 18%.
Amendment 79, page 4, line 2, at end insert—
“provided that any such company which has more than £1 million in qualifying expenditure must also—
(i) adhere to International Labour Organisation convention 98 on the right to organise and collective bargaining,
(ii) be certified or be in the process of being certified by the Living Wage Foundation as a living wage employer, and
(iii) not be liable to the digital services tax”.
This amendment would, in respect of companies with qualifying expenditure of over £1 million, add conditions relating to ILO convention 98, the living wage and the digital services tax.
Amendment 80, page 4, line 2, at end insert—
“provided that any such company which has more than £1 million in qualifying expenditure must also make a climate-related financial disclosure in line with the recommendations of the Task Force on Climate-related Financial Disclosures within the 2021/22 tax year”.
This amendment would, in respect of companies with qualifying expenditure of over £1 million, add a condition relating to climate-related financial disclosure to the conditions that must be met in order for expenditure to qualify for super-deductions.
Amendment 66, page 4, line 6, at end insert “, except general exclusion 6”.
This amendment would remove leased assets from the list of assets excluded from the super-deduction and special rate allowance introduced by Finance (No. 2 Bill).
Amendment 67, page 4, line 21, at end insert “, except general exclusion 6”.
See the explanatory statement for Amendment 66.
Amendment 53, page 5, line 15, at end insert—
“(11) The Chancellor of the Exchequer must, no later than 5 April 2022, lay before the House of Commons a report—
(a) analysing the fiscal and economic effects of Government relief under the capital allowances super-deduction scheme since the inception of the scheme, and the changes in those effects which it estimates will occur as a result of the provisions of this section, in respect of—
(i) each NUTS 1 statistical region of England and England as a whole,
(ii) Scotland,
(iii) Wales, and
(iv) Northern Ireland,
(b) assessing how the capital allowance super-deduction scheme is furthering efforts to mitigate climate change, and any differences in the benefit of this funding in respect of—
(i) each NUTS 1 statistical region of England and England as a whole,
(ii) Scotland,
(iii) Wales, and
(iv) Northern Ireland.”
This amendment would require the Chancellor of the Exchequer to analyse the impact of changes proposed in Clause 9 in terms of impact on the economy and geographical reach and to assess the impact of the capital allowances super-deduction scheme on efforts to mitigate climate change.
Amendment 78, page 5, line 15, at end insert—
“(11) Expenditure shall not be qualifying expenditure under this section if it is incurred by a member of a group which is required to publish a tax strategy in compliance with Schedule 19 of the Finance Act 2016, unless any tax strategy published in compliance with that Schedule after the coming into force of this Act includes any relevant country-by-country report.
(12) ‘Country-by-country report’ has the meaning given by the Taxes (Base Erosion and Profit Shifting) (Country-by-Country Reporting) Regulations 2016.
(13) A country-by-country report is relevant if it—
(a) was filed or required to be filed by the group in compliance with those Regulations on or before the date of publication of the tax strategy, or would have been so required if the head of the group were resident in the United Kingdom for tax purposes, and
(b) has not already been included in a tax strategy published by the group.”
This amendment would require large multinationals accessing super-deductions to make their country-by-country reporting public.
Clause 9 stand part.
Clause 10 stand part.
Clause 11 stand part.
Clause 12 stand part.
Clause 13 stand part.
Clause 14 stand part.
Amendment 55, page 85, line 10, in schedule 1, leave out from “period if it is” to the end of line 30 and insert—
“a related 51% group company of that company in the accounting period as defined by section 279F of CTA 2010.”
This amendment would prevent the introduction of a new definition of “associated companies” for the purposes of the small profits rate and uses an existing provision instead.
Amendment 56, page 93, line 29, leave out paragraph 11.
See the explanatory statement for amendment 55.
Amendment 57, page 94, line 5, leave out sub-sub-paragraph (a).
See the explanatory statement for amendment 55.
Amendment 58, page 94, line 14, leave out sub-paragraph (3).
See the explanatory statement for amendment 55.
Amendment 59, page 94, line 22, leave out paragraphs 15 to 17.
See the explanatory statement for amendment 55.
Amendment 60, page 95, line 5, leave out paragraphs 20 and 21.
See the explanatory statement for amendment 55.
Amendment 61, page 96, line 44, leave out paragraph 30.
See the explanatory statement for amendment 55.
Amendment 62, page 97, line 22, leave out sub-sub-paragraph (e).
See the explanatory statement for amendment 55.
New clause 1—Eligibility for super-deduction—
“(1) Only employers that meet the criteria in subsection (2) shall benefit from the provisions relating to capital allowance super-deductions in sections 9 to 14.
(2) The criteria are that the employer—
(a) recognises a trade union for the purposes of collective bargaining with its workforce, and
(b) is certified by the Living Wage Foundation as a living wage employer.”
This new clause would ensure that only employers that pay their staff the living wage and recognise trade union(s) would be eligible to receive the capital allowance super-deductions.
New clause 2—Commencement of super-deduction provisions (report on the benefits)—
“(1) Sections 9 to 14 shall not come into force until—
(a) the Secretary of State has commissioned and published a report that sets out the expected benefits of the capital allowance super-deductions in this Act, and
(b) the report has been debated and approved by the House of Commons.
(2) The report in subsection (1) must consider what the economic and social benefits would be of making the capital allowance super-deductions contingent on employers meeting criteria relating to—
(a) reducing their carbon emissions,
(b) tackling the gender pay gap,
(c) paying the right amount of tax and not using avoidance schemes,
(d) paying the living wage to all directly employed staff, and
(e) recognising trade unions for the purposes of collective bargaining.”
This new clause would mean that sections 9 to 14 could not come into force until the Government had published a report examining the economic, social and environmental effect of the capital allowance super-deductions and that report had been agreed by the House of Commons.
New clause 6—Commencement of super-deduction provisions (report on existing capital allowances)—
“(1) Sections 9 to 14 shall not come into force until the conditions in subsection (2) are met.
(2) The conditions are—
(a) the Public Accounts Committee has reported on the effectiveness of the existing capital allowances listed in section 2(3) of the Capital Allowances Act 2001, and
(b) at least one week after the publication of the report in paragraph (a) both Houses of Parliament have agreed that sections 9 to 14 shall come into force.”
This new clause would set the following conditions before clauses 9 to 14 of the Bill come into force: that the Public Accounts Committee prepares a report on the effectiveness of existing capital allowances, and then that both Houses of Parliament approve the clauses coming into force.
New clause 9—Equalities impact assessment of capital allowance super-deductions—
“(none) The Chancellor of the Exchequer must, no later than 5 April 2022, lay before the House of Commons an equalities impact assessment of the provisions sections 9 to 14 of this Act, which must cover the impact of those provisions on—
(a) households at different levels of income,
(b) people with protected characteristics (within the meaning of the Equality Act 2010),
(c) the Treasury’s compliance with the public sector equality duty under section 149 of the Equality Act 2010,
(d) equality in different parts of the United Kingdom and different regions of England, and
(e) child poverty.”
New clause 13—Review of impact of sections 6 to 14—
“(1) The Chancellor of the Exchequer must review the impact on investment in parts of the United Kingdom and regions of England of the changes made by sections 6 to 14 and schedule 1 and lay a report of that review before the House of Commons within six months of the passing of this Act.
(2) A review under this section must consider the effects of the provisions on—
(a) business investment,
(b) employment,
(c) productivity,
(d) GDP growth, and
(e) poverty.
(3) A review under this section must consider the following scenarios—
(a) the United Kingdom reaches an agreement with OECD countries on a minimum international level of corporation tax, and
(b) the United Kingdom does not reach an agreement with OECD countries on a minimum international level of corporation tax.
(4) In this section—
“parts of the United Kingdom” means—
(a) England,
(b) Scotland,
(c) Wales, and
(d) Northern Ireland;
and “regions of England” has the same meaning as that used by the Office for National Statistics.”
This new clause would require a report comparing scenarios in which (a) the United Kingdom reaches an agreement with OECD countries on a minimum international level of corporation tax, and (b) the United Kingdom does not reach an agreement with OECD countries on a minimum international level of corporation tax on various economic indicators.
New clause 17—Review of impact on corporation tax revenues of global minimum rate of corporation tax—
“The Chancellor of the Exchequer must within six months of Royal Assent lay before the House of Commons an assessment of the effect on corporation tax revenues in 2022 and 2023 of a global minimum corporation tax rate set at 21%.”
This new clause would require the Government to publish an assessment of the revenue effect of a global minimum corporation tax rate of 21%.
New clause 19—Review of impact of sections 6 to 14 (No. 2)—
“(1) The Chancellor of the Exchequer must review the impact on investment in parts of the United Kingdom and regions of England of the changes made by sections 6 to 14 and schedule 1 and lay a report of that review before the House of Commons within six months of the passing of this Act.
(2) A review under this section must consider the effects of the provisions on—
(a) business investment,
(b) employment,
(c) productivity,
(d) GDP growth, and
(e) poverty.
(3) A review under this section must compare the estimated impact of corporation tax rate changes in this Act with the impact on investment from the changes to the corporation tax rate in each of the last 12 years.
(4) In this section—
‘parts of the United Kingdom’ means—
(a) England,
(b) Scotland,
(c) Wales, and
(d) Northern Ireland;
and “regions of England” has the same meaning as that used by the Office for National Statistics”
This new clause seeks a review of the estimated impact of corporation tax rate changes in this Act with the impact on investment from the changes to the corporation tax rate in each of the last 12 years on various economic indicators.
New clause 20—Review of impact of section 7—
“(1) The Chancellor of the Exchequer must review the impact of section 7 and lay a report of that review before the House of Commons within six months of the passing of this Act.
(2) A review under this section must consider the effects of the provisions on—
(a) the link between corporate profit rates and ownership, and
(b) the cost of re-introducing a small profits rate.”
This new clause seeks a review of corporation tax provisions on (a) the link between corporate profit rates and ownership, and (b) the cost of re-introducing a small profits rate.
New clause 21—Review of impact of sections 6 to 14 (No. 3)—
“(1) The Chancellor of the Exchequer must review the impact on investment in parts of the United Kingdom and regions of England of the changes made by sections 6 to 14 and schedule 1 and lay a report of that review before the House of Commons within six months of the passing of this Act.
(2) A review under this section must consider the effects of the provisions on—
(a) progress towards the Government’s climate emissions targets, and
(b) capital investment in each of the next five years.
(3) A review under this section must include—
(a) the distribution of super-deduction claims by company size, and
(b) estimated tax fraud.
(4) In this section—
‘parts of the United Kingdom’ means—
(a) England,
(b) Scotland,
(c) Scotland,
(d) Wales, and
(e) Northern Ireland;
and ‘regions of England’ has the same meaning as that used by the Office for National Statistics.”
This new clause seeks a report on the impact of the super deduction on (a) progress towards the Government’s climate emissions targets, and (b) capital investment in each of the next five years. A review under this section must include (a) the distribution of super-deduction claims by company size, and (b) estimated tax fraud.
New clause 24—Review of super-deductions—
“(1) The Chancellor of the Exchequer must review the impact of sections 9 to 14 and schedule 1 of this Act and lay a report of that review before the House of Commons within six months of the passing of this Act, and then annually for five further years.
(2) A review under this section must estimate the expected impact of sections 9 to 14 and schedule 1 on—
(a) levels of artificial tax avoidance,
(b) levels of tax evasion, reducing the tax gap in each tax year from 2021–22 to 2025–26, and
(c) levels of gross fixed capital formation by businesses in each tax year from 2021–22 to 2025–26.
(3) The first review under this section must also consider levels of usage of the recovery loan scheme in 2021.”
This new clause would require the Government to review the impact of the provisions relating to super-deductions and publish regular reports setting out their findings.
Jesse Norman
Clauses 6 to 14 and schedule 1 establish the charge and set the rate of corporation tax at 19% for the financial year beginning in April 2022, and establish the charge and increase the rate of corporation tax to 25% for the financial year beginning in April 2023. They also introduce a small profits rate at 19% for companies with profits of £50,000 or less, with marginal relief for companies with profits between £50,000 and £250,000; and they increase the diverted profits tax rate by 6 percentage points, in line with the increase in the main rate of corporation tax. Finally, they introduce a capital allowance super-deduction for investments in plant and machinery.
At 19%, the current rate of corporation tax is the lowest headline rate in the G20 and significantly lower than in the rest of the G7. However, given that the Government have used the full weight of the public finances to support businesses during the pandemic, protecting thousands of businesses with more than £100 billion-worth of support, it is right that, as the economy rebounds and businesses return to profit, they share in the burden of restoring the public finances to a sustainable footing. That is why the Chancellor announced at Budget that the rate of corporation tax will increase to 25% from April 2023, after the economy is forecast to recover to its pre-pandemic level.
While many businesses are struggling now and the Government are continuing to provide support for them, others are sitting on large cash reserves. To unlock those funds and support an investment-led economic recovery, from April 2021 until the end of March 2023 companies will be able to claim a 130% capital allowance super deduction on qualifying plant and machinery investments. This super-deduction makes the UK’s capital allowance regime truly world-leading, lifting the net present value of our plant and machinery allowances from 30th in the OECD to first.
Given the number of amendments and the number of speakers, I will try to keep my remarks relatively brief. Clause 6 sets the main rate of corporation tax at 25% from April 2023. The OBR forecasts that this will raise over £45 billion in the next five years. It should be noted that 25% is still the lowest headline rate in the G7—lower than in the United States, Canada, Italy, Japan, Germany and France. The clause also sets the main rate of corporation tax at 19% for the financial year beginning on 1 April 2022. That means the higher rate will not come into force until well after the point when the OBR expects the economy to have recovered to its pre-pandemic level.
To protect businesses with small profits from a rate increase, clause 7 and schedule 1 introduce a small profits rate for non-ring fence profits for the financial year beginning 1 April 2023. As a consequence, only around 10% of actively trading companies will pay the full main rate.
Clause 8 makes changes to increase the rate of diverted profits tax to 31% from 1 April 2023, along with apportionment provisions for accounting periods straddling the commencement date. This will maintain the current differential between the main rate and ensure the diverted profits tax remains an effective deterrent against profits being diverted out of the UK.
Clauses 9 to 14 make changes to encourage firms to invest in productivity-enhancing plant and machinery assets that will help them grow, and to make those investments now. Clause 9 introduces new capital allowances available for expenditure incurred by companies between 1 April 2021 and 31 March 2023. These include a 130% super deduction for new main rate plant and machinery and a 50% special rate first-year allowance for new special rate plant and machinery
Business investment fell by a record £12 billion between the first and second quarters of last year. Making capital allowances rates for plant and machinery investments more generous has the effect of stimulating business investment and enhancing productivity. As firms invest, they create new, or substitute better, assets for use in production. That increases labour productivity, as workers produce more output per hours worked through the use of new equipment that enables faster, higher-quality outputs.
The measure will greatly benefit British companies of all sizes, including those investing more than the £1 million annual investment allowance threshold, which are responsible for around 80% of total plant and machinery capital expenditure. The changes made by clauses 9 to 14 will allow all companies to reduce their taxable profits by 130%, or 50% up front, all in the first year—a cash-flow benefit powerful enough to encourage businesses to invest now. We expect the measure to cost around £25 billion over the scorecard period.
Opposition Members have tabled a number of amendments to clauses 6 to 14. Amendments 55 to 62 propose the removal of the associated companies rules that apply to the small profits rate. The rules will affect a small proportion of companies, but they are an essential feature of the regime to prevent profitable businesses from fragmenting in order to take advantage of a lower rate or creating unfair outcomes, and they were a feature of the previous regime on which these rules are based. In the absence of the rules, a consultant, for example, could provide his or her services through five companies with profits of £40,000 each and benefit from the small profits rate. I cannot believe that Opposition Members, or indeed any Member, would support that form of avoidance: restructuring in order not to pay the tax.
Several of the new clauses call on the Government to publish a review of the impact of these clauses and potential alternative policy approaches. The Office for Budget Responsibility considers the impact of policy changes in its fiscal forecasts and sets them out in its “Economic and fiscal outlook”, which is published alongside the Budget. Therefore, I can reassure Opposition Members that new clauses 17 and 20, which request reviews into the revenue impacts of a potential global minimum tax rate and the impact of the small profits rate, are not necessary.
New clauses 13, 19 and 21 request reviews into the investment and various economic impacts of clauses 6 to 14 across the UK. The economic impacts of the clauses have been reflected in the OBR’s forecasts published in its “Economic and fiscal outlook”, as were the impacts of reductions in the rate of corporation tax. The fiscal impact of any future agreement on international tax reform will be reflected in subsequent “Economic and fiscal outlook” documents.
Opposition Members have also tabled several amendments relating specifically to clauses 9 to 14. Amendment 11 would reduce the level of the super deduction to the current writing down allowance of 18% for main rate assets. That would have the effect of removing all the benefit conveyed by this groundbreaking new policy for shorter-life assets, while the benefit of a 50% first-year allowance for longer-life assets would remain. That would distort investment behaviour in favour of longer-life assets and reduce the positive benefits of the policy.
Various other amendments seek to restrict the relief only to certain companies, or require companies that claim the super deduction to meet more burdensome conditions than would be required for other first-year allowances. The super deduction is an intentionally broad-based tax relief, designed to ensure that as many companies as possible are able to benefit from this very generous policy, in order that they can invest in their own future to drive the economic recovery.
Regarding a new requirement for country-by-country reporting, I am pleased to say that this Government have championed tax transparency both at home and abroad. That is demonstrated by the requirement introduced in 2016 for large businesses to publish their annual tax strategy, containing detail on the business’s approach to tax and how it works with HMRC. However, the Government continue to believe that only a multilateral approach to public country-by-country reporting with wide international support would be effective in achieving transparency objectives and avoiding disproportionate impacts on the UK’s competitiveness, or distortions regarding group structures. The Government firmly believe that that should remain voluntary and that no further legislation is needed unless and until public country-by-country reporting is agreed on a multilateral basis.
New clauses 2 and 6 would have the effect of delaying the super deduction, but to delay the policy now would be highly irresponsible and would risk holding up the economic recovery that the policy will help to stimulate. The likely real-world effect of delaying the implementation of the super deduction would be that businesses would delay investment until they had certainty on whether the super deduction would be available. At a time when investment is most needed, delaying the implementation of the super deduction would thus have negative impacts on employment, growth and wages. Various other amendments would delay the measure, narrow its scope or replicate existing analysis and safeguards, and I urge the Committee to reject them.
James Murray
I rise to speak to the amendments and the new clause in my name, that of the Leader of the Opposition and those of my other right hon. and hon. Friends.
In the preceding debate, we saw how this Finance Bill will hit families, in all their many forms across the country, by making half of all people in the UK pay more tax from next year. As I made clear, the sense of injustice is made all the more acute by the fact that that increase in costs for families comes before any rise in corporation tax and that at the same time, through this Bill, the Government are letting tech giants stop paying tax altogether.
Clauses 6 to 8 make it clear that the proposed changes to corporation tax will come after increases to the income tax personal allowances, while clauses 9 to 14 centre on the so-called super deduction, a £25 billion tax break targeted at big corporations that the Chancellor has said represents
“the biggest two-year business tax cut in modern British history”.
That tax break forms the centre of the Chancellor’s strategy set out at the Budget, and it comes with a huge cost attached to it. We need to be absolutely clear who will benefit from it.
One thing is clear: that tax break is not targeted at small and medium-sized businesses. The truth is that such businesses can already benefit from the annual investment allowance, a 100% tax break on investment up to £1 million, which clause 15 extends to the end of this year. The Financial Secretary was very clear in his written statement of 12 November 2020, which announced the extension, that it:
“Simplifies taxes for the 99% of businesses investing up to £1 million on plant and machinery assets each year.”
Indeed, the Treasury Committee concluded in its report published in February, “Tax after coronavirus”, that the annual investment allowance
“appears well targeted to promote growth in small and medium-sized enterprises.”
The existing allowance is said to be well targeted at the growth of small and medium-sized businesses and, by the Financial Secretary’s own admission, it already benefits 99% of businesses, which will benefit only marginally from the new super deduction. Who does that leave? It is very clear who will be the main beneficiaries of the Chancellor’s new scheme. It will be a tax break for the 1%.
Sammy Wilson
Does the shadow Minister not accept, first, that large businesses are an important component of our economy and we need to increase productivity in those businesses as well as in small businesses, and secondly, that many large industries, such as the aviation industry, have been badly hit by the pandemic and would benefit from the kind of tax allowances proposed in the Bill?
James Murray
I thank the right hon. Gentleman for his comments, but as I have set out, the annual investment allowance already appears to serve small and medium-sized enterprises well. The super deduction that we are debating now is designed to help companies such as Amazon, which do not need any help with their investment. It is important that we see this in the context of those companies that have done well throughout the outbreak and are already avoiding much of the tax they should be paying. It is no wonder that Tax Watch has nicknamed this the “Amazon Tax Cut”. This giveaway from the Chancellor could wipe out Amazon’s UK tax bill entirely.
Analysis of Amazon’s accounts from 2019 shows that the corporation’s UK operations made pre-tax profits of £102 million. In the same year, it spent £67 million on plant and machinery, £80 million on office equipment, and £15 million on computer equipment. The super deduction would have enabled Amazon to deduct £211 million from the calculation of its taxable profits— more than enough to wipe out its entire tax liability twice over. It is truly astonishing that, faced with all the challenges of this outbreak, the Government see their priority as giving Amazon a tax break.
Here and around the world, people agree with us that investment in jobs and growth is what is needed. A tax break for tech giants that already fail to pay what they should is not the answer. That is why our amendment 79 would explicitly prevent the biggest tech firms from taking advantage of the Chancellor’s tax break, as well as other big firms that do not support workers’ rights and the living wage.
The Government should be improving the lives of Amazon workers, who have helped so many people with deliveries throughout the pandemic, not giving a huge tax break to their bosses. Amendment 79 would prevent Amazon and other tech giants from accessing the super deduction by preventing firms from doing so if they are liable for the digital services tax. When the Government set out their plans for the digital services tax, they made it clear that it would apply to businesses that provide social media platforms, search engines, or online marketplaces to UK users. The detail of that tax means that businesses will be liable when the group’s worldwide revenues from these digital activities are more than £500 million, and when more than £25 million of these revenues are derived from UK users.
We are clear that those big corporations that should be caught by the digital services tax are among those that absolutely should not be benefiting from the Government proclaim as the biggest business tax cut in modern British history. We know that Amazon has brazenly made it clear that it will dodge the bill from the digital services tax by passing the cost on to its marketplace sellers. The fact that it is not even paying the tax that was designed for it to pay makes the prospect of a further massive tax cut from the Chancellor even more galling.
Furthermore, as well as excluding big corporations on the basis of their being liable for the digital services tax, we are seeking to use our amendment to stop those big businesses that do not support workers’ rights and the living wage from accessing the tax break. Both conditions would also catch Amazon and would also require other big businesses—those that are not liable for the digital services tax—to respect the right to organise and collective bargaining, and to be certified, or be in the process of being certified, by the Living Wage Foundation as a living wage employer.
When firms stand to benefit from what the Chancellor has called the biggest business tax cut in modern British history, the very least the Government should require of them is that they pay their workers the living wage and respect workers’ basic rights to organise. Alongside this, we propose in amendment 80 that the Government require big firms benefiting from the Chancellor’s tax break to make a climate-related financial disclosure, in line with the recommendations of the Task Force on Climate-related Financial Disclosures.
Beyond the specific issue of how the biggest corporations are set to benefit from this tax break the most, we have also tabled new clause 24 to reflect the widely-held concerns about the impact of the super deduction on levels of tax avoidance and evasion. As the chief executive of the Resolution Foundation has made clear, investment incentives have been abused for tax avoidance purposes in the past, yet the Government have failed to say or do anything to address widespread concerns that the super deduction is open to fraud and abuse.
As I mentioned on Second Reading, economists from the Institute for Fiscal Studies have said that the super deduction will
“create a risk of tax avoidance and even potentially fraud as companies essentially try to find ways to dress things up as plant and machinery investment”.
Minsters were unable to reassure us on this point when I raised it last week, so we are asking for the levels of tax avoidance and evasion arising from the super deduction to be reviewed and put transparently before this House.
It tells us everything about the Conservatives’ priorities that they are taking money from people’s pockets at the very same time as letting tech giants off paying tax altogether. This Government are proposing to wipe out some of the biggest corporations’ tax bills through a £25 billion boon, aimed at the biggest corporations, that the Chancellor has called
“the biggest two-year business tax cut in modern British history.”
In the face of a struggling economy, a tax break for tech giants that already do not pay enough tax should be the last thing on the Government’s mind. Instead, it is top of their list. They are wrong.
Richard Fuller (North East Bedfordshire) (Con)
Will the hon. Gentleman give way?
James Murray
No, let me make some progress.
The Government are wrong, and that is why we will be voting to stop the Chancellor’s tax break going to the biggest tech firms or other big corporations that do not support workers’ rights and the living wage. We need a fairer tax system and we need investment in jobs and growth. This Government’s Finance Bill fails on both fronts. I urge Conservative Members to show that they understand this, support our amendments today and take a stand against the Amazon tax cut.
Felicity Buchan (Kensington) (Con)
I speak in support of clauses 6 to 14 and against the amendments. This Finance Bill needs to be a delicate balancing act. It needs to give immediate support to businesses and individuals while setting a path to rebalance our books in the medium to long term. In my view, these provisions on corporate taxation and the super deduction get that balance exactly right. The Bill defers the increase in corporation tax for two years and applies to only one in 10 businesses at 25%, but at the same time it turbocharges the incentives to invest in business now.
This country has had a perennial problem with productivity. We need to incentivise and encourage business investment. That business investment will help productivity, growth and innovation, and that is exactly what we need. The OBR has said that it anticipates that business investment will go up by a massive 10% as a result of this measure and, as my right hon. Friend the Minister mentioned in his introductory remarks, we will go from No. 30 in the OECD rankings for attractiveness for business investment to No. 1. That is what we need over the course of the next two years as we turbocharge this economic recovery. We need the economic recovery to be strong.
Sammy Wilson
Does the hon. Lady accept that many of our large companies will lead the way in our export growth as we seek to capitalise on the new markets that will open to us as a result of Brexit, and that to capitalise on that we need new, competitive products and to be productive and competitive on the world stage, which is why we need to encourage investment in firms both large and small?
Felicity Buchan
The right hon. Gentleman makes a very good point. We need to encourage investment across the board in large, medium-sized and small firms. Productivity has lagged and we need to correct that, so I absolutely agree.
Let me move on to corporation tax. As I have said, we will increase corporation tax but that is delayed for two years. Corporation tax, by definition, is paid only by profitable companies. I am a low-tax Conservative, so I do not normally advocate increasing taxes, but given the exceptional amount of debt that we have rightly accrued and taken on, we need to be fiscally prudent and look to balance our books in the medium to long term. The reality is that we are very sensitive to interest rates and inflation, given the debt we have; so yes, I do think we need to do this, although it goes against the grain. However, as my right hon. Friend the Minister has said, even with the increase to 25% we still have the lowest headline corporation tax rate in the G7.
I also want to point out that the measure applies only to the most profitable businesses, those that make £250,000-plus. A small business that makes profits of up to £50,000 will have no change whatsoever in its corporation tax, and businesses in between will have a tapered rate. I believe that this is an unavoidable increase in corporation tax, but it still leaves us incredibly competitive on the international stage, and it applies to only one out of 10 businesses.
Sammy Wilson
Does the hon. Lady accept that, despite the impression being given tonight that we are going to tax firms less and take less money off them, the Red Book indicates that corporation tax take in the economy as a whole will escalate from £40 billion this year to £85 billion by the end of the Budget period? The result will be that we take more tax from firms. Hopefully, those firms will become more profitable and will therefore be paying more tax.
Felicity Buchan
I completely agree with the right hon. Gentleman that all the forecasts show a very substantial increase in the tax take by virtue of this move in corporation tax.
I believe that we have the right balance. We are increasing corporation tax, but only for 10% of our businesses and only in two years’ time. Importantly, we are also accelerating and incentivising investment in businesses, which will be critical to our economic recovery.
Richard Thomson (Gordon) (SNP)
I want to speak to the amendments and, in particular, the new clauses that have been tabled in my name and those of my colleagues.
First, I will start with the positives. We very much welcome the planned increase in corporation tax rates. For a number of years, there has been an orthodoxy that lower corporation tax rates are one way to economic growth. There was a period in the 1980s through to about the 2000s when it was possible to make the argument, as many did, that lower taxes could be a route to securing an increased level of foreign and direct investment, and that the resulting increase in economic activity could result in higher tax revenues than might otherwise have been the case. I would like to think that we are all just a bit wiser and more savvy now, given that, in the growth of that period, it is impossible to properly separate out the increase in corporation tax take and the general growth in activity that took place independently.
Given that we did not see conspicuously high levels of investment or wage growth over that period, except perhaps in boardrooms, and given the condition of our public finances and the importance of public goods as a driver of wellbeing and sustainable growth and prosperity, we consider that this increase, which will apply a new 25% rate on the top 10% of firms, is fully justified. We are relieved that firms will have until 2023 to plan for this move. We believe it was misguided for the Chancellor to try to increase it from 19% to 20% in September, ahead of any recovery starting, beyond the anticipated return-to-trend growth that we are seeing anyway.
The SNP firmly believes that it is important that our corporate citizens pay their share towards the maintenance and good functioning of the market and the public goods that allow them to flourish. However, domestic corporation tax is only part of that story. If re-elected—obviously, we have elections coming up in Scotland, which I am sure hon. Members are focused on avidly—the SNP Government will be looking to explore the possibility of levying a higher poundage on properties where the owner is registered in a tax haven. That is part and parcel of the package of measures that is needed to ensure that everyone who benefits from participation in the market is making a suitable contribution towards it.
Further, we believe that the UK must seize the opportunity that this moment presents to work closely with the Biden Administration in the USA. We must heed the call of that Administration’s Treasury Secretary, Janet Yellen, to set a global minimum tax take for companies to ensure the global economy can thrive, based on a more level playing field and the taxation of multinational corporations, and help spur innovation, growth and prosperity.
New clause 13 would oblige the Government to review the impact of the changes made by clauses 6 to 14 in all parts of the UK, particularly in respect of business investment, employment, productivity, GDP growth and poverty, and to compare the difference in actual and forecast outcomes between having a deal in place with other OECD countries on a minimum level of corporation tax and not.
Similarly, new clause 19 asks the Government to review these changes but in a way that looks both forwards and backwards. As I said earlier, orthodoxies may change in economics, and the Chancellor’s commitment to increasing the headline rate seems to mark the end of a protracted period of a race to the bottom on corporation tax rates. The Chancellor himself said on 3 March that cuts
“might not be the most effective way to drive capital investment up”.
On that basis, it is very important that the Government should compare the estimated impact of corporation tax changes in the Bill with the impact of the changes in corporation tax rates that we have seen in each of the past 12 years.
New clause 20 seeks a review of corporation tax provisions on the link between corporate profit rates and ownership, and the cost of reintroducing a small profits rate. We believe that the lower small profits rate introduces an unnecessary degree of complexity into the tax system. We were unable to find specific costings for the reintroduction of the small profits rate in the OBR policy costings. Instead, they appear to have been rolled into the costings for the overall rate increase. The Treasury should publish details of the revenue forgone through this measure for the purposes of proper scrutiny.
New clause 21 seeks a report on the impact of the super deduction on progress towards the Government’s climate emissions targets and capital investment in each of the next five years. It is important that we understand properly not just the impact that the super deduction is expected to have but the impact it actually has, because it is one of the most significant spending measures in the Budget and a very significant giveaway to big business.
The super deduction is poorly targeted, since it applies to physical assets rather than investments in software, for example, and seems to mostly benefit larger companies. Smaller investments are already tax-deductible under the annual investment allowance. OBR analysis suggests that some £5 billion of the super deduction will, in any event, be spent on previously planned investments. It is hard to avoid the conclusion that this measure will benefit larger companies in a way that does not necessarily drive growth in the way that the Chancellor would hope and certainly does not target the small and medium-sized enterprises that benefited from those deductions anyway and are the engine of growth in most parts of these islands.
When setting policy, it is always a good idea to know what we are doing and why and to have the most solid evidential base for doing so. The fact that we will not put these measures to a vote does not diminish the significance and importance of what we propose. I can assure the Minister that we will return to these matters and will look to the Government to act, even if these matters are not addressed in the final version of the Bill.
Andrew Jones
One of the biggest challenges that the UK economy has faced for many years is its productivity. The UK has some of the highest-calibre companies in the world, among the smartest and most productive on the planet, but outside the south-east, there are areas of the UK where productivity matches parts of southern Europe. For many years there has been a long tail of companies whose productivity is very poor. There are many causal factors in that, including skills—particularly digital—and infrastructure challenges, which I have focused a fair amount of my time on. One of the key issues is a lack of business investment, and one element of the Bill, which I shall focus upon in my few words, goes right to the heart of tackling that: the super deduction.
Until March 2023, companies can claim 130% capital allowances, which basically means that for every £1 a company invests, its taxes are cut by up to 25p. I have no doubt that this will prompt investment. Investment is a driver of economic growth. While the UK has performed well on growth over the last decade, it has lagged on investment, so if investment rates can be improved, the UK will do even better.
The Office for Budget Responsibility estimates that the UK will rise from 30th to first in the OECD world rankings for business investment. That is a very positive thing. Being a beacon for investment is a positive, not a negative; we should not listen to Opposition Members on this. However, such a rise in the world rankings will not be achieved unless there is real scale to this measure. For the two years that it is in place, it is estimated to amount to £25 billion. It would therefore be the largest business tax cut in modern British history, so there is indeed real scale to it.
When we talk about productivity in this place, there is a danger of speaking in jargon. What people could take away is the message that they will have to work harder, do 40 hours per week instead of 38, or work in a team of six rather than eight but still do the same work. What I know we mean, and what I am talking about, is working smarter, so that there is more economic output for the same input. Investment in new machinery and the latest technology is one way to increase productivity, and the super deduction will increase investment.
There are amendments ahead of us this evening about measuring the impact of those policies. Those amendments are not necessary as the Treasury always reviews the impact of its policies, but as the Treasury does its work it will be interesting to see the impact of the super deduction on different parts of the country. It will simply reflect the different economic mix that we have in different areas, and some will benefit more significantly than others. I think the policy will be very helpful in the levelling-up agenda.
Dame Margaret Hodge (Barking) (Lab) [V]
With the support of a wide range of Members from across the House, I tabled amendment 78. Although we will not put it to a vote tonight, we intend to return to the subject on Report. Sadly, I cannot look the Minister in the eye, but I strongly and sincerely urge him to give the matter proper and serious consideration. A knee-jerk rejection to a practical idea simply because it is proposed by Back Benchers from across Parliament would confirm yet again that the Government listens only to the few—the powerful corporations and influential tax advisers—and ignores the views of most taxpayers in Britain today.
Boosting investment to stimulate growth is a vital and shared objective, especially as we emerge from the shadows of the pandemic, but the super deduction is both hugely expensive and poorly targeted. With a cost of £25 billion over two years—nearly half the total annual defence budget—the Government must ensure proper value for hard-working taxpayers. Our amendment seeks to target taxpayers’ money more effectively. Every new tax relief, as the Minister well knows, provides a new opportunity for the unscrupulous to identify loopholes and then to shirk their responsibilities and avoid paying their fair share of taxes. Capital allowances have long been fertile ground for tax avoidance. Anybody looking online will find an army of people advertising expertise in classifying expenditure to help companies to exploit the eligibility criteria and so avoid tax.
With a super deduction, the opportunities for exploitation are obvious. The tax relief will last for only two years, so it is unlikely to fund the aviation industry or genuinely new capital investment, which takes time to plan and to implement. It will mainly be used to cut taxes for companies that were investing anyway, and those that will benefit most are those that have prospered the most during the pandemic. They are the companies with oven-ready capital investment plans, benefiting from the increased demand that they have enjoyed over the last torrid year—companies such as BT, whose share price rose by 7% on the day the super deduction was announced, or, as others have mentioned, the notorious tax avoider Amazon.
In 2019, Amazon’s UK turnover was £13.7 billion, but by claiming that its UK sales took place in Luxembourg it exported its profits and avoided corporation tax. It declared only a bit of profit in the UK, as the shadow Minister said, on its warehousing and logistics activities. Its corporation tax contribution was less than 0.1% of its turnover. Analysis by TaxWatch shows that even that miserly contribution would be wiped out with super deductions. It would write off its investment in IT equipment and machinery against its deliberately understated profits. 8.30 pm
Does the Minister really intend to fritter taxpayers’ money away on bungs for global companies that do not pay fairly into the system? Jeff Bezos, whose personal fortune rose to $200 billion during the pandemic, and his $1 trillion company are pocketing money from the British taxpayer and flagrantly refusing to pay back into the system. Does the Minister really think that taxpayers support this sort of daylight robbery? Our amendment would provide a straightforward way for the Government to ensure that this did not happen. It would require proper transparency, with multinational corporations showing where they undertake their economic activity and where they make their profits as a condition of eligibility for super deductions.
The House voted in favour of country-by-country reporting in 2016, as the Minister said, but that power has never been enacted. Our amendment urges the Government to use that power to ensure that this egregious behaviour by companies is visible for all to see, and to ensure that taxpayers’ money is not wasted on those who greedily grasp the nation’s money and assiduously avoid contributing to the public purse. Accepting our amendment would achieve two important objectives. First, it would stop taxpayers’ money being squandered. Secondly, with President Biden pioneering a new global settlement for corporation tax and the EU reaching agreement on country-by-country reporting, it would ensure that Britain played a leading role in developing a fair and responsible global system of taxation.
John McDonnell
Following on from my right hon. Friend the Member for Barking (Dame Margaret Hodge), I find it almost incredible that we are having this debate at all, given what we know about the track record of abuse of this type of tax deduction, as she so eloquently pointed out. The Minister is right to suggest that amendment 11, tabled in my name and those of other right hon. and hon. Friends, would have the effect of removing the provision of capital allowance super deductions.
There has been considerable evidence, and concern, from economic think-tanks and Committees of this House that tax reliefs have failed to deliver their stated objectives and, worse, that they have often had unintended consequences through the creation of perverse incentives. Members have raised example after example in recent years, including the entrepreneurs allowance, the patent box and the tonnage tax, all of which have not only failed in their objectives but lined the pockets of company directors and shareholders, exactly as my right hon. Friend said. Accountants, lawyers and others have been using them effectively for tax avoidance. The scope for perverse incentives and unintended consequences is even greater with these super deductions. If the Chancellor wants a sweetener to go alongside his corporation tax rises, surely at a time of rising unemployment it is more urgent to incentivise job retention through a temporary cut to employers’ national insurance contributions rather than introduce what has been described as this dog’s dinner of untargeted super deductions in clauses 9 to 14.
Unlike Ministers, in dealing with business, I do not believe in a something-for-nothing culture. If the Government are giving tax breaks to businesses, the Government, as guardians of the public purse and the public interest, should demand something in return. New clause 1, in my name and those of other hon. and right hon. Members, asks simply that, in return for companies being eligible for these super deductions, they should pay their workers the real living wage and should recognise trade unions for collective bargaining purposes—two simple things that reflect that they are responsible employers.
I regret very much the Minister’s reference to these as “burdensome” requirements. Paying a decent wage and recognising trade unions are not a burden, but actually things that enhance the role of an individual company. As has been said in debate after debate, even by Government Ministers, in many instances the greater involvement of the workers in a company increases productivity. These are just low barriers for companies to pass. It does not take long to recognise a trade union or to be accredited as paying the living wage. Companies that do not currently meet these extra criteria could easily do so during the passage of this Bill and its enactment.
I also back the Front-Bench amendments in the name of the Leader of the Opposition, and I pay tribute to my hon. Friend the Member for Ealing North (James Murray). He is right that companies such as Amazon that dodge their taxes and evade their responsibilities to their workers should not be given tax breaks on top. The Chancellor of the Exchequer made much of his compact with unions and business groups over the furlough scheme. This modest new clause 1 puts in legislation the approach I am putting forward. I believe that it is within the spirit of that relationship between Government, trade unions and employers, and I just urge the Government to think again about accepting it.
New clause 2, in my name and those of other hon. and right hon. Members, combines a request for an evidence base for super-deductions in respect of capital allowances and to explore what economic benefits could be derived from attaching social and environmental conditions to the receipt of super deductions. I heard one hon. Member in this debate say that the Treasury monitors these policies and does indeed review them; unfortunately, it does not.
Historically, tax reliefs have been introduced, and over the years an accumulation of tax reliefs have never been reviewed and never really been tested for their effectiveness in the way they should be. The Office for Budget Responsibility stated in its March “Economic and fiscal outlook” that the super deductions, as others have said, are expected to cost at least £25 billion in total between 2021-22 and 2023-24. This is a huge commitment, and it is surely in the public interest that we have an assessment of policies’ effectiveness and also ensure they deliver on social and environmental goals.
In new clause 6, I seek to create an evidence base on which this House can assess the merits and drawbacks of the super deduction policy. The Public Accounts Committee has previously looked into the operation of UK tax reliefs, and its findings painted a worrying picture. These reliefs already cost more than £100 billion a year in forgone tax, and HMRC does not even know how many reliefs exist or monitor their cost, let alone their effectiveness. Let me quote my right hon. Friend the Member for Barking, who is the former Chair of the Committee. She said:
“HM Treasury and HM Revenue and Customs…do not keep track of those tax reliefs intended to influence behaviour. They do not adequately report to Parliament or the public on whether reliefs are working as intended and what they cost and whether they represent good value for money.”
She went on:
“HMRC does not effectively monitor changes in the cost of tax reliefs so is slow in identifying instances where a relief is being exploited for a purpose”
beyond what Parliament intended. I think that is an accurate but damning indictment and one that should concern the whole House, but especially Treasury Ministers.
New clause 6 specifically recommends that the Public Accounts Committee is tasked with reviewing the effectiveness of existing capital allowances and that this House then votes on the clauses that provide for super deductions in the light of that evidence. I urge the Government to get a grip on the whole process of tax reliefs. We have seen how they can be abused. We have seen how ineffective they can be. We have also seen an industry develop, with accountants and lawyers who have profiteered from tax reliefs that the Government have introduced over decades. To add now to that abuse of taxpayers’ money in this way, I deeply regret. I urge the Government to think again. I give the Government this warning: in a few years’ time, if the Bill goes through as it is now, I bet we will be returning to this debate with example after example of how this system has been abused, to all our cost.
Miriam Cates (Penistone and Stocksbridge) (Con) [V]
I wish to speak to the numerous amendments and new clauses relating to corporation tax changes and the new super deduction.
As the previous speaker, the right hon. Member for Hayes and Harlington (John McDonnell), will no doubt keenly remember, raising corporation tax was one of the pillars of Labour’s 2019 manifesto. We frequently hear Labour Members expressing the view that big businesses should pay their fair share of tax. I completely agree, and that is why I fully support the Government’s proposals to increase corporation tax with a new maximum rate of 25% for those businesses with profits of over a quarter of million pounds from April 2023. Unlike a rise in income tax or national insurance, which affects taxpayers in a blanket way regardless of personal financial circumstances, corporation tax is only paid when profits are made—no profit, no tax due. And where profits are made, it is of course absolutely right that a proportion of those profits is returned to the taxpayer, because without the infrastructure, education, security and health services that the state provides, those businesses would clearly be much less profitable.
Members across the House like to champion small and local businesses, and rightly so. These businesses will, in the vast majority of cases, continue to pay the lower rate of corporation tax. In my constituency, we have 2,890 registered businesses, with 88% having fewer than 10 employees. These are not the kind of companies that generally make profits exceeding a quarter of a million pounds a year. The corporation tax rise will only affect the very largest and most profitable businesses. In fact, only 10% of businesses will pay the new higher rate. The Government are right to delay the increase until 2023, as it gives companies time to plan as we emerge from a period of uncertainty, but it is wrong to say that the impact of the pandemic means that the change should not take place at all. Yes, many businesses have struggled during the pandemic, but some businesses have prospered hugely, often due to circumstances for which they can take no credit. Online traders and the big supermarkets have seen their revenues increase substantially purely because other retailers have been legally forced to close. It is therefore right for the Exchequer to recoup some of those additional revenues through taxation. These measures must therefore pass without the proposed amendments, some of which could allow large businesses to restructure to avoid the high rates of tax.
We all want UK businesses to be profitable, but we also want those profits to result in higher wages, better training and reinvestment in our economy so that profits can be shared fairly across society and not just concentrated among shareholders or the most highly paid executives. In other words, we need businesses to be more productive. Low productivity has been a thorn in the flesh of the UK economy for some time. The proposed super deduction is therefore exactly the measure we need to encourage the reinvestment of profits through large-scale investment, turning crisis into opportunity and setting UK businesses on a new path to innovation, productivity and growth. The OBR has predicted that this will increase business investment by 9% and lift us from 30th in the OECD’s world rankings for business investment to first. This is the right moment for this incentive, when many businesses have been forced to pivot or have seized opportunities presented by the pandemic, and now is the time to invest. That is why I oppose the amendments to the super deduction clauses, which would ultimately delay and reduce its effectiveness.
Our economy is an ecosystem, with the private sector, the public sector, our communities, individual employees and employers existing interdependently in a multitude of symbiotic relationships. Each element of this ecosystem has obligations and responsibilities to the other parts. For businesses, these responsibilities include paying fair levels of tax and making investment decisions in the best interests of our whole society. It is the Government’s role to encourage businesses to act for the common good. The unamended measures in this Bill will be successful in doing just that.
Sarah Olney [V]
I wish to speak to clauses 6 and 7 relating to the rates of corporation tax and also to the super deduction.
Businesses everywhere, of all sizes and in many different sectors, have had an extremely challenging year. As we hopefully move into a time when business as usual can return, I know that Members in all parts of this House are united in wanting to support businesses to flourish once more. But this has also been a year of unprecedented demand on the public finances. Much of that money has been directed towards households in the shape of our furlough and SEISS schemes to ensure that incomes can be sustained and, in turn, to maintain revenue for those businesses providing essential services. Many businesses have seen increases in revenue this year as indirect competitors have been forced to close or prevented from making their goods and services available. Any business that provided a digital or delivery service found an unexpected increase in demand compared with those that provided an in-person service.
Why should the businesses that have profited from the pandemic not pay their share in restoring the public finances that have been expended on supporting us all through this difficult time? The Liberal Democrats have called for an excess profits, or windfall tax so that those businesses that have done well can contribute their share to the recovery. This could most easily be done by an immediate increase in corporation tax whereby only those companies that have remained profitable would pay it. Instead, the Government propose a sharp rise in corporation tax in 2023. This delayed increase will give larger companies time to rearrange their affairs, potentially limiting the amount of revenue that can be captured by the planned rise. It will create an artificial boost to the economy in the short term as profits are brought forward, to be reported against the lower tax rates of the next couple of years.
The Government’s changes to corporation tax rates come when the global nature of trade presents a major challenge to national autonomy on tax rates. The Liberal Democrats are in favour of higher corporation tax rates to ensure that businesses are paying their fair share. The challenge to implementing this has always been that we are in competition with other countries attracting investment by setting lower tax rates. I am interested to hear how the Government plan to react to the plans by the new Biden Administration in the United States to set a global floor for corporation tax rates. This is a fantastic opportunity to introduce a fairer and more progressive tax regime in all nations and reduce the options for corporations to reduce tax. I very much hope that the Government will sign up to the Biden plan and set an example to the rest of the world.
The Chancellor’s most eye-catching announcement in the Budget was the super deduction available to businesses over the next two years to get back 130% of the cost of new plant and machinery. I know that this will benefit many businesses, but I fear that the impact will be more limited than at first appears. First, it creates a cliff edge in investment, especially when coupled with the tax increase in the third year. Secondly, many manufacturing businesses invest for the long term and plan their capital expenditure in 10-year cycles, so a two-year incentive will not make a big change to investment plans. Thirdly, a great deal of equipment is leased rather than bought outright, so investment incentives like these will make no difference.
It would have been a better policy if the expenditure recovered could have included measures to get our economy to achieve net zero carbon emissions or have included expenditure on training and development to help us to build the high-skill economy that we need. These expenses could then have been claimed by a far wider number of businesses in many different sectors and made a genuine contribution to future prosperity and green growth.
The Government need to be clear about their business tax policy so that businesses have time to plan and an understanding of how tax policy interacts with an overall strategy to support enterprise and productivity. Many of our business owners feel a real loyalty to their communities and will maintain those connections regardless of the tax rates, but they need to know that this continues to be a country that welcomes entrepreneurs and supports small businesses. Much more can be done in our tax system to support small and medium-sized enterprises, and I regret that the Government have not taken the opportunity to do this. The Liberal Democrats would introduce a tax cut for SMEs and quadruple the annual employment allowance to allow small businesses to employ up to five people without paying any national insurance contributions. The Government have shown a lack of commitment to small and growing businesses in this Bill and no strategy for private sector growth.
The Liberal Democrats oppose the corporation tax clauses in the Bill because they mean that profitable corporations are not paying their fair share as we recover from this pandemic and the overall provisions do not provide the support we need for small businesses.
Bell Ribeiro-Addy [V]
I shall speak in favour of new clause 9 in my name, and the amendments and new clauses in the names of my right hon. Friend the Member for Hayes and Harlington (John McDonnell) and the Labour Front Bench.
The thread that weaves through these amendments and new clauses is utter outrage at plans for big corporations, including big firms that do not support trade union rights, that pay below the living wage or that avoid tax, to benefit from the Chancellor’s astonishing super deduction tax break giveaway. In particular, new clause 9 would require a meaningful equality impact assessment of capital allowance super deductions that must cover the impact of those provisions on households at different levels of income; people with protected characteristics; the Treasury’s compliance with the public sector equality duty; and equality in different parts of the UK and different regions of England.
For most of us, one of the key consequences of the pandemic has been to illuminate far-reaching health and socioeconomic inequalities in many countries. However much this Government try to conjure otherwise, it is just a statistical and factual truth that, as a result of years of cruel Conservative austerity followed by the callous Conservatives’ handling of the covid crisis, the pandemic’s impact has fallen disproportionately on the most vulnerable individuals and along gendered, ethnic, occupational and socioeconomic lines.
Inequalities in people’s protection from and ability to cope with this pandemic and its tremendous societal costs have stressed the importance and urgency of the societal changes needed to protect population health and wellbeing. According to the statement issued by independent experts of the special procedures of the United Nations Human Rights Council, condemning the Commission on Race and Ethnic Disparities’ report:
“The reality is that People of African descent continue to experience poor economic, social, and health outcomes at vastly disproportionate rates in the UK.”
Women—particularly the poorest women, black, Asian and minority ethnic women, disabled women, lone parents and young women—not only have been badly hit by the pandemic, but have suffered for years under this Government’s brutal austerity onslaught. Yet, coming in at an enormous £12 billion for 2021-22, the Chancellor’s announcement of a super deduction on purchases of capital goods by businesses was one of the largest spending items in the spring Budget. In fact, some argue that it is one of the largest single-year tax giveaways ever enacted by a Government. And who will it benefit? Although the Chancellor claimed in his speech that the Government’s response to covid had been “fair”, women, those on low incomes and those from BAME backgrounds stand to benefit the least from the untargeted tax breaks for large companies through the super deduction. We know that more businesses—and larger ones—are owned by men than by women. As such, it is important to recognise there are many potential equalities impacts to business taxation.
Incentives such as the super deduction are biggest for large firms and the Financial Secretary to the Treasury has admitted that only 1% of firms will benefit this year, as the rest are within the annual investment allowance. How can the Government justify the fact that under this Bill the rich and big business will be treated to mouth-watering tax giveaways and reliefs, despite unclear evidence about whether that will actually create the investment needed?
The Women’s Budget Group argues that this provision is likely to have “substantial deadweight costs”, bringing forward investment rather than generating new investment. The group also raised the point that it is unnecessarily limited to investment in “plant and machinery”, thereby excluding training and other human capital investments, and missing opportunities regarding the transition to a lower-carbon economy that recognises the economic benefits of spending on the social infrastructure that our public services provide. This goes to the crux of the problems with this Finance Bill, and with the Government’s lack of vision for a green recovery based on intersectional socialist economics and progressive taxation.
Ben Lake (Ceredigion) (PC)
It is a pleasure to speak in this debate, Sir Charles. I rise to speak in support of amendment 53, which I hope will encourage the Government to bring some rigour and meaning to their rhetoric of levelling up and the use of taxpayers’ money.
In a Budget that confirmed £17 billion of spending cuts, relative to March 2020 plans, the Chancellor’s decision to announce the super deduction, equivalent to forgoing approximately 20% of the UK’s corporation tax revenues, was certainly a bold one, particularly as the Financial Secretary noted in November 2020 that the existing annual investment allowance already covers 99% of all UK businesses. The House has heard this evening that the super deduction is a major tax break for the top 1% of UK businesses. We have also heard many concerns that it is a blunt tool in need of significant refinement if its perceived benefits are to be targeted to those in greatest need of support. I also point to concerns that the super deduction will disproportionately benefit London and the south-east of England and that it flies in the face of the Government’s commitment to level up the UK economy.
I draw the House’s attention to a finding from the Centre for Progressive Policy, which has calculated that, although the super deduction could amount to a tax break worth up to £513 for London residents, it would be worth only half as much in Wales, whose sum benefit is the second lowest of the UK nations and regions, with only Northern Ireland benefiting less on this measure.
I am afraid that I disagree with other hon. Members who have suggested that the super deduction might, on the contrary, actually benefit and address regional inequality. My fear is the opposite—that the super deduction will, at best, lock in existing regional inequalities and, at worst, exacerbate rather than address the UK’s geographical economic imbalance. That is why Plaid Cymru wishes to amend the Bill to require that the Chancellor considers the impact and geographical extent of the super deduction across all the UK’s nation and regions and would support calls made by other hon. Members this evening that measures should be introduced to establish a deeper evidence base for these changes. Similarly, given the urgent need for climate action and the retooling of the economy for a net zero future, this amendment also requires the UK Government to consider the super deduction’s impact on efforts to mitigate climate change.
I hope that the Government will incorporate guarantees such as these into the Bill to ensure that we truly do rebuild back better from the pandemic, rather than resuscitate the UK’s deeply flawed pre-pandemic economy. Failure to do so would make it clear that their rhetoric of support for all nations, for the levelling-up agenda and for climate action are no more than fine words and lofty intentions.
Richard Fuller
It is right, as our hard-working business leaders emerge from the most torrid 12 months, that the Government set a clear course for their understanding of how those businesses will be taxed in future. I would have hoped that it would have been heartening for the people who have been running businesses through these most difficult times to listen in to this debate to hear what Members of Parliament have to say on their behalf. However, personally speaking, I think that most people who run businesses will be rather saddened by what they have heard—largely, a perspective that it is wrong for people to run businesses that are profitable, that there is sin in becoming rich by creating a business that creates products that people want, rather than virtue, and a complete lack of understanding that businesses that make profits are a sign of success, rather than a sign of failure.
Personally, I am rather in favour of us increasing taxes. When this or any Government seek to increase tax on corporations, I wonder whether they realise that, essentially, they are putting a tax on success—that every pound that we take away from a business, from its profits, is a pound taken away from things that the business owner may do him or herself. They might be radical things, such as investing in and expanding the number of people who work for the businesses, investing in machinery that will make their business more competitive in terms of exports, or lowering their debt so that they are on a more substantial and more stable footing for the long term. Every time a state takes away money from enterprise it is putting at risk the resources those companies have to do those things, and the future success of this country. Therefore the Government were right to consider carefully how to balance a change in corporation taxes, and given what has happened subsequently to the Budget, the Chancellor deserves a bit of a pat on the back for understanding what would be going on in the global realm of corporation tax, as well as the crucial importance of providing some short-term incentive for businesses to invest as we emerge from the recession.
Antony Higginbotham (Burnley) (Con)
I agree with almost everything my hon. Friend the Member for North East Bedfordshire (Richard Fuller) said about corporation tax. It is a tax on success, and on this side of the House we are all naturally low-tax Conservatives—we believe fundamentally that businesses are most successful when they are left to innovate and grow, and can keep more of the money they earn. However, we also have to accept that that is not the only thing that drives businesses. Globally adaptable businesses that look around the world at where they are going to locate their next manufacturing plant or innovation look at myriad factors: the support available; the skills of the local population; and the infrastructure in place. All of those things cost money. As we have seen during the past 12 months, the Government have gone to great lengths to support businesses. In my constituency, 11,000 jobs have been supported by the furlough scheme. That is money that has helped businesses across Burnley and Padiham prepare and stay ready for when the economy reopens. We are also talking about £20 million in grants so that those same businesses can restart as soon as the economy opens up. All businesses understand that; they understand that responsibility comes with this and the taxation they pay enables them to take part in society in a meaningful way.
With all that in mind, I agree with the measures my right hon. Friend the Chancellor set out on corporation tax, as a low-tax Conservative. I do so because the Chancellor has struck exactly the right balance in making sure we secure the economic recovery first: we do not look at businesses now as they are just starting to reopen and get trading again and say, “Just because you are profitable, we are going to increase your tax rate immediately”; we look ahead and say, “When the economy has recovered and you are trading as you were pre-pandemic, that is when we will look for you to make a fair contribution to repay some of the support we have been able to put in place.”
In Burnley and Padiham, we are heavily reliant on small and medium-sized enterprises—those small innovators. As we recover from the pandemic, we often see the most SMEs and new businesses start up; people who used to work for one company and who may have been made redundant—something may have happened—then start their own businesses. That is why the small profits rate of corporation tax is so important, because it is the incentive those innovators and entrepreneurs need to start their business, to grow, to employ someone else.
We also have to recognise that one thing we have suffered from historically in the UK, for many, many years, is low productivity, and that has come from a huge lack of investment from businesses. If we are really going to level up across the country, we need to drive investment in growth and utilise the power the private sector has through whatever means are available to us. We know that since 2007-08 there has been a systemic lack of investment, driven by the uncertainty we have had, so that there is a pot of money that so many businesses are sitting on, waiting to be unlocked. That is where the super deduction will prove so important, because it encourages those businesses that have had a stockpile—that have lived with uncertainty for the best part of a decade and so have not been able to invest, as they have not had that confidence. As we emerge from the pandemic, the super deduction gives them the confidence to invest.
In Burnley, we are talking about aerospace manufacturers, automotive manufacturers and textile makers. The super deduction will help businesses transition to green technology, as we have spoken about. It will help aerospace businesses to move into HS2 and textile companies to move into weaving—we do still make textiles here in the UK.
All of these things will result in a high-skill, high-wage manufacturing economy here in the UK. So, yes, we need to keep the UK attractive to investment, job creation and new businesses, but we do that through a fair corporation tax system, lower rates for new businesses and using schemes such as the super deduction to drive investment into manufacturing jobs, which are going to be so vital for our future.
Rebecca Long Bailey [V]
I will limit my comments to the super deduction which, as we have already heard today, will be one of the largest single-year tax giveaways ever enacted in the UK. Arguably, some companies’ corporation tax bills will be wiped out entirely for a couple of years.
My right hon. Friend the Member for Hayes and Harlington (John McDonnell) has already said that the Public Accounts Committee found that tax reliefs cost more than £100 billion a year in forgone tax, but HMRC does not know how many reliefs exist; nor does it monitor the efficacy of such reliefs. That is staggering. Can we be confident that HMRC will know what effect the super deduction will have, and who will actually benefit from it? Many of my small and medium-sized enterprises in Salford would love a super deduction, but sadly it will not benefit them. The Financial Secretary to the Treasury told the House last year that the enhanced annual investment allowance of £1 million already covers the capital expenses of 99% of businesses in the UK, so it seems that this super-relief will overwhelmingly benefit only 1% of extremely large businesses.
I would have no problem if such businesses desperately required the relief in order to protect jobs or to invest in our local economies, but let us look at some of the potential beneficiaries. Amazon has benefited from the pandemic, seeing its sales jump by 50%. According to TaxWatch, the company’s latest accounts show that they spent £66.8 million on plant and machinery, £80.4 million on office equipment and £15.3 million on computer equipment in the same year, so the 130% super deduction could entirely account for the pre-tax profits of the company even before any deductions of staff pay awards.
Similarly, many energy and water companies find themselves also able to wipe out their tax bill. United Utilities spent £1.275 billion on property, plant and equipment in the past two years, compared with a current tax liability of just under £89 million. Electricity North West stated that covid has had a limited impact, and it had a tax bill of £45 million for 2019-20 while investing £449 million in property, plant and equipment. For both companies, it would only take a small proportion of the capital investment to be spent on plant and equipment to use the super deduction to eradicate their tax bill, too.
Do these buoyant companies really need a super deduction? The answer is no. In the absence of any clear conditions specifying the use of such savings or providing a wider social benefit, such as increasing salaries for workers, investing in decarbonisation or reducing costs for end consumers, I struggle to see the benefits being passed on to anyone other than shareholders.
I hope that the Government support amendment 11 and new clauses 1, 2 and 6 in the name of my right hon. Friend the Member for Hayes and Harlington and others, as well as the Labour Front-Bench amendments, because there are companies that do need support to help them recover from the pandemic. There is a real need to support long-term, patient investment by industry, but the untargeted nature of this relief, without conditions, is not the best use of public money. In fact, it borders on the obscene.
Rachel Hopkins (Luton South) (Lab) [V]
I shall speak in support of the amendments in the name of the Leader of the Opposition and those in the name of my right hon. Friend the Member for Hayes and Harlington (John McDonnell). The Budget and Finance Bill represent the Government taking steps towards further structuring our economy on insecure, precarious work and deregulation, which will widen income and wealth inequality.
The Government’s unambitious plan provides neither a foundation for rebuilding our economy nor a plan to tackle the climate emergency that my constituents have called for. They have announced a future cut to social security and a real-terms pay cut for public sector workers at the same time as introducing a super deduction tax cut for big businesses, allowing firms to write off 130% of the value of qualifying capital investment against their taxes.
When we look across the Atlantic to the US, we see a stark contrast. The Biden Administration have committed to fast-tracking a $1.9 trillion Government-led stimulus package, which is about 10% of the annual output of the US economy and which contained no promises of future deficit reduction. That is alongside a forward-looking plan to spend a further $2 trillion on infrastructure. Biden’s spending plan, in proportion to GDP, is three times the size of the UK’s.
Jesse Norman
I am grateful for the contributions that have been made to this debate. It saddened me, however, that Labour Members seemed to be reading off a single piece of paper in so many of their speeches. I encourage them not to follow the script slavishly but to actually think about what they say.
The hon. Member for Salford and Eccles (Rebecca Long Bailey) put the matter at its most plain when she argued that because 99% of businesses benefit from the annual investment allowance, it meant the super deduction benefited only the remaining 1%. Of course, that is completely wrong. The super deduction benefits all businesses that are in a position to take advantage of the eligible deduction it provides, and that is better than the annual investment allowance. The whole premise of the arguments advanced by the Opposition is wrong. The fact is that tax reliefs are an understood and established part of tax policy; they are not to be thought of merely as giveaways. A raft of international authorities have testified to the benefits of greater investment allowances, including full expensing, and our proposal goes some way beyond that. We need to see it in that context.
The UK already has a rather competitive intangibles regime, and the productivity challenge that we face as a country is focused on the tangible assets and therefore it is on those that this super deduction is aimed.
The hon. Member for Ealing North repeated the line about small businesses, but also asked whether the super deduction was somehow extremely vulnerable to exploitation by malfeasant tax actors. I can tell him that the deduction has been very carefully assessed and includes important exclusions, including as to related party transactions and second-hand assets. It also includes a new anti-avoidance provision, which is designed to give it additional protections.
It is true that this is a country that takes the question of tax avoidance and tax manipulation extremely seriously. The right hon. Member for Barking (Dame Margaret Hodge), who has been a great campaigner in this area, focused on that. Of course I cannot discuss individual taxpayers. No one knows what an individual company’s taxpaying arrangements are. She purported to know—that is her privilege—but I am not in a position to discuss that. None the less, I can tell her that it would be very bad policy indeed for any Government to base tax policy on a single employer or taxpayer. If she thinks that this country has been soft in any respect on tax, let me remind her that we have led the international charge on base erosion and profit shifting, on diverted profits taxes, and on the corporate interest tax restriction. We have put into law a digital services tax and are consulting on an online sales tax. That is not the action of a Government who take these things in any way other than very seriously.
I join my hon. Friend the Member for North East Bedfordshire (Richard Fuller) in emphasising, as he rightly did, that we need businesses to be as productive, effective and successful as possible, because they are the anchors of successful and effective employment and of the profit generation on which our tax base, and therefore the funding we need to support public services, rely. It does not follow from the fact that the Labour party is confused on corporate taxation that we should not have a policy that supports business in developing, investing and building our collective economic future.
Question put and agreed to.
Clause 6 accordingly ordered to stand part of the Bill.
Clauses 7 and 8 ordered to stand part of the Bill.
Clause 9
Super-deductions and other temporary first-year allowances
Amendment proposed: 79, in clause 9, page 4, line 2, at end insert:
“provided that any such company which has more than £1 million in qualifying expenditure must also—
(i) adhere to International Labour Organisation convention 98 on the right to organise and collective bargaining,
(ii) be certified or be in the process of being certified by the Living Wage Foundation as a living wage employer, and
(iii) not be liable to the digital services tax”.—(James Murray.)
This amendment would, in respect of companies with qualifying expenditure of over £1 million, add conditions relating to ILO convention 98, the living wage and the digital services tax.
Question put, That the amendment be made.
Ben Lake
I beg to move amendment 54 in clause 109, page 63, line 14, at end insert—
“(1A) An area may be designated as a special area under subsection (1) only when a motion approving the creation of freeport tax sites has been agreed by—
(a) Senedd Cymru,
(b) the Scottish Parliament, and
(c) the Northern Ireland Assembly.”
This amendment would require the Treasury to have received consent from the devolved parliaments on proposed freeport measures before introducing the changes proposed by Clause 109.
The Chairman of Ways and Means (Dame Eleanor Laing)
With this it will be convenient to discuss the following:
Clause 109 stand part.
Clauses 110 and 111 stand part.
That schedule 21 be the Twenty-first schedule to the Bill.
Government amendments 43 to 52.
That schedule 22 be the Twenty-second schedule to the Bill.
New clause 4—Eligibility for capital allowances and stamp duty land tax relief for freeport tax sites—
“No company shall benefit financially from the provisions of sections 110 or 111 unless the company—
(a) recognises a trade union for the purposes of collective bargaining with its workforce,
(b) is certified by the Living Wage Foundation as a living wage employer,
(c) is taking steps to reduce its carbon emissions, and
(d) publishes details of its equality pay gap and has a published plan to reduce disparities.”
This new clause would ensure that the benefits of capital allowances and relief from stamp duty land tax for freeport sites apply only to companies that meet certain criteria relating to employment and environmental credentials.
New clause 5—Economic impact of freeport tax sites—
“(1) Sections 109 to 111 shall not come into force until—
(a) the Secretary of State has published a report, commissioned from the Office for Budget Responsibility, and
(b) the report has been debated and approved by both Houses of Parliament.
(2) The report in subsection (1) must forecast the impact of sections 109 to 111 on—
(a) Government and local council tax revenues,
(b) economic activity in areas directly adjacent to proposed freeports,
(c) UK productivity, and
(d) the provision of jobs paid at more than the median wage.”
The new clause would make the commencements of sections 109 to 111 dependent on the Secretary of State publishing a report that would allow Members of Parliament to assess the economic case for freeports, and on both Houses agreeing that report.
New clause 25—Review of freeports—
“(1) The Chancellor of the Exchequer must review the impact of sections 109 to 111 and schedules 21 and 22 of this Act and lay a report of that review before the House of Commons within six months of the passing of this Act and once a year thereafter.
