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Oral Answers to Questions
(2 years, 9 months ago)
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Deidre Brock (Edinburgh North and Leith) (SNP)
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
The Secretary of State for Northern Ireland (Brandon Lewis)
I begin with some brief remarks regarding the public apology to be delivered on Friday 11 March by the Northern Ireland parties to victims and survivors of historical institutional abuse.
The Hart report into historical institutional abuse in Northern Ireland was published in 2017. I particularly thank and note the hard work of the Northern Ireland Office, the Northern Ireland civil service and my predecessors, my right hon. Friend the Member for Staffordshire Moorlands (Karen Bradley), who put so much time and focus into this, and my right hon. Friend the Member for Skipton and Ripon (Julian Smith), who delivered the Historical Institutional Abuse (Northern Ireland) Act in December 2019, securing a key recommendation of the Hart report to establish a redress system for victims who suffered abuse while resident in these institutions in Northern Ireland.
It is only right that victims and survivors are now receiving a formal apology for the abhorrent abuse they suffered while residing in institutions that were meant to care for them. This is another key recommendation of the Hart report, and it is to be welcomed. For too many years, the voices of victims and their appeals for help went unheard, and on 11 March they will receive a full and unconditional apology that is so deserved.
In answer to Questions 1 and 9, I regularly meet Cabinet colleagues to discuss Northern Ireland matters, including the Northern Ireland protocol. The situation in Northern Ireland is serious, and the Government are keeping all options available to make sure we achieve a positive outcome.
Deidre Brock
I am pleased to hear the Secretary of State’s statement.
The Russian war of aggression against Ukraine threatens to undermine global food security, including for people across these islands, by cutting the world off from 30% of all grain supplies and undermining global production of fertiliser for other foodstuffs. Unbelievably, recent media reports suggest that senior Brexiteers are pressing the Government to trigger article 16 and proclaim unfinished business with the EU. Such action would be reckless and unnecessary even without a war raging on the European continent. Will the Government take triggering article 16 off the table once and for all?
Brandon Lewis
Absolutely not. We are very clear that we have to keep all options on the table. Article 16 is part of the protocol and, if we cannot resolve these issues, it is the proper legal process to take things forward. Ultimately, the right result, and the result on which we and the Foreign Secretary are focused, is getting a resolution by agreement with the EU. Be in no doubt that we are determined to make sure Northern Ireland can access goods from Great Britain in the way it should, which we should all support.
Sir William Cash (Stone) (Con)
Many of us in this House are deeply concerned about the lack of progress in these negotiations. Does the Secretary of State recognise that the sovereignty issue for Northern Ireland still remains on the table with regard to EU lawmaking? Although the context is quite different, it is worth remembering that we are also dealing with the Ukrainian situation, which is also an issue of sovereignty.
Brandon Lewis
My hon. Friend makes an important and accurate point. The reality is that we have not seen enough progress, and are not yet seeing enough flexibility and pragmatism from the EU. What is positive is that there is a recognition now, including in the conversations I have had with Vice-President Šefčovič, that issues with the protocol need to be resolved. We all want to see that happen at a much faster pace, and to see more flexibility on all these issues, both on trade and, as he rightly says, on remembering that Northern Ireland is an integral part of the United Kingdom and its internal market.
Dr Neil Hudson (Penrith and The Border) (Con)
We know that viruses and many infectious agents do not stick to international, let alone domestic, borders, as we have seen in both the human and animal health settings. With that in mind, does my right hon. Friend agree that if the UK and the EU were to agree a veterinary and SPS—sanitary and phytosanitary—agreement, that would not only protect the biosecurity of the UK, but facilitate trade and the movement of plant and animal produce between Great Britain and Northern Ireland?
Brandon Lewis
My hon. Friend gives an example of one area where we are keen to see flexibility from the EU, so that we can see some resolution. We have put forward a range of constructive proposals to meet the objectives—respecting the single market of the EU while making sure that we achieve our prime priority, which is protecting all aspects of the Belfast/Good Friday agreement—such as the green channel proposals, which can deal with east-west customs and those SPS burdens that he mentioned. We have to make sure that we find a resolution that works, and that means goods can flow from Great Britain to Northern Ireland—the goods that are not at risk of moving to the EU—in the way they always have done.
Peter Kyle (Hove) (Lab)
The Prime Minister has told the right hon. Member for Lagan Valley (Sir Jeffrey M. Donaldson) that negotiations on the protocol have only a 30% chance of success. Does the Secretary of State share that assessment?
Brandon Lewis
I am not sure I am in a position to give betting odds in terms of percentages. The experience we have had with the EU so far, in the past six to nine months, has shown us a lack of the pragmatism and flexibility that we need to see. We have not seen the EU move in a way that allows us to resolve the issues of the protocol, either the trade issues or the wider issues of identity and sovereignty. It is important that we do that. We have to be realistic about the reality of that lack of progress and flexibility, which is why I am clear that we take no options off the table.
Peter Kyle
The reason the Secretary of State cannot give a direct answer to the question is because Ministers and the Prime Minister have been telling so many people informally so many different answers. That is a reason why there is such a lack of trust in the Government at the moment. Queen’s University Belfast has just carried out a poll, which found:
“The UK government is by far the most distrusted…of all actors”.
That is because so much is happening in the shadows; Ministers are telling people different things behind closed doors. Since the Executive collapsed, there has been no statement to the House. Following five rounds of negotiations between the UK and the EU Governments, there has not been a single statement to the House. Will the Secretary of State promise to bring discussions out of the shadows and start making statements to the House, so that we can have things on the record and not behind closed doors?
Brandon Lewis
I think the hon. Gentleman misunderstands how negotiations need to work. We have been clear that it is right and appropriate that we have the space to have those private negotiations with the EU, which is why we have not gone out and publicly outlined some of the specific details we have put. But we have been very clear, and I am very clear publicly as well as privately, that we take no options off the table. We do need to resolve this. There is a point at which there is a judgment call for the UK Government to make on whether those negotiations are able to progress in a way that gives us confidence that we can get to a positive resolution. We have not seen that flexibility from the EU yet, but we will continue to strain every sinew, and the Foreign Secretary continues to talk to Maroš Šefčovič, to do everything we can to get a resolution that works. But we have to be very clear: this is about a resolution that respects all aspects of the Good Friday agreement and protects the best interests of the people of Northern Ireland.
Mr David Jones (Clwyd West) (Con)
The period of purdah in the run-up to the Northern Ireland Assembly election is fast approaching. Does my right hon. Friend acknowledge the need to make real, serious progress before that period commences? Does he anticipate that such progress will be made?
Brandon Lewis
It is important that we get progress as quickly as possible, regardless of the pre-election period in Northern Ireland, because every day that we are not seeing that flexibility from the EU is another day when consumers in Northern Ireland cannot access products; when the Jewish community cannot access, technically, under the EU provisions, kosher food; when businesses cannot get access to the products they need; and when more than 200 Great Britain businesses are not supplying Northern Ireland. That affects the economy of both Northern Ireland and the wider UK, and we need to resolve that as quickly as we can.
Sir Jeffrey M. Donaldson (Lagan Valley) (DUP)
Further to that answer, may I draw to the Secretary of State’s attention the situation of my constituent from Dromore who is disabled and confined to a wheelchair? Three weeks ago, the ramp on the back of her disability-adapted motor vehicle broke. When she went to order the spare part from the supplier in England, she was told it could not be sent to her because she was not registered with Her Majesty’s Revenue and Customs to trade with the rest of the United Kingdom. That is precisely the kind of difficulty that the protocol is causing for ordinary people in Northern Ireland and the idea that we just ignore it, sweep it under the carpet and forget about article 16 ignores the rights of my constituents.
Brandon Lewis
The right hon. Gentleman is absolutely right. There are multiple examples out there, whether it is the issues for the Jewish community that I just outlined or the individual case he has. Both he and I have heard of cases of other people who are unable to access products and goods, some of which are very important so that they can continue to live their lives in the way that any other UK citizen could. That is not good enough. We need to be clear with the EU that its current lack of flexibility puts at risk the very thing that the protocol was there to protect: the Belfast/Good Friday agreement and peace and prosperity in Northern Ireland. It is right that we keep the pressure on. We will strain every sinew, and I hope the EU will show flexibility and pragmatism to resolve the issue that it now recognises, which is that the protocol is not working and is, I have to say, just not sustainable in its current form.
Sir Jeffrey M. Donaldson
At this time, households throughout the United Kingdom, including in Northern Ireland, are struggling because of rapidly increasing home-heating costs. In Northern Ireland, we are subject to European Union VAT rules, which means that if the Chancellor of the Exchequer sought to reduce VAT on home-heating oil, he would need the permission of the EU and all 27 member states. Surely, it cannot be right that my constituents are being deprived of the support they need from the Government because of the protocol.
Brandon Lewis
In February this year we put a further £250 million into the Executive to allow them more flexibility, on top of their underspend, to support people at a time when there are such pressures. The right hon. Gentleman is quite right to highlight another of the many areas where the protocol is creating real problems on the ground for people in their everyday lives. We must remember that the protocol itself says it will not disrupt the everyday lives of people in their communities; the right hon. Gentleman has given yet another example of how the implementation of the protocol is doing exactly that. That has to stop.
Richard Thomson (Gordon) (SNP)
I associate myself and my party with the Secretary of State’s remarks at the outset about victims of historical abuse and the forthcoming apology.
Another important part of the Northern Ireland protocol is article 3, which says:
“The United Kingdom shall ensure that the Common Travel Area and the rights and privileges associated therewith can continue to apply…in particular with respect to free movement to, from and within”—
the island of Ireland—
“for Union citizens and their family members, irrespective of their nationality.”
Does the Secretary of State recognise the potential economic and political strain that the introduction of an electronic travel authorisation system could put on freedom of movement across the border? What engagement does he plan to have with the Government of Northern Ireland and the Government of the Republic and their partners in the EU in respect of how to make sure such frictions do not take effect?
Brandon Lewis
I am sure the hon. Gentleman will be aware that throughout the pandemic we have made sure we have kept the common travel area flowing and open. That has not necessarily been the case on the part of the Irish Government at certain points, but we have done that; we think it is important and we will continue to do that. I am looking to have further talks with the Irish Government. My officials have been talking to them about all these issues this week and last week, and I will continue to do that myself as well.
John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)
Damien Moore (Southport) (Con)
Mr Richard Holden (North West Durham) (Con)
The Minister of State, Northern Ireland Office (Conor Burns)
Next month marks 75 years since the young Princess Elizabeth made her famous pledge:
“I declare before you all that my whole life whether it be long or short shall be devoted to your service”.
My Department is working closely with colleagues across Government, and we will play our full part in celebrating the achievement of Her Majesty the Queen on the occasion of her platinum jubilee. It will be the nation’s opportunity to recognise all that she has given to the United Kingdom and the Commonwealth, to express to her all she means to us, and to say to her with gratitude and in unity: long may she reign over us—God save the Queen.
John Lamont
I very much associate myself with the Minister’s remarks. I know the celebration of the platinum jubilee will be a cross-Government effort, but will he assure me that he is working with the devolved Administrations to ensure it is an entire-UK event, with all parts of the United Kingdom joining together to celebrate this momentous occasion?
Conor Burns
My hon. Friend is absolutely right: this is an occasion that should unite the whole of the United Kingdom—all regions and all nations of the United Kingdom. My right hon. Friend the Secretary of State and I are working closely with local authorities and the Government in Northern Ireland to make sure that this is something that brings communities together. We will want to remember some of the 25 occasions that the Queen has visited Northern Ireland: three of them as Princess Elizabeth and 22 of them as Queen. We want to involve young people and we want to use the opportunity of the jubilee to celebrate the best of Northern Ireland.
Damien Moore
I recently was proud to join colleagues from across the House in setting up the all-party group for the Queen’s platinum jubilee. Can the Minister tell us what steps he is taking to ensure that the celebration extends across the United Kingdom and that it is used to showcase the benefits of our UK, with Northern Ireland as an integral part of it?
Conor Burns
This occasion should bring us all together. In that light and specifically with reference to Northern Ireland, I would like to welcome the comments of the Leader of Sinn Fein who said that she wanted to
“extend to the British Queen a word of congratulations because 70 years is quite some achievement.”
She said:
“That is what you call a lifetime of service.”
Those comments have made it easier for us in Northern Ireland to celebrate this in all communities across the whole of Northern Ireland.
Mr Holden
The platinum jubilee presents a great opportunity to celebrate and reaffirm the place of all parts of our United Kingdom, especially in Northern Ireland, which, this year, has celebrated its centenary year. Will my right hon. Friend confirm that the celebrations will include UK-wide events, including in Northern Ireland, to celebrate all 70 years of Her Majesty’s service? Will he also encourage all primary school-aged children in North West Durham to take part in my competition to design a platinum jubilee card for Her Majesty?
Conor Burns
The example that my hon. Friend gives of the competition that he is running in his own constituency will, I am sure, be replicated across the House. I can give him the assurance that Northern Ireland will participate in all of the national events around the jubilee: the platinum pudding competition; the big jubilee lunch. This is a great celebration for us all to enjoy in a spirit of unity.
Gavin Robinson (Belfast East) (DUP)
The Minister was right to reflect on the comments from the Leader of Sinn Fein. They are rare and he will know that, in Northern Ireland, there still pervades a lack of generosity about the huge commitment and dignity that Her Majesty has shown our United Kingdom. He will also know that there is a stark contrast between the Northern Ireland Office’s position on celebrating the centenary last year, with the construction of a forum and the allocation of funds, and the tame approach when it comes to the platinum jubilee. Will the Minister outline whether he will dedicate significant resource, so that we can celebrate this historic achievement in style?
Conor Burns
I do not totally agree with the characterisation of the hon. Gentleman around the centenary programme that the Northern Ireland Office ran. I thought that it was bold, that it was inclusive and that it recognised the unique circumstances—[Interruption.] Oh, the hon. Gentleman said that he welcomed it. Sorry, I misheard him. Mr Speaker, I apologise to the hon. Gentleman. I am so used to criticism from the Democratic Unionist party that that rare outbreak of consensus passed me by. I can give him my total assurance that we will be marking this jubilee with full throttle, joy and celebration, and my right hon. Friend the Secretary of State will be coming forward with some very innovative ideas about how we will mark it, especially in Northern Ireland.
Greg Smith (Buckingham) (Con)
James Daly (Bury North) (Con)
The Minister of State, Northern Ireland Office (Conor Burns)
May I say to my hon. Friend the Member for Buckingham (Greg Smith) that it is particularly good to see him in his place today?
I recently attended the Northern Ireland Day at the Dubai Expo, where I met many Northern Irish businesses already exporting globally, including White’s Oats, Kiverco and Greenfields. We also had the opportunity to meet with two sovereign wealth funds, which, I am pleased to report to the House, have accepted our invitation to come to Northern Ireland and look at the opportunities to invest in Northern Ireland as part of their programme of investing in the United Kingdom.
Greg Smith
I am grateful to my right hon. Friend for that answer. Thanks to our exit from the European Union, the United Kingdom is able to strike trade deals around the world without being constrained by the bureaucrats in Brussels. Can he assure me that he is working with his colleagues in the Department for International Trade to ensure that businesses in Northern Ireland which export their products are given full and due consideration in all trade deal negotiations?
Conor Burns
I can assure my hon. Friend that, as a former Minister of State for Trade Policy, I bring that worldview to my role as Minister of State in Northern Ireland. The short answer to his question is yes; I am delighted that we have now opened a new Department for International Trade hub in the heart of Belfast. I recently met the Economy Minister, Gordon Lyons at the Northern Ireland Showcase and we introduced him to the President of the Board of Trade before Christmas. We have put £8 million into Invest NI to help it to promote Northern Ireland abroad. Northern Ireland is an integral part of the United Kingdom’s offer to the world and will benefit fully from our international trade agreements.
Colum Eastwood (Foyle) (SDLP)
While it is obviously important to bring investment into Northern Ireland, my constituents in Derry are struggling right now with soaring energy bills. A mile across the border, the Irish Government are cutting vehicle excise duty by up to 20% for petrol and diesel. This Government are very keen and very quick to raise national insurance contributions and to cut universal credit. Will they be quick to cut vehicle excise duty to save people from the soaring costs that are crippling home budgets?
Conor Burns
On 3 February this year the Government announced that the Northern Ireland Executive will receive an additional £250 million to help them to support households with the cost of living. He mentions tax changes, but it would be imprudent of me as a junior Minister to comment ahead of the Chancellor’s making statements to the House.
James Sunderland (Bracknell) (Con)
It was a real pity that we could not land the return of the world rally championship to Belfast in 2022. Can the Minister please confirm that we will pull out all the stops for 2023?
Conor Burns
I can. We did extensive work with the Department for the Economy and the hon. Member for North Antrim (Ian Paisley) was heavily involved in lobbying on that. We think it would be a great thing to bring to Northern Ireland and we are determined to build on the work we have already done to see whether that is possible next year.
Hilary Benn (Leeds Central) (Lab)
Last week, I was in Northern Ireland with members of the UK Trade and Business Commission, where we heard from a major supermarket about the impact that the protocol could have in future if the grace periods no longer exist. I listened carefully to the Secretary of State’s answer to the hon. Member for Penrith and The Border (Dr Hudson) earlier, when he suggested an SPS agreement as a way forward. Can we be clear that the Government are seeking an SPS agreement with the EU that differentiates the goods that are at risk of going into the EU, and those that are not?
Conor Burns
I must say to the right hon. Gentleman, whom I hold in high regard, that I was delighted that he was in Northern Ireland to hear first-hand some of the challenges Northern Ireland is facing. What we are seeking, as the Secretary of State, the Foreign Secretary and the Prime Minister have all made very clear, is to take the protocol back in its application to how it was intended. It says in the protocol that,
“the application of this Protocol should impact as little as possible on the everyday life of communities in…Northern Ireland”.
It also refers to,
“the importance of maintaining the integral place of Northern Ireland in the United Kingdom’s internal market”.
The disruption that the implementation of the protocol is having in Northern Ireland is not sustainable. That is why the Government are committed to finding a negotiated solution.
Tonia Antoniazzi (Gower) (Lab)
On inward investment, the realisation of the redevelopment of Casement Park, a third sporting stadium in Belfast, would give Northern Ireland the opportunity to host sporting events on an international stage and bring communities together. What input or influence, if any, have the Secretary of State and his Minister on that? Could the £1.2 billion that the Northern Ireland Executive have returned to the Treasury since 2016 be used to realise such projects for Northern Ireland?
Conor Burns
I welcome the comments from the Labour Front Bench. We look at a whole range of opportunities for investment in Northern Ireland, to give it the opportunity to attract inward investment and to host international events. That will be a core part of what we are able to do through levelling up, and it is a key thing that the Secretary of State and I have been driving through our city and growth deals to help Northern Ireland and communities in Northern Ireland to attract investment that creates jobs and prosperity, which is the best way to underpin peace.
Rob Butler (Aylesbury) (Con)
The Secretary of State for Northern Ireland (Brandon Lewis)
The Northern Ireland (Ministers, Elections and Petitions of Concern) Act 2022 was specifically designed to improve the sustainability of the Northern Ireland institutions. The benefits include allowing more time and space for the formation of an Executive following an election or the resignation of the First or Deputy First Minister.
Rob Butler
I was pleased to serve on the Bill Committee for that legislation, and it is now clear that it was timely, given the recent resignations of Northern Ireland’s First Minister and Deputy First Minister. Can my right hon. Friend assure me that he is emphasising to Northern Ireland’s political parties that they all need to play their part and work together to achieve stable devolved Government?
Brandon Lewis
Yes, I can give my hon. Friend that assurance. He is absolutely right. I continue to speak to a range of stakeholders, including the party leaders in Northern Ireland, about the importance of having a strong, functioning Northern Ireland Executive. A couple of them are in the Chamber now, and I have expressed to them my desire to have a First Minister and Deputy First Minister nominated now and after the May elections.
Stephen Farry (North Down) (Alliance)
The Government have been clear that they want to legislate for the language and culture package of New Decade, New Approach before the Assembly rises for the elections, which is only two weeks away. Is that pledge going to happen in the next two weeks?
Brandon Lewis
The hon. Gentleman makes a fair point. I am absolutely committed to ensuring that we deliver on our promise, as is the Prime Minister, as we set out last summer, and indeed that we deliver on all our commitments in the New Decade, New Approach deal, which brought Stormont back.
Mr Speaker
Before we come to Prime Minister’s questions, I would like to point out that the British Sign Language interpretation of proceedings is available to watch on parliamentlive.tv.
Mrs Pauline Latham (Mid Derbyshire) (Con)
The Prime Minister (Boris Johnson)
Never before has this House listened to an address such as the one given yesterday by President Zelensky. I want to tell the House that, working with our friends and allies across the free world, we will be doing even more in the coming days to protect the people of Ukraine. My right hon. Friend the Defence Secretary will set out more details for the House later.
This morning I had meetings with ministerial colleagues and others. In addition to my duties in this House, I shall have further such meetings later today.
