Nuclear Energy (Financing) Bill (Third sitting)
Thursday 18th November 2021
(3 years ago)
Public Bill CommitteesRead Full debate Nuclear Energy (Financing) Act 2022 View all Nuclear Energy (Financing) Act 2022 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 18 November 2021 - (18 Nov 2021)
The Committee divided: - Ayes: 5 / Noes: 8 - Question accordingly negatived.
The Chair
I have a few preliminary reminders for the Committee. Please will you switch all your electronic devices to silent? No food or drink is permitted during sittings of the Committee, except for the water provided. I encourage Members to wear masks when they are not speaking. That is in line with Government guidance and that of the House of Commons Commission. Please give each other and members of staff space when seated, and when entering and leaving the room. Hansard colleagues will be grateful if Members could email their speaking notes to hansardnotes@parliament.uk.
We now begin line-by-line consideration of the Bill. The selection list for today’s sitting is available in the room and it shows how selected amendments have been grouped together for the debate—there is one change. Amendments grouped together are generally on the same or a similar issue. Please note that decisions on amendments do not take place in the order in which they are debated, but in the order they appear on the amendment paper. The selection and grouping list shows the order of debates. Decisions on each amendment are taken when we come to the clause to which the amendment relates. Decisions on new clauses will be taken once we have completed consideration of the existing clauses of the Bill. Members wishing to press a grouped amendment or new clause to a Division should indicate when speaking to it that they wish to do so.
We will start with amendment 1 to clause 1, but first, Dr Whitehead, did you wish to talk about the change to the selection list?
Dr Alan Whitehead (Southampton, Test) (Lab)
Thank you, Ms Fovargue. It is a pleasure to serve under your chairmanship. I want to say two things before we go into detailed line-by-line discussion: one is on the order in which we are debating the Bill—clause 1, clause 2 and so on. The other is to say to the Committee before we start that Her Majesty’s Opposition voted in favour of the Bill on Second Reading and, therefore, we hope that the amendments before us will be seen and discussed in that light, which is that they seek to strengthen the Bill and to address specific concerns that we have about elements, in particular the RAB—regulated asset base—process.
The Chair
Order. This should just be about the amendments and groupings; there can be no general statements about the Bill. Is everyone content to group amendments 1 and 2 together?
Mark Jenkinson (Workington) (Con)
Ms Fovargue, I draw the Committee’s attention to my entry in the Register of Members’ Financial Interests. It is a matter of public knowledge that I worked in the nuclear industry before my election to this place.
Clause 1
Key definitions for Part 1
Matthew Pennycook (Greenwich and Woolwich) (Lab)
I beg to move amendment 1, in clause 1, page 1, line 15, at end insert—
“(6) ‘Owned by a foreign power’ means owned by a company controlled by a foreign state and operating for investment purposes.”
This amendment is a definition of “foreign power” set out in amendment 2.
The Chair
With this it will be convenient to discuss amendment 2, in clause 2, page 2, line 14, at end insert—
“(c) the nuclear company is not wholly or in part owned by a foreign power.”
This amendment prevents the Secretary of State designating a nuclear company owned or part-owned by the agents of a foreign power.
Matthew Pennycook
It is a pleasure to serve with you in the Chair, Ms Fovargue. The amendments you have grouped stand in my name and that of my hon. Friend the Member for Southampton, Test.
Taken together, the purpose of amendments 1 and 2 is to ensure that in enabling nuclear companies to benefit from the RAB model and for the Government thereby to bring a large-scale nuclear project to a final investment decision by the end of this Parliament, as they are committed to do, the Bill nevertheless makes it clear what kind of companies it would be inappropriate for the Secretary of State to designate for that purpose. In moving the amendment, my assumption—Government Members may correct me if I am mistaken—is that the Committee as a whole would accept that it would be inadvisable to allow some nuclear companies to own and/or operate a nuclear reactor on British soil. That is because civil nuclear power is, without question, critical national infrastructure, the compromise of which would have real implications for national security, given that any company owning and/or controlling such infrastructure would have direct access to the national grid.
Conservative Members, or indeed the Minister when he responds, may argue that the amendments are unnecessary, because no Secretary of State would choose to designate a nuclear company to benefit from the RAB model that posed any threat to national security. Yet it is precisely because previous Secretaries of State have been content to allow companies that the Opposition would argue should never have been given the opportunity to own and operate UK nuclear plants that we believe we need such additional safeguards in the Bill.
Put simply, we want to ensure that the legislation is amended so that this Government, or any future Government who might wish to use the RAB model for new nuclear, cannot make the kind of error that was without doubt made in recent years. Namely, a company owned and directly controlled by a foreign state—a state that the integrated review is clear poses a systemic challenge to our security, prosperity and values—was given the opportunity to own and access critical national infrastructure.
I will touch on the way in which the Government might, if they were minded to accept our amendments or table modified versions of their own on Report, differentiate companies owned and directly controlled by a foreign power and those in which a state merely has a majority financial stake. Before that, I will examine the error that I have mentioned and the lessons we might draw from it to improve the Bill.
On Second Reading, we made it clear that our strong view is that although the Bill has the appearance of a general piece of enabling legislation, it is in practice concerned solely with the future of Sizewell C, as the last potential nuclear project that could conceivably begin to generate by the end of the decade.
Alan Brown (Kilmarnock and Loudoun) (SNP)
I note that the hon. Gentleman was choosing his words carefully. We all know that it is about the China General Nuclear Power Corporation; many people have concerns about its involvement in the nuclear sector, which I echo. He talked about when a state is a majority shareholder, which includes EDF in France, but surely the amendment says
“not wholly or in part”.
As France is a majority shareholder in EDF, would that not eliminate EDF from participating in the RAB exercise for Sizewell C?
Matthew Pennycook
The hon. Gentleman pre-empts what I will come on to say. We are keenly aware of the need to differentiate different types of companies, which is why, thankfully, the Chair has allowed me to group this amendment with amendment 1, which clearly defines what we mean by “owned by a foreign power”. It is not just owned by in terms of a majority stake, but directly controlled by in the way that I would argue EDF is not.
To return to the involvement of the China General Nuclear Power Corporation in UK nuclear more widely, we believe that the case of Sizewell C illustrates precisely why amendments 1 and 2 are required. Driven by an almost embarrassing enthusiasm for Chinese investment, which was shared and arguably surpassed by the coalition Government that preceded it, the Cameron Government eagerly embraced Chinese involvement in UK civil nuclear energy. As a result, Hinkley Point C, while largely financed by EDF, is underpinned by effectively foreign Government part-financing in the form of a 33.5% interest on the part of China General Nuclear Power Corporation.
When the final investment decision for Hinkley Point C was approved, associated heads of terms were agreed for CGN to take a 20% stake in Sizewell C and to secure majority ownership, complete control of planning and financing, and unfettered operation of the nuclear plant at Bradwell-on-Sea in Essex that would incorporate, subject to generic design approval, a Chinese-designed Generation III Hualong One reactor. Bradwell B was always the ultimate prize for CGN and why it was willing to take a significant stake in the Hinkley plant and a minority stake in the development work to progress Sizewell C toward a final investment decision.
As far as we can ascertain, although the present Conservative Administration have never said as much—I invite the Minister to remedy that if he wishes—there is now a general acceptance that acquiescing in the construction of a piece of critical national infrastructure at Bradwell that would be designed, planned, owned and operated by a subsidiary company of a Chinese state-owned enterprise, and, as all SOEs are in China, controlled ultimately by the Chinese Communist party, was perhaps not the wisest decision that the Cameron Government made.
Furthermore—I do not believe a Minister has said this explicitly, so I urge the Minister to provide greater clarity to the Committee when he responds—I take it as read that the present Government now take the view that such an arrangement is no longer tenable, and that it is their intention to remove the influence of the People’s Republic of China from the Sizewell C project entirely, and, should any new nuclear view on that project prove necessary, the future UK nuclear programme more widely.
The press release accompanying the publication of the Bill stated:
“The RAB model will reduce the UK’s reliance on overseas developers for financing new nuclear projects”.
The Committee will appreciate that that statement is not a clear declaration of intent when it comes to rolling out foreign Government part-financing, ownership and control of civil nuclear power in this country. If it is the Government’s intention to end foreign Government part-financing and ownership of new nuclear projects, the Committee should be told what that means in practice for the October 2016 Sizewell C strategic investment agreement, as well as what the Government’s reneging on that deal would mean for CGN’s 33.5% stake in Hinkley Point C. More specifically, it is right that the Committee is also given a sense of how, assuming it has been determined, the Government intend to remove the CGN minority stake from the Sizewell C company, or, if it has not, the various options being considered.
That brings me to the £1.7 billion committed to nuclear in the recent Budget, the purpose of which, according to the Red Book, is
“to enable a final investment decision for a large-scale nuclear project in this Parliament”—
the very same intention that we are told is the purpose of the Bill. As I am sure Members will appreciate, that statement contained in the Red Book is wilfully obscure. Given that Sizewell C is, as I have said, the last potential nuclear project that could conceivably begin to generate by the end of this decade, and the fact that this Bill creates the funding model that will almost certainly enable a final investment decision on it to be made, the Minister needs to be more transparent with the Committee about the future of the CGN minority stake, because the answer could have real implications for the applicability of the funding model set out in this legislation, and, as a result, the bills that consumers in all our constituencies will pay in the years ahead.
We heard from Professor Stephen Thomas in our evidence session on Tuesday that the cost of buying out the CGN minority stake in Sizewell C is likely to be a tiny fraction of the £1.7 billion allocated to nuclear in the Budget, so what will the rest of that public funding be used for? Will it in whole or in part be used to finance Sizewell C beyond financial closure? If so, how do the Government intend to require the consortium to allow them to participate, and will the investment of direct public funding, if made, have any impact on the amount of RAB financing that will be required for Sizewell C to proceed?
Whatever the £1.7 billion committed to in the Budget is ultimately used for, the involvement of CGN in UK nuclear power over recent years illustrates the risks associated with foreign states, particularly ones of an authoritarian nature, financing and operating critical national infrastructure. We should not only learn the lessons of that, but ensure that clauses 1 and 2 are tightened so that the Bill cannot be used to facilitate such involvement in the future. That is the purpose of amendments 1 and 2. Taken together—this follows on from the point made in the intervention earlier—they would ensure that the Secretary of State cannot designate a given company to benefit from the RAB model provided for in the Bill if the company in question was owned and directly controlled by a foreign power. Their combined effect would not be to prevent the coming together of consortia that are not UK majority-owned. That would almost certainly render future projects unviable or more costly, but the amendments’ incorporation in the Bill would ensure that consortia drawing upon the RAB model could not include investors owned and controlled by a foreign state.
The use of the word “controlled”, as per amendment 1, is critical. This follows on from the point I made in response to the hon. Member for Kilmarnock and Loudoun. We are acutely aware that in attempting to amend the Bill to prevent a company such as CGN from benefiting from the RAB model, we would not wish to prevent all companies in which states have a majority interest—EDF is the most obvious example—from doing so. That is why amendment 1 specifically defines “owned by a foreign power” as one owned and controlled by a foreign state.
I hope the Minister responds to the amendments in the constructive spirit in which they have been tabled and that the Government will see the value of incorporating them into the legislation.
Alan Brown
It is a pleasure to serve under your chairwomanship, Ms Fovargue. In my intervention, I wondered if the amendments would technically preclude EDF under the RAB scheme. I hoped that the amendments were a stalking horse for Labour to come round to our way of thinking regarding a new nuclear power station, but unfortunately, that does not seem to be the case.
That said, I support the amendments. It is crazy that decisions have not been made before now about excluding China General Nuclear from critical infrastructure. The UK Government probably acted on the back of the United States’s actions to remove Huawei from critical telecoms infrastructure, so it makes no sense that a Chinese state-operated nuclear company is allowed to participate and invest in and possibly, if it gets its way, construct a new power station at Bradwell. That makes no sense. I would like to hear what the Minister has say about that. In principle, I support the amendments, although, ideally, I would rather we were not doing new nuclear.
Dr Whitehead
Continuing briefly from my initial remarks, I want to make it clear that the amendments—and all our other amendments—are based on the idea that the Bill should be strengthened, not subverted in any way. I can assure the Committee that the hon. Member for Kilmarnock and Loudoun’s hope that these two amendments are a stalking horse to remove EDF from the project is certainly not the intention. The intention is precisely to ensure that the nuclear programme in this country is sound, robust and integral to our security in all senses of the word.
We do not think the amendments will do anything other than put us in a much better position to ensure that the financing of nuclear is done on a clearer footing and on the basis that we know who is putting money into the project, in this instance Sizewell C. I concur with my hon. Friend the Member for Greenwich and Woolwich that effectively the Bill is pretty much about how Sizewell C gets going, comes to financial closure and gets into its construction period so that it produces electricity in good time for the grid.
It is important that the Committee thinks carefully right at the beginning of its proceedings about how we want to framework that nuclear financing; how we want to framework the arrangements which, after all, will be the umbrella under which we have all our other discussions in Committee. The framework that we have at the moment, particularly for Sizewell C, as my hon. Friend has set out, is a sequence of memorandums and a number of things further to memorandums, which appear to lock our nuclear development into an arrangement with the Chinese General Nuclear Power Corporation, which is very much an instrument of the Chinese state. Although companies have been set up—set up for the purpose of engaging in Hinkley—with one nominated director, given who those nominated directors are and how they go back to China it is very clear that those companies are centrally state-controlled, and are state-controlled vehicles for investment—just as we have stated in our amendment—for the promotion of that particular foreign power’s interests, in this instance in nuclear power.
Given those interests in nuclear power, it is important that we do not lose sight of the overall scheme of things in considering investment or otherwise in Sizewell C. It is important to understand that the deals, as it were, that were made between 2013 and 2016 were very much about that sequence of events leading from investment in a power station with a minority stake, with a reactor that would be built in France, within a framework of a company controlling that, that is a private company but has substantial state connections, but nevertheless is a very different model from what we are faced with regarding the CGN investment.
So there has been a sequence of events that starts with Hinkley C, with a minority stake, a French reactor and a French company with its own investment in the majority of the plant, and then a contract for difference at the end of it for production, moving to the second event in the sequence, which was envisaged at that time to be Sizewell C, with an undefined arrangement at the time for investment elsewhere in the plant, but a clear stake in that plant, beyond financial closure, of the Chinese General Nuclear Power Corporation, coming to 20%. And then would come the prize at the end of the sequence—certainly the prize for the Chinese Government—of the entry into European nuclear development for the first time of a Chinese reactor, the Hualong One. That would be the basis of a Bradwell nuclear plant. That reactor would separately go through a generic commissioning process; the initial moves towards that are being made. That reactor would then be at the core of the Bradwell plant, and Bradwell would be majority-owned, run, controlled and operated by the Chinese state nuclear corporation.
So, leading down the path of that sequence, Sizewell C being a stopping-post in that sequence and the end of it being Bradwell, is obviously the nuclear project that we are discussing at the moment. Therefore, the part-ownership of the nuclear company must be seen as integral to that overall process and that overall agreement; and if we do nothing and say nothing about that involvement, we are effectively condoning that whole sequence of agreements.
Those agreements were initially made in the form of a memorandum of understanding on civil nuclear collaboration in 2013, and effectively those stakes that I mentioned were set out then. George Osborne, the then Chancellor, stated that Chinese companies were taking a stake, including potential future majority stakes, in the development of the next generation of British nuclear power. So, it was pretty explicit, certainly from the UK Government side, what they thought that sequence was going to be about, and it was actually pretty similar to the idea that the Chinese had, as far as their involvement in nuclear was concerned.
That was followed, during Chinese President Xi Jinping’s state visit to the UK in 2015, by a “Statement of Cooperation in the Field of Civil Nuclear Energy”, which welcomed the minority investment and the proposal for a Chinese-led project at Bradwell B in Essex. What is less well known is that that was followed by a very lengthy document, “Secretary of State Investor Agreement”, which was primarily about investment by a number of parties, including CGN, in Hinkley but which also related to the whole sequence. It is arguable, therefore, that there is a substantial lock-on of Chinese involvement not just in 20% of Sizewell but in the whole sequence, as laid out in the various memorandums of understanding and the investment agreements undertaken between 2013 and 2016.
The question is: what are we going to do about it? The proposal is for a RAB scheme to cover the project’s investment costs. A decision will have to be made about how the RAB scheme will work and we will discuss the detail later, including how Ofgem will set out the allowable costs that form the backbone of a RAB agreement. Ofgem will have to assess the overall allowable ceiling for the project costs, particularly in its construction phase but also during its production phase. That will form the basis on which the money to meet those costs will be taken in from the general bill-paying public. The ceiling for those allowable costs will be determined to a considerable extent by how much investment is likely to be required and, therefore, how much of it will have to be underpinned by the RAB arrangement at the Sizewell plant. If a substantial part of the plant is to be financed by the China General Nuclear Power Corporation, then logically the allowable costs would relate to the rest of the required investment, rather than all of it. Crucially, the decisions and discussions that this Committee is going to enter into will be determined by what that 20% consists of.
The Red Book offers a tantalising clue as to what that might be. As my hon. Friend the Member for Greenwich and Woolwich said, a total of three lines focus on the £1.7 billion of new direct Government funding being made available, essentially for the Sizewell C project. He said that the Red Book is possibly wilfully obscure; it is certainly obscure, and for a number of reasons. All the Budget and spending review document has to say about the £1.7 billion Government funding is that it is being provided
“to take a final investment decision this Parliament, subject to value for money and approvals.”
The Chair
Order. We will suspend for a few seconds to enable the sitting to be broadcast more clearly.
The Minister of State, Department for Business, Energy and Industrial Strategy (Greg Hands)
Thank you, Ms Fovargue. It is a pleasure to serve under your chairmanship. I look forward to working with Committee members as we scrutinise this important and timely Bill. To begin, I want to briefly remind Members of the purpose and background of the Bill.
As all Members will agree, it is vital that the UK continues to lead the world in tackling climate change. That is why we have committed to a 78% reduction in emissions compared with 1990, as well as fully decarbonising our power sector by the year 2035, which will mean ensuring that the UK is entirely powered by low-carbon electricity, subject to security of supply. To deliver that, we will need new nuclear power plants, which are the only proven technology deployed at scale to provide continuous, reliable, low-carbon electricity.
Alan Brown
The Bill is mainly about Sizewell C. Can the Minister tell me where any European pressurised reactor is operating at scale connected to the grid at this moment in time? He is talking about proven technology.
Greg Hands
I am speaking in a general sense about nuclear being a proven technology, deployed at scale. That has been the case since 1957 or ’56, with the very first nuclear power plant in the world here in the United Kingdom at Calder Hall just by Windscale.
However, it is clear that we need a new funding model to support the financing of large-scale and advanced nuclear technologies. The Bill will deliver that, in the form of the regulated asset base model. I am sure the Committee will discuss the detail throughout our sittings, so I do not intend to go into the minutiae now, but I want to outline the Government’s position that this is the best way of delivering new nuclear projects while delivering value for consumers.
I am glad that the Opposition recognised that point through their support for the Bill on Second Reading. That support has been reiterated today by Her Majesty’s official Opposition, if not by the Scottish National party. I am grateful for their useful contributions on Second Reading and look forward to further discussions in Committee. Similarly, I recognise the interesting points raised by the SNP in that debate. I recognise that the SNP has a principled—if, in my view, irrational—objection to new nuclear projects. Nevertheless, I am pleased to subject the Bill to the SNP’s careful scrutiny as well.
I hope that as we move through Committee and the rest of proceedings on the Bill, we can work in collegiate and co-operative ways, considering the individual clauses of the Bill to ensure that it can meet its objectives. I think that was the position laid out by Her Majesty’s loyal Opposition at the start of the debate.
I turn to amendment 1, tabled by the hon. Members for Southampton, Test and for Greenwich and Woolwich. It is linked to amendment 2 to clause 2, and I am happy to debate both together. The amendments seek to insert as a criteria for designation that the company is not wholly or partially owned by a foreign country. I want to touch briefly on the implications that the proposed definition could have for the wider policy of financing nuclear projects in this country.
If the definition as drafted could rule in all companies that were seen to be controlled by state sponsors, it could thereby rule them out of eligibility for a RAB. The RAB allows us to bring new sources of financing into nuclear projects and reduce our reliance on overseas developers, but it is not credible to introduce a blanket exclusion on developer participation in RAB companies, many of whom are to some degree state-sponsored, including some of our closest international partners. One has already been named during proceedings on the Bill and in Committee this morning.
I am sure that the intention of the hon. Members does not lie in that direction, as that could make it much harder to bring new, appropriate projects to fruition. We should never forget that the Bill’s purpose is to make it more possible to finance nuclear projects in the future, not less so. However, I welcome the focus on national security in one of the UK’s key infrastructure networks, a point made by Her Majesty’s Opposition. We will no doubt focus on that matter fully in our consideration of all the amendments.
I will take the points raised in turn. The hon. Members for Southampton, Test and for Greenwich and Woolwich both asked what the £1.7 billion in the Budget and spending review is made up of. We had an extensive debate on the Budget—I think it was four days in all—and there was a chance to examine this, but I will now reiterate the purpose of the money.
Alan Brown
The Minister will have noticed in the evidence session on Tuesday when I put the question to the Sizewell C company about the derivation of the £1.7 billion and what discussions the company had had with the Government about that, the lady did not seem to know, or to believe there had been discussions with the Govt. How does this £1.7 billion get defined if the Sizewell C company does not know its derivation?
Greg Hands
To be fair, I also listened carefully to Sizewell C’s evidence, and the company will be as aware as we are that this is an active negotiation. I was not in any way surprised that Sizewell C’s representative did not wish to be drawn on the question of exactly where the £1.7 billion would be deployed. We have outlined in the Budget document the sorts of areas that would be in scope. None the less, this is an active financial negotiation.
Dr Whitehead
Does that mean that the evidence that was given to us in our session with Sizewell C was not correct, or was ill-informed? Or was it informed, but matters have moved on since then? Or was it—
Dr Whitehead
Was it, indeed, as the hon. Member for Bolsover suggests from a sedentary position, diplomatic? If so, was that diplomatic answer given after any sort of instigation from the Government, or was it just diplomatic on the basis that Sizewell C did not want to tell us?
Greg Hands
I do not think the hon. Gentleman is correct. It is not fair to conclude that the evidence from Sizewell C was incorrect, or that it was ill-informed in any other way. This is an active commercial negotiation. We have laid out the parameters of the £1.7 billion, and is in no way surprising that our negotiation partners may not wish to comment on what they think it is likely to be spent on. After all, it is taxpayers’ money, which will be deployed by this Government to move forward a nuclear project.
Alan Brown
The Minister made a key point: this is taxpayers’ money. Surely, we as taxpayers have a right to know, even roughly, what services will be procured from this £1.7 billion. I would still expect the Sizewell C company to have discussions with the Government and say, “We need to do x, y and z in order to de-risk this project and get it to the final investment decision stage”.
Greg Hands
I would say two things in response. First, Sizewell C may not feel it is appropriate to comment on the deployment of taxpayers’ money. Secondly, I know from long experience of Government that often the best way of securing taxpayers’ money in a negotiation is not to reveal too much about what approach the Government might be taking. We have laid out in the Budget document, which was quoted by the hon. Member for Southampton, Test, what we think is going to be in scope—what the £1.7 billion might be spent on.
The hon. Member for Greenwich and Woolwich asked a more general question about China. He asked whether this was about sending a message to China, or words to that effect. The answer is no. The UK welcomes foreign investment in our infrastructure, but as we have always said, that should not come at the expense of our national security. It is already the case in UK law that all investment involving critical nuclear infrastructure is subject to thorough scrutiny and needs to satisfy our robust national security and other legal and regulatory requirements. The National Security and Investment Act 2021 also strengthens our powers to act should we need to.
Matthew Pennycook
I take the point about the National Security and Investment Act. The Minister will know that that was given Royal Assent only in 2021. The strategic investment agreement that applies to Sizewell C was signed off—agreed—in October 2016. I think that I am right in saying that the National Security and Investment Act does not apply retrospectively, so how does it cover the specific arrangements in place as a result of that deal? Can he expand on what regulation is in force to give us assurance about safeguards in relation to foreign states and investment in civil nuclear?
Greg Hands
I thank the hon. Gentleman for that intervention. Of course, the final investment decision has not yet been taken on Sizewell C. All the relevant parts of the NSI Act will be in place—he is right to say that it got Royal Assent this year—but that final decision has yet to be taken.
The hon. Gentleman asked about Chinese involvement at Hinkley. May I be absolutely clear? The Bill is not reopening that decision. Hinkley Point C is vital to reducing our reliance on fossil fuels and exposure to volatile global gas prices. CGN is a partner in financing and building that important project. There is no involvement by any Chinese company in any major contract at Hinkley, including the instrument and control system.
As for Sizewell, to be clear, this Bill does not determine the ownership structure of Sizewell C or any other future nuclear project. That is another really important point to understand about the Bill. The Bill increases our options for financing nuclear projects, ending our reliance on overseas developers for finance—we are not excluding overseas developers—which has led to the cancellation of other nuclear projects in the UK. It will ensure that our own new nuclear power plants can be financed by, for example, British pension funds and institutional investors—often from our closest partners. That is the purpose of it.
Matthew Pennycook
I would like to pick up and press the Minister on the thrust of amendments 2 and 1, which is a consequential amendment. I take what he is saying about the purpose of the Bill being to attract, potentially, more UK investment—we do not know how much, but potentially—and about not wishing to exclude foreign investment. I take the point that he made earlier about the language used in our amendments and how he sees it as meaning a blanket ban. I would argue that it does not have that intent. There are complexities here, but does he not differentiate in his own mind between state-sponsored companies and state-controlled companies—controlled by foreign powers—that his own Government say pose a systemic challenge, and if he does, why does he not think that it is worth putting this in the Bill? Surely there is a need to differentiate and ensure that those types of companies—the latter—are not able to access RAB funding.
Greg Hands
I thank the hon. Gentleman for that intervention. Looking at the amendments, amendment 2 states that
“the nuclear company is not wholly or in part owned by a foreign power”
and amendment 1 states that owned by a foreign power means
“owned by a company controlled by a foreign state and operating for investment purposes.”
To be frank, I have a different interpretation, or at least I am not fully seeing his interpretation as being what he has in the amendment. The amendment strikes me as being worded in such a way that it could, for example, include nuclear operators from some of our closest partners. I look at what I see in front of me, rather than necessarily what Her Majesty’s loyal Opposition say that something might mean.
Matthew Pennycook
If the Minister is unhappy with our language, will he undertake to introduce Government language on Report that satisfies that differentiation?
Greg Hands
As I have made clear, we think that the Bill adequately addresses these issues, particularly in combination with the National Security and Investment Act, so I do not see it as necessary for us to make any further clarification. Ultimately, the Bill is about bringing in more financial options for future nuclear power, not cutting them.
The hon. Member asked about Bradwell. To reiterate, that is not a decision for now. CGN does not have regulatory approval for its reactor, nor has it submitted any applications to build a nuclear plant in Essex. We are in negotiations for Sizewell C, as the most advanced nuclear project in the UK.
Dr Whitehead
I am afraid the Minister cannot have it both ways. Either the Bill is about financing Sizewell C or it is about financing nuclear power more generally, in which case Bradwell surely has to come into the equation. We could be committing today to a RAB model that could, in principle, help to fund Bradwell, if it goes ahead. It is part of the linked sequence that has already been agreed in heads of terms by the UK Government and the Chinese Government, effectively. He says that it is not a discussion for today, but that is true only if the Bill is just about Sizewell C, in which case his statement that the Bill is potentially about other things is not correct. Which is it?
Although the Bill is effectively about financing Sizewell C, it has implications elsewhere. The Minister says that it is not relevant because the Hualong reactor does not yet have generic approval. That is not a question of making a decision about the involvement of foreign powers or anything like that; whether the reactor gets generic approval for use in UK nuclear markets is just a technical issue. I presume that he would want the nuclear authority to take that line and to give approval, or not, on the technical merits of the Hualong reactor, not on who is running it. That is the issue, however, concerning Bradwell. It has nothing to do with generic commissioning or otherwise; it is a much bigger issue, and he needs to recognise that.
Greg Hands
The hon. Member is correct that this is about future nuclear projects, but I stress two things. The original question from the hon. Member for Greenwich and Woolwich was about the future of Bradwell. I am reflecting on the specifics in relation to Bradwell. Of course, nuclear projects going forward are what the Bill is all about, but I will not comment on specific projects potentially going into a RAB process, because that, as we will discover later, is a properly defined process, set out with approvals from the Secretary of State after consultations. The Secretary of State will make essentially two determinations: will the project provide value for money, and is it sufficiently advanced? It would not be proper to comment on whether a specific project that we discuss today will have the ability in future to meet the two most important criteria laid out in the Bill.
Let me say a few extra things about amendment 2. The legislation gives the Secretary of State the power to designate a nuclear company and to modify the company’s licence subsequently to include RAB conditions. The Bill requires the Secretary of State to consider the two criteria that I just mentioned when deciding whether to designate a nuclear project. The two criteria are that the development of a project is sufficiently advanced to justify the designation and that the project is likely to result in value for money.
The amendments seek to include additional criteria for the Secretary of State to consider before designating a project. As I said, amendment 2 requires that a nuclear company may not be owned by a foreign power. I have already raised concerns about the unintended consequences of that for our ability to pursue new nuclear projects in this country.
Matthew Pennycook
The Minister is being incredibly generous in giving way, which I appreciate. On the basis of what he just said, could CGN continue to be involved in a future project as long as those two criteria were met for that project, whatever it might be?
Greg Hands
The National Security and Investment Act is also involved, so I do not think it would be appropriate for me to prejudge that process. I would ask whether the project is at a sufficiently advanced stage, whether it is likely to result in value for money and also whether it fulfils the other criteria set out in the Government’s current legislative approach.
I will not go over the consequences again. It is enough to say that I think the amendments could threaten our ability to bring forward new nuclear projects, even with our closest international partners. I nevertheless appreciate the attention paid by Opposition Members to the protection of the UK’s core infrastructure; we are wholly aligned on its importance and centrality. Although we welcome inward investment to the UK civil nuclear sector, we recognise the need to ensure that that investment is subject to appropriate scrutiny and is in the interests of our national security.
To reassure Members, I will focus on the robust protections that we have in place to control who invests in our critical infrastructure, which gets to the heart of many of the interventions by Opposition Members. Under the National Security and Investment Act, the Government will have significant oversight of acquisitions of control in a nuclear project.
Significantly, the Government will be able to intervene in any qualifying transaction, including an acquisition that would take the holdings to 25% or more of the shares or votes in an entity, or an acquisition of material influence over an entity. Such qualifying transactions would be subject to a national security assessment and would require the approval of the Secretary of State for Business, Energy and Industrial Strategy to proceed. That is a very tough condition on the sort of involvement that is at the heart of the interventions made by Opposition Members.
The Act also provides the Government with the ability to call in any acquisitions for assessment if there are national security concerns. From that assessment, the Secretary of State can order the prevention or alteration of the acquisition. The final funding model of any nuclear project would also be subject to full scrutiny from the UK Government prior to a final investment decision.
As currently drafted, both amendments would appear to violate the commitments we made in article 129 of the trade and co-operation agreement with the European Union, in which we agreed that we would treat investors from the EU no less favourably than UK investors. There may be multiple views within the Committee about that agreement with the European Union—the hon. Member for Kilmarnock and Loudoun voted against it in the hope of no deal—but those of us who support it believe that that article is important. The discrimination that the amendment appears to propose towards some of our closest partners and operatives in the nuclear sector would therefore be undesirable policy-wise and could put us in a difficult position.
I hope that I have convinced Members that the Government take seriously the need to ensure the security of our nuclear energy assets, including who can invest in them, and that the amendments as currently drafted are not workable. I ask the hon. Member for Greenwich and Woolwich to withdraw the amendment.
Matthew Pennycook
I thank the Minister for his response. I also very much welcome his opining on the sanctity of the UK-EU trade and co-operation agreement—a refreshing change.
I agree with the Minister entirely that we are aligned on the importance of national security in our critical national infrastructure, but I am afraid he has not done enough to reassure me. From the argument he made, as long as the two criteria that he spoke to are met, it seems that we could still end up, having passed the Bill, with financing from companies such as China General Nuclear in future UK nuclear projects. Also—this is critical—because of the sequencing agreement that has been spoken about at length and has been agreed already, that would allow China in theory to own, plan, finance and operate a site at Bradwell. We might have not only CGN financing involved, but CGN operation.
I remain unconvinced by what the Minister said about the national security regulation that is in place. In essence, he said, “Trust the Secretary of State when the point of decision comes”, but we do not think that that is enough. We think this should be in the Bill. If he is unhappy with the wording of the amendment, I invite him to propose wording more appropriate to his mind, but that does the job. We will therefore press amendment 2 to a Division—not amendment 1, which is definitional in nature and consequential. I beg to ask leave to withdraw that amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Greg Hands
I think we have already had the debate, but I will say briefly that the clause defines the key terms referred to in part 1 of the Bill. Subsection (2) defines a “nuclear company” as one that holds an electricity generation licence granted by the authority for a nuclear energy generation project. The authority is the Gas and Electricity Markets Authority, the governing body of Ofgem.
The clause goes on to make a distinction between an ordinary licensed company and one that has been designated by the Secretary of State to benefit from a RAB through having its licence modified by the Secretary of State. Subsection (4) defines a “relevant licensee nuclear company”. To become one such, it is necessary for the company to have had its licence modified by the Secretary of State to insert RAB special conditions and to amend the licence terms. It is also necessary for the company to have entered into a revenue collection contract with a revenue collection counterparty, so that RAB funding may flow to the company’s project.
Alan Brown
I appreciate that the Minister has been generous with his time. Will he clarify whether Sizewell C has an electricity generation licence? I could not find that on Ofgem’s website.
Greg Hands
I will write to the hon. Gentleman on that specific issue, perhaps this afternoon. I need to check whether Sizewell C has such a licence. I will get back to him.
Those steps in the clause are necessary to make clear the different stages that a company goes through under the RAB model.
Question put and agreed to.
Clause 1 accordingly ordered to stand part of the Bill.
Clause 2
Designation of nuclear company
Amendment proposed: 2, in clause 2, page 2, line 14, at end insert—
“(c) the nuclear company is not wholly or in part owned by a foreign power.”—(Matthew Pennycook.)
This amendment prevents the Secretary of State designating a nuclear company owned or part-owned by the agents of a foreign power.
Dr Whitehead
I beg to move amendment 3, in clause 2, page 2, line 14, at end insert—
“(c) the Secretary of State is of the opinion that the nuclear company is able to complete the nuclear project.”
This amendment requires the Secretary of State to give a view that a designated nuclear company is able to complete the project for which it is designated.
I am grateful to you, Ms Fovargue, for grouping amendment 3 on its own so that we can talk about it in its own right. Like the previous amendment, it seeks to add into the clause the designation of a nuclear company. We have not talked about the designation process, although I am sure we will.
The designation process is where a nuclear company that appears to have an interest in a plant, and has at least taken some steps to develop it beyond the conceptual state, is then given a preferential initial contract and a window—again, we will discuss the timescale of the window later—where it goes through the various processes of modifications of its licence to set itself up to take part in a RAB. It agrees to various things relating to the counterparty in the RAB process and agrees the initial ceiling for allowable costs for the project, which it has at the time of designation brought to a position where work can start to proceed. It is therefore on a track, but not in the RAB process at that point.
We attempted to put a third designation criterion in the clause a moment ago, which states that the designation criteria are that
“the development of the nuclear project is sufficiently advanced to justify the designation of the nuclear company”.
In other words, the project is more than just a drawing board idea. As I am sure the Minister will be painfully aware, we have had a plethora of nuclear projects in this country at various stages of advancement that have fallen by the wayside for various reasons. Some of them were relatively advanced and some were just concepts, but they were all reflected in the original planning documentation in, I think, 2011 in terms of consortia and sites and various other things that were given an overall green light in the planning process. The sites were not designated in the sense we are considering here, for nuclear development, but it is certainly true that a number of the projects suggested for those sites would not have passed the designation test before us today on the work having been done to advance the project.
Alan Brown
I understand where the hon. Gentleman is going, but where is the fall-back?. The Secretary of State is desperate to get a nuclear deal signed off, so he just signs it off: “Yes, I am of the opinion that this project will be completed.” Ten years down the line, it all falls apart and the project cannot be completed, a bit like the Californian example. What protection would the amendment introduce? It seems that the Secretary of State can just sign this off based on his opinion. If there are repercussions down the line, they do not come back on that Secretary of State.
Dr Whitehead
The hon. Member makes an important point, at least part of which we will discuss when we come to the procedures under which a potentially failed project might be rescued or transferred to other undertakings so that it can be delivered and completed, or if already operating, can continue to operate.
Dr Jamie Wallis (Bridgend) (Con)
In what circumstances is it conceivable that a nuclear project would be deemed not to have a realistic prospect of completion but at the same time to be value for money?
Dr Whitehead
It is quite possible that the Secretary of State could deem the first two criteria on the basis of work that the company had done to approach designation. However, unless the Secretary of State has in mind the whole picture at the point of designation—in the previous group of amendments, we touched on some of the things concerning the whole picture—it would be possible for him to conclude that, yes, on the basis of the work done so far, the particular mechanisms looked like they might produce, say, value-for-money electricity at a rate per kilowatt-hour that was compatible with market levels of electricity at that point or in the future or with value for money as far as other electricity production is concerned, but he might still not have a handle on whether the undertaking that the nuclear company was about to engage in was sound in the overall, as far as completion was concerned.
The hon. Member for Kilmarnock and Loudoun touched on an important lesson in that respect, which ought to be put before the Committee. He mentioned a case in California—it was not quite in California; it was a little way a way, although it began with the same letter. I am talking about the experience of a nuclear power plant in South Carolina in the United States. When I say the experience of a nuclear power plant in South Carolina, I do not mean that—because there is no nuclear plant in South Carolina; there are a bunch of a concrete foundings, walls and various other things that look like a nuclear power station, but it does not operate, it has never produced a single kilowatt of electricity and it remains abandoned.
More significantly, that project not only was abandoned but was commissioned precisely on the sort of criteria that are contained in the Bill. All those things were gone through by the South Carolina legislature, which put in place something remarkably similar to a RAB. Indeed, the bill payers of South Carolina were required to stump up money for the project as it progressed, and I am sure hon. Members will be interested to know just how much money went from the bill payers of South Carolina to that project and how much they got out of it as a result of introducing a RAB model in South Carolina. The answer is nothing. Some £9 billion of customers’ money went into the project, and they will continue to pay for that lump of concrete for the next 20 years in their bills because of the way in which the thing was constructed, all on the basis of agreements that looked pretty similar to what is in the Bill.
What South Carolina did not do was ask serious questions about the resilience of the various partners and companies involved in the project in the light of changing circumstances in terms of the construction of the project and the health of the companies involved. Among other things, costs went through the roof, the timescale increased substantially and one of the companies that was in charge of the project effectively went bust—it called for chapter 11 protection and was therefore unable to continue with the project. All those things could have been foreseen by the South Carolina legislature, but were not. The project went ahead, with the customers footing the bill, as various reviews subsequent to the collapse of the nuclear programme said, on the basis of something that was extremely unlikely to ever come to fruition as a nuclear power plant, not only because of the dodgy nature of the financing of the project but because it had completely unrealistic timescales—those involved expected to produce electricity within six years from the start of production and so on, none of which was properly overseen.
Alan Brown
I appreciate the hon. Gentleman giving way once more; I am starting to feel like I am on a mission to annoy each contributor—apologies. He makes valid points, and I understand his concerns and what he is trying to do, but I still do not understand how the amendment would preclude such a scenario. Surely, as well as the amendment, the Secretary of State would need to look at a list of criteria, with their sign-off verifying what factors have been considered to reach the opinion that the project is viable. Otherwise, the Secretary of State could just say, “I think this project will be completed—let’s move on.”
Dr Whitehead
Yes, indeed. The hon. Gentleman is right, to the extent that the amendment does not actually guarantee the success of a project as a result of its placement in the designation clauses. Of course, it is not possible to do that, because changing circumstances can mean that projects cannot come to fruition. The difference the amendment would make is that the Secretary of State would be required to look at all those sorts of things in the overall scheme of things as far as the company and the prospects for success of a particular project are concerned, in such a way that he could form an opinion, which he would undoubtedly have to publish, that he was as satisfied as he could be, having done all that work, that the project had a very high prospect of being completed, and he would have to underwrite that.
One thing I did not say about the South Carolina project is that a lot of it is now the subject of legal action, and various state officials are being hauled up before the courts for their lack of diligence in actually looking at the overall circumstances of the project when they gave the go-ahead on a similar basis to that which we are discussing. If the Secretary of State had to sign off, on the basis of the amendment being in the Bill, that it was all okay and could go ahead, and it turned out that it was not okay and could not go ahead, under circumstances that could have been foreseen, he would then be liable. That is potentially quite an important concentration of the mind, ensuring that the work had been done, as much as it could be done—I accept that it would not be a perfect operation—to ensure that there was a reasonable or good prospect that the company involved could complete the project. That is all the amendment says. It would be an important addition to the designation process.
We need to be clear that, as much as we can do the work, we have done the work in getting the designation clearly marked on the basis that the company really can deliver a nuclear plant and produce electricity for customers. As I have said, we are engaged in a RAB process, which ultimately lands on the customers. We absolutely do not want to ever land the customers of the United Kingdom in the same position that the customers of South Carolina are in today, so far as a nuclear power plant is concerned.
Ordered, That the debate be now adjourned.—(Mark Fletcher.)
Judicial Review and Courts Bill (Ninth sitting)
The Committee divided: - Ayes: 5 / Noes: 7 - Question accordingly negatived.
The Committee divided: - Ayes: 5 / Noes: 7 - Question accordingly negatived.
The Chair
Before we begin, I have a few reminders for the Committee. Please switch any electronic devices to silent. No food or drinks are permitted during sittings of the Committee, except the water provided. Members are expected to wear masks when they are not speaking, in line with current Government guidance and that of the House of Commons Commission. I remind Members that they are asked by the House to have covid lateral flow tests twice a week before coming to the parliamentary estate. That can be done at home, or if you want to come into the House, you can have it done here. Please also give each other and members of staff space when seated and when entering and leaving the room. Hansard colleagues would be grateful if Members could email their speaking notes to hansardnotes@parliament.uk.
Clause 32
Employment Tribunal Procedure Rules
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to consider that schedule 5 be the Fifth schedule to the Bill.
The Parliamentary Under-Secretary of State for Justice (James Cartlidge)
The employment dispute resolution system has responded impressively to the challenges presented by the pandemic. Despite the enormous challenges they faced, employment tribunals have now succeeded in returning to pre-covid levels of hearings. I should stress, because we have had a wide-ranging debate about technology and the role of digitisation in the courts, that a key reason for that is that employment tribunals have been among the greatest users of technology in enabling hearings to go forward. However, they still face significant challenges from a growing backlog. The pandemic has highlighted the need for a speedy and efficient process for making and amending rules for the employment tribunals.
Since the establishment of employment tribunals in 1996 under the remit of the now Department for Business, Energy and Industrial Strategy, responsibility for the rules and governance of employment tribunals has rested with Ministers in BEIS, as the Department responsible for employment law. This is the only area of the tribunal system where responsibility rests with a Minister in another Department; all other matters heard in the justice system have procedural rules that are the responsibility of independent judicial-led committees or of the Lord Chief Justice.
Clause 32 transfers the powers to make rules for the employment tribunals from the Secretary of State for BEIS to the tribunal procedure committee. It also makes the same committee responsible for rules in the employment appeal tribunal. Being judiciary-led, the TPC is better placed to make these rules. The transfer will allow for the development of a more closely aligned tribunal system. It means that we can respond more quickly when we need to amend procedure rules, for example to help to address the backlog in claims or in circumstances such as the pandemic. Schedule 5, introduced by clause 32, gives the TPC the same powers to make rules for the employment tribunals and the employment appeal tribunal as for the first-tier and upper-tier tribunals, and aligns the rule-making process.
It is important that the TPC has the right knowledge and experience when considering making or amending rules. Schedule 5 provides for two additional members to sit on the TPC. One will be appointed by the Lord Chancellor and will have experience of practice or advising in the employment tribunals and the employment appeal tribunal. The second will be appointed by the Lord Chief Justice and will have experience of sitting in employment tribunals. This will ensure that the TPC can call on the right level of expertise when making decisions.
Andy Slaughter (Hammersmith) (Lab)
It is a pleasure to be here again under your chairmanship, Sir Mark. Let me say first that we are not opposed to what the Government are proposing in this clause and, indeed, this part of the Bill, which is largely administrative. There are a few issues that we wish to raise. I think that I can do that logically under this clause and then be very brief—or even silent—on some of the other clauses.
The Minister is right that employment tribunals—industrial tribunals, as they were—go back some years and have a distinct history. In some ways, they were the forerunners of the tribunal system, which has effectively overtaken them in terms of procedure and organisation. Employment tribunals have a broad jurisdiction for employment matters, save in important respects such as their very limited role in breach of contract cases and no role in relation to personal injury. They are administered by Her Majesty’s Courts and Tribunals Service, but are outside the tribunal structure.
As the Minister said, employment tribunals are under either the joint supervision of the Ministry of Justice and the Department for Business, Energy and Industrial Strategy, or the Secretary of State for BEIS. That is anomalous. There have been many attempts over the years to correct and address the issue. Such proposals were made back in the 2001 Leggatt review, so we are catching up after 20 years. There have been various other measures in the interim. The 2004 White Paper proposed a tribunal process that should be separate from both the civil courts and the rest of the tribunal structure. The 2015 Briggs review preferred to put employment tribunals in with the civil courts. A case can be made for either of those options, although the drawback of placing tribunals in the civil court ambit is the lack of provision for lay members. Lay members are an important part of how employment tribunals work, and we would be loth to lose them.
There can also be conflicts of interest. BEIS is quite a substantial employer, and there could be something of a conflict by placing this part of the tribunal system within a non-judicial Department. For all those reasons, and the fact that we have a working TPC, what the Government have proposed seems to have a certain logic. The “but” is—and this is a feature of the Bill generally—that opportunities are being missed.
The Law Commission recommended last year that the Government look at time limits for bringing claims, look again at the issue of breach of contract, which I have already mentioned, and look at the key element of enforcement. Many employees—despite the difficulty of bringing claims, particularly if they have been dismissed or the claims deal with complex issues of law—win their cases and then cannot enforce against the employer. There is nothing to deal with those points. The Minister began by saying he thought the tribunal law system is doing a good job, and the people who work within the employment tribunal system do a very good job. However, they work under a great deal of pressure, and the Government have contributed to that pressure.
We have the debacle over charging for bringing claims, which the Government introduced in 2012-13. Unsurprisingly, to anyone except perhaps the Government, the number of claims fell by two thirds after that. Consequently, they felt able to shut down large parts of the network. The Supreme Court ruled that unlawful and claims began to climb again, although a lot of the damage that was done has not been unpicked. The latest figures I have show that, of the £32 million that was supposed to be repaid to claimants, only £18.5 million has been repaid. That is shocking. It shows that people have been unlawfully deprived of what should rightfully be theirs and that they paid fees that were deemed to be unlawful.
The point here is that, the Government having depressed the level of claims in a dramatic and significant way, and then seeing them rise again, there has been no sufficient response to that. The backlog was down at 22,698 in March 2018, but according to figures from March this year—the Minister may have more recent ones—it is now at 50,287. That has more than doubled in two years. Part of the reason is that there has been no strategic effort to restore the employment tribunal system to what it was before earlier cuts were made. We are not short of suggestions. Last summer, the Employment Lawyers Association produced a long list of what the Government could do: through ACAS; reviewing of the administrative capacity of each tribunal; using standard case management procedures; dealing with case management applications on the papers; using hybrid hearings where accommodation is a problem; improving the provision of legal advice; and allowing multiple claims to be put on one claim form.
I would like to see a number of things in the Bill, and the Minister may be able to address some of these points when he responds. The Minister says the measures will make the process more streamlined, which they may do, but only up to a point. The proposals will address the real, chronic and ongoing problems in the employment tribunal system only to a limited extent. We have the debacle over the fees, where many are deprived of their rights and are unable to bring claims or, after bringing claims, are not refunded the money they are owed. There is a long wait to get to a tribunal—I think the average resolution time is 45 weeks, which is appalling—and we also have those problems with enforcement, even if employees win their case. The system really is in a parlous state. I wish there were measures in the Bill, or elsewhere, to address those issues.
James Cartlidge
I will respond briefly, because I really would emphasise that the clauses are limited in their impact on employment tribunals. I certainly hope that no one is under the impression that I am pretending they are a wholesale, comprehensive reform of the employment tribunal system. I have in no way implied that.
I welcome the recognition by the hon. Member for Hammersmith that it is, in his words, anomalous that the rule-making powers are held by the Department for Business, Energy and Industrial Strategy. To that extent, I therefore assume he welcomes the transfer. As he said, it certainly makes sense, and there are many positive aspects in its favour. Having more flexibility in the way the rules are made for employment tribunals will enable them to better respond to the backlog and related issues. Of course, that is not in itself enough to drive down the backlog or improve the overall user experience.
The hon. Gentleman asks what other steps the Government are taking. We are recruiting more employment tribunal judges. We also have a very positive initiative called the virtual region, which we estimate will save about 500 sitting days in employment tribunals. It is a virtual region of judges who, because cases are heard online, can sit pretty much anywhere in the country and hear an employment tribunal case anywhere else in the country, underlining how important technology has been.
It is a bit strange that, when my right hon. Friend the Member for South Holland and The Deepings—who is not here this morning—spoke about his desire to revert to in-person hearings and roll back the digital progress we are making, he seemed to get a lot of sympathy from the hon. Member for Hammersmith. If we were to do that in the employment tribunal sphere, we would have a massive backlog, and we would have far more limited means of dealing with it. I am bound to say that we would be reducing access to justice, both for those seeking to bring claims and in terms of the judicial ability to respond with things like the virtual region.
