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Oral Answers to Questions
(3 years, 4 months ago)
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Sarah Olney (Richmond Park) (LD)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Amanda Solloway)
Having worked in the retail sector for a number of years, I sympathise with consumers who have been targeted by these dreadful scams. Guidance for businesses on how to spot and avoid getting caught out by scams is available on Business Companion and the Businesses Against Scams website; consumer advice is available on the Citizens Advice website. All of these are funded by Government.
Sarah Olney
The reported rise in remote banking fraud poses considerable concern to small and medium-sized enterprises, which are increasingly accessing online business banking services owing to the closure of high street banks in many of our communities. What steps is the Minister taking to ensure that SMEs are well equipped to navigate online banking and, by extension, recognise fraudulent activity?
Amanda Solloway
Businesses and consumers all fall victim to these scams, so it is important that they have an awareness of all online scams. They can report matters to Action Fraud; consumers can also go to the Citizens Advice scams action helpline.
Christian Matheson (City of Chester) (Lab)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Amanda Solloway)
My noble Friend the Minister for Investment met representatives of GKN Automotive on 21 May. GKN committed to considering all the viable alternatives to closure, including repurposing the Birmingham plant to produce parts for electrical vehicles, but it concluded that that was not commercially viable. The Government stand ready to assist the workers at this difficult time. I add that Nissan’s recent announcement shows that we are actively supporting UK electric vehicle production and supply chain growth.
Christian Matheson
In April, in a Westminster Hall debate, the Minister said:
“The Government are committed to doing what we can to save those…jobs”
of the 519 GKN workers, including through
“investments in capital equipment or in the skills needed to secure future vehicle technology.”—[Official Report, 28 April 2021; Vol. 693, c. 128-129WH.]
Those commitments were warmly welcomed. Does she understand that if the site on Chester Road closes with 519 job losses, it will be a hammer blow to the families of those workers, but also to the UK automotive sector at a time when we need to be powering ahead with electric vehicle technology?
Amanda Solloway
The hon. Member makes a really important point. He will know that I have every sympathy with GKN; he will also know that we have been having ongoing conversations recently. However, it is really a difficult situation. The Department for Work and Pensions and Jobcentre Plus work coaches will provide bespoke advice and guidance. In addition, the West Midlands Combined Authority and the Greater Birmingham and Solihull local enterprise partnership have several programmes that can support GKN employees to reskill for a new job or help them to start their own business.
Stephen Crabb (Preseli Pembrokeshire) (Con)
The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
Since 2003, various bodies across Government have provided innovation funding of £175 million to the wave and tidal sectors. Projects remain eligible to compete in contract for difference auctions. We have also set a target of 1 GW by 2030 for floating offshore wind to stimulate investment. We are currently assessing the contribution of tidal stream, wave power and tidal range generation, following the call for evidence last September.
Stephen Crabb
As my right hon. Friend knows, and as I hope she will see if she visits Pembrokeshire, my constituency is emerging as an important hub for marine energy, but technologies such as tidal stream need the same revenue support that we gave to solar and wind to unlock private investment and reduce costs over time. To that end, will she assure us that the parameters of the CfD auction round later this year will be set to ensure that new tidal stream and other marine renewable projects can be developed?
Anne-Marie Trevelyan
I agree that there is significant potential for these new marine technologies. Recent market engagement carried out by the Crown Estate showed a high level of market appetite to develop more projects in the area, which is very encouraging. We will set out the details of the new technology as part of CfD round 4 in the autumn, so I hope that my right hon. Friend can wait that long. In the meantime, I look forward to being able to visit Pembrokeshire to meet him with businesses and those in the community who are keen to progress these projects.
Mr Philip Hollobone (Kettering) (Con)
The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
In December, the Government aim to deliver our biggest auction yet for new renewables, through the contracts for difference scheme. We aim to launch the green heat network fund in April next year. The Government are also committed to investing £9 billion in improving the energy efficiency of our buildings while creating thousands of green skilled jobs.
Mr Hollobone
With some 30 major wind turbines and several solar farms, the Kettering constituency is doing its bit for renewable energy. Last year, how much renewable electricity was produced in Kettering? How many homes would it power?
Anne-Marie Trevelyan
As at the end of December 2019, the east midlands region produced more than 5,500 GW of electricity from renewable resources, including nearly 1,600 GW from offshore wind. To break that down, 1,534 of the 88,000 renewable electricity installations were in the Kettering constituency, including photovoltaic, onshore wind, anaerobic digestion, landfill gas and plant biomass. This is generating 173 GW, or enough power to power 45,000 homes.
Gill Furniss (Sheffield, Brightside and Hillsborough) (Lab)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)
The Government are absolutely committed to ensuring that anyone entitled to be paid the minimum wage receives it. Since 2015, we have more than doubled the enforcement budget to almost £30 million and ordered employers to repay £100 million to 1 million workers.
Gill Furniss
The Low Pay Commission has called on the Government to recruit a new director of labour market enforcement as an urgent priority, but the Government have dragged their feet for almost a half the year while claims are falling and waiting times are rising. Can the Minister inform the House when that vital post will be filled? And “in due course” simply does not cut it.
Paul Scully
Cracking down on non-compliance in the labour market is a priority for the Government, and the new director of labour market enforcement will be appointed as soon as possible, but the temporary vacancy has no impact on workers’ rights. The three enforcement bodies themselves are responsible for overall work and enforcement responsibilities, and they will continue to work hard to protect workers and bring enforcement actions against employers who break the rules.
Mark Logan (Bolton North East) (Con)
Peter Gibson (Darlington) (Con)
Alexander Stafford (Rother Valley) (Con)
Mark Eastwood (Dewsbury) (Con)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Amanda Solloway)
We have made a commitment to level up all areas of the country. The plan for growth is a critical part of this and we will go further with the publication of a levelling-up White Paper later this year.
Mark Logan [V]
I wrote to the Minister outlining Bolton’s bid to be the home of the Advanced Research and Invention Agency, featuring the full support of the vice- chancellors of the University of Bolton and the University of Manchester, along with Innovation GM and a wider coalition. I am sure that even my neighbour but one, the Speaker, would find it difficult to resist Bolton’s attraction. We have kindly received a response from the Minister, and now that the advert for the ARIA chair has gone live, will she tell us when she would like to visit Bolton to support us in our ambition to reinvent Britain’s biggest town in line with the Government’s levelling-up agenda?
Amanda Solloway
My hon. Friend paints a fantastic picture of Bolton North East. He really is a wonderful advocate for his constituency, and he has a keen interest in ARIA, which I am delighted by. No decision has yet been taken on ARIA’s location, and I do not expect one to be reached until the chief executive officer and the chair are in post, but my hon. Friend will be delighted to hear that the open recruitment process for a visionary chair began yesterday, and I would encourage him and other hon. Members to share this exciting opportunity widely to reach as diverse a pool of candidates as we possibly can.
Peter Gibson
Whether it involves investing £105 million in Bank Top station, investing £23.3 million through the towns fund or establishing a new Department for Business, Energy and Industrial Strategy presence in Darlington, this Conservative Government are delivering on their manifesto commitment to level up. Does my hon. Friend agree that it is therefore short-sighted of LNER to propose to cut services to Darlington?
Amanda Solloway
I am glad that my hon. Friend recognises the work that the Government have done to support investment in the town, and I know that the Department for Transport and LNER appreciate his desire to ensure that his community continues to be well served by rail services across the north. His comments and those of his colleagues are exactly the level of detail that the consultation is looking to elicit, and it is important that the industry understands the strength of the business case, so I would urge him to continue to engage with the consultation process.
Mr Speaker
We now go to Alexander Stafford. Not here. Let’s go to Mark Eastwood, who is here.
Mark Eastwood
I am pleased that my hon. Friend the Member for Penistone and Stocksbridge (Miriam Cates) and I have put forward a £48 million joint levelling-up fund bid to support improvements to the Penistone line, which runs through our constituencies. Will the Minister agree to work with the Department for Transport and the Treasury in supporting this bid, which, if successful, would help to boost local businesses and bring much-needed jobs to my constituency, especially in Kirkburton and Denby Dale?
Amanda Solloway
My hon. Friend has been a tireless advocate for his constituency, most notably in his advocacy of the Dewsbury town deal. As he will know, the support of MPs is important for bids to the levelling-up fund, but he will understand that I cannot go further than that while the bids are being evaluated.
Stephen Flynn (Aberdeen South) (SNP)
Today marks 33 years since the Piper Alpha disaster, when 167 lives were lost and many more oil workers were injured. The trauma reverberates right across Aberdeen to this day, and I would like to pass on my thoughts to the friends and families of all those involved in that awful, awful tragedy.
We have heard three questions from Conservative Members and had three answers from the Minister, but we have not had a single mention of the fact that rather than being a Government who are levelling up, they are cutting back. Just last week we have seen furlough support sliced away from businesses, many of which have been unable to open or operate since the start of this pandemic. Many of them will also now be paying back covid loans, despite of course never being able to bounce back. So may I ask the Minister: how does pulling funding away from businesses help communities to level up?
Amanda Solloway
I would like to add my thoughts to those expressed by the hon. Gentleman about the Piper Alpha disaster. Across government, we are investing in Scotland through a number of routes, including the United Kingdom community renewal fund, the levelling-up fund and the future UK shared prosperity fund, to name but a few. For example, at the Budget we confirmed £27 million for the Aberdeen energy transition zone, in the hon. Gentleman’s constituency, which is helping to support north-east Scotland to play a leading role in meeting our net zero ambitions.
Stephen Flynn
I do not think the Minister actually answered my question, but let us look at another aspect of the levelling-up prospectus: freeports. The Scottish Government have been clear that they want freeports to have a green agenda and to have fair work and net zero at their core, but just last week the UK Government told us that they will ignore that green port prospectus and will instead seek to enforce their will on the Scottish Parliament and the Scottish people. So may I ask the Minister: when did levelling up become less about empowerment and more about dragging powers from Scotland back to London?
Amanda Solloway
I thank the hon. Gentleman for the question. This Government are committed to the levelling-up process, and we have made it incredibly clear that that is what we are going to do. We will have a levelling-up White Paper, which is to be issued in the autumn. We are ensuring that we are levelling up throughout the whole of the United Kingdom.
Beth Winter (Cynon Valley) (Lab) [V]
The UK Government talk about levelling up former coalfield communities such as those in my constituency, yet at the same time they have profited by billions of pounds from the mineworkers’ pension scheme since its privatisation in 1994. That money could be going to miners and their families, many of whom are experiencing hardship and are struggling to make ends meet. The Government’s announcement yesterday not to implement the recommendations of the cross-party Select Committee on Business, Energy and Industrial Strategy to redress this injustice was met with dismay and was described as a “slap in the face”. Will the Minister agree to review that decision and implement the BEIS Committee recommendations in full?
The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
The hon. Lady will know that I have sent my reply in to the BEIS Committee, but I also had a very constructive meeting with a number of the trustees just a few weeks ago and we have agreed to continue. I have left them with some questions that they must go to talk to the rest of the trustees about, and my door continues to be open for them to bring back propositions if they want to continue to discuss this.
Stephen Hammond (Wimbledon) (Con)
The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
We will publish our comprehensive net zero strategy ahead of COP26. It will set out the Government’s vision and how we will meet our ambitious goals as we transition to net zero emissions by 2050.
Stephen Hammond [V]
I thank my right hon. Friend for her response. She will know that many infrastructure institutions, including the Institution of Civil Engineers, have called on the Government to deliver a system-wide plan for transitioning the UK infrastructure. Will she confirm that when she publishes the strategy in the autumn—I take that from her response—it will provide the policy certainty for infrastructure and the supply chain so that there is investment and we can ensure that the necessary initiatives are put in place to enable the Government’s aim of net zero to be achieved?
Anne-Marie Trevelyan
The net zero strategy will include a focus on how better to embed net zero as a key consideration across all Government activity. Furthermore, infrastructure will play a crucial role in the transition to net zero, and our policies and approach will reflect that. The net zero strategy will continue to build on policies that we have already announced, such as the £1 billion carbon capture and storage infrastructure fund and the £240 million net zero hydrogen fund. We are also supporting underlying investment decisions to mobilise private finance. The national infrastructure bank announced in the Budget will have £12 billion of capital and be able to deploy £10 billion of Government guarantees.
Matthew Pennycook (Greenwich and Woolwich) (Lab)
The 2021 progress report published by the Climate Change Committee last month stated:
“A pattern has emerged of Government strategies that are later than planned and, when they do emerge, short of the required policy ambition.”
Despite the committee’s characteristic politeness, that is a damning critique from the Government’s own climate advisers. I take it from the Minister’s previous answer that the House has this morning been given a cast-iron guarantee that a net zero strategy will be published well in advance of COP26; will she confirm that that is the case? Does she recognise that the credibility of such a strategy is predicated on a substantive Treasury net zero review that sets out precisely how the benefits and burdens of the transition will be shared fairly?
Anne-Marie Trevelyan
Of the 92 recommendations made by the Climate Change Committee in its 2020 progress report, 40 have been achieved or partly achieved and another 32 are under way, meaning that progress has been made against more than 75% of the recommendations. Our forthcoming strategies—including on hydrogen and transport and our comprehensive net zero strategy—will set out more of the policies that the committee calls for in its recommendations. I clearly cannot speak for the Treasury, which will publish its own review, but I know that that is also very well advanced.
Craig Whittaker (Calder Valley) (Con)
The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
The Government confirmed our commitment in the energy White Paper to more nuclear power after Hinkley Point C, and we are currently negotiating for Sizewell C. That is a great example of the bright future ahead for our skilled nuclear workforce.
Craig Whittaker [V]
Gathering the skills and expertise for building new nuclear power stations in the UK has been a mammoth task and a considerable expense to many companies because no nuclear has been built in the UK for many decades. Can my right hon. Friend give some assurance to the tens of thousands of employees who are worried about their jobs as contracts on Hinkley Point come to an end and there is potentially a lengthy gap before the funding model for Sizewell C is agreed?
Anne-Marie Trevelyan
My hon. Friend is right that there was a long gap in respect of investment in UK, but I am pleased that the Prime Minister’s leadership has reset that. We are working closely with industry and the skills bodies to make sure that as we grow our nuclear industry again, we better understand the skills requirements and challenges faced by the industry. EDF’s latest estimate suggests that the number of people working on the Hinkley project will peak at around 8,500. That is a fantastic local employment story and, given EDF’s plans to replicate HPC at its next project, Sizewell C in Suffolk, we expect to see employment benefits transfer to that project, creating thousands of jobs in that local area.
Stephen Morgan (Portsmouth South) (Lab)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Amanda Solloway)
The Secretary of State for Business, Energy and Industrial Strategy has until 8 September 2021 to take his decision on whether or not to grant development consent for the proposal.
Stephen Morgan
I have long represented Portsmouth’s opposition to AQUIND, which would cause untold disruption to our communities and no clear benefits to my city. There are serious concerns about the company, its murky financing and the influence that its leaders have over Ministers who are responsible for giving the project the go-ahead. Last weekend, I launched a petition to give a real voice to local people who are opposed to the development. With no Secretary of State present today, will the Minister listen to the weight of concerns from my constituents and reject the damaging and suspicious proposals?
Amanda Solloway
Local communities have had the opportunity to raise concerns during the examination undertaken by the Planning Inspectorate. The Secretary of State will consider all relevant matters—I will ensure that I pass on the hon. Gentleman’s message—when he takes a decision, but as it is a live planning application I cannot comment further.
Dr Alan Whitehead (Southampton, Test) (Lab)
Is the Minister aware that we are talking about a company that, as its sole activity, is proposing to build an interconnector with France, that has attempted to get itself exempted from all the rules governing interconnectors, and that is now extraordinarily seeking Government backing to trash parts of Portsmouth to land its cable? Throughout all of this, it has never traded and is completely reliant for its existence on loans from unnamed overseas companies. But it has been active as a company in one other area: giving huge donations to the Conservative party and a number of its MPs to the tune of £1.1 million, either from the company itself or through the good offices of its part-owner. Now, perhaps in return, it wants the Government to support its rackety scheme through the Secretary of State’s personally approving its planning application. This whole thing stinks. I ask Ministers to call a halt to this seedy enterprise and certainly not endorse its wild and inappropriate planning proposals.
Amanda Solloway
As previously stated, the Secretary of State for BEIS will have until 8 September 2021 to take his decision on whether to grant development consent on this proposal.
Stephen Kinnock (Aberavon) (Lab)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Amanda Solloway)
I thank the hon. Member for raising this important topic again after engaging in a recent Westminster Hall debate, and I know how passionately he cares about this subject. I know, too, that he will have welcomed the Government’s action on trade safeguards to protect our steel sector and jobs. We are also working closely with the Steel Council, reformed by the Secretary of State, on important matters such as decarbonisation, a sustainable future and procurement.
Stephen Kinnock
For as long as anyone can remember, steel MPs, trade unions and employers have been urging the Government to do something about industrial energy costs, and yet our steelworkers still face prices that are 86% higher than their French competitors, and that is after the Government’s compensation scheme has been factored in. With Ofgem planning to hike network charges even higher, what action is the Minister taking to block this potential hammer blow and to enable our steelworkers to compete on a level playing field?
Amanda Solloway
Since 2013, we have provided more than £500 million in relief to the steel sector. On 14 June, we published a consultation on the future of the compensation schemes, which will close on 9 August. Network charging, however, is a matter for Ofgem as the independent regulator, and decisions on its targeted charging review are for it to make. Government continue to engage with Ofgem to inform our understanding of the reform’s policy implications.
Bell Ribeiro-Addy (Streatham) (Lab)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)
The recent Uber Supreme Court judgment upheld the law that those who qualify as workers in the gig economy are entitled to the same employment rights and protections as workers in other parts of the economy. The Government have one of the best records on employment rights in the world, and we have just increased wages again for the UK’s lowest paid workers.
Bell Ribeiro-Addy[V]
According to the McKinsey Global Institute, 5 million people in the UK work in the gig economy, which is around 15.6% of the UK’s total full and part-time workforce. That is 5 million people without legal rights to statutory sick pay, holiday pay, redundancy pay, maternity leave or minimum wage. February’s Supreme Court ruling in favour of Uber drivers was a momentous step forward for gig economy workers. In the same month, however, the Minister for Small Business, Labour Markets and Consumers refused to back Labour’s call to enshrine this in law, so I ask the Minister again for the sake of the millions of gig economy workers, will the Government finally step up and enshrine the rights of gig economy workers in law ?
Paul Scully
Employment law is clear that an individual’s employment rights are determined by their employment status, which in turn is determined by the detail of their working arrangement. Government actively encourage businesses to ensure that they are adhering to their legal obligations and that individuals are treated fairly and in accordance with the law.
Rachel Hopkins (Luton South) (Lab)
Sam Tarry (Ilford South) (Lab)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)
Our comprehensive economic response to business is worth more than £352 billion, including grants, the furlough scheme, tax deferrals, and business rates relief. We have extended the protection of commercial tenants from eviction and debt enforcement due to non-payment of rent until 25 March 2022.
Rachel Hopkins
Businesses in Luton South, whether they are in the town centre, Bury Park or High Town, have told me that additional support is required to safeguard their future and local jobs. Small businesses need Government to bring forward a plan to support them as we recover, particularly those that have had to take out loans to pay their rent. Does the Minister recognise that a proper debt restructuring plan will be vital in alleviating the burden of debt and in helping small businesses get back on their feet?
Paul Scully
It is important, yes, that first we reopen. I am glad that the Prime Minister is making encouraging signs regarding 19 July, so that small businesses in particular can welcome back customers and start to recover; that helps get into the recovery. We will continue to flex and extend our support for those businesses. Much of that support extends to September and beyond.
Sam Tarry
Businesses in Ilford represented by Ilford business improvement district have been damaged so severely by the pandemic, often closing or finding their revenues down to about 30% of what they were pre pandemic. Many of those businesses now have significant debts and rent arrears. I would like to know, as would businesses in Ilford, what plans the Minister has to support the thousands of businesses struggling to pay their rent.
Paul Scully
I have talked about reopening and recovery. We need to build back better and build resilience into our high streets and the ecosystems that make our communities. We have extended the moratorium on rents until next year so that we can legislate to encourage proper conversations between landlords and tenants. We are also reviewing the Landlord and Tenant Act 1954.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
Many businesses on our high streets face financing their reopening in July while dealing with quarterly rents, emergency loan repayments, business rates and VAT deferrals, all while furlough support is being withdrawn. UKHospitality has now warned that the sector faces coming out of lockdown with more than £6 billion of Government debt. Not all sectors are going to bounce back overnight; they need a Government who are on their side at this crucial time. Does the Minister think it is fair for hospitality businesses to pay a £100 million business rates bill from 1 July? Why do the Government not extend the relief period, as the Labour-led Welsh Government have done, and what discussions is he now having on the root-and-branch reform of business rates to allow the reintegration of the high street that was promised in the Conservatives’ 2015 manifesto but has still not been delivered?
Paul Scully
Different businesses and sectors have different views on furlough. UKHospitality is explaining that furlough is starting to become a problem, while other sectors want it extended further. On business rates and other support, the Chancellor deliberately went long in his Budget; he erred on the side of generosity. It was always about data, not dates, so that was always going to be flexible. The fundamental business rates review that we are conducting will report back this autumn.
Chris Green (Bolton West) (Con)
Paul Howell (Sedgefield) (Con)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Amanda Solloway)
The Prime Minister has reasserted our commitment to restoring the UK as a science superpower and to increasing Government investment in R&D to £22 billion. We continue to make progress on the R&D road map and are planning to publish the R&D people and culture strategy alongside the innovation strategy in the coming weeks.
Chris Green
The life sciences ecosystem is incredibly interdependent and clinical trials are a key part of it. Will my hon. Friend join me in meeting key stakeholders to discuss how we can maintain our position as a world leader?
Amanda Solloway
Our ambition for clinical research is for a world-leading clinical research environment that capitalises on innovation, is resilient in the face of future healthcare challenges and improves the life of patients UK-wide. I would be happy to meet my hon. Friend to discuss that ambition.
Paul Howell
At North East Technology Park in Sedgefield, we have a hub of innovation-led businesses from space to defence, including companies such as Filtronic and Kromek, which are already established; many smaller ones such as Evince and PragmatIC, which are redefining the semiconductor space; and the North East Satellite Applications Centre of Excellence, which is operated by Business Durham. Does the Minister agree that places such as NETPark, with embryonic ecosystems already in place, can be the foundation stones of building back better and levelling up, and will she come and see for herself this amazing asset of the north-east?
Amanda Solloway
NETPark is an excellent example of how science parks bring together talented communities to turn ideas into global successes. As home to the two of the UK’s Catapult centres, NETPark is playing a vital role in helping us to build back better across the United Kingdom. I would be delighted to visit not just NETPark but the wider north-east, to see how the region is capitalising on its innovation and technology strengths in order to support its local economy and communities. I know that my hon. Friend enjoyed his visit there so much that he went back week after week.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
On Friday I visited Newcastle University’s dementia research centre and spoke to the wonderful scientists striving to cure this terrible affliction. But I also heard of the desperate conditions that early career researchers face, with Government funding commitments abandoned; grants ending as covid devastates medical research charities excluded from Government support; institutes closed as the Government’s international development funding is slashed; and post-docs eking out funding from project to project with no job security, working two jobs at once or working for free, and unable to apply for funding in their own name—and the most disadvantaged are hardest hit. How can the Minister say that she is supporting science when she is throwing the next generation of scientists to the wolves?
Amanda Solloway
I always appreciate the hon. Member’s candid questions. She will know that we have been working on the people and culture strategy, which very much takes into account early career research, career progression and all the important things that we need to consider to ensure that our R&D system is really allowed to thrive and flourish. In May we announced funding of £15 million from BEIS, together with a £5 million fund from the Department of Health and Social Care, to support early career researchers, supported by charities, helping to protect the pipeline of research superstars who will have a fantastic impact in improving patients’ lives in future.
Caroline Lucas (Brighton, Pavilion) (Green)
The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
The independent Climate Change Committee agrees that the UK will need oil and gas as we deliver net zero by 2050. No other significant oil and gas producing nation matches the UK’s action on hydrocarbons in the economy, while our withdrawal of support for international fossil fuels, our North sea transition deal and our new checkpoint for licensing provide a global exemplar. Our climate compatibility checkpoint will also operate from 2022. Any reduction in domestic production would be replaced by increased imports.
Caroline Lucas [V]
The International Energy Agency’s report is clear that there can be no new investment in fossil fuel projects if the world is to meet its climate targets, yet the Government are set to approve the Cambo oilfield, which, thanks to a loophole, will not even be subject to its derisory climate checkpoint because the original licence was granted over a decade ago. Is it really the Minister’s understanding that this new North sea oil project will not add to global heating because of the date on the original licence? Will the Government think again about approving this oil project when they are meant to be showing local leadership ahead of COP26, or, as with the Cumbria coalmine, are they waiting for the US climate envoy to intervene instead?
Anne-Marie Trevelyan
The checkpoint will apply to all future licence rounds. Those projects already licensed are already accounted for in our projections for future oil and gas production. Projects such as Cambo are already licensed and are going through normal regulatory processes. Estimated emissions from all the existing licences are already accounted for in our forward projections.
Helen Hayes (Dulwich and West Norwood) (Lab)
The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
Solar is key to the Government’s strategy for low-cost decarbonisation of the energy sector, and we will need sustained growth in capacity over the next decade as we move to net zero. It already accounts for 28% of installed renewable capacity in the UK. Large-scale solar photovoltaic projects are eligible to compete in the next contracts for difference allocation round in December this year. The Government also support rooftop solar through the smart export guarantee and energy efficiency schemes.
Helen Hayes
Community energy is vitally important in delivering renewable energy and engaging communities in contributing to net zero, but the sector has suffered since the Government cancelled the urban community energy fund in 2016 and excluded it from the social investment tax relief in 2017. This evening I am meeting Sustainable Energy 24 in my constituency, which is working hard to deliver new solar installations and engage our local communities, despite the Government’s lack of support. Will the Minister commit to meaningful support for community energy?
Anne-Marie Trevelyan
We are absolutely supportive of community energy. The £10 million rural community energy fund provides grant funding to help communities with the up-front costs of project development. We have also funded dedicated officers at five local energy hubs to provide one-to-one support. We intend to set out our future plans for community energy in the forthcoming net zero strategy.
Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)
Ministers in this Department have regular and productive discussions with the automotive sector on opportunities in the UK. Through our efforts, just last week—five years after the EU referendum—a new electric vehicle hub in Sunderland was announced, which will benefit the whole sector. Nissan still remains in the UK. Nissan is investing in the UK.
Gerald Jones [V]
The automotive sector has been through a hugely difficult time, impacting on the industry and the supply chain right across the UK, including in my constituency of Merthyr Tydfil and Rhymney. I very much support the recent announcements of new opportunities, supporting jobs and job opportunities in England. What recent discussions has the Minister had with the Welsh Government on this issue to ensure that support and opportunities for the automotive sector reach all parts of the United Kingdom?
Paul Scully
My colleagues across the Department speak with the Welsh Government regularly, and I have quad meetings with my counterparts in Wales, Scotland and Northern Ireland. We absolutely recognise the importance of the automotive sector to the UK’s economy, and indeed to the Welsh economy, and are continuing to invest in it. By supporting innovation in the sector’s transition to zero-emission technologies, we are securing existing jobs and creating jobs for the future.
Mr Speaker
I call Richard Holden—not here. This is not very good. I call Bob Seely—not here. This is the worst school register anybody could have.
Catherine West (Hornsey and Wood Green) (Lab)
Steve Brine (Winchester) (Con)
The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
I will pass on your displeasure, Mr Speaker. I had some very interesting answers to share with my hon. Friends, so I am as disappointed as you. Our 10-point plan lays the foundation for the transition to net zero, with key commitments and action including in offshore wind, zero-emission vehicles and building our green economy. Ahead of COP26, we will also publish a comprehensive net zero strategy. It will set out the Government’s vision for transitioning to a net zero economy, making the most of new growth and employment opportunities across the UK.
Catherine West
May I press the Minister on the Aquind scheme, in which I believe she may have an interest that she needs to declare? It was raised by my hon. Friend the Member for Southampton, Test (Dr Whitehead). How many green jobs will be provided by the proposed scheme and what national security assessment has been carried out, given that the project is sponsored by an oligarch who has donated £1 million to the Conservative party?
Anne-Marie Trevelyan
I am unable to answer any of the hon. Lady’s questions, because I have recused myself from all matters to do with the Aquind interconnector, because Northumberland Conservatives received some funds from one of the owners of the company.
Steve Brine
The retrofitting of existing housing stock has to be a key component of our net zero drive. We have had the green deal and we have had the green homes grant. I think the most diplomatic way of putting it is that neither has realised their potential. Can I ask the Minister what comes next and when we might have sight of that?
Anne-Marie Trevelyan
The Government are continuing to fund a number of schemes as part of our commitment to retrofit homes in order to cut energy bills for the poorest households and make them greener on that path to net zero. The green homes grant local authority delivery scheme, which is supporting projects to install energy efficiency measures for low-income households, has already provided £500 million to local authorities and low-income households across England. That is being delivered up to the end of this year. In June this year, we launched the sustainable warmth competition, enabling local authorities to apply for further funding under the £200 million local authority delivery phase 3 scheme.
John Penrose (Weston-super-Mare) (Con)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)
I and my officials have regular conversations with the Competition and Markets Authority on a wide range of issues, although open banking is normally handled by the Exchequer Secretary to the Treasury, my hon. Friend the Member for Saffron Walden (Kemi Badenoch). We support independence as a key criterion for the future open banking governance model.[Official Report, 20 July 2021, Vol. 699, c. 6MC.]
John Penrose
I am delighted to hear that the independence of open banking is a core principle. Would my hon. Friend agree that open banking potentially creates a much wider idea or direction of travel for open everything? All sorts of other sectors could benefit from this approach to allow switching to be done much more easily and much more quickly. We could open up to competition many more sectors of our economy.
Paul Scully
I totally agree with my hon. Friend. He is absolutely right, because we want to continue the UK’s lead in open banking, but there is so much more to do with smart data. We will learn the lessons that allow us to lead in open banking and apply them to all those other areas that he mentions.
Dr Julian Lewis (New Forest East) (Con)
Much to my surprise, Mr Speaker—Question 35.
Dr Julian Lewis (New Forest East) (Con)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Amanda Solloway)
The National Security and Investment Act 2021 delivers important reforms of UK investment-screening powers, helping to keep this country safe. The Government look forward to working with the BEIS Committee to enable it to provide the same effective scrutiny of the Investment Security Unit as it does of the rest of the Department’s work. We are in the process of developing a memorandum of understanding to allow it to do just that.
Dr Lewis
Will my hon. Friend the Minister kindly explain the practical arrangements that will be made to ensure that the BEIS Committee can scrutinise the top secret documents involved in the work of the Investment Security Unit? Specifically, will the Committee’s members and staff be cleared to see and handle such documents, and will they be given access to secure premises in which to read and discuss such highly classified papers? And I think the answer is “fat chance”.
Amanda Solloway
No, we will make sure that the BEIS Committee has the information it needs to fulfil its remit and scrutinise the work of the Investment Security Unit. As my right hon. Friend will be aware, the Osmotherly rules set out how secret and top secret material should be handled with respect to Committees other than the Intelligence and Security Committee. I can assure the House that we will have regard to those principles as we develop the memorandum of understanding with the BEIS Committee.
Paul Holmes (Eastleigh) (Con)
The Minister for Business, Energy and Clean Growth (Anne-Marie Trevelyan)
After a very long and difficult year, things are looking up. Our economy is in better health than many had predicted, and the vaccine roll- out continues apace. While some are keen to talk down Britain, across the economy optimism is returning. Last week, Nissan and Envision announced a £1 billion investment to create the UK’s largest gigafactory, creating 1,600 new jobs in Sunderland and 4,500 more in the supply chain. Today, Stellantis has announced over £100 million of investment at its Vauxhall plant in Ellesmere Port, which is to become the first mass-volume, fully battery-electric vehicle plant in Europe. This will safeguard the future of the site and its supply chain for the next decade. These are both huge votes of confidence in the UK post Brexit, and show our green industrial revolution in action. With COP26 fast approaching, the Secretary of State and I will continue to drive forward the Prime Minister’s 10-point plan—growing our economy, levelling up the country and, of course, tackling emissions.
Paul Holmes [V]
I welcome the Secretary of State’s announcement last week that he is bringing forward the date to remove unabated coal from the UK’s energy mix by a whole year to 2024. Does my right hon. Friend agree that this shows how the UK is leading the world in consigning coal power to the history books, and showing that we are serious about decarbonising our power system so that we can meet our ambitious, world-leading climate targets?
Anne-Marie Trevelyan
I fully agree with my hon. Friend. Closing Britain’s remaining coal units by 2024 will mean that we have reduced coal’s share of our electricity supply from a third to zero in only 10 years. This is a huge achievement that reinforces our record on climate action.
Edward Miliband (Doncaster North) (Lab)
As my hon. Friend the Member for Greenwich and Woolwich (Matthew Pennycook) said earlier, the Climate Change Committee’s report card on the Government two weeks ago was devastating:
“This defining year for the UK’s climate credentials has been marred by uncertainty and delay”.
The Climate Change Committee says that
“the policy is just not there”,
and:
“We continue to blunder into high-carbon choices.”
The chair, Lord Deben, when asked to give the Government marks out of 10 for policy, said “somewhere below four”. On any measure, these are failing grades. Who does the Minister hold responsible?
Anne-Marie Trevelyan
As we are world-leading—and, like a number of world leaders, I think Mark Carney stated at a Select Committee yesterday that we are doing as well as anybody else across the planet—I must respectfully disagree with the right hon. Gentleman, because I think we really are making huge progress. The policy that is rolling out is rolling out at incredible pace. Businesses—and I am hugely impressed—are leaning in so hard to help as their contribution to the decarbonisation challenges we face. As we move towards the net zero strategy, he will be able to see the holistic approach we are taking, which will ensure that all of us who are going to help to solve that will meet the challenge.
Edward Miliband
I think that is what we call the “dog ate my homework” excuse, and this is where the problem lies. When it comes to investment in a green recovery, the UK Government’s plans per head of population are less than a third of Germany, a quarter of France and just 6% of the US. That is why the Climate Change Committee says that we are just one fifth of the way to meeting our targets in terms of policy. Is it not the truth that, because the Government are not matching their grand rhetoric with public investment at scale, they are failing to tackle the biggest long-term threat our country faces?
Anne-Marie Trevelyan
We are one fifth of the way. If this is a journey to net zero in 2050, we have put into law—in fact, I did so just two weeks ago—carbon budget 6, which has brought forward the challenge we face to decarbonise our power industry by 15 years. We are literally world-leading in doing this, and other countries are talking to me day by day in an effort to help them follow the path we are taking and to make sure that we all do our part to meet net zero. This is not only about the UK; this is of course a global challenge, and the work my right hon. Friend the COP President-Designate is doing to help drive that across the world is critically important to its success.
Nickie Aiken (Cities of London and Westminster) (Con)
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)
My hon. Friend is a doughty champion of small and independent businesses in her constituency, as well as of those big businesses that everybody knows around the world, not just the country. She is right to say that if people come to the centre of London, which has been remarkably quiet and slow to recover, they will see the benefits of those independent shops, as well as being able to enjoy everything that the most fantastic global city, represented by my hon. Friend, has to offer.
Alex Cunningham (Stockton North) (Lab)
Anne-Marie Trevelyan
As the hon. Gentleman will know, the process is in full swing and we will make an announcement before too long about those first clusters, and who will be able to lead in the carbon capture, utilisation and storage programme. The sixth carbon budget means that we have brought in the challenge of getting to grips with aviation and shipping fuels, and the Department for Transport is focusing on how that will be part of the net zero strategy.
Bob Blackman (Harrow East) (Con) [V]
Anne-Marie Trevelyan
The Government are committed to new nuclear power, as we set out in the Energy White Paper last year. We have entered into negotiations with the developers of Sizewell C to consider the financing, and to set to building that as the next one after Hinkley Point C. We have committed £385 million for developing advanced nuclear jobs, including small modular reactors, for deployment in the 2030s.
Mary Glindon (North Tyneside) (Lab)
Anne-Marie Trevelyan
As I mentioned in an earlier answer, I met a number of trustees a few weeks ago and we discussed a number of issues in detail. I left them with a number of issues to go away and consider. The proposition as it currently stands is one that the Government do not wish to take forward, but I have asked the trustees to come back to me once they have considered the questions we discussed.
Mark Eastwood (Dewsbury) (Con)
Paul Scully
What a fantastic story. In just 18 months, my hon. Friend has shown the impact of his work across his home town. He is absolutely right. Dewsbury’s transformative £24.8 million investment will make it a more attractive place to live, work and invest by supporting projects that deliver that enhanced business environment, such as the arcade to be reopened to small independent businesses and Dewsbury market to be transformed into a modern-day market, with fibre network improvements and repurposing underused sites. This is really going to boost Dewsbury’s reputation as a place for starting and growing a business.
James Daly (Bury North) (Con)
Paul Scully
I thank my hon. Friend for his interest in a really important area of supporting pubs. We will shortly publish a consultation to seek views on detailed options to improve the practical operation of the pubs code. It is important that all interested parties are able to comment, given the code’s complexity and potential impact on property rights. It covers just under 8,700 tied pub tenants in England and Wales, so it is only a small proportion of businesses in the hospitality sector, but a very important proportion. Next year, we will launch a second statutory review to seek stakeholders’ views on the effectiveness of the pubs code.
Dame Diana Johnson (Kingston upon Hull North) (Lab) [V]
Paul Scully
I thank the right hon. Lady for her continued interest in this important area. I have said time and time again that it is not acceptable for employers to use such bully-boy negotiating tactics. ACAS has done the quantitative work on fire and rehire. We are asking it to write guidance, but also to do some more detailed work. If we need to act, we certainly will act.
Mrs Pauline Latham (Mid Derbyshire) (Con)
Paul Scully
Travel has an impact beyond the sector itself and the impact of reopening our cities. We will continue to work with the sector to offer it support and to flex our support. My hon. Friend mentioned weddings. On 21 June, the restrictions on weddings were eased, which I was pleased to see. The number is now determined by how many a venue can safely accommodate with social distancing measures in place. I am looking forward to the day when those final social distancing measures can melt away.
Peter Grant (Glenrothes) (SNP)
Paul Scully
I have continued to converse, whether in person or on social media, with some of the people leading the campaign in this area. As I have said before, a lot of the schemes we put in place have been reverse engineered so we can deliver them quickly, at pace and at scale. We have not been able to save every business and every job, but clearly, we will look to not only reopen and recover, so that we can bounce back better and protect as many jobs as we can, but create new jobs as well.
Sir Desmond Swayne (New Forest West) (Con)
Paul Scully
There is a shortage of building materials due to global demand outstripping supply. We are working with the Construction Leadership Council’s product availability group to identify and resolve these challenges.
Grahame Morris (Easington) (Lab)
Anne-Marie Trevelyan
That fund—one might describe it as a backstop—is there for support if there is a need to increase pensions. I am pleased to continue discussions with the trustees to look at potential solutions for the years ahead as the number of miners reduces and the investment pot needs to be looked at differently.
Damien Moore (Southport) (Con)
Paul Scully
I agree with my hon. Friend about Nissan’s investment and the confidence it has shown in this country, which is a ringing endorsement. Indeed, the Secretary of State is up in Ellesmere Port talking to Stellantis about its investment in this country as well.
Wera Hobhouse (Bath) (LD) [V]
Anne-Marie Trevelyan
As I said earlier, we already have a number of funds working in community energy. I am happy to meet the hon. Lady at any point to discuss her perspective.
Alan Brown (Kilmarnock and Loudoun) (SNP)
Yet again, we have heard about the need for a nuclear baseload. The reality is that Dungeness nuclear power station shut down seven years early and 75% of the existing nuclear fleet will be offline before Hinkley Point C can be up and running. Will the Minister tell me whether the nuclear baseload is a myth or when the lights will be getting turned out?
Anne-Marie Trevelyan
We continue to invest in new nuclear, as I set out earlier, and we are working to grow our renewable energies at an extraordinary pace. We are world leading, with our offshore wind capacity already at 29% of the total, and we will continue to grow that from 10 GW to 40 GW by 2030.
Catherine West (Hornsey and Wood Green) (Lab)
On a point of order, Mr Speaker.
Catherine West
It is. In Question 31, I asked about green jobs and a scheme called Aquind, sponsored by Mr Temerko, who is a funder of the Tory party to the tune of £1 million. The Minister for Business, Energy and Clean Growth quite rightly recused herself from answering the question because she has an interest, but can anyone else on the Front Bench answer my question about green jobs? Has a national security assessment been done of the Aquind project for an interconnector between France and the UK and its data implications?
Paul Scully
Further to that point of order, Mr Speaker. My right hon. Friend the Minister for Business, Energy and Clean Growth was right to recuse herself from the decision to ensure probity. We will find an answer for the hon. Member for Hornsey and Wood Green (Catherine West) from the Secretary of State.
Mr Speaker
Right, thank you.
I am now suspending the House for three minutes for the necessary arrangements for the next business to be made.
Petition
Felicity Buchan (Kensington) (Con)
I rise to present a petition on behalf of the residents of Kensington, to save a physical police presence in the north of Kensington. The petitioners declare that it is “imperative” that such a presence is retained in the north of the Royal Borough of Kensington and Chelsea. This petition, alongside the corresponding online petition, has accumulated 1,208 signatures. I would also like to draw the House’s attention to the fact that there are two similar independent petitions, which have also garnered 684 signatures. The petitioners urge that
“the House of Commons urge the Government to take immediate action to ensure that a physical police presence is retained”
in the north of Kensington.
Following is the full text of the petition:
[The petition of residents of the constituency of Kensington,
Declares that it is imperative that a physical police presence, that being defined as a police station with a counter, continues to be located within the boundaries of the Royal Borough of Kensington and Chelsea, North of Holland Park Avenue/Notting Hill Gate; further that such a presence is needed because tackling crime in the area, particularly violent crime, poses significant challenges and the Grenfell community deserve to have a police presence; and further that a guarantee of police presence should be made as soon as reasonably possible and no later than the date set for the closure of Royalty Studios (North Kensington) Police Station.
The petitioners therefore request that the House of Commons urge the Government to take immediate action to ensure that a physical police presence is retained and not withdrawn from Kensington.
And the petitioners remain, etc. ]
[P002672]
Covid-19 Update
(3 years, 4 months ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
The Secretary of State for Health and Social Care (Sajid Javid)
With permission, I would like to make a statement on the pandemic and the road map to freedom.
Freedom is in our sights once again, thanks to the protective wall of this country’s vaccination programme and the huge advances we have made in getting this virus under control. Yesterday, I stood at this Dispatch Box and set out the details of what step 4 in our road map will mean for this nation. After the arduous 18 months that we have all endured, it was so wonderful to describe a world where we no longer have to count the number of people that we are meeting; where theatres and stadiums are bustling with people once again; and where care home residents are able to see their loved ones without restrictions.
Of course I understand that some people are cautious about the idea of easing restrictions, but we must balance the risks—the risks of a virus that has diminished, but is not defeated, against the risks of keeping these restrictions, and the health, social and economic hardship that we know they bring. This pandemic is far from over, and we will continue to proceed with caution. But we are increasingly confident that our plan is working, and that we can soon begin a new chapter, based on the foundations of personal responsibility and common sense rather than the blunt instrument of rules and regulations.
Today, I should like to provide an update on another area where we will be able to ease restrictions: the rules on self-isolation. Self-isolation has played a critical role in helping us to get this virus under control, by denying the virus the human contact that it needs to spread. And I am so grateful to the many, many people right across the UK who have selflessly done their duty, making sacrifices so they can help keep the virus at bay. Even though we have done everything in our power to support the people who have had to self-isolate—and yesterday we announced that we will be extending financial support until September—I am fully aware of how difficult it has been. But we can take hope from the fact that science has shown us a solution, just as it has done so many times in our fight against this virus. That solution is our vaccine, which we know offers huge protection.
The latest data from Public Health England shows that our vaccination programme has saved over 27,000 lives and has prevented over 7 million people from getting covid-19, and it shows that both doses of covid-19 vaccine can reduce symptomatic infection by almost 80%. That protective wall—because that is what it is —means that the odds have shifted in our favour, and we can look afresh at many of the measures that we have had to put in place. That is especially important when almost two thirds of adults—64%—have had both doses of a vaccine, and so have the maximum protection that the vaccine can offer. As a result, we will soon be able to take a risk-based approach that recognises the huge benefits that vaccines provide both to the people who get the jab and to their loved ones.
From 16 August, when even more people will have the protection of both doses and when modelling suggests the risk from the virus will be even lower, anyone who is a close contact of a positive case will no longer have to self-isolate if they have been fully vaccinated. If someone gets their second dose just before or just after 16 August they will need to wait two weeks, after which their second jab will have taken effect, to get these new freedoms. Those two weeks will allow the vaccine time to build up the maximum possible protection.
As we make this change, we will draw on the huge capacity we have built for testing and sequencing and will advise close contacts who are fully vaccinated to take a PCR test as soon as possible, so that they can have certainty about their condition. Of course, anyone who tests positive will have to self-isolate, whether they have had the jab or not. This new approach means we can manage the virus in a way that is proportionate to the pandemic, while maintaining the freedoms that are so important to us all.
As hon. Members will be aware, we are not currently offering vaccines to most people under the age of 18. We have thought carefully about how we can ensure that young people get the life experiences that are so important to their development, while at the same time keeping them safe from this deadly virus. In line with the approach for adults, anyone under the age of 18 who is a close contact of a positive case will no longer need to self-isolate. Instead, they will be given advice about whether to get tested, dependent on their age, and will need to self-isolate only if they test positive. These measures will also come into force on 16 August, ahead of the autumn school term.
I know that hon. Members will have questions about the changes and about step 4 of our road map and the impact on schools and colleges; my right hon. Friend the Education Secretary will update the House immediately after my statement. We are looking at the self-isolation rules for international travel, to remove the need for fully vaccinated arrivals to isolate when they return from an amber list country. The Transport Secretary will provide an update to the House later this week.
Step by step, jab by jab, we are replacing the temporary protection of the restrictions with the long-term protection of a vaccine, so that we can restore the freedoms that we cherish and the experiences that mean so much to us all. Let us all play our part to protect ourselves and to protect others as we enter these crucial few weeks, so that in this battle between the vaccine and the virus, the vaccine will prevail. 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. This morning, he warned that he expected infections to hit 100,000 a day. Will he confirm that he is saying that will be the peak? By his expectation, when will we hit it? Infections at 100,000 a day will translate to around 5,000 people a day developing long-term chronic illness—long covid. What will the long covid waiting list look like by the end of the summer?
The Secretary of State justifies allowing infections to climb by pointing to the weakened link between hospitalisation and deaths, and saying that we are building a protective wall. But the wall is only half built. We know from outbreaks in Israel and research that the delta variant can be transmitted through fully vaccinated people, even if they do not get sick.
Indeed, data in the last 24 hours or so from Israel’s Ministry of Health points to the Pfizer vaccine being just 64% effective at stopping symptomatic and asymptomatic transmission of the delta variant. Sadly, being double jabbed means a person is still a risk to others, yet the Secretary of State is releasing controls on transmission at a time when infections are rising. Hospitalisations will rise, too, given what we know he is doing.
Can the Secretary of State tell us the percentage of intensive care beds, and general and acute beds, that need to be occupied before, in his view, wider NHS care is compromised? We have heard him in the last week or so tell us that he wants to unlock because he rightly wants to focus on the monumental NHS backlog, but the rising hospital admissions that are baked into the plan, into the path he has chosen, will mean operations cancelled, treatments delayed and waiting times increased. Will he now be clear with patients, who are waiting longer and at risk of permanent disability, that the increase in hospital admissions will mean they have to wait longer? What is his assessment of the waiting list, and what will it hit by the end of the summer?
I understand the rationale for the Secretary of State’s announcement today, but I have to tell him again that the biggest barrier to an effective isolation policy has been not the inconvenience but the lack of financial incentive to stay at home. If we are to live with this virus, the days of people soldiering on when unwell are over. Sick pay is vital to infection control. Will he please now fix it?
Getting back to normal, which we all want to do, depends on people feeling safe. Does the Secretary of State appreciate that those who are immunocompromised, or for whom the vaccination is less effective, will have their freedoms curtailed by ditching masks on public transport? Blood Cancer UK warned yesterday that people with blood cancer will feel like their freedoms have been taken away when mask wearing lifts. What is his message to those with blood cancer? It is not good enough simply to say that people should travel or go to the shops at less busy times.
Of course, the Secretary of State understands the importance of masks. I have now read his Harvard pandemic paper, to which he likes to refer. He praises the use of masks in this paper, but he also warns:
“Changing course in policy making…is an essential feature of good policy making. Yet, politicians find it hard”—
because of—
“the tendency for decisions to become psychologically and emotionally anchored.”
Well, I agree with him, and I hope he still agrees with himself. Let us have a U-turn on mask wearing. Yes, let us have freedom, but not a high-risk free for all. Keep masks for now, fix sick pay and let us unlock in a safe and sustainable way.
Sajid Javid
Let me turn to the right hon. Gentleman’s questions. First, he asked about infections. As I said yesterday from this Dispatch Box, we expect infections to continue to rise for the time being, for the reasons I set out yesterday. By 19 July, when we enter step 4, the advice we have received and the modelling suggests infections could be as high as 50,000 a day, double what they are now. Beyond that, as he says, we believe infections will continue to rise. As the modelling goes out further, it is less certain, but infections could go as high as 100,000 a day. I have been very up front about that.
What I have also been very clear about is that the reason we can make the decisions that we have made, as set out yesterday and today, with the decision just announced on self-isolation rules for those who are double vaccinated if they come into contact with someone who is infected, is because of the vaccine. The vaccine has been our wall of defence. Jab by jab, brick by brick, we have been building a defence against this virus.
Although no one can say at this point that the link between cases and hospitalisations has been definitively broken—there is not enough evidence for that—there is enough evidence to show us that the link between cases, hospitalisations and deaths has been severely weakened.
The right hon. Gentleman asked how many hospitalisations there have been or there may be. What I can tell him will help to demonstrate how this link has been severely weakened. In the last 24 hours, there have been approximately 27,000 reported new infections, and the total number of people in hospital in England with covid-19 is just under 2,000. The last time we had infections at that level, we were certainly above 20,000. That is a demonstration of how much the link has been weakened. In making sure that it stays that way, we of course want to see more and more people getting vaccinated. We have announced a booster programme that will start in September, to make sure that the immunity that comes from the vaccine remains.
The right hon. Gentleman also rightly talked about non-covid health problems, which a number of hon. Members have raised. I would like him to try to understand that one reason why so many people who wanted to go to the NHS with non-covid health problems such as cancer, heart disease and mental health problems but were prevented from doing so, is the restrictions that we had in place. The restrictions caused many of those problems—for example, the right hon. Gentleman should think about the mental health problems that have been caused by the restrictions. If we want to start dealing with non-covid health problems, we must start easing and moving away from the restrictions because of the protection that the vaccine has provided us. As the shadow Health Secretary, the right hon. Gentleman should be just as concerned about non-covid health problems, as I am, as he is about covid health problems.
The right hon. Gentleman also asked me about the immuno-suppressed. Again, he and other colleagues are absolutely right to raise this issue. The vaccines are there to protect everyone, including many people who are immuno-suppressed but who can take vaccines. For those people who cannot take vaccines, the fact that the rest of us do helps to protect them. We would them to take the same precautions that they would usually take in winter—for example, trying to protecting themselves against colds, flus and other viruses. I also encourage people to ensure that they are in contact with their GP to see what other measures or precautions they might be able to take.
Lastly, the right hon. Gentleman asked me about masks. He referred to a paper that I authored before I took this position, but he should understand that it is a strange question for him to ask. There is a role for masks in dealing with a pandemic, particularly when we have no wall of defence against it. When we have a vaccine, when that vaccine works and when we have the best vaccine roll-out programme in the world, we need to start moving away from restrictions, including on masks.
Jeremy Hunt (South West Surrey) (Con)
One of those other illnesses, apart from covid, that has been very badly affected by the pandemic is cancer. My right hon. Friend will know that, last year, 40,000 fewer people started cancer treatment, which will sadly lead to a number of preventable deaths. Will he be looking at the workforce required to deal with the cancer backlog? Will he also look at the capital requirements of many hospitals, including in my area? The Royal Surrey County Hospital is trying to build a cancer institute, but many hon. Members will have similar stories. May I make him a bold and generous offer to come in front of the Select Committee in September to talk about those plans? He can come for a couple of hours, but we do up to seven hours, should he so wish.
Sajid Javid
My right hon. Friend is absolutely right to raise the issue of cancer, and of course it is a huge priority for the Government. I mentioned earlier how, sadly, because of the rules that we have had in place for well over a year, there are many people who would have come forward to the NHS with cancer or suspected cancer, and they have not been seen. That has really built up a terrible problem, and it is an absolute priority for me to tackle with the workforce and with capital. Of course, I look forward to coming and sitting in front of my right hon. Friend’s Select Committee. I am not sure about the seven hours—I hope he will be a bit more lenient with me than that—but I do look forward to it.
Martyn Day (Linlithgow and East Falkirk) (SNP) [V]
Given that the UK Government have repeatedly got things wrong on covid—the timing of lockdowns, which allowed the Kent variant to spread; the lack of border controls, which allowed the delta variant into the UK; the delay in red-listing India; and now the surge in cases of the delta variant while millions of people are still to be fully vaccinated and more than 1 million are already living with long covid—many people will be concerned that they are actively trying to snatch defeat from the jaws of a vaccine victory. What confidence can the public have that the latest round of measures abandoning all restrictions is not another reckless gamble in the face of increasing transmission?
In a poll by New Scientist, a majority of disease experts said that some form of mask-wearing would be required until 2022. Others thought that 2023 or later was the correct time to lift mask requirements—more than agreed with the Government’s position of ending the requirements this year. For the sake of clarity and honesty, can the Secretary of State confirm that the UK Government have stopped listening to the science on their covid policy? Tragically, we have 150,000 people dead already, and the Prime Minister has said that we must reconcile ourselves, sadly, to more deaths from covid, so perhaps the Secretary of State can enlighten us as to how many more deaths the UK Government think acceptable.
Sajid Javid
The hon. Gentleman refers to the announcement on masks that we made yesterday, about moving away from rules and regulations to guidance and personal responsibility. He asks how we can make such a decision; the answer is the vaccine. The vaccine is working. We have more people vaccinated than any other large country in the world, thanks to the work of the NHS, the volunteers and everyone else involved—including, of course, in Scotland. That has weakened the link between cases, hospitalisations and deaths. Contrary to what the hon. Gentleman says, these decisions have been informed by the science. The science is working.
Layla Moran (Oxford West and Abingdon) (LD) [V]
The Secretary of State said in his statement that he was
“grateful to the many, many people right across the UK who have selflessly done their duty”.
We all are.
Last week, a friend of an NHS intensive care doctor emailed me in despair. The doctor contracted covid-19 on Christmas eve while doing her duty in hospital and has been unable to work since, as covid then developed into long covid. Now HR has issued her with papers to file for statutory sick pay at the jobcentre and she stands to lose her salary entirely. Surely that is completely unacceptable and an insult to NHS workers’ sacrifices during the pandemic. Does the Secretary of State believe that it is fair? I hope not. If not, will he look into this case and similar cases urgently, so that the frontline staff—the heroes of this pandemic—receive the proper financial support that they need while they recover?
Sajid Javid
I am pleased that the hon. Lady has raised this issue. First, I give my personal thanks to the doctor in her constituency to whom she refers and to the many other doctors and clinicians for everything that they have done for the country and continue to do throughout this pandemic. I am not aware of the details of the case that she refers to, but if the hon. Lady writes to me I will certainly respond to her and look at it carefully.
Damian Green (Ashford) (Con)
We all recognise that the tremendous success of the vaccine programme has changed everything—my right hon. Friend has made that point eloquently again this afternoon—but it is also clear from recent daily figures that take-up appears to be falling. Can he explain why that is happening? What is he doing to make sure that as many people get vaccinated fully as fast as possible?
Sajid Javid
I can tell my right hon. Friend that our take-up, compared with that of any other large country, is the best in the world. That said, of course we would like to see even better take-up. At the moment, four fifths of adults have had at least one jab, and three fifths have had two jabs. We are seeing many vaccine centres moving to walk-in; I visited the one at St Thomas’ Hospital just last week. That has certainly encouraged more people. As I announced yesterday, we are also shortening the gap between the first and second dose to eight weeks for all under-40s, which I think will help as well. We continue to push take-up, but every time the matter is raised in Parliament it is a good thing: it is an opportunity for us all, as parliamentarians, to ask our constituents to come forward, take the vaccine and help to build that wall of defence.
Jim Shannon (Strangford) (DUP)
I thank the Secretary of State for his statement today and for all that he and the staff of the NHS have done on behalf of us all. I recognise that there must be a risk-free approach in place, as he has said, and I welcome that, but what steps will his Department be taking to meet the psychological needs of young people with cancer to ensure that they can access timely, high-quality support regardless of the covid statistics and variants, which have seen their treatment delayed, causing them additional mental health strain?
Sajid Javid
The hon. Gentleman is right to point out that there is no risk-free way forward. For the whole world, this pandemic is unprecedented, and leaders across the world are having to balance risks and take the approach that they think is right. He is also right to raise the challenges created by the pandemic and our response to it that are not directly linked to covid itself, such as the increase in mental health issues we have seen across the nation, including in Northern Ireland. We have provided much more funding for mental health, but we need a long-term, sustainable plan to deal with mental health challenges, which have, sadly, increased.
Dr Andrew Murrison (South West Wiltshire) (Con)
I very much welcome the statement and I welcome my right hon. Friend to his place. It emerges that the AstraZeneca vaccine made in India—particularly batches 4120Z001, 4120Z002 and 4120Z003—may not be recognised by the European Medicines Agency, despite being recognised by the Medicines and Healthcare Products Regulatory Agency. This has implications for the digital covid certificate that will enable many constituents to travel to Europe this summer. Can the Secretary of State clarify the negotiations with Europe on this, and say whether regulatory bodies in other jurisdictions, notably the Food and Drug Administration, are taking a similar line to that of the EMA?
Sajid Javid
I can tell my right hon. Friend that the AstraZeneca-type vaccine being used in India is, I think, referred to as Covishield. We have not used Covishield in the UK, and we are in intensive discussions with our European friends to ensure that they have the facts to hand and that they can respond accordingly.
Debbie Abrahams (Oldham East and Saddleworth) (Lab) [V]
Today’s Health Foundation covid report adds to evidence from Professor Sir Michael Marmot on the UK’s high and unequal covid death toll. It shows not only that the UK has suffered high levels of mortality with the second highest level of excess deaths for working-age people in Europe, but that people of colour and disabled people were five and six times respectively more likely to die than their white counterparts and their non-disabled counterparts. On top of that, those in poverty were nearly four times more likely to die from covid than those in more affluent groups.
Following my question to the Health Secretary yesterday, when I asked whether the Government were committed to levelling up, I am now asking when they will implement the recommendation from Sir Michael Marmot and the Health Foundation to address these inequalities and build back fairer.
Sajid Javid
I am looking closely at those recommendations. I want to look at the expert advice of everyone out there who is providing good, sensible advice about how we can come together to tackle this pandemic. The hon. Lady is right to point out that the pandemic has, sadly, been disproportionate in certain communities and in its impact, including, sadly, on disabled people and people from ethnic minorities. That is true not just in the UK; it is true across the world, and we need to work out a plan to deal with that, and also, if there is ever a future pandemic, to ensure that we have learned the lessons.
Mike Wood (Dudley South) (Con)
Clearly, our protection against further waves of the virus depends on the uptake of vaccines. Will my right hon. Friend look at how the daily infection, hospital admission and death statistics can be broken down by age group and by vaccination status, so that everybody can see the benefits of vaccination for themselves and for others?
Sajid Javid
The vaccines are our wall of protection. That is what is allowing us to make the decisions that we have made to restore our freedoms and continue down that road, and I think providing more information and detail on the take-up, especially by age group and locality, can be helpful.
Tulip Siddiq (Hampstead and Kilburn) (Lab) [V]
The flu season that we have just been through was the mildest on record, thanks in no small part to the fact that we have all been wearing masks to protect against coronavirus. Public Health England has warned that we could see a flu surge in winter, as we have not had much recent exposure to and therefore immunity from other respiratory viruses. What is the Secretary of State doing to prepare for this? Does he agree that we should keep the wearing of masks compulsory on public transport to keep covid cases down and prepare for the flu season?
Sajid Javid
The right policy on masks is the one we set out yesterday, but the hon. Lady is right to raise the concerns about flu this coming winter, for the reasons she mentioned. She asked what we are doing about it; one of the things we are doing—this is by no means everything—is this: we recently announced that we plan to have a covid vaccine booster programme in September, starting with the more vulnerable cohorts, and our plan, based on the advice of the Joint Committee on Vaccination and Immunisation, is simultaneously to offer the flu vaccine, which will mean that the take-up of the flu vaccine should be at record highs.
Antony Higginbotham (Burnley) (Con)
I welcome my right hon. Friend’s statement. An increasing number of constituents contact me about access to GP appointments, with many still struggling to see their GP face to face. We know how that will impact on early diagnosis and the treatment of other illnesses. What steps is the Department taking to encourage and support GPs to see patient patients face to face, which will help to address many of the other challenges?
Sajid Javid
As my hon. Friend says, it is essential that we get GP access back to normal. We can all understand why, during this pandemic, GPs have had to do other jobs such as help us to get the vaccines out, and have not been available in the normal way because of social distancing rules and for other reasons, but I think we are gradually starting to see things going back towards normal. The changes announced yesterday will help with that. As the vaccine programme—which will continue for a while, as we have set out—settles down and we get more people dedicated to it, we can release GPs from some of those duties. All that put together will help.
Liz Twist (Blaydon) (Lab)
The Secretary of State has already acknowledged the importance of dealing with the mental health problems we have seen arise in this pandemic, and it is now urgent that the issue is addressed, so when will the Government publish a clear statement on where Public Health England’s vital public mental health and suicide prevention work will sit in the new arrangements for our national public health system?
Sajid Javid
The hon. Lady is absolutely right to draw attention to this issue. One of the worst outcomes of all the restrictions we have necessarily had to have during the pandemic is the significant rise in depression and many other public health problems. We need to start to make tackling that much more of a priority now that we can move past what I hope is the worst of this pandemic. I want to come forward as quickly as I can with a new plan on mental health, to set out what more we can do not only to clear the backlog of cases, as it were—we need to put more effort and resources into that—but to look at what more we can do through investment in both skills and capital.
Dr Jamie Wallis (Bridgend) (Con) [V]
I thank my right hon. Friend for his statement. Many constituents are asking me about the role that booster vaccines will have in ensuring that we do not have to go back into lockdown. Does he agree that providing additional booster jabs to the most vulnerable and all those over 50 will strengthen the protection and gains delivered by our current vaccine programme?
Sajid Javid
Yes, I do agree. The vaccine programme is our wall of protection, and every jab builds that wall higher. As immunity wears off, we need to make sure that people get a booster with a third jab. As we have announced, the boosting programme will begin with the most vulnerable cohorts in September.
Neale Hanvey (Kirkcaldy and Cowdenbeath) (Alba)
I thank you, Mr Speaker, for your indulgence in allowing me to acknowledge the passing from covid last night of Father Stan Swamy, a humanitarian Jesuit priest who had been held in custody in India since October last year. I hope the House will join me in expressing our condolences to all who knew him.
On today’s statement, there is a fundamental weakness in the Secretary of State’s comments. The covid virus did not get the memo and has not read his statement. Vaccines are really important, but if he wants to build a ring of defence around the continued spread of the virus, he will find that surveillance is absolutely key. Last week, I was promised evidence from Porton Down supporting the continued use of Innova lateral flow devices across the country, but that information has not been passed to me. I also asked for the MHRA’s letter recommending the extension of the exceptional usage authorisation, but, again, that has not been forthcoming. When can I expect to receive this important information?
Sajid Javid
First, may I associate myself with the hon. Gentleman’s expression of condolences? On his substantive question, I am not fully aware of the information he has requested, but I have noted it and will look into it and write to him.
Mr Gagan Mohindra (South West Hertfordshire) (Con) [V]
I welcome the statement from the Secretary of State and welcome him to his place. Does he agree that the UK’s portfolio of 517 million vaccine doses is evidence of the world-leading effort of this Conservative Government in securing our route out of this pandemic, allowing the restrictions to be lifted?
Sajid Javid
I agree absolutely with my hon. Friend on that. It is fair to say that our effort on vaccines, as a country, has been world-leading. It is certainly the best in Europe in terms of the number of people who have received the vaccine—ours is the largest of any of the large countries. That is down to the efforts of so many people, especially the scientists, the vaccine taskforce and all the NHS workers—the doctors, nurses and volunteers. It is a group effort, and when we look back at this pandemic it will be one of the things we will know has saved so many lives.
Patricia Gibson (North Ayrshire and Arran) (SNP)
Some experts are warning that easing covid restrictions too quickly could contribute to the emergence of new, more dangerous variants, which may well be resistant to the vaccine. Will the Secretary of State inform the House of any contingency planning by his Department or the UK Government as to how they will cope in the event of such an alarming eventuality?
Sajid Javid
The hon. Lady is right to highlight the risk that absolutely exists—this pandemic is not over—of new variants. We have seen the impact of variants already, and no one knows what is going to happen. Of course, reasonable experts will have different views on this.
As for the measures we are taking, I will point to a couple. We are keeping border controls in place. Yes, we are making some proportionate and balanced changes, but border controls are staying in place. We are keeping the test, track and isolate policy in place; again, some sensible changes are being made, but through that policy and the huge amount of testing that will still be done, with our genome sequencing programme being the best and largest in the world, we will be able to detect any changes in the virus sooner than perhaps other countries. Lastly, the team in my Department and in Public Health England, and the chief medical officer, are very much aware of this issue of new variants. It is not only an issue for us; it is an issue around the world, and we will continue to work with our international partners.
Henry Smith (Crawley) (Con) [V]
The UK’s world-leading covid-19 vaccination programme has been phenomenal, but, unfortunately there are some immunosuppressed and immunocompromised people, such as those with blood cancer, for whom the vaccine is not nearly as effective. May I have a commitment from my right hon. Friend the Health Secretary that those who fall into that category will be properly informed and advised by the NHS as to how to protect themselves better?
Sajid Javid
Yes, I can give my hon. Friend that assurance. He is absolutely right to raise this issue. As we develop our plans, we are absolutely thinking about all those more vulnerable cohorts and the impact that there may be on them. That is why when we set out the details of step 4 regarding those who are immunosuppressed there will be new guidance, and GPs will be able to use it in working with those patients.
Munira Wilson (Twickenham) (LD)
It is clear from comments made by the chief medical officer, the Prime Minister and the Secretary of State over the past 24 hours that, in their view, it is better to have a third wave of covid now than it is in the winter when the NHS is struggling. Will the Secretary of State please confirm explicitly whether that is the policy aim of the Government and, if so, will he confirm the estimate of his officials of how many excess deaths and additional cases of long covid that that third wave will result in?
Sajid Javid
No one wants another wave of covid cases. As the hon. Lady will have heard, what is different this time, as we sadly see cases rise, is the vaccine. The link between case numbers and hospitalisations has been severely weakened, as I have set out to the House in quite some detail, and that is what matters.
Sir David Amess (Southend West) (Con)
I welcome my right hon. Friend’s appointment as Health Secretary and his sensible statement today further easing restrictions. Following on from what other colleagues have said, will he confirm to Southend residents that the booster vaccine will be available this winter and that enough centres will remain open to administer it efficiently?
Sajid Javid
I am very happy to confirm to my hon. Friend that the booster programme will start in September. We still have to get the final advice from the JCVI on exactly how it will work, but it will be administered throughout the United Kingdom and that, of course, includes to his constituents in Southend.
Catherine West (Hornsey and Wood Green) (Lab)
Parents in my constituency have been in touch regarding ventilation in their children’s schools. What advice will health officials give to the Department for Education about putting ventilation in schools and paying for extra measures, which might mean that children can stay in school longer without the fear of covid transmission and that staff will be protected as well?
Sajid Javid
That is another very good question. The Education Secretary will be speaking right after me about some of the changes that we are making and how they will affect schools. When it comes to ventilation, there has been, during the course of this pandemic, more funding to schools to make certain adjustments. Not only will that kind of support continue, but some of the measures that we are announcing today will help schools and schoolchildren.
Jonathan Gullis (Stoke-on-Trent North) (Con)
I welcome my right hon. Friend’s statement. Earlier today, I spoke with Tracy Bullock, the fantastic chief executive of one of our local NHS trusts in Stoke-on-Trent, who oversees the Royal Stoke University Hospital. Tracy has told me that there has been a significant increase in emergency department attendances, above those usually seen in winter. Can he outline what additional resources can be given to help our NHS get on top of that, because winter is coming?
Sajid Javid
My hon. Friend will know that the reason we have seen an increase in demand for A&E across the country is that many people have not been able to go to their GP in the usual way. Quite understandably, when their problem gets to a point that, in normal circumstances, it would not have reached, they go to A&E. That is what I meant when I talked earlier about the backlog of cases. Yesterday, I said that there are some 7 million people who, in normal circumstances would have come forward to the NHS either through their GP or in another way, but have not done so because of the rules and restrictions around the pandemic. Easing those restrictions will make a big difference.
Florence Eshalomi (Vauxhall) (Lab/Co-op) [V]
More than a quarter of my Vauxhall constituents are aged between 20 and 29 and many of them have not had the chance to come forward for their second vaccine. Obviously, the lockdown restrictions that we are under will ease in two weeks’ time. This morning, the Secretary of State has confirmed that numbers are expected to rise after 19 July. He will be aware that a number of young people—one in eight—are still vaccine-hesitant. We know about the link between cases and hospitalisation and that the link is not broken. Young people are fearful of getting long covid, so can the Minister inform the House what specific resources are being made available through the NHS for those suffering with long covid?
Sajid Javid
The Government have made more than £90 billion of additional funding available to deal with the consequences of the pandemic. Much of that has gone to the NHS and other parts of the healthcare system, and it is helping in every aspect, including with those sadly suffering with long covid. Younger people are, of course, affected by the virus—no one could pretend otherwise—but the hon. Lady will know that they are less affected and impacted than older people in their communities. That is why older people have been the priority in the vaccination programme. One of the reasons that the date of 19 July was set was to allow every adult to get their first jab. Yesterday I announced the decision to shorten the time period between jabs from 12 weeks to eight weeks, so that some more people, including all the younger people to whom the hon. Lady referred, can get the full protection of a double dose by September.
Stephen Hammond (Wimbledon) (Con)
May I thank my right hon. Friend for his statement today? He will know that the normal winter preparedness programme is just about to start. Will he confirm whether he will examine the medical evidence for vaccinating people under the age of 18 as part of this year’s programme? What extra measures might he also put in place regarding social care and discharge, to ensure that the pressure on beds, which normally increases, is taken care of this winter?