Mrs Latham
My son Ben died of an aortic dissection at age 44, leaving a wife and two young children. It is a condition that kills 2,000 every year needlessly—more than those who die on the roads—yet most people do not know anything about it until it devastates their family, as it did mine. So many of these cases are preventable by identifying those at risk and through early and accurate diagnosis. Will the Prime Minister commend the work of the Aortic Dissection Charitable Trust in working with all aspects of the patient pathway for this condition? In particular, will he commit to public funding for research into the diagnosis of aortic dissection and into genetic screening for it?
The Prime Minister
May I first say to my hon. Friend how very sorry I am, as I am sure the whole House is, for the loss of her son Ben? She is a passionate advocate for this work, and I also thank the Aortic Dissection Charitable Trust. She is completely right that accurate and fast diagnosis and treatment is crucial, which is why I am pleased that the National Institute for Health Research is looking to do further work in this area, and my right hon. Friend the Secretary of State for Health and Social Care will meet her at his earliest convenience.
Keir Starmer (Holborn and St Pancras) (Lab)
The typical energy bill is going up by £700 next month, and that is because of pressures before Russia invaded Ukraine. What is the Chancellor’s solution? A forced £200 loan for every household, to be paid back in mandatory instalments over five years. The big gamble behind that policy was that energy costs would drop quickly after a short spike. That bet now looks certain to fail. When will the Prime Minister force the Chancellor into a U-turn?
The Prime Minister
My right hon. Friend the Chancellor has set out plans to help families with energy costs and unprecedented measures to abate council tax by £150, in addition to all the other schemes that we are putting forward. Yes, the right hon. and learned Gentleman is absolutely right that we need to meet the long-term impacts of the spike in energy prices, which is why I will be setting out an energy independence plan for this country in the course of the next few days, to ensure that we undo some of the damage of previous decisions—not least the Labour Government’s decision not to invest in nuclear—and so that we prepare our people for the long term, with a sustainable, cost-efficient energy supply.
Keir Starmer
I do not think the Prime Minister understands the mess he is in. Working families are facing a £700 spike in April. They will not even receive their £200 loan from the Chancellor until October. The wholesale price of oil and gas is now ballooning, so by October when the loan finally comes in, household bills are set to shoot up by another £1,000. It is a total mess, so I ask again: when is the Prime Minister going to force the Chancellor to U-turn?
The Prime Minister
If the right hon. and learned Gentleman is asking for the Chancellor to U-turn on the support we are giving families and households, I think that he is absolutely out of his mind. We are going to continue to give people support throughout this difficult period, as we did throughout the coronavirus epidemic, with unprecedented levels of support. We have a £200 discount on bills, a £150 non-repayable reduction in council tax, and £144 million extra to help councils support vulnerable families with their energy bills. Altogether, there is a £20 billion package of financial help that we are giving the British people, and we will continue to do more. A U-turn is the last thing we want.
Keir Starmer
We will see how long that position lasts. Let me try to help the Prime Minister by coming at this from a different angle. Before Russia invaded Ukraine, North sea oil and gas companies were making bumper profits. BP made £9.5 billion, Shell made £14 billion—in their own words,
“more cash than we know what to do with.”
Since then, the international price of oil and gas has skyrocketed, and so will their profits. When will the Prime Minister admit he has got this badly wrong, put a windfall tax on those super-profits, and use the money to cut household energy bills?
The Prime Minister
The net result of that would simply be to see the oil companies put their prices up yet higher and make it more difficult for them to do what we need them to do—which, by the way, I think they are doing very responsibly at the moment—which is divesting from dependence on Russian oil and gas. That is the way forward for this country: to take a sober, responsible approach to end our dependence on hydrocarbons altogether, particularly Russian hydrocarbons. We are taking steps to rectify some of the mistakes made by the Labour Government and have a long-term, sustainable, independent energy supply policy. That is what this country needs.
Keir Starmer
Protecting energy profits, not working people—doesn’t that say it all? Britain cannot afford another crisis like this. We need to improve our long-term energy security. That starts with supporting new nuclear and renewables, but the Conservatives have effectively banned new onshore wind. As a direct result of this short-sighted approach, we are using more gas every year than we import from Russia. That is ludicrous, so will the Prime Minister relax planning laws, end the block on onshore wind, and stop supporting policies that make us so dependent on foreign gas?
The Prime Minister
It is thanks to the policies that this Government have pursued that we are dependent on Russian gas for only 3% of our gas needs, unlike virtually every other European country. It is thanks to the massive investment we have made in renewables that we are—as I have said many times in this House—the Saudi Arabia of wind power, producing more offshore wind than virtually any other country in the world. By the way, this may be news to some of his party, but I think the right hon. and learned Gentleman just committed to supporting more nuclear power. Great news! There is more joy in heaven over one sinner that repenteth than over a hundred others. Those were the people who cancelled our nuclear efforts during the time they were in power—they did completely the wrong thing. I am delighted to now welcome them into the fold.
Keir Starmer
Come off it! Labour is pro-nuclear. This Prime Minister cannot get a single brick laid of a new nuclear plant. Energy security is not just about supply; it is also about reducing demand. Our housing stock is the least efficient in Europe. That is why Labour set out a plan to upgrade the 19 million British homes that desperately need it within a decade, saving families £400 on their energy bills and cutting UK gas imports by 15%, whereas all the Government have is a failed policy. Taking all their announcements together, it will take 75 years to deliver the upgrades that we need. That is a lifetime, when we need urgent action. When is the Prime Minister going to get on with it?
The Prime Minister
I just remind the House that under the Labour Government, our nuclear output fell from about 25% to 10% of our energy needs, and as I recall, that was because of the decisions they took. We are now going to rectify that. The right hon. and learned Gentleman asked about the cost of energy bills, and we are helping households with the cost of energy bills to the tune of £9.1 billion. Why can this Government afford to do that? Why can we afford to put huge quantities of taxpayers’ money into supporting households with their energy costs? I will tell you why, Mr Speaker: it is because we have the fastest growth in the G7. Do not forget that if we had listened to Captain Hindsight, we would have stayed in lockdown and never achieved it.
Keir Starmer
Twelve years in power and that is the best the Prime Minister can do. The Ukrainian people are fighting for democracy. We must stand with them, and that means taking the toughest possible measures against Putin. Let us be honest that there will be costs here at home. We can withstand those costs, and we must, by using a windfall tax to keep bills down for working people and by starting a new era of energy policy, never again at the mercy of a dictator, by supporting new nuclear after years of neglect, sprinting on renewables, including onshore wind, and having an urgent national mission to upgrade homes, ending years of dither and delay. Why is the Prime Minister offering the same failed energy policy that cast us into the security crisis and allowed bills to rocket? [Interruption.]
Mr Speaker
Order. I want to hear the answer. Standing up will not catch my eye; in fact, it has the opposite effect on me.
The Prime Minister
What we are junking is the failed energy policies that left us without enough nuclear power, and what we will do is go forward with policies that allow this country to be independent in our energy supply, maximising renewables, making sure that we use transitional hydrocarbons and going for nuclear as well. As I say, I am overjoyed that Labour now seems to occupy that position. What we will also do, and here the right hon. and learned Gentleman has been supportive, is ensure that as a House of Commons we work together to maintain our opposition to Vladimir Putin’s vile war in Ukraine. There, together with the toughest possible economic sanctions and by maintaining our military support for the people of Ukraine, I have no doubt that although there will be dark days ahead and difficult times, we will come through it stronger. I have no doubt that Vladimir Putin will fail and we will succeed in restoring a sovereign and independent Ukraine.
David Johnston (Wantage) (Con)
The Prime Minister
I thank my hon. Friend. He is a fantastic champion for his constituents in Wantage. As I understand it, the decision on the Abingdon reservoir has not actually been made, but we would expect Thames Water to consult further on the proposal. I know that it will have heard the points that he has rightly made.
Ian Blackford (Ross, Skye and Lochaber) (SNP)
We are now 14 days into Putin’s war. In that time, I have genuinely tried to work constructively with the UK Government and I will continue to seek to do that. Nobody should support the Government, however, when it comes to their response to the refugee crisis—760 visa approvals in two weeks is disgraceful.
In that time, Poland has taken over 1.2 million refugees, Hungary has taken over 190,000 refugees, Germany has taken over 50,000 refugees, Italy has taken over 7,000 refugees and Ireland—a country of just over 5 million people—has given sanctuary to three times as many refugees as the United Kingdom. Those numbers do not lie; they tell a devastating truth. Does the Prime Minister find it acceptable that his Home Secretary has overseen one of the slowest, most bureaucratic and incompetent refugee responses in the whole of Europe?
The Prime Minister
I think everybody sympathises with the plight of refugees. The Government want to do everything we can to welcome them and that is indeed what we are doing. The numbers are almost 1,000 as I speak to the right hon. Gentleman today, and they will rise very sharply. They are uncapped and we expect those numbers to rise to in the region of hundreds of thousands.
As Vladimir Putin doubles down in his attacks, we will go further and there will be routes by which the whole country can offer a welcome to vulnerable people fleeing from Ukraine. My right hon. Friend the Secretary of State for Levelling Up, Housing and Communities will be setting out that route in the course of the next few days. This Government have a proud, proud record. We have done more to resettle vulnerable people than any other European country since 2015.
Ian Blackford
I do not think the Prime Minister understands the scale of the challenge or the urgency. These are people fleeing war crimes, torn apart from their families as their homes are shelled, and the Home Secretary is blocking them with endless paperwork. That is not just incompetence; this is ideology. In the face of the biggest refugee crisis in Europe since the second world war, the UK Government will not set aside the hostile environment. [Interruption.] By the way, we are seeing the hostile environment this afternoon—Conservative Members might quieten down a bit.
We have seen that too many times from a Tory Home Office: the Windrush scandal, the “Go home” vans, and the inhumane Nationality and Borders Bill. The UK Home Office is raising barriers and bureaucracy when we should be offering care and compassion. I say to the Prime Minister that he should not let the history of failure repeat itself. Scotland stands ready to offer sanctuary and refuge, so will he join the rest of the European continent and waive the visa restrictions for refugees fleeing war in Ukraine?
The Prime Minister
This country has an unparalleled record—[Interruption.] Just since—[Interruption.] Since I have been Prime Minister, look at the numbers we have taken from Afghanistan and Hong Kong. The right hon. Gentleman lectures the Home Secretary, but this is a Government unlike any other: the Prime Minister, the Deputy Prime Minister and the Home Secretary are directly descended from refugees. We understand how much refugees have to give to this country and we understand how much this country has to gain from welcoming refugees. We will be generous and we are being generous.
What we are doing is making sure that, in those neighbouring countries, the UK is out in front giving humanitarian assistance and we are in every capital. [Interruption.] SNP Members laugh, they mock, they scoff, but this country is leading in every respect. We are also the single biggest donor of humanitarian aid to the Ukraine warzone—the single biggest donor—and the right hon. Gentleman should be proud of that.
Julian Smith (Skipton and Ripon) (Con)
The Prime Minister
I thank my right hon. Friend very much, and I thank him for all the work that he does in this area, but I hope he will have heard what I just said in my answer to the leader of the SNP, which is that this Government are I think unlike any other in our understanding of what refugees can give and the benefits to this country. We have done more than any other to resettle vulnerable people since 2015. There is a huge opportunity now for us to do even more. That is why my right hon. Friend the Secretary of State for Levelling Up will be setting out a route by which the British people—not just the family reunion route, which can run into the hundreds of thousands, but a route by which everybody in this country—can offer a home to people fleeing Ukraine. My right hon. Friend will be setting that out in the course of the next few days.
Sir Jeffrey M. Donaldson (Lagan Valley) (DUP)
The Prime Minister will be acutely aware of the pressures facing households across the United Kingdom, including in Northern Ireland, with the rapid increase in the cost of heating homes and running a motor vehicle. Heating a home has more than doubled for many households in Northern Ireland in recent weeks. Will the Prime Minister commit to bringing forward a package of measures designed to help households, including a cut in VAT on home heating fuel and reducing or cutting excise duty on fuel for motorists, and will he ensure that those measures apply to Northern Ireland, where the Northern Ireland protocol once again presents a problem in this Government taking control over the affairs of all of the United Kingdom? Will the decisions that the Treasury takes apply to the whole of the United Kingdom?
The Prime Minister
We will make sure that we do everything to support the people of the whole of the United Kingdom, including Northern Ireland, and we have already extended a further £250 million to help the people of Northern Ireland with the costs of living, particularly heating. As the right hon. Gentleman knows, excise on fuel has been frozen for the last 12 years. We will ensure that the people of Northern Ireland continue to be protected, along with everybody in the UK, from the cost of living crisis, but the House should be in no doubt that the pressures on energy will continue. We need a pan-UK solution, and that is what we are going to be setting out.
John Stevenson (Carlisle) (Con)
The Prime Minister
My hon. Friend is absolutely right that food security is a crucial issue. It is affected of course by the cost of energy, and the energy inputs into agriculture are certainly something that we need to address. There is also a separate issue to do with childhood obesity. The House passed measures already in the autumn—the ones to which he refers—and we are giving the industry more time to adjust to the impact of those measures.
Grahame Morris (Easington) (Lab)
The Prime Minister
We have an overall cap, and obviously EDF is incorporated differently in the UK from its incorporation in France. We will do everything in our power to abate the costs of energy across the country, as we already are, but what is needed is a short-term, medium-term and long-term energy strategy so that we have sustainable supplies.
Mr Richard Holden (North West Durham) (Con)
The Prime Minister
Yes, I am delighted that there will be a new hospital at Shotley Bridge, and I congratulate my hon. Friend on the work he has done to lobby for that. It proves that, in spite of the pandemic and in spite of war in Ukraine, this Government are getting on with the job.
Peter Dowd (Bootle) (Lab)
The Prime Minister
I thank the hon. Gentleman very much. I think everybody understands the anguish of people who have not been able to see their loved ones during the pandemic, and as he knows, we have relaxed the restrictions in care homes. I would be happy to offer a meeting between him and the relevant Health Minister to discuss his further concerns.
John Penrose (Weston-super-Mare) (Con)
The Prime Minister
Yes. I thank the House for what we have done to accelerate the economic crime measures. We will be able to whip aside the veil of anonymity. Ownership of the luxurious dwellings to which my hon. Friend refers will be exposed and, yes, we will be able to take away the ability to remain in this country.
Barbara Keeley (Worsley and Eccles South) (Lab)
The Prime Minister
I thank the hon. Lady very much and she raises an important issue. Clearly, the spike in energy prices is going to fall most heavily on vulnerable people such as the ones she mentioned, and we will certainly be looking at ways to abate their costs.
Paul Holmes (Eastleigh) (Con)
The Prime Minister
I thank my hon. Friend. He is a great champion for Eastleigh. The planning framework is robust and should ensure that quarries do not have an adverse impact on the environment or on health. I will ensure that he gets a meeting with the relevant Minister to discuss his concerns further.
Abena Oppong-Asare (Erith and Thamesmead) (Lab)
The Prime Minister
No, and actually the Kremlin has singled out the UK for being in the lead on global sanctions—[Interruption.] Yes it has, and in leading the world in defiance of the odious war that Putin is leading in Ukraine.
Greg Clark (Tunbridge Wells) (Con)
Yesterday, President Zelensky drew on the words of Churchill in this Chamber. As we salute the courage of the people of Ukraine, it reminds us that we can meet in freedom today only because of the courage of a generation of men and women who, in the second world war, defended us from annihilation. Among them is my friend Flight Lieutenant Colin Bell DFC, who flew his de Havilland Mosquito in 50 missions over Nazi Germany. Colin Bell is with us today. On Saturday, he celebrated his 101st birthday. [Hon. Members: “Hear, hear!”] Will the Prime Minister join me in wishing Colin a very happy birthday and thank him for what he did to allow us to be here today?
The Prime Minister
The whole House will want to join me in thanking Colin Bell and wishing him a very happy 101st birthday.
Brendan O'Hara (Argyll and Bute) (SNP)
The Prime Minister
I really do not think that that question reflects the views of people around the world. Nor does it reflect reality because this Government have done more than any other European country to support people by way of direct bilateral humanitarian aid, and we have two very generous schemes for allowing people to come to this country. This is a Government who believe in welcoming people fleeing from zones of conflict.
The Prime Minister
The hon. Member shakes his head. Look at our record. Look at what we have done just in the last two years. He should be proud of what we have done.
Paul Maynard (Blackpool North and Cleveleys) (Con)
We were pleased to welcome both the Prime Minister and the Secretary of State for Levelling Up, Housing and Communities to Blackpool the day after the launch of the levelling up White Paper. Will he meet me to discuss how we can ensure that Blackpool is not just a testbed for innovation in many areas of levelling up but a showcase for the impact that it can have on the community that I represent?
The Prime Minister
I thank my hon. Friend for his wonderful work in Blackpool for the communities he represents. It was fantastic to be with him and to see the extension and upgrading of the tram network in Blackpool, which will help to drive the economy and help to bring in high-wage, high-skilled jobs, in the way we hope to do across the whole of the UK as we get on with levelling up.
Ed Davey (Kingston and Surbiton) (LD)
In the months before world war two, the UK took in more than 60,000 Jewish refugees fleeing Nazi persecution. Over half a century ago, we took in more than 27,000 Ugandans expelled by Idi Amin. Since then, we have taken Tamils escaping civil war, Bosnians escaping genocide and Syrians escaping Assad. But this week, the Home Office turned away hundreds of Ukrainian refugees escaping Putin’s bombs because they did not have the right paperwork. Can the Prime Minister not see that that flies in the face of our country’s proud tradition of providing sanctuary? Since the Home Office is clearly not up to the task, will he send in armed forces personnel to speed up the process so that Ukrainian refugees can come here quickly and safely?
The Prime Minister
I thank the right hon. Gentleman very much. The whole House wants to do as much as we can as fast as possible, but what he says about the UK is, I am afraid, completely wrong, because we have visa centres open in Warsaw, Budapest, Prague, Rzeszów in Poland, Chi inău in Moldova, Bucharest and elsewhere. We have already got 1,000 people in under the existing scheme. That number will climb very sharply. Look at what we have done already—15,000 from Afghanistan, 104,000 applications from Hong Kong Chinese, and I think there were about 25,000 from Syria. No one has been turned away. That is simply—[Interruption.] We want to be as generous—[Interruption.] It is important to have checks. Let me make this point to the House because I think people need to understand.
There are some people who would like to dispense with checks altogether and simply to wave people through—[Interruption.] I hear the voices on the Opposition Benches, and I think that that is irresponsible and is not the approach that we should be taking. The Schengen countries have a different arrangement. We must be in no doubt, as I said in answer to a previous question, that the Kremlin has singled out this country for the approach that we are taking, and we know how unscrupulous Vladimir Putin can be in his methods. It would not be right to expose this country to unnecessary security risk and we will not do it. We are going to be as generous as we can possibly be, but we must have checks.
Shaun Bailey (West Bromwich West) (Con)
My community in Tipton came together on Sunday to commemorate the 100 years since the devastating explosion at the Dudley Port munitions factory and the 19 girls who were recklessly murdered by the owner of that factory. In the Black Country, it is vital that we acknowledge both the pride and the pain of our industrial heritage. May I ask my right hon. Friend, therefore, to reaffirm his commitment today to the Black Country to ensure that we honour the legacy of those girls from that factory in Dudley Port 100 years ago? The one way that he can do that for my community in Tipton is to come to Tipton to see that beating heart of the Black Country, and we will welcome him with open arms.
The Prime Minister
Long ago, when I was a reporter, Tipton was on my beat—many years ago—and wild horses could not keep me away from Tipton. I’ll be back.
Ronnie Cowan (Inverclyde) (SNP)
I have a constituent whose elderly parents are seeking refuge in the United Kingdom from Ukraine. Her parents are both in their 80s. They have made it to Hungary. They went to the visa application centre, as instructed by the Home Office hotline, and they were told, “Come back on 22 March.” Then, and only then, will their biometrics be processed. That is the harsh reality—no spin, no subterfuge. Prime Minister, when will refugees from Ukraine be welcomed into the United Kingdom?
The Prime Minister
I thank the hon. Gentleman. If he would be kind enough, I would be grateful if he passed me the details of the case that he mentioned and I would be happy to give it to my right hon. Friend the Home Secretary. We are moving heaven and earth, because we understand the value to this country of refugees. We also understand the imperative of helping people fleeing a war zone in terror. That is why the people of this country want to open their arms, and we are going to help them to do it with a new humanitarian route, in addition to the family reunion route that we have already set out. That family reunion route alone could bring hundreds of thousands of people here. I think the whole House understands that; we will do even more through the new humanitarian route.
Mr Speaker
That is the end of Prime Minister’s questions. Please leave quietly.
Ukraine Update
(2 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Defence (Mr Ben Wallace)
With permission, Mr Speaker, I would like to update the House on the situation in Ukraine and Her Majesty’s Government’s support to the Government in Kyiv.
The situation on the ground is grave. As we can recall, on 24 February, forces of the Russian army, unprovoked, crossed into Ukraine’s sovereign territory. Along three main axes, Russian armour has attempted to occupy Ukraine. Its plan was to reach and encircle Kyiv, encircle Ukrainian forces near the border and invade from the south to link up with its forces via Mariupol.