I will not go any further. One should recognise when clauses have a very specific purpose, which these do. The measure is positive and will help us to improve matters and, alongside some of the other things we are doing, it shows we are driving forward a positive agenda for employment tribunals.
Question put and agreed to.
Clause 32 accordingly ordered to stand part of the Bill.
Schedule 5 agreed to.
Clause 33
Composition of tribunals
Question proposed, That the clause stand part of the Bill.
James Cartlidge
The clause will make the Lord Chancellor responsible for determining the composition of employment tribunals and employment appeal tribunals through secondary legislation. That duty can be delegated to the Senior President of Tribunals, the President of Employment Tribunals, or the President of Employment Appeal Tribunals. It also sets out a framework within which the Lord Chancellor or the presidents must exercise the power. That is the same approach as in the wider unified tribunal system. The clause will align the approach taken in employment tribunals to those tribunals, and will ensure that panel composition is a judicial function.
That does not mean that we will lose the unique characteristics of employment tribunals, or that we intend to move away from the current structure. Rather, the clause will provide the necessary flexibility to ensure that the composition of an employment tribunal or employment appeal tribunal can be tailored to the needs of users and the complexities of cases. It will mean that the handling of cases can be streamlined while ensuring that tribunals have the right composition to make fair and informed decisions.
Andy Slaughter
Again, we do no oppose the change. I make only one point, which I think the Minister alluded to, but that it may be useful to have on the record. It clearly makes sense to give discretion to the Lord Chancellor in terms of the composition of tribunals, but the distinctive lay element of them has been successful over the years. We would not want the change to alter that. The presumption should be in favour of it, save in circumstances where there are good reasons to derogate from it.
James Cartlidge
An individual with experience of appearing before employment tribunals and an employment tribunal judge or lay member will be appointed to sit on the committee so that the needs of the wider employment sector continue to be represented in the rule-making process. The tribunal procedure committee is also able to request external expertise to support the development of rules, including a representative to reflect the needs of business.
Question put and agreed to.
Clause 33 accordingly ordered to stand part of the Bill.
Clause 34
Saving for existing procedural provisions
Question proposed, That the clause stand part of the Bill.
James Cartlidge
The clause ensures that existing procedure regulations and rules, including for tribunal composition, are not automatically revoked by these measures. That means that cases will continue to be dealt with under existing procedure rules until the TPC makes new procedure rules. Cases will continue to be heard by panels made up of the existing composition until the Lord Chancellor makes new regulations. That will allow the transition between the existing provisions and new employment tribunal procedure rules to be managed appropriately.
Question put and agreed to.
Clause 34 accordingly ordered to stand part of the Bill.
Clause 35
Exercise of tribunal functions by authorised persons
Question proposed, That the clause stand part of the Bill.
James Cartlidge
The introduction of legal case officers has played a valuable role in helping employment tribunals to tackle the demands of the pandemic. They free up judicial time by allowing straightforward non-contentious administrative decisions to be made by legal case officers under the supervision of an employment judge. The clause will align an employment tribunal’s power of delegation to legal case officers with the wider tribunal system. It will also allow the TPC to make rules for legal case officers. The decisions of legal case officers are always reviewable by the judiciary, and that will remain the case.
Andy Slaughter
We do not oppose the clause. There is always a hesitancy in transferring powers from a judiciary to a lay or administrative officer. As the Minister says, it is done in other parts of the tribunal system. We just wish for reassurance that it will be kept under review, and that where changes are made—I am talking about the system, rather than individual cases—we will look at it again, and ensure that it is working properly and that applicants are not disadvantaged in any way by the changes.
James Cartlidge
Yes, that is a fair point. Judicial functions can be delegated to HMCTS staff across tribunals and the wider civil justice system, including in employment tribunals, as the hon. Gentleman acknowledged. The Bill gives the tribunal procedure committee the same powers to make employment tribunal rules on judicial delegation as it has for the unified tribunals, so that it is consistent. This will allow for the creation of harmonised tribunal rules and greater alignment across the tribunal system. We always keep all matters under review. This positive change is in keeping with the way the wider unified tribunal system works.
Question put and agreed to.
Clause 35 accordingly ordered to stand part of the Bill.
Clause 36
Responsibility for remunerating tribunal members
Question proposed, That the clause stand part of the Bill.
James Cartlidge
This is the final clause related to employment tribunals. As a consequence of the history of the establishment of employment tribunals, authority for the remuneration of pay and expenses for employment tribunal judges currently rests with BEIS, in contrast to the remainder of the tribunal system, where responsibility for the remuneration of panel members sits with the Lord Chancellor. The clause will transfer responsibility for that remuneration from BEIS to the Lord Chancellor, bringing employment tribunals in line with the wider tribunal system.
Question put and agreed to.
Clause 36 accordingly ordered to stand part of the Bill.
Clause 37
Discontinuance of investigation where cause of death becomes clear
Andy Slaughter (Hammersmith) (Lab)
I beg to move amendment 69, in clause 37, page 49, line 33, at end insert—
“(4) After subsection (2), insert—
(2A) The coroner is not to decide that the investigation should be discontinued unless—
(a) the coroner is satisfied that no outstanding evidence that is relevant to the death is available,
(b) the coroner has considered whether Article 2 of the European Convention on Human Rights is engaged and is satisfied that it is not,
(c) there are no ongoing investigations by public bodies into the death,
(d) the coroner has invited and considered representations from any interested person known to the coroner named at section 47 (2)(a) or (b) of this Act, and
(e) all interested persons known to the coroner named at section 47 (2)(a) or (b) of this Act consent to discontinuation of the investigation.”.
This amendment would ensure that certain safeguards are met before a coroner can discontinue an investigation into a death.
The Chair
With this it will be convenient to discuss the following:
Amendment 70, in clause 37, page 49, line 33, at end insert—
“(4) After subsection (2), insert—
(2B) If a coroner is satisfied that subsection (1) applies and has complied with the provisions at subsection (2A)(a) to (d), prior to discontinuing the investigation, the coroner must—
(a) inform each interested person known to the coroner named at section 47(2)(a) or (b) of this Act of the coroner’s intended decision and provide a written explanation as to the reasons for this intended decision,
(b) explain to each interested person known to the coroner named at section 47(2)(a) or (b) of this Act that the investigation may only be discontinued if all such interested persons consent, and
(c) invite each interested person known to the coroner named at section 47(2)(a) or (b) of this Act to consent to the discontinuation of the investigation.”.
This amendment would ensure that family members and personal representatives of the deceased are provided with the coroner’s provisional reasons for why the coroner considers that the investigation should be discontinued, to ensure that family members can make an informed decision as to whether to consent to the discontinuation.
Amendment 71, in clause 37, page 49, line 33, at end insert—
“(4) Omit subsection (4) and insert—
(4) A senior coroner who discontinues an investigation into a death under this section must—
(a) as soon as practicable, notify each interested person known to the coroner named at section 47(2)(a) or (b) of this Act of the discontinuation of the investigation and provide a written explanation as to why the investigation was discontinued, and
(b) if requested to do so in writing by an interested person, give to that person as soon as practicable a written explanation as to why the investigation was discontinued.”.
This amendment would ensure that family members are informed in writing for the reasons for a discontinuation of an investigation, without being required to request this information.
Amendment 72, in clause 37, page 49, line 33, at end insert—
“(4) Section 43 of the Coroners and Justice Act 2009 (Coroners regulations) is amended as follows.
(5) In subsection (3) after paragraph (a) insert—
“(aa) provision for the establishment of an appeals process for interested persons who disagree with the decision to discontinue an investigation under the provision in section 4 of this Act.”.
The purpose of this amendment is to ensure the Lord Chancellor establishes an appeal process for families who disagree with the decision to discontinue an investigation.
Andy Slaughter
We now come to the part of the Bill that deals with coroners, to which we have tabled a number of amendments and new clauses. We appreciate that the clauses in the part of the Bill we have just discussed, and indeed in other parts of the Bill, are very much a template for the Government to take forward procedural changes to parts of the courts and tribunal systems. We essentially have two things to say about that.
First, we are not against any of that per se, particularly where the aim is to make what is proposed more streamlined, efficient and economical. However, we must look at safeguards, because often in the process, as we have seen in earlier parts of the Bill on criminal procedure and online procedure, there can be dangers to current users of the system that need to be addressed. Secondly, as addressed in our new clauses, the Government are not short of advice on improvements to the coronial system, including most recently through the report of the Justice Committee, which we debated in Westminster Hall, but many opportunities for improvement simply have not been taken. We highlight some of those around representation, and vulnerable representation, which we will come on to. That is disappointing, given that that report is only the latest in a whole series, going back to Tom Luce’s report in 2003—although there are many more recent than that—that have drawn attention to the limitations and the need for improvements in the coroners system. We just wish that there was more to address that, either in the Government’s response to the Justice Committee report or in the Bill.
I thank some of the organisations that provided briefings to us, including Justice, the Association of Personal Injury Lawyers and, principally, Inquest, which I will say a bit more about when we debate the new clauses. It has been an outstanding organisation in representing, and fighting the cases of, bereaved families for many years.
I have concerns about clauses 37 to 39. Clause 37 will broaden the circumstances in which coroners can discontinue investigations, Clause 38 gives coroners powers to hold inquests in writing, and clause 39 enables the wider use of remote hearings, including the power to hold remote hearings with juries. I will argue that the increase in discretion to discontinue investigations in clause 37 risks important evidence not being tested and complex cases not being publicly scrutinised. I will describe the lack of evidence to support the introduction of clauses 37 to 39 and how evidence instead suggests the need for careful safeguards to ensure that proper investigation and scrutiny is permitted where necessary, with due weight given to the wishes of the family. I will also argue that the Bill should be amended to include provision on public funding for bereaved families at inquests where state bodies are involved.
Chapter 4 deals with coroners and suggests that it will improve the efficiency of the service in the light of the backlogs in coroners’ courts due to the pandemic. The measures in clauses 37 and 38 were recently recommended by the Chief Coroner in his 2020 annual report. I am not aware of some other cause or evidence— the Minister may want to point me to some—for these measures to be introduced. It is notable that none of the conclusions or recommendations in the Justice Committee’s May 2021 report on the coroner service provides any justification for these measures, despite the Committee’s detailed analysis of the current state of the coronial system. It is extremely concerning that the argument that these measures are needed to address the covid-19 backlog of cases in the coroners’ courts is unevidenced, especially given the strong argument that the measures will lead to corners being cut and crucial opportunities for hearing and scrutinising evidence missed.
In its report, the Justice Committee found there to be
“unacceptable variation in the standard of service between Coroner areas.”
In the absence of a national coroner service, which the Committee recommended but the Government have refused, a central concern is the widespread inconsistency in approach by individual coroners in relation to all aspects of the inquest process—a postcode lottery, in other words.
James Cartlidge
The hon. Gentleman has twice referred to the backlog in coroners’ courts caused by the pandemic. Can I be absolutely clear? Does he accept that the pandemic has had a very significant impact on the backlog in the coroners’ courts?
Andy Slaughter
The pandemic has had a substantial effect on almost every aspect of our waking lives and on backlogs throughout the court system. That does not abrogate the Government from responsibility for dealing with the backlog so called, or indeed for other reasons why backlogs have been building up in the system over that time.
I mentioned Tom Luce’s fundamental review, in which he wrote:
“The phrase we have heard more than any other during the Review is ‘the coroner is a law unto himself’. Virtually every interest has complained of inconsistency and unpredictability between coroners in the handling of inquests”.
Clauses 37 and 38 will further entrench levels of coronial discretion and inconsistency, adding yet more challenges for bereaved families forced to navigate the inquest system. The Government have not evidenced how these measures will address the stated problem of reducing the backlog of cases in coroners’ courts. The latest statistics on the coroner service indicate an 18% rise in deaths in state detention. Many of those cases are complex, meaning that these provisions are unlikely to apply.
Let me deal specifically with amendment 69 and amendments 70 to 72, with which it has been grouped. Clause 37 broadens the circumstances in which a coroner might discontinue an investigation into a death. The current law, the Coroners and Justice Act 2009, holds that where a coroner has commenced an investigation, they must proceed to an inquest unless the cause of death becomes clear in a post-mortem examination. The Government claim that is a costly and unnecessary step where the cause of death may become clear through other means, such as medical records. As such, clause 37 will amend section 4 of the 2009 Act to allow for an investigation to be discontinued if the coroner is satisfied that the cause of death is clear, thus removing reference to a post-mortem as a necessary requirement for discontinuing an investigation. If the investigation is discontinued, the coroner cannot then hold an inquest into the death unless fresh evidence later comes to light or a successful challenge is brought to the decision.
There are a number of concerns about that, and about the implications of the Bill for inquests and bereaved families. Amendment 69 seeks to address three main issues: the need to test evidence; what happens in article 2 cases; and the need to safeguard the wishes of families.
On the need to test evidence, I am concerned that clause 37 would allow a coroner to discontinue an inquest based on evidence that could change if tested. The current wording states that a coroner must discontinue an investigation into an individual’s death if they are
“satisfied that the cause of death has become clear in the course of the investigation”.
While the Chief Coroner states in his 2020 annual report that such a provision could include evidence such as medical records, the Bill itself does not clarify the types of evidence that could be used, and effectively allows any evidence obtained during the investigation to be used to justify discontinuance, without the opportunity for it to be challenged at a later stage.
James Cartlidge
As ever, the hon. Gentleman makes a number of interesting points. Some of them go quite a bit wider than the clause before us, although he did enter the caveat that, given the importance of this clause, he was making some broader points, and I think that is fair. Taken together, these provisions are very important in terms of the coronial court. They do address matters relating to streamlining and ultimately, therefore, the backlog; and before I go into the specific points that he raised, some of which were very sensitive and very important, I want to talk about the backlog.
What the hon. Gentleman said was incredibly important. He specifically acknowledged that covid is responsible in large part—or however he wants to couch it—for the backlog in the coroners’ courts, and he is absolutely right. Let us be absolutely clear about this: social distancing has had a dramatic impact in the courts, particularly where juries are concerned. That is true in the Crown court. It is true in the coronial court. It is simple maths. The coroners’ buildings were not designed suddenly to have a rule about 2 metres, which was there, after all, for everyone’s public health benefit. The coroner’s house in Sunderland, for example, has capacity for, I believe, 54 persons in the courtroom. With social distancing, it had 11, so it does not take a great leap of imagination to work out how much harder it would have been to dispose of cases with a jury.
Dr Caroline Johnson (Sleaford and North Hykeham) (Con)
In support of the Minister’s point, I can say that during my visit to a Crown court last week, there were five defendants who would normally be sat in the same dock in the courtroom, but because of social distancing, a separate courtroom and separate dock are having to be used just to hold the extra defendants, which means, of course, that that courtroom cannot be used for anything else.
James Cartlidge
I am grateful to my hon. Friend. Was it Lincoln, by any chance?
James Cartlidge
Ah! I asked because my hon. Friend is obviously a Lincolnshire MP. She is absolutely right. Since I got this job—I have been in post only a matter of weeks—I have visited Crown courts and magistrates courts around the country, and to someone who has not been to one recently, it is very striking to go to a Crown court and see the limitations caused by social distancing. We are trying to deal with those, but it has been a job of work to deal with them.
Dr Johnson
I just wonder whether my hon. Friend could update me on what work he is doing with the Department of Health and Social Care to alleviate some of these restrictions. Now that we sit next to one another in, for example, the House of Commons Chamber, is the social distancing measure still required?
James Cartlidge
There are some very good examples. There are one or two that we are working on at the moment, which I will go into more detail about at the appropriate moment. But the most important thing by far is that many existing courtrooms in the Crown court have come back into use as social distancing has reduced. For example, I was visiting Highbury magistrates, where the maximum number of people in the building had been lifted, because, for example, when people arrive to be allocated to cases—there are all kinds of reasons why we have lots of people in a court building—the capacity in itself becomes a significant constraint.
I appreciate that this provision is about coroners, but what I am describing is fundamental to the current debate. I could not care less, frankly, what people say on Twitter. They are all predetermined—there is not a single swing voter out there. But the Labour party has now strongly put forward a message, effectively, that the backlog in the Crown court is not because of covid but because of this Government. I find that wholly disingenuous. It is not only inaccurate—the hon. Member for Stockton North is shaking his head. It is not only inaccurate; it therefore conveys a false sense of the reality on the ground.
Let me give a statistical example. On 31 December 2009, the outstanding case load—what we have generally come to call the backlog, although there is always an outstanding case load—was 47,713. In December 2019, it was 38,291. Surprise, surprise: when courts were closed because of social distancing and jury trials suspended—although we restored them as quickly as possible—that figure shot up. It created a huge bottleneck. And we still have those problems. It really matters what we say on this, because people must understand the extent to which the pandemic has hit our ability to dispose of cases, because obviously it therefore dictates the solutions. On this side, as my hon. Friend the Member for Sleaford and North Hykeham said, that has meant, for example, trying to lift restrictions where we can, which I think is very important. Therefore I am grateful that, in the matter of coronial courts, the hon. Member for Hammersmith has put on the record his recognition of the impact of covid on the backlog.
Andy Slaughter
The sensitivity of this is pretty clear. We have suddenly veered off to talk about backlogs in the Crown court. There will be ample opportunity to debate those matters in future. The relationship between backlogs and covid is a complicated one. No one is saying, clearly, that covid has not put pressure on the courts system—that would be bizarre—but the Minister is misinterpreting what I said. The Government have two responsibilities here. First, they must look at their responsibility for the extraordinary cuts in justice budgets that occurred post 2010, long before covid was ever thought of. For a whole raft of reasons to do with lack of legal aid, court availability because of court closures and so on—the Minister knows all the arguments—we have put ourselves in that vulnerable position, as we did in other areas, such as the NHS. The fact that the court service, including the coronial service, is in a parlous state is at the door of the Government—the Minister was not there, but his colleagues were in government during that time. So, first, they must take responsibility for that. Secondly, they must now take responsibility for reducing backlogs, whether they were caused by covid or were pre-existing before covid. Trying to exculpate himself from that, he does himself no service.
James Cartlidge
I look forward to debating that further. Labour have pulled their Opposition day debate on the backlog twice, one of which was for good reason, given the business that the House was debating. I will be delighted if they have an Opposition day debate on the backlog at their next opportunity, because it is important to stress the very positive things that the Government are doing.
The reason I made that point is that the whole purpose of the provisions is to streamline the courts in the coronial system, so of course it matters if the hon. Member for Hammersmith accepts covid causation in the coronial courts backlog and yet, for political reasons, the Opposition’s central message on backlog in the Crown courts magically does not relate to social distancing measures that have been so profoundly challenging to holding jury trials in particular and for cases with multiple defendants. But there we are. All I would add is that if he wants to go back to 2010, bring it on in that debate, because we know what their plans would have been had they got into government. He should always remember that.
On the specific points, I have great sympathy for those families who have had stressful cases in the coronial court or had cases in which they were disappointed with what happened. Obviously, as a Minister, I cannot comment on the specific cases raised by the hon. Gentleman. Those are determined by our independent judiciary, which is an important part of our constitution, but I sympathise with the families. Bereavement is an inherently distressing experience, we can all agree, and in part that is why we are trying where possible to address and reduce that anxiety with the measures in the Bill. For example, in this clause we are trying to reduce some of the bureaucracy that can come with bereavement.
The hon. Member for Hammersmith made a couple of other specific points about coroners’ courts and the Justice Committee report. He was recently a member of that Select Committee, and I pay tribute to his work on it, and to the Committee more broadly under the chairmanship of my hon. Friend the Member for Bromley and Chislehurst (Sir Robert Neill). Recently, I spoke about such matters at length in a Westminster Hall debate on coroners, but to be absolutely clear, we have accepted six of the recommendations made by the Justice Committee in its report on coroners published in May. To enact some in the Bill is incredible timing—to have Committee recommendations in a Bill within six months. The obvious example is clause 41, dealing with the merger of coroner areas, which we shall come on to.
The other important specific point that I wish to make is on safeguards. Again, the hon. Member for Hammersmith is absolutely right. As I have said throughout the Committee’s proceedings, streamlining measures—generally technological, but not always, as some might be in procedure or when a hearing is held and so on— are there to improve efficiency, and in itself that can actually help families. For example, if we reduce the need to hold an inquest, particularly because it has proven to be unnecessary because the cause of death was natural causes, that can remove some of the bureaucracy that can be faced by a bereaved family.
Andy Slaughter
If those safeguards exist, as the Minister says, why are they not on the face of the Bill? They are, at least in part, in clause 38, which we are going on to discuss, so why would the Minister not accept some or all of the safeguards that we propose?
James Cartlidge
I will be addressing all the points, but the hon. Gentleman is right: clause 38 contains very significant safeguards.
The intention behind clause 37 is to provide coroners with the flexibility to discontinue an investigation into a death where a death from natural causes has become clear through means other than a post-mortem examination. It is intended that the clause will negate the need for unnecessary procedures and processes, freeing up capacity and resources for the coroner to concentrate on more complex cases. The clause should be read along with section 4 of the Coroners and Justice Act 2009, which it amends.
Amendment 69 proposes to introduce additional safeguards into clause 37, as discussed, by requiring additional conditions when a coroner seeks to discontinue an investigation into a death where the cause of death becomes clear in the course of investigation, which typically will be where medical evidence shows that the death was from natural causes. The safeguards include a requirement that the coroner seek consent from interested persons before discontinuing such an investigation. Although I understand the hon. Gentleman’s concerns, I would like to assure him that the amendment is not necessary. The 2009 Act already provides the safeguards that the amendment seeks to include in the Bill. Section 4 of the Act sets out instances where the coroner may not discontinue an investigation, which include violent or unnatural deaths, or deaths in custody or other state detention.
I also remind the hon. Gentleman that coroners are independent judicial office holders, and the way that they carry out investigations and inquests is a matter for them. Introducing a requirement for the coroner to seek consent from interested persons before making judicial decisions would be not only fettering their discretion but would, in effect, remove the decision from the coroner—that is, the judge, which is what they ultimately are—into the hands of an interested person or a number of interested persons. That is at odds with the most fundamental principle of judicial proceedings, which is that only the judge or the jury makes the decisions, having listened to all the arguments without fear or favour. We must be mindful that while interested persons have certain rights at the inquest, they do not control the inquest process or its investigations. That is for the coroner alone to determine, as a judicial office holder.
I would like to assure the Committee that in his capacity as judicial head of the coroner service, the Chief Coroner will provide guidance to coroners accompanying all changes, which we expect coroners will follow.
Amendment 70 proposes that the coroner gives interested persons an explanation as to why they are considering discontinuing an investigation, to enable them to make an informed decision about whether to consent to the discontinuance of the investigation. Section 4 of the 2009 Act, which clause 37 amends, already provides that a senior coroner must, on request, provide a rationale for the discontinuance of an investigation. We expect the coroner to work sensitively with bereaved families to address any concerns that they may have regarding the investigation into their loved one’s death. However, as I have said, the decision on the direction of the investigation, including consideration of any discontinuance, must be for the coroner alone. In any event, section 4 has a narrow remit. It is to permit the discontinuance of an investigation where natural causes are found to be the reason for the death, and not in any other instances. Every day, coroners make the decision not to investigate deaths reported to them that they determine are of natural causes. Section 4 expressly prohibits the coroner from discontinuing an investigation where the coroner has reason to suspect that the deceased died a violent or unnatural death, or died while in custody or otherwise in state detention. That position remains unchanged.
Amendment 71 goes slightly further and proposes to set out in primary legislation a requirement for the coroner to provide to the bereaved family a written explanation of why they have decided to discontinue an investigation, regardless of whether a request has been received from the bereaved family. As I have said, section 4 of the 2009 Act already provides that the coroner must provide a written explanation for discontinuing an investigation on request. We consider that that ensures that only family members who actually require the information will receive it, and that additional work is not required of the coroner when it is not needed. After all, these are streamlining measures. The Government’s intention behind the measures on coroners in the Bill is to reduce unnecessary procedures in coroners’ courts and unnecessary distress to bereaved families. The amendment runs counter to the Government’s intentions and would add additional administrative process to the system. Providing such information unsolicited could also unintentionally distress bereaved families, although I am not suggesting that that is the hon. Gentleman’s intention.
Finally, amendment 72 would require a separate appeals process to be established for bereaved families who would like to challenge a coroner’s decision to discontinue an investigation into the death of their loved one. Although I understand that the hon. Gentleman wishes to ensure that bereaved families have recourse to appeal if they are not happy with the coroner’s decision, I must remind him that there is already a route for bereaved families to challenge a coroner’s decision by seeking judicial review of the decision. In 2020, there were just 20 judicial reviews against coroners’ decisions, of which five got permission and two were successful at hearing.
Additionally, an individual may apply to the High Court, with the permission of the Attorney General, for an investigation to be carried out if the coroner has not held one, or for a fresh investigation to be held, for example if new evidence comes to light. The High Court will allow a fresh investigation only if it would be in the interests of justice, but importantly, there is no time limit for making such an application, which of course is not the case with judicial review. We therefore do not think it appropriate to set up a seemingly freestanding, separate appeals process to deal with this single element of coroners’ judicial decision making.
I hope that I have adequately addressed the hon. Gentleman’s concern and assured him that appropriate safeguards are in place. On that basis, I urge him to withdraw the amendments.
Andy Slaughter
That was a disappointing response from the Minister. I was looking for any or all of the following: an explanation of why there are not safeguards in the clause that go beyond what is in the 2009 Act; perhaps acceptance of some, if not all, of the suggestions that we have made; and at least reassurances that the Government will look at mitigation. It is undeniable that the effect of the processes set out in this part of the Bill is to make it more difficult for bereaved families to be active participants in the process when all the evidence is that we should be taking steps to facilitate that.
The Minister mentioned the recommendations of the Justice Committee. I can tell him that the Justice Committee was extremely disappointed with the Government’s response. I will not go into that in detail now—it is outside the scope of these amendments—but I will quote from the debate that we had recently in Westminster Hall:
“I counted at least seven major omissions from the Government’s response, and many of them have been mentioned already…One is the provision of non-means tested legal aid,”
which we are coming on to.
“One is appeals on coroners’ decisions. One is the issue of pathologists’ fees. One is the national coroner service, which the report recommends. One is the inspectorate, which the report recommends. One is a complaints procedure. The last is the independent office.”—[Official Report, 28 October 2021; Vol. 702, c. 216WH.]
The significance of that is that, individually and collectively, those recommendations of the Justice Committee were trying to give some consistency and rigour to the way that coroners’ decisions are made. The reason I quoted Tom Luce was to point out that inconsistency has been the constant complaint over the years. Coroners, in a way that is not typical of the courts and tribunal system, can produce very anomalous responses to families in that situation.
The Government have chosen not to bring forward responses on the issues that I have mentioned that were raised in the Justice Committee report, and they have been generally quite negative about them, while not ruling all of them out. However, at the very least, we need the very specific safeguards that I have mentioned. Having heard everything that the Minister has said, we will press amendments 69 and 72 to a vote. I will not oppose the clause outright, but those amendments are, frankly, the least that is necessary to offer the safeguards that we have indicated.
James Cartlidge
Over the past year, the coronial system has shown great resilience in how it has coped with the impacts of the pandemic in ensuring that death investigations have continued as far as possible. I pay tribute to our coroners and all of those who work in the coronial system. We are, however, aware that a considerable number of inquests have been delayed due to the pandemic restrictions, and coroners, along with the Chief Coroner, are looking at post-pandemic plans to ensure that the system recovers.
We expect that the coronial measures introduced in the Bill will play a major role in the coronial system’s post-pandemic recovery, as they will reduce unnecessary procedures in coroner’s courts. This will provide capacity to coroners as they address inquest backlogs in their courts. The Government’s priority remains to ensure that bereaved families are at the heart of the coronial process. The measures in the Bill support this priority. Reducing unnecessary procedures in coroner’s courts will reduce the distress of bereaved families. Clause 37 gives the coroner the flexibility to discontinue an investigation where the cause of death becomes clear and it has been revealed through means other than a post-mortem examination.
Where the cause of death has become clear otherwise than through a post-mortem examination, clause 37 will negate the need for the investigation to proceed to an inquest, reducing the distress for bereaved families. The clause does not remove the statutory requirement for a coroner's investigation into deaths in custody or other state detention to proceed to an inquest. Inquests into such deaths will still be required to take place as usual. We expect that the Chief Coroner will issue further guidance on this and the other coronial measures to ensure consistency of approach across the coroner areas.
Question put and agreed to.
Clause 37 accordingly ordered to stand part of the Bill.
Clause 38
Power to conduct non-contentious inquests in writing
Andy Slaughter
I beg to move amendment 73, in clause 38, page 50, line 18, after “hearing” insert—
“(e) the coroner has considered the views of any of the interested persons named at section 47(2)(a) or (b) of this Act who are known to the coroner,
“(f) all of the interested persons named at section 47(2)(a) or (b) of this Act who are known to the coroner consent to a hearing in writing.”
This amendment will ensure that inquests are not held without a hearing if that is against the wishes of the deceased’s family.
The Chair
With this it will be convenient to discuss the following:
New clause 10—Publicly funded legal representation for bereaved people at inquests—
‘(1) Section 10 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 is amended as follows.
(2) In subsection (1), after “(4)” insert “or (7).”
(3) After subsection (6), insert—
“(7) This subsection is satisfied where—
(a) The services consist of advocacy at an inquest where the individual is an Interested Person pursuant to section 47(2)(a), (b), or (m) of the Coroners and Justice Act 2009 because of their relationship to the deceased; and
(b) One or more public authorities are Interested Persons in relation to the inquest pursuant to section 47(2) of the Coroners and Justice Act 2009 or are likely to be designated as such.
(8) For the purposes of this section “public authority” has the meaning given by section 6(3) of the Human Rights Act 1998.””
This new clause would ensure that bereaved people (such as family members) are entitled to publicly funded legal representation in inquests where public bodies (such as the police or a hospital trust) are legally represented.
New clause 11—Removal of the means test for legal help prior to inquest hearing—
‘(1) Schedule 1 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 is amended as follows.
(2) In paragraph 41, after sub-paragraph (3), insert—
“(4) For the purposes of this paragraph, the “Financial resources” provisions at section 21 (and in The Civil Legal Aid (Financial Resources and Payment for Services) Regulations 2013 do not apply.””
This new clause would remove the means test for legal aid applications for legal help for bereaved people at inquests.
New clause 12—Eligibility for bereaved people to access legal aid under existing provisions—
‘(1) Section 10 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 is amended as follows.
(2) In subsection (4)(a), after “family”, insert—
“or where the individual is an Interested Person pursuant to section 47(2)(m) of the Coroners and Justice Act 2009 because of their relationship with the deceased.”
(3) In subsection (6), after paragraph (c), insert—
“(d) or they fall within any of the groups named at section 47 (2)(a), (b) or (m) of the Coroners and Justice Act 2009.”
(4) Schedule 1 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 is amended as follows.
(5) In paragraph 41, after sub-paragraph (3)(c), insert—
“(d) or they fall within any of the groups named at section 47 (2)(a), (b) or (m) of the Coroners and Justice Act 2009.””
This new clause would bring the Legal, Aid, Sentencing and Punishment of Offenders Act 2012 into line with the definition of family used in the Coroners and Justice Act 2009.
Andy Slaughter
As we move on to clause 38, I will speak to amendment 73 and the three new clauses about legal aid for representation and other matters.
Clause 38 gives coroners the power to hold inquests in writing where they decide that a hearing is unnecessary. Currently, rule 23 of the coroners’ rules allows for documentary inquests to take place, where no witnesses are required to give evidence but a hearing must still take place. Clause 38 would change that by creating a new section 9C to the Coroners and Justice Act 2009, allowing a coroner to hold an inquest entirely in writing. New section 9C does include a list of considerations that the coroner must make before deciding to hold an inquest in writing. They include ensuring that all interested persons have been invited to make submissions; considering whether an interested person has put forward “reasonable grounds” for a hearing to take place; and determining that there is no public interest in holding a hearing.
The key concern with clause 38 is that there may be circumstances in which the bereaved family wants an inquest with a hearing but a coroner deems one unnecessary. Other interested persons invited to make representations may argue against a hearing. Holding an inquest in writing in this context could deprive the family of the opportunity to explore all available evidence and limit their ability to scrutinise the account provided by relevant authorities, including by hearing oral evidence and questioning key witnesses.
It is acknowledged that clause 38 provides some safeguards in this regard. However, we believe that those safeguards are insufficient. For instance, clause 38 does not mention the need to consider the bereaved family’s wishes in terms and there is no guarantee that they will be given any weight in the coroner’s ultimate decision. Therefore, it is not clear that a family’s wishes would constitute the reasonable grounds needed to decide against conducting an inquest in writing. The current drafting of the Bill leaves a wide discretion to individual coroners to determine whether reasonable grounds for a hearing have been made out by a family.
Further, at the point where a family would be invited to make representations to the coroner on whether an inquest should or should not be held in writing, many families would not necessarily have legal representation to support them in making their views heard. That would put families at a disadvantage in comparison with other interested persons with the benefit of legal teams who were also invited to make representations and argue against a hearing.
I will refer to a particular case; my purpose is to illustrate the argument rather than deal with the specifics of the individuals concerned. Jessica died on 16 October 2020 at a women’s crisis centre called Link House. Jessica had mental ill health and had suffered from an eating disorder and depression for most of her adult life. The inquest into Jessica’s death was originally listed as a rule 23 documentary inquest. However, given emerging evidence that there were serious problems in Jessica’s care, representations were made to the coroner that the inquest should be adjourned. That request was granted, and a pre-inquest review is scheduled for later in the year, when lawyers will be able to argue that article 2 is engaged.
If clause 38 had applied in this case, Jessica’s family might have struggled to make clear their arguments that the coroner should proceed to an inquest hearing; an inquest in writing might have proceeded at the coroner’s discretion and against the family’s wishes. My amendment to clause 38 would ensure that the wishes of families are respected in decisions on whether to hold a paper-only inquest instead of having a hearing, as ordinarily happens. Some families may wish to have a hearing so that evidence can be fully aired and they have the opportunity to raise any concerns with the coroner directly. The amendment would ensure that inquests are not held without a hearing if that is against the wishes of the family of the deceased.
I move on to new clauses 10, 11 and 12. I start with a quote from Deborah Coles, the executive director of Inquest. She sums up the position we are in and why I am asking the Government to support the three new clauses on legal aid at inquests. Ms Coles says:
“It is now for the Government to put the experiences of bereaved people at the front and centre and ensure equality of arms, accountability, oversight and candour. There can be no more false starts, broken commitments or shelved recommendations.”
Ms Coles knows well what she is talking about. Inquest has worked on more than 2,000 cases and investigation processes, with 483 families currently needing their support after a bereavement. This work is done to secure more effective scrutiny of the state when people die. These are people who die in police custody, in prison cells, in health or social care settings, but also in major disasters such as Hillsborough and, more recently, Grenfell.
When these deaths occur, there is a fundamental inequality of arms when it comes to what follows. Inquests following state-related deaths are intended to seek the truth and to expose unsafe practices and abuses of state power. However, the preventative potential of inquests is undermined by the pitting of unrepresented families against multiple expert legal teams defending the interests and reputations of state and corporate bodies. What is more, bereaved families often struggle for legal representation, while public authorities have unlimited access to lawyers at the taxpayer’s expense.
I want to mention the intervention from the hon. Member for East Worthing and Shoreham (Tim Loughton) in the Westminster Hall debate on 28 October. The Minister was there replying for the Government. The hon. Gentleman himself, with the assistance of many, had to work to get to a situation where there was representation for the families in the Shoreham air show case. There were 18 different public bodies, all of which had legal representation. That is at the far end of what can happen, but it is not untypical for there to be not just one, two or three, but four, five or six different public bodies represented.
I did not accept the evidence of Mr Rebello. He made some very cogent points, which we will come on to in clause 39. Lawyers are employed to represent the interests of state parties. Yes, they will have a general duty, as all lawyers do, to assist the court, and, yes, they may, albeit asked by the court, assist unrepresented parties—or they will volunteer to—but that is not the norm. They are there to—and are paid to—represent their clients. They will, on the whole, make points that seek to exculpate their client from responsibility. To see that happening day-to-day, year-to-year, in the coroner’s courts, where families are pitted in that way, is deeply disturbing, frankly.
Families will face hospitals, police and local authorities and other public bodies that have legal representation, often funded by the public bodies. Where these bodies do not have representation, they will still likely have formal assistance through in-house legal professionals or specialist inquest officers—none of which is available to most families. At the very least, public bodies will have witnesses who are experienced professionals, such as doctors, who will still have been provided with advice from a legal team prior to the inquest. All this, and yet a family suffering a bereavement and dealing with the trauma surrounding the circumstances of the death and the inquest process are likely to be refused the same publicly funded legal assistance.
Legal aid will be granted only under the Government’s exceptional funding scheme if it is considered that there is a wider public interest in the inquest or if it is an article 2 inquest. As many of the Committee will know, an article 2 inquest is held when there is a death in state custody, or if it can be argued that the state failed to protect someone’s right to life. Furthermore, to be granted legal aid under this scheme, families must currently also meet a financial means test.
In the absence of legal aid, some lawyers help bereaved families by funding representation through a conditional fee agreement—or CFA—otherwise known as no win, no fee. This funding arrangement has to be linked with a separate civil claim for compensation. If a CFA is not possible, either legal representation is provided free of charge by a lawyer, which can be unsustainable for law firms, or a family has to fund its own representation. This is simply unaffordable for many families—for most, I would argue. Legal aid provides families with the certainty that there will be equality of arms at the inquest and that they will not be alone during what is likely to be one of the most difficult periods of their lives.
Animal Welfare (Kept Animals) Bill (Fifth sitting)
(3 years ago)
Public Bill CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Committee divided: - Ayes: 6 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 5 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 10 - Question accordingly negatived.
The Chair
We have had an emergency membership substitution this morning, allowable in narrow circumstances in accordance with the resolution of the Committee at selection, with Jane Stevenson being discharged and Lia Nici being appointed to the Committee.
I remind Members that they are expected to wear masks when they are not speaking. This is in line with current Government guidance and that of the House of Commons Commissions. Please also give each other and members of staff space when seated, and when entering and leaving the room. Hansard colleagues would be grateful if Members would email their speaking notes to hansardnotes@parliament.uk.
Clause 47
Zoos
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Amendment 84, in schedule 5, page 44, line 12, leave out from “to” to “education” and insert
“a broad range of conservation activities (including species recovery work both in situ and ex situ,”.
This amendment aims to ensure that any conservation measures laid out in the new standards will include the conservation work, such as species recovery work, undertaken within zoos, as well as externally.
Amendment 119, in schedule 5, page 44, line 14, leave out lines 15 and 16.
This amendment would remove a provision that would allow different standards to be applied to different descriptions of zoos.
Amendment 122, in schedule 5, page 44, line 15, at beginning insert—
“(1A) Standards relating to conservation may not be made unless a draft has been laid before and approved by a resolution of each House of Parliament.”
This amendment would require standards relating to conservation to be laid before and approved by a resolution of each House of Parliament.
Amendment 83, in schedule 5, page 44, line 16, at end insert—
“(3) In drawing up standards of modern zoo practice, the Secretary of State must—
(a) consult the Zoos Expert Committee (ZEC), and
(b) issue a public consultation seeking the views of zoos, aquariums, and other interested parties,
and the Secretary of State must publish the responses to these consultations.
(4) The Secretary of State must lay a copy of the standards of modern zoo practice before Parliament.”
This amendment seeks to ensure that the Secretary of State’s standards for modern zoo practise are subject to full consultation and scrutiny, both when published and if any further changes are made, by Parliament, zoos and aquariums, other interested parties, and the Zoos Expert Committee.
Amendment 121, in schedule 5, page 44, line 16, at end insert—
“(3) The standards of modern zoo practice must define “conservation” for the purposes of the standards and, in drawing up that definition, the Secretary of State must consult the Zoos Expert Committee and publish its advice.”
Amendment 120, in schedule 5, page 45, line 15, leave out “a specialist” and insert “an expert”.
That schedule 5 be the Fifth schedule to the Bill.
The Minister of State, Department for Environment, Food and Rural Affairs (Victoria Prentis)
It is a pleasure to be here again, Mr Davies. I am going to speak once on zoos, unless I need to answer anything specific: there is a lot to get through, and it is quite technical.
There are over 300 licensed zoos in England. A zoo is not just the classic setting that we might think of: it is an establishment where wild animals are kept for exhibition to the public for more than seven days a year. This can be a range of different settings, such as a traditional zoo, a park, a farm park, an aquarium, or a bird of prey centre. All zoos are subject to the Zoo Licensing Act 1981. Most of the licensing requirements are set out in the standards of modern zoo practice. As part of their licensing conditions, all zoos are required to carry out conservation, education and research. Some of our zoos do incredibly valuable work in those areas, but others, frankly, should do more. The changes set out in this Bill should help to deliver that.
The current conservation requirements in the Zoo Licensing Act were introduced in 2002, and have not been updated since. They have been criticised as being on the weak side. All other standards for the management of zoos and the animals within them are set via the standards created by section 9 of that Act. This Bill makes changes to move the conservation requirements out of the Act and into the zoo standards.
Turning now to the Zoos Expert Committee and amendments 83 and 121, I reassure the Committee that ZEC already plays a significant part in the drafting of the new zoo standards, and has been involved very much in the production of that new document. ZEC is an expert committee of the Department for Environment, Food and Rural Affairs and the Scottish, Northern Irish and Welsh Governments. DEFRA and ZEC are currently in the process of updating the full package of zoo standards, which will be put out to consultation by the end of this year. That process has involved the full spectrum of zoo industry specialists. We therefore do not feel that amendments 83 and 121 take us any further.
When it comes to defining conservation, as is done in amendments 84 and 121, we feel that conservation should take its normal meaning, which of course will include both in situ and ex situ breeding programmes involving endangered species. One of the reasons why we have not defined conservation is that its meaning has changed over time, and we want any new zoo standards drafted by the ZECs of the future, with input from the zoo sector, to continue to reflect the latest best practice on consultation, so we are trying to future-proof this legislation.
We do not feel that the amendments dealing with ZEC transparency need to be in legislation. However, we have acknowledged the purpose behind some of these amendments, which is that the work of ZEC should be more transparent. In order to deal with that issue, we have recently provided ZEC with its own online presence on gov.uk, and that website is where we will put reports from ZEC and, where appropriate, responses from the Secretary of State. We believe that the process we have put in place—standards are drafted by the expert advisory committee, then put online to be transparent—means that the parliamentary scrutiny suggested would not add much in this area. We therefore do not believe that it is necessary.
The zoo standards are detailed technical standards that set out what is required of zoos. They are drafted by ZEC, which is made up of vets, inspectors, animal welfare experts and zoo operators, who all have detailed knowledge of the zoo sector. The same welfare standards will apply equally to all specimens of a species, regardless of the size of the zoo in which they are kept, so the provision for different standards for different types of zoos is aimed only at the new standards relating to conservation, education and research.
I understand the concerns—I will pre-empt them—about how the term “specialist” may have a separate meaning in the veterinary profession. I do not know whether my hon. Friend the Member for Penrith and The Border was going to mention that, but we have heard him mention it before. However, we are satisfied that the term “specialist” will be commonly understood to mean a person trained in a particular branch of a subject.
Dr Hudson
I am eternally grateful to my hon. Friend the Minister for giving way, and I welcome her comments. We could add to the Bill the term “competence” or “experience” in the relevant species, in accordance with the Royal College of Veterinary Surgeons’ guidance. For any vet who deals with animals, there are separate guidelines within the Royal College guidance that talk about what they should be dealing with as a veterinarian. If we added Royal College guidance, that would help.
Victoria Prentis
I thank my hon. Friend for his intervention. I know that he feels very strongly about this issue, but I reassure him that we have tried to use the normally understood meaning of the word “specialist”.
Schedule 5 makes various amendments to the Zoo Licensing Act 1981. Some of the amendments are technical in nature—for example, including the Council of the Isles of Scilly, which for some reason was not included before. I really have no idea why that was the case. Schedule 5 also removes circuses, because that reference is now obsolete following the passing of other legislation, and increases the available penalties. Importantly, schedule 5 amends the 1981 Act to ensure that each zoo will have a condition on its licence that it must meet the standards specified under section 9 of the Act. Currently, local authorities must only “have regard to” the standards produced under section 9. We think this change will make the standards easier to follow and enforce. On that basis, I hope the hon. Member for Cambridge will not press his amendments to a Division.
Daniel Zeichner (Cambridge) (Lab)
This is a short clause, but it is complicated, as the Minister said. I am grateful to her for her introduction, and she has clarified one or two points that I still want to pursue. I will start with amendments 121 and 122, which have been tabled in my name and that of my hon. Friends, but I also want to speak to amendments 83 and 84 and new clause 4, which were tabled by my hon. Friend the Member for Rotherham (Sarah Champion) and the hon. Member for Romford (Andrew Rosindell), both of whom spoke on these issues on Second Reading. I am sure the Minister was listening closely, as she always does, to the Second Reading debate, in which considerable concern and interest, and some unease, was expressed by Members of different parties about some of the proposals.
Despite the Minister’s reassurances, our amendments seek to ensure that there is greater oversight of the Government’s zoo advisory body, the Zoo Expert Committee, and the process for setting future conservation standards. Amendment 83 would make a full consultation with appropriate stakeholders on any future standards changes not just a matter of best practice, but a requirement. We will probably labour this point a bit: it is not that we do not trust the Government, but who knows what future Governments will do? We think that is an important point, as others have expressed, and it should not be left to discretion; it should absolutely be a requirement.
As the Minister has set out, the Government are making promises, and although we have no reason to disbelieve them, we want the legislation strengthened. There is no statutory requirement on future Ministers to consult on further updates. The role of the Zoos Expert Committee is a dilemma, frankly, because we have had cause for concern in other areas when reports from expert committees have not necessarily always been published. That is why people are pressing for a stronger system. We think it important not only that there is a consultation, but that everything is done transparently. The Bill does not currently provide for a statutory requirement on future Ministers to involve the Zoos Expert Committee as part of any review of the conservation standards, or to formally respond to that committee’s guidance.
Amendment 83 would ensure that any advice provided by the Zoos Expert Committee, and the response by Ministers, is transparent and open to the public. I have heard what has been said about a website, but I am afraid we have seen examples of that not working—they are almost always controversial cases, quite frankly, and those are the ones that people are interested in. If that transparency is good enough for the Animal Welfare (Sentience) Bill, which is coming our way soon, it is good enough for this Bill, so we think that the amendment makes a reasonable demand. Amendment 121 puts it slightly differently but also requires the Secretary of State to consult the Zoos Expert Committee and to publish its advice.
Amendment 84 deals with the vexed issue of conservation. The Minister is right that the understanding of the term “conservation” has changed. I am grateful to both Chester Zoo and the British and Irish Association of Zoos and Aquariums for their advice. Both have expressed concern about the need for the Bill to provide a clear definition of “conservation”, because they fear that future definitions may not fully capture the breadth of the work done by zoos. I am told that zoos globally contribute more than $350 million annually to species conservation programmes in the wild, making them the world’s third-largest funder of species conservation after the World Wide Fund for Nature and the Nature Conservancy.
I am also told that UK zoos contribute 10% of that global zoo total, so we are making a big contribution. Most of that funding comes from the large charitable zoos, which I am told receive no direct public subsidy, and generate the surpluses for conservation through visitor revenue. They support more than 800 projects in 105 countries, providing direct conservation action for 488 species of animals and plants. They believe it important that the Government’s definition of zoo conservation accurately reflects the wide range of work.
Amendment 84 would ensure that the Bill recognises
“a broad range of conservation activities”
and that, alongside education and research, it explicitly includes “species recovery work”, both in situ and ex situ. Although in situ species reintroduction and overseas field projects, for example, are vital to zoo conservation efforts, they alone do not fully capture the extent of the work that takes place or the impact that zoos have. To put it simply, that excellent work cannot be achieved without a lot of back-up within the zoos themselves., including the world-class care by keepers, the feed, the bedding, the veterinary attention, the facilities, the scientific development and the carefully planned and co-ordinated breeding plans. I perhaps got slightly confused by “ex situ” and “in situ”, but basically, the ex situ work is an essential component of a holistic planned approach to species recovery.
Amendment 84 would ensure a broad understanding of zoo conservation, and that the standards accurately reflect the different ways in which zoos achieve conservation impacts, helping to ensure the continuation of the vital work that zoos undertake in support of international conservation efforts. Put together, the amendments would ensure parliamentary scrutiny of future changes to conservation standards. We think that is important because, despite the Government’s decision to take the standards out of primary legislation, those standards are to become a core part of the zoo licensing and conservation requirements, so we believe that there should be democratic oversight of them.
I listened closely to what the Minister said about amendment 119 and I was reassured by what she said. It is a technical point and it depends how the draft Bill is read. We are concerned that different standards of animal welfare might be applied to “different descriptions of zoo.” The Minister made it clear that is not what is meant.
Daniel Zeichner
No, please don’t, because obviously that would upset the Whip and then it would have to be changed.
Finally, we come to amendment 120, which I really hoped was going to be a final victory and was written with guidance from the British Veterinary Association. We have discussed the amendment and the hon. Member for Penrith and The Border put things very well, although I wait to see whether his helpful suggestion about amending it further will be well received or not. The issue is around “specialist” and “expert”. We cannot see why the Government cannot just change that word, so, Mr Davies, we will press this amendment to a vote.
Dr Hudson
Again, we are coming back to this issue of specialist competency and expertise. As a new Member of Parliament, I am new to the system but I wish to put on record the frustrations with how we are drafting law. Obviously, we cannot change hundreds of years of history relating to how we do it, but it is very frustrating to have amendments from both sides of the House—from Government and Opposition—when if there were consultation with members of the Bill Committee, in a similar way that Select Committee members agree the final wording of a report, I am sure we could nail all the different issues and agree a sensible form of wording. When amendments are tabled and there has not been any discussion about them, then those amendments may pass or fail depending on the wording. If an amendment is incorrectly worded, then we cannot support it. If we could get together, consult and agree on wording, then we would pass better law.