Sajid Javid
My hon. Friend is absolutely right to raise the issue of the normal winter pressures. The measures that we had for the pandemic mean that this winter there will be less immunity from flu and other viruses that tend to come around in winter, so we are actively making plans in that regard. There were already plans in the Department when I arrived. I am reviewing those plans and this matter will be a priority.
Matt Western (Warwick and Leamington) (Lab)
The Secretary of State stated quite rightly last week that he was looking at the numbers very carefully immediately after being appointed. No doubt he will have looked at Japan and Korea, where the death rates are something like 2% or 5% of the UK’s death rate. Case rates are currently eight or nine per 100,000 in Korea and Japan, yet those countries—certainly Korea—are still mandating the wearing of masks. In the light of that, what does the Secretary of State think we should be doing, because those places are clearly having success?
Sajid Javid
We all know that the impact of this terrible virus has been very different across the world. The hon. Gentleman has talked about countries in the far east. The impact in South America, India and Europe has been very different. I do not think we can simply draw a conclusion that the reason for that difference is the policy on masks. The primary reason that we were able to announce the step 4 measures yesterday was the vaccine. If the hon. Gentleman looks at the countries he mentioned, particularly Japan, he will see that their vaccination rates are a lot lower than ours. That will partly explain why they may be taking a different approach to tackling the pandemic at this point.
Miriam Cates (Penistone and Stocksbridge) (Con)
I congratulate my right hon. Friend on his new role and warmly welcome his statement about the importance of addressing non-covid health issues. Sadly, for the last 17 months our children have been not seen and not heard. I know from my own children and those of my constituents the devastating impact that lockdowns have had on the wellbeing of our children and young people. Will my right hon. Friend set out what measures he is taking, as we return to normal, to focus on the physical and mental health of our young people, and ensure that the anxiety and physical inactivity of the pandemic is not leaving permanent scars?
Sajid Javid
My hon. Friend is absolutely right to raise this issue. Sadly, because of the necessary measures that we have had to take, the impact on children has been immense in the negative ways that she set out. She will know—as I know just from my own research that I did before coming back into Government—that we have seen a huge rise in reports of child abuse. For example, reporting to the NSPCC’s Childline has rocketed during the course of the pandemic. That is a direct result of children not being in school and not having enough people to report that kind of activity to. We need to respond to that. The Education Secretary will have more to say about the measures in a moment, but I hope and know that the measures that we announced yesterday and today will make a dramatic difference to children’s wellbeing.
Charlotte Nichols (Warrington North) (Lab) [V]
The pandemic is not over, and learning to live with the virus means putting in place measures to reduce risk. Flamefast, based in Woolston Grange in Warrington North, manufactures CO2 monitors that alongside measures such as air filtration and improved ventilation can help dramatically to reduce the risk of indoor transmission of the virus. Why has the Secretary of State ignored calls from the Labour party to put in place measures such as air filtration, improved ventilation and CO2 monitoring to reduce the risk in indoor confined spaces, particularly in hospitals and care homes, for the most vulnerable in our communities, which could help to save lives and to give a vital boost to our manufacturing sectors?
Sajid Javid
I think it is not right for the hon. Lady to suggest that the Government have ignored the need to combat the virus with better air filtration and better ventilation. A lot of the funding that the Government have provided during the course of the pandemic—for example, extra funding to care home providers—has been there precisely to introduce and help to fund some of these measures.
Laura Farris (Newbury) (Con)
I welcome my right hon. Friend to his new post. I know that he will share the view of many of my constituents in west Berkshire that we must do all we can to avoid another national lockdown. In the event that vaccine efficacy should falter as we head into the winter months because of, say, a new variant, what extra steps is his Department taking to ensure that this winter will not be a repeat of the last?
Sajid Javid
I can tell my hon. Friend about just one of the measures that we are taking. A huge number of tests are carried out—over half a million a day—and that gives us a certain insight into how the virus is changing, if it is. The genome sequencing resources that we have are the best in the world; we do almost half of the genome sequencing in the world. That is fed directly to our scientists and our world-leading vaccine programme and taken into account as we develop new vaccines. My hon. Friend knows about the booster programme, which will continue into next year—and for who knows how long? Every time we have a booster we will be doing everything we can to take into account changes in the virus.
Tony Lloyd (Rochdale) (Lab) [V]
The Health Secretary has referred to the pressures on our GPs and our hospitals from non-covid patients, and that is of course real. Most health professionals—doctors, nurses and others—have been double-jabbed and regularly use at least the lateral flow test to ensure that they are not infected with covid. However, one of the local hospitals in my constituency, Fairfield General Hospital, tells me that some 30% of doctors were not available recently because they had been pinged as they had, not surprisingly, come into contact with somebody with covid. This happened not because they found they were infected but because they had to go into quarantine for the 10-day period. We risk a build-up of cases when we increase the number of times that our medical professionals are likely to find themselves pinged. Will he see whether there is some way, at least for medical staff, of bringing forward the August date?
Sajid Javid
The hon. Gentleman raises the issue of people who are pinged, so to speak, for coming into contact with an infected person and who have to self-isolate. The announcement that I have made today will clearly make a huge difference to everyone that is pinged in such a way, including all the fantastic people that work in our health service—the doctors, the nurses and others. As I said, it will come into force from 16 August. We thought carefully about whether we could do that earlier, and it is a fair question, but we decided not to do so, based on the best public health advice, because by 16 August many more people—even more than now—will be double-jabbed, and that extra layer of protection made us more comfortable in sticking with that date.
Jack Brereton (Stoke-on-Trent South) (Con)
I welcome the Secretary of State’s statement. Primary care has shouldered the brunt of the vaccine deployment, and many GP surgeries in Stoke-on-Trent South are not yet back to full capacity with general appointments. A number of my constituents have raised the difficulties of getting to see their GP. Will my right hon. Friend do all he can to ensure that primary care services are able to recover fully?
Sajid Javid
Yes, I can absolutely give my hon. Friend that assurance. As well as the extra resources we are putting in, the measures that I have announced today about people not needing to self-isolate if they are in contact with an infected person but have been double-vaccinated will help across the board, and that certainly includes our NHS and primary care providers.
Mr Speaker
I am now suspending the House to enable the necessary arrangements to be made for the next business.
Covid-19: Education Settings
(3 years, 4 months ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
The Secretary of State for Education (Gavin Williamson)
With permission, Madam Deputy Speaker, I would like to make a statement on restrictions that will be lifted for schools, early years, childcare, colleges and universities when we move to step 4, which is currently anticipated to be on 19 July. The Prime Minister has announced that at step 4 we will be able to remove swathes of restrictions on daily life and that, after 16 months of sacrifice by people across society, we will return ever closer to normality.
We have faced down, together, an historic public health emergency, and we all owe a great debt of gratitude to pupils, parents and teachers, who gave up so much as we took action to save lives. However, I highlight to everyone that step 4 does not mean the end of the pandemic. Some restrictions will be kept in place as we move towards more of the population being fully vaccinated. Although the pandemic is not over, we are moving into a new phase of managing covid, from strict rules towards ever greater personal responsibility.
When I came to this place last week, I again set out my priority to put the interests of children first. We know from our own experience and evidence that children are better off in classrooms with their friends and teachers. Since 8 March, millions of children and young people have been back in the classroom learning with their friends and teachers. That is hugely valuable for their wellbeing as well as for their education.
I also made it clear that I do not think it is acceptable that children should face greater restrictions, over and above those of wider society, especially since they have given up so much to keep older generations safe during the pandemic. Therefore, having balanced the risks, I am pleased to tell Members across the House that key restrictions on education and childcare will come to an end as we move to step 4.
Although keeping children in consistent groups was essential to control the spread of the virus when our population was less vaccinated, we recognise that the system of bubbles and isolation is causing disruption to many children’s education. That is why we will be ending bubbles and transferring contact tracing to the NHS Test and Trace system for early years settings, schools and colleges. Where there are outbreaks, schools and colleges may be contacted by NHS Test and Trace and they will also work with local health teams as they do now. We are also setting out new rules that mean that, from 16 August, children will need to isolate only if they have tested positive for covid-19. I am also pleased to be able to say that there will be no restrictions on in-person teaching and learning in universities, unless students are advised to isolate or impacted by local outbreaks.
From step 4, a more proportionate set of controls will apply in early years, schools, colleges and higher education institutions. These will maintain a baseline of protective measures in education settings while maximising attendance and minimising disruption to children and young people’s education. In addition to ending bubbles, it will not be necessary to stagger start and finish times. Schools and colleges may, of course, continue with those measures until the end of the summer term if they so wish.
My right hon. Friend the Health Secretary outlined earlier today that we can ease restrictions on the self-isolation rules for close contacts of someone who has tested positive for covid-19. In education settings, all other existing measures, including guidance on isolation of contacts, will stay in place until the end of this term, in line with isolation rules for the rest of the population as more adults are vaccinated. Settings will continue to have a role in working with health protection teams in the case of a local outbreak. Where necessary, some measures may need to be reintroduced.
From 16 August, those under the age of 18 will no longer be required to self-isolate if they are contacted by NHS Test and Trace as a close contact of a positive covid-19 case. That will balance the need to keep children safe with allowing them to get the education that they deserve and need. Instead, children will be contacted by Test and Trace, informed they have been in close contact with a positive case and advised to take a PCR test. Eighteen-year-olds will be treated in the same way as children until four months after their 18th birthday to allow them to have the opportunity to get fully vaccinated.
Having listened to teachers, and balancing the risks to health and education to maximise attendance and minimise disruption to children and young people’s education, some protective measures, including enhanced hygiene and ventilation, will remain in place for the autumn term. From step 4, face coverings will no longer be advised for pupils, students, staff and visitors either in classrooms or in communal areas and social distancing will no longer be necessary.
As I mentioned earlier, testing programmes remain important as we move cautiously out of restrictions. With that in mind, secondary schools and colleges will be asked to provide two on-site tests to their students at the start of term, with regular home testing continuing until the end of September, when that will be reviewed. It is vital that secondary school and college students continue to test for the last few weeks of this term and throughout September. Education settings still operating over the summer will continue to test twice a week, with asymptomatic test kits still available to families over the summer break as well.
I want to encourage all teachers, educational staff and eligible students to get their vaccines. It is incredibly important for all staff to get the second dose of a vaccine as soon as they are eligible, so that they secure the strongest possible protection against covid-19. In line with wider changes to isolation from 16 August, if in close contact with someone who has tested positive, fully vaccinated teachers will be able to remain in the classroom from the autumn term.
My Department has just set out more detail and published new guidance for arrangements in education settings from step 4, covering both the summer period and the following term, when children will return to school. I want to take this opportunity to assure Members that headteachers in their constituencies can contact the Department for Education if they have any questions about the new guidance that we have published.
No Government would want to restrict people’s freedom in the way we have had to do since the spread of covid-19. We have prioritised education since the start of this pandemic. We made sure that schools and colleges were the last to close but the first to open. We kept school and college places open to vulnerable children and those of key workers throughout the pandemic, and procured millions of laptops and tablets for children to learn at home. None of this could have been achieved without the incredible work of our inspirational teachers and wider educational staff, and I thank parents and students, who have shown patience and flexibility over the last 18 months.
I know that many colleagues will agree that today, as a nation, we prize the role of schools, colleges and universities more than ever before. With the ending of these restrictions, children and young people will be able to get on with their education and lives while we continue to manage this pandemic. I commend this statement to the House.
Kate Green (Stretford and Urmston) (Lab) [V]
I thank the Secretary of State for his statement and for advance sight of it. I echo his tribute to the education staff, pupils and parents who have done so much over the past 15 months to keep children and young people learning.
Just over an hour ago, the Department for Education confirmed that, last week, 623,000 pupils were not in school because of coronavirus. Although 471,000 of those pupils were out of class because of a bubble collapsing, there were still over 150,000 who were not in the classroom with confirmed or suspected cases of coronavirus, or because of potential contact with a case outside the classroom. It is not just bubbles that have driven pupils from the classroom; it is the Conservatives’ negligence in letting the delta variant take hold at the same time as they fail to support schools with the necessary precautions.
I have always said that school is the best place for children—for their learning, wellbeing and development—which is why we must do everything we can to keep them there safely. Many parents will be relieved to hear that the chaotic bubbles policy is coming to an end, but the Secretary of State has not given us confidence that his alternative will keep more children in school without driving up infections. His Department has piloted using testing instead of the bubble system, but he did not mention that in his statement. Can he tell us the results of the pilots using daily testing in some schools? Did it mean more hours in the classroom? Did it mean more cases? Did it mean an unmanageable workload for school leaders? Can he confirm how many schools pulled out of the pilots and whether the reasons for schools’ withdrawal are informing his Department’s planning for next year?
The Secretary of State said that bubbles will end when we reach stage 4 but there will be no on-site testing until September, so what support is he putting in place to keep pupils in the classroom for the remainder of this term? He said that bubbles need to end in order to support summer schools. Can he confirm that they will have mitigations in place in addition to testing, so that children can learn and not just isolate over summer? Separate from summer schools, his Department has promised a holiday activities and food programme. Can he tell me what measures will be in place to ensure that this programme can run so that children do not miss out on the opportunities it offers?
The Secretary of State spoke of a baseline of protective measures when schools return in September. Can he say more about what they are? He mentioned better ventilation. Will all schools receive support from his Department to put that in place? Specifically on masks, can he explain why masks were required in schools in March and April but are not required now, when case numbers are much higher? Will he publish the scientific evidence that I am sure he has received to underpin his decision? If he cannot do that, will he reconsider it?
We know that the vaccination programme delivered by the NHS remains our route out of the pandemic, but we still do not know whether the vaccine will be available to children. When does the Secretary of State expect to receive that advice, and when will he make it public? If the Joint Committee on Vaccination and Immunisation does propose vaccinating older children, can he guarantee that the infrastructure will be in place to begin that process before the return to the classroom in September? As we look ahead to the new academic year, can he guarantee that schools, staff and pupils will know his plans for assessments next year by 1 September at the latest?
The Secretary of State mentioned on-site testing in colleges, but what other measures will be in place? Have they been supported to implement better ventilation, for example? I am sure students will welcome the return of in-person teaching and learning in higher education, but can he say what protective measures will be in place in these settings? What steps will be taken to support the return and safe learning of international students?
I want nothing more than for children to be in class, learning and spending time with their friends and teachers, and it is right for their learning that we move away from the chaotic bubbles system, but we cannot simply wish away the real challenges of the pandemic. Today’s statement offers no clarity on how the Government will stop infections spiralling. The Conservatives’ inadequate testing regime, lack of action on ventilation and recklessness at the border have put our children’s education at risk. This must not continue.
Gavin Williamson
The hon. Lady touches on a number of areas. With regard to universities, we of course always support universities with international students, but we are also supporting them to get back to face-to-face teaching and to welcome youngsters back into the lecture theatre, which I know is part of the university experience that so many students have dearly missed.
The hon. Lady seems to have missed what is probably the biggest thing that has changed over the past few months. I appreciate that she is probably wedded to the European Union vaccine programme, and probably feels a sense of disappointment that this country decided to go out on its own and procure our vaccines, but the biggest difference is that in this country we have seen over 80 million vaccines already delivered into people’s arms, giving them more protection. There is so much more protection today than we had back in March and April of this year, as this incredibly successful programme, led by the Prime Minister, has had a real impact in saving lives, keeping hospitalisation down and ensuring that we can take these important steps back to normality, and that adults and, most importantly, children can get on with their lives.
Robert Halfon (Harlow) (Con)
I strongly welcome the Government’s announcement today, and I thank my right hon. Friend for his statement. We need to keep our children in schools, not out of them. We know that covid-related absence in secondary schools was 10.4% on 1 July, up from 6.2% on 24 June. Other analysis suggests that year 10 pupils due to sit GCSEs next summer have missed, on average, one in four days of face-to-face teaching this year. What assessment have the Government made of the impact on children not at school in exam years, and what remedial action will they take to ensure that those children who have missed so much school have a level playing field for next year’s exams?
Gavin Williamson
My right hon. Friend raises a very important issue that is, of course, a concern to teachers and parents, but most of all to pupils who will be looking towards 2022 and assessment and the awarding of grades. It is our intention to move back to an exam system, but we recognise that we must ensure that mitigations are in place for pupils taking that assessment in the next academic year. We will look at sharing more information about what those mitigations are before the summer, and we will update his Education Committee and the House accordingly.
Vicky Foxcroft (Lewisham, Deptford) (Lab) [V]
Many young people are extremely worried about next year’s exams. One young constituent recently told me:
“I have never felt less confident in my ability to take part in next year’s exams—if there even is that opportunity—and I’m sure many others are also struggling. I ask for 2022 GCSE exams to be simpler, easier and adapted to our lack of necessary education, out of compassion.”
What does the Minister say to them? When will schools get certainty about changes to next year’s exams and assessments?
Gavin Williamson
The hon. Lady might not have heard my answer to my right hon. Friend the Member for Harlow (Robert Halfon). We are looking at giving further guidance and information to schools imminently, and we are very much looking at putting in place mitigation measures there, while recognising that the best form of assessment is always examination.
Sir Edward Leigh (Gainsborough) (Con)
I thank the Secretary of State for putting children first. In the last year, the education of children has been trashed. Although every death of a child is tragic, we have to understand that there are 12.7 million children in this country and, sadly, every year 6,000 die. Can we have a sense of proportion? Will the Secretary of State reassure parents that the chances of any child falling seriously ill from covid are “vanishingly small” and there is no risk to children from what he has announced today?
Gavin Williamson
My right hon. Friend is right to point out, as Professor Chris Whitty has done so many times, that children have very few adverse effects from covid, if they are unfortunate enough to get it. That is why, combined with the vaccination programme that we are rolling out right across the country, we think it is right to take this next cautious but important step forward, in the light of the scientific, medical and health evidence.
Munira Wilson (Twickenham) (LD)
Today’s announcement about the scrapping of bubbles and self-isolation for pupils will be welcome news to many parents, pupils and teachers across the country. The Secretary of State made passing reference to the importance of ventilation. We know now about the importance of ventilation because it is an airborne virus. Therefore, what more is he doing to support schools to put better ventilation in place? Yesterday I visited Richmond upon Thames School in my constituency, which has spent £15,000 alone on improving ventilation. Many schools simply cannot do that, as they are already struggling to balance the books. What more support will he put in place, following the example of Germany and New York City?
Gavin Williamson
At every stage during the pandemic we have provided support for schools to put in place the measures needed to restrict the transmission of covid and ensure that they can open. We recognise that good hand sanitising and good hygiene, along with ventilation, are important. We continue to offer schools advice on how best to deliver that.
Alexander Stafford (Rother Valley) (Con)
Digital inclusion is a huge issue for people across Rother Valley. However, both the Government and local businesses such as AESSEAL have stepped in to eliminate that barrier. AESSEAL has provided computers for over 1,500 households across Rotherham, and the Government have provided 1.3 million laptops and tablets to disadvantaged students across the country during the pandemic. Can my right hon. Friend confirm that pupils will continue to benefit from this record investment in IT equipment?
Gavin Williamson
My hon. Friend highlights not only the amazing work done through the Government’s distribution of laptops right across the country, but the wonderful work of local businesses such as AESSEAL, which has gone out of its way to support its community, help children and make a real difference. That shows how communities have come together to support the elderly and our children. It is a great testament. I very much hope that the investment that AESSEAL and the Government have made in laptops and education technology will have a long and lasting legacy of bettering people’s education not only in his constituency but in every one of our constituencies.
Christian Matheson (City of Chester) (Lab)
May I press the Secretary of State on the question of exams, which other right hon. and hon. Members have mentioned? My constituent Ian, who is a teacher, points out that every time there has been a change to the exam system in order to cope with the pandemic over the past couple of years, it has been made at the last minute, with very little time for schools and pupils to prepare. If the Secretary of State is considering changes to the exam system, will he have an open consultation with school leaders and teachers, and will he get the plans in place as early as possible, so that there is not the sense of teachers being dumped on at the last minute?
Gavin Williamson
I can absolutely assure the hon. Gentleman that we talk continually to school leaders, teachers and many in the education sector on these issues. I can assure him that, as I have mentioned a couple of times in answer to questions today, we will be sharing further information on assessment in the next academic year.
Damian Hinds (East Hampshire) (Con)
I strongly welcome my right hon. Friend’s statement and the return to normality and stability with the contingencies and safeguards he set out. Does he agree that although people sometimes talk about a balance between education and health objectives, actually overwhelmingly they go together because being in school is so important for children’s mental and physical health? Indeed, for some children there is also a safety protective factor.
Gavin Williamson
My right hon. Friend is exactly right. The greatest single act to support children’s mental health was welcoming them back into schools on 8 March. That was the single biggest act that anyone could have done to help every single child. [Interruption.] Opposition Members are shaking their heads. They would probably like a situation where schools remained empty and children just remained at home. We on the Government Benches recognise that the beneficial effects of education and children’s welfare are delivered by children being in school.
Dame Diana Johnson (Kingston upon Hull North) (Lab) [V]
I know that the Secretary of State is familiar with Hull and knows about the educational challenges we faced in the city before covid. I just want to press him on whether he really believes that less than one hour of tutoring a fortnight over the next school year is really enough to make up for the 115 days of in-school teaching that children in Hull have missed this year.
Gavin Williamson
The right hon. Lady is right to say that I know Hull very well, as my family come from Hull. I recognise that schools have faced great challenges, not just in the great city of Kingston upon Hull but right across the country. That is why our support for schools is not just about tutoring. She will be aware that there is so much evidence showing that small-group tutoring delivers some of the best educational catch-up and results of any intervention, in terms of money invested. Covid recovery support premium has gone out to schools, so they are able to build on further actions and interventions that they themselves can take to support children to catch up on the work they have missed.
Dr Ben Spencer (Runnymede and Weybridge) (Con)
I also welcome the statement and thank my right hon. Friend. I thank everyone—the families and the staff—who has worked so hard to ensure that education has been delivered to children over the course of the pandemic. However, will my right hon. Friend clarify a point around the self-isolation requirements? As every parent knows, children—especially very young children—have coughs and colds and temperatures two a penny. At the moment, a temperature leads to a family self-isolation requirement, causing huge disruption to the child’s educational development and a huge impact on families. Can he unpack a bit what the requirements will be around children developing coughs and colds, particularly in early years, and what guidance and protocols will be taken forward? Will isolation be necessary, will testing be necessary, or can it be passed over if it is just a simple cough or cold?
Gavin Williamson
We would always encourage people, if they are poorly or ill, to remain at home in order to be able to get better. But for clarity, those who have been in contact with someone who has had covid will still be able to access education and be able to come in to school, but if they have had that contact, Test and Trace would then be in touch with them and advise them to take a PCR test. But that individual is able to continue to attend school during that time, unless of course they are demonstrating symptoms of covid—we would always advise people to self-isolate if that is the case—or have had a positive PCR test. Those reasons apart, they would be able to attend school.
Clive Efford (Eltham) (Lab)
The Secretary of State has told us that there will be a spike in infections following the relaxing of restrictions, and currently there are 150,000 school pupils with suspected covid-19 that are out of school, so we know that that figure will go up. So this is not about children dying of the infection; it is about schools being a vector for infection. What is the Secretary of State going to do when the winter months are coming, and we have increasing numbers of infections, to ensure that that does not happen, by improving ventilation and assisting schools with the resources that they need to deliver a safer environment?
Gavin Williamson
I do not wish to contradict the hon. Gentleman, but schools have not been vectors of transmission; they have been reflective of the wider rates of covid in the community. That is why we continue to have measures in place, including the testing that will be in place for schools as they return after the summer period; and the continued twice-weekly testing that will run through September for children of secondary age, those tests to be taken at home.
Madam Deputy Speaker (Dame Eleanor Laing)
We now go by video link, or rather audio link, to Mark Harper.
Mr Mark Harper (Forest of Dean) (Con) [V]
When schools return in September, every adult will have had the chance to be—[Inaudible.]
Madam Deputy Speaker
We will try to come back to the right hon. Member as soon as we can.
Rachael Maskell (York Central) (Lab/Co-op)
As the data show, in York infection rates are soaring, particularly in school-age children, people are poorly, and as a result we are seeing major disruption in young people’s education. So as we see infection rates soar across the country, it means that education will be further disrupted, and I hope that the Secretary of State recognises that. How would he ensure that effective testing is put in place, working with our public health teams on the ground locally, to mitigate against that spike in infections and ensure that young people and their families are supported when they have to isolate and miss school?
Gavin Williamson
It is absolutely right that schools have, and should continue to have, close and strong working relationships with local public health teams, not just in York, but right across the country. We have emphasised that point as part of the guidance that we have issued and made available to schools, because we recognise that we still have more to do. Work to defeat this virus will continue past the summer and into the winter.
Nigel Mills (Amber Valley) (Con) [V]
I welcome today’s announcements. Will the Secretary of State confirm that the easing of restrictions will not affect his plans to provide high-quality tutoring alongside normal education in schools?
Gavin Williamson
I can absolutely reassure my hon. Friend that that is the case. High-quality tutoring, with the roll-out of the national tutoring programme that will have a positive impact on so many, is one of the absolute top priorities of this Government. It is the single thing that can probably have the biggest impact on helping children to catch up on lost learning. That is why we are making such a substantial investment in it.
Emma Hardy (Kingston upon Hull West and Hessle) (Lab) [V]
What are the Government doing to prevent the chaos of last year by ensuring that all higher education students can receive both vaccinations before moving around the country to their university? How will the Secretary of State ensure that those turning 18 late in this academic year are offered both vaccinations before they move to university?
Gavin Williamson
The hon. Lady raises an important point. That is why we are so pleased that we have been able to say to all those who are 18 and above that they have access to a vaccination. We are working very closely with the university sector to really get the message through about how important it is for youngsters—students—to be out there getting their vaccine: it protects not only them, but their friends, their family and their community.
Richard Graham (Gloucester) (Con)
Having called for it in last week’s debate, I warmly welcome the Education Secretary’s statement today about pricking the school bubbles and self-isolation system with effect from 19 July. Will my right hon. Friend confirm the timing? Is it entirely up to the schools themselves whether they implement any or all of these measures in the last week of term? What will happen during the summer schools? How does the timing of the measures combine with his statement that children need to self-isolate only if they test positive after 16 August?
Gavin Williamson
My hon. Friend asks and then it is delivered for him, so that goes to show his power. We are leaving it to the discretion of schools for the final few days of term. We are not expecting bubble systems to be operating during summer schools, including the holiday activities and food programme. This will be purely a test and trace approach, as is currently taken with the whole adult population. As we move to 16 August, that will be the moment we move to a system of children not having to self-isolate, as they will be able just to go for a PCR test and get the confirmation that they do not have covid. If they do have covid, they will, sadly but understandably, have to isolate.
Andrew Gwynne (Denton and Reddish) (Lab)
Schoolchildren have a had a pretty miserable year and covid is a pretty miserable disease. It does not recognise the inequalities in society and it disproportionately affects some of the poorest, most disadvantaged communities—the same communities that often need extra resource and help to get that educational attainment. What more is the Secretary of State doing to tackle that inequality, which was there before covid—it will still be there after it and will be exacerbated by it—to ensure that those children have the best start in life? They are our country’s future. What more can we do to help them to catch up and excel?
Gavin Williamson
The hon. Member and I share the same passion to deliver that sort of change and opportunity for so many children. It should never matter where they grew up or what their personal circumstances are; the ability of every child in this country to access the world’s best education and the very best opportunities drives us on both sides of the House.
We have talked about the investment we are making to support children and help them to catch up, but we must not lose sight of the fact that in the drive to raise standards of education and ensure that knowledge-rich curriculum, we are pushing every child, no matter their background, to their absolute maximum, so that they can excel and have the opportunities that all of us want for our own children, and that we want for the nation’s children. That is where the focus will be. As we cast our eyes to the year ahead, we look forward to spelling out a longer plan for how we will deliver that education, ensuring that we deliver not only for the hon. Gentleman’s constituents, but for all our constituents, regardless of their background.
Felicity Buchan (Kensington) (Con)
I warmly welcome my right hon. Friend’s statement. I understand that testing will continue in secondary schools until the end of September, and at that point it will be reviewed. Will he update the House on what criteria we will consider at the end of September? I do not think any of us want testing in schools in perpetuity.
Gavin Williamson
None of us wish to have testing in schools in perpetuity, but as the Prime Minister has set out at every stage, we are taking a cautious, gradual approach to ensure that as we are able to lift restrictions, we do not get to a position of having to reimpose them. We feel that this prudent and sensible step needs to be taken. If there are concerns and a continued need to have testing in schools, we would of course consider doing that. Most importantly, for all of us, is to ensure that schools remain open and pupils are in them.
Tim Farron (Westmorland and Lonsdale) (LD)
A couple of weeks ago I was at the Bendrigg Trust outdoor education centre in my constituency, and it was a massive joy to see residential activities slowly starting again, with young people getting the benefits of outdoor education. It is a reminder of two things. First, 6,000 of the 15,000 people who worked in outdoor education at the beginning of the pandemic have now lost their jobs, and because of a lack of a specific bespoke package to support those centres, many have closed and many more are on the cusp of closing. Secondly, our outdoor education specialists in Cumbria and around the country have a unique set of skills that we need to deploy at this very moment, to encourage young people to re-engage with learning, and reignite a love of learning. What will the right hon. Gentleman do specifically to commission outdoor education centres to do that, out in mainstream schools, and will he meet me and some outdoor education specialists so that we can explain how that could be done?
Gavin Williamson
It is as if the hon. Gentleman’s constituency neighbour, my hon. Friend the Member for Barrow and Furness (Simon Fell) and the hon. Gentleman think incredibly alike—perhaps not on absolutely everything, but certainly on this issue. My hon. Friend met me just last week, and we spoke about that exact matter. The best thing we can do to help those outdoor centres is ensure that their doors can open to welcome not just day visitors, but those who want to stay there on a residential basis. We will continue to look at what other measures we can introduce to support the sector. I know the value and enrichment that comes from doing so many activities, whether on Lake Windermere or in many other excellent locations around the country, and it brings real benefit. I am sure that my right hon. Friend the Minister for School Standards would be happy to meet the hon. Gentleman and his colleagues.
Jonathan Gullis (Stoke-on-Trent North) (Con)
I strongly welcome my right hon. Friend’s statement, and the four schools in Stoke-on-Trent North, including Goldenhill Primary Academy, have received condition improvement funding. Rather than flogging the dead horse of exams, which I was going to do, I will jump to a different issue. Let us take 10% of pupil premium funding and ensure that it goes into high quality, extra-curricular enrichment activities, as laid out by me previously in the House, and by the Challenger Trust, which does excellent work in Gateshead. Let us ensure that we give those disadvantaged pupils the access to high-quality enrichment activities that many enjoy, such as those in the school that I attended, the private school Princethorpe College.
Gavin Williamson
My hon. Friend is a man who likes to chew off a Secretary of State’s ear, especially when it comes to condition improvement funding for his schools. It is great to see four schools benefiting from his assiduous lobbying, making sure that he is delivering for his constituency.
My hon. Friend raises an important point about the use of pupil premium funding. We want to see schools considering how it can be more effectively targeted, especially at pupils from the most disadvantaged backgrounds and those who need extra support. In the past, far too often, pupil premium funding has been seen as just another stream of funding going into schools. We need schools to consider how pupil premium funding is delivering for the pupils it is targeted at.
Tahir Ali (Birmingham, Hall Green) (Lab) [V]
Can the Secretary of State explain how children will access free school meals if they have to isolate away from holiday activities and food programmes during the summer? Does he agree with me that a cash transfer system, enabling parents to get the supplies that are right for their children, would ensure that better support reaches all those who need it?
Gavin Williamson
The hon. Gentleman raises a valuable point, and it is why the extra support provided by the Department for Work and Pensions, through local authorities, to ensure children are fed through the summer is such an important part of our holiday activity and food programme, which will of course be delivering not just food for so many students but activities that are just as valuable.
Madam Deputy Speaker (Dame Eleanor Laing)
In the hope that communications have improved in the Forest of Dean, we will try to go back to Mark Harper.
Mr Harper
I am grateful, Madam Deputy Speaker. When schools return in September, every adult will have had the chance to be vaccinated at least once, which provides the bulk of protection, so why is regular testing still going to continue, perhaps forever? Last week, the Secretary of State said he wanted to see it end. What has changed?
Gavin Williamson
Not only do we get my right hon. Friend’s voice, but we get his picture on the screen too, so it was enhanced in every possible way.
Of course, we want to see schools return to as much of normal as possible as quickly as possible, but we have always taken the view that we need to take a cautious and careful approach, because we want things to be in a place where we do not have to take a step backwards. We have one of the most successful testing programmes that has ever been run in this country, and it was delivered in schools from the week commencing 8 March. We have seen it play an important role in containing and dealing with covid and, most importantly, ensuring we keep schools open and welcoming to pupils.
Tom Hunt (Ipswich) (Con)
While all these huge issues are going on, the largest teaching union in the country, the National Education Union, has said there is an “urgent” need to “decolonise” the curriculum and how classroom layouts, in fact, represent colonialism. Does my right hon. Friend agree that there is probably a more urgent need for the largest teaching union in the country finally to focus on the urgent need for kids to catch up on their learning, and for it to work constructively with the Government, perhaps for the first time, to try to ease these remaining restrictions?
Gavin Williamson
My hon. Friend is a new Member, and he arrives here with a lot of optimism. I reassure him that we have a broad, balanced and knowledge-rich curriculum of which we should be proud, although we always work to make sure it gets even better.
It is with some sadness that I say the National Education Union started off by saying it did not want teachers to teach pupils in person, and then said it did not want teachers to teach students online. It starts to make me question whether the National Education Union really believes in education at all. We will wait and see, and hopefully it will be more co-operative and hard-working in the next academic year.
Barbara Keeley (Worsley and Eccles South) (Lab) [V]
Regular testing for pupils and staff is going to be a vital part of stopping the spread of covid-19, but the decline in testing numbers shows that home testing is currently not working well. Tackling this with on-site testing would mean some schools in my constituency having to test 600 children a day, which they tell me they simply do not have the resources to do. Will the Secretary of State give schools the resources they need, including external support if they need it, to make sure they are able to carry out testing and keep children safe?
Gavin Williamson
I would like to reassure the hon. Lady that we will be supporting schools as they roll out the testing. Schools have delivered asymptomatic testing on school premises incredibly successfully already in this academic year and we will look at providing the same level of support to them as we did earlier on, in March. We have every confidence that we will be able to deliver that right across the country.
James Wild (North West Norfolk) (Con)
I welcome these changes, which will mean that healthy pupils can spend more time in the classroom. Following my recent visit to Ashwicken Church of England Primary School, may I urge my right hon. Friend to ensure that, as part of the recovery plan and with an eye to the spending review, schools get the special educational needs funding that is required now more than ever, so that every child’s needs are met?
Gavin Williamson
I know that my hon. Friend is a great champion for not only the schools in his constituency, but children with special educational needs—we all have a shared passion to do more for them. He is tempting me into public discussions with Her Majesty’s Treasury over the Dispatch Box and straight to the Chancellor. Although I am tempted and he is desperately trying to lure me down that path, I will decline on this occasion to enter that public discourse. But of course children with special educational needs are a top priority for us, and I would certainly expect that to be properly reflected in any future settlements.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
I welcome the end of mandatory bubble isolation, which has caused such disruption to parents, teachers and children, but the impact of covid continues and the poorest are hardest hit. Over the past five years, child poverty in my constituency has risen by 13 percentage points, to 45%, which is six times the national average increase. So what additional support can children in my constituency expect, apart from the catch-up plan, which the Government’s own educational recovery commissioner described as “feeble”?
Gavin Williamson
One thing we can do to best help all children across the country is keep up the continued drive to raise standards across our schools. The hon. Lady dismisses the more than £3 billion of investment that we have made, but it is important investment, targeted at the interventions that will deliver the biggest benefit to her constituents.
Steve Brine (Winchester) (Con)
Last Monday, I made clear my view, and that of many in my constituency, about the unfairness of the bubble system and the consequential isolation, so I welcome today’s confirmation. However, is it not the case that sending the whole bubble home because of one positive case is no more necessary now than outdoor sports days being cancelled or held behind closed doors, or end-of-term events being ruined? These are things we never get back. How can the Secretary of State and his team help colleagues across all educational settings feel supported to get the balance right come the new term?
Gavin Williamson
My hon. Friend hits upon the issue of sports days. Let us be absolutely clear: the guidance is there in black and white saying that sports days can proceed, and parents should be able to attend. We encourage schools to be able to do this because, as he rightly points out, these are things people cannot get back. That is why we wanted to be able to lift those restrictions at the earliest possible moment. I know that he is familiar with his regional schools commissioner, and if there are challenges, having local dialogue with the regional schools commissioner’s team plays an important part, as they can deal with the school directly.
Sarah Owen (Luton North) (Lab)
Early years providers and nurseries—such as the fantastic Grasmere nursery in Luton North, which I had the pleasure of visiting recently—are a vital part of our education system. Although primary and secondary schools have been compensated for some of their covid costs, nurseries have not had a single penny of the costs incurred during the pandemic reimbursed. Why are nurseries always an afterthought for this Government? Will this unfairness be rectified? If not, why not?
Gavin Williamson
I am sure that Grasmere nursery is reflective of the many nurseries right across the country that had the benefit of being funded at pre-covid levels. We carried on that level of funding in recognition of the fact that they were operating in truly exceptional times.
Greg Smith (Buckingham) (Con)
I warmly welcome my right hon. Friend’s statement and the step back to normality and letting children be children that the scrapping of the bubbles system brings, but there continues to be an anxiety that affects people on both sides of the debate, which is whether the vaccination programme will be extended to those under 18 years of age. Will my right hon. Friend redouble his efforts to work with colleagues in the Department of Health and Social Care to push the JCVI to come forward with its recommendations so that, one way or the other, a decision can be made that takes that additional anxiety away from young people?
Gavin Williamson
My hon. Friend is right to highlight the importance of ensuring that we have the correct and best information to inform decisions on the vaccination of children. It is my hope that the JCVI report will be imminently forthcoming, and that will obviously inform the decisions that the Government make in the best interests of all our children.
Liz Twist (Blaydon) (Lab)
For many months now, school leaders have been spending a lot of their time on weekends making contacts when they are notified that someone has covid-19, so I am glad that some of that responsibility will be shifted to NHS Test and Trace, but will the Secretary of State clarify exactly what the relationship will be, given the references in the guidance to settings still having a role to play in that situation?
Gavin Williamson
Of course. The hon. Lady is right to highlight the amazing and important role that schools, headteachers and our whole education team have played in supporting the efforts on test and trace. We expect the contacting to shift from schools having to do it to Test and Trace doing it, but of course contact information will sometimes still be asked of schools. We see the current burden that schools face being scaled back considerably, very much to the benefit of headteachers and teachers.
Points of Order
(3 years, 4 months ago)
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Mark Tami (Alyn and Deeside) (Lab)
On a point of order, Madam Deputy Speaker. On Friday, the Secretary of State for International Trade visited Airbus at Broughton in my seat. Her office gave me 14 minutes’ notice before the meeting was due to take place—14 minutes. What can you advise us to do to ensure that the rules that apply to the rest of us also apply to Government Ministers?
Madam Deputy Speaker (Dame Eleanor Laing)
I thank the right hon. Gentleman for giving me notice that he intended to raise this point of order. I can say very safely and in a straightforward way that such behaviour by a Minister or, indeed, any Member is wrong —quite simply wrong.
As things have not been operating normally here this last year and a bit, Members may not be aware that there is a little booklet called “Rules of behaviour and courtesies in the House of Commons”, and I seriously advise everybody to look at it. It is not some ancient tome hidden away in the Library about how things worked in this ancient Parliament; it is bang up to date. It says quite clearly that as a matter of courtesy between one Member and another:
“You should notify colleagues whenever…you intend to visit a colleague’s constituency (except on purely private visits).”
I take it that the right hon. Gentleman is certain that this was not a private visit.
Madam Deputy Speaker
I take it that the right hon. Gentleman has informed the right hon. Lady to whom he refers that he intended to raise this point of order.
Madam Deputy Speaker
Excellent. Then the right hon. Lady will be aware of the situation. I simply say to all Members that it says in this booklet—and Mr Speaker takes this very seriously—that failing to inform colleagues of an intention to visit their constituency
“is regarded…as very discourteous.”
That is what I can say to the right hon. Gentleman now: it is discourteous for the Minister to behave in this fashion, and I am quite sure that an apology will be forthcoming.
Stephanie Peacock (Barnsley East) (Lab)
On a point of order, Madam Deputy Speaker. Yesterday, the Government rejected the cross-party proposals from the Business, Energy and Industrial Strategy Committee about the mineworkers’ pension scheme. Can I ask through you whether the Government will come to this Chamber and give a statement to explain their disgraceful decision to continue to take billions of pounds from the pockets of retired miners?
Madam Deputy Speaker
I thank the hon. Lady for her point of order, and for telling me that she intended to raise this point of order. I am not at all surprised, as I have heard her speak many times about this subject with passion in this Chamber. The hon. Lady will know, of course, that the decision about whether Ministers come to the House to make an announcement or to respond to a report is not a matter for the Chair, but I can advise her that there are various ways in which, as the Table Office will advise her, she may endeavour to bring a Minister to the Chamber to answer the questions that clearly to her and her constituents are important questions.
I will now suspend the House for three minutes so that arrangements can be made for the next item of business.
Fire and Building Safety (Public Inquiry)
Tuesday 6th July 2021
(3 years, 4 months ago)
Commons ChamberRead Full debate Fire and Building Safety (Public Inquiry) Bill 2021-22 View all Fire and Building Safety (Public Inquiry) Bill 2021-22 Debates Read Hansard Text
A Ten Minute Rule Bill is a First Reading of a Private Members Bill, but with the sponsor permitted to make a ten minute speech outlining the reasons for the proposed legislation.
There is little chance of the Bill proceeding further unless there is unanimous consent for the Bill or the Government elects to support the Bill directly.
For more information see: Ten Minute Bills
This information is provided by Parallel Parliament and does not comprise part of the offical record
Daisy Cooper (St Albans) (LD)
I beg to move,
That leave be given to bring in a Bill to establish an independent public inquiry into the Government’s response to concerns about fire and building safety.
This Bill would not duplicate or undermine the ongoing and essential work of the Grenfell Tower inquiry, and nor would it repeat any of the Hackitt review into building and fire safety regulation. What the Bill seeks to do, however, is compel the Government to establish an independent inquiry into their handling of the fire safety crisis.
It is now more than four years since the horrific loss of life at Grenfell Tower, yet the Government’s handling of the fire safety crisis has become a national scandal of epic proportions. Tens of thousands of innocent people deserve to understand how and why, after four years, they are still trapped in homes that are not safe and that they cannot sell. They deserve to know why they are facing bankruptcy from bills they cannot afford, with their mental health left in tatters. They deserve to know the Government’s real motivations, because fire safety victims have had to battle the Government again and again for four years, and at every twist and turn, to get help to solve a problem that is not of their making and for which there is still no end in sight.
There are scores of questions that the Government must answer, but they relate to three broad areas. The first is the Government’s failures to date, the second is the faulty design of the building safety fund, and the third is the gaping hole between the Prime Minister’s promises and his Government’s actions. Let me start with the Government’s failures to date. It is incomprehensible that four years on from Grenfell, we still do not know the scale of the building safety scandal. That is because the Government have no complete data on how many mid-rise buildings below 18 metres have been built with dangerous materials and fire safety defects. It was revealed more than a year ago that the Government had been told by their own advisors that the most dangerous forms of aluminium composite material cladding and insulation are unsafe on buildings of any height, yet the Ministry of Housing, Communities and Local Government admitted that it did not have the data on the number of buildings below 18 metres that have cladding systems, or on what proportion of the buildings that have such systems are likely to be clad in ACM. The Government could have taken immediate action, but they failed to do so. An inquiry is needed to find out why.
The second area of the inquiry would be to look at how the Government have designed the building safety fund. On the face of it, it appears as though the building safety fund has been deliberately designed by the Government to exclude a huge number of issues and a huge number of people. Housing associations with non-ACM cladding are excluded, properties below 18 metres are excluded, and non-cladding fire safety remediation works are also excluded. Anybody who really wanted to solve the crisis would not design a remediation fund that excluded all of that. The Secretary of State has ignored recommendations from the Housing, Communities and Local Government Committee that social housing providers should have free and equal access to the fund. That is in the face of a national housing shortage, when social housing providers should be investing their funds in new, affordable homes.
On the 18-metre threshold, how did the Government reach the conclusion that buildings below 18 metres should be treated differently and not be eligible for the building safety fund? The Secretary of State described height as a “crude” factor in determining risk and we all saw the video in which a top civil servant working on the cladding scandal admitted that the crucial 18-metre rule had been picked simply because Ministers did not have time to come up with a better number. Why are the Government still using it? There has been no explanation of why that arbitrary figure has been applied.
The perverse nature of the 18-metre rule is demonstrated perfectly by the Decks in Liverpool. To the casual observer, it is a development of six identical blocks. Three of them are just over 18 metres and might qualify for help from the Government, but the other three are just short of 18 metres and left out in the cold. Why do the Government persist in using the 18-metre threshold when it is clearly unfair and, in some cases, outright absurd? An inquiry is needed to look into that.
There is also the size of the building safety fund. The Housing, Communities and Local Government Committee estimates that the cost to remediate cladding will be in the region of £15 billion, so how did the Secretary of State arrive at the precise initial figure of £1.6 billion and his revised position of £5.1 billion? Fire safety experts have repeatedly said that the fund is a mere drop in the ocean, so why are the Government refusing to budge? Why have the Government excluded all other fire safety issues not caused by cladding from the building safety fund? Flammable balconies, missing fire breaks, defective fire doors and dangerous insulation have all been identified as critical safety failings. Like cladding, none is the fault of leaseholders, yet they are still not being addressed by the Government’s schemes. That is before the huge cost of the waking watches that are needed to ensure that people’s homes do not go up in flames.
Finally, the third area relates to the gaping hole between the Prime Minister’s promises and his Government’s actions. Last autumn, the End Our Cladding Scandal campaign put forward a simple 10-step plan. In essence, it called on the Government: to stump up all the cash to remediate fire safety problems; to get rid of all the problems by the end of 2022; and to use their weight to recoup that money from those who are responsible. That plan would meet the Government’s own test of not letting the cost fall to the taxpayer or to innocent building safety victims.
On 3 February, leaseholders were given fresh hope that their nightmare was finally over when the Prime Minister stood at the Dispatch Box and told the House:
“We are determined that no leaseholder should have to pay for the unaffordable costs of fixing safety defects that they did not cause and are no fault of their own.”—[Official Report, 3 February 2021; Vol. 688, c. 945.]
However, that fresh hope turned to false hope. The Prime Minister and his Government spent 10 months fighting Members of this House who were trying to protect leaseholders from these costs. We tried to amend the Fire Safety Bill, but the Government fought tooth and nail to stop us.
On Sunday, with much fanfare, the Secretary of State announced that he was bringing forward measures in the Building Safety Bill to give leaseholders 15 years to take action against those who are responsible.
Fire safety victims have already said that most of them will not benefit from this, either because the 15-year limit has expired or because the potential defendants no longer exist or are insolvent. Everyone else now has to add the prospect of years of litigation to their woes, but what is really disturbing is that the Secretary of State has announced this in the full knowledge—I quote from a National Audit Office report—that
“the legal costs of taking action are likely to outweigh the costs for remediation works in a significant number of cases”
and that
“enforcing cost recovery from the outset could impact the pace of remediation.”
Do the Government really think that it is acceptable for leaseholders facing bankruptcy and mental ill health to have to start legal action against huge, powerful housing companies, builders and others when they know that the legal bills could cost more than the remediation work itself and then delay that remediation?
This is Alice in Wonderland stuff, and it is not just that the Prime Minister and his Government are falling short on this promise. They are doing exactly the opposite of what they promised, because the Government are actively legislating to effectively protect the guilty while letting innocent victims hang out to dry. A public inquiry is now needed to rigorously investigate why this Government have comprehensively failed to put any serious system in place to protect innocent building safety victims or to recoup the costs from developers, builders, suppliers and contractors. What precisely is the Government’s relationship with these potential defendants such that they are so determined time and again to put the interests of big developers and others ahead of innocent tenants and leaseholders?
This public inquiry is desperately needed, because when we said “never again” some of us actually meant it. Fire safety victims have faced four years of delays, obfuscation and broken promises. This has become a national scandal of epic proportions and we need an independent inquiry to tell us why.
Question put and agreed to.
Ordered,
That Daisy Cooper, Ed Davey, Tim Farron, Munira Wilson, Sarah Olney, Layla Moran, Wera Hobhouse, Sarah Green, Mr Alistair Carmichael, Wendy Chamberlain, Christine Jardine and Jamie Stone present the Bill.
Daisy Cooper accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 10 September, and to be printed (Bill 142).
Dissolution and Calling of Parliament Bill
Tuesday 6th July 2021
(3 years, 4 months ago)
Commons ChamberRead Full debate Dissolution and Calling of Parliament Bill 2021-22 View all Dissolution and Calling of Parliament Bill 2021-22 Debates Read Hansard Text Read Debate Ministerial Extracts
18:46 - The House divided: - Ayes: 367 / Noes: 65 - Question accordingly agreed to.
Madam Deputy Speaker (Dame Eleanor Laing)
I have to tell the House that Mr Speaker has not selected the reasoned amendment.
The Chancellor of the Duchy of Lancaster and Minister for the Cabinet Office (Michael Gove)
I beg to move, That the Bill be now read a Second time.
It is a real pleasure to move the Second Reading of this Bill. The Bill contains provisions to ensure that we supersede the Fixed-term Parliaments Act 2011 with appropriate, democratic and timely reform in order to ensure that we restore to this place and to the people an opportunity to ensure that the Government that govern in their name can command the confidence of this House and the confidence of the public.
The legislation that we are bringing forward will I hope command support across this House, because it was a manifesto promise in both the Conservative and Labour party manifestos. Both Front-Bench teams are committed to the legislation, and it follows on from an excellent report by the Public Administration and Constitutional Affairs Committee, chaired by my hon. Friend the Member for Hazel Grove (Mr Wragg), and from recommendations made by the Constitution Committee in the other place. It has also received extensive scrutiny and support from a Joint Committee of the Commons and Lords. With both Front-Bench teams and three important Committees all in favour of this legislation, we can see already that the arguments that have been lined up for it are powerful and command wide support. I sincerely hope that nothing I say this afternoon undermines that consensus.
Michael Gove
That is very good advice from the hon. Gentleman. He, like me, believes that brevity is the soul of wit.
Rachael Maskell (York Central) (Lab/Co-op)
Will the right hon. Gentleman give us a definition of “democratic” in view of the fact that when it comes to calling general elections, this legislation will move power from this democratically elected Chamber to royal prerogative?
Michael Gove
Well, it gives power to the people. Fundamentally, all of us sit here at the pleasure of and at the disposal of our electorates. As we saw from the addled Parliament—or the paralysed Parliament or whatever you want to call the Parliament of 2017 to 2019—parliamentarians were actually frustrating the will of the people, in attempting to overturn Brexit and in attempting to sustain in power a Government who needed to seek confidence from the electorate and for the maintenance of their programme. For that reason, we are restoring power to the people, which had been taken away by the FTPA.
Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)
I saw the right hon. Gentleman try to answer what I was going to ask him in his reply to the earlier intervention. Considering that there have been two snap elections in the past four years, what problem are the Government trying to solve?
Michael Gove
It is precisely because there have been at least two elections of the kind that the hon. Gentleman draws attention to that the Fixed-term Parliaments Act has not done what it said on the tin. It has failed the Ronseal test. For those who advocated the Fixed-term Parliaments Act in the first place, all sorts of arguments were made about the importance of the predictability of election timing, and, of course, the Bill palpably failed to achieve that in the way that it failed to achieve so much else. What we are doing with this legislation is restoring a tried and tested method by which Prime Ministers can command the confidence not just of this House, but of the country.
Aaron Bell (Newcastle-under-Lyme) (Con)
Will my right hon. Friend give way?
Michael Gove
I am more than happy to give way to my hon. Friend, a distinguished member of the Joint Committee.
Aaron Bell
Does the Secretary of State agree that any legislation in this area must work with any parliamentary arithmetic? That was the problem we saw in the previous Parliament and that is what going back to the status quo ante before 2010 will achieve.
Michael Gove
My hon. Friend is absolutely right. Our approach to the dissolution of Parliament and the calling of elections before the Fixed-term Parliament Act was robust, successful and effective and ensured that our democracy worked as it should. What we are doing is ensuring that those tried and tested procedures are restored, and in so doing not just fulfilling our manifesto pledge, but—and it was a pleasure to do so—fulfilling the manifesto pledge of the right hon. Member for Islington North (Jeremy Corbyn) and making sure that democracy in that way is underpinned.
Sir Charles Walker (Broxbourne) (Con)
Does my right hon. Friend not agree that the Fixed-term Parliaments Act was probably the single worst piece of legislation that the coalition Government introduced? Fortunately, I did not vote for it then, but I will certainly be voting for this repeal tonight.
Michael Gove
Regarding the coalition years, I think that others are better placed—given that I served in the Government for five years—to decide which was the worst piece of legislation that was passed. The one thing I will say for the Fixed-term Parliaments Act is that it was very much a child of its time. It did achieve one purpose. It was introduced at the request of our Liberal Democrat coalition partners in order to ensure that, for the five years of that Parliament, neither party could collapse the Government in a way that might secure for either the junior or the senior coalition partner perceived political advantage. It did serve that purpose for those five years. Notwithstanding the points made by my hon. Friend, there was a significant range of achievements that the coalition Government can take pride in; nevertheless, the Act was specifically a child of its time. While it worked in that narrow sense, in cementing the coalition and ensuring it could achieve the policy gains that I believe were gained during those five years, its utility beyond those years in tougher circumstances has been tested to destruction.
Chris Bryant
I will let the Minister in on a secret: not all of us supported everything that was in the Labour manifesto at the last general election.
Is there not a worrying issue here, which is precisely what the right hon. Gentleman refers to as “the child of its time”? If the Government can always reconstitute the constitution every time they can pass a law, we have a problem here, because the Government are most likely always to do so in their own interests.
Michael Gove
I take very seriously the points that the hon. Gentleman makes, because there are few deeper scholars of our constitution or parliamentary history than him, but I would say two things. First, sometimes there are constitutional experiments or innovations, and it is understandable that they will have partisans who can see benefits from them; but then we can see in real time and in real circumstances whether those constitutional innovations are right and work, or whether it is appropriate for us to go back to the situation that prevailed before, which has actually proven over time, in a variety of circumstances, to be both more robust and more effective.
The second point is that of course there is always a temptation for Governments or any Administration in power to seek to look to the rules and to derive advantage perhaps from changing them, but the critical thing here is that, ultimately, the decision on whether an election has been called and Parliament has been dissolved appropriately rests with the people. We can look at historical examples; for example, in the 1970s Edward Heath decided to go to the country to ask the question, “Who governs?”. He believed that, in choosing the timing of the election, he was doing so to his party’s advantage, but when he asked, “Who governs?”, the country replied, “Well, not you, mate.” On that occasion, it was the case that a miscalculation on the part of the Prime Minister resulted in the electorate deciding that Edward Heath’s Administration should end and that Harold Wilson’s should take over.
Chris Bryant
In which case, one could conceive of a situation in which the Government were aware of something coming up that the public were not aware of—a report or a major security breach that had not yet been made public, for example. Or, for instance, the Government might choose to hold a general election before boundary changes because they thought that it might be to their advantage. Would it not make far more sense for the House simply to be able to vote at that moment?
Michael Gove
In both the cases that the hon. Gentleman mentions, if there were jiggery-pokery or the Government were acting in a way that the electorate considered heedless or reckless, electoral punishment would occur sooner or later. Attempting to rig the rules in that way is, as we have seen in the past, something that the public are always alive to, always wise to and always ready to punish.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
Surely the biggest difference, though, between the situation today and that facing Edward Heath in the 1970s is the amount, the nature and the regulation of the spending of money. Heath did not have a long period before a short period of expenses and there were not those controls. Effectively, this Bill will allow the Prime Minister and the Prime Minister alone to be the only person who knows when that long period starts and to pile the money in. That is what this is about, is it not?
Michael Gove
No, it is not what it is about. The money spent on elections is an issue in which the Liberal Democrats and other parties have long had an interest, but more broadly the point is that the choice of election timing should ultimately depend on the capacity of the Prime Minister to command the confidence of this House. We saw during the course of the 2017 to 2019 Parliament the consequences of the Fixed-term Parliaments Act in a way that worked against the interests of democracy explicitly.
Michael Gove
I will just make a little progress and then come back to the right hon. Gentleman.
We saw in the 2017 to 2019 Parliament what happened when Parliament attempted to sustain a Government in office, to deny a Prime Minister the Dissolution that he requested, and yet at the same time would not allow that Government to get their business through, so we had a paralysed Parliament. We also had a Schrödinger’s Government: they were simultaneously in power and not in power, in office but incapable of carrying forward their legislation. We saw in the December 2019 general election the consequence of that: the party that argued that there needed to be a Dissolution, an election and a refreshed mandate secured that refreshed mandate, and, as a result, we saw our democracy working as it has so successfully in the past and as it deserves to again in the future.
Mr Carmichael
If, as the Minister says, this is about the point at which the Prime Minister can command the confidence of the House, surely that is something that can only be determined by this House and not the Prime Minister, so the point made by the hon. Member for Rhondda (Chris Bryant) is a good one.
Michael Gove
The points made by the hon. Member for Rhondda (Chris Bryant) are nearly always good ones, but on this occasion it is wrong. Ultimately, the decision about whether it is right to call an election and whether the Prime Minister and the Administration should return to power rightly rests with the people. During the course of the 2017-19 Parliament, parliamentarians sought to frustrate the Prime Minister seeking an election, and when that election eventually occurred, we saw that an appropriate decision was taken by the voters.
We also saw during the 2017-19 Parliament the reputation of Parliament—much to my regret—diminished in the eyes of the public because of its failure both to deliver on the original Brexit vote and to allow Government to carry on their business. In making sure that we return to a situation where we do not have the Fixed-term Parliaments Act, we are keeping faith with democracy. We are also keeping faith with the basis on which this Government were elected and, indeed, on which the Opposition argued for office.
Rachael Maskell
The reality is that Government hold privileged information. In the light of the economic challenge coming down the path, surely the Bill is simply a cut-and-run Bill to allow the Government to call an early general election before they have to deal with that crisis.
Michael Gove
I completely disagree. Looking at the broad economic situation that we face and what may happen in future, we have a well-informed and judicious electorate that will make a judgment whenever an election is called about the fitness of this Government to be returned to office or, indeed, the readiness of the Opposition or any other party to assume office, as has been seen in the past.
When Governments have sought to cut and run—when they have sought to manipulate the electoral timetable to their advantage—they have been punished. It was the case not just in 1974 with Edward Heath but in the early 1920s with Stanley Baldwin, when he sought to cut and run using the formidable advantage that he had—the support of press barons and the wealthy. Nevertheless, we saw the return of the very first Labour Government under Ramsay MacDonald, supported for all too brief a period by the Liberals of that time.
Dr Julian Lewis (New Forest East) (Con)
The historical case that my right hon. Friend is making is absolutely incontrovertible. The fact is that the legitimacy of previous elections has barely—if ever—been questioned. As soon as we brought in that wretched legislation, we ended up in what he rightly described as a paralysed Parliament. However, is he satisfied that clause 3 is strong enough to ensure that Parliament is not paralysed in future by political uses of the court to try to interfere with the process of dissolving Parliament? Professor Ekins in particular, I believe, has certain suggestions that might make that provision a little stronger.
Michael Gove
I believe that clause 3 is robust and fit for purpose, but it is also the case that Professor Ekins, of the Judicial Power Project attached to the think-tank Policy Exchange, is a brilliant legal mind. We will pay close attention to his arguments and to those of my right hon. Friend and others, in order to ensure that clause 3 is robust enough.
Reference to clause 3 means that it is appropriate for me to turn to the specific clauses in this short and focused Bill. Before I do so, I just want to thank again the work of the Joint Committee under Lord McLoughlin and others, which did such a service to this House, and indeed to the other place, in scrutinising the legislation. When reviewing the original 2011 Act, the Joint Committee found that—
Michael Gove
I will in just a second.
The Joint Committee found that the 2011 Act did fulfil its immediate political purpose of maintaining the coalition Government for five years, but that it did not succeed in enforcing a super-majority constraint on the calling of early general elections, given what happened in 2017 and 2019. Mere repeal of the Act without any form of replacement would create uncertainty and what the Committee called a “constitutional lacuna”—hence the need for this legislation. The Government should allow sufficient time for Parliament to explore the full implications of any replacement legislation. Indeed, the Committee’s own work and the work of other committees has been a service to that cause. That constitutional education should secure a wide degree of cross-party agreement—that exists in the support given from the Opposition Front Bench and from others.
Any replacement should be equally suitable for whatever parliamentary arithmetic is provided by the electorate; I believe this Bill does that. Any replacement should consider allowing the date of any early election to be stipulated in a motion triggering that election, which of course it will, and any replacement of the 2011 Act should not contain super-majority provisions. The Joint Committee also made the point that if future Administrations introduced fixed parliamentary terms they should consider whether the political gridlock that characterised the 2017 to 2019 Parliament is a price worth paying for the perceived benefit of a fixed-term Parliament. All those arguments were powerful. I thank the Committee again for its work.
I would also like to thank—I should have mentioned this earlier; forgive me—my hon. Friend the Minister for the Constitution and Devolution for the fantastic work that she has done in preparing this legislation and engaging with Committees. It is the first time that she has been back on the Front Bench since her recovery from cancer. She has showed remarkable fortitude and I know that across this House we are all absolutely delighted that she is back in her place.
Jonathan Edwards
I absolutely echo the Minister’s comments in relation to his colleague. The law as it stands means that if the Government lose a vote of no confidence, there are 14 days to form another Government, and if that does not happen, that leads to an election. What would be the position following the passing of this Bill? Would the Government losing a vote of no confidence immediately trigger a general election?
Michael Gove
In those circumstances the Prime Minister could immediately, and should immediately, request of Her Majesty a Dissolution and an election would follow. One of the most powerful examples in our recent parliamentary history was the loss of a vote of no confidence in 1979 by James Callaghan, which led to the general election that followed. Some might argue—it is a counterfactual, the truth of which we cannot know—that had James Callaghan sought to refresh his mandate in 1978 when he was in a stronger position politically, he might well have been returned. The perception on the part of the Labour party at that time—although it had lost the support of the Liberals just beforehand—that it was to its advantage to continue was of course undone by a decision of the electorate.
Chris Bryant
Historically, many different things have counted as motions of no confidence—for instance, losing a vote on an amendment to the Loyal Address following the Queen’s Speech or on an amendment to the Finance Bill, or refusing to grant supply for a military intervention or to allow a military intervention. Does the Minister think that all those things would still count as a motion of no confidence?
Michael Gove
The formal motion of no confidence that is traditionally requested by the Opposition and has to be granted within a day is a classic example, but on the question of military intervention, I personally believe—again, it is for the House to take a view—that that is a proper exercise of the prerogative power in certain circumstances. That is perhaps for debate in other forums, but it would not count in the way that the hon. Gentleman suggests.
Mr Robert Goodwill (Scarborough and Whitby) (Con)
Does the Minister agree that in that situation it would be open to any Member of this House to ask a Minister or the Prime Minister at the Dispatch Box whether he or she considered it to be a matter of confidence and then what followed from that would bear that out?
Michael Gove
My right hon. Friend is exactly right. If any Prime Minister felt that the House’s decision not to grant supply, the House’s decision to censure an individual Minister or the House’s decision not to authorise support for military action was a matter of confidence, that might mean that it would be appropriate to request a Dissolution at that point.
Michael Gove
Not for a little bit, because I want to run briefly through the clauses in the Bill.
There are six clauses and one schedule. The first clause repeals the Fixed-term Parliaments Act. The second clause revives the prerogative power and allows the Prime Minister to request a Dissolution from the monarch. The third clause is specifically to ensure that that decision cannot be reviewed in the courts. It is what might be called an ouster clause. It is there explicitly to say that proceedings in this House relating to the exercise of the prerogative power should not be justiciable.
It is very important, following on from the points made by my right hon. Friend the Member for New Forest East (Dr Lewis), that the House understands, appreciates and supports the Bill on that basis. It has been constitutional practice since 1688 and the Bill of Rights that it should not be the case that these matters are reviewed in the courts. Let me say that judicial review is an important part of keeping Governments honest, but there needs to be an absolute limit on what is considered justiciable and it should not be the case that the courts can prevent the request for a Dissolution on the part of a Prime Minister. If that decision is mistaken, then it is for the people to decide in a general election what is appropriate. I was very pleased that the Joint Committee confirmed in its report that it would be appropriate for Parliament to affirm that.
Michael Gove
I do not think that they would, necessarily. There are people who might seek to do that, but one of the things that Parliament can do—and one of the reasons that my hon. Friend’s question is so helpful, as were the Joint Committee’s deliberations—is to affirm what is the case. It would then be remarkable indeed for any court to attempt to do what my hon. Friend describes; it would be constitutionally unprecedented and, to my mind, would risk the understanding of the balance between Parliament, when its will is clearly expressed, and the courts’ interpretation of the law. I hope that in Committee and on Third Reading, and perhaps later in this debate, all hon. Members will affirm the importance of the non-justiciability of the exercise of these powers.
Jackie Doyle-Price (Thurrock) (Con)
One thing that came out of the Joint Committee’s report was the very clear interpretation that a Prime Minister requests a dissolution rather than advising the monarch on it. I am pleased that the Government have accepted that advice from the Joint Committee, but does it not make the ouster clause completely superfluous? The monarch, acting in conjunction with Parliament, is non-justiciable already.
Michael Gove
That is definitely my understanding of constitutional practice, but—without getting into the details—there have been one or two recent decisions by the courts that might be thought by some to have moved one or two goalposts on the constitutional playing field. Lest there be any doubt, the ouster clause is there to affirm that interpretation. It is a new pair of braces to join the sturdy constitutional belt to which my hon. Friend refers.
Clause 4 makes it clear that the maximum length of any Parliament should be five years. Clause 5 contains some minor updates, taking account of how the Fixed-term Parliaments Act modernised our electoral law, and introduces the schedule attendant to the Bill. Clause 6 makes it clear that the Bill covers the whole of our United Kingdom.
Sir Charles Walker
On clause 4, will my right hon. Friend confirm that a maximum five-year term will mean that the latest that we could have a general election in this Parliament would be January 2025?
Michael Gove
I think that I would defer to others on fixing the precise date, but I believe that that is so.
Aaron Bell
In addition to what is in the Bill, we have to discuss what is not in it: the conventions that we seek to restore and the Dissolution principles published along- side the draft Bill. As my right hon. Friend will know, the Joint Committee considered the conventions, the paramountcy of confidence and all those things quite extensively. From reading our report, what conclusions have the Government reached about the nature of confidence and the circumstances in which calling a general election would not be an appropriate thing for a Prime Minister to do?
Michael Gove
Again, my hon. Friend makes a very important point. Alongside the Bill, we have produced a brief statement of Dissolution principles. He is absolutely right. Our broad understanding of Dissolution principles derives from a letter written by Sir Alan “Tommy” Lascelles pseudonymously—I am glad to be able to use that word in the House of Commons—to The Times in the 1950s. He argued that a Dissolution should not be granted if the monarch thought that there were a viable alternative that could command a majority in the House of Commons—or, indeed, if it were a time of economic crisis or peril in which it would be inappropriate for a general election to be called. We think that it is very difficult, as my hon. Friend the Minister for the Constitution and Devolution and others made clear in evidence to the Joint Committee, to provide an exhaustive list of example cases in which it would be inappropriate for a Dissolution to be granted when requested. One thing we would like to do in Committee is have proper consideration of them.
It is important that our constitution always remains flexible and agile. I could conceive of circumstances—immediately after an election defeat, for example, when a Prime Minister is still perhaps clinging on, seeking to form a coalition or a confidence and supply arrangement and failing to do so—when that Prime Minister might seek an immediate other Dissolution shortly afterwards. In such circumstances, I can see that it would not be appropriate for a Dissolution to be granted. As I say, it would be helpful for everyone to take part in the debate to outline the circumstances that they think should guide the operation of the principles.
Mr Goodwill
Is it not also the case that, if there were a vote in the Commons that many considered to be a confidence vote, but the Government refused to accept that, it would be open to the official Opposition to table a confidence motion, in which there would be no doubt whatsoever?
Michael Gove
Exactly so, and it is absolutely important, as my right hon. Friend points out, that we stick to the principle that, immediately upon receipt of a request from the Opposition for a vote of no confidence, such a debate is granted and that the Prime Minister of the day would make their case. Following the defeat of an earlier attempt by my right hon. Friend the Member for Maidenhead (Mrs May) to secure support for her withdrawal Bill, a motion of no confidence was tabled by the then leader of the Labour party. That motion of no confidence was defeated and that allowed the Prime Minister to consider other ways of fulfilling that mandate.
Chris Bryant
I do not want to test everybody’s patience, but the one time when that course is not available to the Opposition is immediately after a general election, before Parliament has got on to actually meeting; and it is the Government, and only the Government, who decide when the House meets and what it debates. I note that we still have no formal process in our system of knowing when, after a general election, the House will meet to transact substantive business, other than to elect a Speaker and have the swearing-in.
Michael Gove
That is an important point, but it is also important to recognise that no newly elected Government can effectively govern without Parliament. It would be impossible without a vote of supply and without a Queen’s Speech to ensure that the basis on which they were elected, and the effective governance of the country, could continue. It is important that we recognise that that is the principle that prevailed beforehand, and it is the principle that we should adopt now.
I shall conclude, because many hon. Members wish to speak. I return to the point that I made at the start. Those who brought forward the Fixed-term Parliaments Act were motivated, I think, by two entirely reasonable motivations. The first was to ensure that the coalition Government—the first coalition that we had had since 1922—was able to proceed and govern in an effective way; of course it was against the backdrop of economic crisis. As a member of that coalition, I do not resile for a moment from the many decisions that were taken during that five years, and I take the opportunity to thank the right hon. Member for Orkney and Shetland (Mr Carmichael) and others who served in that coalition for putting the national interest first at that time.
The second thing that the Fixed-term Parliaments Act was designed to do was to ensure that our constitutional arrangements became more predictable. Although the FTPA succeeded in the unique circumstances of the coalition years, it emphatically has not made our constitutional arrangements more predictable, as what happened in 2017, and indeed between 2017 and 2019, reinforced. Indeed, the circumstances of the 2017 to 2019 Parliament reinforced in the public mind—and certainly that was reflected in the general election result of 2019—the need to move to a more flexible, more responsive, more agile, more familiar and more tried and tested set of constitutional arrangements. It is for that reason that I commend the Bill to the House.
Cat Smith (Lancaster and Fleetwood) (Lab)
I begin by saying how lovely it is to see the Minister for the Constitution and Devolution, the hon. Member for Norwich North (Chloe Smith), back on the Front Bench after her absence, how well she is looking, and—without wishing the entire debate away—how much we are looking forward to her contribution at the end of this Second Reading debate.