Russian high command committed 65% of its entire land forces, which are indisputably in possession of overwhelming firepower and armour. It is estimated that at the start of the invasion they had between 110 and 120 battalion tactical groups dedicated to the task, compared with approximately 65 in Ukraine. Their missile stocks gave them even greater strength to reach Ukraine at distance. However, what they did not and still do not possess is the moral component so often needed for victory.
After 14 days of the war, according to the Ukrainian general staff, at 6 March, Russian casualties were assessed to include 285 tanks, 985 armoured fighting vehicles, 109 artillery systems, 50 multiple launch rocket systems, 44 aircraft, 48 helicopters and 11,000 soldiers, who have lost their lives needlessly. There are numerous reports of surrenders and desertions by the ever-growingly disillusioned Russian army. To be clear, those are Ukrainian figures; I have to caution the House that we have not verified them by defence intelligence or other means.
I can announce to the House our assessment that, of the initial Russian objectives, only one has been successfully achieved. While Russian forces are in control of Kherson, Melitopol and Berdyansk in southern Ukraine, they currently encircle the cities of Chernihiv, Sumy, Kharkiv and Mariupol but are not in control of them. In addition, their first day objective of targeting Ukrainian air defence has failed, preventing total air dominance. The Ukrainian armed forces have put up a strong defence while mobilising the whole population. President Putin’s arrogant assumption that he would be welcomed as a liberator has deservedly crumbled as fast as his troops’ morale.
For our part, the United Kingdom continues to play a leading role in supporting Ukraine. On 17 January, I announced to the House the Government’s intention to supply military aid to the Ukrainian armed forces. The aid took the form of body armour, helmets, boots, ear defenders, ration packs, rangefinders and communication equipment, and for the first time it also included weapons systems. The initial supply was to be 2,000 new light anti-tank weapons, small arms and ammunition.
In response to further acts of aggression by Russia, we have now increased that supply. I can update the House that, as of today, we have delivered 3,615 NLAWs and continue to deliver more. We will shortly be starting the delivery of a small consignment of anti-tank javelin missiles as well. I want to assure the House that everything we do is bound by the decision to supply defensive systems and is calibrated not to escalate to a strategic level.
Britain was the first European country to supply lethal aid. I was pleased that not long after a military aid donor conference I held on 25 February, many more countries decided to do the same. From right across Europe, the donations came. In particular, I want to highlight the Netherlands, Sweden, Finland, Denmark, Poland, Romania, the Baltic states, Belgium and Slovenia for their leadership, and we should not ignore the significance of the German Government joining us, in a change of stance, and donating such aid.
Donations are not enough; the delivery of aid to the frontline is just as important. Here, again, Britain is leading, because alongside Canada, the United States and Sweden, we have invested in building Ukrainian military capacity since 2015, and we find ourselves able to co-ordinate the delivery alongside our partners.
As the conflict intensifies, the Russians are changing their tactics, so the Ukrainians need to, too. We can all see the horrific devastation inflicted on civilian areas by Russian artillery and airstrikes, which have been indiscriminate and murderous. It is therefore vital that Ukraine maintains its ability to fly and to suppress Russian air attack. To date, the international community has donated more than 900 man-portable air defence missiles and thousands of anti-tank guided weapons of varying types, as well as various small arms. However, the capability needs strengthening, so in response to Ukrainian requests the Government have taken the decision to explore the donation of Starstreak high-velocity, man-portable anti-aircraft missiles. We believe that this system will remain within the definition of defensive weapons, but will allow the Ukrainian forces to better defend their skies. We shall also be increasing supplies of rations, medical equipment, and other non-lethal military aid.
As with any war, the civilian population is suffering horrendous hardships. According to the Ukrainian Minister of Education, 211 schools have been damaged or destroyed, and media footage shows Russian strikes hitting kindergartens. The Chernihiv regional administration reported that the Russian air force was employing FAB-500 unguided bombs against targets in the city, and according to Human Rights Watch, civilians in Mariupol have now been without water and power for almost a week. President Zelensky talked of children dying of thirst. Today the estimated number of Ukrainian civilians killed or injured stands at more than 1,000, but the true figure is expected to be much higher, and I am afraid that worse is likely to come. It is for that reason that the UK will increase its funding for Ukraine to £220 million, which includes £120 million of humanitarian aid. That will make the United Kingdom the single biggest bilateral humanitarian donor to Ukraine. We are also supporting humanitarian work with the Polish and Romanian Governments on the borders.
As I said in my last statement, we still believe that it is worth trying to build diplomatic pressure on Russia. This week, my good friend the Prime Minister met the Prime Ministers of Canada, the Netherlands and Poland. He also spoke to the leaders of France, Germany and the United States, and the Prime Ministers of Hungary, Slovakia and the Czech Republic. The Foreign Secretary is in Washington at the G7, and also attended the NATO Foreign Ministers meeting earlier this month. I myself met the Ukrainian Ambassador just this morning. President Putin should be and can be in no doubt that the international community is united against his actions. It remains strong, and will not back down.
As well as giving direct military support to Ukraine, we continue to bolster our contribution towards NATO’s collective security. NATO Defence Ministers will gather next week in Brussels to discuss the next steps. The UK is doing its bit in giving military support and reassurance to its allies. We are currently supplying significant air power to NATO, including increased air patrols, with both Typhoons and F-35s for NATO air policing. We have also deployed four additional Typhoons to Cyprus to patrol NATO’s eastern border, and have sent an additional 800 troops to Estonia. Over the last week, Apache and Chinook helicopters were involved in exercises in Estonia. Meanwhile, HMS Diamond has sailed to the eastern Mediterranean, HMS Northumberland is taking part in a northern deployment, and HMS Grimsby is in the Norwegian sea supporting NATO mine countermeasures.
On Monday HMS Prince of Wales, RFA Tidesurge and HMS Defender joined HMS Albion and RFA Mounts Bay for Exercise Cold Response, a multinational exercise off the coast of Norway, and HMS Richmond will be exercising with our joint expeditionary force. We have put over 1,000 more British troops on readiness to support humanitarian responses in the bordering countries. Britain’s contribution to NATO is significant and enduring. It is important at this time that, in order to maximise our reassurance and resilience effect, we co-ordinate through NATO and the Supreme Allied Commander Europe.
Few of us will not have been moved by President Zelensky’s speech yesterday. His people are fighting for their very survival. His country is united against this aggression, and it is indeed his country’s darkest hour. Yesterday I saw footage of a Russian armoured train, bristling with guns, heading towards Mariupol. A single brave Ukrainian woman ran to the train and shouted “Slava Ukraini”—unmoved, unintimidated by the guns. That woman’s bravery should inspire us all.
I know that many of our constituents, and our colleagues, are fearful of what will happen next. President Putin and the Kremlin continue to threaten countries that offer help to Ukraine. Their military campaign will, I am afraid, become more brutal and more indiscriminate, but it is my firm belief that our strength to stand up to such bullying comes from our alliances. As long as we stand united, both as a House and as the international community, the Kremlin’s threats cannot hurt us. We should take strength from the peoples right across Europe who are standing shoulder to shoulder to protect our values—our freedom, our tolerance, our democracy and our free press. That is our shield.
John Healey (Wentworth and Dearne) (Lab)
I thank the Defence Secretary and his team for the way they have kept Members in all parts of the House updated and informed, and I thank him for his statement this afternoon. President Zelensky spoke for his country when he told us yesterday:
“We will not give up, and we will not lose.”—[Official Report, 8 March 2022; Vol. 710, c. 304.]
His address, like his leadership, was deeply moving and deeply inspiring. Ukrainians are showing massive bravery—military and civilians alike—and we must do all we can to support their resistance. The Government have Labour’s full backing for providing military and intelligence assistance to Ukraine to defend itself.
I welcome the Defence Secretary’s statement and the detail of the further weapons and equipment that Britain has been able to provide Ukraine to defend itself. I also welcome the role we are playing in co-ordinating help from other countries for Ukraine. Can I urge him to conclude the examination he is now giving to the provision of Starstreak missiles as quickly as possible? These are exactly the sort of ground-to-air missiles needed to defend against Russian air attacks. Can I ask him more broadly whether these supplies to Ukraine are coming solely from our UK stockpiles, or is the MOD also purchasing from other countries to respond to Ukrainian requests? Have other non-NATO, non-European countries with weaponry or well-trained air forces yet been involved?
It is clear that President Putin miscalculated the resolve of the Ukrainian military and the strength of his own Russian forces. He planned for a short campaign without the provision of logistics for protracted fighting and occupation. What is the MOD’s assessment of how far the Russians have now rectified this? I think the Secretary of State said 65%, but can he confirm what proportion of Russian forces that were on Ukraine’s borders and off her coast have now been deployed into Ukraine?
This is only still week two. Russia has such crushing firepower, and Putin has such utter ruthlessness, that we must expect more than one of his military objectives to be taken over the next few weeks. We must expect greater brutality, with still further civilian casualties. Our thoughts and prayers are with the residents of Kyiv and those other great Ukrainian cities as they face encirclement and bombardment from Russian forces.
Whatever the short-term gains Putin secures, we must make sure that he fails in the longer run through Ukrainian resistance, tougher sanctions, more humanitarian help, wider international isolation, justice for the war crimes being committed and, above all, lasting western unity. We must be ready to deal with the consequences of this invasion for many years to come. It is clear, however, that Putin has also miscalculated the international resolve to isolate Russia and the strength of western and NATO unity. Labour’s commitment to NATO is unshakeable, and the Government again have our full support for reinforcing NATO nations on the alliance’s eastern border with Russia. The Labour leader and I fly out tonight to Tallinn to reassure Estonia of the united UK determination to defend its security and to thank our British forces deployed there from the Royal Tank Regiment and the Royal Welsh battlegroup.
It was Labour’s post-war Foreign Secretary, Ernest Bevin, who was the principal architect of NATO and in particular of its article 5 commitment to collective defence. Today is the anniversary of Bevin’s birth in 1881, so today let President Putin be in no doubt that our commitment to article 5 is absolute. Let him not mistake NATO’s restraint for any lack of resolve. NATO’s response force has been activated, as the Defence Secretary has said, in response to this aggression. We welcome the detail of the UK’s contribution to that, but what role could the UK-led joint expeditionary force play? Is it not time for NATO to issue an initiating directive to the Supreme Allied Commander to plan future options as part of overhauling NATO, necessarily, for the decade ahead? Could the Defence Secretary also confirm what I think he said, which was that the 1,000 UK troops put on stand-by before the invasion are still in Britain and still on stand-by, and that we have received no requests for the humanitarian help that they were designed to respond to?
It is not the job of British forces to protect the failing Home Secretary or Border Force, especially at this critical time of conflict, but yesterday the Defence Secretary said that help for Ukrainians fleeing the war had “not been quick enough”. He also said that he was offering MOD assistance to the Home Office. Has this offer been accepted? Can he tell us what role military personnel will play, where, and for how long?
As we confront aggression abroad, we need to strengthen our defences at home. A national resilience strategy was promised a year ago. When will this be published? The integrated review, published a year ago, made the Prime Minister’s first focus the Indo-Pacific. It neglected the need to rebuild relations with essential European allies and the European Union, and it planned to cut the British Army still further. Will the Government now rethink such fundamental flaws in their integrated review?
Finally, if I may, Mr Speaker, we expect a big budget boost for Defence in the Chancellor’s spring statement in two weeks’ time. With Russia’s full-scale invasion of Ukraine, the Government must respond to new threats to UK and European security, just as Labour in government did after the twin towers attacks on 9/11. If the Government act, they will again have Labour’s full support.
Mr Speaker
I am going to make mention of this important issue: Front Benchers have to be in line with the rules, and I have to enforce the rules. The rule says five minutes, but that was seven. If you want me to grant urgent questions and if you want me to support statements, you have to work with me to ensure that we do not take the time from other agendas. I do keep clock of the time, and I do not want to get into an argument about it—the Labour Front-Bench spokesman took a lot longer. This is an important matter and I want to keep it on the agenda, but you need to work with me. Or change the rules and make my life easier!
Mr Wallace
Maybe I should apologise, Mr Speaker. I did not give the Labour Front Benchers long enough to examine the statement; it was fairly short notice for them. I think we hear you on both sides of the House, and you would not like me to take too long either—[Interruption.] Certainly those on the Labour Back Benches would not like that.
The right hon. Member for Wentworth and Dearne (John Healey) asked some important questions. I am grateful for Labour’s support for the position that the Government have taken on Ukraine. Our position mirrors that of the international community—not just NATO members but nations outside NATO such as Sweden and Finland. In answer to his question on the stockpile, we will currently take the supplies from our stockpile and we will backfill them from the manufacturer when and where we can. We already have some on order, so I can give him that assurance. I also ensure that we keep a basic level to ensure that we cover our own force protection as required. We will not leave our soldiers at risk in somewhere such as Estonia, specifically. Nevertheless, we will ensure that we calibrate that correctly.
On the MOD’s assessment of the Russian forces, over 90% of those forces on the border have now been committed to Ukraine and inside Ukraine. We also see media reports about Belorussian forces maybe, or maybe not, being primed. This has had an interesting effect on Belorussian forces, with reports of desertions and senior officers refusing to join the fight. There is also something very telling about Russia’s desperation at the moment. We have seen significant amounts of effort to try to bring the Wagner Group into Ukraine. The Wagner Group is the wholly unacceptable mercenary company responsible for all sorts of atrocities in Africa and the middle east. The fact that Russia is now trying to encourage the Wagner Group to take part in Ukraine is a telling sign. It does not give us any comfort but, nevertheless, it is a sign.
I went to Copenhagen last week to meet my Swedish, Lithuanian and Danish counterparts as they set off to join our enhanced forward presence in Estonia. The Danish sent a company of armoured infantry, which was escorted across the sea by a Swedish and Danish ship with air cover from Sweden. That JEF deployment is a good example of how, in the neighbourhood of the Nordics, we come together either bilaterally or multilaterally to make sure we provide greater defence.
After our meeting in Rutland a few weeks ago, we determined to have a longer programme of joint planning to make sure we maximise our capabilities, exercises and activity. We will see more of the JEF, and I am happy to continue keeping the House informed.
I am grateful for the reminder of Bevin’s birthday. As a Conservative, I will be forgiven for not knowing that date, but I always welcome being educated. I have some Labour supporters in my family, but I am not sure they would know he was born in 1881 either. Nevertheless, the commitment to article 5 is important. Yesterday I met my counterpart from North Macedonia, the newest member of NATO. Importantly, Britain is in NATO not for what we can get out of it but because we fundamentally believe in defending each other. Whether we are big or small, we all stand for the same values.
I promised to keep Members informed on Ukraine, no matter what happens. My team is available, as is the Chief of Defence Intelligence. I will happily do dial-ins and as many briefings as possible at both Privy Council and non-Privy Council level.
The right hon. Gentleman asked about the Home Office, and the offer has been accepted in principle. There is a meeting straight after this statement between Defence Ministers, Home Office Ministers and Foreign Office Ministers to make sure we co-ordinate our assistance in speeding up the visa process, which is incredibly important.
It is important not to mischaracterise the IR. The right hon. Gentleman has said this before, but the actual quote from the IR is that Russia is
“the greatest nuclear, conventional military and sub-threshold threat to European security.”
Strengthening Europe is critical to preserving our security and prosperity in the north Atlantic. The IR did not miss Russia. In fact, it squarely identified Russia as our main adversary. It would be wrong to characterise it as everyone going off to the Pacific. Looking at the balance of my investments as Defence Secretary, including in basing and expeditionary forces such as JEF, they are in Europe, and in northern Europe, too. That is incredibly important.
The Cabinet Office is in charge of the national resilience strategy, and I will pass on the details to the relevant Minister. Like the right hon. Gentleman, I look forward to reading that strategy.
Sir William Cash (Stone) (Con)
I congratulate my right hon. Friend, the Government and the Prime Minister on the manner in which they have conducted themselves in relation to this dreadful invasion of Ukraine.
I have just come back from a conference in Paris, where I had the honour of leading the European Scrutiny Committee’s delegation. All the countries of Europe appreciate what the United Kingdom is doing.
My son is currently doing humanitarian work in Poland and Hungary, and I trust that others will be able to do the same. This is important not only to our constituents but to fairness and justice in the world. I thank my right hon. Friend the Secretary of State for everything he has done.
Mr Wallace
I thank my hon. Friend for his kind comments. It is incredibly important that we recognise that this is not just a military response. The scale of the humanitarian crisis, which will only grow as Russia seeks to punish the innocent for having the temerity to stand up to it, means we all have to lean in as an international community. We have all received emails from constituents who want to help, and I urge colleagues to channel them in the right direction. Some of us are old enough to remember the Bosnia war, and I know from soldiers who were on the ground that lots of well-meaning people drove out there and put at risk both themselves and the forces whose job it was to protect them. We need to make sure the work is properly co-ordinated, and I will get details to hon. and right hon. Members so that they can point their constituents in the right direction.
Stewart Malcolm McDonald (Glasgow South) (SNP)
I thank the Secretary of State for advance sight of his statement. Like the shadow Secretary of State and the Secretary of State, I put on record how grateful we are to President Zelensky for taking the time to talk to the House yesterday. It is a moment that I am sure will stay with us all for a long time.
The statement says that the Secretary of State and the Ministry of Defence will explore the donation of new anti-air missiles. We urge them to conclude that as swiftly as possible and to ensure the missiles get to Ukraine as swiftly as possible. As the conflict continues, and it is now going into its third week, Ukraine’s needs will adapt and the support we give has to adapt, too. We have previously talked to the Minister for the Armed Forces about supplying satellite phones, which Ukraine identified as an urgent need two weeks ago.
As I understand it, the United States has declined to be involved in supplying jets from Poland, but the Department of Defence has said it will keep that under review. Is the Secretary of State part of that discussion? Given the new security and defence arrangements that were announced six or seven weeks ago involving Poland and Ukraine, how might we expect that to develop in the coming days?
Time is not on Ukraine’s side, and I appreciate the immense sensitivities around this. Like many others, I welcome the additional military aid, non-lethal aid, and humanitarian support. Of course, I also welcome all the efforts of our constituents up and down the land in supporting Ukrainians in their time of need.
What sort of changes can we expect to see in the forthcoming NATO strategic concept? For example, will the air policing mission be reprofiled as an air defence mission? Can the Secretary of State talk a bit more about what the House can expect?
We have tried to support the Government on Ukraine and in many other areas, and the Government have made that easy in many ways, but on refugees we stand out in Europe for all the wrong reasons. Although the Secretary of State’s Department is not responsible for refugees, I plead with him to fix it, and to fix it soon.
Mr Wallace
Like the hon. Gentleman, we are determined to fix it. My hon. Friend the Minister for the Armed Forces will have a meeting this afternoon on exactly this. We should not forget that the overall offer is generous: 200.000 places via the family route and unlimited places via the humanitarian route. The key is to speed it up to make sure that, when people arrive at the border, they are home and safe with their family as soon as possible. The Ministry of Defence will do everything to support that.
I do not have access to the discussions on jets from Poland. I have said publicly that the position of the United Kingdom Government is that it is for the Polish Government to decide on the calibration of their aid to Ukraine but, as an ally and friend, Britain will stand by whatever decision they make. Poland is, of course, on the frontline, and I hope that any consequence is positive, but we never know with President Putin.
It is important to give Poland the reassurance and the space to make this decision but, fundamentally, the Ukrainians need to be able to take action against artillery at deep ranges, which can be done with unmanned aerial vehicles, and to protect their airspace, which can be done with the missile systems we are providing. The only lag with the missile systems is that, as they get more complicated, people need training.
How and where we deliver that training is obviously sensitive, but we have to make sure it is rolled out into Ukraine. These valuable pieces of equipment need to be positioned in the right places to make a difference. One reason why I wanted to come to the House as soon as possible, although we are going to do it in principle, is so that the House has the earliest warning possible.
The hon. Gentleman made an important point about NATO’s strategic concept, and I will also be asking questions about what happens now. There are questions for NATO on both the short term and the long term. In the long term, after Ukraine, what are we going to do to contain Russia and to provide reassurance and resilience to our neighbours and fellow NATO members who will need it? At next week’s meeting, I will start the process of indicating to the Supreme Allied Commander Europe that I would like to see him start planning for containment, if that is one of the options post Ukraine. I will ask what that looks like in the 21st century.
Dr Neil Hudson (Penrith and The Border) (Con)
I thank my right hon. Friend for his statement and for all that his Department and our incredible armed forces are doing at this time to help the people of Ukraine. The humanitarian crisis is worsening hour by hour. Will he assure my constituents and people across the UK that the UK is doing everything it can, on a cross-government basis, to widen and accelerate the visa system, cut through the red tape and work practically and compassionately with our partners in Europe to offer sanctuary and aid to as many Ukrainian people as we can, as quickly as we can?
Mr Wallace
My hon. Friend will have heard my answer to my Scottish National party colleague the hon. Member for Glasgow South (Stewart Malcolm McDonald), and the Minister for the Armed Forces will be happy to brief my hon. Friend once those meetings have taken place to update him on the assistance the MOD can give.