(2) A review under this section must estimate the expected impact of sections 109 to 111 and schedules 21 and 22 on—
(a) job creation within the sites designated as freeports and across the UK as a whole,
(b) revenue from corporation tax and stamp duty land tax within the sites designated as freeports and across the UK as a whole,
(c) levels of artificial tax avoidance and tax evasion across the UK as a whole,
(d) levels of criminal activity,
(e) the necessary level of staffing for HMRC and the UK Border Force, and
(f) departmental spending by HMRC and other departments on enforcement.”
This new clause would require the Government to review the impact of the provisions of the Act introducing freeports and publish regular reports setting out the findings.
Ben Lake
It is a pleasure to have the privilege of opening the debate on this clause. I rise to speak in support of amendment 54 in my name, which would require the Treasury to have received consent from the devolved Parliaments before it could designate freeport tax sites as outlined in clause 109.
Although the amendment will not be pushed to a vote, the very need for an amendment requiring democratic safeguards and devolved consent is sadly indicative of the Government’s disregard for devolution and the interests, rights and ambitions of the devolved nations. It is jarring that today’s debate, and its pursuit of powers, paid for by taxpayers across the UK, is happening despite the Government’s failure to achieve consensus across all four nations of the UK.
That unilateralism by the Government is not only disappointing but, I would argue, economically self-defeating, as the overwhelming body of evidence, some of which has been gathered by Committees of this place, including the Welsh Affairs Committee, of which I am a member, suggests that freeports will lead to the redistribution of jobs and investment, rather than their creation across the UK, unless the policy is very closely and carefully co-ordinated.
Jim Shannon
The hon. Gentleman is absolutely right: one of the prerequisites of the opportunity for freeports is to ensure that every part and every region of the United Kingdom of Great Britain and Northern Ireland benefits. Although every hon. Member is right to claim it for themselves, it is important that we all benefit. Does he agree?
Ben Lake
I agree with the point that the hon. Member makes. If the freeport policy is to have real benefit and ring true to the rhetoric of levelling up every single nation and region of the United Kingdom, it is clear that no port—or no nation or region—should be disadvantaged by the location of any other. In effect, we cannot have a situation whereby the Government are asking for Welsh, Scottish or Northern Irish taxpayers, along with English taxpayers, to pay for freeports in certain parts of England that may actively disadvantage those in Wales, Scotland or Northern Ireland. If they did, it would appear that the Prime Minister and his Chancellor would be willing to trample over the devolution settlements in pursuit of this freeport master plan.
The Wales Act 2017 largely devolved the regulation and supervision of ports and harbours in Wales to the Welsh Government, while economic development is also of course a devolved competence. UK Government demands, such as capping the number of Welsh freeports to one—an outcome that would likely lead to an overall reduction in the number of Welsh ports—are direct infringements on the Welsh Government’s responsibility for the Welsh economy.
It is therefore especially dangerous that Wales cannot count, it would seem, on its Secretary of State to defend its interests at the Cabinet table. Instead, rather than side with Wales’s democratic institutions, the Secretary of State for Wales has threatened that a freeport will be implemented in Wales come what may, including if Wales’s Parliament were to reject such a measure.
I am conscious that there are others who wish to make perorations on this topic this evening, so I will draw my remarks to a close. I look forward to summing up at the end. Although I will not press the amendment to a vote this evening, I hope that the Minister will consider my remarks and ensure that freeports are established with the consent of all four nations and supported by an engaged public debate. Refusal to do so would be a tacit admission that this Government will not hesitate to trample over Wales’s economic interests and aspirations if they run contrary to the plans drawn up in London.
Jesse Norman
I rise to speak in support of clauses 109 to 111, schedules 21 and 22 and amendments 43 to 52.
The clauses will act in support of the Government’s freeports programme, which is designed to unlock investment in eight regions of England so far, with more to follow in the devolved Administrations. At Budget, following an open and transparent bidding process, the Chancellor announced the locations successful in securing freeport status: East Midlands airport, Felixstowe and Harwich, Humber, Liverpool city region, Plymouth and South Devon, Solent, Teesside, and Thames.
Freeports will be national hubs for international trade, innovation and commerce, regenerating communities across the UK by attracting new businesses and spreading jobs, investment and opportunity. They will bring together ports, local authorities, businesses and other key local stakeholders to achieve a common goal of shared prosperity and opportunity for their regions. In doing so, they will help in the Government’s ambition—indeed, all of our ambition—to level up areas that have been left behind.
The Government’s freeports model enables the UK to take advantage of the benefits of leaving the European Union. The Government have drawn on examples of successful freeport programmes all over the world to develop freeports that will attract significant new investment and encourage development across the UK. The model will enable businesses in freeports to draw on benefits relating to customs, planning, regeneration and innovation, as well as the offer of targeted tax reliefs supported by the clauses in the Bill.
The Government have engaged extensively with ports, local authorities and industry, including through a consultation on the wider programme running between 10 February and 13 July 2020. We have also listened to feedback from a wide range of stakeholders to inform the development of an effective model that will benefit port areas across the UK.
For the reasons already outlined in the earlier debates, I will confine my remarks to the key points at issue. Clauses 109 to 111 give the Government the power to designate tax sites and, once sites have been designated, to provide relief within those sites for the acquisition of commercial purpose property and new plant and machinery assets, as well as relief on the construction or renovation of buildings.
Sammy Wilson
So far, no freeport has been designated in Northern Ireland, but one of the great fears is that because Northern Ireland remains within the single market rules of the EU, any such measures to set up a freeport could be contested by the EU and the Irish Government because they might give Belfast an advantage over Dublin, for example. How will that issue be resolved, given the terms of the Northern Ireland protocol?
Jesse Norman
The right hon. Gentlemen raised a very similar question with me on Second Reading and, as he knows, the Government are engaging very closely with the Northern Ireland Executive. I am not in a position to second-guess what the EU may or may not do in that regard, but we have been very clear that we want to put a freeport in Northern Ireland and we want it to be a strong offer comparable to the freeports available elsewhere in the United Kingdom. That is what we will be seeking to achieve.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
In passing, I thank the Government for designating Freeport East, which includes Harwich in my constituency, as one of the freeports. I am struggling to find how the tax concessions in this Bill avail us of the new freedoms outside the European Union. Will my right hon. Friend identify how the freedoms in this Bill are in contention with the EU state aid rules on tax subsidies? Of course, that would not apply in Northern Ireland, where the EU state aid rules still apply. The Government might as well be completely honest about this: if there are advantages for England of being outside the EU that we do not have because Northern Ireland is still effectively inside the EU, let us hear about them, because we want to know that we have those advantages in England.
Jesse Norman
I think my hon. Friend has erred in his logic. It is perfectly possible for us to benefit from the flexibility of setting taxes, as we are, while being able to have a strong agreed offer that satisfies whatever rules may apply in Northern Ireland with the Northern Ireland Executive. They will be of different characters, but there is no reason to think that neither is possible.
Clauses 109 to 111 give the Government the power to designate tax sites and, once sites have been designated, to provide relief within them for the acquisition of commercial purpose property and new plant and machinery assets, as well as relief on the construction or renovation of buildings. These powers will enable the Government to move quickly to enable businesses to begin accessing the benefits of freeports as soon as is feasible.
The Government are committed to tackling non-compliance in the tax system, and freeports are not an exception to that. Anti-avoidance and evasion provisions are included in the Bill, and will be taken across further legislation for the individual tax reliefs. In addition, the Government will take further powers to create a robust system of monitoring in freeports and enable HMRC to request relevant information from businesses. This will ensure that public money is being used effectively in pursuit of the regeneration and development of freeport locations.
Clause 109 will enable the Government to designate the location of tax sites connected to any freeport in Great Britain. The tax reliefs made available as part of the Government’s freeports programme will apply only in these sites, and the Government intend to bring forward legislation to apply these reliefs in Northern Ireland at a later date.
Bidders submitted initial proposals for their tax sites during the bidding process. The Government allowed up to 600 hectares of tax site space to be proposed, across a maximum of three separate sites per freeport. Tax site proposals were also judged against a set of criteria relating to existing deprivation and unemployment, to ensure tax measures will have maximum impact in regenerating those areas. The Government will now work with the successful locations to approve their tax site proposals. Once the successful bids have completed the full tax site assessment process, the Government will designate the agreed areas as tax sites. From that point forwards, businesses will be able to claim and benefit from the tax reliefs.
Sir Bernard Jenkin
I am most grateful to my right hon. Friend; he is being very generous, though whenever I am tackled on a point of logic by a professor of philosophy, I wonder what is going on. But my question is quite an innocent one in this case. In Harwich, there are some businesses very near the tax sites which have been affected by Brexit and would benefit greatly from being included in the tax site. To what extent are the boundaries still adjustable, and is there an issue of principle regarding included businesses that could expand much more effectively? I am thinking of the particular example of a petrochemicals processing business, which exports substantially and would benefit very greatly by being in the tax site. It would generate many more jobs and much more wealth for the United Kingdom.
Jesse Norman
Of course, the circumstances for each individual freeport site will be, and I am sure are, very different. I cannot comment on the site my hon. Friend describes, but in general the emphasis of the legislation is very much on new investment and new development, rather than on existing or dead-weight investment. It may well be the case that there are businesses that would propose to make substantial new investments and, depending on the freeport in question, it may be possible for them to qualify for some of the benefits associated with that, but, again, it is not possible for me to comment on individual cases.
Clause 110 and schedule 21 will allow businesses in freeport tax sites in Great Britain to benefit from two new capital allowances: enhanced capital allowances and an enhanced structures and buildings allowance.
On clause 111 and schedule 22, the clause makes changes to provide for a new relief from stamp duty land tax for acquisitions of land and buildings situated in freeport tax sites in England that are used for qualifying commercial purposes. Relief will be available for purchases made from the date a freeport tax site is formally designated until 30 September 2026.
Amendments 43 to 52 amend the provisions introduced by clause 111 and schedule 22 to provide certainty that property investors using sharia-compliant alternative finance are able to benefit from stamp duty land tax relief in the same way as investors using conventional finance. That will be done by taxing the alternative finance intermediary’s acquisition as though it were an acquisition by the investor. The amendments ensure that the tax payable by someone using alternative finance is the same as that which would be payable were the property purchased using a conventional financial product.
Opposition Members have tabled two new clauses relating to clauses 109 to 111. Among other things, they would place additional eligibility criteria in respect of employment rights, equalities and the environment on the claiming of capital allowances and stamp duty land tax relief in freeports. It is important to say that freeports will deliver tangible benefits that will help to level up areas. By imposing those additional criteria, the new clauses would potentially delay the implementation of these measures by making freeports more complicated for businesses to navigate, and therefore reducing their impact and effectiveness. In any case, the Government have a very strong commitment to reducing carbon emissions, which is why this country was the first major economy to implement a legally binding net zero greenhouse gas emissions target by 2050. The Government will continue to ensure that the role of tax is considered alongside other policy measures needed to meet environmental goals.
As I have already indicated, freeports will also have an important role in reducing regional disparities. The rigorous assessment of bids that has been undertaken has ensured that tax benefits are available only in areas that require regeneration and would benefit from being a tax site, helping the Government to level up those that have been left behind.
New clauses 5 and 25 as tabled would have the following effect. New clause 5 would make the commencements of clauses 109 to 111 dependent on the Secretary of State publishing a report that would allow Members to assess the economic case for freeports, and on both Houses agreeing that report. New clause 25 contains a similar request for a review of the impact of clauses 109 to 111 and schedules 21 and 22, and for a report of that review to be laid before the House within six months of the passing of this Bill and once a year thereafter. A robust and transparent bid assessment process, using the criteria set out in the bidding prospectus, ensured that the eight English freeports so far granted all demonstrated a good or better economic case, including a strong economic rationale for their proposed tax site locations.
In the interest of transparency and accountability, the Government have also published a decision-making note that clearly sets out how sustainable economic growth and regeneration were prioritised in this process of assessment. The Government will publish costings of the freeports programme at the next fiscal event, in line with conventional practice. Imposing an additional economic incentive on top of what has been outlined would only risk delaying the delivery of the programme and therefore the associated benefits of the increased investment and employment.
Amendment 54 would make the commencement of a freeport tax site in any UK nation subject to approval by the three devolved Administrations. The hon. Member for Ceredigion (Ben Lake) has already introduced that. Let me say to him that tax is first and foremost a reserved matter unless it is specifically devolved. The UK Government have the power to set tax sites that offer reserved tax reliefs across the UK, and Ministers for the devolved Administrations have the power to set devolved tax reliefs. Devolved Ministers will be accountable to their Parliaments for the use of tax instruments under their control in a freeport tax site within their nation under the proposed plans.
The Government are determined to establish freeports across the UK, not just in England. That is why we are committed to continuing discussions with the Administrations in Scotland and Wales, when their new Governments have been established, and with the Northern Ireland Executive. The Government intend to have a freeport in each nation, and are determined to deliver that as soon as practicable. They will be national hubs for trade, innovation and commerce, regenerating communities across the country. They can attract new businesses and spread jobs, investment and opportunity to towns and cities up and down the UK, which will boost international trade and economic growth.
Sir Bernard Jenkin
I am most grateful. Well, it is the Committee stage of a Bill. The hon. Member for Ceredigion (Ben Lake) raised an issue that I had not considered before, which is that the provision of a freeport in a devolved nation might actually reduce the revenue being collected by that devolved Government. Has my right hon. Friend given consideration to that? I cannot see how that would actually happen, but will he give an assurance that there is a means of addressing that if it were to occur?
Jesse Norman
As far as I am aware, this is a very remote contingency and I see no evidence to suggest that it might be the case in the context that has been described, but I can certainly tell my hon. Friend that, when the Government engage with the Welsh Government, we will be sensitive and open to discussion of the potential economic effects of a freeport in Wales, as one might expect.
Abena Oppong-Asare (Erith and Thamesmead) (Lab)
It is a pleasure to speak for the Opposition on the clauses relating to freeports. I will speak to new clause 25 in my name and the names of my hon. and right hon. Friends. Before I turn to the detail of our new clauses in this group, I would like to say a little about Labour’s position on freeports and regional economic policy more generally.
Labour wants to see good new jobs created in every region and nation of the United Kingdom. We want to see genuine levelling up that hands power and opportunity to areas that have been deprived of them for too long. We want an economic policy that addresses the fundamental challenges facing our country and our constituents: ever widening regional inequality, low productivity and low wages in too many places; a social care crisis that threatens the dignity of older people; and an environmental crisis that threatens us all.
I am afraid that the Government’s approach to levelling up has been far less ambitious. We have seen regions and areas pitted against each other to bid for pots of money, only to find that Conservative Ministers overruled officials and handed funding to already wealthy areas. We have seen nothing to make up for the 11 years of a Conservative Government who have sucked funding and opportunities out of areas that they now say need levelling up. We have seen a total lack of ambition from the Government on supporting a recovery from the coronavirus crisis to build a stronger and more resilient economy. That brings me to freeports and the clauses that we are considering today.
I think we were all a little underwhelmed when the rabbit pulled from the hat at the end of the Chancellor’s Budget speech last month was the reannouncement of his freeports policy. The Opposition simply do not believe that freeports are the silver bullet for our post-Brexit economy that the Chancellor clearly hopes they are. In fact, the evidence is that freeports are likely to have relatively little impact on overall job creation and are far more likely to move jobs from one place to another. We want every area to flourish, whether or not they have a freeport. We know that Ministers are aware of this problem because they asked potential freeports operators to address it in their bids. Our new clause 25 would require the Government to produce an annual review of the impact of the freeports policy on job creation in freeport sites and across the country as a whole.
Jesse Norman
I would be grateful if the hon. Lady could tell us whether the Labour party’s position is to support freeports or not to support freeports.
Abena Oppong-Asare
I thank the Minister. I will approach that later in my speech, so I thank him for already guessing what I was going to say.
We really need some honesty and transparency from the Government on this. The estimates of the job creation benefits of freeports made by their advocates so far have been flimsy to say the least. We also need a proper assessment of the risk of job displacement. If freeports simply move existing economic activity around, they risk doing harm to the economic fortunes of neighbouring areas, with no net benefit to the country as a whole. Indeed, a 2019 report by the UK Trade Policy Observatory found that the main effect of freeports was to divert businesses into a port from a surrounding area, rather than creating new jobs, so it is not just Labour saying this; it is the experts saying it too. That may be especially problematic in areas where freeports are situated near a local authority, or regional or even national borders.
Our new clause would require the Government to report on tax avoidance and evasion and criminal activity in freeports and to set out the level of additional staffing and resources required by HMRC and other Government bodies. There are long-standing concerns that freeports allow or encourage tax avoidance and evasion, and there is international evidence that freeports have been used for criminal activity. For example, the OECD has stated that there is
“clear evidence that free trade zones are being used by criminals to traffic fake goods”.
The Financial Action Task Force has said that the lack of scrutiny can facilitate trade-based money laundering through relaxed oversight and a lack of transparency. The TUC and others have warned of the dangers to workers’ rights from deregulation in freeports. We need to take these concerns seriously. As a minimum, the Government should commit to trade union representation in the governance of freeports at local and national levels.
I will now make a few points about the clauses we are considering. First, on the cost of the tax reliefs being introduced, the Government have provided some information on the expected operational costs of HMRC but, as recently as last month, they were unable to estimate the reduced revenue that the Exchequer will receive as a result of these reliefs. I hope the Minister can address that. Clause 110 includes the enhanced capital allowance for plant and machinery spending at 100%, but that is less generous than the 130% super deduction. Presumably, for the period that they overlap, companies will need to consider whether they can claim the super deduction rather than this allowance.
The Chartered Institute of Taxation has raised a number of concerns about the operation of the stamp duty relief in clause 111. One issue is how exactly freeport tax sites will be designated and whether particular buildings can be identified as either in or out the boundary of the tax site. Can the Minister provide some clarity on joint ventures where there is both commercial and residential development? The Chartered Institute of Taxation points out that the clause, as currently drafted, excludes a common commercial arrangement from that relief. Finally, there is the issue of withdrawal of relief for subsequent non-qualifying activity. A small amount of non-qualifying use can potentially lead to withdrawal of all the relief. Is the Minister concerned that the risk of loss of the full relief in such circumstances could discourage investment?
To conclude, the Opposition have real concerns about the Government’s freeports policy. If it is going to succeed and bring the sorts of benefit that those on the Government Benches claim, we need to see more detail on the operation of freeports and how the Government plan to mitigate the risks. We need regular monitoring of the effectiveness and the impact on the country as a whole over the years to come, which is exactly what new clause 25 would require the Government to do. If the Government are confident in their policy, they should be confident in allowing scrutiny of how it works in practice. I call on them to support our new clause.
Richard Thomson
I would like to add my support for the Opposition amendments and to seek a commitment from the Government, while the Minister is here, to allow the Scottish Government after the Scottish elections to move ahead with their greenports adaptation of the freeports concept. Freeports do not require Brexit in order to be brought about, and legitimate questions remain about how much additional economic activity they will actually generate, rather than simply displace from other areas of the economy.
Sir Bernard Jenkin
I am most grateful to the hon. Gentleman for allowing me to intervene. There was a freeport in Shannon in the Republic of Ireland before the Republic of Ireland joined the European Economic Community. The tax freedoms that it was granting at the Shannon freeport were significantly curtailed as a result of joining the EEC, because the EEC prevented it from providing those freedoms. That is why we are discussing the question as to whether or not we are using the new freedoms we have, but the fact is we have much more tax freedom outside the EU for freeports than we had when we were in the EU, and hopefully Scotland will benefit from that.
Richard Thomson
I thank the hon. Gentleman for that intervention, but I think my point still stands. No matter what the spirit of truth might be in his remarks about how constraints were placed on the Shannon free zone, there are freeports in the European Union. Freeports are not something that intrinsically require Brexit of itself in order to be able to be pursued. But certainly I hope there are benefits for Scotland from this. I think those benefits can be manifested best perhaps through the greenports approach, which I would like to expand upon.
As I say, the Scottish Government have developed their own version, the greenports, which seeks to embrace all the potential benefits that could come through freeports, while aligning that with ensuring the principles of fair work are enshrined, ensuring that workers within the greenports are paid a real living wage and that the reduction of carbon emissions is embedded at the heart of those developments. A re-elected Scottish National party Government will seek to implement those greenports, making public sector support contingent on businesses complying with that fair work first agenda, paying that real living wage and implementing the Scottish business pledge: our values-led partnership between Government and business based on boosting productivity competitiveness through fairness, equality and sustainable employment, and on delivering on concrete plans to reduce carbon emissions in line with supporting the Scottish Government’s ambition to reach net zero by 2045.
The Scottish Government proposals for these economic development zones already have widespread buy-in from stakeholders, who are desperate to start bidding to run the greenports. It was heartening to hear from the Minister his commitment to seeing freeports in all parts of the UK. Nevertheless, if the people of Scotland choose to re-elect a Scottish National party Government, the Government need to accept the mandate that comes from that and, if there has been an element of heel dragging, to hasten the process of coming to an agreement on the rules around these proposed greenports so that the bidding can begin immediately.
Having taken positive steps to end the race to the bottom on corporate taxation, as we heard in an earlier debate, I think it is important that the UK Government do not allow those who take advantage of freeport status to neglect or otherwise elude their obligations to the workforce, to the environment and to the building of long-term, sustainable value in the regions where they are located and the wider economy.
In the year that the world is coming to Scotland to plan our future at the COP summit, I think it is absolutely fitting that we should be able to develop greenports to demonstrate our ambitions on sustainable, inclusive economic growth as we transition to a net zero economy. A fair, sustainable greenport model can be an exemplar of those values, while adding value to Scottish goods, services and the country’s brand. The UK Government, once the Scottish elections are over, need to get on board with this and back the innovative approach of the Scottish Government model so that we can get the bidding process under way.
Ruth Edwards (Rushcliffe) (Con) [V]
The east midlands is one of the regions that was fortunate to benefit from a new freeport in this Budget. Spread across three sites in Leicestershire, Derbyshire and my own constituency of Rushcliffe, we hope to establish a green technology park on the site of one of the UK’s last coal-fired power stations, at Ratcliffe-on-Soar.
Hearing contributions from the Labour party in recent weeks, and from the shadow Minister just now, we would be forgiven for thinking that, with the arrival of a freeport, Rushcliffe will become some sort of wild west, with disputes over stolen art, organised crime activity and tax avoidance settled with a shoot-out in the drinking establishments of Ratcliffe-on-Soar. Quite a picture, but one that ignores the extensive steps the Government have taken to prevent illicit activity, such as background checks for businesses that want to locate in a freeport, including their beneficial owners, and a register of businesses operating in each freeport site, to which HMRC, the National Crime Agency and Border Force will all have access. Successful freeport bids also had to demonstrate their approach to inventory systems, physical security, personnel security, cyber-threats and international regulations.
John McDonnell [V]
New clause 4 stands in my name and those of several right hon. and hon. Members. As I said in the debate on the provisions for super deductions, if the Government are giving tax breaks to businesses, then the Government, as guardians of the public interest, should demand something in return. The provisions in new clause 4, listed as (a) to (d), are modest demands that many Members, especially those on the Opposition Benches, think should be required of all businesses anyway. It is important that public money supports public goods and good public outcomes, like a fair day’s pay for a fair day’s work, like tackling climate change, in which we all—individuals, Government and businesses—must play a role, and like eradicating the gender pay gap, a process this House began over 50 years ago with Barbara Castle’s groundbreaking Equal Pay Act 1970.
The Minister referred to those as “complications”. I do not believe that paying decent wages, tackling climate change or overcoming the gender pay gap are complications. I believe they are essential criteria for any policy for the future. If we are to tackle rising poverty—if the Government want to do that—there is an opportunity here to end in-work poverty by guaranteeing the real living wage in companies locating to freeports. We have 4.3 million children in poverty, and most are living in households where at least one parent is in work. Government policy must act to tackle low pay.
Low pay holds people back and is often linked to insecure work, which is why the Government should also act to end zero-hours contracts. Insecure and low-paid work means insecure housing and instability for children. The Government should put down a marker in this policy for the society we want to be. As things stand, from what we have heard in the debate so far, it is a society for a few to profit and the rest to struggle. This new clause is about hardwiring fairness and justice into our economic system, and about levelling up. It should not be in conflict with any stated aim of the Government, and I hope that they accept the new clause or at least consider the issues about how we tackle this range of policies and use the state to enable that to happen.
New clause 5 also stands in my name. In its analysis of the Chancellor’s Budget, the Office for Budget Responsibility said of freeports:
“Further details have been announced in the Budget but came too late to be incorporated into our forecast. We will return to this in our next”
economic and fiscal outlook. So this is policymaking as a leap in the dark. It is not evidence-based, but done on the basis of supposition and, largely, ideology, given what we have heard so far. What I seek to do in new clause 5 is create an evidence base for policy, on which this House can assess the merits and drawbacks of such a policy. There are reasons to be concerned. Many Members of this House will recall the debates about enterprise zones in the 1980s. Those zones did little to benefit local workers and simply transferred jobs and investment, rather than stimulating it. In an assessment of the enterprise zone policies of the 1980s, the Centre for Cities think tank found:
“The first two rounds…created 58,000 additional jobs (directly and indirectly), but over 40 per cent of those jobs were created by businesses that had relocated to enjoy the tax cuts”.
It also found that each job
“cost the public purse £26,000 (in 2010-11 prices), which was significantly more expensive than other policies”
for job creation that we were being pursued at that time. The same policy was brought back under the Government of David Cameron, championed by the then Chancellor George Osborne. Analysis of those zones by the Centre for Cities showed the jobs supposedly “created” in these zones were often just relocated from elsewhere. Unfortunately, the evidence showed that they were also overwhelmingly low-skilled and low-paid. Tax breaks in underinvested areas are not an industrial strategy. New clause 5 is a simple plea for evidence-based policy making, and one I hope the Government will accommodate in their future discussions.
I hope the Government will also accept new clause 25 in the name of the Opposition Front-Bench team, because it too demonstrates that evidence-based policy requires policies to be reviewed, and that the evidence base has to be assessed throughout implementation of any particular policy. The case for freeports has not been made and the risks are significant. There are risks of accelerating tax avoidance, and actually doing economic damage to areas neighbouring freeports is a real concern. To leap into a policy with such a lack of evidence and of account taking of past practice is worrying, to say the least.
This is the last time I will speak at this stage of the passage of the Bill, so I would like to place on record that, after listening to the debates on Second Reading and today, even I am shocked at the undeniable evidence of the scale of corporate capture of this Government, going well beyond anything we have seen under the last two Tory Prime Ministers. The central purpose of this Government, on the basis of these policies—both the super deduction and holding back the corporation tax increase, as well as the freeports—appears to be simply to line the pockets of corporations with taxpayers’ money and to render them free of any effective regulation that would make them accountable to a wider community. I therefore honestly and fervently fear for the future of this country in the hands of this Government.
Jane Hunt (Loughborough) (Con)
I rise to speak in favour of the Bill.
Freeports will play an important role in the Government’s levelling-up agenda, bringing much needed opportunities for economic growth and social mobility to areas that have historically seen low levels of investment and less opportunity. That is why, over the past year, I and my fellow east midlands MPs from both sides of the House have worked hard, alongside our local enterprise partnerships, businesses, local authorities and educational establishments for the east midlands, to become a freeport site. I was delighted by the announcement at the Budget that East Midlands airport will be one of eight ambitious new sites across the UK. This decision will ensure that the east midlands cements itself as a hothouse for innovation and becomes a dynamic environment for innovators, businesses and regulators to generate and test new ideas and technologies.
Crucially, the freeports will be vital to the development and expansion of local businesses that are the driving force of the east midlands economy, and of the green agenda for the nation. The east midlands, being part of the midlands engine, is also the heartland of the UK’s manufacturing sector, and the freeport will help to transform this manufacturing base through new technologies, creating a whole new industrial sector locally. The extended supply chain across the country will also fully benefit from this through products and services being fed into the business base at the freeport. The impact of this decision will not only be seen in the basic mechanics of what a freeport does to act as a customs hub for imports and exports; it will also create a highly skilled ecosystem, becoming a magnet for inward investment and business expansion, and acting as a springboard for opportunity throughout the region, creating an estimated 60,000 new skilled jobs. As such, new businesses will be attracted to Loughborough and its surrounding towns, seeking to reap the benefits of being situated close to a freeport. Indeed, interest has already been expressed by several organisations in taking advantage of the benefits a freeport would bring, either by moving to the area or expanding locally.
Loughborough is already home to a flourishing life sciences sector. We have the education powerhouses of Loughborough College with its new T-level centre and thriving apprenticeship scheme, as well as Loughborough University with its degree and above level skills that support business start-up and expansion, often through research and subsequent development of spin-off businesses. We have the physical infrastructure required for incoming businesses at Loughborough University’s science and enterprise park and Charnwood campus, and the educational expertise required to provide both a skilled local workforce ready to take up the new employment opportunities created by the freeport and the research base to drive innovation.
This is about jobs and livelihoods. It is not a reaction to covid. Freeports were in our manifesto, and I fully support the idea.
Sarah Olney [V]
I wish to speak to clauses 109 to 111 relating to the powers to designate sites as freeports and associated provisions.
This has been a turbulent year for the UK economy, with the expected disruption of Brexit and the unexpected and unprecedented impact of the coronavirus pandemic. Now that we can, hopefully, look forward to the end of the pandemic and its associated lockdowns, it is time for the Government to put forward their bold and radical plans for kickstarting the UK economy to enable growth and skilled employment in all corners of the country.
The Government have had plenty of time to think about how they plan to deliver the benefits of Brexit that we have all been promised. I expected the Chancellor to jump at the chance to realise those benefits through the Budget and this Bill—and he has delivered freeports. This is it: the big idea, the bold move, the economic leap forward that our freedom from EU shackles has finally granted us. Except, of course, we have always had the freedom to initiate freeports in this country. We last had them in 2012. The reason we have not had them since is that their economic impact has previously proved to be negligible.
Research into freeports in other countries has shown that they do little to boost exports as opposed to imports, and there is very little evidence that they create new economic activity as opposed to redirecting existing economic activity from elsewhere. This risks trappings thousands of workers in insecure work with reduced rights, in areas with reducing opportunities for alternative employment. Any increased economic performance arising from freeports is therefore unlikely to trickle down to higher living standards in local households and communities.
What is the plan for economic growth in areas of the UK that are not lucky enough to have been awarded a freeport? The Budget and this Bill are silent on that matter. Elsewhere, the Government have scrapped their industrial strategy, replacing it with a glossy brochure full of photographs but very little content. More seriously, there has been no real attempt to quantify the impact of leaving the EU on UK business and trade, and what that might mean for our economy as a whole.
We have already seen a big short-term impact on the level of trade across the channel. It will take a while for the full picture to emerge, clouded as it is at the moment by the pandemic and the unwinding of pre-Brexit stockpiles, but there is no doubt that the increased paperwork is an expensive burden on our small businesses—and that is before import controls are introduced and the impact of the scrapping of mutual recognition of professional qualifications has been fully realised.
The UK economy has a difficult road ahead, and nothing in the Budget or this Bill demonstrates that the Government have a plan to lead us to new sources of productivity or prosperity. The Liberal Democrats are not opposed in principle to freeports, but they are not a sufficient solution to the current challenges of our economy. They fall a long way short of what is required to compensate for our leaving the EU and to restart our economy in the wake of the pandemic. Thank you, Madam Chair.
Sir Bernard Jenkin
I am very pleased, Dame Eleanor—if I may address you correctly—to make common cause with the hon. Member for Richmond Park (Sarah Olney) at the outset. We can agree that freeports are necessary but not sufficient to deal with regional disparities and levelling up.
I am none the wiser from the contribution by the hon. Member for Erith and Thamesmead (Abena Oppong-Asare) whether the Labour party is in favour of freeports or against them. I would just point out to her that I spent a certain amount of my period in opposition, which was a miserable 13 years, as shadow Secretary of State for the regions, and though the Labour party was elected in 1997 with a very sincere determination to reduce economic disparities between London and the other regions of England and the other parts of the United Kingdom, it failed, and those disparities got wider.
This is a very difficult thing to address, and the answer is that we should use every tool in the box. We should use every tool we possibly can. It is also perfectly clear that all the tools are not available if a country stays in the European Union. Some of the tools were taken away from the Republic of Ireland at its Shannon freeport when it joined the European Economic Community, and it got worse; the notion that tax advantages or tax incentives were artificial tax subsidies was extended.
Of course, we want to see other tax advantages extended to other parts of the United Kingdom, such as differential rates of corporation tax, which we have extended to Northern Ireland, but only with the permission of the European Union to treat Ireland as a separate entity—which has a double edge to it that we perhaps do not want to pursue. We should be able to do that on a sovereign basis and to bring Ireland into the sovereignty of the rest of the United Kingdom in the longer term.
I wish to emphasise that the freeport east was very much driven by the need for levelling up. I see my hon. Friend the Member for Thurrock (Jackie Doyle-Price) nodding in sympathy, because she shares this problem. The perception is, “Oh, you’re in the rich south-east. You don’t need any help. It all needs to be directed to other parts of the United Kingdom.” Well, I can tell the House that I have red wall voters in my own constituency. Places like Clacton, Jaywick and Harwich are hard bitten by economic decline. Average weekly earnings in Tendring district, which is Clacton and Harwich, are £556, compared with a GB average of £587, and incidentally below the rate in Liverpool, which is historically regarded as deprived. We have a project that could generate, we hope, 13,500 jobs. The hon. Member for Richmond Park and others are right: we have to make sure that the minimum is substitution and the maximum is additionality. That is the challenge of making sure this works.
I will concentrate on what is in the Bill. I very much welcome the tax provisions in clauses 109 to 111, but there are bits missing from the Government’s additional proposals. Not mentioned in the Bill are the enhanced structures and buildings allowances, or the lower national insurance contributions, or the business rate reliefs proposed in freeport sites, or the local retention of business rates, so I remain concerned that we are offering only what is allowed under EU state aid rules. I will be grateful if the Minister, when he replies to the debate, addresses those points and says how those other tax reliefs will be provided.
It is worth mentioning that the Shannon freeport zone was regarded as such a success that it was imitated and adopted by China, which now has a freeport zone programme that it regards as an important enhancement of its economic competitiveness. I ask those who are cynical about freeports to open their minds, to look at the successful freeports and free trade zones around the world, and to learn from them, as well as listening to what one might call the “economic statics”—the people who think everything is about substitution and nothing is about releasing additional creativity.
I take seriously the points raised by the hon. Member for Erith and Thamesmead about compliance with the necessary conventions, such as authorised economic operator certification, World Free Zones Organisation safe zones rules and the OECD code of conduct for clean free trade zones. Those are all important, but let us recognise that, unless we avail ourselves of all the freedoms available to freeports, they will not deliver the benefits we want. I am reminded that when he was a Back-Bench Member of Parliament, the current Chancellor produced a very interesting report, “The Free Ports Opportunity”, which was published by the Centre for Policy Studies, price £10, which was rather more radical than the Treasury’s current offering. Some of us are a little worried that we will not see that enthusiasm and radicalism. Let us go step by step, let us work incrementally —that is not a criticism, but this is something to build on for the future.
Let us also recognise that the real benefit of freeports is not the tax incentives, but the customs facilitation. We must have really modern electronic customs systems to make the customs advantages of being in what is called a customs inversion zone real. Otherwise, it becomes a bureaucratic nightmare and we will not get the advantages we should get from it. Also, if it is a bureaucratic nightmare, it is the less savoury elements who benefit, not the legitimate businesses.
That is the challenge. We have a great opportunity, for which I really thank the Government in respect of my constituency and others. Incidentally, I think the freeports around the United Kingdom—this is a United Kingdom policy—should be working together. I wonder whether the MPs who represent the freeports that have been designated should get together, stop this mutual suspicion—which is understandable, as we have been competing for designation—and start working together to press the Government for the positive changes that will benefit all our freeports in the future.
Rebecca Long Bailey [V]
I will limit my brief comments to freeports. Detailed Government assessments on the operation and impact of freeports are sadly not yet available. As we have heard tonight, the OBR has stated that the announcements made in the Budget came too late to be incorporated into its forecast. If the Government recognise this, they must understand that they have a duty to provide such evidence and legislative reassurance in response to legitimate and wide-ranging concerns on the operation and impact of freeports.
There are concerns that, rather than complementing a local economy by stimulating the growth of new business, existing businesses may simply opt to relocate to freeports. Certainly, the Government have not made it clear how they will mitigate against the significant geographic movement of jobs away from one area and into a freeport—how they will avoid a wild-west scenario of pitting regions against each other, nor the prospect of lost revenue for local authorities from business rates, for example, if businesses opt to relocate to such a zone.
The job creation numbers are equally sketchy. The Chancellor argued back in 2016 that if the UK’s approach performs as well as that in the USA, freeports would create more than 86,000 jobs, but as the Centre for Progressive Policy found, this figure was a cut-and-paste job, being simply the number of people employed in the US free zones adjusted for the relative size of the UK population. There was no data on the labour market impact on specific regional economies or industries, nor any mention of the need for bespoke local skill strategies to feed into this.
On workers’ rights, the TUC has repeatedly warned about the gradual erosion of workers’ protections in these zones. It stated:
“Free ports are a Trojan Horse to water down employment protections”—
in a “race to the bottom”.
Finally, as we have heard tonight, there are real concerns that freeports could create a bonanza for money launderers and tax evaders. Indeed, the EU reported in 2018 that freeports were
“conducive to secrecy. With their preferential treatment, they resemble offshore financial centres, offering both high security and discretion and allowing transactions to be made without attracting the attention of regulators or direct tax authorities.”
The Government must address these concerns before pressing ahead. To that end, new clauses 5 and 25 would allow the Government to create an evidence base for freeports, which the House can then examine, and new clause 4 would impose standards and protections. If the Government are serious about addressing these concerns and building in clear legal protections, they will support these new clauses tonight.
Jackie Doyle-Price (Thurrock) (Con)
I commend the Government on the ambitious agenda running through this Finance Bill. It needs to be ambitious because the last year has been a very painful one for us economically. We must do everything we can to foster renewed growth, renewed job creation and, indeed, renewed wealth creation.
I have listened to the speeches from Labour Members. They raise some important things, but if I seriously believed that this freeport policy was going to undermine workers’ rights and lead to massive non-compliance with health and safety and tax legislation, I would not support it. I am supporting it because I have real ambition for my local community and my area, and I am very proud and pleased that the Thames freeport has been chosen as one of the eight. I assure the House that this is going to be the transformation of Thurrock after a very long time.
My hon. Friend the Member for Harwich and North Essex (Sir Bernard Jenkin) referred to the fact that people often see levelling up in terms of north versus south and we have heard that a lot, but nothing could be further from the truth; in fact some of the most deprived areas in our nation are our coastal communities, so it is absolutely right that freeports should be one of the headline levelling-up policies.
Ben Bradley (Mansfield) (Con) [V]
I wish to speak in support of the new clauses and amendments listed earlier by the Minister and in support of the plans to deliver freeports, and the benefits they can bring, across the United Kingdom. This Finance Bill is vital for our recovery plans in the coming months and years. Freeports are intended to be national hubs for global trade and investment across the UK, and to promote regeneration and job creation as part of our levelling-up agenda. Post-Brexit Britain stands to benefit hugely from being able to compete more effectively in a global market and to offer UK-based businesses the chance to take full advantage of new trading opportunities, to expand and to innovate within the UK.
As a Nottinghamshire MP, I want to refer specifically to the freeport based around East Midlands airport, in conjunction with local plans for a development corporation at the Ratcliffe power station, which is shortly to be decommissioned and the site put to this new use. Taken together, these proposals present a huge opportunity for bringing investment and employment to our region and to my Mansfield constituency. The site at East Midlands airport has a unique mix of logistics and transport connections, with an inter-modal hub bringing together air freight with major road and rail arteries right in the centre of the UK.
This is a chance for the east midlands and this unique inland freeport model at the UK’s largest pure cargo airport to take full advantage of the Government’s agenda for growth through a green recovery—we hope that green energy can form a big part of the east midlands’ future—and through new technical skills. It can play a key part in our levelling-up agenda and, as my hon. Friend the Member for Rushcliffe (Ruth Edwards) explained, it can help us keep talented people working in our constituencies in the east midlands instead of feeling that they have to disappear to the major cities to find opportunities. The partnership between Nottingham Trent University and West Nottinghamshire College in my constituency can support this development with skills development while equally benefiting from it themselves.
As the Minister explained, clauses 109 to 111 give the Government the ability to designate sites and offer tax incentives and reliefs at those sites. The sites are fairly and openly assessed, and across the east midlands my colleagues and I are delighted that our area has been successful. We estimate that these plans could bring up to 60,000 jobs to the region over the coming years, and my constituents stand to benefit from that in a big way. We are most grateful to the local authorities, the local enterprise partnerships and the businesses involved in putting the bid together. I ask the Minister to ensure that as much support as possible is available for our region to be able to put together the best possible business case, with advice and support from the Government and from his Department during the next phase.
It is telling that, before the freeports have even been set up, Labour’s amendments are already seeking to restrict and limit the benefits for businesses that invest in these sites, thereby limiting the potential for growth and job creation for my constituents. The point of these sites is to encourage innovation and investment, but it is typical of Labour Members to put ideology before jobs and livelihoods in working-class communities. They would rather fight for more power for their trade union bosses than for more wealth creation for our region and jobs for my constituents. In fact, it sounded a lot like the shadow Minister, the hon. Member for Erith and Thamesmead (Abena Oppong-Asare), did not really want to see this investment happen at all, despite offering no other suggestions for how Labour would regenerate these communities. The right hon. Member for Hayes and Harlington (John McDonnell), despite all his experience in this place, still has not worked out that it is businesses that create jobs, and that helping business is not an end in itself but a means by which to create more of the jobs that are so vital for areas such as mine that have needed them for a long time, and for our economic recovery after covid. Maybe he will get it one day, but I doubt it.
I support the Minister and the Government’s approach to delivering the new freeports. I am grateful that they have chosen the east midlands as one of the sites, with its unique location right at the heart of the country and all the potential that that brings for our region, and I will be supporting the Bill in its entirety.
Virginia Crosbie (Ynys Môn) (Con)
This Finance Bill gives us the freedom to look at freeports around the world and to propose innovative and exciting new possibilities for the UK. Last year I set up the Anglesey freeport bidding consortium, which includes Stena, Anglesey County Council, Bangor University and the North Wales Economic Ambition Board. We have approached our bid by asking the question: what problems could a freeport on Anglesey solve? By looking at the problems, we are building a freeport model that will offer benefits not just locally but globally.
Our first problem is local. After almost two decades of disinvestment under the Welsh Labour Government, Ynys Môn’s gross value added is now among the lowest in the UK. With large employers such as Anglesey Aluminium and Rehau closing down, it is highly dependent on seasonal tourism. Our island haemorrhages young people every year because there are no quality jobs for them locally. What better place for the Government to use their freeport model to create jobs and opportunity? How better to show levelling up at its most effective?
Our second problem is national. Brexit has impacted the flow of trade across the central corridor from Holyhead to Dublin. A collaboration between a freeport in Northern Ireland and a freeport on Anglesey would create a virtual special economic zone corridor and significantly improve the customs and trade route between Great Britain and Northern Ireland.
Our third problem is global. How will we hit our 2050 net zero carbon target, as energy island Anglesey is already leading the way in green energy: we have on and offshore wind farms, tidal energy, solar farms and we are about to establish a hydrogen production plant in Holyhead. We also have the best nuclear site in the UK—Wylfa Newydd. The UK needs innovative solutions, large-scale infrastructure and significant investment to achieve its 2050 target. The exemptions, tax and tariffs incentives, customs facilities and regulatory easements available to freeports would make Anglesey a global, sustainable energy investment base of choice.
Our final problem is that of re-establishing the UK’s place on a global stage outside of the EU. The competition for global capital is fierce and UK freeports are in competition with those all over the world. Ambitious and forward-looking proposals such as ours will future-proof the UK’s position as a world player. By holistically applying the levers available, the freeport of Anglesey could become the jewel in the UK’s crown.
Ian Paisley (North Antrim) (DUP)
I thank the hon. Member for giving way. I did not want to cut her off in mid-flow; she is making a brilliant speech. I hope that, when the Government respond to the points being made tonight, they will take the opportunity—I agree absolutely with what she has just said about Anglesey—to affirm that Northern Ireland will be entitled to a freeport and that it will not be blocked because of the arrangements that we have with the protocol and the EU.
Virginia Crosbie
I thank the hon. Gentleman.
Unfortunately, despite all the good reasons I have for bringing a freeport to Anglesey, the Welsh bidding process has not yet started. The Welsh First Minister has cited concerns about economic displacement, but my biggest concern is the economic displacement that will occur when trade that could have come to Anglesey goes instead to one of the eight English freeports announced in the Chancellor’s Budget. Ports such as Liverpool are already six months ahead of us in this process.
I absolutely support the Finance Bill and the opportunities that it gives the UK now that we are free from the shackles of Europe. I look forward to seeing Anglesey become a freeport, attracting new investment and creating the good, quality jobs that the island so desperately needs and deserves.
Mr Ian Liddell-Grainger (Bridgwater and West Somerset) (Con) [V]
I am absolutely delighted to take part in this debate and also to follow my hon. Friend the Member for Ynys Môn (Virginia Crosbie). We share a nuclear power station. I look forward to the fantastic day that we build at Wylfa.
I must say that the Chancellor has done a remarkable job in supporting the economy during this pandemic. He has also kickstarted the economy without a shadow of a doubt. Economic regeneration and regional economic regeneration does have to come with various—dare I say it?—caveats. I advise extreme caution when shelling out any extra cash to Somerset County Council. I would not spend a penny on it. Somerset County Council is incompetent, profligate and, worst of all, unbelievably pompous. It has failed to get broadband working. It has signed contracts that it does not understand, which has cost the tax payers millions of pounds. It adds absolutely nothing to the development of the local economy, except, unfortunately, hot air. Oh yes, Somerset County Council loves to claim credit for everything, but that is either exaggeration or lies.
Somerset is run dishonestly and it does not deserve to be taken seriously. My constituency has the biggest infrastructure project in the whole of Europe. Hinkley Point C nuclear power station is taking shape. Who masterminded this local planning? Who carried the burden? It was Sedgemoor District Council. Sedgemoor is one of the four districts that Somerset wants to gobble up in its greedy ambition to become a unitary authority. Why? It is because the district councils do not squander public money. They save it and have shown that they do so year after year. What does Somerset County Council bring to the party? They bring nothing but trouble and, I am afraid, waste. It pleads poverty, and begs for more, but it does not deserve a bean.
Across the country, our secondary school head teachers are furious with the council for ordering extra cuts that will hurt the most vulnerable children in our society who desperately need all our help. The heads have no confidence in the overpaid oaf in charge of Somerset schools. I do not think that I have confidence in any of them in the council, and I am not sure that I ever had. The staff of Chief Executive Pat Flaherty call him “flat battery”, which is a little worrying. He actually could not start a Dinky toy, let alone regenerate the economy.
Most people say the council is a waste of space and money—this has been going right across Somerset for the past few months. The public is not being fairly consulted about the unitary dream, which is, I am afraid, a scandal that lies at the door of the Secretary of State of Housing, Communities and Local Government. This is at the heart of the problem. The county chose to bid for change, just as the pandemic started. It is crazy timing. Why the rush? It should have waited. People have suffered because of this, but the Government danced to its tune and postponed the county elections, which were meant to take place next month, depriving the voters of a democratic say. I worry about the state that we are in.
Jesse Norman
I thank colleagues, not least my hon. Friend the Member for Bridgwater and West Somerset (Mr Liddell-Grainger), for a very entertaining and rowdy end to the debate. Let me pick up some of the points that have been raised on this important subject.
The hon. Member for Erith and Thamesmead (Abena Oppong-Asare) asked about expected revenue for freeports. As she will be aware, it is not really appropriate to comment on that at the moment. These tax sites have not yet been agreed. The revenues, or at least the associated tax costs, are very much site-specific. I am therefore not in a position to comment on that, but of course once the sites have been agreed, the appropriate estimates will be brought forward.
The hon. Member for Salford and Eccles (Rebecca Long Bailey) argued—indeed, it was a recurrent theme—that freeports would have the effect of watering down employment protections. The Opposition have no evidence for that viewpoint at all. There is no deregulatory agenda whatever with freeports. Businesses and freeports will have to abide by UK worker and environmental regulations, national minimum wage standards, workers’ rights and the rest of it, just as any other company would anywhere else in the UK.
The hon. Member for Gordon (Richard Thomson) raised the topic of freeports in Scotland. He did not remind the Committee, but he will be aware, that the Scottish Government originally rejected the idea of a freeport, then rather changed their tune when they saw the local reaction. I encourage him and the Scottish Government, whatever their complexion after the election, to step forward and engage with the Government so that we can agree a freeport in Scotland.
My hon. Friend the Member for Harwich and North Essex (Sir Bernard Jenkin) talked about the different elements, and was worried that somehow the offer had been watered down. I reassure him that, although he did not notice that the structures and buildings allowance is legislated for in the Bill, the employer national insurance contributions relief will be legislated for in a forthcoming Bill and the business rates relief will follow in due course.
My hon. Friend the Member for Thurrock (Jackie Doyle-Price) rightly talked about the magnificent port at Tilbury. I have visited it myself, and a thoroughly splendid and impressive thing it is too. Finally, my hon. Friend the Member for Bridgwater and West Somerset put in what I think we can all agree was a typically low-key and restrained performance, for which we very much thank him. He put me ineffably in mind of a great moment in a work of literature and film with which I am sure the House will be familiar: “Animal House”. There is a marvellous moment where John Belushi’s future senator John Blutarsky says, “Was it over when the Germans bombed Pearl Harbor?” There is a pause, and someone says, “Leave him, he’s rolling.” That is what I felt we should do with our dear friend the Member for Bridgwater and West Somerset. With that, I will sit down.
Ben Lake
It is a pleasure to close the debate this evening. We have had a very beneficial debate on two main points about freeports and regional economic development. We had a very good discussion about the merits or otherwise of freeports for the areas in which they are located, and although I think we will continue to discuss whether any growth of investment generated by the sites will be new, partially new or a substitute for or displacement of economic activity elsewhere, it has been a good debate nevertheless.
My final point leads on from the question of whether any growth in investment would be new or a reflection of displacement of activity from elsewhere. That is particularly important when it comes to the question of levelling up and addressing regional inequalities and disparities. We still need to discuss that further. One potential solution in Wales’s case, for example, may be to look again at the cap of just one freeport in Wales. Perhaps we should have at least two. I am looking to other Members—perhaps that is one way to address the disagreements we have had tonight.
Either way, we have had a very good and beneficial debate and although I do not want to press my amendment to a vote, I hope that the Minister will consider how the Government can better work with the devolved Governments to address some of these concerns and the need to co-ordinate policies for our economic development. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clauses 109 to 111 ordered to stand part of the Bill.
Schedule 21 agreed to.
Schedule 22
Relief from stamp duty land tax for freeport tax sites
Amendments made: 43, page 231, line 8, at end insert—
“(ca) Part 3A makes provision about cases involving alternative finance arrangements,”
This amendment is consequential on Amendment 52.
Amendment 44, page 231, line 26, after “sites),” insert
“other than in a case to which paragraph 10A of that Schedule (alternative finance arrangements) applies,”
This amendment is consequential on Amendment 45.
Amendment 45, page 231, line 39, at end insert—
“3A In section 81ZA (alternative finance arrangements: return where relief withdrawn)—
(a) in subsection (1), after “arrangements)” insert “or under Part 3 of Schedule 6C (relief for freeport tax sites) in a case to which paragraph 10A of that Schedule (alternative finance arrangements) applies”,
(b) in subsection (3) (as substituted by Schedule 17 to this Act), at the end insert—
“(c) where the relief was given under Part 2 of Schedule 6C, the last day in the control period on which the qualifying freeport land is used exclusively in a qualifying manner.”, and
(c) after subsection (6) insert—
“(6A) Terms used in paragraph (c) of subsection (3) which are defined for the purposes of Schedule 6C have the same meaning in that paragraph as they have in that Schedule (as modified by paragraph 10A of that Schedule).
(6B) Paragraph 10 of Schedule 6C (as modified by paragraph 10A of that Schedule) applies for the purposes of subsection (3)(c) as it applies for the purposes of paragraph 8 of that Schedule.”
“3B In section 85(3) (liability for tax), after “arrangements)” insert “or under Part 3 of Schedule 6C (relief for freeport tax sites) in a case to which paragraph 10A of that Schedule (alternative finance arrangements) applies”.”
This amendment makes provision about returns, and liability to SDLT, in cases in which relief under Schedule 6C to the Finance Act 2003 (freeport tax sites, inserted by Schedule 22 to the Bill) is withdrawn in cases involving certain alternative finance arrangements.
Amendment 46, page 231, line 40, leave out “86(2)” and insert “86”
This amendment is consequential on Amendment 49.
Amendment 47, page 231, line 40, after “tax)” insert “—
(a) in subsection (2),”
This amendment is consequential on Amendment 49.
Amendment 48, page 231, line 41, after “sites),” insert
“other than in a case to which paragraph 10A of that Schedule (alternative finance arrangements) applies,”
This amendment is consequential on Amendment 49.
Amendment 49, page 231, line 41, at end insert “, and
(b) in subsection (2A), after “arrangements)” insert “or under Part 3 of Schedule 6C (relief for freeport tax sites) in a case to which paragraph 10A of that Schedule (alternative finance arrangements) applies”.”
This amendment makes provision about the payment of SDLT in cases in which relief under Schedule 6C to the Finance Act 2003 (freeport tax sites, inserted by Schedule 22 to the Bill) is withdrawn in cases involving certain alternative finance arrangements.
Amendment 50, page 231, line 44, after “sites),” insert
“other than in a case to which paragraph 10A of that Schedule (alternative finance arrangements) applies,”
This amendment is consequential on Amendment 51.
Amendment 51, page 232, line 2, after “81(1A);” insert—
“(azab) in the case of an amount payable because relief is withdrawn under Part 3 of Schedule 6C (relief for freeport tax sites) in a case to which paragraph 10A of that Schedule (alternative finance arrangements) applies, the date which is the date of the disqualifying event for the purposes of section 81ZA (see subsection (3) of that section);”
This amendment makes provision about interest on unpaid SDLT in cases in which relief under Schedule 6C to the Finance Act 2003 (freeport tax sites, inserted by Schedule 22 to the Bill) is withdrawn in cases involving certain alternative finance arrangements.
Amendment 52, page 235, line 25, at end insert—
“Part 3A
Alternative finance arrangements
Cases involving alternative finance arrangements
10A (1) This paragraph applies where either of the following applies—
(a) section 71A (land sold to financial institution and leased to person), or
(b) section 73 (land sold to financial institution and re-sold to person).
(2) This paragraph applies for the purposes of determining—
(a) whether relief is available under Part 2 of this Schedule for the first transaction, and
(b) whether relief allowed for the first transaction is withdrawn under Part 3 of this Schedule.
(3) For those purposes this Schedule has effect as if—
(a) references to the purchaser were references to the relevant person, and
(b) the reference in paragraph 3(2)(d) to land held (as stock of the business) for resale without development or redevelopment were a reference to land held in that manner by the relevant person.
(4) The first transaction does not qualify for relief under Part 2 of this Schedule except where it does so by virtue of this paragraph.
(5) In this paragraph—
“the first transaction” has the same meaning as in section 71A or 73 (as appropriate);
“the relevant person” means the person, other than the financial institution, who entered into the arrangements mentioned in section 71A(1) or 73(1) (as appropriate).”—(Jesse Norman.)
This amendment makes provision about the operation of Schedule 6C to the Finance Act 2003 (relief from SDLT for freeport tax sites, inserted by Schedule 22 to the Bill) in cases involving certain alternative finance arrangements.
Schedule 22, as amended, agreed to.
New Clause 25
Review of freeports
“(1) The Chancellor of the Exchequer must review the impact of sections 109 to 111 and schedules 21 and 22 of this Act and lay a report of that review before the House of Commons within six months of the passing of this Act and once a year thereafter.
(2) A review under this section must estimate the expected impact of sections 109 to 111 and schedules 21 and 22 on—
(a) job creation within the sites designated as freeports and across the UK as a whole,
(b) revenue from corporation tax and stamp duty land tax within the sites designated as freeports and across the UK as a whole,
(c) levels of artificial tax avoidance and tax evasion across the UK as a whole,
(d) levels of criminal activity,
(e) the necessary level of staffing for HMRC and the UK Border Force, and
(f) departmental spending by HMRC and other departments on enforcement.”—(Abena Oppong-Asare.)
This new clause would require the Government to review the impact of the provisions of the Act introducing freeports and publish regular reports setting out the findings.
Brought up, and read the First time.
Question put, That the clause be read a Second time.
Business without Debate
Delegated Legislation
DELEGATED LEGISLATION (Committees)
Gender Pension Gap
(3 years, 8 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Patricia Gibson (North Ayrshire and Arran) (SNP)
I am delighted to have secured this important debate on the gender pension gap, which stands at a shameful 40.3%—more than double the gender pay gap of 17.3%. That is truly shocking, and I hope that the debate will both highlight this terrible inequality and perhaps persuade the UK Government to take some fairly straightforward measures to address it if they are truly committed to pension justice and equality.
We are all aware of the justifications for women’s state pension age being raised, but equalising state pension ages is very different from pension equality. We could simply throw our hands in the air and exclaim that women have always had lower pensions than men, and that is just the way it is, but it need not be this way. It is simply unacceptable that all types of pension provision—whether state pensions, workplace pensions or private pensions—inherently discriminate against women. If they choose to do so, the UK Government could tackle this and thereby tackle the poverty that too many women face in old age. This can wait no longer, as an increasing proportion of women are simply not able to rely on their partner’s income in retirement, and nor should they be required to.
David Linden (Glasgow East) (SNP)
I congratulate my hon. Friend most sincerely on securing the debate. The average woman in her 20s in the UK will have to work almost 40 years longer than her male counterpart to build up the same pension. Indeed, a female saver can expect to have £100,000 less in retirement savings thanks to time taken out of the workplace to raise children. In the previous debate, the Government spoke an awful lot about levelling up. Does she agree that, if the Government are serious about levelling up, the first thing they could do is tackle the injustice of the gender pension gap?
Patricia Gibson
Absolutely. I know that the Minister will be listening intently, and I hope he will take away the reasonable and straightforward suggestions that I will make this evening, so that we can truly level up in the way that the Government say they want to.
Women born in the 1950s—WASPI women, or Women Against State Pension Inequality—have suffered hugely as their state pension age was accelerated, giving them insufficient time to prepare for retirement. Despite the clamour of outrage, the Government have refused to do anything to address the hardship caused to the women affected. I wish I could say that that policy decision was the only one that targets women in retirement. I wish this was the only measure I could find that has transformed retirement into a time of financial uncertainty and fiscal pressure for women. Sadly, it is a mere continuation of policy choices that have contributed to—indeed, exacerbated—the gender pension gap under which too many women now labour.
Jim Shannon (Strangford) (DUP)
The hon. Lady, myself and others in this Chamber have supported the WASPI women the whole way through. Does she agree that there is not only a legal obligation but a moral obligation to deliver for them and that the WASPI women in our constituencies who have contacted us deserve to know that the battle has not ended for them?
Patricia Gibson
The hon. Gentleman is absolutely right. It is impossible, in all conscience, to have any debate about pensions and not mention the plight and difficulties into which the WASPI women have been thrust. Indeed, it would be remiss not to mention them and to pay tribute to the dignified campaign that they have fought and continue to fight.
Let us take pension credit as an example. The uptake of pension credit is only around 60%—a matter that I have raised repeatedly over the years in the House, urging the UK Government to do more to improve uptake. Doing so could play an important part in helping to close the gender pension gap, since women are much more likely to need to rely on pension credit, which is additional support for the poorest pensioners, as their lifetime earnings tend to be lower than men’s. However, the so-called triple lock on state pensions does not apply to pension credit. This means that the poorest pensioners, who tend to be women, do not have the same income protection as those pensioners who are better off.
In addition to this gender penalty, the very lowest earners, who we know tend to be women—I keep saying it because it bears repeating—are excluded from building credit on their state pension. Those who have a job earning below the lower earnings threshold get no credit for their state pension at all, and that applies even if a person has more than one job. This exclusion disproportionately hits women hard as they are more likely to be in part-time work. When the Minister gets to his feet, I hope that he will explain why this stubborn inflexibility in the national insurance system has not been addressed and when we can expect this pitfall—that is what it is—to be removed, as it contributes to the impoverishment of women in retirement. The lower earnings threshold should be abolished so that all workers can claim credit for state pension, no matter the level of their earnings.
The gender pension gap is exacerbated in all sorts of sneaky and labyrinthine ways, some of which most women do not know about due to the arcane nature of the system. The UK Government could fix many of these problems almost at a stroke; why this has not happened is curious.
For example, even if a woman is not currently in paid work, if she claims child benefit for a child under 12, she will get national insurance credit towards her state pension, and is treated as though she has contributed to national insurance while she claims that child benefit, when her state pension is calculated. Even if her partner’s earnings deem her ineligible for child benefit, she needs to apply in order to get national insurance credit. Who knew?
If a woman finds out subsequently about this rather silly and pointless method of gender discrimination—well, too bad. She cannot backdate her claim. In addition, research has shown that huge numbers of women simply do not know how child benefit claims affect their state pension calculation. And who could blame them? It would be fairly simple for the UK Government to address this by allowing all women who are looking after their children to claim state pension credit. Why not? What is the obstacle to this change, which could play a part in reducing the shameful gender pension gap?
Let me turn to the issue of temporarily leaving the workforce to look after children adversely impacting on a woman’s pension. Workplace pensions discriminate against women, who tend to earn less and to have interrupted careers, meaning that they are active in the workplace for fewer years than men. This means that their workplace pensions are lower, as well as their state pensions. This could be mitigated if the Government introduced a family carer’s top-up, whereby the Government would pay the equivalent of the employer’s contribution—at least at the level of minimum wage—into women’s pensions if they are taking time out as carers. This would equate to around £820 per year and would boost pension outcomes for women by 20% if they took 10 years out of the workforce to undertake caring responsibilities and return to the workforce thereafter. Importantly, research shows that this could close half the pension wealth gap that is created by taking time out of work to care for others—so far, so good.
It was always traditionally the case that women were forced to leave company pensions if they married or switched to part-time working. I have lost count of the number of WASPI women who have told me that they were forced out of occupational pension provisions when they married. However, we know that women also tended to be less likely even to be offered an occupational pension in the first place due to the types of jobs women traditionally did. Again, we have inherent bias against women’s workplace pensions.
We also need to remember that some workplace pensions do not aggregate women’s pensions following maternity leave. Not merging periods of pension service means that women have a reduced pension when they retire, relative to their male counterparts. Surely it cannot be beyond the wit of this Government to regulate pension provision so that women’s pension rights can be preserved whilst caring responsibilities are attended to?
If this litany of how women get a raw pension deal and suffer institutional bias seems to be long, I am afraid it is set to become longer still, because we have not yet considered auto-enrolment. This much-heralded programme to ensure all employers provide workplace pensions leaves out, ignores and simply does not take into account millions of women.
How can that be? It is actually very simple. Those who earn less than £10,000—again, disproportionately women of course—do not benefit from auto-enrolment and therefore do not benefit from their employer’s pension contribution. Again, it does not matter if someone has two part-time jobs, because if each pays below £10,000, they miss out on auto-enrolment and the employer’s contribution to the pension.
New research from the Pensions Policy Institute shows that almost half of single mothers are currently ineligible for auto-enrolment—almost half. Does the Minister think that is acceptable? What will he do to persuade his Government to remove the £10,000 earnings limit for auto-enrolment so that the threshold can be reduced to the very first pound earned? When one considers the part that that measure alone could play in helping to reduce the gender pay gap, I can think of no good reason not to do it.
If that was not bad enough, those who are auto-enrolled into their workplace pension are often forced to pay an additional 25% for their pensions if they earn between £10,000 and £12,000. Again, that situation tends to affect women disproportionately and is due to the type of pension an employer may use, which operates on a net pay basis. That means that the employee has to pay extra to their pension provider instead of receiving the tax relief they could have in a different type of pension scheme, such as a relief at source scheme. Sadly, it seems that most employers use the net pay scheme, so contributions are collected before tax.
However, if the relief at source scheme were used, women would benefit from an additional £8,000 in their pensions over their working lives. We have, quite frankly, a disgraceful situation in which women, who are most in need of help in building up their pension pots, are forced to pay more, usually without knowledge of how they are being financially penalised. If we want pension equality, why are the Government not legislating so that employers and pension providers ensure workers are enrolled into schemes that will qualify for tax relief?
If, after all that, a woman finds herself widowed, her late husband’s life annuity will probably not provide her with any income, meaning that after the shock of being widowed many women are thrown into poverty, financially unprotected. Similarly, if a woman is divorced, she may find herself in poverty in retirement. Indeed, she is more likely to do so. It seems clear that there are institutional, inherent, ingrained and unfair barriers to women being able properly and fairly to build up a pension pot that will offer them protection from poverty in their later years.
The obstacles, problems and barriers have been set out clearly tonight, and the Minister has been listening to the potential solutions. I urge him to respond to each barrier and to indicate what his Government will do to address the shocking and unacceptable gender pension gap that exposes women to poverty and hardship in their later years, because it does not have to be this way.
The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
It is my mission as pensions Minister to make the UK pensions system safer, better and greener. We are doing that in a variety of ways, ranging from our world-leading climate change and environmental, social and governance reforms, which positively impact pension investments, to taking tough action on scams and unscrupulous bosses, and through our work to make pensions simpler and more easily understood with dashboards, and to tackle inequality.
I congratulate the hon. Member for North Ayrshire and Arran (Patricia Gibson) on securing this important debate. This Government, like previous Governments, recognise that this is an important issue—one that we remain committed to addressing. It is one of the key drivers of the automatic enrolment reforms and the 2016 new state pension reforms, both of which help to address the issue raised. Through automatic enrolment and the new state pension, we are enabling more women to build up pension provision in their own right, reducing historical inequalities in the pension system.
With respect to the hon. Lady, I submit that automatic enrolment has been a genuine game changer in workplace savings. It has happened over the past nine years, but the work has been done by successive Governments, including a Labour Government, who set up the Turner commission. Automatic enrolment was commenced by the coalition Government in 2012, before the original blueprint was fully rolled out by this Conservative Government in 2018-19. Savings of 8% are now the norm, and 10.5 million employees have been automatically enrolled by more than 1 million employers.
Overall workplace pension participation for eligible employees has increased by 44 percentage points since 2012, reaching 86% in 2019. It has been especially transformative for women, low earners and young people, who have historically been poorly served by or excluded from workplace pensions. The proportion of women participating in a workplace pension reached 86% in 2019, which is double what it was in 2012. Some 79% of low earners now save into a workplace pension, which is more than double what it was in 2012. Finally, 85% of young people now save into a workplace pension, which, again, is well over double what it was in 2012.
David Linden
I do not think anybody in this House would quibble with the fact that automatic enrolment has been a success story, but the point outlined by my hon. Friend the Member for North Ayrshire and Arran is that the £10,000 trigger in place discriminates against women. Why do the Government have such an objection to making sure that the trigger kicks in at the first pound, rather than waiting until £10,000, which is so disadvantageous to women?
Guy Opperman
I am grateful to the hon. Gentleman for raising that point, because I am coming to that specific issue. He will be aware that we conducted a review of automatic enrolment and that we are committed to implementing its findings by the mid-2020s. We intend to remove the lower earnings limit, which will benefit low earners, and for the first time everyone will get an employer contribution from their very first pound of earnings if they are enrolled or opt in. That will improve the incentive to save, especially for women and those individuals working part-time in multiple jobs. In addition, the review also proposed extending eligibility to those aged 18, which will support younger people with the opportunity to start saving earlier for a more secure retirement. Clearly, there is a benefit in the hon. Gentleman’s constituency. In the constituency of the hon. Member for Strangford (Jim Shannon), for example, 7,000 people are currently automatically enrolled, and thanks are due to the thousands of employers who are supporting them in that process.