As the Chancellor of the Duchy of Lancaster said, the Bill seeks to do two things: it repeals the Fixed-term Parliaments Act 2011 and it reinstates the status quo before that Act came into force. Effectively, it is turning back time. It is on those two points that I shall focus my remarks.
I suspect that we shall have quite a lot of debate today about whether the Fixed-term Parliaments Act worked. The Minister has set out clearly that he believes that it did not, but I believe there is an equally valid argument that aspects of it did work, although of course it was not without its pitfalls and flaws. The best example was the 2015 general election, which took place five years after the 2010 general election. It worked in the sense of holding the coalition Government to that timetable. However, I would argue that we could also say that the 2017 general election proves that the Act worked, because there were clauses within it for having an early election and those were gone through in the 2017 election.
The debate about whether the Act works probably centres around whether the 2017 to 2019 Parliament worked. That probably highlights the flaws in the Act. The fact that the Act said the Prime Minister could control the date of the election was, I would argue, one of the main sticking points of the Act, because at that point the Opposition felt the Prime Minister might abuse the Act to leave the European Union with no deal. Therefore, the Act was not without flaw.
There are also the issues around confidence motions and the questions that they raise. I think that will probably be explored in quite a lot of detail.
Dr Julian Lewis
I concede the hon. Member’s point that the Act did work as far as holding the coalition together until 2015 was concerned, but it did not work in 2017. If it had not been for the fact that the Scottish nationalists and the Liberal Democrats, for political reasons of their own, decided to allow the Dissolution, that stasis could have gone on for months, or years longer than it did. The Parliament would have been paralysed endlessly until the end of the five years. That cannot be right, surely.
Cat Smith
I will let other parties answer for their own actions. I certainly do not seek to speak for them. I think it would be a misinterpretation to say that the Act was purely for the purpose of holding the coalition together. I think that was a huge reason for support in certain parts of the then Government, but actually it was an idea that had been batted around in politics long before then. Indeed, I believe it had been a matter for various private Members’ Bills before the coalition Government came into office. It was certainly not an idea that was just thought up to hold the coalition together.
Alec Shelbrooke (Elmet and Rothwell) (Con)
I look forward to sparring with the hon. Lady on another constitutional Bill. Just to come back to the point she made about trying to set the date of the last election, she may recall that, 24 hours before the one-line Bill was passed, the Fixed-term Parliaments Act failed again to cause the election. The one-line Bill was put through and the irony was that it was by a two-thirds vote of the House. That undermines the FTPA because it shows it was just being used to play games.
Cat Smith
It is a pleasure to see the right hon. Gentleman in his place and I, too, look forward to sparring with him again on constitutional matters. I do not disagree with that. I am certainly not stood here to mount a defence of the FTPA. I was outlining some ways in which I felt the Act did work, but I am also highlighting huge flaws in the Act. Indeed, there is a reason why, in the Labour manifesto of December 2019, we said we would repeal it. The point he raises about the Prime Minister being able to control the date of the election is a huge reason why the Act is flawed. However, I am arguing that the principle of having fixed terms in itself is not necessarily a bad principle; it is a very pro-democracy principle.
Christine Jardine (Edinburgh West) (LD)
Something occurs to me. Those on the Government Benches might say there was stasis for two years, but perhaps the public expected politicians to debate and find a way ahead for the country, rather than just fix into positions and refuse to compromise. The way is not always to jump. It should not always be the Government alone who decide what is best for the country. That is Parliament’s role, surely.
Cat Smith
It would not be at all like the Liberal Democrats to dig into a position and hold it. [Laughter.] I do not believe that that Parliament hit the troubles it hit necessarily just because of the FTPA. If the Act had not been in place, there would still have been huge problems, because the governing party could not command confidence within its own Members and have a majority for its flagship policy. That was the sticking point for that Parliament.
The Act has been used as quite an easy scapegoat. It is blamed for all the ills of that Parliament. While it is not a perfect piece of legislation, and I support its repeal, I can see that the principle of fixed terms is not, in itself, necessarily a bad thing. Indeed, I believe the then Prime Minister, David Cameron, said 10 years ago, during the passage of the Act, that it was the biggest move of powers from the Executive in several centuries. That raises the question, if we are to repeal that Act and go back to the status quo and the old way of doing things, whether today is the biggest transfer of powers from the legislature to the Executive. Indeed, the 2015 Conservative manifesto celebrated the Fixed-term Parliaments Act’s success:
“We have also passed the Fixed Term Parliament Act, an unprecedented transfer of Executive power.”
That raises the question of whether we are transferring power back to the Executive and, if so, whether that is something this House really wishes to do.
Sir Charles Walker
I thank the hon. Lady for giving way, as this is such a therapeutic exercise. It is 10 years of hurt. [Laughter.] I am like a dog with a bone. The problem with the Fixed-term Parliaments Act in 2011 was that it transferred responsibility for keeping the coalition together away from the leaders of each of the coalition parties to Parliament. It was never any of Parliament’s business to keep that coalition going; it was the responsibility of David Cameron and Nick Clegg.
I feel so much better for having got that off my chest for the second time in a decade. I thank the hon. Lady.
Cat Smith
If it does not work out in politics, perhaps I have a career as a therapist.
I find it remarkable that Ministers sitting on the Treasury Bench filed through the Lobby 10 years ago to vote for the Fixed-term Parliaments Act, as today they will presumably be voting the opposite way.
Aaron Bell
The hon. Lady asks who power is being transferred to but, as the Chancellor of the Duchy of Lancaster said, it is a transfer to the people.
I enjoyed the hon. Lady’s exchange with the hon. Member for Edinburgh West (Christine Jardine), but the problem with the 2017 Parliament is that it did not trust the people, which is why we ended up where we did. That is why we had to have the election we eventually had, and it is why we had the result we did. If we just trusted the people, we would all be much better served.
Cat Smith
The hon. Gentleman is right to say this is about power and where power lies. Where we probably disagree and diverge is on the definition of where power is moving to and from.
The Bill before us transfers all the power into the hands of one individual, the Prime Minister. The power to call an election currently lies with all 650 Members of this House, who are elected by the people. I would argue that power to the people lies more in keeping the Fixed-term Parliaments Act. Of course I disagree with the Act, and I support its repeal, but I disagree with the Government’s replacement.
Several hon. Members rose—
Cat Smith
If I may, I will make a little progress. I am conscious of time.
I want to say a few words about comparisons, because it is always important to compare this House and how we do things with other countries and other parts of the United Kingdom. It is about the principle of who has the power to decide when an election takes place, or whether it should be fixed.
The Opposition believe that the democratic position to take, as a starting principle, is that these things should be fixed. Indeed, that is already the case for the Scottish Parliament, the Senedd Cymru and the Northern Ireland Parliament, as well as for our local councils in England and English elected Mayors. We know, and the voters know, when those institutions and individuals will be up for re-election, when they can re-elect them to do their job or reject them if they disagree.
The only question mark lies over this House and when this House goes to the people and the country. We are out of step even within our United Kingdom. In most parliamentary democracies, Dissolution is controlled by the legislature, with varying degrees of involvement from the Executive. I would argue that is good for democracy and, of course, for planning legislation and passing the Government’s manifesto, which the people would have voted for. It helps civil servants to work and plan with politicians, and it helps our electoral administrators, who have frankly been put under an awful lot of pressure in recent years. It helps us as political campaigners to know when a long campaign spend will start, because if we know when an election is called, we know when the spending limits can start kicking in. It is also good, most importantly, for voters to know when they can either re-elect or reject a politician.
The UK has a strong tradition of parliamentary sovereignty, and I believe that Parliament should be central to any decision to dissolve.
Alec Shelbrooke
I just want to probe the hon. Lady’s point about when to hold elections. Is she saying that there could be a period of time when the Opposition would not want to fight an election?
Cat Smith
Of course, in most circumstances an Opposition will want to have an election. If the right hon. Gentleman is referring to the 2019 situation, that was not about not wanting to have an election; it was about not wanting a situation in which the Government could take the country out of the European Union with no deal. That was the sticking point, and that was the issue with the date. In most situations, an Opposition would always want an election. Indeed, I can say quite confidently that I would do a darn sight better job than the right hon. Member for Surrey Heath (Michael Gove), but he knows that.
Chris Bryant
Might there not be a point where the Opposition just wanted to form a Government, because the Government had lost the confidence of the House but the Prime Minister would want to have a general election, because the numbers in the House might allow two different kinds of Government?
Cat Smith
I find it difficult to disagree with my hon. Friend. Indeed, the points that he has made, not just in that intervention but in earlier interventions on the Minister, have raised some important questions that I hope the House will consider. I am grateful that the Bill will be considered in Committee of the whole House and that we will have the advantage of my hon. Friend’s insights at that stage, as well as his contribution in the Joint Committee.
There is no way that this legislation would be before us this afternoon if it did not provide an electoral advantage. When Governments decide when elections happen, there is absolutely no doubt that it can be played to their advantage. As has already been made clear, the Government can call an election before bad news is about to be delivered, or if they feel that their Opposition are in disarray. Professor Petra Schleiter from Oxford University did a comparative study of 27 western and European democracies and found that when governing parties had the power to control when elections happened, they gained, on average, a 5% electoral advantage. Those of us who live and breathe politics will understand that that is the difference between forming a Government and falling out of government. That is why I would argue that it is anti-democratic to allows all the power to lie in the hands of one individual.
Anthony Mangnall (Totnes) (Con)
I am sorry to interrupt the hon. Lady, but that argument is somewhat of a straw house of an argument, because that could still be used at the end of a five-year parliamentary term if the Government stacked their legislative programme to be so in the interests of their constituent base that they would win anyway. So I am not entirely sure that her argument holds water, because either way, the Government of the day, whatever their colour, are able to do whatever they want in legislative terms that is most beneficial to their constituents.
Cat Smith
I suppose the difference is that when there is a five-year Parliament and all the parties know when the election is happening, there is a level playing field, unlike when a Government can call a general election unexpectedly if the advantage lies entirely with the governing party and not with any of the Opposition parties. The Bill therefore skews power towards the Executive and towards incumbent governing parties. It also gives Prime Ministers the power to haggle with Parliament by threatening early Dissolution and early elections. I would also argue that the Fixed-term Parliaments Act—although it is flawed and I certainly support its repeal—puts us more in line with other democracies that constrain the power of Prime Ministers.
Turning to the monarch and the attempt to restore the royal prerogative with legislation, if the Crown is left as the only check on untimely requests for Dissolution, that would inevitably draw the Crown into controversy if such requests were refused. Perhaps the Minister will shed some light on that in her closing remarks, but I struggle to see the circumstances in which a sovereign might decline a request for an election. I would argue that the most effective way of avoiding such a constitutional crisis would be to leave decisions on Dissolution to Parliament, which is the right place for what is a quintessentially political decision. The House of Lords Constitution Committee said when it published its report on the Fixed-term Parliaments Act in September:
“Reform of the Fixed-term Parliaments Act must keep the Queen out of politics.”
I sincerely agree with that. The Government’s proposal that the monarch should be the only check on a questionable request for Dissolution inevitably risks dragging the monarch into politics. I argue that the easiest way out of such a situation would be a parliamentary vote on Dissolution, which would protect the monarch from being dragged into politics.
Cat Smith
I would like to make a bit more progress.
I put on the record my thanks to Professor Meg Russell and Professor Robert Hazell for their evidence to the Joint Committee, which I have found very useful, as well as for their informative podcast, of which my hon. Friend the Member for Rhondda (Chris Bryant) was a feature.
The arguments that I have heard for leaving Dissolution in the hands of Parliament have convinced me that it would be the easiest way to keep the courts out of these decisions. Clause 3 will be a topic of quite heated debate. It is impossible to imagine the crack through which the courts could intervene had a House of Commons decision to trigger a statutory power of Dissolution been recorded. If the Government adopted that approach, we could remove the ouster clause, which would then be self-defeating in its current terms.
As long as Prorogation continues as a prerogative power, one way to avoid Parliament being prorogued against its will would be to make the prerogative power exercisable at the request of Parliament, rather than on the advice of the Prime Minister. An alternative would be to abolish the prerogative power and put Prorogation on the same footing as the power of Adjournment, thereby enabling Parliament to be prorogued when the House of Commons passes a motion to that effect.
Ultimately, I believe that Dissolution should remain in the hands of Parliament, not the Executive. The Bill is very much about the question of where power lies. The Fixed-term Parliaments Act was problematic and there are certainly aspects of it that I will be quite happy to see the back of, but the principle of having fixed terms is not in itself necessarily a bad thing—indeed, it puts us on a level footing with many other western democracies and progressive democracies around the world, and in line with our own Parliaments here in the United Kingdom.
Prorogation should be in the hands of Parliament, not the Executive, so I urge all colleagues, as this Second Reading debate continues, to consider where power should lie and how checks on that power can be put in place. If indeed we are to place power in the hands of people, I argue that the situation is far stronger if that power lies in the hands of the elected representatives in this House, rather than in the hands of one Prime Minister.
Mr William Wragg (Hazel Grove) (Con)
I welcome the Minister for the Constitution and Devolution, my hon. Friend the Member for Norwich North (Chloe Smith) back to her rightful place on the Treasury Bench. May I say how appreciative I have been of her attendance at the Public Administration and Constitutional Affairs Committee, which I chair, over recent months to discuss this subject and others?
I thank my right hon. Friend the Chancellor of the Duchy of Lancaster for his mention of our report on the Bill, although it perhaps had a slight difference of emphasis to that which came from the Joint Committee. As he is in the Gallery today, I pay full tribute to Lord McLoughlin from the other place for so ably chairing that distinguished Joint Committee.
There are many minds in the House greater than mine that have given this subject a lot of thought—[Hon. Members: “Oh!”] On this subject, there certainly are, if I can be self-deprecating. As Bagehot would have it, we are discussing, and indeed legislating on, the at once solemn but also practical interaction between the “dignified” and the “efficient”—that is to say, the transaction between the monarch and the Prime Minister. On that note, I was pleased to see that the draft Dissolution principles were changed on the advice of the Joint Committee, such that the Prime Minister now shall not advise the monarch of the need to dissolve Parliament but rather make a “request” so to do.
How have we reached this point? I suggest that the disputatious nature of politics in recent years is too easily given as a reason. I contend that part of the real reason is the lesson of not tinkering with the constitution to suit immediate circumstances, which brings me to the Fixed-term Parliaments Act. Was it a high political ideal, as advanced by some, or a case of political expediency? I humbly suggest that it was the latter. It was of course necessary for a smaller coalition partner to have the assurance that it was not going to be cast off part way through a term, when it might have been to the larger party’s advantage to seek an election.
In all this, motivation is key, so it is perhaps helpful to consider briefly the Dissolution principles, which have been mentioned already as the Lascelles principles. In May 1950, Lascelles, the King’s private secretary—Senex being his pseudonym—wrote to The Times to suggest that “no wise Sovereign” would refuse a Dissolution except in three instances. We have heard them already, but the first was if the existing Parliament was still viable. The second was if a general election
“would be detrimental to the national economy”.
The third, and perhaps the most interesting and still relevant, was if the sovereign could find
“another Prime Minister who could carry on his Government, for a reasonable period, with a working majority in the House of Commons.”
Do they all stand today? As I have said, I think the latter one certainly does.
Most people’s knowledge of Tommy Lascelles, I am afraid, comes from “The Crown”. That is how we learn history these days, and of course it is a flawless representation of the truth. People know him from that, rather than from his letter to The Times some 70-odd years ago. Here I seek to make a tangential link to the world of drama, for all are players in our unwritten constitution. Each has a role set for them, even if it is unscripted. The actors must conform to the expectations, if we are to avoid the play that goes wrong, or indeed the Parliament that goes wrong.
In recent history, I am afraid that at times some have gone off the unscripted script, if such a thing were possible, because politics is a numbers game, and the reason we had such a quagmire in the last Parliament was that the numbers did not quite add up. That going off the script was not surprising, given the testing circumstances of the 2017 Parliament, but it is also a reflection, if I can be charitable, of the constitutional short-sightedness or, if not, vandalism done by the Constitutional Reform Act 2005. Add to that the novel action of the Prorogation that never was, if I can put it that way, combined with the actions of the former Speaker of this House. In short, everybody went off script. Fortunately, the ultimate safety valve of our constitution—a general election—worked.
Mr Wragg
Of course, this is all my view. The House will have a chance to listen to the utterances of the hon. Member for Rhondda (Chris Bryant) later on, and we look forward to that immensely. He will teach us a thing or two.
I support the Bill, but I fear that clause 3, the so-called ouster clause, may be superfluous. Its inclusion could be seen by those of a cynical bent as being a hangover from the intervention of the Supreme Court in 2019. We should hold more surely to the Bill of Rights of 1689. After all, the Queen in Parliament is not justiciable—at least that is my understanding.
Brendan O'Hara (Argyll and Bute) (SNP)
May I, too, say how pleased we are to see the hon. Member for Norwich North (Chloe Smith) back in her place? I look forward to many confrontations with her in the coming weeks and months. Let me say at the outset that the SNP will be opposing the Second Reading of this Bill when the House divides this evening. We will do so not because we are particularly wedded to the Fixed-term Parliaments Act, but because we believe that the Bill is a much wider part of a fundamental attack on our democracy.
One should not view the Bill in isolation. I believe that when Members look at it in the wider picture and place it alongside the voter suppression Bill, the Government’s plan to neuter the Electoral Commission and the draconian Police, Crime, Sentencing and Courts Bill, they will reach the same conclusion that many of us have reached: this Bill is simpler another part of a brazen attempt by this Government to further centralise control, give more power to the Executive, strip parliamentarians of their powers and deny the judiciary the ability to scrutinise what they are doing, while at the same time eroding the public’s right to protest against them. This is an unashamed power grab by the Executive, and we believe that it will be seen as such when seen in the context of the wider picture.
Brendan O'Hara
I thank the right hon. Gentleman for his intervention. No, we are not doing that, and I will come on to exactly why we are not. Although I acknowledge that the 2019 Labour manifesto said that they would repeal the Fixed-term Parliaments Act 2011 and I understand that they intend to abstain in tonight’s Division and amend in Committee, I would caution that any support for this Bill has to be contingent on what is coming to replace it. I say to anyone who might not like the current Act and wishes to see it repealed to be careful what they wish for. To address the point made by the right hon. Member for Scarborough and Whitby (Mr Goodwill), let me say that although in and of itself repealing that Act might look fairly innocuous and taken in isolation might even be seen as trivial and almost unimportant, I caution that if it is viewed as part of that wider, much larger strategy to centralise power and control with the Executive, this is a far cry from a benign piece of legislation, as they would have us believe.
Michael Gove
In this House and indeed in this Administration, there is a distinction between the role of Director of Public Prosecutions and Attorney General. I understand that in the Scottish Government the Lord Advocate combines both roles. That is a centralisation of Executive power, is it not? Would the hon. Gentleman advise his colleagues in the Scottish Government to move away from that centralisation of powers, towards the higher constitutional principles that we have here in the UK?
Brendan O’Hara
That is another piece of absolute obfuscation by the Minister—a ridiculous piece of obfuscation—so I will return to what I was saying. No matter how intense the 2011 Act, this is not a sufficient reason to support this Bill, because what this Government are proposing is a stripping away of one more pillar of parliamentary or judicial oversight. It is not simply a return to the position we had in 2011.
Mark Elliott, professor of public law at Cambridge University, has said:
“The statement of principles accompanying the Bill appears to presume that the Queen will dissolve Parliament as a matter of course when the Prime Minister so requests, thus implying an intention, on the part of the Government, not to restore the pre-FTPA position but to usher in a regime under which its latitude is greater than before”.
As we have heard, prior to 2011 the monarch was able, in certain circumstances, to deny a Prime Minister’s request to dissolve Parliament and seek an early general election. Because of the weaknesses of having an unwritten constitution, the prerogative power of the monarch, exercised, as we have heard, through the Lascelles principles, was one that was never able to be enshrined in statute. The Lascelles principles asserted that the monarch could deny Dissolution in certain circumstances, including in relation to the viability of the Government, being detrimental to the national economy and being able to find another Prime Minister who could govern. If this Bill becomes statute, what becomes of the Lascelles principles and the monarch’s ability to deny a request for a Dissolution of Parliament? As I understand it, this place may be able to create statutory powers by enacting statutes, but it cannot create prerogative powers, which, by definition, derive from a source other than statute. So those prerogative powers that the monarch has to seek a Dissolution are not coming back, meaning that this Bill is little more than an attempt by the Executive to circumvent even the minimal gatekeeping function exercised in the Lascelles principles by the monarch and all the power will be concentrated in the hands of the Prime Minister. As Professor Elliott says
“the very legal uncertainty as to whether the prerogative can be revived means that it would be irresponsible simply to legislate to repeal the Act and try to revive the prerogative without being sure that you could.”
Anthony Mangnall
This is more of a clarification point. If the Lascelles principles are in place and the Government were to call a general election but an alternative grouping could come together to be able to create a Government, would that not allow the Queen to appoint a new Prime Minister, under the principles that were referenced by my hon. Friend the Member for Hazel Grove (Mr Wragg)?
Brendan O’Hara
As I understand it, and reading what Professor Elliott says, the Lascelles principles would go and therefore we are not returning to exactly the position we had prior to the introduction of the 2011 Act. The Lascelles principles, because they are royal prerogatives, are not part of statute and therefore there is nothing to say that they will remain. They will go, so all the power will be on the Prime Minister and when a Prime Minister requests a Dissolution and a general election, the monarch will have no power on which to refuse.
Anthony Mangnall
I thank the hon. Gentleman for being so patient with me on this, but on reading the Bill, I do not see where it will be rescinding or taking away the Lascelles principles.
Brendan O’Hara
I think the fact that the principles are not there suggests that they will not be there. I understand that there is no statute—there cannot be—and therefore there will be no Lascelles principles on which to act. Hon. Members will know that things are pretty bad when I of all people stand here discussing the right of an unelected Head of State to use prerogative powers to act as a check on the excesses of the Executive.
Mr Carmichael
I am grateful to the hon. Gentleman for giving way because this is perhaps where we see the significance of clause 3. If there is to be nothing in this Bill or no decision that would be justiciable, then surely the implication is that, in fact, there is only one decision that can be made by the monarch, and that is to grant the application.
Brendan O’Hara
I thank the right hon. Gentleman for that intervention, and I absolutely agree. What is happening here is that the monarch will not be able to refuse under any circumstances, although not because of that very dangerous path of going into the political arena.
Although something of a constitutional anachronism, the Lascelles principles did at least provide a degree of constraint on a Prime Minister who opportunistically may have wanted to cut and run mid-term and hold a snap general election when their popularity was on the up, or perhaps more importantly and more pertinently, when they knew future events—perhaps the result of a particularly unhelpful public inquiry—would be guaranteed to put a major dent in their approval ratings.
Brendan O’Hara
The right hon. Gentleman shouts from a sedentary position that that would never happen to the SNP. Indeed, the SNP could not cut and run in the Scottish Parliament because we work to a fixed term. The next Scottish Parliament elections will be on 7 May 2026, and no matter what befalls the Government between now and then, the Scottish Government will be held to account on that date.
Mr Carmichael
Presumably in that case, as with the OECD report on Scottish education, the SNP would just not publish the report until after the election.
Brendan O’Hara
The Scottish Government will stand by and have stood by their record, and have been accountable on the day of the Scottish elections for every Parliament. The Scottish Parliament knows when the next election will be, and every Government will be accountable on that day. If those in the Chamber want to look at the success of the Scottish Government—the SNP Scottish Government—as put forward and verified by the Scottish public just two months ago, let me say that I am sure there is not a Member of this House, particularly on the Liberal Democrat Benches, who would not give their eye teeth for such an endorsement. However, I will move on, Madam Deputy Speaker, because I can see that I am testing your patience somewhat.
Brendan O’Hara
I will come to the right hon. Gentleman in a moment, but I will take your advice, Madam Deputy Speaker, and move on.
Clause 3 of the Bill is an ouster clause. It aims in effect to put the Government’s action beyond the reach of the law, meaning that decisions made by the Government on these matters are non-justiciable. This is clearly the action of a Government who are still smarting from the humiliation of the Supreme Court’s Prorogation judgment in 2019, which said that it was not in the power of the Prime Minister to suspend Parliament for such a long time at such a critical moment.
In January, Baroness Hale and Lord Sumption gave evidence to the Joint Committee on the Fixed-term Parliaments Act, and they both expressed serious reservations about clause 3 of this Bill, which renders non-justiciable the powers given to the Government in clause 2. Those non-justiciable powers include controlling the space of time between the Dissolution of one Parliament and the general election and between the general election and the first sitting of a new Parliament. All of that would be in the control of a Government whose previous attempts to undermine parliamentary democracy through proroguing in 2019 were, as we have seen, deemed unlawful. The difference this time is that they hope that the Supreme Court could not intervene. Back in January, both Lord Sumption and Baroness Hale were unequivocal in saying that the minimum safeguard that this Bill needed in the event of such an ouster clause was to put a time limit on the moving of writs for parliamentary elections, which has not been done.
Michael Gove
It is very much on that point. That case was brought by the hon. Gentleman’s hon. and learned Friend the Member for Edinburgh South West (Joanna Cherry). Why was she sacked from the SNP Front Bench?
Brendan O’Hara
In the name of the wee man. Madam Deputy Speaker, I attempt not to waste your time or this House’s time, so yet again I will ignore the Minister.
In evidence to the Committee, the Government were advised that:
“The Fixed-term Parliaments Act had a provision that limited the time within which writs for parliamentary elections could be moved, and it is the latter that I think you would be wise to introduce into this Bill.”
Lord Sumption also warned the Government at that meeting. He said:
“I suspect that if the Prime Minister was effectively attempting to rule without Parliament by simply failing to issue writs of summons, the courts might well intervene for precisely the same reasons that they intervened in the case of the prorogation…I think it quite likely that the reasoning in Miller No. 2 would be applied to that situation. But, because this is a very undesirable state of affairs, I would very strongly urge you to introduce into the Bill a provision with a time limit.”
Baroness Hale and Lord Sumption could not have been clearer, but, six months later, the Government still have not introduced anything of the sort and clause 3 remains as it was back in January, in effect allowing the Government to decide on the length of a Prorogation, the gap between a Dissolution and an election and, indeed, the gap between an election and the first sitting of a new Parliament. They were warned by learned judges that that is not an acceptable state of affairs and they have had six months to do something about it, but it still does not appear in the Bill. If the Bill is passed as the Government wish, they will be able to do all of that in the hope of not having the courts look at it.
Until now, the only vague explanation I have heard about why the Government have not taken on the former Supreme Court judges’ advice is on a basis of, “Trust us—do you really think we would do such a thing?” The obvious answer is yes, because they have form for doing exactly that and have been found to have acted illegally. When the Minister for the Constitution and Devolution responds to the debate, will she explain why the Government have not taken on their advice? Indeed, will the Government finally seek to amend the Bill?
Under normal circumstances, a debate on whether this Parliament chooses to fix a term between its general elections is not something that the SNP would get overly het up about. Indeed, we do not intend to be here much longer. Hopefully, Scotland’s participation in UK general elections will be a thing consigned to the history books and children will learn about it alongside Robert Burns, William Shakespeare, the moon landings and how England came so close to winning the European championships. I hope, and have little doubt that, when established, our independent Scottish Parliament will continue to use the current arrangement: the one whereby everyone knows that, barring the collapse of the Government and an inability to create a new one, Scottish Parliament elections will take place on the first Thursday of May in 2026. That is how it should be.
The Bill once again exposes the absurdity of the UK not having a written constitution and reveals the inherent weakness of a system which simply hopes that the Executive branch do not do the things that, as a matter of legal and constitutional theory, they are allowed to do. Unfortunately, when the Executive decide to flex their muscles at the expense of the legislature and the judiciary, the failure to have adequate entrenched legal constitutional constraints becomes all too apparent. As I have said several times, the Bill cannot be seen in isolation and must be viewed as part of a concerted and co-ordinated power grab on the part of the Executive; one which, if they are successful, will give them even greater powers over Parliament and the courts. That is why the SNP will vigorously oppose it.
Mr Robert Goodwill (Scarborough and Whitby) (Con)
First, may I put on the record how much I welcome the Bill? Indeed, having served on the Joint Committee chaired so ably by the noble Lord McLoughlin, who has gone on from a distinguished career in this House to—I hope—even greater things in the other place, I can probably own up to knowing more about the constitutional convolution surrounding this subject than it is healthy for any person to know, with the possible exception of the hon. Member for Rhondda (Chris Bryant).
I was slightly confused by the points made by the shadow Minister, as Labour has a manifesto commitment to repeal the Fixed-term Parliaments Act. I am not sure whether we will see some backtracking on that. I was also confused when she said that the Prime Minister of the day could take the opportunity of the Opposition being in disarray to call a general election. I have to say that I could probably pick any day in the past five years, and no doubt in the next four years, when that particular situation could be in force.
When we started out on this journey, I took the view that we should go as far as possible to restore the situation to as it existed before the Fixed-term Parliaments Act. At the end of our deliberations, I remained of the same view, but we all came to understand better the historical and constitutional context. It is important that we restore the royal prerogative. Less important is the academic discussion about whether it was merely in abeyance and could be restored or had been abolished. The Lascelles principles were discussed: the reasons why the King or Queen could refuse the initiative from No. 10 and, of course, the discretion around a request—or is that advice?—to Her Majesty. Indeed the hon. Member for Argyll and Bute (Brendan O’Hara) talked about whether the Lascelles principles would still be in place. We learned about the golden triangle—the communications between the Queen’s private secretary, the Cabinet Secretary and the Prime Minister’s private secretary—who would head off an embarrassing situation for the monarch who might have to turn down an election because it was too soon after the previous election, because an alternative Government could be formed, or because other situations might mean that it was inappropriate to call that particular election.
Jackie Doyle-Price
To emphasise the point that my right hon. Friend has just made, the truth is not that a monarch would never be put in a position where she had to say no, but that what happens in our constitution means that that question is never put until it is an acceptable time for a general election. Putting it in rules in the Fixed-term Parliaments Act got in the way of a functioning electoral democracy.
Mr Goodwill
That is right. I am a big subscriber to the view that if it ain’t broke, don’t fix it. The situation that we had worked for many years—during constitutional crises, world wars and great political events in this country. The people of this country have a great regard for Her Majesty the Queen, and I feel that if anyone was going to be put in that position, she is probably the best person—with advice from those around her, including the golden triangle, to make that decision.
Having been a member of the coalition Government, I have to say that the Fixed-term Parliaments Act worked well during the coalition period, steadying the nerves of our Liberal Democrat partners against a snap election. If the same situation were to happen again—perhaps a Labour-SNP coalition, but probably not any time soon—it could be dusted off again. I am not sure whether those two coalition partners would make very good bedfellows—certainly the image of Morecambe and Wise sat reading their bedtime books does not spring to mind, but who knows what might happen at some point in the future.
In the meantime, this Bill restores the situation as it was before 2020. It is a procedure that has stood the test of time and, most importantly, cannot be challenged in the courts. Let us remember the autumn of 2019 when, three times, Labour proved that it was frightened of the electorate and did not give the two-thirds majority for an election. Indeed, in December 2019, we discovered precisely why it was frightened of the electorate; it was brought to book by the electorate for ignoring them since the referendum decision was made. Hence I very much support the need for the ouster clause in clause 3, which ensures the belt and braces situation to which the Secretary of State referred.
Finally, there is one improvement that we should consider either for this Bill or for the forthcoming elections Bill. Currently, when an election is called after the customary wash-up, we have an election campaign that lasts 25 working days. With weekends and bank holidays, that means that we have more than 35 full days on the campaign trail. That is far too long. My view is that a campaign of that length is more likely to turn off voters than to motivate them—I suspect that Brenda from Bristol would agree with me.
I know that the returning officers will have all sorts of reasons why they need more time, and no doubt the party campaign managers will say that they do not have enough time to organise their campaigns. I know that the situation is different with overseas and more postal voters, but surely there are technical solutions to those issues. Perhaps, once every four of five years, our hard-working council officials could do some overtime at weekends if necessary. Let us have a 25-day election campaign and not a 25 working day election campaign.
Elections never used to be this long. Many people have already decided how they will vote. We should minimise the time for which the Government are possibly hamstrung during an election and cannot be scrutinised or challenged by Parliament. I welcome the repeal of the Fixed-term Parliaments Act, but look forward to provisions to fix the length of the election at 25 days only.
Chris Bryant (Rhondda) (Lab)
May I first say what an utter delight it is to see the hon. Member for Norwich North (Chloe Smith) in her place? Cancer is a bugger, and quite a lot of us have been through it. At the rate we are going, we will have a very large cancer survivors unit here in Parliament, and we shall overcome.
I know the right hon. Member for Surrey Heath (Michael Gove) is not present, but there is nothing more miserable than parts of one’s private life going through the public domain. I wish him and Sarah well.
The hon. Member for Hazel Grove (Mr Wragg) has come back. I was going to criticise him because he had just departed, having said that he was looking forward to hearing what I was going to say, but now he has returned.
I am afraid that I dislike the Bill from beginning to end. I know it was in our manifesto that we would repeal the 2011 Act, but there were lots of things in our last manifesto with which I did not fully agree, so merely saying that it was in our manifesto does not cut the mustard. Our 2010 manifesto said that we wanted to move towards a fixed-term Parliament and to hand over significant elements of the prerogative to Parliament. Indeed, I note that the Conservatives’ manifesto in 2010 said that they wanted to make
“the use of the Royal Prerogative subject to greater democratic control”.
I supported bits of the 2011 Act when I was the shadow Minister dealing with it at the time, in 2010. There were bits of the Act that we criticised but, broadly speaking, we supported it. What I object to in this Bill is that it significantly increases the Government’s power over Parliament. Indeed, when the Fixed-term Parliaments Act was introduced, it was a major transfer of power away from the Executive, and a major strengthening of Parliament’s authority over its own lifetime. By definition, this Bill is exactly the opposite of that. The Bill assumes that all the players in the so-called golden triangle—why on earth do we resort to such outdated concepts?—will be good guys. I use the word “guys” advisedly, because quite often they are guys, but of course there is a danger that the Bill also brings the palace and the monarch directly into party politics.
Dr Julian Lewis
The hon. Gentleman is making a strong case that it should not be a question of the Government against Parliament, but does he not agree that it should not be a question of Parliament against the people? That is the situation that we were nearly stuck in, because the Government, by wanting to be dissolved and have an election, wanted the people to have the final say about Brexit, but Parliament did not want the people to have the final say about Brexit. So the hon. Gentleman needs to be very careful, because there is a lot to be said for the Government not overruling Parliament, but there is not much to be said for Parliament not overruling Government when the Government are trying to give the final decision to the people.
Chris Bryant
Well, my point is simply that we need to have a level playing field in any general election. The Bill deliberately gives the Government the upper hand. It places them on the hill surrounding the territory. It means that they determine the territory on which a general election will be contested. They determine many other aspects, such as who is able to vote, who is able to register to vote, how the boundaries are constituted and so on. I start to ask myself: how much power do the Government want to have?
Dr Lewis
The hon. Gentleman is extremely kind in giving way a second time. I do not think he answered my point, which is that the key thing about Dissolution is that we are giving power to the people to have the final say.
On the hon. Gentleman’s other point, he says that the Government are able to choose a time that is to their advantage. The alternative is surely that when we have a fixed date when the election has to be held, the Government will still try to manipulate the situation so that it will coincide to their advantage at that date. We cannot really escape the question of manipulation entirely.
Chris Bryant
If there is a fixed date for a general election, there are fewer options for the Government to manipulate the situation. That is a publicly known fact to everybody, so there is a level playing field. Indeed, over the last 20 years or so we have had a set of rules in this country that mean that in the six months before a general election, the Opposition are allowed special access to the civil service. If the Opposition do not even know when the general election will be, they never have that opportunity.
Time and again, the Government get to set the rules, and there is a significant party political advantage to being able to set the date of a general election. That is why Governments never wanted to change that. They did it in 2010 for 2015 only, because they wanted to solve a specific problem. My biggest anxiety is that, while we all love the fluidity of our constitution, the downside is that it becomes the plaything of the Government of the day who want to jig and rejig bits and pieces to benefit themselves and keep themselves in power.
One instance of the kind of behaviour a Government today might conceivably think of is to hold a general election immediately after the new boundaries come in, or immediately before the boundaries come in, for their own party political advantage because that is how they will have assessed that. Alternatively, they could decide that we will not have a full judicial review producing a report on the lessons learned from the covid pandemic until after the date of the next general election. The right hon. Member for New Forest East (Dr Lewis) is absolutely right that it could be after 2025—they could decide that it will not produce its result until 2027. My point is that even if a report is about to be produced, they could decide to have a general election.
The Minister herself gave evidence to our Joint Committee on the Fixed-term Parliaments Act saying that the public would punish nefarious activity of that kind. I am not convinced by that, because in a general election the public are making a whole series of decisions, and the simple matter of whether the general election should have been called is probably round about number No. 535 on the list of issues that are of concern to them. My simple point is that this is about having a level playing field. We insist on that for other countries and democracies. It is a fundamental principle of what constitutes a fair democracy.
I will deal with some specifics, if I may. First, five years is far too long for a Parliament. Over the past 200 years, they have tended to run for about four years, including when we had a seven-year term for Parliaments. It would make far more sense for us to have a four-year term—that would be more in keeping with the rest of the country. If the Bill passes Second Reading, I will table an amendment to curtail it to four years. We do not even say that it is five years at the moment—it is five years plus with the additional bits. The five years is not from the start of one Parliament to the start of the next Parliament; it is from the date of the Parliament’s first sitting until the general election.
The Government get to decide the date not only of a Parliament’s first sitting but of its first sitting to transact substantial and substantive business, which traditionally starts with the First Reading of the Outlawries Bill, followed by the Queen’s Speech. Even after the Queen’s Speech, it is for the Government to decide when we actually get into proper business and, during that period, whether there might or might not be a motion of no confidence. That means that after a general election, such as when Baldwin lost the general election, there had to be a motion of no confidence in the new Parliament, but that depended on the Government bringing Parliament to sit. We are almost unique in the world by not having any provisions in statute or our Standing Orders guaranteeing that the House will be able to transact business within a certain number of days, let alone set up Committees and all the rest.
I am very worried about snap elections, because often they mean that parties are not able to provide a duty of care towards potential candidates. I will mention only one, Jared O’Mara. If we had had a more sensible run- up to a general election, we would have served him better, because we would have gone through a proper process of selecting candidates. I could look at other instances across the last few years. As Chair of the Committee on Standards I am painfully aware that sometimes people become candidates without being prepared, briefed and given the support they need to enter into what can be a very difficult and painful place.
We have already seen that the Government have phenomenal powers over prorogation, and I simply do not understand why the House of Commons cannot have a vote beforehand. We would nearly always grant it, but if there were any jiggery-pokery, we might not. Government Members might say, “You are only doing that for a party political reason.” We could point to the Labour Government in the 1940s, who brought forward a special prorogation so that three Sessions of Parliament ran during one year, to meet the requirements of the Parliament Act 1911. Why does prorogation remain a simple act of the Executive? I think it is a mistake. Indeed, it would assist the Government simply to say that every time there is going to be a prorogation, just as there is before a recess, there will be a vote in the House of Commons.
I completely agree with the hon. Member for Hazel Grove, although when he is being sarcastic and ironic it is sometimes slightly difficult to determine which side of his own argument he is on. I think he was suggesting that the ouster clause may be a bit of an own goal. It sounds a bit like, “the lady doth protest too much”. It is as if we do not have confidence in the Bill of Rights.
Chris Bryant
The hon. Gentleman is the Mona Lisa in so many ways. I do not know what to make of that. My point is that the Government are protesting too much. I think that is counterproductive and will lead to the exact opposite of what they are trying to achieve. They virtually invite the courts to have a pop at them, which is a mistake. We should rely on the fact that proceedings in Parliament shall not be impeached or questioned in a court of law or any other place, under the articles from the Bill of Rights.
I am concerned about what constitutes a confidence motion. It should be perfectly possible to bring down a Government by virtue of refusing to allow them either money, or the basic thrust of their programme through the Queen’s Speech, or a major item of foreign policy, such as sending troops into war. In 1784 that was one of the first reasons a Government were brought down by a motion in the House. If I am honest, I was perplexed when David Cameron and William Hague—now Lord Hague—did not resign or even seem to think worthy of comment the fact that they lost a vote on sending British troops to war. In any other generation of our political history, that would have meant the Government would have fallen. This is an important principle: on big national issues, whether something is a matter of confidence should not simply be a matter for the Government. We all know that money, major policies, and issues of war and peace are fundamentally matters of confidence.
Mr Carmichael
I hesitate to intervene, but the record should show that the particular motion to which the hon. Gentleman refers from 2013 was not one that committed the country to deploying troops. In fact, in specifically guaranteed that before that happened, the matter would come back before the House.
Chris Bryant
I think I am right in saying that the original motion tabled by the Government did commit, but the version carried by the House, which was an Opposition amendment, said that the matter would be brought back to the House.
Chris Bryant
Well, the record will have to be found, won’t it. I completely agree with the comments made by the right hon. Member for Scarborough and Whitby (Mr Goodwill) about the election period being far too long. I have some sympathy with the fact that many people now vote by post, and there are issues for electoral registration officers and all the rest. Honestly, however, it cannot be beyond the wit of woman and man in this country to bring a general election in a shorter period than we currently do.
My bigger point—I will bring my remarks to a close after this—is that the Government already have phenomenal power in this country. In our system, the amount of power that Government have in Westminster is most extraordinary. They determine every single element of the timetable and, indeed, they do more so now than they did in the time of the second world war. If we think of one of the big confidence debates, in 1939, there was the debate on the summer recess, because people who were opposed to appeasement were terrified that Neville Chamberlain as Prime Minister was going to use the recess to do a deal over Poland with Hitler. There was a chance in those days for another Member to table an amendment to the date of the recess. The rules now specify that we cannot even table an amendment to the date of the recess that has been tabled by a Government Minister.
The same is true of nearly every element of our expenditure. We cannot table a motion from the Opposition. Only a Government Minister can table a motion changing a tax, increasing a tax, laying a duty or a tax on the people, or increasing expenditure. We barely do a process of expenditure in our system at all. We do not really have a Budget, not in the sense that any other country would understand that they have a Budget. We have a statement by the Chancellor every year. The power that Government hold in this country is absolutely phenomenal and I do not think that simply to allow a few things such as a vote on Prorogation and a vote on Dissolution is too much to ask.
Jonathan Edwards
As a Welsh MP, I am sure that the hon. Gentleman would agree that one benefit of a fixed-term Parliament for this place is that there cannot be a clash with Welsh elections. Although the Bill says that there cannot be an election for the Senedd and a general election at the same time, the Library note states:
“Regulations can be made to hold”
an “extraordinary general” election. The question for us, if the Bill passes tonight, is: what are those extraordinary circumstances and how will UK Ministers co-ordinate with Welsh Ministers and the Welsh Parliament?
Chris Bryant
My personal view for some time has been that it is probably for the convenience of the people to have a more or less fixed time of the year when we have elections. The beginning of May seems to work for local elections and I do not see why it would not work for most other elections. I am not personally opposed to having several elections on the same day either. I know others are, but I think that that would be for the greater convenience of most people in the country.
My biggest fear is that the present Government have a very high theology of strong government. It feels to me akin to the Stuarts’ divine right of kings, which is not to say that they feel that they have a divine right to rule, but that they think that the Government have the divine right to rule. What makes me think this is the number of times that the Leader of the House—we had it again today from the Chancellor of the Duchy of Lancaster—referred to the “addled Parliament” of 1614. It was the king who called it the “addled Parliament” in 1614 because the king did not get his way. There are many ways of interpreting what happened in the last Parliament, but the Government did not get their way—we know that. I think that when the Government feel that the constitution has to change because the Government have not managed to get their way through Parliament, that is a worrying moment.
The truth is that the whole of this system depends—I mean the word “depends” deliberately—on a very, very thin thread of confidence in the Government. I think a better way of understanding politics is that Governments govern by consent, and that consent is not just earned at a general election. It is constantly earned and has to be constantly earned in this arena—in here. I worry that the Government do not feel that way. I personally do not trust any Government who abrogate more powers to themselves. It is even worse when a Government then claim to do so in the name of democracy, as we heard in the very first sentence of the Chancellor of the Duchy of Lancaster’s contribution earlier. Such abrogation nearly always rapidly descends into the arrogance of office. I think that there is a particular irony in the fact that the people who shouted “Take back control” again and again now ratchet up their own control over the British constitution.
Power is always best spread thin. Even a Cabinet Minister is only dressed in a little brief authority. Our constitution must never be a plaything of the Government of the day.
Alec Shelbrooke (Elmet and Rothwell) (Con)
It is a real privilege to follow the hon. Member for Rhondda (Chris Bryant). I want to expand on his closing remarks, because I think we need to strip back to why we are doing this, and I will start by talking about faith in democracy.
The reality is that in the last six months of 2019, and certainly in the autumn of 2019, the public did not have faith in this place. That is a simple fact—we had only to look at our inboxes and at the comments being made. We were not doing anything, we were not getting anywhere and we had a Speaker who, quite frankly, acted disgracefully on many an occasion, going way beyond the remit within which he should have operated. All that that did, from the public’s point of view, was make them say, “You are pointless. We have given you an instruction in a referendum and in a general election, but two years after the 2017 general election, you have still achieved nothing.”
The reason we did not achieve anything was that we were gridlocked. The hon. Member for Edinburgh West (Christine Jardine) made a comment today that was used so many times in that period: she said that people were looking for us to come to this place and solve the issues. I heard that phrase used throughout the argument, but what it actually meant was “People are looking for you to agree with me, to do what I say and to ignore what you want to say.” It was a 50-50 Parliament, really: it kept hitting gridlock and we did not get anywhere.
As I said in my intervention on the hon. Member for Lancaster and Fleetwood (Cat Smith), for whom I have a great deal of respect—I am looking forward to debates with her in Committee—the games that were played at the time did no favours to this place. The fact that 24 hours before we finally dissolved the last Parliament we had failed to dissolve it under the Fixed-term Parliaments Act, but then a one-line Bill got the two-thirds majority and got the Government to choose the date of the election, added to the sense of “What are you all playing at?”
Chris Bryant
I am sorry to do this, but I just want to push back against the words “game playing”. There were very passionately held views on both sides of the argument on every single constitutional matter that was going on. I do not think that anybody was playing a game. Everybody was in deadly earnest—we just disagreed.
Alec Shelbrooke
I accept the hon. Gentleman’s intervention about the choice of language, and I will change it. His observation is well made and he makes it earnestly.
What I will therefore say is that what happened almost showed that we should have dissolved the last Parliament much earlier. It was going nowhere. We created a situation in which passions were high about the constitutional issues, but we just never made any progress—yet for all the calls from people outside saying “Resign!”, we could not. The ultimate act of resignation is for a Government to call a general election: they do not know whether they will be re-appointed. The Government literally could not resign.
Mr Carmichael
The hon. Gentleman touches on points that the hon. Member for Rhondda (Chris Bryant) raised at the very end of his speech. I was part of the process of discussion and eventually we did get an election in 2019, because the Government were prepared to talk to other parties and bring them along. That runs to the heart of the whole difficulty throughout the Parliament of 2017 to 2019: the Government decided on their position, whatever it happened to be on that day. It was never the same position all the time, but it was their way or the highway. Surely the point is, as the hon. Member for Rhondda and others have said throughout this debate, that it is for Parliament as a whole, and not just the Government on their own, to make these decisions.
Alec Shelbrooke
Parliament failed, and it failed day in and day out, week in and week out. It does not matter, to go back over these arguments, whether people should have shifted to my position or gone to another position. The now Leader of the Opposition spent hours and hours in No. 10 Downing Street, and every time we thought a deal had been made, he scuppered it and moved the goalposts.
Parliament did not work. It is all very well to say that we should have taken particular positions, but the history books show that it failed at every attempt. The way out of that situation is to go back to the people and to lay it on the table. That happened far too late, and in this place we undermined several attempts along the way.
I honestly believe that we have to be very careful at the moment. It is getting better now, but we have been through a period in which the value of the democratic processes in many democracies has been questioned. We have just seen a narcissistic, arrogant now ex-President of the United States with, quite frankly, low political intellectual ability, undermine the entire system to the point he literally caused five people to die because he did not accept the result of an election. He used social media and all the other things to stir it up by saying, “I won this election.” He clearly did not, but most polling shows that a whole swathe of voters in America think that he did, which again undermines democracy.
We still have some way to go to make sure we have the ability to dissolve a failing Parliament and go back to the people. It comes back to the point, which I have used in many a speech, of trusting the people. There have been comments today about how a Government could perhaps abuse a Bill, how we might not recall Parliament, how we could choose the date of the election or how we could delay and do all these things. I promise that the public would give us a right kicking if we did that.
One of the reasons the 2017 general election was, frankly, a disaster for my party was that we were looking to cash in. The people thought, “You are just trying to take advantage of the situation. You don’t actually need to have this election,” and we were punished for it. The public are not stupid; they recognise what goes on, and they have their own concerns. Ultimately, they give their verdict on us at the ballot box. Leading up to the December 2019 general election, the public thought that things had to change. It was noticeable that, whether people were remainers or leavers, they just wanted the situation resolved, which is why the result was the way it was.
I do not think what went on over the Prorogation helped the situation in any shape or form. Lord Roskill, in Council of Civil Service Unions v. Minister for the Civil Service 1985, stated that in his view prerogative powers were not susceptible to judicial review, yet that is pretty much exactly what happened, and it was applied retrospectively. There is precedent for longer Prorogations.
Again, it all added to the view—I do not want to use the word “establishment”, and the hon. Member for Rhondda (Chris Bryant) might once again advise me on better language—that the establishment was against the view of the people and was trying to thwart clear instructions that had been given. And we remained powerless in this place to do anything about it, which was the fundamental problem.
I have been in this place long enough to know that, going into Committee, it is unwise to take a fixed position on Second Reading. I am over the moon to see my hon. Friend the Minister back in the House today. She looks in fine health and it is a source of great joy to us all to see her back in her place. I know she will be listening to all the contributions being made, including from the hon. Member for Rhondda. I remember being a new MP, and he and I sparring over the Fixed-term Parliaments Bill and the issue of four years or five years.
Alec Shelbrooke
The hon. Gentleman is quite right: I did indeed vote for that Bill. I think what has been slightly overlooked in these arguments is that the question of stability at a time when the markets were in disarray over what happened was very important. We had not had to deal with those parliamentary maths, I believe, for nigh on 70 years and something had to take place to calm the markets. So that is why I think it is was worth it at the time. It is worth listening to the hon. Gentleman’s views on years. I still think five years is acceptable and he thinks four years. As my right hon. Friend the Member for Scarborough and Whitby (Mr Goodwill) outlined, we really do need to shorten these elections.
Overall, the Bill is an important healing mechanism and stepping stone to starting to restore faith. If a Parliament in future ends up again in the situation we ended up in, where views were deeply entrenched and would not budge on either side of the argument, then surely, we must easily be able to dissolve that Parliament and go back to the people. We must always trust the people.
Owen Thompson (Midlothian) (SNP)
Some people might feel that this place can be a tad old fashioned, but the Bill makes the system that was abolished in 2011 seem almost progressive. It is not just the restoration of the previous prerogative powers; it is using statute to move to a system with even less accountability for the Executive.
Another chance is being grabbed by this Government, with all their centralising tendencies, to cut the checks and balances of Parliament and abandon any pretence of the separation of powers. There will be no role for parliamentarians, no role for the courts and no attempt to set out the kind of circumstances where the Queen could refuse a Dissolution request, such as the Lascelles principles. As a democrat, I believe it is right that an unelected monarch should not get involved. But even at that, this is such a bad position to be put in to have to overrule the bad decisions of Government. Apart from anything else, I am sure she would be too busy if she tried to deal with the bad decisions of this current Government. There is no longer a role for MPs, no place for the courts and the Queen is left as the last check. The type of circumstances where that might apply should at least be set out, rather than the business being done by a nod or a wink.
There were clearly problems with the Fixed-term Parliaments Act and I have some sympathy with the arguments to get rid of it. Most democracies can sensibly manage fixed terms, it has to be said, including the far more modern and efficient Parliament in Scotland. The approach makes perhaps for less democratic theatre, but for better long-term planning and more sensible Government decisions, which I am sure the public would welcome. However, five years is a very long time in this place. The Government party is usually chock-a-block with power-hungry schemers keen to get the knives out on their own side as quickly as possible. The official Opposition are usually far too busy chewing their own tail to bother with distractions such as actually opposing the Government. Elections can offer a temporary relief from the pain of listening to the baying mobs on the green Benches and offer a vague hope to the electorate that something better is on the horizon. It is little wonder that, outside wartime, no Parliament in the past 100 years has lasted the five-year distance.
There may be issues with the fixed-term legislation, but that does not mean we should simply throw the baby out with the bath water and give all the power to this Prime Minister to choose when and if it suits. The interests of the nations this Parliament is supposed to serve should come before the whim or ego of anyone, man or woman. It is not so much the principle of the Bill—perhaps even the most questionable clauses can be justified—but the alarm bells that are set off, as my hon. Friend the Member for Argyll and Bute (Brendan O'Hara) indicated earlier, when we look at the bigger picture: the behaviour about which all democrats should be concerned, whether it is the Government challenged on their lack of accountability or transparency, or the knee-jerk response to strip power away from those who challenge them. We saw that when the Prime Minister removed the Whip from those who simply disagreed with him—loyal Conservatives every one of them. We saw it when they illegally prorogued Parliament and in the Miller-Cherry case established by the Supreme Court. Now we see it in the ouster clause making it clear that any potential questioning of the Executive through the courts will no longer be tolerated. No wonder we on the SNP Benches are suspicious of the Government’s motives. This comes at a time when there is a systematic weakening of judicial review under way and the public are having their fundamental rights to protest curbed.
We have seen evidence of the same worrying approach to challenge when it comes to the Electoral Commission. The UK Government seem determined to strip powers from the watchdog that oversees elections and ensures the integrity and transparency of party election finance. Given the very real threats to our democracy from systematic disinformation and the election-changing influences of dark money, it is very clear that this independence is needed more now than ever before, rather than being watered down. Yet at this fragile time for our structures, the Government are choosing to remove the Electoral Commission’s powers to prosecute.
It might be a coincidence, and I am certainly willing to hear arguments for that case, but that proposal was brought forward just shortly after an investigation into donors who helped the current Prime Minister to buy wallpaper. It might just be chance, or it might not be—who knows? When these things are all added together, it leads to a perception that backs up the case to give us real suspicion as to the motives behind this Bill. Then we look at the issues around those who happen to be friends or have donated money—the donors and colleagues. Perhaps the Government could do a bit more to restore trust and faith in democracy than simply taking more power into the Executive. There are unanswered questions that still sit and fester and give no confidence to the public.
Where we are just now, it seems that this Government have given up on democracy altogether. It looks as though a stash of cash and a vested interest or two, or the right school tie, is what is needed to get into the corridors of power, and it stinks. As an excuse for bypassing democracy, the Prime Minister says that he wants to “get things done”, but so do many people around the world whom this place would often seriously challenge. Getting things right might take a little bit more time, but it stops the cronyism, corruption and rotting at the heart of any democratic structure.
The problems that caused the paralysis in 2019 were not the fault of the Fixed-term Parliaments Act; they were the fault of an intransigent Government. It is like a bad workperson blaming their tools. We may have left the EU, but the tricky questions were still there to be dealt with. They were pushed away for another day because the answers could not be found. Brexit was just steamrollered through without a care for the consequences, which continue to manifest themselves in ordinary lives even today. No doubt when things get too difficult we will see a familiar picture of another Tory leader running for the hills with their and their cronies’ wealth secured and the important numbers in their pockets in case they want to take up expensive lobbying jobs. Meanwhile, we still do not know how to square the circle of having no trade border with the EU, while having secured the right to dump all the EU’s standards for trade. Nor are we getting the chance to scrutinise properly decisions taken in rushed, desperate-looking trade deals with countries such as Australia that will change the face of farming in this country.
While I agree that there needs to be change to the electoral processes, the changes need to be in the opposite direction to that taken by this Government. We need greater openness, more transparency, more power for Parliament and independent watchdogs, including the judiciary, and more chances to hold the Executive to account. It is ironic that the Government accuse my party of being obsessed with the constitution when in reality they have been endlessly tinkering with the constitutional structures since coming to power. We in the SNP have a cause to improve active participation of all citizens in Scotland, and active engagement with the electorate has got to be a part of that process. That is a long campaign that I certainly have no issues with, because actually engaging with the electorate gives a better understanding and makes sure that all can be better informed.
Elements of this Bill are just a small but symbolic part of the centralising tendencies that continue to dominate under the opaque nature of this Government. If this is the route that Westminster wishes to take, I and my colleagues in the SNP cannot stand by and watch as the Government continue to attack and undermine democracy. I recognise that both the Conservative and Labour parties had the intention to repeal the Fixed-term Parliaments Act in their manifestos, but that does not mean at any cost. As the Government travel further from democracy, we will stand as defenders of that democracy and respect the democratic decisions of the people we represent. The Scottish Government and the Scottish Parliament have a clear mandate for a referendum on the future of our country, to take place during this electoral term, and if the Fixed-term Parliaments Act is repealed in this way, that could come sooner than expected.
Craig Whittaker (Calder Valley) (Con) [V]
I want to put on the record what an honour it was to be part of the Joint Committee on the Fixed-term Parliaments Act, which was superbly and ably led by Lord McLoughlin. Our task was to look at the Fixed-term Parliaments Act, which, as history has shown, has become totally unfit for purpose.
Although there was much debate and much evidence was taken on the Committee, it is important to say that the Committee’s report was an accurate reflection of the general views of the Committee. That does not mean that we did not have a robust debate and discussion of some of the elements of the draft legislation put before us, but the end result was that everyone agreed that the legislation needed to be the change before us, and restoring the status quo prior to the Fixed-term Parliaments Act seemed to be the logical thing to do for the majority.
I want to talk today on two elements of the Bill that drew alternative views and evidence from our panels of witnesses. The first is the so-called ouster clause. That proposal brought much scrutiny, views and evidence not just from our panel but from the members of the Committee. The Committee recognises that views differ as to whether the Government’s approach on justiciability is the best one. A minority of Committee members, as we have heard today from my hon. Friend the Member for Hazel Grove (Mr Wragg) , and I may say grunted quite loudly from a sedentary position by my hon. Friend the Member for Thurrock (Jackie Doyle-Price), believe that a House of Commons vote on a dissolution would be a protection against impeaching and questioning by the courts because of article 9 of the Bill of Rights of 1688. Such a vote would, in their view, give us a better guarantee than an ouster clause against unwarranted judicial involvement, and would avoid setting a precedent for ouster clauses in future legislation. That was one view.
Some members of the Committee have expressed doubts as to whether the belt and braces, or sledgehammer, approach of an ouster clause is really necessary if the courts will not in practice entertain legal challenges to dissolution. Provided it is clear that dissolution and calling of Parliaments are a personal prerogative, and that the Monarch’s veto over requests is real rather than ceremonial, they are satisfied that the courts would never—almost never—grant an application for judicial review of a decision to dissolve Parliament.
The majority view of the Committee, however—I am one of that majority—accepts that the general presumption is that Parliament does not intend to oust the jurisdiction of the courts; the Executive should be accountable to both the courts and to Parliament, too. None the less, in principle, the majority believe that Parliament should be able to designate certain matters as ones that are to be resolved in the political, rather than the judicial sphere, and that Parliament should accordingly be able to restrict and, in rare cases, entirely exclude the jurisdiction of the courts. This position, of course, is not inherently incompatible with the rule of law, even if ousting the courts’ jurisdiction will often be in tension with it, so that a [Inaudible] ouster would rarely be appropriate. In this case, when the power in question is to enable the electorate to determine who should hold the power, we consider the ouster to be acceptable. It also sends a very clear message to the courts what the spirit of the Bill intends.
My second and final point on the Bill is on the Electoral Registration and Administration Act 2013, which extended the length of the electoral timetable for UK elections from 17 working days to 25 working days. At the time, it was done to ensure the smooth and effective running of our elections. It also recognised the complexity of elections, in so far as the current Bill is compatible with ensuring that the register is up to date and that proxy and postal votes, including those of overseas voters, are possible. This Bill retains the 25 working day period between dissolution and polling day to ensure the supposedly continued operability of our electoral system. However, the lengthening of the election period has meant that the time between the dissolution of Parliament and its return is also lengthened. Although we consider that the country should be without Parliament for as short a time as possible, this must be balanced with the need to ensure that as many citizens as possible can register to vote and exercise their democratic right to vote in elections.
We had, if my memory serves me correctly, a unanimous feeling that we would like to see a significant reduction in the election timetable, as this 25-day period is for the benefit of the administrators rather than the electorate. Our proposal in the report is that a cross-party working party should be established by the Government to examine how the general election campaign period could be shortened from 25 days without compromising voter participation, including through the increased use of technology and increased focus on year-round voter registration. This would be a better approach to seeing how we can have a robust and transparent approach to democratic elections for the benefit of those who participate, rather than for the benefit of those who administer.
I support the Bill before us, which genuinely appears to have taken note of the plethora of robust debates and evidence from many quarters of this House, and that is before it has been subjected, from today, to the scrutiny of the House as well. My only request is that the Government look again at my final point on reducing the 25 working day requirement for the electoral timetable. I believe that, with modern-day technology and amended processes, that can be achieved quite easily, without compromising voter participation, in an open and transparent way. It would also future-proof our electoral system further around technological advances, which in my view should be embraced.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
I am delighted to have the opportunity to make a contribution to the debate. I am sorry that the Minister for the Constitution and Devolution, the hon. Member for Norwich North (Chloe Smith), has just left the Chamber. I would just place on record—and I hope she will see it at some point on her return—that for me, as for so many others in this debate, it is a matter of genuine delight and joy to see her back in the House. Contrary to what we might read in some parts of the press, a lot of Members of Parliament are held in respect, but the hon. Lady is someone who is held not just in respect but in affection. The manner in which she has tackled her illness has been an inspiration to many, and we are delighted to see her back.
Madam Deputy Speaker, I hope that you will indulge me for a minute or two while I pick over some of the history of this matter and of the Fixed-term Parliaments Act. I am not quite the last man standing from that period, but I am one of the last few. It is often said that history is written by the victors. Well, not even my sense of hyperbole would allow me to describe the Liberal Democrats as the victors in that episode in our political history, but I think it is important that we put a few matters on record.
The Chancellor of the Duchy of Lancaster, in opening the debate, said that the Fixed-term Parliaments Act was a “child of its time”. I openly accept that, at the start of the quite remarkable political adventure that was the coalition Government, the necessary trust that people might have had in a single-party Government was not there and, yes, the Fixed-term Parliaments Act was a necessary safeguard for both parties to ensure that the Government would last the whole term. Remember what it was like at the start of that Government. All the commentators and all the clever people said, “This won’t last a month” and then, “It’ll not last two months”. They said that that Government would not last three months, then six months and then that they would not last a year. And then, eventually, it was accepted that that Government were going to last the whole term, as indeed they did.
The coalition Government did a lot of things that were very necessary in the interests of economic rebuilding after the crash of 2008, and it was necessary that we had five years of stability to be able to take those decisions.
Alec Shelbrooke
I agree with the point that the right hon. Gentleman agree has just made. He will recall that, just before the 2010 general election, the then Governor of the Bank of England, Mervyn King, said that whoever ran the next Government would be out of power for a generation because of the decisions they would have to make. Actually, we were able to bring that stability to the coalition, and one of the reasons that I happily backed the Fixed-term Parliaments Act then was to bring that stability. The public saw that there were two parties from different political spheres willing to do what needed to be done. I know that the right hon. Gentleman and I are on different sides of the coin when it comes to repealing that Act, but it is important to say why we both agreed on the importance of the Act at that time.
Mr Carmichael
I often say that the spending decisions that were taken—although, when they were implemented, they were actually the same as the ones that Alistair Darling had put in his last Budget in March 2010—were not taken on a whim; they were taken on the advice of the Governor of the Bank of England, and when that advice is given, any responsible politician or parliamentarian should listen to it.
I fully acknowledge what the Chancellor of the Duchy of Lancaster said about that Act being a “child of its time”, but it was more than that. As I think the hon. Member for Rhondda (Chris Bryant) said, the fixing of the parliamentary term was in Labour’s 2010 manifesto, and the regulation of and accountability over the exercise of the royal prerogative was in the Conservatives’ 2010 manifesto. For my party, it had been a long-standing policy. We saw it as a necessary modernisation, and the logical conclusion of getting rid of it in the way in which the Government seek to do through this Bill would mean that we were risking taking significant steps backwards in terms of constitutional integrity and electoral law. I shall return to that point.
Anthony Mangnall
I am sorry to interrupt the right hon. Gentleman, but the last line of clause 2(1) reads
“as if the Fixed-term Parliaments Act 2011 had never been enacted.”
The emphasis of those words means that we are going back to a point where that Act had never been enacted. Is that not the point—that we are going back to how it was, not trying to make changes going forward?
Mr Carmichael
The point is that, as I said, it was a necessary modernisation; we are undoing something that, 10 or 11 years ago, was a necessary modernisation.
The Chancellor of the Duchy of Lancaster spoke about the Ted Heath Government in the 1970s. The world was a very different place in the 1970s. I suspect that the hon. Member for Totnes (Anthony Mangnall) is not old enough to remember it. I should place on record that, notwithstanding the imminence of my 56th birthday, I only have a child’s recollection of that time. However, the conduct of elections was very different, and, of course, the general elections in the 1970s were to the only Parliament that people could be elected.
We now have a very different situation. We have a Parliament in Edinburgh, a Senedd in Wales and an Assembly in Northern Ireland, and they operate on fixed terms. Indeed, the Scottish Parliament—as my hon. Friend the Member for Edinburgh West (Christine Jardine) reminded me earlier—changed its terms in order to keep its elections in lockstep with, albeit at a different time from, the elections to this place. There was also the very different way in which campaigns were financed then.
One of the most significant and concerning aspects of the Bill is that everybody is in the same position as far as the short regulated period for expenditure is concerned, but when we do not know how long the Parliament will be and when the general election will come, the setting of the start of the long period is effectively done retrospectively. We can be caught for expenditure that we did not know we would be caught for, or, as is more likely to be the case, we can ladle money in, because every political campaigner will say that early money is what buys results. To my mind, that is one of the reasons why the Fixed-term Parliaments Act was a necessary modernisation in 2011. To take it away now actually risks a more substantial unbalancing of the playing field than anybody from the Treasury has thus far acknowledged.
I say gently to right hon. and hon. Members on the Government Benches that it might seem like a good idea today, while they are in government, but that will not last forever. The first election in which I actively campaigned was in 1983, when we all said that the Labour party was finished and there would never be another Labour Government. Then, in 1997, we said exactly the opposite: that the Conservatives would never again be in government. Yes, they have the whip hand today, but the day will come when they are sitting on the Opposition Benches, and they should consider how they will feel if the Government of the day treat them and their access to the playing field in this way.
Anthony Mangnall
I am sorry to inform the hon. Gentleman that I still was not born in 1983. If we do not know when an election is coming—I think this goes to the point made by the hon. Member for Midlothian (Owen Thompson)—we will find ourselves campaigning more regularly. There is a better form of direct democracy, because we are all required to be out there canvassing all the time. That has its advantages, in the sense of the engagement that we have with our constituents.
Mr Carmichael
Let me just say that the pattern of campaigning across the constituencies represented in this House is far from uniform. I spent a significant amount of time in Chesham and Amersham not that long ago, for reasons that will be understood. I was a great admirer of the late Cheryl Gillan—she was another one for whom I held not just respect, but affection—but it was apparent that the Conservatives’ campaigning machine in that constituency had perhaps been left in the garage for a few years longer than was necessarily helpful. If what we are about is engaging the electorate on an ongoing basis, I am all for that. Indeed, I suggest to the hon. Gentleman that the best way to achieve that would be by getting rid of the notion of safe seats, which is a product of the first-past-the-post system, so I will look to enlist his support the next time my party brings forward proposals for introducing proportional representation.
I can see that your smile is becoming increasingly indulgent, Madam Deputy Speaker, so I will not carry on down this route for too long, but it is surely an important principle that we should never hand to one of the runners the starting pistol that will start the race. Whatever view people take of the Fixed-term Parliaments Act, the principle that Parliament should be in control of its own timetable and election is surely something that all those who fought so hard to bring back control to Parliament would have found an easy sell.
There has been some talk about the Lascelles principles. My concern about the exclusion of any decision to dissolve Parliament from justiciability, as we find in clause 3, is that the debate is essentially about constitutional theory. If the Prime Minister were to go to the Queen and ask for a Dissolution and she were to refuse him, I suspect that, given the standing that the Queen has in the public’s affection, it is probably a constitutional crisis that we and the monarchy could survive. I cannot honestly imagine it ever happening, but given everything else that has happened in this country over the past six years, we should perhaps try to legislate not just for those things that we can imagine happening. The day may come when we have a different monarch—well, the day will come—and perhaps that monarch will need time to establish their standing in the way that Her Majesty has been able to do. For that future monarch, the temptation may be not to risk the instability.
Essentially, my concern—this is what the Lascelles principles were designed to avoid—is that the Bill as currently constituted risks bringing the monarchy into active partisan party politics. That is something we should countenance only with the very greatest of caution and the most careful consideration.
Jackie Doyle-Price
The truth of the matter is that our constitution does behave in a very dignified way. We know that Prime Ministers’ audiences with the monarch are, most of the time, entirely confidential—other than when Prime Ministers choose to leak them. I think we can trust Her Majesty never to utter what has been said to her in the confines of her study on those occasions. On that basis, can we actually be sure that those discussions have never taken place?
Mr Carmichael
No, we cannot. That is the self-evident answer to that question. I am fairly confident that conversations will be had by, as it were, the support teams on either side on a highly theoretical and hypothetical question, such as, “Well, in the event that this were to happen…” Indeed, that was why Lascelles wrote his letter to The Times in the first place—to give a bit of necessary transparency and certainty to the whole process, which in truth, because it is rooted in convention, has neither transparency nor certainty.
Ultimately, what we show here is that the insistence on continuing with an unwritten constitution becomes more and more difficult with every year that passes. Ultimately, that is something we will have to recognise. It will be the mother and father of all tasks to get the necessary consensus to codify it, but in an age when all the constitutional changes that we have had in the past few decades are there competing with the sovereignty of this House within Parliament in particular, it is in everybody’s interests that we should find the moment to do that. This is not the moment, for the avoidance of doubt. I think Parliament would need some time to be clear of its current concerns before we could undertake that.
Finally, I want to say a few words about the conduct of the 2017-19 Parliament. It is a shame that the hon. Member for Hazel Grove (Mr Wragg) is no longer in his place, because he outlined all the various actors in these dramas and how some might be seen to have executed their obligations better than others, but it is inevitably the case that where we have a system that relies on checks and balances, every time somebody takes out a check, somewhere else we have to adjust the balance. That is why although I felt exceptionally uneasy about the way former Speaker Bercow made some of his decisions, I thought they were necessary because the Government were getting close to abusing the substantial amounts of power that an unwritten constitution based on convention gave them. That is why instead of relying on nods and winks, and checks and balances, it is better that we should write it all down, as then everyone would know where they stood.