Derek Twigg (Halton) (Lab)
I thank the Secretary of State for the regular and excellent updates and briefings we have and for the hard work he is putting in on Ukraine, within the constraints he has to work within. However, I do think it is a strategic mistake that when confronting a tyrant we tell him what we will not do. If Putin remains in power, we will have to confront him at some point militarily. We should be aware of that and get it out in the open. But my question is: what level of slaughter of Ukrainians are we willing to see before NATO and the west intervene militarily in Ukraine, such as by ensuring safe areas in western Ukraine?
Mr Wallace
I am grateful to the hon. Gentleman for that. It is a difficult balance as to when we tell people. In effect, I have to come to this House to get policy permission from you before we take a different step on the weapons systems, and that is the right thing to do; we have to make sure that this is calibrated into the right process. It is important with Putin, especially as he would seek to discover things and potentially use them to escalate, that we are up front and transparent about what we are going to do, so that he cannot try to repackage it as a major strategic issue. This is not an easy line; on the one hand, I would be happy sometimes to do this, but the decision is about bringing the House with us and making sure that people understand. I do not think there will be a tactical difference on the ground because I have come to the House today to tell people in advance that this is happening. Russia now has a serious problem with the international community’s donations, which are at a large scale, whether we are talking about anti-tank or Stinger missiles. It has had to change its tactics as a result. It would be wrong for Putin to characterise this as anything other than our responding to its change in tactics, but we are making sure that he does not get impunity to bomb people from the air and kill innocent victims. On the other issue, associated with humanitarian corridors and no-fly zones, we have to be careful. We would have to enforce them and in thinking about enforcing them, we have to recognise the knock-on effects and whether we trigger a wider war in Europe.
Mark Pritchard (The Wrekin) (Con)
I thank the Defence Secretary and all the ministerial team for working so hard on this, and I thank all those in the main building and those in uniform throughout our armed forces for responding so well to the war in Ukraine. He mentions just over 3,600 new, light anti-tank weapons. They have been put to very good use, as he will know. Will he reassure the House that that supply will continue, and at pace? Secondly, he mentions consideration of surface-to-air missiles and the system Starstreak. How long will that decision-making process take?
Mr Wallace
First, the decisions have been made in principle that we will provide them, which is why I came to the House. We have to make sure that we provide people with the training and capability to deliver that. I thank my right hon. Friend for the effort he put in, working with the Speaker, to deliver the speech yesterday by President Zelensky. I cannot tell the two of you how important it was to hear from a man who is clearly leading his country from the front, but who is also under tremendous personal threat from Russia.
Layla Moran (Oxford West and Abingdon) (LD)
First, I thank the Defence Secretary for the approach he takes, being the calm voice of competence that we want to hear in this crisis. He should not have to intervene in the Home Office, but I am glad that he is doing so and I thank him for stepping up where his colleagues are failing again. He will know that this is not just the right thing to do, but strategically the important thing to do, because Putin is counting on Europe not getting the refugee crisis right. That plays into his hands in the medium term and longer term. Does he agree with my concern that if we do not get a grip on the refugee crisis soon, across the whole of Europe, including in this country, we could well be playing into those fears?
Mr Wallace
I am grateful to the hon. Lady for her comments. One of the most important things is recognising that President Putin and, as we saw, the President of Belarus, used migrant flows deliberately to divide and put pressure on our system. That is why when they did that in Belarus, with the Belarusians literally shoving people through fences a few months ago, we sent 100 Royal Engineers to assist the Poles to manage that issue. It is incredibly important that we all think about what happened. Many of us who were warning about what Russia was going to do warned a number of countries on this. Indeed, I said to the EU, “Where you can add value is to plan for mass refugees in a way that we have not seen since the war.” That is really important. That is where the EU is at its best, in co-ordinating the non-military responses. It has done well, but it is not shielded from the criticism as well. We all have to do this internationally and do it better. We have to do the visa bit faster. My colleagues are absolutely bringing to bear those assets from the MOD, but we should also remember that we act as a team; I am not intervening in the Home Office. Government is a team and we are working together as a team to deliver that.
Mrs Flick Drummond (Meon Valley) (Con)
Although Putin has committed almost all the forces he had pre-positioned, we know that he has more modern equipment still to deploy. Are we able to determine whether those additional forces are ready to deploy?
Mr Wallace
First, let me say that Putin has deployed some of his most modern equipment. He has “gone all-in” and played his full hand. Members will have seen only recently an SA-22 or a Pantsir anti-air medium-range missile system that has been defeated by the mud of Ukraine; it has a burst tyre and it is stuck in the mud. Putin has gone all-in and risked some of his most important equipment. He is using significant numbers of his missile stocks and he is taking a huge risk around the wider boundaries of Russia, which he is now leaving thinned out in terms of defence.
Kevin Brennan (Cardiff West) (Lab)
There was a report from Reuters yesterday that dozens of former Paras have signed up for the Ukrainian foreign legion and that hundreds more are expected to do so. Will the Defence Secretary give the House absolute clarity on the UK Government’s position in relation to those volunteers?
Mr Wallace
The Government’s position is: if you are a serving member of the armed forces, you will be breaking the law. There were reports in the weekend newspaper about three members who had gone AWOL over the weekend. They will be breaking the law and they will be prosecuted when they return for going AWOL or deserting. For others, as the Government’s travel advice is “Do not go to Ukraine”, we strongly discourage them from joining these forces. My experience, having been Security Minister, is that where people went off to join the YPG and other organisations it did not end well. It is also the case, as a number of these people are now discovering, that the Ukrainians are very clear in saying, “You turn up, you are in it for the whole game. You are not in it for a selfie and six weeks. You are in it for real.” I think we have seen already some people at the border decide that that may not be the right option to follow.
Sir Roger Gale (North Thanet) (Con)
I understand that it would be possible, at very short notice, to reopen Manston airport in Kent to fly out humanitarian aid such as pharmaceuticals and to fly in refugees, who could then be processed at Manston barracks. That would require the co-operation and effort of the MOD and of the Department for Levelling Up, Housing and Communities. I am not asking for a guarantee now, but will my right hon. Friend speak to the Secretary of State for Levelling Up, Housing and Communities and Minister for Intergovernmental Relations, the right hon. Member for Surrey Heath (Michael Gove) to see what possibilities there might be there?
Mr Wallace
I am grateful for my right hon. Friend’s question. At the moment, we have the capacity we need, and the landing slots and landing fields we need to deliver whatever we need to do. If, however, there is greater pressure, I would be delighted to talk to both him and the Levelling Up Secretary to see whether we can take advantage of my right hon. Friend’s kind offer.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
I thank the Secretary of State for all he is doing and the compassionate way he is doing it.
My question relates to a constituent, and although the issue is not necessarily the Secretary of State’s departmental responsibility, I would be grateful if he could follow it up. Four weeks ago, my constituent, who lives in the Donbas, drove across the country and managed to get through to Poland. He has been waiting for a visa for his wife and their infant daughter for the past four weeks and has heard nothing from the Home Office. He is running out of money and wants to get home with his family. Will the Secretary of State please urge the Home Office to do its job?
Mr Wallace
If the hon. Lady gives the details to my Parliamentary Private Secretary, my hon. Friend the Member for Stourbridge (Suzanne Webb), I will be happy to make that representation to the Home Office.
Mr Peter Bone (Wellingborough) (Con)
I thank the Secretary of State for coming to the House again to keep us informed. He was right when he said that the whole House was moved by the President of Ukraine’s address yesterday. The President of Ukraine has spoken again today and is desperate for aircraft to protect women and children from being bombed and killed by Russians. Poland has acted, but there is a hold-up because of the response from the United States. The Secretary of State touched on this earlier, but will he be clear that he supports what Poland is doing? Will he pressure America to support that action?
Mr Wallace
I shall say two things in response to my hon. Friend. First, I support the steps to allow Ukraine to continue to fly in its own airspace—its sovereign airspace—to deliver military effect against the massive amounts of Russian artillery that are indiscriminately killing and bombing places around the country. That is one reason why a no-fly zone is a problem, because it would mean that both sides do not fly. The first thing is that we need to protect Ukraine’s anti-air capability.
Secondly, what are the most appropriate tools? Obviously, the Ukrainians know and have said what they wish for. We have acted when they have asked us, which is why the new missiles we are talking about today are coming forward. It is a matter for Poland—I have said I will support whatever its choice is—and in the meantime we will continue to try to meet the outcomes that Ukraine wants with whatever methods we can.
Alan Brown (Kilmarnock and Loudoun) (SNP)
I am sure the Secretary of State would agree that, rather than getting to the stage at which we might need to rely on MOD assistance to get refugees here, it is better to get people here to the UK while they can get here. It is the same with humanitarian aid: we have the bizarre situation in which people who are displaced in Ukraine may need to use humanitarian aid, yet they could already be here in the UK where they have family members. If the UK is not going to lift the visa requirements for Ukrainians who come here, surely under the existing scheme, which applies to the family members of British and Ukrainian people who already live in the UK, we can use the information we have here, bring the people here and then process them and do the security checks while they are safely here in the UK, rather than wasting resources in Ukraine that could be better deployed elsewhere.
Mr Wallace
It is possible to do both. We can process them very quickly out there, and the key here is to—
Mr John Whittingdale (Maldon) (Con)
Three years ago, I visited Mariupol with my right hon. Friend’s predecessor, Michael Fallon, and we heard the Ukrainian armed forces’ appreciation of the help we were already giving them then through Operation Orbital, so I strongly welcome my right hon. Friend’s announcement today. Does he agree with the Secretary-General of NATO that the sight of bodies lying unburied on the streets in Mariupol is credible evidence that Russia is guilty of war crimes?
Mr Wallace
As I have previously reported, the International Criminal Court has opened an investigation. A number of countries, including Britain, are collecting evidence—Canada is taking quite a strong lead—and it is important that we follow the evidence. The open-source reports of not only civilian bodies but Russian dead abandoned by their own forces show a crime in itself. What a disgrace that the Russian generals have abandoned those young men who have been killed. The leadership of the Russian army deserve to be in court for betraying their own soldiers and, at the same time, for what they are doing to the civilians of Ukraine. They are criminally responsible and I hope they face justice.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
I thank the Secretary of State for updating us on the UK’s actions in support of the Ukrainians’ heroic defence of their country. He will have noted that his update was received much more warmly than that given by the Home Office yesterday, and with good reason—I do hope that Home Office Ministers have noted that as well. We must act on all fronts. The need for humanitarian assistance is overwhelming. Will the Secretary of State say a little more about the 1,000 UK troops who I understand from his statement are still on stand-by to provide humanitarian assistance? Where are they and under what circumstances will they be deployed?
Mr Wallace
We have not yet had any request for humanitarian support from neighbouring countries. As soon as they do request support, we will be happy to deploy those troops to help in that process. We have a NATO meeting next week, when perhaps those things will come to the fore, but that is what those troops are there for—they are earmarked to do exactly that.
On the hon. Lady’s point about the Home Office, having been a Home Office Minister and having sat in opposition across from Labour party Home Secretaries, I know that it is never an easy job in the Home Office. It is never a popular brief, and questions are never kind.
James Sunderland (Bracknell) (Con)
I thank the Secretary of State for his bold and forthright leadership and pay tribute to all those in the MOD, Foreign, Commonwealth and Development Office and beyond who are burning the midnight oil. The level of operational detail in the statement was unprecedented, for which I am grateful. The Secretary of State will know the importance of close air support in a tactical environment. What is being done specifically to support the Ukrainian air force?
Mr Wallace
I am grateful to my hon. Friend. First, there are the high-velocity missiles to assist the Ukrainian air force to fly freely in the airspace. Also, one way the Ukrainians are delivering close air support—or, actually, fires in depth—is through the Turkish TB2 unmanned aerial vehicles, which are delivering munitions to their artillery and, indeed, their supply lines, which are credibly important, in order to slow down or block the Russian advance.
Jim Shannon (Strangford) (DUP)
I thank the Secretary of State very much for his statement, for his clear commitment to donating military equipment to the Ukrainians, and especially for the Starstreak anti-aircraft missiles that will down even more Russian aeroplanes and helicopters—we look forward to that.
On support for Odesa, which is the last Ukrainian port that is open for Ukrainians to use—they severely damaged a Russian ship just this week—will the Secretary of State outline what naval support and capability is available to keep that last Ukrainian port open for what is undoubtedly the next step in the Russian war of aggression?
Mr Wallace
The hon. Gentleman makes an important point about the southern flank. The south is the one area where the Russians have made advances, obviously using Crimea, which they illegally annexed in 2014. That part of the sea, both around Odesa and elsewhere, is heavily mined. That has helped Ukraine to defend its coastline; in fact, we can assume that the ship on which the media are reporting was hit by a mine, although that is unverified. Of course, the Russian navy is blockading those ports, which gives the Ukrainians limited capability to take on those ships. If there are ways in which we can help them to do that, we will explore them.
Robert Halfon (Harlow) (Con)
I have huge respect for my right hon. Friend and his team for the way they have conducted themselves in this awful situation. Understandably, my Polish constituents are incredibly worried because of Putin’s expansionism and the threat to Poland. I hope my right hon. Friend will agree that Poland is making a huge humanitarian effort, supporting hundreds of thousands of refugees and proposing military support. Will he continue to ensure that Britain throws a protective arm around Poland, given the risks that that plucky country faces? I understand the position that my right hon. Friend set out earlier, but if Putin starts to carpet bomb across Ukraine, will he and NATO reconsider the issue of a no-fly zone?
Mr Wallace
On a no-fly zone, we have set out our position, and I am not going into hypotheticals and what-ifs. Nevertheless, at the moment the balance is that I do not think it would suit the Ukrainian disposition, given the amounts of heavy armour and missiles in the Russian stocks. The Russians have a massive advantage with shells and missiles, and they would not stop in a no-fly zone, whereas the few things that the Ukrainians have to reach the Russians at depth are in the air, and one of them would be hampered.
On the resilience and support to Poland, we put 150 soldiers out there and 100 soldiers when the Belarusian migrant crisis was happening. We have nearly 700 soldiers there now helping the country in terms of resilience and, indeed, with humanitarian issues, if needed. I spoke to my Polish counterpart yesterday, and I am hoping to visit next week. We will also look at air defence requests from Poland to protect its airfields. It has been an ally for more than 150 years. We stand absolutely by Poland, shoulder to shoulder. When it comes to military requests, it is really important that we put the military equipment where it makes a difference and where the Supreme Allied Commander Europe wants it. There is often a danger in these events that we spread our forces all around for reassurance, but do not necessarily achieve the military tasks that we need to achieve.
Liam Byrne (Birmingham, Hodge Hill) (Lab)
I, too, want to thank the Secretary of State for Defence. It is now very clear that we need to re-contain Russia, which will mean resupplying Ukrainian forces, refortifying our frontline, and, crucially, repressing the Russian economy. At the moment, nobody can recognise the 275 figure that is being used for the number of sanctions that have been issued. The Foreign Affairs Committee yesterday heard evidence that the Government simply were not ready. Even today, the family of the founder of the Wagner Group have still not been sanctioned here, even though they have been sanctioned in Europe. When the Secretary of State sees the Foreign Secretary later today, can he ask her to get her act together?
Mr Wallace
I would have to have pretty wide eyesight, as my right hon. Friend is in Washington at the moment, but if I had some massive binoculars, I would definitely pass on the message. I am happy to try to get to the bottom of all the figures. On the amount of money that has been sanctioned, the statistics that I had was that the UK has frozen more funds in London than Europe and the United States, and that matters. The construct of sanctions are different in different countries, but I would be very happy to look into that. I do not think that there should be any hiding place—and nor does the Foreign Secretary—for any of these Moscow hoods who are running around, including the dreadful Wagner Group.
Mr John Baron (Basildon and Billericay) (Con)
In commending the Government for their robust response to this dreadful invasion and notwithstanding existing levels of support and our article 5 commitment to NATO, the Government are right to rule out a no-fly zone and also to emphasise that it is a difficult balance to ensure that any defensive support is calibrated not to escalate matters to a strategic level. With talk of Polish jets being donated in mind, what assurance can my right hon. Friend give that, whatever the outcome, this will achieve the right balance, because a wider war would not serve the interests of any population, let alone Ukraine?
Mr Wallace
My hon. Friend makes some wise observations. Just on the jet issue, and on all lethal aid issues, it is, in a sense, for each individual country to make the unique choice that it has to make. I have the duty of defending this wonderful nation, and it is those people for whom I have to answer, and we have to calibrate our action as suits. If the Polish Government feel that the security threat is so acute that it requires them to do that, I would fully understand their decision and stand by them. Let us remember that the countries that will face the direct consequence of a successful Russia over Ukraine are the bordering countries, because we know that, in Putin’s mind, some of those are not genuine countries and some of those countries are the very places that he historically feels should either be punished or, indeed, coerced into his way of thinking.
Hilary Benn (Leeds Central) (Lab)
I echo the thanks to the Secretary of State and his team. Will he pass on the House’s thanks to all his teams who are making this happen? On the Polish jets issue, it is, of course, a matter for Poland. Given that we are giving man-portable air defence systems and anti-tank weapons, does he regard the gift of aircraft as a defensive system, which is the word that he has used in his statement?
Mr Wallace
I think it depends on how those aircraft are used. If they are used as close air support to Kyiv, then it is obviously defensive. If a country is seeking to enter another sovereign territory, like the Russian air force is, then it is not. That is important to recognise, but, I am afraid, as I have said, it is a deeply bilateral decision for those countries. As a friend and ally to Poland, we would stand by its decision.
Sir Desmond Swayne (New Forest West) (Con)
He was warning for months precisely what was coming. Why did we not use the time that he gave us to forward deploy resources to deal with the inevitable flow of applications from refugees?
Mr Wallace
I do not know quite how to answer that question; the important thing is that we will fix it in the here and now.
Patrick Grady (Glasgow North) (SNP)
How much of the MOD spending in response to the crisis will be accounted for as official development assistance? What impact has the Government’s decision to slash the aid budget and abolish the Department for International Development had on their ability to co-ordinate the humanitarian response?
Mr Wallace
I am not sure the Government’s decision to abolish DFID affected President Putin’s judgment one bit.
Tim Loughton (East Worthing and Shoreham) (Con)
I applaud the personal lead being taken by my right hon. Friend and the strong role of the MOD and our forces. This morning, the Home Affairs Committee took worrying evidence from the Ukrainian ambassador and Ukrainian support groups. May I make two requests from that? First, it is reported that there are many thousands of unaccompanied Ukrainian children across the border, who have been taken there for safety, and that the number is growing. Can he make the offer that, when the welcome humanitarian and military supplies go in in military planes, he includes personnel from the Soldiers, Sailors, Airmen and Families Association, the largest employer of social workers, to help with the safeguarding worries that are now occurring on the border, and preferably bring the children back to the UK and do the checks that may need to be done? We do not need to change the law to grant them a six-month visitor visa at the very least.
Secondly, my Ukrainian constituents tell me that their friends in Ukraine are ordering over the internet body armour from British companies, because they are desperately short for their reserve and volunteer forces. We need to do more to help equip those people who have bravely gone to the frontline as part of the standing military and do not have the sort of kit that we would expect.
Mr Wallace
On that last point, included in the increased package is more body armour, alongside what was donated by many countries in the conference in February. I am slightly in danger of entering into Home Office questions here, although I know that they took place yesterday. Although I was a Home Office Minister, one of the greatest delights was not being the immigration Minister, but the security Minister. All I will say is that I understand the feeling in the House, so does the Home Secretary and so does the Prime Minister, and we are working to resolve that matter as quickly as possible. As for the internal details of different immigration schemes, I gently refer my hon. Friend to the Home Office.
Madam Deputy Speaker (Dame Eleanor Laing)
I will protect the Secretary of State from the temptation to stray outwith his own territory.
Barbara Keeley (Worsley and Eccles South) (Lab)
I, too, give my thanks to the Defence Secretary for his work and that of his team and for his compassion. I am afraid that I am going to raise another visa issue with him. My constituent is trying to get his young niece to the UK after she fled her home in Ukraine. After endless bureaucratic checks and delays, they have been told today that she has to travel nearly 300 km across Poland to get the decision on her visa. The Defence Secretary will understand that refugees such as my constituent’s niece have already made long and challenging journeys from Ukraine to Poland and now have to make more journeys just to get the decision. My constituent calls the Government’s approach to people fleeing the war in Ukraine “inhumane”. Given the meeting on the visa process that the Secretary of State mentioned, can he press on the Home Secretary the need to offer a compassionate and human response to refugees fleeing the war in Ukraine?
Mr Wallace
I do not want to run the risk of making you angry, Madam Deputy Speaker, so I will say that I would be delighted to pass that case to my Parliamentary Private Secretary and press the Home Office to resolve it. If I indulge myself here, Madam Deputy Speaker will rule me out of order, because this is a question about the Ukraine situation through Defence.