Daniel Zeichner
That is a very sensible suggestion. I fear we are not quite in that world yet, although it is miraculous how things, as they go through, can sometimes change. I reassure the hon. Gentleman that the message has been heard on this side, but we will still press the amendment to a vote. One never knows—we might even win. On that basis, I do not wish to pursue any of the other amendments.
Dr Luke Evans (Bosworth) (Con)
It is a pleasure to speak under your chairmanship, Mr Davies. I declare an interest as I am a member of the zoos and aquariums all-party parliamentary group and I have Twycross zoo in my patch, in regard to which I have spent a lot of time and effort.
I was intrigued to hear my hon. Friend the Minister’s comments at the start. Would she be kind enough to expand a little further? As put across by the Opposition, there is some concern about the definition of conservation. I was pleased to hear that it will be kept broad, fluid and future proof, because I think that is important. I am also pleased to hear that there is more transparency with regards to ZEC and that opening up. That will go a long way to alleviate concerns that may be there.
It is fair to say there is a rift within the zoo community and the wider conservation community about where things should and should not be kept, and how they should be looked after, so there is wide agreement that the welfare aspect of the Bill is important. The reason there is an interest in the definition of conservation is around the question of what is deemed to be conservation. Are zoos arks? Are they exhibits? Should they have no place at all? That is one of the threats that the zoo community may be feeling.
I have no truck with zoos with low standards. They should not exist and the Bill provides legislation to drive up those standards, which is well founded. However, if the definition of conservation is too narrow and not all encompassing, there is concern for purely monetary reasons because of positions with turnover and with money being given out just to specific areas. As Twycross zoo has recently got £19.9 million in the levelling-up fund for an education, science and conservation centre, the hope is that we will have a regional and national centre of excellence training the top-level conservationists of the future. That is obviously something very good for us locally, regionally, nationally and internationally, and it needs to be recognised for the work it will contribute to saving species in the future.
I was pleased to hear that the Minister can confirm that species recovery, both in situ and ex situ, can be included—I think it was hinted at. I was also pleased that the Minister will take away the fact that such consideration must be out there; getting that information out to the broader zoo and conservation community may help relieve a lot of the angst that is felt.
Victoria Prentis
I would like to thank my hon. Friend the Member for Bosworth—and for Twycross zoo, if I may put it that way—for his intervention. I am thrilled about the recent grant from the levelling-up fund. I know that Twycross is going to do important work to study the four great apes and over a hundred endangered species in this new, purpose-built unit. As I said earlier, it is important that both in situ and ex situ are covered by the new standards, and I reassure the Committee that we will work with zoos to ensure that the new conservation standards are appropriate and achievable. All zoos will be consulted on the new standards, including the new conservation standards, and we will assess their likely impact before deciding how long zoos will have to bring in those standards. The new standards will also seek to reflect the size of the zoo, because larger zoos are likely to be expected to do more in the conservation space. As my hon. Friend said, there will be no difference in welfare.
Question put and agreed to.
Clause 47 accordingly ordered to stand part of the Bill.
Amendment proposed: 120, in schedule 5, page 45, line 15, leave out “a specialist” and insert “an expert”.—(Daniel Zeichner.)
Question put, That the amendment be made.
Victoria Prentis
I beg to move amendment 54, in clause 48, page 31, line 6, leave out from “authority”” to end of line 15 and insert
“, in relation to a power to make provision, means—
(a) the Secretary of State;
(b) the Scottish Ministers, so far as the provision would be within the legislative competence of the Scottish Parliament if contained in an Act of that Parliament;
(c) the Welsh Ministers, so far as the provision would be within the legislative competence of Senedd Cymru if contained in an Act of the Senedd.
(2A) But the Secretary of State may make regulations under section 43 or 46 only with—
(a) the consent of the Scottish Ministers, if the regulations contain provision that could be made under that section by the Scottish Ministers;
(b) the consent of the Welsh Ministers, if the regulations contain provision that could be made under that section by the Welsh Ministers.”
This amendment amends the definition of “appropriate national authority” to provide that the devolved authorities’ powers are limited by reference to devolved legislative competence.
The Chair
With this it will be convenient to discuss the following:
Government amendments 57, 61, 63, 64, 69 and 70.
Government new clause 2—Concurrent functions in Wales.
Victoria Prentis
The amendments in this group are technical and concerned with the way in which Scottish and Welsh Ministers may make regulations under the Bill. Amendment 54 amends clause 48 to ensure that the powers to make regulations under part 4 are consistent with devolution arrangements. Amendment 57 amends clause 50 and provides Scottish and Welsh Ministers with powers to amend other legislation where there are consequential changes.
Amendment 61 amends clause 51 and removes a reference to clause 49. Amendments 63 and 64 also amend clause 51 to provide for the commencement of new clause 2, which will come into force two months following Royal Assent. Amendments 69 and 70 amend clause 52 to confirm that the territorial extent on the amendments to the Government of Wales Act 2006 is the same as for that Act.
Amendment 54 agreed to.
Clause 48, as amended, ordered to stand part of the Bill.
Clause 49
Regulations under Part 3
Question proposed, That the clause stand part of the Bill.
Victoria Prentis
This clause is no longer necessary as it has been replaced by new clause 3, which brings all the regulation-making powers in the Bill into a single new clause. I ask the Committee to agree that clause 49 does not stand part of the Bill.
Clause 49 disagreed to.
Clause 50
Power to make consequential provision
Amendments made: 56, in clause 50, page 32, line 8, leave out “made by statutory instrument”.
This amendment (together with Amendment 58) removes provision about regulations under this clause with a view to provision about regulations being made by a new clause.
Amendment 57, in clause 50, page 32, line 9, at end insert—
“(1A) The Scottish Ministers may by regulations make provision that is consequential on any provision of Part 3 as it extends to Scotland.
(1B) The Welsh Ministers may by regulations make provision that is consequential on any provision of Part 1 or 3 as it applies in relation to Wales.
(1C) But—
(a) provision may be made under subsection (1A) only if it would be within the legislative competence of the Scottish Parliament if contained in an Act of that Parliament;
(b) provision may be made under subsection (1B) only if it would be within the legislative competence of Senedd Cymru if contained in an Act of the Senedd.”
This amendment confers powers to make consequential provision on the Scottish Ministers and the Welsh Ministers.
Amendment 58, in clause 50, page 32, leave out lines 14 to 24.—(Victoria Prentis.)
This amendment removes provision about regulations under this clause with a view to provision about regulations being made by a new clause.
Victoria Prentis
Clause 50 provides a general power for the Secretary of State to make any necessary changes to legislation that are consequential on any provisions included in the Bill.
Question put and agreed to.
Clause 50, as amended, accordingly ordered to stand part of the Bill.
Clause 51
Commencement
Amendments made: 59, in clause 51, page 32, line 29, at end insert—
“(A1) Part 1 comes into force—
(a) in relation to England, on such day as the Secretary of State may by regulations appoint;
(b) in relation to Wales, on such day as the Welsh Ministers may by regulations appoint.”
This amendment, which is consequential on the amendments of Part 1 that result in that Part applying to Wales, confers on the Welsh Ministers the power to commence Part 1 in relation to Wales.
Amendment 60, in clause 51, page 32, line 30, leave out “Parts 1 and 2 come” and insert “Part 2 comes”.
This amendment is consequential on Amendment 59.
Amendment 61, in clause 51, page 32, line 35, leave out “, 48 and 49” and insert “and 48”.—(Victoria Prentis.)
This amendment is consequential on Amendment 55.
Victoria Prentis
I beg to move amendment 62, in clause 51, page 32, line 36, at end insert—
“() section (Animal Welfare Act 2006: minor amendments) comes into force on such day as the appropriate national authority may by regulations appoint;”
This amendment provides for the new clause containing minor amendments of the Animal Welfare Act 2006 to be commenced by regulations.
The Chair
With this it will be convenient to discuss the following:
Government amendment 68.
Government new clause 1—Animal Welfare Act 2006: minor amendments.
Victoria Prentis
The amendments and the new clause ensure that the time limits for prosecuting offences set out in the Animal Welfare Act 2006 also apply to regulations that are made under the Act. Doubt was thrown on this position by a recent administrative court decision. It is important that we make the changes proposed, to enable prosecutors long enough to gather detailed evidence in animal welfare cases.
Amendment 62 agreed to.
Victoria Prentis
I beg to move amendment 85, in clause 51, page 32, line 36, at end insert—
“() sections (Taking of dog without lawful authority etc) and (Power to extend section (Taking of dog without lawful authority etc)) come into force on such day as the Secretary of State may by regulations appoint;”
This amendment provides for NC5 and NC6 to be commenced by regulations.
The Chair
With this it will be convenient to discuss the following:
Government amendment 86.
Government new clause 5—Taking of dog without lawful authority etc.
Government new clause 6—Power to extend section (Taking of dog without lawful authority etc).
Victoria Prentis
The theft of a pet is devastating. We all know that pet sales increased during the pandemic, as we were all at home and felt that we would like to share our homes with various furry friends. As a consequence, the price of puppies and kittens rose, which is thought to have triggered a rise in the abhorrent crime of pet theft. In May this year, the Government launched the pet theft taskforce. It was asked to gather evidence and make representations, and I thank its members for their speedy work—they produced a report in September. I also thank my right hon. and learned Friend the Member for South Swindon (Robert Buckland) for chairing the taskforce and for his continued interest in this area.
In brief, the taskforce found that there is a growing feeling among the public that the current laws do not sufficiently recognise the difference between pets and inanimate objects. The taskforce therefore recommended the creation of a new offence of pet abduction, which acknowledges that pets form bonds with their owners and that their welfare can be adversely affected when they are removed from their primary carer. To start with, the new offence will apply to dogs—that is a recommendation from the taskforce. The reason is that seven of 10 animal thefts are thefts of dogs, and most of the evidence on the effect on animals is concentrated on dogs at the moment. However—you have heard me talk about cattism before, Mr Davies—we need to continue to gather evidence on other species, so we are taking a power to extend the offence to other common pet species in the future. The new offence has penalties that mirror those in the Animal Welfare Act 2006, with a maximum penalty of five years in prison.
Daniel Zeichner
Well, here is a surprise: pet theft through the back door. We have been calling for it for ages, and we are absolutely supportive of it, but what a way to do it on such a significant issue. The amendment was tabled on Friday, after the evidence session, and there is no Library briefing. Of course, the amendment, as drafted, is not actually about pet theft; it is about dog theft. It may reasonably be asked why it does not apply to cats. I understand the additional power. The Minister denied cattism the other day, but I feel that the charge will continue to be levelled.
This is such last-minute stuff. I notice the Department managed to get its press briefing out, although it muddled pet theft and dog theft throughout. That is my gripe with the amendment: this is a really important issue that has been added to the Bill very late in the day, which means that we do not have the opportunity to scrutinise it in the way that we would have liked. We had relevant witnesses at the evidence session last week, and we did not ask them about it. I could not help noticing that, unusually, the Minister’s speech was handwritten. Goodness me! This is so typical of the Government at the moment. What a mess.
There is a problem with this. If we do it in a rush, we will get it wrong. We have seen it before with dogs, so can we repeat the same mistake again? There are a number of unanswered questions, particularly on the concept of lawful control and complicated questions of ownership. One can immediately see that the connected person test could easily be problematic. There are many multi-person households in this country, and there are millions of people living together who are not in civil partnerships. Many are reconstituted or blended families. Perhaps Government Members have not noticed what the modern world is like—or perhaps they have. In a domestic row, for example, one person goes off with the dog or cat—they consider it theirs—and the other gets the police involved for a claim of pet theft, which carries a five-year prison sentence. The connected person test really needs to be looked at properly, not just brought to a Bill Committee late in the day. I am sure that it will be subject to further scrutiny elsewhere, but this is no way to do it.
New clause 6 states that the Secretary of State may exercise the power under subsection (1) if there is evidence that
“removing an animal of that species from a person with whom it has formed a bond may adversely affect its wellbeing.”
How is that test to be assessed? Who is the judge? Does a snake get sad when it is parted from its keeper? I do not know, but we ought to find a way of finding out before we pass this legislation. Maybe this should have been done in the right sequence, starting with the Animal Welfare (Sentience) Bill. But, as ever with this Government, it is all about a rush to get a headline—it could have been drafted by the Prime Minister.
To be helpful, I direct the Minister’s attention to the Police, Crime, Sentencing and Courts Bill, to which Labour tabled amendments last November to deal with pet theft. Again, amendments were tabled on Report, in July this year, and not just by the Labour Front Bench but by a cross-party group of esteemed parliamentarians, including many senior Government Members. The Government opposed all those amendments.
I find myself in some difficulty this morning, because although we absolutely want the legislation on the statute book, we do not want rushed legislation that leads to unintended consequences. I have some sympathy with the Minister, as I suspect that she is embarrassed about it, but that is the problem we have. We will not oppose the new clause, but we think that the provisions need to be looked at much more carefully. Otherwise, we will find ourselves in the same kind of situation as with the Dangerous Dogs Act 1991.
Dr Hudson
Thank you, Mr Davies. I rise to welcome Government action on pet theft. In response to the hon. Member for Cambridge, I noted those amendments to the Police, Crime, Sentencing and Courts Bill a few months ago, and the reason why many of us on the Government side voted against them was not because we were against pet theft law being strengthened, but because we were given assurances by the then Justice Secretary, my right hon. and learned Friend the Member for South Swindon (Robert Buckland), who has been mentioned, that pet theft would be addressed in law. I am so pleased, as a veterinary surgeon and a parliamentarian, that we are now at the stage of recognising and passing pet theft into law.
I welcome that the Opposition will not oppose the new clause. I very much agree with the hon. Member for Cambridge that the new clause has been tabled at very short notice, and I feel that the Government can work with the Opposition, with Committee members, and with Members on both sides of the House, to ensure that we get the legislation right. We have to get the wording right so that we can stamp out the abhorrent crime of pet theft.
I have called for some time for the legislation, once introduced, to be expanded to include other species. I welcome the Government’s acknowledgment of those calls and their attempts to address them with new clause 6, but I share the hon. Gentleman’s concerns. As it is worded, the new clause is incredibly complicated, incredibly confusing and subject to much misinterpretation. I urge the Government to look closely at the definitions in the new clause, which are not suitable.
The Government are moving forward on animal welfare. The Animal Welfare (Sentience) Bill has been introduced, and will recognise that animals are fully sentient beings—the theft of animals is distressing for both the animals and their owners. Cats are being stolen as we speak, and should be included. I am keen, though, for the provisions to be expanded beyond pets.
I welcome the fact that we are expanding the measures to other species, but they should not apply only to pets. Should we be talking about “companion animals”, rather than pets? What about farm animals? When a farmer in Cumbria has 20 sheep stolen—a not uncommon occurrence—it is incredibly distressing for that farmer. I urge the Government to look closely at expanding the measures to include all animals: farm animals, horses, ponies. What about the Vietnamese pot-bellied pig that someone keeps in the back of their garden? What about someone who keeps a sheep to help them keep the lawn down—is that a pet or a farm animal? This is where we will end up going due to the complexities of the Bill.
I fear that if the Government do not change new clause 6, we will have some form of George Orwellian “Animal Farm” interpretation of how important some animals are compared to others. I urge the Government to not let us go into that. These animals are being stolen now—farm animals, horses, cats, dogs—so we need to act now. I welcome what the Minister is doing, and what DEFRA is doing, and I encourage them to listen to voices on both sides of the House. I ask with good grace whether the Minister will meet me and Lord Goldsmith. Can we get round the table and see if we can improve these clauses, so that all animals are covered, and so that we can stamp out not just pet theft, but animal theft?
James Daly (Bury North) (Con)
It is a pleasure to serve under your chairmanship, Mr Davies. I was a criminal defence solicitor for 16 years. The one thing that we will never get in legislation that will potentially go before the criminal court is 100% exact language. We are talking about legal interpretation. These are matters that will be decided on by those giving expert evidence and through the interpretation of the courts. That is how the system works—the separation of powers. I understand the point made by my hon. Friend the Member for Penrith and The Border about looking at the wider definition of theft, but all the matters that he mentioned are covered; they are acts of theft, which is on the statute book already.
I welcome new clause 6; I think it is a good clause. Criminal lawyers, together with those giving expert evidence and others involved in the court system, will be able to understand it clearly. Even if we were to have a lengthy discussion, as the hon. Member for Cambridge said, regarding what “forming bonds” means—we could discuss that forever—it will be expert evidence in a court that will decide matters, not what parliamentarians debate. I welcome the clause and congratulate the Minister on it.
The Chair
I welcome Members making contributions, but could you use your leg muscles to indicate that you want to contribute—perhaps near the start of the debate, but you are free to stand whenever you like—so that I do not miss you out? I almost missed that last request to contribute.
Victoria Prentis
Well, we cannot seem to get it right, can we? We are either going to quickly or too slowly. [Interruption.] I am teasing. This is being done quickly; I am not apologising for that because I think the situation is one that we need to resolve quickly. The taskforce was a serious body that did important work, and it worked quickly—I refer Members to its work and recommendations. The Government then had to find the first appropriate piece of legislation for these recommendations to go in; the Animal Welfare (Kept Animals) Bill seemed too good an opportunity to pass up.
I have listened to and accept the comments about “connected persons”, “animals capable of forming bonds” and extending provisions beyond pets. My hon. Friend the Member for Penrith and The Border mentioned livestock; sheep rustling is already covered under the Theft Act 1968. I will take these points away and continue to do work to make sure that the drafting of this clause is, as my hon. Friend the Member for Bury North suggests, entirely suitable for the criminal courts.
I would be delighted to meet, as I am sure Lord Goldsmith would be, any Member of this House, or of the other place, to discuss the drafting of this clause. It is always important that we get the law right. It is important that we make sure the clause is as good as it can be; it is difficult when clauses are brought forward at a late stage of a Bill’s proceedings. However, I am not apologising for that; it is right that we should do this. We should make a new offence of pet abduction and this is an appropriate place to do that.
Dr Hudson
I welcome the Minister’s comments. On the concept of forming a bond with an animal, I note the comments made about livestock rustling. The Bill covers livestock worrying, too. It can be incredibly distressing for a farmer when farm livestock are attacked by dogs. A person can have a bond with an individual animal or be devastated when 20 sheep are attacked by a dog. I take on board what my hon. Friend the Member for Bury North, who is from the legal profession, said about the legal definition of the word “bond”, but I think these debates in the courts of law will be incredibly fraught, so I urge the Government to move on that.
Victoria Prentis
I reassure Members that we will look carefully at the drafting of this clause, following the remarks we have heard today. I am confident that this is an appropriate place to bring forward the offence of pet abduction, and I am pleased that we have been able to do so.
Amendment 85 agreed to.
Amendments made: 63, in clause 51, page 33, line 13, after “Part” insert
“(except section (Concurrent functions in Wales))”.
This amendment is consequential on Amendment 64.
Amendment 64, in clause 51, page 33, line 13, at end insert
“; section (Concurrent functions in Wales)) comes into force at the end of the period of two months beginning with that day.”
This amendment provides for the commencement of new clause (Concurrent functions in Wales).
Amendment 65, in clause 51, page 33, line 16, leave out from first “Ministers” to “may” in line 17.
This amendment is consequential on Amendment 67.
Amendment 66, in clause 51, page 33, line 18, at end insert “in Scotland”.
This amendment is consequential on Amendment 67.
Amendment 67, in clause 51, page 33, line 18, at end insert—
‘(6A) The Welsh Ministers may by regulations make transitional or saving provision in connection with the coming into force of any provision of Part 1 or 3 in relation to Wales.’—(Victoria Prentis.)
This amendment confers powers to make transitional or saving provision on the Welsh Ministers, in consequence of Part 1 applying to Wales (as well as Part 3).
Question proposed, That the clause, as amended, stand part of the Bill.
Victoria Prentis
The clause sets out when provisions in the Bill will commence, following Royal Assent.
Question put and agreed to.
Clause 51, as amended, ordered to stand part of the Bill.
Clause 52
Extent
Amendments made: 68, in clause 52, page 33, line 32, at end insert—
“() section (Animal Welfare Act 2006: minor amendments) extends to England and Wales only;”.
This amendment provides for the new clause containing minor amendments of the Animal Welfare Act 2006 to extend to (ie form part of the law of) England and Wales only.
Amendment 69, in clause 52, page 33, line 35, at beginning insert “Subject to subsection (5),”.
This amendment is consequential on Amendment 70.
Amendment 70, in clause 52, page 33, line 35, at end insert—
“(5) The amendments and repeals made by section (Concurrent functions in Wales) have the same extent as the enactments to which they relate.”—(Victoria Prentis.)
This amendment provides for the amendments and repeals of Schedule 7B to the Government of Wales Act 2006, made by a new clause, to have the same extent as that Schedule.
Question proposed, That the clause, as amended, stand part of the Bill.
Victoria Prentis
This clause sets out the territorial extent of provisions in the Bill.
Question put and agreed to.
Clause 52, as amended, ordered to stand part of the Bill.
Clause 53
Short title
Question proposed, That the clause stand part of the Bill.
Victoria Prentis
This clause is a standard provision that simply provides for the short title of the Bill once it becomes an Act at Royal Assent. The short title of this Bill will be the Animal Welfare (Kept Animals) Act 2021.
Question put and agreed to.
Clause 53 ordered to stand part of the Bill.
New Clause 1
Animal Welfare Act 2006: minor amendments
‘(1) The Animal Welfare Act 2006 is amended as follows.
(2) In section 31(1) (time limits for prosecutions) after “under” insert “or by virtue of”.
(3) In section 51 (inspectors)—
(a) in subsection (5) after “under” insert “or by virtue of”;
(b) after subsection (6) insert—
“(7) In this section, a reference to the purposes of this Act includes the purposes of provision made under the Act.”’—(Victoria Prentis.)
This new clause amends the Animal Welfare Act 2006 so that section 31 (time limits for prosecutions) applies to offences under regulations under that Act (as well as to offences under that Act) and section 51 (inspectors) applies in relation to provisions of regulations under that Act (as well as in relation to provisions of that Act).
Brought up, read the First and Second time, and added to the Bill.
New Clause 2
Concurrent functions in Wales
‘(1) Schedule 7B to the Government of Wales Act 2006 (general restrictions on legislative competence of Senedd Cymru) is amended as follows.
(2) In paragraph 9(8)(b) (exceptions to restrictions relating to reserved authorities)—
(a) omit the “or” at the end of paragraph (vi);
(b) at the end of paragraph (vii) insert “; or the Animal Welfare (Kept Animals) Act 2021.”
(i) the Animal Welfare (Kept Animals) Act 2021.”
(3) In paragraph 11(6)(b) (exceptions to restrictions relating to Ministers of the Crown)—
(a) omit the “or” at the end of paragraph (vi);
(b) at the end of paragraph (vii) insert “; or the Animal Welfare (Kept Animals) Act 2021.””
(i) the Animal Welfare (Kept Animals) Act 2021.”’—(Victoria Prentis.)
This new clause amends Schedule 7B to the Government of Wales Act 2006 so as to disapply certain restrictions in that Schedule in relation to functions conferred by or under the Bill.
Brought up, read the First and Second time, and added to the Bill.
New Clause 3
Regulations
“(1) This section applies to regulations under any provision of this Act except section 51.
(2) A power to make regulations includes power to make—
(a) different provision for different purposes;
(b) different provision for different areas;
(c) consequential, incidental, supplementary, transitional, transitory or saving provision.
(3) Regulations made by the Secretary of State or the Welsh Ministers are to be made by statutory instrument.
(4) For regulations made by the Scottish Ministers, see section 27 of the Interpretation and Legislative Reform (Scotland) Act 2010 (asp 10) (Scottish statutory instruments).
(5) The Secretary of State may not make a statutory instrument containing (whether alone or with other provision)—
(a) regulations under section 3(1) or (3)(b),
(b) regulations under section 22,
(c) regulations under Part 2,
(d) regulations under Part 3 other than regulations made by virtue of section 46(2A)(c) (power to prescribe fee for making application), or
(e) regulations under section 50 that amend, repeal or revoke provision made by primary legislation or retained direct principal EU legislation,
unless a draft of the instrument has been laid before, and approved by a resolution of, each House of Parliament.
(6) Any other statutory instrument made by the Secretary of State containing regulations is subject to annulment in pursuance of a resolution of either House of Parliament.
(7) The following regulations made by the Scottish Ministers are subject to the affirmative procedure (see section 29 of the Interpretation and Legislative Reform (Scotland) Act 2010)—
(a) regulations under Part 3 other than regulations made by virtue of section 46(2A)(c);
(b) regulations under section 50 that amend, repeal or revoke provision made by primary legislation or retained direct principal EU legislation.
(8) Any other regulations made by the Scottish Ministers are subject to the negative procedure (see section 28 of that Act).
(9) The Welsh Ministers may not make a statutory instrument containing (whether alone or with other provision)—
(a) regulations under section 3(1) or (3)(b),
(b) regulations under section 22,
(c) regulations under Part 3 other than regulations made by virtue of section 46(2A)(c), or
(d) regulations under section 50 that amend, repeal or revoke provision made by primary legislation or retained direct principal EU legislation,
unless a draft of the instrument has been laid before, and approved by a resolution of, Senedd Cymru.
(10) Any other statutory instrument made by the Welsh Ministers containing regulations is subject to annulment in pursuance of a resolution of Senedd Cymru.
(11) In this section “primary legislation” has the meaning given by section 50.’—(Victoria Prentis.)
This new clause makes provision about regulations under the Bill (except regulations under clause 51).
Brought up, read the First and Second time, and added to the Bill.
New Clause 5
Taking of dog without lawful authority etc
“(1) A person commits an offence if, without lawful authority or reasonable excuse, the person takes or detains a dog in England—
(a) so as to remove it from the lawful control of any person, or
(b) so as to keep it from the lawful control of a person who is entitled to have lawful control of it.
(2) No offence is committed if the person taking or detaining the dog is connected with any of the following—
(a) any person entitled to have lawful control of it;
(b) where it is removed from the lawful control of a person, that person.
(3) A person who commits an offence under this section is liable—
(a) on summary conviction, to imprisonment for a term not exceeding the maximum summary term for either-way offences or a fine (or both);
(b) on conviction on indictment, to imprisonment for a term not exceeding 5 years or a fine (or both).
(4) In this section—
“connected person”: a person is connected with another person if—
(a) they are married to each other,
(b) they are civil partners of each other,
(c) one is the parent of the other, or
(d) they are siblings (whether of the full blood or the half blood);
“detaining”: references to a person detaining a dog include the person—
(a) inducing it to remain with the person or anyone else, or
(b) causing it to be detained;
“maximum summary term for either-way offences”, with reference to imprisonment for an offence, means—
(a) if the offence is committed before the time when paragraph 24(2) of Schedule 22 to the Sentencing Act 2020 comes into force, 6 months;
(b) if the offence is committed after that time, 12 months;
“taking”: references to a person taking a dog include the person—
(a) causing or inducing it to accompany the person or anyone else, or
(b) causing it to be taken.” —(Victoria Prentis.)
This new clause, which will be added to Part 3, creates an offence, committed by taking or detaining a dog in certain circumstances. The offence applies in England.
Brought up, read the First and Second time, and added to the Bill.
New Clause 6
Power to extend section (Taking of dog without lawful authority etc)
“(1) The Secretary of State may by regulations amend section (Taking of dog without lawful authority etc) so that it applies not only to dogs but also to one or more other species of animal.
(2) The power under subsection (1) may be exercised in respect of a species only if the Secretary of State considers—
(a) that animals of that species are commonly kept as pets, and
(b) that there is evidence that—
(i) animals of that species are capable of forming bonds with people who keep them, and
(ii) removing an animal of that species from a person with whom it has formed a bond may adversely affect its wellbeing.
(3) Before making regulations under this section the Secretary of State must consult such persons as the Secretary of State considers appropriate.” —(Victoria Prentis.)
This new clause, which will be added to Part 3, confers a power to extend the new offence relating to the taking or detaining of a dog so as to apply in relation to other species.
Brought up, read the First and Second time, and added to the Bill.
New Clause 7
Prohibition of Sow farrowing stalls
“In Schedule 8 of the Welfare of Farmed Animals (England) Regulations 2007 omit sub-paragraph 6(2).”—(Daniel Zeichner.)
This new clause would the end the use of sow farrowing crates.
Brought up, and read the First time.
Daniel Zeichner
I beg to move, That the clause be read a Second time.
We move on to what could be called the second half of the Committee—Labour’s animal welfare Bill. I suspect that there will be a division on new clause 7, which is about pigs. Schedule 8 of the Welfare of Farmed Animals (England) Regulations 2007 allows female pigs to be kept in small metal crates for the period beginning seven days before the predicted day of their farrowing and ending when the weaning of the pigs is complete—a process that lasts around four weeks. This clause would put an end to the use of those sow farrowing crates.
Compassion in World Farming tells us that every year, over 200,000 sows are subjected to this procedure, the purpose of which is to try to reduce the risk of the sow lying on and crushing her new-born piglets. We acknowledge that that is clearly a problem for farmers. However, as a result of their seeking to achieve that aim, sows are forced to spend weeks in stalls, unable to turn around. Alongside the crate in the pen is a creep area for the sow’s piglets. The piglets are able to reach the sow to suckle, but she is unable to clean and interact with them.
Farrowing crates are also a major concern because they prevent sows from building their nests. Even if nest-building material is provided—sadly, that does not always happen—sows do not have room to build them. Not allowing sows to behave naturally can make them frustrated and stressed, and the sow is more likely to savage the piglets in farrowing crate systems. I do not think there is much dispute anywhere about the desire to find a way forward on this issue.
Alternatives to farrowing crates, many of them designed by British farmers and engineers, are already commercially available in the UK. We should support British ingenuity and pig welfare by requiring the use of these higher-welfare systems. Labour has long been committed to ending the cage age and banning sow farrowing crates, and many others from across the political spectrum are committed to the cause—including, it would seem, the Prime Minister, who claimed in the Chamber that as a result of Brexit, we would be now able to introduce such a ban. The issue was very close to the heart of Sir David Amess, who earlier this year brought forward a private Member’s Bill, the Pig Husbandry (Farrowing) Bill, that sought to ban the use of farrowing crates.
However, I am also mindful of the challenges facing pig producers, particularly at the moment. I have spoken about this frequently in recent months, and have urged the Government to give swifter assistance. As we speak, the culling of healthy pigs continues on farms, because despite the welcome announcements a few weeks ago, neither the temporary visa scheme nor the private storage scheme has yet come into effect. Sadly, it may be mid-December before the 800 skilled pork butchers arrive, and in reality, help may not come before the new year, so the situation remains very serious.
We will press the new clause to a vote, and are signalling our intention to bring in a ban when in government, but I reassure the industry that we will work closely with it to make sure that a ban is introduced in a way that does not damage the industry. We all want higher standards. This goes to the heart of the trade debate. There is no point imposing higher animal welfare standards here if the suffering, and the industry, is merely exported elsewhere. The Government have repeatedly told us that we should trust them on not allowing lower-standard food products to be imported. Frankly, we do not, but if we take them at their word, the amendment should not create a problem. I suspect many Government Back Benchers are not entirely persuaded either.
I note that the Government’s action plan for animal welfare says they
“are currently considering the case for introducing further reforms, on areas such as the use of farrowing crates for pigs”.
Here is their opportunity. It is time to move on and end the suffering caused by farrowing crates.
Victoria Prentis
The hon. Gentleman, with whom I remember discussing this issue at some length during the passage of the Agriculture Bill, will know that we are very much of one mind on this issue. My difficulty is that the new clause would cause an immediate ban.
The Government’s action plan on animal welfare said that we are considering the case for further reforms in this area. Our stated aim is for farrowing crates to no longer be necessary. We want any new system to protect the welfare of the sow, as well as her piglets, but an immediate ban on the use of farrowing crates for sows without full consideration of the implications for animal welfare and the pig sector would have a significant impact on the industry. We spoke to Dr Zoe Davies, chief executive of the National Pig Association, earlier this week. She said:
“To suggest an immediate ban”,
as the hon. Gentleman suggests,
“on the use of farrowing crates would be the final straw for the majority of indoor producers and would trigger a mass exodus from the pig sector, thus exporting production to countries with lower welfare standards. Far better to work with the sector on a longer term transition, which we have already begun.”
Some 60% of UK sows are kept indoors and use farrowing crates, so moving overnight entirely to free-farrowing systems would require a fundamental change for pig producers, and significant investment. I am keen to ensure we have a realistic phasing-out period that is sustainable for the industry, so that we can achieve the welfare goals shared by Members from across the House. I do not consider this Bill to be the appropriate delivery mechanism, so I cannot support the new clause, and I ask that it be withdrawn.
Daniel Zeichner
The Minister is absolutely right: we sat here two years ago and had exactly the same conversation. The question is: when? That is the problem. I do not disagree with Zoe. I will speak to her about this in a few days’ time. I have made it absolutely clear that we would not make this change without working with the industry to ensure that the dangers the Minister mentioned, of which we are all aware, do not come to pass. This animal welfare Bill is an opportunity to take a stand. That is why we will put the new clause to a vote.
Question put, That the clause be read a second time
Daniel Zeichner
I beg to move, That the clause be read a Second time.
This new clause returns us to part 2 of the Bill, on dogs attacking and worrying livestock. As I said on Tuesday, we want to address the issue of compensation for farmers who are victims of livestock worrying. As we noted then, livestock worrying has a significant financial impact: in 2020, the total costs were around £1.3 million, while data from NFU Mutual indicates that in the first quarter of this year, the cost of dog attacks on livestock rose by more than 50%. That insurer said that its total claims for January to March of this year were estimated at £686,000—up from £453,000 for the same period last year.
As we discussed on Tuesday, contributing factors may well be increased dog ownership and, since the first coronavirus lockdown, more people accessing the countryside with a lack of understanding of how to behave there. That is why organisations including the Royal Society for the Prevention of Cruelty to Animals, the National Farmers Union and the Countryside Alliance supported the requirement for dogs to be on leads when around livestock. We have had that debate, and the Committee chose not to go down that route, but that does not mean that we cannot use our deliberations as an opportunity to look at whether there are ways to offer support to livestock owners. I listened closely to the moving words from the hon. Member for Penrith and The Border.
The new clause would require the Secretary of State to carry out a review of the appropriate measures to compensate livestock owners for cases of livestock worrying. It would also require the Secretary of State to bring forward legislation based on the findings of the review within 12 months of the date of the Bill receiving Royal Assent.
This is not a simple issue, but given that there are rights of way, and that we all want more people to enjoy access to the countryside, it is reasonable, when those various rights collide, to at least consider the consequences for those who live in the countryside and whose living is made by raising livestock. Is there a public responsibility to help in those situations? The need to find the right balance calls for a proper review.
Victoria Prentis
We absolutely understand how distressing and financially damaging livestock worrying can be for farmers. The legislation makes reforms to provide police with more powers to tackle dog attacks on livestock, so that we can identify and, we hope, prevent repeat offences. That should, in turn, lead to fewer instances of livestock worrying, but we will monitor that closely.
However, we appreciate the importance of not leaving farmers out of pocket when they fall victim to livestock worrying attacks. We agree that suitable and effective compensation mechanisms are key. There are various ways that farmers can recoup their losses, including through out-of-court settlements, civil compensation claims and insurance claims. Insurance is often claimed via the NFU, which is, as we know, the UK’s leading rural insurer. The NFU estimates that the cost of dog attacks on farm animals was around £1.3 million in 2020, and the average value of an NFU claim in this area was £1,329. Most livestock worrying incidents are resolved in out-of-court settlements through the community resolution process. That is the police’s preferred route; it allows the victim to be compensated swiftly without escalation, and relies on an agreement between the victim and the suspect.
We are happy to consider how well existing mechanisms—other than insurance via the NFU and other providers—work. We will work closely with the industry and the police to ensure that that happens. By modernising the legislation and improving the enforcement mechanisms, we aim to reduce livestock attacks in the future. We hope that, through improved awareness, with dogs being kept away from livestock and on leads where appropriate, there will be less need for compensation. I therefore ask that the new clause be withdrawn.
Daniel Zeichner
In the light of the Minister’s response, for which I am grateful, I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 10
Regulation of the keeping of hunting dogs
“(1) The Secretary of State must, within 12 months of the date of Royal Assent to this Act, make regulations providing for licensing of the keeping of one or more dogs used for the purposes of hunting.
(2) It shall be an offence to keep a dog which is used for hunting without a licence.
(3) For the purposes of this section, “hunting” includes, but is not limited to—
(a) hunting any animal; and
(b) trail hunting or other hunt simulation.”.—(Daniel Zeichner.)
This new clause would require the Secretary of State to make regulations for licensing of the keeping of one or more dogs used for the purposes of hunting.
Brought up, and read the First time.
The Chair
With this it will be convenient to discuss the following:
New clause 11—Hunting dog welfare: review and consultation—
“(1) The Secretary of State must carry out a review of the welfare conditions of dogs used for hunting.
(2) In conducting the review the Secretary of State must—
(a) consider the welfare conditions of dogs used for hunting;
(b) consult the public and such persons as the Secretary of State considers appropriate on the welfare of dogs used for hunting.
(3) The Secretary of State must lay before Parliament a report on the findings of the review, which must set out recommendations for action.”
This new clause would require the Secretary of State to conduct a review into the welfare conditions of dogs used for hunting.
New clause 12—Ban on the use of a dog below ground in the course of stalking or flushing out—
“The use of a dog below ground in the course of stalking or flushing out is prohibited.”.
New clause 13—Removal of exemption of hounds under the Road Traffic Act—
“(1) The Road Traffic Act 1988 is amended as follows.
(2) In section 27 (Control of dogs on roads), in subsection (4) omit paragraph (b).”.
Daniel Zeichner
You might not like this one so much, Mr Davies—or some might not. New clauses 10, 11 and 12 are about the welfare of hunting dogs. I am grateful to the League Against Cruel Sports for its advice on the new clauses.
New clause 10 would require the Secretary of State to make regulations within 12 months of the passing of the Bill that would require individuals who keep one or more hunting dogs to obtain a licence, and it would make it an offence to be in possession of hunting dogs without a licence. New clause 11 would require the Secretary of State to carry out a review of the welfare of dogs used for hunting. At the core of these issues is a concern about the welfare of hunting dogs and that the absence of a robust licencing system has resulted in some hounds experiencing poor welfare conditions.
Unlike dog boarding kennels, which are commercial and therefore licensed, hunt kennels are not licensed and are regulated by the code of practice for the welfare of hounds in hunt kennels. The code sets out that euthanasia is not an offence so long as it is done in an “appropriate and humane manner”. It says that, for adult hounds over the age of 10 weeks, a humane killer should be used, and that hounds of all ages may be put down by a veterinary surgeon with an overdose of Euthatal. The issue is that hunt kennels are not independently inspected, and so there is no independent monitoring of hound welfare and the euthanasia of hounds. As a result, hound welfare concerns are unlikely to come to light, and when they do, reports of how the dogs are treated sometimes fall well below expected standards.
Last month, ITV published an exposé of the killing of hounds by the Beaufort hunt, which included videos of hounds being dragged outside and shot, including one hound that was shot twice, minutes apart, before it died. It is believed that the shooter was not a trained veterinary professional. This clearly does not constitute appropriate and humane euthanasia. I watched the footage, and I suggest others do so, although it is upsetting. A number of those commenting in the ITV piece, including a Conservative MP, urged regulation. That is what we propose.
In 2015, the Daily Mirror published a report on the treatment of hunting dogs, including the testimony of a former hunter who said that the whipping of dogs was commonplace and that hounds are disposed of when they are perceived to have failed in any way. In the past, when the debate over the future of hunting was raging, I visited the West Norfolk Foxhounds to speak to people directly. My strongest memory of that visit was of the hounds themselves—big, strong dogs, totally unsuitable for rehoming. When I asked what became of them, the answer was honest and clear: “We shoot them.” Some will say that that is just the way of it; that is a reality of rural life. I do not think that is good enough in 2021, and my sense is that most people living in rural areas do not think so either.
It is our view that such weak regulations and the lack of monitoring of hunting kennels leave hounds open to poor welfare conditions. Given that we license dog boarding kennels, I do not see why the same approach is not taken to hunt kennels. Are we saying that somehow the welfare of hunting dogs is not important?
I would like to make it clear that I am not saying that all hunts necessarily treat hounds in that way, but the lack of monitoring makes it difficult to know how they are treated. Given that the Bill is an animal welfare measure, I believe that we should be seriously concerned about the limited understanding of how hounds are treated and the lack of a licensing system to protect their welfare. New clauses 10 and 11 would rectify that.
New clause 12 would ban what is known in the hunting world as terrier work. That terminology describes a hunting activity whereby terriers are introduced into a hole in the ground to flush out or force a wild mammal to escape. If the wild mammal does not escape from the hole immediately, those in charge of the dog will dig down to access it—a process that can take hours, I am told. If the wild mammal—usually a fox, but sometimes a badger—does not subsequently bolt from the hole, there can be an underground battle. That is not only cruel to the wild animal being flushed out, but to the dogs, who risk being forced into a dangerous confrontation, which can result in severe injuries or death.
I am afraid that there is also, in our view, the real risk that the practice is used as a cover for illegal hunting with dogs. Although hunting with dogs is illegal, we are told that those who work with terriers still sometimes accompany hunts under the guise of trail hunting. There is of course little reason for that since no live wild mammals should be being hunted and there should be no need for support to flush out a wild mammal. Recently, in a notorious, high-profile case, Mark Hankinson of the Masters of Foxhounds Association was found guilty of encouraging and assisting people to evade the ban on foxhunting. The prosecution was the result of leaked footage of webinars hosted by the Hunting Office in August 2020, during which, among other incriminating comments, Mr Hankinson said that terrier work is “our soft underbelly”.
The League Against Cruel Sports reports that, in addition to its role in foxhunting, terrier work continues to occur as a stand-alone recreational pastime for individuals and gangs of people across the country who enjoy using their terriers to attack foxes and badgers. It stated that evidence it has gathered suggests that putting dogs underground to chase and fight foxes can lead to some of the worst cruelty cases associated with hunting. Given the harm that terrier work can cause to dogs, the new clause banning the practice is long overdue.
New clause 13 would remove the exemption for hunting dogs from section 27 of the Road Traffic Act 1988, under which local authorities may specify “designated” roads where dogs must be kept on leads. Sadly, every season there are incidents of hounds causing chaos by running across roads when trail hunting. During the March 2019-20 hunting seasons, the League Against Cruel Sports received 128 reports of hunts causing havoc on roads. Eight involved foxes being chased across roads by hounds that were supposedly trail hunting. The league also received reports of 10 hounds involved in road traffic collisions. Five of them were killed.
Removing the exemption would mean that a hunt had to abide by the same rules as any other dog owners on designated roads. Again, that should not pose a challenge to legal hunts. If trail hunts are operated properly, they can be organised in a manner whereby there is no possibility of hounds ending up on the road. The route of any trails laid should be properly planned, well away from such hazards. In cases of exempt hunting, hunts should have sufficient control over hounds to prevent them from unexpectedly marauding across and along roads. It should be added that not all roads are designated, so hunts will still be allowed to cross certain roads if the council allows it.
Victoria Prentis
The Government are committed to improving the welfare of all dogs. The Animal Welfare Act 2006 puts obligations on all animal keepers to meet the full range of welfare needs. It is backed up by the statutory code of practice, to which we referred extensively on Tuesday, for the welfare of dogs.
The Animal Welfare (Sentencing) Act 2021 raised the maximum penalty for cruelty to five years’ imprisonment and an unlimited fine. Local authorities have powers under the 2006 Act to act where a dog is suspected to be suffering. The local authority can enter the land and take control of the animals. As we know, local authorities often work very closely with the RSPCA.
The Committee will remember that dog licensing was abolished in 1988. I remember buying a licence for our springer spaniel at the post office as a child—it cost 37p —but apparently only half of all owners bought one. We did not find that dog licensing ensured the welfare of dogs or restricted who was able to keep them. We would need sufficient evidence of welfare concerns to treat one type of dog differently from another.
Daniel Zeichner
I thank the Minister for her response. I suspect that we will not find agreement on this. I do not think that there is any need to rehearse the arguments at length, but the Minister’s licensing argument is weak, frankly. On that basis, we will not pursue all the new clauses, but I will press new clause 10, on the basic welfare of hunting dogs, to a Division.
Question put, That the clause be read a Second time.
Olivia Blake (Sheffield, Hallam) (Lab)
I beg to move, That the clause be read a Second time.
The new clause would ban the sale of dogs with cropped ears, although obviously not if they have been rehomed by official rescue organisations. We have been over the issue during our debates, but this new clause is about the sale of such dogs, rather than their transportation into the country. Let us see what the Minister has to say.
Victoria Prentis
The mutilation of dogs’ ears has been banned in the UK for some time, but there is currently no ban on imports, so as we heard in evidence, sadly the numbers continue to rise. The Bill includes an enabling power that will allow us to restrict such imports on welfare grounds via secondary legislation. We recently consulted widely on the issue and received 14,000 responses, of which we will publish a summary early next year. We are also working closely with the devolved Administrations on the matter.
In summary, we already have the powers to take action, and we are working through the process of doing so. I therefore ask for the new clause to be withdrawn.
Olivia Blake
As I said earlier, this practice has increased by 621%, which is obviously concerning. I hear what the Ministers says, and although a ban on sales would be welcome, we will not push the new clause to a vote.
I beg to ask leave to withdraw the clause.
Clause, by leave, withdrawn.
New Clause 16
Snare traps
“Snare traps may not be used in England in areas where there is a possibility that kept animals may become intentionally or unintentionally ensnared.”—(Olivia Blake.)
This new clause would prohibit the use of snare traps in the England where there is a possibility that they might ensnare kept animals. Snare traps are thin wire nooses that are used to catch foxes, rabbits and stoats but can also catch other animals such as cats.
Brought up, and read the First time.
Olivia Blake
I beg to move, That the clause be read a Second time.
Under new clause 16, we propose a ban on the use of snare traps in England in areas where there is a possibility that kept animals might be ensnared, whether intentionally or not. Snares are imperfect, indiscriminate traps that regularly cause unnecessary suffering and harm to kept animals as a result of incorrect usage and inadequate legislation. Although snares can legally be used only to trap certain species, in reality it is impossible to limit the species or type of animal that gets trapped in a snare. As a result, non-target species are often caught and suffer through exposure and injury.
The current legislation, which was introduced in 2005, is failing to protect animals from harm. It proposed a code of practice on snares, setting out best practice on their use and guidance on where and how to set them. Unfortunately, compliance with the code is voluntary, which severely negates its effectiveness. A 2012 report by DEFRA found that although awareness of the code was high, levels of compliance with best practice were, sadly, exceedingly low.
The same report found that 1.7 million animals were caught in snares each year. Of those, 33% were hares, 26% were badgers, 25% were foxes and 14% were other animals. In 2015 alone, the RSPCA reported 717 calls from members of the public about animals caught in snares, including 157 cats, 58 dogs, 10 equines and 307 wild mammals. The reality is that without more controls over the placement of snares, there is no way to prevent more kept animals from being snared and injured, whether intentionally or not.
Victoria Prentis
I absolutely recognise that snares can be used improperly, and that non-target species, such as livestock, and particularly cats, can get trapped in them, sometimes fatally. The code of practice to which the hon. Lady referred was set out in 2016, and tries to ensure that snares are not set near domestic dwellings, where pets may be trapped.
We continue to work on the issue. In our action plan for animal welfare, we have committed to opening a call for evidence on the use of snares, which we hope to publish shortly. We encourage Members across the House, and indeed members of the public, to make their views known when we open the consultation. In those circumstances, I ask that the motion be withdrawn.
Olivia Blake
I understand what the Minister says about more consultation, but the Opposition feel that the matter is clearcut and we wish to press new clause 16 to a vote. A lot of time has passed since the code of practice came in; as I say, it is sad to hear that it has been ineffective in resolving some of the issues.
Question put, That the clause be read a Second time.
The Chair
Order. I do apologise; the Whip had meant to adjourn the Committee, but she did not do it in time, so please carry on.
Olivia Blake
Thank you, Mr Davies—I will be quick. I am sure that everyone knows about the “justice for Reggie” campaign, which has been working tirelessly better to regulate online sales of animals following a tragic experience. Reggie was a 12-week-old Labrador who was sold online through a reputable website that advertises thousands of puppies for sale, but he was sold without proper care from a breeder and with insufficient checks to safeguard his welfare and wellbeing. Within 12 hours of Reggie arriving home with his new owners, he fell gravely ill. He spent the next three days receiving care at a vets before dying of parvovirus. His death was painful and horrific, and his owners were understandably still traumatised because of their ordeal. Following Reggie’s death, it was discovered that false documentation had been provided, and in fact Reggie was unwell at the time of the sale.
The new clause proposes further regulation of online animal sales to prevent situations such as Reggie’s happening again. It would require all websites that sell animals to verify the identity of all sellers. It further proposes that all prospective sellers who wish to sell a cat or dog aged one year or less must post a photograph of the animal with one of its parents. Putting such checks on a legal footing would help strengthen the use of online sales—unfortunately, I do not think we can end them—and is essential to prevent animals being sold with falsified or no documentation. We could therefore ensure that all animals sold come from reputable, trustworthy breeders.
Victoria Prentis
The Government take this issue seriously and have recently taken several steps to strengthen pet breeding and selling regulations, including banning the third-party sale of kittens and puppies. We are also encouraging the responsible sourcing of pets via the national “petfished” campaign.
The Animal Welfare (Licensing of Activities Involving Animals) (England) Regulations 2018 introduced a wide range of real welfare improvements for pet breeding and pet sales. The object of the regulations was to update and improve the existing welfare standards. They also provided a template for adding further activities in future, when necessary. The regulations make numerous requirements of pet sellers and dog breeders who are licensed relating to the keeping of records and advertising. Any licensed pet seller or dog breeder advertising animals for sale will need to include their licence number in the advert and specify the local authority that issued the licence. Additional requirements relating to adverts include a requirement for the age of the animal to be displayed alongside a recognisable photo. That said, we are always looking to make improvements where possible. We will review the regulations before October 2023.