I do not think there is any hyperbole here, and it is overstating the case somewhat to suggest that the political turmoil of the 2017-2019 Parliament was a consequence of the term of Parliament having been fixed in 2017; there were lots of political reasons for that, most of them to do with the internal splits and divisions in the Conservatives, as the minority governing party after 2017. The fact that they had a minority set the political tone of that whole Government. Somebody said earlier that the election was far too late by November 2019. When would have been the right time? Perhaps it was when the Prime Minister became Prime Minister in July of that year, but I do not remember him having any great appetite for having an election at that point.
The truth of the matter is that we eventually had an election in 2019, at probably the worst time of year to be campaigning in Orkney and Shetland—we are never going through that again. That election required the Government of the day to work with the Opposition, with us and with the Scottish nationalists, and that is how it should be. That is effectively how the Fixed-term Parliaments Act did its job, when the Government eventually allowed it to do so. That is why I deeply regret this Government’s decision to repeal it, and why my party will be opposing them in the Lobby this evening.
Madam Deputy Speaker (Dame Rosie Winterton)
We now have nine more speakers, which means that, allowing for the wind-ups, we need speeches to be just under 10 minutes. No. 11 on the list has withdrawn, so we will go straight to Christine Jardine.
Christine Jardine (Edinburgh West) (LD)
Thank you, Madam Deputy Speaker. I can assure you that I will take much less than 10 minutes. In this debate we have gone over the constitutional law aspects of the Bill, and we have talked much about the Parliament of 2017 to 2019 and the implications of the Fixed-term Parliaments Act. I wish to look at one aspect that I do not think has been discussed sufficiently, which is that as a new Member of Parliament in 2017, I came into a situation where there was constant speculation about the possibility of an early election.
Almost every week between 2017 and December 2019, we discussed the possibility of a general election and when it would be—this year, next year or next month. That causes instability, and not only within Parliament for its Members, who are trying to figure out what they should be doing; but how does one govern in a situation where the Government could end at any moment and one could be going into a general election?
We have talked a lot about the public and their perception of Parliament today, and between 2017 and 2019 they were dissatisfied with the uncertainty about where their Government were going and what was going to happen. Business was unhappy with it, and it disrupted much of the personal, commercial and industrial life of the country.
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
I am listening to the hon. Member intently. Was the problem between 2017 and 2019 not precisely the opposite, in that there was no way to have an election so that the Government could get on with governing and we could get business transacted in this place? Was it not the exact opposite of what she is describing that posed so many of the issues that we faced in those years?
Christine Jardine
I thank the hon. Member for his contribution, but I would say that it was actually the opposite. If we all cast our minds back to 2017 when the Fixed-term Parliaments Act was in place, we will remember that we had a snap general election because the Government wanted a general election. The Fixed-term Parliaments Act allowed for that. Then, between 2017 and 2019, the Government chose to behave like a majority Government when they were not one. The right hon. Member for Elmet and Rothwell (Alec Shelbrooke) said earlier that we had an instruction from the public; we did not. We had a divided country and a divided Parliament as a result. We did not have a majority and we had uncertainty and a Government who did not accept that to get anything done, they had to find a way to work with the other parties. That was the problem between 2017 and 2019.
Ironically, as my right hon. Friend the Member for Orkney and Shetland (Mr Carmichael) said, in 2019 we were able to come to a general election, even though it was in December, because the Government realised that they had to find a way and talk to people. In that respect, the Fixed-term Parliaments Act did not fail; it proved its worth in allowing the Government to be flexible enough to do that. Contrary to what the hon. Member for Argyll and Bute (Brendan O’Hara) said, the devolution Act allows for the same possibility in Scotland: if it is not possible for the Government to govern, there will be an election. I accept that the Fixed- term Parliaments Act is not perfect, but I do think it allows for some stability. It allows a Government, an Opposition and the public to know that there will be a period of stability if there is a majority Government.
Andrew Bowie
The hon. Member is being kind and indulgent of me in giving way. The simple fact is that the reason why we were able to have a snap election in 2017 was that two thirds of the House of Commons voted for it. That was never going to be the case at any point between 2017 and 2019; in fact, we had the farcical scenes of the Prime Minister wanting to dissolve his own Government to go to the country and the Leader of the Opposition agreeing, but not just yet. The hon. Member suggests that the uncertainty was brought about because the threat of an election was hanging over us, when actually the exact opposite was the case.
Christine Jardine
I am afraid I beg to differ. For me and for many people I know, the instability was because the Government did not accept the reality of the situation we were in and act accordingly. We could spend the rest of the evening debating what the Government did between 2017 and 2019 but we would not change it.
The fact of the matter remains that we had a general election in 2019 and we are now discussing the Fixed-term Parliaments Act, which I believe offers this country the opportunity for the same sort of stability as we see in democracies around the world and within our own democracy. If the Fixed-term Parliaments Act is repealed, this place will be perhaps the only sphere of government—local, national or devolved—in the United Kingdom that does not have a fixed term. It is not just about those elected to this place; those who work for it and for the elected representatives do not have the certainty and security of knowing what the term of a Parliament will be. That is why, as I said, I believe that although the Fixed-term Parliaments Act was not perfect, it was, as my right hon. Friend the Member for Orkney and Shetland said, a necessary modernisation and a recognition that the way we had done things up to 2011 had to be changed. We had to come into the 21st century, with a fixed-term Parliament with the flexibility to have an election but the stability that the country not only needed at that time but needs right now because of covid-19.
What happened in 2010 was not something that will never happen again. The situation that the country faced—the crisis that needed stability—was not something that happens only once in history. It has happened before and it will happen again and, as I have said, it is happening now. What the people of this country need from us is the certainty and the stability of what their future will be. That is why they elected us. We should not need the threat of a general election to be out there talking to and engaging with our constituents and listening to what they say. If we do, then we have failed.
The hon. Member for Argyll and Bute (Brendan O’Hara) described this Bill as a power grab and, in that, I have to agree with him. It is taking power away from Parliament. It is taking power away from the Members of Parliament and, in doing so, from the elected representatives, and placing it in the hands of the Government and only the Government. It is making the timing of a general election the whim, potentially, of one person based on the scenario of the time. We have talked about lots of decisions about when general elections were and when they were not. In 1974, when, sadly, I was also alive—
Anthony Mangnall
I am sorry that I was not there to see the 1974 election. We talk a lot in this place about the precedent and the history of what has gone on before us, but actually there are not many examples, with the exception of 1974, of where early elections have been called, so this is not a precedent that has been abused. It has been done with careful consideration by the Government of the day to call an election, not always to their advantage.
Christine Jardine
I am conscious that I am running out of time. I accept that it has not always been abused. If we look at that thread, we will see something common in 1974 and 2017. If a party goes for a snap election, the country will not necessarily re-elect it, because the country did not necessarily want a snap election; it wanted stability. Therefore, I return to my original point that what we have with the Fixed-term Parliaments Act is the certainty and the stability that, perhaps not the Government, but the country demands. Therefore, I will be voting with my right hon. Friend the Member for Orkney and Shetland.
If I could take one more second, Madam Deputy Speaker, it would be to echo the thoughts of my right hon. Friend, now that the Minister for the Constitution and Devolution is back in her place, and say what a delight it is to have her here.
Gareth Bacon (Orpington) (Con)
I join colleagues from across the House in warmly welcoming my hon. Friend the Minister back to her place. It is a great pleasure to see her back here today.
I rise in very strong support of this Bill. It is a long overdue redress of our constitutional balance and the use of the royal prerogative. The Bill reasserts that Parliament is sovereign in our democracy over what are fundamentally political decisions.
Let me speak to clause 1. The Fixed-term Parliaments Act, which this Bill repeals, is a prime example of how short-term measures, necessary at the time, can have very hazardous long-term implications for our constitution. I understand why the coalition Government considered it necessary to bring in the Fixed-term Parliaments Act, and the right hon. Member for Orkney and Shetland (Mr Carmichael) set out those reasons in what I thought was a very thoughtful speech earlier on. There were both political and economic considerations at the time. The reverberations of the financial crisis were still being felt, and the economic mess that was left behind by the outgoing Labour Government needed urgent and stable administration, but the election of 2010 did not deliver that. A clear outcome had not been achieved, so there was a need to show that the Government would provide stability for a full term. Whether the Fixed-term Parliaments Act was required to achieve that, or a simple Bill fixing the length of a single Parliament, is something that we could debate endlessly. However, we have to deal with what is, and the detrimental trade-offs have been shown to be patently obvious.
The Joint Committee of both Houses, established under section 7 to review the Act, found it flawed in several respects. There are still unanswered conundrums in key areas, which demonstrate why the Act should be repealed. For example, who governs after the 14-day period following the successful passage of a no-confidence vote? Is the Prime Minister still in charge? Should he or she resign immediately? Who takes over and how? What if an agreement is reached on the 15th day?
Secondly, how do other traditional confidence motions such as the Budget and the Queen’s Speech tie into the Act when statutory provisions mean that the Government could refuse to put a specific motion before the House? Thirdly, and most crucially, the gridlock, uncertainty and, eventually, utter paralysis that became the hallmarks of the bitter disputes of 2019 meant that we faced the absurd situation in which the Government could neither legislate nor go to the country. I can testify, as somebody who was a member of the general public and not a Member of this House at the time, to how that massively undermined the status of Government and Parliament in the eyes of the general public. Every single person I spoke to was tearing their hair out at what they saw as self-indulgent paralysis in this House.
My right hon. Friend the Chancellor of the Duchy of Lancaster outlined the important elements contained in clauses 2 and 4 of the Bill. I will focus on clause 3, which is extraordinarily important because it safeguards due political process from interference. Events during the last Parliament showed that the judiciary can be used and abused by activists to wage political wars through the courts. One of the most dangerous aspects of the Miller and Cherry case was that not only did a group of largely unelected elites seek to thwart the democratic will of the British people—I hasten to add that the 2016 referendum result was finally vindicated when we eventually had an election in 2019—but the sovereign was drawn into a partisan dispute. It is paramount for our constitutional democracy that the sovereign must be, and must be seen to be, above party political battles.
The Bill will help to prevent such a situation from arising again by making the revived prerogative powers non-justiciable. That is wholly welcome. For those reasons, I will support the Bill, and I congratulate the Government on delivering another of their manifesto commitments.
Jim Shannon (Strangford) (DUP)
May I say, as others have said, what a pleasure and joy it is to see the Minister for the Constitution and Devolution in her place? I mean that sincerely. I and the Democratic Unionist party are pleased to see her back to health and strength and back in her position of control as well. We wish her well. [Laughter.] Well, she has control as Minister. She has been much in our thoughts and prayers —I will leave it at that.
It is always a pleasure to speak in this House, whatever the issue may be. While my constituency staff may have a different opinion—it is incredibly exhausting for them to work their full-time hours during the day and canvass for hours in the evening, so they may long for a five-year fixed term—I believe it is right that we have the flexibility to match the requirements of Parliament and the nation as well as finding a balance and, perhaps, peace of mind for me and staff. I am a great believer in the democratic process, and I have been elected by the people to say that in this House. Coming as I do from Northern Ireland, I have endured the terrorist campaign directed against us, and that underlines why it is important to have a democratic process. I have always encouraged people to use the democratic process to express themselves. I am a great believer in it, and it has to deliver.
The hon. Member for Totnes (Anthony Mangnall), who has been active in interventions, referred to elections. I remember every election that I have done—there have been a brave few over the years—and, on the night of the count, I have always told my workers and voters, “The campaign for the next election starts tonight.” Anyone who thinks the campaign starts only as we run into an election is very much mistaken; it is from the start of the five years, four years or whatever it may be. It is always good to put that on the record. It is also, I believe, important that this House, this mother of Parliaments, this seat of democracy sent the democratic process and the methodology for that across the whole world, and how privileged we are to be here to be part of that.
I do, however, have just one real issue that concerns me. Others have spoken of it, and I want to put it on the record. Indeed, the hon. Member for Orpington (Gareth Bacon) referred to it in his last comment as well. We must ensure that Her Majesty is not put in a position that is untenable. I ask the Minister—I look to the Minister—to respond to it. Will she elaborate on what steps there are to protect the institution from allegations of affronts to the position of our constitutional monarchy?
I am unashamedly a fan of royalty and a fan of the Queen. It goes without saying that I just love the institutions, the traditions and the history that we have. Boy, the whole world wants to have it, but we have it here and in our history, and I love it. However, I have to say that I was incredibly dismayed about the suspension of Parliament in 2019, which saw our Head of State receiving a backlash for doing what she is supposed to do as our Head of State in following the lead of the Prime Minister.
From the background notes, I just took one paragraph, one sentence of which states:
“The Prime Minister could choose to advise the Queen to set a polling date 6 months in the future, or later, or could delay giving any advice on the subject to the Queen at all.”
Well, how disrespectful would that be to Her Majesty the Queen, given the high respect we have for her and for the institution in upholding the democratic process in every way, including her moral stance. I just think that we really need to have that clarified. In any of these changes, we must ensure that the position of the monarch in her role as sovereign over Parliament must be crystal clear, not once again debated and challenged. It should never be in doubt, there should never be a question mark and it should not be unnecessarily highlighted.
I have read one opinion stating that the Fixed-term Parliaments Act was designed to prop up a weak Government. We have no need for this. We have a democratic process that we all believe in, and the result is that the majority rules. This is sometimes a difficult pill to swallow, especially in scenarios such as the Northern Ireland withdrawal agreement, on which my party and I foresaw the dreadful position that Northern Ireland would be put in. We had a very awkward hokey-cokey of being in the EU and then out of the EU, as it suits the EU. It has been incredibly detrimental to small independent businesses that cannot import their products as they once did. I have numerous companies that are stretched and prevented from doing their normal business, as well as farmers who cannot get machinery in and nurses who cannot get the products they have had for years. Democracy has not been easy to accept.
However, when I look at an alternative, I am again drawn to the wisdom of Churchill. In my first speech—my maiden speech—in this House, I referred to Churchill. I am a fan of the Queen and of royalty, but I am also a great fan of Winston Churchill. He had an incredible ability with words, and I just wish I had even a small piece of his ability. He is one of my heroes. He said that
“it has been said that democracy is the worst form of Government except all those other forms that have been tried from time to time; but there is the broad feeling in our country that the people should rule…and that public opinion, expressed by all constitutional means, should shape, guide, and control the actions of Ministers who are their servants and not their masters.”—[Official Report, 11 November 1947; Vol. 444, c. 207.]
What wise words from Winston Churchill. He is not here any more, but he walked in this House of Commons where we are. He perhaps sat in these seats because he was apt to sit on both sides of the Chamber—with the Government and with the Opposition. He was a great man and a great leader at a time when we needed him. Perhaps all of us in this House need a reminder that we are here to serve the people, not to rule them. If we get such servitude into our minds, I believe we will have the right mindset. What a privilege it is to be here, in the mother of Parliaments, and to be the MP for Strangford.
I support the changes in principle, and tonight we will vote with the Government, but I ask for further information on protecting our Queen and her role as the sovereign, in conjunction with her position as head of the constitutional monarchy that we hold so dear and love so deeply in our hearts—we enjoy it every day. This information will, of course, determine the form of where we are, so I look to the Minister for clarity and assurance, which I value, on the Bill’s impact on the monarchy and Her Majesty. The Government and Parliament must avoid a constitutional crisis, and they must always be respectful to our Queen and the monarchy.
Jackie Doyle-Price (Thurrock) (Con)
I join colleagues on both sides of the House in welcoming the Minister for the Constitution and Devolution, my hon. Friend the Member for Norwich North (Chloe Smith), back to her place at the Dispatch Box. She has fought her battle with the characteristic grace she always displays, and it is great to have her back.
I have really enjoyed this debate because I am a constitutional nerd, so bear with me if I become a bit tedious. We have heard a lot about the Fixed-term Parliaments Act today, and people’s view of it tends to be informed by where they were in the debate in 2019. Some of us are perhaps more charitable about it than others.
It is difficult to view our constitutional settlement through the prism of what happened in 2019, because those circumstances were unprecedented and they would have tested the constitutional arrangements whatever they were. Fundamentally, we had a Government who were governing without a majority in Parliament, which is always testing, and they were trying to implement a policy that was not supported by a majority in Parliament, which is equally testing. There was also much dispute within the political parties, which meant the usual ways of sorting out issues were difficult. This was an issue of major constitutional significance, overlaid by a public referendum, so it was a powder keg.
Everyone was badly behaved because everyone, recognising that there was no majority for their particular position, did what they could to pursue their own opinions. It was not Parliament’s finest hour, but it was the fault not of the Fixed-term Parliaments Act but of the outcome of the 2017 general election. We can debate how that came about, and maybe it came about because of the Fixed-term Parliaments Act.
It might be a moot point whether consent for an election might have happened at all, given the Prime Minister went to the country with a majority in the House of Commons and without having lost a vote on any significant matter of policy, but that is a question for another day, because we have before us the Government’s proposals for reforming the Fixed-term Parliaments Act.
I am supportive of the proposal to return to the status quo that prevailed in 2010, but seeing these events through the prism of what happened in 2019 has led to a draft of the Bill that perhaps needs a little improvement. I am pleased the Government have already accepted some of the recommendations of the Joint Committee on the Fixed-term Parliaments Act in that regard.
It is important that the Government continue to act in that way, because these constitutional issues need to stand the test of time. If there is one lesson we can take from the Fixed-term Parliaments Act, it is that it did not stand the test of time, because it is a creature of its time. We can understand why the coalition Government wished to bake in some stability. We would all agree that messing around with the constitutional settlement in this country was perhaps not the best way to go about it, but that is easy to say in hindsight. We have to recognise there may be future coalitions, and perhaps the House could put on record that any attempt to bake a coalition agreement into legislation should not interfere with our constitutional arrangements.
We also need to acknowledge that, in delivering five years of stability in government, the Fixed-term Parliaments Act was a success. The right hon. Member for Orkney and Shetland (Mr Carmichael) reminded us of the political circumstances in which that Government came into being. For any long-term stability, following a financial crisis, we needed that Act to happen.
The Fixed-term Parliaments Act was not all bad, but what we have to replace it is better because it gives flexibility, within a reasonable amount of certainty. The Bill establishes a five-year maximum as opposed to a fixed term, and the expectation will be, as previously, that Governments will choose the date of an election. That is not to say that we encourage snap elections without any good reason. History tells us that the public do not like people who cheat; they expect everyone to play fair. If there was a perception that any Government were abusing their powers in that regard, the public would take a dim view. We can perhaps look to 2017 as an example of that.
As I said in my intervention on my right hon. Friend the Chancellor of the Duchy of Lancaster, I am pleased the Government have acknowledged that the Prime Minister requests a dissolution from the Queen, and does not seek advice. Accepting that, however, renders the ouster clause irrelevant. By making a decision to grant a Dissolution, is the Queen acting in Parliament? That is covered by the Bill of Rights. The issues we had in 2019 were about advice. I appreciate the point made about “let’s do belt and braces, be absolutely certain and put it in the Bill”, but if we are going back to and re-establishing the status quo from 2010, the existence of the ouster clause goes beyond that.
We had vigorous debates on these issues in the Joint Committee, and there was a strong minority opinion that an ouster clause is not the best way of doing things. My point is that it is superfluous. That it is in the Bill is perhaps belt and braces—fair enough—but by so doing, it almost becomes an article of bad faith. I think we should put the events of 2019 well and truly behind us. As I said earlier, that was not Parliament’s finest hour. What happened is that our unwritten constitution—and this is the beauty of it—finds a way of flexing to get to the right outcome. Again, it was uncomfortable for the Government at the time to have their actions thwarted, but the outcome was the right thing to happen.
I am concerned—the Fixed Term Parliaments Act is a good example of this—that as romantics we believe in our unwritten constitution. I was someone who believed that the fewer rules there are, the more reliant we are on honourable behaviour by all players in the system. In many ways, having too much prescription in the Fixed Term Parliaments Act enabled people to be compliant with the detail of the law, but not the interests of good governance. As we pass this Bill, which enjoys considerable support across the House in terms of returning to the status quo, I would not like it to be undermined by quick fixes to address the situation that happened in 2019. That should not be informing how we look after our fantastic constitution going forward.
Mrs Maria Miller (Basingstoke) (Con)
It is a great pleasure to take part in this debate and join many other right hon. and hon. Friends in hailing the good health of my hon. Friend the Minister for the Constitution and Devolution. I do not, however, join Members in welcoming her back, because I do not think she has ever been away. Whether by texts or telephone messages, Teams calls or ministerial meetings, she has always had a hand on the tiller, even if it was sometimes behind the scenes. It is a great pleasure to see her in her place. Democracy is a fragile thing. We are custodians of our democracy, and we should never, ever forget that. Having my hon. Friend at the centre of these discussions fills me with a great deal of confidence that they are being dealt with diligently. That is very important indeed, because elections are pivotal to our democracy. The process of dissolving Parliament and calling a new Parliament was changed back in 2011 to help make the coalition Government more stable, and it did that; the Bill is designed to return us to the tried and tested process, following what have been a bumpy few years.
In reflecting on the speeches of the right hon. Member for Orkney and Shetland (Mr Carmichael) and the hon. Member for Edinburgh West (Christine Jardine), I referred back to my notes, because I felt that they might be falling into rose-tinted glasses territory with respect to where the Fixed-term Parliaments Act came from. In its scrutiny, the Joint Committee, of which I was a member, took some important evidence from Oliver Letwin, who after all was one of the architects of the coalition agreement. He said that
“a fixed-term Parliament arrangement…was a product entirely of the coalition discussions.”
Any notion that it was at the back of the Conservative party’s mind could not be further from the truth. Indeed, he went as far as to say that coalition would not have worked as well with either side knowing that, to use his word, it could “crater” the Government.
The 2011 Act was legislation of convenience, as others have said. Perhaps it was not something that we should have done, or perhaps it should have been very time-limited, but in the eyes of those who put it together it was very much legislation of convenience, so it feels entirely appropriate that we are now rethinking it and looking for a different way forward. As my hon. Friend the Member for Thurrock (Jackie Doyle-Price) and others have said, it is highly probable that the bumps in the road that we experienced between 2017 and 2019 would have happened anyway, regardless of the Act, because our exiting the EU was a challenging process for this place—I recognise some of the criticisms that hon. Members have made of the way we behaved at the time. However, it is clear that the Act caused some delay at a time when we should have had a much slicker process for dealing with the constitutional crisis in the middle of 2019.
From the evidence that the Joint Committee took from academics and lawyers, it is clear that it can be argued that the Bill will return us to the position before the Fixed-term Parliaments Act was enacted. On balance, while the Act did its job for the coalition Government, there will not be too many people crying into their beer—to put it colloquially—if it is repealed. At times, when people such as Lady Hale and Lord Sumption came before the Joint Committee, we felt as if we were having a constitutional seminar on a very grand scale. Ultimately, however, we have to make the decision on the way forward, because views are mixed at best.
It is good to see that some of the drafting has been reconsidered, particularly in the name of the Bill, which is much more apposite now. There has also been redrafting in other areas as a result of the hard work of the Joint Committee, which was ably chaired by my noble Friend Lord McLoughlin—he did a superb job.
Suggestions have been made that the Bill might bring the sovereign into politics, but the evidence that the Joint Committee took did not overwhelmingly support that position. Suggestions that the non-justiciability clause was unnecessary really did not receive overwhelming support in the Joint Committee either, based on the evidence that we received. There was, however, a wonderful quote from Lord Sumption to the effect that there are many things that academics look at in great detail that are not worthy of great scrutiny. I think that sometimes we may be running down some unnecessary rabbit holes in these discussions. At some stages, there were as many views expressed as there were academics and lawyers in the room. We as elected representatives need to decide on the way forward and I think that the Government have taken some very sensible decisions.
This Dissolution and Calling of Parliament Bill is entirely silent on where it is decided who actually comes to Parliament—that is, the election campaign itself, which my right hon. Friend the Member for Scarborough and Whitby (Mr Goodwill) and others have raised. If we are to consider Dissolution and the calling of Parliament, should we also consider the election and how that fits in? The Government have a further piece of legislation coming our way soon and it may be that they will look at this issue in more detail at that point. I really hope that they do, because we need to be able to look at the whole of this process—the whole of the way that our democracy works—and, at the moment, we are at risk of looking at it in a very piecemeal way.
Since I was elected, there has been a profound change in the way that our election campaigns run. Back in 2015, general election campaigns were around 25 days. In fact, dare I say it, they may have been even shorter when you were elected, Mr Deputy Speaker, which was a little way before me. You may well be interested to know that, in 2019, the general election campaign was 36 days. That is despite incredible advancements in technology and the ways that we work and despite the legislation clearly stating that elections should take 25 days—perhaps this is because, hidden in the mice type, as it were, it states that that is 25 days minus bank holidays and weekends. I have to say, nobody who has run or fought an election recognises bank holidays or weekends, so in hindsight what nonsense it was to draft the legislation in that way.
Lengthening campaigns has real consequences for our democracy, for the engagement of voters, for the period of uncertainty and for our economy and our politics. This point is borne out by academic research. We were not able to take evidence on this issue in any great detail in the Joint Committee. It is not covered in the Cabinet Office democratic engagement plan and I hope that we can rectify that omission in the progress of the Bill, perhaps, as the Joint Committee suggested, through a review of the issue either by a cross-party Committee or in other ways. I think that is long overdue.
To be absolutely clear, the actual length of elections and the trade-offs that we make in increasing the length of elections is not something that we have really debated in this place, at least not for quite a while. While I welcome the return to a much clearer and much more transparent system for the calling of elections, there is still the opaqueness of the election timetable and the increased use of postal votes. Overseas voters may well be very important, but we need to consider how that trades off against the length of campaigns.
I really welcome this Bill and a return to the transparency and the feeling of control that it gives to the way Parliament works. However, I join my hon. Friend the Member for Calder Valley (Craig Whittaker) and my right hon. Friend the Member for Scarborough and Whitby in urging the Government to look at the issue of shorter elections as well.
Sir David Evennett (Bexleyheath and Crayford) (Con) [V]
I am pleased to be able to participate in this important debate. I begin by congratulating my right hon. Friend the Chancellor of the Duchy of Lancaster on his excellent speech on the reasons why we need the Bill. I am also delighted to be able to say welcome back to my hon. Friend the Minister for the Constitution and Devolution. It is so good to see her on the Front Bench again. I am proud to call her a personal friend as well as a political colleague, so that is really good news.
I strongly support the Bill and the approach presented by the Government. I reluctantly voted for the Fixed-term Parliaments Act in 2011 due to the political and economic consequences at that time. The result of the 2010 general election necessitated a coalition Government between the Conservatives and the Liberal Democrats, and I was pleased to serve in that Government under the premiership of David Cameron. However, contrary to the comments of some hon. Members this afternoon, the Fixed-term Parliaments Act was not brought in to reform Parliament. Our country desperately needed both political and economic stability to sort out the mess left by the previous Labour Government. Therefore we needed everyone to know that the 2010 Parliament would run until May 2015, when a general election would be held, to give confidence to the people, the country, businesses and, of course, the Government themselves.
Long-term stability was provided, and therefore the fixed-term Parliament was a success. It was only a pity that the Act did not have a sunset clause so that it ceased to apply after that five-year period—but hindsight is a wonderful thing. As such, the Act served its purpose at the time. However, the political and economic landscape has changed significantly over the past decade and rendered the Act unfit for purpose and redundant.
Although the 2010 Parliament continued to term, the two subsequent Parliaments concluded early. It was never meant to be an indefinite situation, and the paralysis of Parliament from 2017 to 2019 shows how unsatisfactory the situation had become by that time. In fact it was ludicrous, unsatisfactory and undemocratic prior to the general election of 2019, and it did damage, I believe, to our parliamentary system. Although we are past that now and have to move on, the Government, we must remember, failed on three separate occasions— 4 September, 9 September and 28 October 2019—to get an election called. We do, therefore, need to have the status quo return, so that a two-thirds majority in Parliament is not needed to trigger an early election. The Prime Minister must, as colleagues have said, ask Her Majesty the Queen to dissolve Parliament and call an election, as was always the constitutional right prior to the introduction of the 2011 Act.
The Dissolution and Calling of Parliament Bill is a good title. It is a constitutional change, and it says what it means. It makes provision for the Dissolution prerogative to be revived, and in doing so ensures legal, constitutional and political certainty around the process for dissolving Parliament in future. It is a return to the tried and tested traditions that worked so well in the past, before the 2011 Act.
I welcome the fact that the Bill retains provision for the maximum length of a Parliament to remain at five years. I do not agree with the hon. Member for Rhondda (Chris Bryant); he spoke an awful lot of sense, but I think a four-year Parliament is too short. We do not want to have a Parliament that is constantly electioneering. Five years seems to me the right time.
I hope that the Government will look carefully at another issue, though: I share the opinion of my right hon. Friends the Members for Scarborough and Whitby (Mr Goodwill) and for Basingstoke (Mrs Miller) that the length of an election campaign—25 working days between Dissolution and polling day—is too long. A short, sharp, effective campaign will get the electorate more engaged and will get a better turnout and greater interest. The 2017 general election campaign was far too long. As you know, Mr Deputy Speaker, I have had many election campaigns, and I have never known one that was as long. By the time election day came, people had had enough of the campaign because it had been too elongated. Our constituents wanted to vote and boredom had set in over a long period. Therefore I think this could be looked at, and I hope that when my hon. Friend the Minister takes the Bill through Committee, she will look seriously at reducing the number of days between Dissolution and polling day.
I strongly support clause 3, which will not allow the courts to intervene in any Prorogation process. That is a vital safeguard because it should be the Prime Minister and the Government who decide when, with the Queen’s permission, to call an election, and the courts should not intervene. On the Conservative side of the House, and across the House, we believe in trusting the people. They will have their say at the polls and make their judgment on the Government, the policies and the approach. They will also make their judgment on whether they think a general election is justified and vote accordingly. People believed in December 2019 that an election was necessary, so that we could get past Brexit and look towards global Britain and the future for our country. I think it will be a successful future.
It is interesting that both the Labour and Conservative parties had in their manifestos a pledge to repeal the Fixed-term Parliaments Act. That is indicative of the difficulties we had at the time—people thought its time had come and gone.
I believe the Bill represents a minor electoral change, but it is important for the good of our democracy. I share quite a lot of the views of my right hon. Friend the Member for Basingstoke about other things to do with our electoral system, which need to be discussed as well. I know the Government are looking to present another Bill, which will hopefully deal with a lot of the different issues. However, the pledge in our 2019 Conservative party manifesto is being implemented. I look forward to discussing in Committee some of the Bill’s finer points because it is important that we get it right.
I strongly support the measure, and I welcome the Government bringing it forward now. It will bring back to Parliament the traditions and the tried-and-tested ways in which we run our affairs, which have succeeded for so long. This is an opportunity for us to start on the path, with another Bill on another day to discuss other issues to do with elections, but I strongly support the measure.
Aaron Bell (Newcastle-under-Lyme) (Con)
It is a pleasure to follow my right hon. Friend the Member for Bexleyheath and Crayford (Sir David Evennett). As others have said, it is an absolute pleasure to see the Minister, my hon. Friend the Member for Norwich North (Chloe Smith), in her place. We all welcome her back, as my right hon. Friend the Member for Basingstoke (Mrs Miller) said. The Minister has not really been away, but it is good to have the Smith vs. Smith show back, live in the House of Commons.
This is a very important Bill. It is a constitutional Bill, which means it is not necessarily box office. I do not know how many people are tuned into BBC Parliament at the moment, but I am glad that we are having the debate. We have had a full debate in the best traditions of the House and—praise be—with no time limit either, although I will ensure that my hon. Friends get their space at the end of the debate as well.
It was a privilege to serve on the Joint Committee with so many distinguished Members, five of whom have already spoken in the debate, and some of whom are still in their places. We had some very eminent witnesses, including former Clerks of the House, former Cabinet Secretaries and noble lordships, most of whom also served in this House in their time, who lent so much expertise to the proceedings—not least our Chair, the noble Lord McLoughlin, who was a fellow MP from Staffordshire in his day. I pay tribute to the Clerks of the Committee, who did an absolutely superb job in both arranging the witnesses and getting us all to a report that we could all support, which is incredibly important. When legislating in this area, we should strive to be as bipartisan as possible.
The case for change has been well made by the Government and was made by the Labour party in its manifesto. The 2011 Act, which we are repealing, was indeed a product of its time, as we have discussed. It actually served reasonably well from 2011 to 2015, as it was supposed to do. In the period between 2015 and 2019, however, it clearly showed its flaws. It was a constitutional innovation that did not really survive its first contact with any sort of difficulty, which is perhaps also because of the referendum.
Referendums are also a relatively recent constitutional innovation. When the referendum asked the House to do something that it did not want to do—previous referendums had usually been on things for which the House already had a will, such as giving devolution to Scotland and Wales—and came back with an instruction from the people that the majority of Members of the House did not support, we ended up with the situation that we had in the 2017 to 2019 Parliament, which I and other Members from the 2019 intake watched with horror from home. It was not just us; it was people who were not even interested in politics and did not know what was going on. Norms had broken down, and we need to restore those norms.
As I said when intervening on the Chancellor of the Duchy of Lancaster during his opening remarks, any constitutional arrangement needs to be equally suitable for any parliamentary arithmetic, and given what we had under the Fixed-term Parliaments Act that was blatantly not the case. I accept that Brexit exacerbated tensions, but those tensions would have been there anyway in any minority Government situation.
I understand that future coalitions may need similar security to what the Liberal Democrats sought in the Fixed-term Parliaments Act, but I suggest a simple Bill in the future, prohibiting the Prime Minister from requesting—something we said, requesting—a dissolution until a given date. That simple Bill would last only for that Parliament; after that, we could move back to the tried and tested, which is what we are trying to do today.
Conclusion 7 of our report was that a requirement for a super majority in this House cannot be enforced. It has been said sometimes that the constitution of this country is whatever commands a majority of the House of Commons. The only way to enforce a super majority requirement is perhaps through the House of Lords, but the idea that the House of Lords could prevent an election is not credible, or it would ultimately damage the credibility of the House of Lords to such an extent that it would not consider it.
Turning to other recommendations of the Joint Committee, I am pleased the Government have listened to the point about the Prime Minister requesting, not advising. As other hon. Members said, the name change is appropriate. Hopefully, this Bill will be part of our constitutional settlement for decades, perhaps even centuries, to come. The idea that it should have been called the repeal of the Fixed-term Parliament Act is simply not befitting. We have had some constitutional oddities in our time: the reason we have elections every five years is the Septennial Act, which means seven years. We can move on. This is the right title—the dissolution and summoning of Parliament is precisely what the Bill does.
The point about the 25 working day election period was well expounded by my right hon. Friends the Members for Scarborough and Whitby (Mr Goodwill), for Basingstoke and for Bexleyheath and Crayford. We need to find a way to reduce that. We need to press the Electoral Commission further; it has been very resistant, both in its evidence to our Committee and in answers given to questions in this House. With technology, surely it should not be insurmountable to find a way to reduce the period in which Parliament is absent and to reduce the overlong campaign, which does not serve us or our constituents.
Jackie Doyle-Price
Does my hon. Friend agree that the principle ought to be that the electoral timetable should be fixed at the convenience of the public and the participants in the election, not the Electoral Commission?
Aaron Bell
I could not put it any better than that; my hon. Friend is absolutely correct. I understand the desire to make sure things are done properly, but there has to be a way to do things more quickly. We have to embrace technology, which ought to make things more possible rather than more difficult—putting in extra time for this, that and the other, for coming from overseas or to set up people’s proxy vote. We must be able to do things far more quickly than we have done in the past.
On our recommendations, the Government need to look at—we all ought to, actually, because this is probably a conventional point—the period after the election. In many cases, we have been lucky that we have been able to form Governments quickly, but that is not necessarily always the case. We need to look at the conventions around that. In fact, turning to conclusions 31 to 33, by definition we are not meant to vote on those conventions because they are conventions, but, as the Chancellor of the Duchy of Lancaster said, a discussion in Committee of the whole House may help to establish conventions.
It was our Committee’s opinion that the original dissolution principles document was inadequate. We proposed a 20-point list of conventions relating not just to dissolution but to the period of time in which Parliament is dissolved and the calling and forming of Governments. I hope that we can all consider that in Committee and come to a common understanding, because honourable behaviour and common understanding is the way that we need to proceed in these matters.
Overall, the Bill does strengthen the democratic process by restoring the overriding principle that the Government should have the confidence of the House of Commons. That was the norm that was distorted over and again in 2019. We have to reaffirm that; it is fundamental to the operation of Parliament. Once again, parliamentary votes can be designated as matters of confidence. That was the essential problem: it was possible for a number of Members to vote against the Government’s absolute flagship policy one day and the next day to vote that they had confidence in the Government. That is no Government at all. We need to find a way for things to function so that there has to be confidence in the Government’s flagship policies, Budget and Queen’s Speech; otherwise, they are no longer the Government. That is how things need to proceed in this place.
The Bill would also provide greater legal constitutional and political certainty around the processes for dissolving Parliament and holding a general election, with the flexibility we need for exceptional circumstances. The one thing that contributed to the general sense of chaos that I saw watching from home, and I know others did, was the lack of certainty about how things should be operating. In particular, nobody seemed to know what was supposed to happen in that 14-day lacuna: whether the Prime Minister was supposed to resign on day 1 or day 14; whether the Leader of the Opposition would become the Prime Minister, even if they could not command a majority. It was a ridiculous position for our country to have got into, and we will get ourselves out of that by passing this Bill.
On clause 3, the ouster clause, I accept that opinions differ and they differed in the Committee, but I certainly have no problem putting into statute the very clear precedent that the exercise of prerogative powers relating to dissolution is non-justiciable and cannot be reviewed by the courts. That is a long-standing and generally accepted convention. Personally, I would of course take a dim view of a court seeking to intervene in the timing of an election. There is nothing more inherently political than an election and involving the courts—what is called “lawfare”—in the timing of an election would be incredibly uncomfortable for the public, everyone in the political sphere and, I think, the courts as well. How could the image of a Supreme Court trying to override the wishes of a Prime Minister, as enacted by the sovereign, be tolerable to the public? I cannot see any circumstance where that is better than having the election or, potentially, the sovereign refusing to dissolve Parliament.
On that point, we heard repeatedly that the sovereign would not refuse. If the sovereign was going to refuse, it would be communicated to the Prime Minister beforehand that the sovereign would refuse, so the request would never be made. That is how our unwritten constitution should work: through those sorts of understandings. That is what we need to get back to.
The ultimate arbiter of all these matters should be the voters or, in exceptional circumstances, the sovereign. If they are unhappy with how a Government have behaved with the calling of an election or the timing of an election, it is in their hands to determine the consequences for that Government and what the electoral punishment should be. I take issue with the idea we have heard a few times today that the Bill is about putting power in the hands of the Government. It takes power away from Parliament, certainly, but it vests that power in the public and the electorate, and that is where power should truly lie.
Anthony Mangnall (Totnes) (Con)
It is always a pleasure to follow my hon. Friend the Member for Newcastle-under-Lyme (Aaron Bell). May I start, as so many colleagues have done, by welcoming the Minister for the Constitution and Devolution, my hon. Friend the Member for Norwich North (Chloe Smith), back to her rightful place? It is wonderful to see her.
This has been a very entertaining, interesting and thought-provoking debate. As ever, it is good to see Parliament on form, with cross-party consensus on what needs to be achieved. There has been a great deal of thought and consideration about what further steps this House might take. I certainly know that my hon. Friend the Member for Thurrock (Jackie Doyle-Price) will be able to hold me up on anything I get wrong, as a constitutional geek, as I make my speech.
I want to agree with what my hon. Friend the Member for Newcastle-under-Lyme said. When the Fixed-term Parliaments Act 2011 came in, the idea that it was there for political expedience was perfectly obvious. It should have been introduced with a sunset clause, so that we did not have to endure it beyond 2015.
I want to make just a few remarks, because there is nothing new I can say at this point in the debate. In 1974, we saw one election in February and one in October. I am not able to remember either of them, but I am acutely aware of the fact that that is the exception. Governments take very seriously the idea of holding general elections. It is not a power to be abused. There is not a system where Governments think they can instantly call one and find the public on their side. It takes great consideration to be able to make that decision. We have to be clear about that. Many of the arguments that have been made by the Opposition seem to be confusing personality with the politics. That is not acceptable in this debate, because the reality is that it has not been done since 2010, apart from in 2017, and, I would argue, because of the FTPA. The hon. Member for Strangford (Jim Shannon) made the point that elections are won not at election time but in between elections. It is in our interests to make sure that we run as close to the full term of a Parliament and certainly history would suggest that that is what we have done.
The excellent report produced by the Joint Committee and the Public Administration and Constitutional Affairs Committee report suggests in the recommendations that any replacement for the Act should support a majority, a coalition or a minority Government. That could include confidence and supply. I think that is exactly what happens now. As far as I can understand it—I will take any interventions if I am getting this wrong—the Lascelles principles are there to allow the opportunity for the Opposition, or another grouping, to come forward with an alternative if they can supply the numbers in the House. The hon. Member for Argyll and Bute (Brendan O'Hara) was saying that the Lascelles principles no longer stand and that that convention is overwritten by the Bill. That is not true. That is not the case. The fact that the convention is unwritten means that the point for the sovereign still stands and that, if someone were to approach the sovereign with the alternative model, it would work.
Jackie Doyle-Price
My hon. Friend is articulating this very well. Again, it comes back to the fact that one of the biggest issues with the Fixed-term Parliament Act was the way it interfered with votes of no confidence. It had a very prescriptive set of rules that prevented the Lascelles principles from being implemented at that stage, but now that we are going back to the status quo, they will absolutely come back.
Anthony Mangnall
I was worried that my hon. Friend was going to tell me that I was wrong, but that was a delightful intervention and one I entirely agree with. I thank her for that point, because the wording of the Bill ensures that it will look as though the Fixed-term Parliaments Act had never been enacted. We are going back to the status quo before the Bill, rather than trying to change things forward, and it is important that that is understood.
Parliament should be flexible, agile and able to respond to the needs of the public, and by removing the Fixed-term Parliaments Act, we will go back to a stage in which we can respond to the issues of the day, and the concerns and problems that must be addressed. Governments should be held to account by the Opposition and by Back Benchers. They should fear votes of no confidence where necessary and be prepared for elections to be called, if required, because their legislative agenda cannot be pursued. After all, we are here because we set a legislative agenda that we need to see through. If we are unable to do that, it is only right and sensible that we either go back to the people or offer an alternative, and that is what the Bill will do.
As far as I can make out, the only benefit of the Fixed-term Parliaments Act was that it brought the Liberal Democrats into an embrace of death from which they have not recovered, five years on. However their recovery goes, that seems to be it. They did not learn from the 1920s and they have not learned from 2010-15. The Bill offers us the opportunity to reassure our constituents that we can be on their doorsteps 365 days of the year. We can make the case about knocking on their doors and ensuring that they have the democracy and the representation that they deserve.
The last point I would like to make is on clause 3, the ouster clause, which has been referenced by many in the House. It reminds this place of the fact that the courts must not involve themselves in the way in which we call elections. The point has been made time and again about the damage that would do. I welcome the Government’s Bill. I welcome the fact that it is fulfilling a manifesto commitment, and I welcome the fact that this is a return to a good piece of legislation that will ensure that democracy is secured for many years to come.
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
It is always a pleasure to follow my hon. Friend the Member for Totnes (Anthony Mangnall), and even more of a pleasure to know that we are going to be in the same Lobby this evening—that is not always the case. I want to join everybody across the House in welcoming the Minister for the Constitution and Devolution, my hon. Friend the Member for Norwich North (Chloe Smith), back to the Chamber. It has been a lesser place without her, and although she has been joining us through the wonders of Zoom, it is absolutely brilliant to have her back on the Front Bench doing her job so ably. I wholeheartedly echo the thoughts expressed by everyone in the House today.
It would be remiss of me not to mention that today, 6 July, is a day that is clouded by tragedy in the north-east of Scotland, because today we remember the 167 men who lost their lives in the Piper Alpha disaster 33 years ago. Many people are still grieving for lost loved ones, and this still causes many of us in the north-east to pause and think about the sacrifices made on our behalf by those people working to ensure that we continue to receive our energy in the way we do. We thank them and we remember them.
I am not a constitutional geek by any stretch, certainly not to the extent of my hon. Friend the Member for Thurrock (Jackie Doyle-Price). I thought I was, but listening to the arguments today, I realise that I am but a rank amateur when it comes to constitutional history, the details of how this country got to the place it did, how our constitution was created and how we run the country. However, I am strongly of the view that the Fixed-term Parliaments Act was, frankly, a piece of constitutional vandalism that I cannot wait to see repealed.
Governments must have the confidence of this House, and they must be able to govern. Most of us in this House who lived through the events between 2017 and 2019 will know that neither was the case in that Parliament, and 2019 is a year that I still shudder to remember. It a year—you will not believe this, Mr Deputy Speaker—in which I started with no grey hairs and ended up with plenty, and I think my hairline was 2 cm further down my forehead than it is today. It is vital that the action we are taking today goes ahead.
In the autumn of 2019, the British people had confidence in this Government and in the Prime Minister. Most wanted us to deliver on the referendum result, while others just wanted the country to move on; neither was possible. Who can forget the utter farce of the indicative votes process, when this Parliament literally voted to do nothing? It was a shambles. What arrogance for politicians to deprive the people of their will, when it was so clear that, in the national interest, we needed to go to the country and expunge that dead, or dying, Parliament. Who can forget the frankly absurd spectacle of the Prime Minister, almost on bended knee, seeking the permission of the Leader of the Opposition, then the right hon. Member for Islington North (Jeremy Corbyn), a man who claimed he wanted an election, just not quite yet—was it three times he used that line?
Indeed, we could still be in that awful holding pattern of wanting to go to the country but failing to get the two-thirds majority required under the Fixed-term Parliaments Act, had Jo Swinson and the Liberal Democrats not come graciously to the aid of the country and the Government. For her and their sacrifice, we and indeed the entire country will remain eternally grateful. [Laughter.] We laugh now, but I remember the debates back then about when the right hon. Member for Islington North would decide that it was right for us to go to the country—maybe it would be after Christmas; maybe it would be in spring, when the weather would be better. Knowing what we know now, imagine if we had still been in that position, with that Parliament coinciding with the coronavirus pandemic and all that it wrought on the country. Are we not so very glad that we went to the country when we did? It is a genuinely frightening thought.
It is hard now in this new Parliament—sort of new—with a functioning Government majority, to imagine returning to such a scenario, but in 2010 we were told by very clever people on TV that coalitions would be the future, and in 2015 we were told that government by a single-party majority had returned. I remember in 2017 also being told that the country was braced for an era of minority government. Now, of course, we are told that we have returned to large one-party Governments that command control of the House. It is very bad to try to predict the future. In this game, it is hard to predict what will happen in three weeks, let alone three years.
The greatest asset that this country has is the flexibility of its famously uncodified constitution not only to dignify, but to bend and adapt to, circumstance and event. It has been the habit of recent Governments since the late 1990s to meddle with that, and in many instances we have learnt the hard way that we do so at our peril. As my right hon. Friend the Member for Scarborough and Whitby (Mr Goodwill) said, the old adage “If it ain’t broke, don’t fix it” should be every Government’s mantra. The joy and brilliance of the previous system—whereby a House of Commons could boot out a Government if they lost confidence, or a Prime Minister could, in the national interest, go to the country—was flexible and enduring. And it worked; it did not need fixing.
Ultimately, the Fixed-term Parliaments Act failed. It expressly failed to ensure that we had fixed-term Parliaments. If it had succeeded, I would not be standing here today—some might think that would be a very good thing, but from my perspective I am very glad that the Act failed. The Act is bad law. It was ill conceived and ill thought through, with awful consequences. My hon. Friend the Member for Orpington (Gareth Bacon) spoke about the confusing situation that would arise in the two-week gap between a Government falling and the creation of a new Government. I am very glad that the Government are seeking to overturn the Act. I support this Bill and look forward to voting for it this evening.
I will finish by echoing the comments of my hon. Friend the Member for Newcastle-under-Lyme (Aaron Bell), when he wondered whether many people were tuning into BBC Parliament to watch this debate. Shame on them if they are not, because today I genuinely think we have seen Parliament at its best—a dignified, in-depth, serious debate with no time limit. The only cry I would make is: more of this sort of thing, please.
Cat Smith (Lancaster and Fleetwood) (Lab)
With the leave of the House, I shall make some closing remarks on behalf of the Opposition. As the Minister for the Constitution and Devolution, the hon. Member for Norwich North (Chloe Smith), is now at the Dispatch Box, let me begin by welcoming her back. I am sure she has heard all the comments made by colleagues this afternoon and hope she feels appreciated. I agree with what the right hon. Member for Basingstoke (Mrs Miller) said: it almost feels like the Minister has never been away. As her opposite number, I can say that she has never been more than a text message or Microsoft Teams call away. I know that it must have been quite challenging at times, but it is a credit to her, her strength and her strength of character that she has continued to do the job in the way she has through an incredibly challenging time personally. Now that she is back, she is not going to be easing her way back into it, because we have not only this chunky piece of legislation before us but the Elections Bill to come.
This is probably a good opportunity for me not only to welcome the new SNP spokesperson on election matters, the hon. Member for Argyll and Bute (Brendan O’Hara), who made an incredibly passionate speech, but to pay tribute to his predecessor, the hon. Member for Glasgow East (David Linden), who was a pleasure to work with and a fully signed up constitutional geek, unlike the hon. Member for West Aberdeenshire and Kincardine (Andrew Bowie), apparently—he claims not to be but I am sure that we can convince him otherwise.
This was a very good debate and I wish to make a few comments about what was said. I referred just a moment ago to the hon. Member for Argyll and Bute, who made a strong case for the argument that this legislation is a huge power grab by the Executive. Indeed, I agree with him that clause 3 looks very much like the Government are still smarting from the 2019 court judgment on the Prorogation that never was. I reach out to my SNP colleague and suggest to those on the Government Benches that one way to solve the perceived problem that the Government have, and the reason for clause 3 being in the Bill, could be a parliamentary vote on Dissolution, which would pave a way forward.
Alongside many other Members, the right hon. Member for Scarborough and Whitby (Mr Goodwill) raised the issue of shortening the election period. Indeed, election periods have got much longer—although in the most recent election, of course, the days were much shorter. I urge all colleagues to listen to their local electoral administrators, because there are significant challenges in running elections for those who are behind the scenes, not just for us who are campaigning. One of the biggest challenges we have is the processing of electoral enrolments. I suggest to the Minister that we could look again—perhaps it could be included in the Elections Bill—at a process of automatic voter registration, which would include everybody who was entitled to vote on the electoral roll and save an awful lot of time. Perhaps that would give us the freedom to shorten the election period without putting additional pressure on electoral administrators.
My hon. Friend the Member for Rhondda (Chris Bryant) made many salient points in the debate, but ultimately he called for a level playing field, which is a concern that runs right across those of us have concerns about the Bill.
I have sparred with the right hon. Member for Elmet and Rothwell (Alec Shelbrooke) on many other constitutional and electoral matters over the years—it is always a pleasure—but I very much agreed with him when he was talking about the threats to democracy and democratic systems globally, including his point about the United States of America. However, I disagreed with his analysis of the 2017-19 Parliament, which was echoed by some of his colleagues. I think we are unfairly blaming the Fixed-term Parliaments Act as the sole cause of the difficulties that the Government had at that time. If I close my eyes and imagine that that Act was not in place in the 2017-19 Parliament, I do not see that the political path would have been much smoother for the Government, so it is unfair to blame solely that Act for the Prime Minister’s difficulties at that time. When we legislate, we should be careful not to base everything on recent political experience. Indeed, we are legislating for constitutional matters that should not only secure as broad a consensus as we can across the House but stand the test of time. We should not base everything on the specific and unique circumstances in that Parliament.
I thank the right hon. Member for Orkney and Shetland (Mr Carmichael) for reminding us that he is, of course, one of the remaining veterans of the coalition Government. He referred to the Fixed-term Parliaments Act as a “necessary modernisation” and I agree with him. That is certainly borne out as true if we look across similar parliamentary democracies across Europe and the western world; we would be out of step by reverting to the old way of doing things—indeed, to do so is arguably a regressive step. He warned that the party that is in government today is not necessarily going to be in government forever and that those on the Opposition Benches might one day be in government. We should all be careful what we wish for and consider the fair and level playing field that we all seek to achieve.
I really enjoyed the contributions made by many Members. The hon. Member for Newcastle-under-Lyme (Aaron Bell) had an awful lot to say, but his take-down of the ridiculous situation of having a super majority in the Fixed-term Parliaments Act was very succinct. Indeed, it was total nonsense that there was any super-majority in the legislation in the first place. I certainly do not think that the hon. Member for Totnes (Anthony Mangnall) built any bridges with his Liberal Democrat colleagues in his contribution.
The Bill before us does two things: it repeals the Fixed-term Parliaments Act 2011 and reinstates the status quo as if the past 10 years did not happen at all. On the first of those matters, the official Opposition absolutely agree with the Government that the Fixed-term Parliaments Act 2011 should be repealed. However, the Government have some way to go to have our confidence that this Bill is worthy of our support. We certainly cannot wish to drag our monarch into politics. We should ensure that Parliament has a central role to play in the process, as is right in any modern democracy, and certainly has a say over Dissolution.
I say to the Minister that if this was a Bill in isolation, that would be one matter, but there is a pattern of behaviour and a pattern of legislation coming out of this Government when it comes to constitutional and election matters. The attacks on the Electoral Commission from members of her party, the attacks on judicial review, and making it harder to vote by requiring ID at polling stations when there is very little problem to solve shows a pattern of behaviour that does cause concern. So much of our politics and parliamentary procedures rely on people being, as my hon. Friend the Member for Rhondda said, good guys—and women, of course. If that is broken then everything else will fray at the edges.
Ultimately, this Bill is about where power lies. I would certainly argue that power should lie with the people, but this is a power grab by the Executive against the legislature. The Bill as it currently stands needs an awful lot of work if it is to have our confidence.
Mr Deputy Speaker (Mr Nigel Evans)
Minister, we have already had many messages from within the Chamber welcoming you back to the place where you rightfully belong. May I say on behalf of every Member of Parliament that it brings us great joy to see you back here in Parliament?
The Minister for the Constitution and Devolution (Chloe Smith)
Thank you very much indeed, Mr Deputy Speaker, and I thank all the very many friends across the House who have said such nice things to me today. It makes me blush but it makes me pleased and happy to rejoin you in person and to be able to lead the closing of the debate on this very important Bill.
I thank everybody who has spoken, including well-known sparring partners on the Opposition Front Benches, with a new one joining from the SNP, so I look forward to many a time speaking on constitutional matters with the hon. Member for Midlothian (Owen Thompson). I thank the Chairman of the Select Committee, my hon. Friend the Member for Hazel Grove (Mr Wragg), who is nearly in his place, and the members of the Joint Committee who have spoken, as well as many other colleagues from across the House.
I will cover as many of the specific points that have been made as I can, but let me start by outlining how today’s debate has underlined how our former and fundamental constitutional arrangements work, with the flexibility that is essential to our parliamentary democracy. The Bill restores that constitutional balance. How do we restore the former arrangements? With reference to the comments by the hon. Member for Argyll and Bute (Brendan O’Hara), it is very important to be clear about how the Bill does this puzzle of reviving the prerogative power. There are two aspects: whether it can be revived, and, critically and importantly, the practical effect of doing so. I will cover both very briefly.
Our view is that the prerogative power can be revived but that express provision is needed, and clause 2 does exactly that. It delivers on its intended purpose to firmly reset the clock with as much clarity as possible. In preparing the Bill, we engaged with a wide range of stakeholders, including many academics, some of whom have been quoted but many more of whom also agreed with the Government’s approach, including Professor Mark Elliott. The drafting is therefore sufficiently clear, as the Joint Committee agreed.
Moving on to the practical effect, a former First Parliamentary Counsel also agrees with the Government’s approach, talking about this question almost as
“a red herring…because…it is perfectly plain that the intention of the Act is to restore the situation to what it was before…and therefore the law will then be indistinguishable”.
Let me turn from that into how this power works and what is being restored. Here we talk about the role of the sovereign. I note that the shadow Minister, the hon. Member for Lancaster and Fleetwood (Cat Smith) was, if I heard her correctly, arguing or concerned that it perhaps was not clear what the role of the sovereign might be in the returning system. Indeed, I think the hon. Member for Midlothian made the same point. I want to be absolutely clear: there remains a role for the sovereign in exceptional circumstances to refuse a Dissolution request. I am not going to be able to speculate on that from the Dispatch Box. It would not be sensible for me to do so, but other Members of this House have already offered some examples this afternoon, such as, for example, if an Opposition already had the numbers to be able to form a Government and could demonstrate confidence and viability. That point was made by the hon. Member for Rhondda (Chris Bryant). Unfortunately he is not here to enjoy me joining him in making it.
Turning to how the conventions endure, I thank the Chairman of the Public Administration and Constitutional Affairs Committee, my hon. Friend the Member for Hazel Grove for bringing that point out very well. I also thank Joint Committee members, such as my right hon. Friend the Member for Scarborough and Whitby (Mr Goodwill), who reminded us of the Lascelles principles. What I will say here is just a point about how we see the principles that accompany the prerogative power—the convention principles, or the Dissolution principles, as we named them in a document that we published alongside the Bill—going forward. That document was published to facilitate Parliament’s discussion and consideration of these very important accompanying points. We also provided a very full response to the Joint Committee, which was a further opportunity to go further in outlining the conventions as commonly understood.
I think the place for further discussion and debate on these conventions is here in Parliament—in this Chamber and the other. That will provide us with a shared understanding and the commanding of confidence— I should say “agreement”; “confidence” risks being misunderstood in the context of our debate this afternoon. It will provide us with the commanding of agreement on what provides conventions, and therefore those conventions may be able to endure.
Let me go from there to what we intend to restore and some elements that we are maintaining, although the grander scheme here is to return to a former set of arrangements. The purpose of the Bill, as I say, is to restore the long-standing arrangements that existed before the 2011 Act, but there are some exceptions, and those are where changes had already been made to enable the smooth running of elections. That brings me to, for example, the retaining of the 25 working day period between Dissolution and polling day. That ensures the continued operability of our electoral system, and I will just dwell on that for a few minutes, because a number of hon. and right hon. Members raised it.
There are three points to be made, and each is about the benefit for voters, which is a point that rang out loud and clear—that we should have such arrangements for the benefit of voters, not administrators or, indeed, politicians. The first point is that the timetable as it stands gives enough time for nominations to be received—six days—and then 19 days for those nominations to be decided upon. Let us remember that in our constitution we have a constituency-based decision going on each time. Any voter in any constituency rightly needs time to consider and decide upon the candidates in the constituency once nominated.
The second point is how much change has occurred in electoral delivery since the arrangements that we are otherwise seeking to restore were created. That is to say that the system of delivering elections is more complex than at any other point in our history. First, before 2014, there was no online individual electoral registration. That is a point of fundamental change that has enabled increasingly higher numbers of last-minute applications. That is of benefit to voters, and I would argue very strongly so. Secondly, postal voting on demand was only allowed in 2000. Again, that is the subject of debate, but I would argue that it is very strongly of benefit to voters.
My third and final point is that, in the written evidence to the Joint Committee, the Association of Electoral Administrators argued strongly that
“it would be catastrophic for everyone involved…if the… period were to be shortened…It would create a significant risk of the election failing and not being delivered and increase the risk of disenfranchising potential electors, particularly those voting from overseas.”
Fundamentally, that is a point that we should be concerned about, and it is a point in favour of the benefit to voters.
Let me move on to acknowledge what it is that we are leaving behind if we are moving to restore a different system. At this point, I acknowledge the words of the right hon. Member for Orkney and Shetland (Mr Carmichael) and thank him again for his kind words to me. Fundamentally, his argument here is one for statute and one for qualification, and, fundamentally, my argument is not. We will have to agree to differ on that, and we will do so in the Lobby tonight. What we mean by moving away from a statutory system is that we do not think that it is possible to define everything. All the scenarios that could occur at the point at which a Dissolution might be needed could not possibly be codified, so statute is not adequate in this case. What we do think, though, is that there is a very important role for the House of Commons, and I want to make this point because it came up in several hon. Members’ remarks.
There is, of course, a crucial voting role for the House of Commons in indicating confidence in the Government, or the opposite of it. That is no small role at all. To swap a statutorily defined role for the House of Commons for that role is no small swap. Fundamentally, of course, having confidence is what defines the Government. There could be no more powerful role for the House of Commons in our constitution.
That takes us to the point of certainty that my hon. Friend the Member for Newcastle-under-Lyme (Aaron Bell) very wisely made. The certainty comes because the people will know that they then have their role. If it has not been possible to find confidence in the House of Commons in the formation of a Government, then the power flows to the people, and that is a certain understanding of what will happen.
Chloe Smith
I do not have a great deal of time, but I will give way briefly.
Mr Carmichael
On this point of certainty, surely all parties are entitled to certainty about the date on which the long period for electoral expenses starts to run. Under the current arrangements from the Government, only the governing party will have that certainty. Is that fair?
Chloe Smith
I am extremely glad that the right hon. Gentleman has made that point. I was going to address it in just a moment, because he raised it at the very outset, so I will come back to it shortly.
Let us be realistic. What is the prerogative power here for? It is a bit more like “break glass in case of emergency” than it is the kind of scheme that I think the Liberal Democrats are looking for. I think we can all agree that people do not welcome needless upheaval—Brenda from Bristol put it pretty well—but they do want their role in resolving a crisis. Vernon Bogdanor, in evidence to Committees along the journey of this Bill, made the point very well. Essentially, unsuccessful Governments have attempted to get to five years. Successful Governments have gone to the people at four years. Anything short of that is a national emergency. What we are talking about today is what needs to happen in the cases of emergency or crisis. I note the arguments made for fixed terms, particularly by the hon. Member for Edinburgh West (Christine Jardine), but we have tried designing those and they have not worked, so what we are returning to here is an arrangement that did work.
I want to reassure the House on a couple of points, as I said I would to the right hon. Member for Orkney and Shetland. The long campaign expenditure controls are not changed by this repeal. Those arrangements are that if Parliament is not dissolved 55 months from its first meeting, then the long campaign controls apply. That situation continues. That has not changed. I also point out that there is a measure in the schedule to this Bill that adds to that in respect of third party donations. The schedule also provides that the trigger for the election timetable in the case of a general election is the Dissolution of Parliament. That is an important safeguard that we have built into the Bill, acknowledging arguments made on that note from the Joint Committee.
I conclude by thanking hon. Members once again for their contributions this afternoon. It has been a very good debate, and I am delighted to be back and to be part of it. My priority with this Bill is to encourage consensus, because that is what will give us the most effective operation of the conventions that must endure once again.
I close with the points made by the Public Administration and Constitutional Affairs Committee on the nature of our constitution:
“at the heart of the UK’s constitutional arrangements is a fine but constantly-shifting balance of convention, principle and law, that provides clear guidance, but also flexibility… In areas of prerogative power, the Sovereign remains the constitutional backstop.”
I could not have put it better. None the less, the hon. Member for Strangford (Jim Shannon), in his inimitable style, did put it better. He said that our institutions are often the envy of the world, and I could not agree more. It is those that I want to uphold. This Bill will return our country to successful constitutional arrangements that have stood the test of time and will continue to serve the people, with the choice ultimately in their hands.
Mr Deputy Speaker (Mr Nigel Evans)
I am anticipating a Division, so could Members please follow covid regulations as they go to vote?
Question put, That the Bill be now read a Second time.
Business without Debate
Delegated Legislation
Police presence in Kensington
Felicity Buchan (Kensington) (Con)
I rise to present a petition on behalf of the residents of Kensington, to save a physical police presence in the north of Kensington. The petitioners declare that it is “imperative” that such a presence is retained in the north of the Royal Borough of Kensington and Chelsea. This petition, alongside the corresponding online petition, has accumulated 1,208 signatures. I would also like to draw the House’s attention to the fact that there are two similar independent petitions, which have also garnered 684 signatures. The petitioners urge that
“the House of Commons urge the Government to take immediate action to ensure that a physical police presence is retained”
in the north of Kensington.
Following is the full text of the petition:
[The petition of residents of the constituency of Kensington,
Declares that it is imperative that a physical police presence, that being defined as a police station with a counter, continues to be located within the boundaries of the Royal Borough of Kensington and Chelsea, North of Holland Park Avenue/Notting Hill Gate; further that such a presence is needed because tackling crime in the area, particularly violent crime, poses significant challenges and the Grenfell community deserve to have a police presence; and further that a guarantee of police presence should be made as soon as reasonably possible and no later than the date set for the closure of Royalty Studios (North Kensington) Police Station.
The petitioners therefore request that the House of Commons urge the Government to take immediate action to ensure that a physical police presence is retained and not withdrawn from Kensington.
And the petitioners remain, etc. ]
[P002672]
Covid-19 Vaccines: Nepal
(3 years, 4 months ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Mr Deputy Speaker (Mr Nigel Evans)
It being 6.59 pm as we go into the Adjournment debate and the Minister moves slowly to his place, the Dispatch Box has been sanitised, so we do not need to suspend the House. The fact that I am rabbiting on a little will mean that the hon. Member for Monmouth (David T. C. Davies) need move the Adjournment only once.
I do apologise, but as this is a very limited debate, Members other than the hon. Member for Ealing, Southall (Mr Sharma) and the Minister will not be able to make speeches. However, they will at least be able to ask to intervene on the Minister; of course, it will be up to the Minister whether he accepts their intervention.
Motion made, and Question proposed, That this House do now adjourn.—(David T. C. Davies.)
Mr Virendra Sharma (Ealing, Southall) (Lab)
Thank you, Mr Deputy Speaker, for chairing this debate to close our proceedings today. I thank all hon. Members who are unable to intervene on me today because of constraints of time and virtual participation; I especially thank my hon. Friends the Members for Feltham and Heston (Seema Malhotra) and for Stockport (Navendu Mishra), and the right hon. Member for Basingstoke (Mrs Miller) for their support and for their interest in the debate.
As chair of the Nepal all-party parliamentary group, I have spoken about the country many times in this House. I say much the same every time: Nepal is a great ally and friend of the UK, and has been for more than two centuries. The Nepali diaspora and the Gurkhas have contributed to the safety of this country, to our economy and to our cultural life throughout all that time. I talk about the wonderful country that I have visited many times, the friendly and welcoming people, Nepal’s place in the world—pressed between India and China, at the top of the world on the Himalayan plateau —and its development into a democracy with Government scrutiny and elections since 2008.
I was honoured to host Prime Minister Oli here only a few years ago, when he met the then Prime Minister and Leader of the Opposition, the right hon. Member for Maidenhead (Mrs May) and my right hon. Friend the Member for Islington North (Jeremy Corbyn). No one knew of covid-19 then; discussions were about strengthening Parliament, development, trade and climate change. Everyone promised to help in 2019—they committed support and proclaimed friendship—but now, when Nepal is in dire need of vaccines, we hide behind international efforts and behind global schemes and platitudes.
The situation in Nepal is severe—indeed, it is a crisis. Amnesty International has said:
“The country’s health care system is teetering, with hospitals reaching capacity, and overstretched, hopelessly under-resourced staff are unable to keep up with overwhelming demand”.
UNICEF’s staff on the ground have reported:
“Within a short time, cases were just climbing up and up…We were stretched to the very limit, trying to do the best with the resources we had.”
More than 600,000 people have officially been infected with covid-19 and more than 9,000 people have died following a major surge in infections—similar to that in India, but less reported on. More than 50% of deaths have been among over-60s. In May, the country had the highest positivity rate in the world, at 47%. The situation is even worse, because the lack of tests and the serious under-reporting hide the real figures, but we know that the country’s weak and fragile health system has been totally overwhelmed, that patients are unable to access care and that desperate shortages of oxygen across the country claim lives.
Health experts have warned of an imminent third wave that will cause further havoc for an acutely under-vaccinated population: less than 3% of Nepalis have been fully vaccinated, and a further 6.3% have received only one dose. The lack of a second dose puts 1.4 million vulnerable Nepalis at high risk of getting covid once again and risks invalidating their first dose. Partial immunisation also increases the risk of mutations emerging, which is a problem not just for Nepal, but for everyone in the world: we have seen the damage that the delta variant has done and continues to do. New mutations are a risk to everyone, vaccinated or not.
Most older people and those in vulnerable categories received their first dose of the Oxford-AstraZeneca vaccine in March, but there are no supplies available to provide their second dose. They were due their second dose between 28 June and 5 July. The clock on the time to administer the second dose has not just started ticking; it has almost run out. The supply shortage happened because of severe problems in global supply due in part to the crisis in India, problems with COVAX and an over-dependency on a small number of vaccine producers whose supplies had been purchased by richer countries.
In response to the covid crisis in India, the export of vaccines from India largely ceased, affecting both a deal that Nepal had agreed to purchase vaccines directly and also severely impacting on the supply available to COVAX. While COVAX had forecast to deliver nearly 2 million vaccines between March and May, it was able to deliver only 348,000. But the crisis has happened, and the causes, while sad, are now a fact. It is what we can do that matters.
I will pose three questions to the Minister. First, we know the UK has a large supply of Oxford-AstraZeneca vaccines and could donate the 1.4 million vaccines needed. This would represent 0.3% of all the vaccines ordered by the UK, and represent just three days of the UK’s roll-out. We can act unilaterally. We know the Prime Minister is proud of global Britain. Will he put the medicine where his mouth is?
Secondly, the Prime Minister, at the beginning of last month, committed to 5 million doses being sent “in the coming weeks”—his phrase, not mine. Nepal is a prime candidate to receive some of those. Will the Minister commit to Nepal receiving some of those doses and offer us an actual date for delivery?
Thirdly, COVAX is welcome, it is a good initiative and it is the right thing to do, but today it is not delivering because it does not have enough supply. What steps and on what timetable will the Government much more rapidly donate the promised vaccines to reach vulnerable people across the world, and how will we use our power overseas to encourage other countries to do the same and meet their international obligations?
I wrote to the Foreign Secretary at the end of May about this pressing need for vaccines, about the millions of lives at risk and about the crisis in Nepal. I wrote with other Members from across this House and from the other place. The response from his Department continues to talk about COVAX facing all the problems I have already outlined, followed by the line that
“this will be sufficient to vaccinate 70% of the population of Nepal once supplies allow.”
Once supplies allow—that is the heart of the problem, because supplies do not allow. Some 1.4 million older and vulnerable people need their second dose, and supplies do not allow. We can change that, but will the Minister and the Government have the courage to live up to a global Britain brand?
The Minister for Asia (Nigel Adams)
I am incredibly grateful to the hon. Member for Ealing, Southall (Mr Sharma) for securing the debate. I am sure everyone in the House will pay tribute to his work as chair of the Nepal all-party parliamentary group. It is absolutely right to debate vaccine access as Nepal recovers from a devastating second wave of covid-19. It is vital that the country has a clear route to a comprehensive vaccine programme.