Madam Deputy Speaker (Dame Eleanor Laing)
The Secretary of State is steering a careful and wise course, and I will endeavour to help him in doing so, but it is the case that the Government are acting as one, and we all recognise that.
Bob Blackman (Harrow East) (Con)
President Putin was clearly counting on a quick victory, so I congratulate my right hon. Friend not only on his statement, but on the far-sighted view of training Ukrainian troops and, indeed, on supplying defensive weapons. What assessment has he made of the effectiveness of both that training and the defensive weapons in theatre, which, of course, can never be tested except in theatre?
Mr Wallace
There are two parts to that question. Whatever happens, one will be the lessons that we need to learn for our own defences and our own capabilities. It is absolutely the case that one of the other assumptions that President Putin made was that the Russian army was invincible. For all the money that was spent, it did not really matter about the people in that army and it did not matter about battle preparation and all the things that we do to prepare people to go to war. Russia did not do that, and some of those so-called invincible weapons are now being taken apart by handheld weapons, some of which are provided by Britain. That is not something to gloat about. In the end, this is about the loss of human life. None the less, we can be proud that Britain followed up its determination to stand up for its values and its allies by supporting them with hard power as well as soft.
Stephen Flynn (Aberdeen South) (SNP)
In terms of the military response, the Secretary of State can and must be wholeheartedly commended. However, I do not necessarily share his enthusiasm for the Government’s humanitarian response. Indeed, I spoke with my constituent Mariya this morning, whose family in Poland cannot even get clarity from the Home Office on whether they should continue with pre-existing visitor visas or go for a family visa. Quite simply, it is a shambles. When the Secretary of State meets the Home Office this afternoon, can I ask him, for want of a better phrase, whether he will stick a rocket right up the Home Office?
Mr Wallace
On the immigration pathway, the overall number of 200,000 for family and uncapped for humanitarian is a good thing. The fact that Britain is the biggest single donor to humanitarian aid is a good thing. We should not underplay those two facts. I understand the frustration among both Ukrainians trying to flee and Members of this House about the speed of that processing. I said yesterday that the MOD will support the Home Office as requested; it has agreed in principle and we have work on today to make that go quicker.
Dr Andrew Murrison (South West Wiltshire) (Con)
Exercise Cold Response and the reinforcing of Tapa camp are welcome and will reassure our Scandinavian and Baltic colleagues, but what is being done specifically with Lithuania? It is very much at risk, since Putin’s next move might very well be an attempt to link Russia proper with the Kaliningrad oblast.
Mr Wallace
My right hon. Friend raises an important point. That is why some of these countries must take some of their decisions bilaterally, because they will face the consequences of a successful Russia in Ukraine and what will happen next. That is why we have paid extra attention to the Baltics. The right hon. Member for Wentworth and Dearne (John Healey), the shadow Defence Secretary, is going today to Estonia; I was happy to facilitate that, and I will do likewise for Scottish National party Members they wish to visit. It is important that we work through the Balts together. There are, I think, four enhanced forward battle groups there and we must ensure they are well co-ordinated. For a time, we put some of our Apaches through Lithuania. As my right hon. Friend points out, though, we are acutely aware that the area called the Suwalki gap, between Belarus and Kaliningrad, could be exploited for Russia’s purposes.
Mr Ben Bradshaw (Exeter) (Lab)
At the risk of destroying the Defence Secretary’s career, the reason he is getting so many questions on refugees is that hon. Members on both sides of this House wish he were in charge of the Home Office. Leading on from the question by my hon. Friend the Member for Halton (Derek Twigg), how confident can the Secretary of State be that, if we do not confront Putin more directly now in Ukraine, we will not have to do so next month or next year, somewhere else in Europe?
Mr Wallace
I am afraid that is the $60 million question. We must all be mature about how we work that out, through analysis and through talking to people who understand it. There is no easy answer. Is Putin acting irrationally? Yes, he is; why would he have done this? Is he acting out of an ambition far beyond his perceived threat of NATO? Yes, he is; he has written about that himself and made speeches about it. Does he take a view that there are a number of countries in NATO that do not really belong in NATO? Yes, he does. That is very dangerous for the west, and I say with all passion that we must work at ensuring that we keep our alliances completely strong. That is the thing that makes a difference to him, plus the economic sanctions and the fact that his legacy now is that he is done. If he is going to make a mistake, it is to pretend that somehow his political reputation can survive this. If he wanted to further Russia, he has damaged it and sent it backwards. If he wanted to further his case as a great leader, he is now contained in a cage of his own making.
Sir Robert Neill (Bromley and Chislehurst) (Con)
I will briefly join the queue of those expressing our thanks that the Secretary of State and his Department are now involved in trying to sort out the very sorry process in relation to visas. I will perhaps use the good offices he has suggested to take up a particular case.
Returning to the issue of evidence gathering of war crimes, however, is it not important for future deterrence of not only Putin, but the rest of his regime, that it is clear that we are deadly serious about the gathering of evidence on war crimes? It may take many years before we are in a position to prosecute them, and it may be necessary to look, as some have suggested, at a dedicated international criminal tribunal to deal with jurisdictional issues. Does the Secretary of State agree that it is important that we send a message that we are not going away on this—that we will amass the evidence and, however long it takes, we will pursue not only Putin, but those responsible right down the chain of command, and that when his regime falls, as Milošević’s did, the democracies of the world are coming for him?
Mr Wallace
I agree 100% with my hon. Friend. My hon. Friend the Minister for the Armed Forces met the International Committee of the Red Cross only last week to discuss exactly that. It is absolutely right that they should know that the long arm of justice will follow them forever. My hon. Friend said something else important: this cannot be swept away by one man in the Kremlin. Right down through the chain of command, right now, those commanders sending those young men to their deaths must also face justice, military or international.
Matt Rodda (Reading East) (Lab)
I thank the Secretary of State for the calm and professional approach he has taken to this difficult issue, and for the pressure he is applying to the Home Office to speed up the fair treatment of refugees. Will he also speak to other Government Departments about the lengthy delays that some medical convoys are facing? I have had approaches from my local Ukrainian community and I understand that other hon. Members across the House have faced this difficulty. There seems to be a genuine issue of red tape created by customs declarations. If he could raise that with other Departments, it would be a huge step forward.
Mr Wallace
I would be delighted to do that. If the hon. Gentleman would like to give me that information, I will ask after this statement and investigate what more we can do. We have helped the Department of Health and Social Care to fly in some of its medical supplies, but I know that there are also many people driving out with supplies. If the customs are on our side, we can do something about it; if they are not, I will raise it with my international counterparts.
Aaron Bell (Newcastle-under-Lyme) (Con)
My right hon. Friend may be aware of the reporting and, extraordinarily, the opinion polls coming out of Ukraine that show that the people and the Government of Ukraine regard the United Kingdom as foremost among their friends in western Europe. That is in no small part due to his leadership and his foresight, as others have said. We supplied them with 2,000 anti-tank missiles before the invasion, and I welcome what he said in his statement about what we are doing today. Can he assure me that all future requests for further defensive military equipment by Ukraine will be met in the same way?
Mr Wallace
We will look at every request quickly and genuinely, and do whatever we can to help Ukraine. I thank my hon. Friend for his kind comments, but I think it is what Britain stands for. Whether I work with Sweden and Finland, non-NATO countries, or with aspirant NATO countries and countries who want to belong to our values, they all value what Britain stands for and her history.
Paul Bristow (Peterborough) (Con)
Russia’s advance has been hamstrung by logistical difficulties, defections and now freezing temperatures; the convoy advancing on Ukraine has essentially been immobile for the past few days. Does my right hon. Friend agree that President Putin has badly misjudged the effectiveness of his own military and the resistance of the Ukrainians, backed up by western military aid and training?
Mr Wallace
I think there have been two major miscalculations by President Putin. The first was that his military was invincible and that the Ukrainian people would welcome him. His other major miscalculation was that somehow the international community was not united. He is wrong on that.
Clive Efford (Eltham) (Lab)
Hon. Members on both sides of the House will wish the Secretary of State well in his discussions with the Home Office—it is a hard nut to crack. I spoke with a constituent of mine over the weekend who has family in Irpin. When she asked me about a no-fly zone, I explained the situation to her, but the words came with some difficulty. Much as I support the position we are taking, when facing somebody who has family in a war zone, it is difficult to explain why we cannot intervene. She responded, “We need to be able to defend ourselves,” and said that they want access to more weaponry which we can supply to them. I know the Secretary of State is providing Starstreak high-velocity anti-air missiles and that he hopes that that will fall within the definition of defensive weapons. Is that definition a difficulty in providing the support that people in Ukraine are asking for, and is it something that will have to be kept under review?
Mr Wallace
That is always kept under review, depending on the actions of President Putin. I winced when the hon. Gentleman said the town was Irpin, because they are under daily artillery and missile bombardment, being literally flattened by the Russian forces. I can only pass on my support and hope for his constituent that she gets through this. We will do everything we can. When I speak to Ukrainians, it is about the outcomes they want. They do not want to be bombed, they do not want to be shelled and they want to be able to patrol their own skies. We think there are currently other ways of doing that without risking a wider war in Europe, and that is why we think it is important. Some of the mass devastation we see comes from artillery and missiles rather than the air, so we must find other ways of dealing with those.
James Wild (North West Norfolk) (Con)
Providing Starstreak anti-air missiles will help Ukraine defend itself and so is very welcome. Given the situation on the ground and the practical difficulties, will the Secretary of State look at creative ways of delivering training so that this capability can be used by those brave Ukrainian forces?
Kerry McCarthy (Bristol East) (Lab)
I welcome the Defence Secretary’s very strong condemnation of, as he put it, the “indiscriminate and murderous” attacks on civilian areas. What will the UK Government’s position be next month on the UN-backed political declaration on restricting the use of wide-area effects explosive weapons in populated areas?
Mr Wallace
May I write to the hon. Lady, because that will be a Foreign Office lead and I understand the debate will be progressing next month?
Margaret Ferrier (Rutherglen and Hamilton West) (Ind)
I thank the Secretary of State for his statement, and for his excellent daily briefings. With Russia repeating false allegations that the US is supporting a Ukrainian military biological programme that would release deadly pathogens such as the plague and anthrax, what new steps are the MOD and other Government agencies taking to tackle the dissemination of such false information effectively?
Mr Wallace
The hon. Lady makes an important point, because Russia has not given up its false flags and false narratives. In fact, it has shut down nearly every avenue of information for its people, which again shows the fear that it is under—I think only yesterday TikTok was stopped in Russia. We absolutely must challenge those false flags, and we do—she has heard me call them out publicly. At some stages we did that by declassifying intelligence early, which we do not normally do. We should also be genuinely worried when false flags drop breadcrumbs leading to chemical weapons, nerve agents and biological weapons, because we all worry what is behind that in the first place.
Madam Deputy Speaker (Dame Eleanor Laing)
I thank the Secretary of State for coming to the House to keep us updated and for his thorough answers to a very large number of questions.
Russian Oil Import Ban
(2 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Business, Energy and Industrial Strategy (Kwasi Kwarteng)
With permission, I would like to make a statement on the UK’s phase-out of imports of Russian oil in response to Vladimir Putin’s brutal and illegal invasion of Ukraine.
First, I want to say what a privilege it was for all of us to hear President Zelensky’s historic address to the House yesterday. I am sure that all Members will join me in thanking him once again for his inspiring words and great leadership. It is with those words in mind that I come here today.
The UK joins key allies, including the United States, in halting the import of Russian oil, which makes up 44% of Russian exports and 17% of the Russian Government’s revenue through taxation. This action follows the most punishing set of sanctions that the British state has ever imposed on a G20 nation. Our trade, financial and personal sanctions are having an effect on the Russian economy. As I speak, the rouble has now fallen by nearly 42%, and the Moscow Exchange’s stock trading has been shut since 25 February. The British Government have sent a clear message to Putin’s regime and to those who support him in his war against Ukraine.
It is important to remember that Russia produces only a fraction of the fuel products currently imported in the UK. In a competitive global market for oil and petroleum products, demand can be met by alternative sources of supply. As a result of international revulsion at Putin’s invasion, Russian oil is already being excluded from much of the market, and currently it is trading at quite a sharp discount from other crude oil sources.
We want to go further. Yesterday I set out that the UK will be phasing out imports of Russian oil during the course of the year. This transition will give the market, businesses and supply chains more than enough time to substitute Russian imports. Businesses should use this year to ensure as smooth a transition as possible, so that consumers will not be affected. The Government will work with companies through a new taskforce on oil to support them to make use of this period in finding alternative suppliers. Yesterday I spoke with businesses, unions and representatives from the sector, and of course I and officials in the Department for Business, Energy and Industrial Strategy will continue to engage with and support British business.
Although Russian imports account for 8% of total UK oil demand, we should remember that the UK is a significant producer of crude oil and petroleum products. We participate in a global market for those products and we have resources in place in the unlikely event of supply disruption. Over the course of the year, the taskforce that we have set up will work closely with international partners, including the USA, the Netherlands and the Gulf to ensure alternative supplies of fuel products. Last week I addressed the International Energy Agency and tomorrow we will have an extraordinary meeting of the G7 Energy Ministers to discuss further steps.
Although businesses should do everything they can to secure oil from alternative sources, it is important to emphasise that they will still be able to import Russian oil during this transition period. These measures target oil-related products imports only. The UK is not dependent on Russian natural gas, which makes up less than 4% of our supply. However, I will be exploring options to end that altogether.
I want to make it clear to the House that we must end our dependency on all Russian hydrocarbons. In the meantime, we need more investment in North sea oil and gas production as we make the move to cheaper, cleaner power. Turning off domestic production at this moment, as some are calling for, would be completely the wrong thing to do. We are not going to do that. The Prime Minister has also confirmed that the Government will set out an energy strategy to explain the UK’s long-term plans for greater energy security, including renewable and nuclear power, building on our 10-point plan.
This measure to phase out Russian oil, and those being taken by our allies, will move the west away from dependency on Russian oil. It will take us on a road to building a stronger and more resilient British energy system. It will increase the growing pressure on Russia’s economy and, ultimately, hamper Russia’s ability to impose further misery on the Ukrainian people.
Edward Miliband (Doncaster North) (Lab)
I thank the Secretary of State for his statement. We are united against Russian aggression. We stand together in solidarity with the Ukrainian people. Let me echo his admiration for President Zelensky, whose bravery and eloquence yesterday were extraordinary and inspiring.
On the Secretary of State’s immediate decisions, we know that Putin’s war machine is being funded by oil and gas, which is why it is right that every country does what it can to isolate the regime, and that every company does so too. We fully support the Government’s decision to ban oil imports, which is a welcome step. It is also right to work with companies and unions on how we implement that policy. What assessment has he made of the impact of the ban on petrol and diesel prices?
We also support the Secretary of State’s decision to seek ways of ridding ourselves of Russian gas imports. On the wider energy security context, it is essential that we learn the right lessons from this crisis. Although 50% of our gas comes from the North sea and only 4% from Russia, we pay the same price for our own gas as for that which we import because we operate in an integrated gas market, so we are absolutely exposed to these rocketing wholesale gas prices, which are currently up 100% on the month and 800% on the year.
Therefore, the right lesson to learn is surely that we have to go much further and faster in developing home-grown zero-carbon power, including renewables and nuclear, which can free us from the whims of autocrats and dictators who can use fossil fuels as a geopolitical weapon. Does the Secretary of State agree this is the right lesson and that policy will need to change? In particular, does he agree that we should finally end the effective moratorium on onshore wind in the planning regulations, which since 2015 has denied us power each and every year equivalent to our gas imports from Russia? Does he agree that we should ramp up our offshore wind so we go well beyond 40 GW, and that it is time to finally get serious about energy efficiency—the best way of cutting energy demand and an area in which the Government have not succeeded in past years?
There needs to be a phased transition in the North sea, but will the Secretary of State now clarify the Government’s position on fracking? Will he confirm that the moratorium that was put in place will remain in place—no ifs, no buts—as fracking would not make any difference to the prices consumers pay, is dangerous and would take decades to come on stream? [Hon. Members: “No!”] They do not agree with me. I have a position against fracking; they support fracking. We would love to know what the Secretary of State and the Government think and I am sure they would, too.
Let me ask the Secretary of State about the cost of living crisis facing families, arising from what is happening to oil and gas prices. We have consistently warned the Government that their measures were wholly inadequate to address the rise in energy bills. Will he undertake to tell the Chancellor that, in his spring statement, he must come back with much more help for both families and businesses?
We are united in our support for the people of Ukraine. We will support the Government in everything they do that can cut off support for the evil and barbaric Putin regime, and we urge the Government to learn the right lessons for our country from this crisis, so we can achieve both energy security and energy sovereignty.
Kwasi Kwarteng
In his customary way, the right hon. Gentleman raised a large number of questions, the majority of which I hope to deal with. He spoke against Putin’s barbaric invasion and completely illegal actions. I am very pleased that he reflects our sentiments and that we have a mutual interest in making sure that Putin fails.
As far as the cost of living is concerned, the Chancellor of the Exchequer has made an extensive intervention, and it is wrong for Opposition politicians to say that the price cap that will be set in August will necessarily be higher than it is today. We simply do not know. As the right hon. Gentleman understands, the price cap will be set retrospectively, looking at the average price. It may well be higher, but there are circumstances in which it will not increase as much as he imagines. As is always the case, we take an ongoing approach to looking at the price cap. We speak to Ofgem all the time and Ofgem is engaged in work on how the price cap is calculated.
I am pleased to hear that the right hon. Gentleman is keen to support investment in the North sea, making sure that gas is a key transition fuel, something that many people on the Opposition Benches may disagree with. He is right to stress an increased focus on renewables and nuclear power—we are absolutely at one in our agreement on that.
Robert Jenrick (Newark) (Con)
I welcome my right hon. Friend’s statement. We have to brace ourselves for the greatest impact on living standards that any of us has known in our lifetime, which necessitates a more pragmatic approach to energy policy. It means accelerating investment in renewables, potentially lifting the effective moratorium on onshore wind, looking again at fracking and taking all possible advantage of our domestic supplies in the North sea as part of a transition. Does my right hon. Friend agree with that, and also that it would be perverse and dangerous to take away oil from Russia and replace it with oil and gas from Iran and Venezuela, two regimes that are just as malign and dangerous as Putin’s in Russia?
Kwasi Kwarteng
My right hon. Friend is absolutely right: we have to look at all the possible technologies that can give us as much resilience as possible. We have to shrug off a lot of outdated dogma in this area, and I am pleased that the right hon. Member for Doncaster North (Edward Miliband) is full square behind nuclear, because as I remember, when he was Secretary of State, he was not the most supportive of the nuclear industry. My right hon. Friend is right to identify potentially hostile powers and we are keen to diversify away from providing resources to those powers.
Stephen Flynn (Aberdeen South) (SNP)
I think it is safe to say that we in this Chamber all broadly support the statement that the Secretary of State has made and, while there will be arguments about the potential speed of the transition, we cannot escape the sheer scale of what has been announced today. This is a seismic shift in UK, US and indeed European energy policy. However, we also cannot be blind to the fact that there will be consequences and one of the potential consequences is retaliatory action from Putin himself. What consideration has the Secretary of State given to that matter?
On that point, if there were to be gas and oil shortages on the European continent, as a producer of oil and gas, would that not emphasise the importance of Scotland’s North sea oil and gas reserves? In terms of resources and Scotland’s resources in particular, the renewable resources that Scotland has are enormous: 25% of Europe’s entire offshore wind capacity sits off the coast of Scotland. I was a bit disappointed that the Secretary of State did not say more about renewables, so I would like to hear a little more from him about the additional support he intends to give to onshore and offshore wind, tidal, hydro pump storage, hydrogen and so on and so forth, and what the timescales for that progress will be.
Of course, the second big consequence will be for consumers. We cannot escape that fact: there will be inevitable price rises, irrespective of what the Secretary of State intimated about the price cap. Will he commit to using every single penny of additional resource that comes from the North sea oil and gas sector to insulate households from the looming cost of living crisis?
Kwasi Kwarteng
I was very determined not to inject any kind of partisan tone into these proceedings, but it struck me as particularly bizarre to hear the hon. Gentleman defend our North sea transition deal and the considerable oil and gas assets in Scotland. I would be very interested to hear what his Green counterparts in the coalition north of the border thought of his remarks.
In relation to protecting consumers, the hon. Gentleman will know that we are fully committed to the price cap, and review it all the time to determine how effectively it can operate. Of course, we are 100% behind renewables. Regarding onshore wind, it is important to remind the House that we lifted the ban on the pot one auction last year, which has led to a huge boost for onshore wind.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
I thank my right hon. Friend for his statement and very much welcome the overall emphasis on replacing fossil fuels with renewables in the longer term. However, does his Department understand the urgency of the present short-term situation for not just prices, but security of supply? The Government have announced support for households, but what about businesses? Businesses tend to buy on six-month contracts and his hope that the situation will rectify itself within a few months is, I am afraid, hopelessly naive. We are facing a crisis in energy bigger than the oil price shock of the 1970s and it is likely to have as big an impact, or a bigger impact, on our economy than that had on our economy then. Is his Department seriously engaged with this situation with the necessary urgency?