Our regulations aim to ensure that sellers and breeders become responsible, but I understand that the hon. Member’s concerns are about online platforms used by sellers; that is what the new clause covers. It may be helpful to outline the work that the Government are doing. We support the work of the pet advertising advisory group—PAAG—created in 2001, which aims to combat concerns regarding the irresponsible advertising of pets for sale, rehoming and exchange. It comprises various animal welfare organisations, trade associations and vet bodies. It has been engaging with online marketplaces in the UK to help them to distinguish appropriate adverts and take down those that are not.
DEFRA has backed a set of minimum standards developed by PAAG. Encouragingly, several of the UK’s largest classified websites have now agreed to meet those standards. I look forward to working closely with PAAG. I therefore ask the hon. Member not to move the new clause.
Olivia Blake
I thank the Minister for the response. I beg to ask leave to withdraw the clause.
Clause, by leave, withdrawn.
Ordered, That further consideration be now adjourned. —(Mrs Wheeler.)
Nuclear Energy (Financing) Bill (Fourth sitting)
Thursday 18th November 2021
(3 years ago)
Public Bill CommitteesRead Full debate Nuclear Energy (Financing) Act 2022 View all Nuclear Energy (Financing) Act 2022 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 18 November 2021 - (18 Nov 2021)
The Committee divided: - Ayes: 5 / Noes: 7 - Question accordingly negatived.
The Minister of State, Department for Business, Energy and Industrial Strategy (Greg Hands)
Welcome back to the Chair, Ms Fovargue.
I believe that the intent of the amendment is already captured in the approvals framework for the regulated asset base. That includes the process for designating a project and then modifying its licence, and wider due diligence on the project. The Government simply would not allow a company to enter into a RAB revenue collection contract if there were cause to doubt the ability of the company to complete construction, a point made slightly more pithily by my hon. Friend the Member for Bridgend in his intervention on the shadow Minister, the hon. Member for Southampton, Test. We expect to say more about how the Secretary of State will make this judgment in our statement on the designation criteria, which we will publish in advance of any consultation on designation.
Before considering the matter of licences, let me return to the question asked earlier by the hon. Member for Kilmarnock and Loudoun. Sizewell C does have a licence, as within the terms of clause 1(2). He said that he could not find the link to the licence on the Ofgem website, so I will commit to write to him, copied to the Committee, with that link.
Designation is very much the first step in the process of amending a developer’s licence to include the RAB conditions. At the point of designation, no commitments have been made; a project will be under development, and further negotiation is required between the developer and the Government. The process is open and transparent and includes consultation at several stages, meaning that a project will be designated only at an appropriate point.
Let me deal with the points raised about various RAB projects in the United States. It is not unreasonable to look at foreign experiences, but it is important to separate the experience of another country in developing and delivering a nuclear power plant from what part of that experience was due to a RAB model. There were several unique circumstances linked to the failure of the South Carolina Virgil C. Summer project, which was referred to, and the parent company, including—[Interruption.] I beg your pardon?
Dr Alan Whitehead (Southampton, Test) (Lab)
Sorry. I was just wondering to myself whether the Minister had looked all this up during lunchtime. If so, I congratulate him on doing so.
Greg Hands
I thank the hon. Gentleman for that intervention—I think it was an intervention—from a sedentary position. As the Energy Minister, I have to be aware of what is going on in the world of nuclear globally, so no, I did not look it up during lunchtime, actually; I have looked into this and other US plants. The failure of the Virgil C. Summer project—I think that is the one he was referring to—and the parent company included arrests and a conviction for fraud. There were also issues linked to design and supply chain immaturity, as well as a lack of experience with the construction of new nuclear projects. Those issues are pretty far removed from its status as a RAB project. I do not think those risks in South Carolina are applicable to the UK.
Dr Whitehead
I fully accept that the Minister did not look that up at lunchtime and that he is fully apprised of the circumstances surrounding the South Carolina project. However, does he not accept that the issues that he has mentioned as relevant to the failure of that project—it was entered into without proper consideration of a lot of things that, as he said, were at least in part responsible for its failure—are precisely the sorts of issues that we would expect him to take into account and sort out before deciding on the designation of a project in this country?
Greg Hands
Broadly speaking, the answer is yes. I think that all of those factors, if known at the time, would be considered when the Secretary of State makes the designation. That is the point. Of course they would be factors, were they to be known. I cannot put myself in the shoes of the governor of South Carolina—if indeed it was the governor of South Carolina who made the decision—but if he were or had been of the opinion that the project could not have been completed, he would surely not have made the designation at that time. I am slightly hesitant to stray into the politics of South Carolina, but doubtless the governor was of the opinion at that time that the project would have been completed. The hon. Gentleman uses South Carolina as an example, but I do not think that his amendment would have helped the governor make that decision.
This is not just a question of the factors, which are already covered in the Secretary of State’s determination of a RAB designation. The timing is also important. A project has to go through many stages and approvals post designation of a RAB. To include the hon. Gentleman’s additional definition at this stage might be premature, though I doubt it is needed at all, for the reasons pithily put by my hon. Friend the Member for Bridgend about the chances of the person making the decision being of the view that the project might not be completed. If that were the case, I think it would be a highly material fact in determining whether to designate a RAB. I do not believe that this amendment is necessary in order to meet the laudable objectives that Opposition Members seek to achieve. I therefore ask the hon. Gentleman to withdraw the amendment.
Dr Whitehead
I hear what the Minister says about the amendment, but I am not entirely convinced that he has made the case that he thinks he has made as to why this addition is not necessary for the designation process. After all, we are not talking here about a particularly adept and alert Minister in a particular Administration taking a decision on Sizewell C. As the Minister has said, this Bill is supposed to deal with decisions that might be taken under other circumstances, for other projects, at other times, with other Ministers, and possibly other Administrations. It is important that we put in legislation everything that we think could go wrong with a project and its designation process, so that the legislation is robust for the future.
On South Carolina, the Minister is right. The project failed as a result of a series of interlocking issues. Those issues were not necessarily associated with the RAB process, which is what we are considering in this Bill, but there were wider concerns that should have been apparent to legislators in South Carolina when the project was commissioned and went ahead. Many of the things that the Minister alluded to that occurred in South Carolina were not unforeseeable events. They were events that could have been analysed out at the time of the designation of the plant. Essentially the amendment seeks to address that issue.
We will not press this amendment to a vote—indeed, we will withdraw it—but we have put on the record our belief that the Secretary of State should have a very substantial hand in ensuring, as far as possible, that the project really can come to completion. I am sure that the Minister is with me on that and agrees that that should be the process by which we conduct designation.
Even if it is not explicitly in the Bill, the fact that the Minister has indicated that he thinks that a number of these issues can be covered within the designation elements is perhaps a step along the path to ensuring that these processes can be carried out properly. I do not wish to proceed with the amendment on that basis, but we need to do a proper job at the point of designation, for the protection of investors, for the project and for the customers who pay for it.
Greg Hands
Just to probe the hon. Gentleman on this, if I may, one of the criteria is whether the project is sufficiently developed to warrant a RAB. At what point does he think that the fact that the person making the decision might not necessarily think it would be completed would mean that they do not think it is sufficiently developed to start the process? Surely, if they did not think it was going to finish, they would not think it was ready to start either?
Dr Whitehead
The Minister puts that as a binary choice, but it is not because there are circumstances. That is essentially what happened in South Carolina. A number of people thought that it was a fine project that would go ahead; they put forward impossible timelines for the project to work on, there were very difficult financing arrangements and the RAB was placed on top of that. Yes, they may have thought that the project could come to completion, but it was not a very well-founded thought, and nor was it arrived at on the basis of the sort of diligence we should expect from the approach to a project the size of, say, Sizewell C.
The amendment’s intention is not to make the Secretary of State make a choice based on a potential view, when designating a project, that it might not be completed. He should do all that work, and indeed be publicly accountable for it, when ensuring that his view is as well founded as possible and that it will stand the test of time as the project progresses. There are points of landing between knowing whether a project is not going to be completed, and being sure that it is going to be completed. When making a designation, the Secretary of State should be held accountable for arriving at an informed position, which can be scrutinised in future, on whether it is reasonable and realistic to say that a project is likely to be completed. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Greg Hands
This clause, through subsection (1), gives power to the Secretary of State to designate by notice a nuclear company to benefit from a RAB. The later provisions of this part mean that the designation power can only be exercised with appropriate protections and transparency of decision making. Subsection (3) sets out the criteria a company must meet to be eligible for designation: that the Secretary of State must be of the opinion that, as previously debated, the nuclear project is sufficiently advanced to justify the designation, and that designating the company in relation to the project is likely to result in value for money. In considering value for money, it is expected that the Secretary of State will take into account considerations such as the cost to consumers and the impact on our net zero obligations. As set out in clause 3, the Secretary of State will be obliged to publish details on the process that he will follow when assessing whether the criteria are met.
The eligibility criteria offer important protections for consumers and taxpayers. A company can have access to a RAB only when the Secretary of State is convinced that it is a good project and sufficiently advanced, and where the likelihood of cost overruns is remote. The Secretary of State will also need to consider whether using the RAB to fund the project is likely to represent value for money.
Alan Brown (Kilmarnock and Loudoun) (SNP)
I will come to this in my own comments, but is it not the case that the Secretary of State gets to sign off whether he thinks a project is value for money and sufficiently advanced, and then a statement is published giving the reasons for that? However, the Secretary of State gets to write the rules for the sign-off. Is it not the case that no clear structure or checklist will be gone through so that the Secretary of State can sign off such projects?
Greg Hands
I disagree with the hon. Gentleman. I think that the process and the checklist is set out pretty well. If he would like, I can run through how the process works when we get to the later clauses and look at the specifics of the process. It might appropriate to take him through that.
When considering value for money, the Secretary of State is expected to have regard to the cost to consumers, future security of supply and our decarbonisation targets. The Secretary of State can designate multiple nuclear companies at any given time, so more than one project can be designated for a RAB at the same time, but the designation criteria, project status and likely value for money will be applied individually to each project.
Alan Brown
Following on from my intervention, I have real concerns about the clause—we will come later to clause 3—and the lack of transparency in what constitutes value for money. In signing off projects, the Secretary of State has to give an opinion on whether they are suitably advanced to justify a designation, but what constitutes “suitably advanced”? What considerations must the Secretary of State be compelled to make to ensure that a project is suitably advanced to give the correct level of detail and analysis for cost definition in sign-off? We should bear in mind that sign-off for a 60-year contract ties up consumers.
I do not see those considerations in the Bill. The Minister said that he would take the Committee through them, but how does the Secretary of State consider how suitably advanced a project is? Does there have to be a working prototype? There is no working prototype of the evolutionary power reactor model generating electricity to the grid. The projects in France and Finland are years late, over cost and still not connected to the grid—and, as I said earlier, the Taishan 1 EPR is now offline due to safety concerns. How can the Secretary of State have any confidence that a project such as Sizewell C is suitably advanced when there is no working prototype?
What other permissions need to be taken into account to determine whether a project is suitably advanced? Does it need to have planning permission? Does it need to have gone through all its environmental appraisals and have all its environmental approvals in place? Are there other things to consider? How far is outline design to be developed? Is there a level of detail to consider to determine whether a project is suitably advanced? How much site investigation work needs to be undertaken before a Secretary of State can have confidence that a project is suitable advanced, bearing in mind the cost of a 60-year contract? Should consideration be given to a company’s track record on deliverability? That takes us full circle to how there is not an EPR up and running. In a way, that touches on what the shadow Minister said about having confidence that a project can be delivered when not one project has yet been delivered successfully.
The Government are in advanced negotiations on Sizewell C, which is the most well developed nuclear project at the moment. Does it come close to the definition of “sufficiently advanced” or does a lot more work need to be done? That takes us full circle back to the discussions earlier about the £1.7 billion allocated in the Red Book. The Minister has still not given us any clarity on what the £1.7 billion is for. Is it to allow the Sizewell C company to develop the project further to get it to a position that the Secretary of State thinks is sufficiently advanced? That would mean that, by default, the Secretary of State knows what “sufficiently advanced” means, so we should be able to understand what the £1.7 billion is going to pay for. Hopefully, all that can be explained.
EDF has claimed it is using Hinkley as a prototype that it will replicate at Sizewell C. It will accrue savings and just move the design almost lock, stock and barrel from Hinkley into the footprint at Sizewell C. I would have thought that, by default, that means the project is sufficiently advanced such that we do not need the £1.7 billion to advance it any further. A bit of clarity on that would be useful.
We need a lot more clarity on subsection (3)(b). What is the process for the Secretary of State assessing and giving the opinion that
“the project is likely to result in value for money”?
What are the intended governance and transparency protocols? We have spoken about the designation in a statement, but there is no clarity on what the Secretary of State will consider and what will be provided in the statement.
In recent months we have had the dodgy covid contracts. How do we ensure good faith rather than backroom negotiations and that there is public trust in what goes on in the signing-off of contracts? When I asked the Treasury a written question about the £1.7 billion and the discussions the Chancellor has had, the answer I was given was:
“Details of any meetings with companies regarding funding are commercially sensitive.”
If the Treasury will not even tell me who it is meeting and when, how can we have any comfort about what goes on behind closed doors in respect of the negotiations and the assessment of value for money? I hope to come back to value for money later in Committee, because I have tabled a relevant new clause.
It seems to me that as it stands, subsection (3)(b) means nothing, other than that the Secretary of State can rubber-stamp something that he believes to be value for money. Let us bear in mind that this is the Government who told us that Hinkley was value for money, even though everybody argued that the strike rate was too high. With this Bill, they are telling us that Hinkley was actually a rubbish deal, so we need the RAB model in the Bill to save taxpayers’ money.
The Government explained on Second Reading that a contract for difference had to be used for Hinkley because it was the first of a kind, so all the risk was on the developer, but that raises further questions. If a CfD was needed for Hinkley because it was the first of a kind in the UK, how on earth can the Government make a final decision to proceed with Sizewell C under a RAB model before Hinkley is even operational?
Hinkley is 25% over budget and at least a year late, with a possible further 15-month delay on top of that. How can the Government have any confidence in signing off on something like Sizewell C, for which the impact assessment talks about a 2023 construction start date? How can that project be anywhere close to “sufficiently advanced”? How can the Secretary of State do a proper value-for-money assessment given all the outstanding issues with Hinkley?
As I said, we need a lot more clarity on that £1.7 billion. Is that going to be the way forward in future? Is it the intention that, for a project to get to a stage where it is sufficiently advanced and the Secretary of State can make a value-for-money assessment, something like £1.7 billion will be allocated to each developer that is in the mix for a new nuclear project? That is crucial for value for money overall.
Paragraph 50 of the explanatory notes gives four criteria that might be used to consider value for money, but three of them are just the traditional Government tropes to justify nuclear in the first place: security of supply, low-carbon electricity and net zero targets. The Minister alluded to that in his opening speech. Those same arguments have been put forward to justify new nuclear for the past 15 years. We still do not have a new nuclear plant operational, so when the Secretary of State looks at the reasons for value for money, it will be very easy because those are the arguments that they will use.
In particular, the security of supply argument was used to justify Hinkley, but Hinkley was supposed to be required by December 2017 to stop the lights going out. It will not be operational for at least 10 years after that original date, and the lights have not gone out, so security of supply is almost a nonsense argument for value for money. That confirms to me that the criteria are too loose and will be too easy. There will be a lack of transparency, but the Secretary of State will sign it off and say, “Yes, I think the project is value for money.” Again, we have this Bill because they are desperate to get Sizewell signed off at any cost.
In conclusion, for me the clause is too loose and too vague. It is set up to encourage backroom negotiations without transparency. At the very least, it would be nice if the Government conceded to an independent assessment of the risks and value for money for consumers. That was suggested in the witness session on Tuesday by Citizens Advice. I look forward to the Minister’s response, but he will have to go a long way to satisfy me that there is a robust procedure in place to assess value for money and how suitably advanced the project is for designation.
Greg Hands
I thank the hon. Gentleman for that varying and detailed speech on clause 2. I will try to deal with each of his points. First, he raised a series of additional factors that could be considered by the Secretary of State. He might have tabled an amendment, for example, on what those additional factors might be. I do not think I have seen any amendments tabled by the Scottish National party, but he might have perhaps tabled one in the same way that the official Opposition did as a test. My initial response is that the additional factors he raised would be covered by the two criteria on whether it is value for money and sufficiently advanced, so his additional criteria would be encompassed by the two processes that are already there. Perhaps he can table an amendment to deal with where he would specifically like something added.
The hon. Gentleman asked about the £1.7 billion. We have been clear, while remaining consistent with the fact that this is a commercial negotiation, that the funding is to bring a project to a final investment decision in this Parliament, subject to value for money and all relevant approvals. That could include development stage funding to support the maturation of the project to de-risk it. It could also include some Government investment at the point of a transaction, helping to mobilise other private sector capital. It is already laid out in detail in the Budget document. It was debated at Budget, and I reiterate it today. That there is a limit to how much additional information I can put out on something when ultimately the background is that it is a commercial negotiation.
Alan Brown
Earlier, the Minister talked about UK pension funds as well in terms of levering in capital. Is some of the £1.7 billion going to be matched funding with pension funds, for example, or is it to provide some guarantees so that the pension fund can invest at a guaranteed rate of return, where the guaranteed rate of return comes from the taxpayer?
Greg Hands
I am not going to add anything on the £1.7 billion, which is a separate process and a separate factor to the Bill. I have nothing further to add. I have given sufficient detail of where the £1.7 billion might be spent. Where it will be spent is properly a matter for which the background is the commercial negotiation.
The hon. Gentleman mentioned delays at Hinkley Point C. He is in danger of arguing with himself at times. At one point he argued that we had not brought a nuclear project to a final investment decision, or we had brought only one in the last decade. Then he said that we should wait to make a decision on Sizewell C until we had Hinkley Point up and running. It sounds to me as if he wants to have it both ways—
Greg Hands
He is saying we are either moving too quickly or too slowly. Ms Fovargue, it reflects back to the starting position. If the hon. Gentleman does not mind me saying it, I think he is opposed to nuclear power per se. I suspect he is less interested in whether it is going too quickly or too slowly, to be frank, and it would be helpful if he gave us a straight view as to whether we are being too quick or too slow.
Dr Whitehead
I beg to move amendment 4, in clause 3, page 2, line 37, at end insert—
“(5) Prior to consulting persons under subsection (3)(g), the Secretary of State must publish a statement setting out why it is relevant to consult those persons.”
This amendment requires the Secretary of State to indicate the relevance of the people he is consulting on the designation of a nuclear company.
The amendment, and another couple that relate to clauses further down the order paper, need not detain us for long. They essentially seek to improve the effect of the text of the Bill and are not controversial.
Amendment 4 applies to clause 3, on page 2 and requires the Secretary of State to
“publish a statement setting out why it is relevant to consult those persons.”
That refers to the list of those people who are to be consulted upon the designation of a nuclear company. At the bottom of that list is the phrase
“such other persons as the Secretary of State considers appropriate.”
I appreciate that is often seen in Bills and I am sure hon. Members have seen it in their time in other Committees, but I suggest that it is rather loose arrangement if we want to have a Bill that will stand the test of time. While it is a catch-all arrangement, one could almost ask why the other categories are listed. One might as well just put, “Those persons who the Secretary of State considers appropriate.”
Surely, where the Secretary of State is considering consulting other people, in addition to those listed, those people ought to be relevant to the designation of the nuclear company. As the Bill stands, it is just people
“the Secretary of State considers appropriate.”
Kirsty Blackman (Aberdeen North) (SNP)
I am slightly confused about why the hon. Member seems to be suggesting that it is a bad thing for the Secretary of State to undertake more consultation. Surely more consultation is a good thing. Generally, the Opposition call for more transparency. If the Secretary of State feels that it is necessary to consult more people, I am not hugely convinced that there is a point to making him justify that.
Dr Whitehead
I hope that the hon. Member will forgive me if I have not made myself clear. I am certainly not saying that consultation is a bad thing or that there should be less of it; I am saying that the Bill appears to provide for consultation with all the people named in it and anybody else the Secretary of State feels like including. One may think that that is a good thing, but I would have thought that anyone else the Secretary of State feels like including ought to be relevant to the designation of the nuclear company. All the amendment asks is that, when and if the Secretary of State decides that people other than those who were already on the list be consulted, he publish a statement to say why the people he has selected for additional consultation are relevant to the issue in hand. Otherwise in principle it would be possible for the Secretary of State simply to choose a random number of people off the street and consult them. That would not serve the cause of further consultation and transparency.
Kirsty Blackman
May I check that an alternative amendment could have been to change the last word in subsection (3)(g) to “relevant” rather than “appropriate”, which would mean that the Secretary of State would be able to consult all the other people he considered to be relevant, rather than appropriate? Is that the direction in which the hon. Member is trying to go with his amendment?
Dr Whitehead
Indeed. The hon. Member has drafted her own, perhaps more succinct, amendment on the fly. I would welcome hon. Members tabling amendments if they feel that they can do it better, or more succinctly, than we can. She is right that it is a test of the relevance of the consultation process. Her suggestion does not quite cover the point because I would like the Secretary of State to say why those people are being consulted. Essentially, the amendment requires the Secretary of State to not just think that people are relevant but tell us why. It is not a big point, but I think that would improve the Bill a little were it to be accepted.
Greg Hands
I thank the hon. Members for Southampton, Test and for Greenwich and Woolwich for amendment 4, which amends the clause governing the process by which the Secretary of State can designate a company. As part of the process, the Secretary of State must consult a named list of persons, including the authority, Ofgem, the Office for Nuclear Regulation and the relevant environment agency. The Secretary of State will also be able to consult, of course, such other persons as they deem appropriate at that time. The amendment would require the Secretary of State to publish the reasons for consulting those persons not named in the legislation.
Of course it is important for us to be transparent, and I welcome the intention of the amendment to increase transparency and accountability throughout the process, but it might help if I set out the intention of the consultation requirement in clause 3. The Government have agreed a set of persons that they feel must be consulted: the Office for Nuclear Regulation, Ofgem, the relevant environmental agencies and the devolved Administrations in the event that all or part of one of the plants be located in one of the devolved nations of the United Kingdom. The ones who must be consulted include the key regulatory bodies for nuclear generators in Great Britain.
Alongside that, for each designation, there may be other relevant parties that the Secretary of State thinks it is reasonable to consult to inform the draft reasons for designation. That sort of provision is standard practice. The clause is modelled closely on existing consultation obligations in the Energy Act 2013, which allows the Secretary of State to consult other persons without the requirement to publish a justification.
I do not seek to reject the amendment because of concerns about transparency. The designation process takes several important steps to ensure transparency, including the publication of a statement on how the designation criteria will be assessed and the publication of the designation notice.
The hon. Member for Southampton, Test says that those consulted ought to be relevant, but I think that the Secretary of State will consult only with those who ought to be relevant rather than, in the terms of the hon. Member for Southampton, Test, a random set of people off the street. The way that governmental processes work is that consultations are supposed to be with people who are relevant. I do not think that including a relatively unprecedented amendment to publish a statement about why it is relevant to consult those persons will help the transparency or the understanding of the decision made by the Secretary of State.
I hope that I have shown hon. Members that the legislation already takes the necessary steps to ensure transparency and that the amendment would go against the established precedent for this kind of provision, which has generally worked well for big Government infrastructure decisions. I therefore ask the hon. Member for Southampton, Test to withdraw the amendment.
Dr Whitehead
I am certainly happy to withdraw the amendment, but in passing I mention that the Minister has drawn attention to the word “must” in clause 3(2), which precedes the people who the Secretary of State is listed as consulting. I am glad that he drew attention to that, because it may reflect on an amendment that I will move later concerning the words “may” and “must”. The Minister will know that a regular concern of mine is that legislation needs to be written in the right way concerning the imperatives on the Secretary of State rather than the allowances. We have made progress from that point of view.
Although this clause contains a fairly standard way of putting things, that may just mean that legislation has been slightly lax in the past, which may be considered less than satisfactory in future. I take the Minister’s point, however, that it is not an exceptional way of putting things, and I take his assurance that a question of relevance would be in the Secretary of State’s mind when he consulted anybody under such circumstances. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Greg Hands
Let me lay out the purpose of clause 3, which is to set out the procedure that the Secretary of State must follow to designate a nuclear company for the purposes of the nuclear RAB model. The clause requires the Secretary of State to undertake various transparency and consultation obligations before a company is designated.
The clause sets out the process. By putting the process in the Bill, the Government are showing their commitment to transparency and openness when designating a company. Prior to the designation of any company, subsection (1) requires the Secretary of State to publish a statement setting out the procedure they expect to follow in determining whether to designate a nuclear company and how they expect to determine that the designation criteria are met.
The Government anticipate that a nuclear company with a generation licence, and which thinks that its project should be funded through a RAB, would approach the Secretary of State. The Secretary of State will then assess the project against the factors set out in the statement, before consulting expert bodies on the designation. That provides opportunities for those directly affected by the potential designation, or with special expertise relevant to the decision, to provide their views on the matter. That includes the Gas and Electricity Markets Authority, the governing body of Ofgem—I will refer to it generally as Ofgem in the course of this debate, for the sake of time—whose primary statutory duty is to protect the interests of consumers.
Alan Brown
The Minister spoke about transparency, but as I touched on earlier, it seems to me that clauses 2 and 3 still do not provide transparency. Clause 3(1) gives the Secretary of State the power, in effect, to make things up as they go along. Under paragraph (a), the Secretary of State sets out the procedure that they will follow, so they are setting the rules, and then paragraph (b) allows the Secretary of State to confirm whether the designation criteria that they have already set in clause 2 have been achieved. The criteria in clause 2 are simply these: does the Secretary of State think that the project is advanced enough to be designated and is it value for money?
Effectively, by my logic, the Secretary of State states that the project is advanced enough and is value for money. Then, under clause 3(1), the Secretary of State affirms what rules will be applied to confirm what has already been confirmed—that the project is value for money and suitably advanced. It is a kind of circular argument. If the Secretary of State is determined to sign off on a new nuclear project, which they are, and they are setting the rules that they are going to apply and then they will publish the rationale as to why it has been signed off, that, to me, does not provide proper transparency. It is not things that can be challenged; it is actually just the Secretary of State giving their reasons for why they have signed off.
As I touched on earlier, paragraph 50 of the explanatory notes still does not give enough information, either. It actually gives too much wriggle room for a Secretary of State to be able to sign off, so that is also not robust enough. The Minister challenged me to table amendments, and I can table a new clause at a later date, or we can challenge further, but it is really hard to table amendments to clauses that are so fundamentally flawed. It is hard to actually improve them.
Turning to value for money, the cost to consumers is one of the items that has been suggested, but the Government are also good at saying that a new nuclear power station will add only £x a year to a consumer’s electricity bill and therefore it will have minimal impact on bills. That is a very neat way of trying to argue that a new nuclear station involves minimal cost to consumers, but of course we are talking about a 60-year contract.
In the same vein, the letter from the Minister to all MPs on 26 October stated that a nuclear project starting construction in 2023 will add only a few pounds to bills during the lifetime of the Parliament and only £1 per month during full construction. I will leave to one side the fact that 2023 is a fanciful construction date, but let me break down what the cost of £1 per month per consumer means. According to the Office for National Statistics, there are now 27 million households in Great Britain. According to the Bill’s impact assessment, the construction period for unit 1 is estimated to be between 13 and 17 years, plus another year for unit 2, so let us call it a 15-year construction period. That £1 a month per household is circa £5 billion up front. It can be argued that £1 a month is a low cost for consumers, but something like £5 billion is actually being committed. That is why we need more robust ways to evaluate what is the actual cost to consumers and what is value for money.
Let us work backwards from some of the figures in the impact assessment. It is suggested that, under RAB, the capital cost and associated financing for a new nuclear power station could be £63 billion. If we work backwards over a 60-year period, that is still only a few pounds a month, but it is actually £63 billion that we are talking about. That is a huge sum, which could be invested much better elsewhere in other forms of renewable energy. I hope that demonstrates how much wriggle room the Minister and Secretary of State have given themselves with the Bill. In fact, looking at the cost and impact assessment that the Government have quoted, it almost undermines their argument about the justification for new nuclear.
I turn now to subsection (2). Truthfully, it adds little more in the way of transparency. The Secretary of State must provide
“draft reasons for the designation”
and consult stakeholders, but the subsection does not detail how the statutory consultation will be undertaken, the timescales applied to it or, more importantly, what happens to the consultation feedback from the stakeholders whom the Secretary of State consults. Paragraph 54 of the explanatory notes states that a final reasons determination must be published as part of the designation notice, and subsection (5) covers that too. With the way the Bill is currently framed, however, this has the potential to simply be a tick-box consultation exercise. The Secretary of State can consult and stakeholders respond, then the consultation is dismissed out of hand and the final reasons are printed.
Subsection (3)(f) states that the Secretary of State may consult the Scottish Ministers and the Scottish Environment Protection Agency for Scottish projects, so what protection is there for the Scottish Government if they say no? We are implacably opposed to new nuclear, as is current SNP policy and the policy of the Government who have been elected by voters in Scotland since 2007. At the moment, the Scottish Government rely on the national planning policy framework to block new nuclear, but will the Minister confirm that, despite market failure, if somehow a proposal came for a new nuclear project in Scotland, the Bill, along with the United Kingdom Internal Market Act 2020, will not be a way for the UK Government to ram it through? How valid would the consultation with the Scottish Government be? It is not clear in the Bill.
Again, clauses 2 and 3 do not do enough to provide transparency and hold the Government to account. As I say, I would like to amend the clauses and be helpful to the Government, but given that I am opposed to the Bill and that I do not think the clauses are robust enough, it is very difficult to do so.
Kirsty Blackman
It is a pleasure to be able to take part in this Committee. Thank you very much for your excellent work in chairing today’s sitting, Ms Fovargue.
I have just been on the Subsidy Control Bill Committee, and the Subsidy Control Bill has an incredible lack of information. We spend a huge amount of time asking for more transparency in that Bill, but this Bill is significantly worse than the Subsidy Control Bill in the lack of information that has been provided. To be honest, I cannot believe that the Bill is actually considered appropriate for primary legislation, because there is a totally stunning lack of info and an absolute lack of transparency.
The Secretary of State has to publish the reasons for the designation. What does that mean? What does the Secretary of State actually have to say in their reasons for the designation? Do they just write, “I think it’s a good idea. Let’s go for it.”? There is not enough information. As my hon. Friend the Member for Kilmarnock and Loudoun asked earlier, does the Secretary of State have to take into account whether there is planning permission in place? Does the Secretary of State have to take into account the licences that have been put in place? It is totally unclear how this is likely to work.
I have a specific question for the Minister in addition to my general dismay at the clause. Subsection (3) talks about the people who have to be consulted. It says that if part of a site is in Scotland, the Scottish Ministers and SEPA have to be consulted. It also says something similar in relation to Wales and England. We know that if something is to be built in a border area, it will likely have cross-border environmental effects, so two environmental agencies could be involved should a project be fairly close to a border.
I would like the Minister to give me some comfort by saying that he would consider consulting more than one environmental agency, because if a project were to be on the border between England and Wales but slightly more on the English side, it might still have environmental impacts in Wales. It would be relevant, therefore, for the Minister to ensure that the consultations are slightly broader than simply where the footprint of the site is, because we know that any large thing that is built—whether it is something as potentially likely to cause massive environmental problems as nuclear or something much less of a potential environmental risk—has wider environmental issues than simply its footprint. It would be useful if the Minister could confirm that he would give consideration to that happening in the event that it is really pretty close to a border.
Greg Hands
I thank the hon. Members for Kilmarnock and Loudoun and for Aberdeen North for their contributions on clause 3. I will try to deal with their points.
It is important to understand the different parts of the process and the transparency involved in the process. The rules are published first; then comes the rationale for the designation, which is consulted on. It is standard practice in a consultation, of course, to take into account the results or the responses made to the consultation. Perhaps the hon. Member for Kilmarnock and Loudoun was trying to characterise it as superfluous or part of a process that would not add any additional information, but a Government consultation is there specifically to seek out and find more information. We then publish the final rationale for the designation. I hope that is helpful in setting out a little of the process involved.
The question about stating the length of the consultation is one that would be appropriate to the project itself. Let us not forget that we are trying to design a process here that would take into account a number of different possible future nuclear power stations. It would be difficult for us today to be prescriptive about the length of time that a consultation should take. We have set out those who we think must be consulted, and we have also left it open for the Secretary of State to consult other interested parties, which is quite reasonable considering that this legislation is supposed to encompass various forms of future nuclear power plants. We would be in danger of becoming too prescriptive about things such as the length of the consultation and the earlier amendment about stating reasons for particular people to be consulted.
Dr Whitehead
I do not want to be accused of trying to be too helpful to the Minister but, as I understand it, this part is about the designation of an existing nuclear company for the possibility of receiving RAB payments for a project it has not yet undertaken. That is it. It seems to me that what we are concentrating on in this part of the Bill—although not later on in the Bill—is just the designation process. I hope the Minister will agree that that is not the project or the RAB process itself, on which we would expect considerable transparency as it goes through, but not necessarily at this particular stage.
Greg Hands
The hon. Gentleman makes a fair point, and he is right that that is the purpose of this clause. None the less, the purpose of the clause is also to allow designation for a potential variety of timeframes within those projects, so it is still important not to be over-prescriptive, for example with the suggestion that we lay out today what the length of time for a consultation should be.
In terms of the costs, the whole purpose of the Bill is to reduce costs. The hon. Member for Kilmarnock and Loudoun is probing on the costs and what they actually mean, but the point is that this is a reduction in the costs that would otherwise be the case under a contract for difference model. That is ultimately getting to the heart of the Bill. I appreciate that he is against nuclear power, but he would surely have to recognise that the Bill is about reducing the costs of nuclear power. That is the purpose of the Bill. He says it is going to be very expensive—we acknowledge that it can be very expensive, and the purpose of the Bill is to make it less expensive.
Mark Jenkinson (Workington) (Con)
Is it not the case that the rest of the UK can learn from Scotland’s lead on net zero when we see the low-carbon content of their grid, which is thanks to nuclear technology?
Greg Hands
My hon. Friend makes a very strong point—one made by quite a few people who were in Glasgow just two weeks ago. Ironically, in Scotland, making that argument strongly were not just the UK Government, but countries from all over the world. They were making the argument for nuclear power being part of our low-carbon future.
The powers of the Scottish Government are unchanged. The Bill makes provisions for the Secretary of State to consult named persons and organisations prior to the specification of any project under a nuclear RAB, and to consult those persons or organisations before he or she amends a projects licence to insert RAB conditions. Ministers in devolved Administrations will be captured—in scope, I should say; not physically—by this consultation.
Alan Brown
The Minister has already said that energy generation is a reserved power. Is he confirming that if the devolved Administrations say no in a consultation, that could be overruled by Westminster, with the imposition of a nuclear power plant?
Greg Hands
The hon. Gentleman is inviting me to go down a hypothetical road. The devolved Administrations have powers in other areas, and if the devolved Administration was strongly minded about having a nuclear power plant in that particular part of the UK, it is difficult to envisage circumstances in which the UK Government would proceed to do that. I hope that gives him enough reassurance.
I will deal with the point made by the hon. Member for Aberdeen North. On the question of a project near a border, it is reasonable then that the UK Government would consider the appropriateness of consulting with the devolved Administration. I return to my earlier point about specifying those who must be consulted and those who the Secretary of State would think it reasonable to consult. That would be within the scope of who the Secretary of State would think it reasonable to consult.
Kirsty Blackman
I appreciate that really helpful clarification.
A couple of points about the lack of transparency in the clause have not been covered. Subsection (2)(a) states that the Secretary of State has to “prepare draft reasons”. Subsection (5)(b) states the Secretary of State must provide the reasons “amended as appropriate”. We have not heard what those reasons look like. Do they say something along the lines of, “The Secretary of State gives designated status because he feels like it”? I presume not, but there is no information about what those reasons would include. Could we have something in writing about what could be in those reasons? There is no framework here at all—the Bill seems to be quite lacking.
Greg Hands
I thank the hon. Lady for that intervention. The point strikes at the heart of what a Government Minister is doing. I think she is asking what happens if a Government Minister behaves entirely unreasonably. The way our constitutional settlement works is that if a Minister is behaving entirely unreasonably, he or she is answerable to Parliament. If Parliament believed the Secretary of State to be unreasonable or acting in a way contrary to the intention of the Act, people would find ways of getting the Secretary of State to explain. I think the hon. Lady was trying to suggest that the Secretary of State might arbitrarily decide to go through with something—
Greg Hands
I am not going to give way again, because I have set out clearly that the Secretary of State is ultimately accountable to Parliament, and Parliament would find a way of examining the reasons that he or she laid out under this clause.
Question put and agreed to.
Clause 3 accordingly ordered to stand part of the Bill.
Clause 4
Expiry of designation
Dr Whitehead
I beg to move amendment 5, in clause 4, page 3, line 24, leave out “5” and insert “4”.
This amendment shortens the maximum time allowed by the Secretary of State for the designation period of a nuclear company.
The Chair
With this it will be convenient to discuss amendment 6, in clause 4, page 3, line 33, leave out “5” and insert “4”.
This amendment shortens the maximum time allowed by the Secretary of State for the designation period of a nuclear company.
Dr Whitehead
The amendments are grouped because one follows directly from the other—amendment 6 is consequential on amendment 5. The previous debate about the designation process was helpful for discussion of this clause, because clause 4 looks at how long a designation may last once the process has started. That is important because the process can cease to have effect either on the expiry of the designation—that is, a company has been designated for moving along the path to eligibility for a RAB and various negotiations will take place as the company develops its plant—[Interruption.]
Dr Whitehead
Hon. Members have such Pavlovian responses these days, automatically running out of the door whatever the circumstances.
The expiry date of a designation could well arrive because the company has received a designation, but has done nothing about it, or because the Government have got a designation through, but are a bit lax in pursuing the subsequent process. Alternatively, as the clause suggests, it could be because a project is under way, the revenue collection contract starts biting, investment is secured and the project goes ahead.
However, I am a little concerned that the expiry date is set at a period of five years, beginning on the date of the designation notice in question. As such, both the nuclear company and the Government have five years to get their act together on the RAB process, although that could lead to a going slow or delays. We already know that nuclear projects have a habit of running over time, sometimes due to construction issues and so on, but we do not want projects to be further delayed because people have not got themselves organised for a proper RAB process or because the Government cannot be bothered to get things going at a certain time and believe that they have five years to sort that out.
We have made the modest suggestion that that period should be four years; that might concentrate minds a little on moving from the process of hopefully being designated to the process of having a revenue collection contract and getting under way properly. There would not be that time to mess about between the two ends of the process, as might be the case under the five-year designation period.
I agree that we could pick any one of a number of different dates; the four-year period is just to suggest that we should concentrate minds a little. The amendment does not lay down the law: if the Government think it could be reconstructed in a different but more concentrated way, we would be happy with that. The amendment just suggests an indicative new date so that the point is borne in mind. I hope the Government will be able to accept it on that basis.
Greg Hands
Amendments 5 and 6 would seek to reduce the length of time a designation remains valid from five to four years and they would reduce the period for which the Secretary of State may extend the designation notice for a designated nuclear company to four years.
First, I thank the Opposition for their consideration of this matter. The hon. Member for Southampton, Test spoke to his amendment in a probing way—trying to get to the bottom of why the period should be five years rather than some other period. I am glad that the Opposition recognise the importance of the designation notice period and the fact that it should strike the right balance between providing enough time for the Government and the company to undertake all the processes necessary to inform a decision on licence modifications without leaving a designation in place for an unreasonable length of time. That is, as it were, the exam question here.
I believe that we have achieved that balance in the Bill. Currently, if negotiations on a project are successful and a relevant licensee nuclear company becomes party to a revenue collection contract, the power of the Secretary of State to modify its licence ceases, of course, outside some limited circumstances. That is vital to give investors confidence that the Secretary of State does not have an open-ended power to further amend the generation licence.
On the other hand, if negotiations are not successful after a project has been designated—the point here is to give enough time for those negotiations to be successful—it is necessary for the Secretary of State’s modification powers to lapse rather than continue indefinitely, so a sunset clause to the designation is also needed. That sits alongside the provisions in the Bill that revoke designation if the designation’s criteria or conditions are no longer met.
However, a decision to take a financial close on a nuclear power station may not happen overnight; robust processes must be followed, extensive due diligence must be carried out and there must be rigorous negotiations to ensure value for money for both the consumer and taxpayer. That is the case with many large infrastructure projects.
Take the negotiations at Hinkley Point C as an example: discussions and eventual negotiations on the project took a number of years to complete. I believe therefore that a five-year window is a reasonable period to expect negotiations to have run their course, recognising that a project for RAB must be suitably advanced to be designated in the first place—that goes back to the earlier debates. That window provides time for negotiations to achieve a successful outcome without providing the Secretary of State with licence modification powers for an inappropriate period. The ability to extend the designation presents a backstop provision that allows the designation to be continued when the designation criteria continue to be met and negotiations are ongoing—in other words, it builds a certain amount of flexibility with a positive decision to extend negotiations. It is therefore appropriate that the extension period should mirror the initial designation period.
I do not consider that the amendments would provide any enhancement to that rationale. I did not hear any specific argument for four years rather than five years, so I am minded to continue with five years. I consider the provisions within this clause, which will permit the Secretary of State to revoke a designation notice at any point if he considers that the criteria are no longer met, mitigates the risk that negotiations—or, indeed, the modification power—will continue for longer than they should. I therefore invite the hon. Gentleman to withdraw his amendment.
Dr Whitehead
As the Minister has said, the amendment was essentially a probing amendment to seek a little more clarification on why five years is considered to be the appropriate time. I am not sure that the Secretary of State has fully answered the question about the extent to which that might allow people not to get on with things as quickly as they might otherwise do, but I appreciate that in a complicated project such as those we are considering, there are processes that take quite a lot of time; it may well be that getting on for five years is the time necessary for such projects to be completed.
The overall point is that we want to make sure that, once designation has been undertaken, we move to the next stage as quickly as possible. I am sure that the Secretary of State would concur with that particular aim. On that basis, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Greg Hands
Clause 4 sets out the circumstances in which the designation of a nuclear company would expire. As set out in subsections (1) and (2) of the clause, the designation of a nuclear company will be limited to a period of five years from the date of the project designation. If a designation expires, the Secretary of State must publish the details of that fact under the provisions in subsection (5). However, the Secretary of State will have the power under subsection (3) to extend the designation period before the five-year period lapses.
Subsection (4) of the clause requires that prior to granting an extension for a maximum of five years, the Secretary of State would need to consult the company, the authority, the ONR, the relevant environment agency, and the devolved Governments if relevant. Before exercising that power, the Secretary of State would also need to continue to be satisfied that the criteria for designation are met. This would allow for any circumstances in which the negotiations with the designated company and engagement with the financial markets last beyond the five-year designation period, but the Secretary of State believes that the project both represents value for money and is sufficiently advanced to warrant a RAB.
The designation will also expire if the company enters into a contract with a revenue collection counterparty. That is to provide confidence to investors that once the RAB licence conditions have been inserted into the company’s electricity generation licence, the Secretary of State will no longer be able to modify that licence except in the limited circumstances set out in clauses 7 and 35 of the Bill. This is a proportionate approach that balances the need for investor certainty with the ability to flexibly apply the RAB model to individual projects. On that basis, I commend the clause to the Committee.
Question put and agreed to.
Clause 4 accordingly ordered to stand part of the Bill.
Clause 5
Revocation or lapse of designation
Dr Whitehead
I rise to speak to amendment 7, in clause 5, page 4, line 16, leave out “either” and insert “any”.
This amendment is consequential on amendments 2 and 3.
This amendment was tabled to deal with the possible eventuality that we would have three designation criteria in clause 2(3), rather than two, as is the case at the moment. We moved an amendment to try to place three criteria into that clause, which the Committee did not accept. The statement, therefore, that either of those two criteria are relevant stands as far as the Bill is concerned, and the word “either” should therefore not be replaced by “any”. On that basis, amendment 7 logically falls, so I have no wish to move the amendment.
Question proposed, That the clause stand part of the Bill.
Greg Hands
Clause 5 provides the Secretary of State with the power to revoke the designation of a nuclear company and sets out the applicable circumstances and procedure for doing so, as well as the circumstances and procedure whereby a project designation could lapse. The revocation power is tightly constrained by subsection (1). It applies only where a nuclear company ceases to hold a generation licence in respect of the nuclear project for which it was designated or it no longer meets the designation criteria. It is important that only the right projects are able to benefit from a RAB where they are sufficiently advanced and likely to provide value for money.
As set out in subsection (2), revocation of a designation would follow a similar process to project designation. The Secretary of State must prepare draft reasons, consult the named persons and publish a revocation notice, where relevant; they can attach additional conditions to a designation notice, as set out in subsection (3). If a company fails to comply with the conditions set out in the designation notice, the Secretary of State will notify the company that it has failed to comply, which will result in the designation lapsing. Such a notice must be published by the Secretary of State under subsection (5).
Such a model is a common feature of similar RAB models. The procedures envisaged allow time for consideration and consultation before any decision to revoke is taken. Given that the ability to continue to meet any of the conditions attached to designation is within the control of the company, there is no consultation requirement for the Secretary of State before a designation lapses.
Taken together, these routes to ending a designation provide an important layer of protection for consumers before a designated company enters into a RAB. In essence, they allow for a designation to end in any circumstance where it is no longer appropriate for a company to benefit from a RAB before project funding begins.
Question put and agreed to.
Clause 5 accordingly ordered to stand part of the Bill.
Clause 6
Licence modifications: designated nuclear companies
Dr Whitehead
I beg to move amendment 8, in clause 6, page 5, line 3, at end insert—
“(2A) Prior to exercising the power under subsection (1), the Secretary of State must publish a statement setting out how the exercising of the power will facilitate investment in the design, construction and commissioning of nuclear energy generation projects.”
This amendment requires the Secretary of State to justify the exercise of a power to modify the electricity generation licence of a nuclear company.
The clause concerns modifications to the licences of companies that have entered into a designation with regard to the RAB process. It sets out a number of powers enabling the Secretary of State to make modifications to licences in order to square the designation process with the licence process. It occupies a lot of other areas, but would be particularly relevant to the licence as it applies to, say, the Sizewell C project.
Subsection (2) states that the Secretary of State is able to exercise the power under subsection (1)—to modify licences—
“only for the purpose of facilitating investment in the design, construction, commissioning and operation of nuclear energy generation projects”,
which restricts the powers of the Secretary of State to modify the licences, concentrating it in the field of the design, construction and operation of the nuclear project.
Hon. Members will notice that that restriction stops there—that is, the Secretary of State may exercise that power for that purpose, but no one else needs to know about it. The Secretary of State may consider doing that, or restricting himself or herself to that particular designation, and may consider that he or she has done that, but it is a completely opaque process.
This amendment seeks to ensure that the Secretary of State publishes a statement setting out how his decision does indeed facilitate investment in the design, construction, commissioning and operation of nuclear energy generation projects, so that when he is considering exercising that power, it is a publicly exercised power, and information on what he has done is in the public domain.
The publication of the statement does not restrict what the Secretary of State can do; it sheds a light on what they can do, and ensures that they are carrying out that particular power correctly, as laid out in the legislation. We think that would be a good, safe addition to the Bill. It does not fundamentally alter its direction, but sheds a little more light on the process as the directions of the Bill are undertaken.
Greg Hands
As the hon. Gentleman says, this amendment addresses the process for modifying a designated nuclear company’s licence, particularly which documents should be published before the power is exercised. We recognise that designating a nuclear company and subsequently modifying its licence is a significant decision. That is why the legislation lays out a clear process, which provides transparency and builds confidence in the decisions that the Secretary of State will make when exercising these powers. The process in the Bill is strongly based on existing licence modification powers; it is well precedented.
The amendment obliges the Secretary of State to publish a document setting out how the licence modification would facilitate investment in nuclear projects before modifications are made. I do not believe that is necessary. The Government have already set out a clear process and strong transparency provisions in the legislation. Currently, the Secretary of State is required to consult named persons prior to making any licence modifications, and must then publish the details of any modifications as soon as reasonably practicable after they are made, with material excluded only when necessary—for example, for purposes of commercial confidentiality or national security.
Alan Brown
Could the Minister give an example of an existing licence that the Government have granted that could likely need to be modified to facilitate the investment that the Government are looking for? Could he explain what that process looks like?
Greg Hands
The process is as described. It is based on a very good precedent on these sorts of licence modifications. This would not be the first Bill to come along to look at how to modify a licence, and we have based that entirely on existing precedents. There is nothing unusual in this process or this structure.
The approach of consultation followed by publication is well precedented, as I said, in other licence modification powers. We think that the amendment proposes an unnecessary additional process. Moreover, the consultation provisions will allow expert voices to input on whether the licence modifications are effective in facilitating investment, which, of course, is exactly the purpose of the clause. I therefore hope that the hon. Gentleman will withdraw the amendment.
Dr Whitehead
We do not intend to press the amendment to a vote, but I will say that we think it is a good idea, which adds to the Bill’s transparency. The Minister has given examples where certain elements of that transparency would be facilitated by other components of the Bill, but I would note that most of those are post hoc rather than before the process. Nevertheless, I take some assurances from what the Minister has said about the proper transparency of the process, so we will not pursue that this afternoon. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Dr Whitehead
I beg to move amendment 9, in clause 6, page 5, line 13, at end insert—
“(ba) the interests of existing and future consumers of electricity in relation to their prospects of recouping their contribution at the conclusion of the construction phase of the project;”.
This amendment requires the Secretary of State to have regard to the interests of electricity consumers in recovering the value of their contribution to the construction of a nuclear power plant.
We have now reached the point where we have the first consideration of the consumer in the Bill, in clause 6(4)(b), dealing with the licence modification arrangements. Hon. Members will note in subsection (4) the things that the Secretary of State must have regard to when exercising the power under subsection (1), subject to what we have just discussed about subsection (2) in terms of the design, construction, commissioning and operation of nuclear energy generation projects.