Patricia Gibson
While the Minister is talking about auto-enrolment, will he say whether he has any concerns about the issue I outlined about the employer using the net pay basis, instead of the relief at source scheme, so that tax relief can be earned?
Guy Opperman
The hon. Lady raised the RAS—relief at source—issue, which is a legitimate one. It is a matter governed by the Treasury. Obviously, I speak for all the Government, so I can try to address that point. She may have missed it, but in the Budget the Government announced a call for evidence on pensions tax relief administration, in line with the Conservative Government’s manifesto commitment to review comprehensively relief at source tax arrangements. The call for evidence is now closed and the Treasury is continuing to analyse the responses to it. The Treasury will, in the usual way, respond and publish its response shortly. Although the hon. Lady legitimately and rightly raises a matter that, to be fair, is also in the Conservative party manifesto as an issue to be addressed, the Treasury is addressing and has the matter in hand.
I will briefly touch on the very important issue of the self-employed. We remain committed to developing effective, durable retirement solutions for the self-employed. We commenced trialling a research programme in 2019-20 to test differing approaches aimed at improving retirement savings for self-employed people, looking at the role of behavioural messages and saving mechanisms using financial digital platforms. Some of those trials were paused during the covid pandemic for obvious reasons, but the work is done such that we hope to recommence trials this summer. We are also specifically working with Her Majesty’s Revenue and Customs to incorporate self-employed pension solutions into the Making Tax Digital programme that HMRC is rolling out, which I believe will genuinely assist the issue in relation to the self-employed.
Turning to the desire to make pensions simpler, more understandable and more practical, we are taking several measures to address that. In particular, the House will be aware of the pensions dashboard, which we took through in the Pension Schemes Act 2021. We are also driving forward the two-page annual pensions benefit statement, which will take the dozens of pages that were very hard to comprehend and make them into a simple two-page statement. We believe simplicity is key. We want all savers to be easily able to understand their pensions savings, so they can plan for the retirement they want. We believe that communications should be designed with savers’ needs in mind to encourage such engagement. Effective engagement will require a continued partnership between the various providers—the Government, the advisory community and the savers in the longer term.
I also want to outline to the House—I believe it is relevant to this debate—the pilot projects that we are conducting up and down the country on the midlife MOT. This builds on the work of the private sector, in particular Aviva and others, looking particularly at interventions between the ages of 45 to 50. Effectively, it is looking at wealth, work and wellbeing. We have committed several hundred thousand pounds to a number of pilot projects from Cornwall to the north-east and all across the country to ensure that there is a piloting of particular interventions to try to get people engaged with their pensions at an earlier stage and to see whether real differences can be made. I thank the Financial Conduct Authority for meeting me on this issue today as we try to drive forward this innovative change.
The hon. Lady also raised the state pension and a number of issues in respect of it. She will be aware that the state pension has never been higher in this country. When we came into government, it was barely £66 billion in 2009-10. It is now approximately £100 billion-plus. There is a well over £1,000 real-terms increase by reason of the triple lock. Clearly, pension credit has increased as well. She will also be aware that our reforms have seen the gap reduced between the state pensions of men and women. The new state pension system, introduced by one of my predecessors, corrects some of the historic inequalities of the previous system. Over 3 million women stand to receive an average of £550 more per year by 2030. The state pension outcomes are expected to equalise more than a decade earlier than they would have under the old system. We believe that the new state pension, introduced from 2016, gives equal value to national insurance contributions and credits, providing access to the same level of entitlement for all. There is also a comprehensive framework of credits available when people are out of the workforce, for example caring for children or elderly relatives. This will protect people’s state pension position for those periods.
We have introduced the “Check your state pension forecast” service, which I strongly recommend. There is also a desire for everyone to find out whether filling any gaps will increase their payments when they reach state pension age. In particular, that should be done in respect of gaps since 2016, because filling in the gaps, by either receiving credits or making voluntary national insurance contributions, could increase state pension.
The hon. Lady raised a number of additional points that I want to try to address. She raised the campaign on the women’s state pension age increase. Clearly, these were decisions made in the early 1990s and then legislated for, fundamentally on grounds of equality, in 1995. The notice period, I suggest, was several decades. Whatever the hon. Lady’s views or mine, this matter was then taken to the courts, and both the High Court and the Court of Appeal rejected all legal claims of the state pension age campaigners comprehensively, in highly detailed judgments.
This Government, at the same time, have raised the living wage, increased the personal allowance to £12,570, introduced free childcare, introduced the returners programme and addressed shared parental leave, and spent record sums already on universal credit, disability support and, as I say, state pension.
I thank all hon. Members for participating in this debate and showing a clear passion for improving pension outcomes for women. I believe that this Government and previous Governments have made progress. I accept that there is more to do and that closing the gender pension gap remains a priority for all.
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 |
Steven Bonnar (Coatbridge, Chryston and Bellshill) (SNP) | Owen Thompson |
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 |
Steve Brine (Winchester) (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) | Sammy Wilson |
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 |
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 |
Sir Jeffrey M. Donaldson (Lagan Valley) (DUP) | Sammy Wilson |
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 |
David Duguid (Banff and Buchan) (Con) | Stuart Andrew |
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 |
Colleen Fletcher (Coventry North East) (Lab) | Chris Elmore |
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) | Sammy Wilson |
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 |
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) | Sammy Wilson |
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 |
Robbie Moore (Keighley) (Con) | Stuart Andrew |
Layla Moran (Oxford West and Abingdon) (LD) | Mr Alistair Carmichael |
Penny Mordaunt (Portsmouth North) (Con) | Stuart Andrew |
Jessica Morden (Newport East) (Lab) | Chris Elmore |
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 |
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 |
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) | Sammy Wilson |
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 |
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 |
Maggie Throup (Erewash) (Con) | Stuart Andrew |
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 |
Christian Wakeford (Bury South) (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 |
Common Organisation of the Markets in Agricultural Products (Wine) (Amendment, etc.) Regulations 2021
(3 years, 8 months ago)
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The Chair
Before we begin, I would like to remind Members to observe social distancing and only sit in places that are clearly marked. I would also like to remind Members that Mr Speaker has stated that masks should be worn in Committee. Hansard would be most grateful if Members could send their speaking notes by email to hansardnotes@parliament.uk.
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Victoria Prentis)
I beg to move,
That the Committee has considered the Common Organisation of the Markets in Agricultural Products (Wine) (Amendment, etc.) Regulations 2021 (S.I. 2021, No. 279).
It is a pleasure to serve under your chairmanship, Mr Hollobone.
The instrument concerns protection of geographical indications in Great Britain. Geographical indications, or GIs, are a form of intellectual property protection for the names of food, drink and agricultural products with qualities attributable to the place they are produced or the traditional methods by which they are made. Examples include Scotch whisky, Welsh lamb and Melton Mowbray pork pies. However, the instrument concerns only wine.
The instrument contains a necessary amendment to the retained EU regulation that provides the legal basis for the wine GI scheme. I am sorry to be taking up the Committee’s time with this, and can only apologise that the original error was made in the large number of SIs that we had to prepare at the end of the transition period. The amendment corrects an error in the original legislation that was identified by a very sharp-eyed civil servant in the Department for Environment, Food and Rural Affairs—and we are very grateful to her. We have used the made affirmative procedure as the resolution provided by this instrument was needed quickly. This ensures that the intellectual property protection of wine GIs and traditional terms in Great Britain continues and the UK maintains compliance with its international agreements. The SI does not make any wider policy changes.
All we are doing is correcting article 107 of retained EU regulation No.1308/2013, concerning protected wine names and traditional terms. Three separate exit instruments provided for amendments in relation to this article, but in the process an inadvertent revocation was made of the text that was intended to be in place. The instrument puts the intended provision back in place. That ensures that all established wine GIs and traditional terms are protected and legitimately appear on the public register of wines and traditional terms that we protect. That in turn ensures that the UK Government fully comply with their GI commitments under the EU withdrawal agreement, and our World Trade Organisation obligations.
As well as making a direct amendment to a retained EU regulation, the instrument includes a corresponding revocation of domestic secondary legislation. Since the instrument entered into force on 10 March 2021, the relevant entries in our public GI registers have been updated to show the date of registration as 10 March, rather than 31 December 2020. This change has been made to just under 2,000 records; seven of these are UK names, the rest are predominantly from EU countries.
We have engaged with the Food Standards Agency and the network of trading standards authorities, which have confirmed that they are not aware of any wine GI infringements during this period related to the mistake. We have provided this reassurance to the European Commission. We have also engaged with the two main wine trade bodies, the Wine and Spirit Trade Association and WINEGB, and with the Scottish and Welsh Governments, who were appreciative of our speedy efforts to rectify the error and our engagement with them. They also thankfully reported no knowledge of any breaches to affected product names.
I want to reassure the Committee that all product names under the three other GI schemes have not been affected, including spirit drinks and agri-foods.
I commend the SI to the Committee.
Daniel Zeichner (Cambridge) (Lab)
It is a pleasure to serve under your chairmanship, Mr Hollobone.
I hope that I will not need to take us to 6 o’clock, because at first sight the Committee is considering a simple change correcting a previous error, which the Minister has elegantly explained and for which no apology is required. An honest mistake was made, but it was spotted and corrected. I have to say that I am rather pleased that I was not involved with the previous SI. Looking at paragraph 7.1 of the explanatory notes, it is clear that there is no way that many of us would have noticed the issue. As I have observed before, there is a huge level of complexity and detail in these regulations that, frankly, most of us do not have the capacity to work through. We are very reliant on civil servants and grateful to them for doing that.
I should also like to note the importance of geographical indications in general, and for our domestic wine industry, which we all wish to see go from strength to strength. I can assure you, Mr Hollobone, that the Opposition will not oppose the instrument, but—of course there is always a “but”—there is an issue on which I will be slightly less gracious, on which we have touched before when SIs relating to wine are discussed, and which I suspect that the Minister may have anticipated. The VI-1 may sound like a horrible warhead, but it is actually a horrible form, and it is exercising many people. It was the main issue raised when the SI went before the Lords last week. I certainly found Lord Moynihan’s contribution very telling and powerful.
I shall briefly remind the Committee of the issue, which is about wine import certification and the blue tape with which the Government are currently strangling parts of the British wine industry. The Government have chosen to roll over EU rules on wine imports that require a detailed import certificate in addition to standard customs paperwork, the VI-1 form, for all wine imports from third countries. These detail how strong a wine is, what grape it is made from and how many containers are being sent. Each different type of wine in a consignment must list all these details and the form requires a stamp from customs officials, presenting a significant logistical challenge and cost burden for wine importers in the UK.
While a slightly simpler version of the VI-1 form has been negotiated in the UK-EU trade and co-operation agreement for wine imports from the EU, this still requires a customs stamp, which will delay transit through ports and place a significant burden on our importers. The Government have delayed the introduction of these new forms twice, but as it stands they are still going to be introduced at the end of the year. The British wine industry is quite frankly at a loss to understand why the Government are so set on introducing this import documentation at all.
The EU’s rationale for having an import document that is effectively a technical barrier to trade is, in reality, to protect its wine industry. For the UK, which is a net importer of wine, it makes very little sense for us to maintain rules designed to disadvantage our imports; we import over 99% of the wine we consume in this country, and around half those imports are from the EU.
As I said, we want our own wonderful wine industry to flourish and grow—there are great English and Welsh wines produced in this country, which is why we support the correction to ensure that geographical indications work properly. In terms of volume, however, we remain a significant importer. The Minister will know that we also have a vibrant export industry based on this trade, with the UK acting as a major wine hub for the rest of the world and wine being our sixth biggest food and drink export in 2019. So this is important.
Yet the Government seen happy to wrap these vibrant industries in blue tape. These forms are a measure that will be significantly damaging to our UK wine importers, who already have to deal with a raft of new barriers to trade as a result of leaving the EU. It will disproportionately damage SMEs, particularly independent wine merchants like Cambridge Wine Merchants in my constituency, as well as pubs, bars and restaurants, for which a wide selection of niche and interesting wines is a unique selling point. It will be damaging to UK consumers, who could see cost increases and decreased product choice, and to the Government themselves, who could see a loss of revenue to the Exchequer and are committing themselves to carrying out yet more form stamping at the border due to the customs stamp requirement.
Daniel Lambert, who will probably be well known to the Minister and who imports up to 2 million bottles of wine a year for 300 retailers including supermarkets, has been vocal in the media about the situation he now finds himself in due to the Government’s decisions. He has likened the impact on the sector to a
“multiple pile-up in the fog”.
He is not happy and neither are others. Yet again we see the Government’s incompetent Brexit deal wrapping ribbons of red tape around the UK’s wine sector for no good reason whatever.
As the Minister said, the Wine and Spirit Trade Association has been clear that, as far as it can tell, the additional bureaucracy is unnecessary. There is no customs requirement for it and no safety issue involved. Wine is already heavily regulated by rules such as the geographical indications to ensure quality control and no other alcoholic drink requires a similar form, so will the Minister clarify the Government’s practical reasons for introducing the forms? If there is no real consumer protection purpose for them, the Government must have another reason for their introduction.
I understand that it has been suggested that maintaining wine import certification rules will level the playing field for wine from the rest of the world. I am sure that the Minister recognises that there are two different scenarios here. I am reliably informed by the Wine and Spirit Trade Association that the supply chain for wine imported from third countries thousands of miles away, often moved in bulk, is very different from the supply chain for wine imported from the EU, which is often imported by SMEs. Importing 25,000 litres of Australian wine in a flexitank with one VI-1 form is much less burdensome and costly than importing 20 wines in bottles from the EU that require 20 additional pieces of documentation.
Rather than imposing a requirement on all imports, the Government could just as easily create a level playing field by not introducing a requirement for import certificates for EU wines and scrapping the current requirements for non-EU wine imports. The only explanation for the Government’s action—Lord Moynihan made the point powerfully—is that it is a negotiating ploy in ongoing trade negotiations with third countries. I am sure that the Minister will deny it, but in my view, the Government are using the British wine industry and particularly British small businesses as pawns in a bigger trade game and happily leaving them endure extra bureaucracy just for extra leverage. Small wonder that Ministers are so reluctant to respond to the sector’s concerns. I am told that repeated requests from the Wine and Spirit Trade Association for a meeting to discuss the issue have been ignored.
At a time when the Government are already having to delay the introduction of mandatory customs procedures, it makes no sense to introduce additional controls if they are non-essential. As a minimum, it would be far more sensible for the Government to delay the introduction of the forms until an electronic version can be established, but the British wine industry is clear that it would be far better to scrap the unnecessary forms. It is entirely within the Government’s gift to do that.
The Government have a perfect opportunity to put their money where their money is, scrap the red tape and support British businesses. Will the Minister explain why on earth they are choosing not to do so when they have been given the chance—a Brexit benefit, no less?
Will the Minister commit today to meet me and the Wine and Spirit Trade Association at the earliest opportunity to discuss the issue further? If not, I fear there will be an empty chair, perhaps occupied by a bottle of wine wrapped in red tape, or even red, white and blue tape. We do not oppose the statutory instrument but we are cross about the Government’s continuing failure to engage.
Victoria Prentis
Clearly, it is essential that we have the right legislation in place for the effective operation of the UK’s GI scheme. That is of course what we are here to talk about this afternoon. However, I am prepared to deal briefly with the hon. Gentleman’s points about VI-1s, though they are not directly in scope, so I will be brief.
VI-1s already exist for other nations—Australia, the US and Chile. Those wines are very competitive in the UK market and the existence of a VI-1 form does not prevent them from being enjoyed here. The hon. Gentleman is right that leaving the EU gives us the opportunity to consider whether we should review the policy to suit our needs. As he said, it is possibly a Brexit benefit and it certainly gives us the opportunity to ensure that the scheme that we have in the UK is right for us, our importers and our exporters.
As the hon. Gentleman said, we are an important wine-trading nation, second only to the United States in the value of our imports. We also export, and re-export mainly, large quantities of wine to the EU—about £400 million- worth a year. Leaving the EU gives us scope to review our policies and we continue to monitor all areas of retained EU law, including those concerning wine certification, to ensure that they are fit for purpose.
The Wine and Spirit Trade Association was pleased with our plans to issue an easement to the need for VI-1 certificates to accompany imports of wines from the EU. It also welcomes the introduction of a simplified VI-1 certificate—the arrangements for the EU and UK wine trade that were set out in the trade and co-operation agreement at the end of last year.
The Department for Environment, Food and Rural Affairs treats the geographical indications regime very seriously. The UK has a proud and growing food reputation and GIs play an important role as exemplars of our quality producers. We are committed to celebrating the success of those products and driving further market access to ensure that they are enjoyed around the world, as symbolised by our new UK scheme logos.
It is right that we put the correct legislation in place and that we took steps to correct the error as soon as possible. I am always delighted to meet the hon. Gentleman to discuss other aspects of our wine trade—both import and export—whenever we can find a convenient date.
I commend the regulations to the Committee.
Question put and agreed to.
Draft Audiovisual Media Services (Amendment) Regulations 2021
(3 years, 8 months ago)
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The Minister for Digital and Culture (Caroline Dinenage)
I beg to move,
That the Committee has considered the draft Audiovisual Media Services (Amendment) Regulations 2021.
This instrument, laid in both Houses on 25 February, is being made under the European Union (Withdrawal) Act 2018. The regulations remedy certain failures of retained EU law arising from the withdrawal of the United Kingdom from the EU. Through this statutory instrument, we are seeking to address minor and technical issues in domestic law following the transposition of the audiovisual media services directive by the Audiovisual Media Services Regulations 2020. It is necessary to ensure that the law remains fit for purpose beyond the end of the transition period.
The regulations amend references to EU legislation, substituting domestic law references where appropriate and making references to EU legislation ambulatory where appropriate. They also remove the requirement for Ofcom to notify the European Commission of in-scope services falling within the UK’s jurisdiction and address Ofcom’s co-operation with EU member state regulators. These regulations were debated and approved by the House of Lords on 13 April.
I would like now to look quickly at the regulations in a little more detail. The EU’s audiovisual media services directive, known as the AVMS directive, governs the co-ordination of national legislation on audiovisual media services. It was initially implemented into UK law in 2010, primarily by way of amendments to UK broadcasting legislation. The UK’s Audiovisual Media Services Regulations 2020, which transposed the revised AVMS directive, were made and laid in Parliament on 30 September.
The 2020 regulations came into force on 1 November last year; for the first time, they introduced rules for video-sharing platform services. The Government have appointed Ofcom as the regulator for video-sharing platforms falling under the UK’s jurisdiction. The rules ensure that platforms that have the required connection with the UK have appropriate systems and processes to protect the public, including minors, from illegal and harmful material. “Required connection with the UK” means that the platform provider is established in the UK or that a group undertaking of the provider is established in the UK and the service is not regulated by another EEA country. In those circumstances, Ofcom will have jurisdiction to regulate the video-sharing platform service.
The three requirements placed on video-sharing platforms under the 2020 regulations are: first, to take appropriate measures to protect minors from content harmful to those under 18 years of age; secondly, to take appropriate measures to protect the general public from harmful and certain illegal content; and thirdly, to introduce standards around advertising.
Ofcom has published guidance on scope and jurisdiction. It is also continuing to actively engage with platforms that may be in scope of the regime. In March this year, Ofcom published draft guidance for consultation on the list of measures that video-sharing platforms can take to protect users from harmful material. More vigorous regulation will commence once all guidance on video-sharing platform regulation has been published later this year.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
It is a great pleasure to serve under your chairship, Ms Elliott, and I welcome the rest of the Committee to this important statutory instrument. I thank the Minister for her opening remarks—here we are again, talking about audiovisual regulation without there being any online safety Bill in statute or in sight.
To begin with, I declare an interest: as the Minister is aware, before I entered Parliament I spent six years working for Ofcom as head of technology. As she mentioned, Ofcom has responsibility with regard to this SI. During my time there, it had responsibility for regulating broadcast audiovisual services and some responsibility for online audiovisual media services, which were beginning to grow in importance—although not always legally. Online audiovisual media services were nowhere near as widespread or important then as they have since become, and they have been especially critical during the pandemic. Video-sharing platforms, or VSPs, which are the core of the SI, have become a major presence in the lives of many people in this country—just look at TikTok or YouTube.
The SI follows on from two SIs of the same name that were laid in November and September 2020 and which put the UK’s obligations in line with the European Union’s audiovisual media services directive—AVMSD— in preparation for the end of the transition period at the end of last year. As the Minister said, the AVMSD introduced three key requirements for VSPs: to take measures to protect minors from content that is harmful to those under 18; to take appropriate measures to protect the general public from harmful and illegal content; and to introduce standards on advertising. It is notable that we are dependent on the directive for regulation because we do not have online harms legislation, and I want to emphasise that AVMSD should not be used as a replacement for robust UK online safety legislation.
As the Minister said, the SI makes technical changes to the definition of terms and to Ofcom’s duties as a regulator, and it could potentially impact on the UK-EU working relationship. The SI includes changes to the definition of “European works”. As part of the AVMSD’s attempt to strengthen the competitiveness of the European audiovisual industry and to promote cultural diversity and heritage in Europe—I am sure they are ambitions that we all support—the European Union identified “European works”. Such works are both linear and on-demand audiovisual media products. Under the AVMSD, 30% of on-demand programming services must be European works, so the SI laid in November brought that quota into UK law.
For a product to qualify as a European work, it must originate in a member state or third-party state, or have been co-produced within a framework of agreements between the EU and third countries. My understanding is that UK productions currently qualify as European works because the UK continues to be a signatory to the European convention on transfrontier television, and I hope the Minister will confirm that.
The changes made by the SI allow the definition of European works in UK law to adapt to and adopt unilateral changes to the definition of European works by the European Union. On the one hand, this allows flexibility and removes potential legislative barriers that may arise in the future, but on the other hand, it raises concerns over sovereignty, which I am sure the Minister remembers was a key issue in the Brexit debate. Should the European Union change the definition of European works to exclude audiovisual works created in third-party states and by signatories to the European convention on transfrontier television, I believe such a change would be automatically adopted into UK law, leaving UK audiovisual works outside the 30% quota. That could create a circumstance whereby UK audiovisual products are at a disadvantage and are not considered part of European works.
Can the Minister confirm whether any changes made by the EU to the definition of European works will be automatically transposed into UK law? If such a circumstance occurred, how quickly and by what means would the Government act to ensure that UK products are not placed at a disadvantage? It highlights the fact that, although we are still using European Union definitions, we have no say in how those definitions evolve. What guarantees has she received from the European Union that future changes to the definition of European works will not lead to the UK being excluded? What assessment has she made of the impact of such an exclusion, should it happen? Will unilateral changes by the European Union to the definition of European works be addressed in the forthcoming online safety Bill, which we have heard so much about even though we have yet to see even a draft?
I would hope that future negotiations between the European Union and the UK ensure ongoing agreement on this definition. However, it is clear from the draft regulations that the relationship with respect to the definition of European works is not reciprocal: the UK has adopted the European Union’s definition without the European Union being forced to reflect or adopt any changes that the UK could make; I am not sure that in this case it could make any.
Back in November, I raised jurisprudence issues. Under the current rules, a VSP will come under UK jurisdiction if it has a fixed establishment in the UK and the centre of its economic activity relating to the relevant service is based in the UK, not in an EU member state. If the VSP is not established in the UK and no EU member state has jurisdiction over it, it will come under UK jurisdiction if it has a group undertaking established in the UK. The draft regulations and the AVMSD fail to provide a level playing field for online and offline services: they do not protect UK citizens from harmful content, either specifically for VSPs that do not have a group undertaking in the UK or generally, whereas offline broadcast services in the UK are subject to UK regulation.
A significant gap has opened up in online safety legislation. UK citizens and consumers are not adequately protected from harms under the current jurisprudence and regulatory regime, and the draft regulations do nothing to address that. Analysis commissioned by the Government shows that under the current rules-of-origin approach to jurisprudence, YouTube, Facebook, Instagram, Dailymotion and Twitter are all outside the UK’s regulatory scope. What are the Government doing to build the regulatory framework that will protect UK citizens online? What role will the draft regulations play in that? I am sure that the Minister will refer to the online safety Bill; we look forward to more details on the timetable of its passage.
The Government may have left the UK without the regulatory framework that we need, but they have assigned it a regulator, as we heard from the Minister. We do not know how broad Ofcom’s regulatory responsibilities will be—presumably they will be fleshed out in the online safety Bill, which we have yet to see—but the draft regulations do tell us one thing: Ofcom will not have a duty to inform the European Union of breaches of the AVMSD, because its duty to inform has been scaled back to a power that it “may” exercise. I understand that that is because EU states are not mandated to inform Ofcom of a breach, so the Government have decided to remove Ofcom’s mandate to inform European Union states.
I think we can all agree that we would be safer if breaches were reported globally: one of the challenges of regulation in the online world is that it requires global co-operation and collaboration. The decision to stop Ofcom reporting breaches to the European Union has been made because we cannot obtain a reciprocal agreement. Did the Government seek to ensure reciprocity on the sharing of data breaches and of breach data? Have they assessed the impact of the decision on the flow of information between regulators? Failure to ensure that reciprocity is a failure of Government, and it could have implications for the UK’s online safety relationship with the European Union, making us more vulnerable. I am concerned in particular that it may affect the information our regulator receives from friends and partner agencies in Europe. Will the Minister say a little about the future working relationship between UK regulators—Ofcom and the Information Commissioner’s Office, for example—and European Union state regulators, particularly on reciprocity? Will she promise no regression in the sharing of information that may keep us safe online?
I have already touched on the reason why this is so important: the UK lacks any robust online harms legislation. The online safety Bill has been a decade in the making. It is startling to think that from 2010, starting with the coalition, the Government have presided over dramatic changes in the role of the internet, the web and the online world in our lives, but we have yet to see any online safety legislation. It took them nearly two years to issue a full response to their own consultation on the matter, despite huge increases in online threats because of the pandemic. I raised the threat of child abuse, online scams and misinformation in November, when I think we all agreed that legislation was way overdue. Six months later, we still have nothing beyond the promise of a reference in the Queen’s Speech. I hope that the regulations are not a further sticking plaster to hide the Government’s delaying on such a vital issue and that further delays will not materialise. The Minister’s Department has stated that the online safety Bill will supersede the regulations, but as that Bill will probably not become law for another year, we have another year of uncertainty. Has the Minister assessed the impact that such uncertainty is having on the audiovisual sector?
Labour will not oppose the regulations because we do not believe that the Government can legislate quickly enough to address threats to online safety and jurisdiction concerns. However, we are greatly concerned about the holes in the UK’s regulatory framework and the path that the Government are taking with our future relationship with the European Union, which should be one of collaboration and co-operation on the key subject of online safety. We need reassurance that the UK and the EU will work closely together without interruption or confusion, confirmation that the Government will prioritise the wellbeing of the UK audiovisual sector, and robust and substantial regulatory legislation to protect us online.
Caroline Dinenage
I thank the hon. Lady for her questions. First, she mentioned Ofcom’s duty, as opposed to a power, to co-operate with EU regulators and suggested that that could result in uncertainty regarding enforcement platforms whose services are used in the UK. In the post-transition period, co-operation continues to be of the utmost importance. The regulations provide Ofcom with the power to co-operate and collaborate with its EU member state counterparts. That is crucial, as she said, because we need to have to have that co-operation to keep people safe.
Co-operation and sharing of information between national regulatory authorities is really helpful in enabling authorities to fulfil their functions in the most effective and coherent way. Ofcom will be able to use the power to co-operate in a number of circumstances, including: co-ordinating enforcement action; ensuring substantial cross-border compliance; exchanging regulatory best practice, which we all want to adopt; and, most importantly, addressing jurisdictional matters such as determining where a provider is established, which will ensure that UK users are protected from illegal material that appears on a video-sharing platform that is not regulated by the UK.
In the absence of this statutory instrument, Ofcom will be able to engage only in non-specific informal co-operation with other EU regulators—things such as exchanging regulatory best practice, rather than, for example, co-ordinating enforcement action. This could result in a lack of transparency between regulators and lead to less effective protection of UK users, including, crucially, minors.
Although this instrument does not guarantee that EU counterparts will reciprocate and co-operate with Ofcom, these regulations show a willingness on behalf of the UK Government that Ofcom should engage and promote collaboration in this really important area of online safety. There should be no regression in reciprocity. It is really important to keep us all safe online. Leaving a duty to co-operate in place would be inappropriate because of the lack of reciprocity from EU member states, and would provide no incentives for EU national regulatory authorities to co-operate with Ofcom.
Chi Onwurah
I thank the Minister for her comments, which are enlightening. Were there discussions around maintaining a mutual reciprocal duty to co-operate on this issue?
Caroline Dinenage
I will drop the hon. Lady a line on that because I do not know for sure. She asked how long this will last and how it works in relation to the online safety Bill. As she knows, we are working at pace to prepare the legislation. It will be ready shortly and she will be able to cast her eyes over it in the near future. In the meantime, we are working closely with Ofcom and will continue to engage with parliamentarians as we prepare the legislation.
Of course, we recognise the importance of being online and the benefits that that brings, but we have seen most poignantly during the coronavirus period how online safety can be a major concern. There are serious risks that users, particularly children, currently face when they are online. It has been brought to a head over the past year, and the prevalence of illegal and harmful content and activity online is unacceptable and has become more so. We have made clear our intention to repeal the video-sharing platform regime in part 4B of the Communications Act 2003 once the more comprehensive online harms regime comes into force.
In the interim, through regulating and engaging with video-sharing platforms, Ofcom will have the unique opportunity to understand the potential challenges and opportunities to be harnessed with systems regulation. These vital learnings, combined with the scope to engage with UK-established video-sharing platforms, will no doubt strengthen the online harms regime once it comes into force.
This instrument ensures that the law remains clear and operable. It is required to remedy the failures of retained EU law arising from the withdrawal of the UK from the EU. The instrument will allow Ofcom to progress the implementation of the video-sharing platform regime and provide protections for UK users, especially minors.
The UK and EU have similar objectives, and we continue to share similar values when it comes to protecting users online. Through the introduction of a power to co-operate, we are signalling our commitment to working with our European and international partners. This engagement will strengthen our ability to keep UK users protected from illegal and harmful material on video-sharing platforms not established in the UK ahead of the upcoming online safety legislation.
Chi Onwurah
I thank the Minister for her comments. I also asked about European works and whether the definition of European works could be changed to exclude the UK at a future date.
Caroline Dinenage
Again, I will drop the hon. Lady a line on that.
Question put and agreed to.
Petition
Reduction in VAT for home energy bills
Westminster Hall
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Trespass
(3 years, 8 months ago)
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Mr Peter Bone (in the Chair)
I remind hon. Members that there have been some changes to normal practice in order to support the new hybrid arrangements. Timings of debates have been amended to allow technical arrangements to be made for the next debate. There will also be suspensions between each debate. I remind Members participating physically and virtually that they must arrive for the start of the debate in Westminster Hall. Members are expected to remain for the entire debate.
I must also remind Members, particularly those participating virtually, that they are visible at all times, both to each other and to us in the Boothroyd Room. If Members attending virtually have any technical problems, they should email the Westminster Hall Clerks’ email address. Members attending physically should clean their spaces before they use them and before they leave the room. I would also like to remind Members that Mr Speaker has stated that masks must be worn in Westminster Hall. Members attending physically who are in the latter stages of the call list should use the seats in the Public Gallery and move on to the horseshoe when seats become available. Members can speak only from the horseshoe, where the microphones are.
Katherine Fletcher (South Ribble) (Con)
I beg to move,
That this House has considered e-petition 300139, relating to trespass.
It is an honour to serve under your chairmanship, Mr Bone. I have demonstrated that not all talents are distributed equally, as I have managed to pour water all over my speaking notes. If there is any disintegration of these words, I beg your forgiveness.
This debate is about how we access the countryside, how much we value it and what laws should govern that access. The petition proposes changes to legislation currently going through Parliament. In short, it asks that we do not criminalise trespass. Before its closure in September last year, the petition had been signed by 134,932 people, 185 of whom are from my own fabulous patch of South Ribble.
In seeking to represent fairly the different sides of this complex debate, I met a number of individuals and organisations to hear their views. I am particularly grateful for their time and expert insight. My sincere thanks go to the petition’s originator, Guy Shrubsole; Gemma Cantelo, representing the views of the Ramblers; Abbey Kirkby, for sharing her thoughts from the Traveller community; as well as George Dunn, from the Tenant Farmers Association; Sam Durham, from the National Farmers Union; and Andrew Gillett, from the Country Land and Business Association.
With those thanks over, let me take a step into the detail of this debate. My right hon. Friend the Minister has stated that the Government
“made a clear manifesto commitment to act on the issue of unauthorised encampments and…remain determined to ensure police have the powers they need.”
As a result, the Police, Crime, Sentencing and Courts Bill introduces intentional trespass as a criminal offence. The “Don’t criminalise trespass” petition was set up by Guy as he has a series of concerns about unintended consequences for countryside lovers and those who seek to reside in it. In his view, criminalising intentional trespass could lead to, although not exclusively: prosecuting ramblers who stray from the path by accident—I am sure that is something that the Minister, the Chair and all of us in this room have done, although I confess that I am normally in possession of a mountain bike and a rucksack when issuing unfettered apologies for being in the wrong part of the countryside—preventing participation in wild camping, even for personal safety or enjoyment; limiting the right to peaceful protest; and forging new paths in the countryside. Guy is also keen to highlight the wider implications of criminalising intentional trespass on the lives of Traveller communities across the country.
Through an online survey, the Petitions Committee sought the opinions of affected groups and forums. A remarkable 84% of respondents felt that criminalisation of intentional trespass would have major or moderate effects on how they live their lives. Further conversations with representatives of the Ramblers regarding access and right of way suggest that they share similar concerns about the criminalisation of those who have become lost or strayed from the footpath. They argue that the likelihood of becoming lost with unkempt footpaths and limited signage—and, in my case, a lack of capability —inhibits visitors from venturing out and exploring our beautiful countryside. Discouraging rambling should not be a consequence of the legislation, and nor should be it threatened.
Respondents to the Petitions Committee survey also suggested that urban dwellers—I was most definitely one in my youth—include higher levels of minorities and the economically disadvantaged, who already have less access to outdoor spaces in England. They could be disproportionately affected through either the reality or the perception that they will be criminalised for accessing the countryside, and the petitioners feel extremely strongly that this should not be the case.
There were concerns that the proposed changes in the law would add further barriers to outdoor access. I am proud that we are a country with 140,000 miles of public rights of way, mainly founded through public footpaths and bridleways. Such routes to access to the countryside, nature and wildlife are here to stay, and they are extremely important as an outlet for our educational, mental and physical needs. Like the petitioners, I use them regularly on my bike and on foot, and I would be deeply concerned if new legislation were to deter others from enjoying the beauty of England—north or south.
Many robust concerns were raised about the unintended consequences of the legislation. Crucially, such opinions were mirrored in the conversations that I have had with rambler groups, farmers and landowners. During those discussions, it became clear that at the heart of the debate is a key phrase: “to intentionally reside”. It many cases, a lost walker has no intent to reside unlawfully on a farmer’s field. When discussing this further, Guy’s experience of wild camping in Dartmoor is a potential model. Stays there are restricted to a maximum of two nights, which prevents a camper from establishing intent to reside, and arguably they are at no risk of committing trespass by that account.
The legislation that sparked the petition is aimed at tackling illegal encampments, where visitors occupy land and do not leave when asked. In representing the petitioners, I felt it appropriate to speak to those whom the legislation seeks to support. Within my constituency of South Ribble, there have been a series of trespass issues for landowners. As trespass is currently a civil offence, returning access to landowners’ property can be a lengthy process with temporary results. According to my local landowners who have reported back to me, the current reprimands for trespass do not equal the financial and environmental cost. Despite the focus on unauthorised encampments, petitioners are concerned that under the proposed changes to the law, there is a real possibility that the legislation will be manipulated to criminalise participants in wild camping, mountain biking and rambling who get lost. I look forward to hearing from the Minister what he can do to assuage the extremely valid concerns.
Representatives of the National Farmers Union, the Country Land and Business Association and the Tenant Farmers Association were keen to highlight that farmers and landowners are delighted to share the countryside with others, as long as visitors are respectful. That means steering clear of livestock and crop production, and adhering to the countryside code. However, they were keen to speak to the points in the petition. In their view, instances of trespass with residency have become a larger problem, with the use of intimidation, violence and environmental destruction being reported to them. They felt that current legislation is not a useful tool to prevent such issues. In order to best prevent and discourage intentional and destructive trespass, it seems logical to them to make it a criminal offence.
I discussed these points with Abbie from Friends, Families and Travellers during a really brilliant conversation. She expressed the importance of not associating certain behaviours with all members of the Traveller community. Given the authorised Traveller sites in South Ribble, I must wholeheartedly agree with her. She recognised a persistent problem with unlawful encampments, but she has huge concerns that further legislation compounds the inequalities experienced by the Traveller community. The Bill strengthens police powers, including the ability to seize a vehicle, for example. For those in the Traveller community, that could mean the seizure of their home and possessions. The number of lawful sites in which the Traveller community can reside is limited, so Abbie and the petitioners argue strongly that improved site provision, not further legislation, is key to preventing issues. On behalf of the Traveller community, she says quite clearly: “Don’t criminalise trespass.”
Owing to the delay caused by covid, since the petition’s inception and our meetings, the Police, Crime, Sentencing and Courts Bill—the subject of the petition—received its Second Reading in the House of Commons on 16 March. The Bill contains provisions on unauthorised encampments, including the creation of an offence
“relating to residing on land without consent in or with a vehicle”.
My understanding is that that phrasing is intended in part to address the concerns raised by the petitioners. The new offence has been phrased in such a way as to ensure that the right of ramblers and others to enjoy the countryside is not affected. Despite that, under the definition provided, a bicycle could constitute a vehicle, which could put me and my haphazard mountain biking at risk. The inclusion of bicycles in the definition has been highlighted as a concern of many of those who have signed the petition. I look forward to hearing the Minister’s response to those points.
The petitioners are worried about the introduction of a barrier to their access to the wonderful British countryside, and about the idea that it would put others off accessing our bridleways and footpaths for recreation and enjoyment, good mental health, and engagement with nature—all those amazing things. Although farmers and landowners are experiencing difficulty with unlawful encampments, with which they believe the current statute cannot assist, they are mindful of the unintended consequences of legislation.
The Traveller community have concerns about their way of life, and about being judged by the actions of a minority, which is a concern shared by the petitioners. I repeat my grateful thanks to all those who signed the petition, and to those who took the time to meet me in the run-up to the debate. I look forward to hearing colleagues’ responses on this difficult and nuanced subject. The petition says, “Don’t criminalise trespass”, but is that the same as residing on land without consent in or with a vehicle?
Andy Slaughter (Hammersmith) (Lab)
It is a pleasure to be before you in Westminster Hall, Mr Bone. I thank the Petitions Committee for facilitating the debate, which has come slightly later than we envisaged—it was due to take place in January. If anything, it is now more relevant, as the hon. Member for South Ribble (Katherine Fletcher) said.
We have had Second Reading of the Police, Crime, Sentencing and Courts Bill, and we heard the arguments put forward then. I must compliment the hon. Lady on putting forward a balanced argument, but in her effort to do that, what shone through was how strong the arguments are on the side against this wholly unnecessary provision, which is being included in the Bill for reasons on which I will speculate in a moment.
There is no reason for the provision. If the petition had not been closed, as they are after six months, I am sure that we would by now have had many more than the 135,000 signatures. Lots of groups are threatened by the criminalisation of trespass: ramblers, who have been mentioned; off-road cyclists; canoeists; wild campers; those who are forced to live in a vehicle because of homelessness or other circumstances; and those who care about and want access to the countryside.
In their response to the consultation on the Bill, the Government have implied that many of those groups are not the target. Two questions spring from that. First, the Government have not persuaded anyone. As the Ramblers said in the briefing for this debate, the legislation is vaguely drafted and many of the proposals are unclear in both scope and reach, which risks criminalising activities such as wild camping when accessed by a motor vehicle or bicycle, as well as the legitimate right to protest. The Bill would allow the police to take action on an officer’s suspicion that someone might intend to reside. It would give the minority of landowners who might wish to make the countryside a hostile place for those seeking to enjoy it for recreation a powerful new tool to deter users. The potential for abuse of the legislation is obvious and significant. The Bill would send a signal that the countryside is not an open resource that is accessible to all, but a place of complex rules and regulations, with criminal sanctions for breaching them.
If the Government did succeed in so limiting the Bill by a further amendment in Committee or at a later stage, the issue of who is primarily the target would become clearer: Gypsy and Traveller communities, and those who adopt a nomadic lifestyle through choice or necessity. I say this regretfully: I can only reach the conclusion that it is a rather nasty racist little attempt to attack minority ethnic communities already suffering severe discrimination, and other socially marginalised groups. I will repeat something I said when speaking about the Bill on Second Reading, that
“no family willingly stops somewhere they are not welcome, and which has no running water, waste disposal or electricity”—[Official Report, 15 March 2021; Vol. 691, c. 88.]—
and where they will be harassed.
The reason for unauthorised encampments is the lack of authorised sites, be they permanent or transit sites. The number of permanent or transit sites on aggregate has gone down over the past ten years by several hundred, and by over 8% in total. Gypsies and Travellers are among the most marginalised and discriminated against groups in the country. Their outcomes in health, education and life expectancy are the worst of any ethnic minority group, and proper provision is simply not made. There are 354 transit pitches across the whole of England, and only 29 local authorities provide them. If there is nowhere to go that is of an authorised nature, then what alternative is there but to use unauthorised sites? There are 1,696 households on the waiting list for pitches, with only 59 vacant pitches on permanent sites and 42 on transit sites.
In responding to the petition, the Government said:
“The law of trespass is largely one of common law, with the courts developing the law and resolving disputes based on the circumstances of the case. However, following the ‘Powers for Dealing with Unauthorised Development and Encampments’ consultation in 2018, it was clear”—
clearly it was not clear, because most people opposed the provision responding to that consultation—
“that action is needed to address the sense of unease and intimidation residents feel when an unauthorised encampment occurs.”
That is an insidious piece of text. First, it is good that the control of trespass is brought up by the common law over the centuries. Secondly, there is plenty of legislation on the matter, notably the Criminal Justice and Public Order Act 1994. That legislation was seen as draconian at the time, and this goes much further. Over the past two decades, law enforcement and nomadic communities have tried to make the current law work by guidance, negotiation and compromise. The police Bill strips away all of that experience and sets up confrontation, arbitrary use of power, and the threat of arrest, imprisonment, loss of home and perhaps of families. For what purpose? So that the Home Secretary can indulge in a bit of dog-whistle politics.
If people think I am exaggerating, I chaired a seminar earlier today, organised by the all-party parliamentary group on Gypsies, Travellers and Roma, to hear the real-life experiences of Gypsies and Travellers, and to hear from their advocates in the Friends, Families and Travellers movement who were loyally supporting those communities. They all do an excellent job. We heard stories of Traveller families who had booked official caravan sites, only to be turned away on arrival. The racism of Pontins in refusing access on the grounds of ethnicity is far from rare.
Without access to legal sites, where are families supposed to go? Under the current law, there was at least a chance of negotiating an organised departure, and the discretion lies with the police whose guidance says that only where there is “damage”, “abusive behaviour” or multiple vehicles should precipitous action be taken. Under the new law, we apparently need to address the sense of “unease” that local residents might feel, an “intention to reside” or the likelihood of causing “damage, disruption or distress”.
Has there ever been a law so disingenuously or vaguely worded? It is clear why, because in their frequently answered questions, the Government give the explanation that “strengthened police powers” and the new offences
“could also deter unauthorised encampments from being set up in the first instance.”
This is designed to frighten people into taking no action at all. It is designed to attack the principles of nomadic life, which the Government have already attacked by changing the definition of what Gypsies and Travellers means.
If the legislation is passed unamended, it will have a rough ride in the courts. It is already clear that it violates important principles of the Human Rights Act and the Equality Act 2010. No one with any sense supports this unnecessary and vindictive provision—certainly not the police. Only 21% of police organisations responded positively to the proposals and the consultation, while 94% called for more site provision.
I know that other Members are waiting to speak and that I have taken my allotted time. I simply say to the Minister that this is the time to consider what changes will be made to the detail of the Bill. Part 4 adds nothing useful to the current law. It will do huge damage to relations between settled communities and Gypsies and Travellers. It will put the police in an extremely difficult position. It will suck in whole groups of other people who, whether this is the intention or not, are also severely worried about the consequences. Let us have a sensible and mature rethink and let us drop these invidious proposals now.
David Simmonds (Ruislip, Northwood and Pinner) (Con) [V]
It is a pleasure to serve under your chairmanship, Mr Bone. As we consider the important matter of illegal encampments and unauthorised access to land, may I commend my hon. Friend the Member for South Ribble (Katherine Fletcher) for her eloquent and balanced introduction to the debate? It is important that I be clear from the outset that I and my constituents strongly support the introduction of tougher measures to protect land and property from trespass, whether it belongs to private individuals or the taxpayer in the form of central Government or local authorities.
I pay tribute to the work of Councillor John Warmisham, the Labour leader of the UK delegation at the Congress of Local and Regional Authorities in the Council of Europe, who has led work for many years at an international level to improve the way in which human rights law, as administered by local authorities and regional governments, treats Gypsy, Roma and Traveller people. His work has been very important in informing my thinking on the subject and my approach to the petition today.
There seems to be no evidence that the proposed strengthened measures would deter anyone from lawful access to private land. Ramblers, walkers and riders do not see their legitimate and time-honoured access restricted by what the Government propose. It is very clear, as my hon. Friend the Member for South Ribble said, that powers to prosecute are triggered only in circumstances where someone is present where they have no right to be, and when they refuse to leave when asked.
In my constituency, on the edge of London, we have many popular walking and rambling paths, mountain bike routes and bridleways. The users of these amenities, many of which are maintained by private landowners as part of the good husbandry of their holdings, should have no fear that they will be negatively impacted. It is also clear that the law in Scotland might offer a model to consider, and I know that the Government have been consulting on that. Trespass is a criminal offence, but legitimate use of the property is included. Other Members may disagree with that, but that is the legal interpretation that I saw in the briefing note. I look forward to being enlightened.
Many communities have suffered significant blight from unauthorised encampments for too long. I live opposite a green space owned and maintained by the London Borough of Hillingdon, and it was the subject of one such incursion. Like many people across the country, other residents and I were treated to the sight of people defecating publicly opposite our homes, with rubbish strewn around and extensive vandalism. Normal activities such as children’s football, outdoor exercise and dog walking all had to stop while the legal process was followed.
Once that notice was served, I watched alongside those other residents as campers gathered all the glass that they had accumulated during their stay, smashing it to fragments and scattering it across the whole area, to maximise the harm and inconvenience that their illegal incursion caused the community. When they finally departed, they left a massive clean-up job and, for that season, a bill in excess of £300,000 for council tax payers to meet. I speak from personal experience when I say that the measures are long overdue.
Some will argue that legitimate lifestyles are at risk of being criminalised. I wholly disagree. Not one moment of what I witnessed was legitimate. Both the settled and the temporary residents of local caravan sites, which are made available for public use, would agree, because they pay council tax to clear up that kind of mess, too. Breaking into other people’s property, causing misery and stress at a massive cost is simply unacceptable. It is not a lifestyle; it is straightforward criminality, and it must be robustly dealt with when it occurs.
Clearly, there is a balance to be struck. At the moment, the balance weighs too heavily against the landowner and the taxpayer, and in favour of the small minority of criminals who choose to exploit the fact. It is absolutely right that the Government take heed of the concerns of communities across London and the rest of the country, and enact the measures.
Margaret Greenwood (Wirral West) (Lab) [V]
It is a pleasure to serve under your chairmanship this afternoon, Mr Bone. I am pleased to have the opportunity to speak in this important debate.
I would like to begin by paying tribute to the more than 134,000 people, including 149 of my constituents, who signed the petition “Don’t criminalise trespass”. The petition set out that the Government’s manifesto stated that the Conservative party
“will make intentional trespass a criminal offence”.
It pointed out that it is
“an extreme, illiberal & unnecessary attack on ancient freedoms that would threaten walkers, campers, and the wider public.”
It expressed concern that that would, among other things,
“Criminalise ramblers who stray even slightly from the path …Criminalise wild camping, denying hikers a night under the stars”.
The petition shows great strength of feeling on this issue, which is part of our great tradition in this country of securing access to the countryside through protest. We have an incredibly important tradition of accessing the great outdoors, and are richly blessed with the diversity of landscapes that we can enjoy. That tradition is in activities such as walking, cycling, kayaking and mountaineering; it is in the activities of brownies, girl guides, cubs and scouts, and it is in our culture through the poetry of Wordsworth and the paintings of Turner, to name just two of the many artists and writers who have found inspiration in the power and grandeur of the natural world.
We have wonderful national parks, such as Snowdonia, the Lake District and the Peak District. The last one became the first national park in the UK almost exactly 70 years ago, on 17 April 1951. Our national parks give us access to breath-taking coastal scenery, such as that in Pembrokeshire, the south downs and the North York Moors. In my constituency, there is Caldy Hill, Thurstaston Common, Irby Hill and Harrock Wood, all owned and cared for by the National Trust, which does such an important job preserving such areas for the benefit of local people and visitors.
When we reflect on all that we have to enjoy, it is important to consider the invaluable work of individual conservationists, campaigners and protest groups that have delivered such riches to us, and have ensured that we can access those beautiful places. I am thinking of people such as Beatrix Potter, who bought large tracts of land in Cumbria specifically to preserve the landscape, and who left 4,000 acres of countryside to the National Trust, as well as 14 farms, when she died in 1943. Millions of people enjoy that countryside, in what we know as the Lake District national park.
Hundreds of ramblers from Manchester and elsewhere took part in the mass trespass on Kinder Scout in 1932. Knowing our history is important: the mass trespass is widely credited with leading the Labour Attlee Government to pass legislation in 1949 to establish the national parks, playing a part of the development the Pennine Way and many other long-distance footpaths, and securing walkers’ rights over open country and common land in the Countryside and Rights of Way Act 2000. In 2007, Lord Hattersley described it as
“the most successful direct action in British history.”
In January this year, a number of organisations—including the Campaign to Protect Rural England, Friends of the Earth and the Ramblers Association—wrote to the Home Secretary, arguing that making trespass a criminal offence is
“an extreme, illiberal and unnecessary attack on ancient freedoms.”
They warned that
“It would send a signal that the countryside is not an open resource accessible to all, but a place of complex rules and regulations, where stepping off a public path could lead to a criminal sentence.”
Recently, the Government published their Police, Crime, Sentencing and Courts Bill, and Labour opposed it on Second Reading. The proposals in part 4 of the Bill, on unauthorised encampments, create a new offence of
“residing on land without consent in or with a vehicle”.
However, more than 250 civil society groups are still concerned that the Bill threatens our right of access to the countryside, as they made clear in their letter to the Home Secretary and the Secretary of State for Justice last month. Liberty has pointed out that the provisions of the Bill will
“impact access to the countryside and affect the enjoyment of British land for recreational activities.”
Can the Minister tell us how the Bill is consistent with the Government’s commitment to
“opening up the natural world”,
as they stated in their 25-year environmental plan? The countryside should always be accessible to everyone and it is incredibly important that we follow in the tradition of those who have gone before us to secure rights of access.
The petition that is the subject of today’s debate also raises important concerns that legislation making intentional trespass a criminal offence could impact on Gypsy, Roma and Traveller communities, and I have to say that I was very shocked by the comments of the previous speaker. The Bill includes a new criminal offence of trespass with the intent to reside; until now, trespass has been a civil offence. The National Police Chiefs Council and the Association of Police and Crime Commissioners have stated quite clearly that
“trespass is a civil offence and our view is that it should remain so”
and that
“no new criminal trespass offence is required”.
Why have the Government ignored that viewpoint?
The charity Friends, Families and Travellers has warned that making trespass a criminal offence would push Gypsies and Travellers into the criminal justice system merely for existing nomadically. It has pointed to an absence of places where Gypsies and Travellers are permitted to stop or reside. One of my constituents wrote to me to say that she is
“from one of the many Gypsy, Traveller and nomadic communities who will be directly and harmfully affected by the criminalisation of trespass put forward in the Bill.”
She said that
“We need more sites and stopping places where Gypsies and Travellers are allowed to be. Nobody should be made a criminal or punished for living a nomadic way of life.”
What is the Minister’s response to my constituent? What would he say to her about how this Government are treating Gypsy, Traveller and other nomadic communities?
The petition also raises concerns about the Government’s proposals to
“clamp down on peaceful protest, a fundamental right and essential part of our democracy”.
Numerous organisations have drawn attention to how the Bill threatens the right to peaceful protest. Three years ago this month, many of us gathered to see the unveiling of the first statue of a woman in Parliament Square, which was of the suffragist Millicent Fawcett. She holds a banner that reads, “Courage calls to courage everywhere”. That unveiling was an historic moment for us democratically.
Protests and demonstrations have forged positive change in our country over generations, whether they were the actions of the suffragettes tackling the grotesque injustice of women not even having the right to vote, or, more recently, the actions of anti-fracking protesters who set up camp at places such as Preston New Road in Lancashire. The actions of those campaigners helped to achieve a moratorium on fracking, and now the Government say that fracking is over in the UK.
The numerous demonstrations for employment rights that have been spearheaded by the trade union movement have been crucial in furthering the rights of working people, and the protests of people up and down the country against the Conservative Government’s plans to privatise the national health service continue, showing the passion with which people believe in a national health service that is paid for through direct taxation and free to all at the point of need.
Without people being able to gather and show their opposition to issues of social injustice and attacks on the environment, the Government would feel as though they could do whatever they pleased. No Government should ever be given that opportunity. It is as important now as it has ever been to make it clear that we demand the right to protest. Any attempt to curtail that right strikes at the heart of our democracy.
Catherine West (Hornsey and Wood Green) (Lab)
It is a pleasure to serve under your chairmanship, Mr Bone, and to contribute to this important debate. It is also a pleasure to highlight the 600 signatures from Hornsey and Wood Green on the petition—clearly my constituents are concerned about their ability to go about in and enjoy the great outdoors.
We are blessed with parks and walks in Hornsey and Wood Green, but none as lovely as being outside London and enjoying a quiet walk. During the pandemic the desire to be outdoors has been heightened because of the impact of the loneliness of coronavirus on mental health. It has been lovely for our friends and families to walk in and explore the countryside. I hope that the Government will have a rethink on the matter, and I note a number of campaigns and newspaper articles calling for that. The Ramblers Association, which is a well established group, is one of those calling for a rethink so that we can fully enjoy the outdoors—particularly in the summer months as we go towards another year, possibly, of holidays at home—without the fear of being told we are trespassing.
The proposals risk putting a stop to some of the walks that we enjoy so much, with landowners closing off swathes of remote countryside. Furthermore, some local authorities do not look after paths and maintain tracks; the measures will be a disincentive to them when it comes to doing that and showing signage. The enjoyment of a walk can be slightly spoiled by getting lost, which can lead to trespass, and that can happen if local authorities do not look after paths well. I hope that the Minister, who, of course, has a background in local government, will take note and perhaps send round a little note to local government leaders asking for paths to be looked after, so that there is not a risk of trespass and so that people can walk with proper signage, and enjoy their ramble.
I emphasise that there are some naturalists who desire to carry out wildlife surveys. Some scientists have warned that the measure we are debating could prevent some of the basic science through which we get our love of science and nature. It cannot be stressed enough how vital it is for people to have access to nature and the open countryside.
Sales of camping equipment have soared, which is great for the economy. British Canoeing has had a 40% jump in membership and our national parks have had huge numbers of visitors. I am not sure whether the Government have yet got round to implementing Labour’s suggestion, from the last manifesto, of bringing in some more national parks; but certainly the experience of camping and visiting a national park should not be underestimated.
I want to highlight concerns about some of the debate on Second Reading. It was disheartening when Member after Member stood up to criticise, in demeaning terms, the Gypsy and Traveller community going about their travelling, and some of the challenges that that community faces. Statistics show us that the Gypsy and Traveller community is probably the one most discriminated against in Europe. It was dispiriting to hear, in this wonderful Parliament, Member after Member having a go at that community on Second Reading. That is not what the House of Commons should be about.
The police have made it clear that they believe that the powers they have are sufficient—75% of police responses to the proposals show that they believe that. Additionally, 84% did not support the criminalisation of unauthorised encampments, and 65% said that lack of site provision was the real problem. In my view, some of the problem with policing is the closure of 50% of police stations since 2010 and the drop in the number of police. Hundreds of police have been taken off the street since 2010 and that is the real problem with much of policing. In particular, some schools say that they miss the friendly bobby on the beat who drops in. A lot of that policing in schools has disappeared from the budget, and that is a real pity. That is the sort of issue that we want to get down to—not high-level mudslinging at minority communities.
I urge the Government to pull back from what is a dangerous, illiberal and unnecessary step. If they really want to protect landowners, Ministers should heed the calls from the police and campaigners to provide access to well-maintained walking paths and sites for Travellers, rather than continuing down this thinly veiled attack on rights and livelihoods, which will deny so many the chance to explore our beautiful countryside.
Barbara Keeley (Worsley and Eccles South) (Lab) [V]
I am glad to speak in this debate with you in the Chair, Mr Bone. This debate is important and timely as we await the Committee stage of the Police, Crime, Sentencing and Courts Bill. The proposals around the criminalisation of trespass are deeply concerning, and I want to focus today on an area of them. There is real concern that these proposals will have the effect of deterring people from accessing the countryside for recreation.
We have seen during the pandemic that access to green space and the countryside is central to promoting people’s physical and mental wellbeing, but access to green space has too often been the preserve of a small number of more privileged groups. Over the past year, we have begun to see a broadening of access as more people seek out green spaces and visit the countryside. It is vital that this is promoted, rather than suppressed. I am concerned that the provisions in the Bill could deter people who seek to access green spaces for entirely legitimate reasons.
Key to the issue is the provision that allows people to be stopped by the police if they are suspected of intending to reside on land without consent. This power is so broadly defined that it could cover people on wild cycling trips who intend to camp on open land such as moors or hillsides. It would give the small number of landowners determined to discourage public access to the countryside a powerful tool to make it a hostile place.
The potential for abuse of this legislation is obvious. The impact of this measure on trespass would be to create an image of the countryside as a place governed by complex rules and regulations, with criminal sanctions for breaching them. This will particularly deter people who already have more negative experiences of the criminal justice system, especially people from diverse communities who already face more structural barriers to accessing the countryside. The end effect of these proposals is likely to be fewer people accessing the countryside.
The Government have claimed that they want to do more to promote access to nature for everyone, but their actions say otherwise. From a delayed Environment Bill that makes no firm commitments on access to nature, to this retrograde proposal that could actively deter people from getting out into the countryside, we are seeing a Government that are putting up barriers, rather than breaking them down. If the Government choose to criminalise trespass, they would also be completely out of touch with the public mood. More people are visiting the countryside and green spaces due to covid-19. Visits to parks and green spaces have doubled in the past 10 years, and more people are taking part in outdoor activities.
Despite this, the number of people who spend little or no time in natural spaces is still too high. Evidence shows that access to good-quality green space such as parks, woodlands, fields and allotments varies greatly depending on where people live. The most economically deprived areas often have less available public green space, meaning that people in those communities have fewer opportunities to reap the benefits to their health and wellbeing. I join the Ramblers and other groups in urging the Government to reconsider and to drop these damaging proposals, so that people are free to enjoy the countryside without the threat of criminalisation hanging over them.
Mary Kelly Foy (City of Durham) (Lab) [V]
It is a pleasure to serve under your chairmanship this afternoon, Mr Bone. It is with great sadness that I speak to the House on this subject again—it seems that when it comes to Gypsy, Roma and Traveller communities, the Government never learn. The Police, Crime, Sentencing and Courts Bill contains many authoritarian measures, but none so pernicious as those aimed at GRT communities.
I was saddened to come across the most awful racism on Twitter this week in relation to the Channel 5 programme “Here Come the Gypsies!” It was sickening to read the way in which people were displaying their prejudices, many without any challenge, but of course there is a political context to this hatred. As we know, the Police, Crime, Sentencing and Courts Bill includes measures to
“Strengthen police powers to tackle unauthorised encampments, where trespassers cause distress and misery to local communities and businesses.”
Of course, as Members have mentioned, the criminalisation of trespass is a direct attack on the nomadic lifestyle of many Gypsies and Travellers. Police forces across the country have specifically asked not to be given these powers on trespass, as they realise that such powers attack the lifestyles of groups who are often voiceless and who do not have a choice over where to stop.
When the measures to criminalise trespass were consulted on by the Government, over 90% of police bodies said that the provision of additional legal sites for encampments, rather than additional criminal powers, should be the approach taken by the Government, so why are seeing this unthinking and vicious anti-Traveller legislation once again? It starts from a lack of education: politicians and legislators do not understand and, worse still, do not try to understand the problems faced by Gypsy, Roma and Traveller communities trying to balance their nomadic traditions with the need for services and the constant hostility wherever they settle. At the heart of this is a form of racism.
I know it has been said before, but there is a reason why anti-Gypsy, Roma and Traveller prejudice is called the last acceptable face of racism. It is because politicians do not stop and think before they paint whole communities as the problem, as perfectly demonstrated by the hon. Member for Ruislip, Northwood and Pinner (David Simmonds) a few moments ago. Communities all over the country have issues with rubbish, antisocial behaviour and small-time criminality. Nobody should excuse such behaviour or pretend that it does not exist, but we have a racism problem whereby one section of our society is blamed and targeted relentlessly, and others are excused or ignored. The double standard of that targeting should be scrutinised, not fuelled, by this House.
We should be honest about what this is: a political attack on Gypsy, Roma and Traveller communities. It is kicking a community that has very few self-defence mechanisms at its disposal. The key thing is that there are other solutions. Abbie Kirkby of Friends, Families and Travellers has said:
“The Government should not imprison people, fine them and remove their homes for the ‘crime’ of having nowhere to go. Another way is possible. Through negotiated stopping and by identifying land where Traveller sites can be built, councils can ensure nomadic families have a safe place to stop, save money on evictions and improve relations between travelling and settled communities.”
Giving all people dignity and respect is a fundamental duty for anyone who calls themselves an anti-racist or who understands the concept of human rights. It is easy to scapegoat a community—sometimes it is done unconsciously, but it is just as damaging—and all because we do not take the time to listen, understand and find solutions. Tony Benn once said:
“The way a Government treats refugees is very instructive because it shows you how they would treat the rest of us if they thought they could get away with it.”
The same could be said for the way in which our Government treat the Traveller community. That is our challenge: if we want to live in a decent, respectful and fair society, we should think about what that means in practice and look for the answers that are already out there in the provision of adequate sites, services and facilities.
Olivia Blake (Sheffield, Hallam) (Lab) [V]
It is a pleasure to serve under your chairmanship, Mr Bone. I speak not only as someone who supports the right to roam freely, but as a Sheffield MP standing in a long and proud tradition of Sheffielders who fought for the right to roam. Many constituents have contacted me about this issue, with 713 signing the petition and many others emailing me about today’s debate.
Our debate on the petition is well timed, although delayed. It takes place between two dates that are important to my city and my constituency, and which have significance for the whole country. The first date fell on Saturday 17 April, which marked the 70th anniversary of the Peak District national park, which was the first such park in the UK. The foundations of the park were built by my constituent Ethel Haythornthwaite, who was born in 1894. After falling in love with the beauty of the countryside surrounding our city, she founded the Sheffield Association for the Protection of Local Countryside, which would later become the Peak district and South Yorkshire branch of the Campaign to Protect Rural England. Throughout her life, she directed a host of campaigns to defend the use by everyone of the green spaces in and around Sheffield.
The second important date is this Saturday, 24 April, which will be the 89th anniversary of the Kinder Scout mass trespass mentioned by my hon. Friend the Member for Wirral West (Margaret Greenwood), one of many regular trespasses into moorland estates organised by workers from northern industrial towns and cities, such as the Sheffield Clarion Ramblers. Before the founding of the national parks, these workers were forced to trespass because moorland estates were privately owned by the landed gentry. Their demand was simple: that everyone should be able to access the moors. In 1945, their efforts were recognised when a Government were elected who shared the views not only of Ethel but of the Kinder trespassers as well. Ethel was actually appointed to the National Parks Committee and helped the new Government to deliver the National Parks and Access to the Countryside Act 1949.
Ministers now propose to turn back the clock and make trespass a criminal offence. They attack not only the right to roam but the right of the Gypsy, Roma and Traveller community to live as they wish. If the Government were serious about addressing unauthorised encampments, they would increase funding for more legal sites and more places to legally stop, not pass new laws that attack an already persecuted community and force more people into our criminal justice system. We should look to extend our right to green spaces, not deter people from accessing our precious countryside, nor should we criminalise those whose culture is based around the right to roam.
As a Sheffield MP, I am proud to stand on the shoulders of Ethel Haythornthwaite, the Sheffield Clarion Ramblers and the Kinder Scout trespassers in demanding that everyone should enjoy, as Ethel put it, the “peace, freedom, solitude, excitement” that comes with the escape into the clean air and the gradual return to nature.
Martin Docherty-Hughes (West Dunbartonshire) (SNP) [V]
It is good to see you in the Chair, Mr Bone. I hope that you and the Clerks are well in these difficult times. I thank those who brought forward the petition, and I am grateful to those Members who opened the debate, which I will now respond to on behalf of the Scottish National party. There will of course be those who ask why I am participating in the debate, given that the trespass in England and Wales comes under the remit of the UK Parliament. However, the debate also relates to the police Bill, which will have ramifications for Scots law.
May I first of all, if you will forgive me, Mr Bone, clarify some points on the law in Scotland? At this moment in time, trespass in both England and Scotland is a civil wrong but not a criminal act. I can say on behalf of my party that, if we are re-elected to government in May, we will certainly not bring forward any legislation at Holyrood to follow the police Bill, which seeks to criminalise trespass, at least from our perspective. I also highlight that it seemed as if some points made during the debate suggested that all members of the Gypsy and Traveller community, owing merely to their being members of those ancient and historic communities, commit criminal acts. My own window was smashed at the weekend, and I can tell hon. Members that it was certainly not by members of the Gypsy and Traveller community; it was clearly by somebody who probably had too much wine in the sun at the weekend during a global pandemic. I do not assume for one minute that it was a member of the Gypsy, Roma and Traveller community. These extraordinary statements are entrenched in a lot of the narratives and debates and discussions we have had over the last couple of months leading up to the police Bill and debates on it in Parliament. It has been quite horrific to hear some of the dreadful instances of racism and bigotry that our Gypsy, Traveller and Roma communities face.
That is not to say that things are in any way perfect in Scotland, in terms of reflection, but there has been an opportunity to learn and to move forward. That is for all parties, I have to say, and not only in the Scottish Parliament; before the break-up of the last Session of the Holyrood Parliament, my colleagues in local government, through the Convention of Scottish Local Authorities, co-signed Scotland’s national plan for the Gypsy and Traveller community. That was signed by my colleagues, the Minister the Minister for Older People and Equalities, Christina McKelvie, and Councillor Kelly Parry of COSLA. The aim has been to secure political support across all parties so that they work together to improve the lives of Scotland’s Gypsies and Travellers; and to formally recognise the right to travel.
There has been a commitment to finding ways to map and, where possible, reopen traditional and, as I often say, ancient stopping places across the nation of Scotland, used since at least the 12th century. The Scottish Government and COSLA, representing all parties, announced a shared commitment with Police Scotland to work together to challenge discrimination and promote equality for Gypsies and Travellers—people who have been economically, socially and politically excluded from our country. That has been brought forward with a package of investment—up to £20 million, announced through the action plan—and critically for the issue of housing, they are linking it to Scotland’s national housing strategy, to ensure that Gypsy and Traveller communities, whether living on official or new sites or in their nomadic lifestyles, have access to that investment.