As the hon. Gentleman knows, the United Kingdom and Nepal share a very deep relationship that has lasted over two centuries. In fact, Nepal’s first formal diplomatic relationship was established with us in 1816 and Nepal has held a special place in our hearts ever since, not least through the distinguished service of Gurkhas in the British Army and the bravery and excellence of its Sherpas who have inspired thousands of British mountaineers over the decades, as well as through the kindness and warmth of its people and because of its spectacular natural beauty.
In May, the delta variant of covid-19 spread to Nepal and quickly took hold in a devastating second wave of infections. As the hon. Member said, that overwhelmed Nepal’s healthcare system, and the people of Nepal have suffered immensely. I speak for the United Kingdom Government in offering my deepest condolences to the people of Nepal for the hardships they have endured in recent months.
Jim Shannon (Strangford) (DUP)
I thank the hon. Member for Ealing, Southall (Mr Sharma) for introducing this debate. I really appreciated his significant contribution. It is also a pleasure to see the Minister in his place.
Recently, in my role as chair of the all-party parliamentary group for international freedom of religion or belief, I had the privilege of a productive meeting with His Excellency Mr Lokdarshan Regmi, the new Nepalese high commissioner in the UK, at which he shared the details of the extremely difficult situation that Nepal faces with regards to the covid-19 pandemic. What help can this Government in the United Kingdom give in particular to Nepal’s Christians, Muslims and other religious minorities who are not getting help or getting the vaccine?
Nigel Adams
I am grateful to the hon. Gentleman for his intervention. He is right to mention his interaction with his excellency. We have used existing programmes to support Nepal since the second wave. We have fielded our own experts to help Nepal’s Ministry of Health and Population with epidemiological analysis and data, we have financed two covid treatment centres in hotspots in Pokhara and Bhaktapur, and we have provided local governments in those hotspots with medical equipment such as personal protective equipment, oxygen concentrators and ventilators, and much more. I will come to that in my speech.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
Will the Minister give way?
Nigel Adams
I am not sure that I had advance notice of the hon. Lady’s intervention, but I am happy to take it.
Seema Malhotra
I thank the Minister for giving way. I am sure he will appreciate our concern over the stories of what is going on in Nepal. The Foreign, Commonwealth and Development Office has said that the UK stands “shoulder-to-shoulder” with Nepal, but many of my constituents—including our first Gurkha Nepalese Mayor of Hounslow, Councillor Bishnu Gurung—are deeply concerned that what is being provided to Nepal is not nearly enough, and not nearly fast enough for the situation. An estimated 63 retired Gurkha soldiers who served in the British Army have died of covid-19 in Nepalese villages. Following the powerful speech by my hon. Friend the Member for Ealing, Southall (Mr Sharma), what more can the Minister say to give confidence to our constituents that enough is being done practically on the ground and in relation to vaccines to support the situation in Nepal?
Nigel Adams
I thank the hon. Lady. She is absolutely right to speak up for the Nepalese diaspora in her constituency and elsewhere. What I can add to my response to the hon. Member for Strangford (Jim Shannon) is that the United Kingdom is stepping up. We were first out of the blocks delivering equipment, for example, to India when the second wave hit in India. Of course, whatever we do will never be enough. It is a really, really challenging situation—the hon. Lady will appreciate that—but 269 ventilator machines have been donated, and thousands of pieces of personal protective equipment. We are constructing an oxygen plant in Kathmandu, with an additional plant in Pokhara; that will be completed by August. We are stepping up. We are also working with the Gurkha Welfare Trust to help those Gurkhas who have served this country so brilliantly. Through the UK-funded welfare trust, we are ensuring that lifesaving support and supplies to Gurkha veterans and communities are getting through. That includes three medical clinics and subsidised hospital treatment.
I understand that, as of last week, just 8.8% of Nepal’s population have received a first vaccine dose and 2.6% have received both doses. I understand that some will accuse us of failing Nepal in its time of need. I can tell hon. Members that nothing could be farther from the truth. Since the beginning of the pandemic, the UK Government have reprioritised over £40 million of foreign aid through the British embassy in Kathmandu to help Nepal respond to the challenges of covid-19, and at each phase of the pandemic, as it changes and as waves come along, we have tailored our support to Nepal’s needs
Navendu Mishra (Stockport) (Lab)
I thank the Minister for giving way; in my experience I have always found him open to dialogue. I congratulate my good friend, my hon. Friend the Member for Ealing, Southall (Mr Sharma). The Minister was right to point out, early in his speech, that the UK and Nepal have a long relationship, going back over 200 years, and the Nepali community in Britain makes a significant positive contribution to this country. I appreciate that the Minister is aware of the problems of COVAX, particularly when it comes to the delivery of vaccines. India and South Africa made a proposal at the World Trade Organisation regarding a trade-related aspects of intellectual property rights—TRIPS—waiver, that would have facilitated the provision of covid vaccines, medicines and equipment to low and middle-income countries, which unfortunately the British Government blocked. I notice that the Biden Administration have changed their position and are now supporting that TRIPS waiver. Does the Minister agree that the UK Government should also amend their position on such a waiver, to help countries such as India, Nepal and so many others?
Nigel Adams
I can tell the hon. Gentleman that we are of course acutely aware of the challenge, whether that is getting first or, in the 1.4 million cases scenario, second doses. We have supported the Government of Nepal in liaising with and approaching the secretariat about the issue. As he knows, because it was announced recently, the majority of our over 100 million shared doses will go through the COVAX facility. That will help lower and middle-income countries enormously; that roll-out has now begun. Of course we are working constantly with Governments who are in need of those vaccines.
If I may get back to Nepal, we have targeted our support at the immediate health response and at the economic consequences of lockdowns, which we are acutely aware of in our own country. We have funded water sanitation and hygiene facilities for 400,000 people, safe spaces for women in isolation centres, cash and voucher assistance for the most vulnerable, and nutritional support for women who are pregnant or breastfeeding.
In response to the second wave of covid in Nepal, we have provided additional medical support through our embassy in Kathmandu. We have funded experts to support the federal Government response. We have helped to establish temporary treatment centres in hotspots and, as I said to the hon. Member for Feltham and Heston (Seema Malhotra), we constructed an oxygen plant in Kathmandu, with another one coming in Pokhara next month. We have delivered medical equipment and PPE to local governments in the worst affected areas. That has included providing oxygen concentrators and ventilators for hospitals in Banke and Mugu. Throughout the pandemic, the Gurkha Welfare Trust—I referred to that in response to the hon. Member for Strangford—has been UK funded, and we have also ensured access to life-saving support and supplies to veterans and their communities.
In May, my colleague, Lord Ahmad of Wimbledon, who is Minister for South Asia and responsible for the Nepalese portfolio, spoke to Mr Gyawali, Minister of Foreign Affairs, to discuss what further support the UK could provide. In response to that conversation, a military flight from Brize Norton arrived in Kathmandu a week later. It carried 260 ventilators and many thousands of pieces of PPE. Make no mistake, Mr Deputy Speaker, those pieces of equipment and that assistance are saving lives in Nepal as I speak. I recognise, however, that medical supplies are only part of the solution. Vaccines are also crucial—that point has been raised in the other place on several occasions by Lord Lancaster, who takes a keen interest in Nepal.
We are playing a leading role in ensuring equitable access to vaccines for countries such as Nepal. The COVAX initiative sits at the centre of that effort, and the United Kingdom was integral to building COVAX from scratch. Our early commitment of more than £548 million, which in turn leveraged $1 billion of funding from other donors, allowed COVAX to arrange supply deals with vaccine manufacturers. Despite supply challenges, COVAX has started to make significant progress in delivering vaccines around the world, with almost 348,000 doses already delivered to Nepal, and another tranche on the way in the next few weeks.
Ninety-six per cent. of vaccines distributed by COVAX to date have been the Oxford AstraZeneca vaccine, including in Nepal. Clearly, the United Kingdom was crucial to the development of that vaccine. We provided £90 million to support the initial research and development, and the subsequent manufacturing required to produce the Oxford AstraZeneca vaccine. What is more, we made clear that, as part of that funding, the vaccine should be affordable around the world. In total, more than 0.5 billion doses of the AstraZeneca vaccine have already been delivered at a non-profit price globally, with two thirds going to lower and middle-income countries.
With United Kingdom support, a global licensing deal was also struck to transfer AstraZeneca’s technology to other manufacturers and establish 20 supply chains across the world, taking it to even more people. We have also been at the forefront of efforts around the world to boost confidence in covid-19 vaccines. Unfortunately, misinformation about vaccines—which can spread quickly, as we all know, on social media, with no respect for borders—has the potential to undermine trust and confidence in vaccines, which, ultimately and sadly, can cost lives. At the G7 global vaccine summit earlier this month, the UK Government and Google Cloud announced that they would work with some of the world’s leading tech companies on new digital solutions to tackle misinformation around vaccines.
Furthermore, the United Kingdom has supported the World Bank and the Asian Development Bank to provide special finance to Nepal to tackle the consequences of covid-19, including to purchase those vaccines. The World Bank has already released $75 million and the Asian Development Bank will shortly agree an additional $165 million financing deal with the Government of Nepal. The United Kingdom supported these contributions as a shareholder in both those banks. With that finance and COVAX allocations, the Government in Nepal will be able to vaccinate seven out of every 10 Nepalis when, clearly, supplies allow.
We have also used our presidency of the G7 to spear- head a commitment from G7 members to share 1 billion vaccine doses by June 2022. At least 100 million of those vaccines will come from the United Kingdom. As the House knows, the majority of our shared doses will go to COVAX. I am sure that the hon. Member for Ealing, Southall will understand that we are not yet able to announce the detailed allocations of those, but we will endeavour to share with him and the House that information regarding the distribution as soon as possible.
Let me emphasise that the United Kingdom remains committed to supporting Nepal’s development and recovery from covid-19, and I hope that some of the measures that I have outlined in answer to hon. Members’ interventions put some clarity on what we have actually delivered for the people of Nepal. As I said, we have reprioritised over £40 million of foreign aid to help Nepal respond to this awful pandemic. We sent scores of life-saving equipment to help Nepal respond to the country’s second wave and we have played a leading role in establishing COVAX and ensuring access to vaccines for Nepal—and not just Nepal, but all developing countries.
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 |
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 |
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 |
Mr Nicholas Brown (Newcastle upon Tyne East) (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) | Bell Ribeiro-Addy |
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) | Ian Paisley |
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 |
Sarah Champion (Rotherham) (Lab) | Chris Elmore |
Douglas Chapman (Dunfermline and West Fife) (SNP) | Owen Thompson |
Bambos Charalambous (Enfield, Southgate) (Lab) | Chris Elmore |
Joanna Cherry (Edinburgh South West) (SNP) | Owen Thompson |
Rehman Chishti (Gillingham and Rainham) (Con) | Stuart Andrew |
Sir Christopher Chope (Christchurch) (Con) | Mr William Wragg |
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 |
Sir Geoffrey Clifton-Brown (The Cotswolds) (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) | Wendy Chamberlain |
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) | Wendy Chamberlain |
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 |
Leo Docherty (Aldershot) (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) | Ian Paisley |
Michelle Donelan (Chippenham) (Con) | Stuart Andrew |
Dave Doogan (Angus) (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) | Liz Saville Roberts |
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 |
Michael Fabricant (Lichfield) (Con) | Stuart Andrew |
Laura Farris (Newbury) (Con) | Stuart Andrew |
Stephen Farry (North Down) (Alliance) | Wendy Chamberlain |
Simon Fell (Barrow and Furness) (Con) | Stuart Andrew |
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) | Ian Paisley |
John Glen (Salisbury) (Con) | Stuart Andrew |
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 |
Sarah Green (Chesham and Amersham) (LD) | Wendy Chamberlain |
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) | Liz Saville Roberts |
Emma Hardy (Kingston upon Hull West and Hessle) (Lab) | Chris Elmore |
Ms Harriet Harman (Camberwell and Peckham) (Lab) | Chris Elmore |
Mr Mark Harper (Forest of Dean) (Con) | Stuart Andrew |
Carolyn Harris (Swansea East) (Lab) | Chris Elmore |
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 |
Antony Higginbotham (Burnley) (Con) | Stuart Andrew |
Damian Hinds (East Hampshire) (Con) | Stuart Andrew |
Simon Hoare (North Dorset) (Con) | Stuart Andrew |
Wera Hobhouse (Bath) (LD) | Wendy Chamberlain |
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) | Wendy Chamberlain |
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) | Stuart Andrew |
Ben Lake (Ceredigion) (PC) | Liz Saville Roberts |
Ian Lavery (Wansbeck) (Lab) | Bell Ribeiro-Addy |
Chris Law (Dundee West) (SNP) | Owen Thompson |
Kim Leadbeater (Batley and Spen) (Lab) | Chris Elmore |
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) | Ian Paisley |
Chris Loder (West Dorset) (Con) | Stuart Andrew |
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 |
Kenny MacAskill (East Lothian) (Alba) | Neale Hanvey |
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 McNally (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 |
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 |
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) | Wendy Chamberlain |
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 |
James Morris (Halesowen and Rowley Regis) (Con) | Stuart Andrew |
Joy Morrissey (Beaconsfield) (Con) | Stuart Andrew |
Jill Mortimer (Hartlepool) (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) | Wendy Chamberlain |
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 |
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 |
Sir Mike Penning (Hemel Hempstead) (Con) | Stuart Andrew |
Matthew Pennycook (Greenwich and Woolwich) (Lab) | Chris Elmore |
John Penrose (Weston-super-Mare) (Con) | Stuart Andrew |
Andrew Percy (Brigg and Goole) (Con) | Stuart Andrew |
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) | Peter Aldous |
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 |
Anum Qaisar-Javed (Airdrie and Shotts) (SNP) | Owen Thompson |
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 |
Mr Laurence Robertson (Tewkesbury) (Con) | Stuart Andrew |
Gavin Robinson (Belfast East) (DUP) | Ian Paisley |
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 |
Gary Sambrook (Birmingham, Northfield) (Con) | Stuart Andrew |
Selaine Saxby (North Devon) (Con) | Stuart Andrew |
Paul Scully (Sutton and Cheam) (Con) | Stuart Andrew |
Bob Seely (Isle of Wight) (Con) | Stuart Andrew |
Andrew Selous (South West Bedfordshire) (Con) | Stuart Andrew |
Naz Shah (Bradford West) (Lab) | Chris Elmore |
Grant Shapps (Welwyn Hatfield) (Con) | Stuart Andrew |
Alok Sharma (Reading West) (Con) | Stuart Andrew |
Mr Virendra Sharma (Ealing, Southall) (Lab) | Chris Elmore |
Mr Barry Sheerman (Huddersfield) (Lab/Co-op) | Chris Elmore |
Alec Shelbrooke (Elmet and Rothwell) (Con) | Stuart Andrew |
Tommy Sheppard (Edinburgh East) (SNP) | Owen Thompson |
Tulip Siddiq (Hampstead and Kilburn) (Lab) | Chris Elmore |
David Simmonds (Ruislip, Northwood and Pinner) (Con) | Stuart Andrew |
Chris Skidmore (Kingswood) (Con) | Stuart Andrew |
Andy Slaughter (Hammersmith) (Lab) | Chris Elmore |
Alyn Smith (Stirling) (SNP) | Owen Thompson |
Cat Smith (Lancaster and Fleetwood) (Lab) | Chris Elmore |
Chloe Smith (Norwich North) (Con) | Stuart Andrew |
Greg Smith (Buckingham) (Con) | Stuart Andrew |
Henry Smith (Crawley) (Con) | Stuart Andrew |
Jeff Smith (Manchester, Withington) (Lab) | Chris Elmore |
Julian Smith (Skipton and Ripon) (Con) | Stuart Andrew |
Nick Smith (Blaenau Gwent) (Lab) | Chris Elmore |
Royston Smith (Southampton, Itchen) (Con) | Stuart Andrew |
Karin Smyth (Bristol South) (Lab) | Chris Elmore |
Alex Sobel (Leeds North West) (Lab) | Chris Elmore |
Amanda Solloway (Derby North) (Con) | Stuart Andrew |
John Spellar (Warley) (Lab) | Chris Elmore |
Dr Ben Spencer (Runnymede and Weybridge) (Con) | Stuart Andrew |
Mark Spencer (Sherwood) (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) | Wendy Chamberlain |
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) | Stuart Andrew |
Sir Robert Syms (Poole) (Con) | Stuart Andrew |
Sam Tarry (Ilford South) (Lab) | Chris Elmore |
Alison Thewliss (Glasgow Central) (SNP) | Owen Thompson |
Derek Thomas (St Ives) (Con) | Stuart Andrew |
Gareth Thomas (Harrow West) (Lab/Co-op) | Chris Elmore |
Nick Thomas-Symonds (Torfaen) (Lab) | Chris Elmore |
Emily Thornberry (Islington South and Finsbury) (Lab) | Chris Elmore |
Stephen Timms (East Ham) (Lab) | Chris Elmore |
Edward Timpson (Eddisbury) (Con) | Stuart Andrew |
Kelly Tolhurst (Rochester and Strood) (Con) | Stuart Andrew |
Justin Tomlinson (North Swindon) (Con) | Stuart Andrew |
Michael Tomlinson (Mid Dorset and North Poole) (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 |
Mr Shailesh Vara (North West Cambridgeshire) (Con) | Stuart Andrew |
Martin Vickers (Cleethorpes) (Con) | Stuart Andrew |
Matt Vickers (Stockton South) (Con) | Stuart Andrew |
Theresa Villiers (Chipping Barnet) (Con) | Stuart Andrew |
Mr Robin Walker (Worcester) (Con) | Stuart Andrew |
Mr Ben Wallace (Wyre and Preston North) | Stuart Andrew |
Dr Jamie Wallis (Bridgend) (Con) | Stuart Andrew |
David Warburton (Somerset and Frome) (Con) | Stuart Andrew |
Matt Warman (Boston and Skegness) (Con) | Stuart Andrew |
Giles Watling (Clacton) (Con) | Stuart Andrew |
Suzanne Webb (Stourbridge) (Con) | Stuart Andrew |
Claudia Webbe (Leicester East) (Ind) | Bell Ribeiro-Addy |
Catherine West (Hornsey and Wood Green) (Lab) | Chris Elmore |
Matt Western (Warwick and Leamington) (Lab) | Chris Elmore |
Helen Whately (Faversham and Mid Kent) (Con) | Stuart Andrew |
Mrs Heather Wheeler (South Derbyshire) (Con) | Stuart Andrew |
Dr Alan Whitehead (Southampton, Test) (Lab) | Chris Elmore |
Dr Philippa Whitford (Central Ayrshire) (SNP) | Owen Thompson |
Mick Whitley (Birkenhead) (Lab) | Chris Elmore |
Craig Whittaker (Calder Valley) (Con) | Stuart Andrew |
John Whittingdale (Malden) (Con) | Stuart Andrew |
Nadia Whittome (Nottingham East) (Lab) | Chris Elmore |
Bill Wiggin (North Herefordshire) (Con) | Stuart Andrew |
James Wild (North West Norfolk) (Con) | Stuart Andrew |
Craig Williams (Montgomeryshire) (Con) | Stuart Andrew |
Hywel Williams (Arfon) (PC) | Liz Saville Roberts |
Gavin Williamson (Montgomeryshire) (Con) | Stuart Andrew |
Munira Wilson (Twickenham) (LD) | Wendy Chamberlain |
Sammy Wilson (East Antrim) (DUP) | Ian Paisley |
Beth Winter (Cynon Valley) (Lab) | Bell Ribeiro-Addy |
Pete Wishart (Perth and North Perthshire) (SNP) | Owen Thompson |
Mike Wood (Dudley South) (Con) | Stuart Andrew |
Jeremy Wright (Kenilworth and Southam) (Con) | Stuart Andrew |
Mohammad Yasin (Bedford) (Lab) | Chris Elmore |
Jacob Young (Redcar) (Con) | Stuart Andrew |
Nadhim Zahawi (Stratford-on-Avon) (Con) | Stuart Andrew |
Daniel Zeichner (Cambridge) (Lab) | Chris Elmore |
Draft Business and Planning Act 2020 (Pavement Licences) (Coronavirus) (Amendment) Regulations 2021
(3 years, 4 months ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister for Housing (Christopher Pincher)
I beg to move,
That the Committee has considered the draft Business and Planning Act 2020 (Pavement Licences) (Coronavirus) (Amendment) Regulations 2021.
It is a great pleasure to serve under your chairmanship, Sir Christopher.
The regulations were laid in draft before the House on 8 June. If approved, the regulations will extend the temporary pavement licence provisions for 12 months until 30 September 2022, and will come into effect the day after the regulations are made.
The temporary pavement provisions create a faster, cheaper and more streamlined consenting regime for the placement of removable furniture, including tables and chairs, on pavements outside premises such as cafes, bars, restaurants and pubs. The measures have been popular and very successful in supporting businesses, making it easier for pubs, restaurants and cafes to facilitate alfresco dining with outside seating. It is vital that we continue to support the hospitality sector by extending the provisions for 12 months, as it has been one of the hardest hit as a result of coronavirus.
Part 7A of the Highways Act 1980 sets out a permanent local authority licensing regime for the placement of furniture, such as tables and chairs, on the highway. However, licences under part 7A are subject to a legal minimum 28 days’ consultation, and there is no statutory cap on the fee that a local authority may charge. Hon. Members may recall that we made changes to the law on 22 July 2020 to provide for temporary pavement licencing provisions, which were part of the Business and Planning Act 2020. They enabled the hospitality sector to reopen safely and supported the sector through the economic recovery when the coronavirus lockdown restrictions were eased. The proposed regulations will enable powers in the 2020 Act, which allow the Secretary of State to extend the temporary provisions, subject to parliamentary approval.
The sole purpose of the regulations before the Committee is to change the four references to the expiry date in the legislation from 30 September 2021 to 30 September 2022. The regulations do not change any other part of the pavement licence provisions, so the process for applying for a licence during the extended period will not change. The regulations do not automatically extend licences that have been granted under the current provisions, so businesses will need to apply for a new licence if they wish to have one in place during the extended period.
Local authorities are encouraged by guidance to take a pragmatic approach in applying the extended provisions so that it is as convenient as possible for businesses to apply for a licence during the extended period. All licences are subject to a 10-working day determination period, including a five-working day—excluding public holidays—public consultation period, starting the day after the application is sent electronically to the local authority. If the authority does not determine the application before the end of the determination period, the licence will be deemed to have been granted for a year, or sooner, until 30 September 2022. They are no changes beyond the four changes to the date of expiry of the legislation.
Licence application fees will continue to be set locally, but are capped at a maximum of £100. Those fees are unchanged from those introduced under the July 2020 regime. All licences are subject to a national no- obstruction condition and a smoke-free seating condition, as well as any local conditions that may be set by local authorities.
The effect of the regulations will enable food and drink hospitality businesses to continue to obtain a licence to place furniture on the highway outside their premises quickly and cheaply. To explain just how hard the hospitality sector has been hit, it is probably worth while noting some evidence from trade organisations and other sources. They have indicated to us how significant the financial losses and other wider economic pressures have been on the hospitality industry. The Office for National Statistics reports that in July more than half of businesses in the accommodation and food services industry had experienced a fall in turnover compared to normal expectations for this time of year—losses more than any other industry.
We firmly believe that the regulations will offer essential economic support out of the pandemic for many food and drink businesses by enabling them to extend outdoor capacity to serve food and drink. We support the regulations and trust that all hon. Members will do so. I commend the regulations to the Committee.
Ruth Cadbury (Brentford and Isleworth) (Lab)
It is a pleasure to serve under your chairmanship, Sir Christopher.
The Opposition will not oppose the extension to the current regulations, which grant pavement licences to allow for the placement wof outdoor furniture by businesses selling food and drink. We believe that it is a common-sense extension. From eating out in my constituency, I know that the measure will be welcomed by the relevant businesses, neighbouring retail business that benefit from additional footfall and trade, and obviously by people who have enjoyed eating and drinking outdoors, particularly when the weather is nice. The benefit of pavement-based eating and drinking to all sales is the type of boost and support that high streets have needed, and will continue to need. It is ironic that that benefit runs alongside the changes that the Government have made to permitted development rights, which mean that planning permission is not required to turn a commercial business into housing, thus threatening the viability of some more vulnerable high streets and town and village centres.
On the regulations, the Minister will have read the briefing from the Local Government Association. Although it greatly welcomes the proposed extension of the regulations, it has raised some concerns about the fixed and expedited process for issuing pavement licences brought in as a result of the covid pandemic. The Minister will be aware that the process has raised operational challenges for councils, particularly for inner-city and inner-London local authorities, where there are a large number of such businesses. The process has imposed new burdens on authorities, such as when road or footway closures result in additional costs for barriers, road closures and marshals. Those additional costs to local authorities account for far more than the £100 cap charged for such licences. Figures from Westminster City Council for April this year show that the implementation costs to the authority were more than £2 million, and some councils have estimated that they lose around £700 per licence application.
Has the Minister carried out any assessment of the financial impact on local authorities of the proposed extension of the regulations? Has he any plans to provide additional support to local authorities that are particularly subject to a significant net cost arising from implementation of the regulations? Local authorities request that the regulations are brought into effect before the summer recess, and are concerned that they apply only until September 2022. Has the Minister any comments about that proposed timing? Will he commit to working with the LGA and local authorities on a fundamental long-term review of pavement licensing, for which they have asked, which blends the best of the original regulations with the new? They want the proposed extension to last beyond September 2022 because such a review will take longer than the proposed year extension.
I hope that the Minister can address those important issues in his response.
Christopher Pincher
I am grateful to the hon. Lady for the Opposition’s broad support for the regulations. We believe that they are important to efforts to support the accommodation and hospitality sector businesses to recover effectively from the coronavirus epidemic, given that they have been hit disproportionately by its effects.
The hon. Lady asked a number of questions. One of the reasons we are introducing the PDR changes is to ensure that people are living and working closer to high streets and services that they may use, because that extra footfall may benefit those high street businesses.
Christopher Pincher
Well, I was just giving that introduction in response to her questions, but I am happy to give way.
Ruth Cadbury
I will say, as I have said before, that one does not need permitted development rights; the planning permission is perfectly adequate for dealing with issues connected with people living and working in town centres, to ensure that a core is retained around the centre of a town and village, even where retail generally is declining.
Christopher Pincher
I will not dwell on that matter, Sir Christopher, because you would soon direct me to do otherwise. We believe, however, that the changes we have introduced will ensure that more properties can benefit from residential accommodation in towns and urban spaces. Some 72,000 new homes have been created thanks to the introduction of PDR, homes that probably would not have been built on brownfield and urban spaces without that change.
On the hon. Lady’s specific questions, she asked me quite properly about the burdens that may be placed on local authorities as businesses unlock, and as a result of requirements to process speedier applications for licences. We will undertake a burdens assessment, as we ordinarily and properly do, of the effect the regulatory changes may have on local authorities. That will be done by September, in accordance with the new burdens doctrine. We will make sure that local authorities will receive the appropriate support to expedite applications in the extended period.
The hon. Lady asked why the date of 30 September 2022 was chosen for the conclusion of the extension period. The answer is simple: this is a statutory instrument, and other changes would require primary legislation. Within the scope of the 2020 Act, all we are able to do with the SI is to increase the date on which the regulations expire. We believe that a 12-month extension that takes us to the end of the next summer season is a sensible date for local authorities to plan for.
We will study the data to assess the effect of the regulations in supporting businesses and the wider effect they may have on consumer behaviour and, of course, local authorities. We will contract to work with local authorities, the LGA, the District Councils Network and other appropriate bodies to see what further and possibly permanent regime changes we may wish to introduce in future. For now, we think that a year’s extension to the current regulations is right and appropriate. I commend the regulations to the Committee.
Question put and agreed to.
Draft Bank of England Act 1998 (Macro-Prudential Measures) (Amendment) Order 2021
(3 years, 4 months ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
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 remind Members that Mr Speaker has stated that masks must be warn in Committee. Hansard colleagues would be most grateful if Members could send their speaking notes to hansardnotes@parliament.uk.
The Economic Secretary to the Treasury (John Glen)
I beg to move,
That the Committee has considered the draft Bank of England Act 1998 (Macro-prudential Measures) (Amendment) Order 2021.
May I say what a pleasure it is to serve under your chairmanship, Mr Efford? Since the financial crisis, the Government have implemented significant reforms to address the problems of the past and make the financial sector safer and more stable. The key element of those reforms was establishing the Financial Policy Committee, the FPC, which is responsible for identifying, monitoring and addressing risks to the financial system as a whole. The FPC addresses macro-prudential risks through its powers to issue recommendations and, importantly, directions to the Prudential Regulatory Authority, the PRA, and the Financial Conduct Authority, the FCA.
Successive Governments have legislated to provide the FPC with the powers of direction it needs to address risks to financial stability. Through those existing powers, the FPC can ensure that firms are not allowed to take on excessive levels of leverage, effectively tackle systemic risks in the UK housing market and vary firms’ capital requirements against exposures to specific sectors over time.
This statutory instrument amends the existing powers of direction granted to the FPC by Parliament to ensure that they continue to operate effectively given changes that have been made to the wider prudential regime since they were first introduced.
The Financial Services Act 2021 represents a major milestone in shaping a regulatory framework for UK financial services outside of the EU. It enhances the competitiveness of the sector and ensures it continues to deliver for UK consumers and businesses. The Act extended the powers for the PRA to make rules that apply to holding companies for the purposes of prudential regulation. Accordingly, the Act granted the FPC the ability to make directions or recommendations that relate to holding companies, ensuring a coherent regime under which holding companies become responsible for meeting prudential requirements.
Consistent with those changes, the instrument amends the FPC’s existing powers of direction where necessary, so that they can also be applied in relation to holding companies. In addition, the Government have stated their intention to move the detail of the leverage ratio framework exclusively into rules made by the PRA using powers introduced by the Financial Services Act 2021.
The leverage ratio is intended to be a broadly risk-insensitive measure of a bank or investment firm’s level of leverage and seeks to provide an important complement to the risk-based capital regime. This instrument, therefore, amends the FPC’s powers of direction over the leverage ratio so that the method for measuring a bank’s exposures when calculating the leverage ratio is defined by reference to rules made by the PRA. This method will be subject to any specifications made by the FPC when it issues a direction in relation to leverage.
For example, the FPC currently recommends that the PRA excludes central bank reserves from banks’ exposures for leverage purposes, to ensure that macro-prudential policy does not impede the smooth transition of monetary policy. Under this SI it would instead be able to direct the PRA to make such an exclusion.
The Treasury has worked closely with the Bank of England to prepare this instrument. In accordance with our statutory obligations, officials have consulted the FPC, which agreed with the approach being taken. We have also engaged with the financial services industry on the contents of the SI.
In conclusion, the SI is necessary to ensure that the FPC’s existing macro-prudential tools continue to operate effectively given changes that have been made to the wider prudential regime since they were first introduced. I commend the order to the Committee.
Mr Pat McFadden (Wolverhampton South East) (Lab)
It is a pleasure to serve under your chairmanship, Mr Efford.
The regulations will potentially do two things. The first is to square the FPC’s powers with the changes made to the PRA’s powers in the Financial Services Act 2021, which the Minister and I spent many a happy hour debating—I think it was in this Room—about six months ago. That Act gave the PRA new powers, as a result of our departure from the EU, in relation to various macro-prudential measures, specifically the capital requirements regulation. The order gives the FPC the power to direct the PRA on matters relating to holding companies.
I have three questions for the Minister about the order. First, paragraph 8.1 of the explanatory memorandum states that
“This instrument does not relate to withdrawal from the European Union”,
but did the new powers given to the PRA, which the order relates to, not result from the onshoring of the EU capital requirements regulation? If what we are doing is squaring one set of regulations with something in the 2021 Act that arose from withdrawal, does that not also relate to our ongoing and seemingly never-ending process of onshoring EU regulation? That is my first question: is this part of the onshoring process or not?
The second thing the regulations do is to make changes in relation to the total exposure measure, or the overall leverage ratio, of financial companies. That is important, because it acts as what could be called a “backstop” over and above the various risk-weighted activities that are dealt with in the Basel rules. Of course, leverage, or the lack of overall capital, were at the heart of the financial crisis. Since then, the rules have been changed to make financial companies more resilient, decreasing the likelihood of the taxpayer being on the hook and having to bail out systemically important firms in the event of a future crisis. I want to ask the Minister about that overall leverage ratio. What difference will the SI make to the way that the overall leverage ratio will be dealt with? What is the effect of excluding the balances held by the Bank of England? Will that actually make any difference to the amount of capital that a bank is expected to hold in relation to its overall loan book?
My third and final question is more fundamental. Is the Government’s policy intention that financial institutions should be required to hold less capital now that we are outside the EU than if we had remained inside?
John Glen
As ever, I thank the right hon. Gentleman for his questions. He referenced the leverage framework, on which I will go into some detail in answering his second and third questions.
It is the Government’s view that this instrument is necessary to ensure that the existing macro-prudential tools that the FPC has continue to operate effectively in the light of the changes that we have made in that wider prudential regime. In so far as all those changes are consequential of decisions made five years ago, I suppose that there is a tangential link, but it is not a direct causal relationship.
The right hon. Gentleman also asked about the leverage framework. It may be helpful to the Committee if I set out that that leverage ratio is an indicator of a firm’s solvency relating to its capital resources and assets and, unlike the risk-weighted capital framework, a leverage ratio does not seek to estimate the relative riskiness of assets. The purpose of the leverage ratio requirement, alongside risk-weighted capital requirements, is to guard against the danger that the firm’s models or regulatory requirements fail to reflect the current riskiness of its assets. Currently, the leverage ratio framework requires that major banks and building societies satisfy a minimum tier 1 leverage ratio of 3.25% on a measure of exposures that excludes central bank reserves, along with various buffers that relate to those in the risk-weighted capital framework. Separately, the PRA also maintains a supervisory expectation that all firms maintain a minimum leverage ratio.
The FPC and PRA have undertaken a review of the UK leverage ratio framework in the light of the finalised international standards. The Bank published a consultation on the outcome of that review on 29 June and there are three main proposals incorporated in the FPC’s consultation.
The first is the level. The proposal is to keep the existing leverage ratio framework broadly unchanged for UK consolidated groups of major UK banks, apart from implementing the Basel 3.1 changes.
The second is around scope—to extend the framework to UK banks, building societies, investment firms with significant non-UK assets and, where relevant, certain holding companies, which reflects the importance that such firms have for the functioning of the UK financial market and that the Basel standards require the leverage ratio to be applied to internationally active banks. The PRA propose to extend the leverage ratio of firms with non-UK assets of at least £10 billion, which will capture the larger, non-ringfenced banks and international broker dealers, including Goldman Sachs, JP Morgan and Morgan Stanley.
The third element is the level of the application—the leverage ratio framework would generally be extended at the individual level, except where a relevant firm is subject to a requirement on the basis of its consolidated situation. The PRA would also have discretion to allow a sub-consolidated requirement, rather than an individual one, to be applied in certain circumstances.
The Bank believes that the extension of the leverage ratio framework to internationally active firms would only result in modest additional costs for firms, which reflects that, for many firms, their risk-weighted capital requirements remain more binding than their leverage ratio requirements, firms typically hold management buffers above their capital requirements or they are part of wider groups.
In addition, the PRA has proposed other less significant changes, which reflect updated Basel standards relating to the leverage exposure measure used for calculating the ratio, and reporting and disclosure requirements, aligning with the Basel III standards to ensure that the UK remains consistent with transparency requirements in other jurisdictions.
The review of the leverage ratio framework took place in the light of those revised Basel standards. They require the leverage ratio to be applied to internationally active banks and therefore the main change being proposed to the framework moves the UK closer to international standards.
If the consultation proposals are implemented, the FPC will argue that the UK leverage ratio framework would be equivalent to Basel standards on an outcomes basis—indeed, in some areas, super-equivalent. For example, the FPC requires the leverage ratio to be met with a higher quality of capital than the Basel framework and includes some buffers that are not mandated by Basel. However, the UK framework would potentially be sub-equivalent to Basel on a line-by-line basis, as, for instance, the FPC framework does not put restrictions on distribution —for example, the paying of dividends—if a firm breaches its leverage ratio requirements. It also has a lower leverage buffer for globally systemic important banks.
There has been little reaction to these measures at the moment, but we will continue to monitor that. These are obviously complex matters that the Treasury keeps under close review. The provisions essentially ensure that we have absolute alignment of the FPC’s responsibilities and discretions to the new environment that we passed in the 2021 Act.
I hope that addresses the questions that have been raised—I am happy to give way to the right hon. Gentleman if not.
Mr McFadden
I thank the Minister for that explanation. Does the instrument and what it does on excluding the Bank of England balances make any difference to what he has just outlined and what the leverage ratio is? I think the answer is no.
Mr McFadden
I want to press the Minister a bit on this. Does the Government have a view on these capital requirements that is any different outside the EU from when we were in the EU?
John Glen
I confirm to the right hon. Gentleman that we do not. Though we are outside the capital requirements regime of the EU, our objective is to align to the highest global standards—we will just do that in a way that reflects the nuances of our banking system. We will always maintain the highest possible standards. Indeed, our international reputation relies on it.
I hope that the Committee has found my observations helpful to some degree and will be able to support the order.
Question put and agreed to.
Ministerial Correction
(3 years, 4 months ago)
Ministerial CorrectionsRead Full debate Read Hansard Text
Education
(3 years, 4 months ago)
Ministerial CorrectionsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Vicky Ford
Many Members have spoken of the record funding that is going into our schools, and before this virus hit, we committed to the biggest school funding boost in over a decade. That means that the whole schools budget will be over £52 billion this year.
[Official Report, 15 June 2021, Vol. 697, c. 180.]
Letter of correction from the Under-Secretary of State for Education, the hon. Member for Chelmsford (Vicky Ford).
An error has been identified in my response to the debate.
The correct response should have been:
Vicky Ford
Many Members have spoken of the record funding that is going into our schools, and before this virus hit, we committed to the biggest school funding boost in over a decade. That means that the whole schools budget will be over £52 billion in 2022-23.
South Tyneside Hospital
Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill (First sitting)
(3 years, 4 months ago)
Public Bill CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Committee consisted of the following Members:
Chairs: David Mundell, † Christina Rees
† Baker, Duncan (North Norfolk) (Con)
† Baynes, Simon (Clwyd South) (Con)
† Grant, Peter (Glenrothes) (SNP)
† Hall, Luke (Minister for Regional Growth and Local Government)
† Hunt, Jane (Loughborough) (Con)
† Jenkinson, Mark (Workington) (Con)
† Malhotra, Seema (Feltham and Heston) (Lab/Co-op)
† Mishra, Navendu (Stockport) (Lab)
† Richardson, Angela (Guildford) (Con)
† Rimmer, Ms Marie (St Helens South and Whiston) (Lab)
† Scully, Paul (Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy)
† Smith, Jeff (Manchester, Withington) (Lab)
Tomlinson, Michael (Lord Commissioner of Her Majesty's Treasury)
† Webb, Suzanne (Stourbridge) (Con)
† Whitley, Mick (Birkenhead) (Lab)
† Young, Jacob (Redcar) (Con)
Yohanna Sallberg, Committee Clerk
† attended the Committee
Witnesses
Stephen Pegge, Managing Director, Commercial Finance, UK Finance
David Kerr, Fellow, Chartered Institute of Credit Management
Dr John Tribe, Senior Lecturer in Law, University of Liverpool
Public Bill Committee
Tuesday 6 July 2021
(Morning)
[Christina Rees in the Chair]
Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill
The Chair
We are now sitting in public and the proceedings are being broadcast. Before we begin, I have a few preliminary announcements. Members will understand the need to respect social distancing guidance. In line with the Commission’s decision, face coverings should be worn in Committee unless Members are speaking or they are medically exempt. Hansard colleagues would be grateful if Members could email their speaking notes to hansardnotes@parliament.uk. Please switch electronic devices to silent. Tea and coffee are not allowed during sittings.
We will first consider the programme motion on the amendment paper. We will then consider a motion to enable the reporting of written evidence for publication and a motion to allow us to deliberate in private about our questions before the oral evidence session. In view of the time available, I really hope that we can take those matters forward without debate. I call the Minister to move the programme motion standing in his name, which was discussed yesterday by the programming sub-committee for the Bill.
Ordered,
That—
1. the Committee shall (in addition to its first meeting at 9.25 am on Tuesday 6 July)
meet—
(a) at 2.00 pm on Tuesday 6 July;
(b) at 11.30 am and 2.00 pm on Thursday 8 July.
2. the Committee shall hear oral evidence in accordance with the following Table:
DateTimeWitnessTuesday 6 JulyUntil no later than 10.30 amUK FinanceTuesday 6 JulyUntil no later than 11:00 amThe Chartered Institute of Credit ManagementTuesday 6 JulyUntil no later than 11:25 amDr John Tribe, University of LiverpoolTuesday 6 JulyUntil no later than 2:45 pmThe Chartered Institute of Public Financeand Accountancy; The Institute of RevenuesRating and ValuationTuesday 6 JulyUntil no later than 3:15 pmLocal Government AssociationTuesday 6 JulyUntil no later than 4:00 pmThe Transparency Task ForceTuesday 6 JulyUntil no later than 4:45 pmUKHospitalityTuesday 6 JulyUntil no later than 5:15 pmR3
Date
Time
Witness
Tuesday 6 July
Until no later than 10.30 am
UK Finance
Tuesday 6 July
Until no later than 11:00 am
The Chartered Institute of Credit Management
Tuesday 6 July
Until no later than 11:25 am
Dr John Tribe, University of Liverpool
Tuesday 6 July
Until no later than 2:45 pm
The Chartered Institute of Public Finance
and Accountancy; The Institute of Revenues
Rating and Valuation
Tuesday 6 July
Until no later than 3:15 pm
Local Government Association
Tuesday 6 July
Until no later than 4:00 pm
The Transparency Task Force
Tuesday 6 July
Until no later than 4:45 pm
UKHospitality
Tuesday 6 July
Until no later than 5:15 pm
R3
3. the proceedings shall (so far as not previously concluded) be brought to a conclusion at 5.00 pm on Thursday 8 July.—(Luke Hall.)
Resolved,
That, subject to the discretion of the Chair, any written evidence received by the Committee shall be reported to the House for publication.—(Luke Hall.)
Resolved,
That, at this and any subsequent meeting at which oral evidence is to be heard, the Committee shall sit in private until the witnesses are admitted.—(Luke Hall.)
The Committee deliberated in private.
Examination of Witness
Stephen Pegge gave evidence.
The Chair
We are now sitting in public again, and the proceedings are being broadcast. Before we start hearing from the witnesses, do any Members wish to make any declaration of interest in connection with the Bill?
Peter Grant (Glenrothes) (SNP)
One of the witnesses this afternoon is from the Chartered Institute of Public Finance and Accountancy. I am a member of that institute.
The Chair
Q So noted. We will now hear oral evidence from Stephen Pegge, managing director, commercial finance, at UK Finance. Before calling the first Member to ask a question, I should like to remind all Members that questions should be limited to matters within the scope of the Bill and that we must stick to the timings in the programme motion the Committee has agreed. For this session, we have until 10.30 am.
Stephen Pegge: Good morning, and thank you for the opportunity to come along today. My name is Stephen Pegge. I am managing director, commercial finance, at UK Finance. UK Finance is the trade association for finance and banking. We have around 300 members, many of whom provide services to companies, and we are involved more widely in supporting small and medium-sized enterprise policy.
The Chair
Q Do you have any general remarks about the Bill?
Stephen Pegge: Yes. This is an important Bill, and one that certainly has the support of many in the business community, including lenders. I know that the consultation had widespread support. It does appear that closing this loophole should be beneficial in terms of the enforcement of good practice, the prevention of abuse and a certain degree of deterrence of the misuse of an important and useful facility that allows companies to be dissolved quickly and cheaply, where that is appropriate and justified, as an alternative to liquidation.
There have been instances over the years where companies have been dissolved with outstanding liabilities, as a result of creditors or those who are owed money. I should stress that it is not just a question of banks, but others who may be owed money and indeed consumers who have perhaps paid deposits on work that has not been done or who are unable to recover those funds, because there has been a deliberate attempt to avoid debts by seeking dissolution.
It is possible in current circumstances for action to be taken, but it can be time consuming and costly, and would usually involve restoring a company to the register if it has already been dissolved. The particular arrangements here will make it possible for the Insolvency Service to investigate directors where there is evidence of abuse, even in circumstances where the business is not insolvent, but instead has been dissolved. That is the loophole that the Bill is looking to close and one, as I say, that we would very much support being open.
The Chair
Thank you, Mr Pegge. We will now take questions from members of the Committee, if you would be so kind as to answer. The Opposition traditionally go first, so I call Jeff Smith.
Jeff Smith (Manchester, Withington) (Lab)
Q Hi, and thanks for coming to give evidence. I am just trying to get a picture of the scale of the problem. To what extent do you think this is a problem? Are the measures in this legislation adequate to deal with the scale of the problem that you think is out there?
Stephen Pegge: To put it in context, the Insolvency Service estimates that there is currently evidence of misconduct or misuse of dissolution process in only 1% of cases. Given that there are something like 500,000 dissolutions a year, that might amount to only about 5,000 cases. There is some evidence that it is a rising problem and, given that the average company that is dissolved might have a loan of say £200,000, even 5,000 cases could amount to a risk to creditors of up to £1 billion. It is significant in scale because of the large number of companies, even if it is not currently a high level of risk in proportionate terms. I would emphasise that the vast majority of businesses are honest and straightforward and are not abusing this scheme.
The other factor that members of the Committee may be interested in is that quite clearly over the last year, during the covid crisis, there have been a significant number of companies that have taken finance. Given that the Government, through the British Business Bank, have provided guarantees, there would be an impact on the taxpayer if those loans were not repaid and a claim for repayment were made. Again, that is relevant to consideration.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
Q Thank you for your evidence today, Mr Pegge. I understand that you helped to establish the covid-19 lending schemes. The Government have suggested that some companies have been dissolved to avoid paying back Government loans given as coronavirus support. Have you seen any evidence of that? If these measures go through, do you believe, from your experience and what you have seen, that the Insolvency Service is adequately resourced to deal with the expansion of powers it would have through the Bill?
Stephen Pegge: Yes, we have seen instances of this practice being used to try and avoid liability under bounce back loans. Back in May 2020, UK Finance with the British Business Bank established the bounce bank loan fraud collaboration group. It involves attendees from the Cabinet Office; CIFAS, the UK fraud prevention service; the Treasury; BEIS; and the National Investigation Service—NATIS. The aim is for intelligence to be shared, good practice to be developed and a threat log to be maintained and fed into the National Crime Agency and the National Economic Crime Centre. In fact, this was one of the practices which had been identified through that and has led to some efforts more recently to try to intervene and intercept these cases of dissolved companies involving Companies House and BEIS.
In the meantime, it is always possible that these cases may well have got through and there is some evidence—again, reported by the Insolvency Service—that there could be around 2,000 such cases which are dissolved and where currently the powers to investigate do not exist, so it is a real problem. If it were to become a more popular route for fraud, while there are mechanisms to deal with it and creditors can object when they get notice through alerts when these situations are gazetted, unscrupulous individuals can still get through and it is important that it is closed as a loophole.
As regards the resources of the Insolvency Service, we have all been conscious that, while the number of insolvencies has been low during a period of suspension and the generous support that has been provided to businesses through public agencies and the finance industry, we would expect that to rise significantly in this next period. There is already some evidence that it will do so. It is important that the Insolvency Service is resourced sufficiently to be able to deal with this. The evidence at the moment is that they have been involved in disqualification of directors in something like 1,000 or so cases across the last year, so it is quite possible that there might be a rise in the amount of work that they will need to do. We would certainly support any investigation into what additional resources might be necessary.
Peter Grant
Q Good morning, Mr Pegge. You have described the loophole of company directors being able to dissolve the company in order to avoid their liabilities. Another way that directors can act is to set up two or three companies, transfer all the assets out of a company, dissolve the company with the debts and retain the companies with the assets. Is that a loophole that will still exist, even if the Bill goes through? If that loophole continues, is there a danger that that then becomes the route of choice for dodgy directors to avoid their liabilities?
Stephen Pegge: I think the practice you are describing is sometimes called phoenixing—setting up a company in the same location with the same assets purporting to be the same business with the same directors. It has certainly been a matter of concern for some time. Putting in place these measures should help to discourage and mitigate the risks of phoenixing: I do not think it entirely removes it. As you say, it is possible, even without these additional powers of investigation, for that to take place, but certainly where there is evidence of abuse, the fact that the Insolvency Service will have powers under the discretion delegated by the Secretary of State to investigate the directors, take action against them in terms of disqualification more generally, and seek compensation from them personally for losses suffered will discourage the practice of phoenixing, which I know is a concern. As I say, I do not think that it entirely removes it, but it certainly will discourage it, and to some extent remove some of the possibilities of it taking place.
Mick Whitley (Birkenhead) (Lab)
Q Welcome, Mr Pegge. Do the Government proposals address all the problems that have been identified with the dissolution process in relation to liabilities and directors’ conduct?
Stephen Pegge: This is certainly a very important contribution to addressing major issues, and it is the one that we have been most concerned about recently. We have seen, as I mentioned, real evidence of dissolution being used as an attempt to avoid liability, but I stress that in many cases dissolution is an efficient and appropriate way for companies to be removed from the register where there is no money owing and that business is ceasing, without going through the time and cost of liquidation, which obviously is available as an alternative—for solvent businesses through members’ voluntary liquidation, or in insolvent situations through creditors’ voluntary or compulsory liquidation. I am not aware of significant other means by which we need to deal with abuse of dissolution. This is the one that has been most to the fore in the evidence that we have seen of abuse, certainly through the fraud group.
Jeff Smith
Q I am trying to get a picture of the scale of the issue. You mentioned that the Insolvency Service was involved in about 1,0000 cases in the last year. I appreciate that you said that that is a low number for the year. Then you said that there may be around 2,000 cases where the powers to investigate currently do not exist. That sounds like a significant increase in work for the Insolvency Service, and I wonder whether you think that it will be able to cope.
Stephen Pegge: I am not close enough to its work and resource. One thing that I would say is that the Insolvency Service has very good experience in these sorts of investigations. I would also say that the other element of work, if it has found problems that meet the threshold of evidence and it takes action to disqualify a director, does not necessarily need to involve a court process. In most cases, the Insolvency Service will be successful in getting an undertaking from the director involved to be disqualified. It then has the powers to put that into effect, but certainly people may want to consider whether the resources are sufficient to deal with the case.
The other point is that these are situations where dissolution has been successful. We are also looking to these measures to act, to a certain extent, as a deterrent, in order to make it less attractive for those looking to abuse the system to try it on, as it were. So it may be that this event becomes less frequent in due course.
In fact, one of the processes that is clearly available is for creditors to object to an application for dissolution—and, indeed, the Insolvency Service at the moment is also able to object—on the basis of complaints at that earlier stage, where they have evidence of doing so. And because of evidence of significant numbers of attempts here, those objections have been done on a mass basis.
Ms Marie Rimmer (St Helens South and Whiston) (Lab)
Q Good morning, Mr Pegge. Clause 2(14) states that the provisions
“have effect in relation to conduct…occurring, and in relation to companies dissolved, at any time before, as well as after, the passing of this Act.”
Do you support making these provisions retrospective and, if so, how should the Insolvency Service make use of these retrospective powers?
Stephen Pegge: As I understand it, the support for this measure was confirmed as early as 2018 and it has really been a lack of parliamentary time that has made it difficult for it to be put in place. Given that we are aware of abuse that has happened in the meantime, I support this measure being retrospective. I appreciate that that retrospectivity is not often applied to such Bills, but we are talking about a fairly high evidence threshold and about situations where natural justice would support this measure being made with retrospective effect.
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)
Q It is good to see you again, Stephen. That is an interesting point about the retrospective nature of the measure, given what you were saying about businesses taking on more debt throughout the pandemic. Obviously, the insolvency practitioners will work through things, as you have rightly said, in order of public interest. What do you think they may look to do to give lenders confidence, by approaching the pandemic response finance first?
Stephen Pegge: Clearly, when lenders are undertaking a credit assessment, they will consider both the willingness to repay and the ability to repay, the probability of default and the loss in the event of default. All those could potentially be, and I would say probably at the margin, factors that could be influenced by the use of dissolution as a means of avoiding liability.
Quite clearly, it is very difficult for a company that has been struck off the register to make payments under a loan, so there will be the avoidance of debt in those circumstances. Given that currently there is time and cost involved in restoring a company to the register, the ability then to take this action against directors after the event both to deter and, if the activity should still carry on, to investigate and take action against directors in a more timely and cost-effective way should reduce the ultimate losses to creditors. I think there has been an estimate that creditors could be saved around £1 billion as a result of this measure, which would be significant in terms of credit assessments.
The net effect is the ability to provide more finance with less time having to be spent on assessment up front, on better terms, and in circumstances that should help the recovery. However, I will emphasise, Minister, that this is only one factor and it is all operating at the margin. Nevertheless, it is certainly something that during the past year has become a matter of concern, especially in relation to bounce back loans.
Paul Scully
Q It is a complicated scene, as you say, and this is only one part of it. I think you are, therefore, suggesting that strengthening the regime in this way will give further confidence to lenders, and especially SME companies within the supply chains.
Stephen Pegge: Yes, exactly. It will, therefore, be possible to focus more time and support on those who deserve the finance, without the distraction of those who are abusing the process.
Paul Scully
Q Finally, what effect do you think there would be on lending if this regime did not come into place or the loophole were not closed? Would there be a chilling effect?
Stephen Pegge: As you say, it is a matter of a chilling effect. It is one other factor that would weigh on finance providers’ minds when making lending decisions. This is a crucial time for lenders to provide finance. If you look at the latest Bank of England figures, for May, which were published last week, some £7 billion of new lending was provided to SMEs.
Latest surveys suggest that high proportions of loan applications are being sanctioned—something like 85%—and we want that to continue. The expectation that this sort of loophole is being closed should build confidence. It will ensure that there is discouragement of bad actors, so that it does not grow out of proportion, which we fear might otherwise be the case.
Peter Grant
Q Good morning again, Mr Pegge. I apologise because I think I mispronounced your name earlier because I tried to read it without my glasses on. In an earlier answer, you referred to the retrospective nature of parts of the Bill. You indicated that you supported them. In particular, you referred to the fact that the Government had made it clear since 2018 that the legislation was coming.
Clearly, we are not creating a new offence that was not illegal at the time. We are considering legislation to make it easier for the authorities to act against people who may have committed offences, which I think is an important distinction. Even given that, is there an argument that the retrospective power should apply only to the date when the Government first published their proposals to legislate? Would you still support the Insolvency Service if it wanted to take action in relation to things that had happened in, say, 2015 or 2016? Would you have any concerns about that?
Stephen Pegge: As you say, this is essentially a technical loophole, which the Bill seeks to close. All it does is confer powers of investigation, with significant and rigorous practices in terms of investigation. The risk of miscarriage of justice is relatively limited. I do not have a particular date in mind. The point I was trying to emphasise was that this has widespread support and has had for some time.
The Chair
Thank you for joining us today, Mr Pegge, and taking the time to give evidence to the Committee. We are grateful.
We should be moving on to the next panel now but apparently the next witness is not ready. I will adjourn the Committee for a short time. We will reconvene when we have the next witness online. Thank you.
Sitting suspended.
Examination of witness
David Kerr gave evidence.
The Chair
Q We will now hear oral evidence from David Kerr, a fellow at the Chartered Institute of Credit Management. We have until 11 for this session. Could the witness please introduce himself for the record and make a few remarks about the Bill? Thank you.
David Kerr: Good morning, and thank you for the invitation to join the proceedings today. My name is David Kerr. I am a fellow of the Chartered Institute of Credit Management, the largest such body for credit managers. It was formed approximately 80 years ago and provides professional support, training and representation for credit managers and the creditor community.
The CICM contributed to the 2018 consultation and broadly supported the proposed measure in relation to director disqualification. Creditors have often raised concerns about directors leaving behind unpaid debts; whereas in a formal insolvency process, there will be some inquiry by an insolvency practitioner, when a company is dissolved ordinarily there is not. As we have heard, at present, the Insolvency Service will rarely look at those cases because it would potentially involve the cost of restoring a company to the register. The Bill therefore plugs an important gap, as others have commented.
It is probably important to make the point that this was first considered as a suitable measure and had support back in 2018, and while the urgency to bring it in now is understood, this measure is not solely for the purposes of chasing after directors and recouping funds in relation to covid debts but potentially has wider implications as well. There has been reference to the fact that 2,000 or 2,500 companies with unpaid bounce back loans may have been dissolved over the last year or so. I do not think there is any suggestion that every one of those will be investigated, but presumably the Insolvency Service will apply the same public interest criteria as it has hitherto in relation to insolvent companies. That would certainly give it the power to investigate those companies where directors have left behind debts, whether they are bank or Government debts or any other. That should act as a deterrent, one would hope, to directors using this route to avoid liabilities, and will perhaps also restore some confidence in the creditor community, provided that the action taken is publicised and therefore serves its purpose, both in the compensation orders that might be made and the deterrent factor. Broadly, the CICM supports the Bill. With that, I will be happy to take any questions that Committee members may have.
Seema Malhotra
Q Thank you for giving evidence today, Mr Kerr. You talked about restoring confidence to the creditor community. Would you say that there has been a loss of confidence in the creditor community? In relation to the 2,000 or 2,500 dissolved companies that you mentioned as having received covid-related loans, would you say that a high proportion of those may require investigation? Based on your experience of the creditor community, do you think that there was the means to repay those loans that those companies then tried to avoid?
David Kerr: In relation to confidence, I would not go as far as to say that there is a lack of confidence in the system, but in order to enhance confidence this is a suitable measure. It removes one source of frustration among creditors, which is where they can see directors who are not taking steps to put their companies through a formal insolvency process and instead are seeking to avoid debts by using the dissolution route.
In terms of numbers, I have not made any inquiry into the 2,000 to 2,500 companies that have been mentioned, but there has to be a sense of realism about the extent to which any Government agency can inquire into their circumstances. A percentage of them, based on creditor inquiries, complaints or other information that may come into the hands of the Insolvency Service, would trigger some investigation.
In relation to insolvent companies, although perhaps insolvency practitioners and creditors may be frustrated from time to time about the number of cases that result in disqualification proceedings, again there needs to be a sense of realism around the extent to which that can be done. That will happen in cases where, despite all the information, there is also a public interest test that is passed to pursue those actions.
Seema Malhotra
Q If a case passes the public interest test, do you think there should be the resources to deal with that? There is concern that the Insolvency Service may not have the resources, and therefore the ability to follow up on the expansion of powers in the Bill in the public interest. Has your experience been that the Insolvency Service has been able to resource any investigations that might be needed? What tools should the Government use to pursue directors of dissolved companies that they identify as culpable? Do you have a view on that?
David Kerr: In terms of resources and the ability to pursue all the cases that the Insolvency Service might wish to pursue, I guess that is probably a question for the Department. Not all the cases that are investigated will pass the public interest threshold. To the extent that there are cases that pass the test but cannot be pursued for resource reasons, I am sure the Insolvency Service would welcome any additional resources that can be made available to it. From the point of view of creditors, if actions are pursued in relation to covid-related debts and not others, perhaps the measure works against them a bit.
That comes to the second part of your question. There are two elements to this. First, there is the potential disqualification of individuals who are proven to have acted inappropriately. Secondly, and on the back of that to some extent, there is the possibility of compensation orders against those individuals, with a view to putting money back into the hands of creditors. Again, I am sure CICM creditors would wish that to be as effective for its members as for any Government debt.
Jeff Smith
Q Mr Kerr, you said that the CICM is broadly supportive. Do you have any particular concerns about the Bill? Is there anything that you think is missing from it, or could it be improved?
David Kerr: I think the point has been made about resource. I have heard comments from others on Second Reading and elsewhere about that. It would be unfortunate if the emphasis were entirely on dealing with bounce back loan fraud and if that took resources away from other directors’ conduct investigation cases. That point is not, I suppose, directly relevant to the provisions in the Bill; it is more a question of how it is implemented and taken forward. There have also been some comments about the retrospective element; the previous witness touched on that. I think these cases have to be taken within three years of the relevant date—the date of insolvency or the date of dissolution. I do not think the Department would be able to go back before 2018 in any event, and that was the date on which the consultation was conducted, so I suppose one could argue that directors have had notice of the intended provisions for the relevant period.
Those were probably the only points where there might be concerns to a limited extent, but generally I think the provision is a sensible one that gives the service powers that it does not have currently and which can only be helpful, I would have thought, to trust and confidence in the insolvency regime.
Jeff Smith
Q That is very helpful. On the three-year cut-off, are you concerned that that is likely to have implications on other investigations that the Insolvency Service carries out if it is not funded properly?
David Kerr: I was referring partly to the point that had been made by the Committee to the previous witness about whether there would be any issues around natural justice if the retrospective provisions pre-dated the consultation. I do not think that, in practice, that would happen. Going forward, the compensation laws that might be sought can be obtained after the disqualification order or undertaking, so there may be more than three years available to the service from the date of dissolution. There has to be a cut-off. I do not think there is any suggestion that the provisions of the disqualification have to be changed in that respect, merely that they would be applied to these circumstances. They have proved to be satisfactory since 1986 in relation to director disqualification in the insolvency proceedings, so I have no reason to believe that, going forward, those time limits will not be effective in relation to dissolved companies.
Seema Malhotra
Q Are any sanctions that are currently available to use against directors who may have dissolved companies to avoid liabilities not being used as much as they could be?
David Kerr: None that I can think of immediately.
Peter Grant
Q Good morning, Mr Kerr. May I come back to the retrospective nature of parts of the legislation? The three-year period will be permitted because that is what the current timescale is. Given the notorious complexity of a lot of financial misconduct cases and the fact that they are long drawn-out processes, is there an argument for that three-year period to be extended in cases where there is an indication that there is not only misconduct, but potentially criminal fraud? I am thinking about cases in which the potential fraud runs into the tens of millions of pounds. Is there an argument that in those cases, there should be no hiding place for criminals of that scale, simply because of the length of time they have managed to get away with it?
David Kerr: That is a fair point. I suppose the statute of limitations could be considered a relevant backstop, but I will come back to my previous point that we have a three-year limit in relation to investigations into directors’ conduct in insolvent situations, and that has been with us for 35 years. I have not heard any suggestion from the Insolvency Service that that has proved to be inadequate. This is effectively an extension of the same power into dissolved company circumstances. I have not seen or heard any evidence to suggest that it is an inadequate period.
Peter Grant
Q You say that you have not heard any such representations from the Insolvency Service. Have you had any such representations from lenders or creditors? They may take a different view from the Insolvency Service if it is their money that is at stake.
David Kerr: Perhaps some in the creditor community would like it to be a six-year period, but I do not think they have argued strongly for it, and I do not think there is a necessarily a case made for that. From a creditor perspective, in an ideal world, perhaps it would be open ended. That may be unrealistic.
Paul Scully
Q Thank you for giving evidence, Mr Kerr. Can you talk a little bit more about the deterrent that you spoke about? How much of an impact do you think the measure, and especially the threat of disqualification, will have on providing the necessary deterrence?
David Kerr: The current disqualification provisions act as a deterrent to some extent, because directors know that, in respect of every company that goes into an insolvent liquidation or administration, there will be some inquiry. There is an obligation on the insolvency practitioner to carry out a certain amount of inquiry into the contacts of the directors of those companies and make a report in each of those cases to the Insolvency Service on their conduct. The provisions do not provide for the same report. It will have to be triggered by something else, whether that is a creditor complaint or other information, but it will provide the opportunity for the service to make the same inquiry.
Paul Scully
Q You talked earlier about the public interest test and prioritisation. Obviously, we are trying to strengthen the enforcement regime to deal with the most egregious cases of fraud in relation to the financial support that the taxpayer has given throughout the pandemic. In your experience, has the insolvency practice been prioritising this work? As well as having the public interest test, or threshold, has it prioritised approaching the most serious cases at the earliest stage?
David Kerr: Do you mean the work of the Insolvency Service?
Paul Scully
Yes. We are talking about Insolvency Service resources. We would have expected the Insolvency Service to prioritise the work that it does on the most egregious cases, and that would indeed be how we would anticipate it moving forward. Have you seen that first hand?
David Kerr: This may not be a direct answer to your question, but the concern of the creditor community might be that, if this provision were used almost exclusively for the purposes of pursuing bounce back loan fraud, perhaps it would not have the wider benefit that could come from it. Perhaps that has to be the emphasis in the short term, but in the long run—it is a provision that was considered worthy of introducing back in 2018, before covid came along—one would hope that it will be of broader use.
Quite how the service will prioritise its limited resources and decide which cases to look at is a matter for it to work out once it gets the powers. One would hope that the cases that come to its attention through the insolvency practitioners’ reports will receive equal attention and that it will not be to the detriment of those cases that these other cases are being pursued.
Paul Scully
Q We heard a little bit in the earlier panel about phoenixing. Do you think this measure will help to combat that malpractice, where one company is shut down and dissolved and another takes its place, with the same directors, doing the same business from the same premises with the same staff?
David Kerr: That can happen, whether it is through an insolvency process or a dissolution. To the extent that it has happened through dissolution, the measure plugs that gap, because it is gives the same investigative powers to the Insolvency Service. It comes back to the deterrent point that you made previously. If the service is seen to be taking action in these cases and publicising the fact that it has done so, that will, one would have thought, have a deterrent effect.
Paul Scully
Q Finally, in terms of your role in credit management, what do you think this will do for the confidence of lenders and supply chains, in particular SMEs in those supply chains?
David Kerr: Generally, if the system is seen to be working well and those who abuse it are brought to account, then it helps enhance the confidence of those engaged in providing credit, whether it is through loans, trade credit or anything else. In that sense, it is a welcome provision that, if resourced and used as intended, should have the desired effect.
Seema Malhotra
Q To follow up on a couple of points, there have been critics of the proposals in this small piece of legislation. From your experience and that of your members, how long can it take for companies that have been dissolved to be restored to the register? In 2019, over half a million UK companies were dissolved but only 33 restored. In terms of the time it takes in practice, what could that look like?
David Kerr: I think the cost issue is the bigger disincentive for creditors that previously might have wanted to take steps to try and get somebody appointed to investigate. The service itself has made the point that there are legal costs and other costs associated with that process, and it would not be practical for creditors to mount that kind of action alone or, in many case, at all, given the amounts of their own debts.
The bigger disincentive is probably the cost and this avoids that. You are right in the sense that if there is a lengthy time process and if it takes several months, that eats into the three-year time limit that we have talked about, so that could be a problem. I think here, with this measure, we avoid that because the Department can have the ability to make appropriate inquiries and take action, without the need to go through that process.
Seema Malhotra
Q How much could it cost? What sort of range of costs could creditors see?
David Kerr: I do not have those figures in front of me but I have seen the fees involved. They amount to a few hundred pounds, but that does not include the cost of a solicitor to spend the time doing the necessary work. I would imagine that it would be a few hundred running into a thousand or more pounds to get a company restored, but I could not give you any exact figures.
Seema Malhotra
Q May I probe you a little further on the three year issue? You are right that within legislation there is provision for courts to make disqualification orders within three years after a company has been dissolved. This legislation extends that in line with that current time limit. In light of the fact that we have very unusual circumstances at the moment, with potentially thousands of companies that could require investigation, do you think that with that increased workload for the Insolvency Service, the question about available resources and the court backlogs, there could be a particular issue with directors effectively being culpable but the Government running out of time for courts to issue disqualification orders against them?
David Kerr: We might have touched on this slightly previously. First, there is no suggestion, as far as I am aware, that the whole of the 2,500 companies that have been mentioned would be the subject of an investigation. We are talking about dissolutions in the last 15 months or thereabouts. The time limit is relevant, obviously, because the service has to work to that, but the previous witness made the point, which we should bear in mind, that the majority of the cases that it takes do not necessarily involve court proceedings. In a lot of cases, having presented the evidence to the directors and with the threat of court proceedings available to the service if necessary, many are resolved by the director giving an undertaking, which has the same effect as an order, so a lot of them will not involve court proceedings and that helps the service to achieve what it is seeking to do within that timeframe. Many of the cases in these instances of dissolved companies, I imagine, would result similarly in a relatively high proportion of those being concluded by undertaking.
Simon Baynes (Clwyd South) (Con)
Q Thank you, Mr Kerr, for your evidence. I have two questions. These measures clearly have widespread support. Can you give us a feel for the scale of the problem with dissolved companies? We have discussed quite a lot of different figures this morning, but do you feel this is a very significant problem, or a manageable problem, just to get some more idea anecdotally on that?
Secondly, clause 2 allows “easier investigation”. Can you give us some idea of the way in which the Bill improves that process of investigation?
David Kerr: I will deal with the second point first. We know that this provision means that we do not have to go through the process of restoring a company and instead the Department can commence an investigation in circumstances where it deems it appropriate without any barriers to doing that. In that sense it makes the process easier to commence the work it needs to do.
Many companies are dissolved every year, but I do not think there is any suggestion that all those, or even the majority, involve any misconduct by directors and those who have opposed or supported them. I do not think there is any suggestion among those who proposed or supported the measure that that process should be removed as an option for companies in appropriate circumstances. The question is really how many of those represent some form of misconduct or where misconduct might be hidden, or where there is some abuse. I have not seen any statistics on that and do not know if anybody would know for certain. Again, it comes back to the point that the service would have the power to investigate in circumstances where something was brought to its attention, suggesting a need for investigation. In that sense, it is a welcome provision.
The Chair
Thank you for giving evidence, Mr Kerr. If there are no further questions, we will move on to the next panel.
Examination of witness
Dr John Tribe gave evidence.
The Chair
Q We will now hear oral evidence from Dr John Tribe, senior lecturer in law at the University of Liverpool. We have until 11.25 am for this session. Please introduce yourself for the record and make some remarks about the Bill.
Dr Tribe: Thank you very much for the invitation and opportunity to address the Committee on this important Bill. I will address the second half of the Bill and the clauses on directors disqualification. Like all the contributions on Second Reading in the House of Commons, I welcome and support the changes that the Bill introduces to the Company Directors Disqualification Act 1986 and the extension of the public protection provisions in that Act to unfit directors of dissolved companies.
The measures are a welcome addition to the insolvency framework and system that work effectively and are well managed by the Insolvency Service and its diligent and hard-working staff. This new statutory addition to their armoury is a necessary power to maintain public confidence, to protect the public from unfit directors, and to maintain the integrity of the limited liability company form.
My contributions to this Committee come from an academic viewpoint, as a senior lecturer in law at the University of Liverpool. For 20 years, I have been researching and writing about insolvency law, both corporate and personal. For much of that time, I have been interested in the role and accountability of office holders, including company directors. I have been editor of the Mithani: Directors’ Disqualification newsletter, and continue to sit on the editorial board of that publication. More recently, I have written about the disqualification proceedings in Kids Company and Carillion. I have five brief points or observations to make on the Bill: if the Chair allows, I can run through those. They are brief, if you want me to address them at this point.
The Chair
Yes, of course.
Dr Tribe: The first is on limited liability and corporate form abuse. I view the corporate form as a statutory privilege—a concession of the legislature that should be managed properly and should be used by individuals adhering to the highest standards of commercial morality and probity. Put simply, directors should know their duties and live up to them. They should be held to account if they do not, and certainly if they stray further into the realm of the unfit.