Subsection (4)(b) says that the Secretary of State must have regard to
“the interests of existing and future consumers of electricity, including their interests in relation to the cost and security of supply of electricity”.
I understand that to mean that the Secretary of State, in modifying licences, particularly in respect of a RAB agreement, must look at the interests of consumers with respect to the cost of electricity and the extent to which it may be produced at a better price as production develops in the years following the adoption of a RAB, and the extent to which security of supply to customers can be maintained.
What is lacking in that list of things that the Secretary of State must have regard to—along with many other things—as far as the consumer is concerned is a recognition that the consumer has an active interest as well as a passive interest in this process. If we are setting out to produce a RAB arrangement that effectively requires a levy on customers at all stages of the process—during development, construction and production—then the consumer surely has rather more of an interest in that process than just the passive interest in price and security that is suggested in subsection (4)(b).
For example, the consumer has a considerable interest in making sure that the cost to them is reasonable at all stages of the process, and that it does not simply set out to milk the consumer for the purpose of sorting out the project regardless of its vicissitudes. The consumer has a particular interest not only in the way that the RAB contract talks about the price of electricity, but in how it addresses the extent to which the consumer’s investment may be recouped as the RAB process comes to its conclusion and goes down its path.
Of course, in that context, the RAB arrangements that we are discussing have, during their latter stages, a two-way process. If the production of electricity goes above the ceiling of the allowable costs limit, then it is expected that the company producing the electricity, because the model is regulated, will restore money to the consumer in one way or another. If its production is under that allowable costs ceiling, however, it will take money from the consumer to allow that process to continue smoothly. Indeed, in the RAB consultation, we had a rather optimistic, smooth little curve down as the process comes to its end. I do not think that will quite be the reality as the RAB process goes on, but it is important.
Alan Brown
I share the hon. Gentleman’s concerns about protecting consumers from costs and so on. That is actually why we are against large-scale new nuclear. Can he explain a wee bit more about recouping costs? Recouping costs sounds like getting money back in terms of the asset, which does not make sense. The amendment also mentions recouping contributions
“at the conclusion of the construction phase of the project”.
That is effectively rent on a 60-year contract for the RAB, so I am not sure why it would be at the conclusion of the construction stage.
Dr Whitehead
It is at the conclusion of the construction stage because the construction stage gives way to a production stage. That is the point at which electricity is produced, when the customer—I am assuming we can describe the consumer and customer as an entity—or those acting on behalf of the customer can start to think about the extent to which some of that money may come back as a result of the way that production is carried out within the ceiling set for overall RAB programme costs.
There could be circumstances under which, as the RAB process comes to an end, the customer recoups—in lower bills, dividends and so on—a lot of the money that was put in. There will always be excessive production over the allowed costs level, so money will come back to the customer. We will see later in the Bill the methods by which that money might be restored to the customer. Yes, there is a real interest, post the construction phase, in recouping those costs.
A second issue for the consumer is the eventual outcome of the ownership of the plant at the end of the RAB period, as it goes into production. As it is a regulated asset base, by the end of the RAB period, the company that has undertaken the construction and run the production of the plant will have received all the money it should have received through the regulated asset base arrangement, and will have worked successfully as a result of the support that the RAB process provides.
Depending on how many years are set out for the RAB process to take place, if it reaches its end within the working life of the nuclear plant, the question then arises of who owns the nuclear plant at the end of that period. Does the consumer own it at the end of that period? If they do, that is a little bit like a mobile phone contract, whereby the consumer would expect the charges to reduce substantially after paying off the cost of the phone in their contract. Clearly, it is in the interests of customers to have an active involvement not just in spending their money wisely, but in recouping or changing it into a different form as the RAB process sets its course. Indeed, under those circumstances, the Secretary of State might need to consider the length of the RAB contract, and how far it goes into the operating life of the nuclear power station, to carry out the terms of the contract and to consider what arrangements might be made for life at the end of that contract.
I suggest that those are all things that the Secretary of State ought to have regard to over and above the passive involvement of consumers that is set out in subsection (4). That is why we tabled the amendment, which states that the Bill should take account of
“the interests of existing and future consumers of electricity in relation to their prospects of recouping their contribution at the conclusion of the construction phase of the project”.
That is an active consideration in the management of customers’ contracts, not just a passive one where the customer stands by and waits for the money to be deducted from their account to pay for these projects forever. The Secretary of State should have an active view on that in terms of how to get the best value for the customer from the project overall, over and above the best value for the project itself.
Greg Hands
Amendment 9 addresses how the interests of consumers, which are vital in this process, will be taken into account and what the consequences of that would be. In the Bill as currently drafted, the Secretary of State must have regard to a number of matters when modifying a designated company’s licence. That includes the UK’s net zero ambitions and the interests of existing and future consumers in relation to the future cost and security of electricity supply.
The amendment requires the Secretary of State also to have regard to the prospect of consumers recouping what I think the shadow Minister described as their “investment” at the end of the construction phase. I appreciate hon. Members’ enthusiasm for ensuring that consumers will benefit from any RAB project, and, in that sense, I welcomed their support on Second Reading. However, the amendment is not compatible with how the RAB model works.
The hon. Member for Kilmarnock and Loudoun got to the heart of this: the amendment would make RAB effectively inoperable. It treats consumers as investors, but they are not investors. Consumers will benefit from a new nuclear power station. He and I might disagree on whether that should have happened in the first place, but none the less, the benefit to consumers is in electricity rather than in a return on any investment.
Fundamentally, the amendment misunderstands how the RAB model will work. The RAB model will mean that consumers contribute to meeting project costs from the start of construction and reducing the cost of capital, which is the main driver of project costs. That is why we are seeking consumers’ contribution. What they get in return is a nuclear power station that produces low-cost, low-carbon electricity.
Dr Whitehead
Let me say two things. First, if someone contributes in a penny fund to a co-operative society account of some description, that does not mean that they are not an investor; it just means that they are investing in a certain way and at a certain rate. The fact that the RAB arrangements will be passed on to customers’ bills and that there will be a known and determined amount of levy on those bills, which can be quantified, means that the customer is, in effect, adding an investment into the process on top of their bills. That is what I am trying to say, and I am sure that the Minister would agree that that is a form of investment in the process, even though the consumer is not a conscious investor in the way that a corporation might be. This is one of the problems of how we best protect the consumer interest in this process. Nevertheless, I suggest that that is a consumer investment in the overall process.
Secondly, I am sure that the Minister would agree that the RAB process continues after construction for a considerable time in the production period, as the RAB consultation set out. Therefore, that part of the process needs to be considered equally as an investment in the overall outcome of the project, as it is in the construction period. If he thinks that it is something different, he ought to explain why.
The Chair
Order. Interventions are getting very long. There will be an opportunity to respond at the end of this debate, Dr Whitehead.
Greg Hands
I thank the hon. Gentleman for that lengthy intervention. I think that a bill payer’s contribution is not an investment. The objective is to lower the cost overall to the consumer. That is why we have the figure of £30 billion or more, or £10 a year per bill payer. The consumer’s objective is not to become an investor and get a return on that investment, but to have a future source and availability of low-cost, low-carbon electricity—that is, through a nuclear power station.
Kirsty Blackman
It is not low-cost energy. It may be slightly lower than more expensive nuclear, but it is still way more expensive than offshore wind, onshore wind, solar and such. Characterising it as low cost is simply wrong.
Greg Hands
That is a wider debate around nuclear, which I would contest. Obviously, it is an active debate: first, how expensive is nuclear, and secondly, how expensive is it relative to other forms of power generation? Those are active parts of political debate.
Greg Hands
Can I just deal with the hon. Lady’s first intervention? We are seeking to give effect to Government policy, which is to support the roll-out of more nuclear power. How do we do that in a financially reasonable and more cost-effective way for both consumers and the taxpayer? That is the purpose of the Bill within the confines of having already agreed as a Government that nuclear power is going to be the way forward in providing a large part of Britain’s electricity.
Kirsty Blackman
I was not aware that there was a political debate about the cost. The Department for Business, Energy and Industrial Strategy’s figures say that offshore wind costs £47 per megawatt-hour; nuclear is £93, onshore is £45 and large-scale solar is £39. Those are BEIS figures, so I did not think there was any debate. I am concerned that the Minister is inadvertently misleading us by using the term “low-cost”. He can use “low-carbon”, but to say “low-cost” is simply not true, even by BEIS figures.
Greg Hands
Again, I thank the hon. Member for that intervention. The cost of different forms of power generation is a very interesting part of the energy debate. Obviously those costs move around and will be based on any number of factors, including global market prices and the cost of extracting and producing particular forms of energy. Nuclear’s advantage is its ability to provide a steady, constant baseload, which is not always the case with some of the other technologies the hon. Lady is comparing it with.
I hope I am not digressing too far, but when it comes to offshore wind, the UK has had enormous success. We have the world’s largest capacity. None the less, when the wind is not blowing and the sun is not shining, we have to have something else to provide that baseload. That is the purpose of nuclear power. The Bill is about making it more cost-effective and reasonable for consumers. That is the Government’s position.
I hope I have convinced hon. Members that this amendment would not achieve their goals of helping consumers. The concept of consumers investing in a plant and then recouping their money somehow is incompatible with the RAB model. There are mechanisms in place to give confidence that any RAB project will successfully lead to the means of delivering large amounts of stable, low-carbon energy to consumers. I hope the hon. Member will withdraw the amendment.
Dr Whitehead
This really worries me. What does the Minister think consumers are doing in contributing to a RAB process? If the Minister does not think that that is in any way a form of investment in the plant and that consumers are just completely passive recipients—that they are good for whatever money is required to get the system through and should have no interest in the proceedings, other than being a milch cow for the process—I am afraid that we differ.
Kirsty Blackman
On that, consumers are investing in the significant profits for private companies that are in many cases not based in the UK. That seems to be the essence of the hon. Gentleman’s concerns and the reason he moved the amendment. Is that correct?
Dr Whitehead
Yes, indeed. This is perhaps a separate debate, but we have a position not just on this particular instance of nuclear power, but on similar arrangements that relate to the RIIO process for energy distribution and network companies, whereby they are enabled to charge an additional amount on bills in order to secure assets that they own and that consumers or the public do not. The consumers, however, are expected to pay for the privilege of having that piece of technology at their disposal subsequently, but the question of ownership never comes into it, because they pay collectively for someone else to have an asset to call its own. That is exactly the situation with the nuclear plant.
We therefore need to take the consumer rather more seriously than just being a passive contributor in the way often set out in such processes—“Oh well, the customer will pay an additional levy in the bill. As long as it doesn’t look too serious at any particular time, that’s okay.” Not only is that not okay, in particular for levies with no consequences if applied to customers, but it is not okay to have a cumulative set of levies that put a lot of money on electricity and gas bills over a period for particular purposes that the consumer has no hand in at all.
I agree that the concept of the consumer being a part investor in the process might sound a little odd to those who have a traditional view of an investor and how an investor works, it is nevertheless a real thing: the consumer is in effect investing in the success of the plant. The Secretary of State—the Minister; I have promoted him already—has set out how he sees the customer being involved in the process, but that completely ignores the proper interest and protection of the consumer and bill payer as far as the overall process is concerned.
The amendment would not make the RAB process impossible; it merely states that as part of that process—we will come to the debate about where allowable costs have been exceeded—yes, the customer invests in it, but the customer also has reasonable expectations of some quid pro quo for that investment. That ought to be looked after. The quid pro quo in this instance, as I set out—I am sure the Minister agrees that this takes place in the RAB process—is that in the production process, if there is an excess over the allowable costs of production, the fact that it is a regulated asset means that that money goes back to someone. In this instance, it should be the customer.
That is what I mean by the customers’ interests being protected in recouping their investment. The Minister surely cannot deny that that is part of, not instead of, the RAB process in the production period. That is actually set out in the notes that accompany the Bill. I am therefore a bit mystified as to how the Minister takes the position that he does, given what is in his own Bill and in the arrangements for RAB that he himself is putting forward. I see no reason why he should not accept the amendment if he has the customers’ interests at heart, because it does not detract from RAB; it adds to it by recognising who is paying the money, what their interests are and how they should be protected.
I will not press the amendment to a vote, but I want to record my disappointment in the Minister’s apparent lack of either understanding or empathy for the customer’s position. We are discussing a Bill in which the customer is central, because they are bankrolling a substantial part of the project as it goes forward. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Greg Hands
I will try to speed up a little. As we know, the clause allows the Secretary of State to make the necessary licence modifications to apply a RAB model to a designated nuclear company. Subsection (2) clarifies that the effect of a licence modification is that the company would benefit from being able to receive an allowed revenue to construct, build, commission and operate a new nuclear power plant. Subsection (3) requires that the power be exercised only in relation to a nuclear company that is designated in accordance with the provisions of the Bill.
Licence modifications will not take effect unless the nuclear company whose licence has been modified subsequently enters into a revenue collection contract with a revenue collection counterparty, as set out in subsection (9). The modifications will be subject to negotiation between the Government and the nuclear company. It is therefore not possible to describe the exact modifications that would be required; however, subsection (5) highlights possible examples, such as the revenue that a company is allowed to receive, how that revenue is to be calculated, and the kinds of activities that may be undertaken by the company.
When making any modifications to a licence, subsection (4) requires the Secretary of State to take into account both our commitment to decarbonising the power sector and the interests of existing and future consumers with respect to the cost and supply of electricity. Alongside that, and to ensure that any RAB project is financeable, the Secretary of State, when making modifications under the clause, must have regard to the costs incurred in delivering the project and the need for the company to finance that activity. Together, those obligations will ensure that the modification powers are used so that the project contributes to a transition to a low-carbon, low-cost energy system.
As set out in subsection (3), the power to make modifications to a licence will last while the designation for a nuclear company is in effect. That is important to allow the Secretary of State to make modifications to the licence to take into account developments in negotiations and engagements with the financial market. When making any modifications in that period, the Secretary of State will need to continue to take account of the consultation that he undertook with all bodies named in clause 8. In addition to the modification of the designated nuclear company’s licence, subsections (7) and (8) allow him in very limited circumstances to modify the standard conditions of generation licences if necessary. The Secretary of State can make those modifications only if he considers it appropriate for consequential, supplementary or incidental purposes.
Alan Brown
I will be brief, because I know that time is getting on, and far be it from me to speak to a clause that both Front Benchers have agreed adds transparency to the Bill—albeit that, being facetious, I would say that doing so is a low benchmark. Subsection (2) clearly states that the licence can be modified only to facilitate
“investment in the design, construction, commissioning and operation of nuclear energy generation projects.”
Given that clause 1 states that a company can be designated only if it already has a generation licence, I would like the Minister to provide more clarity on what could be in a generation licence that prohibits the investment that he says that we are seeking to unlock by modifying it. That is the part that I am not quite clear on.
Clause 6(5) says that it is all about being able to change the revenue mechanism to allow a company to create more money. The Minister rightly said that subsection (4) lists some of the things that need to be considered as part of a licence modification. I ask him to consider that in the light of what I said earlier about clauses 2 and 3, and about there not being enough information in the Bill about what the Minister or Secretary of State should consider. We could also look at that in the round on Report, but we would like a wee bit more information about why the licence would need to be modified to release this so-called investment.
Greg Hands
I thank the hon. Member for his contribution. The Government are satisfied that the amount of information included in the Bill is sufficient. Far be it from me to suggest that Members table amendments, but perhaps he might seek to do so if he wants to see more transparency and more information. I realise I was not quite right earlier in saying that the SNP had not tabled any amendments; I know that it has tabled some new clauses. If he wants additional publications, he might table some amendments on Report to be a little more precise about what additional information he thinks the Secretary of State should publish.
Question put and agreed to.
Clause 6 accordingly ordered to stand part of the Bill.
Clause 7
Licence modifications: relevant licensee nuclear companies
Dr Whitehead
I beg to move amendment 11, in clause 7, page 7, line 8, at end insert—
“(3A) When exercising the power in subsection (1), the Secretary of State must not cause the excess of expenditure being incurred over the allowable revenue cap to lead to further charges upon revenue collection contracts.”
This amendment prevents the Secretary of State from allowing the levy of further consumer charges should an increase in allowable revenue be agreed following increases in costs or timescale of a nuclear project.
The Chair
With this it will be convenient to discuss amendment 12, in clause 7, page 7, line 8, at end insert—
“(3A) When exercising the power in subsection (1), the Secretary of State must publish a statement setting out how an adjustment in the company’s allowed revenue is to be made without relying on revenue collection contracts.”
This amendment requires the Secretary of State to set out how an adjustment to allowed revenue, following an increase in costs or time, is to be provided for by means other than additional customer levies.
Dr Whitehead
With these amendments, we get to the heart of the consumer interest in the Bill. They are closely related, so it is appropriate that they are grouped and spoken to together.
As I think hon. Members know, when the RAB process gets under way, one of the first things that will happen is that Ofgem will be required to draw up a programme of allowable revenue. That is the sum total of the amount that is considered to be within the RAB process. Much of the rest of the Bill is about how that allowable revenue is collected from customers, placed with the counterparty and allocated out to the nuclear company that undertakes the construction and subsequent production of a nuclear plant, and about the safeguards and concerns surrounding that process. The question of allowable revenue is crucial to the rest of the Bill.
Allowable revenue is made up of a number of building blocks. The return on capital must be assessed, as must depreciation, operating costs, the project’s taxation, grid costs, the funded decommissioning programme, incentives and other adjustments. Those all go into the pot of the allowable costs regime, which sets a ceiling for the amount of money that can be taken from the consumer, albeit that that is a contribution towards the process made by lots of people in small amounts on their bills over a period of time. It sets out the quantum of those contributions, and many adjustments can be made to how that works, in relation to the timescale of the process, the part of the allowable costs element that is placed into construction and the part that is placed into production. That is set out later in the Bill as part of the process of allocation from the counterparty body to the body that carries out nuclear construction and production.
As was mentioned earlier, it is not always the case that nuclear power plants are constructed exactly to cost and exactly to time. Indeed, if we look at the construction of nuclear power plants across the world, we find that all but one has run over time or over cost or both—in some instances by very large amounts. The allowable costs ceiling is therefore important for us to get a clear scope of what the customer will have to bear in this process. However, there is also a process in the Bill that allows that allowable costs ceiling to be raised, on the Secretary of State’s consideration, if the circumstances change. If the costs rise or the timescale slips, the Secretary of State can allow the allowable costs ceiling to be raised.
What that means in principle for the consumer is potential catastrophe, because the consumer thought they were in for a particular allowable costs ceiling that had been determined. We have heard already about the rather heroically optimistic cost assessments provided for in the Bill, and on that sort of allowable costs arrangement consumers would have about £1 put on their bills in the design phase, with a lot more—perhaps £10—on their bills in the construction phase. The amount would then taper down as production gets under way, with the possible payback of some money in the process. The overruns on construction costs or time costs could double or treble that amount, particularly during the construction period, in a way that the consumer would not have anticipated.
In the amendments, we suggest that the consumer should be in for the initial allowable costs ceiling estimate—and that is it. In circumstances where the Secretary of State is contemplating what should happen with the allowable costs ceiling, he should not cause any excessive expenditure simply to be plonked on to customers’ bills. At that point, if the costs or the timescale have changed, there are a number of options open to him as to how to deal with the new cost ceiling; that need not necessarily be done by simply raising the allowable costs ceiling. For example, it could be by adding a particular taxpayer’s investment to the project, or it could be by issuing nuclear bonds, which puts additional money into the company but does not impact on customer bills.
We are seeking to cap the RAB in terms of what the customer expectation of it is. That does not necessarily mean that the function of the RAB is determined by that cap; it just means that the exponential milking of the customer to fund the RAB does not take place and that the Secretary of State has recourse to other means and should publish, as amendment 12 says, what the plans would be in the event of an excess over the ceiling to make the project a success.
That is a very important part of the new deal as far as RAB is concerned. The customer is now being asked to invest, in the first instance, in the hope for a plant, well before the plant has been established; that is new—the CfD process is post the construction of the plant. They are being asked to underpin the expensive costs that are incurred during the construction period. They are also being asked to engage in a two-way process whereby, yes, they get cheaper bills but they are still potentially contributing to a RAB process as the production phase continues. So the very least we should expect on behalf of the customer is that they know what they are letting themselves in for at the time of the outcome of the project.
We are not talking about capping costs necessarily; we are talking about how those additional costs are paid for under the circumstances where they do rise. We obviously hope that, as the project progresses, those costs and timescales do not increase, but if they do we do not see that the customer needs to foot the additional bill; there needs to be other recourse. That is what we have put in these amendments, and should the Secretary of State consider in any way that the customer is an investor in this process, we hope he would consider that a reasonable way of dealing with the investment that the customer is undertaking in the process as a whole.
Greg Hands
I will speak for a little longer than I might ordinarily do, because this is an important question of consumer protection. I will try to deal with all the points raised by the hon. Member for Southampton, Test.
Amendment 11 would limit the ways in which the Secretary of State could exercise the powers under clause 7. As we know, clause 7 allows for a nuclear company’s allowed revenue to be increased should its financing cap be exceeded in construction, but only in certain circumstances and where a clear procedure is followed. The amendment seeks to prevent the Secretary of State from creating any additional recourse to consumer funding in the exercising of his or her powers under the clause. Amendment 12 proposes that the Secretary of State should be transparent about the funding of a nuclear RAB project were they prohibited from funding an extension to the allowed revenue through a revenue collection contract.
First, I draw the House’s attention to the remoteness of the scenario under which the Secretary of State may choose to exercise the power under clause 7. Under a RAB model, the licence would determine a risk-sharing mechanism, whereby construction cost overruns up to the agreed financing cap are shared between investors and consumers. We expect that any RAB structure will ensure that financial incentives are in place to ensure the company’s investors manage project costs and schedules. The financing cap will be based on robust risk analysis, including best-practice, reference-class modelling, and set at a level that is sufficiently remote that there is a very low chance that it would be reached.
However, in the event that the financing cap is reached, investors would not be obliged to provide the capital to complete the project and this risks considerable sunk costs to consumers if the project is discontinued. Given the size and importance of the project, the Government consider it crucial that there is a mechanism in place to allow the additional capital to be raised to ensure completion of the project, and that decisions to extend the project’s revenue rest with the Secretary of State.
I would emphasise at this point that any decision taken by the Secretary of State to adjust the allowed revenue is one that is subject to a robust process of scrutiny and transparency. The Secretary of State could exercise the power to extend the allowed revenue only following consultation with the licensee, the ONR and Ofgem, which, I remind the Committee, has as its primary statutory duty the need to protect the interests of existing and future consumers with respect to the cost and security of the supply of electricity.
In exercising the power, the Secretary of State must continue to have regard to those matters detailed in clause 6(4), which includes the interests of existing and future consumers with respect to the cost of supply of electricity. As is consistent with our approach across the Bill, we have sought to ensure a transparency process whereby the Secretary of State is required to publish a statement setting out the procedure to be followed when exercising this power. That is set out in subsection (6).
Dr Whitehead
That is very disappointing. The Minister has effectively said that the customer has no say in this arrangement. He used the phrase “reduce the options to Ministers”; yes, this would reduce the options available to Ministers—it would make them think about how they should put forward other ways of covering a breach of the allowed expenditure without simply fleecing customers. The Minister may think that one of his options ought to be to fleece customers—that might be the universe he inhabits—but we do not think that should be the case. We think that the customer must have much clearer lines of protection, other than the very woolly things that the Minister has said that might cause the customer to be given some consideration in this process. For those reasons, we would like to divide on amendment 11.
Question put, That the amendment be made.
Dr Whitehead
I beg to move amendment 10, in clause 7, page 7, line 17, after “operations” insert
“and have generated power for placement onto the National Grid”.
This amendment amends the definition of the completion of construction of the nuclear project to include initial generation of power.
The amendment relates to statements made, for the purpose of licence modifications, about the completion of the construction of a nuclear project. Clause 7(5) states that completion of the project should be based on
“successful completion of such procedures and tests relating to the project as constitute, at the time they are undertaken, the usual industry standards and practices for nuclear energy generation projects in order to demonstrate that they are capable of commercial operations.”
I wonder whether hon. Members can spot what is missing from that subsection. This is not a quiz, and I think hon. Members have long gone to sleep—but in case not, the answer is that there is no suggestion in it that the nuclear power station actually has to produce anything. Construction could be regarded as complete provided that all the hoops have been jumped through, even if no button has actually been pressed. Presumably what one would regard as the original purpose of the whole operation is that it should produce some power that goes into people’s homes, buildings and so on.
The amendment simply says that not only must all those things be completed, but the project must do what it was originally supposed to do: generate power. As the amendment describes it, the project must
“have generated power for placement onto the National Grid”.
That seems a very modest amendment, but it would put right what I think is rather a serious omission in clause 7(5) with respect to the whole idea of what a nuclear power station is for. Surely we must agree that generating power is the purpose of a nuclear power station, and that completion must therefore be based on that purpose.
I cannot see any great reason why the amendment should not be accepted, but I am sure that the Minister has a very good argument why not.
Greg Hands
I thank the hon. Gentleman for moving his amendment. It is important that we consider that the scenario is remote; before allowing any project to have a RAB, we will obviously have conducted robust due diligence, using best practice benchmarking analysis to set the financing cap at a remote level. The project’s investors will be incentivised to control costs below that level and will be penalised for project overruns. We are clear that this power of modification should be exercisable only during the construction of the plant, and have sought to do this in clause 7(4). This determines that this power cannot be exercised at any point once construction has been completed. For the purposes of this clause, we have defined the construction phase in clause 7(5).
The amendment would provide further qualification to the definition of the end of a project’s construction phase. It seems to make it explicit that the purpose of the construction phase of the nuclear project is to build a plant that will contribute electricity to the national grid, and that might appear fair enough. However, the clause is intended to cover both the period of construction and the testing of the plant, to ensure that it can operate commercially to provide power. An early part of this testing is the connection of the plant to begin to provide power to the national grid. However, there is further testing that follows, to ensure that the plant can operate effectively throughout its life. We consider it appropriate that the option to increase funding to complete the project should run until all testing completes.
In a nutshell, I think the cut-off point proposed by the hon. Member for Southampton, Test is too early in the process. The point at which the power station connects to the national grid is not the point at which one can have 100% confidence in the project from there. Therefore, I thank the hon. Gentleman for his interest and concern, and of course we would not wish to see consumers being penalised, but unfortunately I think he strikes the wrong point in the process at which this clause would kick in. I urge him to withdraw the amendment.
Dr Whitehead
I concede that I may not have fully understood all the various tests that are undertaken to usual industry standards, but nowhere in this clause does it say that those tests include the production of power. That is my central point. It is a bit like going into a car showroom and being shown a really nice vehicle. It has all the bells and whistles on it, and all the guarantees; it looks greats and the paint is really good. But when one asks to go for a test drive, the person in showrooms says, “I’m sorry, you can’t do that, Sir; it hasn’t got an engine in it.” Surely it must be about producing power. That ought to be explicitly in the Bill. That is my only point. If the Minister thinks that, concealed in all these various tests is the production of power, which does not seem to be the case to me, then maybe that is not needed on the face of the Bill. I think it would be rather good if it were on the face of the Bill.
Dr Jamie Wallis (Bridgend) (Con)
Does the hon. Gentleman agree that we are in a very sorry place indeed if all the usual industry standards and practices for nuclear energy production do not actually include the production of energy?
Dr Whitehead
We would be in a sorry place, but that is effectively what the clause appears to state. It is all about the fact that it could produce energy, not that it does produce energy. Those are two potentially different things. The hon. Gentleman is right about the industry standards that set it all up to make sure that energy can be produced. I merely think it might be a good idea if we found out if it did produce that energy.
Alan Brown
I do not want to go on for too long but, further to the previous intervention, is it not the case that it can easily be argued that the EPR reactors currently being built are capable of generating electricity, but not one of the two EPRs under construction in Europe have started generating electricity for the grid? They are actually 10 years late, which underlines the point made by the hon. Member for Southampton, Test.
Dr Whitehead
The hon. Member makes a good point. We have a number of nuclear reactors in Europe that look like they can produce energy, and they are still standing there not producing energy, many years after they were supposed to do so.
We will not press the amendment to a vote. I am a little disappointed that the Minister did not take the opportunity to add to the Bill what I think an average person reading the Bill would think obvious, but I know we cannot get what we want all the time. He has put forward reasons why he thinks that point is covered elsewhere in the clause. It would have been good if it was more transparent and up front. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Alan Brown
Again, I will be brief. I have a few comments on clause 7 stand part. Subsection (2) and paragraph 83 of the explanatory notes confirm that a licence can be modified to allow the cost cap to be exceeded, but also, critically, so that additional revenue can be collected. The Minister spoke about transparency. How can that power be applied transparently? Clause 7 references clause 6(4), but that subsection does not provide enough scrutiny of governance.
I will give an example. What is to stop a nuclear company begging another £1 billion? With the costs of a nuclear project, £1 billion here or there does not make much difference in the overall scheme of things. If the Secretary of State thinks, “I am so worried about security of electricity supply”—that is an argument we keep hearing on nuclear—under clause 6(4)(b), they can then decide, “Yes, this power station is so critical for future energy security, I will just throw more good money after bad.” It is an easy step, and one that could be repeated several times—£1 billion here or there makes no difference.
This Government have already proven to be so pro-nuclear that they signed up to the most expensive power station in the world, Hinkley Point C, and so pro-nuclear that, after market failure, we are here debating this Bill, and, as was said earlier on, they have committed £1.7 billion just to develop Sizewell C to the final investment stage. We know they are so desperate to get Sizewell C over the line for the final investment stage, they are making that the newest, most expensive power station in the world, which we will be paying for for 60 years. So I do not understand how the clause gives protection and transparency for consumers, if costs go up. Invariably, costs will go up. It is unlikely that the risk is going to be carried by the developer. The risk under the RAB model is going to be carried by the consumers.
Greg Hands
Clause 7 provides the Secretary of State with the power to modify the allowed revenue of a relevant nuclear company where that is required to complete the construction of the nuclear RAB project.
I stress that this is a narrow power. Subsection (2) makes it clear that it can be exercised only where the expenditure to complete construction is likely to exceed a cap under the licence and to make modifications to the allowed revenue of the company. Subsection (4) means the power can only be used before the completion of construction, the point at which the plant is ready to enter commercial operations. That refers back to our previous debate. That is the right point at which this power ceases to be exercisable. The use of the power is at the discretion of the Secretary of State.
Alan Brown
Will the Minister explain how he sees the cap being set? Obviously, on a construction project, there is usually agreed risk sharing and that effectively sets a cap, but presumably, given the way the Minister is talking, there will be even more headroom here. How is that headroom going to be set and how transparent will that be, in terms of understanding what costs have increased to reach the cap?
Greg Hands
The financing cap will be set out at the beginning of the project by the Secretary of State. It will be available to be scrutinised. The purpose of the power in the clause relates to what happens in the event that we approach the financing cap.
The clause would have relevance in the very unlikely situation that, during construction, the project is likely to breach its financing cap under a RAB. The financing cap is the point at which investors are no longer required to put money into the project. What happens then? The cap is set at a remote overrun threshold. This means that before committing to a company having a RAB, the Secretary of State should be confident that the prospect of costs hitting that threshold is really very unlikely. Under the RAB licence, mechanics will be in place to incentivise investors to minimise costs and schedule overruns, such as overrun penalties. That will ensure that the breach of the financing cap is a remote risk.
When deciding whether to exercise the powers, subsection (3) means that the Secretary of State will need to have regard to the achievement of carbon targets and the interests of consumers, and whether the company is able to finance its activities. Those are the same considerations as when deciding whether to amend the company’s licence to insert the RAB conditions in clause 6. Given the strategic importance of a new nuclear plant, and the wider considerations, such as our need to secure resilient low-carbon energy, it is more appropriate that such a decision is made by the Secretary of State in this instance.
The Secretary of State is also the most appropriate person to balance the interests of consumers, taxpayers and investors. It is not about putting additional burdens on consumers. The RAB is designed to protect consumers by giving them a more cost-effective nuclear power plant, as shown by the steps that we have taken in the Bill. That includes robust due diligence before the final investment decision to be confident that the project will be effectively managed, incentives on the project in construction, penalties for investors in any overrun scenario, and the option for the Government to step in if the project hits extreme overruns.
Question put and agreed to.
Clause 7 accordingly ordered to stand part of the Bill.
Clause 8
Procedure etc relating to modifications under section 6 or 7
Dr Whitehead
I beg to move amendment 13, in clause 8, page 8, line 11, leave out from “power” to end of line.
This amendment strengthens the requirement on the Secretary of State to publish details of license modifications.
Ms Fovargue, as there are no amendments or objections to the clauses from this one to the end of part 1, I suggest that it might be possible to dispose of them collectively to get to the end of part 1 this afternoon. The Opposition would have no objection to that.
I will be brief. Amendment 13 simply says that if the Secretary of State is going to publish something, they should get on and publish it. As it stands, the clause states:
“The Secretary of State must publish details of any modifications made under a relevant power as soon as reasonably practicable after they are made.”
That is a weaselly dilution of the “must” at the start of the line—if the Secretary of State must publish details, they should just get on with it. Hon. Members will see that the following subsection states:
“If…the Secretary of State makes a modification…the Authority must…publish the modification.”
That does not have the little weasel phrase at the end, so why is that weasel phrase in subsection (5) and not subsection (6)?
Alan Brown
I do not want to be a pain, but does not deleting
“as soon as reasonably practicable after they are made”
make the timescale for the Secretary of State to publish open-ended? In a way, the amendment is not tightening the timescale but leaving it more open-ended.
Dr Whitehead
My concern in this clause is that the phrase
“as soon as reasonably practicable”
gives the opportunity for almost limitless delay to publication. If the Secretary of State must publish details of any modifications, he must, and if he does not, he can be called up under the terms of the Bill. If that weasel phrase is in it, however, the delay could last for a long time. I suggest that the amendment tightens it up by saying that it should be published and that is it.
Alan Brown
I realise that we are arguing over semantics, but perhaps it should be amended to be “must publish details of any modifications made under a relevant power once that modification has been made” to try to bring absolute clarity that it needs to be published right away.
Dr Whitehead
Yes, that might have been a good idea, but unfortunately it is not on the amendment paper this afternoon. My amendment is, so I hope the Minister will consider ensuring that subsections (5) and (6) are consistent, so that both modifications made under both are required to be published, full stop.
Greg Hands
Amendment 13 addresses how soon the Secretary of State should be obliged to publish the details of any modification made under the relevant powers, as already referred to. We think the clause already provides a clear and transparent process, which includes consulting the named parties before exercising these powers and modifications, and then publishing medications made
“as soon as reasonably practicable”
after the fact. Of course, publication can exempt matters that are commercially sensitive or that relate to national security.
The purpose of the amendment is to remove the obligation on the Secretary of State to publish the details of any modifications as soon as practicable after they are made. The Secretary of State would therefore not be subject to an express time obligation on when the details of the modifications must be published. I welcome the Opposition’s focus on ensuring transparency throughout the process of setting up a RAB for a project. We recognise that decisions to modify licences are important, and we believe it is necessary to provide a transparent decision-making process in legislation, as the Bill seeks to do.
I believe the amendment would reduce transparency, not increase it. I do not consider that it will help us to achieve the objective of a clear and transparent decision-making process. Removing the express obligation on the Secretary of State to publish details of any modifications as soon as reasonably practicable could result in uncertainty about when they should be published, which might cause the Secretary of State to unnecessarily delay the publication informing the public, stakeholders or industries of the modifications made. I hope that the hon. Members for Southampton, Test and for Greenwich and Woolwich will agree with that position; the amendment would reduce transparency, not increase it. I therefore ask that amendment 13 be withdrawn.
Dr Whitehead
I think we perhaps have a slight divergence of opinion here. We were seeking to simplify and create an imperative for publication by reducing the qualifications on that publication. The Minister has sought to suggest otherwise. We will have to disagree on that; however, we do not wish to push this to a vote this afternoon, so I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 8 ordered to stand part of the Bill.
Clause 9
Expiry of modifications made under section 6
Question proposed, That the clause stand part of the Bill.
Greg Hands
Briefly, clauses 9 to 14 lay out pretty clearly the direction of travel. No amendments have been tabled, so I assume there is contentment across the Committee with the clauses as they stand. They are perfectly drafted, though I say so myself, and I therefore urge the Committee to agree that they stand part of the Bill.
Question put and agreed to.
Clause 9 accordingly ordered to stand part of the Bill.
Clauses 10 to 14 ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned. —(Mark Fletcher.)
Judicial Review and Courts Bill (Tenth sitting)
The Committee divided: - Ayes: 5 / Noes: 8 - Question accordingly negatived.
The Committee divided: - Ayes: 5 / Noes: 8 - Question accordingly negatived.
The Committee divided: - Ayes: 8 / Noes: 4 - Question accordingly agreed to.
The Chair
I remind the Committee that with this we are discussing the following:
New clause 10—Publicly funded legal representation for bereaved people at inquests—
“(1) Section 10 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 is amended as follows.
(2) In subsection (1), after “(4)” insert “or (7).”
(3) After subsection (6), insert—
“(7) This subsection is satisfied where—
(a) The services consist of advocacy at an inquest where the individual is an Interested Person pursuant to section 47(2)(a), (b), or (m) of the Coroners and Justice Act 2009 because of their relationship to the deceased; and
(b) One or more public authorities are Interested Persons in relation to the inquest pursuant to section 47(2) of the Coroners and Justice Act 2009 or are likely to be designated as such.
(8) For the purposes of this section “public authority” has the meaning given by section 6(3) of the Human Rights Act 1998.””.
This new clause would ensure that bereaved people (such as family members) are entitled to publicly funded legal representation in inquests where public bodies (such as the police or a hospital trust) are legally represented.
New clause 11—Removal of the means test for legal help prior to inquest hearing—
“(1) Schedule 1 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 is amended as follows.
(2) In paragraph 41, after sub-paragraph (3), insert—
“(4) For the purposes of this paragraph, the “Financial resources” provisions at section 21 (and in The Civil Legal Aid (Financial Resources and Payment for Services) Regulations 2013 do not apply.””.
This new clause would remove the means test for legal aid applications for legal help for bereaved people at inquests.
New clause 12—Eligibility for bereaved people to access legal aid under existing provisions—
“(1) Section 10 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 is amended as follows.
(2) In subsection (4)(a), after “family”, insert—
“or where the individual is an Interested Person pursuant to section 47(2)(m) of the Coroners and Justice Act 2009 because of their relationship with the deceased.”
(3) In subsection (6), after paragraph (c), insert—
“(d) or they fall within any of the groups named at section 47 (2)(a), (b) or (m) of the Coroners and Justice Act 2009.”
(4) Schedule 1 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 is amended as follows.
(5) In paragraph 41, after sub-paragraph (3)(c), insert—
“(d) or they fall within any of the groups named at section 47 (2)(a), (b) or (m) of the Coroners and Justice Act 2009.””.
This new clause would bring the Legal, Aid, Sentencing and Punishment of Offenders Act 2012 into line with the definition of family used in the Coroners and Justice Act 2009.
Andy Slaughter (Hammersmith) (Lab)
It is a pleasure to serve under your chairmanship, Mr Rosindell. I am sure you have been told that, before the short adjournment, I had made my remarks on amendment 73 and new clause 10. I will deal with new clauses 11 and 12 briefly because I dealt with most of the points on new clause 11 in my opening remarks on the group.
New clause 11 asks for the removal of the means test for legal help prior to an inquest hearing. It is complementary to new clause 10, which deals with representation. As I indicated, the Government have given certain assurances on legal help and on representation for bereaved families at inquests. We are keen to hear more details on that. However, what we have heard so far does not go far enough, or in this case, fast enough. Legal help is important, because as soon as a death occurs, complex legal processes are triggered involving multiple interested persons and agencies. Families often need expert advice on areas such as access to and release of the body, post-mortems, communication with investigation teams, securing of evidence, inquest scope, witnesses, article 2 inquests, criminal investigations and so on. As previously highlighted, legal help can significantly impact the scope and quality of an inquest. It is imperative that families secure specialist legal advice at the earliest possible stage. Until the Government remove the means test for legal help, that will not be possible for a significant number of families. I therefore propose new clause 11, which would remove the means test in legal aid applications for legal help for bereaved people at inquests, as the Government have committed to doing for advocacy services.
New clause 12 would bring the definition of family in the Legal Aid, Sentencing and Punishment of Offenders Act 2012 in line with the definition used in the Coroners and Justice Act 2009. Article 10(4) of LASPO refers to services offered only to members of the deceased’s family. The amendment would bring that definition of family in line with that used in the 2009 Act, ensuring that the eligibility for those services includes an “Interested Person”, which as per that definition can be a spouse, child or sibling, but can also be a child of a sibling, a partner, civil partner, grandparent, step-parent or half-sibling. Crucially, that definition also covers a personal representative of the deceased and others acting in an official capacity on behalf of the deceased. That will apply where there is a personal representative who may not be directly related. This change has the common-sense advantage of making the legal aid eligibility under LASPO consistent with the 2009 Act.
An example of why that is important comes in the case of an ex-prisoner who had no or very little contact with her family owing to her time in prison and other factors. The only person who could represent her interests was someone she had become close to in her community, and whom she had named in a letter to her probation officer as next of kin. The coroner and all the interested parties treated this person as next of kin, but despite that, the Legal Aid Agency maintained that funding could not be provided because the person was not family under the definition set out in LASPO. I therefore propose new clause 12, which would bring the definition of family in LASPO in line with the definition used in the 2009 Act.
The Parliamentary Under-Secretary of State for Justice (James Cartlidge)
It is a pleasure to serve under your chairmanship, Mr Rosindell. Amendment 73 proposes to set out in primary legislation the requirement for a coroner to seek consent from interested persons before deciding on whether to hold an inquest without a hearing. The intention of clause 38 is to allow coroners flexibility to hold cases without a hearing where they determine there is no requirement to hold one. The clause is focused on non-contentious cases, and while it will be for the coroner to determine what constitutes a non-contentious case, we expect that these will be cases in which the bereaved family is content not to attend a hearing.
I understand that the vast majority of the 30,000 inquests heard each year are held with only the coroner and their officer in the courtroom, speaking into a recording device. In these cases, it is simply unnecessary to hold hearings and to prolong the process for bereaved families. Safeguards for clause 38 are already set out clearly in subsection (2), which states that the coroner has to have
“invited representations from each interested person known to the coroner”,
and cannot decide that a hearing is unnecessary if an interested person
“has represented on reasonable grounds that a hearing should take place”.
Coroners also cannot proceed without a hearing unless they think the public interest would not be served by having one. As I said on previous clauses, coroners are independent judicial office holders. How they conduct their investigations and inquests is a matter for them. Introducing the concept of consent into the coroner’s decision-making process is tantamount to fettering a coroner’s discretion. Notably, amendment 73 does not address the entirely possible eventuality that consent may be unreasonably withheld.
I turn to the motions relating to legal aid. As hon. Members know, I am sympathetic to the difficulties facing all bereaved families. The Government believe that affected families should be at the heart of any inquest process. The coroner’s investigation, including the inquest, is generally an inquisitorial, fact-finding process; a narrow-scope inquiry to determine who the deceased was and how, when and where they died. This means that, for the vast majority of inquests, legal representation and legal aid are not necessary. New clause 10, which would expand access to legal aid at inquests, would run counter to that approach. There is a risk that additional lawyers at an inquest will not provide an overall improvement for the bereaved and could have the unintended consequence of turning an inquisitorial event into a complex defensive case, which could prolong the distress of a bereaved family.
The hon. Member for Hammersmith made some perfectly reasonable points. He referred to the oral evidence that we heard from André Rebello. I remind Members that André Rebello is a senior coroner operating in the north-west of England and the honorary secretary of the Coroners’ Society of England and Wales. As he said:
“A coroner’s jurisdiction is inquisitorial. It is an inquiry; it is not litigation.”
He also said:
“Where there is representation…where the properly interested persons are identified, they have rights with regard to disclosure of advance information, but thereafter their duty is to assist the court in finding the true facts as to who the deceased was, when and where they died, and by what means and in what circumstances they came by death in certain cases. That is all done without determining criminal liability by a named person or any question of civil liability. This is an inquest, not litigation.”––[Official Report, Judicial Review and Courts Public Bill Committee, 2 November 2021; c. 35-36, Q36-38.]
It is worth pointing out that witnesses are examined, not cross-examined, for precisely that reason.
The Government recognise that this is a difficult time for bereaved families and have been working on several measures to make inquests more sympathetic to the needs of bereaved people. We have engaged with the Chief Coroner on training for coroners and officers; published new guidance on coroners’ services for bereaved people; developed a protocol that, among other matters, ensures that where the state is represented it will consider the number of lawyers instructed so as to support an inquisitorial approach; and building on that protocol, supported the legal services regulators—the Bar Standards Board and the Solicitors Regulation Authority—in their work to develop inquest-specific information to guide lawyers who represent at inquests. The regulators published a toolkit and competences for practitioners on 13 September.
For bereaved families who need legal help, advice and assistance is always available under the legal aid scheme, subject to a means and merits test. This can help preparation for an inquest, including help for families to decide what questions to ask. For legal representation at an inquest, legal aid may be available under the exceptional case funding scheme where certain criteria are met. Where these criteria are met, the Government are of the view that the process should be as straightforward as possible. With that in mind, we have already committed to removing the means test for exceptional case funding applications for representation at inquests and for legal help at an inquest where representation is granted. I said in Westminster Hall, and will say again in answer to the hon. Gentleman’s question, that we are in the process of drafting the clauses for a statutory instrument, which I believe will be legislated for early in the new year. I am afraid that I cannot give more detail than that, but it does mean that we will be bringing this measure forward relatively imminently.
Andy Slaughter
I am grateful for that, and I will not press the Minister further on timing beyond “the new year”, although we know that that could last up until December. However, is he saying that the measures on legal help will be dealt with at the same time and in the same way as those relating to exceptional case funding?
James Cartlidge
I was just about to come on to the issue of legal help, because the hon. Gentleman asked about that earlier. Legal help and advice in relation to inquests is already in scope of legal aid, and the Legal Aid Agency has the discretion to waive the eligibility limits if it considers it equitable to do so. However, the legal aid means test review is considering the legal aid means test as a whole, including in relation to legal help for inquests. That review will be published shortly.
New clause 11 would remove the means test for legal aid applications for legal help for bereaved people at inquests. As I said, we have recently announced our intention to amend regulations to remove the means test for applicants for exceptional case funding for legal representation at inquests. That change will also provide non-means-tested legal help in relation to an inquest for which ECF has been granted for legal representation. As was said in relation to legal help specifically, we are also carrying out a review of the legal aid means test as a whole, and that review will be published shortly.
New clause 12 would amend the definition of “family” for the purpose of applications for legal aid at inquests. As I said in response to new clause 10, the Government recognise that this is a difficult time for bereaved families, and have already made a number of changes to make inquests more sympathetic to the needs of bereaved people. However, that does not mean that legal aid is required in all cases. The coroner’s investigation is generally an inquisitorial and fact-finding process. This means that for the vast majority of inquests, legal aid is not necessary. For bereaved families who do need legal help, advice and assistance is already available under the legal aid scheme, which is of course subject to a means and merits test.
Again, as I have already said, for legal representation at an inquest, legal aid may be available under the exceptional case funding scheme where certain criteria are met, and the Government have already committed to removing the means test for those applications. Given the ongoing work that this Government are undertaking to support families at inquests, I urge the hon. Gentleman to withdraw his amendment.
Andy Slaughter
I hear what the Minister has said in relation to the amendment and the new clauses. Notwithstanding his comments on amendment 73, it is not our intention to press that amendment to a vote, or indeed to oppose the clause as a whole when we come on to clause stand part. I accept—although it is far from perfect—that there are some caveats built into the text of the clause, which are not built into clauses 37 and 39 in the same way.
As for the legal aid clauses and new clause 12, I hope the Minister will at least see that there is a logic and a consistency to adopting the same definitions as are in the Coroners and Justice Act 2009, and notwithstanding his comments, I hope that the Government might look at this issue again. I hear what he says about legal help: he has made essentially the same point that he made about new clause 10, which is that this is an inquisitorial process and additional lawyers could complicate the matter, so in that sense, the new clause is not necessary. I will not push new clause 11 to a vote—let us see what the Government come up with—but we will wish to vote on new clause 10.
Frankly, the arguments that the Government are repeating in a rather tired way have been completely debunked now. As the Minister has said, we did hear from Mr Rebello, who is a senior coroner, but there are many coroners who do not share Mr Rebello’s view. As I indicated at some length this morning, this is the overwhelming opinion of not just practitioners but practitioner organisations, family organisations and all those who have done these reports for 20 years, and the Government are conceding that in part. This is an area on which the Government have moved, and I respect the fact that they have done so, but if they really believe in equality of arms in these matters, they have to put families at inquests on the same footing as those parties who are fully represented. It still will not be equality of arms. Frankly, in many cases, there will still be a number of different parties reinforcing each other. I have appeared in many inquests of that kind against a family, often a single family, and their lawyer.
The Chair
Just for clarification, votes on new clauses come at the end of the proceedings.
Question proposed, That the clause stand part of the Bill.
James Cartlidge
Each year, around 30,000 inquests are held in England and Wales. Indeed, 32,000 inquests were opened in 2020. A significant number of the cases are non-contentious and those most likely to attend, such as the bereaved family, are content not to attend. Despite that, the coroner still has to hold a hearing, often in an empty courtroom with just a recording device. The clause will enable the coroner to determine when an inquest can be held without a hearing, for example, where there is no practical need or public interest to do so. That would, in turn, free up physical space and resources for inquest cases that do require a hearing.
There will, of course, be cases that genuinely need a full public hearing, and coroners will still be expected to hold these as usual. There will also be cases where the family would like a hearing, and the coroners will be expected to judge each case on merit, working with families sensitively. The Chief Coroner will provide further guidance to coroners to ensure that there is consistency of approach across coroner areas. The clause will reduce the need for unnecessary procedures, bringing efficiency to the coroner’s courts and supporting bereaved families by reducing the need for unnecessary inquest hearings, which add to their distress.