We have even recently seen here in Scotland some rather unfortunate terminology from the UK Government’s party and the way in which some of its members have utilised the debate to marginalise, yet again, the Gypsy and Traveller community in Scotland. I am glad that no one else here is participating in the use of that type of language.
Will the Minister consider that this may be an opportune time to reflect on what is happening in Scotland? I am referring to the right-to-roam legislation and the working with the Gypsy and Traveller community. As Members from across England have already mentioned, there is a requirement not only to invest in existing sites, but to open up England’s ancient and historic Traveller sites, which are as much a part of England’s heritage as any other element of it. It is very important, I think, that that should be done. Will the Minister recognise the recommendation not to criminalise trespass? Because of the existing legislation, police forces across not only England but Wales and Scotland say that there is no need for new legislation.
There is also a requirement to understand infrastructure. I happen to be the Member of Parliament for West Dunbartonshire, in which are found the national park headquarters for Loch Lomond and the Trossachs. I am afraid we have to say that the vast majority of trespass, vandalism and the lighting of fires has never traditionally been by the Traveller or Gypsy community; it has been by those of us who went out and utilised that lovely part of the world. Through the right to roam and working with people, working with communities, the national park as a body has reduced those elements: fires, litter and antisocial behaviour. It has done so by ensuring that we work together. I hope that the Government and the Minister will reflect on the lived experiences and also the policy experiences across these islands, and I look forward to hearing their answers.
Sarah Jones (Croydon Central) (Lab) [V]
It is a pleasure to serve under your chairmanship, Mr Bone. I want to begin by thanking everyone who signed the petition and all the individuals and organisations that have spent a lot of time, in the various consultations and processes around this issue, giving their views. It is clear that there is a very strong community of organisations, from all kinds of backgrounds and interests, that are coming together to give their view and to oppose what the Government are seeking to do. I thank those individuals and organisations.
I thank the hon. Member for South Ribble (Katherine Fletcher), who I thought gave a very balanced view, as my hon. Friend the Member for Hammersmith (Andy Slaughter) said; and I thank my hon. Friend, who is so principled and so practical in everything that he says—I hope that the Minister was paying close attention. Indeed, I thank all colleagues who spoke in the debate. We have heard about both the importance of keeping our countryside open as much as possible for as many people as possible and about the other side of this issue, which is the prejudice and harm that the legislation will do to the Gypsy, Traveller and Roma communities. That was very well articulated by several hon. Members, including my hon. Friend the Member for City of Durham (Mary Kelly Foy), who made a really powerful case. I thank everyone for their contributions.
As we have heard, over 140,000 people signed the petition against the Government’s proposals. That is not surprising, given the moral and practical problems that the Government are introducing with the proposals. The Petitions Committee’s online survey was really interesting and asked petitioners for their views. As has been said, over 84% of respondents told the Petitions Committee that
“the criminalisation of trespass would have a ‘major’ or ‘moderate’ effect on how they live their lives as they do today…Many respondents were concerned that criminalising trespass could increase pre-existing tensions, mistrust, and lack of understanding between their local community and Travellers. There was consensus that more needs to be done to provide authorised sites for Travellers.”
As I mentioned, a broad coalition—from the NSPCC to Liberty, from the Gypsy, Roma and Traveller communities to the Ramblers Association, and from the police to Shelter—is united in the view that the proposals put forward by the Government would be wrong and unhelpful and would go against our basic rights. The Police, Crime, Sentencing and Courts Bill is designed to criminalise the act of trespassing when making an unauthorised encampment. What is proposed in the Bill on the trespassing of unauthorised encampments is deeply concerning and unnecessary. As one of the responders to the Petitions Committee’s survey put it:
“The criminalisation of trespass will simply exacerbate an already fraught relationship. Gypsies and Travellers will still camp but there’ll be more prosecutions, more distrust, more public money spent on legalities”.
Other people who have a nomadic lifestyle have told me that they feel that they will no longer be able to live on the road in the way that we have seen in this country since the 16th century, and that the Bill risks criminalising their way of life. Failure to comply with a police direction to leave land occupied as part of an unauthorised encampment is already a criminal offence, but the proposals create a new offence of residing on land without consent in, or with, a vehicle. The broad way in which the definition is drafted seems to capture the intention to do this as well as actually doing it—the intention can be criminalised as well—with penalties of imprisonment of up to three months or a fine of up to £2,500, or both. The loose drafting of the wording in the legislation invites problems with its interpretation, and it is simply not fair to put that on the police. If someone were to drive in a car, park it and walk somewhere in order to wild camp beneath the stars, what does “with a vehicle” cover in the legislation? How far away from the vehicle would the campers have to be in order to escape carrying out a potential criminal offence?
The major concern that the Opposition have with this part of the Bill, and that is articulated in the petition, is that it is clearly targeted at Gypsy, Roma and Traveller communities, and such criminalisation could breach the Human Rights Act 1998 and the Equality Act 2010. When the powers in the Criminal Justice and Public Order Act 1994 were first debated in Parliament, it was stated that the powers were intended to deal with “mass trespass”. In the new Bill, however, even a single Gypsy or Traveller travelling in a single vehicle will be caught by the offence. What constitutes
“significant damage, disruption or distress”
is subjective, particularly as there needs to be only one vehicle, and what constitutes the intention to cause
“significant damage, disruption or distress”
is even more subjective. That is in part why the measures to increase police powers on unauthorised encampments are not backed by the police, as we have heard. When Friends, Families and Travellers researched the consultation responses that the Government received, it found that 84% of the police responses did not support the criminalisation of unauthorised encampments.
In her opening speech, the hon. Member for South Ribble quoted the Minister as saying he wants to ensure that the police have the powers they need. Actually, they believe that they already have the powers they need. Senior police are telling us that the changes in the Bill relating to unauthorised encampments would only make matters worse. They would add considerable extra cost to the already overstretched police and risk potentially breaching the Human Rights Act.
The views of the National Police Chiefs Council and the Association of Police and Crime Commissioners were clearly put in their joint submission to the 2018 Government consultation.
They state:
“Trespass is a civil offence and our view is that it should remain so. The possibility of creating a new criminal offence of ‘intentional trespass’…has been raised at various times over the years but the NPCC position has been—and remains—that no new criminal trespass offence is required. The co-ordinated use of the powers already available under the Criminal Justice and Public Order Act 1994 allows for a proportionate response to encampments based on the behaviour of the trespassers.”
Why are the Government determined to lock up Gypsies and Travellers against even the advice of our own police?
The police already have extensive powers in the Criminal Justice and Public Order Act 1994 to move on unauthorised encampments. As of January 2020, just 3% of Gypsy and Traveller caravans in England were on unauthorised encampments. Some 419 of those caravans were on sites not tolerated and 275 were on tolerated sites. Police and campaigners tell us that the evidence is not there for these new powers to be necessary at all and that many more authorised encampment sites should be provided instead. In their joint response to the Government’s consultation on unauthorised encampments, the Association of Police and Crime Commissioners and the National Police Chiefs’ Council called for the shortage of transit sites and the lack of accommodation provision to be addressed.
In a ministerial statement on 8 March 2021, the Home Secretary stated:
“As of January 2020, the number of lawful traveller sites increased by 41% from January 2010.”—[Official Report, 8 March 2021; Vol. 690, c. 22W.]
Friends, Families and Travellers has pointed out that
“this is a gross misrepresentation of the facts.”
It says that the 41% referred to by the Home Secretary is in fact
“an increase in transit provision and the Ministerial Statement fails to include this key component of referencing ‘transit’.”
That amounts to about 101 additional transit pitches, which is 10 a year over 10 years, whereas the number of permanent pitches has gone down by over 500 since 2010. Friends, Families and Travellers goes on to say:
“This misrepresentation of the figures leads people to believe there has been a much greater increase in site provision than there has. In fact, the Government published figures show there has been an overall 8.4% decrease of pitches on local authority Traveller sites.”
The Government should be focusing on ensuring that local authorities have the resources they need to provide more space for Traveller communities to legally reside. By taking an enforcement approach to addressing the number of unauthorised encampments, they are overlooking the lack of site provision. Friends, Families and Travellers notes:
“There are other solutions to managing unauthorised encampments, such as negotiated stopping, whereby arrangements are made on agreed permitted times on stopping and to ensure the provision of basic amenities such as water, sanitation and refuse collection.”
The Conservative party manifesto commitment and the Government response to the consultation refer to littering as a problem. Why do the Government not consider providing more authorised camping sites with proper refuse facilities? If a family are asked to move on, where are they supposed to go if there is no authorised encampment in their area? Why do the Government think that confiscating someone’s home, putting them in prison and fining them is the answer?
The legislation that the Government seek to introduce would cause harm to Gypsy and Traveller communities for generations and threaten their very way of life. It is impractical, misleading and adds nothing useful to the law that already exists to tackle problems such as rubbish and antisocial behaviour, which we all abhor and which the Government claim they seek to address. I urge the Government to rethink these harmful proposals.
This debate has been a good opportunity to raise concerns about the forthcoming Bill, which we will discuss in more detail in Committee. I end by asking the Minister to answer the following questions in his response. Can he provide an update on the progress of the national strategy to tackle Gypsy, Roma and Traveller inequalities, which was announced by the Government in June 2019? We have heard nothing since then. Under the provisions in the Police, Crime, Sentencing and Courts Bill, what would happen to a Traveller family in a single vehicle who are residing on a highway and have nowhere else to go?
Can the Minister clarify the Home Secretary’s claim that there has been a 41% increase in site provision? Can he confirm that that applies only to transit provision and that permanent site provision has significantly decreased? Can he confirm that the provisions in the Police, Crime, Sentencing and Courts Bill on unauthorised encampments are not in breach of the Human Rights Act 1998 and the Equality Act 2010?
Will the Minister look at different approaches, such as that of the Welsh Labour Government, who have placed a legal duty on local authorities to ensure that the accommodation needs of Gypsies and Travellers are properly assessed and that the needs for pitches are met? As an example of the current lack of provision for Gypsies and Travellers, only eight of 68 councils in south-east England have identified enough land in their areas for Travellers to live on. Will the Minister tell us where those Gypsy and Traveller families, who will otherwise be criminalised, are supposed to go?
Finally, does the Minister agree with the multiple concerns raised by the police, and what is he doing about them? What is he doing to ensure that the Bill, if passed, does not damage our rights as British people and cause more harm than good?
The Minister for Crime and Policing (Kit Malthouse)
It is a great pleasure to appear under your beneficent hand on this beautiful spring day, Mr Bone. As I am sure colleagues are aware, the debate was convened on the strength of an online petition submitted on 5 September last year. Since then, the Government have published our response to the public consultation “Strengthening Police Powers to Tackle Unauthorised Encampments”, and we have introduced the Police, Crime, Sentencing and Courts Bill, which sets out our measures to introduce the new criminal offence. I am grateful to my hon. Friend the Member for South Ribble (Katherine Fletcher) for her introduction to the debate, and to all hon. Members who have participated.
I understand that those who signed the petition were primarily concerned about the impact that the new offence might have on the ancient freedoms of walkers and the wider public to access the countryside. As somebody who represents 220 square miles of beautiful chalk downland in the northern part of Hampshire, I am pleased to be able to say that those who wish to enjoy the countryside, including in my constituency, will not be prevented from doing so by the offence. We made that clear in our response to the consultation, and the clauses currently before Parliament set out the circumstances in which the new powers can be used.
Our proposals, which were included in our manifesto, are aimed squarely at unauthorised encampments. For many of our constituents, and for landowners, those cause damage, destruction or distress, as well as causing significant cost to local authorities. Residents often feel helpless as their local amenities are damaged or disrupted, and for some councils, such as in Birmingham in 2016, with £700,000 of clean-up costs, the bills can be huge. I have seen that repeatedly in my own constituency.
It is only right, then, that the Government seek to protect citizens and strike a balance for those who are adversely affected by unauthorised encampments. The measures that we are introducing in the Bill will give the police the powers to bring an end to the misery caused by some unauthorised encampments. The new criminal offence will apply where a person who resides on land with a vehicle causes significant damage, disruption or distress and does not leave when asked to do so. That means that the powers will not apply to people camping in tents in the countryside or to others who inadvertently stray on to private land.
The Government have also amended the Criminal Justice and Public Order Act 1994, which gives police the power to direct people away from land in the first instance when they are causing lower levels of harm, disruption or distress. We will broaden the types of harm that can be caught under that provision to include physical damage to the land and non-physical damage, such as damage to the environment, which includes excessive noise and litter. Disruption includes an interference with a person’s ability to access any facilities located on the land or otherwise make lawful use of the land, or with a supply of water, energy or fuel. Offensive conduct, such as threats or abuse, is also covered. We will also increase from three months to 12 months the period for which trespassers directed away from the land must not return. We will enable police to direct people away from land that forms part of a highway.
I reassure hon. Members again that those who wish to access the countryside to walk, hike, climb or cycle—as many of us love to do—will not be caught by the measures. We all have the right to enjoy the beautiful national parks and green spaces that this country has to offer, and we will be able to continue to exercise that right, even when the Bill is passed. I am sure that that will come as welcome relief to those clubs, associations and individuals who have taken the time to write to their MPs or the Home Office about the issue.
Andy Slaughter
Will the Minister explain why he thinks that the organisations that he indicates, such as the Ramblers Association, whose comments I read out, are not at all persuaded by the Government’s view? Will he, the Minister for Policing, address the police’s concerns? They do not believe that the provisions are sensible. Will he also address what the shadow Minister, my hon. Friend the Member for Croydon Central (Sarah Jones), said about equalities and human rights law? He must be familiar with the leading cases of Chapman v. UK and Bromley v. Persons Unknown. Does he think he will face legal challenges if this goes through?
Kit Malthouse
I will come on to many of those issues later in my speech if the hon. Gentleman will be patient.
We received significant support in the consultation for some of these measures. Some 94% of local authorities that responded to the consultation supported one or more of the proposed amendments. The Criminal Justice and Public Order Act, to which the hon. Gentleman referred in his speech, will extend the powers of the police to direct trespassers away from land.
During the passage of the Bill, I hope we will be able to reassure the groups that have perhaps taken alarm at these measures that they will not be affected. Let us remember that there is the lock that significant harm and disruption must be under way and that people must be residing with a vehicle, so this does not cover ramblers, who, presumably, are without a vehicle—I am not sure whether a canoe counts as a vehicle or indeed whether one can reside in a canoe. Therefore, those who are wild camping or enjoying the countryside will be unaffected. Hopefully, that will come as a relief.
I now turn to the impact on Traveller communities set out in the petition statement. The legislation is not anti-Traveller and it would be wrong to portray it as such. We know that a small minority of people in unauthorised encampments cause harm, disruption and distress, but the vast majority of Travellers are law-abiding citizens, and unauthorised sites can often give an unfair and negative image of their communities. Enforcement will obviously not be based on ethnicity. Rather, anyone who causes significant harm, disruption or distress under the specified conditions and who refuses to leave when asked to do so will be caught by the offence. The Government want to ensure fair and equal treatment for all travelling communities. Settled and travelling communities should be able to live side by side harmoniously, and indeed integrate. We hope that the clear rules and boundaries that we are putting in place will facilitate that. The police are fully trained, and we expect that their actions will continue to be compliant with equality and human rights law.
The Government remain committed to developing a cross-Government strategy, as mentioned by my shadow, the hon. Member for Croydon Central (Sarah Jones), to tackle the inequalities faced by Gypsy, Roma and Traveller communities. We are also committed to supporting the provision of Traveller sites via the new homes bonus. This provides an incentive for local authorities to encourage housing growth in their areas and rewards net increases in effective housing stock, including the provision of authorised Traveller pitches.
In addition, the £11.5 billion affordable homes programme will deliver a wide range of affordable homes to meet the housing needs of people in different circumstances and different housing markets, and will include funding for new Traveller pitches. Data shows that we have seen an increase in the number of caravans on authorised sites from 14,498 in July 2010 to 20,043 in July 2019, showing that this locally led planning system works. We expect that local planning authorities should assess the need for Traveller sites in their areas and make provision accordingly. Local authorities are best placed to make decisions about the number and location of such sites locally, having due regard to national policy and local circumstances.
Finally, I note that the e-petition refers to the impact that the new offence will have on clamping down on peaceful protest. Of course, the right to protest is a fundamental human right and is central to our democracy. Although the new offences do not apply to protests, we are introducing other measures in the Bill that will enable the police to better manage highly disruptive protests, striking a better balance between the rights of protestors and the rights of others to go about their business unhindered.
Kit Malthouse
I will not. I hope this Chamber is reassured that the measures the Government are taking are right, balanced and measured. We are delivering on one of the manifesto commitments that we were elected on. I commend the Government’s response to the e-petition.
Katherine Fletcher
What an interesting debate. We have heard from passionate enjoyers of the countryside, including from the city of Sheffield—I particularly enjoyed the description of Manchester and Sheffield as one city with a massive park in the middle of it. That is how much the countryside is valued on both sides, and what has come across very clearly in the contributions of the hon. Members for Wirral West (Margaret Greenwood), for Hornsey and Wood Green (Catherine West), for Worsley and Eccles South (Barbara Keeley) and for Sheffield, Hallam (Olivia Blake) is the idea that access to the environment is a fundamentally British right, provided that we stick within the rules of the countryside. I was delighted to hear that.
We have also heard some powerful testimony about the harms that illegal encampments can cause from my hon. Friend the Member for Ruislip, Northwood and Pinner (David Simmonds), to give him his full title. It was very obvious that the acts of that minority of individuals are a cause of personal pain to him, as well as—being a serving council officer—a significant financial disruption.
We heard from the hon. Member for Hammersmith (Andy Slaughter) about how important it is to make sure we have a complete lack of discrimination and the extra sites to provide for a unique part of our heritage, which as one Member mentioned—forgive me, I have forgotten which—has been part of our lives since the 16th century. The hon. Member for City of Durham (Mary Kelly Foy) made a hugely important plea to ensure that we always bear in mind that racism, in all forms, is abhorrent. I am quite happy with that, as I am—on a personal note—with the fact that so many Members from urban constituencies have attended this debate to talk about something that is fundamentally about access to the countryside, such as the wonderful areas within South Ribble and those within the Minister’s constituency.
I will draw my remarks to a conclusion there. I hope the petitioners feel that we have done them justice with today’s debate, and let them draw their own conclusions from what the Government and Opposition spokesmen have said. Thank you, Mr Bone; it has been a pleasure to serve under your chairmanship.
Question put and agreed to.
Resolved,
That this House has considered e-petition 300139, relating to trespass.
Black Maternal Healthcare and Mortality
(3 years, 8 months ago)
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Sir Gary Streeter (in the Chair)
Welcome, everyone, to this important debate. I remind hon. Members that some changes have been made to normal practice, to support the new hybrid arrangements. Timings of debates have been amended to allow technical arrangements to be made for the next debate. There will be a suspension between each debate. I remind Members participating physically and virtually that they must arrive for the start of debates. Members are expected to remain for the entire debate.
I remind Members participating virtually that they are visible at all times, both to one other and to us in the Boothroyd Room. If Members attending virtually have any technical problems, they should email the Westminster Hall Clerks’ email address. Members attending physically should clean their spaces before they use them and before they leave. I would also like to remind Members that Mr Speaker has stated that masks should be worn in Westminster Hall.
Before I call Catherine McKinnell to move the motion, I must say that we have 12 Back-Bench speakers. We normally allow 10 minutes for each Front-Bench speaker. If Catherine speaks for about 10 minutes, that should allow for in the region of four minutes for each Back-Bench speaker. I will not impose a formal time limit, but I ask everyone to try to deliver your speech within four minutes. That would be most helpful.
Catherine McKinnell (Newcastle upon Tyne North) (Lab) [V]
I beg to move,
That this House has considered e-petition 301079, relating to Black maternal healthcare and mortality.
It is an honour to speak under your chairmanship, Sir Gary. I am also honoured to open this debate on behalf of the Petitions Committee and the more than 187,000 people who signed the petition organised by campaigners Tinuke Awe and Clo Abe.
The petition highlights the shameful fact that in 21st-century Britain, the colour of a woman’s skin affects how safe she and her child are during pregnancy and birth. That is one of the starkest examples of racial health inequalities in this country. As Tinuke and Clo have pointed out, the latest data show that black women are more than four times more likely than white women to die during pregnancy or in the six weeks after giving birth. Women from Asian backgrounds are twice as likely as white women to die during pregnancy. To put that into context, I should state from the outset that the UK is one of the safest countries in the world to give birth. Deaths during pregnancy are very rare. I am sure the Minister will reiterate that in her response.
Around one in 10,000 pregnant women dies every year from causes related to their pregnancy. Every single one of those deaths is a tragedy, but they are a very small proportion of all pregnancies. The situation has also improved slightly over the last 10 years. Those figures mask the underlying, long-standing and shocking inequalities in maternal mortality, yet we do not have a base of research and evidence to fully explain their root causes and to point the way forward. There is still no Government target to eliminate the gap. That needs to be addressed urgently.
What do we know about women who die during or shortly after pregnancy? Pregnancy alters the way the body works. Two thirds of all pregnant women who die fall victim to complications such as heart disease or the care they receive while pregnant. Most do not die during childbirth itself. Dr Christine Ekechi, co-chair of the race equality taskforce at the Royal College of Obstetricians and Gynaecologists, points out that black women are more likely to have pre-existing health conditions that lead to greater risks during pregnancy. However, she also highlights that the obvious question to ask is why black non-transmissible health issues such as cardiac disease and high blood pressure are more prevalent in the first place. If it is a result of existing social and economic inequalities, that must be addressed.
Across all ethnicities, most pregnant women who die have complex medical needs, but leading maternal health researchers such as Professor Marian Knight have expressed concerns that our health and social care system is just not set up to deal with that complexity. Clinics are often based at different hospitals, requiring separate appointments. Communication between them does not seem to happen in the way it should. Women are often expected to juggle other childcare and work commitments while attending myriad appointments at a range of different institutions. Not all women have the same support and security at home and at work, and the system does not account for that.
Accounts have shown that the symptoms that pregnant women present with are too often dismissed and attributed to pregnancy itself, when they could be indicators of serious underlying medical complications. Pregnant women from all backgrounds report not being listened to despite the fact that that is crucial to the physical and mental wellbeing of both mother and child. Professor Knight points to what she calls the “constellation of biases” that black and Asian women are subject to. Those range from lack of listening, learning and nuance around women’s backgrounds and the most appropriate care, to micro-aggressions, all the way to completely unacceptable race-related perceptions such as the entirely unsubstantiated notion that black women have higher pain thresholds. If pregnant women are not being listened to and their symptoms are not taken seriously, or if they feel that they will not be, that is a recipe for tragedy.
It is important that public awareness of that issue has finally begun to increase, which is in no small part thanks to the work of such campaigners as Tinuke and Clo and the initiatives that they have launched, such as Black Women’s Maternal Health Awareness Week, which was first held last September, and the petition that we are debating. More women are now coming forward with their experiences, and five times more have shared their stories. One woman recounted:
“As soon as the second midwife was on shift she just seemed to have one goal in mind and that was delivering my baby as soon as possible, she didn’t seem to care about easing any part of my pain or reassuring me for the many worries I had at the time—she rushed my labour along and as a result almost cost me my sons life.”
Another said:
“I already seemed like that hyper-emotional black woman worried about nothing and I let that silence me. I really wish in this moment I expressed my concern or spoke up, because I honestly couldn’t have fathomed that what happened next would come.”
The reaction on social media to Channel 4’s recent “Dispatches” documentary was also very telling. One Twitter user said:
“For many Black women ‘The Black Maternity Scandal’ on Ch 4 is sadly not shocking or eye opening at all. Not being listened to in times of pain has become far too normal and it has to change.”
Another wrote:
“For many of us Black and Brown women, this felt like the first time our stories and traumatic, hurtful experiences got a small hearing on national TV.”
Pregnancy can be a special and exciting time, but it can also be exhausting and terrifying. For any woman to have to spend it not being listened to or not receiving the most appropriate care because of the colour of her skin is nothing short of appalling, so it is unsurprising that there is now an increasingly vocal consensus on the urgent need for more research and evidence, and for firm commitments from the Government and the NHS to end the scandal. We need to address the under-researching of health issues that black women face, and get a clear picture of the data on maternal deaths among different ethnic groups. Many different ethnicities are grouped together under broad categories, which risks missing cultural nuances, misrepresenting experiences and leading us to the wrong conclusions.
Maternal deaths are just the tip of the iceberg. For every woman who dies, many more will have severe pregnancy complications, and there is evidence of disparities between ethnic groups in that respect, too. However, the number of those cases and the impact on their families and lives is not recorded. Lack of research on those so-called near misses is a gap in the knowledge base that must be urgently and proactively corrected.
Tinuke and Clo are asking MPs to act by signing up to the Five X More black maternal health pledge, which I know many colleagues who have spoken today have already supported. One of the asks is that the Government implement the recommendations of the Joint Committee on Human Rights, including the introduction of a firm target to end the disparity in maternal deaths. I would be grateful if the Minister would tell us whether the Government agree with the Joint Committee on Human Rights, the chief midwifery officer and the petitioners that such a target must be put in place. It would also be useful to know whether the Government intend to address the data gap in medical research in the upcoming women’s health strategy.
I want to end by quoting what Tinuke said in an interview with The Guardian last year:
“In 1991 when my mum gave birth to me she was at greater risk of dying. In 2020 when I gave birth to my daughter that risk had increased and I was five times more likely to die…I’ll be damned if my daughter, whenever she decides to give birth, is 25 times more likely to die.”
That truly is a source of shame for this country, which is why today must mark the day that future generations start to look back and wonder how on earth this situation was ever tolerated for so long.
Ms Harriet Harman (Camberwell and Peckham) (Lab)
I thank the members and Chair of the Petitions Committee for choosing this subject for debate. My constituency contributed the second highest number of signatures to this petition, which reflects the concerns of both black and white people in my constituency.
It is particularly tragic when a new mother dies. She will die early in life, leaving behind a newborn or other children. Everyone in maternity services wants maternity care to be a properly resourced and highly professional team. A black woman is four or five times more likely than a white woman to die during childbirth or shortly thereafter, and nobody wants that to be the case. It is a dreadful situation and it must be addressed. I have four proposals for the Minister. I know that she understands this issue very well, having worked in the health service. She cares about it, so I look forward to hearing her response.
First, the monitoring must be clear and publicly accessible. The publication of covid statistics has provided a real example of this. It has shown how, when information needs to be brought into focus and targeted at the public and everybody in the health service, the regular and consistent publication of statistics can enjoin us all in a public effort. Coherent statistics must, therefore, be published.
Secondly, as my hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) has said, we must have a target to end this black maternal mortality gap, with milestones set for progress year by year. The Joint Committee on Human Rights, which I chair, heard evidence from the chief midwifery officer that there is a great deal of concern about this issue but no targets have been set. We know that the NHS works to targets and to milestones. Good intentions are not enough.
Thirdly, we have to reduce health inequalities—this is a general but important point—and income inequalities, which mean that if someone is black they are more likely to have a low income, and if they are on a low income they are more likely to have poorer health.
Finally, we must recognise that this is not just about the health status of the mother; it is also about the delivery of care. We have to face up to a difficult truth. Polling by the Joint Committee on Human Rights found that 60% of black people felt that they were not likely to get equal care in the NHS, and 78% of black women felt that the NHS would not give them equal treatment. For white people, those are shocking statistics, particularly as so many black women and men play such a crucial part in providing NHS services. Those figures are based on the experiences and expectations of black women in a society where black people are not treated equally.
This is a matter for the consideration not only of everyone in every part of our society, but of everyone in every part of the NHS and everyone involved in maternity care. Like the Chair of the Petitions Committee, I hope that this debate will mark the start of rapid and transparent progress towards ending this egregious inequality.
Kate Osamor (Edmonton) (Lab/Co-op) [V]
It is an honour to serve under your chairmanship, Sir Gary. First, I congratulate Tinuke and Clo, the co-founders of Five X More, on working tirelessly to change black women’s maternal health outcomes, and on putting forward this petition, which gained over 187,000 signatures.
The racial disparities in maternal mortality rates are completely unacceptable. A black woman is four times more likely than a white woman to die in the UK due to pregnancy or childbirth. Just think about that—that is four times as many women passing away well before their time, and four times as many families suffering the pain and grief of losing a loved one.
It is not just those women who have sadly died who have been victims of this disparity. Research by the Nuffield Department of Population Health has shown that women of black African and black Caribbean heritage are, respectively, 83% and 80% more likely than white European women to suffer a near miss of maternal death. That reflects, and is the consequence of, the wider disparities in care, which countless women have recounted from their experiences. As well as the socioeconomic inequality that disproportionately affects black people, a study by MBRRACE-UK showed that only 29% of women who died during pregnancy and childbirth were deemed to have received good care, with improvements in care being judged to have potentially made a difference to the outcome in 51% of those cases—evidence that there are clearly improvements to be made.
The attention shone on this issue in recent months, and highlighted by the sheer number of people who have signed the petition, must be used as a spur for the Government and the NHS to develop a clear action plan. Furthermore, it highlights the damaging nature of the Government’s recent race report, which sought to sideline almost any suggestion that racism could be a factor in the different outcomes experienced by people in Britain today. Racism is not just a perception or historical experience, as Tony Sewell wrote in his foreword to the recent report.
This is not about a chip on our shoulder; it is about addressing the real inequality of black maternal mortality rates, which result in women unnecessarily passing away. It is a disparity that requires the Government to take seriously racial and ethnic disparities. Therefore, what we are asking today, and what the campaigners have been asking the Government to do, is to listen and to really take the data seriously. I hope the Minister will introduce an NHS target to end this disgusting disparity.
Florence Eshalomi (Vauxhall) (Lab/Co-op) [V]
It is a pleasure to serve under your chairmanship, Sir Gary. I thank the campaigners for bringing this really important issue to Parliament and for raising awareness on behalf of all women. Over 1,186 Vauxhall constituents signed the petition that has led to this important debate.
As the mother of two young children born just over the road from Parliament, at St Thomas’ Hospital, I know that giving birth should be one of the most natural and exciting experiences that any mother can have. I think back to my first pregnancy—the fear, excitement and mixture of emotions. Like many women from a black or minority ethnic community, I was not aware that I suffered from a disease called fibroids until I had my first maternal scan. That brought additional fear and anxiety around my childbirth, but for far too many women, pregnancy and childbirth can be complicated and dangerous. When I got pregnant, I also realised that I was a sickle cell carrier.
We have known for some time that maternal and perinatal mortality rates are significantly higher for women of black, Asian and mixed heritage and their babies. That is why we have to do everything we can to ensure that pregnancy and childbirth is as safe as it can be for all women in this country. We have the data. We know that the death rate in childbirth for black women is five times that for white women. In 2021, that cannot be acceptable.
To tackle the problem, we must first acknowledge the structural and institutional racism that exists in our healthcare system. We know that black and minority ethnic women are sometimes not listened to during the course of their care, and this can be subject to unconscious bias and microaggression. As a result, their symptoms are dismissed as normal during pregnancy, whereas they should be investigated a lot further.
The NHS is aware of the disparity, but it has no target to end it. I hope that by raising awareness of this issue, we will help to kickstart a national debate that will lead to the Government taking real action to address it. My colleagues have already asked the Minister to respond by looking at those key targets. We need to work with the NHS to implement the Joint Committee on Human Rights’ recommendations, which are clear. They are about reducing racial disparities in black and minority ethnic maternal health outcomes, and specifically about introducing those targets, so that we can measure those protections.
Sarah Owen (Luton North) (Lab) [V]
It is a pleasure to serve under your chairship, Sir Gary. I thank the right hon. Member for South West Surrey (Jeremy Hunt), the Chair of the Health and Social Care Committee, for asking me to respond on behalf of the Committee. Too often our Parliament is viewed as old, with blind spots on issues such as the health inequalities that affect black people, and black women in particular, so I am grateful to each of the nearly 200,000 people who signed the petition.
We have already heard that black women in the UK are four times more likely to die during pregnancy or childbirth than other women, and up to twice as likely to experience a stillbirth than white women. This is not coincidence or fluke. We see in the available data and in people’s experiences how health services, designed disproportionately by non-black people, fail to meet the needs of black people. It is an institutional problem.
The Select Committee is currently looking into the safety of maternity services in England. The brilliant Tinuke and Clo from Five X More came to speak to us and share their experiences, and I thank them for leading this petition and for their campaigning work. Clo told the Committee that there needs to be greater investment to understand the huge disparity in health outcomes for black women. We currently do not collect data on near misses, morbidity, illnesses or poor outcomes for black women. I hope the Minister announces some changes to that.
Clo also told us that only once we uncover the experiences of black women going through maternity services and set targets to do better will we have better outcomes for all black women. The same sentiment was echoed when I met Mars Lord, a doula and birth activist working on the Black Mums Matter Too campaign, which is not only highlighting the shocking inequality facing black women and their children relating to maternal mortality, but taking action to save lives. Mars is working with Peppy Baby, which gives black birth parents free expert support, delivered remotely via an app.
In my own constituency, I have been doing my best to support my constituent Ernest Boateng. His wife, Mary Agyeiwaa Agyapong, sadly lost her life to covid-19. Mary was pregnant, and a nurse at Luton and Dunstable University Hospital in my constituency. Shortly after undergoing a C-section, Mary sadly died. I have been so moved by Ernest’s resolve and commitment over the last year to seek answers and to make sure that no other family faces such a tragic loss in the same way. I presented Ernest’s petition for greater protections for pregnant women during the pandemic to Parliament earlier this year. This is hugely important, especially as 55% of pregnant women hospitalised during the first months of the pandemic were from black, Asian and minority ethnic backgrounds.
I have written to the Minister multiple times to ask her to meet Ernest. He is the father of two children, and his one-year-old, little Mary, will never get to meet her mum. He is campaigning to make things better and safer for other expectant parents, but sadly every time I have asked, the Minister has responded that she is too busy to meet me and Ernest, so I use this opportunity to ask for even just 20 minutes of her time. I am sure that she will stand up and say the right things, and I know that her heart is in the right place. I am more than happy to assist, if she is willing to listen to the experiences of Ernest, so that no family has to face the devastating loss that his has.
Bell Ribeiro-Addy (Streatham) (Lab) [V]
It is a pleasure to serve under your chairmanship, Sir Gary. I start by paying tribute to Tinuke and Clo from Five X More, who have been leading the charge in calling for action on black maternal health. Black women are four times more likely to die in pregnancy and childbirth—we have heard that many times today, and we will probably hear it some more, but I really want it to hit home. We know this, but we have no target to end it.
During my own pregnancy, it was not hard to find instances where, as a black woman, how I was perceived or believed drastically impacted the care I received, from complaints about how I was feeling to being denied scans. We know that black women are perceived to experience less pain. We know this, and we have no target to end it.
Things went from bad to worse for me. I was swollen. My blood pressure would get so high that I would feel dizzy and my nose would bleed. My doctor eventually had me rushed to the hospital for further tests and scans, and I was admitted to the hospital with pre-eclampsia. My last conversation with the consultants was harrowing. They said that my pregnancy had become very dangerous and there were only two outcomes: my child would die, or both myself and my child would die. My diagnosis was too late for any intervention, and simple steps—which I soon found were simple things such as taking aspirin—were no longer an option for me. The consultants’ advice was for a late termination and a delivery to save myself. They also explained that my condition was deteriorating so quickly that I would immediately have to nominate someone to make the decision for me if I should become unconscious.
Some 83% of women of African origin, like myself, and 80% of Caribbean women suffer a near miss in pregnancy and childbirth. Not only do we not have a target to end this, but we do not have information about the health issues that black women go on to face. I did not have to make this decision, because a scan scheduled the day after that meeting showed that my baby’s heart had stopped beating. I was induced, and after something like 18 hours of labour, she was born. As a person of faith, even then, I still had faith that maybe the doctors were wrong and everything would be okay, but she did not move, she did not cry, and there was no miracle. Black babies have a 50% increased risk of neonatal death, and a 121% increased risk of stillbirth, like my own daughter. With figures like that, I wonder how much of a chance she really had. We know this, and we have no target to end it.
When I talk about this, I am asked how long ago it was and how far along I was. I just want to say that when any woman loses a baby, however her pregnancy ends—miscarriage, stillbirth, or even an abortion if she had to have one—it is not for anyone else to quantify how much pain she must feel, as if to decide how much empathy to show, and it is certainly not for them to decide how much care she should be shown.
I would like people to stop blaming black women—that is all I have heard in response to some of the messages that have been put out. So often, black women are viewed as the problem, but we could be the solution if people would just listen to us, respect us and care for us. We are not a lump of comorbidities—some of us who go on to have these tragic experiences did not even have any comorbidities. We are black women who have decided to bring life into this world, and that choice has become a matter of life and death and health. The inequality we face is not our fault. Inequality is an institutional and political outcome—an institutional and political choice—and it is the duty of the Government to end it, not to outsource responsibility and blame those who are suffering.
In the US, they have just had a Black Maternal Health Week, and $200 million were put towards ending this disparity in training clinicians. In the UK, we have a Government who have ordered reports saying that institutional racism does not exist. So when the Minister responds today, I do not want to hear what the Government think is wrong with women who look like me; I want to hear what they will do to protect women who look like me, and the children we have. I want to hear that this Government realise that if they are not part of the solution, they are part of the problem, and I want them to acknowledge the institutional racism that we face and to have a target to end it. The colour of a woman’s skin should have no bearing on whether she or her child live or die.
Abena Oppong-Asare (Erith and Thamesmead) (Lab) [V]
It is a pleasure to serve under your chairmanship, Sir Gary. I thank my hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) for bringing this e-petition debate on black maternity healthcare and mortality before the House. I also thank Tinuke and Clo, the founders of the Five X More campaign, who have been fighting to get this issue taken seriously.
Other Members have touched on these heartbreaking and stark statistics, but they bear repeating: black women are four times more likely to die during pregnancy or up to six weeks postpartum, women of mixed heritage are three times more likely to die, and Asian women are twice as likely to die. Each loss of life is a tragedy, and that disparity is unacceptable. It needs to be understood and it needs to change.
I also want to mention the Royal College of Obstetricians and Gynaecologists’ term “near misses”. The numbers of women who survive childbirth and are left with long-term morbidity are currently not recorded, but are part of a wider health picture. They must be taken into account. For the past year, covid has exacerbated many of these issues. In fact, even when other factors such as age, obesity and location were taken into account, black and Asian women are more likely than white women to be hospitalised. We need to understand why that is the case, because the statistics can only tell us so much. A commitment to looking into how and why that is the case is urgently needed. I am sure that all of us in the debate today would welcome that.
These tragic deaths are part of a wider picture, a story of health inequality, with black women facing disparities when it comes to stillbirths, cancer diagnoses and outcomes, and access to fertility treatment, among other things. We must recognise that disparities in health outcomes are driven by social factors—poverty, education and housing—as well as discrimination. None of that is new. It is not earth-shattering. It is not changing, either. That simply is not good enough. So we need action, and we need action now.
The Government must commit to a target to reduce the disparity in mortality rates. The Government must support Five X More pledges, including the recommendations relating to black maternity health in the report “Black people, racism and human rights” produced by the Joint Committee on Human Rights. There needs to be a full and independent review that seeks to end the disparity once and for all. The NHS must commit to robust data collection to aid the understanding of these outcomes. For a start, we need to move beyond the term BME. When women are dying, it is not good enough use data catch-all terms. We need to do more to deliver a workforce that reflects the diversity of the communities it serves.
On a final and quick point, I have not mentioned “no recourse to public funds”. That is, of course, the huge elephant in the room when it comes to health outcomes. Some women face costs of £7,000 or more for essential maternity care. These are the very women who are at risk of increased mortality. It is time for that practice to end.
Janet Daby (Lewisham East) (Lab) [V]
I am pleased to be speaking today on such an important but also disturbing issue. I commend my hon. Friend the Member for Streatham (Bell Ribeiro-Addy) for sharing such a personal, moving story that is so relevant to the debate.
Every death in maternity is a tragedy, but it is wrong that we are having to speak on the issue of black women dying during pregnancy or soon after giving birth in the UK. It is unacceptable that the disparity exists between women from different ethnic backgrounds. It is most distressing that when a mother dies, a child or children are left motherless, not to mention the loss to their partner or spouse and to the wider community. Too many unanswered questions need to be asked, and too many changes need to be made, and that is why we request that the Government work with the NHS to improve maternal health outcomes of black women, women of mixed heritage and Asian women.
As we have already heard, compared with white European women, black women in the UK are four times more likely to die in pregnancy and childbirth, women of mixed heritage are three times more likely to die, and Asian women are two times more likely to die. African women are 83% more likely to suffer a near miss in childbirth, and black Caribbean women are 80% more likely to do so. That is all happening in the UK. It is shameful and outrageous. How and why is it happening? It is a huge concern regarding equality of care. Why are non-white women’s experiences so different compared with those of white women? Change needs to happen, and it is this Government’s responsibility to make the change happen.
These babies are 121% more at risk of stillbirth. Their life chances are limited before they are even born. Do these little black lives matter? I think they do, and I know that many Members in this Chamber agree with that. Immediate interim changes and safeguards need to be put in place now for these vulnerable women to protect their lives: the lives of the mothers and children.
I call on the Government to implement the recommendations in the Joint Committee on Human Rights report on black maternal health, “Black people, racism and human rights”, to ensure that all health professionals record and identify those who are most at risk of poor outcomes, so that protective factors are implemented. I also call on the Government to ensure that there is increased support for at-risk pregnant women. I ask the Secretary of State for Health and Social Care to introduce a plan and target to improve maternal outcomes for black women. Professor Maggie Rae, president of the Faculty of Public Health, has said:
“This year’s coronavirus pandemic has brought this disparity even more starkly to the fore, and we must not lose sight of the actions that are required to address systemic biases that impact on the care we provide for ethnic minority women.”
Naz Shah (Bradford West) (Lab) [V]
It is a pleasure to serve under your chairmanship, Sir Gary. May I associate myself with all the comments that have been made? I commend in particular my hon. Friend the Member for Streatham (Bell Ribeiro-Addy) for the courage and bravery with which she spoke.
The disparity of maternity care outcomes in England is already well known. Black women are four to five times more likely than white women to die during pregnancy, birth and the postpartum period, while our Asian women, most of whom are from Pakistani and Bangladeshi backgrounds, are two to three times more likely than white women to die during those periods. Those statistics have been known for many years, but in the last 20 years or so they seem to have gone the wrong way and got worse.
We must find out why black and south Asian women and their babies are more likely to die. In addition, we need to find out why black women and then south Asian women are most likely have an emergency C-section. Why are black women and then south Asian women most likely to have excessive bleeding? Are those factors contributing to their deaths? Are those women receiving the right care at the right time? We need to look further into all those questions, because most of the deaths are likely to be preventable.
Why do racial and ethnic variations in health outcomes occur? The Government’s latest report suggests that institutional or structural forms of racism just do not exist, and that, in fact, they are just in our minds, or they are narratives pushed by groups that lobby on racism. I would be really grateful if the Minister explained why, if there is no racism, those disparities exist.
I am co-chair of the all-party parliamentary group on Muslim women, which is currently conducting research to find out about Muslim women with babies and maternity care, so that lessons can be learned to mitigate existing inequalities. Muslim women are from diverse ethnicities, and in the UK they are mostly from black and south Asian backgrounds, but we wanted to take an intersectional approach to find out how overlapping factors, such as ethnicity and faith, could affect their healthcare. The aim is to find out why those women have poor health outcomes, and to understand their perspectives and experiences of the healthcare during and after pregnancy. The findings of the inquiry are set to be published in the autumn.
This debate signifies just how important such an inquiry is, so I will end by expressing my gratitude to the whole team in the APPG on Muslim women, to the Muslim Women’s Network UK, and to all colleagues across the House who raise this important issue.
Claudia Webbe (Leicester East) (Ind) [V]
It is a pleasure to serve under your chairmanship, Sir Gary. I congratulate the campaign group Five X More, and the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) on securing this hugely important debate, as well as the nearly 200,000 UK residents who signed the petition. The debate could hardly be more important, as it shines a light on a devastating and long-neglected area of institutional racism.
The latest UK data shows that black women are five times more likely to die in pregnancy, or up to six weeks after giving birth, compared with white women, yet there is no target to end that. This difference has almost doubled since 2011, with a 121% increased risk for stillbirth and a 50% increased risk for neonatal death, but there is no target to end this. It is not true that black women are superhuman. They do not have a higher pain threshold.
The maternal mortality for women from Asian backgrounds is double that for white women. There is also a concerning increase in the maternal mortality rate for women from mixed ethnic backgrounds, who now have a three times higher risk compared with white women, yet there is no target to end any of this. There is no doubt that health disparities within maternity care settings have been amplified by the coronavirus pandemic. Indeed, African, African-Caribbean, Asian and minority ethnic women made up 56% of all pregnant women hospitalised in the early months of the pandemic.
Discrimination is ingrained in the social, political and economic structures of our economic system. According to the Office for National Statistics, key workers are more likely to be from black, Asian or minority ethnic communities, to be women, to be born outside the UK and to be paid less than the average UK income. These inequalities are grounded in class inequality and reflect the severe racial disparities in our economy. African, Asian and minority ethnic women are also more likely to be in insecure work, which can leave them without basic maternity rights and more exposed to discrimination when it comes to hospital treatment.
That said, we cannot ignore the issue of racism and implicit racial bias in our healthcare system, which can negatively influence diagnosis and treatment options provided by clinicians, including pain management, and indirectly affect medical interactions, through loss of patient-centredness in treatment and the removal of patient autonomy. That has a corrosive effect on trust in services, which creates a downward spiral of healthcare outcomes.
The demonisation and mistreatment of migrants and those with unsettled status must also end. Migrant women with insecure status face charges of £7,000 or more for NHS maternity care, which can deter women from accessing essential services. The Government cannot be serious about reducing maternal health inequalities unless they abolish the “no recourse to public funds” policy.
There is also a significant gap in the medical research community, contributing to disparity of access in the UK. Latest figures show that 0.7% of professors employed at UK universities are black. In 2018, there were just 25 black British female professors in UK universities. Much more must be done to invest in research and researchers who can help combat those unacceptable health inequalities.
I finish by saying how callous, how cruel and how ignorant the Government’s recent race and ethnic disparities report is in the context of this debate. The Government’s crusade to deny the existence of institutional racism means that the disproportionate suffering of pregnant women of African, Asian and minority ethnic backgrounds is ignored. This must change. The UK Government must urgently set a target to abolish racial disparity to combat maternal mortality, so that we can all hold them to account and work towards long-lasting change.
Wera Hobhouse (Bath) (LD)
I am grateful that we are debating this important petition today and pay tribute to the women who have bravely shared their stories, from those involved in the “Dispatches” documentary to the Five X More campaigners to some of my own constituents in Bath.
The disparity in maternal health outcomes between black and Asian women and white women is one of the most frightening elements of systemic racism in today’s society. The statistics revealed in the MBRRACE report should shock and horrify us all. It should go without saying that health outcomes should never be determined by race, but for too many women this is the awful reality when accessing healthcare. One of my constituents said:
“I have two dual heritage daughters. As things stand, they are three times more likely to die during pregnancy and childbirth than my white friends’ daughters.”
Another wrote to me to share her concern that her race affected the way she was treated.
She felt she was not properly informed about the options open to her, her concerns were not taken seriously, and she could not say no when she felt uncomfortable.
Closing the gap between maternal health outcomes for white women and for women of colour must be a priority for the Government. It is not enough merely to recognise the disparity; we need a specific target to dramatically cut the rate of maternal deaths among black women. I urge the Minister to ensure that targets are in place to halve the disparity in the next five years. We need more and properly funded investigations into maternal death, with recommendations that are actioned. We need national accreditation for those who provide language support in maternity care, and we need to look at health outcomes for those new mothers who have no recourse to public funds because of insecure immigration status.
On top of that, if we are serious about eliminating maternal health inequalities, we must tackle the inequalities that exist in all areas of society. We know that the pandemic has made all inequalities much worse. Women from ethnic minority backgrounds made up 56% of all pregnant women having to go to hospital in the early months of the pandemic. Women from ethnic minority backgrounds are more likely to be key workers, giving them an increased risk of contracting the virus. They are more likely to be in insecure employment, which leaves them without basic maternity rights. They are at risk of higher exposure to discrimination and poor treatment at work, affecting their mental health. Once again, I urge the Treasury to look at Maternity Action’s proposals for amending the furlough scheme. It would allow employers to claim 100% of the cost of maternity suspension for women who are over 28 weeks pregnant, or pregnant women with underlying health conditions—we have heard today that underlying health conditions make it much more risky for pregnant women from different ethnic backgrounds.
I hope that the powerful personal stories shared by so many brave women will spur urgent action from the Government. We need to listen to black women, to ensure that pregnancy and childbirth are safe for all.
Helen Hayes (Dulwich and West Norwood) (Lab) [V]
It is a pleasure to serve under your chairmanship, Sir Gary. I pay tribute to Tinuke and Clo for their vital work campaigning on black maternal health under the banner Five X More . I also pay tribute to my hon. Friend the Member for Streatham (Bell Ribeiro-Addy) for sharing her devastating experience so bravely and powerfully.
The statistics on maternal mortality are truly shocking. Skin colour should have no correlation with maternal health, yet in the UK, black women are over four times more likely than white women to die during pregnancy or childbirth; women of mixed heritage are three times more likely; and Asian women are twice as likely. What is even more shocking is that the gap has been widening—not for a short period of time, but for more than a decade.
The factors contributing to maternal mortality rates are complex and multiple. Social and economic factors have a strong influence on underlying health. Pressures such as insecure work, low income and fear of losing employment force some women into unsafe situations. Implicit racial bias in healthcare can lead to assumptions being made and some women not being listened to. The extent to which women are listened to, respected and empowered throughout pregnancy and childbirth has a vital bearing on ultimate outcomes.
The most shocking aspect is that every organisation concerned with maternal mortality says that more research is needed to understand why black women are at greater risk of death. After a decade of increasing black maternal health disparity, we still need more action to understand why there is such appalling racial healthcare inequality, so that action can be taken to stop it. That means better data collection, clear and measurable targets, and more funding for research.
We have to ask why those appalling statistics have been of so little concern to the Government that they have failed to undertake any major inquiry or fund significant research. There is a gender and ethnicity gap in medical research, and that must change. The Government must now commission an independent review of the ethnic disparity in maternal mortality, looking in detail at the data and capturing the lived experience of black women, Asian women and women of mixed heritage.
I want to highlight in particular some of the things that are known and on which action could be taken right away to make a difference, even as further research is commissioned. We know that women from black and Asian backgrounds are more likely to be key workers in frontline roles and physical roles such as social care. Many of those women are on low pay and in insecure work. Maternity rights and health and safety protections at work must be extended to all women, whatever their employment status or job role. It must not be the case that fear of losing pay or losing work forces pregnant women to risk their health, either through the work itself or through being unable to attend essential healthcare appointments.
The barriers to accessing healthcare that face some black and Asian women, particularly asylum seekers and women with no recourse to public funds, must be removed. In maternity care, relationships really matter. Women’s experiences during pregnancy and childbirth are far too inconsistent across the country, but often, the best care is delivered by community-based midwifery teams, working across both community and hospital settings and enabling women to get to know and trust the midwives who will eventually deliver their babies. Dealing with a birth is not like other forms of healthcare. Women in childbirth should feel that they are equal partners with midwives, doctors and the wider professional team to deliver their baby safely.
Finally, the racial disparities in maternal health further serve to underline the nonsense of the report by the Commission on Race and Ethnic Disparities. That report straightforwardly denies the lived experience of many black people and people of colour living in the UK. Addressing structural racism, shown so clearly in the health data we have been discussing today, must start with listening to and taking seriously the experiences of black people and people of colour in the UK, not denying those experiences. That report will not even help to get off the blocks the work that needs to be done to iron out and remove racial disparities in maternal health.
Kim Johnson (Liverpool, Riverside) (Lab) [V]
It is a pleasure to serve under your chairship, Sir Gary. I, too, would like to begin by thanking the Five X More campaign for raising awareness and bringing this important debate to Parliament, and my hon. Friend the Member for Streatham (Bell Ribeiro-Addy) for her bravery in sharing her devastating story with us all tonight.
I am a black mother of twins and I had a very positive experience, but sadly, too many black women are dying needlessly in childbirth. In today’s historic debate, we have already heard incredibly personal and heartfelt stories, and I pay tribute to my sisters’ strength and bravery in sharing their experience to help to bring about change.
The rate for black mothers dying during or just after childbirth is five times that of white mothers in the UK; and black babies have a 121% increased risk of a stillbirth. It is estimated that for every instance of maternal mortality, there are 100 severe maternal morbidities or near misses. Behind every one of these statistics is a story, and behind every one of these mothers who dies is a group of women who had a near miss.
The report by the Joint Committee on Human Rights, which was published last year, highlighted the lack of an NHS target to end this obscene disparity and urged the Government to introduce one. I call on the Government today to rectify that urgently and set ambitious targets to address and eliminate these inequalities, including to halve the number of black maternal deaths by 2023.
The 2019 MBRRACE-UK report revealed that almost all those who died during or after pregnancy had multiple issues such as mental or physical health problems or were victims of domestic abuse or were living in a deprived area. More than half of those who died were overweight or obese. Black women are more likely to have conditions that can put them at greater risk, including cardiac disease, diabetes and high blood pressure. We must ask the deeper question of why black and Asian women are more likely to have those pre-existing health conditions in the first place. There is no specific genetic connection between all black people. Many of these pre-existing conditions are non-communicable diseases that are driven by social determinants of health, such as poverty, education and housing. Women living in the most deprived areas were three times more likely to die than those living in more affluent areas. Social services were involved in the lives of 20% of the women who died.
We are now a year into a pandemic that has laid bare the pervasive health inequalities that exist in our country. We have seen clearly that race, class, housing, education, income and employment all directly define someone’s chances of survival. More than half of pregnant women admitted with covid-19 in the first two months of the pandemic were black, Asian or from another minority ethnic group. Black women have been eight times more likely to be admitted to hospital as a result of coronavirus. These inequalities are widening and will become more profound as deprivation and disadvantage continue to be fuelled by the pandemic and women continue to suffer.
The recent Sewell report, backed by the Government, who allegedly had a hand in doctoring its findings, had the gall to assert that structural racism no longer exists as a dominating force in Britain today. The figures and the stories that we have heard today tell a very different story, so will the Minister go back to the Government and appeal to them to rectify the report, given the undeniable evidence we have heard today? This must be a turning point. The Government must commit today to a national strategy to tackle health inequality, which must include a road map and a timeframe for the eradication of the racial injustice in maternity care.
Anne McLaughlin (Glasgow North East) (SNP) [V]
I am happy to speak under your chairmanship today, Sir Gary, although what we are discussing is a very unhappy set of circumstances. I thank Five X More for the petition and the debate, and the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) for leading it. I confess—I know I am not alone in this—I knew very little about this subject until hearing from Five X More , and I am someone with a long-term interest in racial inequality, so I thank it sincerely. Many hon. Members have spoken powerfully today. I pay particular respect to the courage of the hon. Member for Streatham (Bell Ribeiro-Addy).
In the UK, almost 800,000 women give birth every year. That is 800,000 interactions with their national health service, making childbirth the No. 1 reason for engagement with the NHS. For a large proportion of women, it is their first adult contact with health services, and maternity care should be a unique opportunity to mitigate some of the factors that perpetuate health and social inequalities. I have no doubt that for many it is, regardless of ethnicity. I also have no doubt that the vast majority of healthcare workers care deeply about the people they work with. This debate is more about the system itself and the structural inbuilt inequalities.
We are hearing through heartbreaking testimony and alarming reports that these inequalities are very much there, putting black mothers and babies at a significantly higher risk of maternal and perinatal death. It is worth repeating again and again that black women are four times more likely to die during pregnancy or shortly after giving birth than white women. Women from mixed-race backgrounds are three times as likely and Asian women twice as likely. Most alarming to me is the fact that this inequality and disparity in maternal and newborn health has been highlighted for several years, yet there is still no target to end this. Why on earth not?
I want to pay tribute to MBRRACE-UK for the work that it has done in the confidential inquiry into maternal deaths. There is a coldness to research and statistics that often lets us forget what MBRRACE-UK points out: behind each number is a mother, a father, a baby, a family and a community left devastated by these events. Five X More has published a comprehensive list of suggestions for the Government to act on, as many hon. Members have noted today. I will note just one: the advice to listen to the voices and experiences of black women. Listen!
Maternity Action notes that a reason for the disparity, as the hon. Member for Erith and Thamesmead (Abena Oppong-Asare) has noted, is that migrant women with insecure status face charges of £7,000 or more for essential NHS maternity care. That will clearly deter lots of these women from attending for care. Maternity Action has rightly called for an end to no recourse to public funds rules, as others have today. The rules exclude some migrants from access to top-up payments such as housing benefit, universal credit, child benefit and other critically important benefits. Many working people are paid so little that they require those top-ups just to survive, but many migrant women with work visas and jobs and others with limited leave to remain do not have the right to what is considered essential for everybody else.
Finally, Maternity Action and others are calling for a welfare safety net for all pregnant women. I will add to that by talking about how important universality can be. In Scotland, there is universal access to free prescriptions, but even more relevant to this debate is universal access to the baby box. It is not a poor baby’s box, but a “welcome to the world” baby box. It is free to all new parents and is based on the Finnish model, which has a proven record of decreasing infant mortality. The box includes essential items for a baby’s first weeks and months, and it provides a safe space for babies to sleep near their parents. However, one of the most important aspects of the baby box is that it brings women in touch with healthcare workers before and after the baby is born. Those workers can then support the mother and baby.
Every baby should be born with an equal start in life, and the SNP Government are exploring even more ways in which the baby box can be used to promote women’s health and support mental health. I mention the baby box not to say that Scotland does everything so much better than the rest of UK, but it is something that I would love to see the rest of the UK adopt. It is not just about health and being in touch with health services; it is about the psychological impact of the Government telling people, particularly migrants to this country, that their babies are welcome and loved. So much work was done on ensuring that it was not seen as a poor baby’s box that, in 2019, 47,000 baby boxes were delivered to new parents in Scotland—a 93% uptake. That is what happens when there is universality.
As we know, the mortality risk from covid-19 among ethnic minority groups is twice that for white patients, and that is after potential confounding factors such as age, sex, income, education, housing tenure and area deprivation have been taken into account. A recent report found that black pregnant women are eight times more likely to be admitted to hospital with coronavirus, and Asian women are four times more likely. There is simply no hiding from this issue. If we are to fully understand race and health, we have to fully understand the role of ethnicity and racism in our society—the everyday acts of discrimination, the unconscious and implicit biases, and the cultural and structural racism that we are now being told does not exist.
I do not have the time or expertise to delve deeply into this issue, so I am glad that others are speaking about it. One of those is Dr Christine Ekechi, who is the spokesperson for racial equality at the Royal College of Obstetricians and Gynaecologists. She said:
“it’s important for us to acknowledge that we are still humans, and so there are lots of things that can operate at a conscious level, but there are many things that operate at a subconscious level.”
Dr Ekechi has suggested that we need more diversity in healthcare systems and that healthcare professionals should check themselves for whatever biases they may have. I expect the vast majority would want to do that, and we should be supporting them. It is one of the things that we will be looking at on the all-party parliamentary group on unconscious bias, because it does exist. We should be finding ways to help people unravel their biased thinking, because it has a massive impact on people’s lives.
I want to add to some of what others have said about the Commission on Race and Ethnic Disparities report. Rather than focusing on structural inequalities, it attempted to explain them by talking about economics, geography and family units. Academics have accused the report of cherry-picking data to reach predetermined conclusions. They say it is littered with mistakes and selective quoting, in an attempt to tell us that
“the British discourse on race is obsessed with victimhood when it should be celebrating progress.”
That is not surprising, given that the author has already said many times in the past that he does not believe structural inequality exists, but it also chimes with a growing trend among Conservative politicians to claim that there is no such thing as structural racism in the UK. However, even the Prime Minister now seems to be distancing himself from the report, saying recently:
“I’m not going to say we agree with every word.”
For those who may not know and who may be watching, if we say the health service is structurally racist, it does not mean that it is populated by racists. It means that the way it is structured is for white people and that it takes into consideration their needs—culture, language, health trends and so forth—with very little flexibility to take account of anyone else’s. We need to change the structures and make them more flexible, which is what this debate is calling for. After all, our NHS is not a national white person’s health service; it is supposed to be for everybody equally.
This is a moral issue. As Alexandre Dumas wrote:
“Moral wounds have this peculiarity—they may be hidden, but they never close; always painful, always ready to bleed when touched, they remain fresh and open in the heart.”
I will end with the words of Amy Gibbs, the chief executive of Birthrights:
“A lot of black and brown people in the birthing world are understandably frustrated by calls for more research when what’s needed is action.”
I think she is right. We need to act now. No more endless research: let us just do something about this.
Marsha De Cordova (Battersea) (Lab)
It is a pleasure to serve with you in the Chair, Sir Gary. I am grateful to my hon. Friend the Member for Newcastle upon Tyne North (Catherine McKinnell) for leading the debate on behalf of the Petitions Committee. I also congratulate the formidable campaigners Tinuke and Clo, the founders of the Five X More campaign, who got the petition debate in Parliament today. The petition received more than 180,000 signatures. It is not before time that such a huge injustice is finally receiving the attention it deserves.
We have heard some powerful contributions from right hon. and hon. Members this evening, including my right hon. and learned Friend the Member for Camberwell and Peckham (Ms Harman), the Chair of the Joint Committee on Human Rights. Just last year, the Committee published its report “Black People, Racism and Human Rights”, which contains shocking findings, particularly that the care that many black people receive is unequal to what is given to white people. I urge the Minister to accept all the recommendations of that report.
My hon. Friend the Member for Edmonton (Kate Osamor) highlighted, as others have done, the choice made in the report of the Commission on Race and Ethnic Disparities to sideline the institutional and structural racism that exists across society, but more so in the health service. My hon. Friend the Member for Streatham (Bell Ribeiro-Addy) made a powerful contribution sharing her lived experience. I thank her for doing so, but also for her tireless campaigning on the issue. She has been brave, and I thank her for that.
More importantly, my hon. Friend the Member for Vauxhall (Florence Eshalomi) highlighted some of the issues related to underlying health conditions in her own experience of being diagnosed with fibroids and also of being a sickle cell carrier. I also urge the Minister to listen to my hon. Friend the Member for Luton North (Sarah Owen), to give 20 minutes of her time to her and her constituent and to hear their experiences.
I also want to mention the contribution of my hon. Friend the Member for Dulwich and West Norwood (Helen Hayes), who highlighted the fact that we need to focus more on issues relating to research. Unless we do the work, we will not move forward and bring an end to this crisis.
As we have heard, it is absolutely shameful that black women continue to be four times more likely to die in childbirth and pregnancy than white women. That inequality has existed for decades, with little action being taken to address it. [Interruption.]
Sir Gary Streeter (in the Chair)
Order. Does any Member present have to go to vote physically, or is everyone on a proxy vote? If everyone is happy, let us continue.
Marsha De Cordova
Last week I met campaigners, obstetricians, midwives and black, Asian and ethnic minority women with lived experience of maternal health complications. They were very clear that socioeconomic determinants such as income, housing and occupation and comorbidities only partially explain the inequalities affecting black maternal health. It is absolutely clear that structural racism is a driver of disparities in treatment, and it is a missed opportunity that the Commission on Race and Ethnic Disparities chose to sideline that important issue. I hope the Minister will choose to ignore and reject that view.
Black and Asian women, and their partners, regardless of their socioeconomic status, are not being listened to, not being respected and not being cared for. When they voice pain or concern during pregnancy or childbirth, they are branded as “aggressive” or “angry”, while dangerous stereotypes about “strong black women” mean that black women are often not offered the same treatment as white women.
It is outrageous that racist myths about black women having higher pain thresholds than other women continue to affect their treatment. Meanwhile, the lack of cultural competency in medical training means that complications experienced by black women are not spotted early enough. For example, black women have shared accounts of how their anaemia was not picked up soon enough because of the colour of their skin.
So I ask the Minister what action she is taking to tackle structural racism and to build trust in maternity services for black, Asian and ethnic minority mothers and their partners and for healthcare professionals, including midwives, as many have shared their experiences of occupational discrimination, as was highlighted in the Public Health England report last year. I would really like the Minister to address this issue. Additionally, cultural competency and unconscious bias training is an essential part of ending these inequalities, so will she commit to improving training in the health service and in medical schools?
We are all aware of the importance of data, which as we have heard is central to closing the maternal mortality gap. Many mothers and medical professionals have shared accounts of how pregnant women are recorded as being white if they do not disclose their ethnicity, meaning that it is difficult to track complications. Therefore, the recording of data is essential, so will the Minister commit to ensuring that all maternity services record the specific ethnicity of all mothers?
It is clear that fatalities are just the tip of the iceberg, with many women speaking of the near-misses and poor treatment they have experienced. I have heard from many medical professionals that data on near-misses could easily be made available, but it is not being. Will the Minister therefore commit to collecting and publishing data on maternal near-misses by ethnicity, and, if so, can she set a timeline for that commitment, with some clear milestones?
Midwives consider the continuity-of-care model as a way to help bridge some of these inequalities. A 2016 study found that women who see the same midwife throughout their pregnancy are 16% less likely to lose their baby. The NHS standard contract for 2019-20 stipulated that 35% of women will be booked on to a continuity-of-care pathway by March 2020. Can the Minister confirm whether that target was met? Can she also say what is being done to meet that target in the NHS long-term plan, which aims to provide continuity of care for 75% of black, Asian and ethnic minority women by 2024?
Before I close, I want to mention how the hostile environment is exacerbating this problem, as mentioned by my hon. Friends the Members for Erith and Thamesmead (Abena Oppong-Asare) and for Dulwich and West Norwood. Charging for maternity services and no recourse to public funds conditionality mean that many women are either becoming indebted as a result of their pregnancy or are turning away from health services all together for fear of being reported to the Home Office. Many women subject to charging are destitute and unable to pay, and three of the 209 women whose deaths were investigated in the 2019 MBRRACE-UK report were affected by charging for NHS maternity care. Does the Minister agree that charging women for maternity care is cruel and dangerous during this pandemic?
I want to make it clear that black maternal health and mortality is an avoidable inequality, and it is scandalous that the Government have not yet set a target to end this injustice in the NHS long-term plan, so will the Minister commit to doing so today? The NHS long-term plan sets many targets for other issues, so why not for black maternal health?
Let me be absolutely clear that a Labour Government would be committed to ending the crisis in black maternal health and mortality, and that the Government must take urgent action now. We need a national strategy to tackle health inequalities as a matter of urgency, which must include a target and a commitment to end the mortality gap between black, Asian and ethnic minority women and white women and to tackle structural racism once and for all, not deny its existence. We cannot afford for this not to be a priority.
The Minister for Patient Safety, Suicide Prevention and Mental Health (Ms Nadine Dorries)
I thank all Members of the House who have taken the time to attend and speak in today’s debate, and particularly the hon. Member for Newcastle upon Tyne North (Catherine McKinnell) for having secured the debate. Along with everyone else, I also thank the co-founders of the Five X More campaign, Clo and Tinuke, for their incredible work. Their petition to Parliament has generated a huge amount of interest and support, and their work to improve maternity mortality rates and healthcare outcomes for black British women is inspiring and brings this deeply important issue the attention it deserves.