My second point is on phoenixing. Contributions from across the House of Commons on Second Reading of the Bill, the explanatory notes to the Bill, and the Parliament Library document on the Bill have all mentioned the phenomenon of phoenixing, and comments suggest that the misuse of limited liability companies and of the bounce back loan scheme is the latest example of this sort of undesirable behaviour, or “unfit” behaviour, to use the language of section 6 of the Company Directors Disqualification Act 1986. I agree with the comments that have been made: phoenixing has been a perennial problem with the limited liability form because of the damage that misuse of that form can do to creditors, and it is right that it is troubling us now in the context of the bounce back loan system as part of the Government’s package of support during the pandemic. The taxpayer stepped up and provided these bounce back loans; the taxpayer should be protected now at this point, and the Insolvency Service needs the tools and, most importantly, the funding to do that work.
My third point is on directors disqualification and public protection. Through the history of our corporate insolvency laws, we have grappled with the balance between entrepreneurialism on the one hand and the kind of behaviour we are discussing today—unfit behaviour and malpractice—on the other. Indeed, directors disqualification provisions were first introduced in the Companies Act 1928, and there have been several reforms and updates over time since then—and hopefully, in my view, also with this 2021 Bill, if it is passed.
Over the past 20 years or so, we have also gradually increased the number of entities that are subject to the disqualification regime, and dissolved companies are the latest vehicle in a long-running trend, because there will always be some misuse. We need to ensure that the relevant regulator has the powers and funding to combat that unfit behaviour when it does arise, because public protection is, in my view, the main driver of the directors disqualification regime. As we know, the limited liability form is the basis of our credit system: if it is not protected properly, the whole system could ultimately be damaged.
My fourth and penultimate point is on the dissolution statistics. We know that dissolution is an important part of keeping the Companies House register in order. Dissolution is part of the normal life cycle of the company; dissolution keeps the register tidy and up to date. It happens regularly, and it is necessary. As you perhaps already know, there were approximately half a million dissolutions per year over the past six years, and the explanatory notes to the Bill explain that in the first quarter of 2021, we saw some 170,000 dissolutions. It is appropriate that these take place, for the reasons I have outlined—namely, keeping the register in good order—but unfortunately, among those dissolutions, there could be some of the unscrupulous activities that we have been mulling over, namely the dissolution of a company that has taken out a bounce back loan and has been dissolved before the loan has been paid back to what is ultimately the taxpayer-creditor. This is a loophole, and it should be closed so that directors of live companies, directors of insolvent companies and directors of dissolved companies are all treated the same way for the purposes of section 6 of the Company Directors Disqualification Act 1986.
In late June 2021—I think it was the 21st—the Public Accounts Committee projected a loss of between £16 billion and £27 billion of bounce back loans, from a total of approximately £90 billion that was lent by the British Business Bank via the banks. As you know, PricewaterhouseCoopers is due to report on the extent of fraud and credit failure within that £27 billion. There could be a huge loss to the taxpayer, unfortunately. Any loopholes that may have helped facilitate those losses, which, in turn, help evade responsibility for those losses, should be closed.
My final point is on funding. The Insolvency Service needs to be properly funded to ensure that this additional disqualification work can happen. Until appropriate funding is hammered out, the provisions in the Bill still provide a deterrent to those who seek to use limited liability forms in an unfit manner. The Bill’s clauses, and any compensation orders which may follow directors disqualifications, go some way to ensuring that limited liability corporate forms are protected, and that delinquent directors have an immediate, powerful deterrent against abuse of conduct, so that trust in our system is maintained. In short, the bigger the stick, the better the deterrent. That is my introductory statement.
Jeff Smith
Q Thank you Dr Tribe, that was a very helpful overview, and pretty unqualified support for the principle of the Bill. It did seem that your main concern is about resourcing it. You said that until appropriate funding is handed out to the Insolvency Service, the Bill will, at least, be a deterrent. Do you have a view as to the nature of the problem, and the funding that the Insolvency service would need to actually make this work?
Dr Tribe: It is my impression that this new work to deal with directors of dissolved companies who have potentially behaved in an unfit manner would be subsumed into the general run of business of the disqualification unit at the Insolvency Service. They prioritise the most egregious cases, or those that help send out a public protection signal to the public. In the interim, I think this kind of work would fall into that part of their function. My point about hammering out or ensuring funding is in place is partly in response to some comments on funding made on Second Reading of the Bill. Since the Companies Act 1928, and perhaps most famously in the Cork report of 1982, this question of whether the disqualification regime is properly funded has always existed. Its lack of efficacy between 1928 and 1982 was put down to a lack of resourcing.
That point is very important, because in essence this is the system that protects the limited liability form, the engine of capitalism that drives through our commercial activities. Unless the Insolvency Service is able to properly resource and ensure that this work is undertaken, we have a problem when we try to pursue those who are responsible for the loss of between £16 billion and £27 billion. This potentially unknown—we will find out when the PwC report comes in—and potentially large gap will need to be addressed in terms of where the money went and who was responsible for causing that money to be dissipated.
Jeff Smith
Q Thank you, that is helpful. Just as a follow-up, are you concerned that there might be a focus on making use of these new powers at the expense of current work on other insolvent companies?
Dr Tribe: Not necessarily. Going back to my prioritisation point, the Insolvency Service obviously has finite resources that it needs to deploy in the best way possible—I suppose that is a problem for many public bodies— if other types of abuse manifest over time. The most obvious and recent problem is the bounce back loan phoenixism problem, but in due course other things might come about that require us to tinker with our corporate and insolvency law so that we have an effective system that maintains trust and confidence in it. What the Insolvency Service wants to do in terms of prioritising threats to the system will depend on its internal guidance.
Seema Malhotra
Q Dr Tribe, I want to ask first whether you have a view about the existing sanctions that are available to use against directors who may be abusing the dissolution process—perhaps powers that are currently available but are not used as extensively as they might be. That is one of the challenges that critics of this legislation may make.
Secondly, are there any other more general problems with the dissolution of companies that are important to discuss at this time while changes are being made? Should changes be made to the eligibility criteria on dissolutions? What steps need to be taken prior to dissolution?
Dr Tribe: I will take the first question first. I think you are drawing attention to the compensation order regime, and you did so on Second Reading, too. There is some interesting research by Dr Williams at Cambridge in 2014, who looked—he sort of future-gazed—at how successful the compensation system might be. In that research, he highlighted that some of the directors in small closely held companies, which he argues the regime mainly targets, might end up being adjudicated bankrupt—they might go through the bankruptcy process, I should say—in due course. That would mean, of course, that any pursuit of those individuals would run into another layer of difficulty in trying to get to the value that might be there for the insolvent estate of the company or dissolved company that we are dealing with. His work future-gazed in that way at some of these issues.
It is true to say that, on the compensation regime, we saw one case in 2019, the Noble Vintners case, where insolvency and companies court Judge Prentis made a 15-year disqualification order. That is right at the top of what we call the Sevenoaks scale, after the case in which Lord Justice Dillon set out the various types of malpractice and where they fall on the scale, from two years up to 15. In the Noble Vintners case, it was the most unfit behaviour on the facts of that case that you could have —up at the 15-year period. Then, of course, that was followed by a compensation order that recouped for creditors just over half a million pounds—£559,000.
There has been some success with the compensation scheme. It is in its early days, in a certain sense. Although the reforms came in in 2015, there was a delay in implementation. You are right to say that we should pause for thought and mull over how effective that is. That takes us back to the resourcing and funding point, for one thing. Secondly, it takes us to the idea of that prioritisation agenda and how fruitful a claim that you are going to bring might be to get compensation. It is a power that exists and should exist. It goes some way—as you can see from the case of Noble Vintners—to getting value back into the insolvent estate for the creditors. It is a positive thing for creditors, and something that the disqualification regime did not do until that reform in 2015. Of course, it provided a protection mechanism, but in terms of getting value back into the estate, that is a good reform. That is your first question.
Your second question was on dissolution problems. I think you might be driving at the process of dissolution and how the registrar at Companies House deals with dissolution. After the directors have signed their form, made their declaration, paid the £10 and noted that there is going to be a striking off and that is published in the London Gazette, there is a period of two months where all the parties that should be informed—shareholders, creditors, employees and pension managers, for example—might know of this potential dissolution and should then, therefore, perhaps act on it as creditors. Some of the witnesses who have gone before me may have addressed this, particularly those from the credit community. In due course, as part of a wider analysis of what Companies House and its function is, that step in dissolution may be looked at.
As I said earlier, there are approximately half a million dissolutions per year, and many of those are for very good reasons in terms of, as I have said, maintaining the integrity of the register and getting rid of companies that have been through the insolvency processes but then get dissolved as well. The guidance for the Bill and some other sources note that among those half a million dissolutions, there could be about 5,000 that are potentially problematic that we would want the Insolvency Service to be able to investigate. Obviously, 5,000 is a lot more than the current levels of disqualification under the current provisions. Over the past decade or so, there have been about 1,200 a year, so you can see there is quite a significant upshift in the work that the Insolvency Service might have to do.
A Companies House review perhaps in due course mulling on what its function is—is it a regulator, is it a repository of information?—might look to dissolution, but in the short term I think you have this £17 billion to £26 billion problem, and there seems to be a loophole that needs to be closed.
Peter Grant
Q Thank you, Ms Rees, and good morning, Dr Tribe. Following on from that last question, there are three kinds of sanctions available now: the director disqualification, the compensation order and, ultimately, criminal prosecution. Are there significant differences, first, in the burden of proof required for each of those actions, and secondly, in the cost and time taken to bring any of those actions to fruition?
Dr Tribe: I think you are right to point out that there are different avenues that could be visited on the directors that we are talking about. We are not necessarily talking about directors in the general run of business; we are talking about people, as perhaps you suggest, who engage in criminal behaviour. For example, with the bounce back loan scheme, a form of fraud could lead to a prosecution.
What we are dealing with today, though, particularly with this amendment to the Company Directors Disqualification Act 1986, is a regulatory function, so we are dealing with a lower burden of proof than we would if it was a criminal sanction for any subsequent prosecution for fraud. In that sense, on the Insolvency Service’s work on what is known as a jury question in the context of directors’ disqualification, with each case being looked at on its facts, the determination whether whatever has occurred has been deemed to be unfit does have that lower evidential burden than any subsequent criminal activity that the prosecuting authorities might address. In that sense, the disqualification regime is perhaps better able to get deterrent-type results than mounting subsequent criminal prosecutions. We know, of course, that the criminal justice regime is also having some problems with funding. If the disqualification regime is able to achieve any public policy outcomes in terms of deterrent, in a regulatory manner, that is perhaps quite effective.
Peter Grant
Q You also mentioned, as some other witnesses have, what is known as phoenixing. There is a variant of that practice whereby, rather than creating a new company immediately after the old one has been dissolved, you create what looks on the surface like a legitimate group company structure, and then over time, you very quietly shift all the assets over to one company, leave all their liabilities in another one, wind up the company with the liabilities, and then the directors help themselves to the company with the assets. Does this legislation do anything to address that particular loophole, and if not, what further changes are needed to prevent, or at least strongly discourage, that practice?
Dr Tribe: That is an interesting question because it highlights the long history of English and Welsh and Scottish company provisions when we are thinking about the nature of groups of companies and then single entities, and how structures and groups are used and how we move value between one entity and another.
There is the quite interesting case of Creasey v. Breachwood Motors Ltd where, because of an employment claim, value was moved into a new entity, and of course the claim was left with the original company, meaning that that employee had an empty shell through which to pursue their claim, which was problematic. The judge at first instance was able to say, “No, in the interests of justice, you can switch your claim to that new entity.” That judgment was overruled subsequently, but it does raise an important point. Indeed, in the case that overruled it, the group reconstruction that occurred was held to be legitimate for tax reasons. There are instances of the kind of behaviour that you are talking about that can perhaps be problematic in the pure phoenixing sense, but then there are legitimate reconstructions that happen where the intentions of the directors were for tax efficiency or some other purpose that is not unfit or nefarious in the way that we are discussing.
In terms of the misuse of the corporate form, one can go right back through our company law history to recite many examples of essentially what we are talking about—phoenixing, or what has been called centrebinding—and some of the critique of pre-packaged administration is around the same point. Is it appropriate that the corporate form is able to be used in this way so that the creditors of company A are left languishing while all the value is moved into company B in the way you have described?
That takes me back to my introductory response point, which is that in English and Welsh and Scottish law, for a very long time we have used the separate juristic person—the company as a thing. It is a really sacrosanct idea that, just like I am not responsible for your debts, and you are not responsible for mine, we have that structure in place for policy reasons, and have done since the 19th century originally, to aggregate wealth and entrepreneurial activity. I suppose you as the legislature expect that, as part of that privilege that you have allowed incorporators to use, over time you will get some form of abuse, and that element, which is hopefully as small as possible, has to be dealt with, like we are trying to do today, or, to some extent, tolerated.
Peter Grant
Q Finally, I want to look at the retrospective nature of some of the provisions from a legal point of view. First, do you have any concerns not about the principle of creating a retrospective offence, which the Bill does not do, but about retrospectively giving powers to an enforcement agency that we used not to have? Do you have any concerns about the natural justice issues that that might raise? Alternatively, are there circumstances where the three-year time limit is too short and where you would be in favour of allowing the Insolvency Service to go back more than three years before the dissolution date?
Dr Tribe: On your first point, which was about retrospective activity, it is much like the Corporate Insolvency and Governance Act 2020 reforms, which have successfully been passed. We have seen lots of new cases on the provisions that were in that Bill; it has been very successful. The reforms in that statute were mooted much earlier, in 2018. It is the same with this suggestion to close the dissolution loophole. Much like with the 2020 CIGA provision, the coronavirus has freed up legislative time to get both sets of provisions—the CIGA activity and the dissolution activity—in front of you to get it on to the statute book. Some of this was discussed by Sarah Olney on Second Reading.
What does it mean in terms of the retrospective nature of what you are doing? We had the idea some time ago, and corona has meant that we have had to address it against the backdrop of the bounce back loan scheme. Unfortunately, the abuse of that scheme seems to be so massive—as we have seen, there is a £16 billion to £27 billion projected shortfall, or loss—that we need to go back in time to look at some behaviour. Of course, we are not generally speaking about breaches of duty in the general sense of directors’ duties. We are talking about what could be seen as the use of the corporate form purposely to avoid the insolvency provisions and the oversight that they can give, with the powers that are currently in the Act that we are dealing with.
That needs to be dealt with, and if it is in a retrospective way—you may have seen in late June that there was a disqualification order for 12 years because of some fraudulent activity that had occurred with a Mr Khan and his Birmingham-based business, where he had forged documents to get a bounce back loan of £50,000. The Insolvency Service successfully brought that action following administration. Some Glasgow-based companies have also been wound up in the public interest because of bounce back loan abuse. To answer your question briefly, it is the bounce back loan fraud that has meant we have had to act retrospectively. No, I do not have any issues on that point.
On your question about three years, I suppose that again goes back to funding and time limits, and whether the Insolvency Service is adequately resourced to deal with the amount of dissolutions—whether it is 5,000 as predicted, or whether the forthcoming PwC report shows that it is much worse. If it is well resourced, the time issues might not be such a problem. If it is not, they perhaps will be.
Paul Scully
Q I have just two brief questions, because you opened up and summarised well. The point about funding has come up quite a lot, and I wonder if you could expand on some of your comments. You talked about the public interest test and the prioritisation of the Insolvency Service’s cases, so that it would look at the bigger, most egregious issues first. Obviously, with the number of cases you are talking about, it would also presumably look at the ones where there is a realistic likelihood of a successful outcome, rather just investigating every case.
Dr Tribe: In some writing on this point in relation to Carillion, I suggested the reason that the Insolvency Service might be looking at a large public limited company to bring these mechanisms to bear is because that is a pretty well known, massive liquidation, which has lots of Government contracts linked to it and taxpayer money bound up in its activities. You can see why it would perhaps be appropriate, much as with previous well-known disqualifications, for the Insolvency Service to bring the action or the proceedings if the relevant public interest tests are met. That is because it helps with the agenda of sending out the appropriate messages to the commercial community that you should use corporate vehicles and corporate forms in an appropriate way, and that you should live up to your duties in an appropriate way generally, as well as facing some of the consequences if you misuse the form and harm creditors and other stakeholders.
On the prioritisation point, you could go for good messaging, in the sense of prioritising cases. I suppose that the problem with the bounce back loan scheme and this dissolution issue that we are dealing with is that, as I think one of the previous questions hinted at, the volume of cases could be so great that with prioritisation you will need to have quite a large group of civil servants working on the issue.
As for the question of how likely it is that we might get a result in a case, and therefore whether we should bring proceedings, we have seen recently that once the Insolvency Service’s tests are met, it is wholly appropriate that it should bring these proceedings, even if in due course the result is not what it thought or what its specialist advisers—the QCs and so on who have advised it—would have predicted. Hopefully, the money will be well spent in bringing proceedings, but sometimes we do not get the result for factual reasons, basically.
Paul Scully
Q I have a final question. You mentioned Carillion, which you wrote about and studied. Within Carillion and a number of other cases—Carillion is an interesting one, because there are a lot of supply chains in there—as I asked previous panel members, what extra confidence does plugging these loopholes bring to small and medium-sized enterprises?
Dr Tribe: Carillion, because it is a large plc, has messaging on the plc side of our regime, thinking about how directors behave in relation to those types of companies. This perhaps goes back to Mr Grant’s question about group structures—do not use group structures in a way that is problematic. That will be interesting to monitor on what is a live case; I do not want to mull on the facts of that case too closely.
Sorry, what was the second part of your question?
Paul Scully
Q It was about the fact that Carillion obviously has a large supply chain within it, and you have been dealing with and writing about cases with complex supply chains. What confidence can this measure to close that loophole give to SMEs in particular?
Dr Tribe: Thanks for that clarification. If we can ensure that any vehicle that is used in any form of creditor relationship with different entities has an individual put-off effect by going down this dissolution route that we have identified, it will hopefully increase confidence in the way people use the corporate form. The more loopholes we can close down that have caused us to think the form is being used inappropriately, the better.
Unfortunately, phoenixing, as we have discussed, has been going on for literally decades, and perhaps in the future we might be back here again with some other problem that has arisen because of nefarious activity.
Jeff Smith
Q I will just ask one final question. We have had some written evidence suggesting that the current regime is adequate. If you do not mind my quoting from it, it says:
“Applying the current controls properly, putting dissolved companies into liquidation and publicising that new policy will be a far more effective deterrent...That requires no new legislation at all.”
Do you have a view on that?
Dr Tribe: The trouble is that to get to that liquidation point, you have to go through the restoration stage. I think that submission might have also talked about the idea of restoring an entity to the register and then going through that insolvency route. I think the Insolvency Service did 33 of those in 2019—pre the bounce back loan issue and pre corona, obviously. Each one of those 33 will have cost it court fees, process fees at Companies House and so on, which means there is this extra layer of procedure that it has to get through before it can ultimately investigate the unfitness activity. I think the dissolution reform in this legislation ensures that that extra layer of bureaucracy—getting the companies back on the register, through restoration, then going through the insolvency processes—is cleared out, and we move straight to the enforcement section.
The other problem with restoration is that you perhaps undermine the integrity of the register itself if you take 33 companies off it, but you then want to put them back on because you need to go through the steps that we want for enforcement and so on. It is an interesting point, but I think you have a quicker public protection mechanism process that you can do now that gets you to a less costly enforcement outcome.
The Chair
If there are no further questions, I thank you, Dr Tribe, for giving evidence this morning. It is much appreciated. I thank all the witnesses for appearing this morning.
Ordered, That further consideration be now adjourned. —(Paul Scully.)
Adjourned till this day at Two o’clock.
Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill (Second sitting)
Tuesday 6th July 2021
(3 years, 4 months ago)
Public Bill CommitteesRead Full debate Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Act 2021 View all Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Act 2021 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 6 July 2021 - (6 Jul 2021)
The Chair
Good afternoon. We are now in a public session and I can welcome our fourth panel of witnesses: Adrian Blaylock, revenues adviser at the Chartered Institute of Public Finance and Accountancy, and David Magor, chief executive of the Institute of Revenues Rating and Valuation. Gentlemen, may I confirm that you can see and hear us? And can you each introduce yourselves?
Adrian Blaylock: I am Adrian Blaylock, lead revenues adviser for the Chartered Institute of Public Finance and Accountancy. My role in the institute is to provide specialist technical advice to local government on matters relating to council tax and non-domestic rates.
David Magor: My name is David Magor. I am the chief executive of the Institute of Revenues Rating and Valuation—I run a professional body; it’s that simple. In a previous life, I was a chief officer in local government.
The Chair
Thank you. This session will run to 2.45 pm. As you will understand, you will be questioned by members of the Committee. Are you going to start the questioning, Mr Smith?
Jeff Smith (Manchester, Withington) (Lab)
Q
Adrian Blaylock: Local government has faced significant financial pressure since the start of the pandemic—and before that, for other reasons—and the Bill attempts to address, potentially, some of the issues that local government could face if the covid restrictions are not prevented from being considered in the material change of circumstance appeals. The potential loss of income to local government could be pretty significant, and what local government really needs is continuity of funding and certainty of funding, so to carry the risk of material change of circumstances, which could be the case for many years, depending on how long they take to actually make their way through the system, is significant. I think that the Bill addresses that potential issue; it does what it is intended to do.
David Magor: Adrian is correct in his summary. Certainly the impact of the material change of circumstances and the challenges that were outstanding will have had a significant financial effect on local government, and of course that will have reduced Government revenues. The Chancellor, in the Budget, had not forecast the anticipated loss as a result of these material changes in circumstance. The rating professionals, the rating advisers to the ratepayers, had chosen what was the only route available to them at the time; the route that they lawfully had to take was to treat the coronavirus impact as a material change of circumstance and act reasonably on behalf of their clients, which they did. But of course the financial impact was going to be considerable and so we have a situation where Government have intervened and said that a better way of dealing with it is through a relief scheme. All things considered, and provided that the relief is paid in a timely manner and the amount of relief is appropriate, that is a satisfactory way of dealing with it.
That having been said, the reductions in assessment that were being mooted with regard to the material change of circumstance were quite considerable, and it has raised expectations of ratepayers. One hopes that when the Bill is passed into law, as we expect it to be, and the relief scheme is put in place, the amount of relief will be sufficient to satisfy the desires of those particular ratepayers. Certain sectors, like retail, hospitality and leisure, have done very well out of the reliefs that have been awarded to them. This measure, of course, picks up others, who were not covered by those particular rules. One hopes that, when the Bill becomes law and the relief scheme is put in place, it will meet the needs of the ratepayers.
Jeff Smith
Q
David Magor: Obviously, the Chancellor made provision for the airports with a special airport scheme, but of course the rateable value of the major airports in England is very significant. One can look at Heathrow, for example. It has a very significant value, and the amount of relief that was made available to it was nowhere near its rates liability. You can look at all the airports in England and compare those airports with the way airports have been treated in, for example, Scotland, where they have had 100% relief. The expectations of the airport providers and the companies running the airports are very high. However, the amount does not appear to be sufficient to meet the desires of all the ratepayers who had outstanding challenges and large assessments, like the airports. The challenge for the Government is to ensure that those particular ratepayers are satisfied.
As far as businesses generally are concerned, there are of course those that have done very well through the pandemic: their trading positions and profits have remained stable. You can argue that giving relief to them, as well as to those that have really suffered—particularly companies in the supply chain—would be unfair. Of course, if the new relief scheme is going to be dealt with by application—companies can choose to apply—one hopes the criteria of that relief scheme will ensure that relief is paid to those who are entitled to it. Meeting the expectations of the ratepayers who have had challenges in is going to be the real problem with the outcome of this Bill.
Jeff Smith
Q
David Magor: The challenges are laid down in legislation; we know what the challenges, and the circumstances surrounding those challenges, are. It is for the valuation officer to look at every individual challenge and how that challenge is made up, and to decide whether it is covid-related or related to a normal material change of circumstance.
The important thing is that the valuation officer inspects every challenge and makes a reasonable decision in every case. That will be absolutely critical. The ones that are covid alone will stand out quite clearly. However, with those where you perhaps have a change in the high street, with the closure of a major retailer because of trading patterns, you have to be very careful to make sure that you do not mistake the fact that the retailer was intending to close anyway for the impact of covid. Remember, the valuation officer is very experienced in this process. The material change of circumstance legislation has been around for a long time, and there is lots of case law. There is absolutely no reason why the valuation officer cannot act in a reasonable and transparent way.
Adrian Blaylock: What David says is absolutely right. It is important to recognise that there are material changes of circumstance that are not related to covid. These can still go through the normal process, and the Valuation Office Agency should be able to distinguish between the different types.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
Q
The second question is more specifically to Mr Blaylock and relates to the IRRV’s evidence, in particular to paragraph 6, where you are talking about the benefits of amending provisions of section 47 of the Local Government Finance Act 1988. It would be useful to talk through your argument there to help us understand it.
Adrian Blaylock: That is probably aimed at Mr Magor, rather than me. It is really hard to know whether the size of the pot—the £1.5 billion—is large enough or not. The way I expect this scheme to work is for the Government to release guidance on the types of business they expect local government to support. In the announcement on 25 March, they gave a couple of examples of types of businesses that have not been affected but would see a reduction due to a material change of circumstance, and one that has been affected but would not see a reduction through a material change of circumstance.
Local government has to follow guidance issued by the Ministry of Housing, Communities and Local Government. That is in the regulations; section 47 of the Local Government Finance Act 1988 says that it must be taken into account. Until we know exactly the types of business the Government are expecting local government to give support to, it is really hard to say whether £1.5 billion is enough. Airports were given as an example. If airports appear in the guidance as something that the Government want local government to support, as Mr Magor says, their rateable values are large, and therefore the pot probably would not be sufficient, but it is really hard to say at this point in time.
David Magor: On the size of the overall pot, we at the institute have the advantage of having a comprehensive database going back to 1990 of all non-domestic properties. We have been looking at that database and trying to do some early forecasting of how big the pot should be.
You can see from the ministerial statements that the Minister has made quite clear exactly the direction that he wants the relief to go in. You can do a rough calculation by taking out retail, hospitality and leisure properties, exempt properties, small businesses and so on, and you are left with an effective amount of rateable value and an effective number of properties that would get the relief. Of course, the Government have also added local economic factors into the decision on the distribution of the pot, and we do not know the detail of them.
If you look at the eligible rateable value and the eligible properties, once you take out the exempt properties and those that have already received relief, you start to come to a figure well in excess of £1.5 billion. You are starting to look at a figure perhaps three times that amount. Initially, that sounds quite frightening, but of course we do not know the economic impact of covid on individual companies. Again, the Minister said in his guidance that the scheme will be by application, so it will be for companies to choose whether they apply.
No doubt, if we see the draft guidance and it gives clear indications of the way local government is to work, you can frame an application form in such a way that it will target the relief at those in most need. Until we see the guidance, it is difficult to give a clear forecast of whether the pot is large enough, mainly because of the mysterious economic factor. The implication from the Minister’s statements is that it will differ from area to area, so it will be impossible to know what figures the Minister has taken into account unless we have absolute transparency and those figures are made available.
Of course, there is a danger that individual local authorities will challenge the figure. If it is not sufficiently clear, the first thing that elected members will do is compare their figure with that of a similar local authority, and if it is significantly different, they will want to know why, so there are a few challenges ahead for the Minister.
The Minister for Regional Growth and Local Government (Luke Hall)
Q
David Magor: When this legislation was introduced, you saw various significant events that triggered MCC changes. When you are looking for things that are similar to covid, you perhaps look at the crash of 2008 and things like foot and mouth disease. These are factors that are taken into account when you are looking at the broad picture. The covid situation, as we all know, is quite unique. The normal material change of circumstance is an essential part of the overall evaluation process. You need to reflect the changes in communities and in the environment, such as buildings being demolished or empty and so on—the material changes that happen in every neighbourhood from day to day. There are roadworks and 101 different things. Those have been dealt with very adequately by the Valuation Office Agency. The agents, on behalf of ratepayers, put in the challenges under the new challenge and appeal process, and it has worked very effectively. It has ensured that the distribution of the rate is as fair as it can be when you have got a five-year cycle of revaluations.
The special circumstances that come to mind are the crash in 2008 and foot and mouth disease. It worked quite adequately but, of course, it was nowhere near on the scale of covid, and the impact of covid on the economic wellbeing of communities.
Adrian Blaylock: The only thing I would add is the position since the end of March 2020. From 1 April 2017 to 31 March 2020, just short of 160,000 MCCs were lodged against the 2017 rating list. By the end of June, that had grown to just over 300,000, so had almost doubled in that three-month period. By the end of March 2021, 568,000 MCCs had been lodged with the Valuation Office Agency. There has been a significant increase, and it is fair to say a good proportion of those will be related to the pandemic.
Luke Hall
Q
David Magor: Since the introduction of the rates retention scheme, local authorities have had to forecast the impact of changes in the valuation list from year to year when preparing their budgets. You started with 50% retention, and moved to pilot schemes of 75% and 100%. When you have a rates retention scheme that works in that way, if you make a mistake in forecasting the reduction in value, you will significantly affect the finances of the local authority and the budgeting process.
Every chief financial officer has to make a forecast of the impact of a change. They would have to make a provision against that forecast and, of course, provisions prevent you from spending money, because you are providing for an event that is likely to happen. Certainly, as far as forecasting for the 50% rates retention scheme was concerned, every time you looked at your rateable value and the changes in that over the forthcoming year, you were conscious that any forecast you made, 50% of that reduction in value would fall on your budget.
That was the way the retention scheme worked, and it created a great deal of concern because chief financial officers were making very significant provisions. As I said, making provisions curtails the local authority’s ability to spend. Elected members quite rightly get very concerned about that. Then the MCC checks and challenges came in, with the checks first. As Adrian said, the enormous number of checks has now reached half a million, and the challenges emanating from those are well in excess of 100,000. You are talking about a massive impact on the valuation resources of the list. Local authorities have to make provision for that.
Through this Bill you would remove that risk and, as the Chair said, transfer it to central Government, because you would fund it through a relief scheme. The real problem is whether the relief will be sufficient to meet the needs of the ratepayers who are expecting a reduction in rateable value.
Adrian Blaylock: That is right. The risk and the responsibility of a local authority to set aside sufficient funds to cover any potential losses to the rating list could be significant. If I can just give you some indication of where we were: at the end of 2019-20, local government had just short of £3 billion sat in provisions for alterations of lists and appeals. This is all pre-covid. This is nothing to do with the pandemic, just essential changes to the rating list. Every year, they have to forecast what they think they will lose in the forthcoming year and there is roughly £1 billion a year being added to that pot, regardless of covid. So the potential loss on top of those normal everyday changes to the rating list—well, I would not like to think what would happen to local government finances if it went ahead. You would need a significant level of provision to be able to carry that. We have already seen local authorities applying to MHCLG for capitalisation directions because they are struggling to pay the day-to-day costs of running their services. How many more authorities would need to go down that route if that is where we get to? That is what concerns me.
Ms Marie Rimmer (St Helens South and Whiston) (Lab)
Q
David Magor: I must admit that the Bill is very well framed. We have looked closely at the Bill, clause by clause, and it meets its specific purpose. The approach to dealing with the material change in circumstances and to withdrawing or removing the covid ones is very sound. I find the provisions of clause 1 fit for purpose and they meet the needs of Government. That is a relief, in the sense that it seems to be fair. Of course, it is important that in making decisions in relation to the clauses that you have mentioned the Valuation Office Agency is transparent and gives the ratepayer and ratepayer’s agent every opportunity to make their case for other matters that are outside the covid situation.
Adrian Blaylock: I have nothing to add to that. I agree with David.
Ms Rimmer
Q
Adrian Blaylock: It is really hard to say because there was a suggestion of what level of reduction ratepayers would see in their rateable value from discussions between the Valuation Office Agency and rating agents. However, it is hard to say. Would that be across the board? Is that for a specific area? Is it for a specific kind of property? Without knowing exactly what the extent of the reductions in rateable values would be through material change of circumstances, it is really hard to say. The other thing to think about is longevity. Is it for the period of the lockdown? Is it from now to perpetuity? Forever? It is hard to say what the actual loss would be. There are too many unknowns, I would suggest.
Ms Rimmer
Q
David Magor: The problem with the pot of money is that when the Bill is passed and the relief scheme is released and we have guidance—of course, along with that guidance, one assumes you will have the distribution of the pot as well by individual local authorities—as well as making sure that they fully understand that individual pot and how it is made up, each local authority will then have to develop its own scheme and that scheme will be approved by members. In developing that scheme, you would have to look at the potential eligible properties in your area. From ministerial statements, you can take out RHLG properties, exempt properties and so on, because they will not get any relief, or it is the Government’s intention that they do not get any relief. You will then be left with a number of properties that are entitled to relief. What you do not know is what the economic factor in the distribution will take account of, but one assumes that you will look at the economic factor from individual company to individual company, and a company that has traded satisfactorily through the pandemic will, no doubt, not qualify for relief. One assumes, certainly from the statements that have been made in Parliament, that that is the way the Government wanted it to work.
When you get to that situation, you have to decide exactly how much relief you will pay to each individual ratepayer. There is no indication of what a reasonable amount is. There were some press releases from certain rating agents suggesting reductions as high as 25%. A couple of examples were put forward in statements from the Treasury where the amount of relief granted was a good deal less than 25%, but at the end of the day a local authority has to be really careful because it has a cash-limited pot that it has to distribute fairly to everybody to ensure that it has sufficient resource to meet the needs of every applicant. That in itself will be a challenge.
As Adrian says, you have to know how long the pot will last. The problem is that, if it is a cash-limited pot and you cannot go back for more, local authorities will be in a really difficult situation with those ratepayers who may be entitled but you did not have enough money to go around. You then revert to your other discretionary powers, particularly the hardship power. Then the cost of that starts to fall on the shoulders of the council tax payer, so it really is a massive challenge to local authorities. On top of that, in a practical sense there have already been adverse reports from the ombudsman about a lack of transparency in some local authorities with regard to the grant schemes. That was a significant problem with the grant schemes, and local authorities handled it really well. This problem, I think, is greater.
Ms Rimmer
Q
David Magor: When the new values come into force there will be rights to appeal against them. The effect of the Bill, of course, is to prevent any applications under the check, challenge and appeal process from going forward in relation to the pandemic. That seems to be the intention of the Bill. Due to that being the law—it has closed down that particular area of activity, and the impact of the pandemic on the material change of circumstances definition—they cannot make any more appeals about that, but of course they can still continue to make normal material change of circumstances appeals right up to the closing of the existing list.
Ms Rimmer
Q
Adrian Blaylock: Definitely. The way I read it, the Bill prevents any announcements regarding the pandemic from being taking into account, but it does not prevent any other methods of check or challenge from being taken forward by a ratepayer if something different is affecting their rateable value.
Simon Baynes (Clwyd South) (Con)
Q
The Chair
For our witnesses, the Commons is being suspended for three minutes. It is not a vote or a fire bell.
Simon Baynes
Thank you, Mr Mundell. Is there a sense in which the timing of the rate revaluation is a helpful coincidence, in that it could mitigate some of the issues that ratepayers might have with the change to their business arising from coronavirus, perhaps particularly where a business has been badly affected and has to change its whole focus? Is the revaluation a way to mitigate that, and is that a helpful coincidence of timing?
David Magor: It is a helpful coincidence of timing. There is an antecedent evaluation date, and the rental evidence gathered to determine the values for the next evaluation list will reflect the circumstances of the pandemic and what is happening in the property market. The valuation officer has started to call for that evidence, which is required by statute and will reflect the current situation. Therefore, the list coming into force in 2023 will reflect the current difficult circumstances and, as you rightly say, potential changes in trading patterns and other things.
Adrian Blaylock: I agree. It is convenient it coincides, so will do exactly what David says.
Seema Malhotra
Q
David Magor: I know Adrian will pick up on the impact of it, but I will start. On the guidance, for reliefs under section 47 of the Local Government Finance Act 1988, the Minster is required to give guidance and local authorities to have regard to it. You would expect the guidance to be sufficient to enable local authorities to develop a scheme within the Government’s wishes. From ministerial statements, we know that that scheme will not include awarding relief to retail, hospitality and leisure, or those in receipt of other reliefs that remove their rate liability, and that economic factors will be considered from company to company. I would expect the guidance to clarify those issues and make it clear how the individual pots will operate.
I would also expect it to give local authorities an element of discretion—after all, section 47 is about discretionary relief—to have a scheme shaped for their area. This is why it has to be done in stages. The first is passing the Bill into law. Then, you issue the guidance with the distribution, give local authorities a chance to analyse that distribution and understand whether it is fair, and what to do at a local level. Local authorities then have regard to that guidance and devise a scheme, which has to be done quickly.
If we had not had this proposed change in the law, the valuation officer and ratepayers’ agents would be settling matters now, and I suspect refunds would have started to circulate. If this scheme is to replace those MCC challenges, you would like to think it would be in force later this year, and that any reliefs would be paid during the current financial year— that must be the aim.
The pot is a one-off that would be distributed as quickly as possible, because now is the time when the money is needed. The real issue for local authorities is devising a scheme and ensuring that they can distribute the pot fairly, and that they do not run out of money. That, in itself, will be a massive problem.
Adrian Blaylock: The only point I would add to that is timing. I think you questioned the timing and the need for haste; as David said, businesses need this money now. The only thing I would question is to ask what this relief pot meant to be compensating for. The majority of the lockdown measures and the restrictions applied during 2020-21 rather than during 2021-22, and there is a specific part of section 47 of the Local Government Finance Act that says that a local authority cannot take a decision more than six months after the financial year to which the decision relates. So, strictly speaking, as at the end of September a local authority will not be permitted to give discretionary relief rate back into 2020-21. That means that either everything needs to be in place and all the local schemes need to be up and running by the end of September, or the relief is not given for 2020-21 but is given for 2021-22 instead. However, what then happens to the businesses that had a material change of circumstances lodged for 2020-21 that are no longer in existence? They have missed out on that.
As for the timing, it is important that the Bill gets through as quickly as possible, but it is also important for people to understand that local government also have to go through their own governance processes. Devising a scheme is not just a case of somebody sitting at a desk and saying, “There you go, this is our scheme”. It needs to go through the proper governance process, which will take time. It could take two or three months for all that to go through its own internal processes, on top of whatever time it takes for the legislation to be passed and the guidance and allocations to be issued by MHCLG. Timing is crucial in this process.
Jeff Smith
Q
Adrian Blaylock: I do not see why not. If the Government have already taken the decision on the value of the pot—I do not know what they are doing about the allocations, but if they can work out what the allocations need to be for each local authority, they must have a clue now what they want to support, what areas they want to support and where they want local government to focus their attention. If that was to happen, it would allow local government to start formulating plans and start going through the process of putting together their own local policies. I think that would be a positive step.
David Magor: I agree wholeheartedly with that. Draft guidance and an indicative figure of the amount for each local authority would be most welcome at this stage. It would enable planning to start; it would also enable the local authorities to challenge. Better those challenges come now, as we are preparing. We are going through—let us hope—a long, hot summer, and through that long, hot summer local government accountants have nothing better to do than to work out what their relief should be, so I am sure that they would be pleased to see some indicative figures and draft guidance.
Jeff Smith
Q
Adrian Blaylock: Not to my knowledge.
David Magor: I think the overall reaction to where we are now has been relatively positive. The Government are in the process of removing this element of the material change of circumstance, and are replacing it with a grant scheme—with funding of a relief scheme. I think the only problem is the timing—that is the issue. If there is any lesson to be learned, it is that ratepayers are expecting their relief now and local authorities need to provide it in the current financial year, because they are the customer-facing service. They face the ratepayer and have to deal with the complaints that the relief has not been paid promptly enough.
The Chair
Gentlemen, your timing has been excellent, because you have concluded answers to the questions just within the time limit. On behalf of the Committee, I thank you both for your evidence this afternoon.
Examination of Witness
Sarah Pickup gave evidence.
The Chair
Q
Sarah Pickup: I can, thank you.
The Chair
Q
Sarah Pickup: I am Sarah Pickup. I am deputy chief executive of the Local Government Association, with a lead on finance. I do not have the level of technical, detailed knowledge that your preceding witnesses had, but I can certainly bring you the LGA’s views on questions.
Jeff Smith
Q
Sarah Pickup: You are correct: we welcome the principle of the Bill. An unquantified amount of material change of circumstances resolved over an unspecified period of time would be a really difficult prospect for local government to manage, and the need to make provisions would have been substantial. We have spoken to Manchester City Council, for example, which said it had calculated that it might need to make provision of around £11 million in respect of these material change of circumstances, which obviously would have meant that it had to take that resource from somewhere else. We think that there is a substantial level of challenges—we understand around 50,000 nationally. Manchester alone has had a 569% increase in those appeals on the year before, and 88% of those were to do with material change of circumstances, so certainly something needed to be done.
We welcome the prospect of a discretionary scheme, because we think councils will be able to assess where the real damage and the hit is on businesses in their area, but there are of course some challenges in devising a scheme within a fixed sum of money, so we await the guidance. A plus to local discretion is that you can try to fit it to your circumstances, but of course you have to fulfil the promises you set out in your scheme, and the resources put a cap on that. There are some challenges here, but in principle we absolutely welcome this as a way forward.
The other thing I just refer to is the timing issue, which was referred to by the previous witness. Our understanding is the same—that if someone has not made a decision by September, they cannot relate the change to the previous year. The appeals that have come in have come in largely for 2020-21; certainly, the Manchester increase refers to 2020-21. I think that is what businesses were applying for. The fact that it is ongoing into 2021-22 raises another question. There is a question about whether this fund is intended to apply to 2020-21, 2021-22 or to an unspecified period over which coronavirus has an impact. Those things will need to be addressed in the guidance, and we will need to understand whether we are trying to meet the losses to businesses in one year or in more than one year, and the timing of the regulations is important there as well.
Jeff Smith
Q
Sarah Pickup: It is extremely difficult, actually. If we assume that it is meant to be for one year, I think Manchester’s assessment of £11 million represents about 1% of its rateable value. If in a very rough, back-of-the-envelope calculation you were to extrapolate that up to a national picture, it would take you to about £1.1 billion. However, that is a big extrapolation. Manchester has calculated what share it thinks it might get of the £1.5 billion pot, and it thinks that will permit it to offer reductions of around 10% to non-hospitality and leisure properties across its area. Of course, not all of them may need a reduction or will qualify for a payment from this fund, but I think it reinforces the point made earlier—that the expectations of business of what the fund might be able to deliver for them might not be realised in reality, for two reasons. First, more than one year is at stake here, and, secondly, people will have to design their schemes within the confines of the resources available through the distribution mechanism.
It is difficult without knowing how prescriptive the guidance will be. We understand there will be discretions here, for the very reason that you have to fit your scheme to the money available. What we do not want is some guidance that leads businesses to expect more than councils can possibly deliver within the sum available in their area.
Jeff Smith
Q
Sarah Pickup: Not that I am aware of. The guidance would normally follow from the legislation. Obviously, people will have to give some thought to it alongside the passing of the Bill. We have not been involved to date in discussions about developing that guidance. We would welcome the opportunity to get involved in that with the Department.
Navendu Mishra (Stockport) (Lab)
Q
Sarah Pickup: These provisions mitigate against the need for having to make provisions against the material change of circumstances. In that sense, they are beneficial to local government, because it takes away that uncertainty, albeit we need the clarifications around timing and discretion as part of this.
If we stand back and think about business rates as a source of finance for local government and the Treasury’s fundamental review of business rates, they form 25% of local government income and are really important. Alongside council tax, business rates are one of the two main sources of funding, but where we stand now is that there is a whole patchwork of reliefs and new provisions for relief to businesses against their core business rates commitment. It means that the future is very uncertain. The way in which the next revaluation will go is uncertain and, arguably, while business rates have a role going forward, some significant reforms are needed to make them a stable source of finance for local government going forward.
Luke Hall
Q
Sarah Pickup: Gosh, it is really hard to recollect precisely; so much has gone on in the last year. It was probably about a year ago; it may be slightly less. There was a lot of discussion at the point when the Valuation Office Agency started to discuss how it might address these appeals. I think there might have been some leaks in the press. That is when the discussion started to come to the fore a bit more, because there were some quite substantial proposals around the adjustments to valuations that might go forward. I think there was an attempt to address this on a uniform basis, rather than deal with every appeal and address it individually. We have gone from there to this scheme which approaches the issue differently, probably more straightforwardly and in a more timely way, certainly in the short term.
The anxieties around appeals are ever present and this was just an addition to the pre-existing issue about businesses’ ability to put in appeals right up through a rating list with no time limit on it. The check, challenge, appeal process has made a difference to that, but we have not yet seen the end result of the number of appeals from the 2017 list, because the time window has not closed yet.
Luke Hall
Q
Sarah Pickup: There is a greater degree of certainty, because they do not face a period of time of not knowing whether an appeal will be successful or not, nor the extent of that success, and therefore having to make additional provisions on their balance sheet. Instead, they have a scheme to operate that offers them resources to provide discretionary funds to local businesses, which is welcome. As we have said, there is still some uncertainty in relation to what the guidance says and whether the scheme delivers what businesses expect, and whether, if not, there is either a pressure on the council to fund beyond the resources that have been made available, or a pressure because businesses cannot manage without the relief that they had been expecting, and therefore some businesses start to fail.
Seema Malhotra
Q
Sarah Pickup: I do not have detailed knowledge of its precise funding at the moment, but over time, we certainly have made a case that we support the Valuation Office Agency being funded adequately to deal with the task in hand, because there has been a very big backlog of appeals on the books. It has been pulling those down, and the change to check, challenge, appeal has impacted on that. Nevertheless, there is still a backlog, and our fears were that if the Agency was not properly resourced, you would end up with overlapping backlogs of appeals from different rating lists creating ever more uncertainty and not really taking away that need for councils to keep assessing the provisions that they need to make on their balance sheets.
One of the things that we certainly would support is a time limit on the time when businesses can put forward checks, challenges, and especially appeals against any given rating list. We think that would help, and it is in place, I believe, in some of the other UK nations.
Ms Rimmer
Q
Sarah Pickup: This was probably picked up by your previous contributors. Because the basis of a valuation is based on rent as of March 2021, that valuation date sits in the middle of the pandemic, so the question is whether any adjustments are made to that or not. You would think that the impact of the pandemic on rental values would be reflected in the valuations going forward for the list starting in 2023, but clearly we will not know that until we go forward.
The other point is that it is a very changeable picture, and businesses will continue to be able to appeal based on changes in circumstances. Things that are currently due to covid could turn out to be long-term impacts on businesses, in which case I think they move into a different category. If you lose trade as a result of covid, that is one thing, but if your business goes into permanent decline, it becomes a very substantial and permanent change in circumstances, and that probably falls into a different category.
Ms Rimmer
Q
Sarah Pickup: Yes, we are aware, and we think that the exclusions seem reasonable—as you say, they are very specific. They would be limited to very small numbers of businesses. Loss of trade goes across a much wider range of businesses and therefore the scheme is aimed at addressing that.
Ms Rimmer
Q
Sarah Pickup: That is something that they would have to address. We have had concerns in the past about whether the resource was sufficient to deal with the backlog quickly enough. It is in the interests of local government for there not to be a big backlog and for things to be dealt with as and when they arise. That is much more efficient in the long run.
Jeff Smith
Q
Sarah Pickup: I could not give you an estimate of the amount of funding, but it is clearly a new burden. In most of the instances when new burdens have come along during the pandemic, some resourcing has been put in place to help with the design of new schemes.
Of course, revenues and benefits officers—in particular, finance officers in councils—have implemented a huge number of different schemes, some of which they have had to consult on and some of which have been much more directed and put in place by the Government. They have done that throughout the pandemic and this is another instance of something they will have to do.
The key thing, of course, is that those officers are given time. Sometimes, what we have found is that the money is announced, the guidance is passed or the regulations are put in place and then immediately everyone starts asking councils, “Where is the money? Why has it not been put out yet?”. As you said, councils need to be given time to go through due process to put schemes in place. A lot will depend on what the guidance says—and yes, early sight of it or early drafts and indications of the direction of travel, as well as early indications of the sums of money available, would be extremely helpful in helping councils to prepare.
The Chair
There are no further questions for Ms Pickup. I thank you for your time this afternoon giving evidence to the Committee.
Sarah Pickup: A pleasure—thank you.
Examination of Witness
Andrew Agathangelou gave evidence.
The Chair
Q
Andrew Agathangelou: Good afternoon. I am Andy Agathangelou, the founder of the Transparency Task Force. The Transparency Task Force is a certified social enterprise dedicated to helping ensure that consumers are treated fairly by the financial industry. I should also mention in passing that I am involved with two all-party parliamentary groups: one on pension scams and the other on personal banking and fairer financial services. My involvement is as the chair of the secretariat committee to both those APPGs. If the Chair would like, I would be very happy to elaborate on the work of the Transparency Task Force and our particular interest in this matter.
Jeff Smith
Q
Andrew Agathangelou: The Transparency Task Force is all about trying to bring about regulatory reforms so that consumers get a better deal from the financial industry. An increasingly large proportion of our time and effort goes towards trying to sort out the terrible mess that occurs when people are scammed. We are very interested in cases such as Blackmore Bond, London Capital & Finance, Connaught, Lendy and Ark. There is a very long and very sad list of scams that have affected quite literally thousands of people in our country.
The reason I am particularly interested in the Bill is that we have noticed over many years that a colossal amount of carnage is being caused by a relatively small number of criminally minded individuals. It will not surprise you that one of their methodologies—one of the ways that they work—is phoenixing. As soon as they start to feel the temperature rise around them, they close down shop and reappear somewhere else. These individuals tend to be highly intelligent, very sophisticated and very good at planning and strategising their next step. They always have a plan B, C, D, E and F up their sleeves. Frankly, they have been running rings around the regulators and enforcement agencies. One of the most powerful weapons they have is the ability to dissolve their organisations and pop up somewhere else. That is why the Bill is of real interest to me. It will also be of enormous interest, I am sure, to the many tens of thousands of people out there who have lost as a consequence of criminal activity.
I do feel the need, if I may, to elaborate on the loss. When somebody finds that they have lost their entire life savings, quite literally in some cases, when they are in their 60s—in other words, too late in their life to do much about it—the financial loss is absolutely horrific, but the emotional consequences, the shock to the system, can be so bad that they find themselves self-harming. People find themselves under huge amounts of emotional stress and strain. It is particularly bad when, let us say, it is the husband who has had his entire pension savings taken from him by crooks; he is so fearful of the situation he has created for himself and his family that he has not even told his wife that it has happened. There are people out there who are living day by day with a horrific secret—that they have lost a lot of money—and they have not quite got it in them to tell their partners and families what has happened.
I am very deliberately painting this picture for you, Mr Smith, because the work that you are doing with the Bill is of great importance. If there is anything that can be done to mitigate the risk of that kind of emotional and catastrophic carnage, I would be very pleased to give it all the support I can, and I am sure everybody else would feel the same way.
The very, very worst manifestation of this—in fact, I will give you two. The worst manifestation is when you learn about children who self-harm routinely and repetitively because of the stress-induced state of the household resulting from the family’s life savings being tricked away from them by criminals. Of course, one step beyond that is when people take their own lives. There have been many suicides as a direct consequence of this kind of malpractice. That is why I am so pleased to be here today to share whatever I can about this Bill.
Jeff Smith
Q
Andrew Agathangelou: The short answer is yes. I would characterise this Bill as a worthwhile step in the right direction. However, there is ample scope for improvement in relation to all the other areas that it touches on. I see it, hopefully, as a spearhead that might lead to other things happening as a direct consequence.
I will give you one quick example. There has been so much in the way of catastrophic regulatory failure over recent years that all the related enforcement agencies and bits of the regulatory framework need to wake up to the fact that our country has a horrific situation on its hands, in terms of the amount of crime that is going on. I believe I am right in saying that the National Crime Agency says that the annual cost of fraud in this country is something like £190 billion. That is a very big figure. Just to put that in context, I think it is well over half what the NHS costs. However, according to Anthony Stansfeld, the former Thames Valley police and crime commissioner, who is a man we have admired for quite some time for reasons that I will go on to, something like 0.03% of the amount lost in fraud, white-collar crime and economic crime is being given to the police as a resource to go and fight it. I believe I am right in saying that only 1% of the police budget goes towards fighting those sorts of issues.
My point is: yes, brilliant, let us stop criminally-minded directors from phoenixing, but please understand that this is just one small part of the ecosystem. What Parliament might want to do as a consequence of this Bill is to sit back and say, “Fine. We’ve done something really worth while in moving this Bill forward, but let’s not kid ourselves that the job is done. We’ve actually only just started to scratch the surface.”
Organisations such as Action Fraud, which, by the way—I can’t resist the joke—we call “Inaction Fraud”, the Financial Reporting Council, the Financial Conduct Authority, the Pensions Regulator, the National Crime Agency, the Serious Fraud Office, City of London police, the Insolvency Service itself, the Solicitors Regulation Authority and the professional bodies for the accounting and audit professions are all part of the landscape. They all need sorting out because of the part that they play in allowing a lot of crime to go on that really should not happen.
Let me give one further quick example. I am aware that there are people who are at risk of being scammed by directors of organisations operating today that were doing exactly the same thing last year, the year before that and the year before that. I think we can go back as far as 11 years. We are aware of dodgy directors who were scamming people 11 years ago, and were known to be scammers, but are still operating. Frankly—excuse my language—it drives me nuts.
Jeff Smith
Q
Andrew Agathangelou: I am quite a plain-speaking person, so forgive me, but I am about to be quite plain. The regulators need to enforce. There is evidence to suggest that, for example, despite the fact that one of the most important statutory duties of the Financial Conduct Authority—our primary conduct regulator in the UK for the financial service industry—is to try to protect consumers from harm, it is a little reluctant to enforce. That is not my opinion; the chief executive and the chairman of the Financial Conduct Authority gave evidence to the Treasury Committee earlier this year—I will try to find the link for you—admitting, frankly, that they were risk averse, I think the phrase was, when it comes to enforcing and mitigating. That is not verbatim, but that was the gist of it.
Would it not be good, ladies and gentlemen, if as well as having rules in place designed to protect consumers, we had a regulatory framework that had the gumption to go after the baddies whenever it could? There are two very important reasons for that. First, we might get them locked up or make them pay fines, and so on. That is great. That is exactly what we want, but even more importantly than that, it will show that there is good reason for these dodgy directors to not carry on their wicked craft.
It is currently a very low-risk career path for somebody to become a criminally minded director of a company. The chances of their getting caught are very low. The chances of their paying a fine are very low. The chances of their being banged up are also very low. Why? Because the regulatory framework as a whole is not built to cope with the tsunami of criminal activity that is going on. I would say, from a long list of potential improvements, that one of them would be to please encourage our regulators to regulate robustly and enforce effectively.
Seema Malhotra
Q
Andrew Agathangelou: I will answer your question, but before I do I would like to elaborate on a small point that you made. I actually think that the regulatory framework has been built by Parliament to do what it is designed to do. The problem is not that it is not capable of doing it; it just does not do it. It is a bit like having a really fast car that is just not being driven fast by the driver. The problem is not the vehicle; it is who or what is controlling it. I just thought I would throw that in.
To respond to your question more specifically, again I am a plain-speaking person. The Transparency Task Force ran an event last Thursday, with the title “The Great Insolvency Scam”. I can provide the Committee with the recorded video testimony of that. The reason why we ran an event called “The Great Insolvency Scam” is that we see insolvency as a very dark and murky part of the world of business and commerce. We believe that there is a pile of evidence suggesting that the Insolvency Service has been weaponised. That is where the Insolvency Service is frankly abusing its very extensive powers.
The net result is that people sometimes have their homes or businesses taken away from them, as a consequence of engineered bankruptcies. It really is an horrific, dark area. It sometimes results in people self-harming, committing suicide and all the rest of it. I will now answer your question directly. Personally, the Insolvency Service is a can of worms. I will repeat that it is my personal opinion. I think the Insolvency Service, in part, is a can of worms that needs to be opened up and looked into. It needs to be properly regulated.
I have enormous concern about giving the Insolvency Service lots more money to carry out the additional work that is going to be necessary as a consequence of this Bill going through, if it does, without first ensuring that the service is fit for purpose. These are very strong views. I am not an extreme individual who has crazy ideas. I have just listened to and seen the testimony of people who have suffered as a consequence of the types of things I am talking about.
Think of this Bill as the start of an ongoing process of reform. Please do not think of it as the end point. Please do not make the mistake of thinking that it is a “job done” situation. It really is not. There is so much to be looked at. I ask the Committee to do all it can, on behalf of the British public, to ensure that the Insolvency Service stops doing what it sometimes does.
Peter Grant (Glenrothes) (SNP)
Q
Andrew Agathangelou: If the purpose of the Bill is to have a positive effect, of course they would. You manage what you are monitoring. If things are being looked at and checked, and if the progress you are hoping will happen does not, you have a chance to review, to modify and to ask challenging questions about why what Parliament wanted to happen has not.
There is a great parallel. I was involved in giving evidence on the Compensation (London Capital & Finance plc and Fraud Compensation Fund) Bill 2021-22 a while ago. The parallel there applies here. It is absolutely vital that there is a requirement for those responsible for executing the will of Parliament to be accountable and to be able to demonstrate that they have done so.
I would be disappointed if it took an amendment to make that happen. It should go without saying that you do not just abdicate your authority, pass the Bill and hope it happens. That to me would be a very poor approach to governance in terms of ensuring that legislation is effective. Essentially, if you want the Bill to work, you must ensure that what is supposed to happen after it is passed does actually happen. To my mind, frankly, that is very clear and obvious, and I cannot begin to think what the argument against that would be. How on earth could somebody argue against the idea of making sure that something you hope works does work? I could not even begin to think about how to argue that.
Peter Grant
Q
Andrew Agathangelou: First, yes. In my opinion this most certainly should be made retrospective. Why not make it retrospective? If the purpose of the Bill is to catch the baddies and to mitigate the risk of others deciding to go about doing this stuff as a direct consequence of the very powerful deterrent effect, why on earth would you not make it retrospective? To my mind that is really clear. I cannot imagine why you would not want to make it retrospective, if you had the power to do so. You are Parliament and obviously you do have the power to do so, so why not do it?
Three years is the blink of an eye in this context. There are all sorts of things that directors can—and do—do to play the game. They know the rules and regulations, and they know how to dance in, on and around them. The longer the time that you can go back, the more good you are going to do. It is as simple as that. The further you can go back and prosecute people who have broken the law, and wilfully and callously committed offences, the better. Why not make it 10 years or 15 years? I do not know what the right timeframe is, but to my mind three years seems like a very short period of time.
If the objective is to try to clean up our country, then make the timeframe as long as you can. I make this point because on the international scale I should mention that we have about 1,000 members outside the UK. It shames me to know that outside the UK, the UK is considered to be one of the worst places in the world when it comes to economic and financial crime and fraud. Some countries think the UK is the laundromat of the world. There are huge concerns over money laundering and over international drug money, terrorist money and so on.
Given how bad the level of fraud, white-collar crime, corruption and those sorts of things are within the UK, I would suggest that Parliament should come at this from the point of view of, “We should now be as powerful as we can be in opposing these dark and dangerous forces, unless there is a really good reason not to, because we have a national duty to do so.” I was brought up with the idea that the UK was a world leader when it comes to these sorts of things, but frankly the evidence really does not show that.
I want to make one particular point, Peter, if I may? There is a very powerful database called Violation Tracker that tracks the levels of violations by companies against the US authorities. When you look at the data in there, you find some startling trends, and the first is this: there are about $667 billion-worth of infringements against the US authorities by all kinds of industries. I think 52 industries are listed. The worst offending industry on the Violation Tracker database is the financial services sector, despite the fact that there is a long list of reasons why the financial industry actually ought to be the most trustworthy industry of all. That is not the case; it is actually the worst offender out of all of them. In fact, it is so bad that roughly half of all the infringements in that $667 billion total are directly attributable to the financial sector. In other words, it equates to all of the other industries put together.
My point is that the jewel in our crown, in terms of UK plc, is our financial services sector. I am of the opinion that if similar analysis to that which has been done in the US market were done in the UK, it would likely show a very similar picture. Therefore we should be fighting extremely hard to hunt down all perpetrators, all criminal dodgy directors. From my point of view, given the interest of my organisation, I think we should be relentless when it comes to chasing down people who operate scams such as Blackmore Bonds, Connaught, LCF, Premier FX, Lundy & Associates, and all the others.
Peter Grant
Q
Andrew Agathangelou: Yes, that is absolutely the case. I will elaborate on my answer, if I may. Last year, the Work and Pensions Committee led by Stephen Timms MP opened an inquiry on pension scams. Many of our members are victims of pension scams, so as a consequence it is a topic we know rather a lot about. I will share a document with the Committee produced by the Transparency Task Force as part of our response to that inquiry, and that document will evidence without any doubt why it is absolutely necessary that the three-year limit is extended to five, six, seven, 10 years, however far back you can go.
I say this because I am working on the basis that if the regulators, the enforcement agencies and the Insolvency Service can prosecute criminals and have them pay fines or be locked up, or whatever it might be, they would want to do that. Why would they not want to prosecute the baddies? To my mind it is simple, and I absolutely assure you that in the document I will provide to the Committee, as well as other supporting documents and evidence, you will see named individuals who have been dancing around prosecution over many, many years—I think one is 11 years. This Bill, if extended to a proper duration of time, would become a problem for them.
I would take great satisfaction if this Bill helped to finally lock up individuals who are currently in very expensive villas in Florida, with properties all over the world, with all kinds of fancy cars and fancy homes, all paid for by the life savings of British pension savers and investors. That would be very rewarding to know.
Navendu Mishra
Q
Andrew Agathangelou: I cannot answer your question directly, forgive me—I do not have that data and have not done that research. Let us think of it like this: roughly four or five years ago, a man called Roberto Saviano, an investigative journalist, became quite famous for a period because he did some investigative journalism on the mafia, and as a consequence of that investigative journalism, he now lives, I believe, under police guard 24 hours a day because he lifted the lid on a whole load of really bad, really heavy stuff.
I am mentioning Roberto Saviano because about five years ago, at something called the Hay Festival, he made the point that London is the heart of global financial corruption. That is a pretty powerful thing for somebody to say, especially if they have been investigating the mafia for years and years. You can google it and find it yourself. This is a very serious heavy-duty investigative journalist.
I mention that because it is reasonable to assume that a lot of that corruption involves entities and companies set up for special purposes. If the UK is the worst country in the world when it comes to global financial corruption—or if it is not the worst, let us say it is in the top quarter of really bad countries when it comes to financial and economic crime and corruption—it is reasonable to assume that the artful dodge of phoenixing is part of the modus operandi of the “community” that does this kind of stuff. I cannot give you any facts or figures, but a little deduction suggests that it is a massive problem.
I will make one further point, if I may. One of the reasons why it is a problem is Companies House. It is still shocking to me that, despite about nine years of Parliament having an interest in Companies House, finally getting its act together and asking even really basic questions about the people behind a new company that is being set up, Companies House has been allowed to carry on behaving in the nonchalant way that it does, with its casual, risky and dangerous way of granting companies the chance to come into existence when no proper due diligence has been done.
Similarly, in the pensions world, there was a period of about three years when Her Majesty’s Revenue and Customs was happy to authorise the setting up of new pension schemes with the lightest-touch due diligence you can imagine. Basically, people were allowed to go online, fill in a form and create a new pension scheme, which would then be the perfect vehicle for scammers to use. That has happened so much.
While I am on this little rant, allow me to stay there with one more point. When the pension freedoms legislation was being introduced, many people said, “Woah, woah, woah, woah, woah! Before you go allowing people to transfer their entire pension savings in a lump sum, why don’t we stop and think what the risks of this are? Why don’t we have a conversation about whether this might lead to some kind of fraudster’s paradise?” But no, pension freedoms legislation was rushed through, and now, many years later, even the regulators, such as the Financial Conduct Authority, are making the point that not enough thought was given to the risks associated with that kind of casual, fast policy-making.
So there we go. Companies House is effectively advertising to criminals, “Come and set up a company in the UK. Don’t worry, we’ll turn a blind eye to pretty much anything that happens because, frankly, we won’t know what you’re doing or what you’re about because we won’t bother asking you.” That is one example of these sorts of issues. The second example I have given you is in relation to HMRC, and it goes on.
I honestly think that if anybody was to do some kind of independent, objective, evidence-based evaluation or analysis of the work of City of London police, the Insolvency Service, Companies House and the financial regulators—that very long list that I mentioned—around how effective they are at preventing crime from happening in the UK, I am pretty sure that report would be rather scathing.
Navendu Mishra
Your contribution is quite depressing, but thank you for making it.
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)
Q
It is interesting: you talked about the amendment, which actually asks for a single report in a year. Clearly, we want to be managing the situation and making sure that it is effective. In terms of the time that you are looking at, obviously that does not negate the ability for criminal action to be taken; it is to restore directors.
I really want to focus on the Bill itself, and the focus within that and what we are doing positively to try to tackle some of these issues—including on phoenixing, which you started off talking about. I know you talked about lots of other things, and other things that we can be doing and are doing, but do you agree that the Bill adds an extra weapon to tackle phoenixing itself?
Andrew Agathangelou: I certainly do. As I said earlier, it is a significant, valuable, worthwhile step in the right direction. My plea—forgive me; I guess I am repeating myself here—is that we look at the whole ecosystem. For example, why on earth are we not including fraud and so on in the online safety Bill? I know that is another topic, but can you see how, from my point of view, these are all interconnected issues—this is all the ecosystem?
I guess I am saying that Parliament can take one of two views here. You can either deal with this tactical, ad hoc Bill, which is of course worthwhile, in isolation of everything else. However, for goodness’ sake, please do not do that; actually look at the bigger picture here—the interconnected matrices of other issues that Parliament ought to be grabbing by the scruff of the neck and finally sorting out.
Paul Scully
I appreciate that. If you look at corporate governance and Companies House reform and all these issues, and indeed at the online harms Bill, I am sure you will have plenty of opportunity to comment on that. As I say, this deals with one specific issue because of the impetus now. That is all I wanted to raise.
The Chair
If nobody else has any questions for our witness, I thank you on behalf of the Committee for your evidence, Mr Agathangelou. I am sure the Committee welcomed your frank speaking throughout. Thank you very much.
Andrew Agathangelou: Thank you all.
Examination of Witness
Kate Nicholls gave evidence.
The Chair
We move on to our fourth witness panel for this afternoon. The next witness we will hear from is Kate Nicholls, the chief executive of UKHospitality. We have until 4.45 pm for this session. Ms Nicholls, could you formally introduce yourself for the record?
Kate Nicholls: I am Kate Nicholls, chief executive at UKHospitality, the national trade body representing hospitality businesses—pubs, clubs, bars, restaurants, hotels and holiday accommodation. We have 700 member companies, which between them operate 95,000 sites across the UK, which is about 90% of the total hospitality market.
Jeff Smith
Q
I suppose my first question is this: what is the general view of UKHospitality of the measures, allied with the £1.5 billion funding package that goes with them?
Kate Nicholls: The key point that we would make is that we have had a high degree of support from the hospitality sector and the supply chain that goes alongside it throughout the course of the pandemic. We have a challenge in the supply chain in so far as the discretionary grants made available to our businesses within the supply chain have been allocated by local authorities, and by and large that has not flowed through as swiftly or as seamlessly as could possibly have been the case.
In addition, the business rate support made available to the supply chain businesses, and those businesses operating in the wider hospitality community that have been excluded from the hospitality and leisure grants, is not flowing through to the level that it needs to. Perhaps that is an indication of the large volume of businesses that are trying to get to grips with things and trying to get part of the wider funding available. There is a relatively small pot for a large number of businesses, particularly small and medium-sized enterprises.
Jeff Smith
Q
Kate Nicholls: Part of what would be really helpful would be to have greater guidance made available to local authorities about the types of businesses that are particularly impacted by the pandemic and particularly dependent on the hospitality sector.
Hospitality is quite unique in that it has a supply chain that almost exclusively derives its income from hospitality businesses; with hospitality businesses, either 90% or 100% of their income comes from hospitality, but 75% of supply chain businesses within the sector gain more than 80% of their income from hospitality. More detail needs to be given to local authorities. Local discretion is meaningless unless you have really clear national guidance about the type of businesses that are to be supported and the impacts that they have had.
Greater clarity and economic advice centrally would help, as well as a comprehensive overhaul of the central guidance to make it clear that a multiplicity of funds have been available throughout this process—some of which have closed now, some of which remain open and some of which have been extended. That would be helpful: to provide greater clarity to those local authorities about the types of businesses that are able to be supported and how long this money is expected to last. There has been a general reticence about giving out funds when you might have a further call on income going further forward. However, now that we are towards the end of the pandemic, overhauling that guidance and providing greater certainty would be helpful.
Jeff Smith
Q
Kate Nicholls: The businesses that need to be prioritised are those that have been most significantly affected by the covid crisis: both those frontline businesses in hospitality that have not benefited from the grants and the supply chain businesses to tourism, hospitality and leisure—and also those that are not business-based.
One of the areas that has been missing in a lot of the grant distribution has been food wholesale and food distribution—logistics companies wholly dependent on hospitality—but also our event caterers, business caterers and contract caterers. Those are the businesses that operate from a museum or an office, and not from their own units. They have therefore been totally excluded from grant support going forward.
In terms of the quantum available, we need to look at the allocation per local authority and make sure that that is given on the basis of the number of businesses they have that are disproportionately affected, so that we do not end up with the situation that we have had in the past, where constituencies in local authority areas that have a high concentration of these adversely affected businesses get a relatively small pot of money, because it is allocated per head, or per resident, or it reflects a different form of demographic.
We need to look at the pockets of deepest concern. As we come out of this, we want to avoid a whole-economy approach and be much more targeted and specific with the funds that need to be available in a greater volume to businesses particularly affected.
Jeff Smith
Q
Kate Nicholls: Yes, they are. We are having conversations with the three main Departments that we work with—the Department for Business, Energy and Industrial Strategy, the Department for Digital, Culture, Media and Sport and the Department for Environment, Food and Rural Affairs, on the food supply and wholesale side—to ensure they are pushing to make sure that grant guidance is as comprehensive as possible and identifies the businesses that need to be caught that have been missed in the past but are disproportionally affected by covid. We are also urging that concern and care are taken to include businesses that have been particularly adversely affected as a result of the delay in step 4.
Seema Malhotra
Q
Kate Nicholls: The quicker, the better is all I can say. A lot of hospitality businesses and their supply chains are clinging on by their fingertips, particularly given that they have had an extra month of restrictions imposed on them. A quarter of hospitality businesses have not been able to open and legally cannot until 19 July.
The remainder are subject to severe restrictions, meaning a loss of revenue of £3 billion. That impacts up the supply chain because if we are not operating at full capacity, we cannot get our supply chain kickstarted. The delay and cooling effect of that month of extra restrictions is significant, particularly in our town and city centre businesses.
We need to have that money as rapidly as possible, particularly because business rates bills started to kick in again for hospitality from the 1st of this month. Some £100 million of business rates bills started to be felt by the most affected businesses; that flows up through the supply chain as it tightens the credit and liquidity within the market.