Question put and agreed to.
Clause 38 accordingly ordered to stand part of the Bill.
Clause 39
Use of audio or video links at inquests
Andy Slaughter
I beg to move amendment 74, in clause 39, page 51, line 10, at end insert—
“(2B) Coroner rules that provide for the conduct of hearings wholly or partly by way of electronic transmission of sounds or images must not allow the conduct of hearings wholly or partly by sound only.”
The purpose of this amendment is to prevent an inquest from being conducted by telephone or other means which are audio only.
The Chair
With this it will be convenient to discuss the following:
Amendment 75, in clause 39, page 51, line 10, at end insert—
“(2C) Coroner rules that provide for the conduct of hearings wholly or partly by way of electronic transmission of sounds or images must provide for all interested persons to have to give their agreement to the conduct of hearings wholly or partly by way of electronic transmission of sounds or images.”
The purpose of this amendment is to ensure the agreement of families is secured before an inquest is conducted remotely.
Amendment 76, in clause 39, page 51, line 10, at end insert—
“(2D) Coroners rules that provide for the conduct of hearings wholly or partly by way of electronic transmission of sounds or images must specify that, other than for any pre-inquest hearing, such a hearing, may only be held if—
(a) all interested persons known to the coroner named at section 47(2)(a) or (b) of this Act 2009 consent to such a hearing,
(b) the coroner is satisfied, and continues to be satisfied until the conclusion of any such hearing, that such a hearing is in the interests of justice, considering all the circumstances of the case,
(c) the coroner has considered the likely complexity of the inquest, and
(d) the coroner has considered the ability of interested persons known to the coroner to engage effectively with the hearing by way of electronic transmission of sounds or images.”
This amendment would ensure that certain safeguards are met before a remote inquest hearing is held.
Amendment 77, in clause 39, page 51, line 10, at end insert—
“(2E) Coroners rules that provide for the conduct of hearings wholly or partly by way of electronic transmission of sounds or images must require coroners to set out to all interested persons the reasons for why such a hearing, other than for any pre-inquest hearing, is to be held—
(a) at the conclusion of any pre-inquest hearing where any such hearing is ordered, if applicable, and
(b) in writing as soon as practicable after a decision has been taken for such a hearing to be held and prior to the commencement of the hearing.”
This amendment would ensure that interested persons are provided with the reasons for any remote inquest hearings.
Amendment 78, in clause 39, page 51, line 10, at end insert—
“(2F) Coroners rules that provide for the conduct of hearings wholly or partly by way of electronic transmission of sounds or images must provide for such hearings to comply with, and be subject to, Rule 11 of The Coroners (Inquests) Rules 2013 (Inquest hearings to be held in public).”
This amendment would ensure that remote inquest hearings and pre-inquest hearings are still held in a manner accessible to the public.
Amendment 79, in clause 39, page 51, line 10, at end insert—
“(4) Before this Clause may be commenced, the Lord Chancellor must—
(a) commission an independent review, including a consultation, of the potential impact of the conduct of inquest hearings wholly or partly by way of electronic transmission of sounds or images, considering in particular the impact on the participation of interested persons, and open justice,
(b) lay before Parliament the report and findings of such independent review, and
(c) provide a response explaining whether and how such issues which have been identified would be mitigated.”
This amendment would require a review, including a consultation, of the potential impact of remote inquest hearings before Clause 39 comes into effect.
Andy Slaughter
The Committee will see that we have a number of concerns about the way in which the amendment is presented, but not about the principle. We covered the role of technology and so forth in a previous part of the Bill, but we repeat some of those concerns and we have additional concerns in relation to the coronial process.
Clause 39 would enable remote attendance at inquest hearings by amending the coroners rules to allow provision for the conduct of hearings either wholly or partly by way of electronic sounds or images. Proposed new subsection (2A) sets out a provision to allow members of the jury to take part in a hearing virtually. It clarifies the fact that all members of the jury must take part in the same way and from the same place. There is much to be said for support measures to make pre-inquest reviews more readily available remotely, and we have seen this working well in many instances. In some cases, it is true that remote inquest hearings will be appropriate and some families have welcomed them during the covid-19 period.
There can be additional benefits of remote hearings in facilitating wider participation for public and media access, but only if arranged in a way that ensures that is established. Given the way in which the clause is drafted, I have significant concerns about accessibility, transparency, participation and open justice with remote hearings.
Amendment 74 does not dispute the fact that there is a place for remote hearings, either partly or in full, but I argue that it would be inappropriate for an inquest to be conducted by audio only. It can be vital to see a witness who is being questioned during the inquest; otherwise it is impossible to know whether that person is being prompted on what to say by someone else, for example. Furthermore, if a hearing is audio only, neither the coroner nor anyone else will be able to get a sense of the body language of the witness, which could help to establish credibility. The amendment would prevent an inquest from being conducted by telephone or by other means that are audio only.
Inquests can help to provide closure for grieving families and, according to families who have been through this experience, part of that closure can be achieved by physically being in court. It is the opposite point to the one that the Minister made on families who may find it more comfortable not to be in court for various reasons. Every case and every family is different, but being in court allows families to be supported by their legal representatives not just professionally but emotionally. That could be difficult if they are in different locations. Some families may not have internet access, or an internet connection that is good enough to allow them to take part in an online hearing. Amendment 75 will ensure that those families are not excluded from an inquest by ensuring that their agreement is secured before one is conducted remotely.
The Government’s rationale for clause 39—that it would bring inquests to
“the same position as civil courts”—
fails to recognise the specific nature of inquests, which often differ from mainstream courts and tribunals because of the highly sensitive and distressing nature of the issues addressed and their potential complexity, especially for state-related deaths. Whether remote inquests are appropriate depends on a case’s circumstances: its facts, complexity and attendees, and their ability to participate electronically in the proceedings. The introduction of remote inquest hearings without considering the needs and wishes of bereaved families, who already face many barriers to effective participation in the inquest process, is extremely concerning.
As with any remote hearing, myriad issues, including health conditions and disabilities, may make it difficult for individuals to follow or engage with a virtual hearing. Those same issues may make it difficult for them to explain to the coroner why they would prefer to attend in person. Furthermore, inquests can be highly distressing and re-traumatising for bereaved family members. The Government state that remote hearings will reduce the additional distress of the inquest process for bereaved families; however, it is unclear what evidence there is for that statement.
It is possible that some families may welcome a remote hearing, including the practical benefit that it can provide for some participants; however, it is very possible that requiring bereaved families to attend inquests remotely from their own home, which may make it more difficult to detach the inquest from their personal lives, will risk increasing unnecessarily the distress for bereaved families. In addition, bereaved families who attend from home risk not having the same level of support, including vital in-person support from charities such as the Coroners’ Courts Support Service. They will also be required to navigate the additional technological challenges that remote hearings can pose.
Inquests play an important role in allowing bereaved families to understand the circumstances around their family member’s death; however, if family members have difficulty engaging with the inquest remotely, that may disconnect families and key witnesses from this important process. Given the highly personal and distressing nature of inquests, it may be difficult for family members to put forward arguments and explanations to a coroner of why they do not want a remote hearing, especially since many bereaved family members do not have access to legal advice and representation, and may be faced with competing arguments from other interested persons. A remote inquest hearing should occur only if family members have consented to it. To help to mitigate those risks, clause 39 could be amended to ensure that certain safeguards are met before a remote inquest hearing is held.
Turning to amendment 77, it is important that interested persons, including bereaved family members, are provided with the reasons why an inquest hearing is to be held remotely. That helps to ensure that, if necessary, they have a basis on which to contest a decision to hold an inquest remotely. It is crucial that bereaved family members are engaged throughout the inquest process and provided with regular updates on what decisions are being made by the coroner and why. Without this communication, bereaved families, who often find the inquest process complex and alienating, risk experiencing further alienation, confusion and distress.
“Chief Coroner’s Guidance No. 38”, on remote participation in coronial proceedings, recognises that need, specifying that where coroners order a partially remote hearing, they should set out their reasons to interested persons at the conclusion of any pre-inquest review or in writing, by letter or email. It is important that this important step is not misplaced by clause 39. Amendment 77 would ensure that interested persons are provided with the reasons for any remote inquest hearing.
Turning to amendment 78, hearings in public are a central and cardinal feature of the coronial system, and there is an obviously public interest in ensuring transparency and openness. Since the beginning of the pandemic, practice with regard to the ways in which inquests are held has become extremely variable. Coroners have been sitting in court throughout the pandemic, because pre-inquest reviews and inquest hearings must be held in public. The current variation in wider access relates directly to the availability of premises and the very different approaches taken by different coroners. This has meant that families face extremely different experiences.
The same relates to access for journalists and other members of the public, who have at times been denied remote access to hearings on various grounds. Remote hearings have a negative impact on access for the wider public and media, as shown in a recent survey of journalists’ experiences of remote coroners’ courts during the covid-19 pandemic. The survey highlighted the difficulties that journalists had experienced in gaining access to remote inquest hearings and the technical difficulties faced.
The Bill is unclear on the precise circumstances in which inquests would sit remotely and provides no stipulations on the way in which interested persons and the wider public should be able to access hearings. As a result, there is a risk that these measures will crystallise the gradual process towards reduced access, rather than being motivated by the opportunities of new technologies to increase it. That would row back on the important principle outlined by the Chief Coroner:
“In public means not just open to the public but arranged in such a way that a member of the public can drop in to see how an inquest is conducted.”
It would appear that clause 39 amends section 45 of the Coroners and Justice Act 2009 to allow coroners more generally to attend hearings remotely. That must be clarified. The proposed new section does not say explicitly that coroners can attend remotely from outside court, or that they can attend remotely from outside court as long as the hearing is still held in public. That may be appropriate where an inquest is set to take place otherwise remotely with the family’s consent, but we have concerns about where that is not the case.
Public hearings are a fundamental element of the coronial system, ensuring that there is public accountability, investigation and explanation where an individual has died. There must be public access to hearings and, as I have said, although we recognise that in some circumstances a remote hearing can increase availability for members of the public and media to attend the inquest, we are concerned that the Bill does not provide any assurance that continued public access to inquests will not be limited in a remote setting.
Clause 39 should therefore be amended to ensure that remote inquest hearings, including pre-inquest reviews, continue to comply with rule 11 of the Coroners (Inquests) Rules 2013, which requires hearings to be held in public. Amendment 78 would ensure that remote inquest hearings and pre-inquest hearings are still held in a manner that is accessible to the public.
Turning to amendment 79, I can support measures to conduct pre-inquest reviews remotely, as we have seen that working well in many instances. I note that many organisations that support the legal profession have said the same. The Bar Council said in its brief: “In line with our tradition regarding criminal trials, we are in favour of a presumption that proceedings for a jury are conducted in a room in which key interested persons are able to be physically present, and in which the coroner also sits.” However, there may be some sense in allowing pre-inquest review hearings to be conducted wholly remotely.
The Government state that remote hearings will reduce the “additional distress” of the inquest process for bereaved families—a claim for which they provide no concrete evidence. I have not been made aware of any evidence base in academic or other research to support this move. Indeed, it seems that remote or partly remote inquest hearings can, in fact, add to the distress of bereaved families. The only research into the experience of remote juries was a limited pilot study by Justice, which did not look specifically at inquests. As a result of the pilot, Justice concluded that whether remote inquests are appropriate is highly dependent on a case’s circumstances facts, complexities and attendees, and, vitally, on the impact of a remote hearing on access to justice for the bereaved family, who already face barriers to effective participation. Justice also concluded that vital safeguards for families, greater investment in technologies, and a pilot and evaluation are essential.
I share that view, because the Government must be asked to produce evidence to support these dramatic changes, or be asked to conduct further research and consultation with bereaved families on the implications of remote hearings, prior to enacting clause 39. The research must consider the positive and negative consequences of both fully and partially remote hearings and inquests. The review must include a consultation with bereaved families, to ensure that all concerns are fully considered and, where necessary, addressed. That would also highlight any gaps in the technology required for remote hearings and ensure the necessary investment.
Sir John Hayes (South Holland and The Deepings) (Con)
I am very grateful to you, Mr Rosindell. Your stewardship of our deliberations adds lustre to our proceedings.
The hon. Member for Hammersmith has done the Committee a service by tabling the amendments. I do not think even his greatest fan would say that he is an exciting performer on the Committee, but he is certainly a diligent one. His diligence has allowed us to consider again the issue of court users who may be disadvantaged in some way by the drive for efficiency. There is a barely a sin that has not been committed in the name of efficiency somewhere and at some time, and it is vital, as the amendments make clear, that we move forward with a careful consideration of the interests of all court users.
I will not rehearse the arguments that the hon. Member for Hammersmith has made very well. The amendments would ensure that consent is at the heart of the process, which I think would be welcome. Furthermore, they would guarantee that coroners will take full account of the character of hearings, which again I think the whole Committee would welcome. Moreover, they are clear that consideration must be given to those involved in an inquest who might be put at a disadvantage by the drive towards communications of a new kind, as proposed in the Bill. I appreciate that the Minister wants to make the process as convenient as possible but, my goodness, in the name of convenience, are we as a House and a people to cast aside all the sensitivities and sensibilities that characterise the way we go about our proceedings in courts, in this place and elsewhere? It is important that we recognise that the cause of utility, justified by convenience, is not the only consideration in these matters.
As I have said before, the Minister has been extremely sensitive to this issue in his responses. It is a case that I have made repeatedly on behalf of disadvantaged people, particularly disabled people, who will come before courts with all the doubts, fears and apprehension that anyone would have, but with the added challenges of having to navigate a system without the advantages that most of the people in this Committee have. It is really important that in trying to make the system more cost-effective, convenient and efficient, we take full account of disadvantaged people’s interests and needs. That is my purpose in adding my voice to this debate.
I pay tribute to the Minister for the way in which he has responded to the sensible arguments that have been made by Members on both sides of the Committee, and for his willingness to listen and take these things back and consider them further. I leave him simply with this thought. All my experience of life, which is not as long as it is going to be but is longer than some, is that as we journey through it, with all the joys and sorrows, all the trials and tribulations, all the triumphs and so on, it is perhaps the things that are inconvenient that take us closest to the sublime. I therefore long for the inconvenient life, and I hope that the Minister will recognise, in his very sensitive handling of these considerations, that convenience must not make us less caring.
James Cartlidge
I am grateful to my right hon. Friend the Member for South Holland and The Deepings for another very interesting contribution. His point that he is not as experienced as he will be in the future was an interesting chronological observation that it is impossible to dispute in any way, shape or form.
Sir John Hayes
That presupposes, of course, that I do not face an imminent decline or departure, which is not entirely impossible, although I am not hoping for it. I am glad that the Minister is wishing me a long and prosperous life—if that is what he is doing.
James Cartlidge
Not least because we do not want to have to put a further burden on the coroner’s office should any question marks be raised about the circumstances—[Laughter.] Or, indeed, a further by-election. These are not simple matters—and all that notwithstanding the fact that my right hon. Friend is a great man, who is bordering on a regional treasure if not yet a national one. The only point that I make is that, in many ways, in craving inconvenience, he has made an ode to traffic jams. There are many inconvenient things in life that I think all of us find a great displeasure.
Let me make a serious point about efficiency. I said on Second Reading that the streamlining of the courts is the thread that runs through the Bill. Almost every measure in it is, in one way or another, streamlining, and therefore about efficiency, but it is not efficiency for efficiency’s sake. If we take the measures to do with coroners, I very much regret that many cases are backlogged in the coroners’ courts, and inevitably they are the most serious cases—cases that will require inquests, possibly with a jury. We have to remember that that causes great distress for the families concerned. These efficiency measures will help us to reduce those backlogs so that we can deliver those cases in a more timely fashion, which I would argue is in the interests of supporting bereaved families and is therefore in itself compassionate.
By the same token, as I have said repeatedly throughout our consideration of the Bill, when one talks about the virtual sphere, measures such as remote participation and digitisation are not taken for the sake of it. They enable justice to happen in ways that it might not have done during the pandemic, for example. I accept my right hon. Friend’s point, but we have to remember that there is a very important reason why we are seeking to streamline these measures, and ultimately it is in the interests of our constituents.
Of course, if one is seeking to streamline and have efficiency—I have said this throughout, and I have agreed with the hon. Member for Hammersmith—one has to have safeguards in place. The amendments in this group all seek to provide additional safeguards for audio and video-link provisions in clause 39.
To be clear, clause 39 is intended to provide coroners with the flexibility to hold remote inquest hearings where all participants, including members of a jury, where applicable, participate remotely. During the pandemic, remote elements of inquests have worked well, with interested persons and witnesses attending virtually, so this is not unprecedented by any means. Other courts and tribunals have been holding wholly or partly remote hearings where participants have the option to participate remotely. The clause is intended to bring coroners’ courts in line with other jurisdictions. I would like to assure members of the Committee that we introduced the clause with bereaved families in mind. Giving coroners flexibility on how they hold their inquest hearings will ensure the timely hearing of cases and help to reduce unnecessary distress to families, not least by reducing delay.
Amendment 74 proposes to set out in primary legislation the requirement that remote hearings must not be conducted by audio only. The clause is intended to provide coroners with the flexibility to hold remote inquest hearings with the use of either audio or video links. It is important that coroners have the flexibility to conduct hearings by audio, as there may be occasions where that is the only means by which participation is possible—for example, if someone’s wi-fi is not strong enough for a video link. We have all been there, on Teams or Zoom, where we have had to go audio-only because things start breaking up. It is a fall-back position that we have all made use of, and I would argue that it is sensible.
It is similar to the situation in other courts and tribunals where, for instance, parties to a civil case can join via audio-only. Indeed, many courts ask parties who will not be speaking, as well as counsel waiting to respond to submissions, to switch their cameras off so that the transmission is more stable. After all, we want to be accessible online throughout the country. Unfortunately, although their number reduces every day, there are still parts of the country that have less effective broadband access than others.
Dr Johnson
I thank the Minister for giving way. Could he clarify a point on the use of audio as opposed to audio and visual evidence? When one is listening to someone give evidence in court, surely their facial expressions and the way they present themselves are also part of one’s understanding of their evidence, their believability and the emotions behind what they are saying.
James Cartlidge
Although not a lawyer, my hon. Friend, given her medical background, understands very much how we deal with people day to day, but I would argue that one could say that of any remote participation.
James Cartlidge
My right hon. Friend is furthering his cause of unravelling progress towards remote participation and so on.
On the basis of what my hon. Friend says, we could question almost all remote participation, in that we would have to therefore argue that it could only be possible if we could keep the camera on or, alternatively, that we wanted to see them face to face.
I think I made it clear to colleagues—I cannot remember if it was during the previous sitting or the one before—that one big advantage of more digitisation is that it frees up resource for the most important in-person procedures. In criminal, that is clearly trials—in particular, jury trials, which I accept will remain in person. So there is a consistent logic to this.
James Cartlidge
I want to make progress, but I will give way one more time.
Sir John Hayes
I appreciate that the Minister wants to make progress. However, amendment 76, tabled by the hon. Member for Hammersmith—he is not with us at the moment, but he has done a diligent job—says:
“(c) the coroner has considered the likely complexity of the inquest, and
(d) the coroner has considered the ability of interested persons known to the coroner to engage effectively with the hearing by way of electronic transmission of sounds or images.”
I am sure the Minister agrees—I am not making an antagonistic point—that it is important that the effects of that kind of communication are measured on the basis of those who might struggle. I do think that the point about disabled and disadvantaged people is very important—[Interruption.] I see that the hon. Member for Hammersmith has returned. I was again praising him; some may think he is more a bridge than a palais, but on this subject he is right on the button. There are people who could find the processes we are debating more intimidating, more unreasonable and less fair as a result of these changes. That is what we are all trying to get at. I know that the Minister is trying to do the right thing on this issue, but I hope he might think again, particularly about disadvantaged and disabled people.
James Cartlidge
My right hon. Friend speaks with great expertise and, indeed, with more experience than when he made his last intervention, based on his earlier comments.
James Cartlidge
The hon. Member for Hammersmith asked for evidence. It is obviously a difficult area. The procedures are new, so having very clear evidence on certain types of remote proceedings—
James Cartlidge
I am just responding to one intervention at the moment.
I stand by the point that I made earlier: overall, remote access digitisation enhances access to justice. For many people who are disabled, for older members of society for whom getting around and travel are not easy or straightforward, or for those who live in more remote areas, being able to access the process online will make it more accessible. It is simply about being reasonable. I want to make some progress on the amendments, but I will give way to the hon. Gentleman after making another point.
Andy Slaughter
Earlier, the Minister quoted with approval Mr Rebello’s evidence, which we took at the start of the Committee proceedings. The Minister agreed with him on the issue of representation, which one might think is more of a point to be debated. Mr Rebello is an experienced coroner and his evidence was persuasive on whether it was as acceptable to have people remotely as it was to have them in the room, in terms of not just the individual parties—there are many different parties—but the collective impact. I wonder why the Minister was not persuaded.
James Cartlidge
What I hope I have set out is that we are simply introducing flexibility. One should not underestimate the fact that the powers are in the hands of a judicial figure—the coroner is in effect a judge—who in all the provisions has discretion in how such matters operate. I have great faith in the judiciary. One needs to apply common sense. What cannot be done is something that the law does not allow, and we are enabling something to be possible.
Amendment 75 proposes to set out in primary legislation the requirement for the coroners to obtain consent from interested persons before making a decision on whether to conduct an inquest hearing remotely. As I said, coroners are independent judicial office holders and how they decide to conduct an inquest hearing should be a matter for them. In line with other courts and tribunals, the final decision will lie with the judiciary.
It is expected, however, that the rules to govern remote inquest hearings will provide that coroners should seek views from interested persons and take those into consideration as part of their decision making. I assure hon. Members that coroners will continue to act sensitively to ensure that bereaved families’ concerns are considered when making decisions about the investigation, including the pre-inquest and inquest hearings.
Amendment 76 proposes to introduce additional requirements into the clause when a coroner proposes to hold an inquest hearing remotely, including the requirement that the coroner obtains the consent of interested persons. Amendment 77 would require coroners to notify the parties before the intention to hold a hearing remotely.
As I said, the clause enables rules to be made permitting remote hearings to be held in coroner’s courts. Detailed rules will be brought forward to govern the conduct of remote hearings to guide how they will work in practice. As such, I am not convinced the amendments are necessary.
Again, I stress that remote elements of the coroner’s inquests worked well during the pandemic with interested persons and witnesses attending virtually. I assure all colleagues that coroners will continue to work sensitively with bereaved families, acknowledging their concerns and working in their best interests to ensure that justice is seen to be done.
Amendment 78 seeks to ensure that remote hearings are held in a way that is accessible to the public. Clause 39 needs to be read in conjunction with clause 167 of the Police, Crime, Sentencing and Courts Bill which is in the other place. That provides for the remote observation and recording of proceedings by direction of the court in a number of courts, including the coroner’s courts. I understand the concerns of the hon. Member for Hammersmith, but his amendment is not necessary, as clause 167 of that Bill will ensure that justice remains open and accessible to the public regardless of how the hearing is conducted.
In addition, it is expected that the rules to govern remote inquest hearings will provide sufficient guidance to ensure that coroner’s inquest hearings remain accessible to the public. The Chief Coroner will provide additional guidance on any law changes, and we expect coroners to follow that guidance.
Amendment 79 proposes to set out in primary legislation the requirement for the Government to review, and consult with relevant stakeholders on, the potential impact of remote inquest hearings before any changes are introduced. To reassure the hon. Gentleman again, let me say that clause 39 only enables the coroner to hold remote hearings. The Coroners (Inquests) Rules 2013 will need to be revised to set out the detail of how remote hearings will operate in practice, and we will seek stakeholder input, including from the Chief Coroner, coroners and the Ministry of Justice-chaired stakeholder forum to ensure that the rules are appropriate. I hope that I have therefore provided suitable reassurance to the hon. Gentleman and I urge him to withdraw the amendment.
Sir John Hayes
I apologise to the hon. Gentleman. What my hon. Friend the Minister has just said is important, because if there is a genuine consultative process of the kind that the hon. Gentleman has emphasised, which I must admit I had not recognised in my earlier remarks, and it involves those groups about which I am particularly passionate and which might be disadvantaged, then, while this legislation enables the things the Minister has described, it will not necessarily mean that they are imposed wholesale. I still think that the hon. Gentleman has done a great service to the Committee by allowing us to have this debate, and it is important that we have done so, but that consultation is critical. Will the Minister give me an absolute assurance that representatives of disabled people and disadvantaged people will be part of this process?
James Cartlidge
I know that my right hon. Friend takes a passionate interest in the subject. I am due to write to him on the position of children in care. I do not think that we have sent that letter quite yet, so I will add to it information about the make-up of our stakeholder group. It is MOJ-chaired and I am sure that it is broad. I cannot tell him who every single person on it is at this moment, but I will try to list for him all the information that I can.
I stand by my point. I think that these measures, just as with other technology, will enhance accessibility for disabled people and many others in society. I would be extremely surprised if, in future, any Government were to wind back this measure, even a Labour Government.
James Cartlidge
I had finished my speech—for the second time. But it is only fair that I rewind in order to give way.
Janet Daby
Will the Minister please share with the Committee the information about children in care that is going to be shared with the right hon. Member for South Holland and The Deepings?
Andy Slaughter
I thought for a moment that the right hon. Member for South Holland and the Deepings was rising to indicate which of the amendments he is going to support, but we will see. They are all good amendments. I will not trouble the Committee by putting them all to the vote, but with all due respect to the Minister I do not think that the case for them has been rebutted.
The failsafe is in amendment 75, which states that the agreement of families must be secured before an inquest is conducted remotely. The Minister said in an earlier discussion that that could be used obstructively in some way, but I think that the chances of that are vanishingly small. I regret to say that there are cases—I may come on to this in the clause stand part debate—where the coroners have not been entirely sympathetic to the wishes of families. We respect their right to run their own courts and they have wide discretion about which evidence is heard, but it is giving all the weaponry to the coroner and perhaps a bit of a brake needs to be left with the family.
I will mention amendment 76, too, because considering the ability of interested persons to deal with the hearing is crucial. I will not push that to a vote and I accept what the Minister has said about these being matters to which he has regard. I hope that they will appear in guidance, because I have concerns about the double whammy of someone not being in a position to articulate their views and being further discriminated against by a remote hearing in which they are unable to take part.
I will press amendment 79 to a vote. The Minister conceded, I think, that there is no evidence here and we are taking a bit of a leap in the dark. It is reasonable that more investigation is needed.
James Cartlidge
Has there been—I will double-check with my officials—exhaustive, detailed analysis of the impact of remote hearings on bereaved families? To my knowledge, there has not yet. If that is not correct, I will come back and correct the record. However, I have said how extensive the use of remote technology has been during the pandemic, and I am not aware of a lot of negative feedback from families or vulnerable users who are somehow disadvantaged by it. If that is the case, however, I will be happy to clarify that. All I have heard is that delivering greater use of cloud video technology, particularly in other jurisdictions such as tribunals, has greatly aided the ability to keep justice going in very trying circumstances.
Andy Slaughter
I hear what the Minister says. This is not making the best the enemy of the good: we have got through, and Zoom and other methods have been a great help during covid, but most of the Zoom, Teams and other meetings that we have taken part in have been professional meetings and even then, I am afraid, some colleagues—probably myself on some occasions—struggle with the technology. Most of the parties to an inquest will be professional—we made this point in relation to our new clauses—but some people will struggle, and it may not be entirely apparent that they are struggling. That is my point. I pray in aid the comments of the Bar Council. On the whole, it has been reasonably sympathetic to what the Minister is trying to do, but it says of clause 39 that
“it is our belief that this measure should not become law without thorough research, evaluation and consideration of the impact on the administration of justice and justice outcomes.”
I think that must be right. We are not opposing the clause, but before we go ahead and support it, we are asking to have the consent of the parties, including the families, and further evidence. I will not press amendment 74 to a vote, but I will press amendments 75 and 79.
Amendment, by leave, withdrawn.
Amendment proposed: 75, in clause 39, page 51, line 10, at end insert—
“(2C) Coroner rules that provide for the conduct of hearings wholly or partly by way of electronic transmission of sounds or images must provide for all interested persons to have to give their agreement to the conduct of hearings wholly or partly by way of electronic transmission of sounds or images.”—(Andy Slaughter.)
The purpose of this amendment is to ensure the agreement of families is secured before an inquest is conducted remotely.
James Cartlidge
Before speaking to the clause, I just want to reflect on something interesting. When we discussed the first clause in relation to coroners, I mentioned the point about the backlog, which is very important. My concern, however, is that we are being criticised about the backlog, but whenever we propose practical measures to streamline the judiciary and bring efficiencies, the Labour party’s response is lukewarm at best, if not voting specifically against them.
I gave the earlier example of the oral questions about the Cart JR cases. Many hundreds of cases are heard by High Court judges and, as Members will know, High Court judges can also sit on the most serious criminal cases in the Crown court. We have measures in this Bill that free up 400 sitting days in the Crown court. The hon. Member for Hammersmith has actually acknowledged that the backlog in coronial courts is being causes by covid. If we were not to press ahead with these clauses, it would be far harder to deal with that. At some point, we must move from recognising that there is a problem, as we do, to bringing forward positive actions, as we are.
On clause 39, as the Committee will be aware—we have debated this previously—courts and tribunals have moved the bulk of their proceedings online, which has been a vital step in ensuring that justice continues in the midst of the covid-19 pandemic and the subsequent safety measures put in place.
Current legislation provides that coroner hearings must be held in public. This provision clarifies how that requirement can be met, permitting rules to be made to allow hearings to be wholly or partly conducted remotely by audio or video. Indeed, the clause will amend the current regulation and allow hearings to take place where all participants, including the coroner, will be able to participate remotely. Wholly remote hearings are already allowed in mainstream courts and tribunals, so this clause merely brings coroners’ courts into line with them.
It is also intended that this provision will provide coroners with additional capacity as they mitigate the impact of covid-19 and implement their recovery plans. In many coroners’ courts, this includes addressing a backlog of complex and non-complex jury cases. This is the key point: I accept the concerns of colleagues, but we must do something practical if we are to address the backlog. That is why we have these measures, and by doing that, we will relieve some of the stress and anxiety for the families whose loved ones have perished and resulted in these sorts of backlogged cases.
Sir John Hayes
I do not want to labour this point, but it is safe to say that the Minister is absolutely right. It is a matter of balance, which is essentially what he said, but there is an argument for improved practices. He made a profound point earlier about the fact that for somebody with mobility issues, who might not be able to easily get to a hearing, online and audio communication can be beneficial. My case was for other kinds of people—perhaps those with learning difficulties, hearing loss, visual impairment, and a number of others. The Minister has been sensitive to that. There is a balance to be struck, and that is a case that this whole Committee is agreed on.
James Cartlidge
I am grateful to my right hon. Friend. That is an ideal note to conclude on, because this is about striking a balance. I would just add that this measure also complements a provision in the Police, Crime, Sentencing and Courts Bill that, if implemented, would allow the media to access coroners’ court proceedings remotely. I therefore commend clause 39 to the Committee.
Andy Slaughter
I know that we want to make some progress, but I will make a few additional comments in response to the Minister, because this is an important clause, and the right hon. Member for South Holland and The Deepings has put his finger on the issue. None of us is against speeding things up, making things more efficient or allowing more options for the ways in which proceedings can be dealt with, but the corollary has to be that we provide protections and avoid unintended consequences that may be harmful to participants and may mean that justice is not done.
The aim of clause 39 is to make provision for pre-inquest reviews and inquest hearings to be conducted wholly or partially remotely, with all parties, including the coroner and jury, participating remotely, but with the jury present in the same place. Currently, the coroner and the jury—if there is one—must be physically present in the courtroom, and the law does not allow fully remote juries. This clause fails to adequately address the needs of bereaved family members; does not provide a guarantee that remote inquest hearings will continue to be in public; and has been introduced with insufficient research and evaluation.
In the criminal justice context, the organisation Justice has piloted fully virtual jury trials. Independent academic analysis concluded that with careful consideration and adaptation, such trials can be fair and may have some benefits over short and straightforward traditional jury trials, such as improved sightlines for jury members. However, while we support the principle of increased use of technology in the form of remote proceedings for certain situations in the justice system, this cannot apply without restriction across the justice system, and must be implemented with caution and with appropriate safeguards.
Let me give an example in which a remote hearing failed to safeguard a family. Chris died after suffering cardiac arrest on 24 March 2019. Chris had been sectioned under the Mental Health Act 1983 and was under the care of Pennine Care NHS Foundation Trust. The inquest into his death took place in April 2021, and was deemed an article 2 inquest and was conducted with a jury. Following that inquest, Chris’s family wrote to the local senior coroner to highlight the challenges they faced due to the remote technology used at the inquest. There were two main issues. First, Chris’s family saw a witness who was giving evidence remotely and representing Pennine Care
“laughing and pulling faces with a colleague”
on their screen. This came just after another member of staff gave evidence concerning the failure to observe Chris properly while he was sleeping. Secondly, the family accidentally saw CCTV footage of Chris’s last hour, which was to be used by another witness. Unsurprisingly, the family found those moments very distressing and wrote to the senior coroner to
“ensure relatives of the deceased are not put through unnecessary additional distress”.
Clause 39 also proposes introducing remote juries to inquest hearings, which is justified on the basis that it would bring coroners’ courts in line with other jurisdictions where it is presently an outlier. However, clause 168 of the Police, Crime, Sentencing and Courts Bill, which has been referred to, would introduce remote juries in criminal trials. That clause is still under consideration in the Lords, and prompted a joint briefing from the Bar Council and the Law Society raising “wide-ranging” concerns that included
“the risk of alienating juries and/or witnesses; ensuring security of proceedings (both in terms of the privacy of the process and individuals, and data privacy); additional expense to the taxpayer; the requirement of new technology and IT systems; and the associated issues arising out of these aspects”.
For families, this brings the additional challenge of them being unable to witness a jury’s reaction to evidence being heard. Lawyers from the Inquest Lawyers Group have spoken of inquests they have sat on where the jury has sat in a separate room to the coroner, watching the hearing via video link. In more than one instance, lawyers have reported seeing members of the jury sleeping and eating without the coroner having any knowledge. That type of situation would be very hard to prevent if the proposals in clause 39 are enacted.
Inquest hearings can have a uniquely distressing impact on bereaved families. The process, which involves hearing details about an individual’s last moments before death, can have a retraumatising effect on families. Clause 39 will make it more difficult for many families to separate the distress of the inquest hearing from their personal lives.
We are also concerned that families engaging in the inquest process remotely will be unable to access in-person support from charities such as the Coroners’ Courts Support Service. In the Justice Committee’s inquiry into the coroners’ service, the Chief Coroner emphasised the critical role played by Coroners’ Courts Support Service volunteers in meeting families and ensuring that they are not by themselves. Justice Committee members picked up on that point and made recommendations to make the service more widely available. The Bill’s provisions, rather than strengthening those services, would roll them back.
Despite the distress, frustration and pain that can be caused by the inquest process, bereaved families go through it to understand the circumstances of their family member’s death, and to bring to light harmful practices with a view to preventing similar deaths in future. I am concerned that remote hearings may disconnect families and key witnesses from that important process, which serves a wider public interest.
We are not against the further introduction of new technology; in some circumstances, such as pre-inquest hearings, it clearly seems appropriate. We have serious reservations about remote hearings for full inquests, but we accept that that can be mitigated. The problem with the way in which the Government have handled the matter in the Bill is that they have not offered those mitigations. They are putting all matters into the hands of the coroner. Of course, there must be judicial discretion, but they need to go further. We hope that the Minister in the other place will table amendments to improve the provisions and mitigate against the possible harmful effects of remote hearings, and perhaps then we will be delighted to support the clause. For present purposes, however, we will vote against clause stand part.
James Cartlidge
Very briefly, I believe that the clause adds flexibility. It is important that we have the ability to hold such hearings remotely. As I have said, it joins up with how hearings have been happening in other jurisdictions, particularly in tribunals and so on. If the hon. Gentleman has such concerns, does he believe that we should no longer be holding tribunals or other types of hearing remotely, such as for the family court? They have been of real benefit to this country during the pandemic.
Of course, such things should be done sensibly. Perhaps it is a question whether the glass is half full or half empty in terms of trusting in the discretion of the judiciary. My view is that, in the face of the significant backlog that we have and the need to take measures to deal with it, not introducing the provisions would be a regressive step.
Question put, That the clause stand part of the Bill.
James Cartlidge
Eighteen months ago, at the height of the pandemic, the Government introduced the Coronavirus Act 2020, which formed the foundations of our approach to combating the pandemic. The classification of covid-19 as a notifiable disease in England meant that any inquest into a death where the coroner had reason to suspect that the death was caused by covid-19 would have had to take place with a jury. There would have been significant implications for the coronial system, as current legislation requires a coroner to hold a jury inquest where the coroner has reason to suspect that the death was caused by a notifiable disease. With covid-19’s high mortality rate and high infection spread rate, there were concerns about the resource implications for coroner workloads and coroner services if coroners were required to hold jury inquests into such deaths.
Section 30 of the 2020 Act was therefore implemented to disapply the requirement that coroners conduct an inquest with a jury where the cause of death was suspected to be covid-19. Anecdotally, we have heard from coroners that section 30 has ensured that stretched coroner services were not overwhelmed when they could have been under considerable pressure. Clause 40 of the Bill therefore ensures continuity after the 2020 Act “sunsets” in March 2022.
It is important to stress, however, that coroners will still be able to conduct an inquest with a jury where covid-19 is suspected as the cause of death where they think that there is a good enough reason to do so. And this clause does not change the legislation concerning other notifiable diseases; coroners are still required to hold an inquest with a jury where another notifiable disease is suspected to be the cause of death.
This clause is intended to support the coronial system as it looks to post-pandemic recovery. Coroners’ courts are moving ahead with scheduling outstanding inquests, which have built up over the pandemic in some places. This provision removes the added pressure of scheduling inquests with a jury where that would be seen as an unnecessary process. Should there be future outbreaks of covid-19 with high mortality rates, this measure will ensure that the coronial system is not overwhelmed with jury inquest cases.
Finally, I note that this is a temporary measure, which will be reviewed and extended after two years by the Lord Chancellor via delegated power. I urge that clause 40 stand part of the Bill.
Andy Slaughter
I will take my lead from the right hon. Member for South Holland and The Deepings on this matter. I think that this is a good example of a practical measure and there are sufficient safeguards to allow jury inquests to continue where necessary, so we do not intend to oppose it. Clearly, one would not wish to restrict unduly, and certainly not against the interests of justice, the opportunity for jury inquests, but I think that the way in which the clause is set out and the stages that are gone through ensure that that will be possible and that there is unlikely to be any miscarriage on those grounds.
Question put and agreed to.
Clause 40 accordingly ordered to stand part of the Bill.
Clause 41
Phased transition to new coroner areas
Question proposed, That the clause stand part of the Bill.
James Cartlidge
Clause 41 is intended to support the objective of the Government and, more recently, the Chief Coroner to merge coroner areas where the opportunity arises in order to improve consistency of coroner provision and standardise practice. In essence, clause 41 will enable coroner areas within a local authority to be merged by order of the Lord Chancellor where the new coroner area would not be the entire local authority. Before 2012, there were 110 coroner areas in England and Wales. Through coroner area mergers, we have brought that number down to 85, and our long-term objective with the Chief Coroner is to reduce it further to around 75 coroner areas. It is intended that this clause will make it easier for coroner areas to merge.
The clause also meets one of the Justice Committee’s recommendations in its inquiry report on the coroner service. The Committee acknowledges that reducing the number of coronial areas has helped to increase consistency across the coroner service. Implementing the clause will ensure that merger opportunities can continue to be progressed. I urge that clause 41 stand part of the Bill.
Andy Slaughter
There is a very helpful example on page 50 of the explanatory notes as to how this would work, for anybody who has any concerns about it. It seems to be administratively sensible and tidy. I cannot do any better than to raise the concerns of a member of the Bar Council who said that this is all well and good provided it does not result in fewer coroners, deputy coroners and deputy assistant coroners covering greater areas. Can the Minister give us that assurance? We have no other points to make or objections to the clause.
James Cartlidge
To be completely transparent, the purpose of the clause is to allow some very specific mergers to happen. If implemented, there will be an immediate benefit in allowing Kent County Council to progress the merger of its current four areas into one coroner area. Kent is currently unable to achieve this because current legislation does not allow two coroner areas to be merged if the merged area will be less than the area of a local authority. The clause has a very practical justification. We do not see any significant impact in the way the hon. Gentleman describes.
Question put and agreed to.
Clause 41 accordingly ordered to stand part of the Bill.
Clause 42
Abolition of local justice areas
Alex Cunningham (Stockton North) (Lab)
I beg to move amendment 96, in clause 42, page 52, line 34, at end insert—
“(7) Before introducing the changes outlined in section (1), the Secretary of State must consult with relevant stakeholders on the impact of the proposals.”.
This amendment would require the government to consult on the abolition of local justice areas before any changes are introduced.
It is a pleasure to serve under your chairmanship, Mr Rosindell. We are now debating chapter 5 of part 2 of the Bill, which covers local justice areas. Before I get into the detail of the amendment, I too have reflected on our attitude and approach to the Bill, and I think the Minister has been slightly unkind in thinking that Opposition Members had some sort of ulterior motive in proposing what we have along the way. I reassure the Minister and the Committee that our entire agenda has been to ensure that anything the Minister proposes is workable and protects people, including the most vulnerable and the elderly—[Interruption.] I am not implying that the right hon. Member for South Holland and The Deepings is elderly, but he has made the point in the past that we need to protect the elderly, and the Opposition also want that. It is important that the Minister understands that we want a more efficient court system as well.
I was also reflecting on what the Minister said this morning when he was trying to justify the growing crisis, particularly in our Crown courts. He tried to claim that, prior to covid, things had improved, in terms of the number of cases before the courts and the efficiency of the system. In fact, in 2010, we had more police, more charges and more cases before the courts. However, the crux of the matter is the actual statistics relating to how efficiently cases were dealt with. In 2010, it took 391 days, on average, for a case to come through the court system, from charge to completion. In 2019, it took 511 days, on average, for a case to pass through the Crown courts, which I think illustrates that, while there were fewer cases, they were taking longer to go through the court system. As my hon. Friend the Member for Hammersmith said, that reflects the huge cuts we have seen to the Ministry of Justice since 2010. Perhaps, had it not been for those cuts, that average would in fact have come down, as there were fewer cases in the system.
Clause 42 will abolish local justice areas. Organisations across the sector have raised a number of potential issues that this would cause, which I am interested to hear the Minister’s thoughts on. I understand it was the Government’s intention that, in place of local justice areas, all magistrates and magistrates courts will be put into one national justice area covering England and Wales, as recommended by Lord Justice Auld’s 2001 review of the criminal justice system, in order to facilitate listing. That proposal is now 20 years old and has not been updated, nor is it supported by additional research in that time, so why would the Government want to rely on that information now?
I am aware of Sir Brian Leveson’s 2015 review of the efficiency of criminal proceedings in England and Wales, in which he supported further steps to unify the criminal courts, although he did not mention anything about abolishing local justice areas. The Government’s explanatory notes to the Bill state that the proposal will
“provide the courts with the freedom and flexibility to manage their caseloads more effectively and ensure that cases are dealt with sooner and in more convenient places.”
More convenient for whom? There is a long-held principle in this country whereby justice is expected to be done for a local community by members of that local community.
I recall my visits earlier this year to Hartlepool, where residents feel strongly that they should have a local court to dispense justice in their own town. Indeed, during the by-election Conservatives promised local residents that they would restore local services that had been cut. Just a few weeks later in a written answer to me, the Minister’s predecessor confirmed that they would not even consider reopening the magistrates court that had been closed by his Government in 2017. Local residents were extremely disappointed and felt cheated. Will the Minister reconsider opening the Hartlepool court to help reduce the backlog across Teesside and beyond—local justice areas or not?
The Opposition are worried about the impact of a curtailment of local justice, which is proposed in the Bill. Transform Justice explains:
“Magistrates are representatives of the people and must have a connection to the area in which they sit. An applicant to the magistracy must currently live or work in their local justice area, so they understand the area, its crime trends and its people. All magistrates are members of a bench made up of other magistrates local to that area. The abolition of local justice areas is likely to lead to a diminution of local justice, including a weakening of the links benches currently have with local criminal justice agencies.”
How does the Minister suggest we maintain this local community link? Is he content for magistrates to be parachuted into local courts from across the country or for cases to be listed who knows how many miles away from where defendants, victims and witnesses live?
Transport Justice raised the issue that the proposals would diminish the independence of the magistracy. It says:
“Magistrates have historically retained an independence from the paid judiciary and governed themselves through democratic processes. They have managed their own ongoing training and disciplinary processes. All leadership roles have been subject to democratic election by peers.”
While the Government’s proposals are scant on detail, it seems that these democratically elected posts will be abolished and that the functions carried out voluntarily by the magistrates will be taken over by court staff and paid judges. Have they not got enough to do? Do the Government foresee that leading to a diminishment of the magistracy’s independence? Will this hand over some of their responsibilities to the senior judiciary? Transform Justice believes:
“Given magistrates’ status as members of the community and ‘representatives of the people’, and their expertise in management, this is not appropriate.”
I worry that the role of magistrates as dispensers of justice from the community will be lost, with all the benefit that that entails.
Why has the proposal been changed slightly since the Prisons and Courts Bill of 2016-17? Under that Bill, which fell with the announcement of the 2017 general election, the Government had exhaustively set out consequential modifications and repeals in a schedule. Under this Bill, the Lord Chancellor would be given a power, exercisable by regulations, to
“make consequential or supplementary provision in relation to the abolition of local justice areas.”
That includes the power to amend, repeal or revoke provision made by or under Acts of Parliament. This is another Henry VIII clause.
On Tuesday, the Minister smiled time and again when I talked of a Government power grab—I think he is probably smiling behind his mask again—and they are at it again. This measure has an impact on witnesses, defendants and victims, of course, as well as the families of all those people. Regulations that amend or repeal any Act of Parliament would remain subject to the affirmative procedure. Otherwise, regulations are made under the negative procedure and do not require prior parliamentary approval. Will the Minister explain why this change was made? Surely it removes helpful accountability and scrutiny mechanisms.
James Cartlidge
I appreciate the various questions from the hon. Gentleman. The key point in his amendment is consultation. Specifically, the amendment proposes to set out in primary legislation a requirement for the Government to consult with relevant stakeholders on the abolition of local justice areas before any changes are introduced.
The hon. Gentleman asked how I feel about consultation. To be clear, on Monday I held a meeting to which I invited all MPs who are or have been magistrates to talk about elements of the Bill. I am pleased to say that a group of colleagues did come—unfortunately, from only one party, but MPs from all parties were invited. Of course, those who did not attend will have had a very good reason. The point that I am making is that I have personally engaged with MPs who are magistrates, or were until they were elected. It was a very interesting conversation. I note that, just as I talk about MPs who are or have been magistrates, my parliamentary private secretary, my hon. Friend the hon. Member for Hertford and Stortford, has entered the Committee Room, and she is of course a magistrate herself.
It is fair of the hon. Member for Stockton North to raise the point of consultation, because of course magistrates are a very important part of the voluntary judiciary, we might say. I recognise the herculean task that they faced to deal with the backlog that arose in the pandemic. The position of the magistrates courts is far more up to speed than it was, although further work needs to be done, which is why the Bill contains several measures to assist with that.
Clause 42 will create a more flexible and unified criminal court by removing local justice areas, which currently restrict work and magistrates from being moved easily between courts. It will also provide the opportunity to improve and enhance the leadership structures of the magistracy. The removal of local justice areas will mean that the current inflexible arrangements for the organisation of magistrates and magistrates courts’ business will be removed from primary legislation. The detail of such arrangements will instead be non-statutory, by way of a protocol to help to ensure greater flexibility and close alignment with the Crown court arrangements. It will mean that arrangements that are specific to local areas and better suited to local needs will be discussed and agreed with the relevant criminal justice and local authority partnerships, in effect moving away from the statutory model to the one that operates in a Crown court.
Our hope is that that leads to much better working between the Crown and magistrates. I am sure that all colleagues recognise that that relationship is absolutely fundamental to the criminal justice system. I said earlier that the common thread in the Bill was streamlining. For example, clause 11 will see more cases remitted from the Crown court to the magistrates court, freeing up—by our estimate—about 400 days in the Crown court. If people see the big picture of better operational working between Crown court and magistrates, that is another very specific and tangible point within the aim of dealing with the backlog and streamlining justice.
Alex Cunningham
The Minister has made a good start to answering my concerns around this particular area with talk of the protocol. However, we all talk about travel-to-work areas, so would he care to comment on travel-to-justice areas and say how far he might expect people to travel for justice when his new protocol is brought into place?
James Cartlidge
Just to be clear, ensuring that magistrates are assigned, wherever possible, to what we would call a home court, near to where they live, is and will remain an important consideration under the revised arrangements. However, there are a number of advantages in allowing magistrates to work across courts, including the sharing of best practice, maintaining a wide and varied case load, and developing skills across a range of competencies.
Return to the amendment and consultation, the Lord Chancellor and Lord Chief Justice already have a statutory duty, under section 21 of the Courts Act 2003, to ascertain the views of lay magistrates on matters affecting them. Magistrates will still be assigned to a home court, as I just said, and ensuring that that court is as close to where they live as possible will remain an important consideration under the new arrangements. However, they will have the flexibility to work in other courts, should they wish to do so.
Ultimately, it will be for the Lord Chief Justice and the judiciary to determine what new arrangements are to be put in place and to what extent they will differ, if at all, from the current ones. Such changes have always been made in consultation with local criminal justice partners, including magistrates, and that will continue to be the case.
Therefore, I hope that the hon. Gentleman is reassured that magistrates and other relevant stakeholders will be fully consulted as any proposals are developed, to ensure that local business needs are met, and I urge him to withdraw his amendment.