Every woman deserves to have safe care, to feel that her voice has been heard and to be an informed decision maker in her own care. The NHS is one of the safest places in the world to have a baby. Few women in the UK die during childbirth. Between 2016 and 2018, 217 out of 2.2 million women died during, or up to six weeks after, pregnancy from causes associated with their pregnancy. That equates to 9.7 maternal deaths per 100,000 pregnancies. We also know from the MBRRACE-UK maternal mortality reports that some of these deaths could have been prevented. Sadly, evidence shows that, currently, there remains a more than fourfold difference between maternal mortality rates among women from black ethnic backgrounds and among white women in England. There also remains an almost twofold difference between women from Asian ethnic backgrounds and white women. Those disparities are worrying and must be addressed, and I have heard all of the calls to do that today.
However, let me address the points that have been raised by speakers today—many of which have been raised repeatedly—beginning with the right hon. and learned Member for Camberwell and Peckham (Ms Harman). We need to fundamentally understand why this issue occurs and why we have these disparities. The statistics tell only part of the story: the lived experiences of black women need to be understood, appreciated and heard for us to really gain an understanding of the full picture. I think it was the hon. Member for Liverpool, Riverside (Kim Johnson) who read out some of the reasons for these disparities that are given in the report. As we know, and as we could tell from that report and from the list that she read, which was just the tip of the iceberg, the reasons are incredibly complex.
That is why, last month, I announced that the Government are embarking on the first women’s health strategy for England. That strategy is, first and foremost, about listening to women’s voices. The call for evidence that launched on International Women’s Day seeks to understand women’s experience of the health and care system, and we have already seen an incredible response to it. Many thousands of women across the country have come forward to share their experiences through the online survey, which takes just a few minutes to complete, so I will unashamedly make another call in this debate for any woman who has not yet completed the online survey to do so.
However, women from black and other ethnic minority groups are under-represented in the responses we have received so far, and today’s debate has reiterated just how important it is to ensure that the health and care system is listening to women of all backgrounds. I encourage any woman listening to this debate, and in particular women from black and ethnic minority groups, to come forward and have their voice heard. By better understanding women’s experiences, we can ensure that the health system truly meets the needs of women as they should be met. The complaint that women’s voices are not heard—that women are not listened to and are spoken down to in the healthcare sector—is a common one across the board from women, and was highlighted in Baroness Cumberlege’s recent “First Do No Harm” report.
Disparities in maternal mortality rates among women from different ethnic groups have been well documented for many years. The numbers are just not acceptable, and the Government are committed to reducing those inequalities. The charity Five X More has campaigned to make the NHS commit to a target to reduce inequalities and close the current gap in maternal mortalities. There are considerable limitations on producing an England-level indicator of maternal mortality by ethnicity. Many Members raised that point. The fact is that maternal deaths are rare, even among women from black ethnic groups. Because of the very low numbers, even a large reduction in mortality rates for a particular ethnic group would not necessarily be attributable to a genuine improvement in the quality of care.
Marsha De Cordova
The issue is that there is a need for a target. When a target is set, work can take place towards a reduction. The Minister says it might be difficult to record the figures by ethnicity. Could she explain why it would be difficult?
Ms Dorries
I will go further and explain what we are hoping to do to make a difference. We know that for every woman who dies, 100 women have a severe pregnancy complication or a near miss. That has been mentioned a number of times. When that woman survives, she will often have long-term health problems. Disparities in the number of women experiencing a near miss also exist between women from different ethnic groups. Because near misses are more common than maternal deaths, we can investigate those disparities at local and regional level, to better understand the reasons for disparity, to assess local variation and to identify areas with less disparity and, hence, best practice.
Wera Hobhouse
Is it not clear from everything we hear that black women and women from ethnic minorities feel that the health system does not communicate appropriately, so they do not understand all the choices available to them? Is that not a way of getting to the bottom of what is going wrong?
Ms Dorries
That is certainly one of the many issues highlighted in the report, but it is not the only one. We have commissioned the policy research unit in maternal and neonatal health and care at the University of Oxford to undertake research into the disparities in the near misses, and to develop an English maternal morbidity outcome indicator. The research will explore whether the indicator is sufficiently sensitive to detect whether the changes made to clinical care are resulting in better health outcomes. Five X More called for that in its list of 10 requests.
We are putting the research in. We have found a way to look at the research in order to make the differences that need to be made. We can do that by examining the near misses. What happened in those cases and in those women’s experiences? What went wrong? Do the women feel that they were not listened to? Was it a matter of treatment? Was it a lack of understanding? We need to understand that by looking at the near misses. The research is being undertaken, but it will take some time. Hopefully, when that is reported, we will be able to make progress on the issue of setting targets.
This Government are no strangers to setting targets. On the very sad issue of baby loss, we set a target to reduce neonatal stillbirth and neonatal mortality rates by 20% by 2020. We have reached almost 25%. We have smashed that target and are still pushing forward to improve that situation even more. We are not afraid of setting targets, but when we are setting them we have to know how to achieve better outcomes. The hon. Member for Battersea (Marsha De Cordova) mentioned continuity of carer. She is absolutely right about those figures. We know that continuity of carer works incredibly well, particularly for black women and women from ethnic minorities. Having the same midwife throughout the process of pregnancy makes a huge difference. That is being rolled out across the country. I am sure that the hon. Lady has spoken to the chief midwifery officer, who is a huge supporter of the policy. We are continuing to roll it out and make progress with it. It has been slightly more difficult during the 12 months of the covid pandemic, particularly because many trusts did not continue with home births.
We are not afraid of setting targets, however. Setting targets in maternity units is what we are about, to make them safer places in which to give birth and in order to reduce both neonatal and maternal mortality rates, but we need to do the research on the near misses, to understand what the problems are. We cannot set targets until we know what we are trying to achieve through those targets and what we need to address. Five X More has asked for that research to be done. It needs to be done, and it will be done.
We are committed to reducing inequalities and to improving outcomes for black women—we work at that daily. I established the maternity inequalities oversight forum to focus on inequalities so that we in Government understand what the problems are. The forum also brings together experts from across the UK—we have met MBRRACE-UK and Maternity Voices—who have done their own research and studied this problem, to hear their findings and recommendations. Professor Jacqueline Dunkley-Bent, the chief midwifery officer for England, is leading the work to understand why mortality rates are higher, to consider the evidence on reducing mortality rates, and to take action to improve the outcomes for mothers and their babies.
NHS England is working with a range of national partners, led by Jacqueline Dunkley-Bent and the national speciality adviser for obstetrics, to develop an equity strategy that will focus on black, Asian and mixed-race women and their babies, and on those living in the most deprived areas. The Cabinet Office Race Disparity Unit has also supported the Department of Health and Social Care in driving positive actions through a number of interventions on maternity mortality from an equalities perspective. The Royal College of Obstetricians and Gynaecologists has established—
Sir Gary Streeter (in the Chair)
Order. Will the Minister kindly leave two minutes for Catherine McKinnell at the very end?
Ms Dorries
I will end there, but if any hon. Members wish to speak with me about the work we are doing and the research we have undertaken with Oxford University, we are happy to share more. I say in response to the hon. Member for Luton North (Sarah Owen) that very few personal meetings have taken place, but I would be happy to meet her and her constituent.
Sir Gary Streeter (in the Chair)
Thank you very much, Minister. It is very important that Catherine McKinnell has the final word.
Catherine McKinnell [V]
Thank you, Sir Gary. I thank the Minister for her response, and everybody who has contributed to the debate, which has been very moving and powerful, and also very painful. I thank in particular my hon. Friend the Member for Streatham (Bell Ribeiro-Addy) for sharing such a powerful personal story.
I hope that the debate has helped to raise awareness and understanding of why the issue must be urgently addressed, and I hope that we have done justice to the passionate and powerful campaigning of Clo and Tinuke. I know that they and we all want to see change, so I hope that the Government and NHS leaders have heard that call today. I urge the Minister to meet those who are affected, to continue to listen and to ensure that data continues to be collected and that changes are made to put an end to the five times more statistic for good.
Question put and agreed to.
Resolved,
That this House has considered e-petition 301079, relating to Black maternal healthcare and mortality.
Written Statements
(3 years, 8 months ago)
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Contingencies Fund Advance
(3 years, 8 months ago)
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The Financial Secretary to the Treasury (Jesse Norman)
Her Majesty’s Revenue and Customs will incur new expenditure in connection with the Government’s response to the covid-19 pandemic in 2021-22.
Parliamentary approval for additional resources of £6,065,000,000 for this new expenditure will be sought in a main estimate for Her Majesty’s Revenue and Customs. Pending that approval, urgent expenditure estimated at £6,065,000,000 will be met by repayable cash advances from the Contingencies Fund.
Further requests to the Contingencies Fund may be made as necessary to fund covid-19 activity delivered by Her Majesty’s Revenue and Customs.
[HCWS921]
London Capital & Finance
(3 years, 8 months ago)
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The Economic Secretary to the Treasury (John Glen)
On 17 December 2020, I announced that the Treasury would set up a compensation scheme for bondholders who suffered losses after investing in London Capital & Finance (LCF) (HCWS678)[1]. This statement provides an update on the Government’s approach, including the details of the scheme and the next steps for bondholders.
LCF was a Financial Conduct Authority (FCA) authorised firm which issued unregulated non-transferable debt securities, commonly known as “mini-bonds”, to investors and then speculatively invested the funds received in a number of underlying businesses. LCF went into administration in January 2019 and at the point of failure 11,625 bondholders had invested around £237 million.
This has been a very difficult time for LCF bondholders, many of whom are elderly and have lost their hard-earned savings. As I noted in my last statement, for some, this will have formed part of an investment portfolio, but for others, it will have represented a significant portion of their savings.
One of the key purposes of regulation is to ensure that investors have the right information to understand their risk. Within this system even a regulator doing everything right will not be able to, and should not be expected to, ensure a zero-failure regime. That is why statute has established the Financial Services Compensation Scheme (FSCS), which is the compensation scheme for customers of failed financial services firms in the UK. Its scope is strictly limited and it is only able to pay out when a relevant regulated activity has been undertaken. The FSCS has considered LCF claims in detail and has been able to protect around 2,800 bondholders, paying out over £57 million in compensation.
It is an important point of principle that Government do not step in to pay compensation in respect of failed financial services firms that fall outside the FSCS. Doing so would create the wrong set of incentives for individuals and an unnecessary burden on the taxpayer. However, the situation regarding LCF is unique and exceptional. After considering the issues in detail, the Government have decided to establish a compensation scheme for LCF bondholders. The scheme I am announcing today appropriately balances the interests of both bondholders and the taxpayer and will ensure that all LCF bondholders receive a fair level of compensation in respect of the financial loss they have suffered.
LCF’s business model was highly unusual, both in its scale and structure. In particular, it was authorised by the FCA despite generating no income from regulated activities. This allowed LCF’s unregulated activity of selling mini-bonds to benefit from the “halo effect” of being issued by an authorised firm, helping LCF gain respectability and grow to an unprecedented scale before it failed, resulting in losses for thousands of bondholders.
A complex range of interconnected factors contributed to the scale of losses for LCF bondholders. Clearly individuals have responsibility for choosing investments that are suitable for their risk profile. The high interest rates on offer from LCF, particularly when compared with deposit accounts, should have prompted questions from potential bondholders about the risks. While some may have understood those risks and invested anyway, LCF’s disclosure materials and marketing strategy may have led others to believe they were investing in a product that was far safer than it was.
Bondholders have reported LCF using a range of dishonest tactics to persuade them to invest. For example, some novice investors have said they were encouraged to declare themselves to be sophisticated and experienced, thereby enabling them to access products that should have been out of reach. Furthermore, LCF appears to have adopted flawed investment and marketing strategies and paid high commissions of up to 25% to the sales agent.
Bondholders have been badly let down by LCF, but they have also been let down by the regulatory system that is designed to protect them. The independent investigation led by Dame Elizabeth Gloster[2], which the Government published at the end of last year, concluded that the FCA did not discharge its functions in respect of LCF in a manner which enabled it to effectively fulfil its statutory objectives during the relevant period.
While I have not seen evidence that would indicate that the regulatory failings at the FCA were the primary cause of the losses incurred by LCF bondholders, they are a significant factor that the Government have taken into account when deciding to establish this scheme. Indeed, the Government do not ordinarily step in to pay compensation to consumers in relation to allegations of fraud, investment losses, mis-selling or mis-buying of investments. I would, however, like to make it clear that neither the Government nor the FCA accept any legal liability for the failure of LCF or the losses incurred by its bondholders.
In these extraordinary circumstances, the Government have decided to establish a compensation scheme. However, it is imperative to avoid creating the misconception that Government will stand behind bad investments in future, even where FSCS protection does not apply. That would create a moral hazard for investors and potentially lead individuals to choose unsuitable investments, thinking the Government will provide compensation if things go wrong. The ultimate responsibility for choosing suitable investments must remain with individuals.
To avoid creating this misconception, and to take into account the wide range of factors that contributed to the losses that Government would not ordinarily compensate for, the Government will establish a scheme that provides 80% of LCF bondholders’ initial investment up to a maximum of £68,000. Where bondholders have received interest payments from LCF or distributions from the administrators, Smith & Williamson, these will be deducted from the amount of compensation payable. The scheme will be available to all LCF bondholders who have not already received compensation from the FSCS and represents 80% of the compensation they would have received had they been eligible for FSCS protection.
Around 97% of all LCF bondholders invested less than £85,000 and therefore will not reach the compensation cap under either the Government scheme or the FSCS. The Government expect to pay out around £120 million in compensation in total and the scheme to have paid all bondholders within six months of securing the necessary primary legislation, which the Government will bring forward as soon as parliamentary time allows.
Bondholders do not need to do anything at this stage and Government will provide further details on how the scheme will operate in due course. The scheme will be simple and straightforward to navigate. Bondholders will not need to use a claims management company, solicitor or any other organisation to help them claim.
I am mindful that some individuals may be anxious to receive their compensation and I urge bondholders to be vigilant to the risk of scammers posing as services to help them claim. To reiterate, the scheme has not opened yet and bondholders should await further announcements from the Government on next steps.
One of the challenges highlighted by Dame Elizabeth Gloster’s report is that, despite exhibiting many of the characteristics of other regulated financial services activities, the issuance of mini-bonds is not currently a regulated activity. The Government are committed to ensuring the financial services sector is well regulated and consumers are adequately protected, and the Treasury is therefore today launching a consultation on proposals to bring the issuance of mini-bonds into FCA regulation. This consultation is the culmination of a review into the regulation of mini-bonds that I announced in May 2019 and delivers on one of the recommendations made in Dame Elizabeth Gloster’s report.
In addition, the FCA is continuing its work to address the recommendations in Dame Elizabeth Gloster’s report, including through its ongoing transformation programme. A number of important steps have already been taken and I welcome the FCA’s commitment to report publicly on the progress of these vital reforms.
Finally, I wish to reiterate my sympathy for LCF bondholders. I hope the compensation offered by the Government scheme will offer some relief to the distress and hardship suffered and provide closure on this difficult matter.
[1] A link to the previous WMS can be found via: https://www.parliament.uk/written-statements/detail/2020-12-17/HCWS678.
[2] The full report can be found at:
https://www.gov.uk/assets.publishing.service/government/uploads/system/attachmentdata/file/945247/GlosterReportFinal.pdf.
[HCWS922]
UK Listings Review: Government Response
(3 years, 8 months ago)
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The Chancellor of the Exchequer (Rishi Sunak)
In November last year, I asked Lord Hill of Oareford CBE to carry out an independent review of the UK’s listing arrangements. Strong public markets are a vital component of the UK economy and the Government are committed to ensuring that the UK’s markets are as competitive as possible, and to supporting the many different companies that use markets to raise capital, including technology firms as mentioned in Lord Hill’s report.
At Budget last month, Lord Hill published his UK listing review1. It made 14 recommendations. Today, I am pleased to set out how the Government intend to take forward each of the recommendations made.
Seven of the recommendations are directed towards the Financial Conduct Authority (FCA), our independent regulator. As the FCA set out in its public response on 3 March, it welcomes the report and intends to consider all the relevant recommendations carefully, including on free float, dual class share structures, and special purpose acquisition companies (SPACs). It has committed to acting quickly where appropriate, including by publishing a consultation by the summer, and a specific consultation on SPACs before that.
Six key recommendations are directed towards HM Treasury (HMT), and I outline how we will be taking forward each recommendation, in turn, below.
First, I agree to present an annual “State of the City” report to Parliament (recommendation 1). I am grateful for the suggestions provided as to what this report could cover, and I believe this would benefit the UK’s capital markets. I will present the first of these reports in 2022.
Lord Hill recommended that HMT considers an additional “growth” or “competitiveness” objective for the FCA, as part of the future regulatory framework (FRF) review (recommendation 2). The first consultation on the FRF review closed on 19 February. This review seeks to ensure the UK’s regulatory framework is fit for our future outside the EU and the first consultation welcomed stakeholder views on the current set of statutory objectives. It also sought views on the future overall accountability framework for the FCA (and PRA). The Government are currently considering the 120 stakeholder responses received in relation to this consultation and will use these to inform a second consultation later this year. I will carefully consider this recommendation as part of that process.
Three of the recommendations, on reviewing the UK’s prospectus regime (recommendation 7), considering whether prospectuses drawn up under other jurisdictions’ rules can be used to facilitate secondary listings in the UK (recommendation 8) and facilitating the provision of forward-looking information by issuers in prospectuses (recommendation 9), all deal with the UK’s prospectus regime. Again, I strongly welcome this, and agree we need to consider reforms to ensure these documents are fit for purpose. I can confirm that the Government will bring forward a public consultation on the UK’s prospectus regime later this year.
Lord Hill also raised the issue of improving the efficiency of further capital raising by listed companies (recommendation 13). This is a highly technical area, and I agree that bringing together expertise specifically on this issue will be helpful to consider what more can be done to improve capital raising processes and I am happy to help convene such a group. My officials will be considering what form this will take over the coming weeks.
One of the recommendations, concerning how technology can be used to improve retail investor involvement in corporate actions and their undertaking of an appropriate stewardship role, is directed towards the Department for Business, Energy and Industrial Strategy (BEIS). As such, this recommendation will be taken forward by BEIS as part of its wider consideration of the findings from the Law Commission’s recent scoping study on intermediated securities. BEIS expects to announce a response to the study later this year.
Finally, Lord Hill concluded by drawing the Government’s attention to other issues raised with the review illustrating how the wider financial ecosystem may impact UK listings. I would like to thank Lord Hill for bringing these issues to my attention.
I would like to conclude by again thanking Lord Hill for his work, and I look forward to taking forward his recommendations.
1 https://www.gov.uk/government/publications/uk-listings-review
[HCWS919]
Women Peace and Security: Annual Report 2020
(3 years, 8 months ago)
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The Minister for the Middle East and North Africa (James Cleverly)
I wish to inform the House that the Foreign, Commonwealth and Development Office, together with the Ministry of Defence, are today publishing the 2020 annual report on progress against the UK’s fourth National Action Plan on Women, Peace and Security.
Published on 18 January 2018, the National Action Plan (NAP) sets out the Government’s objectives on the Women, Peace and Security agenda for the period 2018-2022. This is the UK Government strategy for how we will meet our Women, Peace and Security commitments under UN Security Council Resolution 1325 to reduce the impact of conflict on women and girls and to promote their inclusion in conflict resolution and in building peace and security.
The report published today outlines our progress against the National Action Plan over the last 12 months, including our work in our nine focus countries of Afghanistan, the Democratic Republic of Congo, Iraq, Libya, Myanmar, Nigeria, South Sudan, Somalia and Syria, and Yemen as a priority country. It is centred around seven strategic outcomes where we expect to see progress over the five year duration of the NAP.
The progress report will be published on www.gov.uk. Copies will be placed in the Libraries of both Houses.
[HCWS920]
Non-devolved Provisions of the Coronavirus Act 2020: One Year Report
(3 years, 8 months ago)
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The Parliamentary Under-Secretary of State for Health and Social Care (Jo Churchill)
On 22 March 2021, the One-Year Status Report on the non-devolved provisions in the Act was laid in Parliament. The report provided a thorough assessment of whether the provisions within the Act remained necessary and proportionate to support the response to the pandemic. Page Revised Text Original Text p.14 Section 24 (applies to UK): Extension of time limits for retention of fingerprints and DNA profiles. This provision established a regulation-making power so that biometrics (fingerprints and DNA profiles) held for national security purposes could be retained for up to an additional six months beyond normal statutory retention deadlines (with the possibility of a further six month extension; enabling retention for up to a maximum of 12 months). This provision has successfully mitigated the risk of a critical national security capability being compromised because of the pandemic, including the risk of losing the biometrics of up to 150 individuals per month (many of whom could be subjects of national security interest). However, this power was exercisable only in relation to biometrics that would (ignoring the effect of regulations made under it) need to be destroyed within 12 months of the Act being passed. Regulations have been made to cover this 12-month period. A further extension beyond the second set of regulations made under this power was not necessary and therefore section 24 will be expired as part of the one-year review as it has served its original purpose. The second set of regulations made under this power - the Coronavirus (Retention of Fingerprints and DNA Profiles in the interests of National Security) (No 2) Regulations 2020 -will be saved as they provide the current basis for retention of certain biometrics held in the interest of national security that [would otherwise would have fallen to be destroyed between 1 October 2020 and 24 March 2021]. Section 24 (applies to UK): Extension of time limits for retention of fingerprints and DNA profiles. This provision established a regulation-making power so that biometrics (fingerprints and DNA profiles) held for national security purposes can be retained for up to an additional six months beyond normal statutory retention deadlines. This provision has successfully mitigated the risk of a critical national security capability being compromised because of the pandemic, including the risk of losing the biometrics of up to 150 individuals per month (many of whom could be subjects of national security interest). However, this power cannot be extended beyond the point the Regulations expire in March without primary legislation and therefore it will be expired as part of the one-year review as it has served its original purpose. p.30 Counter-Terrorism Policing has confirmed that a further extension beyond that provided by the Coronavirus (Retention of Fingerprints and DNA Profiles in the Interests of National Security) (No 2) Regulations 2020 is not necessary and therefore a decision has been made to expire this provision. As the regulations under these provisions have expired, and cannot be extended under the Act, the decision has been made to expire these provisions as part of the one-year review. p.30-31 This provision established a regulation-making power so that biometrics (fingerprints and DNA profiles) held for national security purposes could be retained for up to an additional six months beyond normal statutory retention deadlines (with the possibility of a further extension of up 31 to six months - for a total extension of up to 12 months). This power could only be exercised in relation tobiometrics that would (ignoring the effect of regulations made under it) need to be destroyed within 12 months of the Act being passed. A further extension beyond the Coronavirus (Retention of extend these under the Act. Fingerprints and DNA Profiles in the interests of National Therefore, if the powers were p.31 Security) (No 2) Regulations 2020 was not necessary and needed in the future primary therefore this section will be expired under the UK-wide SI legislation would be required, which will be laid after Easter recess. As such, the powers will be expired under the UK wide SI which will be laid after Easter recess. This provision established a regulation-making power so that biometrics (fingerprints and DNA profiles) held for national security purposes could be retained for up to an additional six months beyond normal statutory retention deadlines. The Regulations laid under this power have now expired, and there is no legislative means to extend these under the Act. Therefore, if the powers were needed in the future primary legislation would be required. As such, the powers will be expire under the UK wide SI which will be laid after Easter recess.
The report highlighted an intention to expire 12 provisions and suspend a further three. The cautious expiration and suspension of these provisions reflects the progress made in tackling the pandemic. Progress along the roadmap and continued success with the vaccine rollout, show we are moving in the right direction towards the national recovery.
Following the publication of the One-Year Status Report, the Government identified that it contained a factual error. This relates to text on pages 14, 30 and 31 of the report, regarding section 24 of the Act, which covers Home Office responsibilities relating to the retention of biometrics—fingerprints and DNA profiles—that are being retained for national security purposes. I would like to apologise and address the error.
The report, laid in Parliament last month, stated that the regulations made under section 24 would expire in March 2021. However, it emerged that the second regulations made under this power, Coronavirus (Retention of Fingerprints and DNA Profiles in the Interests of National Security) (No. 2) Regulations 2020, are extant and will continue to have effect until 24 September 2021. This does not affect the substance of the report because the Government will shortly bring forward regulations to expire section 24, alongside other provisions set out in the One-Year Report.
We have taken the appropriate steps to rectify this error, and the corrections can be found at the end of this statement. An un-numbered Command paper will be laid before Parliament and published today setting out the changes. The published One-Year Report will also be updated on www.gov.uk to reflect those changes.
Since gaining Royal Assent on 25 March 2020, the Coronavirus Act has been an essential legislative tool in the Government response, enabling effective action to reduce the impact of the pandemic. The Government remain committed to keeping the powers in the Act under review and to retaining powers only where they continue to be necessary and proportionate.
This table highlights the changes made to the One-Year Report. The bold text represents additional text in the report compared to the previous version.
[HCWS923]
Grand Committee
Arrangement of Business
The Deputy Chairman of Committees (Baroness Healy of Primrose Hill) (Lab)
My Lords, the hybrid Grand Committee will now begin. Some Members are here in person, others are participating remotely, but all Members will be treated equally. I must ask Members in the Room to wear a face covering except when seated at their desk, to speak sitting down and to wipe down their desk, chair and any other touchpoints before and after use. If the capacity of the Committee Room is exceeded or other safety requirements are breached, I will immediately adjourn the Committee. If there is a Division in the House, the Committee will adjourn for five minutes.
Public Health (Coronavirus) (Protection from Eviction) (England) (No. 2) (Amendment) Regulations 2021
(3 years, 8 months ago)
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Lord Wolfson of Tredegar
That the Grand Committee do consider the Public Health (Coronavirus) (Protection from Eviction) (England) (No. 2) (Amendment) Regulations 2021.
The Parliamentary Under-Secretary of State, Ministry of Justice (Lord Wolfson of Tredegar) (Con)
My Lords, the instrument before us today prevents enforcement agents—bailiffs—from attending residential premises in England to execute a writ or warrant of possession except in the most serious circumstances. The House will be familiar with the structure and content of this statutory instrument as it is the fourth that the Government have tabled to restrict the enforcement of evictions since November last year.
The instrument applies to enforcement action in England. It amends the Public Health (Coronavirus) (Protection from Eviction) (England) (No. 2) Regulations 2021 in only one respect: by amending the expiry date of those regulations from the end of 31 March 2021 to the end of 31 May this year. On 18 March, when we debated the previous statutory instrument, a number of noble Lords expressed concerns about the short-term nature of these regulations and suggested that both landlords and tenants would benefit from greater clarity about how long the restrictions would be in force.
I explained in the last debate that the Government have to balance the need for clarity against ongoing developments in the pandemic. We believe that retaining the restrictions in this instrument until 31 May while the Covid-19 restrictions remain in place will align with the broader strategy for protecting public health and will continue to help to reduce pressure on essential public services as we move out of lockdown. Indeed, as I explained last time, the extension to 31 May, which I headlined in that debate, is broadly in line with the road map out of lockdown. Step 3 of the road map will be taken no earlier than 17 May following a review of the relevant data. That step will see a number of restrictions being lifted, including—importantly, in this context—the restrictions on domestic overnight stays.
Noble Lords might say, “Why 31 May and not a date linked to step 4, which is scheduled for no earlier than 21 June?” The short answer is that we must remember, when considering the date of 31 May, that in most cases bailiffs are required to give 14 days’ notice of an eviction. In practice, therefore, protection from the enforcement of evictions will be afforded in most cases until mid-June. We have sought to strike the right balance in the prevailing circumstances.
I am sure that noble Lords will be familiar with the content of the statutory instrument. We have put a ban in place but there are the by now familiar limited exceptions to the ban in cases where we believe the competing public interests in ensuring access to justice, preventing harm to third parties or taking action against egregious behaviour and upholding the integrity of the rental market sufficiently outweigh the public health risks. The exemptions are: first, where the claim is against trespassers who are persons unknown; secondly, where the order for possession was made wholly or partly on the grounds of anti-social behaviour or nuisance, false statements, domestic abuse in social tenancies, or substantial rent arrears equivalent to six months’ rent; or, thirdly, where the order for possession was made wholly or partly on the grounds of death of the tenant, and the enforcement agent attending the property is satisfied that the property is unoccupied. In each case the court will have to be satisfied that the exemption applies, and that will be considered on a case-by-case basis.
We therefore think it is fair and proportionate to allow for an exemption to the ban in cases where a landlord has sought a possession order on the grounds of rent arrears, and where a full six months of rent arrears has accrued. We know that private landlords, in particular, can be vulnerable to rent arrears; 45% of them let just one property, and 29% rely on rent for over half their income.
Data from sources such as the National Residential Landlords Association and the Resolution Foundation indicate that the vast majority of renters who are in arrears will not have built up the extreme level of rent arrears—six months-worth—that would allow the landlord to apply for an exemption to this public health measure. We continue to monitor the impact of the exemptions.
In cases where a court has decided that an exemption applies, bailiffs have to give tenants at least 14 days’ notice of an eviction, in most circumstances. They have been asked not to enforce evictions where a tenant has symptoms of Covid-19 or is self-isolating.
In addition to these regulations, we have also introduced a requirement, in the Coronavirus Act, that landlords, in all but the most serious circumstances, must give six months’ notice before beginning formal possession proceedings. That is another protection for tenants. That means, essentially, that most renters served notice now by their landlord would be able to stay in their homes until October 2021. This measure will remain in place until at least 31 May. We will consider the best approach for after this date, taking into account the prevailing circumstances at that time.
I have set out in previous debates on such statutory instruments the significant help that the Government have given to try to prevent people getting into financial hardship by helping businesses to pay salaries—frankly, that is the most important measure to enable people to pay their rent—through the furlough scheme, which has been extended until the end of September. The Self-employment Income Support Scheme has also been extended, and we have boosted the welfare safety net by billions of pounds. The Committee will be aware that in the Budget we announced that the universal credit top-up of £20 per week would continue for a further six months, and there is a further one-off payment of £500 for eligible working tax credit claimants.
In the Budget there was also a recovery loan scheme, which was launched to ensure that businesses, in particular SMEs, are well supported in their ability to access the finance they need throughout 2021. More than 1.5 million businesses have benefited from Government-backed support, receiving over £70 billion in total.
Ministry of Justice statistics show that the number of possession claims being made to the courts has fallen significantly. The most recent statistics show that applications to the courts for possession by private and social landlords were down 67% in the last quarter of last year, compared to the same quarter in 2019. Temporary court arrangements and rules, which have been put in place by the Master of the Rolls working group, include a review stage at least 28 days before the substantive hearing, so that tenants can get legal advice. Any cases started before August 2020 have to be reactivated by landlords before the end of this month, and we are also putting in place a free mediation service, as part of the possession action process, to support landlords and tenants to resolve disputes before a formal court hearing takes place.
Let me reiterate that I am aware that there are landlords who have been adversely affected by these regulations. As I have also said on previous occasions, we have sought to strike a balance—to enable tenants to pay their rent, but also, in egregious cases, to enable landlords to obtain possession. We remain grateful to landlords for their forbearance during this unprecedented time. We consider that these regulations strike an appropriate balance between the interests of landlords and those of tenants, and I therefore commend them to the Committee.
Lord Hain (Lab) [V]
My Lords, I welcome these regulations on evictions and thank the noble Lord, Lord Wolfson of Tredegar, for his clear explanation. I should be grateful if he would consider another suggestion to deal with the way in which home owners and would-be home owners have been hit by Covid. There has been considerable distress and hardship among those hoping to move or to buy a first home but who, as a direct result of the pandemic, have experienced a sudden and unexpected collapse in their income, triggering a sale collapse and loss of deposit after contracts had been exchanged, through absolutely no fault of their own.
One proposal is to insert for the duration of the pandemic a new Covid regulation containing four key elements: first, that the party’s right to serve a notice to complete will be suspended while an event directly related to Covid-19 prevents the other party from completing; secondly, that a party will not be in breach of its obligations because of a delay caused by Covid-19; thirdly, that either party may terminate the contract if completion does not take place by a specified longstop date, fixed at an agreed date beyond the contractual completion date; fourthly, that there will be a moratorium—with retrospective effect from the first national lockdown imposed by the Prime Minister on 23 March 2020—on deposits so that home buyers do not lose them because a Covid-19 impact prevented sales being completed.
Could the Minister bring forward new regulations, like the ones we are debating today, which would, in effect, freeze transactions due for completion after March 2020 but which, for Covid-related reasons, could not be completed because of an abrupt and dramatic change in financial circumstances? I should be grateful if the Minister looked at this.
Lord Shipley (LD) [V]
My Lords, it was on 18 March that we last debated this matter. We knew then that there would be yet another extension—and here we are. However, I am left wondering what the Government’s plan is. Indeed, I wonder whether they have a plan at all.
We are now a year on from the introduction of the ban on evictions; a year in which more and more tenants fear becoming homeless—one in four, according to Shelter; a year of not addressing the pending crisis in landlords’ loss of income; a year of building up the backlog of claims for possession.
Landlords’ and renters’ organisations have talked to each other and have come up with a plan for a Government-led rent relief scheme which would help both landlords and tenants. We should bear in mind that Scotland and Wales already have schemes in place.
A year ago, the Secretary of State gave a commitment that no one would be forced out of their home because they have lost income as a result of coronavirus. He also said that no landlord would face unmanageable debts. Given that, what discussions have the Government had with those organisations about their proposal?
This further extension is clearly right, given the circumstances, but the problem is not going away because many tenants in the private rented sector are carrying substantial debt and must rely on that sector, because they have no choice. This is the consequence of the failure to build enough homes for social rent, which is making the situation so much worse.
Lord Bilimoria (CB) [V]
My Lords, it is very good that the ban on commercial evictions has been extended to 30 June and the bailiff-enforced eviction ban has been extended to 31 May to protect residential tenants. As president of the CBI, I should like to say that we are very grateful for the many times that the Government have listened to business and shown flexibility and adaptability.
It is right to continue supporting renters with the cost of living and to align this with the Prime Minister’s timely road map, particularly when tenants may continue to be on furlough or working in sectors that cannot reopen for some weeks yet. For the some 49% of hospitality workers who have suffered so much during this pandemic, and the 36% of retail workers currently renting, the new measures will protect jobs as businesses reopen and many more renters can return to work.
However, landlords may be asking how, in some cases, the growing rental debt will be managed after the protection ends. The issue cannot be addressed if parties fall out with each other the moment the protection ends. The Government should be seeking to avoid a cliff-edge in June for residents and landlords and, where possible, helping tenants and landlords to work together to secure fair tenancy agreements moving forward. That should be a priority, as the Minister will agree.
The Government have promised mediation support for resolving issues where disputes arise, and this must be available to all who need it. We could produce a heavy caseload for mediation if the Government can publish guidance for tenants and landlords that will help negotiations to be held in a fair and transparent manner, in good time ahead of May.
It is positive that the Government continue to be clear about giving at least six months’ notice for evictions where eviction notices are necessary, as the Minister said. The Government appear to have launched a new free mediation service for disputes, so you can add this free service’s helpful support for tenants at what could be a difficult time, hopefully avoiding the need for court action. Can the Minister confirm this?
There is still so much uncertainty for the rest of the year around people’s employment as the economy reopens. Health and caring responsibilities continue to impact on people’s ability to work, so it is right that tenants are protected from evictions and given the opportunity to resolve them.
Lord Bourne of Aberystwyth (Con) [V]
My Lords, I declare my interests as set out in the register. It is a great pleasure to follow the noble Lord, Lord Bilimoria. I thank my noble friend the Minister for setting out the regulations with his customary lucidity and precision. Of course, we have been here before, so it could be argued that he has had plenty of practice.
I certainly support the regulations. Clearly, we should extend help to tenants who would otherwise face eviction as a result of coronavirus. What we must now provide as we emerge from the shadow of Covid is long-term help for both tenants and landlords. Tenants still owe rent. Landlords are still owed rent. The whole system is in danger as the creditworthiness of hundreds of thousands of tenants is undermined by the current situation. There is a very real danger of masses of tenants facing eviction, even if it is six months away, as the system of respite from evictions comes to an end.
As the noble Lord, Lord Shipley, noted, a scheme is already in place in both Wales and Scotland. May I press my noble friend the Minister to ensure that a specifically tailored financial package is put in place for tenants? The alternative will be landlords seeking judgments against tenants who are in debt. It would not be correct to assume that the bulk of landlords are vastly wealthy. This needs urgent action from the Minister and the Government, as I have mentioned before. I am still not convinced that we have in place a plan—one is sorely needed—to ensure that, as I say, we do not face a serious problem with the eviction of private tenants as we emerge from the shadow of Covid.
The Deputy Chairman of Committees (Baroness Healy of Primrose Hill) (Lab)
The noble Baroness, Lady Andrews, has withdrawn so I call the noble Baroness, Lady Ritchie of Downpatrick.
Baroness Ritchie of Downpatrick (Non-Afl) [V]
My Lords, I welcome these regulations. I have several questions for the Minister, building on what we dealt with during our debate on 18 March.
Covid-19 has changed every aspect of our society and economy. The private rented sector has been impacted to a significant extent, with many people living in fear of evictions as they are now without a job and have little money with which to pay their rent. Many private renters are struggling to pay. More than 800,000 renters may have built arrears since lockdown measures started a year ago. As the noble Lord, Lord Bourne, said, many landlords are not property tycoons and are also struggling; they, too, need assistance.
With Ministers committing to a tapering-down of emergency restrictions in the sector from the start of June, tenants and landlords need a comprehensive, cross-departmental road map to tackle rent debts, speed up the operation of the courts and carefully taper down the current extended possession notice periods. In view of that, what plans do the Government have to prepare for the implementation of the road map to assist private renters and their landlords?
Furthermore, it needs to be recognised that the majority of tenants now in arrears do not qualify for financial support in the form of discretionary housing payments. What assistance can be provided for them? This is supported by Citizens Advice, the Resolution Foundation and the debt charity StepChange.
Lord Carrington (CB) [V]
My Lords, I declare my interests as set out in the register. I welcome this statutory instrument and the delay until 31 May, but, like others, I would like an assurance from the Minister that the promised return to normality will encompass all the ministries involved in this complicated issue, such as the DHCLG, the DWP, the Treasury and, of course, the Ministry of Justice, so that a comprehensive solution is delivered rather than the current series of sticking plasters. Such is the conclusion of the Housing, Communities and Local Government Select Committee.
The biggest problems are with the private rented sector. Among the actions needed are measures to tackle growing rent debt so that existing tenancies can be sustained and tenant credit scores are protected from the consequences of county court judgments on evictions. It is also inappropriate to regard the private landlord as a bank. Most landlords are private individuals and have their own financial commitments to discharge. Hence, I repeat the request, mentioned also by the noble Lord, Lord Shipley, that the Government give interest-free hardship loans, payable direct to the landlord and repayable as tenants’ finances recover. Similar schemes exist in Scotland and Wales and have been welcomed by some housing charities.
Secondly, the speeding up of the court process, which has been called for by the House of Lords Constitution Committee, is essential. Can the Minister comment on the possibility of remote hearings using video technology? At present, I understand that, even without the effect of Covid measures, it takes an average of 12 months for a landlord to secure possession.
The Deputy Chairman of Committees (Baroness Healy of Primrose Hill) (Lab)
As the noble Baronesses, Lady Uddin and Lady McIntosh of Pickering, have withdrawn, I call the next speaker, the noble Lord, Lord Bhatia.
Lord Bhatia (Non-Afl) [V]
My Lords, this SI has been prepared by the Ministry of Justice. Its purpose is to protect public health and reduce the public health risks caused by the spread of severe acute respiratory syndrome coronavirus 2, which causes the disease, Covid-19. The SI prevents the enforcement of evictions against residential tenants other than in the most serious circumstances and was originally extended to 21 February 2021. By restricting the enforcement of evictions at a time when pressure on public services is acute and the risk of virus transmission is high, this measure will help control the spread of infection and prevent any additional burden falling on the NHS and on local authorities in their work providing housing support and protecting public health.
A previous version of this statutory instrument was introduced on 7 January, when the previous regulations expired, having been made under the emergency procedure and automatically ceased to have effect.
Baroness Gardner of Parkes (Con) [V]
My Lords, as the Minister may recall, I spoke on these regulations back in February when they were initially brought before this House, so I shall not speak in any detail today. I am a landlord myself, as disclosed in the register of interests, but I think these regulations are needed. However, I wish to make a general observation regarding timing. It helps neither tenants nor landlords for these regulations and any extension to them to be brought in so very late in the day and then brought to this House afterwards. Given that we were in national lockdown from January, with the road map beginning to lift restrictions only from 29 March 2021, it can have taken no one by surprise when the regulations were brought before the House in February that a deadline at the end of March would be far too soon and would need to be extended.
I wonder whether the Minister would be better off setting a longer deadline now. It cannot help tenants living on the edge of whether they have protection, nor landlords seeking their properties back, to have a date which rolls ahead at such short notice. Anecdotally, I have heard of some tenants gaming the six months or more rent arrears provision in the regulations, leaving their landlord unable to gain possession yet still suffering five months’ rent arrears. If these regulations return to the House for a further extension, will the Minister look at whether there is some way to help landlords in these gaming situations?
Baroness Grender (LD)
My Lords, I thank the Minister for his explanation of the welcome extension until 31 May 2021 of the ban on bailiff enforcement, as described by him in the previous debate on this statutory instrument on 18 March. We recognise the work he has put in, particularly over the past few months, to ensure that this extension was already in place, but if we look over the past year of this pandemic, I think he would agree that to say that this approach has been piecemeal is an understatement. As ever, it is an honour to follow the noble Baroness, Lady Gardner of Parkes, who made the same point.
Last Friday marked the second anniversary of a promise made by this Government to scrap Section 21 no-fault evictions. Gemma Marshall, who has spoken out, with the support of the Renters Reform Coalition, works in a school providing pastoral support. She, her husband and her children have been served with two Section 21s over the past two years and as a result have had to move four times. Her family is now in the middle of their second Section 21 and is facing the serious prospect of homelessness. Her son Jacob is autistic and finds change extremely stressful. I think all noble Lords would agree that the threat of eviction during a global pandemic is extremely stressful anyway, let alone for a nine year-old child.
I hope all noble Lords will support the newly formed Renters Reform Coalition, which includes Generation Rent, Crisis, Shelter, Citizens Advice and the Joseph Rowntree Foundation. As my noble friend Lord Shipley pointed out, the historical lack of the safety net of a good supply of social housing has resulted in people relying too often on a private rented sector that is not built to replace the welfare state. Gemma’s case is not an isolated one. Some 700,000 renters have been served with no-fault eviction notices during this pandemic year, despite a government promise to scrap the practice. That estimate is based on polling of a cross-section of private renters in a Survation survey commissioned by Shelter and published last week. Some 8% of them have received a Section 21 notice from their landlord since March 2020—that represents 694,000 private renters across England. A further 32% were worried that they would be asked to move out this year.
While 8% sounds small, the size and growth of the private rented sector over the past 10 years means that even 8% is nearly 700,000 cases—cases like Gemma’s, which I have described: often families who, through no fault of their own, have been served with an eviction notice without reason or explanation.
This SI stops bailiffs, but only at the final stage of an eviction. Your landlord may still serve an eviction notice and you may still have to go to a hearing. From the minute the eviction notice is served there is limited ability for discretion in the legal process. I asked this question last time and I am not sure I quite got an answer to it. Will the Minister undertake to re-examine allowing judges to have discretion to prevent an eviction if rent arrears are due to the Covid pandemic? The Government might argue with the methodology Shelter has used. If so, will they agree to establish a way to identify who is currently losing their home?
Tim Farron, who speaks on Housing issues for the Liberal Democrats in the Commons, asked the Minister, Chris Pincher, whether he had made any assessment of the merits of requiring landlords to register eviction notices at the point of delivery, so that his department could have a more accurate picture. I asked in the previous debate whether the Minister could share with us what evidence he has that landlords are serving notice in only the most egregious of cases. I not sure there was a clear answer to my question and the Minister, Chris Pincher, said there are currently no plans to collect this data.
I hope that the promise to reform Section 21 will soon be delivered. I thank the National Residential Landlords Association for its helpful briefing on this issue. As it points out, the Housing Secretary’s promise that
“no renter who has lost income due to coronavirus will be forced out of their home”
is simply not being met. Indeed, I believe that the recent change to include six months of arrears is a direct contradiction to that promise. The fact that we know that there are 700,000 such renters means that people get evicted all the time without it necessarily reaching the knowledge of the Government via the courts. Along with many other organisations, the NRLA is asking that a financial package be put in place to help tenants to clear arrears—this was described by the noble Lord, Lord Bourne, who is highly knowledgeable on this issue, and the noble Baroness, Lady Ritchie, who also has long-time experience in this area—or there is Generation Rent’s proposed Covid rent debt fund.
It is particularly important to note that the NRLA is saying that most tenants now in arrears do not qualify for discretionary housing payments. It is vital to remember that the people we are talking about are ones who, Citizens Advice tells us, are tenants who would take seven years to pay off the arrears that they have accrued during this period. I still find shocking the disparity in subsidies to home owners—even more of them were announced today—in comparison to the subsidies necessary, which do not represent a vast sum of money.
So, there have been two broken promises, which have an impact on hundreds of thousands of people like Gemma and Jacob. They deserve better.
Lord Ponsonby of Shulbrede (Lab)
My Lords, as the Minister said in his introduction, this is the fourth time that this instrument, or a similar one, has been introduced into this House. The Explanatory Memorandum states:
“This instrument extends the prevention of enforcement of evictions, including the service of notices of eviction, at residential premises, and including in repossessions cases, other than in the most serious circumstances, from 31 March 2021 until the end of 31 May 2021.”
It makes no further changes to the previous regulations and only extends the time period during which those provisions are in force.
My recollection is that the bulk of our previous debate—on 18 March—was about how to avoid the cliff edge; a number of noble Lords have referred to that in this debate. The Minister’s speech concentrated on the timetabling and the justification of the various timetabling measures that have been taken; it did not dwell on the substance of the financial support that needs to be introduced to avoid mass evictions, unsustainable levels of debt and turning the current health crisis into a potential homelessness crisis.
It appears that we all received the briefing from the NRLA; the noble Lords, Lord Carrington, Lord Shipley and Lord Bourne, and the noble Baronesses, Lady Ritchie and Lady Grender, referred to it. I thought that it was balanced and put forward a clear case for interest-free, government-guaranteed tenant hardship loans. As we have also heard, the Scottish and Welsh Governments have put in place their own form of financial support for tenants. My noble friend Lord Hain brought up an additional factor, on which I would be interested to hear the Minister’s response, which is to look at modifications to the home-buying process for people whose attempted purchases of houses have fallen through because of Covid restrictions.
The Labour Party has put forward its own six-point plan, which I shall briefly go through. It plans: first, to extend a ban on evictions and repossessions until restrictions are over; secondly, to extend mortgage holidays; thirdly, to raise the local housing allowance to cover median market rents; fourthly, to reform housing law to end automatic evictions through the courts—a point on which the noble Baroness, Lady Grender, elaborated to great effect; fifthly, to reduce the waiting period to receive support for mortgage interest payments; and, sixthly, to retain the £20 uplift to universal credit beyond six months, end the five-week wait and suspend the benefits cap.
On 18 March, when we last debated a similar measure, the noble Lord, Lord Wolfson, described himself as a
“humble Ministry of Justice Minister”—[Official Report, 18/3/21; col. 481.]
and undertook to consult his MHCLG colleagues about the Scottish scheme. I would not presume to judge whether he is humble or not but he speaks for the whole of the Government when he speaks as a Minister, and the substance of today’s debate, as it was on 18 March, is financial support, which all noble Lords are looking to hear about. I look forward to him saying with more substance when we are likely to hear what that financial support will be.
Lord Wolfson of Tredegar (Con)
My Lords, I am very grateful to all noble Lords who have contributed to this debate. I shall try to respond to the points in the order in which they were made but some were made by more than one contributor so, with their permission, I may lump some noble Lords together.
The noble Lord, Lord Hain, made an interesting point, if I may say so. One must distinguish the cases into two groups. The first is where contracts were entered into after the start of the pandemic. In those cases, one would have expected the parties’ lawyers to advise them not to enter a legal commitment to make a purchase unless they knew that they could complete; the government guidance on moving home during the pandemic has been in place since 26 March 2020. However, in so far as people entered into legal obligations before that date, there are principles of English contract law, such as frustration, which might be relevant in this context. That is the sort of point on which, if the noble Lord will allow me, I will write to set out in a little more detail what I understand the legal position to be.
Turning to a number of points made by noble Lords, first, I should make it clear that, on 18 March, I set out that the Government would extend the SI not just to 31 March but to 31 May, so criticism that we have been doing this on a short-term basis is not well made, certainly in that respect.
A number of noble Lords asked about the plan for when we come out of the pandemic. I reiterate that I am a humble Ministry of Justice Minister. There are cross-government conversations about what will be put in place but, so for as a specific financial package is concerned, we have already done a number of things. For example, we have increased the local housing allowance rate to the 30th percentile of local market rents in each area. We expect that to provide 1.5 million claimants with around £600 per year of housing support more than they would otherwise have received. Those increased rates will be maintained at the current levels, in cash terms, in the current financial year—even in areas where the 30th percentile of local rents has gone down.
Going forward, however, I emphasise that this ultimately becomes a housing issue, not a Ministry of Justice issue. Of course, there are conversations across government; as I said, I will specifically bring the detail of this debate to the attention of Ministers in MHCLG. Although I appreciate that this point was made by a number of noble Lords—my noble friend Lord Bourne of Aberystwyth, the noble Lord, Lord Carrington, and the noble Baroness, Lady Grender—there is nothing more substantive that I can say this afternoon, bearing in mind that, as the noble Lord, Lord Ponsonby, reminded me, in whatever I say, I commit the Government too.
The noble Lord, Lord Bilimoria, rightly emphasised the important work that the Government have done with regard to commercial evictions. In both the commercial and residential contexts, it is our intention to avoid any sort of cliff edge.
I underline the noble Lord’s point about the importance of mediation. Mediation in civil disputes is always a very good idea. It has played a part in our civil justice system over the past 20 years or so and its importance is increasingly recognised. In the context of housing, we hope the free mediation service for landlords and renters will enable many landlords and their tenants to reach an agreement about the way forward without a formal court process, which must be to everyone’s benefit.
When I mentioned my noble friend Lord Bourne of Aberystwyth, I should also have picked up the beautifully double-edged compliment that he paid me, which started so well and ended so badly.
The noble Baroness, Lady Ritchie of Downpatrick, asked a couple of questions about speeding up the operation of the courts. There are a number of things that I should say in this context. First, as I say, landlords are obliged to reactivate old cases in order to make sure that the courts are not faced with cases that have become moot—for example, where the tenants have already moved out. Secondly, the introduction of mediation also speeds up the court process because it takes some cases out of the system.
Further, and in response to the noble Baroness, Lady Grender, one has to remember that parts of the court process lie outside government purview. For example, listing is a judicial function, and the order in which the judiciary prioritises cases is and remains a matter for the judiciary. However, the Master of the Rolls’ working group has put in place temporary court rules and arrangements to ensure that cases proceed through the courts as quickly as possible and that delays are kept to a minimum.
I respectfully agree with the point made by the noble Lord, Lord Carrington, that private landlords are not a bank. I have already said that there will be discussions across government about the position that is put in place when these regulations come to an end.
The noble Lord asked specifically about video technology to speed up the court process. That is already being used throughout civil courts. In this as in many areas of life, the Covid-19 pandemic has forced or perhaps encouraged us to do things that we probably would have done anyway but over a longer period. Video technology in court is certainly one of those things; it is now part of our civil justice system and I am sure it will remain so in future. The noble Lord is certainly right that video technology has the potential to speed up cases and enable them to be heard more quickly, and indeed to enable more cases to be heard at once.
The noble Lord, Lord Bhatia, emphasised in his remarks that what is sought to be achieved here is ultimately a balance between the various interests, and I respectfully agree with him.
I hope I have responded to the points made by my noble friend Lady Gardner of Parkes. I have dealt with the date point. We believe that 31 May is now the appropriate deadline for these regulations. We hope that the position will improve as per the road map and that we will not need to extend them thereafter, but obviously we have to keep that under constant review.
In the time that I have left, I turn to the points made by the Front-Bench speakers. I have already dealt with one of the points made by the noble Baroness, Lady Grender, but in response to her important point on Section 21, the Government are committed to bringing forward legislation to deliver a better deal for renters, including repealing Section 21 of the Housing Act 1988, once the urgencies of the pandemic have passed. That would represent a generational change to tenancy law in England, so we have to make sure that we get it right and that we balance the interests of landlords and tenants appropriately. If we are giving tenants more security of tenure, we must also ensure that landlords can recover properties where they have valid grounds to do so.
As far as the noble Baroness’s other point about giving judges more discretion in possession cases is concerned, we do not intend to bring forward such legislation. We believe that the current support package strikes a fair balance and that the rights of both tenants and landlords are appropriately balanced in this area. However, as I said, we plan to bring forward a renters’ reform Bill in due course, once the urgencies of the pandemic have passed. Respectfully, I therefore do not accept that promises have been broken. We made a promise to do the best we can in these difficult circumstances, and we have certainly fulfilled it, as I have explained on several occasions.
The noble Lord, Lord Ponsonby of Shulbrede, asked about the package going forward. I have said what I am able to say about that today. Like me, he found the point made by the noble Lord, Lord Hain, about home buying interesting. I will ensure that he is copied into my letter to the noble Lord, Lord Hain, on that matter.
I am grateful to the noble Lord, Lord Ponsonby, for outlining the Labour Party plan in this area. I do not want to introduce too much of a political element to these exchanges, but the plan highlights the point about where you draw the line. For example, we were told that the £20-per-week universal credit increase would remain beyond six months, but until when?
Ultimately, we must strike a balance in this area. I submit that these regulations strike the correct balance in difficult circumstances. I hope that we will not have to extend them further and that life will return to something approaching normal, so, although I have some regrets that this may be the last outing for these regulations, I commend them to the Committee.
The Deputy Chairman of Committees (Baroness Healy of Primrose Hill) (Lab)
The Grand Committee stands adjourned until 3.45 pm. I remind Members to sanitise their desks and chairs before leaving the Room.
Arrangement of Business
The Deputy Chairman of Committees (Baroness Healy of Primrose Hill) (Lab)
My Lords, the hybrid Grand Committee will now resume. Some Members are here in person, respecting social distancing, others are participating remotely, but all Members will be treated equally. I must ask Members in the room to wear a face covering except when seated at their desk, to speak sitting down and to wipe down their desk, chair and any other touch points before and after use. If the capacity of the Committee Room is exceeded or other safety requirements are breached, I will immediately adjourn the Committee. If there is a Division in the House, the Committee will adjourn for five minutes. The time limit is one hour.
Civil Proceedings Fees (Amendment) Order 2021
(3 years, 8 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Wolfson of Tredegar
That the Grand Committee do consider the Civil Proceedings Fees (Amendment) Order 2021.
The Parliamentary Under-Secretary of State, Ministry of Justice (Lord Wolfson of Tredegar) (Con)
This instrument aligns the fees for online and paper civil money and possession claims. The instrument applies to fees in the civil courts of England and Wales and will come into force in May 2021.
First, I shall say a word or two about the purpose of the instrument. Her Majesty’s Courts and Tribunals Service plays an essential role in our society. Courts and tribunals provide a place where people can vindicate their rights and where the rule of law is upheld, and which is accessible to all who need it. I am proud to say that our courts and tribunals deliver a world-class justice system which is admired by all. The people it serves interact with it at some of the most difficult times of their lives and they trust it to be fair and effective.
For many years, the service has run on the principle that those who use courts and tribunals should pay the full cost of the service they receive, if they can afford to do so. I am sure that the Committee will agree that fees are a reasonable means of ensuring an effective and efficient justice system that is neither solely nor entirely sustained by contributions from the taxpayer. Fees are the main source of direct income for courts and tribunals, and the instrument I am submitting to the attention of the Committee today will further aid this endeavour.
Civil money and possession claims, which are the type of claims affected by this instrument, are regulated by the Civil Proceedings Fees Order 2008. Currently, the fees order offers lower fees, and some exemptions, for civil money and possession claims submitted via online platforms, with a higher fee payable for the same claims issued via the paper route. The instrument before us today removes the online discount and thus aligns the online fees with the paper fees which are currently charged in the Civil Proceedings Fees Order. More specifically, this instrument aligns fees for users of the County Court Business Centre, Money Claim Online, Possession Claim Online and online civil money claims.
Aligning these fees will create a single fee structure which will result in one, consolidated fee, payable by both online and paper users. In doing so, it will also provide much-needed additional funding to our courts and tribunals service. The need to ensure that courts and tribunals continue to perform efficiently and effectively is compounded by the challenges we are facing due to the pandemic.
This, therefore, is the right time to consolidate these fees. The online services were first introduced 20 years ago, in 2001, as part of the Government’s ambitious plans to digitise the service and contribute towards improved performance and increased functionality, while streamlining existing processes. To encourage uptake of what was then a new digitised system, a number of fee discounts for the online processes were introduced. They have therefore been enjoyed by users for many years. Users who issue bulk claims have had a discount on the issue fees since 2004, fees for claims issued via Possession Claim Online have been discounted since 2006, and fees for claims issued via Money Claim Online have been discounted since 2015.
I am pleased to say that the Government’s efforts have paid off. In 2018-19 online applications for civil and possession claims accounted for just under 90% of all claims up to the value of £100,000. So, the modern service is allowing 90% of users to enjoy a seamless journey from lodging a claim right through to settling the dispute as simply as possible. As part of this, users have the opportunity to access mediation as part of efforts to support more proportionate and appropriate dispute resolution.
The Committee will need no reminder from me of the Lord Chancellor’s personal and statutory duty to protect access to justice. The Government remain committed to upholding this fundamental principle, so we must provide an effective and efficient justice system that works for everyone. That means it has to be funded appropriately.
Removing the online discount does not infringe the principle of access to justice. Paper users are already paying a higher fee, and generally those individuals are over-represented among groups with protected characteristics. So, while we want the system to be funded effectively, we also want to build a fairer system that puts neither paper nor online users at a disadvantage.
The Committee should be familiar with the fees we are debating. They are enhanced fees, meaning that they are set above the cost of the service. Such fees can be set only with explicit parliamentary approval, following the introduction of the “enhanced power” provision in Section 180 of the Anti-social Behaviour, Crime and Policing Act 2014. The enhanced power is therefore used in a judicious and limited manner, because most fees in courts and tribunals are set not under the enhanced power but at or even below the cost of providing the service.
The income raised from enhanced fees such as these enables us to cross-subsidise other parts of the courts and tribunals system. That enables us to ensure access to justice for everybody. We do so to protect the most vulnerable members of society. This is not an exhaustive list, but, for example, no fees are now charged for applications for non-molestation orders, occupation orders, forced marriage protection orders or female genital mutilation orders—or for cases before the First-tier Tribunal concerning mental health.
Despite the provision of these enhanced fees, the income currently received from fees covers less than half the costs of running the courts and tribunals. In 2019-20 there was a net fee income of £724 million, against running costs of about £2 billion. That significant gap in funding should highlight for the Committee why the fee increase that this instrument introduces is appropriate, balanced and fair.
Of course, I do not claim that the additional income generated by these proposals will, alone, fill the gap. But it will certainly help the justice system to be better equipped for the many challenges it faces and will supplement the additional funding already being provided by the Government to aid Covid-19 recovery.
I should emphasise that for the vast majority of fees affected by this instrument, the proposed increase is generally modest, ranging from about £10 to £45—and every pound can be reinvested in our ambitious plan for the future of the Courts and Tribunals Service. That is in addition to the £377 million for the criminal justice system in England and Wales, including £275 million to manage the downstream impact of 20,000 additional police officers and to reduce backlogs caused by Covid-19 in the Crown Courts. There is also an investment of £76 million to increase family court and employment tribunal capacity to reduce backlog, £43 million to ensure courts and prisons remain Covid-safe, and £105 million for improvements to the court estate.
The Committee will be aware of the unprecedented challenges that this country has faced because of Covid-19. However, it is important—indeed, critical—to ensure that our world-class justice system operates efficiently and effectively, while minimising the cost to the taxpayer. This instrument allows us to do more work to achieve that aim. It aligns fees for civil money and possession claims, contributes towards the funding of courts and tribunals, and ensures that the existing civil fee structure is both fair and consistent. I therefore commend these fee changes to the Committee.
Lord Blunkett (Lab) [V]
My Lords, I am grateful to the Minister for his explanation. I have joined the Grand Committee’s consideration of this instrument this afternoon as much to learn as to contribute. Given the expertise of those few Members online, I am hopeful that I will be more enlightened at the end of this discussion than I am now at the beginning of it.
I very much appreciate the importance of raising the funds necessary to enhance the tribunal and court system. I understand entirely from the explanation given of the £724 million that has been raised towards the £2 billion total cost of the process. However, I am unclear about the exact cost of this particular process—that is, the procedure in relation to the restriction of funds and property. I would be really grateful if the Minister could clarify this small point for me in his reply. He was good enough to indicate that more money is raised from these charges than the cost of the service itself.
I understand why the list of tribunal activities that the Minister gave us in his earlier contribution should be free. It seems right that the taxpayer should pick up those particular examples because, of course, they relate to very personal issues, such as mental health issues, that require us as a community to fund them. However, it appears that what is actually happening is we are asking those who use the procedure that we are discussing this afternoon to enhance payments in order to subsidise precisely those kinds of activities. It would therefore be useful to know the true cost of this particular element of the courts and tribunals system and of the procedure that we are discussing.
I have no objection to aligning the fee between paper and online in the way that has been described, although clearly it will be an increase for the vast majority of potential users compared with the situation today. It would be helpful to know just how much that additional contribution of between £9 million and £25 million, which will come in next year, will actually make given the cost of implementing the procedure as a whole.
The Deputy Chairman of Committees (Baroness Healy of Primrose Hill) (Lab)
The noble and learned Lord, Lord Woolf, has withdrawn so I call the noble Lord, Lord Thomas of Gresford.
Lord Thomas of Gresford (LD) [V]
My Lords, this is the sort of instrument to slip under the radar at the end of a Session. The proposal is to increase the fees for bringing money and possession claims, for the benefit of the Treasury.
It was a benefit to individuals, and to businesses both small and large, to commence proceedings by way of an online application. I can remember my days as an articled clerk when I made out the paperwork, physically took it to the registry of the High Court or the county court, handed it over the counter and payed the fees. Obviously, it is infinitely preferable to do all this online, not only for the poor old solicitor’s clerk but for the court staff in the registries up and down the country.
There must be an enormous saving in efficiency and time. It is not surprising that, as the Explanatory Notes made clear, 90% of claims are now launched online. To incentivise this increase in efficiency, fees were reduced for online applications, presumably still covering the reduced costs of filing. So there were, and are, two levels of fees: those for online applications, which are efficient and take less time, and those for paper applications in the old way, which obviously consume more time and resources.
One might have thought that in order to help, in particular, individuals and small businesses, who are the people most often chasing money from larger clients such as government departments, the Government would have equalled the fees by choosing the lower figure, but not at all; the watchword is “levelling up”. So this instrument is brought forward to make sure that individuals and small businesses pay more in order to pursue their claims. At a time when small businesses in particular are suffering greatly, many unlikely to survive the pandemic crisis, the Government are loading more expense upon them to the tune of up to an expected £25 million next year.
To add insult to injury, the note accompanying this instrument and the impact assessment proceed upon the curious premise that there is no impact at all on businesses and individuals because this is not an inevitable business expense. You can choose to pursue the money that you are owed—or recover the premises, if it is that sort of application—or, on the other hand, you can decide to do nothing. If you decide to do nothing then you do not have to pay any fees. That is the incredible argument for saying that there is no impact.
The noble Lord, Lord Blunkett, asked a very pertinent question: what is the actual cost of the filing of these proceedings? I have other questions. What percentage of the stakeholders on the consultation that took place responded to say that they were in favour? How many said they were willing for the fees for the more efficient online commencement of proceedings to be raised to match the fees for the less efficient paper service? I hope the Minister will answer those questions.
Lord Ponsonby of Shulbrede (Lab)
My Lords, we on the Labour Benches accept that those who cannot access the internet for one reason or another should not have to pay more for the same service. Having accepted that, we note that there is a net increase above inflation for most users—that is, the 90% of users who currently access civil proceedings online.
We accept that HMCTS is running at a huge deficit and the Government must take action in the interests of justice to reduce that deficit. In his introduction, the noble Lord, Lord Wolfson, gave the figures that are in the Explanatory Memorandum: in 2019-20 there was a net fee income of £724 million against £2 billion of running costs for HMCTS, and that gap in funding has to be paid for by the taxpayer.
The question that we have heard asked by both the noble Lord, Lord Thomas, and my noble friend Lord Blunkett is about the likely overall impact of this change in fees. From my reading of the papers, the impact assessment claims that the alignment of the fees could save about £20 million per year. That saving in comparison to the massive deficit shows that it really is a drop in the ocean.
The problems faced by HMCTS are colossal and represent decades of underinvestment that have brought the system to its knees, with a record backlog to match. HMCTS has lost one-quarter of its budget in the last decade. Courts have been sold and sitting days have been slashed, and all this was happening long before Covid. It is the victims of crime who are paying the highest price for this negligence. While we support—or rather we will not oppose; I will phrase it like that—this increase in civil proceeding fees, we think there is a much larger problem to be addressed. I look forward to the Minister’s explanation of how the larger funding problems will be addressed.
Lord Wolfson of Tredegar (Con)
My Lords, I am grateful for the contributions to this short but important debate; anything to do with our justice system is important. Perhaps I may therefore pick up in turn the points made by noble Lords.
The noble Lord, Lord Blunkett, asked about the principle of cross-subsidy and the amounts involved. I shall deal with each point in turn. The principle of cross-subsidy is in primary legislation; it was considered by Parliament as a matter of principle and considered correct for those who can pay more than the actual cost of the process to do so, so that other people can pay less than the actual cost of the service. So the principle of cross-subsidy is in primary legislation, as I have set out.
As to the figures involved, the Courts & Tribunals Service produces an annual report. The accounts for the year ending 31 March 2020 show that approximately £550 million of fee income was collected from court users in civil proceedings after fee remissions, whereas approximately £545 million was spent on civil jurisdiction, leaving a surplus overall of £4.9 million. Civil business as a whole—that is, civil and family jurisdictions together—showed a deficit of £80.1 million in the financial year, which was funded therefore by the general taxpayer. I shall look at the Official Report and, if I can provide the noble Lord, Lord Blunkett, with any further detail on particular figures, I shall write to him and set it out and copy my letter to other noble Lords who spoke in this debate.
I turn to the contribution of the noble Lord, Lord Thomas of Gresford. This provision is not being slipped “under the radar” at all. I have to say that I was a little surprised that the import of the noble Lord’s comments appeared to be that those who did not have internet access or capability should continue to pay more—more, indeed, than 90% of users of the service. I find that a remarkable proposition, but it is the necessary import of the approach that the noble Lord took. That is even more remarkable when one recalls, as I said when I opened this debate, that the paper group, if I can call them that, contains more people with protected characteristics proportionately than the online group. When one has 90% of people online, one has to level the fees.
The only real question is whether you move the online to the paper or the paper to the online. The position is this: were we to move paper to online, that would cost another £5 million in lost income to the service, which is another increase that the taxpayer would have to fund and a greater loss that the courts and tribunals would therefore be working under. Although I agree with the principle of equalising fees, one ought to equalise online to paper and not paper to online. The justification for a lower fee for online users, which was originally brought in to encourage people to go online, is, for the reasons I have set out, no longer present.
So far as the stakeholders are concerned, it is fair to say that a minority of respondents supported the proposal, but the main sticking point was the principle of cross-subsidisation in the first place. As I have said, that principle was established by Parliament in the Act that I mentioned and is therefore the legal background against which we operate.