The money needs to come as rapidly as possible and local authorities need to be given incentives to make that payment as rapidly as they can through the mechanism, so that delays do not hit. The danger is that if you leave it too late, you fail to get support to the businesses that are teetering on the brink and nearly surviving. We have lost an awful lot within hospitality in our supply chain, and we need to make sure we can keep those that are on the brink. The more swiftly we get money to them, the better.
On those businesses that have not benefited and need to be prioritised in this round of funding, the main ones highlighted are events, contract and office catering, particularly those in town and city centres where the delays will happen. You need a concentration on activities in central London, where businesses will not get back on their feet until we get international travel and office workers back in significant volumes. London hospitality is operating at about 20% to 30% of normal revenue levels; in the rest of the country, it is about 60% to 70%.
There is a severe lag on the central London activity zone and a heavy concentration of affected businesses in those two local authority areas, as well as Southwark on the south bank. You need to have focus on town and city centre areas, as well as the other businesses such as catering, weddings, events, conferences and banqueting, the freelance support and supply chain businesses that sit alongside those, and food wholesale, distribution and logistics.
Seema Malhotra
Q
Kate Nicholls: Yes, we had businesses that started to put in MCC appeals midway through the pandemic, when it was obvious that its effect was going to be much longer lasting than was first anticipated at the beginning of last year. A number of holiday parks, camping and caravan parks, golf courses and bigger holiday and hotel resorts put in MCC appeals. A number had been lined up for town and city centre pubs, bars, restaurants and hotels. Then there was the announcement that the MCC appeals would not be allowed under covid—that would not be a legitimate reason for an MCC appeal.
In our sector, MCC appeals are one of the few ways in which we can adjust our rateable value and our rates bills, which are incredibly high: they are the second biggest overhead as our businesses adapt to structural changes in the economy. While we might have thought that covid would be a temporary blip and a temporary impact on the economy, it is quite clear that for many businesses, particularly in towns and city centres, where there are changes to ways of working and to retail office accommodation, we are seeing a structural change that will have a longer-term impact.
People are very concerned, particularly as we move through this period when we have support and a tapering of relief on business rates at hospitality venues that comes to an end in April 2022. The concern is about what happens when we revert to rateable values and rates bills as normal in April 2022, because those bills will be set according to rateable values that were set for rents in 2015, at the height of the property market.
We are going to come back to rates bills at the highest levels we have ever seen them, having had a delay in revaluation. We will have had a long term without a market adjustment and therefore there is a concern that those businesses for which there is clearly a structural change in the marketplace are prohibited from making an appeal now that allows them to get ready for April 2022.
Seema Malhotra
Q
Kate Nicholls: Thankfully, we have seen very few companies in this sector go into liquidation. We have seen some administrations and some companies being revived with inward investment, particularly in the late-night sector. The areas where we have seen the biggest contractions are office-based and London-based.
We have seen a high number of business failures of individual sites and small and medium-sized enterprises. In particular, we have had contraction in the market of 12,000 hospitality businesses from covid from April 2020 to March 2021. That is a contraction of about minus 8% for pubs and bars, plus 10% for restaurants and hotels, but in major conurbations in the heart of our cities, one in five businesses has failed through the covid crisis. Part of that is very high levels of debt, and that will continue to accelerate business failure and business closure as we come out of this. The first date at which our sector can go cash positive is 19 July, but it is estimated it will take two years before the sector can recover to 2019 pre-pandemic revenue levels and profitability.
As we come out of this, we see a heavily in-debt sector. Previously, debt was used to fund growth and further investment. Pre-pandemic, we were opening two sites a day as we expanded our pubs, bars, restaurants and hotel chains; that was funded largely through the debt and earnings of the businesses. Over the course of the pandemic, we have seen that while the rest of the economy has corporate deposits that are twice the level of corporate debt, in hospitality it is exactly the opposite. We have twice the level of debt as corporate deposits, which means that our sector is going to come out with an anchor on its potential growth and recovery, because it will have to pay down and service that debt and that will delay the recovery further.
You are looking at about £2 billion or £2.5 billion of rent debt. We are waiting to see the Government’s proposals in the detail of the Bill that will help to resolve that. There is also £6 billion of Government-backed loans, which many businesses started to repay this month. That is very challenging when they have limited revenue coming in or heavily restricted revenue. Paying down that debt will to take a lot of time to get through and to get over, and we fear very much that the level of business failure that we saw during the covid crisis will be replicated in the two years as we come out of it, as we try to recover.
Jeff Smith
Q
Kate Nicholls: It is certainly challenging to be able to get into, and I am not sure it would drill down as closely as local authority by local authority level, but there are certainly indications. You can measure footfall drops by high street data: there is good data from Springboard about footfall in our high streets, towns and city centres, as well as shopping centres. They are measuring it for retailers, but that would also apply to hospitality businesses. It is not just the international tourists: it is the offices, the work from home, and it affects different city centres differently according to the demographic that uses them. It is less to do with our coastal towns—they are benefiting from more domestic tourism and domestic footfall—but you are seeing it in London, Edinburgh, Glasgow, Manchester, and to a lesser extent Leeds, Sheffield and Newcastle. They are seeing a drop, but London is particularly badly affected because 70% of London hospitality is inbound tourism, and we are not going to see any pick-up in inbound tourism any time soon.
I think there are broad regional differences that you can apply: it is a very rough and ready crude assessment that you can place on it, but there is a possibility of looking at footfall data. However, I would urge the Government to look at the areas of the country and the constituencies where you have a disproportionately dense population of hospitality and tourism businesses—many of which will be SMEs—and where you have the supply chain businesses that support them. They tend to be local supply chains and to be geographically co-located, so that would be a good indicator of where that support needs to be directed.
Luke Hall
Q
Kate Nicholls: We would urge local authorities to work with us to identify themselves where the areas of greatest need are. One of the things that has frustrated a lot of our businesses is that there is a central message from Government, and it is not necessarily interpreted on the ground as fluidly as Government might have hoped. When you look at some of the local authority areas, we have had businesses that are clearly designed to be captured and covered by the support mechanisms that are available, but local authorities have often taken the view that if it is not directly specified in guidance and it is not a named company or a named type of business, they are precluded from using their discretion and being able to provide support to those businesses. That is the frustration that our businesses have had on the ground going forward.
It would be helpful if local authorities could be a bit more permissive in identifying the businesses that they know are hurting at a local level, rather than applying a prescriptive approach that says, “If your name’s not down, you’re not coming in,” or “Here’s a tick, you are covered.” That would help immeasurably in those businesses that tend to fall between the cracks because they are not clearcut: if you are a coach operator, are you a tourist business or are you not? A local authority should be able to understand its local area and know which ones are and therefore need to be helped, and which ones actually managed okay. Those are the kinds of areas in which we would like local authorities to use their own discretion, not wait to be told specifically by Government that they can help those businesses.
Paul Scully
Q
Kate Nicholls: There are a few notable exceptions, but you can measure on the fingers of fewer than two hands the local authorities and businesses we have been able to help that have had a positive response to that request. All too often, the response has been that the grants that we are talking about are closed, there is no more money, and they will get back in touch with the businesses if more money becomes available.
It is incredibly frustrating that you have this disconnect at a central level. We hear what is being pledged, and we hear and understand the work that is being done by Ministers to communicate to those local authorities, but the operators on the ground just get a “No”. Some local authorities have been more creative than others, and some have been more proactive than others, but generally speaking it has been a long, slow process, and it has been very difficult to get money out of the local authorities for the businesses that desperately need it. It has been too slow in being processed. We know, because of the work we are doing we are doing at a central Government level, that it is there and has been made available; it is just not cascading out.
Simon Baynes
Q
Kate Nicholls: There is clearly a value judgment that needs to be made, and local authorities know their own local markets and the businesses within them, but these businesses will be coming out with such high levels of debt that, however quickly they spring back with revenue, it will take them years to repair the damage that covid has done to them. In the past 16 months, the hospitality sector has been closed with no revenue for 10 months and so severely restricted by the social distancing restrictions that it is not profitable for the remaining six. Businesses in our night-time economy, late-night businesses and entertainment businesses, many of which have struggled to access this grant support, have been closed for 16 months with no revenue. That takes an awfully long time to recover from. The sector has lost £280 million a day. Although certain parts of the sector had a strong performance last summer, the best they achieved was 60% of normal revenue, and that is below break-even.
Yes, demand is strong, and we anticipate that people will be coming to our venues this summer, but there are still constraints that will prevent those businesses from rapidly bouncing back into being sustainable and profitable, and they remain wobbly. Debt is one that could topple them over. There are issues to do with driver and labour shortages across the supply chain. They remain in a very fragile state and there is no resilience left in the industry, so we need to work to make sure we have strategies in place and build back resilience into the hospitality sector. We can then support our supply chain. A bit of pump priming and support now will pay dividends in the longer term.
The Chair
Thank you very much, Ms Nicholls, first, for your evidence and, secondly, for your flexibility with your timings so that you were able to join us early. We appreciated that very much.
Examination of witness
Duncan Swift gave evidence.
The Chair
I now come to our next and final witness of the day. We are going to hear from Duncan Swift, formerly the president at R3, and we have until 5.15 pm for this session. Mr Swift, could you please introduce yourself for the record?
Duncan Swift: Thank you. My name is Duncan Swift. As you have just heard, I am the immediate past president of R3, which is the UK’s trade association for restructuring and insolvency professionals. I am a chartered accountant and a licensed insolvency practitioner with over 30 years in practice, and I am a partner in Azets restructuring and insolvency practice.
Seema Malhotra
Q
Duncan Swift: I will be pleased to do so. It is fair to say that the Bill is regarded by R3 and the profession as a step in the right direction. It has been something that we have been seeking for several years now. However, I have to say that it is not a complete solution to the use of company dissolution as a vehicle for fraud.
To expand on that point, the shortfalls relate to the scale of the problem, which the Bill does not address. It also does not necessarily address fully what remedy is applied in the prosecution of directors or in relation to gaining redress for creditors who have lost out in the use of company dissolution for fraud.
Seema Malhotra
Q
Duncan Swift: There are two things in the context of scale. One is that the Insolvency Service undertakes company director disqualification in relation to the 17,000-odd UK corporate insolvencies that occur annually. It typically achieves about 1,200 disqualifications per annum. R3 members report that they often encounter cases involving significant breaches by directors of Insolvency Act 1986 and Companies Act 2006 requirements that are not included in the company director disqualifications at all, which would suggest that the Insolvency Service is somewhat resource-constrained.
On the flip side, there are about 400,000 to 500,000 company dissolutions per annum. Nobody is quite sure just how many of those are insolvent company dissolutions, but the last time it was looked at in any detail, it was thought that about 50% of that total might be insolvent company dissolutions. That is 10 to 15 times greater than the corporate insolvency volume I talked about earlier. One has to ask whether the Insolvency Service will be scaled up 10 to 15 times to deal with that magnitude of investigation into insolvent dissolutions, or whether the investigation of insolvent dissolutions will come at the expense of investigations into errant director behaviour in insolvencies.
Seema Malhotra
Q
Duncan Swift: Yes, R3 will be happy to supply that to you.
Seema Malhotra
Q
Duncan Swift: From the reports of R3 members, we are seeing surprise that adverse director conduct reports on serious misconduct have not resulted in disqualification of the directors. Whether that caused phoenixism or meant that the directors went on to commit the same type of misbehaviour in other corporate situations, I am not able to advise.
As a trade association, our member feedback is that the number of 1,200 disqualifications per annum, which is a fairly regular number over the past several years, appears to be fewer than the volume of cases where adverse director conduct reports have been submitted, which would warrant such disqualifications being issued.
Seema Malhotra
Q
Duncan Swift: That is one area where the Bill, as presented, appears to be incomplete. Mention is made to using things such as compensation orders, but that ordinarily benefits only a single creditor. I would anticipate that in this scenario that would be the public purse in the form of HM Revenue and Customs. Director disqualification in itself, which is the investigation and prosecution process that is envisaged, does not yield compensation to any party. All it yields is a decision that the behaviour of a director is such that they should be disqualified from acting as a director in future. It does not set the compensation mechanism or the process for compensation, whether to a single creditor or the creditor body as a whole.
Seema Malhotra
Q
Duncan Swift: On what needs to be done, disqualifications that prevent directors doing the same errant actions again is clearly a step in the right direction. Other actions that could be taken include enabling restoration of dissolved companies more readily to the register where such errant behaviour has taken place. I mentioned the number of 400,000 to 500,000 dissolutions—as in strike-offs—per annum, of which it is estimated about half are insolvent. Yet only 1% of strike-off companies are put through a process to restore them to the register. We are talking about 4,000 to 5,000 companies a year. That process, from experience, is a court-driven process that typically costs the applicant, normally a creditor, a few thousand pounds in legal costs, to get the company restored to the register, in order to have a licensed insolvency practitioner appointed to it, whether in a compulsory liquidation or a creditors’ voluntary liquidation, so as to investigate the company’s affairs, and recover assets that might have been misappropriated by its directors.
Seema Malhotra
Q
Duncan Swift: From experience, in terms of restoration pre-pandemic, you could be looking at 12, maybe 18 months. With the restrictions on court time in the pandemic, it is taking a lot longer.
Peter Grant
Q
Duncan Swift: Yes, sir, that is correct. Although director disqualification—banning a director or person from acting as such—is a deterrent, we also see instances of disqualified directors continuing to act as though they are the controlling party in corporate affairs subsequently. The serious rogue directors do not see being disqualified as a significant deterrent. A more significant deterrent is being held to account for the assets that they may have misappropriated and incurring personal liability for such actions that they have wrongfully undertaken while holding the office of director. That goes to the heart of the fact that more thought needs to be given by Government to how they will actually prosecute those directors. It is not just a matter of disqualifying them as directors. Crucially, what are the Government going to do in terms of revisiting the dissolved company that those directors have inappropriately dealt with through dissolution, rather than conducting an office holder investigation of their affairs, to enable some form of redress through the company’s position to recover assets and to compensate creditors who have lost out as a result of that individual’s actions?
Peter Grant
Q
Duncan Swift: That is a very difficult question to answer. I am not a lawyer, so I am not entirely certain where the legal privilege lies. There is the risk that a well-intended but adverse report by an office holder based upon, more often than not, incomplete information might open up that office holder to legal action by the person who is the subject of that adverse report for defamation and impact on their character. It is a very difficult area.
In terms of the position of directors and dissolved companies generally, certainly suppliers, the providers of credit and those who rely upon the good name of an individual as a director are able to assess the quality of that name by dint of Companies House records on the track record of dissolutions and formal insolvencies of those individuals, as long as the Companies House data upon which that assessment is made is known to be accurate. Although this sits somewhat outside the Bill, reforms have been proposed to improve the veracity of the data that Companies House provides to all its users for that assessment.
To go back to an earlier question on improvements that can be made, and going back to the scale of the problem that this Bill currently does not really address, one thing I have not mentioned is that 95% of all company dissolutions are actually at the behest of Companies House. They are not at the behest of directors. Companies House has automatic strike-off for non-filing of accounts and non-filing of conformation statements. It is no surprise that those who would abuse the position of director choose not to file accounts and choose not to file confirmation statements.
One clear improvement would therefore be to remove the automatic strike-off power of Companies House, and to have that 95% of companies that would be struck off put into some form of quarantine or screening process—whether that screening is done by the Insolvency Service or some other Government body—as a precursor to deciding what to do with those companies earmarked for strike-off, and also for their registered directors. What was their behaviour leading up to the circumstances where such strike-off was being contemplated? At the moment, there is a huge volume of companies coming up for dissolution at the behest of Companies House, not at any other party’s behest.
Peter Grant
Q
Duncan Swift: It would certainly act as an effective deterrent. I would have to ask—not having considered the question before—whether that would proportionate to the size of the problem. It would certainly be a proportionate deterrent in the context of this Bill if, rather than it being left to the Insolvency Service to investigate dissolved companies that were found to be insolvent after the event, the companies about to be automatically struck off for non-filing of accounts and confirmation statements had their position reviewed by the Insolvency Service at that point, pre-strike-off, to identify whether they should go through a compulsory liquidation process to address and fully investigate the director’s behaviour, and to recover assets for the benefit of creditors.
Peter Grant
Q
Duncan Swift: I understand where the question is coming from, but actually what I am proposing is a lot more work for the Insolvency Service, which is the party that this Bill identifies as performing it. What I am saying is that that work should occur a lot earlier than after the event of a company being struck off—more than likely at the behest of Companies House—and subsequently found to be insolvent.
Pre-strike-off by Companies House, that review is undertaken, ideally, by the Insolvency Service, if it is scaled up to do that investigation. But as I say, the volumes are 10 to 15 times more than the volume of insolvent companies. Should it go into a compulsory liquidation process following that investigation or initial review by the Insolvency Service, it is the official receiver that is first appointed by the court to be the liquidator in the compulsory liquidation—so, it is Companies House, Insolvency Service, Insolvency Service. That is not a direct benefit to the private sector members of the insolvency profession.
Peter Grant
Q
Duncan Swift: I have to say, from experience, it is too short. Rogue directors or individuals who abuse the position of director go to great pains to extract all the asset value out of the companies that they are abusing and to provide a false, or certainly incomplete, trail of their actions as directors of the company. As an office holder coming in after the event, it is like pulling together a 3,000 or 4,000-piece jigsaw puzzle when holding only about five pieces to start with. You are having to make inquiries with multiple stakeholders, as well as interviewing the directors and their associates, to start to get the bits of the jigsaw puzzle necessary for a picture of what actually went on, in order to convince a court that what went on was actually a fraud upon the creditors and that the director had not acted properly. Again, from experience, although a relatively speedy pulling together of the jigsaw puzzle and convincing of the court takes three years, there are many cases where it takes far longer.
Paul Scully
Q
Duncan Swift: What I was explaining about the timeline was that for the office holder—whether it be the Insolvency Service or the official receiver as liquidator, or the Insolvency Service coming in to pull together a picture of the company’s financial dealings and the director’s conduct in the course of those dealings—it takes time. In the first phase in particular, it can take two years to get a reasonably complete picture before one can be confident of putting forward an application to court, either for a recovery of assets or, I would have thought, the disqualification of a director in circumstances where that individual may well be using the proceeds of such activities to defend their position, as well as seeking to confuse it to defend against the likelihood of such claims being brought against them.
Paul Scully
Q
Duncan Swift: Forgive me, but my understanding and experience of compensation orders is that they are brought on behalf of a single creditor or a few creditors. I suggest a more comprehensive approach: that the insolvency process that already exists is applied, and if a dissolved company is found to be insolvent, it is readily restored to the register and put through the insolvency process. That will have two consequences: a full investigation by the office holder, who in the first instance of the compulsory liquidation is the official receiver of the directors’ conduct; and for that process to recover such assets that are available for the benefit of all creditors of that company, not only a few.
Paul Scully
Q
Duncan Swift: All I can go on is the statistics issued by the Insolvency Service on disqualification orders or undertakings from directors for misconduct relative to the total number of corporate insolvencies per annum, and the member feedback that R3 receives. At an anecdotal level, members report that they have submitted serious adverse conduct reports against individuals, only to find that no action has been taken against said individuals by the Insolvency Service. We are not told why. Clearly there is a threshold.
Coming back to the statistics, it would appear that the Insolvency Service is consistently—year in, year out, irrespective of fluctuations in the total number of corporate insolvencies—disqualifying about 1,200 individuals per annum. That suggests to me that there is a resource issue. I am not in a position to ask the Insolvency Service whether that is the case, but that is what it feels like.
Paul Scully
Q
Duncan Swift: Yes. As I said at the start, this is a step in the right direction, but unfortunately it does not go far enough.
Paul Scully
Q
Duncan Swift: I repeat: it is a step in the right direction, but it is not enough. Individuals who would choose to abuse the benefits of directorship of limited liability companies are not dissuaded by the prospect of being disqualified—that is my experience and that of the members of R3. A more significant deterrent is that they are not only disqualified but the ill-gotten gains of said actions that led to their disqualification are required to be repaid and recovered for the benefit of those who have suffered as a consequence of those actions. If that also includes criminal liability, so much the better; I am sure that will add to the weight of the deterrent. They are far less likely to do it if they can see the routes to the gains that they obtain from such behaviour being readily recoverable.
The Chair
There are no further questions, Mr Swift. We thank you for your evidence this afternoon, and for your flexibility on timing, which we greatly appreciate. That brings us to the end of today’s sitting. The Committee will meet again on Thursday 8 July to begin line-by-line scrutiny of the Bill.
Ordered, That further consideration be now adjourned. —(Paul Scully.)
Northern Ireland (Ministers, Elections and Petitions of Concern) Bill (Third sitting)
Tuesday 6th July 2021
(3 years, 4 months ago)
Public Bill CommitteesRead Full debate Northern Ireland (Ministers, Elections and Petitions of Concern) Act 2022 View all Northern Ireland (Ministers, Elections and Petitions of Concern) Act 2022 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 6 July 2021 - (6 Jul 2021)
The Committee divided: - Ayes: 2 / Noes: 10 - Question accordingly negatived.
The Chair
Before we begin, I remind hon. Members to observe social distancing and sit only in the places that are clearly marked. I also remind Members that, in line with the House of Commons Commission decision, face coverings should be worn in Committee unless people are speaking or medically exempt. Electronic devices should be switched to silent mode. Tea and coffee are not allowed during sittings. The Hansard Reporters would be grateful if Members emailed electronic copies of their speaking notes to hansardnotes@parliament.uk.
We will now begin our line-by-line consideration of the Bill. The selection and grouping list for today’s sittings is available in the room. This list shows how the selected amendments have been grouped for debate and the order of debates. Decisions on each amendment will be taken when we come to the clause or schedule that the amendment would affect.
Clause 1
Period for making Ministerial appointments
Question proposed, That the clause stand part of the Bill.
The Minister of State, Northern Ireland Office (Mr Robin Walker)
It is a pleasure to serve under your chairmanship, Mr Stringer. If I may, I will speak to the first three clauses of the Bill, which do not have any amendments on the amendment paper.
Clause 1 amends the Northern Ireland Act 1998 to extend the period of time available to appoint a First Minister and Deputy First Minister after the resignation of either, or after the first meeting of the Northern Ireland Assembly following an Assembly election. Currently, the period for ministerial appointments is only 14 days from the first meeting of the Assembly after an election and seven days from the First Minister or Deputy First Minister ceasing to hold office. The Bill will extend the period for filling ministerial offices to six weeks, which is automatically renewed—unless the Assembly resolves otherwise on a cross-community basis—a maximum of three times, up to a total of 24 weeks. By extending these periods, the Bill will allow more time for discussions between the parties and for the Secretary of State to facilitate a resolution before they come under an election duty. It also allows Northern Ireland Ministers to remain in post, after an election, until the end of the period for appointing new Ministers. This change will allow greater continuity in decision making.
Under clause 2, Ministers will no longer cease to hold office after the election of a new Assembly. It provides for up to a maximum of 24 weeks after an election or for a maximum of 48 weeks since there has been a functioning Executive in place—whichever is the shorter—in which Ministers may continue to hold office, subject to those offices otherwise being filled, or if a Minister is not returned as a Member of the Assembly. This measure will ensure that institutions becomes more sustainable and resilient.
On Second Reading, concerns were raised about so-called caretaker Ministers. We are not discussing that matter at length today, but I do want to make the following points. While the Executive were not functioning, civil servants were left trying to maintain the machinery of government and to provide public services in the absence of ministerial decisions. Without the direction or control of Ministers, civil servants are significantly limited in respect of the powers that they may exercise. I want to reflect on the examples that we heard in evidence last week from Lilah Howson-Smith on public services. The health service was left to deal with “long waiting lists”; Belfast City Council was unable to resolve sewage issues; and in schools there was what Lilah described as
“a sense of overall stasis.”––[Official Report, Northern Ireland (Ministers, Elections and Petitions of Concern) Public Bill Committee, 29 June 2021; c. 21, Q24.]
Keeping Ministers in a caretaker position means that civil servants can continue to take direction and everyday issues can be resolved. Ministers will not be in post to take new decisions or implement new policy. The purpose of this measure is to ensure that Northern Ireland does not shut down in the way it did during the absence of devolved government. As Sir Jonathan Stephens said:
“The fundamental protection is the absence of an Executive if there is not a First Minister or a Deputy First Minister, meaning that significant, controversial, cross-cutting decisions cannot be taken”.––[Official Report, Northern Ireland (Ministers, Elections and Petitions of Concern) Public Bill Committee, 29 June 2021; c. 31, Q40.]
Under the 1998 Act, Ministers cannot take decisions that ought to have been taken by the Executive. We therefore believe that there is no need to provide further statutory clarifications, given that legal safeguards are already in place. We also know that the courts are ready to step in, should Ministers act unlawfully.
Let me turn to clause 3. Currently, the Secretary of State is required to propose a date for an Assembly election in the following scenarios: when the Assembly resolves to dissolve itself or when the period for appointing Northern Ireland Ministers or the First Minister and Deputy First Minister expires without those offices being filled. Clause 3 allows the Secretary of State to certify or call an Assembly election at any point after the first six weeks in the period for filling ministerial offices, if the Secretary of State considers that there is not sufficient representation among Ministers to secure cross-community confidence in the Assembly. I commend clauses 1, 2 and 3 to the Committee.
Louise Haigh (Sheffield, Heeley) (Lab)
As ever, it is a pleasure to serve under your chairmanship, Mr Stringer.
I appreciate the Minister laying out clauses 1 to 3 and his exposition of some of the issues raised on Second Reading, in particular on caretaker Ministers. As I made clear on Second Reading, we welcome these limited attempts to safeguard power sharing and to improve the sustainability of the Executive and the Assembly, which reflect commitments made in New Decade, New Approach. We believe that all parties to that agreement, including the UK Government, should fulfil all the commitments made in it. That is the basis of amendments that we will come on to.
On clause 1, I appreciate the Minister’s description of the safeguards to ensure that caretaker Ministers do not step beyond the bounds of what is reasonable. I want to tease some of that out, not to put it in statute but to make it clear on the record. On Second Reading, the Minister said that there were well-defined limits for caretaker Ministers and explained that they would be constrained by the ministerial code. Will he confirm that only the ministerial code constrains Ministers in that regard, and not the programme for government?
It will not have escaped the Minister’s attention that at the moment, there is no programme for government, so if there were to be an election and this scenario envisaged, in that situation there would be no programme for government to constrain Ministers. Also, the ministerial code is silent on powers in that situation. I will be grateful if he could make it clear which section of the ministerial code would constrain Ministers.
On the courts being able to step in to hold Ministers to account, exactly what would they hold them to account on—on what point of law, or on what code? Will he clarify that? How exactly do we stop Ministers taking decisions that are significant, controversial and cross-cutting in the absence of an Executive in that scenario? In evidence, Professor Jon Tonge posed questions that need an answer today. What ministerial decisions will be taken that are not significant, controversial or cross-cutting? Will the Minister give us examples of what does not fall in that description? In a caretaker capacity, will Ministers be able to take decisions with financial implications? The reality is that few decisions will fall outwith those scopes.
On Second Reading, we discussed the possibility of Ministers going beyond their mandate and their remit. The reality is that what we are constraining them with is potentially extremely limited. We might be in exactly the same situation as we found ourselves in during the three years of collapse, with Ministers able to take very few decisions. I will be grateful if the Minister explains how he envisages that working.
In the evidence session, Mark Durkan expressed concerns about the possibility of the Assembly being up and running for 24 weeks during this period, albeit a caretaker one, but with potentially no protection for the operation of the north-south institutions. The ministerial code is clear that Ministers are required to attend the north-south institutions, so I will be grateful if the Minister confirms that that would remain the case and that strand two of the Good Friday agreement would be respected equally in such a period, while the Assembly is up and running.
The clause also excludes the possibility of a six-week extension period for filling the offices of First Minister and Deputy First Minister if the Assembly passes a resolution to stop that extension. It further states “without cross-community support”. In evidence, concerns were expressed about exactly what cross-community support looks like in that scenario. What is his definition of “sufficient”?
Clause 3 gives effect to a point that was of some debate during the NDNA talks in late 2019 and early 2020: paragraph 3.15 of the sustainability annex to the agreement. It was aimed at ensuring that a caretaker Executive that might be in place for up to six months had
“sufficient representation to command cross-community confidence in the Assembly.”
That finds expression in the Bill at clause 3, with the authority for the Secretary of State to call an election
“if the Secretary of State considers that it is necessary to do so in order to give effect to the purpose underlying paragraph 3.15 of Annex C of Part 2 of The New Decade, New Approach Deal”.
That leaves open the possibility that all the Unionist parties or all the nationalist parties refused to continue as caretaker Ministers, but that there would not be cross-community support in the Assembly to call an election, so the caretaker Executive could limp on with only one community represented for the six months before an election had to be called, subject only to the judgment of the Secretary of State. It would of course be open to the parties to ensure representation by staying in the ministerial roles as caretakers. However, it is clearly a dilution of the safeguard and places it as much as possible in the hands of the Secretary of State.
There is a difficulty quantifying absolutely what would constitute sufficient cross-community representation in circumstances where, for example, the Deputy First Minister resigns and Ministers withdraw. The common-sense view is that it would be sufficient if either the Ulster Unionist Party or Social Democratic and Labour Party stayed on. I concede it is difficult to quantify in legislation, and would be grateful if the Minister could expand on that.
At a basic level, the safeguard could be strengthened by saying that the Secretary of State “will” rather than “may” call an election if there is not sufficient representation in the Northern Ireland Executive to command cross-community confidence in the Assembly. Is the Minister comfortable that the Bill reads the Secretary of State “may” rather than “will” call an election? Can he explain the circumstances in which the Secretary of State would not call an election, even in the absence of sufficient cross-community support?
The Chair
I make it clear to the Committee, before I call Members to speak, that the Minister spoke to the first three clauses of the Bill. We will vote on clauses 1 to 3 separately at the end of the debate.
Claire Hanna (Belfast South) (SDLP)
It is a pleasure to serve under your chairmanship, Mr Stringer. Apologies for my lateness. I was outside the Boothroyd Room, uncharacteristically on time, and am new to this process.
On the ministerial code, we welcome clause 4—
Louise Haigh
We are just doing clause 1 to 3 at the moment. We are not on to the amendments yet.
Mr Walker
I am grateful to the hon. Member for Sheffield, Heeley for her broad support for the principles of the Bill and for her questions. She asked important questions about the safeguards on what we have come to know as caretaker Ministers. It was agreed in New Decade, New Approach that Ministers will remain in office in a caretaker capacity to allow for greater continuity of decision making. The deal also stated that Ministers would be required to act within well-defined limits, including those set out in the ministerial code and the pledge of office, in accordance with the requirement for an Executive Committee to consider any decisions that are significant, controversial or cross-cutting. As appropriate, restrictions are put in place during the pre-election period.
Limits have not been defined in the legislation because we anticipate they will operate as a matter of convention, rather than a legal issue. This approach to drafting allows a degree of discretion for unforeseen circumstances. I reiterate the expectation that Ministers will act responsibly.
The NDNA deal also stated that Ministers would be required to act within well-defined limits, as set out in the ministerial code, to operate within the framework for government, as the hon. Lady says, agreed by the previously functioning Executive endorsed by the Assembly. Ministers will act in accordance with the statutory requirement, included within the ministerial code, that any decisions that are significant, controversial or cross-cutting are required to be considered by the Executive. As appropriate, restrictions are in place during the pre-election period, as I have said.
The point is that this is not a good situation to be in—we do not want caretaker Ministers to be required. We would prefer to have a fully-functioning Executive and the institutions of devolution up and running at all times. We are trying to put in place—this was agreed by all parties—is a preferable situation to leaving civil servants with no ministerial cover at all, which is important. We heard in the evidence session of the problems faced during that time.
The hon. Lady asks about the decisions Ministers will be able to take—an important question. They will be able to take decisions within their responsibilities and areas previously agreed by the Executive as a priority for their Department. That puts us in a significantly better place than the absence of devolution. She asks about the north-south institutions, and I confirm that those can operate in this scenario and Ministers will be free to take part within the broader constraints.
The hon. Lady asks about cross-community support and is right that this is important. We need to ensure that any Executive meets the requirements of power sharing. She will understand, as she set out in her explanation, why we have not written into legislation the full detail of how that could work, as there are all sorts of scenarios with different outcomes from elections and political crises that could emerge. Her example of only one party being represented in the Executive would clearly not be sustainable. We would want to ensure that the Executive represents more than one community. It is important that a Secretary of State has a degree of discretion, depending on the political circumstances, as to when to exercise that power.
On the question of “will” or “may”, if a Secretary of State were in the position where they thought they were on the verge of a breakthrough in talks, they might need that discretion, but I cannot think of any other scenario in which they would not move towards calling an election if there were not that cross-community representation. I hope I have answered the hon. Lady’s key points.
Louise Haigh
Will the Minister confirm that if a programme for government is not in place, as is the case in the current mandate, Ministers will not be able to take any decisions?
Mr Walker
I am not sure that is quite right because Ministers would be able to take decisions within their departmental remit, which are running-order decisions for their departmental business. Clearly, they would not be able to take decisions that are about making significant changes to policy. The offer of working together is also part of the pledge of office. It is an important part of power sharing and that is one of the things that they are constrained by in their activities. Where a programme for government is agreed, they will also be stuck within its limits and will be working forward with that.
As Sir Jonathan Stephens said, the fundamental protection in the case of caretaker Ministers is the absence of an Executive. If there is no First Minister and Deputy First Minister, significant, controversial or cross-cutting decisions cannot be taken by the Executive. In a resignation scenario, Assembly Committees will also continue to function for the Assembly’s duration and can continue to discharge their important duties of scrutinising Ministers and Departments and holding them accountable. Under the Northern Ireland Act 1998, Ministers cannot take any decisions that ought to have been taken by the Executive. We therefore believe there is no need to provide further statutory clarifications given that legal safeguards are already in place. We also know, and as we saw during the period of absence of an Executive, that the courts are prepared to step in if they feel that decisions are being taken beyond the remit of whoever is taking them. We have seen examples of that.
Question put and agreed to.
Clause 1 accordingly ordered to stand part of the Bill.
Clauses 2 and 3 ordered to stand part of the Bill.
Clause 4
Ministerial Code of Conduct
The Chair
Before I call Claire Hanna, just to be helpful, once you have proposed the amendment, I will call members of the Committee, the Minister will then reply and then you can have a chance to respond. Please indicate to me and to the Committee whether you wish to withdraw or push the amendment to a vote.
Claire Hanna
I beg to move amendment 13, in clause 4, page 5, line 22, after
“be accountable to the Assembly”
insert “users of services,”.
This amendment would ensure that Ministers and Departments are accountable and responsible to users of services, as well as to the Assembly and the public.
The Chair
With this it will be convenient to discuss amendment 14, in clause 4, page 5, line 25, at end insert—
“(ba) ensure all reasonable requests for information from the Assembly, users of services and individual citizens are complied with; and that Departments and their staff conduct their dealings with the public in an open and responsible way;”.
This amendment would ensure that the principles of transparency and openness, as well as a duty to comply with requests for information, as outlined in Strand One, Annex A of the Good Friday Agreement, are maintained within the Ministerial Code of Conduct.
Claire Hanna
Thank you very much, Mr Stringer. I appreciate your guidance. We welcome the strengthening of parts of the ministerial code, which we think will protect, enhance or potentially and eventually deliver good governance in Northern Ireland. Indeed, we think it could have wider purchase. Amendments 13 and 14 refer to our concern that parts of the ministerial code that were in the Good Friday agreement in the 1998 Act have been diluted or omitted here, purposefully or otherwise, and our amendments seek to restore those.
Amendment 13 specifically mentions accountability to users of services. That is topical, as there is much discussion at the moment about the awarding of contracts for the processing of social security payments and the potential processing of the victims’ payment. Amendment 13 would restore the accountability of Ministers for the services they deliver, including the services their Departments may be delivering through a third party.
Mr Walker
I am grateful to the hon. Lady for her presentation of the amendments. We are legislating to update the ministerial code of conduct in accordance with a request made by the then First Minister and Deputy First Minister, following agreement of the revised code by the Executive Committee. The changes have not come from the UK Government; they come directly from the Executive themselves.
It is important to note that the ministerial code of conduct will continue to require that Ministers uphold the seven principles of public life, known as the Nolan principles. Some of the changes to the code that we are making will make that a little more explicit. The principles include selflessness, integrity, objectivity and—crucial to the amendment—accountability, openness, honesty and leadership.
The changes strengthen the code of conduct, as we heard from witnesses last week. We are legislating to strengthen the code to reflect the request that we received from the First Minister and Deputy First Minister, agreed by the Executive. That forms part of the wider package outlined in NDNA, which the Executive were committed to, but it will strengthen the codes governing ministerial accountability and conduct.
I gently propose that it is not for us here as Members of Parliament in Westminster to suggest amendments to a ministerial code of conduct that affects Members of a separate legislature. I urge the hon. Lady to withdraw the amendment. I assure her that the principles of openness and accountability are reflected in the original code and are strengthened in the changes we are making to the ministerial code here.
Claire Hanna
I thank the Minister. We appreciate that this flows from NDNA, but I am unclear whether there was a specific request for those particular provisions to be withdrawn. They existed before the New Decade, New Approach deal. Other aspects have been enhanced, and this one has been diluted. It is not clear to me why that would be the case—why it would have been weakened.
I will keep my powder dry, in order to perhaps push subsequent amendments. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Louise Haigh
I beg to move amendment 4, in clause 4, page 5, line 23, at end insert
“in accordance with the current Programme for Government drawn up in accordance with section 20(3) of the Northern Ireland Act 1998 and paragraph 20 of Strand One of the Belfast Agreement,”.
This amendment requires Ministers to pay regard to the statutory duty under the Belfast (Good Friday) Agreement for the Executive Committee to seek to agree each year, and review as necessary, a programme incorporating an agreed budget linked to policies and programmes, subject to approval by the Assembly, after scrutiny in Assembly Committees, on a cross-community basis.
The Chair
With this it will be convenient to discuss the following:
Amendment 17, in clause 4, page 5, line 25, at end insert—
“(ba) seek in utmost good faith and by using their best endeavours to implement in full the Programme for Government in “The New Decade, New Approach Deal” as regards the transparency, accountability and the functioning of the Executive;”.
This amendment requires Ministers to implement the Programme for Government agreed in January 2020, as it relates to transparency, accountability and functioning of the Executive.
Amendment 18, in clause 4, page 5, line 25, at end insert—
“(ba) seek in utmost good faith and by using their best endeavours to implement in full any future deal on the operation of devolved government between the parties to “The New Decade, New Approach Deal” which may be approved by the Assembly;”.
This amendment requires Ministers to implement any future deal on the operation of devolved government in Northern Ireland.
Amendment 19, in clause 4, page 5, line 26, at end insert—
“(ca) abide by and implement in every respect Annex A to Part 2 of “The New Decade, New Approach Deal” as regards the transparency, accountability and the functioning of the Executive;”.
This amendment requires Ministers to strengthen and enforce the Ministerial Code and other codes including the Special Adviser Code of Conduct.
Amendment 6, in clause 4, page 5, line 28, at end insert—
“(da) comply with paragraph 2.11 of the Northern Ireland Executive Ministerial Code in relation to the inclusion of ministerial proposals on the agenda for the Northern Ireland Executive, with areas for resolution to be recorded in the list of “Executive papers in circulation” against those papers still outstanding after the third meeting, in accordance with paragraph 62(c) of Section F of the Fresh Start Stormont Agreement and Implementation Plan;”.
This amendment implements a commitment further to the Fresh Start Agreement providing that an item may not be blocked for more than three meetings of the Executive through lack of agreement on the agenda.
Amendment 3, in clause 4, page 6, line 8, at end insert—
“(1A) ‘Key performance targets and objects’ include commitments made in the Belfast Agreement (1998), the Hillsborough Agreement (2010), the Stormont House Agreement (2014), the Stormont House Fresh Start Agreement (2015) and the New Decade, New Approach Deal (2020).”
This amendment makes it a requirement of the Ministerial Code of Conduct that Ministers are accountable to the Assembly and the public for fulfilling the Belfast (Good Friday) Agreement and subsequent Agreements.
Louise Haigh
I shall speak to amendments 4 and 3, and in support of amendments 17, 18 and 19 that appear in the name of my hon. Friend the Member for Belfast South.
Amendment 4 seeks to address an issue that was discussed in the earlier debate—an issue that we see with the current absence of a programme for government. As hon. Members know, the programme for government is drawn up in accordance with section 20(3) of the Northern Ireland Act 1998 and paragraph 20 of strand 1 of the Belfast/Good Friday agreement. It provides Ministers and the public with a clear mandate and agenda and a basis for decision making. As we have discussed, any issue that a party in the Executive deems significant or controversial that is outside the programme for government can be referred for approval by the full Executive. Since New Decade, New Approach, that mechanism has been used on at least six occasions.
Despite the draft programme for government having been published in New Decade, New Approach, no programme has been adopted in the current mandate. The amendment would make Ministers accountable under the code of conduct for agreeing a programme for government, providing an additional layer of accountability. It would also be important for sustainability. In the absence of the powers of a caretaker Executive being codified in the Bill, the Committee is being asked to rely, in essence, on a programme for government to limit those caretaker ministerial powers. The amendment is therefore an additional safety mechanism, requiring Ministers to agree a programme for government. I would be grateful if the Minister could explain why he chooses not to accept it, if indeed he does not.
I will allow my colleague to speak on amendments 17, 18 and 19 more comprehensively, but the broad thrust of them is absolutely right and we wholeheartedly support them. Agreements made must be honoured, and too often elements of agreements made in the past—from the Belfast agreement through to the St Andrews agreement and, indeed, too much of New Decade, New Approach—have not been honoured. That has damaged trust in the operation of the Assembly and the perception of its ability to effect change. The amendments in the names of the hon. Members for Foyle and for Belfast South simply codify agreements that have already been reached. For that reason, we are very happy to support them.
Mr Walker
To respond to amendment 4, the Committee will know that clause 4 substitutes a revised ministerial code of conduct, setting out expectations on the behaviour of Ministers, including provisions around the treatment of the Northern Ireland civil service, public appointments and the use of official resources and information management. We are legislating to update the ministerial code of conduct in accordance with the requests made by the then First Minister and Deputy First Minister following agreement to revise the code by the Executive Committee. The changes, as I said, have not come from the UK Government but from the Executive themselves, to reflect what the parties agreed in the NDNA deal.
We do not think that the amendments are, in any event, necessary, as the pledge of office already requires Ministers to participate with colleagues in the preparation of the programme for government, and to operate within the framework agreed within ExCo and endorsed by the Assembly. We therefore feel that amendment 4 is not necessary, and I ask the hon. Member for Sheffield, Heeley to withdraw it.
Louise Haigh
I am grateful to the Minister for placing it on the record that the provisions in the pledge of office will constrain Ministers. I am therefore happy to withdraw the amendment.
The Chair
There was no debate on amendments 17, 18, 19, 6 and 3. I probably should have explained this at the beginning. We were debating amendment 4. I said at the beginning that it would be convenient to debate the other amendments at the same time. I think the hon. Member for Belfast South probably did not understand that. With the Committee’s indulgence, I will listen to the points that she wishes to make.
Claire Hanna
Once again, Mr Stringer, I appreciate your indulgence. I promise that we will be expert going forward, and I will be very brief about amendments 17, 18 and 19.
As the hon. Member for Sheffield, Heeley outlined, the amendments are about compelling and encouraging Ministers to implement the programme for government. Notwithstanding the fact that one is not currently agreed, a programme of work has been laid out. Amendment 18 is a pre-emptive amendment that is designed with the sustainability of the Executive in mind. It would require Ministers to implement future programmes for government. By my count we are, since 1998, yet to make it through a full mandate without at least one period of crisis talks and a refreshing of the programme for government, so it would appear to make sense to have that future-proofing amendment.
Amendment 19 would require a strengthening of the code of conduct. We have some concerns around enforceability. Members who were at the evidence sessions the other day may recall that the Speaker and staff of the Assembly were not particularly expansive in terms of how they thought that enforcement should take place. We have emerged from a period of explicit poor governance in the Assembly, with the likes of the renewable heat incentive debacle, where the ministerial code was perhaps not sufficiently powerful to curb the powers of Ministers. Amendment 19 is designed to strengthen it.
The Chair
I call Colum Eastwood. [Interruption.] I am sorry, I was looking at the names of the proposers and not around the room. I call Stephen Farry.
Stephen Farry
Thank you very much, Mr Stringer. It is a pleasure to serve under your chairmanship. I take no offence at the mis-association of me with the hon. Member for Foyle—I have been called far worse, so I will take it on the chin.
I will speak briefly to amendment 6, which appears in my name. It relates to the ministerial code and the insertion into law of what is known in Northern Ireland as the three-meeting rule, which was agreed by the Northern Ireland political parties as recently as the Fresh Start agreement in 2015. At the moment, my understanding is that it is in essence guidance and not part of law, and we see partial implementation of the rule in the Executive. Sometimes papers can be blocked for considerable periods, causing considerable frustration for Ministers. In recent weeks, for example, the Northern Ireland Health Minister has had a Bill on organ donation blocked. My party colleague, the Justice Minister, has had a Bill blocked for a considerable time.
There has been a lot of talk about the petition of concern and vetoes in discussion of the Assembly, but a lot less attention has been paid to what happens inside the Executive where, in essence, there are two vetoes. The first is in the way in which the First Minister and Deputy First Minister have almost full control over the Executive agenda. It takes almost a double sign-off from both for a matter even to get on to the agenda for debate. Secondly, a cross-community veto can be deployed by three Ministers to block a decision. My amendment addresses the former issue of the agenda, so that there is at least scope for a discussion and a vote to take place on any Executive paper. No Minister puts a paper to the Executive that is without merit, and they all deserve discussion.
The purpose of amendment 6, in essence, is to put into the ministerial code something that has already been agreed by the Northern Ireland political parties in the Fresh Start agreement of 2015.
Gavin Robinson (Belfast East) (DUP)
It is a pleasure to serve under your chairmanship, Mr Stringer.
I promised myself this morning that I would not get into the mould of opposing every amendment that has been proposed by my colleagues from Northern Ireland, but I have a couple of points to make about SDLP amendments 17, 18 and 19, which were tabled by the hon. Member for Belfast South. The danger is that we seek to legislate too much on such issues. I understand entirely the thrust of her argument and, indeed, the way in which the amendments have been structured is to talk of best endeavours and the relationships that we want to see in our political situation. In truth, however, they bring with them no legislative consequence should we not see best endeavours. How I would frame it is that if we need to rely on such provisions being in legislation, the system is not working as it should in any event. Without a consequence, and given the positive but loose nature of the amendments, I do not think that the proposals would add significantly to the Bill or to the agreement reached in New Decade, New Approach.
I also understand why the hon. Member for North Down has advanced amendment 6. He served in the Executive when I was a special adviser in the Office of the First Minister and Deputy First Minister. He will understand not only that the nature of that joint office brings political challenges with it, but that there is still an importance of that office’s chairing and maintaining the efficiency of the business brought before the Executive. He and I will both remember times when things were much more terse around that table, but to reflect on his time as a Minister, whenever he brought forward papers for the Department for Employment and Learning, we engaged in discussions prior to any difficulty emerging around an agenda. His special adviser and I used to spend a lot of time problem solving before issues were brought formally to the agenda.
Mr Walker
I am grateful to all hon. Members who have spoken in this discussion of the amendments. The hon. Member for Belfast East brings important experience from his time working with the Executive. I also recognise that the hon. Member for North Down represents an important strand of opinion in that respect and, indeed, has great experience.
Turning to amendment 17, although the parties made a commitment in New Decade, New Approach that the Executive should bring forward a programme for government, Westminster cannot compel them to deliver a particular programme for government, and nor should we. The programme is for the Executive and Assembly to determine and agree, as is set out in paragraph 20 of the Belfast/Good Friday agreement:
“The Executive Committee will seek to agree each year, and review as necessary, a programme incorporating an agreed budget linked to policies and programmes, subject to approval by the Assembly, after scrutiny in Assembly Committees, on a cross-community basis.”
That is implemented in law by section 20 of the Northern Ireland Act 1998. We therefore ask that amendment 17 be withdrawn.
Turning to amendment 18, the purpose of the Bill is to implement reforms to the institutions of Northern Ireland agreed in the New Decade, New Approach deal, not to use the ministerial code of conduct as a means to instruct Ministers to implement future deals. I appreciate the optimism of the hon. Member for Belfast South in seeking to legislate for future potential deals—or perhaps pessimism that they might be required—but I do not think that it would be appropriate to use the ministerial code of conduct. Should we need to revisit the code in the future, we should do so then. I therefore ask that amendment 18 be withdrawn.
Turning to amendment 19, although we acknowledge the importance of the Executive producing strengthened drafts of their relevant codes, as is set out in annex A to part 2 of the NDNA deal, that is an action for the Executive. We therefore do not think that it is appropriate at this moment for Westminster to legislate on it. It is for the Executive to agree to the amendments to relevant codes and, where appropriate, they must be agreed by the Assembly. It is not for this Parliament to make those changes. The hon. Lady will be aware that the Assembly has recently legislated in respect of some of these matters in the Functioning of Government (Miscellaneous Provisions) Act (Northern Ireland) 2021. That is the appropriate forum for such provision to be made.
Turning to amendment 6, as I have mentioned we are here to amend the ministerial code of conduct in line with requests received from the Executive and approved by the Office of the First Minister and Deputy First Minister. I acknowledge the concerns that the hon. Member for North Down raised about the process to secure Executive discussions on specific issues, and the points that the hon. Member for Belfast East made about the importance of having discussions behind the scenes about them. Ultimately, though, parties did not agree to address that as part of the NDNA deal, and it is not for Westminster to try to go beyond the carefully agreed package of reforms in the Bill.
The Bill is not, of course, the only or final means through which reform to the governance of the institutions of Northern Ireland can be delivered, but we will be guided by the needs and requests of the Executive. Should there be further consensus from the parties that they would like to revise the issue of alternative vetoes, we stand ready to support that, but I say to the hon. Member for North Down that that is not part of the deal that we are in the process of implementing. I therefore urge him to withdraw amendment 6.
The Chair
As the Opposition do not wish to press amendments 4 or 3, I call Louise Haigh to withdraw amendment 4.
Louise Haigh
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Claire Hanna
I beg to move amendment 15, in clause 4, page 6, line 11, at end insert—
“(3) If an investigation by the Commissioner for Standards finds that a Minister has breached the Ministerial Code of Conduct by engaging in harassment, bullying or inappropriate or discriminatory behaviour, then the Minister shall be deemed to have resigned their ministerial post at midnight on the day of the report’s official publication, unless they have resigned before this time.”
This amendment would ensure that if the Commissioner for Standards found that a Minister had engaged in harassment, bullying or inappropriate or discriminatory behaviour, in breach of the Ministerial Code of Conduct, then the Minister would be deemed to have resigned.
The Chair
With this it will be convenient to discuss amendment 16, in clause 4, page 6, line 11, at end insert—
“(3) Ministers shall cooperate with any relevant investigation by the Commissioner for Standards, give due respect to the findings of any report by the Commissioner in respect of themselves or their Special Advisers and responsibly reflect on the findings of other reports by the Commissioner in order to enable them to duly comply with the obligations of their Pledge of Office, the Ministerial Code of Conduct and/or related rules or codes.”
This amendment would ensure that Ministers cooperate with any investigation and give due regard to existing standards including reports from the Commissioner for Standards.
Claire Hanna
These amendments are part of the same package. Essentially, amendment 15 would ensure that if the Commissioner for Standards found that a Minister had engaged in harassment, bullying or inappropriate or discriminatory behaviour—
Claire Hanna
Certainly, Mr Stringer. In that case, the Minister would be deemed to have resigned. Amendment 16 would ensure that Ministers co-operated with any investigation and gave due regard to existing standards, including reports from the Commissioner for Standards. The Minister has made an argument, about legislating for the ministerial code of conduct within the Assembly, that I think has the broad support of this Committee, so I will be happy to withdraw the amendment.
Mr Walker
I am grateful for the hon. Lady’s indication that she is prepared to withdraw the amendment. I will just offer a little further explanation. I understand the intent behind the amendment and agree that there should be a fair system of checks and balances through which to hold Ministers accountable. Provision for that already exists in section 30 of the Northern Ireland Act 1998: if the Assembly resolves that a Minister or junior Minister no longer enjoys the confidence of the Assembly, or the Secretary of State is of the opinion that such a resolution should be considered, the Minister can be excluded from holding office for a period of not less than three months and not more than 12 months. As that provision already exists, I ask the hon. Lady, in addition to making the points that she has made, to withdraw the amendment.
Claire Hanna
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 4 ordered to stand part of the Bill.
Clause 5
Petitions of concern
Stephen Farry
I beg to move amendment 7, in clause 5, page 7, line 12, leave out from “or” to end of subsection.
If appropriate, I will also address the other amendments in my name to this clause in relation to the petition of concern. The petition of concern is something that my party and, indeed, many others have been—
The Chair
Order. This debate is specifically on amendment 7. We will come later to amendment 11, and we will discuss amendment 12 with amendment 11. This debate is just on amendment 7.
Stephen Farry
I apologise, Mr Stringer. I will focus exclusively on amendment 7. My party has been very keen to see the petition of concern amended. Our views and, indeed, those of many others on this issue are very clear. In some senses, it would be almost logical for us to try to make the signing of a petition of concern as difficult as possible. However, I was very struck by evidence that we received orally last week and also in writing from the Speaker of the Assembly. Concern was expressed that if the proposal for Deputy Speakers not to be able to sign a petition of concern were put into law, that might well deter people from coming forward to become a Deputy Speaker in the Northern Ireland Assembly. It is worth referencing the fact that the way Deputy Speakers operate there is somewhat different from the practice at Westminster, in that they continue to have a political role.
I should say that my party does not have at present a Member of the Assembly who is a Deputy Speaker, and nor do we intend to seek any of those offices in the future, so I may be speaking from a position of a certain objectivity in this regard. I do think it is worth the Committee’s considering whether what was a sincere commitment made in New Decade, New Approach—I accept that it is in black and white in that document—may have, in the cold light of day, some unintended consequence and therefore that there may be some scope for reconsideration. I would be happy to hear the views of other Members in that regard.
Gavin Robinson
I just want to give my reflections on the evidence that we heard from the Speaker of the Northern Ireland Assembly. I do not agree that there is a chilling effect associated with the agreement reached––New Decade, New Approach–that would have a material impact on parties’ willingness to provide a Deputy Speaker for the Assembly. I would go further and say that our Deputy Speakers are not the same as Deputy Speakers here. Neither is our Speaker. Our Speaker in Northern Ireland does not resign from their political party. When they seek re-election, they do so as a member of a political party.
The element that I do not think the Speaker reflected on appropriately in his evidence last week is that, as each of the four parties provides a Speaker and three Deputy Speakers—one from each of the four parties—the consequence of assuming that office and so being unable to sign a petition of concern applies to the four largest parties. Each is supplying somebody and each takes the consequence. In that sense, what was agreed in New Decade, New Approach is fairer than one party losing a signatory from a petition of concern because they assume the position of Speaker, so I take quite a different view from that of the Speaker of the Northern Ireland Assembly and I do not believe that the fears that he outlined are merited.
Mr Walker
The New Decade, New Approach deal was explicit that the Speaker and three Deputy Speakers shall not sign a petition. I therefore question why we would seek to amend the deal, which delivers on a key concern of the party of the hon. Member for North Down during the negotiations: that a petition of concern should be used only in rare situations.
I acknowledge the concerns that were raised by the Speaker, but as we have just heard, there are different views on their strength and there is the fact that four out of the five major parties in the Assembly are represented in the speakership or deputy speakership. There is a balance in its impact in that regard. I have offered a follow-up conversation between officials at the Northern Ireland Office and the Speaker’s officials to look into the matter further, but I cannot at this moment support an amendment because we are not aware of how real a risk this poses. We have heard divergent views on that. The Government are willing to return to the issue after further engagement with the Speaker, but for the time being I ask that the amendment be withdrawn.
Stephen Farry
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Claire Hanna
I beg to move amendment 11, in clause 5, page 7, line 12, at end insert—
‘(5A) When a petition of concern is lodged and confirmed against a measure, proposal or a decision by a Minister, Department or the Executive (“the matter”), the Assembly shall appoint a special committee to examine and report on whether the matter is in conformity with equality and human rights requirements, including the European Convention on Human Rights and any Bill of Rights for Northern Ireland.
(5B) Consistent with paragraphs 11, 12 and 13 of Strand One of the Belfast Agreement, a committee as provided for under Section 13(3) may also be appointed at the request of the Executive Committee, a Northern Ireland Minister or relevant Assembly Committee.
(5C) A committee appointed under this section—
(a) shall have the powers to call people and papers to assist in its consideration; and
(b) shall take evidence from the Equality Commission for Northern Ireland and the Northern Ireland Human Rights Commission.
(5D) A committee appointed under this section shall—
(a) report in terms that reflect evidence regarding human rights and equality assessments relating to the matter; and
(b) identify relevant clarification, adjustments and amendments (in the case of legislation) and/or other assurances which would address the stated concerns.
(5E) The Assembly shall consider the report of any committee appointed under this section and determine the matter in accordance with the requirements for cross-community support.
(5F) In relation to any specific petition of concern or request under subsection (5B), the Assembly may decide, with cross-community support, that the procedure in subsections (5A) and (5C) shall not apply.”
This amendment provides for a petition of concern to lead to a special procedure, described in paragraphs 11-13 of Strand One of the Belfast Agreement, whereby a special committee shall consider the stated concern(s) relating to equality requirements and/or human rights. Such a special committee could also be appointed at the request of the Executive Committee, a Northern Ireland Minister or relevant Assembly Committee.
The Chair
With this it will be convenient to discuss amendment 12 in clause 5, page 7, line 27, at end insert—
“(ca) specify the size, timescale and terms of reference for such a committee;
(cb) specify procedure(s) to allow for subsection (5E).”
This amendment is consequential on Amendment 11 and would further clarify how standing orders should make due provision for the working terms for the sort of special committee/procedure in respect of stated human rights or equality concerns as outlined in paragraphs 11-13 of Strand One of the Good Friday Agreement.
Claire Hanna
While we welcome minor amendments to the petition of concern to make it a little more difficult to table one, that does not improve how the POC works or restore it to its intended purposes. Amendments 11 and 12 seek to do that by restoring some of the Belfast agreement’s factory settings, as it were, and reinserting the special procedure described in paragraphs 11 to 13 of strand one, whereby a special committee should examine the rationale and viability of a petition of concern so that it is used as a mechanism to protect minority rights and not, as has been practised during the previous mandate, to thwart them. Amendment 11 would restore that original intent, which has not been adequately used. Amendment 12 enables that by specifying how such a committee could be established at the request of either the Assembly Executive Committee, a Minister or a relevant Committee.
Gavin Robinson
I am not doing very well on my commitment at the start. I want to push back politely on the notion of factory reset, and that we are getting back to the original intent of the provision. That is not agreed. Going through last week’s evidence, it is fair to say that there are those who were involved in the process in 1998 who are now trying to retrofit and read into the 1998 agreement what they hoped to attain or achieve at that stage, and did not.
Mr Walker
I was very interested to hear the hon. Member for Belfast South use the term “restore factory settings”. It is a good technological phrase with which we are all familiar. The issue is that the factory settings lie under what is there and are available to return to at all times. In this case, there is already such a provision for a committee in section 13(3)(a) of the Northern Ireland Act 1998. The Bill requires the Assembly to implement Standing Orders to make provisions for referral to that committee, in the same terms as exist in section 42 of the Northern Ireland 1998.
This is a matter for the Assembly’s Procedure Committee to implement through changes to Standing Orders. The parties did not reach agreement on this in New Decade, New Approach; the hon. Member for Belfast East made that point as well. I urge the hon. Member for Belfast South to understand that her party colleagues in the Assembly can take forward the issue of those changes to Standing Orders, but on the basis that the provision that she is calling for already exists in law, I ask that she withdraw the amendment and consequential amendments.
Claire Hanna
I acknowledge that they exist, but they are not enacted and, when I questioned the Speaker at the evidence session last week, it was not clear why they have not been established. While I understand where the hon. Member for Belfast East is coming from, there is a creeping narrative that the attempt to thwart the vetoholic nature of some Ministers is somehow pulling up a ladder as demographic change happens in Northern Ireland and in the Assembly. That is not the case. It is due to public concerns about the use of that veto on issues that have nothing to do with the in-built traditional divisions, for example around equality for lesbian and gay people, which is the most prominent use of that provision.
I acknowledge the Minister’s comments about the provisions already being there, but they are not being used. I agree with the hon. Member for Belfast East when he said that if these provisions have to be used it is because power sharing is not working, but I would argue that unfortunately the last few years would indicate that in many cases that is not working.
Sir Jonathan Stephens told us last week that no amount of regulation will push parties to power share if that is not what they want to do. Until we have parties that share power appropriately and use power in the interest of everybody, because they think it is in everybody’s interest and not because the law tells them to do so, then unfortunately we need these amendments. On the basis that the Committee is in agreement with the Minister in terms of the Assembly’s legislative ability, then I am happy to beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Chair
With this it will be convenient to discuss the following:
Government amendment 2.
Amendment 8, in clause 5, page 7, line 19, at end insert—
“(aa) make provision for the minimum period under (a) to be reduced in prescribed circumstances to be determined by the Assembly;”.
Mr Walker
Clause 5 reforms the petition of concern mechanism to reduce its use and return it to its intended purpose, as set out under the Good Friday agreement, as a safeguard to ensure that all sections of the community can participate and work together successfully in the operation of the Northern Ireland institutions, that all sections of the community are protected when the Assembly legislates, and to prevent one party from blocking measures or business. The Government have tabled two technical amendments to correct an unintended consequence in drafting.
The Bill, as introduced, required that Standing Orders should specify a minimum period between when a vote is due to take place and when the petition in connection with it must be tabled: at least a day would be required. That was not the intention. Currently, the Standing Orders enable the Speaker to waive notice of the petition in exceptional circumstances. The amendment will enable Standing Orders to continue to include such provision, if that is what the Assembly agrees. The amendments ensure that there need not be any change to the timings for tabling a petition of concern.
While the Government have committed to reforming the petition of concern mechanism to return it to its intended purposes, we are not trying to legislate beyond what was agreed in the NDNA agreement. I can therefore reassure the Committee that the changes are purely technical and aim to ensure that we do not inadvertently alter things from what was agreed between the parties.
Stephen Farry
I want to refer to my amendment in this grouping that probably goes beyond what the Government are trying to rectify with their technical amendments. It goes back to some of the evidence we received from the Speaker of the Assembly. The New Decade, New Approach agreement talks about a 14-day timeframe in relation to the processing of petitions of concern. I welcome that and want to see that become normal practice in what I hope will be the very rare event of a petition of concern being tabled.
It is also important that we are conscious that there may well be some extreme situations in which the 14-day window becomes somewhat of a straitjacket. It may be in relation to some sort of statutory instrument or legal deadline or some other emergency in trying to take something forward. In parallel with that, there is probably a need for petitioners to have the right to withdraw a petition of concern rather than its sitting on the books for 14 days, particularly in the event that they are convinced there is no need for the petition to continue or they have changed their mind. It is essentially a means of trying to ensure there is some flexibility. That is best addressed by giving the Assembly the scope within its own Standing Orders to address the issue.
I am not minded to press my amendment today. I can see the Minister is nodding at some of the comments I am making and I welcome that occasionally. Can the Government give an assurance that they recognise that there is a genuine issue here? The Government might wish to reflect on what I have said today and, indeed, more importantly what the Speaker of the Assembly has said and come back with a Government amendment on Report.
Mr Walker
I am grateful to the hon. Member, particularly for the way he has presented this. I recognise the concerns, but it is important to recognise that we heard a number of positive comments about the 14-day cooling-off period envisaged in the legislation. I draw his attention to the fact that what we have tried to do with the Government amendments is return to what was specifically agreed in the NDNA agreement. I agree with the hon. Gentleman’s comment that this is something the Assembly should be able to address through Standing Orders, and we encourage them to do so. We do not think it is necessary to put in the Bill what should be in the Standing Orders of the Assembly, but I see no reason, if the petitioners who have signed the petition of concern agree to its being withdrawn, that it cannot be made possible to withdraw it at any stage during the 14-day period. That is an eminently sensible approach for them to take. Our view is that this is not the place to deal with it because that should rightly be for the Assembly and its Committee on Procedures to agree on.
Stephen Farry
I am grateful to the Minister for giving way and also for his comments. For the purpose of the record, can he assure me that there is nothing in the Bill today that would inhibit the Northern Ireland Assembly through Standing Orders from making its own decisions in relation to how it would manage a petition of concern around timeframes?
Gavin Robinson
I think this is a constructive proposal. We have to be mindful of the concern that was raised last week in evidence: that Assembly authorities might be slow to consent or assent to such a restriction on the 14-day timescale should it not be elucidated very clearly—not just here, but on Report and so on. If we cannot find a form of words that is acceptable on Report, the exchange that has just been had needs to be expanded on and very clearly delivered on Report in Hansard. There should be no doubt or equivocation among the Assembly authorities that, should petitioners decide that the 14 days are no longer required, or that the issue is of such urgency or significance that it needs to be resolved within that timeframe, that flexibility is permissible.
Mr Walker
I absolutely take note of the hon. Gentleman’s comments, and agree with his intent. I am happy to come back to that issue on Report, as appropriate.
Amendment 1 agreed to.
Amendment made: 2, in clause 5, page 7, line 17, leave out from beginning to first “the” on line 18 and insert “the presentation of the petition and the time when”.—(Robin Walker.)
This amendment means that the standing orders may specify a minimum period of notice of less than a day for a petition of concern.
Stephen Farry
I beg to move amendment 9, in clause 5, page 7, line 31, at end insert—
“(e) make provision to allow petitioners to withdraw a petition of concern at any stage in the process.”
The amendment relates to the wider package of comments I made earlier. I will not press it to a vote today. I just flag it up as part of that wider discussion and hope that the Government reflect on it and, indeed, as the hon. Member for Belfast East said, speak further to this general issue on Report.
Gavin Robinson
When you see the physiology of that amendment, it is clean; it does exactly what we have described. We may have to consider whether it is appropriate for us to do this through the Bill or whether it can be reflected through the Standing Orders of the Assembly, but it is exactly what the intent behind amendment 8 was; amendment 9 does it very cleanly. I am positive about the spirit and the text of the amendment, but it may not be pressed to a vote this morning.
Mr Walker
I am grateful for the brief discussion we have had on this. As the Committee will know, the Bill makes provision for a 14-day consideration period after a petition has been presented by 30 Members. The 14-day consideration period was part of the NDNA deal on the basis of which the five parties entered into the Executive. The consideration period provides MLAs with a vital opportunity to lobby those who are petitioning their item of business, persuade them of its merits and prevent it from going to a cross-party vote.
The question here is where this is most appropriately dealt with. We all broadly agree with the principle that petitions of concern should be able to be withdrawn. However, putting that on the face of the Bill and making it explicit could—we were warned about this in evidence—have the effect of actually making petitions of concern more common. I think Gareth McGrath commented to that effect. We think this would be better dealt with through the Standing Orders of the Assembly, and I am very happy to reiterate the commitment I made on the previous item—to discuss this further on Report if necessary.
Stephen Farry
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Mr Walker
I thank the Committee for the detail in which it has scrutinised this measure. As I said before, the purpose of this clause is to reform petitions of concern and return them to their intended purpose.
The UK Government are not seeking to legislate beyond what was agreed in the NDNA deal. That is exemplified by the amendments I have introduced today, which correct a technical error relating to the time period in which the petition of concern may be tabled. The Bill requires that petitions be signed and confirmed 14 days later by at least 30 MLAs from two or more political parties to prevent one party from being able to block measures or business that would otherwise have cross-community consensus. The changes and commitments from the Northern Ireland parties aim to reduce the use of the mechanism to only the most exceptional circumstances and as a last resort, having exhausted every other available mechanism.
Question put and agreed to.
Clause 5, as amended, accordingly ordered to stand part of the Bill.
Clause 6
Repeal of spent provisions
Question proposed, That the clause stand part of the Bill.
Mr Walker
I can be very brief on this one. Clause 6 repeals the Northern Ireland Executive (Formation and Exercise of Functions) Act 2018, and sections 1 to 7 of the Northern Ireland (Executive Formation etc) Act 2019.
Question put and agreed to.
Clause 6 accordingly ordered to stand part of the Bill.
Clause 7
Extent
Question proposed, That the clause stand part of the Bill.
Mr Walker
The Bill extends to the United Kingdom, but applies only in Northern Ireland. It deals only with excepted matters under Northern Ireland’s devolution settlement, and does not alter the legislative functions of the Northern Ireland Assembly or the Executive functions of Northern Ireland Ministers or Departments. With that assurance, I commend the clause to the Committee.
Question put and agreed to.
Clause 7 accordingly ordered to stand part of the Bill.
Clause 8
Commencement
Stephen Farry
I beg to move amendment 5, in clause 8, page 8, line 8, leave out “at the end of the period of two months beginning with” and insert “on”.
Stephen Farry
Everyone appreciates that politics in Northern Ireland is extremely fluid—that is probably a massive understatement. We never know what political crisis is around the corner.
This is an excellent Bill, and I am keen to see it implemented as quickly as possible following Royal Assent. I am not conscious of what the reason is for the two-month delay in commencement after Royal Assent, so I would be very grateful if the Minister outlined the Government’s thinking in that regard. I am conscious of the laws of unintended consequences, and while this otherwise excellent piece of legislation is sitting on the statute book, about to be implemented, a situation could emerge to which the implementation of one or another aspect of the Bill was very pertinent. We could have the bizarre situation where these good measures could not be deployed because of the two-month delay. Obviously, New Decade, New Approach was not specific about commencement dates, so it is in the gift of this Committee and subsequently the Chamber to look at them further.
Louise Haigh
I rise briefly to speak in support of the amendment in my name and that of the hon. Member for North Down. Recent events could scarcely have proven more how important this legislation is. Because it is clearly the will of this Committee and the House to support the measures in this Bill, it is important that they commence as soon as possible. It is baffling that it has taken 18 months to get here. As I said on Second Reading, covid is not a good enough excuse for why it has taken this long. If it progresses as quickly as it has so far, it will still not be in place until Christmas, which would be two years since NDNA was signed. That is just not good enough, as that will be approaching the end of the mandate for the May Assembly elections. We have made it very clear that we are prepared to do anything we can to help speed up the passage of the Bill and would welcome movement from the Minister on the commencement date.
Gavin Robinson
There are no surprises in this Bill to the parties of Northern Ireland. There is no period of time that is required to get ready, implement or reflect the changes brought forward in the Bill. The shadow Secretary of State has clearly outlined that the agreement was reached 18 months ago. But for coronavirus—whether we accept it as an excuse or not—the provisions in the Bill would be in place and we would be able to fall back on them if they were required.
I am not sure what the rationale is for two additional months beyond Royal Assent. A strong argument has already been put forward by the hon. Member for North Down and the shadow Secretary of State. Subject to a compelling reason why an additional two months are required, there is merit in curtailing that timescale.