Kwasi Kwarteng
We are absolutely engaged with that. As someone who is very interested in the 1970s, my hon. Friend will remember that the oil price quadrupled in three months. We are facing a difficult time. The Department is fully aware of the urgency of the problem, but he will appreciate that a lot of the investment that we needed to make simply was not made. We did not make enough commitment to nuclear—that was a historical mistake of previous Governments—but we are focusing on dealing with the problem in the here and now, and that is why my right hon. Friend the Prime Minister and I are coming up with a plan in the next few days to track—[Interruption.] I find it extraordinary that the right hon. Member for Doncaster North (Edward Miliband), who was responsible for energy policy in the last Labour Government, is smirking from a sedentary position, when he comprehensively failed the nuclear sector, completely failed on energy supply and completely failed on energy resilience. We are still trying to clean up his mess. I say to my hon. Friend that we are working on these plans.
Madam Deputy Speaker (Dame Eleanor Laing)
We will have no more interventions from a so-called sedentary position.
Darren Jones (Bristol North West) (Lab)
I thank the Secretary of State for advance sight of his statement. He will know that many local authorities, NHS trusts and other public bodies are locked into gas supply contracts with Gazprom. To get out of them, the Government need to bring forward legislation to amend the public procurement rules. Will he do so?
Kwasi Kwarteng
The position in respect of Gazprom is that the UK company is separate from the parent but, should anything happen to Gazprom, just as with any other supplier of energy, we will take the appropriate steps.
Sir Desmond Swayne (New Forest West) (Con)
When we sanction Russia, we also sanction ourselves. We need to be clear with the British people, do we not, that this is a sacrifice we are expecting them to make, when the Ukrainians are making so much greater sacrifice.
Kwasi Kwarteng
My right hon. Friend is absolutely right. People in this country have an intuitive, heartfelt feeling for the people of Ukraine. People understand—I have seen it in my constituency at the weekend and I am sure he has seen it in his—and are willing to endure hardships in solidarity with the heroic efforts that the people of Ukraine are making. People understand that in this country, because we are a generous and giving country.
Caroline Lucas (Brighton, Pavilion) (Green)
The Government are right to get off Russian oil and gas—I welcome that—but wrong to propose replacing it with new domestic production. Our dependence on fossil fuels is what got us into this energy crisis in the first place, and that is why many of us, including the International Energy Agency, are calling for no new licences. The real insanity is trying to get out of one crisis by plunging ourselves into another. More extraction from the North sea will keep our bills high and drive us past safe climate limits, and fracking will not help. Will the Secretary of State use this moment to launch an emergency green revolution? Will he get serious at last about energy efficiency, and will he wean the UK off not just Russian oil and gas, but all oil and gas now?
Kwasi Kwarteng
On this question, I have to confess that the hon. Lady and I have completely different views. We are diametrically opposed. I agree with her on the net zero commitment, but this idea that we can simply switch the lights off, so to speak, on oil and gas is absurd. [Interruption.] It is completely absurd and we need to have investment in the North sea.
Madam Deputy Speaker (Dame Eleanor Laing)
Order. I think I said quite clearly no more shouting from people who are sitting down.
Alun Cairns (Vale of Glamorgan) (Con)
I commend my right hon. Friend’s statement and pay tribute to him and his predecessors for the diversification they have made to the supply, security and sources of the energy mix over recent years, despite the lack of investment in nuclear during the 2000s leading up to 2010. Does he agree that oil will remain a key source of energy for some time to come as we are transitioning? What consideration has he therefore given to bringing about influence on OPEC nations to produce more oil so that the global supply can be better managed?
Kwasi Kwarteng
My right hon. Friend raises a particularly important point. We had a discussion at the IEA ministerial only last week where we all agreed as a collective to release our stock. That was an American initiative that we supported. Clearly, we need to work as an international community to ensure we can provide enough supply to dampen the increase in prices that we are seeing.
Mick Whitley (Birkenhead) (Lab)
I welcome the spirit of these plans, but I urge the Government to act even faster. Russian gas and oil constitutes just a tiny fraction of the UK’s energy mix and we must break this last lifeline to the Putin regime as soon as we can. I am also deeply concerned to hear Government Members call for a resumption of fracking, which would be a betrayal of the commitments we made to the world in Glasgow just five months ago. Will the Secretary of State today commit to ruling out further investment in fossil fuels and instead pledge his Department’s support for an ambitious new green deal and wide-ranging investments in renewables, including the Mersey tidal project, so that we can finally set ourselves on the path of true energy independence?
Kwasi Kwarteng
As Energy Minister and now Secretary of State, I have been totally committed to increasing the supply and production of renewable power. We reopened the pot one auction for onshore wind. For the first time ever, we had a pot ringfenced for tidal stream technology. I have introduced an annual auction for offshore wind. I am completely with the hon. Member in being 100% behind renewables and the green revolution.
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
I thank my right hon. Friend not only for his statement, but for his continued and unflinching support for the oil and gas industry that I am proud to represent much of in West Aberdeenshire and Kincardine. On that, despite the importance of energy security, which has been brought home to us all through the tragic scenes we are seeing on television right now, is it not absurd that the Scottish Government’s official position continues to be that we should have no new licences, no new exploration and no new drilling in the North sea?
Kwasi Kwarteng
My answer to my hon. Friend is that he is absolutely right. It is the North sea transition deal—“transition” is the key word—not the North sea extinction deal, as the hon. Member for Aberdeen South (Stephen Flynn) and his Green friends north of the border are pursuing. We have a very different approach from Members on the Opposition Benches, and long may that continue.
Dave Doogan (Angus) (SNP)
“Transition” is the key word, as the Minister has just said. We need to pivot very quickly towards renewable energy, but this is a sharp reduction in oil and gas imports, as 8% come from Russia. We welcome that measure, but insofar as that will lead to a net reduction in the availability of oil and gas, it will also lead to a net reduction in emissions, which will not be maintained. We will need to supplement that demand in the short term. What discussions does he plan to have with the Scottish Government to ensure that we can meet that need with the maximum economic benefit to oil and gas services companies?
Kwasi Kwarteng
I am happy to speak to colleagues in the Scottish Government about these issues. The hon. Member should remember that while we are banning the import, it is a phasing out. We could have gone down the US route and had a 45-day grace period, but that would have been too disruptive to the supply chain. I would be happy to talk to him and his Scottish Government colleagues about how we can manage the process, and that is exactly why in the statement I also announced the formation of a taskforce to deal with that transition.
Richard Fuller (North East Bedfordshire) (Con)
In regard to the UK’s Russian oil ban, I am convinced of the moral case, although I am sceptical about the efficacy of such a ban in the long term. I welcome my right hon. Friend’s commitment to keeping all options open, but he will be aware that moving faster on the transition to green puts greater costs on households from technology risk. Will he therefore look again at options on insulating homes and Government support for home insulation as part of the package?
Kwasi Kwarteng
My hon. Friend, like other Members across the House, is right to focus on energy efficiency, because that is clearly a big part of this conundrum. We have had some successes, but we have also done some things not as effectively as we could have done. There were elements of the green homes grant that worked, and elements that did not work as well. I am constantly trying to improve the offer on energy efficiency with the public sector.
Kerry McCarthy (Bristol East) (Lab)
The Minister has been asked twice now specifically about fracking and has completely avoided answering the question. Would he like to have another go?
Kwasi Kwarteng
I will have a go, and I will be very clear. Funnily enough, I was a Minister at the time when the written ministerial statement on hydraulic fracturing was made. The Government have always been clear that we will take a precautionary approach and support shale gas exploration if it can be done in a safe and sustainable way. That remains our position, and we will be evidence-led. That is what we wrote and said in 2019, and we are still committed to that.
Robert Halfon (Harlow) (Con)
I thank my right hon. Friend for his statement. On oil prices, he will know that prices at the pumps are reaching £1.60 a litre. Hard-pressed motorists are paying over £16 more than a year ago and hauliers are paying more than £120 every time they fill up at the pumps, which is literally unaffordable for most people around the country. I recognise that the Government have done a lot with the fuel duty freeze, but the Irish Government have today announced a rebate of 20 cents on petrol and 15 cents on diesel. We must do the same. He must make the case to the Treasury, so he should not just fob me off. Will he introduce PumpWatch, as recommended by FairFuelUK, which would monitor prices from the big oil companies to ensure that motorists are not ripped off at the pumps when the petrol pump price rockets as the oil price goes high but goes down like a feather when the oil price lowers?
Kwasi Kwarteng
No right hon. or hon. Member has done more for motorists over the last 12 years than my right hon. Friend. I completely hear his imploring the Treasury to help consumers. My right hon. Friend the Chancellor provided a wide range of measures that offer some support, but we are always happy to talk to him to see how we can improve the offer.
Sammy Wilson (East Antrim) (DUP)
It is a great pity that it has taken a war in Europe to show how mad our energy policy is. Nevertheless, I welcome the Secretary of State saying that turning off domestic production of North sea oil and gas would be completely insane right now. Does he agree that it would be equally insane to turn our back on the shale gas that is available in the north of England, which would help to make us less dependent on foreign resources, create jobs, give us security of supply and give the Treasury revenue from gas? Does he agree that the Prime Minister’s decision not to concrete over the wells that are already there is the first step to the exploitation of that gas?
Kwasi Kwarteng
In conversation with the Prime Minister, we were clear that it did not necessarily make any sense to concrete over the wells. We are still in conversation about that. As I said, our position on the moratorium has always been the same: if fracking can be done in a safe and sustainable way, the Government are open to the idea. We have always said that; the position has not changed. With respect to the North sea, I fully agree with everything that the right hon. Gentleman said.
Selaine Saxby (North Devon) (Con)
I thank my right hon. Friend for his statement and for the work done by Conservative Governments to increase our renewable energy capacity by 500%. As we move towards the new normal of a greener and more secure energy supply, will he commit to increase the capacity coming out of the Celtic sea and accelerate the roll-out of floating offshore wind and the target that it can deliver on?
Kwasi Kwarteng
As my hon. Friend remarked, floating offshore wind is key to accelerating our renewables offer. In the next few days, we will hopefully be setting some slightly more ambitious targets for our 2030 ambition than we have hitherto set.
Mr Ben Bradshaw (Exeter) (Lab)
Given that the Conservatives have been in power for 12 years, why has the Secretary of State not already lifted the damaging moratorium put in by David Cameron on onshore wind—the cheapest and quickest way of generating renewables?
Kwasi Kwarteng
I am sure that the hon. Gentleman will remember that there was a moratorium on the pot one auction, which we lifted two years ago. I am pleased to say that in the fourth auction round, we have a separate pot that is ringfenced for onshore and solar technologies. Onshore will be fully reflected in that auction.
Dr Andrew Murrison (South West Wiltshire) (Con)
The Government are right to be cautious about windfall taxes, but it is worth Conservative Members remembering that it was Baroness Thatcher who introduced them in 1981. Given the extraordinary profits particularly of BP and Shell in recent times, and given the very real prospect of simply unaffordable bills landing on our constituents’ doormats in the near future, will the Government at least keep that option open?
Kwasi Kwarteng
My right hon. Friend is well versed in departmental responsibilities and he will know that issues to do with taxation are squarely within the remit of the Chancellor of the Exchequer. I personally feel that a windfall tax is not the way to go in this moment, because there is huge uncertainty about investment in the North sea as it is. If we were to entertain the idea of a windfall tax, that would simply frighten the investment, destroy jobs and destroy wealth creation. I do not think that is in anyone’s interest.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
Putin’s bloody war in Ukraine is being financed by Europe’s addiction to fossil fuels, so we have to speed up our green transition, but more than one in 10 Welsh households are living in fuel poverty and the number is growing daily. Starved of public transport investment, Wales is the most car-dependent nation in the UK, so we will be disproportionately affected by rising prices. Rural regions of Scotland and England with high levels of car dependency are eligible for the rural fuel duty relief. Will the Secretary of State extend that to Wales?
Kwasi Kwarteng
Even if I wanted to, that is not in my power, but I would be very happy to talk to people across Government to address the issue that the right hon. Lady has raised.
John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)
I welcome the Government’s statement today and their plans. Are they aware, however, of current supply issues for red and white diesel? Businesses in the Scottish Borders have contacted me in the last day or so to say that there are real issues in sourcing red and white diesel. Indeed, suppliers are reporting that Grangemouth will run out in the coming days. Are the Government aware of that, and will they investigate it further?
Kwasi Kwarteng
I pay tribute to my hon. Friend, who consistently and ably defends his constituents’ interests. The red diesel phase-out was announced two years ago, and I would be happy to talk to him to see how we can manage that transition.
Mike Kane (Wythenshawe and Sale East) (Lab)
To follow on from the question of the hon. Member for Harwich and North Essex (Sir Bernard Jenkin), many businesses, such as aviation, which has a massive impact on my constituency, hedge their future fuel costs, but many will be hugely exposed because they have not hedged those costs. Is the Department doing some analysis of the exposure of such businesses?
Kwasi Kwarteng
The hon. Gentleman raises a critical point. The Department is always looking, particularly at a time of extreme price volatility, at how prices affect the supply chain and businesses. The Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for North East Derbyshire (Lee Rowley), was speaking to energy intensive industries this morning, as I was, and we are fully alive to their plight.
Lee Anderson (Ashfield) (Con)
We all welcome the banning of Russian oil and gas to put the squeeze on Putin, but what about Russian coal? We currently import more than 500,000 tonnes a year of coking coal, which is the same type of coal—metallurgical coal—that can be mined safely and cheaply in this country. Does my right hon. Friend agree that if we can get it out of the ground cheaply and safely, we should do that without delay?
Kwasi Kwarteng
My hon. Friend will know that the specific issue relating to the Cumbrian coking mine is under judicial review but, as I said in my statement, we clearly want to move away from Russian hydrocarbons. That is absolutely our intention.
Wera Hobhouse (Bath) (LD)
Obviously, the crisis makes us all aware of consumer energy prices and how to contain them to some degree. To reduce the average energy cost for consumers, we need a replacement for the green homes grant that is far more comprehensive and that recognises that solar power, battery storage and smart metering must be part of the solution. What are the Government’s plans to roll out residential solar much more ambitiously, which, together with battery storage and smart metering, could save the average consumer up to £900 annually on their energy bill?
Kwasi Kwarteng
The hon. Lady will appreciate that we have done quite a lot to drive solar. I referred to the fact that we have restarted the pot one auction, which is all about onshore wind and solar. When we announce the result, there will be lots of solar projects that will hugely increase solar capacity in this country.
Bim Afolami (Hitchin and Harpenden) (Con)
The Secretary of State knows that I am a strong supporter of his policy to end reliance on Russian oil and of the need to intensify our investment in renewable energy. There are many rural communities in constituencies such as my own and, I suspect, across the country that rely on heating oil. What plans does he feel his oil taskforce will make for securing the availability of heating oil, ensuring the price of heating oil does not rise out of ordinary people’s reach and intensifying energy efficiency for homes, particularly for the older buildings that we find in many rural communities in areas such as my own?
Kwasi Kwarteng
The taskforce will do exactly what my hon. Friend has asked for. It will look at where we can source supply at the cheapest rate and how we can increase our independence. It will look at taking away our reliance on Russia and at sourcing oil at the cheapest rate. There is an issue about further interventions for heating oil, and we are in discussions with the Treasury and others across Government all the time about how we can lessen the burden on our people.
Geraint Davies (Swansea West) (Lab/Co-op)
The Secretary of State will know that his Department refused support for the Swansea bay tidal lagoon, but the new Blue Eden lagoon project is nevertheless going ahead. Instead of looking again at fracking, which generates 5% of fugitive emissions—that makes it worse than coal for climate change—will he look at supporting the Welsh Government and Wales overall in marine technologies and renewable technologies, alongside looking at organic batteries at scale, which can store such renewables without causing pollution?
Kwasi Kwarteng
The hon. Gentleman makes a very fair point. We have done a huge amount as a Government in driving renewables. I was very pleased to see that the tidal stream auction has been ringfenced. On the specific Swansea lagoon project, I, as the Energy Minister at the time, and the Secretary of State felt that it was not economic, but generally I do not think any Government have done more for marine renewables and marine energy.
Mark Jenkinson (Workington) (Con)
I welcome my right hon. Friend’s swift and decisive action on phasing out Russian imports. To echo the comments of my hon. Friend the Member for Ashfield (Lee Anderson), as our minds are now focused on increased domestic production, such as that from the North sea, does the Secretary of State agree with me that the benefits of domestic supply chain resilience and security should also encompass other critical minerals, such as coking coal, of which we looked to Russia for over 750,000 tonnes—50% of our requirement—last year?
Kwasi Kwarteng
My hon. Friend will appreciate that there is a diversity of sources for coking coal; we are not just looking to Russia. He makes an excellent point about critical minerals, and he will appreciate that this is the first Government ever to have a critical minerals strategy. It will be published in the next few weeks, and the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for North East Derbyshire (Lee Rowley) is leading on that within the Department.
Alan Brown (Kilmarnock and Loudoun) (SNP)
Electricity from gas power stations is one of the ways that we meet peak electricity demand. The Secretary of State knows that dispatchable energy can also be created from pumped-storage hydro, which is a completely renewable source. To minimise our reliance on gas and our switch to renewables, he knows that SSE is ready to go ahead and build Coire Glas in the highlands. Will he commit to agreeing a minimum floor price with the SSE, so that it can get on and build, and will he confirm the timescale for such an agreement?
Kwasi Kwarteng
I am really delighted that the hon. Member raises this. I think he has raised it at every BEIS questions for the past 18 months, and I will keep saying what I have said before. We are interested in the technology, but I need to look at the specific proposals he is suggesting, and we obviously need to work out whether it is value for money. Those are the parameters we always look at.
Alexander Stafford (Rother Valley) (Con)
Yesterday at the Business, Energy and Industrial Strategy Committee, we had a panel of experts talking about this very issue, and when the issue of fracking was raised, they were unanimous in their voice that it would be neither effective nor cost-efficient, would not do anything for the price and was actually a bit of a red herring. Does my right hon. Friend agree with me that fracking is a red herring, and that we should instead focus for energy on more renewables and even more from the North sea, because fracking just does not work in this country?
Kwasi Kwarteng
I think we can look at a range of technologies. We looked at the fracking issue—I was the Energy Minister at the time—and there were issues regarding the seismicity of various projects. However, we have always had an open mind, and we have always said, and I will repeat it, that we will support shale gas exploration if it can be done in a safe and sustainable way. We will be led by the science on whether this is indeed possible, so there are lots of experiments and empirical evidence that we need to consider.
Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)
The Secretary of State mentioned in his statement the need to protect the Ukrainian people from further misery. As he knows, Ukraine is a country with historical debt problems, and the full-scale Russian invasion we are witnessing will inevitably make matters worse for them. Considering this is likely to be a prolonged crisis, can he assure the House that the British Government will be leading international efforts with the IMF, the World Bank and the G7 to offer Ukraine debt relief?
Kwasi Kwarteng
The issues about Ukrainian debt relief are for a much wider set of participants than are reflected in this House. We will do everything we can to support the Ukrainian people, and we are looking at every possible intervention that can in some way lessen the burden of this ferocious assault.
Mr Richard Holden (North West Durham) (Con)
I thank the Secretary of State for his statement. The sanctions today are an excellent next step in what we are doing to clamp down on Russia’s ability to fund its war machine, but my constituents have two questions. First, how can they best support the Government’s actions with direct contributions themselves? Secondly, in their own interests as well, what is the UK going to do to boost our domestic oil, gas and coking coal supply to ensure not only that jobs are created here in the UK, but that we reduce our dependence on other international players at this point?
Kwasi Kwarteng
My hon. Friend is absolutely right. The issues of critical minerals and of security of supply could not be more important, and that is why I have commissioned a critical minerals strategy. On the help his constituents have offered and their full support, there are lots of ways in which we can contribute financially and materially. I helped organise such an effort in my constituency only last week, led by my excellent party chairman, Mike Brennan, but there are lots of ways we can help. On security of supply, that is absolutely, as the Prime Minister has said, our most important consideration right now.
Margaret Ferrier (Rutherglen and Hamilton West) (Ind)
Banning Russian oil will come at a cost every day for people across the UK, and it is a price I am sure they accept the necessity of due to this war by Putin on Ukraine. However, with an already growing cost of living crisis and soaring energy bills, what discussions has the Secretary of State had with the Chancellor about financially supporting green, clean and low-cost energy provision, so that it can be accessed faster and more broadly?
Kwasi Kwarteng
My right hon. Friend the Chancellor and I, and our Departments, speak all the time about these issues. The hon. Member will appreciate that there is a spring statement, but at the beginning of February my right hon. Friend announced an extensive £9 billion of projects. We will be looking across the year at how this market develops, but fiscal interventions, as she will appreciate, are a matter for my right hon. Friend.
Dr Ben Spencer (Runnymede and Weybridge) (Con)
I very much welcome my right hon. Friend’s announcement today. It cannot be right that we are bankrolling the Russian state and war machine through buying Russian oil and gas, and I am glad that we are moving to fix this at pace. He will know that we import quite a lot of aviation fuel from Russia, and his Department has done fantastic work in developing sustainable aviation fuel and its manufacture in the UK. Will he use this as an opportunity to drive that forward at even greater pace to set up SAF manufacture in the UK?