Alex Cunningham
I can be brief. The Minister talked about the protocol and the role of the senior judiciary in determining guidance, perhaps, for decision making in this particular arena. My concern remains around the potential impact on victims, witnesses and defendants, who may well be required to travel greater distances in order to access justice.
However, on the basis of what the Minister has said, I am content to withdraw the amendment, although I hope that he continues to consider travel distances for people involved in the justice system, victims in particular. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
James Cartlidge
It is a very fair question on journey times. Ironically, it has to be said, it comes after a debate about the benefits of remote hearings and so on, although admittedly that was in the context of the coronial courts. However, in terms of local justice, travel needs for victims and so on, it was a perfectly good point.
On the contrary, however, with these measures, greater flexibility in the allocation of resources will increase the opportunities for ensuring that cases are dealt with fairly and efficiently in the most appropriate location for the individual case. This may be at the location closest to the victim and witnesses, or indeed at a location far enough away from a specific area that causes fear for a victim or witness. Basically, there is more flexibility because we move out of, as it were, the statutory defined geography. That is very much our intention.
Clause 42 will help to create a more unified and flexible court system, by removing the requirement that magistrates court systems in England and Wales are divided into separate local justice areas. The boundaries between local justice areas currently restrict both work and magistrates themselves from being moved easily between courts in different local justice areas. Changes to the court estate and transport infrastructure mean that the court within a local justice area may no longer be the nearest or easiest court for court users to travel to. Consequently, cases are not always heard at the earliest opportunity or at the most convenient court location. Court staff are frustrated that they cannot cut waiting times for court users by transferring cases to a court in a nearby local justice area with an earlier listing date. Removing those restrictions will give courts greater flexibility to ensure that cases are dealt with quickly and in the most appropriate location.
This provision will enable the creation of a single magistracy and a new set of principles for deciding how work and magistrates are allocated. Proximity between the courthouse and the offence will remain the primary consideration, but it will allow the taking into account of other factors, such as convenience for victims and witnesses or the relative speed at which a trial can be arranged. That is of course very important in the current context, in which we have to be frank and open about the challenge of dealing with the backlog. Magistrates will still be assigned to a home court, and ensuring that that is as close to where they live as possible will remain an important consideration. However, they will have the flexibility to sit in other courts should they wish to and should the need arise.
This provision will require putting in place the replacement organisation and leadership arrangements and a great number of minor consequential amendments to legislation to remove and replace references to “local justice areas”. The amendments will be made by an affirmative resolution statutory instrument where any primary legislation is to be amended, so Parliament will be able to scrutinise the legislation. The removal of local justice areas will provide the courts with the freedom and flexibility to manage their case loads more effectively, and will ensure that cases are dealt with efficiently in the most appropriate location, reducing delays and inconvenience for court users.
Sir John Hayes
As the Minister began speaking, I thought, “This is another provision of the Bill I don’t agree with,” but as he went on, I became, once again, reassured.
One of the greatest mistakes that we have made in recent years is the closure of local magistrates courts. When I was the first Member of Parliament for South Holland and The Deepings, which was not in the mists of time, contrary to what the hon. Member for Stockton North implied a few moments ago, we had a local tax office, a local driving test centre, a local magistrates court and all kinds of other facilities rooted in communities. Over the succeeding years, those things have been stripped out—a huge error by successive Governments. Community is fundamentally important to the sense of worth and value and the connection between communities; and local justice is a really important part of that.
The Minister will know that the tradition of magistrates—in fact, the essence of the magistracy—was that these were people sitting in their locality, exercising justice about their locality. I was reassured when he said that magistrates would continue to be linked to a locality, but would have the freedom, the opportunity, to travel further. He also emphasised that convenience for victims and others—witnesses and suchlike—would be at the heart of the change. He has reassured us once again and persuaded me that what I thought initially might be a poisonous idea is actually anything but.
James Cartlidge
I am grateful to my right hon. Friend. He will know that the origin of local justice areas—I believe—was in the petty sessions, which was the previous way of organising. There is considerable history here. What we are looking for is more efficiency but, as my right hon. Friend says, to balance that against maintaining the local link. I think we can have that balance. For very good reasons that touch on crucial matters about where we are with our justice system, we have to have a more efficient system. It is frustrating if a case cannot be moved from one magistrates court to another, when it should be moved, because of arbitrary geographic boundaries. That is why we are bringing in the measures, and I urge the Committee to support clause 42 standing part of the Bill.
Sir John Hayes
I was going to make another intervention, but the Minister has concluded his speech, so I have a chance to amplify my point at rather greater length. I wonder whether my hon. Friend, mindful of what I just said, would allow us here, as a group, to begin a campaign to reopen some local magistrates courts. Why on earth would we not want to do that? Why do we assume that there is a single destination, some predefined place, to which we are all headed? We have heard the nonsense about progress once or twice during our deliberations as if somehow we are just acting out a script, but history is not predetermined. We are not fascists or Marxists who think that there is a great plan and we are all mere players performing, so let us have some more local magistrates courts, in the spirit of this provision of the Bill. The additional freedom and flexibility that my hon. Friend described seems to be welcome. However, I think that there are several localities where justice is exercised a very long way from local people. That is particularly true in rural areas, such as the one I represent. In rural Britain, let us take advantage of our 80-seat majority and do something boldly imaginative.
Alex Cunningham
First, I want to reassure the right hon. Member for South Holland and The Deepings that I could never refer to him as an old man because he is, in fact, three years my junior. The Minister heard my points and those made by the right hon. Member for South Holland and The Deepings about local magistracy. It is very important and I am supportive of that. Hartlepool is one of the better examples of a court that could be operating. It is sitting there doing nothing, yet we still have real issues on Teesside.
James Cartlidge
I concur. Being a magistrate is a difficult and important job and we should always remember that magistrates are volunteers. As far as my right hon. Friend the Member for South Holland and The Deepings is concerned, it was appropriate for me not to give way so that I could give him the opportunity to festoon us again with one of his oratorial masterpieces, albeit relatively micro in the context of some of his recent performances. My right hon. Friend was petitioning to avoid either being trapped into Marxism or anarcho-fascism, I think it was. I hope that is not the direction we are taking.
On magistrates courts and other courts, we must look at what is happening in practice. I do not know the facts on Hartlepool. I enjoyed my visit there, not least the result obtained in electing a brilliant new Member to this place. However, on Monday, I visited Loughborough, where we are opening a brand new courtroom in the magistrates court. That is no minor detail. The courtroom cost £2.5 million and it is there for a good reason. With social distancing, the hardest cases of all to dispose of are some of the most serious: multi-defendant cases. The case that was to be heard the day I went there was a nine-handed murder; that is, nine defendants. They are generally gangland-related cases.
We have opened another super-court in Manchester, so we are opening courtrooms. We have invested in Nightingale courts and, crucially, we have brought courtrooms on existing estates back into use by easing social distancing restrictions. I recently visited Snaresbrook, which is one of the largest courts in the whole of Europe, where rooms are being brought back into use.
One reason why we have not been able to use as many rooms is that with social distancing restrictions and particularly with multiple defendants—but even in small rooms with a jury—we have had to use entire courtrooms as jury deliberation rooms, as is the case in Birmingham Crown court. The impact has been huge and that is why we have been opening new rooms where appropriate and where it has helped us reduce the backlog. I have gone through the detail of the clause. It is an important measure; it balances localism with flexibility and, therefore, the greater efficiency we seek if we are to address the backlog and improve the day-to-day experience of our constituents in the courts.
Question put and agreed to.
Clause 42 accordingly ordered to stand part of the Bill.
Clause 43
The Mayor’s and City of London Magistrates’ Court: removal of duty to provide premises
Question proposed, That the clause stand part of the Bill.
James Cartlidge
This clause seeks, as part of a new structure for providing court buildings in the City of London, to remove an obligation in statute requiring the City of London Corporation to provide county court capacity at its current location in the Mayor’s and City of London court. Her Majesty’s Courts and Tribunals Service and the City of London Corporation have reached an agreement on a scheme where the ageing Mayor’s and City of London court, and the City of London magistrates court in clause 44, will be replaced by a new, purpose-built 18-room courthouse on Fleet Street. The new courthouse will significantly improve the quality of court provision within the square mile and strengthen our justice system. The new court is scheduled to be operational in 2026; in the meantime, the existing courts will continue to operate and business will not finally transfer until the new court is fully operational. The existing duty to provide the Mayor’s and City of London court would be removed and replaced by obligations under a contractual lease arrangement. I hope that that reassures colleagues, particularly my right hon. Friend the Member for South Holland and The Deepings, that we are bringing forward new court rooms.
Andy Slaughter
I used to attend Mayor’s and City quite often and, in previous years, the City of London magistrates court. They were extremely well appointed and rather luxurious by the standards of most of the courts of state. I hope that will be replicated in the new court.
James Cartlidge
I am happy to say these will be state-of-the-art courtrooms with very high eco ratings, which I am sure the hon. Gentleman will agree is extremely important. They will bring on stream new additional Crown court rooms, which is particularly important in the context of the backlog.
Question put and agreed to.
Clause 43 accordingly ordered to stand part of the Bill.
Clause 44
The City of London Magistrates’ Court: removal of duty to provide premises
Question proposed, That the clause stand part of the Bill.
James Cartlidge
The clause seeks, as part of a new structure for providing court buildings in the City of London, to remove an obligation in statute requiring the City of London Corporation to provide magistrates court capacity in its current location in the City of London magistrates court. The new purpose-built replacement courthouse will significantly improve the quality of court provision in the square mile and strengthen our justice system.
Question put and agreed to.
Clause 44 accordingly ordered to stand part of the Bill.
Clause 45
Regulations
Question proposed, That the clause stand part of the Bill.
James Cartlidge
The clause is standard in any Bill containing delegated powers, and simply sets out that any regulations made under the future Act will be made by statutory instrument. That would include regulations arising from the online procedure rule committee. The delegated powers in the Bill are set out in the delegated powers memorandum, which is published on parliament.uk and available for all members of the Committee to read, which I am sure they will do this evening. A number of those powers have been debated in previous Committee sittings. I do not propose to go into them again now, but I assure Members that there is a well-established legal framework in relation to practice and procedure in courts and tribunals, which is relevant for the powers taken in this Bill.
Question put and agreed to.
Clause 45 accordingly ordered to stand part of the Bill.
Clause 46
Extent
Question proposed, That the clause stand part of the Bill.
James Cartlidge
The clause clarifies the territorial extent of the Bill, which is also set out in the explanatory notes published alongside the Bill. In summary, the Bill extends to England and Wales only, with the following exceptions: one of the criminal court measures introducing an automatic online conviction as standard statutory penalty procedure will involve consequential amendments for Scotland and Northern Ireland. The online procedure rule committee measures relate in part to the UK with regard to the first and upper-tier tribunals; in part to England, Wales and Scotland with regard to employment tribunals; and in part to England and Wales only. The employment tribunal measures extend to England, Wales and Scotland.
Responsibility for employment tribunals in Scotland is due to transfer to the Scottish Government following the Government’s acceptance of the recommendations of the Smith Commission. Until that happens, the rule-making committee would have rule-making powers for the employment tribunal and employment appeal tribunal in England and Wales and the equivalent tribunals in Scotland.
With regards to removing Cart, as I have said, the unified tribunal system is a reserved matter where it relates to matters of reserved policy. Our measures on Cart will apply to the whole of the UK, but only in respect to the matters heard in that tribunal system that would fall outside the competence of the Scottish Parliament.
Question put and agreed to.
Clause 46 accordingly ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned.—(Scott Mann.)
Animal Welfare (Kept Animals) Bill (Sixth sitting)
(3 years ago)
Public Bill CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Committee divided: - Ayes: 7 / Noes: 8 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 9 - Question accordingly negatived.
Daniel Zeichner (Cambridge) (Lab)
I beg to move, That the clause be read a Second time.
New Clause 19 would require that the Secretary of State conducts a review of the keeping of exotic pets in England, including examining the need for prohibition, licencing or registration for certain exotic animals. Such a review cannot come quickly enough. The Royal Society for the Prevention of Cruelty to Animals reports that it is treating an increasing number of exotic pets each year. In 2020 alone it received 6,119 reports relating to exotic pets, which in total involved 22,865 animals. Because there is a lack of licencing or registration requirements for exotic animals, we do not have an accurate estimate of how many are present in the UK. However, given these lax regulations, their increased prevalence in the UK is a cause for concern.
Exotic animals are not cats or dogs; they are wild animals with often highly complex natural history and incompletely understood welfare needs. Caring for these animals requires a high level of expertise, which, sadly, is not possessed by all exotic pet owners. As a result, exotic animals kept in domestic settings too often experience pain and suffering. Many species have not evolved to survive in the UK and so require artificial light and heat to keep them healthy, but the necessary information and equipment is often variable in quality or unavailable to domestic owners. Diets are often poorly understood, with animals fed the wrong types of food, leading to malnutrition. Enclosures can be too small and do not allow animals to move around and explore, or express other normal behaviours. Some species need to be kept on their own, or with others of their own kind, but, again, this does not always happen, leading to behavioural problems.
The collection of live animals from the wild for the exotic pet trade has led to serious, and in some cases catastrophic, population declines in some species, in addition to the suffering that animals are put through. We feel it is a missed opportunity not to get the ball rolling with the Bill on a set of reforms that would significantly reduce the suffering of thousands of kept animals across the UK. I suspect the Minister will say that there are already provisions to regulate the keeping of exotic animals as pets in the Bill, in the form of the primate licensing system, as hinted at earlier in the discussion, and that there are measures that will allow the system to be expanded to other exotic animals at a later date. We have already touched on this in earlier debates.
New clause 19 would complement that approach, and I commend it to the Minister. It would allow a sensible and reasonable debate about which exotic pets could reasonably by kept with a licence, unlike primates, and which should not be kept as pets at all. We have helpfully added a list that could be considered, based on conversations with the organisations that have to deal with these dilemmas on a daily basis. It is not right that when we have the opportunity to do so, we leave welfare organisations to deal with the problems and dodge our responsibilities. The Government should grasp the nettle.
The Minister of State, Department for Environment, Food and Rural Affairs (Victoria Prentis)
The welfare of exotic pets held in private residences is already protected by the Animal Welfare Act 2006. It is an offence to cause unnecessary suffering to a kept animal or to fail to provide for its needs. The Scottish Animal Welfare Commission is currently undertaking a review of exotic pets, and it published an interim report in September this year. The RSPCA and the Born Free Foundation have also recently published a report on this topic.
The Government would be interested in considering a review of exotic pets, but we do not want to duplicate the work that the Scottish Animal Welfare Commission is doing at the moment. We have had its interim report and we want to wait for the full report. We will look thoroughly at that work when deciding what further assessments are needed. We already have the provisions of the Animal Welfare Act and, as the hon. Member for Cambridge alluded to, the provisions in this Bill, so we will have the appropriate regulatory framework when the review concludes. Any future review will take into account all of the evidence, and further regulation might be needed. I urge the hon. Gentleman to withdraw the new clause.
Daniel Zeichner
I am grateful to the Minister for that response, which was pretty much as I anticipated. I do not understand why we always have to go so slowly on everything. I know she thinks she is going at pace—that is the current term—but it seems to us that we could go more quickly. However, I have heard what she says, which confirms what I said earlier in the debate: basically, a general licensing system is being developed. I think we have it the wrong way round, but we will not pursue it any further today. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
The Chair
May I thank those Members who are wearing masks? It is very kind of them.
New Clause 20
Review of Dangerous Dogs Act
“(1) The Secretary of State must carry out a review of the Dangerous Dogs Act 1991.
(2) In conducting the review the Secretary of State must—
(a) review the Dangerous Dogs Act 1991;
(b) take into consideration the recommendations of the Environment, Food and Rural Affairs Select Committee’s 2018 report ‘Controlling dangerous dogs’;
(c) examine the factors behind canine aggression, the determinants of risk and whether the canine breeds prohibited under the Dangerous Dogs Act 1991 pose an inherently greater threat than other breeds; and
(d) consult the public and such persons as the Secretary of State considers appropriate on the Dangerous Dogs Act 1991.
(3) The Secretary of State must, no later than three months from the date on which the review concludes, publish a statement on the future of canine policy.”—(Olivia Blake.)
This new clause would require the Secretary of State to carry out a review of the Dangerous Dogs Act 1991.
Brought up, and read the First time.
Olivia Blake (Sheffield, Hallam) (Lab)
I beg to move, That the clause be read a Second time.
I am both a lover of dogs and a firm believer in science-driven policy. Unfortunately, it is hard to see any credible scientific evidence to support the breed-specific legislation and breed-specific approach taken in the 1991 Act. We have to learn how we go on these issues, but it is clear now that the legislation has failed to deliver what it was designed to do. It has not reduced hospital admissions due to dog bites, has not improved public safety, and not reduced the types of breeds it legislates against.
Between March 2005 and February 2015, the number of hospital admissions in England due to dog bites increased by 76%, from 4,110 to 7,227. The figure rose yet again in 2016 to 7,719. The legislation has led to the euthanising of thousands of healthy dogs. The law does not currently permit prohibited dog types for new owners, regardless of the individual dog’s behaviour, so the only option permitted is euthanasia.
The new clause is in line with the findings of the Environment, Food and Rural Affairs Committee’s 2018 inquiry, which showed that the current dangerous dogs legislation fails to protect safety and can harm animal welfare. The EFRA report recommended instead
“a comprehensive review of existing dog control legislation and policy,”
and spoke of the need for an alternative dog control model
“that focuses on prevention though education, early intervention, and consistently robust sanctions for offenders”.
I am therefore proposing that the Bill be adapted to ask the Secretary of State to undertake a review into the future of this canine policy, so that we might move on from breed-specific legislation to breed-neutral legislation, and have policies that improve public safety and reduce some dog bite incidents.
Victoria Prentis
I agree that we would benefit from improved data collection on dog attack incidents, and I can confirm that we are already discussing with the police how this can best be achieved. We also recognise that more could be done to support responsible dog ownership, which is why we commissioned a review by Middlesex University to look at responsible dog ownership across all breeds of dog. The Middlesex University research will be published very shortly, in December—in just a couple of weeks’ time—and will provide the basis for the consideration of further reforms in this area, alongside the EFRA Committee’s 2018 recommendations.
Turning to the breed-specific elements of the Dangerous Dogs Act 1991, since around 2005, about one in six fatal dog attacks have been by pit bull terriers, despite the prohibitions we have in place, which have significantly limited the number of pit bull terriers in the community. We saw the devastating consequences of a dog attack only last week, with the tragic death of 10-year-old Jack Lis in Caerphilly. We are still waiting for the police to confirm the breed of dog involved in this awful incident and, whatever the upshot of that conclusion, we firmly believe that these restrictions play an important part in our overall approach towards tackling dangerous dogs.
I understand the sincerity with which Members across the House have spoken many times, both privately and in debate, about this difficult issue. We take the issue very seriously. The Middlesex University report will move us further and, in those circumstances, I respectfully ask the hon. Lady to withdraw the new clause.
Cherilyn Mackrory (Truro and Falmouth) (Con)
It is a pleasure to serve under your chairmanship, Mr Davies. I wanted to draw attention to my interest in this new clause, because when I was doing A-level politics, way back when, the Dangerous Dogs Act 1991 was seen as a piece of legislation that had not worked very well. That was in the early to mid-1990s—I am showing my age now. I have paid close attention to it, and the reason it did not work very well was because it did not include cross breeds, which was where all the trouble first started.
Earlier this year, I was able to visit a dogs’ home called K9 Crusaders, on the outskirts of Truro in my constituency. The amazing owner, Sue Smith, looks after typed dogs once they have been taken from their families. I learned a lot about how dogs are often seized from families in the middle of the night, which is quite distressing for the families. I met a dog named Eric, a pure-bred American pit bull—believed to be Cornwall’s very first. He was an absolute beauty—an absolutely gorgeous dog. I was also on the other side of the bars from lots of Jack Russells, crosses and all sorts of other scary dogs, for want of a better phrase.
I am certain that the legislation needs huge reform. I welcome the research that is coming in December. I have huge sympathy for the hon. Member for Sheffield, Hallam and all of her comments. I hope that we can do something in the future, as we advance, but I do not think this Bill is the place to do it. However, I am pleased to hear that the Minister is thinking about it.
Daniel Zeichner
I wish briefly to make the point that we all agree that something needs to be done. We have had debates about it in Westminster Hall and so on, but if we do not do it through this process, it will be very hard to get a legislative slot, which is frequently the explanation given to us. My worry is that there will not be legislative slots for some time to allow this to be dealt with. That is why the new clause is relevant.
Through the extensive discussions we have already had in Committee, a pretty good system has been established for dealing with dogs under livestock worrying. That could quite easily be applied to other circumstances. The Bill goes a long way to dealing with a range of issues to do with dogs. It is a missed opportunity not to finish the piece.
Olivia Blake
I beg to move, That the clause be read a Second time.
New clause 21 deals with microchipping of cats. We heard about cattism earlier in the debate. We tabled the new clause because microchipping is the safe and permanent way to identify an owned cat. Cats Protection’s “Cats and their Stats” report in 2021 found that there are 2.8 million owned cats without a microchip across the UK, which is more than a quarter of all owned cats.
We know there are a multitude of benefits to increasing the number of microchipped cats: it helps reunite more lost cats with their owners; it ensures owners are informed and able to be involved in decisions about their cat’s veterinary care—for example, if they were hit by a car and taken to a vet by a member of the public, which sadly occurs often—it informs more owners and provides closure in the sad event that their cat is fatally injured and scanned for a microchip; it provides easier detection of cats in the event of theft; and it allows for better traceability of individual owned cats should there be a significant disease outbreak such as rabies.
The new clause would help ensure that more of the UK’s cats are microchipped, registered and traceable in the event of an emergency. We have talked a lot about microchipping different animals, and I do not see why the situation with cats should be different from that with dogs.
Victoria Prentis
We absolutely share the hon. Lady’s desire for all cats to be microchipped. My own cat, a former Purr Minister, is himself microchipped. The Government committed in our manifesto, and reaffirmed in our action plan for animal welfare, our intention to introduce compulsory cat microchipping. Around 75% of cats are microchipped, compared with around 90% of dogs.
Our consultation on microchipping ended earlier this year and we received 33,000 responses, which we have been analysing. We will be publishing a summary of the consultation responses and our response to the consultation, by which I mean our plans for the future, within the next couple of weeks—certainly by the end of the year. I am very pleased to confirm that there was overwhelming support for the principle of compulsory cat microchipping.
Daniel Zeichner
Given that we all agree, and that this is a consultation where it is overwhelmingly clear what people want, why do the Government not just do it?
Victoria Prentis
Well, may I carry on? Colleagues may be aware that we have also carried out a post-implementation review of the Microchipping of Dogs (England) Regulations 2015, which we also intend to publish before the end of the year. The review highlights key difficulties—I think Members across the House are aware of them—with the current microchipping regime, including the current operation of the databases, where improvements can definitely be made. We propose to take a little bit longer to get this right, to ensure that the problems that have beset the multiple databases for dogs do not reoccur.
Our intention is to make a new set of regulations next year that incorporate both compulsory cat microchipping and changes to the current problems in the dog microchipping regimes. These regulations will of course be subject to the affirmative resolution procedure, so it will be possible for Parliament to be involved. In these circumstances and with those assurances, I ask that the new clause be withdrawn.
Olivia Blake
I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 22
Review of cat breeding licencing
“(1) The Secretary of State must carry out a review of the appropriate licencing arrangements for cat breeders.
(2) In conducting this review the secretary of state must—
(a) consider the appropriate licencing arrangements for cat breeders;
(b) consider the maximum permitted litters per cat in a 12-month period;
(c) consider the maximum permitted litters per cat across a cat’s lifetime;
(d) consider restrictions on keeping cats for breeding, when it can reasonably be expected, on the basis of its genotype, conformation, behaviour or state of health, that breeding from a cat could have a detrimental effect on its health or welfare or the health or welfare of its offspring; and
(e) consult the public and such persons as the Secretary of State considers appropriate on the licencing of cat breeding.
(3) The Secretary of State must bring forward legislation based on the findings of the review within 12 months of the date of Royal Assent to this Act.
(4) For the purposes of this section ‘cat breeders’ are individuals who have bred 2 or more litters of cats in a 12 month period.”—(Olivia Blake.)
This new clause would require the Secretary of State to carry out a review of the appropriate licencing arrangements for cats.
Brought up, and read the First time.
Olivia Blake
I beg to move, That the clause be read a Second time.
We probably will not press this new clause to a vote, but I think it is important enough to discuss it in Committee. Despite regulations being in place for dog breeding, there are currently none governing cat breeding. That is not the case across the country; regulations on cat breeding came into force in Scotland in September 2021. It is inconsistent in terms of cat welfare for cats to be protected in that way in one part of the UK but not another. The Bill presents an opportunity to have alignment and to ensure that good breeding welfare is in place for cats and kittens in England.
Cats Protection has raised valid concerns that cats are being bred with conformations that could affect their health and welfare and that of their offspring. In cats such as the Scottish Fold and Munchkin, an inherited disorder is specifically bred for, with the breed’s characteristics being produced by a gene mutation. The inherited disorder is detrimental to the cat and negatively affects its quality of life. Other breeds rely on this too, such as flat-faced Persian cats and other brachycephalic cats, which often experience breathing difficulties, as we have discussed for dogs, as well as eye problems, skin infections and difficulty eating as a result of their skull conformation.
Reviewing the licensing arrangements for cat breeders, and bringing forward legislation to license cat breeding, is the only way we can ensure better enforcement of the welfare of cats across the UK from birth. To be clear, we will not push this new clause to a vote.
Victoria Prentis
I thank the hon. Lady for her comments on this important issue and for confirming that she will not push the new clause to a vote. That is sensible. There are significant issues that we need to look at, which I intend to do in our review of the Animal Welfare (Licensing of Activities Involving Animals) (England) Regulations 2018. We will review and report on those issues fully before 1 October 2023. We are already collecting evidence to inform that review. I encourage the hon. Lady and others, if they have evidence, to please send it to us. We are proactively working with partners, including local authorities. The scope of this exercise very much includes cat breeding. We will consider the case for extending the breeding regulations more widely during the review. We will then be in a position to assess the case for introducing new legislation.
Olivia Blake
I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 23
Local abattoir networks
“The Secretary of State must ensure a network of local abattoirs exists to provide the services required to support the UK’s diverse livestock farming sector and to deliver livestock welfare benefits through minimising distance to slaughter.”—(Daniel Zeichner.)
Brought up, and read the First time.
Daniel Zeichner
I beg to move, That the clause be read a Second time.
We have touched on this issue already. Many are concerned about it, with the notable exception of the Secretary of State, who sparked incredulity across the sector earlier this year with comments suggesting that all is fine in the world of abattoirs. Opposition Members do not think that the lack of local abattoirs is fine, and we want to find ways to address the problem, which is what new clause 23 is about. I will focus specifically on the animal welfare benefits that building up such a network would achieve.
Through the Bill, the Government are rightly trying to end the export of certain livestock for slaughter. This practice can have seriously negative impacts on livestock as a result of extensive journey times, as we have discussed. However, we do not think that the problem will be resolved simply by banning overseas exports. In the UK, there has been a rapid decline in the number of local abattoirs. A report by National Craft Butchers stated that there are only 62 local slaughterhouses left, and prospects for the future are fairly bleak. Seven in 10 abattoir owners were aged over 51, with 11% still working beyond the normal retirement age. More than half had no plan for someone younger to take over. That decline is down to a host of reasons, including staff shortages, vet shortages, centralisation of supply chains and, inevitably, regulatory changes and bureaucracy.
However, the consequence of the lack of a local network of abattoirs is that animals are often transported over long distances for slaughter, which poses much the same welfare concerns as shipping animals overseas, as animals still spend long periods being transported. I appreciate that the Government are consulting on these issues, but I think I am correct in saying that that is largely about improving transport. That is fine, but it does not alter the fact that long distances remain long distances. As I said, some of this is inevitably linked to significant changes in the way supply chains operate and to consolidation within sectors; the old days of local markets have largely gone, and while vertical integration may have benefits, there are, as ever, wider consequences that are less beneficial.
In September, the EFRA Committee published a report on moving animals across borders, saying:
“The consolidation of abattoir services means that the spread of services is not uniform across the UK, so many animals have to travel long journeys prior to slaughter. This undermines the ambition of the Government’s consultation on ‘Improvements to animal welfare in transport’ to reduce unnecessarily long journey times”.
I have spoken about this before. It is quite clear that the lack of local slaughterhouses also means that smaller farmers are unable to keep certain types of animals, due to the welfare concerns associated with transporting them over long distances for slaughter, which in turn reduces the likelihood of the return to mixed farming, which many would like.
Put simply, the market may be delivering what works for some retailers, but it is not delivering the wider public goods that we were discussing in this very Committee room almost two years ago in the Agriculture Bill Committee. We warned about these problems then, and today we give the Government the opportunity to do something about them.
Dr Neil Hudson (Penrith and The Border) (Con)
I echo some of the comments of the hon. Member for Cambridge. I am glad that he referred to the EFRA Committee report. I am a member of that Committee. Based on our findings on the movement of animals across borders, one of our key recommendations was that the UK local abattoir network needed supporting and bolstering, and we recommended that the Government look at that. If we improve the local abattoir network it will actually mitigate a lot of the animal welfare issues related to long-distance transport, because distances will be shorter and animals will be reared locally and slaughtered locally and the food will be purchased and eaten locally—something that we are all pushing for. I know that Ministers agree with me that that is a positive thing that we should try to move towards.
Victoria Prentis
The Government acknowledge the importance of local abattoirs to improving animal welfare through shorter journey times. We are committed to working with the industry to ensure that the UK maintains its high-quality slaughtering facilities. We need to find innovative solutions to address funding issues for small abattoirs.
I am pleased to report that the rural development programme is supporting a mobile abattoir project. The project is currently being trialled at two sites. One is at Fir Farm in Gloucestershire, which I had the pleasure of visiting with the chairman of the EFRA Committee and Lord Benyon earlier this summer; the other is at M.C. Kelly Farm in Devon. It was a very interesting pilot and I would be happy to discuss it with Members outside the Committee; it has thrown up issues that we will have to work through and resolve—that is the purpose of a pilot of course. We really do believe that this project will act as a model for future mobile abattoir sites.
We at DEFRA also chair the small abattoirs working group, which brings together industry representatives. We have initiated a series of smaller sub-groups to go into detailed discussions on how to reduce the regulatory burdens on smaller abattoirs. So far issues discussed include the new livestock information programme, the potential for streamlining the administrative and regulatory burden on small abattoirs and ways of ensuring greater co-ordination across Government agencies and abattoirs. I am looking at how a new group—for which I have two excellent chairs in mind—can oversee all this work and drive through the changes that we need in this area. I will continue to update Members as we progress through this work. Given those circumstances, I would ask that we do not vote on new clause 23.
Daniel Zeichner
I am grateful for the Minister’s response. I think we are on the same page on this. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 27
Rearing of non-native game birds: review and consultation
“(1) The Secretary of State must—
(a) undertake a review of the welfare impacts of the rearing and keeping of non-native gamebirds,
(b) examine the use of cages in the rearing and keeping of non-native gamebirds, and
(c) consult on regulation of rearing and keeping of non-native gamebirds.
(2) The Secretary of State must publish a summary of responses to the consultation under sub-section (1)(b).
(3) The Secretary of State must, no later than three months from the day on which the consultation under subsection (2) closes, publish a statement of future policy on the rearing and keeping of non-native game birds.”—(Daniel Zeichner.)
This new clause would require the Secretary of State to conduct a review of the welfare impacts of the rearing and keeping of non-native gamebirds.
Brought up, and read the First time.
Daniel Zeichner
I beg to move, That the clause be read a Second time.
You will be glad to hear, Mr Davies, that this is our final new clause. I return to an issue that has long been a focus of Labour’s work on animal welfare as part of ending the cage age. New clause 27 seeks to establish a review of the rearing of non-native game birds, with a particular focus on the welfare of the birds and the use of cages.
I am advised that around 50 million pheasants and partridges are mass produced in the UK every year to be used for sporting purposes. I am grateful to the Labour Animal Welfare Society for commissioning its recent report from Professor Stephen Harris—it makes for fairly grim reading. Animal Aid estimates that tens of thousands of partridges and pheasants are confined in cages in England. It argues that the birds inside these cages suffer from feather loss, scalping and injuries inflicted by their stressed cage mates. It also reports that birds may have masks and other devices fitted to try to stop them inflicting injuries, and that large numbers of breeding birds are confined for most of their lives in so-called raised laying cages, which are left outside and exposed to the elements.
Such practices clearly pose significant welfare concerns for the game birds involved. The current code of practice for the welfare of game birds reared for sporting purposes is not legally binding. I am told that the code was due to be reviewed in 2016, but apparently that did not take place. The Minister has indicated in responses to parliamentary questions, however, that the Government are examining the use of cages for the breeding of partridges and pheasants—a lot of examining is going on in the Department. I am in no doubt that every member of the Committee wants to ensure that we end the suffering of kept animals. It really is time to end the cage age.
Victoria Prentis
It is true that a lot of examining of evidence is going on, but that cannot be portrayed as a bad thing. I share the enthusiasm of the hon. Member for Sheffield, Hallam for science-led policy making. We want action as well. That is why I said slightly tongue in cheek earlier that we get criticised when the hon. Member for Cambridge feels we are going too quickly, but then we get criticised when he feels we are going too slowly.
Victoria Prentis
I know you do, Mr Davies. You are quite right—I do not know about the hon. Member for Cambridge.
As we are coming to the end of these proceedings—I hope, pleasurable though they have been—it is right that we accept that, yes, there is a lot to do in the area of animal welfare, but, yes, a lot is being done. We should take this opportunity to step back and to think of the poor people working in the animal welfare team in DEFRA, who are doing all this work, as well as those in the Public Gallery from the Bill team and those offline who drafted the Bill. Yes, animal welfare legislation is difficult. It requires evidence and it requires us to work out what would help and where, and what can be done in other ways through guidance or whatever.
Turning to the new clause, we are already reviewing how to improve game bird welfare, including examining the evidence on the use of cages for breeding pheasants and partridges. As the hon. Member for Cambridge said, we have a statutory code, in section 6 of which are set out the standards, including that enriched cages are a minimum. Breaches of the code may be used in a prosecution under the Animal Welfare Act 2006. It is right that we review the situation periodically, and the plan is to do just that. We already have the power to make regulations in this area when we have the scientific evidence to inform future policy. I therefore ask that the hon. Gentleman to withdraw the new clause.
Daniel Zeichner
I am grateful to the Minister, and delighted to get her cross at last—it is hard to make her cross. I hear what she said but, equally, I hope she heard what I said. We are moving to a different age, a different world, and while I absolutely want it to be evidence-based, there is a feeling in many parts of this country that we ought to move more quickly on these issues. In the interests of getting this done, we will not press the new clause to a vote. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
Victoria Prentis
I beg to move amendment 82, title, line 2, at end insert “; and for connected purposes.”
The amendment updates the long title of the Bill.
I thank you, Mr Davies, all Members who have taken part in the Committee, and the Clerks’ team and others who have worked so hard to get us to this stage of this important legislation.
Daniel Zeichner
On a point of order, Mr Davies. I echo those thanks. I also thank Government and Opposition Members. It has been a constructive and helpful discussion, conducted in good spirits. I, too, thank the Clerks, who often have the impossible task of translating our ideas into appropriate and acceptable parliamentary language. I thank all the organisations we have heard from, the witnesses and my team—particularly George Williams, who has had to do all this pretty much on his own.
The Chair
That is not a point of order, but it was a point of thanks.
Amendment 82 agreed to.
Bill, as amended, to be reported.
Subsidy Control Bill (Eleventh sitting)
(3 years ago)
Public Bill CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Committee divided: - Ayes: 4 / Noes: 7 - Question accordingly negatived.
The Committee divided: - Ayes: 4 / Noes: 8 - Question accordingly negatived.
The Committee divided: - Ayes: 4 / Noes: 8 - Question accordingly negatived.
The Chair
Before we begin, I have some preliminary announcements, particularly about face coverings. Members are expected to wear them, unless exempt, when they are not speaking, and are expected to maintain distancing as far as possible, which I can see you have all done. That is in line with current Government and House of Commons Commission guidance. Please give each other space when leaving the room. I remind Members that they should have a lateral flow test twice a week if they are coming on to the estate, which can be done either in the testing centre in Portcullis House or at home. Please send speaking notes by email to hansardnotes@parliament.uk. Officials in the gallery should communicate electronically with Ministers. Can I have phones on silent, please? I gently remind Members that tea and coffee are not allowed during sittings.
Clause 78
Subsidies and schemes in primary legislation
Question proposed, That the clause stand part of the Bill.
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)
It is a pleasure to serve under your chairmanship, as ever, Ms Nokes. Clause 78 applies the provisions in the Bill to subsidies made by means of primary legislation, as set out in schedule 3. Because of the specific nature of the subsidies given by means of primary legislation, the obligations on those responsible for subsidies in primary legislation needs to be set out separately, rather than being included in the scope of the core clauses of the Bill.
The core purpose of schedule 3 is to apply the subsidy control requirements to subsidies in devolved primary legislation. The schedule makes the necessary technical provisions to that end, and ensures that subsidies in devolved primary legislation are not subject to mandatory referrals to the subsidy advice unit. The schedule provides that subsidies in Acts of Parliament are subject to the transparency requirements on voluntary referrals to the subsidy advice unit. The measures ensure that the subsidy control regime will be comprehensive and robust while taking into account the UK’s unique constitutional make-up.
Before I go into detail about clause 78, it will be helpful to explain what I mean when I refer to subsidies provided by primary legislation. Primary legislation in Westminster or the devolved legislatures can provide for granting subsidies in a number of ways. The most common is by conferring a discretion on Ministers or other public authorities to provide financial assistance, for example section 7 of the Industrial Development Act 1982 in respect of financial assistance in assisted areas. That provides the necessary statutory underpinning for financial assistance but does not mandate financial assistance to be given. The amount and conditions of any financial assistance are at the discretion of the public authority. A subsidy that is granted under a power conferred by a primary enactment is not a subsidy granted by primary legislation. For these purposes, therefore, a subsidy is granted by primary legislation only if the Act itself makes provision that directly amounts to a grant of a new subsidy, or requires a grant of a new subsidy by a public authority with no room for discretion on the part of that authority. Apart from taxation, that is very rare. The reference to the subsidy granted by primary legislation is in practice therefore usually concerned with the grant of a statutory entitlement to a specific tax relief or credit that amounts to a subsidy, for example a tax credit for small businesses to carry out research and development.
I will quickly set out in further detail why each paragraph was included in schedule 3, to which clause 78 relates. Paragraph 1 sets out the intention of the schedule, which I have explained. Paragraph 2 sets out the relevant definitions for the purposes of the schedule, and they are mainly self-explanatory. Paragraph 3 sets out how certain terms of the Bill should be read for the purposes of the schedule, so that the Bill applies to subsidies provided by means of primary legislation. Paragraph 4 provides for the distinction that I discussed before: that subsidies given under a duty imposed by primary legislation are covered by this schedule, but those given under a power in primary legislation are not.
Paragraph 5 confirms that references to a subsidy in schedule 3 should also be taken to refer to a subsidy scheme, as is the case in the rest of the Bill. Paragraphs 6 and 7 apply the subsidy control principles, prohibitions and other requirements, and exemptions in the Bill to subsidies granted or subsidy schemes made by means of devolved primary legislation. In any court proceedings, the provisions in schedule 3 require the courts to consider the views and considerations of the promoters of the Bill, that is, those introducing the Bill or Members of the devolved legislatures who lodge amendments amounting to subsidies, so that courts are not put in the constitutionally novel position of questioning the internal proceedings of the relevant legislature. Paragraph 8 applies the transparency requirements to subsidies in primary legislation, including Acts of Parliament and devolved legislation.
Paragraph 9 deals with the referrals of subsidies in primary legislation to the subsidy advice unit in the Competition and Markets Authority. Voluntary referrals may be made in respect of subsidies or schemes of interest, or subsidies or schemes of particular interest, made in devolved primary legislation or in Westminster Acts of Parliament. That means that the appropriate Ministers, Departments or the Member promoting the subsidy may refer to the SAU those subsidies that have a higher likelihood of distortion. This allows them to make a referral at their discretion, where they judge that the advice or transparency report would be beneficial. That provision does not require mandatory referrals, in view of the unique legislative position and procedure of those subsidies. That means there will be no procedural delays or disruption to primary legislation.
Finally, paragraphs 10, 11 and 12 make the necessary modifications to the enforcement provisions in part 5 of the Bill to apply them to subsidies in devolved primary legislation, which will allow subsidies given by the means of devolved primary legislation to be challenged by judicial review and will include the ability for courts to order devolved Ministers or a Northern Ireland Department to recover a non-compliant subsidy provided by means of devolved primary legislation. Given their expertise in the sensitive task of considering the lawfulness of provisions in devolved primary legislation, the appropriate courts to review such subsidies will be the Court of Session in Scotland, the High Court of England and Wales in respect of Wales, and the High Court in Northern Ireland.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
It is a pleasure to serve under your chairship, Ms Nokes. There are a number of technical provisions here relating to how implementation will take place. I thank the Minister for his opening remarks. There are areas relating to the application of principles, transparency referrals and recovery orders that we have covered in other debates, and I do not propose to go over those arguments. There are points that the Minister is coming back to us on and we will also review the areas to take further ahead of the Bill moving to Report stage.
I have a couple of queries, which I would be grateful if the Minister could clarify. When subsidies are provided by the means of primary legislation, will he clarify whether there will be any differences on reporting, transparency and so on, or will they be expected to be subject to the same control arrangements?
Secondly, the application of principles in paragraph 6 of schedule 3 also
“applies to subsidies provided by means of devolved primary legislation”.
Are there any either unintended, or intended, effects on the competencies of the devolved Administrations? This issue was one that came up in evidence with the devolved Administrations. There was a concern from the Welsh Government about where there could be overlap, or unintended consequences, with policy decisions being made under devolved competencies, particularly on economic development—that there could be some interplay between the provisions in this Bill and existing competencies. I would be grateful if the Minister could respond on those points.
Paul Scully
Essentially, the subsidy control regime differentiates between the subsidies in devolved primary legislation and the subsidies in an Act of Parliament in a way that respects the devolved legislatures and reflects the UK constitution.
The devolved legislatures have a unique constitutional status. We have made sure that the requirements are proportionate and respectful of their status and processes, but it is important that the requirements apply comprehensively and we do not create exemptions. The distinctions in the Bill implement the trade and co-operation agreement, which recognises the sovereignty of Parliament; we would clearly not be compliant with our international requirements if we introduced further exemptions for the subsidies in devolved primary legislation. We will clearly have to ensure compliance within this, and the UK Government will make sure that we comply with our international obligations when giving any subsidies. We will also consider the effects of any subsidy advanced by means of an Act of Parliament during its normal impact analysis and considerations for managing public money.
Question put and agreed to.
Clause 78 accordingly ordered to stand part of the Bill.
Schedule 3
Subsidies provided by primary legislation
Question proposed, That the schedule be the Third schedule to the Bill.
Paul Scully
I think I covered schedule 3 in my opening remarks on clause 78.
Seema Malhotra
I think the Minister did cover schedule 3. We will reflect further on the Minister’s responses to points that we have made, and I will not raise any further issues now. We will support that the schedule stand part of the Bill.
Question put and agreed to.
Schedule 3 accordingly agreed to.
Clause 79
Guidance
Seema Malhotra
I beg to move amendment 80, in clause 79, page 45, line 9, leave out “may” and insert “must”.
This amendment, together with Amendment 81, would require the Secretary of State to issue guidance about the practical application of the areas listed under 79(1)(a), (b), and (c).
The Chair
With this it will be convenient to discuss the following:
Amendment 24, in clause 79, page 45, line 9, leave out “issue guidance” and insert
“by the affirmative procedure make regulations”.
This amendment ensures that the Secretary of State’s guidance is made by affirmative regulation in order that parliament can debate the matter before implementation.
Amendment 81, in clause 79, page 45, line 12, at end insert—
“(1A) The Secretary of State may issue guidance about the practical application of – ”.
This amendment, together with Amendment 80, would allow the Secretary of State to issue guidance about the practical application of the area listed under 79(1)(d), (e), (f) and (g).
Seema Malhotra
It is a pleasure to move amendment 80 and to speak to amendment 81. Clause 79 gives the Secretary of State the power to issue guidance on the new subsidy regime. We agree with the general principle of the clause, which is that the Secretary of State should be able to provide clarity and advice on the practical application of the regime, but we believe that clause 79 is lacking in significant ways and it is important that we look to strengthen it.
Clause 79 states that the Secretary of State “may issue guidance” on the areas listed under subsection (1). However, there are areas of the Bill where we think that guidance is not just beneficial, but necessary for the effective and fair running of the regime, and we should not leave that to chance. In particular, we believe that guidance must be issued for the subsidy control principles, the energy and environment principles and the control requirements laid out in part 2, chapter 3 and chapter 4.
Those areas are crucial to the regime. They will ensure that public authorities create subsidies that match the aims of this Bill; that British subsidies meet the requirements of the TCA; and that public authorities and interested parties are aware of the transparency and scrutiny expected of subsidies. That is why we believe it is vital that the Secretary of State provides information and clarity about what he—or she, in the future, or even the Minister, as we have discussed—expects around the principles and requirements of the new regime, how they should be interpreted and carried out by public authorities and interested parties, and the expectations of subsidy recipients. That is why we propose amendment 80, which would mandate the Secretary of State to issue guidance on the practical applications of subsection (1)(a), (b) and (c).
We want to draw the distinction that we are not being overly prescriptive, so amendment 81 would continue to allow the Secretary of State the option to issue guidance on subsection (1)(d) to (g). We hope that the Minister will appreciate the importance of guidance on the principles and requirements of this new regime, and why the Bill ought to state that they will be—not that they may be—issued for the practical application of those parts of the Bill. If the Minister does not believe that guidance on those areas should be mandated, could he tell us how he expects the Secretary of State to issue guidance on subsection (1)(a) to (c), and indeed (d) to (g), and what the timeframe for such guidance is expected to be?
Kirsty Blackman (Aberdeen North) (SNP)
As has been common throughout, I agree with almost everything that the hon. Lady has said, and I agree that we lack information on what this will look like. I get all the arguments that the Government have made about the structure being permissive, but we could do with more information on several of these things. That is why I have tabled amendment 24, which is a probing amendment to try to find out how the Government intend the guidance to be drafted.
Clause 79(5) states:
“Before issuing guidance under this section, the Secretary of State must consult such persons as the Secretary of State considers appropriate.”
It would have been helpful to have more information on that, and it would be useful to have that from the Minister. With subsection (1)(a), (b), (c) and (e), will the Secretary of State consider the devolved Administrations to be reasonable organisations to contact before issuing guidance around the subsidy control principles, the energy and environment principles, the subsidy control requirements and, crucially, the criteria for determining whether something is of interest or particular interest? That is a really important part of the Bill, and we do not have enough information on what interest and particular interest will mean.
The shadow Minister is absolutely correct that there is a hierarchy. In some areas, the Secretary of State must issue guidance because otherwise the scheme will not work, but in others it is more flexible. I probably would have included subsection (1)(e) among the areas on which the Secretary of State must issue guidance, because I do not think the scheme works if people do not know what interest and particular interest will mean. The Minister has spoken an awful lot about certainty for granting authorities and for organisations that will be receiving subsidies, and about trying to cut down the length of the period of uncertainty. In the absence of proper guidance that we have been able to scrutinise in any way, that uncertainty becomes much higher—definitely at this point, and I hope that will not be the case when the Act comes into force and begins to work.
I have one other question for the Minister. Clause 79 says that
“the Secretary of State must consult such persons as the Secretary of State considers appropriate.”
I have asked before—I have been reasonably happy with the answers—about how long in advance of the Act coming into play the guidance will be published. I think it is hugely important that the consultation period is long enough to ensure that that guidance is right, not just in lining up with the principles that have been set out and achieving the Government’s intentions, but in covering all the gaps that organisations foresee and answering the questions that granting authorities or enterprises might have. That length of time is needed to provide the right level of certainty and enable people to study what is a very big change.
We have had state aid rules in place for a long time, and that is why, in practice, an awful lot of the decisions that are being taken just now are based not on the interim regime but on state aid itself. A lot of people who are going to lawyers for advice are being told, “We will apply the state aid principles to this, because that is the easiest course of action just now.” We want to make sure that that does not continue to happen. For the new regime that the Government intend to be in force, we need to make sure that legal experts have the time to get up to speed on how they should advise people, because it is technical, and it is important that people get it right. It is important that subsidies are allowed to be made—that is the point of the Bill—but that regulation is in place to ensure that public money is spent wisely and properly, and that inappropriate distortion of competition is removed so far as possible.
Amendment 24 asks for that guidance to be made by the affirmative procedure, because I do not think that enough scrutiny will be brought to bear on the guidance that will be issued. If the Minister feels that there will be scrutiny, it will be helpful if he lays out how parliamentarians might interact with that guidance, either before or after—preferably before—it is issued. It is obvious that we have an interest, and it is obvious that we have concerns, but we also have ideas; a number of the amendments that we have tabled have been constructive and intended to improve the Bill. None of us suggests that there should not be a subsidy control regime. We are trying to make it the best subsidy control regime, in order that it works for our constituencies and the countries and people that we represent. Any information that the Minister could give on that would be incredibly useful.
Paul Scully
The power to issue statutory guidance, as is currently provided for in clause 79, will allow the Government to offer greater colour and detail to public authorities in how to comply with the subsidy control requirements. We plan to provide extensive guidance on the new regime, set out in clear, plain language and including useful explanatory material, case studies, practical explanations and additional matters that public authorities may wish to consider. For instance, it might be used to explain how subsidies could be given to support disadvantaged areas in a way that is consistent with the principles; among other things, it could describe characteristics or criteria that a public authority could use to identify a disadvantaged area, which would help to ensure that the subsidy is addressing an equity objective and is consistent with principle A.