Mr Walker
Committee members will know that it is usual practice and parliamentary procedure to allow two months before provisions come into effect following Royal Assent. The type of preparatory measures we might be referring to in this case could be the very changes to Assembly Standing Orders that we have debated. Nevertheless, I recognise the strength of feeling among Committee members.
The hon. Member for Sheffield, Heeley talked about recent events in Northern Ireland. The Bill was not brought forward as a response to recent events. It was brought forward as a response to NDNA and what was agreed between the parties. In terms of the time that has elapsed, she will know that Parliament has been extremely occupied with covid legislation, thanks to the pandemic, but we made a point of introducing this Bill early in this Session. We have also given the time for the Bill not to be rushed through as emergency legislation, but to be subject to full parliamentary scrutiny, which has been welcomed by all sides. That is good news and is all too rare an occurrence for a Northern Ireland Bill.
We are not minded to accept the amendment, but should the political context in Northern Ireland and an early commencement be beneficial for Executive stability, we are content for it to be considered in the other place. I urge the hon. Gentleman to withdraw the amendment for the time being and allow the process of parliamentary scrutiny to continue. Should the progress that we have seen today be repeated in the other place, and the level of cross-party support that we are seeing at this stage, I see no reason why they could not allow for an amendment of this nature to proceed.
Stephen Farry
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 8 ordered to stand part of the Bill.
Clause 9 ordered to stand part of the Bill.
New Clause 1
Report on implementation of The New Decade, New Approach Deal
“(1) The Secretary of State must lay a report before each House of Parliament and before the Northern Ireland Assembly no later than six months after the date on which this Act is passed.
(2) The report under subsection (1) must set out —
(a) whether, and how, each provision of this Act has been implemented, and
(b) what plans the Government has to bring forward further legislative proposals to implement the remainder of The New Decade, New Approach Deal.”. —(Louise Haigh.)
This new clause requires the Government to report on what parts of The New Decade, New Approach Deal have been achieved under this Act, and what plans the Government has to implement the remainder of the deal.
Brought up, and read the First time.
Louise Haigh
I beg to move, That the clause be read a Second time.
I thank you, Mr Stringer, for chairing us through the speedy but proper scrutiny of the Bill this morning.
On Second Reading and this morning, the importance of all political parties abiding by commitments that are made in forming the Northern Ireland Assembly and Executive has been discussed at length. The Government have made that very clear on important elements of NDNA. If it is true for the Northern Ireland political parties, it must be true for the UK Government as well, as one of the co-signatories, just as it holds true for the Irish Government.
The provisions of annex A of NDNA outline a financial commitment that the Government were prepared to provide about 18 months ago. Much of that has still not been delivered, by the Government’s own admission—£1.5 billion of the funding set aside has yet to be delivered. I know the Minister will have figures on how much has been given for covid, but it still remains that much was promised to be delivered on public policy to support the mandate set out in NDNA.
The standstill budget for Northern Ireland when covid support is removed means the 7,500 police officers promised is little more than a pipe dream. Indeed, the Police Service of Northern Ireland has confirmed that it will cut numbers if that budget remains at a standstill this year. That also apples to the investment in transforming public services, such as the health service, which has been repeatedly mentioned because of the appalling waiting times in Northern Ireland, and infrastructure delivery.
The Prime Minster, who could not build a bridge when he was Mayor of London from one side of the Thames to the other, seems more concerned with one that will not be built from Scotland to Belfast, than delivering commitments the UK made just 18 months ago on urgent infrastructure requirements. The Stormont House agreement, recommitted to New Decade, New Approach, seems further way than ever, with the Government unilaterally rewriting it in briefings to newspapers.
The establishment of a Northern Ireland hub in London is nowhere to be seen, neither is the connected classroom initiative. Little wonder that the NDNA review panel has met just twice, as the Minster confirmed on Second reading, when it was supposed to meet quarterly. The Government would clearly rather not review their progress on their commitments.
The new clause is important because it requires the Government to report on which aspects of NDNA have yet to be delivered, especially when there is little time left of this mandate. It would provide an important parliamentary mechanism for Members across the House to keep to their side of the bargain, just as we ask all Northern Ireland political parties to keep to theirs.
Mr Walker
Before I comment on the new clause, I want to correct an error I made in my closing speech on Second Reading on this issue, when I stated that the Government have released £556 million of £2 billion-worth of funding agreed in the NDNA deal. I want to put on record that to date, the Government have released over £700 million of the £2 billion funding agreed over a five-year period.
The Government made good progress on the delivery of commitments under the New Decade, New Approach deal. We provided support for the resolution of the nurses’ pay dispute by securing the advance drawdown of funding. The revision of immigration rules governing how people in Northern Ireland bring family members to the UK took effect from August 2020. The appointment of a Veterans Commissioner took effect in September 2020. The launch of the programme for the centenary of Northern Ireland in 2021, supported by £1 million from the shared history fund, and regulations to bring Union flag-flying days in line with guidance in the rest of the UK, came into force in December 2020.
I am grateful to the Northern Ireland Affairs Committee, which has been scrutinising NDNA delivery closely, and we continue to welcome that. In “New Decade, New Approach Agreement: Government Response to the Committee’s Second Report of Session 2019-21”, the Government were supportive of the Committee’s recommendations to produce an annual report and offered to explore this further with the joint board. The Secretary of State also offered to attend a one-off oral evidence session before the Committee to discuss implementation of the New Decade, New Approach deal.
Given the commitments the Government have already made to bring forward reports and offer further discussions on implementation, as well as the existing scrutiny function in NIAC, we do not consider it necessary at this stage to lay a further report on the NDNA agreement. I ask the hon. Lady to withdraw her amendment.
Louise Haigh
Will the Minister confirm that £1.3 billion has still yet to be made available to the Northern Ireland Executive to fulfil the Government’s NDNA commitments? Can he confirm when the annual report will be published?
Mr Walker
On the first point, those commitments were made over a period of years. Much of the financial commitment has been front-loaded, and is why £700 million has already been brought forward in the first year. It is certainly the case that the commitments from NDNA will continue over that period of years. On the second point, I cannot give the hon. Lady a specific date, but am happy to write to her when that has been agreed with NIAC.
Louise Haigh
On that basis, I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 2
Appointment of First Minister and Deputy First Minister
“(1) The Northern Ireland Act 1998 is amended as follows.
(2) In section 16A (Appointment of First Minister, deputy First Minister and Northern Ireland Ministers following Assembly election), in subsection 4, omit the words “of the largest political designation“.
(3) For subsection (5) of that section, substitute—
“(5) The nominating officer of the second largest political party shall nominate a member of the Assembly to be the deputy First Minister.”.
(4) In section 16(B) (Vacancies in the office of First Minister or deputy First Minister), in subsection (4), omit the words “of the largest political designation“.
(5) For subsection (5) of that section, substitute—
“(5) The nominating officer of the second largest political party shall nominate a member of the Assembly to be the deputy First Minister.”.
(6) In section 16C (Sections 16A and 16B: supplementary), omit subsection (6).”—(Stephen Farry.)
Brought up, and read the First time.
The Chair
With this it will be convenient to discuss new clause 3—Appointment of First Ministers—
“(1) The Northern Ireland Act 1998 is amended as follows.
(2) In subsection 16A (appointment of Ministers following Assembly election), leave out subsections (4) to (7) and subsection (9), and insert after subsection (3)—
“(3ZA) Each candidate for the office of First Minister or deputy First Minister, or jointly First Ministers, must stand for election jointly with a candidate for the other office.
(3ZB) Two candidates standing jointly shall not be elected to the two offices without one or more of the following measures of representational support—
(a) the support of a majority of members, a majority of designated Nationalists and a majority of Unionists; or
(b) the support of 60 per cent of members, 40 per cent of designated Nationalists and 40 per cent of designated Unionists; or
(c) the support of two thirds of members.
(3ZC) The First Minister and the deputy First Minister—
(a) shall not take up office until each of them has affirmed the terms of the pledge of office; and
(b) subject to the provisions of this Part, shall hold office until the conclusion of the next election for First Ministers.”.
(3) In subsection (3)(a) the reference to “subsections (4) to (7)” shall be replaced by a reference to “subsections (3ZA) to (3ZC)”.”.
This new clause would restore the Good Friday Agreement provision for joint election by the Assembly of the joint First Ministers.
Stephen Farry
The issue is essentially about being proactive and the Government and Parliament recognising changes in Northern Ireland, recognising where problems may well arise in the near future and acting to get ahead of those, as opposed to responding to what may well become a crisis in the future.
At present, there is a lot of concern about the precise approach to the determination of the First Minister and Deputy First Minister in Northern Ireland, which has been through quite a number of changes over the years. Obviously, new clause 3, tabled in the names of my friends in the SDLP, potentially takes us back to the original wording of the Good Friday agreement and the Northern Ireland Act 1998, which was of course changed by the St Andrews agreement and the subsequent legislation.
We now have a situation where, under law, the determination of First Minister and Deputy First Minister is closely linked to designations. In effect, at present, the largest party in the largest designation chooses the First Minister and the largest party in the second largest designation chooses the Deputy First Minister, with the proviso—slipped into the legislation in 2007—that when that does not apply to the largest party overall, that largest party takes the First Minister role.
This has become, shall we say, the focal point for a lot of polarisation—even more polarisation in what is already a polarised society—and has led to elections becoming focused around who will become the largest party, rather than recognising First Minister and Deputy First Minister as a joint office, and that in practice it does not matter terribly much which party has the First Minister and which has the Deputy First Minister. None the less, this is part of the narrative of our politics and acts to squeeze out the consideration of other issues during election time.
Beyond that, there is a specific issue. The system of appointing the First Minister and Deputy First Minister is very much linked to the designation system in the Assembly. We do not believe that that was ever legitimate, but it was put in in 1998. Not everyone in Northern Ireland is a Unionist or a nationalist, and not every elected representative is a Unionist or nationalist; people wanted to see themselves in a different light. The situation has changed dramatically over the past 20 years, both in terms of the number of elected representatives who do not identify as Unionist or nationalist, and—perhaps even more significantly—within the wider public. Our people, particularly our young people, have moved away from traditional labels.
It is important that our institutions keep up with the changes and evolution in society. We could see a situation in the near future where a party—I cannot think of one that springs to mind at present—may well emerge as one of the largest two political parties in Northern Ireland, but the current formation of the rules around the appointment of the First Minister and Deputy First Minister, and in particular the link to designations, would act to prevent that from happening. I think that would create a crisis of legitimacy, in terms of the political institutions.
New clause 2 is designed to reflect the changing demographics within Northern Ireland, to move away from the 1998 situation, in which perhaps only a small number of MLAs were neither Unionist nor nationalist, to what may be a very different situation after the next Assembly election. It would also avoid, therefore, what could become a major political crisis of legitimacy, in which the Government would have to intervene to rectify in due course—perhaps with some period of the institutions not being operational. That is why it is important that the Government are proactive: not in a massively speculative way, of course, but by dealing with realistic changes that may be just around the corner in Northern Ireland’s society.
Claire Hanna
The previous amendments to the Bill tabled by SDLP Members were probably probing amendments, but we believe that new clause 3 is fundamental and fairly existential for the Assembly. It is worth saying that for the last 20 years the SDLP has advocated adherence to the Good Friday agreement and the mechanisms and safeguards designed in good faith during that process.
The reason why we have protected some of the changes that happened at St Andrews is that the agreement was designed in good faith and endorsed by a very large number of the people north and south. Subsequent changes have been made by politicians and for politicians in their own interests, frankly—and, we believe, over the heads and to the detriment of the electorate.
The joint election of First Ministers was a centrepiece of strand 1. In recent months, we have heard much debate about the concept of parallel consent, but this is really the clearest example of parallel consent as designed in the Good Friday agreement. In theory and in practice, in those early years the First Ministers would have been jointly elected by all the Assembly Members and in practice by a majority in total and a majority of each designation at the time.
The current distorted process, arrived at at St Andrews, has essentially privatised the election to the two larger parties. That was done to spare the blushes of those parties so that they did not have to endorse one another in the voting lobbies, but that has had knock-on effects on the joint character of the office. Leadership comes from the top, and that has an effect on the character of the Assembly and of political conversation more widely. The current process has also undermined the accountability mechanisms that had been designed for the Assembly and removed the primacy of the Assembly as an authority to hold Ministers to account.
The flaws in that approach become very clear in December 2016, when the Assembly was limited in its ability to hold to account Ministers who had presided over a substantial and fairly catastrophic example of poor governance. Restoring that joint election, as we have outlined in new clause 3, would restore some primacy to the Assembly as the key source of devolved authority. It would also facilitate the cross-party working and cross-party mandates, allegiances and alliances envisaged in 1998.
The St Andrews in this Bill is about sustainability and the new clause is very much in that spirit. The St Andrews change has also facilitated the ransom tactics that we saw most acutely in the 2017-to-2020 stand-off, but that we have also seen in recent weeks as well. The fact that the nominations are private decisions for those parties allows them to withhold a First Minister and therefore to withhold an Assembly. That prevents any potential emergence of a coalition of the willing, as might have come forward in the last three-year stand-off of MLAs from all parties. They wanted to get on with the job to which they were elected but, because of the privatisation of the First Minister’s nomination, had essentially been relegated to being bystanders and commentators with no power to implement a different mandate.
That change at St Andrews also has a ground-level impact, in that it has allowed parties to make every Assembly election a first-past-the-post race to be top dog. It effectively makes Assembly elections into many border polls; we have to race to become them’uns or us’uns as the biggest party and get the top job. That has sucked oxygen away from every other issue and prevented the emergence of a politics and discourse more about the everyday issues that affect people here.
Our new clause seeks to address those issues and would also formalise the joint and coequal nature of the offices in removing the word “Deputy”; the reality is that one First Minister cannot order paperclips without the say-so of the other First Minister. The “Deputy” and “First” mechanism undermines the joint nature of that office. The new clause is in the wider interests of this Bill, which is about sustainability, and would head off any potential existential crisis following a future election if the few hundred votes that separate those parties were to change and people in one were anxious about being deputy to the other.
The mechanisms that we have outlined would also go some way to address the issues discussed by the hon. Member for North Down and for which the SDLP has much sympathy. The designation system was designed and is in place to manage the traditional divides and the two communities, as was, and as has been spoken about, but it is a fair point that it is entrenching those communities, in which people are separated and divided out on that basis.
The mechanism that we have outlined in our new clause designs in other potential ways to ensure that the First Ministers have the support of sufficient numbers of the Assembly, through either majorities of each designation or, in essence, a form of qualified majority voting that would in practice ensure that those First Ministers were acceptable to different sides of the communities—different potential identities, but without negating the role and the vote of those who designate as others, which is a perfectly rational way to designate, whatever the constitutional outlook.
Mr Walker
I turn first to the new clause tabled by the hon. Member for North Down. As I have stated previously, the purpose of the Bill and the reason why we are in Committee today is to legislate for commitments made to support the institutions and to improve sustainability under the New Decade, New Approach deal. I commend the hon. Gentleman on his creativity in seeking to reform the mechanism through which to nominate a First Minister and a Deputy First Minister, but it is not something that I can support because it has not been agreed by the parties.
Of course, I know that the hon. Gentleman’s party may be looking at the polls and at the possibility of making gains in the next election, but it would not be appropriate for the UK Government to alter unilaterally the principles of power sharing so carefully negotiated as part of the Belfast/Good Friday agreement and later by the St Andrews agreement.
The new clause could have an adverse impact on the make-up of the Executive should the First and Deputy First Ministers arise from the same designation. If both the largest and the second largest parties were from the same designation, the Executive could not command cross-community support within the Assembly, which would lead to the instability of the political institutions in Northern Ireland. That is precisely what the Bill aims to avoid. I recognise that the hon. Gentleman might wish the issue to be addressed at another time. As our previous Speaker used to say regularly, that is a bridge that we might have to cross when we come to it, but we do not have any mandate to address it in this particular piece of legislation.
The hon. Member for Belfast South is looking to return the situation to how it stood before the St Andrews agreement. Her party has championed that position consistently. It is worthwhile for her to consider what power sharing should look like in the future, in particular as the political landscape in Northern Ireland evolves. That conversation might need to be had, but it would not be right for this Parliament to reverse unilaterally the approach agreed at St Andrews.
To reiterate a point that I have made previously, the purpose of the Bill is to legislate for commitments made under the NDNA deal. The Belfast/Good Friday agreement has continued to be built on since its historic agreement in 1998 through periods of political difficulty, resulting in the deal that we legislate for today—itself built on agreements such as St Andrews, which the hon. Lady is looking to reverse with her new clause.
The history of devolution in Northern Ireland has shown that the communities and politics are changing continually. Shortly after the Good Friday agreement was reached, there was a prolonged suspension of the institutions between 2002 and 2007. The period of suspension was longer than the institutions had been functioning following the Belfast/Good Friday agreement.
Devolution was restored in 2007, following the St Andrews agreement, which the hon. Lady wishes to reverse. That historic agreement led to a 10-year period of political continuity, between 2007 and 2017. As I stated, it would not be right for this Parliament to reverse unilaterally the approach agreed at St Andrews. I therefore urge that both the motions be withdrawn.
Stephen Farry
We may return to the matter on Report. For now, I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 3
Appointment of First Ministers
‘(1) The Northern Ireland Act 1998 is amended as follows.
(2) In subsection 16A (appointment of Ministers following Assembly election), leave out subsections (4) to (7) and subsection (9), and insert after subsection (3)—
“(3ZA) Each candidate for the office of First Minister or deputy First Minister, or jointly First Ministers, must stand for election jointly with a candidate for the other office.
(3ZB) Two candidates standing jointly shall not be elected to the two offices without one or more of the following measures of representational support—
(a) the support of a majority of members, a majority of designated Nationalists and a majority of Unionists; or
(b) the support of 60 per cent of members, 40 per cent of designated Nationalists and 40 per cent of designated Unionists; or
(c) the support of two thirds of members.
(3ZC) The First Minister and the deputy First Minister—
(a) shall not take up office until each of them has affirmed the terms of the pledge of office; and
(b) subject to the provisions of this Part, shall hold office until the conclusion of the next election for First Ministers.”.
(3) In subsection (3)(a) the reference to “subsections (4) to (7)” shall be replaced by a reference to “subsections (3ZA) to (3ZC)”.’—(Claire Hanna.)
This new clause would restore the Good Friday Agreement provision for joint election by the Assembly of the joint First Ministers.
Brought up, and read the First time.
Question put, That the clause be read a Second time.
Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Bill (First sitting)
Tuesday 6th July 2021
(3 years, 4 months ago)
Public Bill CommitteesRead Full debate Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Act 2021 View all Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Act 2021 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 6 July 2021 - (6 Jul 2021)
The Chair
We are now sitting in public and the proceedings are being broadcast. Before we begin, I have a few preliminary announcements. Members will understand the need to respect social distancing guidance. In line with the Commission’s decision, face coverings should be worn in Committee unless Members are speaking or they are medically exempt. Hansard colleagues would be grateful if Members could email their speaking notes to hansardnotes@parliament.uk. Please switch electronic devices to silent. Tea and coffee are not allowed during sittings. Date Time Witness Tuesday 6 July Until no later than 10.30 am UK Finance Tuesday 6 July Until no later than 11:00 am The Chartered Institute of Credit Management Tuesday 6 July Until no later than 11:25 am Dr John Tribe, University of Liverpool Tuesday 6 July Until no later than 2:45 pm The Chartered Institute of Public Finance and Accountancy; The Institute of Revenues Rating and Valuation Tuesday 6 July Until no later than 3:15 pm Local Government Association Tuesday 6 July Until no later than 4:00 pm The Transparency Task Force Tuesday 6 July Until no later than 4:45 pm UKHospitality Tuesday 6 July Until no later than 5:15 pm R3
We will first consider the programme motion on the amendment paper. We will then consider a motion to enable the reporting of written evidence for publication and a motion to allow us to deliberate in private about our questions before the oral evidence session. In view of the time available, I really hope that we can take those matters forward without debate. I call the Minister to move the programme motion standing in his name, which was discussed yesterday by the programming sub-committee for the Bill.
Ordered,
That—
1. the Committee shall (in addition to its first meeting at 9.25 am on Tuesday 6 July)
meet—
(a) at 2.00 pm on Tuesday 6 July;
(b) at 11.30 am and 2.00 pm on Thursday 8 July.
2. the Committee shall hear oral evidence in accordance with the following Table:
3. the proceedings shall (so far as not previously concluded) be brought to a conclusion at 5.00 pm on Thursday 8 July.—(Luke Hall.)
Resolved,
That, subject to the discretion of the Chair, any written evidence received by the Committee shall be reported to the House for publication.—(Luke Hall.)
Resolved,
That, at this and any subsequent meeting at which oral evidence is to be heard, the Committee shall sit in private until the witnesses are admitted.—(Luke Hall.)
The Chair
We are now sitting in public again, and the proceedings are being broadcast. Before we start hearing from the witnesses, do any Members wish to make any declaration of interest in connection with the Bill?
Peter Grant (Glenrothes) (SNP)
One of the witnesses this afternoon is from the Chartered Institute of Public Finance and Accountancy. I am a member of that institute.
The Chair
Q
Stephen Pegge: Good morning, and thank you for the opportunity to come along today. My name is Stephen Pegge. I am managing director, commercial finance, at UK Finance. UK Finance is the trade association for finance and banking. We have around 300 members, many of whom provide services to companies, and we are involved more widely in supporting small and medium-sized enterprise policy.
The Chair
Q
Stephen Pegge: Yes. This is an important Bill, and one that certainly has the support of many in the business community, including lenders. I know that the consultation had widespread support. It does appear that closing this loophole should be beneficial in terms of the enforcement of good practice, the prevention of abuse and a certain degree of deterrence of the misuse of an important and useful facility that allows companies to be dissolved quickly and cheaply, where that is appropriate and justified, as an alternative to liquidation.
There have been instances over the years where companies have been dissolved with outstanding liabilities, as a result of creditors or those who are owed money. I should stress that it is not just a question of banks, but others who may be owed money and indeed consumers who have perhaps paid deposits on work that has not been done or who are unable to recover those funds, because there has been a deliberate attempt to avoid debts by seeking dissolution.
It is possible in current circumstances for action to be taken, but it can be time consuming and costly, and would usually involve restoring a company to the register if it has already been dissolved. The particular arrangements here will make it possible for the Insolvency Service to investigate directors where there is evidence of abuse, even in circumstances where the business is not insolvent, but instead has been dissolved. That is the loophole that the Bill is looking to close and one, as I say, that we would very much support being open.
The Chair
Thank you, Mr Pegge. We will now take questions from members of the Committee, if you would be so kind as to answer. The Opposition traditionally go first, so I call Jeff Smith.
Jeff Smith (Manchester, Withington) (Lab)
Q
Stephen Pegge: To put it in context, the Insolvency Service estimates that there is currently evidence of misconduct or misuse of dissolution process in only 1% of cases. Given that there are something like 500,000 dissolutions a year, that might amount to only about 5,000 cases. There is some evidence that it is a rising problem and, given that the average company that is dissolved might have a loan of say £200,000, even 5,000 cases could amount to a risk to creditors of up to £1 billion. It is significant in scale because of the large number of companies, even if it is not currently a high level of risk in proportionate terms. I would emphasise that the vast majority of businesses are honest and straightforward and are not abusing this scheme.
The other factor that members of the Committee may be interested in is that quite clearly over the last year, during the covid crisis, there have been a significant number of companies that have taken finance. Given that the Government, through the British Business Bank, have provided guarantees, there would be an impact on the taxpayer if those loans were not repaid and a claim for repayment were made. Again, that is relevant to consideration.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
Q
Stephen Pegge: Yes, we have seen instances of this practice being used to try and avoid liability under bounce back loans. Back in May 2020, UK Finance with the British Business Bank established the bounce bank loan fraud collaboration group. It involves attendees from the Cabinet Office; CIFAS, the UK fraud prevention service; the Treasury; BEIS; and the National Investigation Service—NATIS. The aim is for intelligence to be shared, good practice to be developed and a threat log to be maintained and fed into the National Crime Agency and the National Economic Crime Centre. In fact, this was one of the practices which had been identified through that and has led to some efforts more recently to try to intervene and intercept these cases of dissolved companies involving Companies House and BEIS.
In the meantime, it is always possible that these cases may well have got through and there is some evidence—again, reported by the Insolvency Service—that there could be around 2,000 such cases which are dissolved and where currently the powers to investigate do not exist, so it is a real problem. If it were to become a more popular route for fraud, while there are mechanisms to deal with it and creditors can object when they get notice through alerts when these situations are gazetted, unscrupulous individuals can still get through and it is important that it is closed as a loophole.
As regards the resources of the Insolvency Service, we have all been conscious that, while the number of insolvencies has been low during a period of suspension and the generous support that has been provided to businesses through public agencies and the finance industry, we would expect that to rise significantly in this next period. There is already some evidence that it will do so. It is important that the Insolvency Service is resourced sufficiently to be able to deal with this. The evidence at the moment is that they have been involved in disqualification of directors in something like 1,000 or so cases across the last year, so it is quite possible that there might be a rise in the amount of work that they will need to do. We would certainly support any investigation into what additional resources might be necessary.
Peter Grant
Q
Stephen Pegge: I think the practice you are describing is sometimes called phoenixing—setting up a company in the same location with the same assets purporting to be the same business with the same directors. It has certainly been a matter of concern for some time. Putting in place these measures should help to discourage and mitigate the risks of phoenixing: I do not think it entirely removes it. As you say, it is possible, even without these additional powers of investigation, for that to take place, but certainly where there is evidence of abuse, the fact that the Insolvency Service will have powers under the discretion delegated by the Secretary of State to investigate the directors, take action against them in terms of disqualification more generally, and seek compensation from them personally for losses suffered will discourage the practice of phoenixing, which I know is a concern. As I say, I do not think that it entirely removes it, but it certainly will discourage it, and to some extent remove some of the possibilities of it taking place.
Mick Whitley (Birkenhead) (Lab)
Q
Stephen Pegge: This is certainly a very important contribution to addressing major issues, and it is the one that we have been most concerned about recently. We have seen, as I mentioned, real evidence of dissolution being used as an attempt to avoid liability, but I stress that in many cases dissolution is an efficient and appropriate way for companies to be removed from the register where there is no money owing and that business is ceasing, without going through the time and cost of liquidation, which obviously is available as an alternative—for solvent businesses through members’ voluntary liquidation, or in insolvent situations through creditors’ voluntary or compulsory liquidation. I am not aware of significant other means by which we need to deal with abuse of dissolution. This is the one that has been most to the fore in the evidence that we have seen of abuse, certainly through the fraud group.
Jeff Smith
Q
Stephen Pegge: I am not close enough to its work and resource. One thing that I would say is that the Insolvency Service has very good experience in these sorts of investigations. I would also say that the other element of work, if it has found problems that meet the threshold of evidence and it takes action to disqualify a director, does not necessarily need to involve a court process. In most cases, the Insolvency Service will be successful in getting an undertaking from the director involved to be disqualified. It then has the powers to put that into effect, but certainly people may want to consider whether the resources are sufficient to deal with the case.
The other point is that these are situations where dissolution has been successful. We are also looking to these measures to act, to a certain extent, as a deterrent, in order to make it less attractive for those looking to abuse the system to try it on, as it were. So it may be that this event becomes less frequent in due course.
In fact, one of the processes that is clearly available is for creditors to object to an application for dissolution—and, indeed, the Insolvency Service at the moment is also able to object—on the basis of complaints at that earlier stage, where they have evidence of doing so. And because of evidence of significant numbers of attempts here, those objections have been done on a mass basis.
Ms Marie Rimmer (St Helens South and Whiston) (Lab)
Q
“have effect in relation to conduct…occurring, and in relation to companies dissolved, at any time before, as well as after, the passing of this Act.”
Do you support making these provisions retrospective and, if so, how should the Insolvency Service make use of these retrospective powers?
Stephen Pegge: As I understand it, the support for this measure was confirmed as early as 2018 and it has really been a lack of parliamentary time that has made it difficult for it to be put in place. Given that we are aware of abuse that has happened in the meantime, I support this measure being retrospective. I appreciate that that retrospectivity is not often applied to such Bills, but we are talking about a fairly high evidence threshold and about situations where natural justice would support this measure being made with retrospective effect.
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)
Q
Stephen Pegge: Clearly, when lenders are undertaking a credit assessment, they will consider both the willingness to repay and the ability to repay, the probability of default and the loss in the event of default. All those could potentially be, and I would say probably at the margin, factors that could be influenced by the use of dissolution as a means of avoiding liability.
Quite clearly, it is very difficult for a company that has been struck off the register to make payments under a loan, so there will be the avoidance of debt in those circumstances. Given that currently there is time and cost involved in restoring a company to the register, the ability then to take this action against directors after the event both to deter and, if the activity should still carry on, to investigate and take action against directors in a more timely and cost-effective way should reduce the ultimate losses to creditors. I think there has been an estimate that creditors could be saved around £1 billion as a result of this measure, which would be significant in terms of credit assessments.
The net effect is the ability to provide more finance with less time having to be spent on assessment up front, on better terms, and in circumstances that should help the recovery. However, I will emphasise, Minister, that this is only one factor and it is all operating at the margin. Nevertheless, it is certainly something that during the past year has become a matter of concern, especially in relation to bounce back loans.
Paul Scully
Q
Stephen Pegge: Yes, exactly. It will, therefore, be possible to focus more time and support on those who deserve the finance, without the distraction of those who are abusing the process.
Paul Scully
Q
Stephen Pegge: As you say, it is a matter of a chilling effect. It is one other factor that would weigh on finance providers’ minds when making lending decisions. This is a crucial time for lenders to provide finance. If you look at the latest Bank of England figures, for May, which were published last week, some £7 billion of new lending was provided to SMEs.
Latest surveys suggest that high proportions of loan applications are being sanctioned—something like 85%—and we want that to continue. The expectation that this sort of loophole is being closed should build confidence. It will ensure that there is discouragement of bad actors, so that it does not grow out of proportion, which we fear might otherwise be the case.
Peter Grant
Q
Clearly, we are not creating a new offence that was not illegal at the time. We are considering legislation to make it easier for the authorities to act against people who may have committed offences, which I think is an important distinction. Even given that, is there an argument that the retrospective power should apply only to the date when the Government first published their proposals to legislate? Would you still support the Insolvency Service if it wanted to take action in relation to things that had happened in, say, 2015 or 2016? Would you have any concerns about that?
Stephen Pegge: As you say, this is essentially a technical loophole, which the Bill seeks to close. All it does is confer powers of investigation, with significant and rigorous practices in terms of investigation. The risk of miscarriage of justice is relatively limited. I do not have a particular date in mind. The point I was trying to emphasise was that this has widespread support and has had for some time.
The Chair
Thank you for joining us today, Mr Pegge, and taking the time to give evidence to the Committee. We are grateful.
We should be moving on to the next panel now but apparently the next witness is not ready. I will adjourn the Committee for a short time. We will reconvene when we have the next witness online. Thank you.
The Chair
Q
David Kerr: Good morning, and thank you for the invitation to join the proceedings today. My name is David Kerr. I am a fellow of the Chartered Institute of Credit Management, the largest such body for credit managers. It was formed approximately 80 years ago and provides professional support, training and representation for credit managers and the creditor community.
The CICM contributed to the 2018 consultation and broadly supported the proposed measure in relation to director disqualification. Creditors have often raised concerns about directors leaving behind unpaid debts; whereas in a formal insolvency process, there will be some inquiry by an insolvency practitioner, when a company is dissolved ordinarily there is not. As we have heard, at present, the Insolvency Service will rarely look at those cases because it would potentially involve the cost of restoring a company to the register. The Bill therefore plugs an important gap, as others have commented.
It is probably important to make the point that this was first considered as a suitable measure and had support back in 2018, and while the urgency to bring it in now is understood, this measure is not solely for the purposes of chasing after directors and recouping funds in relation to covid debts but potentially has wider implications as well. There has been reference to the fact that 2,000 or 2,500 companies with unpaid bounce back loans may have been dissolved over the last year or so. I do not think there is any suggestion that every one of those will be investigated, but presumably the Insolvency Service will apply the same public interest criteria as it has hitherto in relation to insolvent companies. That would certainly give it the power to investigate those companies where directors have left behind debts, whether they are bank or Government debts or any other. That should act as a deterrent, one would hope, to directors using this route to avoid liabilities, and will perhaps also restore some confidence in the creditor community, provided that the action taken is publicised and therefore serves its purpose, both in the compensation orders that might be made and the deterrent factor. Broadly, the CICM supports the Bill. With that, I will be happy to take any questions that Committee members may have.
Seema Malhotra
Q
David Kerr: In relation to confidence, I would not go as far as to say that there is a lack of confidence in the system, but in order to enhance confidence this is a suitable measure. It removes one source of frustration among creditors, which is where they can see directors who are not taking steps to put their companies through a formal insolvency process and instead are seeking to avoid debts by using the dissolution route.
In terms of numbers, I have not made any inquiry into the 2,000 to 2,500 companies that have been mentioned, but there has to be a sense of realism about the extent to which any Government agency can inquire into their circumstances. A percentage of them, based on creditor inquiries, complaints or other information that may come into the hands of the Insolvency Service, would trigger some investigation.
In relation to insolvent companies, although perhaps insolvency practitioners and creditors may be frustrated from time to time about the number of cases that result in disqualification proceedings, again there needs to be a sense of realism around the extent to which that can be done. That will happen in cases where, despite all the information, there is also a public interest test that is passed to pursue those actions.
Seema Malhotra
Q
David Kerr: In terms of resources and the ability to pursue all the cases that the Insolvency Service might wish to pursue, I guess that is probably a question for the Department. Not all the cases that are investigated will pass the public interest threshold. To the extent that there are cases that pass the test but cannot be pursued for resource reasons, I am sure the Insolvency Service would welcome any additional resources that can be made available to it. From the point of view of creditors, if actions are pursued in relation to covid-related debts and not others, perhaps the measure works against them a bit.
That comes to the second part of your question. There are two elements to this. First, there is the potential disqualification of individuals who are proven to have acted inappropriately. Secondly, and on the back of that to some extent, there is the possibility of compensation orders against those individuals, with a view to putting money back into the hands of creditors. Again, I am sure CICM creditors would wish that to be as effective for its members as for any Government debt.
Jeff Smith
Q
David Kerr: I think the point has been made about resource. I have heard comments from others on Second Reading and elsewhere about that. It would be unfortunate if the emphasis were entirely on dealing with bounce back loan fraud and if that took resources away from other directors’ conduct investigation cases. That point is not, I suppose, directly relevant to the provisions in the Bill; it is more a question of how it is implemented and taken forward. There have also been some comments about the retrospective element; the previous witness touched on that. I think these cases have to be taken within three years of the relevant date—the date of insolvency or the date of dissolution. I do not think the Department would be able to go back before 2018 in any event, and that was the date on which the consultation was conducted, so I suppose one could argue that directors have had notice of the intended provisions for the relevant period.
Those were probably the only points where there might be concerns to a limited extent, but generally I think the provision is a sensible one that gives the service powers that it does not have currently and which can only be helpful, I would have thought, to trust and confidence in the insolvency regime.
Jeff Smith
Q
David Kerr: I was referring partly to the point that had been made by the Committee to the previous witness about whether there would be any issues around natural justice if the retrospective provisions pre-dated the consultation. I do not think that, in practice, that would happen. Going forward, the compensation laws that might be sought can be obtained after the disqualification order or undertaking, so there may be more than three years available to the service from the date of dissolution. There has to be a cut-off. I do not think there is any suggestion that the provisions of the disqualification have to be changed in that respect, merely that they would be applied to these circumstances. They have proved to be satisfactory since 1986 in relation to director disqualification in the insolvency proceedings, so I have no reason to believe that, going forward, those time limits will not be effective in relation to dissolved companies.
Seema Malhotra
Q
David Kerr: None that I can think of immediately.
Peter Grant
Q
David Kerr: That is a fair point. I suppose the statute of limitations could be considered a relevant backstop, but I will come back to my previous point that we have a three-year limit in relation to investigations into directors’ conduct in insolvent situations, and that has been with us for 35 years. I have not heard any suggestion from the Insolvency Service that that has proved to be inadequate. This is effectively an extension of the same power into dissolved company circumstances. I have not seen or heard any evidence to suggest that it is an inadequate period.
Peter Grant
Q
David Kerr: Perhaps some in the creditor community would like it to be a six-year period, but I do not think they have argued strongly for it, and I do not think there is a necessarily a case made for that. From a creditor perspective, in an ideal world, perhaps it would be open ended. That may be unrealistic.
Paul Scully
Q
David Kerr: The current disqualification provisions act as a deterrent to some extent, because directors know that, in respect of every company that goes into an insolvent liquidation or administration, there will be some inquiry. There is an obligation on the insolvency practitioner to carry out a certain amount of inquiry into the conduct of the directors of those companies and make a report in each of those cases to the Insolvency Service on their conduct. The provisions do not provide for the same report. It will have to be triggered by something else, whether that is a creditor complaint or other information, but it will provide the opportunity for the service to make the same inquiry.
Paul Scully
Q
David Kerr: Do you mean the work of the Insolvency Service?
Paul Scully
Yes. We are talking about Insolvency Service resources. We would have expected the Insolvency Service to prioritise the work that it does on the most egregious cases, and that would indeed be how we would anticipate it moving forward. Have you seen that first hand?
David Kerr: This may not be a direct answer to your question, but the concern of the creditor community might be that, if this provision were used almost exclusively for the purposes of pursuing bounce back loan fraud, perhaps it would not have the wider benefit that could come from it. Perhaps that has to be the emphasis in the short term, but in the long run—it is a provision that was considered worthy of introducing back in 2018, before covid came along—one would hope that it will be of broader use.
Quite how the service will prioritise its limited resources and decide which cases to look at is a matter for it to work out once it gets the powers. One would hope that the cases that come to its attention through the insolvency practitioners’ reports will receive equal attention and that it will not be to the detriment of those cases that these other cases are being pursued.
Paul Scully
Q
David Kerr: That can happen, whether it is through an insolvency process or a dissolution. To the extent that it has happened through dissolution, the measure plugs that gap, because it is gives the same investigative powers to the Insolvency Service. It comes back to the deterrent point that you made previously. If the service is seen to be taking action in these cases and publicising the fact that it has done so, that will, one would have thought, have a deterrent effect.
Paul Scully
Q
David Kerr: Generally, if the system is seen to be working well and those who abuse it are brought to account, then it helps enhance the confidence of those engaged in providing credit, whether it is through loans, trade credit or anything else. In that sense, it is a welcome provision that, if resourced and used as intended, should have the desired effect.
Seema Malhotra
Q
David Kerr: I think the cost issue is the bigger disincentive for creditors that previously might have wanted to take steps to try and get somebody appointed to investigate. The service itself has made the point that there are legal costs and other costs associated with that process, and it would not be practical for creditors to mount that kind of action alone or, in many case, at all, given the amounts of their own debts.
The bigger disincentive is probably the cost and this avoids that. You are right in the sense that if there is a lengthy time process and if it takes several months, that eats into the three-year time limit that we have talked about, so that could be a problem. I think here, with this measure, we avoid that because the Department can have the ability to make appropriate inquiries and take action, without the need to go through that process.
Seema Malhotra
Q
David Kerr: I do not have those figures in front of me but I have seen the fees involved. They amount to a few hundred pounds, but that does not include the cost of a solicitor to spend the time doing the necessary work. I would imagine that it would be a few hundred running into a thousand or more pounds to get a company restored, but I could not give you any exact figures.
Seema Malhotra
Q
David Kerr: We might have touched on this slightly previously. First, there is no suggestion, as far as I am aware, that the whole of the 2,500 companies that have been mentioned would be the subject of an investigation. We are talking about dissolutions in the last 15 months or thereabouts. The time limit is relevant, obviously, because the service has to work to that, but the previous witness made the point, which we should bear in mind, that the majority of the cases that it takes do not necessarily involve court proceedings. In a lot of cases, having presented the evidence to the directors and with the threat of court proceedings available to the service if necessary, many are resolved by the director giving an undertaking, which has the same effect as an order, so a lot of them will not involve court proceedings and that helps the service to achieve what it is seeking to do within that timeframe. Many of the cases in these instances of dissolved companies, I imagine, would result similarly in a relatively high proportion of those being concluded by undertaking.
Simon Baynes (Clwyd South) (Con)
Q
Secondly, clause 2 allows “easier investigation”. Can you give us some idea of the way in which the Bill improves that process of investigation?
David Kerr: I will deal with the second point first. We know that this provision means that we do not have to go through the process of restoring a company and instead the Department can commence an investigation in circumstances where it deems it appropriate without any barriers to doing that. In that sense it makes the process easier to commence the work it needs to do.
Many companies are dissolved every year, but I do not think there is any suggestion that all those, or even the majority, involve any misconduct by directors and by those who have opposed or supported the measure. I do not think there is any suggestion among those who proposed or supported the measure that that process should be removed as an option for companies in appropriate circumstances. The question is really how many of those represent some form of misconduct or where misconduct might be hidden, or where there is some abuse. I have not seen any statistics on that and do not know if anybody would know for certain. Again, it comes back to the point that the service would have the power to investigate in circumstances where something was brought to its attention, suggesting a need for investigation. In that sense, it is a welcome provision.
The Chair
Thank you for giving evidence, Mr Kerr. If there are no further questions, we will move on to the next panel.
Examination of witness
Dr John Tribe gave evidence.
The Chair
Q
Dr Tribe: Thank you very much for the invitation and opportunity to address the Committee on this important Bill. I will address the second half of the Bill and the clauses on directors disqualification. Like all the contributions on Second Reading in the House of Commons, I welcome and support the changes that the Bill introduces to the Company Directors Disqualification Act 1986 and the extension of the public protection provisions in that Act to unfit directors of dissolved companies.
The measures are a welcome addition to the insolvency framework and system that work effectively and are well managed by the Insolvency Service and its diligent and hard-working staff. This new statutory addition to their armoury is a necessary power to maintain public confidence, to protect the public from unfit directors, and to maintain the integrity of the limited liability company form.
My contributions to this Committee come from an academic viewpoint, as a senior lecturer in law at the University of Liverpool. For 20 years, I have been researching and writing about insolvency law, both corporate and personal. For much of that time, I have been interested in the role and accountability of office holders, including company directors. I have been editor of the Mithani: Directors’ Disqualification newsletter, and continue to sit on the editorial board of that publication. More recently, I have written about the disqualification proceedings in Kids Company and Carillion. I have five brief points or observations to make on the Bill: if the Chair allows, I can run through those. They are brief, if you want me to address them at this point.
The Chair
Yes, of course.
Dr Tribe: The first is on limited liability and corporate form abuse. I view the corporate form as a statutory privilege—a concession of the legislature that should be managed properly and should be used by individuals adhering to the highest standards of commercial morality and probity. Put simply, directors should know their duties and live up to them. They should be held to account if they do not, and certainly if they stray further into the realm of the unfit.
My second point is on phoenixing. Contributions from across the House of Commons on Second Reading of the Bill, the explanatory notes to the Bill, and the Parliament Library document on the Bill have all mentioned the phenomenon of phoenixing, and comments suggest that the misuse of limited liability companies and of the bounce back loan scheme is the latest example of this sort of undesirable behaviour, or “unfit” behaviour, to use the language of section 6 of the Company Directors Disqualification Act 1986. I agree with the comments that have been made: phoenixing has been a perennial problem with the limited liability form because of the damage that misuse of that form can do to creditors, and it is right that it is troubling us now in the context of the bounce back loan system as part of the Government’s package of support during the pandemic. The taxpayer stepped up and provided these bounce back loans; the taxpayer should be protected now at this point, and the Insolvency Service needs the tools and, most importantly, the funding to do that work.
My third point is on directors disqualification and public protection. Through the history of our corporate insolvency laws, we have grappled with the balance between entrepreneurialism on the one hand and the kind of behaviour we are discussing today—unfit behaviour and malpractice—on the other. Indeed, directors disqualification provisions were first introduced in the Companies Act 1928, and there have been several reforms and updates over time since then—and hopefully, in my view, also with this 2021 Bill, if it is passed.
Over the past 20 years or so, we have also gradually increased the number of entities that are subject to the disqualification regime, and dissolved companies are the latest vehicle in a long-running trend, because there will always be some misuse. We need to ensure that the relevant regulator has the powers and funding to combat that unfit behaviour when it does arise, because public protection is, in my view, the main driver of the directors disqualification regime. As we know, the limited liability form is the basis of our credit system: if it is not protected properly, the whole system could ultimately be damaged.
My fourth and penultimate point is on the dissolution statistics. We know that dissolution is an important part of keeping the Companies House register in order. Dissolution is part of the normal life cycle of the company; dissolution keeps the register tidy and up to date. It happens regularly, and it is necessary. As you perhaps already know, there were approximately half a million dissolutions per year over the past six years, and the explanatory notes to the Bill explain that in the first quarter of 2021, we saw some 170,000 dissolutions. It is appropriate that these take place, for the reasons I have outlined—namely, keeping the register in good order—but unfortunately, among those dissolutions, there could be some of the unscrupulous activities that we have been mulling over, namely the dissolution of a company that has taken out a bounce back loan and has been dissolved before the loan has been paid back to what is ultimately the taxpayer-creditor. This is a loophole, and it should be closed so that directors of live companies, directors of insolvent companies and directors of dissolved companies are all treated the same way for the purposes of section 6 of the Company Directors Disqualification Act 1986.
In late June 2021—I think it was the 21st—the Public Accounts Committee projected a loss of between £16 billion and £27 billion of bounce back loans, from a total of approximately £90 billion that was lent by the British Business Bank via the banks. As you know, PricewaterhouseCoopers is due to report on the extent of fraud and credit failure within that £27 billion. There could be a huge loss to the taxpayer, unfortunately. Any loopholes that may have helped facilitate those losses, which, in turn, help evade responsibility for those losses, should be closed.
My final point is on funding. The Insolvency Service needs to be properly funded to ensure that this additional disqualification work can happen. Until appropriate funding is hammered out, the provisions in the Bill still provide a deterrent to those who seek to use limited liability forms in an unfit manner. The Bill’s clauses, and any compensation orders which may follow directors disqualifications, go some way to ensuring that limited liability corporate forms are protected, and that delinquent directors have an immediate, powerful deterrent against abuse of conduct, so that trust in our system is maintained. In short, the bigger the stick, the better the deterrent. That is my introductory statement.
Jeff Smith
Q
Dr Tribe: It is my impression that this new work to deal with directors of dissolved companies who have potentially behaved in an unfit manner would be subsumed into the general run of business of the disqualification unit at the Insolvency Service. They prioritise the most egregious cases, or those that help send out a public protection signal to the public. In the interim, I think this kind of work would fall into that part of their function. My point about hammering out or ensuring funding is in place is partly in response to some comments on funding made on Second Reading of the Bill. Since the Companies Act 1928, and perhaps most famously in the Cork report of 1982, this question of whether the disqualification regime is properly funded has always existed. Its lack of efficacy between 1928 and 1982 was put down to a lack of resourcing.
That point is very important, because in essence this is the system that protects the limited liability form, the engine of capitalism that drives through our commercial activities. Unless the Insolvency Service is able to properly resource and ensure that this work is undertaken, we have a problem when we try to pursue those who are responsible for the loss of between £16 billion and £27 billion. This potentially unknown—we will find out when the PwC report comes in—and potentially large gap will need to be addressed in terms of where the money went and who was responsible for causing that money to be dissipated.
Jeff Smith
Q
Dr Tribe: Not necessarily. Going back to my prioritisation point, the Insolvency Service obviously has finite resources that it needs to deploy in the best way possible—I suppose that is a problem for many public bodies— if other types of abuse manifest over time. The most obvious and recent problem is the bounce back loan phoenixism problem, but in due course other things might come about that require us to tinker with our corporate and insolvency law so that we have an effective system that maintains trust and confidence in it. What the Insolvency Service wants to do in terms of prioritising threats to the system will depend on its internal guidance.
Seema Malhotra
Q
Secondly, are there any other more general problems with the dissolution of companies that are important to discuss at this time while changes are being made? Should changes be made to the eligibility criteria on dissolutions? What steps need to be taken prior to dissolution?
Dr Tribe: I will take the first question first. I think you are drawing attention to the compensation order regime, and you did so on Second Reading, too. There is some interesting research by Dr Williams at Cambridge in 2014, who looked—he sort of future-gazed—at how successful the compensation system might be. In that research, he highlighted that some of the directors in small closely held companies, which he argues the regime mainly targets, might end up being adjudicated bankrupt—they might go through the bankruptcy process, I should say—in due course. That would mean, of course, that any pursuit of those individuals would run into another layer of difficulty in trying to get to the value that might be there for the insolvent estate of the company or dissolved company that we are dealing with. His work future-gazed in that way at some of these issues.
It is true to say that, on the compensation regime, we saw one case in 2019, the Noble Vintners case, where insolvency and companies court Judge Prentis made a 15-year disqualification order. That is right at the top of what we call the Sevenoaks scale, after the case in which Lord Justice Dillon set out the various types of malpractice and where they fall on the scale, from two years up to 15. In the Noble Vintners case, it was the most unfit behaviour on the facts of that case that you could have —up at the 15-year period. Then, of course, that was followed by a compensation order that recouped for creditors just over half a million pounds—£559,000.
There has been some success with the compensation scheme. It is in its early days, in a certain sense. Although the reforms came in in 2015, there was a delay in implementation. You are right to say that we should pause for thought and mull over how effective that is. That takes us back to the resourcing and funding point, for one thing. Secondly, it takes us to the idea of that prioritisation agenda and how fruitful a claim that you are going to bring might be to get compensation. It is a power that exists and should exist. It goes some way—as you can see from the case of Noble Vintners—to getting value back into the insolvent estate for the creditors. It is a positive thing for creditors, and something that the disqualification regime did not do until that reform in 2015. Of course, it provided a protection mechanism, but in terms of getting value back into the estate, that is a good reform. That is your first question.
Your second question was on dissolution problems. I think you might be driving at the process of dissolution and how the registrar at Companies House deals with dissolution. After the directors have signed their form, made their declaration, paid the £10 and noted that there is going to be a striking off and that is published in the London Gazette, there is a period of two months where all the parties that should be informed—shareholders, creditors, employees and pension managers, for example—might know of this potential dissolution and should then, therefore, perhaps act on it as creditors. Some of the witnesses who have gone before me may have addressed this, particularly those from the credit community. In due course, as part of a wider analysis of what Companies House and its function is, that step in dissolution may be looked at.
As I said earlier, there are approximately half a million dissolutions per year, and many of those are for very good reasons in terms of, as I have said, maintaining the integrity of the register and getting rid of companies that have been through the insolvency processes but then get dissolved as well. The guidance for the Bill and some other sources note that among those half a million dissolutions, there could be about 5,000 that are potentially problematic that we would want the Insolvency Service to be able to investigate. Obviously, 5,000 is a lot more than the current levels of disqualification under the current provisions. Over the past decade or so, there have been about 1,200 a year, so you can see there is quite a significant upshift in the work that the Insolvency Service might have to do.
A Companies House review perhaps in due course mulling on what its function is—is it a regulator, is it a repository of information?—might look to dissolution, but in the short term I think you have this £17 billion to £26 billion problem, and there seems to be a loophole that needs to be closed.
Peter Grant
Q
Dr Tribe: I think you are right to point out that there are different avenues that could be visited on the directors that we are talking about. We are not necessarily talking about directors in the general run of business; we are talking about people, as perhaps you suggest, who engage in criminal behaviour. For example, with the bounce back loan scheme, a form of fraud could lead to a prosecution.
What we are dealing with today, though, particularly with this amendment to the Company Directors Disqualification Act 1986, is a regulatory function, so we are dealing with a lower burden of proof than we would if it was a criminal sanction for any subsequent prosecution for fraud. In that sense, on the Insolvency Service’s work on what is known as a jury question in the context of directors’ disqualification, with each case being looked at on its facts, the determination whether whatever has occurred has been deemed to be unfit does have that lower evidential burden than any subsequent criminal activity that the prosecuting authorities might address. In that sense, the disqualification regime is perhaps better able to get deterrent-type results than mounting subsequent criminal prosecutions. We know, of course, that the criminal justice regime is also having some problems with funding. If the disqualification regime is able to achieve any public policy outcomes in terms of deterrent, in a regulatory manner, that is perhaps quite effective.
Peter Grant
Q
Dr Tribe: That is an interesting question because it highlights the long history of English and Welsh and Scottish company provisions when we are thinking about the nature of groups of companies and then single entities, and how structures and groups are used and how we move value between one entity and another.
There is the quite interesting case of Creasey v. Breachwood Motors Ltd where, because of an employment claim, value was moved into a new entity, and of course the claim was left with the original company, meaning that that employee had an empty shell through which to pursue their claim, which was problematic. The judge at first instance was able to say, “No, in the interests of justice, you can switch your claim to that new entity.” That judgment was overruled subsequently, but it does raise an important point. Indeed, in the case that overruled it, the group reconstruction that occurred was held to be legitimate for tax reasons. There are instances of the kind of behaviour that you are talking about that can perhaps be problematic in the pure phoenixing sense, but then there are legitimate reconstructions that happen where the intentions of the directors were for tax efficiency or some other purpose that is not unfit or nefarious in the way that we are discussing.
In terms of the misuse of the corporate form, one can go right back through our company law history to recite many examples of essentially what we are talking about—phoenixing, or what has been called centrebinding—and some of the critique of pre-packaged administration is around the same point. Is it appropriate that the corporate form is able to be used in this way so that the creditors of company A are left languishing while all the value is moved into company B in the way you have described?
That takes me back to my introductory response point, which is that in English and Welsh and Scottish law, for a very long time we have used the separate juristic person—the company as a thing. It is a really sacrosanct idea that, just like I am not responsible for your debts, and you are not responsible for mine, we have that structure in place for policy reasons, and have done since the 19th century originally, to aggregate wealth and entrepreneurial activity. I suppose you as the legislature expect that, as part of that privilege that you have allowed incorporators to use, over time you will get some form of abuse, and that element, which is hopefully as small as possible, has to be dealt with, like we are trying to do today, or, to some extent, tolerated.
Peter Grant
Q
Dr Tribe: On your first point, which was about retrospective activity, it is much like the Corporate Insolvency and Governance Act 2020 reforms, which have successfully been passed. We have seen lots of new cases on the provisions that were in that Bill; it has been very successful. The reforms in that statute were mooted much earlier, in 2018. It is the same with this suggestion to close the dissolution loophole. Much like with the 2020 CIGA provision, the coronavirus has freed up legislative time to get both sets of provisions—the CIGA activity and the dissolution activity—in front of you to get it on to the statute book. Some of this was discussed by Sarah Olney on Second Reading.
What does it mean in terms of the retrospective nature of what you are doing? We had the idea some time ago, and corona has meant that we have had to address it against the backdrop of the bounce back loan scheme. Unfortunately, the abuse of that scheme seems to be so massive—as we have seen, there is a £16 billion to £27 billion projected shortfall, or loss—that we need to go back in time to look at some behaviour. Of course, we are not generally speaking about breaches of duty in the general sense of directors’ duties. We are talking about what could be seen as the use of the corporate form purposely to avoid the insolvency provisions and the oversight that they can give, with the powers that are currently in the Act that we are dealing with.
That needs to be dealt with, and if it is in a retrospective way—you may have seen in late June that there was a disqualification order for 12 years because of some fraudulent activity that had occurred with a Mr Khan and his Birmingham-based business, where he had forged documents to get a bounce back loan of £50,000. The Insolvency Service successfully brought that action following administration. Some Glasgow-based companies have also been wound up in the public interest because of bounce back loan abuse. To answer your question briefly, it is the bounce back loan fraud that has meant we have had to act retrospectively. No, I do not have any issues on that point.
On your question about three years, I suppose that again goes back to funding and time limits, and whether the Insolvency Service is adequately resourced to deal with the amount of dissolutions—whether it is 5,000 as predicted, or whether the forthcoming PwC report shows that it is much worse. If it is well resourced, the time issues might not be such a problem. If it is not, they perhaps will be.
Paul Scully
Q
Dr Tribe: In some writing on this point in relation to Carillion, I suggested the reason that the Insolvency Service might be looking at a large public limited company to bring these mechanisms to bear is because that is a pretty well known, massive liquidation, which has lots of Government contracts linked to it and taxpayer money bound up in its activities. You can see why it would perhaps be appropriate, much as with previous well-known disqualifications, for the Insolvency Service to bring the action or the proceedings if the relevant public interest tests are met. That is because it helps with the agenda of sending out the appropriate messages to the commercial community that you should use corporate vehicles and corporate forms in an appropriate way, and that you should live up to your duties in an appropriate way generally, as well as facing some of the consequences if you misuse the form and harm creditors and other stakeholders.
On the prioritisation point, you could go for good messaging, in the sense of prioritising cases. I suppose that the problem with the bounce back loan scheme and this dissolution issue that we are dealing with is that, as I think one of the previous questions hinted at, the volume of cases could be so great that with prioritisation you will need to have quite a large group of civil servants working on the issue.
As for the question of how likely it is that we might get a result in a case, and therefore whether we should bring proceedings, we have seen recently that once the Insolvency Service’s tests are met, it is wholly appropriate that it should bring these proceedings, even if in due course the result is not what it thought or what its specialist advisers—the QCs and so on who have advised it—would have predicted. Hopefully, the money will be well spent in bringing proceedings, but sometimes we do not get the result for factual reasons, basically.
Paul Scully
Q
Dr Tribe: Carillion, because it is a large plc, has messaging on the plc side of our regime, thinking about how directors behave in relation to those types of companies. This perhaps goes back to Mr Grant’s question about group structures—do not use group structures in a way that is problematic. That will be interesting to monitor on what is a live case; I do not want to mull on the facts of that case too closely.
Sorry, what was the second part of your question?
Paul Scully
Q
Dr Tribe: Thanks for that clarification. If we can ensure that any vehicle that is used in any form of creditor relationship with different entities has an individual put-off effect by going down this dissolution route that we have identified, it will hopefully increase confidence in the way people use the corporate form. The more loopholes we can close down that have caused us to think the form is being used inappropriately, the better.
Unfortunately, phoenixing, as we have discussed, has been going on for literally decades, and perhaps in the future we might be back here again with some other problem that has arisen because of nefarious activity.
Jeff Smith
Q
“Applying the current controls properly, putting dissolved companies into liquidation and publicising that new policy will be a far more effective deterrent...That requires no new legislation at all.”
Do you have a view on that?
Dr Tribe: The trouble is that to get to that liquidation point, you have to go through the restoration stage. I think that submission might have also talked about the idea of restoring an entity to the register and then going through that insolvency route. I think the Insolvency Service did 33 of those in 2019—pre the bounce back loan issue and pre corona, obviously. Each one of those 33 will have cost it court fees, process fees at Companies House and so on, which means there is this extra layer of procedure that it has to get through before it can ultimately investigate the unfitness activity. I think the dissolution reform in this legislation ensures that that extra layer of bureaucracy—getting the companies back on the register, through restoration, then going through the insolvency processes—is cleared out, and we move straight to the enforcement section.
The other problem with restoration is that you perhaps undermine the integrity of the register itself if you take 33 companies off it, but you then want to put them back on because you need to go through the steps that we want for enforcement and so on. It is an interesting point, but I think you have a quicker public protection mechanism process that you can do now that gets you to a less costly enforcement outcome.
The Chair
If there are no further questions, I thank you, Dr Tribe, for giving evidence this morning. It is much appreciated. I thank all the witnesses for appearing this morning.
Ordered, That further consideration be now adjourned. —(Paul Scully.)
Written Statements
Stellantis Investment: Vauxhall, Ellesmere Port
(3 years, 4 months ago)
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The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)
I am delighted to welcome the confirmation by Stellantis of a transformational investment at its Vauxhall plant in Ellesmere Port, which will see the site become the first mass volume, fully battery electric vehicle plant in the UK and Europe. Stellantis have committed to investing more than £100 million to transition the plant to produce a new generation of electric vehicles, safeguarding the future of the site and its supply chain for the next decade.
This announcement demonstrates that our net zero ambitions are being welcomed and matched by business, as we work towards increasing the manufacture of electric vehicles in the UK. The Government are committed to ensuring we continue to be one of the best locations in the world for automotive manufacturing and are working closely with the sector to make sure it remains competitive, attracts investment, and protects and creates jobs.
Just over six months ago we presented the Prime Minister’s 10-point plan for a green industrial revolution, setting an ambitious road map for transforming our economy, unlocking investment and levelling up the regions. The plan included a commitment to phase out the sale of new petrol and diesel cars and vans by 2030. The decision by Stellantis to invest in electrification in the UK, alongside recent announcements by Nissan and Envision in Sunderland, are excellent illustrations of business and the Government working together to achieve decarbonisation within the sector.
I was pleased to inform the House in June of the strong consumer growth over the past year, which our strategy is helping to drive. As of March 2021, battery electric vehicle sales stood at 7.7% of the market, up 88% on a year earlier, while plug-in hybrid vehicles sales were 6.1%, an increase of 152%. Changing consumer habits such as the way we shop have also driven a strong increase in demand for light commercial vehicles, and this announcement will help transition the fleet with a new vehicle produced here in the UK. This investment will grow domestic production of electric commercial vehicles, help reduce our reliance on imports and play an important part in reducing emissions in towns and cities across the country.
I am sure Members will agree that this is an important announcement for Cheshire, Merseyside and the north-west of England, which secures the continued presence of a key anchor for the local and regional economy. This significant investment has been secured thanks to a strong partnership approach between Stellantis and the Government, alongside Cheshire West and Chester Council, and the Cheshire and Warrington local enterprise partnership to maximise the benefits of the transformation of the plant to the wider local economy.
This news will be welcomed by the workforce at Ellesmere Port and is a testament to their skills and hard work. The Ellesmere Port plant has been a crucial part of automotive manufacturing in the UK since it first opened nearly 60 years ago. This announcement means that that milestone will be marked next year with the production of its first all-electric vehicle—building a sound future on Vauxhall’s proud legacy.
Today’s announcement is further proof that there is a bright future for automotive manufacturing in this country. The Government are committed to supporting this transition including £500 million to support the electrification of UK vehicles and their supply chains, as part of a wider commitment of up to £1 billion. As Secretary of State I will continue to champion the sector, ensuring that we make the most of the opportunities of the transition to zero-emission vehicles and attract further investment, boost innovation and sustain tens of thousands of jobs in manufacturing and the supply chain.
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Fiscal Risks Report 2021
(3 years, 4 months ago)
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The Chancellor of the Exchequer (Rishi Sunak)
In accordance with the charter for budget responsibility, the OBR has today published its third fiscal risks report (FRR). FRR 2021 provides an update on the risks identified in previous reports, alongside focused coverage of three areas of fiscal risk: the coronavirus pandemic, climate change, and the cost of Government debt. I am grateful to the Budget Responsibility Committee, and staff of the OBR, for their work in preparing this report, which ensures that the UK continues to be at the forefront of fiscal transparency and management during these unprecedented times. The report was laid before Parliament earlier today and copies are available in the Vote Office. The Government will respond formally to FRR 2021 within the next year.
The UK has experienced two “once-in-a-generation” economic shocks in just over a decade, and the challenges faced by the UK since the start of the pandemic have been substantial. Action taken over the last decade to restore the public finances to health enabled the Government to fund a comprehensive package of support for the economy when most needed. The report notes that our direct support to businesses helped keep many of our employers afloat, kept insolvencies in check and avoided the kind of credit crunch that occurred during the financial crisis. The Government have acted on a scale unmatched in recent history to protect people’s jobs and livelihoods and to support businesses and public services across the UK. Taking into account the significant support confirmed at spending review 2020 and Budget 2021, total announced support for the economy in response to covid-19 is £352 billion across 2020-21 and 2021-22.
The report highlights the range of spending choices and risks we face, particularly relating to pandemic spending. These will be considered at the spending review. As the report notes, spending is increasing in cash terms, real terms, and as a share of GDP overall. Total managed expenditure is forecast to rise by 2.1% of GDP between 2019-20 and 2024-25. Core departmental spending is set to grow at an average of over 3% in real terms over this Parliament. Our plans will deliver the largest real-terms increase in departmental spending for any full Parliament this century.
It is clear that unmitigated climate change is another significant fiscal risk and decarbonisation is essential for sustainable long-term growth and therefore also for the health of the public finances. The fiscal consequences of transition to net zero will need to be managed in line with the Government’s broader fiscal strategy. The Government will publish our net zero strategy later this year, which will set out more detail on how we will meet our net zero target.
The pandemic and the Government’s necessary policy response has led to an unprecedented increase in Government borrowing and debt; FRR 2021 illustrates how this has made the public finances more sensitive to changes in interest rates. While borrowing costs are affordable now, interest rates and inflation may not stay low forever. The OBR’s latest forecast recognises that the Government’s current fiscal plans deliver a stable medium-term outlook for public sector net debt, but as I set out at that Budget, we need to pay close attention to the affordability of that debt.
The risks discussed by the OBR in this report underline the importance of returning our public finances to a more sustainable path. The report finds that, in the face of many potential fiscal risks,
“fiscal space may be the single most valuable risk management tool”.
That is why the Government set out at Budget 2021 a plan for returning the public finances to a more sustainable path. It is vital that we rebuild fiscal space to ensure that the Government can maintain fiscal resilience to respond as future risks materialise, continue to invest in excellent public services and give businesses and citizens across the UK the certainty that comes with knowing we can and will support them.
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Channel 4: Future Ownership Consultation
(3 years, 4 months ago)
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The Secretary of State for Digital, Culture, Media and Sport (Oliver Dowden)
Today, we are launching a consultation on the future ownership of Channel Four Television Corporation.
Since its creation almost 40 years ago by a Conservative Government, Channel 4 has delivered on its remit, aims and objectives. But, in that time, the broadcasting landscape has changed beyond recognition, and continues to change apace.
Increased global competition, changing audience habits, the decline of linear advertising revenue and a wave of consolidation in the sector all pose challenges.
The consultation therefore asks for views and evidence on what ownership model and remit will best support Channel 4 to thrive for another 40 years and beyond.
It is the Government’s current view, to be tested through the consultation, that a new ownership model would give Channel 4 the broadest range of tools to continue to thrive in the face of these new challenges.
There are constraints that come with public ownership, and a new owner could bring access and benefits, including access to capital, new strategic partnerships and to the international markets.
As we have set out before, we believe that the need for public service broadcasting in the UK is as strong as ever. We want to see Channel 4 keep its place at the heart of British broadcasting and continue to support the great creative economy in this country. We want to put it on a footing to flourish for decades to come. Now is therefore the time to test whether an alternative ownership model may be better for the broadcaster and better for the country.
This consultation forms a key part of the Government’s wider strategic review of public service broadcasting, along- side Ofcom’s own reflection exercise. Together, our work will ensure that our public service broadcasters and the wider broadcasting framework are fit for the 21st century.
The consultation can be accessed from today on gov.uk and will run for 10 weeks, closing on 14 September 2021 at 11.45 pm. A copy of the consultation will be placed in the Libraries of both Houses.
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Digital Regulation: Driving Growth and Unlocking Innovation
(3 years, 4 months ago)
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The Secretary of State for Digital, Culture, Media and Sport (Oliver Dowden)
The Government have today published a Plan for Digital Regulation which sets out the next chapter of our approach for how we will regulate digital technologies in order to drive growth and innovation. It brings together all the work we are doing across Government in this area under a single coherent vision.
Innovation is at the heart of this plan. We want to encourage it wherever we can, so that we can use tech as an engine for growth and create thriving markets that will cement our position as the tech capital of Europe. We want to do so while also protecting businesses and citizens and upholding their fundamental rights.
Where it is necessary for Government to intervene, we will do so in a way that gets this balance right. We will therefore ensure that regulation promotes competition and innovation in digital technologies, while keeping the UK safe and secure online. We will also promote a flourishing democratic society, and protect our fundamental rights.
The Digital Regulation Plan sets out how we will achieve that balance, setting out new principles for how we design and implement regulation so we actively promote innovation, achieve forward looking and coherent outcomes; and exploit opportunities and address challenges in the international arena. It also sets out some practical steps the Government are taking right now to seize the opportunities of the digital revolution.
The plan is pro-tech and pro-innovation, and builds on the Government’s 10 tech priorities to fuel a new era of start-ups and scale-ups, keep the UK safe and secure online, and ensure that the UK continues to lead the global conversation on tech.
This is intended as the start of the conversation on how we design and implement the right rules for the next chapter in governing digital technologies. To ensure the success of the plan, I want to work with interested parties with a broad range of views on the future of digital regulation, from Parliament, to civil society, to industry, to academia.
A copy of the plan will be placed in the Libraries of both Houses.
[HCWS149]
Nationality and Borders Bill
(3 years, 4 months ago)
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The Secretary of State for the Home Department (Priti Patel)
In March I published the new plan for immigration (NPI), setting out the overwhelming case for change to fix the broken asylum system, and deliver a system that is fair but firm. The Nationality and Borders Bill, introduced today, will deliver the most comprehensive reform of the asylum system in decades. The principle behind the Bill is simple: access to the United Kingdom’s asylum system should be based on need, not on the ability to pay people smugglers.
The Bill—and the wider NPI—has three key objectives:
Make the system fairer and more effective so that we can better protect and support those in genuine need of asylum.
Deter illegal entry into the UK breaking the business model of criminal trafficking networks and saving lives.
Removing from the UK those with no right to be here.
The introduction of the Bill was preceded by a consultation on the NPI which the Government will provide a response to in due course.
To support the parliamentary scrutiny of the Bill, we are publishing a gov.uk page. This can be found at: https://www.gov.uk/government/collections/the-nationality-and-borders-bill.
[HCWS151]
Bus Sector: Covid-19 Recovery Funding
(3 years, 4 months ago)
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The Secretary of State for Transport (Grant Shapps)
During the pandemic, the Government have provided unprecedented levels of financial assistance to the bus sector through the coronavirus bus service support grant (CBSSG), supporting bus operators and local transport authorities in England outside of London, with up to £1.4 billion in funding since March 2020. With patronage falling and social distancing limiting passengers onboard, CBSSG has funded up to 100% of pre-covid service levels, ensuring key workers have continued to be able to travel easily and safely. Critically, as restrictions are lifted and passengers return, the bus sector is important in helping the economic recovery.
I appreciate that this presents bus operators with a fundamental financial challenge. To encourage passengers back, local bus services should be as available as they were prior to the pandemic. Without support, however, it may not be possible for operators to maintain the services they have provided up until now.
I can therefore announce that a further £226.5 million in financial support in the form of recovery funding has been made available for the bus sector. Funding operators and local authorities from 1 September until the end of the current financial year, this will succeed CBSSG which ends on 31 August. In addition to helping maintain services, recovery funding will support the key aims of the national bus strategy of encouraging local authorities and operators to work together to deliver better bus services. In return for receiving funding, operators will be asked to commit to co-operating with the process for establishing enhanced partnerships or franchising.
With the publication of the national bus strategy in March, the Government set out bold ambitions to address the long-term challenge of providing quick, reliable, simple and affordable bus travel. Local authorities have been asked to develop ambitious bus service improvement plans by this October, outlining what will be done at a local level to make travelling by bus as attractive as possible. The Prime Minister has announced £5 billion for buses and cycling to deliver the strategy and provide vital investment for the sector.
[HCWS154]