Finally, on the, if I may respectfully say, more realistic contribution from the noble Lord, Lord Ponsonby of Shulbrede, he will understand that I do not accept the adjectives he used about the Courts Service, but I certainly agree that, after Covid, we need to rebuild the Courts Service and ensure that people obtain in the courts and tribunals the sort of service they are entitled to expect. He focused on the victims of crime. While I do not minimise the issues which we have to deal with in the criminal justice system, I hope he will allow me to say that because this is a civil measure, I will not respond to those comments in detail today. I am sure we will have many opportunities in the Chamber and in Grand Committee to debate the criminal justice system, the Crown Courts and the magistrates’ courts, and I look forward to engaging with him—I am sure constructively—on those occasions. For today, the instrument before us focuses solely on civil justice and, for the reasons I have set out, it is a measure which is both necessary and proportionate. I therefore commend it to the Committee.
The Deputy Chairman of Committees (Baroness Henig) (Lab)
The Grand Committee stands adjourned until 4.20 pm. I remind Members to sanitise their desks and chairs before leaving the Room.
Arrangement of Business
The Deputy Chairman of Committees (Baroness Henig) (Lab)
My Lords, the hybrid Grand Committee will now resume. Some Members are here in person, respecting social distancing, while others are participating remotely, but all Members will be treated equally. I must ask Members in the Room to wear a face covering except when seated at their desk, to speak sitting down and to wipe down their desk, chair and any other touch points before and after use. If the capacity of the Committee Room is exceeded, or other safety requirements are breached, I will immediately adjourn the Committee. If there is a Division in the House, the Committee will adjourn for five minutes.
The time limit for debate on the following statutory instrument is one hour.
Single Use Carrier Bags Charges (England) (Amendment) Order 2021.
(3 years, 8 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Goldsmith of Richmond Park
That the Grand Committee do consider the Single Use Carrier Bags Charges (England) (Amendment) Order 2021.
Relevant document: 46th Report of the Joint Committee on Statutory Instruments (Special attention drawn to the instrument).
The Minister of State, Department for the Environment, Food and Rural Affairs and Foreign, Commonwealth and Development Office (Lord Goldsmith of Richmond Park) (Con) [V]
My Lords, the statutory instrument before the Committee today was laid before this House on 4 March 2021. The Government are committed to eliminating plastic waste and the terrible effect it has on the environment. The use of single-use plastic items and their inappropriate disposal continue to raise significant environmental issues.
Unlike other materials, such as paper or wood, plastic can persist in the environment for hundreds of years. If released into the environment, items such as single-use plastic bags can damage habitats and endanger wildlife, as plastic items are often mistaken for food by animals. Furthermore, plastic that escapes into the environment will eventually break down into microplastics, which permeate our food chain as well as ending up in our soils and seas, the full impacts of which are still being uncovered. Even when single-use plastics are properly disposed of, they will typically end up in landfill or be incinerated, which releases carbon and other greenhouse gases into the atmosphere.
So action is needed to curtail the use of single-use plastics and their release into the environment. The proposed measures in the resources and waste chapter of our Environment Bill will transition us towards a more circular economy and change the way we use and consume resources by keeping them in the system for longer to extract maximum value from them, but there is much that we can already do to address the issue of single-use plastic, including through our highly successful carrier bag charge.
This statutory instrument will amend the Single Use Carrier Bags Charges (England) Order 2015 to extend the requirement to charge for single-use carrier bags supplied to customers to micro, small, and medium-sized enterprises and will remove the exemption from charging from airport sellers. It will also increase the minimum mandatory charge for single-use carrier bags from 5p to 10p.
Since the charge was first introduced in 2015, the Government have successfully prevented billions of plastic bags being sold and ending up in the ocean and environment. We have seen a reduction in the use of single-use carrier bags by 95% in the main supermarkets and more than £150 million donated to good causes. As a result of the carrier bag charge, the average person in England now buys just four bags a year from the main supermarkets, compared with 140 in 2014.
By extending the charge to all retailers, Ministers want to see bag usage cut significantly in small shops as well, with customers incentivised to use long-life bags made from more sustainable and environmentally-friendly materials. Micro, small and medium-sized enterprises circulated around 3.2 billion single-use carrier bags in 2018, which accounts for more than 80% of the single-use carrier bags in circulation in England.
This intervention is a strong marker of the Government’s intention to clamp down on single-use plastic pollution and protect our environment for future generations. When taken in conjunction with our wider policy approach to transition to a more circular economy, this will be another landmark moment following the straws, cotton buds and stirrers ban in October last year. To reduce the burdens on businesses, reporting requirements on the number of single-use carrier bags sold annually will not be extended to businesses with fewer than 250 employees.
We are determined to get this right, and it is vital that businesses and the public are informed about what they can and cannot do. Guidance will be published shortly after these debates explaining the legislation in detail to businesses and the public. Informal guidance has already been shared with businesses to help them prepare for the upcoming legislative changes. To ensure compliance, we have given trading standards authorities the powers they need for this type of restriction, for example, to enter and examine premises they suspect are in breach of the law. Anyone found not to be charging for single-use plastic bags in line with this legislation could face civil sanctions such as stop notices or a variable monetary penalty. Of course, we hope that these enforcement measures will not be necessary, but the regulations need to have teeth to show that this Government take plastic pollution seriously.
These new regulations send a signal to industry and the general public that we need to think carefully about the bags we use and the materials from which they are made. The regulations will help people to make more sustainable choices and are an important step towards a more circular economy. I beg to move.
Lord Campbell-Savours (Lab) [V]
My Lords, this order, with its 10p charge, will have little effect on a huge problem that is well known to this Minister, with his long and admirable track record on the environment.
I have a single question, which I have already notified to the Minister’s officials. Why do we not just set a date in law, perhaps up to two years beyond which it would be unlawful to sell or supply single-use product packaging in the form of a plastic bag that is not fully biodegradable? Here, biodegradable is to be defined as being capable of decomposition by bacteria or other living organisms within a six-month period in any conditions, to include open disposal sites or the natural environment. At the moment, no such product exists.
Secondly, why not set clear minimum standards on the distribution of a reusable bag for life to include biodegradability requirements with a two-year delay but with an extended biodegradability lifespan of up to two years? I understand that such products are on the cusp of availability but lack legislative incentive and are therefore uneconomic to produce. I support the Green Alliance’s proposal for a 70p bag, but it should be top-sliced by law to fund biodegradability research on a bid basis. I also argue that prices should fall as biodegradable target thresholds are met, perhaps to zero for single-use products.
What would the impact of such measures be on manufacturers, distributors and consumers? There would undoubtedly be a shock wave throughout the packaging industry, with howls of protest followed by a measured response and, ultimately, the inevitable avalanche in original thinking, with new products. This is Britain, and that is our forte. Coronavirus vaccine research and research into AIDS antivirals offer clear pointers about how the public and private sectors respond and work collaboratively when faced with crises and problems that require early resolution. Plastic pollution is a crisis.
As to the position of distributors, in which I include the retail trade, they will inevitably encounter problems over price and availability. Experience from Ireland suggests that a major shift in reusable bag usage occurs when consumers are faced with sharp increases. Our objective must be to reduce, reuse and recycle if we are to clean up the environment.
During my research, I spoke to an E Dyas store employee who expressed concern over increased pilferage, as it would be more difficult for till-keepers and shop assistants to monitor and police the handling of goods in store if E Dyas was to pursue the approach that I am advocating. She pointed to resistance even to single-use bag charging. These problems clearly need to be addressed, but they are not insurmountable, perhaps with an element of paper substitution.
Finally, on the impact on the consumer more widely, our objective must be to influence personal conduct. I believe that heavy charging for bags in the period of change will help to educate a population with mixed views on environmental protection. I have no doubt that there will be resistance. In a conversation with Mr Zak Lowe of Euro Packaging, Birmingham, a highly informed expert in this trade, with 20 years’ experience, his emphasis was on public education. I am afraid I am not convinced that that is enough. However, he had an open mind. I hope that the Government talk to people like Zak. He stands on the front line and would be a good sounding-board for reform by government.
Lord Robathan (Con)
My Lords, I agree with a great deal of what the noble Lord, Lord Campbell-Savours, said, particularly about education. I am not generally in favour of banning anything, but I say to the Government that the fee they instigated for single-use plastic bags has been remarkably successful. I therefore applaud further movement. However, the noble Lord, Lord Campbell-Savours, did not mention how many bags for life are bought. The Green Alliance told me in a briefing that a staggering number of bags for life have been bought and some people buy one a week, which rather spoils the point. I would like the Minister to reply to that.
The Minister talked about plastic and litter pollution, which is what this order is about. He said, “Action is needed”, and, “The Government take the issue of plastic pollution seriously”. So do I, and so do most people in this Committee. May I take the Minister back to 24 September, when I asked him a Question about how to educate the public? Education surely starts with children. I know from experience, and I suspect other noble Lords know as well, that if your children are banging on at you about something, apart from a swift clip on the ear, which is not allowed these days—certainly not in Scotland—you tend to have to pay attention to what they say. I suggest, as I suggested on 24 September, that every school should spend one afternoon in a child’s education—in year 6, say—picking up litter. If children learn that picking up litter is what one should do rather than throwing it, it will eventually—it will take time, possibly a generation—permeate through all sections of society and all age groups. Frankly, it seems a very simple thing to do.
Unbelievably, the current lockdown has led to a huge increase in litter on beaches and in beauty spots. One might have thought that people would go out in the Peak District and not leave litter, but the contrary is true. I was in Devon at the weekend—legally, I should say—with my extremely ill mother-in-law. On Dartmoor, there is a huge issue of people going out and dumping litter. We need to educate people. It is not difficult. It does not have to be about banning things or big fines; we just need to educate people and to start with children in schools. As we all know, children are very keen on environmental matters, if things are presented properly, so I suggest that the Minister goes back to the department and considers what I said to him on 24 September: that I would be happy to join him in a meeting with an Education Minister to explore ways in which we can introduce—perhaps informally to start with—into every child’s education an afternoon picking up litter. I did it when I was child; I still do it at nearly 70 in the lane outside my house. My children do it—not all that happily nowadays, in their 20s—to help me. Let us educate children.
There are issues, of course. When I first raised this in the House about three years ago, the Labour Front Bench spokesman accused me of wanting to send children back up chimneys, which seemed slightly far-fetched because I do not. I want children to realise the consequences of dropping litter. There are real safety issues on roads, but there is a safety issue every time a child crosses the road. I plead with the Minister: if we, as a Government, really are going to take litter and plastic pollution seriously, action is needed—to quote his words back to him—and we need to educate children on litter.
The order in hand goes some way, so let us applaud that, but to the Minister—he does not just say all the right things but is, I know, really committed to environmental improvements—I say this: this is one way we could do it and make our lanes, roads and cities a great deal nicer, and, indeed, save a huge amount of money in the long term on clearing up litter.
Lord Khan of Burnley (Lab) [V]
My Lords, it is a pleasure to speak on this instrument. Like the noble Lord, Lord Campbell-Savours, I absolutely agree that the Minister has a fantastic and admirable track record on the environment. As previous speakers have said, in future, we should be thinking about an overall plastic ban. However, I appreciate that, on the basis of statistics such as those the Minister outlined, the initial 5p charge for single-use carrier bags has been a huge success since it was implemented.
The statistics say that the potential rise to 10p will bring an expected overall benefit of more than £780 million to the UK economy, up to £730 million for good causes, £60 million of savings in litter clean-up costs and carbon savings of £13 million. I would like to ask the Minister about that £730 million for good causes. I see a range of good causes on the government website, but would it not be a good idea for the money made from plastic bag charges to go towards something specifically to do with the war on plastic? We need to incentivise customers to use long-life bags made from sustainable and environmentally friendly materials. I am not sure whether the Minister has come across Toraphene, an environmentally friendly artificial plastic that costs the same as plastic bags. What about making its use compulsory, as an alternative?
As the Minister will know, I have a habit of listening to schoolchildren. This morning, I spoke to the wonderful children at St Augustine’s, in my home town of Burnley. In this time of coronavirus, they have done some innovative work with their local pharmacy to give the elderly some good ideas when they go to collect their prescriptions, keeping them motivated and inspired. They have drawn lots of pictures to make people happy. Something that struck a chord with me was a young child talking about getting rid of plastic and making sure that our oceans are plastic-free.
This is an important instrument that will act as a further deterrent and raise significant money. We need to work out what the Government should do to enhance the education programme further, as previous speakers have mentioned. Overall, the 25-year government plan fits into that. On the subject of cleaning plastic from our oceans, beaches and other areas where it has become an unfortunate cancer in our society, may I ask the Minister what the scope is for using gasification instead of incineration, which still causes pollution and adds to the problems with our ozone layer?
It is heartening to know that the higher charge will come into place but we have to do much more. I think that this will ultimately end in a ban on plastics but, in the meantime, I recognise that this is a positive step forward to add to the previous decision, which the statistics and the evidence show is working well.
Lord Moynihan (Con)
My Lords, I thank my noble friend the Minister for introducing this measure. I shall concentrate my remarks on the effectiveness—or otherwise—of the proposed increase in the charge for disposable carrier bags from 5p to 10p, subject to the existing legislation.
The speech made by the noble Lord, Lord Campbell-Savours, reminded me of hearing, possibly apocryphally, during my days as an undergraduate at University College, Oxford, about a thesis aired by the former and eminent professor of jurisprudence at Oxford, Professor Goodhart—a fellow at Univ, and subsequently master of our college. He put the academic case to his students at a tutorial in college that the optimal way of ensuring total compliance with road traffic law was to issue no fines or penalties but place the name of everyone who had committed an offence into a lottery, draw the tickets each year on New Year’s Eve and execute the unfortunate individual whose name was drawn first. So, he argued, the incidence of traffic violations would be solved, and began interesting tutorials challenging students to consider the principles of proportionality, deterrence and behavioural patterns.
When the levy was introduced at 5p and followed by Scotland, which I expect again to be the case on this occasion, my neighbours living in Scotland, on the Ayrshire coast, welcomed the fact that after Scotland’s original introduction of the charge in 2016, the number of carrier bags found on Scotland’s beaches fell substantially—in fact, by 40%. The Marine Conservation Society determined that there was a further drop of 42% between 2018 and 2019. Adding a value to throwaway items results in long-term behavioural change.
The statutory instrument in front of us today challenges us to question the effect a price rise from 5p to 10p will have on behavioural patterns, if any, and whether a move to 10p, 20p, 50p or, indeed, £1, would have a significant or marginal deterrent effect. Simple changes to our daily routines need catalysts for change, and these charges are a good example. We should also keep in mind the importance of a single coin facility, so it is worth considering whether a 10p, 20p, 50p or £1 charge would meet the relevant punitive threshold and provide the tipping point to see a major change in the use of single-use carrier bags.
For my part, I believe that those who argue that moving to 50p would generate unnecessary controversy are out of touch with public sentiment—and, indeed, the views expressed by the Committee today—as the value of the deterrent is critical in considering what further shifts in consumer behaviour would result. At present, we alleviate our consciences with an associated policy of contributing to good causes. However, ultimately, an entirely successful scheme would result in no money coming in at all.
Of course, this charge applies not just to single-use plastic carrier bags but to all single-use bags; it is not simply about plastic. However, as the Minister has pointed out, this policy must be part of a panoply of measures to encourage good environmental behaviour overall, with the ultimate end of single-use carrier bags in the non-exempted category. The Marine Conservation Society and, in particular, Dr Laura Foster and her team, have done some excellent work on the campaign to add value to throwaway items, but we are a long way from the day when I can walk at low tide on a calm afternoon along Prestwick beach and not have to constantly pick up suffocating plastic washed up on the coastline, which is catastrophic to the marine environment. While I welcome this step, it is only a step, a means towards an end, not an end in itself, and I am not convinced that such a marginal change will see behavioural changes compatible with the proposed charge.
In closing, I hope that the Government will simultaneously make further progress by introducing bag deposit/return schemes, similar to those for drinks containers to encourage people to take back their drinks containers and carrier bags. I also believe a tax on on-the-go items, such as coffee cups, water bottles and plastic cutlery would encourage people to carry reusable cups and bottles, help reduce litter and increase recycling rates. I also support imposing a ban on single-use plastic when dining in restaurants and cafés. As we support this measure today, we should not lose sight of the fact that we still use well over a billion bags a year in the UK. We should be encouraging bags for life. Fortunately, there are other ways to reach the goals, which I share with my noble friend the Minister, without resorting to Professor Goodhart’s challenge.
Lord Mann (Non-Afl)
My Lords, we have moved quickly from the moderate social democracy of the Minister’s proposals to the radicalism of the noble Lord, Lord Moynihan, with his high charges and potential executions. I perhaps do not go quite as far as the noble Lord in some of the hints and suggestions that he proffers to the Minister. However, the Minister is a young lad and he does not have the memory of most of us in here—perhaps not all but certainly that I have—of remembering a life before the plastic bag, when one could buy one’s shopping with paper bags, or indeed had one shopping bag in which most things were ceremoniously placed, and we were all the better for that. Therefore, it is no surprise to me that the general public, led by wise elders with that experience, have taken very readily to the fact that they do not want to pay for something that is quite superfluous and often a nuisance but which, being very British about it, most are too embarrassed to reject when given, because they do not want to upset or offend the shopkeeper.
Therefore, if we increase the price, people will be even more pleased—not less—because people do not want things they do not need. There is no additional use. I congratulate Morrisons. I am a new convert; I believe that a second delivery arrived this morning just as I was leaving of Morrisons products—traditional products, of course, from the north of England. Nevertheless, there were no plastic bags. I am almost inclined to say that that will be a supermarket of preference, but perhaps the Co-op will quickly catch up with them. But how sensible! I do not need loads of plastic bags for something that is delivered at home.
The Minister needs to look at other departments. Let us have an all-government approach. Someone can go down the road and throw out their McDonalds package, and they can be fined, of course—but how about taking their licence off them? A six-month ban for throwing such rubbish out of a car on to a public highway would affect behaviour and be good not just for the environment but for the safety of every other driver and, indeed, those walking or conveying themselves by other means alongside a highway.
What about this building—the disgrace of all disgraces, the mother of Parliaments, the Palace of Westminster? The Lords is somewhat better than the Commons in the fact that in the Lords it is possible to have—I am certainly offered—non-plastic cutlery. If you go down to the Commons, not just do you get plastic cutlery, but if a simple soul like me wants merely a bowl of porridge and cup of coffee on a morning, they have to have a plastic-wrapped plastic knife and fork along with a plastic spoon. Can the Minister not have words, using his authority, on this absurdity? A spoon would suffice, preferably a washable metal spoon, perhaps made in Sheffield from stainless steel; that would suffice very well—I have managed all my life on them. I do not need a plastic substitute for it with all the other garbage.
When you go for a cup of coffee, in this place like everywhere else, you get a takeaway. But hang on a minute—I do not want to take it that far, I just want to sit down and have it. I would quite like a mug or a cup; a mug will do fine, not a plastic-embossed paper cup with a plastic lid placed on top of it with my health and safety. I have managed, as we have all managed all our lives, for the whole of the last century, to drink tea and coffee out of cups and mugs. We have not needed to have disposables for it. That culture needs changing.
The Minister has a key role, as we all do—but his young energies should be put to this, and this place should be an exemplar not a laggard in dealing with plastic.
Baroness McIntosh of Pickering (Con)
I also welcome this statutory instrument and the regulations before us today and congratulate my noble friend on introducing them so lucidly. I declare my interest as the chair of the Proof of Age Standards Scheme, through which I work closely with the Association of Convenience Stores.
What is curious is that plastic bags are a relatively recent phenomenon. While it may seem very quaint now, I remember that when I went shopping as a youngster with my mother, she always had material or cloth bags, and several of them. I am not quite sure how we disposed of that habit as easily and quickly as we did to embrace this relatively new culture of plastic bags.
I would like to hear more from my noble friend about how the Government intend to incentivise non-use. That is the problem—we can charge for plastic bags as much as we like but, if they are there, we will continue to use them. I do not think brown paper bags are an alternative because when they are wet, as I have found, the produce just slips out of your hands and ends up on the floor. It will be interesting to see how we can explore more positive alternatives.
While I welcome the order, it is some considerable time since the consultation, to which my noble friend referred, concluded on 22 February 2019. I wonder why it taken quite this long to table the amendment order before us today.
I want to press my noble friend on the start date when the regulations will come into effect. Can I assume that the start date is confirmed as 30 April? If that is the case, it does not give businesses very long to introduce the new provisions of the order.
Having said that, I welcome the fact that the Government are going to be sending less to landfill overall and that we will be seeking to recycle more. It is interesting that Denmark has a very good record on reducing single-use plastics and plastics overall. While it was very quick to incinerate and it did so effectively, it is now going away from incineration towards more recycling. We should pause to recognise just how effective many of the recycling schemes by our councils have been, and we should all encourage those which perhaps do not have such a good record to recycle more. However, it is good that my noble friend expressly stated the implications and consequences of the order before us for the circular economy.
I want to press my noble friend on how the Government will prepare customers for the changes, in the sense that it will no longer be a voluntary charge in smaller stores but will be compulsory. I am sure we are all only too aware of the somewhat unwarranted and potentially aggressive responses that have been seen from certain customers going into stores of all sizes—large and small stores—who fail to wear a mask when asked by those working in the stores for what reason, if they are not exempt, they are not prepared to wear a mask. It is important that we understand precisely how the Government will prepare not just businesses but customers, who are going to be the end users, that they will have to pay these charges now.
Otherwise it is fair to say that businesses are embracing the order. The sector has widely adopted voluntary charging before now, and certainly the Association of Convenience Stores welcomes the exemption from reporting requirements for small businesses.
With those few remarks, with the precise request that I have made that we look to incentivise non-plastic bag use and the use of other materials, having pressed my noble friend on specifically what the Government are doing to encourage those entering small stores to be aware of the new provisions and, lastly, having asked to understand precisely when the order will take effect, I welcome the order.
Baroness Parminter (LD) [V]
My Lords, like all other noble Lords in Grand Committee today, I support this statutory instrument and thank the Minister for his eloquent introduction.
This measure will certainly be a means, but still only one step, in helping to tackle the damage that plastic causes to our environment. It is no surprise that I support it since it was the Liberal Democrats in the coalition Government who championed the introduction of a levy on plastic bags. Given the success of charging for single-use carrier bags in driving down usage, it is right that we now raise that charge to help to drive it down even further, as the Government’s impact assessment indicates that it will.
Equally, I support extending the obligations to all retailers. I was not persuaded at the time of the merits of exemption. Indeed, a number of representatives of small businesses said at the time that they did not oppose being included, so I see the measure as a belated rectification of that.
Having said that, I have three questions for the Minister, which I informed him of in advance. First, why are the Government making the reporting requirements less onerous for franchises? In the draft guidance to retailers on the reporting and record-keeping requirements, there is a section which states that if you are part of a franchise model, whether you report and keep records depends on your size and not the size of the franchise overall. If you own 10 corner shops, each staffed by 24 full-time equivalent people, your total staff head count of 240 people would be below the 250 FTE threshold and you would not have to report. That is different from the way that franchises are dealt with in the current packaging regulations. There, a franchise is covered by the requirements depending on the size of the franchise overall, not the size of the individual franchise businesses. In other words, you could get out of doing anything only if the franchise as a whole fell under the de minimis threshold of how much packaging you used each year.
Will the Minister explain the rationale for the decision to introduce less robust reporting? While it is reasonable that a single family-owner corner shop should not have to report and keep records on bag use, many franchises which are perfectly capable of recording and reporting this information via their head office will not have to as long as they make sure that none of their individual franchises employs more than 250 people. If you run a few corner shops but are part of a franchise, you would get your single-use carrier bags via its head office to reduce packaging run costs and maintain consistent branding. The head office could therefore provide the information for all franchised shops to obey the reporting requirements. Without this, we will not know whether all smaller shops are charging for bags unless local authorities mount secret shopper expeditions. Frankly, given how hard-pressed local authorities are, we know that that is just not going to happen. This is an unnecessary exemption and a retrograde step.
Secondly, do the Government have any plans to introduce mandatory reporting for bags for life? The reporting requirements for single-use carrier bags will change next January, but there is mounting anecdotal evidence of a shift from single-use carrier bags to bags for life. Research in 2019 found that the 10 largest retailers were handing out more than double the number of bags for life anticipated in the Government’s initial impact assessment. There have been welcome initiatives. The noble Lord, Lord Mann, referred to one of them: Morrisons’ commitment to stop selling plastic bags for life. That it says it will remove 3,200 tonnes of plastic and almost 100 million plastic bags every year gives a sense of the scale of the remaining challenge—as I would call it, the plastic drift from single-use carrier bags to bags for life.
The drift may be accentuated by the low cost of these bags for life—20p when I asked in my local Sainsbury’s at the weekend, whereas Green Alliance and the EIA say that Ireland charges the equivalent of 70p, which has led to a 90% reduction in sales. There is also the fact that the money that retailers make on bags for life is all bottom-line profit; unlike with single-use carrier bags, they do not have to donate the money to good causes. I therefore urge the Government to require retailers to report so that the data can be collected so that we will know the size of the bag-for-life market and can determine whether a rise in their cost is now needed.
Finally, I welcome this statutory instrument and other government action, such as the ban on plastic cotton buds, straws and stirrers. Other initiatives, such as the proposed tax on plastic packaging, the Environment Bill’s delayed bottle deposit return scheme and the confirmation in a recent Written Answer to me that the Government are minded to ban oxo-degradables, which break down into tiny microplastics, will all be welcome when they eventually see the light of day. In the meantime, there is a real need to tackle myriad other single-use plastic items bloating our supermarket shelves in coffee pods, teabags, single-serve sachets, biscuit trays and fruit punnets, to name but a handful. What further steps are the Government taking now to help retailers get similarly problematic and unnecessary plastic off our supermarket shelves and to enable consumers to play the part they really want to play in tackling plastic waste to protect our precious environment?
Baroness Jones of Whitchurch (Lab)
My Lords, I thank the Minister for his introduction to this SI. We have ranged far and wide in this debate, even going as far as public executions, but I want to concentrate on the specifics of the SI. Like other noble Lords, I do not oppose the basics of it. However, I must say to the Minister that it is, quite frankly, embarrassing that it has taken the Government so long to bring this proposal forward. Wales introduced a fully comprehensive charge on single-use bags back in 2010. We had to wait another five years before the UK Government introduced a half-measure ban in England applying to larger retailers.
Now, in 2021, the Government are finally catching up with the good practice that the devolved nations have had in place for years. This is despite the fact that, three years ago, the 25-year environment plan committed to extending the application of the 5p plastic bag charge to small retailers and despite the fact that the public consultation on this proposal ended two years ago, in February 2019. That consultation showed there was enormous support from consumers and considerable support from businesses for the proposal, so it certainly does not feel that this simple and popular proposal has been anywhere near the Government’s priority list.
However, we welcome the proposal before us as far as it goes, but I have a number of questions which flow from it. First, we support the increase in price from 5p to 10p for a single-use plastic bag, but can the Minister clarify the impact this is likely to have on the sale of the more substantial bags for life, which are currently sold at between 10p and 30p? As has been said, there is an added incentive for supermarkets to prioritise the sales of these bags as they can keep all the income without making a donation to good causes. Already there is evidence that the 95% reduction in single-use plastic bags has seen a corresponding increase in the purchase of bags for life, with the average householder buying 57 bags for life a year according to research from Greenpeace. Has any consideration been given to a substantial increase in the price of bags for life? It has been suggested that a price of 70p would prevent the perverse consequences of this policy change, following the example of Ireland, which priced the bags at 70 cents and thereby cut their sale by 90%. Otherwise, is there not a danger that more bags for life will be purchased for single use, with the consequent increased damage to the environment?
Secondly, why have the Government exempted SMEs from using a proportion of the money raised from the sale of the bags to donate to good causes? This provision has worked well for the larger supermarkets, so I am not sure that the argument that it would be too complex to administer really holds water. Most small shops have a charity box and many are part of larger franchise arrangements. It seems wrong in principle that they should benefit from a new revenue stream for selling goods which pollute the environment. Also, will there be a requirement for the supermarkets which already administer the 5p charge to donate all the additional 5p to good causes given the additional administration in increasing the price will be negligible? Does the Minister agree with my noble friend Lord Khan, who rightly made the point that donations should be made to charities specifically involved in protecting the environment or clearing up the litter that plastic bags cause?
Thirdly, back in 2019, the resources and waste strategy set out a plan for resource efficiency and a circular economy which included an ambition for all plastics to be biodegradable. As my noble friend Lord Campbell-Savours made clear, the environmental damage caused by single-use bags would be somewhat mitigated if there was a requirement for them to be biodegradable. What steps are the Government taking to prevent plastics, including plastic bags, that are not biodegradable being in circulation?
Fourthly, why are the enforcement mechanisms restricted to being
“light touch, pragmatic and complaints led”?
This issue was raised by the Secondary Legislation Scrutiny Committee. There is some concern that trading standards and local authorities simply will not have the resources to ensure that the ban is truly effective. It would be helpful if the Minister could comment on that.
Lastly, what further plans do the Government have to make the manufacturers of single-use plastic bags more responsible for the environmental damage that they cause? Both the resource and waste strategy and the Environment Bill talk about extended producer responsibility based on the principle of “the polluter pays”, so when are we going to start charging the manufacturers for producing these bags rather than putting the onus on the consumer to change their habits? That is much talked about as a policy but we are yet to see real action. Perhaps the Minister could reassure us that the comprehensive extended producer responsibility package will be introduced into the Environment Bill. I give notice now that that is an issue that we will pursue when the Bill comes before us in the Lords.
Lord Goldsmith of Richmond Park (Con) [V]
I thank noble Lords who have contributed to this debate today. In order for us to leave the environment in a better state than we found it for the next generation, it is essential that we have the right legislation in place to limit the impact that our use of resources has on the natural world. Plastics are causing incontrovertible harm to our marine and terrestrial environments and we need to act now. These measures are an important part of our wider strategy to tackle plastic pollution and serve as an important marker that our reliance on single-use plastics must be reduced.
I will do my best in the time that I have to answer the questions put to me by noble Lords. The noble Lord, Lord Campbell-Savours, asked, effectively, “Why not simply ban single-use plastics?”, a point echoed by the noble Lord, Lord Khan of Burnley. Like both noble Lords, I wish to see an end to plastic waste, full stop. Clearly this statutory instrument alone is not going to achieve that, but it is just one part of a much larger of package of measures. For example, in October 2020 we introduced restrictions on the supply of plastic straws, plastic stirrers and plastic cotton buds. In 2018 we banned microbeads in rinse-off personal care products, a world first at the time. We are seeking powers in the Environment Bill to charge for single-use plastic items, introduce a deposit-return scheme for drinks containers and reform the packaging waste regulations. The Environment Bill will also provide powers to introduce extended producer responsibility measures to make producers bear the full cost of the environmental impacts of their products. We are also taking action to boost the quantity and quality of recycling—a consistent set of materials will need to be collected from all households and businesses in England—and to ensure clearer labelling on packaging so that we know what it is that we can recycle. We are ready to do much more if and where necessary.
My noble friend Lord Robathan initially expressed a concern about the principle and the idea of banning things. When it comes to individual responsibility, I would instinctively agree with him, but he would probably agree with the point that I am about to make: the use and disposal of single-use plastic imposes a heavy cost on all of us and indeed on the world that we share. This happens against our will, in most cases. It is an area that needs, merits and justifies intervention.
My noble friend stressed the importance of education and suggested that every single school should spend time litter picking. That is a suggestion that I fully agree with. I will convey his message to the Department for Education, and if need be I will involve him in those discussions. It is very hard to disagree with him. Young people are very much instinctively onside. I have never spoken at a school where I have not been asked questions about pollution, particularly plastic waste, so there is no doubt a market there waiting to be tapped.
Education and awareness are already a key element in the litter strategy for England. Around 70% of schools in England, for example, are already members of the Eco-Schools programme, which is run by Keep Britain Tidy. Schools can also participate in challenges such as the Keep Britain Tidy Great Big School Clean, the Marine Conservation Society’s Great British Beach Clean and the Canal & River Trust’s Plastics Challenge, joining other community-minded individuals to tackle litter all over the country.
The noble Lord, Lord Khan of Burnley, made the important point that in reducing plastic waste we are saving an enormous amount of money at many different levels. He has made the specific suggestion that the £730 million raised through this charge should be reinvested—recycled, if you like—into the waste and plastic agenda. That is a valuable suggestion and one that I will take back to the department. The only thing that I will say from a personal point of view is that I think the remit should be relatively broad, focusing broadly on the environment as a whole, given that the effects of plastic pollution are predominantly environmental.
For a second time in a week, the noble Lord has stressed the positive interactions that he has had with schoolchildren on this issue. My very first school visit to Parliament as an MP shortly after I was elected in 2010 was with a bunch of children from Barnes Primary who were accompanied by a giant papier-mâché whale, which they wanted to take to No. 10. It would not fit through the door, so we had to go to Parliament Square. This whale was made by the children as a direct response to the sad death of the whale that had been seen—I am not sure that it was swimming past Parliament, but certainly it got caught in the River Thames. When it was dissected shortly afterwards, its belly was found to be full of plastic waste and, in particular, plastic bags. That was rightly very shocking for the children, so they wanted to engage in a protest.
The noble Lord asked about gasification. I am unable to give a proper, authoritative answer, I am afraid, because I am not qualified to do so, but I shall get back to him and will ask my officials to help me to respond in detail to him. I know he will agree that the key is to stop producing products designed only to be used for seconds or perhaps minutes which then take centuries to be disposed of.
The noble Lord, Lord Moynihan, talked about the balance between deterrence and raising funds for good causes. He questioned whether raising the charge to 10p would have much of an impact. The evidence that we have suggests that it would, but he is right that alone that additional charge is not enough. I hope that I have provided reassurance in answers to other noble Lords that this is just part of an overall strategy. He suggested that we should ban further single-use items; he knows that we have banned plastic stirrers, straws and cotton buds, but I wholeheartedly agree with him that we should look for opportunities to go further.
That point was also raised by the noble Lord, Lord Mann, whose passion for this subject I very much share and enjoy. He made the point that, on the whole, people neither need nor want much of the plastic packaging or throwaway items that we are given—and he is right. Most people, when they go to a shop to buy a spring of parsley, do not particularly welcome the brick of plastic that encases it, which is why the emphasis in our approach to tackling plastic is very much to move away from consumer to producer responsibility.
The noble Lord is also absolutely right that we should be leading by example here in this place. It is appalling that we are still offered plastic cutlery and wrappers in this House; it is lazy and irresponsible, and it is completely unforgiveable. We should be leading by example, and I am certainly not going to pretend that I disagree with him on that point. On the resource and waste strategy, we committed to removing single-use plastic from the central government estate, including the Palace of Westminster, and the results of that exercise will be incorporated into the greening government commitments from 2020 onwards. As part of that, every department’s progress will be published annually in the annual report. Some departments are reporting early success, but we do not yet have all the published statistics. I certainly hope to see good results and, if not, I shall certainly use my office—and I know that my colleagues in Defra will do the same—to press for real and meaningful results. Much of this waste is inexcusable.
The noble Baroness, Lady McIntosh, asked about the coming-into-force date, which we described on being the day after the day on which it is made, rather than having a specific date. We were concerned that the packed parliamentary timetable as a result of Covid-19 and EU exit could result in delays to debates and Parliament proroguing before the instrument had been debated. To avoid the instrument being withdrawn and relaid in the next session, we decided to specify the coming-into-force date as simply the day after the day when it is made. However, I stress that in August last year the government response to the consultation made it very clear that the extension and increase of the charge would enter into force in April 2021. The announcement was widely publicised in all the national press, broadcast and media, and Defra considers it reasonable to assume that businesses are aware of the Government’s intention that these changes would come into force in April. Indeed, I believe that we secured a number of front-page news stories on this issue.
The noble Baroness also mentioned paper bags, describing them as not a particularly good alternative. I shall slightly distort her question here, if I may, in order to wedge in an important point. If we judge an item only on the basis of its carbon impacts, we can end up with a perverse answer. Yes, paper bags need to be reused three or four times to have the same carbon impact as single-use plastic bags. But it is wrong to look just at the carbon impact. Plastic bags take centuries to decompose. They are routinely mistaken for food, and choke hundreds of thousands of animals, particularly marine animals. They cause terrible littering and blight, and even when they break down, on the whole they become micro-plastics, which then enter the food chain and poison everything in it, including us. So simply taking a narrow carbon approach is misleading and wrong.
Finally, the noble Baroness asked what we are doing to prepare customers. Again, we believe that the change we are introducing is pretty widely known—but maybe the odd customer will turn up at a shop unaware of it. We have to be realistic about that; it is unavoidable. Some customers will go to a shop without being fully prepared. But it is unlikely that they will make the same mistake twice, or three or four times. The choice is there: bags will be there, available for purchase. But ultimately, we are talking about behaviour change. That does not normally happen overnight, and we need permanent reminders that we are, we hope, moving on a path towards minimising our impact on earth—on the planet—and reducing our environmental footprint.
The noble Baroness, Lady Parminter, asked several pertinent questions. I shall focus, if she does not mind, on the issue of franchises—the subject of her main question. She asked why we are exempting shops that are part of a franchise. All franchises, regardless of total and individual size, will be required to charge for single-use carrier bags. That we know. The noble Baroness’s interpretation of reporting obligations is correct, as franchises will be judged on individual size and not on that of the franchise group as a whole. We made that decision because we recognise that such businesses usually operate independently, so do not benefit from the economies of scale available to large businesses. However, retailers with a chain of shops will be counted as a large retailer if they have more than 250 employees. We are currently exploring options to introduce reporting for producers of plastic packaging as part of their obligation under the Producer Responsibility Obligations (Packaging Waste) Regulations 2007. Any bags used by individual franchises will be reported on through that mechanism, which will, I hope, avoid unnecessary burdens.
Incidentally, the noble Baroness was right to say that many smaller retailers did not initially want or welcome the exemption included when this initiative first came in a few years ago. As someone who, as part of the coalition Government, campaigned hard for this change, I made that point many times during the debate. I too see this as a sort of catching up, or the correction of an initial flaw.
The noble Baroness asked, as did the noble Baroness, Lady Jones, whether the Government had plans to introduce reporting on bags for life. We are reviewing the reporting for single-use carrier bags, and we will consider extending the reporting requirements to bags for life as part of that.
Finally, the noble Baroness asked what further steps the Government were taking to get other problematic plastic off our shelves. In addition to the measures that she mentioned, we are delivering on promises from the resource and waste strategy through seeking powers in the Environment Bill to do a whole range of things, including: charging for single-use plastic items; introducing, as I said earlier, a deposit return scheme; reforming the packaging waste regulations; introducing greater consistency in household and business recycling collections; and more besides. We are currently assessing whether there are additional items for which a ban would be suitable and proportionate, and I would welcome ideas from her and her colleagues—and, indeed, from anyone else who has taken part in the debate—as we undergo that process.
That brings me to the contribution of the noble Baroness, Lady Jones. I thank her for prior notice of her questions, and for her and her party’s support for this measure. First, she too asked what the Government were doing about bags for life. I have addressed part of her question already, but I should add that bags for life are designed for multiple reuses; that is the whole point of them. Customers should therefore be encouraged to reuse them. If they are reused sufficiently, they have a lighter environmental impact than single-use bags. Clearly, if they are used only once, they do not. There will be an increase in the number of bags for life—we know that—but the policy change will lead to an overall reduction of at least 24% in the number of bags across all types. However, I agree with the noble Baroness that bags for life are not a proper long-term solution. They are not. The more progressive and thoughtful supermarkets are already planning their switch away from all plastic bags; a number of noble Lords have mentioned Morrisons.
The noble Baroness asked whether we will hike the price of bags for life, as did a number of noble Lords. We are considering that as part of the post-implementation review. The noble Baroness and the noble Lord, Lord Khan, suggested that money should be recycled back into plastic and waste-related causes. Again, I will convey that message, but I would prefer money to be recycled into a wider remit, something environmental and local as far as possible.
Secondly, the noble Baroness asked how the UK will encourage manufacturers to take responsibility for plastic bags. We are committed to introducing a new, world-leading tax which will apply to businesses producing or importing plastic packaging which does not meet a minimum threshold of at least 30% recycled content from April 2022. Combined with our reform to the packing producer responsibility system which will apply to all packing, including single-use plastic bags, it will change economic incentives by encouraging more use of recycled plastic and drive up recycling rates. We are doing what we need to do to shift the emphasis away from consumers to producer responsibility.
Finally, the noble Baroness asked why all plastic bags—
The Deputy Chairman of Committees (Baroness Henig) (Lab)
I am sorry; we are running out of time.
Lord Goldsmith of Richmond Park (Con)
I apologise. I think I have answered the questions that were put to me and any more is merely an indulgence, so I will simply say that we are taking steps to reduce our reliance on single-use plastics and to explore more sustainable alternatives. This draft order will help us to do so, and I commend it to the Committee.
Motion agreed.
The Deputy Chairman of Committees (Baroness Henig) (Lab)
That completes the business before the Grand Committee this afternoon. I remind Members to sanitise 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, others are participating remotely, but all Members will be treated equally.
Death of a Member: Lord Judd
The Lord Speaker (Lord Fowler)
My Lords, I regret to inform the House of the death of our very good friend the noble Lord, Lord Judd, on 17 April. On behalf of the House, I extend our sincere condolences to the noble Lord’s family and to his friends.
Arrangement of Business
The Lord Speaker (Lord Fowler)
My Lords, Oral Questions will now commence. Please can those asking supplementary questions keep them short and confined to two points and, obviously, could Ministers also keep their answers brief?
Family Policy
(3 years, 8 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Farmer
To ask Her Majesty’s Government, further to the remarks by the Lord Chancellor on 17 June 2020 (HC Deb, col 902), what progress they have made towards joining up family policy across government so that it is “fit for the 2020s”.
The Parliamentary Under-Secretary of State, Department for Education and Department for International Trade (Baroness Berridge) (Con)
My Lords, families play a primary role in caring for and educating their children. The right honourable Secretary of State for Education is charged with driving family policy across government. The Government announced £27.3 million for the family fund in 2021-22 to support over 60,000 families on low incomes raising children with disabilities and serious illnesses. We are also investing over £14 million to champion family hubs.
Lord Farmer (Con)
My Lords, I thank my noble friend for her reply. The Lord Chancellor was referring to current lack of support for separating couples, whose conflicts may be amplified by 2020-style no-fault divorce reform, which legalises one party unilaterally leaving the other without recourse. Mr Justice Cobb’s Family Solutions Group highlighted the role of family hubs, a classic cross-departmental policy in supporting separating couples. Can my noble friend say what progress has been made in providing such support in readiness for these legal changes to divorce?
Baroness Berridge (Con)
My Lords, we are creating the new national centre for family hubs to provide expert advice, guidance and advocacy to support local councils in developing those family hubs. They will be very much locally grown and locally specific and should be part of the relationship support network for families who need it.
Lord Anderson of Swansea (Lab)
My Lords, does the Minister agree that all government departments should recognise the vital importance of family to the well-being of society, particularly of course in the field of taxation policy? To that end, will the Government consider the case for including in all draft legislation of relevant departments a family impact assessment?
Baroness Berridge (Con)
My Lords, indeed, since 2014 there has been the family test, which I believe is led out of the Department for Work and Pensions, which asks government departments to consider the impact of their policies on families.
Lord Dodds of Duncairn (DUP) [V]
My Lords, strong families are the bedrock of a strong society, and we need to ensure, especially now, that families get the support they need at the time that they need it. Can the Minister outline what further help will be given to fund support for relationships, marriage and reconciliation, especially for those who do not have support networks such as other family members to rely on for help and advice?
Baroness Berridge (Con)
My Lords, that is precisely why the Government committed to championing family hubs to provide a locally based—through local authorities—support network. The noble Lord may be aware that the family justice reform group is also looking at matters for those families to try and avoid, if at all possible, people coming through the family justice system and encouraging them to resolve things amicably.
Baroness Eaton (Con) [V]
My Lords, the troubled families programme is a commendable example of the benefits of a cross-government approach to policy. However, there is still insufficient co-ordination of support across departments for families to ensure that children and young people achieve better outcomes. In which specific cross-departmental policy areas is the Cabinet-level lead for families, the right honourable Gavin Williamson MP, bringing together ministerial colleagues, and what progress has been made?
Baroness Berridge (Con)
My Lords, the noble Baroness is correct: what has now been renamed the Supporting Families programme has been successful at supporting families with some of the most complex needs. It has shown that they can avoid the need for further statutory services and for some of their children to go into care or the criminal justice system, as a result. There are various cross-government issues which are dealt with and led partly by the Secretary of State for Education, such as the care leavers board, which he chairs jointly with the Chancellor of the Duchy of Lancaster.
Baroness Tyler of Enfield (LD) [V]
My Lords, I refer to my interests in the register. Given that the adversarial nature of the family law courts is unhelpful in many cases, and that separating couples often need much earlier help addressing emotional distress and practical issues to encourage effective co-parenting after separation, as well as ensuring that children’s needs remain centre stage, could the Minister say what steps the Government are taking to ensure a closer link with, and easier access to, relationship support in the family justice system?
Baroness Berridge (Con)
My Lords, as I have outlined, the family justice system currently has a review into these matters, looking at a potentially more investigative approach to family justice. We also hope that the family hubs will give local authorities the option to bring together not just statutory services but the charitable and voluntary sector, which often provides support in the circumstances that the noble Baroness outlines.
Baroness Altmann (Con)
I commend the Government on their Supporting Families programme. Could my noble friend tell the House what is being done to help families whose children have missed out on education during the pandemic to catch up, and whether the Government would consider building grandparents into family policy, as wider families can often help with dysfunctionality?
Baroness Berridge (Con)
My Lords, the catch-up in the education section of building back after the pandemic is focused on children catching up their education, but particularly disadvantaged children. On many occasions, noble Lords have asked about the laptops that they have received, and a specific element, £302 million, is a Covid catch-up premium built on the pupil premium. She is right that, in considering family policy, we changed the coronavirus regulations to recognise informal childcare support bubbles, where grandparents and others are giving support.
Baroness D'Souza (CB) [V]
My Lords, during a debate on family food banks earlier today, a local government spokesperson said that the priority seems to be just getting the money out of the door and bemoaned the lack of consistency and equal standards across the country. Does the Minister agree that budgets could be immeasurably more cost-effective, if administered and monitored by a senior-level Minister, with the department able to provide guidance on, and fair distribution of, the available government funds?
Baroness Berridge (Con)
My Lords, getting the money out the door is very important, but I take the point that the noble Baroness makes. As the Minister responsible for the efficiency and commercial function of the department, we rely on and give grants to local authorities. We then trust them on the ground. For instance, we have given an additional £40 million to the Covid-19 Support Fund. However, when it comes to contracting with providers, there are procurement processes and contract monitoring, which is an increasingly professional function of the department.
Lord Watson of Invergowrie (Lab)
My Lords, until January 2018, there was a Minister of State for Children and Families with the right to attend Cabinet. The post was then downgraded to Parliamentary Under-Secretary of State, which does not give the current holder the necessary clout either to be heard or to be properly effective. Many parliamentarians have today added their names to a letter from UNICEF UK to the Prime Minister, calling for the reinstatement of the Minister for Children and Families with the right to attend Cabinet, and urging him to deliver a national address directed to children and families to set out his vision of what building back Britain means for them. Does the Minister support these suggestions?
Baroness Berridge (Con)
My Lords, the current Minister for Children and Families, the right honourable Vicky Ford MP, works across government on many issues—for instance, online harms, at the moment, and the issues that have been raised by Everyone’s Invited. The independent Children’s Commissioner today launched her Big Ask to talk to children about their experiences. The group that the noble Lord outlined will get a reply from the Prime Minister, but it is beyond my pay grade to comment further.
Lord Addington (LD)
My Lords, does the Minister agree that there is a degree of confusion about who takes the lead in various family issues? What decisions will be made about which departments lead on certain problems? For instance, if it is finance, will the Department for Education or the DWP lead? What is the process by which that decision is made?
Baroness Berridge (Con)
My Lords, decisions are made on an issue-by-issue basis. As I outlined in terms of care leavers, the dual chairmanship of that is clear. It is important there is also a degree of flexibility so that, as issues arise, a responsible Government are able to work across departments. For instance, the Home Office, DCMS and the Department for Education have been meeting in regard to safeguarding in schools. I have a meeting with the Home Office on violence against women and girls this afternoon.
The Lord Speaker (Lord Fowler)
My Lords, the time allowed for this Question has elapsed. We therefore go on to the second Oral Question.
Nuclear Energy: Hydrogen Production Targets
Lord Ravensdale
To ask Her Majesty’s Government what assessment they have made of the role of nuclear energy in meeting the United Kingdom’s hydrogen production targets.
Lord Ravensdale (CB)
My Lords, in begging leave to ask the Question standing in my name on the Order Paper, I declare my interests as in the register.
Baroness Bloomfield of Hinton Waldrist (Con)
My Lords, the energy White Paper acknowledges the important role that both nuclear energy and hydrogen can have in meeting our climate targets. I am aware of industry proposals showing how current nuclear technologies could play a role in hydrogen production during the 2020s, while small and advanced modular reactors could unlock further efficiencies in future hydrogen production. We will say more on the role of hydrogen production technologies, including nuclear, in our forthcoming UK hydrogen strategy.
Lord Ravensdale (CB)
I thank the Minister for that Answer. Nuclear is a low-carbon, always-on source of power that has the power to economically produce green hydrogen at scale, complementing offshore wind. Will the Minister agree to liaise with the Department for Transport to ensure that nuclear energy is added to the renewable transport fuel obligation following the consultation? This is a great opportunity to create demand and get green hydrogen production moving. Can she also assure the House that nuclear will play a role in her department’s forthcoming hydrogen strategy?
Baroness Bloomfield of Hinton Waldrist (Con)
My Lords, the noble Lord, Lord Ravensdale, makes a very good point. The RTFO was created specifically to address the transport element of the EU renewable energy directive, but to be eligible hydrogen had to be produced from renewable energy. This year we are consulting on preferred long-term sustainable business models and the revenue mechanism to stimulate private investment into new low-carbon hydrogen projects. The UK will take a science-based approach to this whole area of taxonomy. I am sure the noble Lord will have seen the recent leaked report from the EU, which concluded that nuclear is actually no more harmful than any other technology, so we will watch this space.
Lord Empey (UUP) [V]
My Lords, given the strategic and economic significance of hydrogen to the future of the UK economy and climate change, does the Minister believe there are sufficient safeguards in place to ensure that interruption to supplies can be prevented and emerging technical solutions can be protected from any foreign Government who might operate or acquire nuclear facilities in the UK?
Baroness Bloomfield of Hinton Waldrist (Con)
The noble Lord, Lord Empey, makes a very good point—particularly as the National Security and Investment Bill is proceeding through the House this week. I assure him that the UK has a robust safety and security regime. Any nuclear reactor operating in the UK now or in the future will be subject to those safety and security regulations.
Baroness Neville-Jones (Con) [V]
My Lords, there is clearly a huge opportunity for hydrogen to help us achieve our net zero ambitions and create quality jobs across the UK. I note that the global hydrogen race is really heating up. I hope the Minister will agree that, with the UK having done distinguished science in the field, we must not allow others to walk away with the prize of commercial exploitation, as has happened too often in the past. We must benefit from our own scientific activities; I hope we do. Does the Minister agree that, as others have mentioned, in view of the importance of nuclear in this area and as the UK has operational nuclear sites and great expertise, we should start with this now to drive forward green hydrogen production with innovative schemes, such the one associated with the Freeport East Hydrogen Hub? That should be at the forefront of our efforts.
Baroness Bloomfield of Hinton Waldrist (Con)
I entirely agree with the noble Baroness as we have a world-leading position in the production of both green and blue hydrogen. I also welcome the Freeport East Hydrogen Hub. In an ideal world we would see Sizewell C being built by workers transported on hydrogen buses made by Wrightbus. We would see all the heavy loading gear at the ports driven by hydrogen-powered cranes and JCB diggers, which have been adapted for hydrogen.
Lord Broers (CB) [V]
My Lords, I ask the Minister: how much support is being given to the development of high-temperature gas-cooled reactors—HTGRs—to produce hydrogen? All forms of nuclear reactors can be used to generate hydrogen—I strongly support the proposals for Sizewell B and C—but the high-temperature capabilities of HGTRs make them especially suitable for producing hydrogen because they enable the relatively efficient hydrogen reforming and closed-cycle thermochemical processes for hydrogen production.
Baroness Bloomfield of Hinton Waldrist (Con)
The noble Lord is entirely right: the HGTRs are a very promising AMR technology which the Government have supported with £30 million for feasibility and development of AMR designs and the £170 million committed in the 10-point plan. I am delighted that the National Nuclear Laboratory and the Japan Atomic Energy Agency have been working together on this project and produced a report last October calling for increased collaboration on their technical agreements.
Viscount Hanworth (Lab)
The energy density of ammonia, which combines one atom of nitrogen with three of hydrogen, exceeds that of hydrogen. This makes it a useful vector of energy. Its use in land transport is inhibited by its messiness and toxicity; nevertheless, it represents an ideal fuel for shipping. It can also be produced cheaply and efficiently by allying the Haber process with a nuclear reactor. Are the Government mindful of such opportunities and, if so, do they propose to pursue them?
Baroness Bloomfield of Hinton Waldrist (Con)
The Government are mindful of such opportunities and ammonia represents good potential as an energy storage medium. BEIS has supported ammonia-related innovation projects under our £33 million hydrogen supply competition. Between BEIS and the Department for Transport, we are dealing directly with a clean maritime plan setting out both hydrogen and ammonia, which are expected to play a significant role in decarbonising the maritime sector.
The Lord Speaker (Lord Fowler)
My Lords, can we keep questions short please?
Lord Teverson (LD) [V]
My Lords, I draw attention to my interests in Aldustria Ltd. Surely to use an extremely expensive form of energy such as nuclear power to produce another form of energy such as hydrogen, with all the efficiency losses that that entails, cannot make sense. With the Prime Minister’s call for a massive increase in offshore renewables, surely what we need now is not more baseload energy but counter variable, flexible sources such as interconnectors, demand response and energy storage.
Baroness Bloomfield of Hinton Waldrist (Con)
I certainly do not agree with the premise of the noble Lord’s question. Sizewell C will use only 35% of its heat, with the rest being discharged into the sea. If we can use that excess heat to produce blue hydrogen, that has to be a very good factor in achieving net zero by 2050.
The Earl of Shrewsbury (Con)
My Lords, countries across the world are investing billions of pounds into kickstarting their hydrogen economies. We have the ingredients in this country ready to go: great offshore wind capabilities and a highly skilled nuclear industry. This country also manufactures a lot of hydrogen equipment, from electrolysers to boilers and buses. Does my noble friend therefore agree that we should do everything possible now to use the UK’s nuclear energy resources to get our hydrogen economy going and thus ensure as many hydrogen jobs as possible are created in the UK?
Baroness Bloomfield of Hinton Waldrist (Con)
Of course I agree with my noble friend. The UK’s 5 gigawatt production ambition could support up to 8,000 jobs and £0.7 billion gross value added by 2030. This puts us on a pathway to up to 100,000 jobs and £12 billion of GVA by 2050 under a high hydrogen scenario.
Lord Grantchester (Lab) [V]
It is clear that there is a role for hydrogen in the UK’s future energy mix and that nuclear has the potential for cogeneration, producing electricity and heat together. It is also clear that the Government are actively favouring the production of blue hydrogen—an option reliant on fossil fuels. Can the Minister confirm whether the Government will commit to using a net-zero hydrogen fund to prioritise the production of green hydrogen and encourage the participation of the nuclear industry in the Hydrogen Advisory Council?
Baroness Bloomfield of Hinton Waldrist (Con)
I disagree that we are actively encouraging the production of blue hydrogen; we are in a position to do so only because of the length of time that it will take to get AMR and new nuclear technology on stream to help us with the production of green hydrogen. The Government are following the twin-track approach, supporting both electrolytic green hydrogen and CCUS-enabled blue low-carbon hydrogen production in the meantime. We keep the membership of the Hydrogen Advisory Council under review at all times.
Baroness Meacher (CB)
My Lords, the Government have pledged to increase low-carbon hydrogen production capacity to five gigawatts by 2030. Have the necessary investment commitments been made to achieve that objective, and what role will hydrogen produced through nuclear energy play in helping to hit that target?
Baroness Bloomfield of Hinton Waldrist (Con)
Investment was a point made very powerfully by Bill Gates in his new book. We recognise the importance of ambition and a supportive policy framework in building investor confidence in the development of low-carbon technologies in the UK. The Government’s dedicated hydrogen strategy, which will be published in the second quarter of this year, will have more detail on how we work with industry to meet the 2030 ambition, but it will also incorporate a “minded to” paper—that is Civil Service speak—on ways that we could finance these large projects.
The Lord Speaker (Lord Fowler)
My Lords, the time allowed for this Question has elapsed, and we now come to the third Oral Question.
Immigration: Skilled Migrants from Commonwealth Countries
(3 years, 8 months ago)
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Lord Woolley of Woodford
To ask Her Majesty’s Government what assessment they have made of reports that highly skilled migrants from Commonwealth countries who have lived in the United Kingdom for 10 or more years have been refused indefinite leave to remain.
The Minister of State, Home Office (Baroness Williams of Trafford) (Con)
My Lords, we do not believe that highly skilled migrants who came to the UK using the tier 1 general visa route have been incorrectly refused indefinite leave to remain. There have been many cases of applicants appearing to deliberately misrepresent their earnings to qualify for leave to remain. We are giving applicants opportunities to respond to these concerns, and each case is being considered on its merits.
Lord Woolley of Woodford (CB) [V]
My Lords, my understanding of the Home Office data, supported by the Migrants’ Rights Network, shows that all highly skilled migrants who have been refused indefinite leave to remain are non-white and from six Commonwealth countries in south Asia and Africa. Given that the Institute for Fiscal Studies showed that 60% of all online self-assessment tax returns have discrepancies—the main reason for their refusal—can the Minister explain this worrying racial disparity, particularly coming after the Windrush review?
Baroness Williams of Trafford (Con)
My Lords, I absolutely refute that this has anything to do with the Windrush generation. The noble Lord points out that a large proportion of the refusals were given to non-white people; the countries represented have populations that would normally be non-white—that is the link there. People falsified earnings: quite often, amendments were made to tax returns over three years after the original returns and often less than six months before making the ILR application.
Baroness Verma (Con) [V]
My Lords, will my noble friend also look into the fact that there will be many skilled migrant workers who, because of Covid, will also have lost their current regular income, which may impact on their applications to stay? Following on from the question of the noble Lord, Lord Woolley, would she look a little deeper into the fact that a number—indeed, all—of those who have been refused are people of colour?
Baroness Williams of Trafford (Con)
My Lords, as I explained to the noble Lord, Lord Woolley, the fact that these are people of colour probably reflects the countries the applications came from. There were some fairly appalling practices with these applications, as I have outlined—and where ILR had been granted, we saw cases of applicants subsequently amending their tax records back down again not to have to pay additional tax. I totally get my noble friend’s point, but we need to see these cases in perspective.
Viscount Waverley (CB)
My Lords, I believe that the noble Baroness’s response is in order. However, circumstances exist that border on the inhumane and run counter to the spirit of the Commonwealth, and indeed elsewhere. If the Government can be considerate to Hong Kongers, would they consider a one-time amnesty to all those thus impacted, through no fault of their own, thereby doing the right thing in the right way?
Baroness Williams of Trafford (Con)
Absolutely—we have humanitarian routes, which are used. The noble Lord talked about BNOs, and he is absolutely right: the people of Hong Kong are coming here legally—we have granted them leave to remain under the BNO route. Far from being inhumane, this country has a proud record of giving refuge to people who need it.
Lord McConnell of Glenscorrodale (Lab)
My Lords, on that point, there has been and continues to be a particular problem of young people and teenagers, who have spent a considerable number of years in this country, sometimes—through no fault of their own but because of the bureaucracy of the system, the decision-making and so on—finding themselves threatened with a return to the country of their parents’ or their birth, despite having spent a number of years in this country, attending school here and experiencing the growing-up process here. Is that really a humane reaction, and is there a better way that the Government could handle these cases?
Baroness Williams of Trafford (Con)
I totally get the point that the noble Lord is making about some of the humanitarian considerations that we should give to people who grew up in this country, but this is a very different issue. The cases we are talking about this afternoon are of people who falsified their earnings, claiming back tax on them in some instances, as I have said. It is absolutely right that we are not only tolerant and welcoming but that we stamp out fraud where we see it—and these cases were of fraudulently declared earnings.
Baroness Hussein-Ece (LD) [V]
My Lords, I refer to the Minister for Future Borders and Immigration’s recent statement that highly skilled migrants should not face destitution or have their right to work refused while their case is being decided. In reality, nearly half are still experiencing destitution, and 55% have no right to work. What actions will the Government take to honour this, and will they consider compensation for the approximately 80% of the 1,697 cases of individuals who were later found not to have been dishonest in their tax discrepancies?
Baroness Williams of Trafford (Con)
Of the nearly 1,700 refusals, 88% had differences of more than £10,000, and the average difference across all cases was £27,600, so they were not small differences. On people facing destitution, of course people will be cared for while their applications are being considered. Of course, particularly during the Covid pandemic over the past year, it has been very important to be able to give people that bit of respite because of the difficulties that they will face, first, coming here and, secondly, going back, if their applications are refused.
Lord Rosser (Lab) [V]
My Lords, it is rather a serious step to refuse people indefinite leave to remain who have been in this country for 10 years or more. The Minister referred to the non-criminal historic tax discrepancies, which are the cause of the trouble. Will she tell us how long ago these tax discrepancies occurred, on the basis of which indefinite leave to remain is being denied? Have they been recent cases or ones of some 10 years ago? Can she assure me that the statements that the Government are now making from the Dispatch Box have been checked by Ministers to ensure that they are accurate and that these people really are being denied indefinite leave to remain for good, strong reasons?
Baroness Williams of Trafford (Con)
My Lords, most applications for settlement were made around 2016. Some of them go back some years. The reason why they were uncovered was because of the sheer volume that HMRC was noticing as a strange pattern of behaviour. It was sufficiently unusual to draw it to the attention of the Home Office. This is not an attempt to deny ILR—this was a deliberate attempt on the applicants’ part to falsify records so that they matched the self-employed earnings previously declared in tier 1 applications.
Lord Cormack (Con)
My Lords, I listened very carefully to what my noble friend has said. Is she absolutely convinced that these applications have been handled not only efficiently but sensitively, bearing in mind that we really owe a great deal to those who have provided wonderful services in our country for many years? We would all be extremely concerned if some fell through an imperfect net.
Baroness Williams of Trafford (Con)
My Lords, I would share my noble friend’s concern if people were to fall through an imperfect net. We must not conflate them with the Windrush generation, who were genuinely and rightfully here and to whom we owe a debt of gratitude. The people we are talking about have falsified earnings in order to come to this country.
The Lord Speaker (Lord Fowler)
My Lords, I regret that the time allowed for this Question has elapsed. [Interruption. Excuse me—Members should not leave when I am standing up.
Planning: Net Zero Emissions Targets
(3 years, 8 months ago)
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Baroness Sheehan
To ask Her Majesty’s Government whether they plan to revise planning rules to ensure that all planning decisions are aligned with the United Kingdom’s net zero emissions targets.
The Minister of State, Home Office and Ministry of Housing, Communities and Local Government (Lord Greenhalgh) (Con)
My Lords, our Planning for the Future White Paper committed the Government to ensuring that the reformed planning system will support our efforts to combat climate change and help bring greenhouse gas emissions to net zero by 2050. We are currently analysing the 40,000 responses to the consultation; we will publish a response later in the year, which will set out our decisions on the proposed way forward.
Baroness Sheehan (LD)
My Lords, the energy national policy statements are currently under review; they were due to be completed in October last year. When, more precisely, can we expect the completion of the review? Will the Government commit to not granting permission for new fossil fuel projects, such as the controversial Cumbrian coal mine, or any other major infrastructure projects, until the review is complete?
Lord Greenhalgh (Con)
My Lords, I will not be able to comment on a specific planning application for obvious reasons; that particular scheme has been called in by the Secretary of State. I will have to write to the noble Baroness on when the review will be published.
Lord Whitty (Lab) [V]
My Lords, the construction sector, demolition and building use together account for about 40% of all carbon-equivalent emissions. Should not planning law and planning guidance require developers, planning authorities and, ultimately, the inspectorate, in all cases of major housing and office projects, to consider as first option retrofit and refurbishment to higher energy efficiency standards rather than, as is normally the case, opting for carbon-intensive demolition and rebuild?
Lord Greenhalgh (Con)
My Lords, the Government recognise the benefits of retrofit ahead of demolition. Reuse and adaption of existing buildings can make an important contribution toward tackling climate change. The national planning policy framework already encourages this.
Baroness Thornhill (LD)
My Lords, core to this issue is the forthcoming future home standard, which currently threatens to remove the discretion of local authorities to set zero-carbon policies that go beyond current building regulations. Does the Minister agree that the future home standard should be a floor to those authorities struggling to keep up rather than a ceiling constraining what the most ambitious authorities quite rightly are doing to reduce carbon dioxide emissions from new development and lead the way for other councils?
Lord Greenhalgh (Con)
My Lords, it is quite clear that the future home standard is there to provide a floor rather than a ceiling in respect of ambition for local authorities. The Government will set standards that will require the avoidance of fossil fuels in future homes.
The Earl of Caithness (Con) [V]
My Lords, following the question from the noble Lord, Lord Whitty, will the Minister be more specific with local authorities? They are much keener to allow a new building to replace an old building because it usually means more floor space and they will get some benefit from it. I hope that the Minister will press them very hard to consider retrofit before giving permission for a new building.
Lord Greenhalgh (Con)
My Lords, we recognise the importance of encouraging retrofit. That is why, as part of the Planning for the Future reforms, we are looking at making it easier to support changes of use and improvements to existing buildings.
Lord Best (CB) [V]
My Lords, as the Minister knows, there are two ways of getting housebuilders and developers to achieve higher standards: the national building regulations and the local planning requirements. Is the noble Lord’s Ministry looking at how these sometimes conflicting approaches could be harmonised and how the weak enforcement of local planning requirements could be better resourced to prevent housebuilders evading their responsibilities?
Lord Greenhalgh (Con)
My Lords, we recognise the interdigitation between the national standards and other forms of regulation. That is why we started with the implementation of an interim 2021 Part L uplift for new homes as swiftly as possible, in advance of the 2025 new home standards. We are working closely with local government to ensure that consistency.
Lord Kennedy of Southwark (Lab Co-op)
My Lords, I refer the House to my relevant interests as set out in the register. One problem is the timidity of the Government’s actions. When they had the chance to do something about this during the passage of the dreaded Housing and Planning Act 2016, the Government voted against the amendments proposed by the noble Lord, Lord Krebs, in this House and opposed them again on ping-pong. I refer the Minister to the remarks of the noble Viscount, Lord Younger of Leckie, at the time. Can the Minister reassure us that the Government are finally serious in this matter?
Lord Greenhalgh (Con)
We are very serious about the move to a net zero economy and using planning as a vehicle to do that. Further announcements will have to await the review of the consultation that is currently being processed.
Baroness Scott of Needham Market [V]
My Lords, if the Government are as serious as the Minister suggests, would it not be a good idea to review all national policy statements including, for example, on aviation, to try to make sure that all these large infrastructure decisions are made with net zero in mind? That would also give business some certainty, rather than the current situation where major developments are called in and delayed.
Lord Greenhalgh (Con)
My Lords, national planning policy statements are a matter for the relevant Secretary of State, but I would point out that Project Speed is at the moment reviewing national infrastructure planning reform and ensuring that we build projects faster, better and, of course, greener.