Kwasi Kwarteng
My hon. Friend raises a really important point. With the dismal prospect of the ferocious aggression and violence that we are seeing, one of the things we are thinking about is a more sustainable future. A very thin silver lining on a very dark cloud is the fact that we are talking about resilience and sustainability, and I am absolutely delighted to be working with my hon. Friend and with right hon. and hon. Friends in the Department for Transport to make sure that we accelerate the adoption of sustainable aviation fuel.
Rachael Maskell (York Central) (Lab/Co-op)
The pace at which we divest from Putin’s fossil fuels is important for stopping this war. As a result, as in wars past, if we scaled up our manufacturing to see retrofitting and our renewables industry, that could be not only the saviour of the Ukrainian people, but the saviour of our planet. Will the Secretary of State not only scale up, but lead an alliance of countries that need to make such urgent diversification to ensure that we apply this pain to Putin’s regime as quickly as possible?
Kwasi Kwarteng
The hon. Lady is absolutely right. We must work internationally across countries and come up with an alliance that can confront Putin in that way. That is why we are having an extraordinary meeting of G7 Energy Ministers tomorrow. However, it is relatively easier for us and American colleagues to shut ourselves off from that dependency than it is for colleagues in Europe, who are far more dependent on Russian gas and hydrocarbons.
Dr James Davies (Vale of Clwyd) (Con)
I welcome my right hon. Friend’s statement about a ban on Russian oil imports. Does he agree that the increasing need for self-reliance on energy sources means that it is right that we invest in renewable energy schemes in this country, including the possibility of a large tidal range facility in north Wales?
Kwasi Kwarteng
I hear the clamour for a tidal range facility in the Vale of Clwyd, and I am sympathetic towards it. My hon. Friend will, I am sure, be good enough to acknowledge that for the first time ever in the fourth auction round we have a tidal stream auction pot. We are committed to doing all we can to further the development of marine renewable energy.
Deidre Brock (Edinburgh North and Leith) (SNP)
The Secretary of State said that he was 100% behind renewables and he has mentioned the tidal stream pot, but I would like him to offer so much more support for tidal energy schemes, in which Scotland can play such an important role. It is a such a cleaner, greener and cheaper alternative to nuclear.
Kwasi Kwarteng
I recognise the hon. Lady’s commitment to tidal stream, and she will be good enough to notice that this is the first time that any British Government have committed to supporting any marine energy renewable project. There is always the clamour for more. We should do more, and we could do things more quickly, and I am happy to work with her and other Members across the House to see how best we can do that.
Madam Deputy Speaker (Dame Eleanor Laing)
I thank the Secretary of State for his thorough answers to a great many questions on this important subject.
Points of Order
Bob Seely (Isle of Wight) (Con)
On a point of order, Madam Deputy Speaker. I have two points of order, and it may be that you will be good enough to hear one or both of them. The first pertains to how we treat Members of the House of Lords, and I ask this in genuine good faith. There are Members of the House of Lords who may have engaged in ethically questionable practices in relation to work, lobbying or otherwise, for the Russian state or its proxies, formal and informal. We are not—perhaps for good reason, perhaps not—allowed to name those Members of the House of Lords during a debate on, for example, lawfare, lobbying or enabling, and to do so requires some kind of special motion.
In addition, Lords can take leave of absence, which can be open ended. They are allowed to use the Lords facilities and even stationery. They cannot vote, but they then do not have to register their outside interests. That strikes me as being contrary to natural justice and democratic transparency, because we cannot name important players that may be influencing politics, or working for Russian proxies, formally or informally. I would like a ruling from the Chair as to what we can do to enable their participation in a potentially very important part of our national debate.
Madam Deputy Speaker (Dame Eleanor Laing)
The hon. Gentleman raises an issue that, for a change, actually is a point of order, and I can give him an answer from the Chair. If the situation were as he describes, and it were not possible to question the conduct of a Member of the House of Lords in this place, that would indeed be contrary to our usual democratic practices. [Interruption.]—I would be grateful if the hon. Member for Totnes (Anthony Mangnall) perhaps listened. If that were the case, it would be contrary to our usual democratic practices, but that is not the case, and the hon. Gentleman has been slightly misinformed.
It is improper and contrary to our rules to raise in a general debate or question, and without notice, the conduct of a Member of either this House or the other place. However, it is perfectly proper for the hon. Gentleman to put down a motion before the House, so that the House and the person in question has notice of his, or any Member’s, intention to raise those matters, and of the matters to be raised. That motion would then come before the House. Let me give him an example. An early-day motion is a motion before the House, so if he were to submit an early-day motion, that would be a motion before this House and he could raise questions on it. There are other ways of putting down a substantive motion. For example, he could go to the Backbench Business Committee and ask for time in the Chamber to debate the conduct of a Member of the House of Lords, if it were on a motion before the House.
I very much regret that people now do not understand such matters. I do not blame the hon. Gentleman, who is assiduous in his duties, but many Members do not understand what the procedures of this House are, and they do not understand what an early-day motion is. They think it is something to be brought forward by a pressure group, and they get hundreds of signatures, as if that made any difference. An early-day motion is a way of putting a motion before this House, thus giving notice to anyone affected by or interested in it, of the fact that it is a motion before the House. The hon. Gentleman can, of course, get further advice on that from the Table Office, and I am sure the Clerks would be happy to help him draft any motion.
Bob Seely
Further to that point of order, Madam Deputy Speaker. I am so grateful for that. My worry with the Backbench Business Committee is that it can take a month or two to get a debate, although one could perhaps persuade it of a greater need. An early-day motion—correct me if I am wrong, Madam Deputy Speaker; I have never used early-day motions simply because I think they are PR vehicles—does not result in a debate in the House. We need a debate in the House on these matters, in part because it is covered by privilege, and the importance of using that in the public interest.
Madam Deputy Speaker
Again, this practice has fallen into desuetude, and it is most unfortunate that Members who have not been in the House for a long time—since the days when things were done properly—do not realise that one way matters used to be raised before the House is that a Member would table an early-day motion. When the Leader of the House answered the business question, once a week, a Member would come into the Chamber and say, “Is the Leader of the House aware of early-day motion No. 236 in my name and that of 50 other Members, and will he provide time for a debate on that issue? It is extremely important for the following reason.” That way, the matter would be properly raised on the Floor of the House.
It is possible for the hon. Gentleman to do that, and the Table Office will give him advice. If it turns out that he has to wait two months, he should come and see me and we will work out another way of doing it. It is essential that matters of urgency and importance, and topical importance, can be raised on the Floor of this House. It is only because people do not have the proper advice on procedure that that is not being done properly. It is not because any Standing Order or rule of this House prohibits proper debate.
Mark Pritchard (The Wrekin) (Con)
On a point of order, Madam Deputy Speaker. I apologise for dashing into the Chamber—I was chairing a Delegated Legislation Committee. This morning, families awaiting the Ockenden independent maternity review into baby deaths in Shropshire, which was expected to be published on 22 March, were informed that, due to a number of unspecified “parliamentary processes”, the review would be delayed. As you can imagine, that is causing my constituents significant concern and added anxiety. What advice can you give me to ensure that this important review is published as quickly as possible?
Madam Deputy Speaker
I thank the hon. Gentleman for his point of order, which he gave notice of his intention to raise, but not long ago. I have not had the opportunity to inquire and cannot answer his question about what the parliamentary processes are to which he refers. I can well understand his concern and his constituents’ concern that this extremely important matter should not be delayed longer than is necessary. I suggest that perhaps he ought to speak to the Clerk of the Journals, who could advise him about the parliamentary processes and, if necessary, how they can be speeded up. We all appreciate the importance of this matter coming before the House as soon as possible.
Bob Seely
On a point of order, Madam Deputy Speaker. Since the debate on lawfare and the debates on Ukraine last week, a number of lawyers have written what I consider to be intimidatory letters to national newspapers, including the Daily Mail. If I understand the letter correctly, one firm, Harbottle and Lewis, has specifically implied that reporting outside the House of our words in debates in Parliament can be “unlawful and seriously defamatory”. That is relating to statements made by me in the House and the good Lord Rooker, if I may name his excellent work. Madam Deputy Speaker, would you like to say anything about that? It seems that we are dealing with an aggressive culture in the law of trying to intimidate not only members of the free press, but now Members of Parliament.
Madam Deputy Speaker
I thank the hon. Gentleman for his point of order, which, again, is a point of order. I have no objection to him raising two proper points of order within a few minutes of one another—it is all the spurious points of order to which we object. I recall very well the lawfare debate to which he refers; indeed, the right hon. Member for Haltemprice and Howden (Mr Davis), who brought the debate to the Chamber, has miraculously appeared at the Bar of the House just as this matter is quite properly being raised. My recollection is that it was an important and powerful debate and that few people were present to hear and pay attention to it. It has since become all the more urgent and topical. The hon. Gentleman is right to raise it as a point of order.
In technical terms, the point of order that he raises is a matter of interpretation of parliamentary privilege and of when it applies, how it applies and who applies it, which is too complicated to answer immediately. I once again refer him to the Clerk of the Journals. If he and the right hon. Gentleman wish to discuss the matter further, I am quite sure that my office and Mr Speaker’s office would be happy to discuss it with him. It is quite refreshing to have two points of order that are points of order. I thank him for them.
Pets (Microchips)
Wednesday 9th March 2022
(2 years, 9 months ago)
Commons ChamberRead Full debate Pets (Microchips) Bill 2021-22 View all Pets (Microchips) Bill 2021-22 Debates Read Hansard Text
A Ten Minute Rule Bill is a First Reading of a Private Members Bill, but with the sponsor permitted to make a ten minute speech outlining the reasons for the proposed legislation.
There is little chance of the Bill proceeding further unless there is unanimous consent for the Bill or the Government elects to support the Bill directly.
For more information see: Ten Minute Bills
This information is provided by Parallel Parliament and does not comprise part of the offical record
James Daly (Bury North) (Con)
I beg to move,
That leave be given to bring in a Bill to make provision regarding pets with microchips; and for connected purposes.
I am stood here because of Gizmo and Tuk. Gizmo was a cat and a much-beloved family pet. She died in a car accident on 17 July 2016 when she was 15. In the words of her owner, Heléna, she
“was disposed of like a piece of trash”.
Tuk was a healthy 16-month-old rescue dog who was euthanised on 22 December 2017. Tuk was not scanned prior to euthanasia and was presented by an individual who was not his keeper. My Bill would introduce statutory requirements on local authorities and veterinary surgeons to address the failings highlighted in the stories of Gizmo, Tuk and many—too numerous to mention—much-loved pets.
Clause 1 would introduce a legal requirement for veterinarians to scan for microchips before euthanising pets. I am delighted that last year the Royal College of Veterinary Surgeons updated its code of professional conduct to require that, before euthanising an otherwise healthy dog, veterinary surgeons must first scan the animal for the presence of a back-up rescuer. While that is most welcome, it must be put on a statutory footing rather be at the discretion of the veterinarian.
Subsection (2) would require the veterinarian to scan the pet on first presentation and contact the registered owner or back-up rescuer. It is crucial to highlight the importance of that back-up. Rescue organisations and breeders register their details on the original database as a secondary contact as part of the adoption contract or bill of sale. In a time of vulnerability, the secondary contact is there to prevent the animal from being unnecessarily euthanised and to alert the veterinarian to an alternative that is in place. That also allows the rescuer or breeder to remain a constant presence and provide support to the pet should it be abandoned or sold without the rescue organisation’s or breeder’s knowledge. If the adopter or owner does not keep the information registered on the microchip up to date, the secondary back-up rescuer information will enable the rescuer or breeder to be contacted in all circumstances.
As I said, despite the change in the RCVS’s code, the scanning of microchips prior to euthanasia remains at the discretion of the veterinarian and is not a legal requirement. Animals can still be subjected to destruction on the basis of behavioural issues or accusations of such ill behaviour. I do believe that to be right. The back-up rescuer provision allows time for comprehensive assessments, healthcare checks, reforming support and guarantees that any life-ending decision is based on the animal’s best interests, with all facts and alternative options examined.
The Tuk’s law campaign was started four years ago by the brilliant Sue Williams and Dawn Ashley, and it has had the fantastic support of Dominic Dyer. More than 100,000 people from all over the country supported the campaign, leading to a parliamentary debate on 28 June last year.
Clause 2 would place requirements on local authorities to make all reasonable efforts to take steps listed in subsection (2) with regard to deceased cats found on a public highway or otherwise reported to a local authority. Those steps include: making arrangements to pick up the cat; checking for a microchip; finding ownership details; contacting the owner to inform them of what has happened; making arrangements for the owner to be reunited with the cat; and ensuring that the cat is held and preserved by the local authority for up to seven days. There would also be a requirement under subsection (3) to record certain information in a register of cat and cat owner reunification organisations.
My constituent Heléna Abrahams has been campaigning for six years for Gizmo’s law, which is encompassed in the Bill, to ensure that no other pet owner has to experience what she suffered with Gizmo. The efforts of Heléna, Wendy and the whole team at Gizmo’s Legacy have secured the support of tens of thousands of people throughout the country for the proposed change in the law, and every day they work to ensure that those sadly deceased cats—much-loved family pets—are returned to their owners. Gizmo’s law is articulated in clause 2, and it is a testament to the kindness and humanity shown every day by Heléna and her team. There will also, hopefully, be another benefit of the Bill and Heléna’s hard work. She has worked in partnership with a pet food company, which has agreed to supply the appropriate equipment to any local authority that does not have a scanner. Clearly, that is to be recommended.
I hope that the Bill is a sensible step. Steps have already been taken; the Minister is a genuinely excellent Minister and the Department has interacted with me on this issue. I have been speaking in Parliament about this for two years, so I must apologise again to the House for that. However, Sue, Dawn, Heléna and Wendy are genuinely good people who are trying to do things for the right reasons—and that is the end of that.
Madam Deputy Speaker (Dame Eleanor Laing)
The hon. Gentleman certainly held the attention of the House. Most remarkably, his speech came in at well under 10 minutes, so he will probably get in the “Guinness Book of Records” for that.
Question put and agreed to.
Ordered,
That James Daly, Jim Shannon, James Grundy, Luke Pollard, Tom Tugendhat, Mark Logan, Lee Anderson, Aaron Bell, Chris Green, Craig Tracey, Robin Millar and Sally-Ann Hart present the Bill.
James Daly accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 18 March, and to be printed (Bill 278).
Estimates Day
National Tutoring Programme and Adult Education
(2 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Robert Halfon (Harlow) (Con)
I thank the Backbench Business Committee for granting this important debate. I particularly thank the members of the Education Committee, including the hon. Member for Liverpool, Riverside (Kim Johnson) for co-sponsoring the debate, and my hon. Friend the Member for Penistone and Stocksbridge (Miriam Cates). My hon. Friend is a brilliant Committee member and I appreciate all the work that she does.
To reassure the Whip on the Front Bench and, I am sure, the Minister, I should say that I fully support the estimates today. I will try to recommend things that I think can be improved and to argue that, although extra money has been raised, we need to ensure that we have value for money and that that money is spent well. I hope that the Government see my remarks in that spirit.
In last year’s autumn Budget, the Chancellor and the Education Secretary set out a vision of support for schools, skills and families. Of course, I agree with that—it is very important to focus on those three things—but I think that social justice needs to be added. I believe that the fundamental challenges now facing education are recovery from the covid-19 pandemic, addressing social injustices and early years intervention. I see that my right hon. Friend the Member for South Northamptonshire (Dame Andrea Leadsom) is in her place; she is an expert on this issue in Parliament and does so much to ensure that the Government focus on early intervention.
It is also important for me, in opening this debate, to thank the teachers and support staff in schools and colleges in my constituency, who do so much to keep pupils learning and who have worked incredibly hard during the pandemic. I also thank the teachers and support staff around the country.
Clearly, the Government are making progress on skills and standards. Literacy rates are up and 1.9 million children are now in good or outstanding schools. The Skills and Post-16 Education Bill and the lifetime skills guarantee, which passed through the House of Commons only a couple of weeks ago, could be very exciting, alongside proper money—£3 billion of extra funding. That should be welcome; that is real money.
As the Education Secretary and Ministers know, I think that more needs to be done to increase the amount of careers encounters that young people have at school. The Government are suggesting just three—so one a year in key years—but I suggest that there should be nine encounters altogether. That would not cost the Government any more in funding.
I have also suggested that additional funding should be made available to support adults to obtain a level 2 qualification as long as they can demonstrate their intention to progress to level 3, as per the lifelong learning entitlement. As I said in our debate on amendments to the skills Bill, many adults are not yet ready to do a level 3 apprenticeship. I want them to do so—it is wonderful that the Government are going to offer level 3 in the core subjects—but if they are not ready, it makes sense to give them the opportunity to start on a level 2 apprenticeship and use that for progression, as long as they progress to level 3 after that. I recognise that funds are difficult and that they are not readily available, but if we are going to bid for things in the next spending round, that should be a significant Government priority.
To go back to the careers encounters—what is known as the “Baker clause”—the Secretary of State has indicated to me that the Government want to do more on that. The Minister responsible for skills—the Under-Secretary of State for Education, my hon. Friend the Member for Brentwood and Ongar (Alex Burghart)—has said the same. The Bill is being discussed in the Lords at the moment and no doubt this issue is being brought up by Lord Baker and many other peers. If we are serious about transforming adult education and building an apprenticeship and skills nation, we have to get more skills organisations, further education colleges, university technical schools, apprenticeships, apprentice organisations and apprentices into schools to encourage and set out the incredible career paths available, so that pupils know that there is an option not just of university, but of skills and apprenticeships.
As I said in the previous debate on this subject, when I go around the country and meet apprentices—meeting apprentices in all walks of life is one of the most enjoyable parts of my job—it grieves me that eight or nine times out of 10 they tell me that they have never been encouraged by their school to do an apprenticeship. My first speech in the House of Commons was on this subject in 2010, and that situation has not improved. I have even met degree apprentices who are doing incredible, high-quality apprenticeships—they do not have a loan and are going to get a good job at the end of their apprenticeship—who have offered to go back to their school to talk about their higher-level apprenticeship, but the school has turned them down. That has not just happened once—I have asked those degree apprentices about that—because, with their school, the whole culture is university, university, university when it should be skills, skills, skills.
I urge the Minister to introduce teaching degree apprenticeships. I do not understand why there has been resistance to them in the Department; we have policing degree apprentices, nursing degree apprentices and many public sector apprentices in other walks of life. We have apprentices in every other field, from engineering and law to plumbing and hairdressing. Why on earth cannot we have teaching degree apprentices? There are teaching assistant apprentices; there are also graduate teaching apprentices, but they have to go to university first. If we are to deal with the teacher recruitment crisis—a third of new teachers are leaving before five years in the profession—one way to encourage teachers and would-be teachers would be by introducing teaching degree apprentices. I would like to know the Government’s view on that point. I see the Minister nodding; I hope it is a sympathetic nod.
On adult education and skills, the Government are making significant progress, even with the things that I am calling for, and it is important to recognise that. I am excited about some of what is going on. The Government are talking about skills and apprenticeships in a way that they have not talked for a long time. Importantly, they have also reversed the spending cuts to further education.
Harlow College is, I would argue, one of the best colleges in England. As its Member of Parliament, I have visited it nearly 100 times since 2010; it is one of my favourite places to visit in my constituency because I see there how important and transformative further education is. Colleges are places of academic, vocational and social capital and are doing many of the things that the Government want and need in order to ensure we address the significant skills deficits in our country. However, if we do not get educational recovery from the covid pandemic right, and if we do not address social injustices in education, many of our young people will be at risk of not even reaching that stage in their academic career or reaping the benefits on offer.
I want to focus on the catch-up programme, for which I campaigned. From day one, I was passionately opposed to school closures. I have said time and again that they were a disaster for our children. I know that schools were open for vulnerable children and for the children of key workers, but in the first lockdown more than 90% of vulnerable children did not go to school. We know the damage that that has done to educational attainment, to mental health—referrals are up 60% and eating disorders among young girls are up 400%—and to pupils’ life chances. Tragically, it has also meant enormous safeguarding hazards, with children suffering domestic abuse at home and joining county lines gangs. Closing the schools was a mistake and we should never do it again. That is why, alongside other hon. Members, I campaigned for the catch-up programme early on and was very excited when it was announced. I thought it was incredibly important.
Let us look at the figures on the negative effects of school closures. The Education Policy Institute is to education what the Institute for Fiscal Studies is to economics: it is an incredibly respected organisation. Its chair told the Education Committee:
“In our most challenging communities for the most disadvantaged youngsters, they could be five, six, seven—in the worst-case scenarios eight—months behind in some of their learning.”
Ofsted says that some of the hardest-hit children returning to school after the first lockdown had even forgotten how to eat with a knife and fork and in some instances they had lost their progress.