The Secretary of State will consult such persons as appropriate before issuing the guidance. This may well include the devolved Administrations, businesses and public authorities. This will allow public authorities plenty of time to consider the guidance before the new regime comes into force. The hon. Member for Aberdeen North talked about the devolved Administrations. Clearly, the Government cannot do this in isolation. It is incumbent on us to make sure that we speak to the people who will use the guidance, to make sure that it is fit for purpose. I cannot give a precise list of stakeholders that we will engage and consult, but it is in our best interest to ensure that we have the widest, broadest range of stakeholders to make sure that guidance is useful, rigorous and fit for purpose.
On timing, I said earlier that, depending on parliamentary time, the commencement of the Bill will be next autumn, which gives us plenty of time. We have already started the process of engaging with officials, and we will make sure to continue our engagement with officials in the devolved Administrations, as well other public authorities, to make sure that we can publish this guidance in time for the Bill’s coming into force.
Kirsty Blackman
Will the Minister confirm that, should there be a requirement to update the guidance in the future, which there is likely to be, a consultation process will be undertaken in advance of that updating, and that there will be a reasonable length of time before changes are made to the guidance so that authorities can comply with it?
Paul Scully
It is incumbent on us to engage on any changes. How we engage and the timing of that will depend on the circumstances. However, if we are going to do this and make it work, clearly we need to engage as widely as possible to make sure that those changes are fit for purpose.
Amendment 24 would effectively remove the power to issue statutory guidance and replace it with one for the Secretary of State to make binding delegated legislation on the practical application of key elements of the domestic subsidy control regime. We do not believe that regulations are a suitable vehicle for setting out information and advice on the practical application of parts of the subsidy control regime. Regulations are restrictive in their content and must be drafted in a specific, technical way. Guidance, on the other hand, serves the purpose of explaining and clarifying the regime, in ordinary language, for the benefit of those who will need to use and understand the practical effect of the legislation. It can also be quickly updated should circumstances change.
I know that the right hon. Member for Aberdeen North—sorry, the hon. Member; that was another promotion for a colleague. I am sharing the love. I know that she wants to scrutinise future regulations made under the Bill, and it is right that there be additional parliamentary scrutiny of those regulations, as they impose new legal obligations that are additional to those in the Bill, but that is not true of any guidance that will need to be issued under clause 79. The guidance will need to be consistent with, and cannot change, the law to which it relates.
Amendments 80 and 81 would compel the Secretary of State to issue guidance under subsection 1(a) to (c)— that is, on the subsidy control requirements. I understand the intent behind the amendments, but in practice they are unnecessary. While the Secretary of State “may” issue such guidance, in practice he must do so for the regime to function effectively.
Going back to the Government response to the subsidy control public consultation, as we have consistently said, the foundation of the new regime is a clear, proportionate and transparent set of principles, supported by guidance that will ensure that public authorities fully understand their legal obligations and embed strong value-for-money and competition principles. The guidance will show how the assessment of compliance with the principles should be carried out, and how different benefits and distortive impacts should be assessed for different kinds of subsidies. I assure hon. Members that the Secretary of State certainly does not propose to commence the regime without first issuing clear guidance on the subsidy control requirements.
Seema Malhotra
It is heartening that the Minister has said that where the clause says “may”, he thinks it means “must”. From that we conclude that the Secretary of State will issue guidance. It would be helpful to know how soon we can expect that guidance. That was one of the questions. That will be very important in making sure that implementation is accelerated as much as possible, but that there is scrutiny, and time to review the guidance.
Paul Scully
I can commit to this: we want to share parts of the draft guidance as we develop it, because we want to make sure that the guidance is there as we go through this process. Officials from the Scottish Government and Welsh Senedd in particular told us, before we even introduced the Bill, that they wanted more involvement in drafting the guidance. We talked about getting the framework right in the Bill, and issuing the guidance once we knew what the framework looked like; that is the right way round. We consulted and engaged heavily on the framework. It is right that we do a similar job of engagement with parliamentarians, key stakeholders and public authorities as we develop the guidance. We want to make sure that it is put in place—and not just five minutes before commencement of the provisions next autumn. We want to make sure that public authorities have that understanding. We will try to share as much of the guidance as we can as we develop it, rather than having people wait until final publication.
The inclusion of clause 79 in the Bill clearly shows that the Government understand the need for, and importance of, guidance for public authorities on these elements of the regime. For those reasons, I ask the hon. Member for Feltham and Heston not to press amendments 80 and 81 to a vote.
Seema Malhotra
I thank the Minister for his comments, and for his strengthened interpretation of “may” in the clause. I appreciate his saying that he hopes that guidance will be issued, perhaps in stages, so that there is time for scrutiny. I will not press the amendment to a vote. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Seema Malhotra
I beg to move amendment 82, in clause 79, page 45, line 39, leave out subsection (5) and insert—
“(5) Before issuing guidance under this Section, the Secretary of State must seek the consent of the Scottish Ministers, the Welsh Ministers and the Department for the Economy in Northern Ireland.
(5A) If consent to the making of the regulations is not given by any of those authorities within the period of one month beginning with the day on which it is sought from that authority, the Secretary of State may make the regulations without that consent.
(5B) If regulations are made in reliance on subsection (5B), the Secretary of State must publish a statement explaining why the Secretary of State decided to make the regulations without the consent of the authority or authorities concerned.”
This amendment would require the Secretary of State to gain the consent of the devolved administrations before issuing guidance under Clause 79.
The Chair
With this it will be convenient to discuss amendment 86, in clause 87, page 49, line 9, at end insert—
“(7A) Before making regulations under this Act, the Secretary of State must seek the consent of the Scottish Ministers, the Welsh Ministers and the Department for the Economy in Northern Ireland.
(7B) If consent to the making of the regulations is not given by any of those authorities within the period of one month beginning with the day on which it is sought from that authority, the Secretary of State may make the regulations without that consent.
(7C) If regulations are made in reliance on subsection (7B), the Secretary of State must publish a statement explaining why the Secretary of State decided to make the regulations without the consent of the authority or authorities concerned”.
This amendment requires the Secretary of State to seek the consent of the devolved administrations before making regulations under this Act.
Seema Malhotra
This is again about devolution. There is some overlap with the debate we just had. I would have hoped that we were in a position where by the end of this Committee we were not having debates similar to the ones that I feel we had at the start. However, it is important to keep coming back to where engagement with the devolved Administrations matters in particular parts of the Bill, and to say why.
Devolution gives all nations of the UK the chance to make more decisions locally. We have respect for our devolved Administrations and their respective powers, and their input into our economic and social development and our UK-wide democracy. That is why we feel that, if there are ways in which that very important role in our constitutional settlement may be diminished by the way this legislation is crafted and then implemented, it is important for us to consider that issue and also what should be made more explicit in the Bill.
I believe, and I am sure that the Minister believes it too, that all four nations of the UK are stronger together. This Bill is an example of post-Brexit legislation and we are looking at elements of how what was done previously via our membership of the EU will be implemented in a way that will stand the test of time and retain the confidence of all the devolved Administrations. So we must consider how we act in line with those intentions to ensure the importance of devolution and the framework that we have, and how inevitably there will need to be some adjustment, as what happened through the EU is absorbed within our constitution. We must consider some of those roles, responsibilities and judgments about where there needs to be some tweaking of the way our constitution works, with the main principles of devolution—as they have been established and how they are working effectively—and the importance of ensuring that the voices of Scotland, Wales and Northern Ireland are put into legislation that affects all of our nations, and the UK as a whole.
The devolved Administrations will have perspectives that are closer to their own nations. As we have seen, perspectives is a theme running through this legislation, which will be an integral part of how the UK works as a whole, and it will be a more effective regime if those voices are loudly heard.
We agree that Westminster is primary in the way that the legislation is implemented. However, we call on the Minister to consider amendments 82 and 86 seriously. Amendment 82 would mandate the Secretary of State to seek the consent of the devolved Administrations, with a fair backstop, before issuing guidance under clause 79. Amendment 86 stipulates that the Secretary of State must also seek the consent of the devolved Administrations before making the regulations under clause 87.
We have said throughout the debates on the Bill that we want to ensure that there is a settlement that will stand the test of time, that will be flexible in terms of how we all work together, and will be successful for the UK as a whole. It is not just the Labour party or indeed the SNP that thinks along those lines; we have heard evidence from a number of our witnesses alluding to it. I quote Dr Pazos-Vidal, who is head of the Brussels office at the Convention of Scottish Local Authorities, who outlined that the Bill currently is,
“too general and not reflective of the territorial constitution of the UK as it stands. There should be a provision that the Secretary of State must consult the devolved Administrations in a dedicated system that should also involve local law. There should be a duty to make sure that different parts of the UK have full ownership of the final outcome—it is true that the Secretary of State will issue the guidance—but also the intelligence and the local know-how about these ideas.”––[Official Report, Subsidy Control Public Bill Committee, 26 October 2021; c. 8, Q4.]
I ask the Minister, for the final time, to support amendments 82 and 86, which in our view give the devolved Administrations the role they should have and that is appropriate in the Bill. The guidance that the Secretary of State issues on the new regime and the regulations that will be put in place will have just as large an effect on Wales, Scotland and Northern Ireland as on England. Therefore, guaranteeing that the devolved Administrations are involved in the decisions that affect them too will only improve the way in which the guidance is developed and confidence in how it will be implemented.
Kirsty Blackman
As I have said, I largely agree with everything the hon. Member for Feltham and Heston has said and I would be happy to back these amendments, should they be pushed to a vote, but I want to make it clear that I do not agree that the four nations are stronger together, and I look forward to the day—not that far off—when we will prove how much more successful we can be when we are out of this political Union.
Paul Scully
I will speak first to amendment 82. As I have previously stated in addressing other amendments to this clause, the power to issue statutory guidance in clause 79 will allow the Government to add greater colour and detail to public authorities on how to comply with the requirements.
This amendment would require the Secretary of State to gain the consent of the devolved Administrations before issuing guidance, but since subsidy control is a reserved policy matter, it is right that the UK Government do not need to seek the formal consent of the devolved Administrations before issuing guidance. I should reiterate that the Bill as currently drafted already says:
“Before issuing any further guidance … the Secretary of State must consult such persons as the Secretary of State considers appropriate.”
I believe that is the right approach for guidance relating to a reserved policy area.
Stephen Kinnock (Aberavon) (Lab)
Which persons does the Minister think the Secretary of State should consider to be appropriate?
Paul Scully
I think that would depend on what the guidance is, especially with changes to guidance, because this is clearly looking at the wider future. I will come back to engagement, because attaching a formal consent mechanism to the clause could slow and inhibit the issuing and updating of statutory guidance, so it is important that the Government are able to update guidance quickly, should circumstances change—for example, due to the development of new UK case law—and delaying changes would be unhelpful for public authorities and subsidy recipients alike. That said, we have engaged extensively with the devolved Administrations in developing the policy for the new subsidy control regime and will continue to work closely with them while developing the guidance in the way I described in the previous clause. It is in all our interests to ensure that the regime works for the whole of the UK and enables the UK’s domestic market to function properly.
Stephen Kinnock
The Minister has confirmed that consultation with the devolved Administrations has taken place. Does he therefore consider that the devolved Administrations are persons that would be considered appropriate by the Secretary of State for consultation?
Paul Scully
It is really important that we continue to engage with the devolved Administrations—with the Welsh Senedd, the Scottish Government and the Northern Ireland Assembly. The key issue we are talking about here, though, is that the consent mechanisms contained in the amendment may risk delay, and may change the dynamic of the fact that subsidy control is a reserved matter. None the less, as I say, it is really important that we continue to work closely with the Welsh Senedd, the Scottish Government and the Northern Ireland Assembly, because we have to make sure that this Bill works for the UK as a whole, and for every part of the UK as well.
Amendment 86, which has also been tabled by the hon. Member for Feltham and Heston, would, as I said, require the Secretary of State to seek the consent of each of the devolved Administrations before making regulations under the Bill. The amendment would not require the Secretary of State to obtain that consent before making regulations, but if it was not forthcoming, the Secretary of State would be required to make a statement to the House explaining why they chose to proceed with the regulations regardless. However, as I noted while addressing the previous amendment, since subsidy control is a reserved policy matter, it is right that the UK Government do not need to seek the formal consent of the devolved Administrations before making regulations creating streamlined subsidy schemes or issuing guidance.
However, again, I am absolutely clear about the importance of engaging with the devolved Administrations as the Bill progresses through Parliament, as well as the process towards implementation and beyond. That engagement will, and has to, continue as we develop guidance and draft regulations. Throughout, the Government will take into account the specific needs and concerns of authorities and other interested parties. Furthermore—we will discuss this issue further in relation to clause 91 and the commencement provisions of this Bill—we are committed to ensuring the timely passage of the necessary regulations to ensure commencement of the Bill as soon as possible. I therefore ask the hon. Lady to withdraw the amendment.
Seema Malhotra
I thank the Minister for his comments, and I agree with his statement that this regime needs to work for the UK as a whole: I think that is something on which we all agree. I am not quite clear, though, on whether the Minister is saying that there is an incompatibility between the reserved competence and seeking consent, because I am not sure that there is. If there was, we would not have had evidence—including from Daniel Greenberg, parliamentary counsel—about how there could be some co-ordination mechanisms and consultations in and around how the Bill operates.
Stephen Kinnock
To fortify the argument that my hon. Friend is making, the Minister claimed that our amendment would force the UK Government to seek the formal consent of the devolved Administrations, but that is not the case. It would require consultation, but if consent is not given, the UK Government can go ahead with their original plan anyway. Just for the record, we are not saying that formal consent should be given: it is simply a requirement for consultation.
Seema Malhotra
My hon. Friend is correct, and that is the reason I wanted to make this point. I do not think that the arguments the Minister has made about risking delay and changing the dynamic are really arguments against this amendment, which clearly says that
“Before making regulations under this Act, the Secretary of State must seek the consent of the Scottish Ministers, the Welsh Ministers and the Department for the Economy in Northern Ireland…If consent to the making of the regulations is not given by any of those authorities within the period of one month”—
so this is not an extensive delay—
“beginning with the day on which it is sought from that authority, the Secretary of State may make the regulations without that consent”,
but it will be on the record that consent was sought.
Thirdly, the amendment says that
“If regulations are made in reliance on subsection (7B), the Secretary of State must publish a statement explaining why the Secretary of State decided to make the regulations without the consent of the authority or authorities concerned”.
I cannot see anything in the amendment that is incompatible with the fact that this is an area of reserved competence. It simply seeks transparency on where there may be disagreements and why. In my view, that is part of how we have a mature relationship between Westminster and the devolved Administrations—not everyone is always going to agree, but they should be included and views on how the Bill is implemented should be respected. Being able to disagree on the record is, I think, part of how our democracy should be working.
Paul Scully
The clause gives the Secretary of State the power to issue and update guidance on the practical application of the provisions in the Bill. It places a duty on public authorities to have regard to the guidance when designing a subsidy scheme or giving an individual subsidy. The Secretary of State is also required to publish the guidance and keep it under regular review, and may revise or replace that guidance. The Secretary of State must also consult persons they deem appropriate before issuing guidance.
Kirsty Blackman
I wonder whether the Minister would commit to ensuring that there are links to the guidance on the subsidy control database. People who are interested in the database are likely to be interested in the guidance, particularly if they are considering making a challenge. Will he ensure that the links are on the website, so that people can find them more easily? That would be helpful.
Seema Malhotra
The Minister has outlined the details of the clause. Notwithstanding the points we have already made, we support clause stand part.
Paul Scully
In answer to the hon. Member for Aberdeen North, the guidance will be on the gov.uk website. I will reflect on how best to make it accessible. It is important that it is accessible to everybody.
Question put and agreed to.
Clause 79 accordingly ordered to stand part of the Bill.
Clause 80
Disclosure of information
Question proposed, That the clause stand part of the Bill.
Paul Scully
The clause ensures that the powers and duties contained in the Bill to disclose or use information will operate compatibly with existing data protection legislation. It also amends schedule 14 of the Enterprise Act 2002 to include the new subsidy control functions of the CMA. It will ensure that the information obtained by the CMA in its functions under the new subsidy control regime is subject to the same restrictions on disclosure that apply to existing functions. The clause further ensures that the CMA is protected from defamation law when providing advice or reports under the provisions in the Bill.
Seema Malhotra
As the Minister outlined, the clause establishes that any duty to disclose information under the powers in the Bill does not override provisions laid out in the data protection legislation. This is technical and important, and we support the clause.
Question put and agreed to.
Clause 80 accordingly ordered to stand part of the Bill.
Clause 81
Modifications to subsidies and schemes
Seema Malhotra
I beg to move amendment 83, in clause 81, page 46, line 39, leave out “of up to 25%” and insert
“up to the rate of inflation”.
This amendment would prevent modifications that increase subsidy budgets by up to 25% from being permitted, and would instead permit modifications that increased subsidy or scheme budgets by up to the rate of inflation.
The Chair
With this it will be convenient to discuss the following:
Amendment 84, in clause 81, page 46, line 41, leave out “paragraph (g)”.
This amendment would prevent extensions of subsidy schemes from being permitted modifications.
Amendment 85, in clause 81, page 47, line 10, leave out “25%” and insert “inflation rate”.
This amendment relates to Amendment 83.
Seema Malhotra
It is a pleasure to move amendment 83 and to speak to amendments 84 and 85. The clause establishes that unless a modification of a subsidy or scheme is a “permitted modification” listed in subsection (3), including an uplift of up to 25% of the budget or an extension by up to six years, changes to a subsidy or scheme will be regarded as a new subsidy or scheme. Consequently, the public authority will have to comply with the subsidy control requirements. The clause outlines that most modifications to subsidies or schemes must result in said subsidies or schemes being treated as new. The issue is that it also outlines a list of permitted modifications that can be made without having to re-establish the subsidy.
Labour recognises the importance of allowing certain modifications to subsidies, especially under a regime that is intended to be quicker, where there is leave to support a subsidy’s outcomes in line with the control principles and the underlying goals and principles of the legislation. However, such permitted modifications must be reasonable; otherwise, they risk allowing subsidies to undermine the principles of the regulations set out in the legislation.
I wonder whether the Minister has considered in detail subsection (3)(f), which allows an increase in a subsidy’s budget by what seems to be a fairly high and fairly arbitrary 25%. I question whether that is a reasonable modification. There is also a question about subsection (3)(g), which allows the extension of a subsidy scheme by six years. That is longer than a parliamentary term. Again, I wonder whether detailed consideration was given to that. Perhaps the Minister can enlighten us on the basis for deciding to make a six-year extension and a 25% increase permitted modifications.
There is a risk that such modifications will have significant effects on subsidies and schemes. They could cause a previously finely-tuned subsidy to distort the market or become out of proportion. As such, we should question whether they should be allowed to occur without any checks or renewed transparency. Otherwise, there is a risk in increasing a subsidy, particularly a large subsidy, by up to 25%,and, indeed, in extending a subsidy scheme by six years—that is well beyond the period for which local authorities, devolved Administrations or almost anyone in any Administration is elected in this country—without it being subject to some renewal. There does not seem to be a clear explanation of why the clause is framed as it is.
We therefore also propose amendment 83, which would allow for subsidies to adapt to changing economic circumstances by allowing a subsidy’s budget to be increased by no more than the rate of inflation, rather than by a whole 25%. While allowing for adaptation to changing economic circumstances, the amendment would ensure that any significant changes to subsidy amounts were still subject to appropriate transparency.
Amendment 85 would scrap subsection (3)(g), because those long extensions could have significant consequences for the market, and the market could change in that period of time. Any extension of a scheme’s timetable should be subject to full transparency, and it should be treated as though a new subsidy was being created.
I would be grateful if the Minister could respond to our legitimate concerns and explain what underlies the decisions that led to subsections (3)(f) and (3)(g). If there is something that we have missed, we would be happy to reconsider, but in the interests of transparency, value for money and public confidence, we think these are two points that should be addressed.
Paul Scully
Clause 81 allows for limited amendments to be made to subsidies or schemes. A permitted modification will not be treated as a new subsidy or scheme as long as it meets the parameters set out in the clause. First, let me cover amendments 83 and 85. These amendments would remove from the list of permitted modifications an increase of up to 25% of the original budget of a subsidy or scheme. Instead, increases only up to the rate of inflation would be treated as permitted modifications. In doing so, the amendments would greatly reduce the flexibility afforded to public authorities to moderately increase the budget of a subsidy or scheme without facing additional administrative burdens.
The Government have committed to reducing administrative burdens on public authorities wherever possible. That includes giving them the flexibility to make limited amendments to a subsidy or scheme without having to jump through additional procedural hoops. An increase of up to 25% is appropriate, as this level of uplift is unlikely to greatly change the distortionary effects of a subsidy or scheme, which is what we are measuring.
Kirsty Blackman
Will the Minister write to me in advance of Report setting out what would happen if the increase of 25% takes the subsidy above a certain threshold, whether that is the de minimis threshold or the threshold for reporting? It strikes me that it would be possible to use the provision in a negative way to get round the system. I am sure that it is not the Government’s intention, so it would be useful to have advice on what might happen should that subsidy hit the threshold.
Paul Scully
To avoid the bureaucratic burden I talked about, the clause allows for a limited degree of modification without reassessment. That creates the right balance, and public authorities would need to determine whether the change is just administrative or not.
Permitted modifications do not have to be reassessed, and therefore it would not need to be considered whether they bump into subsidies of interest or subsidies of particular interest, for example, because those criteria apply only to new schemes. The public authority will have already carried out an assessment of compliance with the principles and other requirements for all the subsidies and schemes, so the increase in value is unlikely to meaningfully alter that. Clearly, if a public authority was attempting to mislead or exploit that as a loophole, it could be subject to judicial review on general public law grounds.
Seema Malhotra
I may have said in my remarks that amendment 85 scrapped subsection (3)(g), but it was amendment 84, as the Minister has outlined. It is important for our deliberations that the point raised by the hon. Member for Aberdeen North is addressed in writing. It is a fundamental point, and there does seem to be a loophole. Surely, we would not want an inefficiency in the regime that could mean public money being pushed through that little loophole by design. An increase of 25% is significant and could result in the subsidy being pushed over a particular threshold against the requirements of the legislation. Surely, we should design out loopholes rather than designing them in. It would be important, for the purposes of our deliberations and to have confidence in the regime, if the Minister were able to address that point, in writing, for the Committee.
On the Minister’s point about “unlikely to”, surely we do not want to design a system based on things that are unlikely. The way the legislation is drafted could incentivise particular behaviours. We do not want a regime or legislation that make more likely things that we want to be unlikely. There is a small financial incentive for people to look at ways of working around the legislation.
Paul Scully
I am happy to formally write again to clarify the situation, if necessary, but I am pretty sure that I would be repeating what I have just said in response to the hon. Member for Aberdeen North, which will be in the Official Report.
The likelihood and unlikelihood point goes back to the fundamental issue of the regime being a permissive one. If we regimented everything, we would be recreating the EU state aid scheme, which is far more prescriptive.
On the comments about the increases in values and times, let me cover why we believe that the 25% increase is appropriate. Even the strictest subsidy control regime in the world provides for the types of permitted modifications that are included in the clause. The EU state aid regime allows for an increase of up to 20% in the original budget of an existing aid scheme before public authorities need to notify and seek approval from the EU Commission. As I have said, the regime in the legislation is a far lighter-touch regime. I do not mean to suggest that we should start benchmarking every aspect of our subsidy control framework against EU state aid rules, but it is worth noting that the amendments would make the UK’s rules on modifying subsidies far more restrictive than the previous bureaucratic rules. By providing for that level of budget uplift, clause 81 will help to reduce unnecessary processes and provide maximum certainty to public authorities and recipients of subsidies.
As I stated when addressing the preceding amendments, clause 81 allows for permitted modifications to be made for subsidies or schemes without them being treated as a new subsidy or scheme. Amendment 84 would remove from the list of permitted modifications the extension of a subsidy scheme by up to six years. Any extension to a scheme beyond the date on which it would otherwise have been terminated would therefore be treated as a new scheme.
There will be times when public authorities, in monitoring the outcomes of a subsidy scheme, decide it is beneficial to moderately prolong the length of the scheme. If a public authority incurs delays in rolling out the new scheme, for instance, it may wish to bridge the gap by extending the existing scheme. It is appropriate to provide public authorities with the ability to extend a scheme without requiring an assessment against the subsidy control requirements, as an extension of up to six years is unlikely to greatly increase any negative effects stemming from the scheme.
Seema Malhotra
It is important to recognise that if there are to be permitted modifications, they should be designed with transparency in mind, and with ways of tracking how and where they are used. The Minister has just said that the EU regime allows a 20% budget uplift and has an approvals process. The Government are proposing a 25% uplift, but there does not seem to be any clarity in the legislation about the publication of any decisions. Do the Government envisage that, in the event of a permitted modification—of over 5% or 10% of the budget, say—there will be public knowledge of that decision, and if so, where would that information be published?
Paul Scully
Other tools exist to provide the transparency in public authority spending, such as the data published by local authorities under the local government transparency code. The regime is not intended to replace other mechanisms for ensuring that we have transparency and good management of public money.
I do not want to compare and contrast every single element of the regime against the EU, but on timescales, the Committee may find it useful to know that the EU state aid regime also allows for prolongation of an existing scheme by up to six years. The amendment would therefore make the UK’s rules around the modification of subsidies and schemes much stricter than those under the EU without bringing any corresponding benefit. I therefore request that the amendment be withdrawn.
Kirsty Blackman
I appreciate the Minister’s attempt to explain the 25% and what would happen should the subsidy increase above a certain threshold. However, I would very much appreciate it if he would write to us about what is likely to happen should that threshold be hit.
Subsection (3)(g) specifically relates to the length of time for subsidy scheme extensions. An enterprise could conceivably not have existed during the original term of the subsidy scheme but be later affected by the extension of the scheme, with no ability to challenge that scheme because the extension gives no opportunity for it to be challenged. This is not only about the length of time. We discussed the way in which individual subsidies made within a scheme cannot be challenged. It is distinctly possible that that could inadvertently distort competition for new enterprises that pop up during the period of a scheme and so have no ability to challenge it and no recourse to make their concerns known, because a system just does not exist for them to do so if they are outwith the period of being able to challenge the original scheme. If a scheme is not classed as new but extended, there is a bit of a problem.
I understand what the Minister says about the EU, and I assume—although he did not say this—that six years was likely chosen because that is analogous with the length of time the EU gives. However, because of the differences between this scheme and the EU state aid scheme, lifting the same number of years does not work as well as it could, because individual subsidies cannot be challenged. Only the scheme can be challenged, and there will be no ability for new enterprises to challenge the schemes, even though they may have a major distortive effect on competition.
Seema Malhotra
I thank the hon. Lady for her comments. We are extremely concerned about the Government’s lines on this. I do not think there has been any clear explanation, nor any proper assessment of what this could mean and how it could create quite a significant loophole. We will push amendment 83 to a vote.
Question put, That the amendment be made.
Paul Scully
The clause allows for limited amendments to be made to subsidies or schemes, referred to as permitted modifications. They can be made to subsidies made under the terms of the Bill or to legacy schemes and withdrawal agreement schemes. Modifications are also permitted to legacy and withdrawal agreement subsidies or schemes in accordance with their terms. They can involve an increase of up to 25% of the original budget or the extension of a subsidy scheme by up to six years.
Seema Malhotra
The holes in this clause are bigger than those in a big piece of Swiss cheese, and I am concerned about that. We will not be voting against it, but if we had an equivalent of abstain, we would be doing that.
Question put and agreed to.
Clause 81 accordingly ordered to stand part of the Bill.
Clause 82
Gross cash and gross cash equivalent amount of financial assistance
Question proposed, That the clause stand part of the Bill.
Paul Scully
The clause enables the Secretary of State to make secondary legislation to establish how gross cash and gross cash equivalent are to be determined when designing a subsidy or subsidy scheme. It is important to establish a common method for use by public authorities in calculating gross cash and gross cash equivalent values. The Government will set out a methodology to calculate gross cash and gross cash equivalent in regulations that are as clear and simple as possible and subject to the negative procedure.
Seema Malhotra
The clause is important and we support it.
Question put and agreed to.
Clause 82 accordingly ordered to stand part of the Bill.
Clause 83
Minor amendment to the Financial Services Act 2021
Question proposed, That the clause stand part of the Bill.
Paul Scully
The clause makes consequential amendments to the Financial Services Act 2021, in relation to regulated activities in Gibraltar within the scope of the Act. In doing so, the clause ensures that the meanings of “insurance company”, “deposit taker” and “insurer” used in the Bill reflect definitions used in the 2021 Act.
Seema Malhotra
I thank the Minister for his remarks. We will be supporting the clause.
Question put and agreed to.
Clause 83 accordingly ordered to stand part of the Bill.
Clause 84
Financial provision
Question proposed, That the clause stand part of the Bill.
Paul Scully
The clause establishes that expenditure incurred under the terms of the Bill in connection with the subsidies database, established under clause 32, is to be paid out of money provided by Parliament. It also establishes that expenditure, as a result of the CMA carrying out its functions, under or by virtue of part 4 of the Bill, will be paid for out of money provided by Parliament.
Seema Malhotra
I thank the Minister for setting out how clause 84 will ensure that the costs incurred by the Bill will be met by Parliament. We support the clause.
Questions put and agreed to.
Clause 84 accordingly ordered to stand part of the Bill.
Clause 85
Crown application
Question proposed, That the clause stand part of the Bill.
Paul Scully
The clause establishes a customary provision that the Bill applies in full to the Crown. As part of this customary provision, the Crown does not include Her Majesty in her private capacity, Her Majesty in right of the Duchy of Lancaster, or the Duke of Cornwall.
Seema Malhotra
I thank the Minister for his remarks. We will be supporting the clause.
Question put and agreed to.
Clause 85 accordingly ordered to stand part of the Bill.
Clause 86
Power to make consequential provision
Question proposed, That the clause stand part of the Bill.
Paul Scully
The clause provides for the Secretary of State to make regulations that amend, repeal, revoke or otherwise modify existing primary or secondary legislation, including retained direct EU legislation, where such changes are consequential on the functioning of the Bill. It is important to note that regulations that change primary legislation or retained direct principal EU legislation are subject to the affirmative procedure. While the Bill makes provisions for changes to existing legislation, it is possible that possible technical changes to existing legislation may be required as a result of the Bill.
Seema Malhotra
I thank the Minister for his remarks. We have had various discussions over the course of the Bill about how regulations are to be made. Overall, we support the clause.
Question put and agreed to.
Clause 86 accordingly ordered to stand part of the Bill.
Clause 87
Regulations
Paul Scully
The clause sets out the parliamentary procedures that apply in relation to powers to make regulations conferred on Ministers by the Bill. It sets out the procedure that applies where a power is exercisable by affirmative or negative resolution. It makes clear that any power to make regulations in this Bill is not intended to limit the general implementation regulation-making power in section 31 of the European Union (Future Relationship) Act 2020. Finally, the clause does not apply to clause 91 of the Bill. Clause 91 deals specifically with the commencement of the Bill, and it is normal practice that commencement regulations are not subject to either the negative or the affirmative procedure.
Seema Malhotra
I thank the Minister for his remarks. Clause 87 sets out the procedures for when regulations are made under the Bill. We have expressed earlier our opposition to the lack of involvement given to the devolved Administrations; I will not repeat myself, but we continue to have those concerns. However, we will not vote against this clause.
Question put and agreed to.
Clause 87 accordingly ordered to stand part of the Bill.
Clause 88
Directions
Question proposed, That the clause stand part of the Bill.
Paul Scully
The clause establishes that any directions made under the Bill must be made in writing, and also makes provision for a direction to be varied or revoked by a subsequent direction if required.
Seema Malhotra
We have no further comments on this clause, and will be supporting clause stand part.
Question put and agreed to.
Clause 88 accordingly ordered to stand part of the Bill.
Clause 89
Interpretation
Question proposed, That the clause stand part of the Bill.
Paul Scully
The clause establishes the definitions used for various terms within the Bill, whether those terms are defined elsewhere in the Bill or in external sources of law. It also explains how a trade and co-operation agreement or a supplementing agreement should be interpreted by a court or tribunal that is interpreting a provision of this Bill.
Seema Malhotra
I thank the Minister for his remarks. Throughout some of our discussions, the fact that we have not had greater definition of some of the terms used in the Bill has been a challenge, but we will support clause stand part. I hope that some of the more detailed definitions will come forward as soon as possible.
Question put and agreed to.
Clause 89 accordingly ordered to stand part of the Bill.
Clause 90
Extent
Question proposed, That the clause stand part of the Bill.
Paul Scully
The clause establishes that, barring one exception, the Bill extends to England, Wales, Scotland and Northern Ireland. The one exception is clause 48(3) of the Bill.
Seema Malhotra
We obviously agree with this clause. It is a shame that a four-nations approach has not come forward in the drafting of some of the Bill, but in any case, we are not opposing clause stand part.
Question put and agreed to.
Clause 90 accordingly ordered to stand part of the Bill.
Clause 91
Commencement
Seema Malhotra
I beg to move amendment 87, in clause 91, page 50, line 26, at end insert
“which must be no later than six months following the day on which this Act is passed.”
This amendment would require that the Act comes into force no later than six months following Royal Assent.
The Chair
With this it will be convenient to discuss amendment 25, in clause 91, page 50, line 26, at end insert—
“(2A) The Secretary of State may not make regulations to bring the rest of this Act into force until—
(a) regulations under section 34 and section 52 of this Act have been made and been in force for at least three months; and
(b) guidance under section 79 of this Act has been issued and publicly available for at least three months.”
This amendment allows a period of three months after the issuing of regulations relating to the subsidy database and mandatory referrals, and the publication of guidance, before parts of the Act come into force.
Seema Malhotra
We broadly support clause 91, which sets out which parts of the Bill will come into effect and when. We recognise the need to establish when and how various parts of the Bill will come into force. However, at the same time, we want to ensure that this important new regime is not implemented unnecessarily slowly, because the implementation of legislation can sometimes get delayed when it is not at the forefront of Parliament’s attention. The Bill is fundamental to supporting the levelling-up agenda, which is of great concern to us all, and net zero implementation. That is still a disappointment—I am sure we will come back to the need for net zero to be more explicit in the principles. It is important that we move forward as quickly as possible to ensure certainty in the subsidy control regime, and that we support research and investment. All of those measures are necessary. In this low-growth environment, it is important to get investment, and the necessary incentives for it, as soon as possible.
An interim subsidy regime is in now place, but it does not provide the guidance or reassurance necessary for the long-term effectiveness of subsidies, nor does it take advantage of the potential opportunities provided by designing and scoping a new regime now that we have left the European Union. Amendment 87 would mandate that the Bill comes into force no later than six months following Royal Assent, reflecting the important need to make quick progress on introducing the regime, the guidance and the regulations. There should be no avoidable delays. It is important that the guidance is introduced in good time so as to ensure that the Bill receives proper scrutiny as it continues its passage through Parliament.
I expect that the hon. Member for Aberdeen North will speak to amendment 25. We want to make sure that the process moves more quickly, and there is a discussion to be had about the best way to make that happen. I would be grateful if the Minister could outline the Government’s planned timetable for bringing the Bill into force and the important and necessary steps they will take as part of that road map.
Kirsty Blackman
Very unusually, although we are discussing two Opposition amendments, we disagree with one of them. I cannot support amendment 87. As I have said on a number of occasions, I am concerned about ensuring compliance with the regime. There will be compliance only if people have a good understanding of the regime before it kicks in. I do not have a problem with the period following Royal Assent being more than six months, because I would rather that organisations such as public authorities had the time to digest the guidance and regulations in order to be able to adequately comply. We do not want people to accidentally not comply.
I understand the Opposition’s desire to push forward, given the current interim regime, but it is important to get this right. I do not think any of us are comforted that we will be able to judge whether there is a high level of compliance with the regime. The Minister expects that that will be the case, but the lack of transparency data means that it will not be terribly easy to judge the situation.
Under amendment 25, which we have tabled, the Secretary of State would not be able to make regulations to bring the rest of the Bill into force until regulations under clauses 34 and 52 had been made and been in force for at least three months. Those clauses relate to mandatory Competition and Markets Authority referrals and the operation of the subsidy database. It is really important that both those measures are well understood in advance of the rest of the provisions coming into force, which is why the amendment seeks a three-month time period, so that everyone is able to comply.
The second condition that the amendment would require, where I am asking that guidance be in place for three months, is about guidance under clause 79. We spoke at some length during the debate on clause 79 about our concerns. It was useful to have the Minister confirm that the Secretary of State will be making guidance on a number of those things, despite the fact that the word “may” is in there. That is a helpful clarification for us, but it is important that that guidance is published.
I am pleased that the Minister plans to ensure that there is significant consultation and that the asks that come forward are considered. If somebody asks for specific guidance about a specific area because they know it is something they are likely to be dealing with on a regular basis and they are a regular granter, or likely to be a regular granter, of subsidies under this regime, I would like the Minister to have the opportunity to consider that. However, I would also like to ensure that there is a period of time, in advance of people being expected to comply with the regulations and guidance put forward, for them to digest them.
That is particularly important when we look at the operation of the subsidy control database and the method of challenging things on that database. People have only a short period of time—one month—to make those challenges and ask for pre-action information to be brought forward. The Minister’s stated aim is to reduce the length of the period of uncertainty, but the likelihood of there being uncertainty or challenges is increased if organisations do not properly understand the guidance. We all know that lawyers take a significant amount of time to digest things and to give the necessary advice to organisations.
As was stated during the witness sessions, the legal profession will have to do a huge amount of work to ensure that they are giving appropriate advice to organisations that are looking either to grant or to challenge subsidies. I do not think it would be appropriate for the regime to begin in the autumn, as the Minister has stated that the Government hope it will, without there being that period of time in advance.
All the indications the Minister has given are that it is likely that there will be a period of time in advance—that he is hoping that there will be and that consultation will happen. I tabled this amendment to try to ensure that that will definitely happen in the specific areas that are important for organisations to be able to properly understand the guidance in advance. I am not trying to cause us problems or to make the Bill take longer to come into force; I am just trying to ensure that people are able to act in the way the Government would like them to act with this Bill and that anybody whose interests are affected by the giving of a subsidy is able and understands how to adequately challenge those subsidies.
Paul Scully
Rightly, the hon. Member for Aberdeen North does not want to extend the Bill—she has extended the Committee, but that is fair enough—
Paul Scully
She has raised some really important points and it is important that she gets them on the record, because we have a shared aim to ensure that we get this right and make it work for the entire UK.
Amendment 25 would amend clause 91 to require the regulations to have been made and been in force for at least three months ahead of commencement of the new regime. I thank the hon. Lady for the amendment and I recognise her desire to ensure that the guidance on the new regime alongside regulations on the subsidy database and mandatory referrals are in place in good time for public authorities to familiarise themselves with the content.
I share that desire for those regulations to be in place in good time, alongside the clear guidance for public authorities, but I do not agree that it is necessary to restrict when the regime can commence based on those regulations having been in place for a three-month period. Of course we will continue to support and advise public authorities after regulations are made, but we will also ensure that when the Act is commenced, public authorities have a clear understanding of what is required of them under the new regime. That will include having robust guidance and regulation in place.
Amendment 87 would require that the Act comes into force no later than six months following Royal Assent. We recognise the importance of ensuring that the regime is fully operational in a timely fashion, so that public authorities have certainty about how the regime operates and are appropriately supported in interpretating the regime with sufficient guidance. It is not in the interest of Government or public authorities to delay commencement of the regime unnecessarily.
We will ensure that the subsidy control regime is in place as soon as is feasible, while allowing sufficient time for regulations to be made with a proportionate amount of lead-in time for public authorities. Establishing a specific deadline for implementation would remove the flexibility to modify the commencement date if it were in everyone’s interest to do so—for example, if there were an emergency that significantly diverted Government resources or if the deadline fell during the Christmas or summer holidays.
Although seeking to place different restrictions on commencement of the new regime, these amendments serve to highlight the complexity of implementing the Bill and how important it is that the Government get it right. We will ensure that the regime is introduced in good time and that those who need to use it have time to prepare. However, placing these additional restrictions on when commencement can occur would be disproportionate and unnecessary. Therefore, I request that the hon. Member for Feltham and Heston withdraw amendment 87.
Seema Malhotra
I thank the Minister for his remarks. Amendment 87 is a probing amendment, and I hope he will be able to lay out a broad timetable as to what will happen after Royal Assent and what we can expect. I am sure that officials will be starting to map out the necessary activity. It would be helpful to know what may come out and in what order. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Paul Scully
Clause 91 establishes which parts of the Bill will come into effect and when. It provides the Secretary of State with a power to bring certain provisions of the Bill into force by commencement regulations. Any power to make regulations under part 2, 3 or 4 or chapter 1 and chapter 2 of part 6 come into force on the day of Royal Assent. The clause also provides a power for the Secretary of State to make transitional or saving provisions in regulations when the Act comes into force, if that is necessary.
Seema Malhotra
We support the clause.
Question put and agreed to.
Clause 91 accordingly ordered to stand part of the Bill.
Clause 92
Short title
Question proposed, That the clause stand part of the Bill.
Paul Scully
The clause establishes a short title for the Act, which is the Subsidy Control Act 2021.
Seema Malhotra
It is an excellent title, and we support the clause.
Question put and agreed to.
Clause 92 accordingly ordered to stand part of the Bill.
New Clause 1
Subsidy Control Principles: statement to Parliament
“(1) Within six months of the opening of a new Parliament, the Secretary of State must make a written statement to Parliament on the subsidy control principles.
(2) The statement must include details of—
(a) any legislation the Government intends to bring forward to change the Subsidy Control Principles; and
(b) any changes the Government intends to make to guidance under section 79 of this Act.”—(Kirsty Blackman.)
This new clause requires a new Government to make a statement to Parliament about any changes it intends to make to the subsidy control principles.
Brought up, and read the First time.
Kirsty Blackman
I beg to move, That the clause be read a Second time.
This new clause is not unlike ones I have tabled in previous Committees, including the customs Bill Committee. The idea behind the new clause is to ensure that there is more accountability from Governments at the opening of Parliament in the event that they will intend to make changes to the subsidy control principles.
We have been clear about the way in which the regime works. The principles are fundamental. Should there be changes to the subsidy control principles, that would be pretty significant and would fundamentally alter the operation of the regime. Should the Government or a future Government be keen to make changes to the principles contained in the Bill, it would be reasonable for as much notice as possible to be given to Parliament and those who are likely to be operating within the Act.
New clause 1 states:
“Within six months of the opening of a new Parliament, the Secretary of State must make a written statement to Parliament on the subsidy control principles.”
It must include details of:
“(a) any legislation the Government intends to bring forward to change the Subsidy Control Principles; and
(b) any changes the Government intends to make to guidance under section 79 of this Act.”
I would expect that if the Government were making drastic changes to subsidy control principles, they would want to give as much notice as possible. There is no doubt that if it was at the start of a new Parliament, any change would likely have been a manifesto commitment that they stood for in election, so it would be uppermost in their minds any way. I cannot imagine somebody wanting to alter drastically the operation of the subsidy control regime without mentioning it during an election campaign. That is not to suggest that people will necessarily want to make changes to the subsidy control principles; I do not know that they will want to. But we will not have this Government for ever—thank goodness—and different Governments will potentially make different decisions on subsidy control.
Chair, just before I end my remarks, I will just say thank you to everybody who has supported us through our consideration of the Bill and everybody who has spoken during our debates. Despite the fact that only three of us have dominated proceedings and spoken at length—as well, Chair, as your colleague, Mr Sharma; so, four of us perhaps—we are about to wrap up early and not go to the end of this day, which is surely testament to the excellent chairing.
Paul Scully
The subsidy control principles sit at the heart of the domestic regime. They will be underpinned by statutory guidance issued by the Government ahead of the regime’s commencement. I agree that there is no notion that this Government or indeed any Government in the foreseeable future would wish to modify the subsidy control principles; the principles should endure with Governments of any stripe or colour. They are common sense, they ensure good value for money and they help to protect the UK internal market, so I am confident that they will stand the test of time.
However, in the unlikely event that the Secretary of State wished to modify the principles, I do not believe that this amendment would strengthen the scrutiny function of the House. The provisions of the Bill do not confer delegated powers that would enable the Secretary of State to modify and/or remove any of the principles, so any future changes would require the Government to introduce amending legislation and to conform with the necessary parliamentary processes and scrutiny that that would entail.
Guidance issued under clause 79 may of course be updated and revised, and that guidance may need to change in the future to reflect different future practices, or additional information for public authorities, and it is also necessary that that guidance is quickly updated should circumstances change. I do not believe that a statement at the beginning of each new Parliament would necessarily be the right time to announce those changes.
For the reasons that I have set out, I ask the hon. Lady to withdraw the new clause.
Kirsty Blackman
I thank the Minister. I will not push the new clause to a vote, but I will just point out that there are problems with the ability to scrutinise delegated legislation; it is not the most robust procedure in Parliament, as anybody who has sat through Delegated Legislation Committees will know. It is very different from being on the Floor of the House, and something like a written statement would mean that all parliamentarians would have the ability to scrutinise, understand and consider any changes that are likely to come through.
Nevertheless, I appreciate the point that the Minister has made that it is unlikely that there will be changes to the subsidy control principles and that any currently foreseeable or potential future Governments are unlikely to make changes to those principles. So, as I say, I will not push the amendment to a vote.
I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
Seema Malhotra
I do not wish to push new clause 3 to a vote today.
New Clause 4
“Secretary of State and Devolved Administrations: requirement to report
‘(1) The Secretary of State, Scottish Ministers, Welsh Ministers and Northern Ireland Department of Economy shall each report annually on subsidies and schemes which they have made.
(2) All reports made under subsection (1) shall be published.” .—(Seema Malhotra.)
This new clause would require the Secretary of State and devolved Administrations to report annually on subsidies and schemes they make.
Brought up, and read the First time.
Seema Malhotra
I beg to move, That the clause be read a Second time.
New clause 4 would provide for greater transparency under the new regime by mandating the Secretary of State and each of the devolved Administrations to publish annual reports on the subsidies and schemes they have made during the previous year. In our view, that would ensure that interested parties and the public generally are made aware of how their ruling bodies are using public money through subsidies and for what purposes. I am sure that the Minister recognises that transparency is important and that he will agree with Professor Rickard, who said that through transparency we can get better compliance and better value for money, and we can help to ensure that subsidies that have been granted better meet the goals that we are setting out to achieve.
Over the past few weeks, the Minister will have seen all too much, I am sure, both in the Chamber and in the news, the concerns in relation to whether public funds have been used in the way they should be, how contracts have been allocated and so on. I am sure that there will be a keenness to prevent any perceived or potential misuse of public funds or lack of transparency and to ensure that there can be adequate reporting of decisions that are made, particularly on larger subsidies by Administrations.
We will not necessarily press the new clause to a vote today, partly because we think that the issues raised by it could be absorbed within the discussions that we had about the role of the CMA in its reporting and the discussions that we had about the Minister, I think, putting in writing what he would see and how the reporting cycle might work. There may be ways to deal with some of these concerns—depending on what the Minister says—in the rounds of those discussions that we have talked about.
I will just mention also the way we see the CMA having a role. I have not moved new clause 3 today because I think we will want to bring that back. There will be ways in which we look in the round at the role of the CMA and its powers on decision making, advice and reporting. I look forward to the Minister’s response.
Paul Scully
Transparency is absolutely an important part of the new subsidy control regime. It is right, therefore, that it has been a significant part of the discussion during Committee. It is key to the enforcement provisions in the Bill. We have thought carefully about the reporting requirements that we place on public authorities, to get the balance right. Other tools for general public authority financial transparency exist elsewhere already and are not limited to subsidies. We are trying to find the right balance between transparency and burdens on public authorities, as we have said. Although the subsidy database is still a relatively new tool, public authorities, including Departments and the devolved Administrations, are already using it and uploading information about the subsidies that they award. The database is a one-stop shop where both interested parties and the public can see the required subsidies awarded.
The new clause risks duplicating public authorities’ transparency obligations through the making of an unnecessary report on granted subsidies in a way that risks confusing interested parties and undermining the streamlining of subsidy transparency that our one-stop database provides. For the reasons that I have set out, it is neither necessary nor appropriate to include a statutory obligation for the Secretary of State and devolved Administrations to report annually on the subsidies and schemes that they make. Therefore, I request that the hon. Member withdraw the new clause.
Seema Malhotra
On the basis that there will be further discussion, that we do not want there to be administration that is more time-consuming than it needs to be and that we will revisit the way we can have a very efficient reporting regime, I will withdraw the motion. I am not sure whether I will be speaking again—I am not sure of these final few stages—but perhaps I can take this opportunity to echo the comments from the hon. Member for Aberdeen North by thanking you, Ms Nokes, and Mr Sharma, who also chaired the Committee; all hon. Members who have contributed and been part of our deliberations; and the Clerks, Hansard and so on for helping to make the process extremely efficient. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
Question proposed, That the Chair do report the Bill, as amended, to the House.
Paul Scully
I thank you, Ms Nokes, and Mr Sharma for your excellent chairmanship and getting us through this process efficiently and effectively. I also thank the witnesses and all members of the Committee, who have allowed us to go through significant scrutiny and to have significant discussions; the Clerks, the Hansard Reporters and the Doorkeepers for ensuring that we have been well looked after; of course my officials, who have done an incredible job to get us to this point efficiently; and of course the Whip—what an amazing Whip. Both Whips have been remarkable in getting us through this process.
Seema Malhotra
I echo the Minister’s thanks to our witnesses. They gave us very good evidence at very short notice. I also thank both the Whips. We have hugely appreciated how they have managed time well. I also thank our staff—on our side, in particular, Francesca Sellors and Dan Jones—who have helped to ensure that we have had everything in time for the Bill proceedings, because it has been a journey.
Question put and agreed to.
Bill, as amended, accordingly to be reported.