Baroness Jones of Moulsecoomb (GP)
My Lords, it is obvious to me from my own experience as a councillor, and from speaking to planning experts and local planning inspectorates, that they just do not have good enough, strong enough guidance from the Government. I accept what the Minister says about the review but, quite honestly, writing better information for planning inspectorates is vital. We are going to be very embarrassed at COP 26 if we do not get to grips with this.
Lord Greenhalgh (Con)
My Lords, we believe that the current National Planning Policy Framework is clear on how planning plays an important part, but we will look to ensure that the guidance is optimised for our planning inspectors, who play an important role in ensuring that we reach the net-zero economy that we all want.
Lord Vaizey of Didcot (Con)
My Lords, with the news last week that Germany has reached a tipping point in the sale of electric vehicles, is it not now possible to use planning policy to make a step change and ensure that all new developments include superfast broadband, solar panels and electric vehicle charging points?
Lord Greenhalgh (Con)
My Lords, we are moving ahead with the future homes standard. I am sure that this takes into account the points that my noble friend raised and that we will be ready, in 2025, with standards that will drive the net-zero objective.
Lord Krebs (CB) [V]
My Lords, does the Minister agree that planning approval for new rail infrastructure should be contingent on the plan including a decarbonisation strategy, in line with the advice of both the Committee on Climate Change and the National Infrastructure Commission?
Lord Greenhalgh (Con)
My Lords, the question relates to transport, which is not my area of expertise. However, we have published the first phase of the national decarbonisation plan for transport. I am sure that the policy experts will be looking into that, as will my colleagues in the DfT.
Lord Browne of Ladyton (Lab) [V]
My Lords, the Government’s policy of incentivising a housebuilding boom could contradict their net-zero ambitions. Some time ago, the Committee on Climate Change recommended that the Government develop policies to minimise the whole-life carbon impact of new buildings. What progress has been made in this area? How would the Minister describe how the Government envisage the role for the planning system, permitted development and building regulations in delivering a sustainable built environment?
Lord Greenhalgh (Con)
My Lords, we believe that it is possible to build homes, to grow our economy and also to decarbonise. As a nation, we have decarbonised our economy faster than any other G20 country. Our economy has grown some 78% while decreasing emissions by 44%. We have a clear set of planning policies to encourage further decarbonisation. Central to that is the future homes standard, which will be in effect from 2025.
The Lord Speaker (Lord Fowler)
My Lords, all supplementary questions have been asked. I congratulate the Minister, and all those involved, on that outcome. That brings us to the end of Question Time.
Arrangement of business
The Deputy Speaker (Lord Haskel) (Lab)
My Lords, the Hybrid Sitting of the House will now resume. I ask all Members to respect social distancing.
Hong Kong: Pro-Democracy Campaigners
(3 years, 8 months ago)
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Baroness Kennedy of The Shaws
To ask Her Majesty’s Government what assessment they have made of reports that pro-democracy campaigners have been sentenced in Hong Kong for participating in pro-democracy protests.
The Minister of State, Foreign, Commonwealth and Development Office (Lord Ahmad of Wimbledon) (Con)
My Lords, we are clear that the Hong Kong authorities’ decision to target leading pro-democracy figures for prosecution is unacceptable and must stop. The right to peaceful protest is fundamental to Hong Kong’s way of life, protected in both the joint declaration and the Basic Law, and it should be upheld. We shall continue to raise our concerns with the Chinese and Hong Kong Governments and bring together our international partners to stand up for the people of Hong Kong.
Baroness Kennedy of The Shaws (Lab) [V]
My Lords, I thank the Minister for his continued efforts in this regard, but is he aware of the letter sent last week by the last Governor of Hong Kong, the noble Lord, Lord Patten, and signed by 100 parliamentarians from both Houses, including the shadow Foreign Secretary Lisa Nandy and myself? We urged the Government to impose Magnitsky sanctions on officials in Beijing and Hong Kong for the grave and repeated breaches of the Sino-British joint declaration and the serious human rights violations committed in Hong Kong. In the light of the sentencing of some of the most prominent moderate, mainstream, internationally respected and senior pro-democracy campaigners, is it not time to impose Magnitsky sanctions?
Lord Ahmad of Wimbledon (Con)
My Lords, I agree with the noble Baroness on the issue of the increasing number of convictions. At the end of last week, further action was taken by the Hong Kong authorities against people who are simply calling on their rights to protest and to democracy. The noble Baroness knows what I will say about speculation on future Magnitsky sanctions, but, as we have demonstrated in the case of Xinjiang, we have acted, and when we have we have done so in co-ordination with our partners.
Baroness Northover (LD)
My Lords, these are friends and allies who have been locked up, people we all know. The Foreign Secretary has stated that Beijing is now in permanent breach of the Sino-British joint declaration, so I urge the Government to stop holding back on imposing sanctions. Will the Minister assure us that the human rights crisis in Hong Kong will be on the G7 agenda so that collective action can be taken?
Lord Ahmad of Wimbledon (Con)
My Lords, the noble Baroness will already have noted the co-ordination we have shown with our G7 partners and the support we have gained from them on the situation in Hong Kong. Although the agenda is still being finalised for the leaders’ meeting, I am sure the situations in China and Hong Kong will be very much a part of the considerations. As for taking action against those in Hong Kong, we keep the situation under review, as I have said, but I cannot go further than that.
Lord Mackay of Clashfern (Con) [V]
My Lords, apart from admitting residents of Hong Kong to the United Kingdom, what policy can Her Majesty’s Government follow to improve the liberties of the citizens of Hong Kong?
Lord Ahmad of Wimbledon (Con)
My Lords, my noble and learned friend raises some important points about the people of Hong Kong. As he will have noted, we have taken specific steps to broaden the offer to British nationals overseas and their families. That process is operating well. Of course, if anyone seeks the sanctuary of the United Kingdom because of the persecution they face, we will look at each case individually and provide the support needed. That applies to anyone around the world.
Lord Alton of Liverpool (CB)
My Lords, as a patron of Hong Kong Watch and an officer of the All-Party Group on Hong Kong, I personally know Martin Lee, the father of Hong Kong democracy, Margaret Ng, a formidable lawyer, and Jimmy Lai, a champion of free speech and a full holder of a UK passport. Does the Minister agree they deserve better than a medieval star chamber and a Stalinist show trial? Is the debasement of law by puppets and quislings not best met by calling out the Chinese Communist Party at the next meeting of the United Nations Human Rights Council, focusing on, as the noble Baroness, Lady Northover, said, the CCP’s lawbreaking and treaty-breaking, and its sentencing, imprisonment and detention in psychiatric institutions of women and men whose values we share?
Lord Ahmad of Wimbledon (Con)
My Lords, I agree totally with the noble Lord on the issue of values. That is why, as I am sure he would acknowledge, we have led in statements and in consolidating and increasing support at the Human Rights Council. It is something I have personally been engaged in and will continue to campaign for and make note of. He raised the cases of various individuals. Speaking personally, I saw the final interview Jimmy Lai gave just before his arrest, and it is quite chilling to see the conduct that happened thereafter to someone who stood up for media freedom. What has he been arrested for? It is for illegal assembly. We need to put this into context as well.
Baroness Warwick of Undercliffe (Lab) [V]
My Lords, I reinforce the points made by my noble friend Lady Kennedy of The Shaws on Magnitsky sanctions. The Chinese Government recently criticised the UK for granting asylum to the Hong Kong pro-democracy activist Nathan Law. Does the Minister agree that a fitting way to rebut Beijing’s growing crackdown in Hong Kong would be for the Government to allow young Hong Kongers, who do not qualify for the BNO visa, to come to the UK to study and work?
Lord Ahmad of Wimbledon (Con)
My Lords, on the noble Baroness’s first point on asylum, as I said, I am proud that the United Kingdom continues to be a sanctuary for those seeking protection from persecution internationally, as it has been over the years. On her broader point, the BNO scheme has been introduced; it is working well. There are no other plans, but we continue to press the Hong Kong authorities to restore democratic rights and the right to protest within Hong Kong.
Baroness Smith of Newnham (LD)
My Lords, following on from the noble Baroness’s question, I will press the Minister a bit further and ask whether the Government will go away and think again about the rights of young Hong Kongers. Would it be possible to pave the way for those who were too young to have been eligible for the BNO passport scheme to have access to jobs and education here?
Lord Ahmad of Wimbledon (Con)
My Lords, there is no more I can add to what I have already said, but I assure the noble Baroness that the plight of everyone in Hong Kong, including the young generation, is at the forefront of our work and the actions we have taken in partnership with other countries.
Lord Garnier (Con)
My Lords, while I appreciate that shouting from the sidelines will not have any effect at all on the Government of China, will the Minister accept that these latest convictions and sentences exemplify the repression of human rights and the rule of law in Hong Kong? What practical and effective steps can we in the United Kingdom take, both alone and with our allies, to ensure that the position for the people of Hong Kong is improved?
Lord Ahmad of Wimbledon (Con)
My Lords, I agree with my noble and learned friend. Freedom and human rights, including the right to protest, continue to be suppressed in Hong Kong. On the further actions we can take, I believe it resonates with the Chinese authorities when we act in concert with our key partners, not least because they respond accordingly to the statements being made. While the impact of those actions might for the medium to long term, they are noticed not just in Hong Kong but in Beijing.
The Lord Bishop of St Albans [V]
Will the Minister tell us what assessment the Government have made of the ability of BNO applicants to safely leave the territory, after it has emerged that the Government of Hong Kong have asked some foreign Governments not to accept BNO for working holiday visas in Europe, North America and parts of Asia?
Lord Ahmad of Wimbledon (Con)
My Lords, I assure the right reverend Prelate that we are looking very closely at the operation of the BNO scheme. No apparent issues have arisen. Many BNO holders also have dual passports so their ability to travel is not limited. We continue to monitor the scheme very closely.
Lord Green of Deddington (CB) [V]
My Lords, what is the Government’s assessment of the impact of these sentences on applications for their BNO scheme? They have already announced 27,000 applications in the first month but according to the small print this does not include dependants. Meanwhile, more than 300 BNO passports were issued last year, and even today we have had some noble Baronesses calling for the scheme to be expanded from 5 million to 7 million people. If, in fact, numbers run very high, will the Government seek to reduce immigration from elsewhere?
Lord Ahmad of Wimbledon (Con)
My Lords, the importance of the BNO scheme is to provide access—and indeed the rights of settlement—to those who qualify. That is a principled decision from the Government and we will stand by it. On the issue of immigration, while it goes into the realms of the Home Office, we have a specific immigration policy which is now operational.
Lord Collins of Highbury (Lab)
My Lords, the Minister repeats that we should act in partnership with our allies. I reminded him last week that the United States sanctioned Hong Kong officials for these breaches four weeks ago. It is now five weeks. When will we act in concert with our partners? When will we support the United States on something that is our responsibility? We should act now.
Lord Ahmad of Wimbledon (Con)
My Lords, I note and of course accept that the noble Lord has raised this issue on a number of occasions. However, as I have said in answer to other questions, I cannot speculate on future sanctions. I assure him, and indeed all noble Lords, that we work very closely with our partners: the European Union, Australia, the United States and others.
Lord Cormack (Con)
My Lords, much as I sympathise with my noble friend and appreciate the limitations of his personal power and influence, it is appalling when an international treaty—to which we and Hong Kong are joint parties—is violated by one party. We appear to be dragging our feet and it really is important that we have action this day.
Lord Ahmad of Wimbledon (Con)
My Lords, while appreciating my noble friend’s sympathy for my position, I assure him that I have been persistent in my capacity as a Minister within FCDO and particularly in my responsibilities as Human Rights Minister to ensure that we do everything possible, in terms of both direct action and action with international partners. We continue to lead the international community. We have made statements through the Human Rights Council and the G7 and will continue to do so. On the wider policy of specific sanctions, I have already indicated our current position, but we keep that position under review.
Lord Dubs (Lab) [V]
Many of us who were able to visit Hong Kong in the past and were privileged to meet Martin Lee, Margaret Ng and other pro-democracy campaigners will recall that we were warned by them that this might happen and that we should not trust the Chinese Government to support democracy. Given the breach of agreements that the Chinese Government have gone in for, is it not time that this country rethought our whole relationship with China, not just on this one issue but on a whole range of issues? We cannot go on treating China as a normal country when it breaches international agreements in the way it has done.
Lord Ahmad of Wimbledon (Con)
My Lords, I totally agree on the breach of international agreements. Indeed, the Sino-British joint declaration and China’s continued non-compliance has repeatedly been called out by the UK. As I have said before from the Dispatch Box, it is an agreement that has international recognition and China, as a major player on the international stage, should uphold its responsibilities. On the wider issue of China and its role in the world, as I have also repeatedly said, it has a role to play on climate change and, in that regard, without the Chinese the ambitions and the actions required cannot be reached and realised. However, we will not hold back from calling out egregious abuse of human rights as we have done in both Hong Kong and Xinjiang.
Lord Singh of Wimbledon (CB) [V]
My Lords, while we all condemn the incarceration of democratic activists in Hong Kong, there is very little we can do to help them. Economic or cultural sanctions can be only a token of disapproval. Does the Minister agree that it would add weight to our criticism if we were more even-handed in criticising gross human rights abuse wherever it occurs, even in so-called friendly countries, such as Saudi Arabia?
Lord Ahmad of Wimbledon (Con)
My Lords, we consistently call out human rights abuses. It was this Government who introduced the global human rights sanctions—the Magnitsky sanctions regime—and this Government who have acted accordingly. Well over 70 designations have now been made for egregious abuse of human rights. The noble Lord rightly points to the situation with the Kingdom of Saudi Arabia as a partner, but even there we have specifically sanctioned individuals under that regime.
The Deputy Speaker (Lord Haskel) (Lab)
My Lords, all supplementary questions have been asked.
Nuclear Safeguards (Fissionable Material and Relevant International Agreements) (EU Exit) (Amendment) Regulations 2021
Baroness Bloomfield of Hinton Waldrist
That the draft Regulations laid before the House on 25 February, 8 March, 10 March and 11 March be approved.
Relevant document: 50th Report from the Secondary Legislation Scrutiny Committee. Considered in Grand Committee on 15 April.
University Students: Compensation for Lost Teaching and Rent
Lord Bassam of Brighton (Lab) [V]
My Lords, the disruption to university students caused by the pandemic and subsequent government restrictions has meant that students have not enjoyed the university experience that they would have expected, ranging from teaching, lectures and seminars, access to specialist resources and facilities, and career-enhancing placements, as well as the social experience which forms an important part of university life. Indeed, many final-year students have been advised that they will not even be able to attend a graduation ceremony.
Universities report that anxieties are mounting among students, who feel underprepared for their final exams after more than 12 months of major disruption. Following the delayed government announcement on returning to campuses, many still do not know whether these exams will take place on campuses or online and their mental health is suffering as a consequence. What discussions have the Government had with universities about mitigation for students sitting their finals this summer, who have suffered disruption to their learning as a result of the pandemic? Will the Government please ensure that in future plans students are not the forgotten ones left to the end?
Lord Parkinson of Whitley Bay (Con)
My Lords, the noble Lord sets out powerfully the disruption that students have faced to not only the academic element of their university experience but all the extra-curricular activities and the broader experience. The Government are very mindful of that; my honourable friend the Universities Minister engages directly with students and representative bodies and has set up a higher education task force to engage with the sector. Students and universities are certainly not being forgotten—they are being engaged with fulsomely.
Baroness Garden of Frognal (LD)
My Lords, I declare an interest with three grandsons at Glasgow, Southampton and Bath, whose student experience, as the noble Lord, Lord Bassam, said, is a world away from what they were entitled to expect. Why must students wait until 17 May for a return? For many, that will mean missing out until the autumn, with their well-being, tuition and socialising all suffering, when most universities and students are more than ready to return now. Why are the Government so cavalier about our universities and so uncaring about the effect of their prevarications?
Lord Parkinson of Whitley Bay (Con)
My Lords, our decisions have been taken with the well-being of students at their heart. Many students will be able to return from 17 May to engage with all the important experiences from that point. We do not want a situation where people return too early and have to self-isolate repeatedly, as has happened before. We are taking a cautious approach to make sure that we can move out of lockdown and recover from Covid.
Lord Sharpe of Epsom (Con)
My Lords, many institutions, including your Lordships’ House, seem to have adapted rather well to hybrid working. My daughter is in her first year at university, at Royal Holloway, and although she has missed the social life, she says she has actually quite enjoyed the learning experience. Could my noble friend the Minister outline whether the Government have any plans to investigate whether some sort of hybrid model of access to university education, which may offer more flexibility and affordability, could be made available in future?
Lord Parkinson of Whitley Bay (Con)
I am glad my noble friend’s daughter has been able to enjoy her first year of university, notwithstanding the pandemic. He is right that many institutions have proved very adaptable and innovative in the face of the challenges of Covid-19. The Secretary of State for Education commissioned Sir Michael Barber to undertake a review of the shift towards digital teaching and learning, which was published on 25 February. We are considering its implications, particularly its role in supporting flexible provision, and are introducing the lifelong loan entitlement from 2025, which will support modular learning and make it easier for people to study more flexibly over their lifetime.
Lord Bilimoria (CB) [V]
My Lords, what evidence did the Government take and consider when deciding to include student returns in step 3 rather than step 2 of the road map? Professor Galbraith, vice-chancellor of Portsmouth, asked the Government to explain this, calling it “nonsensical” and “unfathomable” and saying that
“many universities will have finished their teaching”
by that time. He said:
“Students can now buy a book on British history in Waterstones and discuss it with a tattoo artist while they have their body decorated, but they cannot do the same thing in a Covid-secure environment with their university lecturer.”
I have seen first-hand, as chancellor of the University of Birmingham, the amount of testing and Covid-safety measures that universities are taking. Other university chancellors, the Russell group and UUK have all called this disrespectful and late. Please could the Minister explain where the data is which shows that teaching spaces are safe, that there are low infection rates and that university students should be allowed to go back to campus? For how much longer will the Government take the university sector—the jewel in the crown of this country—for granted?
Lord Parkinson of Whitley Bay (Con)
My Lords, we certainly do not take it for granted. We have outlined a cautious approach which is underpinned by data rather than dates. We worked extremely closely with scientists and SAGE to understand and model various scenarios to inform our plan. We also examined the economic and social data to gain a balanced understanding, which led to our decision. Some things the noble Lord set out, such as tattoo parlours, take place in the same vicinity as people live; the difference here is people travelling to a part of the country in which they do not reside to form new households. That is why it is different and why we have made the decision we have.
Lord Boateng (Lab) [V]
My Lords, I declare my interest as chancellor of the University of Greenwich. Covid has meant additional costs for universities and students; they are out of pocket. Will the Minister assure us that his department will take that into account in future funding decisions for both universities and students, and will he please bear in mind, particularly for those universities either in London or working with particularly disadvantaged students, the additional costs of living and working in London, which KPMG estimates at some 14% additional cost? Will he make sure that those factors are taken into account in university funding, particularly in relation to the current consultation on London weighting?
Lord Parkinson of Whitley Bay (Con)
My Lords, we understand the difficulty that students have faced throughout the pandemic, in London and elsewhere. That is why the Government announced last week a further £15 million of student hardship funding, meaning that, in total, we have made an additional £85 million of funding available for student hardship this year, on top of the £256 million of taxpayer-funded student premium funding which is already available to providers in London and more widely to draw on towards student hardship funds for this academic year.
Lord Wharton of Yarm (Con)
My Lords, I declare my interest as chair of the Office for Students. Will my noble friend join me in commending those institutions which have offered rent rebates to students after a very difficult year for many and in calling for more to do the same?
Lord Parkinson of Whitley Bay (Con)
This is my first opportunity to congratulate my noble friend on his new role; I look forward to his carrying it out with great rigour and independence, as I know he will. We welcome the decision from many universities and accommodation providers to offer rent rebates for students who need to stay away from their term-time address. We urge all large providers to join them and offer students partial refunds. We ask all providers of student accommodation, including universities, to make sure that their rental policies have students’ best interests at heart and that they are communicated clearly.
Lord Loomba (CB) [V]
My Lords, prior to the pandemic last year, UK universities and their union demanded the stamping out of casual contracts and job precarity for staff in the higher education sector. As university teaching begins to return to normal in the coming academic year, there are increased calls to reimburse students’ tuition fees for lost teaching. Given that academic staff have continued to provide the same amount of labour, if not more, to produce innovative online teaching during this uncertain period, on top of managing disruptions to their personal research, how do the Government plan to protect and provide job security for academic staff going forward?
Lord Parkinson of Whitley Bay (Con)
My Lords, university staff have worked brilliantly to minimise the disruption to students throughout the pandemic. Employment and staffing are of course decisions for universities, as autonomous organisations, but, like other businesses, they can avail themselves of the support which Her Majesty’s Treasury has made available to businesses during the pandemic.
Baroness Blackstone (Ind Lab)
My Lords, I condemn the Government’s last-minute decision to deny half a million students the opportunity to get back to their universities and resume face-to-face instruction. In my view, it shows a scandalous lack of judgment about the needs of these students, who have missed out on not just normal learning but the social experience of university. Since large numbers of students have returned anyway, the argument about the formation of new universities in the Answer is utterly unconvincing, especially in the context of data on the very low levels of hospitalisation for Covid. Will the Government compensate these depressed and disappointed students by funding the universities to extend the summer term into July?
Lord Parkinson of Whitley Bay (Con)
I must disagree with the noble Baroness. The Office for National Statistics estimates that 23% of students are yet to return to their term-time accommodation, which leaves up to half a million students yet to travel. Throughout the pandemic, the Scientific Advisory Group for Emergencies has warned of the risk posed by mass movements; that is what underpins our cautious approach.
The Deputy Speaker (Lord Haskel) (Lab)
My Lords, the time allowed for this Question has elapsed.
Arrangement of Business
The Deputy Speaker (Lord Haskel) (Lab)
My Lords, the Hybrid Sitting of the House will now resume. I request that all Members respect social distancing.
Overseas Operations (Service Personnel and Veterans) Bill
Monday 19th April 2021
(3 years, 8 months ago)
Lords ChamberRead Full debate Overseas Operations (Service Personnel and Veterans) Bill 2019-21 View all Overseas Operations (Service Personnel and Veterans) Bill 2019-21 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 147-R-I Marshalled list for Report - (8 Apr 2021)
The Minister of State, Ministry of Defence (Baroness Goldie) (Con)
My Lords, I beg to move that this Bill do now pass, and it is with pleasure that I make that Motion and propose to make a brief speech.
The Government stood on a manifesto commitment to
“introduce new legislation to tackle the vexatious legal claims that undermine our Armed Forces”,
and they have delivered on that promise. I have said consistently throughout the passage of the Bill that the principles are sound, the objectives are good and the Bill is necessary. The Government believe that the combination of measures in the Bill provides a better and clearer legal framework for dealing with allegations or claims arising from overseas military operations.
The Bill addresses the issue of unacceptable delays in bringing prosecutions and provides greater certainty to veterans for events which happened in the unique context of overseas operations many years ago. The provisions also require that civil claims arising from overseas operations are brought promptly so that the courts are able to assess them when memories are fresh and evidence is more readily available.
The measures recognise both the challenging and extraordinary—I use that word in its literal sense—circumstances of overseas operations and the adverse effects that they can have on our service personnel. These include being exposed to unexpected or continuous threats or being deployed alongside friends and colleagues who are killed or severely wounded in action.
The Bill delivers on a manifesto commitment to our Armed Forces and veterans. It is based on strong support for the proposals by clear majorities in the other place, and it is for these reasons that this House should support the Bill’s Third Reading.
I also thank those of your Lordships across the House who have participated in the various debates. I recognise particularly the contributions of the noble Lords, Lord Tunnicliffe and Lord Dannatt, the noble Baroness, Lady Smith of Newnham, and the noble and learned Lord, Lord Hope. While I may not have been able to acquiesce to all their requests, our meetings have been cordial and their contributions constructive.
The Government have listened very carefully to the views put forward throughout the Bill’s progress. However, they do not agree with amendments that undermine rather than strengthen the Bill, are simply not aligned with its aims or would render it incompatible with the United Kingdom’s international obligations.
None the less, I have noted and trenchantly relayed the very real concerns so eloquently and robustly expressed by your Lordships, not least by the noble Lord, Lord Robertson of Port Ellen, that by not excluding other serious offences, the Bill risks damaging not only the UK’s reputation for upholding international humanitarian and human rights law—including the United Nations convention against torture—but the reputation of our Armed Forces. I am sure that the other place has also heard those deep concerns loudly and clearly.
I also believe that we already offer the highest standards of care and support to our service personnel. I again reaffirm and reassure that the MoD has a long-standing policy that where a serviceperson or veteran faces allegations in relation to incidents arising from his or her duty, they receive full public funding for legal support, as well as welfare and pastoral support, for as long as necessary.
There have been a number of debates on investigations. In addition to requiring prosecutors to give consideration to the public interest in finality, where there has been a relevant previous investigation and no compelling new evidence has become available, we believe that the longstop measures in Part 2 of the Bill will help to reduce the likelihood of investigations being opened many years after operations have ended. Indeed, in the future, the longstops will act as a catalyst for encouraging any civil claims to be brought sooner, and any associated criminal allegations are also therefore likely to be investigated sooner. This reduces the risk of criminal investigations arising many decades later as a result of allegations made in civil claims.
I also remind the House that the review by Sir Richard Henriques into the reporting of allegations and the conduct of investigations on overseas operations is currently in progress. As I have said previously, this work will complement the measures in the Bill, and we should await his recommendations as to whether and what measures may be needed to improve our investigative processes and procedures.
The Bill will shortly move back to the other place for consideration of the amendments proposed by this House. Many of the debates we have had in Committee and on Report have, at times, been emotive. I am sure, however, that all have been born out of our conjoined desire to do the very best we can to support our brave current and former Armed Forces personnel both during and after their operational duties overseas.
In conclusion, I acknowledge and thank profoundly the Bill team led by Damian Parmenter and Jennifer Chamberlain and supported by the Bill manager, Richard Hartell. Their experience, expertise, resilience and patience with an at times crotchety Minister have been invaluable and exemplary. In these comments I embrace—metaphorically, that is—my colleagues: the Advocate-General, my noble and learned friend Lord Stewart, and the Government Whip, my noble friend Lord Younger. I thank them for their steadfast support. I commend the Bill to the House.
Lord Tunnicliffe (Lab) [V]
My Lords, the Bill goes back to the other place with important changes. Throughout the Bill’s passage, we have wanted to work with the Government and colleagues across the House to improve it. I thank everybody who has engaged with us, including the Minister—the noble Baroness, Lady Goldie—and the Bill team. This positive arrangement resulted in the removal of the derogation clause, which is welcome.
We do not want to wreck the Bill; we do not want to kill the Bill. The Government have identified a real problem: personnel can be plagued by vexatious claims and shoddy investigations. But the Government are approaching the problem from the wrong direction by failing to tackle the issue head-on, damaging our international reputation and threatening the Armed Forces covenant.
The amendments which have been successful in this House put personnel first by recognising the MoD’s responsibility to support troops facing investigation and litigation by placing adequate restrictions on reinvestigations and by ensuring that the Armed Forces covenant is not breached by the longstop. They put forces personnel first because they have been led by noble and gallant leaders in this House. I especially thank the noble Lords, Lord Dannatt and Lord West, and the noble and gallant Lords, Lord Stirrup and Lord Boyce, for their leadership and guidance on these important issues. I also thank former Defence Secretaries and Ministers for their contributions.
The other key amendment extended exclusions from the presumption to cover genocide, torture, war crimes and crimes against humanity. I want to thank my noble friend Lord Robertson for leading this broad coalition.
I also want to thank the Public Bill Office for all its advice and help, the House staff, my two leaders—my noble friends Lord Touhig and Lord Falconer—and my adviser and researcher, Dan Harris, without whom I could not have survived.
Baroness Smith of Newnham (LD)
My Lords, as the Minister and the noble Lord, Lord Tunnicliffe, have both pointed out, in many ways there is a lot of agreement on this Bill. Although from these Benches at times there were mutterings of “Kill the Bill”, they were not from me as the Front Bench spokesperson on defence; even my noble friend Lord Thomas of Gresford understands that this is an important Bill and that we are all coming from the same place. Our absolute commitment is to our service men and women and veterans, to getting the right provisions for them, and for dealing with vexatious claims. The question is: what is the best way of dealing with that?
Obviously, as the Minister has said, this Bill was part of a Conservative Party manifesto commitment, but I am also aware that a lot of the issues about vexatious claims and extent go back to Northern Ireland, so at some point I am expecting similar legislation to come forward. I am also expecting that some of the issues that we have debated at various stages of this Bill, particularly those associated with the duty of care, will come back in the context of the Armed Forces Bill later this year. Some of the amendments that were passed—important amendments, as the noble Lord, Lord Tunnicliffe, has pointed out—go wider than the narrow confines of this Bill.
Like the noble Lord, Lord Tunnicliffe, I would like to thank the Minister and also the Advocate-General for Scotland for the time that they spent talking to us and listening to our concerns. I am especially grateful to hear that the noble Baroness has trenchantly taken back our views on what was Amendment 3 on Report. One of the areas on which we have almost unanimous agreement on across the House is that it is appropriate for us to look again at the issues of genocide, war crimes, crimes against humanity and torture. If the Minister can do one thing, it would be to try to persuade the Government not to force the Commons to vote against that amendment; if it comes back here, we will send it back—it is so important. Clearly, the noble Lord, Lord Dannatt, brought forward an important amendment on the duty of care, and if that could be kept in, that would be even more welcome.
I would like to thank the Minister again, the Bill team, my noble friends and also the Liberal Democrat whips’ office, without whom I could not have done what I have done on this Bill either.
Lord Dannatt (CB) [V]
My Lords, I begin by thanking all those associated with this Bill, especially the noble Baroness, Lady Goldie, the Minister, for patiently attending to the points that we have raised in Committee and on Report. I would also like to echo the words of the noble Lord, Tunnicliffe, and the noble Baroness, Lady Smith, for the support that their Benches have given to many of the amendments to this Bill. I would also like to record my appreciation of the noble and gallant Lords, Lord Boyce and Lord Stirrup, for joining me in speaking on behalf of the Army, Navy and Royal Air Force in trying to ensure that, in carrying forward this Bill, the best interests of our service people, both serving and veteran, are attended to.
I would like to congratulate the Government on standing by their manifesto promise to bring forward a Bill of this nature. I believe that the Bill, now amended going forth from your Lordships’ House back to the other place, represents a far more effective way of achieving that manifesto commitment of the Government. Not surprisingly, I would urge that the amendments, particularly on the duty of care, are retained within this Bill and that this Bill now passes through the other place without further reverse amendment. Should a number of our well-intentioned amendments be reversed by the other place, we will have the opportunity of the Armed Forces Bill coming forward quite shortly. I have no doubt that many of the amendments that we have tried to put into this Bill will receive further attention in the Armed Forces Bill, not least of which is the issue of the duty of care. The Ministry of Defence as a caring employer has, indeed, a duty to ensure that they are seen through.
Once again, I thank all those involved, particularly those speakers from the Cross Benches. I hope very much that this Bill now passes in the other place without undue reverse amendment.
Baroness Goldie (Con)
My Lords, I thank the noble Lord, Lord Tunnicliffe, the noble Baroness, Lady Smith, and the noble Lord, Lord Dannatt, for their comments. I know that they continue to give me a message, and I continue to listen to the message.
Arrangement of Business
The Deputy Speaker (Lord Haskel) (Lab)
My Lords, for Day 3 of Report stage of the Financial Services Bill, I will call Members to speak in the order listed. Short questions of elucidation after the Minister’s response are discouraged. Any Member wishing to ask such a question must email the clerk. The groupings are binding. Participant who wish to press an amendment other than a 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 shall 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 this clear when speaking on the group. We will now begin.
Financial Services Bill
Monday 19th April 2021
(3 years, 8 months 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)
Baroness Neville-Rolfe
“Digital identification in the UK financial system
(1) The Treasury may by regulations establish a scheme for the use of a distributed digital identification for individuals and corporate entities operating in the UK financial system.(2) Regulations under this section are subject to the affirmative procedure.(3) In this section, “the UK financial system” has the same meaning as in the Financial Services and Markets Act 2000 (see section 1I of that Act).”
Baroness Neville-Rolfe (Con)
My Lords, I shall speak to Amendments 28 and 29 in my name on digital identification, and I thank my noble friends Lady Mcintosh of Pickering and Lord Holmes of Richmond for their support. I take a substantial interest in facilitating the provision of digital ID and have done so for several years. It is the sort of thing where the UK, with its early adoption of digital and skills in matters of security, should be ahead of the curve. Perfectly good systems exist in a number of areas and have been rolled out in other European countries and Asia but, unfortunately, not here.
I tabled amendments in the same sense during the passage of Covid legislation last year. I did not press the matter because I was promised progress and I had good meetings with my noble friend Lady Williams and with the Digital Minister, Matt Warman MP, who published proposals for the UK digital identity and attributes trust framework on 11 February. Last week, my noble friend Lord Holmes and I had another constructive meeting, this time with my noble friend Lady Penn—currently on the Front Bench—and civil servants in DCMS and the Treasury.
I am perhaps a little too impatient for the Civil Service or, indeed, for the Front Bench, which is no doubt why I am better suited to these Benches, but I warn noble Lords that I will continue to press this matter until we introduce a reliable system of online ID—not a consultation and not a plan, but a government-approved system. But I am very reasonable, so let us start in financial services—the subject of today’s Bill. So much progress has been made already that it ought to be possible to capture this in regulation now. As we discussed in Committee, this could be helpful in reducing fraud, which has mushroomed in financial services.
Likewise, we should be able to introduce digital ID for sales of alcohol; the supermarkets already use such methods for preventing the sale of knives to those aged under 18. We should also allow a trial in a pub chain or two, and we could use digital ID in the property sector, where the ID checks for domestic house sales are needlessly bureaucratic and repetitive. We do not need to get into the question of domestic vaccine passports, of which I strongly disapprove, or of ID cards, but evolutionary progress on digital ID—starting in financial services and honed to appropriate use—is overdue.
I have tabled two alternative amendments. Amendment 28 is an enabling power allowing the Treasury to press ahead, subject to a parliamentary debate, as soon as it has sorted out a system of digital ID—whether on a trial basis or when it has a definitive solution for the sector, which should be soon. We do not want to wait for the online harms Bill or another legislative vehicle. Amendment 29 provides for a review by 1 September this year. My own experience as a Minister and a civil servant is that such reviews and a clear date can be effective where there is a political will to get something done, as I believe there is here. I beg to move.
Lord Holmes of Richmond (Con)
My Lords, it is a pleasure to follow my noble friend Lady Neville-Rolfe; in doing so, I declare my financial services interests as set out in the register.
My noble friend and I came into the House in the same autumn and, since 2013, we have both talked very much about distributed digital ID. It was pressing in 2013, so it certainly is in 2021. I will speak to all the amendments in this group briefly. I had pleasure in adding my name to my noble friend Lady Neville-Rolfe’s amendments; they are clear, succinct, short and to the point, and do the job. Does my noble friend the Minister agree?
My Amendment 30 merely seeks to flesh out some of the elements which must be considered if we are to have a successful distributed digital ID—the issues around scalability, flexibility and, crucially, inclusion. Does my noble friend the Minister agree that not only are these three issues vital to any distributed digital ID but that any ID should be predicated on the 12 principles set out in self-sovereign identity? Does she also agree that, because of the nature of this issue—as my noble friend Lady Neville-Rolfe pointed out—including issues around ID cards and Covid passports, there is a pressing need not only to move forward with this work but to have a public engagement to enable people to understand the issues and really get to grips with a system that can work for all?
My Amendment 31 seeks only to push the opportunity for the UK around open finance. We have seen the advantages open banking has brought; does my noble friend the Minister agree that open finance could be a boon for the UK, and could she set out the Government’s plans to enable this? I brought Amendment 32 forward in Committee so I will not dwell on it, except to seek a specific answer on subsection (2)(a) of the proposed new clause. Does my noble friend the Minister agree that we need to seriously consider the dematerialisation of UK securities at least at the same speed as that proposed in the EU? This is a competitive market; it is a race.
Finally, my Amendment 37E was brought forward simply to push the need for a review of access to digital payments. Digital payments are the future, accelerated by Covid, but, crucially, huge swathes of the population rightly rely—and must be allowed to rely—on cash. Does my noble friend agree that we urgently need a review of access to digital payments?
The Deputy Speaker (Lord Haskel) (Lab)
I call the noble Lord, Lord Davies of Brixton. Lord Davies? I call the noble Baroness, Lady McIntosh of Pickering.
Baroness McIntosh of Pickering (Con)
I am delighted to support my noble friends who have tabled amendments in this group, particularly my noble friends Lady Neville-Rolfe and Lord Holmes of Richmond; they are very timely contributions to this debate. I am delighted to lend my support by co-signing Amendment 28 in the name of my noble friend Lady Neville-Rolfe and co-signed by my noble friend Lord Holmes of Richmond. My starting point is with my interest in developing digital ID and proof of age through digital verification. I speak as chairman of the Proof of Age Standards Scheme board.
For the reasons that both my noble friends have so eloquently given to the House this afternoon, time is passing, and we are living in a digital age; it is extremely important that this is recognised by all departments affected. I pay tribute to the work of the working group, of which PASS is a member, which is, I think, set up under the auspices of the Home Office and the Department for Digital, Culture, Media and Sport. I hope that my noble friend the Minister will be able to confirm that the Treasury is also co-ordinating aspects of digital identification with these other departments. It is extremely important that, if it is the wish of my noble friend Lady Neville-Rolfe that we proceed initially with financial services, we co-ordinate with other aspects. It has been a huge success in terms of sales of alcohol and knives, as my noble friend expressed. In Scotland, where 16 year-olds are able to perform and purchase so many more services than 16 year-olds in the rest of the United Kingdom, the proof-of-age PASS card has been especially important in that jurisdiction.
With these few remarks, I hope that my noble friend will look favourably in particular on Amendment 28. It is important to proceed prudently but with some pace to make sure that we are ahead of the game. This is the time for digital identification—with the proviso that we have the ability to verify age. I absolutely agree with my noble friend Lady Neville-Rolfe that there is space for digital identification in the terms of the online harms Bill, but there is no reason to delay by not passing this amendment to the Financial Services Bill before us this afternoon.
Lord Hunt of Wirral (Con)
My Lords, I draw attention to my interests as set out in the register, particularly as one of the independent directors of the LINK scheme, the UK’s largest cash machine network. I support my noble friends Lady Neville-Rolfe, Lord Holmes of Richmond and Lady McIntosh of Pickering, on Amendment 37E in particular.
It is, of course, far too soon to be drawing definitive conclusions based upon our experiences of the past year or so. However, it is striking how the pandemic has tended to accelerate some existing trends. One has been the declining use of cash. For many people, this decline is something to be embraced. Last summer and again in recent days, pubs and restaurants have begun to reopen, almost universally on the basis of card payments only; the commonly preferred method is to order from the table and pre-pay through a mobile device—no cash, no cards even, and with minimised physical contact. Home delivery of food has expanded dramatically. It is therefore hardly surprising that withdrawal of cash from ATMs almost halved during the worst of the pandemic. I know people who have stopped carrying cash. However, as my noble friend Lord Holmes of Richmond pointed out, this approach does not work for everyone.
Think, for example, of the disadvantages for isolated, elderly people who have to rely upon neighbours for food shopping. Unless they bank online, how can they repay them? My noble friend’s amendment reminds us that even when a trend is broadly welcome to the vast majority of people, it can isolate a minority from the mainstream, sometimes with cruel and unjust consequences. Financial exclusion, digital exclusion, social exclusion and economic exclusion all too often go hand in hand. I know from my work with LINK that those in charge of the UK financial system are acutely aware of these problems and challenges. Indeed, they are working tirelessly to address them, and LINK in particular is committed to maintaining free access to cash across the country, for as long as consumers want and need it.
As part of this commitment, LINK maintains a financial inclusion programme. This has so far provided 1,800 communities with a new, free-to-use ATM service, by providing financial subsidies to operators who install the machines. Consumer and community groups, local authorities, Members of Parliament—including Members of this House—and indeed any other interested parties, can help to identify further, suitable sites. Some providers of ATMs base their business model on charging for transactions. That is a perfectly valid approach, but no one should underestimate just how precious a resource a free-to-use ATM is.
It may be that this amendment is too prescriptive, and I look forward to hearing from my noble friend the Minister on the wording, but these challenges can be overcome only by partnership, including banks, the Post Office, retailers, regulators and the Government, all founded upon the latest possible information and analysis. This will require leadership and a positive, co-operative spirit.
We would be wise to take care in drawing any lasting conclusions from our experience of the pandemic. Much more analysis needs to be done of how financially marginalised people, particularly those without bank accounts, have fared since the beginning of 2020. I am confident that the trends and suggested responses set out in Natalie Ceeney’s excellent report of March 2019 will broadly stand the test of time. All that has changed is the acuteness of the challenge and the urgency of coming together to fashion a sustainable response.
Baroness Kramer (LD)
My Lords, the amendments in this group all deal in one way or another with the digital world and its implications for financial services. We all understand that we are in the midst of a revolution which will gather pace, rapidly expand, and reshape how we lead our lives. It is important that the UK is at the front of the curve in delivering those changes, to underpin its financial services industry. I was very pleased to see that the Bank of England and the Treasury have just announced the creation of a joint task force on central bank digital currency, a potential linchpin to those changes.
These amendments are all extremely useful. On digital identity, the noble Lord, Lord Holmes, hit the nail on the head, when he talked about the importance of engagement with the public. There are a lot of issues around identity, including issues of privacy. It is not an easy issue but a complex one. I hope that this engagement is dealt with more broadly. It may well be that the kind of targeted examples that the noble Baroness, Lady Neville-Rolfe, is concerned to see delivered much more quickly are easier to deal with, but of course, they will always lead to further questions, and this is something that we must confront head on.
We will be discussing access to cash in another group, as the noble Lord, Lord Holmes, has a specific amendment related to that, but it also points out how when we go through revolutionary change, there are always people who will be part of the “left behind”, either by choice or by capacity. Those people have every right to be able to pay a full part in our society and in our communities. Finding those mechanisms may be expensive, since it is much more efficient to go with a single strategy, but we must recognise the full complexity of the societies in which we live, the different pace at which people accept change and the degree to which they need support through that change.
I very much hope that we see something strategic coming from the Government, because we are dealing with each issue in a rather piecemeal way. We have reached the point where we need that fundamental underpinning, and I hope that we can begin to develop that strategic view, and quickly.
Lord Tunnicliffe (Lab) [V]
My Lords, we welcome the amendments tabled by the noble Baroness, Lady Neville-Rolfe, and the noble Lord, Lord Holmes of Richmond, on digital ID and other, broader, fintech issues. They provide the Government with an opportunity to elaborate on the responses given in Committee. I hope that those who tabled the amendments will forgive me for not speaking to each in turn, but to do so would be to repeat many of the points already made.
While we would not necessarily endorse some of the timescales envisaged in the amendments, the questions asked by the noble Baroness, Lady Neville-Rolfe, and the noble Lord, Lord Holmes, are sensible. In commissioning a review of fintech, the Government have demonstrated a level of interest in it, but the key question is how that is developed into concrete initiatives that grow the financial services sector while also improving the customer experience. The use of distributed digital identification could bring about a fundamental shift in how individuals and financial service businesses operate and interact on a day-to-day basis.
Properly considered implementation of digital ID could empower consumers by giving them greater choice in the services that they can access and better control over their personal data. The latter point is crucial. Any steps to further digitise the sector must come with security and privacy safeguards built in. It may not be possible or desirable to roll out digital ID overnight, but it would be interesting to hear more on the steps being taken by the Treasury and others to assess the opportunities and risks that exist. I hope that the Minister can also speak to potential timescales, even if they are not as ambitious as those spelled out in the amendments.
Amendment 37E in the name of the noble Lord, Lord Holmes of Richmond, appears to be a probing amendment, but I hope the Government will take seriously his suggestion of studying the links between digital and financial exclusion. In an earlier debate I referred to the need to tackle some of the bigger, more complex issues that contribute to financial exclusion. Without concerted effort now, one can envisage a scenario in which certain sections of the population already susceptible to financial exclusion will be unable to avail themselves of the products and services facilitated by new technologies.
We are at an interesting point in the fintech debate following publication of the Kalifa review. Items such as digital ID are mentioned in that document, albeit in the context of the need to establish international codes and standards. The UK has long been a leader in this sector. If we are to continue being so, both government and business must seek to participate fully in relevant cross-border discussions and initiatives.
I note from my latest perusal of the House of Lords business that the ever-tenacious noble Lord, Lord Holmes, has secured an Oral Question on 27 April regarding the Government’s response to the Kalifa review’s recommendations. I hope the Minister can provide sufficient reassurance that the Treasury recognises and wishes to harness the potential of fintech, but I am sure that any gaps in the response today will be revisited in just under two weeks.
Baroness Penn (Con)
My Lords, this group of amendments returns to the use of technology and data in financial services, a topic we have discussed at length at earlier stages. It is an important debate, and I welcome the efforts of noble Lords to bring this to our attention again.
As the noble Baroness, Lady Kramer, noted, as part of UK FinTech Week 2021 my right honourable friend the Chancellor, just this morning, delivered a speech setting out the Government’s commitment to fintech as a crucial component of the future of UK financial services. The Chancellor made several announcements, including the launch of a new task force between the Treasury and the Bank of England to co-ordinate exploratory work on a potential central bank digital currency; a new financial market infrastructure sandbox; confirmation that the FCA will take forward the idea of a regulatory scale box; a package of measures to support fintech firm growth; and a commitment to work with the fintech community to realise the idea of a new, industry-led centre for finance, innovation and technology.
The Chancellor also reiterated his thanks to Ron Kalifa for his landmark fintech review and confirmed that the Government will shortly provide a detailed response to Parliament via a Written Statement. I am not sure I can say to the noble Lord, Lord Tunnicliffe, whether that will be before the Oral Question on 27 April.
I turn to the amendments before us today. Amendments 28, 29 and 30 all relate to the establishment of a system of digital identification and call on the Government to publish plans for achieving this. Digital identity is a vital building block for the economy of the future. The Government recognise that digital identities have the potential to make it quicker, easier and more secure for people and businesses to get things done, to simplify people’s lives and to boost business. We want to offer people the choice to provide their identity digitally where and when it suits them, securely, easily and with confidence.
I was pleased to be able to meet my noble friends Lady Neville-Rolfe and Lord Holmes last week. In that meeting, we discussed the ambitious programme of work that the Government are taking forward on digital identities that work across the economy, some of which I will summarise here.
The Government published their response to the digital identity call for evidence in September 2020 and committed to creating a framework of standards, governance and legislation to enable digital identities to be used in the greatest number of circumstances. I assure my noble friend Lady McIntosh of Pickering that this work is being co-ordinated by the Department for Digital, Culture, Media and Sport across all departments, including the Treasury, so that the policy on digital ID captures the widest number of applications and uses for it. An important part of this work was the recent publication of the draft UK Digital Identity and Attributes Trust Framework. This framework sets out a vision of the rules governing the future use of trusted digital identity products.
Baroness Neville-Rolfe (Con)
My Lords, I thank all who have spoken in this short but wide-ranging debate. Time is passing, and we live in a digital age, as my noble friend Lady McIntosh of Pickering said—a revolution indeed, in the words of the noble Baroness, Lady Kramer. My noble friend Lord Hunt of Wirral reminded us that the withdrawal of cash halved during the pandemic, with some cruel consequences. LINK does great work; I remember that from my time at Tesco. We need a network to endure as normality returns. I thank the Minister for updating us on the Chancellor’s statement on fintech and open finance today.
It may not surprise noble Lords that I remain disappointed at the pace of change on digital ID. The Minister is right to emphasise what has been done in recent months, and I strongly support this. However, years are passing, our leadership in digital is eroding, and we can no longer blame the EU. We must solve this problem for the industries, services and, above all, consumers involved. Of course there must be public engagement, but this must not be used as an excuse for undue delay. I will be back, but for today, I beg leave to withdraw my amendment.
The Deputy Speaker (Lord Faulkner of Worcester) (Lab)
We now come to the group consisting of Amendment 53. Anyone wishing to press this amendment to a Division must make that clear in the debate.
Amendment 33
Lord Sikka
“FCA duty to make a statement about ministerial directions on investigations
(1) The Financial Services and Markets Act 2000 is amended as follows.(2) After section 1T (right to obtain documents and information) insert—“1U Duty to make a statement about ministerial directions on investigationsWhere a Minister directs, comments on, or intervenes with an FCA investigation into wrongdoing or malpractice by a company, the FCA must make a public statement about the nature of any such intervention.””
Lord Sikka (Lab) [V]
My Lords, I am very grateful to the noble Baroness, Lady Bennett of Manor Castle, and the right reverend Prelate the Bishop of St Albans for supporting this amendment. It was discussed in Committee, but the Government’s response has raised more questions than answers.
The amendment seeks transparency about ministerial interventions or directions on investigations, especially into malpractice by companies. It would require the FCA to make a statement as and when Ministers intervene. Currently, ministerial interventions and directions, especially those that stymie investigations, are made in secret. Parliament and the public are not informed, and there is no opportunity to question Ministers. Such interventions mean that selected corporations receive ministerial favours and others do not. In the absence of investigations into the criminal practices of major corporations, it is impossible to develop effective legislation or financial regulatory practices.
In Committee, I provided some evidence of how the UK Government protected criminal organisations. It related to HSBC, which, by its own admission, had been engaged in criminal conduct in the US. In 2012, it was fined $1.9 billion for money laundering offences, which at that time was the largest fine ever levied upon a corporation. HSBC also faced the prospect of a criminal prosecution.
HSBC was supervised by the Financial Services Authority, an independent regulatory body in the UK. The US fine did not persuade the FSA to investigate. Instead, on 10 September 2012, the then-Chancellor George Osborne, the Bank of England and the FSA secretly wrote to US regulators and urged them not to prosecute HSBC, as the bank was apparently too big to fail.
The ministerial interventions came to light not because of any statement made by the Government but through a July 2016 report by the US House of Representatives Committee on Financial Services. The report was titled Too Big to Jail, and reproduced the Chancellor’s letters and some email and telephone conversation records, though these are not comprehensive. It is clear that the Bank of England, the Treasury and the regulator colluded to protect a bank engaged in criminal conduct. The matter came to light in July 2016, but there was no Statement made to Parliament to explain why a criminal organisation was being protected by the Government. By July 2016, the FSA had morphed into the FCA, but the FCA did not launch an investigation either.
The report by the US House of Representatives Committee on Financial Services shows that the Government were also shielding other UK banks. These included Standard Chartered, which was fined £670 million for money laundering, and a closer reading of the same report shows that the Government also intervened to protect Barclays.
In Committee, I referred to my legal endeavours to secure a copy of the Sandstorm report, which provides some information about frauds and fraudsters at the Bank of Credit and Commerce International. The bank was closed in July 1991, but there has been no forensic investigation into the biggest banking fraud in the 20th century. Most of the Sandstorm report is available in 1,300 US libraries. The UK courts have forced the Treasury to release a copy to me, and it shows that the Government are still protecting individuals linked to al-Qaeda, Saudi intelligence, and the royal families of Abu Dhabi and other countries in the Middle East, as well as arms dealers, smugglers, fraudsters, convicted criminals, BCCI senior personnel, and some politicians.
What kind of Government protect criminal organisations and wrongdoers? What kind of democracy do we have when such interventions are not explained to Parliament and the people? One of our greatest failures is to not develop durable institutional structures, effective laws and enforcement, and a major reason for this is that many frauds and abuses are simply covered up.
Baroness Bennett of Manor Castle (GP) [V]
My Lords, it is a great pleasure to follow the noble Lord, Lord Sikka, who has just delivered what I can describe only as a bombshell of a speech—one that makes the case for the extraordinary importance of this amendment and for a far broader cleanout of the Augean stables of our financial sector and its so-called regulation and, indeed, of our entire UK system of government.
I remind noble Lords that Amendment 33 in the name of the noble Lord, Lord Sikka—also signed by the right reverend Prelate the Bishop of St Albans, and to which I am pleased to attach my name—creates for the FCA a
“duty to make a statement about ministerial directions on investigations”.
I also remind noble Lords of a key part of the speech that we have just heard. On 30 May 2017, possibly in response to previous invitations, the Thames Valley police and crime commissioner wrote to Prime Minister saying:
“There is a serious problem with bank governance, which appears to be corrupt at the highest level in a number of our major banks. The governance system itself is being run by those most involved in cover ups and corrupt practices.”
That came from the Thames Valley police and crime commissioner, yet it appears that nothing has been done in response to that letter. I note also, as the noble Lord, Lord Sikka, said, that despite an initial offer of a meeting, the late Sir Jeremy Heywood subsequently declined to meet the police and crime commissioner.
Who should be paying attention to this? I would say everyone in the UK, and indeed the world, for while it might be more than a decade since the threat presented by the financial sector to the security of us all was made so starkly evident, the threat remains and is undoubtedly even greater now than in 2008. Among those who should be paying particular attention, I strongly suggest, are all those who have been assuring us in this House and elsewhere that everything is fine: “Nothing to see here, just a few bad apples being cleared out”. People have been saying that there is no problem with regulation or transparency, or the risks that the financial sector presents. They should pay attention to the noble Lord’s speech.
The House has heard my views before on the deep-rooted, decades-old—indeed, centuries-old—issues with our financial sector. I am not going to repeat those, which I explored at some length in Committee. Instead, I focus in this stage on the financial sector as a huge global crime issue, as a major United Nations initiative has recognised. I refer to the High-Level Panel on International Financial Accountability, Transparency and Integrity for Achieving the 2030 Agenda—the so-called FACTI panel. It is calling on Governments to agree to a global pact for financial integrity for sustainable development. This reminds us that while we often think of white-collar crimes and fraud as victimless, in fact they are crimes that damage the whole world, but particularly the poorest and most vulnerable in the UK and globally.
The FACTI panel, consisting of former world leaders and central bank governors, business and civil society heads and academics, says that as much as 2.7% of global GDP is laundered annually, while corporations shopping around for tax-free jurisdictions cost Governments up to $600 billion a year. We have heard often in debating the Bill, and elsewhere from the Government in particular, about how prominent the UK financial sector is on the global stage and about its world-leading role. There can be no conclusion from the FACTI report except that it is directed clearly at the UK and at your Lordships’ House.
The FACTI panel says that stronger laws and institutions are needed to prevent corruption and money laundering, and that the bankers, lawyers and accountants who enable financial crime must also face punitive sanctions. The report also calls for greater transparency on company ownership and public spending, stronger international co-operation on the prosecution of bribery, to which this amendment is particularly relevant, on minimum corporate tax, which I asked a question about last week, and on the global governance of tax abuse and money laundering. In Committee, I also referred to the Center for American Progress, not necessarily an organisation with which I often ideologically agree. However, it was making similar arguments to those of the FACTI panel. I invite any noble Lords with an FT subscription—which is all of us, through the Library—to look at stories tagged “financial fraud”. They make for a sober set of reading.
Action is needed. We hear often about the need for the UK to be world leading. I want to reflect on a meeting—which I know was before the pandemic because it was in person, conducted upstairs in one of the Committee Rooms of your Lordships’ House—when I had a discussion with a group of University of Michigan master’s students. They were visiting with their professor while in Europe to study fraud; their entire master’s degree was in fraud and corruption, examining the scale of it around the world. Pointing down the road from your Lordships’ House, I said to them that the City of London was one of the global centres of corruption. I was perhaps not surprised but still interested to discover that there was no expression of shock or surprise from those students. They simply nodded in agreement, as if I had made a statement that to them was blindingly obvious.
The City of London has been trading on its global reputation with centuries of propaganda, backed for much of that time by the muscle of colonial power. The world has moved on and is less and less likely to believe the propaganda. Amendment 33 is a simple, modest and far from sufficient step, though an important one, to ensure transparency in the governance of our financial sector—indeed, transparency of our governance. I commend it to your Lordships’ House.
Baroness Neville-Rolfe (Con)
My Lords, I rise to speak on Amendment 33 in the name of the noble Lord, Lord Sikka, having studied the comments made in Committee and repeated today. I can understand his frustration with history in this area. In particular, I would highlight the long delay and prevarication by Lloyds and the then regulator in dealing with the HBOS scam, which led to the demise of a number of small businesses banking with HBOS’s corporate division in Reading. Maybe more transparency would have helped there but it was actually a failure by the bank itself and by the regulator, which I very much hope would not happen again today. I am still not entirely sure what eventually happened; I know that there were some high-profile convictions. Perhaps my noble friend the Minister could update us on that sorry tale. I share everyone’s wish to see a system where it could never happen again.
However, I always worry that bad cases make bad law. The cases being quoted are generally old, while the FCA’s powers have been strengthened over the years and the culture has changed so that it is now very pro-consumer. Moreover, as my noble friend the Deputy Leader of the House explained on 10 March, the FCA is an independent body and the power of Ministers to intervene is very circumscribed. I suspect we will come back to these issues in the next financial services Bill, so I would like to make two points today.
First, reports from the United States have to be treated with some care. It is a sad fact that, unlike our own regulatory authorities, the US ones are more than a little protectionist. They come down harder on foreign entities than their domestic ones and like to levy huge fines whenever they can. It is not a level playing field, unlike the UK, which is of course one of the reasons why investors like it here. Secondly, in the sort of cases we are talking about, Ministers—I speak from experience, first as a civil servant and secondly as a Minister at BEIS, DCMS and HM Treasury—act on advice, not as free-talking politicians. If they make a direction in an investigation, it will reflect a public policy need and that could be a confidential matter, such as security or a government interest. Once that is made public it might be difficult for those being investigated to get a fair hearing, which is unfortunate in itself and likely to lead to aborted prosecutions. Whichever party is in power, this would not be in the public interest. For all these reasons, I encourage those involved to withdraw their amendment today.
The Lord Bishop of St Albans [V]
My Lords, I will be brief in my support for this amendment. I am very grateful to the noble Lord, Lord Sikka, and the noble Baroness, Lady Bennett of Manor Castle, for speaking at great length. I therefore do not need to add a huge amount more, not least as I intend to go into a bit more detail on my concerns about transparency when speaking in support of Amendment 34, which touches on similar issues of accountability.
I am a little puzzled why the noble Baroness, Lady Neville-Rolfe, thinks that this is a case of bad cases making bad laws. It seems to me that there have been very considerable concerns in the past. Surely those ought to be investigated.
We are facing a real crisis of trust in public bodies at the moment, and I believe that this amendment will be a beneficial addition to this Financial Services Bill. In making provisions for an additional layer of transparency, it will act as an incentive against any possible interference; whether done formally or informally, it will still have that effect. The truth is that we do not know whether ministerial interference in FCA investigations has occurred, and positively stating either way is speculative.
Although I was not privy to the written response from the noble Earl, Lord Howe, which he promised to send to the noble Baroness, Lady Kramer, confirming whether there were provisions within the Ministerial Code to allow for interventions in FCA investigations, the assumption in Committee was that any attempt to steer an FCA investigation would constitute a breach of the Ministerial Code. That would require breaches of the Ministerial Code or other offences to be taken seriously, and not treated lightly or even dismissed. Last year, an inquiry found evidence that the Home Secretary had breached the Ministerial Code, yet the consequences extended little further than an apology. In February, it was revealed that the Health Secretary had acted unlawfully when his department failed to reveal details of contracts signed during the Covid-19 period. Just before Easter, we all started reading about allegations surrounding conflicts of interest in a former Prime Minister’s dealings with the financial services firm Greensill, and there have been concerns about the current Prime Minister’s dealings during his time at City Hall. It is vital that, if we are to rely on breaches of the Ministerial Code, they are given some teeth and have some effect.
I have no evidence, but it may be that no Minister has ever interfered in any FCA investigation, in any way. I sincerely hope that that is the case, but we cannot rule it out. If interferences have occurred, it would be doubtful to assume that investigations are always steered in the interests of consumers. Although provisions are in place to prevent misconduct, they should not discount the contribution that this important amendment can make in strengthening those rules and further disincentivising any possible ministerial interferences in FCA investigations. If Her Majesty’s Government have concerns about small parts of the wording here, I hope they come back with some improvements to ensure that the levels of transparency are clear to everybody, in every part of the system.
Baroness Kramer (LD)
My Lords, unfortunately, I did not bring with me a copy of the letter that the noble Earl, Lord Howe, kindly sent me in response to my question about the Ministerial Code. I expect that a copy is in the Library and available to everyone, but I am sure that the Minister will follow through. While reading the content was reassuring, I do not want it to be a distraction—it is one of the reasons that I have not signed this amendment—from the underlying issue of whether there is adequate transparency to act as the cleansing light that we need in an industry sector that will always be subject to misbehaviour. There is just too much money and opportunity, and an awful lot of power, washing through this industry. Insight, clarity and visibility are probably more important than in almost any other sector of our economy.
The noble Baroness, Lady Neville-Rolfe, talked as if all the misbehaviour was in the past, but we are talking about Greensill today and I have questions. I know that there are many task forces and investigations going on, but I still have no understanding of how a company with as many red flags against it as Greensill got through the accreditation process to enable it to participate in the CBILS. Other than writing to the British Business Bank—and I doubt that I will get an adequate answer—I am not sure what mechanism I can possibly use to get to the bottom of that. We do not have transparency in the areas where we need it.
I remember many conversations, in the midst of the 2008 financial crisis and subsequently, with regulators that were anxious not to rock the boat. The economy and industry were fragile enough, and they were disinclined to investigate. It is to that which I have always attributed the FCA’s inaction with regard to HBOS. I support the description of the HBOS crisis given by the noble Lord, Lord Sikka. It was purely by chance that the fraud—it was literally fraud that sent people to jail for 10 years—at HBOS was exposed. Thames Valley Police decided to investigate when all the regulators, the Serious Fraud Office and the most relevant and obvious police forces had refused. Part of that was due to a lack of resources, from the police forces’ perspective.
I do not think I have ever forgiven the Treasury for its actions in this regard. It cost £7 million for Thames Valley Police to investigate that fraud and it was never reimbursed that money. The fine, of about £45 million, went to the Treasury and was deliberately not shared with the police force. Had it been, it would have encouraged and enabled police forces around the country to be more acutely aware and engaged when there was evidence of fraudulent behaviour. Even today, the various companies that were defrauded have not yet been fully compensated. Nearly 14 years on, it has not been resolved. We have two more bodies now involved in trying to clean up that mess.
The other area that leaves me with great concern is that the response I always get when I raise issues around transparency and enforcement in financial services is: “We now have the senior managers regime.” I was on the Parliamentary Commission on Banking Standards, which drove a lot of the thinking that led to that regime, but, as we have often discussed in this House, it has been holed below the waterline by decisions of the FCA not to pursue senior executives. We know mostly about Barclays and Jes Staley—who had hired private investigators to track down a whistleblower—being fined but not declared unfit to hold his position. The fine was of a size that was more than made up by the bonuses he received in the following years, so it was pointless.
We have an underlying problem. It is not that the senior managers regime does not do some good—it establishes some procedures and processes—but it focuses on more junior people and does not hold people accountable at the senior level. With Greensill coming into the picture now and triggering a much wider discussion, I very much hope that the Government will take back the message that they have to sit the regulators and the various enforcement bodies down, and work out a way to make this system more effective. They are up against powerful forces and there is inequality of arms, but this industry has to be kept under oversight and control because, when it goes wrong, it takes a large part of our economy with it, as well as creating many individual victims.
Lord Tunnicliffe (Lab) [V]
My Lords, my noble friend Lord Sikka facilitated perhaps one of the most interesting debates in Grand Committee. The amendments raised several important questions about the independence of the FCA, as well as the nature and success, or otherwise, of its past investigations. My noble friend was not happy with the response provided by the Minister last time; nevertheless, I felt that we had a helpful initial response in Committee, with references to legislation that requires FCA action in certain circumstances and allows a Minister to initiate an investigation in others. The response was perhaps a little light on the limits of ministerial power; recent times have shown that the Ministerial Code is not always considered binding. I hope that we will hear more on this later.
Some of the concerns that my noble friends cited related to events preceding the financial crisis, and I wonder whether this is an area where Ministers can go further today. For example, the noble Earl mentioned Section 73 of the Financial Services Act 2012, which imposes a duty on the FCA to investigate in the event of certain regulatory failures. As the measure was introduced after the global crash, it is clearly of no use in shedding light on events that took place before it. However, is he confident that, if some of the instances cited by my noble friend were to happen today, the current legal provisions would be sufficient to trigger an independent investigation?
Earl Howe (Con)
My Lords, before I respond to this amendment, I would like to express my sadness on behalf of us all at the news of the death of the noble Lord, Lord Judd. Lord Judd took part in our debates on the Bill only just before Easter. He was a Member of this House for some 30 years, a man of great wisdom and wide experience, but above all a man of great kindness, who had an abiding concern for those less fortunate than himself both in this country and across the world. We shall miss him.
Amendment 33 seeks to require the FCA to make a public statement on the nature of any intervention a Minister may make concerning an FCA investigation into an individual firm. The noble Lord, Lord Sikka, made a number of allegations against Ministers, past and present, and the Treasury. I do not have the facts or the briefing to enable me to respond to him today on so many detailed issues. Indeed, I have to say that, for the most part, I did not recognise the picture that he painted. I hope, therefore, that he will allow me to write to him on what he has said, copying in noble Lords speaking in this debate, and in doing so I shall attempt also to address the points made by the noble Baroness, Lady Bennett of Manor Castle. However, I can respond to the issue of principle raised by this amendment, which is what we are here to focus on for the purposes of the Bill.
The House may recall that, in Committee, I outlined the current legislative framework which establishes the FCA as an independent, non-governmental body. In my remarks today, I hope to build on that discussion and reassure noble Lords that this amendment is not necessary. Ministerial intervention in the activities of the FCA, were it to occur, would be one of two things: either legally permitted under existing statute, or illegal. What actions are legally permitted within the legislative framework? Under the framework established by Parliament, the Treasury and hence Ministers have strictly limited powers in relation to the FCA. Indeed, the Treasury’s ability to direct or influence the regulators is set out in statute. Most crucially, the Treasury has no general power of direction over the FCA.
The Financial Services Act 2012 sets out the legislative mechanisms through which the Treasury can launch investigations, provided under Section 77 of that Act, which provides a mechanism for the Treasury to direct the FCA to conduct an investigation into events related to a person carrying on a regulated activity. Section 77 was made use of recently, as noble Lords will know, in relation to the regulation of London Capital & Finance, or LCF. Under Section 78, the Treasury can provide direction as to the scope of an investigation, the timeline that it should cover and how it is conducted. So the scope of the powers available to the Treasury is tightly circumscribed by statute. That has to be right, because the ultimate independence of the FCA is vital to its role. Its credibility, authority and value to consumers would be undermined if it were possible for the Government to intervene in its decision-making or ongoing supervision of authorised firms.
As the FCA has acknowledged in its mission statement, Parliament has given the FCA a range of tools in order to deliver its objectives. These tools range from guidance, to censure, to its Section 166 FSMA powers, which allow the FCA to seek the view of an independent third party or “skilled person” on aspects of a regulated firm’s activities if it is concerned or wants further analysis. These accompany independent powers for the FCA to make decisions on how to use these tools most effectively. In my remarks in Committee, I did not intend to suggest that the FCA cannot investigate events that occurred before it was created. I merely pointed out that the events being discussed were historical. The FCA can and does look at historical behaviour of the firms that it supervises.
In the context of this amendment, it is necessary to appreciate that the FCA is an independent body and that there are laws which govern and strictly limit the directions that the Treasury can and cannot give it. However, were such directions to be given under Section 77 and 78 of the 2012 Act, I cannot conceive of a situation where Ministers and the Treasury would not make that fact public.
That covers the intervention that is legally permitted; what about nefarious interference? In Committee, the noble Baroness, Lady Kramer, raised the Ministerial Code, as indeed she has today, and asked whether the provisions of the code were applicable in this instance and strong enough in relation to engagement with regulators. I have since written to the noble Baroness on this topic and a copy has indeed been placed in the Library. However, for the benefit of the House I will expand on that now.
The Ministerial Code requires Government Ministers to
“maintain high standards of behaviour and to behave in a way that upholds the highest standards of propriety.”
In addition, Ministers must act in accordance with the highest standards as set out in the seven principles of public life: selflessness, integrity, objectivity, accountability, openness, honesty and leadership. I particularly point to the requirements under the openness principle for Ministers to
“act and take decisions in an open and transparent manner.”
I hope that this assures noble Lords that, even if Ministers were tempted to interfere improperly, the Ministerial Code provides the proper protections against this. In short, if a Minister were to attempt it, he or she would simply not get away with it. The right reverend Prelate the Bishop of St Albans in a real sense made my point for me. If anyone has evidence of improper behaviour by Ministers, the regulators or firms, they should of course raise that through the proper channels.
It is not a case of my arguing along the lines of “Trust me—I’m a Minister.” I hope that I have demonstrated that the appropriate legislation and the appropriate code and principles of ministerial behaviour are already in place in this space to safeguard against any undue interference as envisaged by this amendment. I hope that this reassures noble Lords that this amendment is simply not necessary, and that the noble Lord is thereby content to withdraw it.
Lord Sikka (Lab) [V]
My Lords, I join the noble Earl, Lord Howe, in expressing sadness at the death of Lord Judd, and send my condolences to all his loved ones.
In her response, the noble Baroness, Lady Neville-Rolfe, raised the interesting point that some matters were confidential and that Ministers or the Government cannot therefore talk about them. There is also a broader issue of parliamentary accountability and public interest, and of being open and accountable, which should always triumph over the pursuit of private interests. I do not think that any of the issues I have spoken about touch upon the position of spy satellites or troop movements and are not, therefore, a real threat to national security. They may be a threat to private arrangements which some elites have negotiated with Governments, but that is another matter.
I am grateful to the noble Earl, Lord Howe, for his detailed explanation. He said that if there is any evidence about ministerial interventions it should be brought to the attention of the proper authorities, but the difficulty is that there is no mechanism by which this intervention is placed on public record. We only become aware of it because of revelations in other cases. In the case of BCCI, which I cited, it was after five and a half years of litigation against the Treasury that I managed to secure a copy of the Sandstorm report. The Government did their utmost to prevent the disclosure of that document, so there simply are no formal channels for any evidence. That means that we can only investigate past events, try to put the bits and pieces together and build up a picture about ministerial interventions.
This issue will remain with us, but one thing we cannot deny is that, even under the FCA’s rules and the Ministerial Code, which the Minister cited, the unredacted version of Lord Justice Bingham’s report on the Bank of England’s supervision of BCCI still remains a secret document. That is really bizarre. The Sandstorm report is on the internet, because I put it there, but as far as the state is concerned it is somehow a secret document.
As I said, this issue is not going to go away. In the post-Covid world there may well be more scandals and more issues. There will, therefore, be more questions about government accountability and interventions. For the time being, I withdraw the amendment, but hope to return to it in the future. I thank noble Lords for their indulgence.
The Deputy Speaker (Baroness Fookes) (Con)
We now come to the group consisting of Amendment 34. Anyone wishing to press this amendment to a Division must make that clear in debate.
Amendment 34
Lord Sikka
“Supervisory Board
(1) There is to be a Supervisory Board to perform the function of monitoring the FCA and PRA.(2) The Supervisory Board must consist entirely of stakeholders.(3) Recruitment for the membership of the Supervisory Board is to be conducted through open competition and the appointments are to be confirmed by the House of Commons Treasury Committee, or another relevant House of Commons Select Committee.(4) The Chancellor of the Exchequer may nominate individuals to the Supervisory Board.(5) The following are ineligible for appointment to the Supervisory Board—(a) current and past employees of the FCA and the PRA, and(b) current employees of organisations supervised by the FCA and the PRA.(6) A member’s membership of the Supervisory Board cannot exceed a period of five years beginning with the day the member’s appointment is confirmed under subsection (3).(7) The Supervisory Board has no responsibility for—(a) the day-to-day operations of the FCA or the PRA, and(b) investigations and enforcement of the rules devised by the FCA and the PRA.(8) The Supervisory Board’s functions are to—(a) provide strategic oversight of the Executive Boards of the FCA and PRA responsible for day-to-day operations;(b) inquire into the adequacy of resources used and available to the FCA and the PRA;(c) seek explanations from the Executive Board for reasons for the delay in launching and completing investigations; and(d) seek explanations from the Executive Board in relation to the efficiency and effectiveness of the FCA and the PRA in discharging their statutory duties.(9) The Supervisory Board shall have powers to—(a) demand explanations from the Executive Board on any matter affecting the protection of consumers from harmful practices;(b) secure information from the Executive Board about their transparency and accountability to the public; and(c) liaise with whistle-blowers and examine FCA and PRA policies for protecting and rewarding whistle-blowers.(10) The Supervisory Board must hold open meetings with the Executive Boards of the FCA and the PRA at least once every three months.(11) The working and background papers of the Supervisory Board must be made publicly available.(12) The Supervisory Board must lay before each House of Parliament an annual report highlighting matters of concern relating to the operation of the FCA and PRA which it has discovered in exercising its powers and functions.(13) The Supervisory Board must be consulted on appointment and reappointment of the Chief Executives of the FCA and the PRA.”Member’s explanatory statement
The new Clause will create a Supervisory Body for each of the FCA and the PRA. Its function would be to internally monitor the Executive Boards of the FCA and the PRA and provide a diversity of views on the conduct and practices of the FCA and the PRA.
Lord Sikka (Lab) [V]
My Lords, I thank the noble Baroness, Lady Bennett of Manor Castle, and the right reverend Prelate the Bishop of St Albans for supporting this amendment, which seeks to democratise regulators by giving the people a direct say in their governance structure, and thus act as a bulwark against capture by corporate interests. Almost every regulator claims to serve the people, but normal people—as I like to call them, rather than ordinary people— are kept off the boards. This amendment would put people inside the regulatory bodies. The amendment proposes a two-tier board structure for the FCA and the PRA. One tier, the executive board, would be responsible for the day-to-day operations, just as it is today. The second tier, a supervisory board consisting of stakeholders, would exercise oversight of the executive board and its practices. The amendment sketches out the composition and some of the powers, rights and duties of the supervisory board and its modus operandi, which is complete sunshine.
Throughout the debate on the Bill, many noble Lords have expressed concerns about the failures of the FCA. Capture by corporate interests has been identified as a major factor. The colonisation of the FCA and the PRA boards, working parties and committees by corporate interests means that their interests are prioritised and anything threatening is filtered out of consideration altogether. The FCA and the PRA are more likely to have one-to-one meetings with finance industry elites than with the victims of banking frauds or mis-sold financial products, or individuals concerned about the RBS and HBOS frauds and bank forgeries.
Baroness Neville-Rolfe (Con)
I start by sharing the powerful words of my noble friend the Deputy Leader on the sudden loss of the noble Lord, Lord Judd, who contributed so very recently to this Bill and whom I remember well as an effective Minister of State at the FCO when I was a young civil servant. His death is a great loss.
As I understand it, Amendment 34 is designed to improve the culture of the financial services sector—a sentiment that I empathise with—although it would do so by adding an extra layer of regulation through a stakeholder supervisory board. I am against this for the FCA, the PRA and other regulators. I have substantial experience of regulation from my Civil Service past, as an executive and a non-executive of non-financial companies, as a Minister and, currently, as a non-executive of a small bank. In my judgment, adding an extra layer of board members without practical experience could have a perverse and negative effect.
For good outcomes, one needs clear, simple and outcome-based regulation, and company directors who take their responsibilities seriously and promote a good culture, with a focus on customers and protection, on risk and the good use of capital, on fraud and cyber, on the people who operate the business—from the top right down to the bottom—and on innovation and cost control. Above all, one needs directors who will challenge, get into the detail and be listened to.
I have been a non-exec for over 20 years and, until recently, there has not been enough attention paid to, or appreciation of, the challenge function and directors who challenge. Cases such as the HBOS scam, which we have been concerned about today, are the result. This needs to change, in terms of the selection of non-executives and with strong internal challenge in the executive structure of companies. This applies to financial services companies and more broadly.
An extra layer in the form of a supervisory board will not solve the problems of culture that have been highlighted. It risks introducing a further confusion of responsibility. To my mind it is, I am afraid, a bad idea.
Baroness Noakes (Con)
My Lords, I am sure that the noble Lord, Lord Sikka, will not be surprised to find that I do not support his Amendment 34. In particular, as a former director of a supervised bank, I do not recognise the regulatory capture that he majored on in Committee and again today. In my experience, the relationships are always challenging and, sometimes, worse than that.
I have two main reasons for opposing the amendment. First, a supervisory board sitting over the top of the existing regulators undermines a fundamental characteristic of regulation in the UK—namely, that regulators are independent. That means that they are independent of government, certainly, and of Parliament and anyone else who thinks that they might have an interest in what they do. They are certainly accountable for delivering against their objectives and expect to be scrutinised by Parliament, but they are autonomous bodies. This amendment runs against that.
Secondly, the regulators already have governance structures that oversee the work that the executives undertake. In the FCA, it is the FCA’s own board, which has a chairman and a majority of non-executive directors. I believe that the only executive on the FCA board is, in fact, its chief executive. In the case of the PRA, there is a Prudential Regulation Committee, which has Bank of England executives and outside members, and is chaired by the Governor of the Bank of England. More importantly, in governance terms, as the PRA is part of the Bank of England it is overseen by the Court of the Bank of England, which, again, is a largely non-executive body chaired by a non-executive, although it does have the governor and the deputy governors, including the head of the PRA.
Governance of the regulators is carried out in the way in which governance in the UK is normally done. It covers the very things mentioned in proposed new subsection (8), which is therefore duplicative. If there are concerns, they should be dealt with within the organisations concerned, without writing reports to Parliament. I believe in transparency, but there is a point at which transparency becomes counterproductive, and I am sure that this amendment is way beyond that point.
Accountability to Parliament takes many forms, a key one being the annual reports that are laid before Parliament, setting out the regulators’ performance against their objectives, which is required by existing statute. It really is difficult to see what added value this amendment would create.
The amendment is also deficient in a number of respects. Perhaps the most glaring is the reference to the “Executive Board” of the PRA and of the FCA. As far as I am aware, there is no such thing specified in legislation or the governance arrangements of either body. I believe that each regulator has an executive committee or equivalent, but they do not have an “Executive Board”, with a capital “E” and a capital “B”.
The amendment would require the exclusion from the supervisory board of anyone who might actually understand what the PRA and the FCA actually do. Proposed new subsection (5) would disqualify “current and past employees” not just of the FCA and the PRA but of any organisation that they supervise. I have never thought that ignorance was a good qualification to be a member of a board.
Proposed new subsection (10) talks about “open meetings” but does not explain what that means in practice. Proposed new subsection (11) says that all the supervisory boards papers must “be made publicly available”, but it seems to pay no heed to the need for confidentiality or data protection. I could go on. These are unnecessary and ill-thought-out proposals, and I hope that my noble friend the Minister will not accept them.
The Lord Bishop of St Albans [V]
My Lords, I will speak in support of Amendment 34, in the name of the noble Lord, Lord Sikka, which is an interesting contribution to the question of governance. I am keen that we find any ways that we can to speak into those organisational cultures that every industry adopts and promotes, and which sometimes lead to groupthink.
There are times when it takes someone from the outside to ask intelligent questions. I am reminded of Her Majesty the Queen asking the Bank of England why there had been a financial crash back in 2008, when many people in the industry, who were paid extraordinary amounts of money because of their supposed expertise, had not spotted that it was coming. I do not think that this is about inviting people who are ignorant to come on to boards; this is a question about whether there is a wider contribution that might be very useful and of help to thinking about issues of governance responsibility.
I will comment briefly on a further development in the FCA’s investigation into car finance, which I have referred to in the House in the past. Since the FCA introduced its new rules banning discretionary commission models in January 2021 and subsequently closed its investigations into Lookers, the car dealership firm, for possible mis-selling, it was revealed that the UK’s accounting watchdog, the Financial Reporting Council, was investigating accounting giant Deloitte for its role in auditing the very same Lookers that the FCA had only just ended its investigation into a few weeks earlier. The FCA never confirmed or dismissed whether there had been any mis-selling, remarking that it had made its concerns clear and did not intend to impose penalties on this FTSE 250 firm. However, the opening of a new investigation relating to Lookers raises questions about the thoroughness of the original FCA investigation: were all aspects investigated?
Viscount Trenchard (Con) [V]
My Lords, I declare my interests in financial services businesses, as stated in the register. I would also like to record my sadness and offer my sincere condolences at the passing of both the noble Lord, Lord Dubs, and the noble Baroness, Lady Williams. Both made an enormous contribution to your Lordships’ House over very many years and will be much missed on all sides of the House.
It is a great pleasure to follow the right reverend Prelate the Bishop of St Albans. We agree on so much, but on this question and this amendment I have to take a slightly different view from his. The noble Lord, Lord Sikka, has brought back Amendment 34, substantially in the same form as his Amendment 120 in Committee.
The drafting of the amendment suggests that it is intended that there should be a single supervisory board of both regulators, the FCA and PRA. The Member’s explanatory statement on the other hand states:
“The new Clause will create a Supervisory Body for each of the FCA and the PRA.”
This implies one supervisory board for each of two regulators. That at least makes more sense than a single supervisory board for the two separate regulators, which is an impossible concept, as I pointed out on 10 March.
As the FCA and PRA are not the same organisation—although I sometimes wish they were—each has its own executive board. In the case of the FCA, this is the FCA board. However, the PRA board was replaced four years ago on 1 March 2017 by the Prudential Regulation Committee and the PRA was absorbed into the single legal entity of the Bank of England. I pointed this out to the noble Lord on 10 March, but he has not altered his approach. My noble friend Lady Noakes has also explained these fundamental errors clearly. A supervisory board such as he proposes, charged with exercising oversight over the board of the FCA and the Prudential Regulation Committee of the Bank of England, could not be a single entity. It would have to have two distinct personae, one within the FCA and one within the Bank of England.
My noble friend Lord Howe explained to the noble Lord that both the FCA and PRA must already
“attend … hearings before parliamentary committees, and those committees may also hear evidence from stakeholders about the performance of the regulators.”
He said:
“Parliamentary committees of both Houses are also able to summon the regulators to give evidence whenever they may choose.”
He added,
“the Treasury already has the capacity to order independent reviews into the regulators’ economy, efficiency and effectiveness. Therefore, all told, the amendment would result in a duplication of existing opportunities for scrutiny and oversight of the regulators’ resourcing.”
As I said on 10 March:
“I do not think that such a supervisory board would replace the need for parliamentary scrutiny of the regulators, which will in itself provide appropriate transparency and accountability, rather than the completely crushing, destructive oversight that I believe the noble Lord’s new board would cause.”
The noble Lord said that his new board would
“not duplicate in any way whatever what any parliamentary committee or review board might do. The supervisory board would simply be engaged in day-to-day strategic oversight. Those people would be in the organisation on a permanent basis, observing, requiring reports, making recommendations”.—[Official Report, 10/3/21; cols. GC 723-26.]
Such an advisory board would seriously and negatively impact the operation of the regulators.
The noble Lord has said that he will not press his amendment, which I think is a wise decision because I believe your Lordships would have rejected it as unworkable, impractical and likely to have a negative impact on the attractiveness of our financial markets which provide so many jobs and a large slice of the country’s tax revenues.
Baroness Kramer (LD)
I suspect that the noble Viscount, Lord Trenchard, was referring to the loss of the noble Lord, Lord Judd, which was just announced, rather than the noble Lord, Lord Dubs. I join with him; I am still feeling slightly in shock, frankly, at the news. We have all lost too many people of significance to this House over this last year. I think we all want to pay tribute to all of them, but we are all struggling a little with some of the very significant people who will not be here for future debates.
On this amendment, I will speak briefly. I understand where some of the thinking of the noble Lord, Lord Sikka, is coming from, but I cannot say that I see a supervisory board as the answer to the issue he raises. I am much more taken with the proposal made by my noble friend Lady Bowles in Committee, for an expert body—it takes experts to really understand how the regulator functions—regularly to follow the Australian model and review the regulators. This could be every three years; the number of years is not exactly the key issue. It would not second-guess the decisions the regulators have made but look at operations, resources and effectiveness. With the regulator now so detached in many ways, that is essential.
I would want the Treasury to be a good distance from anything like this because, like it or not, the Treasury will always be seen as an influencer of decision-making. An expert view is needed to help us ensure that our regulators are functioning in the way that they need to, given the enormous challenges and responsibilities that they have. With that, I have to say that I cannot support this amendment.
Lord Tunnicliffe (Lab) [V]
My Lords, I am grateful to my noble friend Lord Sikka for bringing back this amendment. In Grand Committee, it was discussed in the context of our wider debates on parliamentary scrutiny and the financial services regulators. My noble friend was not content with this, and while I believe that there is a degree of overlap, I accept the point that his amendment focuses on detailed day-to-day oversights rather than taking what some might call a “helicopter view”.
In his previous response, the Minister indicated that supervisory bodies are not necessary because of the various panels that must be consulted by the PRA and the FCA as they fulfil their duties. However, while these panels undertake valuable work, the extent to which the regulators take their views on board is unclear; for example, I sense that the FCA’s consumer panel would take a very different view on the duty-of-care amendment passed on day 1 from the positions taken by both the Treasury and the FCA.
The Minister also pointed to the future regulatory framework review as the correct vehicle for taking this issue forward. I have some sympathy with that view: I will be very surprised if the review endorses the status quo. If it does, we have had assurances that there will be further primary legislation and that means further opportunities for my noble friend to pursue this initiative.
Earl Howe (Con)
My Lords, the Government agree that effective oversight of the FCA and PRA is a crucial component of our regulatory framework. The Government also agree that having a diverse range of independent views in such an oversight regime is key to its success. However, as I have touched on previously, a number of mechanisms already exist to ensure effective independent oversight of the regulators by a diverse range of stakeholders. I believe these are sufficient and I do not propose to go into them in detail here, given our other debates on Report. However, I know from our previous debate in Committee, and from what he has said today, that the noble Lord, Lord Sikka, is seeking particularly to address potential issues arising from so-called regulatory capture and groupthink with his amendment.
Regulatory capture becomes a risk in situations where regulators do not have the views of others—particularly stakeholders—to influence their work. I assure the noble Lord that there are already extensive arrangements in place to allow a wide range of stakeholders to contribute their views to influence the regulators’ work. There are also arrangements in place to provide effective scrutiny of the regulators and to require them to explain their actions; for example, both the FCA and PRA are required under the Financial Services and Markets Act 2000 to consult independent panels on the impact of their work, as the noble Lord, Lord Tunnicliffe, has just mentioned. For the PRA, this involves consulting an independent practitioner panel of industry representatives, while the FCA must consult four different statutory panels. These four panels are: the consumer panel, the practitioner panel, the smaller business practitioner panel and the markets practitioner panel. The FCA considers the views of each of these panels, as appropriate, when developing policies and making regulatory interventions.
I point to the work of the FCA’s consumer panel in particular. This panel meets twice a month to advise and challenge the FCA from the earliest stage of policy development, and to bring to the FCA’s attention broader issues for consumers. This ensures that different perspectives on how the FCA should take forward its consumer protection objective can be taken into account. The FCA board receives a report on the panel’s work each month, which helps to inform the FCA’s rule-making and policy development. Through the panel’s annual report, press releases and public statements, the consumer panel can publicly hold the FCA to account, enhancing transparency and reducing the risk of regulatory silence or capture. Furthermore, the regulators are already under a statutory obligation to organise and publish the results of their public consultations. These consultations allow interested parties—including financial services firms, but also consumer organisations and members of the public—to make representations on issues such as proposed new rules.
Lord Sikka (Lab) [V]
My Lords, I thank everyone for their contributions and deep insights. As I listened to the noble Baronesses, Lady Neville-Rolfe and Lady Noakes, I was briefly reminded of the historical development of the role of the non-executive director, which became popular after the 1973 US crash due to fraud at the Equity Funding Corporation. After that, audit committees staffed by non-executive directors became mandatory for companies listed on the New York Stock Exchange.
However, if you look at the history from about 50 years before that you will find non-executive directors frequently described as inexperienced, lacking in technical knowledge and not knowing enough about business. How could they really invigilate boards of directors in 15 to 20 hours a year? It is strange that so many years after non-executive directors were established we are now hearing the same kinds of points being made against the involvement of stakeholders in the governance of regulatory bodies.
To my mind, democratisation of regulatory bodies is essential. Periodic scrutiny by parliamentary committees is not a substitute for the real-time involvement of stakeholders and their oversight of the executive board. I have listened to all the arguments carefully and will withdraw the amendment; no doubt, I will refine it and return to it at some time in the future.
The Deputy Speaker (Baroness Fookes) (Con)
We now come to the group consisting of Amendment 36. Anyone wishing to press this amendment to a Division must make that clear in debate. I call the noble Baroness, Lady Bennett of Manor Castle.
Amendment 36
“UK Finance Watch
(1) A body corporate called UK Finance Watch is established.(2) The purpose of UK Finance Watch is to provide oversight of—(a) the United Kingdom’s financial services industry,(b) its impacts on the real economy, and(c) all associated regulations.(3) The PRA and FCA must fund the activities of UK Finance Watch.(4) UK Finance Watch must produce reports on the following matters—(a) proposed changes in financial legislation and regulations;(b) deficiencies identified in retained EU law relating to financial regulation;(c) any other issue relating to financial markets and the financial services sector which, in the opinion of UK Finance Watch, threatens the stability and prosperity of the economy of the United Kingdom.(5) The Treasury, PRA and FCA must have regard to any publication produced by UK Finance Watch.(6) The Chancellor of the Exchequer must appoint members to UK Finance Watch.(7) When appointing members to UK Finance Watch, the Chancellor of the Exchequer must have regard to the desirability of appointing members who, between them, have expertise in— (a) academia;(b) accounting;(c) law;(d) climate, biodiversity and the environment;(e) trade unions.(8) UK Finance Watch may appoint officers and staff to assist their functions.”
Baroness Bennett of Manor Castle (GP) [V]
My Lords, before moving the amendment, I join the noble Earl, Lord Howe, the noble Lord, Lord Sikka, and the noble Baroness, Lady Kramer, in expressing my sadness at the death of the noble Lord, Lord Judd. I send my condolences to his family. The noble Lord, Lord Judd, was the first person to ask me a question while I was in the middle of delivering a speech in your Lordships’ House and did so in his characteristically kind and generous manner. It was a good lesson—perhaps intentionally so—for a newbie.
In light of our time-truncated debate in Committee, Amendment 36 in my name, also backed, kindly, by the noble Lord, Lord Sikka, is a somewhat adapted version of the amendment that I presented there. It would create a UK equivalent of the EU’s Finance Watch. I have chosen at this time to use this name for clarity as well as pronounceability.
I really must thank the noble Lord, Lord Eatwell, who made the case for this amendment—intentionally or not, I am not sure—in our previous session on Report. He suggested that there were flaws in my Amendment 37, criticisms with which I would not necessarily disagree. He said the amendment
“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.”—[Official Report, 14/4/21; cols. 1425-26.]
I highlight the last sentence in particular because bringing together expertise, knowledge and analysis is exactly what “UK Finance Watch” would be designed to achieve—to bring together the undoubtedly wide range of expertise around the country to provide independent technical advice to enable Members of your Lordships’ House and the other place to contribute to public debate.
I set out in Committee and in briefings circulated before the Committee debate a detailed explanation of what the comparable EU body has achieved, and I will not repeat that here; nor will I repeat comments I made then about the thinness of the scrutiny of this Bill by your Lordships’ House, except to repeat that that is not a criticism of those here but rather a call for many more Peers to be engaged. The financial sector impacts on every aspect of modern life. We live in a financialised society, whether it is hedge fund ownership of care homes, water supplies or the PFI contracts and their successors doing such damage to our schools and hospitals. Peers who are experts in these areas have interests in these areas and many other Peers from all aspects of society need to be engaged in debates on financial Bills. But that is clearly not customary and could easily be daunting.
However, there is a need for a co-ordinated independent source of information, expertise and detailed knowledge that can, in some way, match the lobbying firepower and influence. I have in mind here the position of remembrancer, to empower Peers concerned with every aspect of society in overseeing the impact of the financial services laws and regulations that are so crucial. This would help the House obtain the complete picture that I was calling for in the amendment last week.
I thank the noble Baroness, Lady Kramer, for her comments in that debate. She said that
“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?”—[Official Report, 14/4/21; col. 1425.]
She has entirely identified what I was seeking to do with that amendment. This amendment would not, as drafted, achieve that aim, being focused on ensuring the quality and effectiveness of legislation and regulation. However, when I put the words of noble Baroness, Lady Kramer, and the noble Lord, Lord Eatwell, together, if UK Finance Watch proved to be a network, a clearing house—as the noble Baroness, Lady Kramer, suggested it could be in our debate in Committee on a similar amendment—of the information that the noble Lord, Lord Eatwell, referred to, then we would have made real progress in the oversight and public legislative understanding of what is currently a far too opaque and little-understood area. As the right reverend Prelate the Bishop of St Albans said earlier, we need far more people asking questions about the financial sector from the outside, but they need help to be able to do that effectively.
I feel that the noble Baroness, Lady Kramer, made the arguments for me but I note that Greensill is just the latest brand name for which the UK financial sector will be famous—or infamous. I hope this model being based on one in the EU does not prejudice noble Lords or, indeed, the Government against it. Being world leading surely means looking around the world, seeing best practice and copying it.
It is not my intention to divide the House on this amendment. The oversight and scrutiny of regulation and laws for our financial sector is clearly an ongoing debate of considerable concern to a wide range of Members of your Lordships’ House. I beg to move.
Baroness Noakes (Con)
My Lords, we simply do not need another body set up to look at the financial services industry. It is already in effect a core function of the Treasury and if the Treasury thought that it needed some help in identifying the issues that the proposer of this amendment identifies, it does not need the cover of primary legislation to set one up. In addition, Parliament itself has always taken a keen interest in the financial services industry. The long-standing Treasury Select Committee of the other place examines regulators as well as key emerging themes in relation to financial services and your Lordships’ House has recently created an Industry and Regulators Committee, which is having its first meeting as we speak. Indeed, the noble Lord, Lord Eatwell, the noble Baroness, Lady Bowles of Berkhamsted, my noble friend Lord Blackwell and I are members of the new committee. Therefore, it should not surprise the House if in due course there is a focus on matters relating to the financial services sector.
I suspect that the subtext of this amendment is a belief that the financial services sector is wicked and has a negative impact on the UK economy. I do not believe that belief is widely shared in your Lordships’ House. On the other hand, there are few—if any—Members of your Lordships’ House who think that the financial services sector is perfect, and that includes me. The important point is that we already have the scrutiny mechanisms that I have described to give a proper focus to the activities and the impact of the financial services sector. I agree with the noble Baroness, Lady Bennett of Manor Castle, that this amendment should not be pressed to a vote.
Lord Sikka (Lab) [V]
My Lords, it is always a pleasure to speak after the noble Baroness, Lady Bennett of Manor Castle. The key issue, which has been touched on by a number of speakers, has been how to secure effective, responsible and accountable regulation. This amendment presents another model. We have already heard about a number of models.
Numerous aspects of life have been financialised, and the finance industry affects every household and almost every walk of life—all the more reason to examine its effects on the economy and daily life. The last 50 years have been littered with examples of mis-sold financial products. We have had a banking crisis in every decade since the 1970s, but still the finance lobby is too powerful for Governments to resist. We need structures and policies that can mitigate the negative effects of the finance industry.
Baroness Kramer (LD)
My Lords, I think we may end up coming to something like a UK Finance Watch, but I hope not, because I hope Parliament will step up to the plate. The kind of issues described here ought to be part of parliamentary accountability, but that will take support from significant expertise that I do not think currently exists for many of the committees we operate. This is such an important industry; it is so huge, complex and powerful. That specialist knowledge will be necessary.
I was on the Parliamentary Commission on Banking Standards, and it is fair to say that the noble Lord, Lord Tyrie, then in the Commons and chair of that commission, had to beg and borrow to find the staff we needed to support that commission. It was scratched together probably with the minimum number of staff with which it could have operated. We were so lucky; we had brilliant people totally dedicated and working the most ridiculous hours. That commission was a good demonstration of how we often underresource around critical issues. That is going to have to be remedied.
I hope Parliament, as it works out how it is going to manage this process of accountability, will take all that on board, so we will come back and look at this amendment for UK Finance Watch and see that a lot of what it proposes has been ticked off as “satisfactory,” because it has been embedded in the support and expertise that will be provided to Parliament. But anyone who thinks that two meetings a year with the Treasury Select Committee, and ad-hoc meetings on whatever happens to be the issue of the day, is anything close to satisfactory, and anyone who thinks that the annual report—never one of the most informative documents from any organisation—is accountability, completely misunderstands the animal with which we are now dealing.
I hope we will not have to go back and resort to an equivalent to the EU Finance Watch body. We may have to, but I would almost regard that as a mark of failure by this House and the other place. Our committees that look at these issues are going to need to be resourced and provided with the real expertise that they need to deal with both the quantity and the quality of the investigation and challenge that they will have to undertake.
Lord Tunnicliffe (Lab) [V]
My Lords, the noble Baroness, Lady Bennett, gave us fair warning that she was likely to bring an amendment back on Report for further debate, which is reasonable given the time constraint we faced in Grand Committee. As with the amendment of the noble Lord, Lord Sikka, we agree that implementing the right forms of oversight is of utmost importance. In Committee, several speakers mentioned the potentially valuable contributions to policy debates that could come from academics, think tanks and others, if they only had access to the data they needed. We agree that more must be done to facilitate such research, and I hope the Minister will say something on this.
The noble Baroness’s redrafting of her amendment addresses some of the points raised in the previous debate. However, her original pitch was for
“a network, not reinventing the wheel, not creating a whole new institution.”—[Official Report, 10/3/21; col. GC 735.]
Yet Amendment 124 from Committee and today’s Amendment 36 would create a whole new institution. I believe that the comments from the noble Baroness, Lady Kramer, bear consideration. Surely the first thing we should do is to make sure that this role is fully taken up by Parliament. We have already established, informally at least, that much more scrutiny of how the FCA and the PRA work will be necessary, and I look forward to how well Parliament reacts to this challenge. It is also important to recognise that resources may be needed to give parliamentary scrutiny the expertise necessary in this complex area.
One area that interests me is the impact of the financial services sector on the real economy. We are all familiar with the arguments advanced by the Minister last time on jobs, tax take and so on, and colleagues will remember that I reflected on the successes of the sector at Second Reading. However, as the UK comes out of the pandemic and as government support schemes begin to disappear, we will need to monitor the extent to which lenders continue to support business expansion and other aspects of the economy. This brings us back to the point about ensuring the availability of data.
Earl Howe (Con)
My Lords, as I set out in our earlier debate, the Government agree that effective oversight of the regulation of our financial services sector and consultation with a diverse range of stakeholders are crucial to the sector’s ongoing success. As we have discussed previously, Parliament has a unique role to play in that oversight function.
In that context, I will set out the existing mechanisms that ensure effective independent oversight of the sector and its regulation by a diverse range of stakeholders. I will not repeat my previous remarks on the regulators’ arrangements for publishing consultations and the manifold ways in which they are already held to account by various panels and Select Committees.
I understand that this amendment is partly inspired by Finance Watch in the EU, an organisation which conducts research, monitors financial services legislation inside the EU and advocates on financial services issues. As the noble Baroness indicates in her amendment, we do not have a body in this country that performs an equivalent role; were we to have one, I imagine it would be made up of industry stakeholders of various kinds. As noble Lords will know, parliamentary committees can and do seek input from a wide variety of experts. In doing so, they can bring together the existing expertise of academics, think tanks and industry stakeholders.
Nothing prevents the creation of such a body in this country without a legislative basis; indeed, the EU organisation was not created by EU law but was simply set up as a non-profit organisation under Belgian law. It is funded by a combination of contributions from its members and philanthropic foundations and grant funding from the EU, for which the group has to bid.
The Government and the regulators regularly consult on their plans and proposals, and interested parties, including those from the backgrounds set out in this amendment, are free to respond. The Government and regulators consider all responses to such consultations carefully and consider how the views expressed should influence final policies and rules. I am concerned that this amendment would therefore duplicate existing practices in a very real sense.
In addition, it would appear to duplicate the work carried out by the Financial Policy Committee of the Bank of England. The FPC acts as the UK’s macroprudential authority; it identifies, monitors and acts to remove or reduce systemic risks to the UK financial system. It may make recommendations to the Treasury, the FCA and the PRA, and is required to publish a financial stability report twice a year setting out its view of the outlook for UK financial stability, including its assessment of the resilience of the UK financial system and the main risks to UK financial stability.
Given this, and the existing processes that I have set out in previous debates today that offer ample means for achieving the outcomes sought by this amendment, I hope the noble Baroness will feel able to withdraw it.
Baroness Bennett of Manor Castle (GP) [V]
My Lords, I thank the Minister for his response and all noble Lords who have taken part in this debate.
The noble Baroness, Lady Noakes, suggested that what this amendment covers is actually a core function of the Treasury. That is very much not the case. The Treasury is the definition of the establishment, part of the Government; this is an outside, independent oversight body. She also said that Parliament takes a keen interest in financial regulation. That conclusion can be questioned by looking down the lists of speakers through the progress of this Bill and contrasting them to the lists of speakers for, for example, the Domestic Abuse Bill.
The Deputy Speaker (Lord Haskel) (Lab)
We now come to the group beginning with Amendment 37D. Anyone wishing to press this or anything else in this group to a Division must make that clear in debate.
Amendment 37D
Lord Holmes of Richmond
“Payment services and the provision of cash
In Part 2 of Schedule 1 to the Payment Services Regulations (S.I. 2017/752) (activities which do not constitute payment services), after paragraph 2 insert—“3_(1) The provision of cash otherwise than through an automatic teller machine does not constitute a payment service where—(a) there is a transfer of a corresponding amount from a payment account held by the recipient of the cash to a relevant person, and(b) the payment account is not provided by a relevant person.(2) In sub-paragraph (1), “relevant person” means—(a) where the cash is provided by a person (“P1”) through one or more persons acting on P1’s behalf, P1 and each person acting (directly or indirectly) on P1’s behalf;(b) where the cash is provided by a person (“P2”) otherwise than on behalf of another person or through one or more persons acting on P2’s behalf, P2.(3) The execution of the transfer referred to in sub-paragraph (1)(a), and other services enabling that transfer, are not excluded from the meaning of payment services by this paragraph.””Member’s explanatory statement
This amendment provides that, in certain circumstances, the provision of cash does not constitute a “payment service” for the purposes of the Payment Services Regulations 2017. Persons would no longer have to be authorised by, or registered with, the FCA in order to provide that service.
Lord Holmes of Richmond (Con)
My Lords, it is a pleasure to speak to these amendments, both of which are in my name. In doing so, I declare my financial services interests as set out in the register. I will move also Amendment 40A when we get to that stage.
I thank my noble friend the Minister for the way that he has engaged not just on this amendment but across the whole of the Financial Services Bill. Indeed, I thank the whole ministerial team and all Treasury officials for having numerous meetings with myself and other noble Lords. It has been the model of how to progress legislation through your Lordships’ House.
There is a very simple and, I hope, clear purpose at the heart of the amendments: to enable cashback without a purchase. As with so many other areas of our lives, Covid has had a dramatic impact on cash usage across the United Kingdom, which has been divergent across different nations, regions, socioeconomic groups and people with different protected characteristics. If cash is no longer king, to millions across the UK it is certainly still more than material. It is beholden on all of us to ensure that people have a right to rely on cash and that a network exists across the country where they can reasonably access it. ATM withdrawals have dropped by over 50% since 2019. We have to look to other resources, other things that we have across the country where individuals and small businesses can access cash. That is the purpose of my Amendment 37D.
Currently, it is possible to get cashback with a purchase and, under the Payment Services Regulations, it is not possible to get cashback without a purchase. This amendment would change that, enabling cashback without a purchase and taking it away from what would be considered a payment service under the PSR 2017. The amendment has wider implications, I hope, than just the ability to access cash. It speaks to well-being, social isolation and a real sense of community, and to using the resources that currently exist far more efficiently and effectively for the benefit of all. In 2019 there were 123 million cashback with purchase transactions. Clearly, there is huge potential for cashback without purchase if we pass the amendment this evening.
The amendment is drawn in a deliberately permissive way to enable innovation. For example, if a fintech wanted to offer a service across a number of locations on behalf of those locations, the amendment would enable it to. Similarly, if a rural café wanted to offer cashback without a purchase on its own behalf, the amendment would enable it to.
We have seen such dramatic changes in the use of cash in recent years, heavily accelerated by the Covid crisis, yet cash still matters. If we do not act, the network that supports cash could disappear in a trice, or become inordinately expensive and leave millions of people without access to cash and, through that, to social inclusion, financial inclusion and an ability to play the part that they have a right to in our society.
Amendment 40A merely enables the regulation to come in two months after the passage of the Bill to give a reasonable period post passage.
I hope that Amendment 37D is clear and that it achieves what it seeks to: enabling cashback without a transaction for millions across the country. I believe it is good for individuals, financial inclusion, business and the high street. Cashback without a transaction could enable part of our Covid build back. I beg to move.
Lord Hunt of Wirral (Con)
My Lords, I again draw attention to my interests as set out in the register, particularly as an independent non-executive director of LINK.
In speaking to an earlier amendment, I touched on the challenges of financial exclusion. The problem is complex and the answer, in so far as there is one, is never going to be simple. However, I congratulate my noble friend Lord Holmes of Richmond, particularly on his vision in seeing a way to at least meet the problem that he so clearly set out. I welcome word that the Government propose to act along the lines set out in this amendment and the subsequent one to help create greater flexibility in access to cash. Of course we all accept that financial services require regulation, but that regulation should always be proportionate, not stifling.
In some respects we have been fortunate in the past year. Not only have food supplies been maintained, but our digital infrastructure held up remarkably well, despite the increased demands on it. Imagine if it had not—if the internet had crashed for a few days or our banking system had cracked and digital payments had failed. I believe there would then have been rather less talk of cash being a thing of the past.
The principal theme of recent months has been resilience, which demands diversity and innovation. The amendment, and my noble friend Lord Holmes of Richmond’s vision and thinking behind it, perfectly captures that.
For the foreseeable future, cash will continue to be a vital medium of exchange for millions of people. The viability of our system for providing access to cash is therefore a necessity, not a luxury. I pay tribute also to the foresight and leadership shown by my noble friend Lord True. These decisions demand innovation and flexibility, and the kind of thinking captured by my noble friend’s amendment will be vital. I know that everyone involved in the payment system will be very supportive.
Baroness Kramer (LD)
My Lords, on reading Amendment 37D I think I recognised some of the distinct phraseology to denote an expert hand in its drafting, so I am exceedingly hopeful that the noble Lord, Lord Holmes, has been effective in persuading the Government that this is language they can accept and live with.
Of course, I join in all the calls to make sure that access to cash remains. Despite Covid and all the pressures that have encouraged people to change to digital and electronic payments, 5 million people have stuck to cash, and those people deserve to be served as much as anyone else. Indeed, the point made by noble Lord, Lord Hunt, that digital systems can always go down and that you had better have a back-up, did not occur to me but strikes me as fundamentally important.
My concern is this: I hope the Government do not think this is all they need to do and that this is part of a broader programme of ensuring access to cash. I spoke to quite a number of the storekeepers in my local area. It is a mixed area, with a lot of wealthy and middle-class people but also many people living on a former council estate, now housing association. Among that range, quite a number of people, for a whole variety of reasons, still want to use cash—but I could not find a single shop that would be willing to do cashback without a purchase. In fact, they did not want to do cashback with a purchase in most instances, simply because they did not want to have the cash on the premises, especially at night. Frankly, because of all the various bank branch closures, it would be at least a 35 to 40-minute drive to get to a place where you could deposit the cash overnight. Then you would have to collect it in the morning, which of course would make no sense because most of the shops would be open before the bank was available to hand it over.
Lord Tunnicliffe (Lab) [V]
My Lords, we are grateful to the noble Lord, Lord Holmes of Richmond, for bringing forward these amendments, which would enable individuals to obtain cashback from retail settings without first having to make a purchase. We have not spent a huge deal of time discussing access to cash during the Bill’s passage, which is a surprise given the challenges we face in this area. It is beyond doubt that the Covid-19 pandemic has accelerated the transition to cashless payment, but this does not mean that cash is becoming obsolete. Many millions of people continue to feel most comfortable making physical payments. While small businesses have access to low-cost options for taking card payments, many will still prefer to deal with cash.
While we welcome this initiative, I hope the Minister can briefly touch on the Government’s response to the wider challenge we face with access to cash, such as the continued closure of bank branches. It is also worth noting that, while people may soon be able to access cash more easily, these amendments do not deal with the fact that some businesses have chosen no longer to accept it. That is their choice, of course, but acceptance is as important as access. I urge the Government to accept these amendments, which would be beneficial to an important part of society.
The Minister of State, Cabinet Office (Lord True) (Con)
My Lords, I join the expressions of sadness at the news of the death of the noble Lord, Lord Judd, such a tireless campaigner for all the causes he held dear. Even though we meet, of necessity, in an almost entirely empty House, it says everything about the noble Lord that one feels that one particular place over there is empty. Our thoughts go out not only to his family, particularly, but to all those in the Labour Party family who were inspired by his example and loved him as a man.
Amendments 37D and 40A seek to facilitate the provision of cashback without a purchase. I say at the outset to the noble Lord, Lord Tunnicliffe, my noble friend Lord Hunt of Wirral and others that the Government will support these amendments. The noble Baroness, Lady Kramer, is able to divine the language of draftsmen even better than I am.
These amendments introduce an exemption for cashback without a purchase, such that it will no longer be a regulated payment service. Under the current legislation, which derives from the EU’s second payment services directive, if a business or its agent, such as a corner shop or supermarket, wanted to offer you cashback without requiring you to make a purchase, it would have to be authorised or registered with the FCA to give you cash from your own accounts. That is a significant burden for even the largest of retailers, let alone small, local shops along the various high streets across the UK.
This amendment removes this requirement; it will take effect two months after Royal Assent. From that point, industry will have discretion to make the service available across the United Kingdom. Where the service is offered, customers will be able to walk into a local business that wishes to participate, such as a corner shop, café or pub, and withdraw cash without having to make an accompanying purchase.
As part of the community access-to-cash pilots, LINK—the UK’s main ATM cash machine network—and PayPoint are already testing a cashback without purchase service in a small number of local stores in Cambuslang, Hay-on-Wye, Burslem and Denny. Indications from this trial are positive, and the Government look forward to the outcomes. This amendment will allow for such initiatives to be rolled out across the UK more easily.
The Government recognise that, as my noble friend Lord Holmes of Richmond said, widespread access to cash remains and will remain extremely important to the daily lives of millions of people across the United Kingdom. Although it was not possible in time for this Bill, I can certainly assure the noble Baroness, Lady Kramer, that the Government have committed to legislate to protect access to cash and to ensure the cash infrastructure is sustainable in the longer term.
The Government published a call for evidence on access to cash in October 2020. This highlighted the potential benefit of facilitating cashback without a purchase through legislation. Cashback with a purchase was in 2019 the second most frequently used method of withdrawing cash in the UK, behind ATMs. As my noble friend Lord Holmes of Richmond told us, there were 123 million cashback transactions, amounting to a total amount withdrawn of £3.8 billion.
The Government’s view is that cashback without a purchase has the potential to be a valuable facility to cash users and to play an important role in the UK’s cash infrastructure. This legislative change, which is possible only now we have left the European Union, would help both to support the availability of cash withdrawal facilities across the United Kingdom, benefiting individuals’ access to cash, and to support local cash recycling. These amendments are therefore a welcome step towards protecting access to cash.
I am particularly grateful to my noble friend Lord Holmes of Richmond, who raised this important issue in Grand Committee, for the constructive way he has engaged with the Government and officials since then on this important issue. I am very pleased to be able to say that the Government are proud to support these amendments. Meanwhile, as I covered in my earlier remarks, the Government are considering responses to the call for evidence and look forward to setting out next steps on legislation to protect access to cash in due course.
Lord Holmes of Richmond (Con)
My Lords, I thank all noble Lords who have contributed to this debate on such an important issue. Cash still matters, and it matters materially to millions. I thank particularly my noble friend the Minister for the way in which he and all Treasury officials have engaged with this issue. It is a key part, but, as other noble Lords have rightly identified, only one part, of what it means to have a cash-enabled, easily accessed economy across the UK. It adds to financial inclusion. More than that, it adds to complete social inclusion.
We all need to think innovatively about how we can do more to enable, empower and unleash true financial inclusion across the UK. It matters economically, socially and psychologically. If we can enable it, it can address so many of the issues that have dogged our nations for decades.
Again, I thank all noble Lords who have contributed, and I thank particularly the Minister and Treasury officials.
The Deputy Speaker (Lord Haskel) (Lab)
We now come to the group consisting of Amendment 37F. Anyone wishing to press this amendment to a Division must make that clear in debate.
Amendment 37F
Baroness Kramer
“Response from the regulators to Parliamentary scrutiny
(1) The PRA and the FCA must have regard to the findings of any Parliamentary scrutiny of their work and operational performance, including but not limited to consultations, rules, supervision and enforcement.(2) The consultations and rules under subsection (1) include but are not limited to—(a) prospective or actual rule changes, and(b) rules and rule changes that have already taken place.(3) The PRA and the FCA must provide a written response to any committee of either House of Parliament in relation to any concerns it has expressed following such scrutiny.(4) The written response in subsection (3) must be received by the committee—(a) in the case of a prospective rule change, before that rule change takes place, or(b) in any other case, within 12 weeks following publication of an expression of concern.”
Baroness Kramer (LD)
My Lords, it seems very fitting that the last amendment for debate on Report should return to the issue of parliamentary scrutiny. Of all the issues that we have discussed over the past many days, and of all the sections of this Bill, it seems to me that that is the one that stands out as being extraordinarily important. It refers to the constitution, in a sense, and the constitutional roles in this country. It deals with the largest economic sector, the way in which it is regulated, and Parliament’s role in scrutinising the regulation of that sector.
The amendment itself is quite brief; it is almost a summation of some of the previous amendments that we have looked at. But let me reassure the House that we have made the decision not to press it today. We will be relying on the Government’s many assertions that the future regulatory framework will offer far more than it appeared to offer in the first days when we looked at the initial consultation.
I want to thank the Minister for persuading—the word is probably not “persuade” but let us use it—both the FCA and the PRA to write to him with their views on this issue. He knows that I consider the FCA letter to be one that simply confirms the status quo, which is inadequate. The PRA letter, however, recognised that, with our departure from the European Union, a whole layer of scrutiny over financial regulation had been stripped away. Although the PRA would obviously not dictate to Parliament how it should replace that accountability, it recognised that it was very likely that Parliament would feel the need to enhance the way in which it scrutinised financial regulation. In the end, we also had a letter from John Glen, using some language to say that it was his view that there must be some toughening of parliamentary oversight—I do not think I paraphrase him incorrectly.
Viscount Trenchard (Con) [V]
My Lords, it is a pleasure to follow the noble Baroness, Lady Kramer, and I thank her for correcting my earlier incorrect inadvertent reference to the noble Lord, Lord Dubs, to whom I apologise, while expressing my sincere condolences on the death of Lord Judd.
The noble Baroness rightly returns again to the subject of parliamentary oversight, which we have discussed extensively, including on the second day of Report, last Wednesday. My noble friend the Minister has argued that it is difficult to decide definitively how parliamentary scrutiny will work ahead of the conclusions of the future regulatory framework review.
I had put my name to Amendment 37A in the name of my noble friend Lord Blackwell, which provides for timely scrutiny of rules proposed by either regulator, either before taking effect or, at latest, within five days of taking effect. It does not refer to a specific committee of either House or a specific Joint Committee of both Houses, but provides for both Houses to agree and resolve which committees or Joint Committee should be charged with this responsibility.
I prefer Amendment 37A to Amendment 37F, because it does not damage the independence of the regulators. Furthermore, it requires a written response to any prospective rule change before the rule change comes into effect, whereas if the rule change has already come into effect, a written response is required only within 12 weeks of any expression of parliamentary concern.
This does not provide for a consistent approach. In the first case, it shackles the regulators too much, but in the second case seems to provide for a very relaxed response, devoid of a necessary level of influence on the regulators. I regret that the Government have not brought forward their own ideas about parliamentary scrutiny, especially as the House has accepted their proposal to dispense with a separate Third Reading for this Bill. I trust that the Minister will let us know the apparent thinking of the Government on this matter.
I thank the Minister and my other noble friends on the Front Bench for the courteous way in which they have conducted the House’s scrutiny of the Bill. I thank the Bill team for all their work, and will welcome passage of the Bill as it completes its remaining stages.
Baroness Bennett of Manor Castle (GP) [V]
My Lords, it is a pleasure to follow the reflections of the noble Viscount, Lord Trenchard, on how oversight of this Bill has been truncated, despite all the hard work put in, and the fact that we still do not have a clear picture of what the Government propose, as the noble Baroness, Lady Kramer, said in introducing Amendment 37F.
As this is the last amendment, and we have already covered this ground extensively, I will be brief. I wanted to speak on this group to offer my support for the amendment in the names of the noble Baronesses, Lady Kramer and Lady Bowles of Berkhamsted, both of whom have done extraordinary, sterling work on this Bill.
We have a real problem of oversight, which has been seen and expressed on many sides of your Lordships’ House. Looking at the real-world situation, the circumstances now and the headlines coming out, we have huge problems with our financial sector, and any independent outside observer would see that clearly. Although we know that this amendment will not be put to a vote, it would ensure that there is a chance to properly question and scrutinise the work of the regulators, which has to be at the heart of the system, and of trying to fix our broken system.
It has been a long debate, if often cut up into different stages and occurring at odd intervals, and we have a long way to go. The Government tell us we are to expect many more financial Bills coming down the track. We will have to keep coming back to these issues again and again, until we finally see progress.
The Deputy Speaker (Baroness Garden of Frognal) (LD)
The noble Baroness, Lady Bowles of Berkhamsted, has withdrawn, so I now call the noble Lord, Lord Tunnicliffe.
Lord Tunnicliffe (Lab) [V]
My Lords, we had a fruitful debate on the issue of parliamentary scrutiny and the regulator’s rule-making powers last Wednesday. Since this amendment was tabled, I have viewed it as an opportunity to tie up any loose ends, rather than being likely to result in a Division.
It is fair to say that nobody is particularly happy with the current arrangements, particularly given the loss of European Parliament scrutiny of new prudential rules, and the glut that will come once the Bill becomes an Act. However, there is little sense in repeating the arguments made in previous debates. I recognise that the Minister was able to make some important additional commitments in his response to last week’s group of amendments. Since this amendment was tabled, we have seen correspondence from the Economic Secretary to the heads of the FCA and PRA, asserting that Parliament, as we have all said in recent months, has and must enjoy a special role in overseeing the regulators’ output. The letter provided what my noble friend Lord Eatwell has long referred to as the final component of a three-legged stool.
Having reached agreement that Parliament should be treated as a significant stakeholder, the key is to now put in place a mechanism for meaningful scrutiny to take place. Our Amendments 45 and 48 envisage the establishment of a dedicated committee of each House, or a Joint Committee of both, and that remains an attractive prospect to us. Therefore, as we move into a new Session, I hope the Minister can assure me that the Treasury and business managers in both Houses will look at making it a reality. We await the outcomes of the future regulatory framework review, which I hope will represent a significant step forward for all strands of oversight. Once we have digested the findings, our task will be to scrutinise a successor to FiSMA, and I repeat our call for legislation to receive the detailed pre-legislative scrutiny it deserves.
Scrutiny has been the central theme of the Bill. The noble Baroness, Lady Kramer, said that we must look forward, and she commented that, in many ways, the theme of scrutiny has crossed parties as an apolitical discussion. I hope it will not be a matter of conflict between regulators and Parliament, and that the opposite will be true, as they must work together to make this scrutiny work. I also hope it will mean that we can have real confidence in the work of the regulators, and a real sense that their actions are fully understood by responsible politicians.
Earl Howe (Con)
My Lords, I am grateful to the noble Baroness, Lady Kramer, for her helpful and constructive introduction to this amendment. I begin by stating my agreement with her on what I am confident is common ground between us in two respects: Parliament has a unique and special role in scrutinising the regulators and shaping the financial services regulatory landscape, and scrutiny and accountability of regulators has emerged as the foremost issue throughout our debates on the Bill. The noble Baroness, Lady Hayman, will forgive me for not putting the issue alongside that of climate change.
I appreciated the noble Baroness’s remarks on the way in which our cross-party discussions have enabled us to make progress on this issue, which we debated in some detail last week. I will not repeat all my remarks from that occasion, but I will summarise them. I confirmed to the House that the Economic Secretary to the Treasury has written to the chief executives of the PRA and the FCA, to endorse the commitments that they made in their recent letters, and emphasised the importance that the Government place on them. I assured noble Lords that the Government agree that the regulators should provide a comprehensive response to parliamentary committees on any issues they raise in the course of their scrutiny. I also confirmed that the Government remain committed to further considering this issue as part of the ongoing future regulatory framework review, and to engaging with Members of this House and the other place, as we continue that review.
As I said then, delivering the reforms that the Government have proposed in this area could be done only through further primary legislation. Therefore, Parliament will have the opportunity to return to this issue where it can be considered fully. The noble Baroness, Lady Kramer, noted that consultations are not the only relevant issue here, and I agree with her. I am happy to confirm again that the Government view parliamentary scrutiny much more broadly, also to encompass the regulators’ wider work.
Baroness Kramer (LD)
My Lords, I am going to do something quite dangerous and put myself for a moment in the shoes of my noble friend Lady Bowles, picking up a couple of points from the Minister, because they are necessary.
First, one of the underlying points of my noble friend Lady Bowles is that, certainly in the European Union but in other places too, there are mechanisms for confidential information to be shared with Parliament, and shared in such a way that the individual firm is not afraid that this will get out into the wider world and therefore compromise it in any competitive way. Sometimes that is a necessary part of appropriate oversight and scrutiny of the decisions the regulator is making. On behalf of my noble friend, I think I can say that she would be delighted to meet with the Economic Secretary to discuss how this could be addressed.
Secondly, it is always slightly disingenuous to treat Basel as though it were some distant body that, essentially, comes out with a set of regulations and tells us what we have to do. The UK regulators are incredibly influential—or they traditionally have been—on the Basel process; they fundamentally shape it. Therefore, engagement with those regulators before they trot off to a Basel meeting and use their various resources to affect the outcome and decisions at the Basel level is particularly significant and important. I want to make sure that it is understood that this is not just a question of our regulators following instructions from a world body; our regulators have a very big impact on what that world body chooses to say. It is a very important way for us as a Parliament to make sure that our concerns that regulation is appropriate are communicated through that route and help shape—or, at least, are in the minds of regulators when they engage in shaping—that world environment.
Having said that, I think we all recognise that we are at the early stages of a process that will not be completed in this Bill. That process now takes off to a series of consultations and eventually to legislation. I have said to the Minister before that I hope there will not be any more measures that end-run that final regulatory framework, but that may happen, and if it does, we will have to deal with it as it occurs. We are doing this backwards—a lot of legislation is going through, shaping the relationship between Parliament and the regulator, before we have even done the consultation on what that should look like, but I appreciate the time that the Minister has taken to respond to my noble friend’s points. With that, I will sit down and be quiet until the next opportunity to take on this issue. I beg to withdraw the amendment.
Member’s explanatory statement
See the explanatory statement for the Minister’s second amendment at page 47, line 34.
“(2) In section 34 —(a) subsections (1), (3) and (5) extend to England and Wales only, and(b) subsection (4) extends to England and Wales and Northern Ireland only.”Member’s explanatory statement
This amendment provides that certain amendments of sections 6 and 7 of the Financial Guidance and Claims Act 2018 in Clause 34 extend only to England and Wales.
“(2A) In Schedule 12, paragraph 14(3A) extends to Northern Ireland only.”Member’s explanatory statement
This amendment and the Minister’s amendment at page 47, line 33 provide that subsection (5B) of section 303Z1 of the Proceeds of Crime Act 2002, inserted by Schedule 12 to the Bill (see the Minister’s amendment at page 182, line 26), extends to Northern Ireland only.
Lord Holmes of Richmond
“(e) section (Payment services and the provision of cash).” Member’s explanatory statement
This amendment provides for the new Clause about payment services and the provision of cash to come into force two months after the Bill receives Royal Assent.
Member’s explanatory statement
This amendment is consequential on the Minister’s amendment at page 182, line 26.
Member’s explanatory statement
This amendment is consequential on the Minister’s amendment at page 48, line 21.
“(ba) the target in section 1 of the Climate Change Act 2008 (carbon target for 2050), and”Member’s explanatory statement
This amendment requires the FCA to have regard to the carbon target for 2050 when making Part 9C rules (defined in section 143F of the Financial Services and Markets Act 2000, inserted by Schedule 2 to the Bill).
“Carbon target
21A_ In relation to the making of Part 9C rules that are made on or before 1 January 2022—(a) paragraph (ba) of section 143G(1) of the Financial Services and Markets Act 2000 (duty to have regard to carbon target for 2050) does not apply, and(b) section 143H(1)(b) of that Act does not require an explanation in respect of matters specified in that paragraph.”Member’s explanatory statement
This amendment disapplies the FCA’s duty to have regard to the carbon target for 2050 (see the Minister’s amendment at page 65, line 27) in relation to Part 9C rules made on or before 1 January 2022.
“(ca) the target in section 1 of the Climate Change Act 2008 (carbon target for 2050), and”Member’s explanatory statement
This amendment requires the PRA to have regard to the carbon target for 2050 when making CRR rules (defined in section 144A of the Financial Services and Markets Act 2000, inserted by Part 1 of Schedule 3 to the Bill) and also when making section 192XA rules (see sections 192XA and 192XB, inserted by Part 2 of Schedule 3 to the Bill).
“Carbon target
24A_ In relation to the making of CRR rules or section 192XA rules that are made on or before 1 January 2022—(a) paragraph (ca) of section 144C(1) of the Financial Services and Markets Act 2000 (duty to have regard to carbon target for 2050) does not apply, and(b) section 144D(1) of that Act does not require an explanation in respect of matters specified in that paragraph.”Member’s explanatory statement
This amendment disapplies the PRA’s duty to have regard to the carbon target for 2050 (see the Minister’s amendment at page 82, line 14) in relation to CRR rules and section 192XA rules made on or before 1 January 2022.
“(3) After subsection (5) insert—“(5A) In this Chapter as it extends to England and Wales and Scotland, “relevant financial institution” means—(a) a bank,(b) a building society,(c) an electronic money institution, or(d) a payment institution.”(3A) After subsection (5A) insert—“(5B) In this Chapter as it extends to Northern Ireland, “relevant financial institution” means—(a) a bank, or(b) a building society.””Member’s explanatory statement
This amendment provides that it is only Chapter 3B of Part 5 of the Proceeds of Crime Act 2002 as it extends to England and Wales and Scotland that is amended to provide for forfeiture of money in accounts maintained with electronic money institutions and payment institutions.
Member’s explanatory statement
This amendment is consequential on the Minister’s amendment at page 182, line 26.
Earl Howe (Con)
My Lords, it is right that we take a brief time to offer some concluding remarks. I begin by thanking all noble Lords who have taken part in our debates for their thorough consideration of this Bill. The Bill is a very important step towards the Chancellor’s vision for the future of the UK’s financial services sector. As the first major piece of financial services legislation since our leaving the EU, it will enhance the UK’s world-leading prudential standards, promote financial stability, promote openness between the UK and international markets, and maintain an effective financial services regulatory framework and sound capital markets.
It has been a great privilege to guide this legislation through the House alongside my noble friends Lord True and Lady Penn; I thank them both. I am especially grateful to both opposition Front Benches for their constructive engagement on the Bill. All those involved have brought to bear huge experience as well as great enthusiasm and insight. There are too many other noble Lords for me to thank individually, but I do so collectively. I for one have appreciated the very thoughtful and expert contributions from all quarters of the House, not least from my noble friends on these Benches.
As my right honourable friend the Chancellor has set out, the financial services sector will be crucial to our economic recovery from the pandemic, offering job creation and economic growth in all corners of the economy. In these debates, noble Lords across the House have demonstrated their appreciation of the important role that this sector will continue to have, and this legislation is undoubtedly better for their consideration.
We have discussed some extremely technical issues as well as broad issues that reach far beyond the specifics of the Bill. We have looked at the role that the financial services sector will play in our efforts to tackle climate change. We have discussed at length the special role that Parliament must continue to have in relation to the scrutiny of the financial services regulators and their activities. As the Government move forward in delivering their vision for the financial services sector, the debates that we have had during the passage of this Bill will continue to be of vital relevance.
I conclude these brief remarks by acknowledging the hard work undertaken by the Treasury Bill team, the numerous Treasury officials and the clerks in the Public Bill Office, who have worked incredibly hard to support the passage of the Bill. I express my warmest appreciation to them for the unstinting support that they have provided. I beg to move.
Lord Tunnicliffe (Lab) [V]
My Lords, this is a very significant Bill. At the point of discontinuity between the days of EU involvement and control to the new world after leaving the EU, the depth of involvement that we have had with both other parties and the Government has been significant. We have had conversations on the Floor of the House and in other meetings, and we have all at least understood one another. We have gone some way to address the central point of the Bill, which is how to scrutinise the regulators while, at the same time, leaving them independent and effective. We will see whether the compromises that have been agreed work, over the next several months, in both the day-to-day examination of the regulators’ output and the development of subsequent law.
I thank the noble Earl, Lord Howe, the noble Lord, Lord True, the noble Baroness, Lady Penn, and their teams, for all their efforts. The leader of the Labour side in this debate was of course my noble friend Lord Eatwell who, unfortunately, was not able to be with us today, but he asked me to read the following statement. These are his words, not mine.
“Standing at the Dispatch Box for the Opposition, I have always believed that my job is to oppose; to expose the flaws in the Government’s erroneous and sloppy thinking. It has, however, been a very new experience working on this Bill with the noble Earl, Lord Howe. It was evident from the start that his objective was to achieve something useful—a constructive experience that I value and for which I am grateful.”
I was less surprised than my noble friend Lord Eatwell, because I have been on the opposite side of this Chamber from the noble Earl, Lord Howe, for many years, and have always found him very committed to finding a consensus way forward, where possible.
I thank my researcher, assistant and speechwriter, Dan Stevens, for all his work, because I would not have survived without it. Finally, I thank the House for its tributes to Frank Judd. He was a wonderful person and he carried on being a wonderful person right to the end. He was voting last week—the right way, of course. I was also his whip, but it really felt the other way round, because he was always so supportive. I have lost not only a member of my team but a very good friend, who has always supported me and been helpful. I thank the House once again for its tributes.
Baroness Kramer (LD)
My Lords, once again I thank Lord Judd, because he contributed to this Bill, so it is entirely appropriate to reference him, as we close and the Bill passes. This was originally presented as a “limited, technical Bill”. Whoever thought up that phrase is probably now assigned to writing detailed amendments on obscure financial practice, because it has been anything but.
From my perspective, we had three major areas to tackle in this Bill. We have talked about the constitutional issues of regulator accountability to Parliament, which are overwhelmingly important to this House and the other place. We have also dealt with extensive legislation that impacts ordinary consumers. One can never overstate the importance of dealing with issues such as debt, mortgage prisoners, sharia finance, access to cash or financial exclusion. They are crucial to the people of this country and to everyday lives, so I am very glad that they formed a major part of this Bill. Thanks to the noble Lord, Lord Holmes, we have had some particular success—and perhaps will have more success with the amendments that we passed.
We also dealt with the environment and made some real progress in that area. I regret that by one vote only—because it was a tie—we did not get our capital adequacy amendment through but I think the House will, at some point in time, be back discussing that issue. I also suspect that, at some point, the PRA will announce the changes to capital adequacy ratios that reflect the underlying stranded assets associated with fossil fuels in various forms. That, too, I see as a work in progress but it was an important discussion and put down some very significant markers.
I want to thank the Public Bill Office. I cannot remember a piece of legislation where so many amendments appeared in each round, both in Grand Committee and on Report. Its work in turning around those amendments to ensure they were in an appropriate form was very much appreciated.
I join in thanking the noble Earl, Lord Howe, the noble Baroness, Lady Penn, and the noble Lord, Lord True. I say to all three of them that we appreciate that they listened to what we had to say and, whether they agreed or disagreed, always responded to us with respect and looked for common ground. Frankly, I regard the noble Earl, Lord Howe, as the Conservative Government’s secret weapon because he certainly brings us to a common point that finds a way through when relatively few other people could.
I really want to thank others for the co-operative working across the House. We have worked closely with all those on the Labour Benches, but it has been with the Conservative Benches as well. It really shows this House at its best when it deals with issues of fundamental importance.
On my own team, Sarah Pughe in the Whips’ Office kept us co-ordinated; she also kept us informed, which was quite some challenge. My noble friends Lord Bruce, Lady Sheehan and Lady Tyler stepped in to contribute some special knowledge. I thank in particular my noble friends Lady Bowles, Lord Sharkey and Lord Oates, each of whom took on one of those three areas that I categorised as crucial in this Bill and brought to them absolutely exceptional levels of expertise, real dedication and hard work. They supported their positions with extraordinary diligence. Sometimes when people come with not only expertise but passion and concern, they can make an effective difference in the way they communicate with the House. I have to say to those three how much I appreciated them.
My noble friends Lady Bowles and Lord Sharkey are off at the Industry and Regulators Select Committee. I understand that the noble Lords, Lord Eatwell and Lord Blackwell, are there. I am sure they are missing the noble Baroness, Lady Noakes, today but I hope she will make that up at the next meeting and ensure that her imprint is on the work of that committee.
This has been a real pleasure. I believe we have achieved something. It is not all I would have wanted but, as I say, this is only the beginning of a long process.
Baroness Coussins (CB)
From these Benches, I too am grateful for the opportunity to express my thanks to all noble Lords who participated at all stages of the Bill. The noble Earl, Lord Howe, the noble Baroness, Lady Penn, and, from the point of view of my own particular interest in the Bill, especially the noble Lord, Lord True, have steered the Bill skilfully through your Lordships’ House. Although he is not in the Chamber at the moment, I place on record my grateful thanks to the noble Lord, Lord True, for his constructive engagement and for meeting me and the noble Baroness, Lady Morgan of Cotes, on two occasions to discuss amendments concerning the statutory debt repayment plans.
Together with the Bill team and the wider group of Treasury officials, the noble Lord, Lord True, has given me and the network of debt advice charities a great deal of confidence that these plans will be brought into effect in 2024. We are all grateful for this positive attitude. I thank all other noble Lords who spoke on this issue and on a variety of other matters of concern to consumers. As well as SDRPs, I welcome the fact that the Bill paves the way towards regulating buy now, pay later products, for example. Indeed, it has been very pleasing to see the level of consensus across the House on the need to improve support for people in financial difficulty and to tackle financial exclusion.
Finally, the passage of the Bill has been an important opportunity to look at what more needs doing on the financial services regulatory framework to ensure that it is as effective as possible at protecting consumers; for example, one area that was raised but ultimately found to be beyond the ambit of the Bill was oversight of bailiffs, but the commitment from the Government to work with stakeholders to develop this is very welcome.
I thank all concerned, including the excellent Lord Judd, whom we will all miss very much indeed.
Earl Howe (Con)
My Lords, I am grateful to all noble Lords for their remarks in bringing our proceedings to a conclusion. I beg to move.