Given the importance of catch-up, there are real questions about whether the catch-up programme, particularly the national tutoring programme, is fit for purpose. My view is that, under Randstad, it is just not working. The Education Committee has heard evidence from multiple sources about the problems besieging its delivery. In January, Schools Week reported that the national tutoring programme had reached just 15% of its overall target. Moreover, it reported that just 52,000 starts had been made through the tuition pillar of the NTP—just 10% of the 524,000 target.
I have met quite a few headteachers, not just in Harlow but around the country; the Committee has done roundtables and I have gone to schools. They have talked about the bureaucratic nightmare that they face while trying to use the catch-up programme and the national tutoring programme. There are also regional disparities: the NTP is reaching 96% of schools in the south-east, which is good news, but it is reaching only 59% in the north-east and the north-west, so there is a north-south divide yet again. Perhaps most alarmingly, the Department for Education’s annual report and accounts, published in December 2021, rated as critical and as very likely the possibility that the measures in the national tutoring programme to address lost learning would be insufficient.
Just last week, we heard that Randstad has removed the requirement to reach 65% of pupil premium children from the tutoring contracts with providers. What is the point of a targeted recovery programme if it does not reach those who are most in need, and if its targets are removed? Was the decision taken by Randstad or by the Department? I very much hope that the Minister will answer that question. Surely the whole point of the programme is that it is disadvantaged children, who learned the least during lockdown, who need most help. Every child suffered during the lockdown and we need catch-up programmes for all, but we must focus on the most vulnerable children. What is the point of that decision? I do not understand why the target of reaching 65% of pupil premium children has been removed. It is really important that the Minister explains what is going on.
The Government must also, as a priority, address the social injustices in our education system. The Department rightly points to higher standards; as I have mentioned, 1.9 million children are in good or outstanding schools, which is really good news. Until the pandemic, standards were going up, but we must also address social injustice in education.
Let me explain what I mean by social injustice. Just 5% of excluded pupils pass English and maths GCSE, just 7% of care leavers achieve a good pass in English and maths GCSE, and 18% of young people with special educational needs get a decent maths or English grade at the time of taking GCSEs. Attainment 8 scores for free school meal-eligible pupils varied across ethnic groups: for white British pupils, the average was just 31.8; for black Caribbean pupils, it was 34.1; Gypsy/Roma pupils scored 16.9; and Irish Travellers scored just 22.2.
Until a few years ago, we were making improvements to the attainment gap, but that progress is now stalling. Disadvantaged pupils are now 18 months of learning behind their better-off peers by the time they reach the age of 16. Progress had stalled before covid, so we cannot just blame it all on covid that the attainment gap between disadvantaged pupils and their better-off peers is 18 months.
Children’s special educational needs is, understandably, a subject that I care about very deeply and that my Select Committee has done a lot of work on. Parents and families have waited nearly three years for the SEN review to be published, and in the meantime they are wading through a treacle of unkind bureaucracy as they try to get a level educational playing field for their children. The Committee has done a big report on special educational needs. It is wrong that children are not given a level playing field, it is wrong that so many families have to wait for education, health and care plans, it is wrong that the healthcare element of those plans is often non-existent, and it is wrong that there are not enough trained staff.
It is not always a question of money. I recognise that the Government put in an extra £800 million for special educational needs a year or so ago. It is also about money not being spent in the right way. We are wasting hundreds of millions of pounds on tribunal cases that the local authorities always lose. Because children with special educational needs are getting a poor service, their parents are going to tribunals, and I believe that more than 90% are winning their cases. That money could have been spent on the frontline. This is what I mean about money not being spent in the right way; the same applies to the catch-up programme.
I have mentioned that just 5% of excluded pupils pass GCSEs in English and maths. Every day, 40 pupils are excluded from our schools and they are not ending up in some wonderful alternative provision. As we know, there is a postcode lottery. Of course there are good alternative-provision schools, but often in the areas where the most pupils are excluded there is poor or non-existent alternative provision. I agree with Michael Wilshaw that we should try to minimise exclusions and that we should invest in local support units in schools—even if they have to be in a separate building—to train staff and to ensure that parents understand their rights.
Our Committee wrote a report entitled “Forgotten children: alternative provision and the scandal of ever increasing exclusions”. The Government said that they welcomed the recommendations of the Timpson review, but what worries me is that very few of those recommendations have begun to be adopted. That is what I mean by addressing social injustice in education. I want disadvantaged pupils to benefit most from the catch-up programme. I want children with special educational needs to have a level playing field like everyone else, and to be able to get on to the ladder of opportunity. I also want excluded pupils—40 of them each day, as I keep repeating—to be given that chance in life, and not end up in prison. We know that 60% of prisoners have been excluded from school.
A further problem that the Government must confront is persistent absence, which has been highlighted by the Children’s Commissioner today. I call children who are persistently absent “the ghost children”. Even before the pandemic, the Centre for Social Justice reported that about 60,000 children were severely absent from school, and in the autumn of 2020 the total rose to more than 90,000. In her report, the Children’s Commissioner says that, according to a survey of local authorities, in the autumn term of 2021, more than 1.7 million pupils were persistently absent and 124,000 were severely absent. I pay huge tribute to her for highlighting that and for her work with the Government to try to get those children back to school. We are allowing this to happen: more than 100,000 children have mostly not returned to school since the schools were fully opened last March.
I urge the Minister to look at the recommendations from the Centre for Social Justice—I stress that this is my personal view; I am not speaking for my Committee at this point—and to use the underspend from the tutoring programme to fund an additional 2,000 attendance practitioners to work on the ground and return these children safely and securely to school. My hon. Friend the Member for Penistone and Stocksbridge, who is better at mathematics than I am, says that that is about 13 per county, which is not a lot.
What are we going to do? Are we really going to allow this? These children are potentially facing enormous safeguarding hazards, so we have to get them back to school. The Government have said that they will introduce a register of children who are not in school and are being home-educated. That must happen, and it must happen sooner rather than later. I have campaigned for it for a long time, along with members of my Committee, and we recently produced a report on the subject.
If the Minister does not agree with the recommendation from the Centre for Social Justice for an additional 2,000 attendance practitioners, I urge him at least to ensure that there is a proper programme of action that we all know about to return those “ghost children” to school. We need to know exactly what is happening. Six attendance advisers are simply not enough to deal with this problem. Education cannot just be for the majority. Academic capital and social capital must go hand in hand. The Government must prioritise levelling the playing field of education so that every child, including those from disadvantaged backgrounds, has the chance to climb the ladder.
Given that my right hon. Friend the Member for South Northamptonshire is present, I had better say something about early years provision. I suspect that she would be upset if I did not, because she is such an expert on the subject. The additional £500 million for family hubs that was announced in last year’s Budget is very welcome: it is an incredible amount of money. The Secretary of State visited my brilliant local family hub, which is run by Virgin Care and Essex County Council and does a great deal of work on parental engagement. As I have said, the attainment gap between disadvantaged pupils and their better-off peers is 18 months by the time the children reach the age of 16, but we also know that 40% of that attainment gap begins before children reach the age of five. Targeted support at this stage of life is therefore crucial. We also need to ensure that younger children from disadvantaged backgrounds are learning more at an early age.
Dame Andrea Leadsom (South Northamptonshire) (Con)
Does my right hon. Friend agree that one way to ensure that every baby has the chance of the best possible start in life is to ensure that all the services that support families are universal, and not in any way stigmatising?
Robert Halfon
I could not agree more. I have seen the work of Manchester Council in this regard and I think that it should be replicated throughout the country. More families would benefit as a result, particularly disadvantaged families.
Parental engagement is critical and the family hubs should follow a model of best practice. Feltham Academy, for instance, takes a “cradle to career” approach. When I was in Nottingham last week, I met the headteacher of a school that trains parents to act as mentors in the community for other parents who would otherwise be disengaged from the school. That really works.
I should like the Government to consider, in the spending round, its funding of early years entitlements. I do not understand why the three or four-year-old child of an MP, when both parents are working and earning up to £100,000 each a year, qualifies for 30 hours of childcare, while the three or four-year-old child of a single parent in my constituency—or elsewhere in the country—who may not be able to work because they have that young child to bring up qualifies for just 15 hours. I cannot see how that can be the right decision on the Government’s part. I know the Minister will tell me that some poorer families qualify for extra benefits and extra hours, but the fact remains that that is the position.
Robert Halfon
I always give way to the hon. Lady and I promise to do so if she will allow me to finish this paragraph.
I am not necessarily asking for more money, but I do ask the Minister to work with colleagues and consider reducing the generous threshold that exists for parents to claim tax-free childcare, a subsidy that does not capture society’s most disadvantaged families. One way we could do this is by dropping the eligibility cap to £65,000 from the existing £100,000 mark. That could free up £150 million, which would go some way towards covering the additional outlay.
Munira Wilson (Twickenham) (LD)
I congratulate the right hon. Gentleman on his excellent speech. On his point about childcare, I declare an interest as he is talking about MPs with children who qualify for the 30 hours free childcare, as my three-year-old son does. We can have a good debate about who should and should not be eligible for that, and I agree broadly with the point he is making. Does he agree, however, that those 15 or 30 free hours are not actually free because most childcare providers cannot afford to provide childcare at the rate the Government are giving them? Parents are therefore regularly asked to top it up. I can afford the top-up, but many people just cannot afford it and therefore cannot make use of childcare, which is preventing them from going out to work.
Robert Halfon
I absolutely accept that where there are strains for providers of early years education, the Government should look at that and fill in the holes, but I think it varies. Some providers have found it very hard and some have managed to provide that service, but I accept the point the hon. Lady makes.
In conclusion, education recovery and the catch-up programme must be the immediate spending priority. I have previously described the Education Secretary as someone who can get mangoes in the Arctic and Brussels sprouts in the desert. He is that kind of person, and I am not surprised that he has managed to wangle all these extra billions from the Treasury for the catch-up and for an overall budget growth of almost 3%. That is a significant achievement in the current climate, and it has to be acknowledged. The House will have noticed that I have not necessarily been asking for lots more money; I have been asking for the Department to spend the money more wisely. It needs to demonstrate, above all, that the catch-up programme is providing value for money. When the Minister goes back to the Treasury, it is going to say that it is not working, and the evidence out there is that it is not necessarily working for the most disadvantaged. There are serious issues regarding the catch-up programme and questions to be asked about whether children are fully recovering from the lost learning in the pandemic. There are long-term issues of social injustice that need to be tackled, and of course early years must be supported, as I have just set out.
I hope the Minister will recognise that these are the priorities for the Government and that education will finally get a long-term plan and a secure funding settlement. We can have a debate about how much it is, but if the NHS can have a 10-year plan and a long-term funding settlement and the Ministry of Defence can have a big funding settlement over the next few years and a strategic review, I do not understand why Education cannot have a long-term plan and a secure funding settlement, at least over a few years. That would give a lot of stability to everyone working in education, to schools, to colleges and to universities, and that would make a huge difference.
Munira Wilson (Twickenham) (LD)
I find myself in a happy position, because normally I am furiously trying to cut down my speech to three minutes. I do not think that is going to happen today, however. I am really quite surprised and shocked at how few people are here for this debate. To my mind, education and our children’s future, particularly given the impact of the pandemic, is one of the most important issues facing us, and given that this debate is meant to be partly focused around the national tutoring programme, which is key to the recovery plan, I would have thought that Members on both sides of the House would be interested, given that children in every constituency are affected. I thank the right hon. Member for Harlow (Robert Halfon) for his speech and congratulate him on securing the debate.
When I looked at the estimates and saw that they had been reduced from the beginning of the financial year, I was a little surprised. I know that there are explanations as to why that has been the case, but given that we have just been through one of the biggest crises that has faced our country since the second world war, which has had a massive impact on children’s learning, their lives and their mental health, I would have thought that, if anything, there would have been a surge of spending through this financial year. I would have expected to see the estimates go up, not down, so I am a little surprised by this. Maybe the Minister will explain more when he responds. Certainly in my constituency, where I am visiting schools week in, week out, every school is really struggling to make ends meet and increasingly relying on fundraising and parental donations, which I find quite shocking.
I see spending on children and young people as an investment, not a cost, and I would urge the Government to do the same. That investment should be made wisely, but the national tutoring programme, which was set up with the very best of intentions and ambitions, risks proving to be “a disaster”, to use the words of Lee Elliot Major, the professor of social mobility at Exeter University. As the right hon. Member for Harlow has already said, even the Department’s own annual report published in December stated that the risk of catch-up efforts failing to address lost learning was “critical or very likely”.
The concept of small group or one-to-one tuition is an intervention that is well supported by evidence and welcomed by many schools, yet we know that the Government’s contractor, Randstad, has met only 10% of its targets for delivering this sort of tuition. I am surprised that when I challenged the Education Secretary in this Chamber a few weeks ago, when we were in the heat of omicron, on why we were not putting air purifiers into every school, he told me—as he told Sophie Raworth on “Sunday Morning”—that he is laser-focused on ensuring value for money. If Randstad is meeting only 10% of its target, I question whether that is value for taxpayers’ money. I particularly look forward to the Minister’s comments on that.
The national tutoring programme was particularly aimed at tackling the learning loss that has been felt most keenly by the most disadvantaged children. As the right hon. Member for Harlow said, all the evidence seems to be pointing to those children having been failed miserably. The National Audit Office questioned whether the programme is reaching the most disadvantaged, and the Education Policy Institute found a marked disparity in the take-up of the NTP between the north and the south. In the south, upwards of 96% of schools are engaging with the programme, compared with just 50% of schools in the north.
It has been reported that tutoring providers will no longer have to ensure that their catch-up reaches at least two thirds of poorer pupils after the target was ditched, even though this was stipulated as a key performance indicator in Randstad’s contract. How does this all fit with the Minister’s levelling-up ambitions?
The feedback from those on the ground trying to access the programme is damning. The leadership team of one academy trust told me they would give NTP a generous two out of 10. There are concerns that the tutoring partners strand is sucking teachers out of schools, and particularly the supply pool, which the Minister will know has come under significant pressure from omicron. Although all the restrictions have been eased, there are still staff and pupil absences in schools. There are many stories of lessons being cancelled at the last moment and tutors not turning up. Schools have had a mixed experience of the tutors with whom they are partnered.
The administrative complexity and burden have left many schools wondering about the value of opting into the programme. One teacher described the admin side as a farce, telling me, “There’s no way you’ll actually get paid if you try to put in honest information. It’s obvious no meaningful records are being kept. To get paid the first time, I had to do six hours of admin over a weekend. There appears to be no evaluation or feedback on what’s going on.”
With schools having to pay a contribution towards the school-led strand of NTP, how does that work for schools that are struggling financially given the huge disparities in school funding in different parts of the country? I know that at least two primary schools in Twickenham have a budget deficit. They lost fundraising money during covid and were unable to claim for many of their additional covid costs. They rely on parental donations and parent teacher association fundraising for some of the basics, with one school having to ask parents for monthly donations to be able to employ teaching assistants. Many schools are having to fundraise to fork out thousands to switch to one of the Department for Education’s mandated phonics providers.
A DFE survey last year found that just 29% of schools are planning to use the NTP in the current academic year, with 30% being unsure. That statistic speaks for itself. The national tutoring programme, if not failing, is severely struggling. It is time for a fresh approach. The Liberal Democrats have been calling for an ambitious package of support for our children and young people as we deal with the consequences of the pandemic. Sir Kevan Collins’s recommendation of £15 billion should be honoured, with the majority of that money being put directly into the hands of schools and a third going to parents and carers in the form of catch-up vouchers, as they are best placed to know what each individual young person needs, whether it is academic or social. That could include counselling support and so on.
The Education Policy Institute suggests that the economic impact of school closures during the pandemic could run into the trillions over the next few decades. A £15 billion investment in our young people would deliver a far greater return than most infrastructure projects.
Miriam Cates (Penistone and Stocksbridge) (Con)
I congratulate my right hon. Friend the Member for Harlow (Robert Halfon) on securing this debate and on his excellent speech. I also congratulate the hon. Member for Twickenham (Munira Wilson), with whom I agree about the impact of school closures. The biggest challenge facing our children is recovering from the pandemic. In the context of this debate, we are talking about lost learning in reading, writing and maths. My right hon. Friend has already spoken about the number of months—six, seven or eight—that some children are behind, but of course our children face a much wider issue, as they have lost social development and confidence, with many struggling with anxiety placed on them by adults over the course of the pandemic. These children have been forced to spend so much time online—six or seven hours a day—often unaccompanied, as they are doing work. Understandably, we have seen a rise in online harms and serious situations for many of our children. So there are huge challenges for our children at this point.
However, this debate is on the Department for Education’s spending, and I know the Minister will be relieved that I will focus my remarks on educational recovery. As has been mentioned, the Government’s flagship programme for academic recovery is the NTP, for which the plan is to deliver 100 million tutoring hours for five to 19-year-olds by 2024. I am pleased that it is a long-term strategy, acknowledging that we are not going to catch up overnight or even in one or two years. I understand that in the first year of the programme we have already launched 311,000 tutoring courses, and we are hoping to offer access to up to 2 million more this year. I very much support this approach in principle, because I have no doubt that tutoring works and has the potential to turbocharge progress.
I have been both a classroom teacher and a private tutor, and I have to say that the roles are extremely different. A teacher who has 30 year 8s in their chemistry class and is trying to do a practical, where there are 30 Bunsen burners and perhaps some scalpels out—and perhaps some lads want to start a fire in the bin when they are not looking—is multitasking. They are prioritising children’s safety, trying to get them logistically to get the right equipment out and trying to keep to the lesson plan. Of course, they are making formal and informal assessments of what the children know, what progress they are making, who is not paying attention and who is not understanding, but they are very much focusing on bringing the class along as a whole as much as they can. Of course, they do not have that much time to invest in individual students who may be struggling, and their ability to know what each student is struggling with at any particular moment is limited. That is the role of a classroom teacher, and that is how it should be.
One-to-one tutoring is completely different—it is child-led. A good tutor can quickly establish the child’s strengths and weaknesses, and what they do and do not know. They can use intensive questioning to build a child’s knowledge and confidence. Tutoring is especially good for children with low confidence, who perhaps do not have the ability to contribute in a large class. So I have no doubt that a tutoring programme is a really positive way forward and could have truly transformational results. Of course, it also gives the opportunities to disadvantaged children that many advantaged children have been using for many years; private tutoring has become the staple of many middle-class educational aspirations. So the idea of being able to give disadvantaged children access to a truly transformational tool is a very positive development, and I applaud the Government’s decision to allocate resources to this. However, I agree that we need to look carefully at how this money is spent, whether this approach is working and whether we are getting value for money.
One issue we need to address is supply. There are not hundreds of skilled tutors in every part of the country ready to deliver this scheme. If there were, we would be in a completely different scenario. We have to hope that if this programme is going to run for a number of years, those skills will come, people will move into tutoring and they will become the supply we perhaps do not have now. We need to be careful, because tutoring is a skill and teaching is a skill. Just because someone has A-level maths, it does not mean they can tutor somebody for GCSE maths. The skills of teaching and the way of assessing a child’s knowledge are not something just anyone can do. We need to have skilled and trained practitioners.
Schools do not always need to look for external tutors. There are advantages in that approach, particularly for disadvantaged children in meeting new adults and learning to form new relationships, but for many schools the best thing will be to use internal providers and train up existing staff. So I welcome the £579 million for schools to develop localised, school-led tutoring provision, as that is an excellent option for schools. We need to be careful about small schools, which may not have the resource, personnel-wise, to allocate to that, but it is certainly a good development.
There are serious issues with Randstad, as we have heard on the Education Committee. The Government urgently need to reassess its ability to deliver the NTP, because if this is going to be our flagship programme and we are relying on it to deliver results on catching children up on academic education, we have to be sure that it is working and it is money well spent, and that in four or five years’ time we can look back and see that it has achieved results.
We also need to consider the fact that some schools would prefer to have their catch-up funding as a lump sum so that they can decide how best to spend it. They know what their children need most, and many will have more pressing concerns than academic catch-up, as we know from the evidence to the Select Committee about the wellbeing and mental health issues that many children face. There is some great practice out there. For example, Horizon Community College in Barnsley in my constituency appeared on the local news last week. It has set up a wellbeing centre and invited the charity Mind into the school. Children can drop into the wellbeing centre at any point; it is having a huge impact on the mental health of children at the school and they very much welcome it. There are some great examples of good practice out there, although it tends to be found among the bigger schools, which have bigger budgets so can be more flexible. Nevertheless, it is definitely something to learn from.
It is, of course, too soon to tell whether the national tutoring programme is working—it needs to run for longer—but evaluation is key and we have to find a way to assess it over time and, obviously, to make sure it works to start with. If the outcomes are good, I would like to see tutoring become an established part of our education system. It provides a brilliant opportunity to level up. There will of course be an element of trial and error to start with, but if we find a way to make it work, particularly for our most disadvantaged children but perhaps for those who show the most academic promise as well as those who are struggling, it could become a key part of our education strategy, so I very much welcome it.
Matt Vickers (Stockton South) (Con)
We are talking about the big challenge of catch-up across the nation, but does my hon. Friend agree that it is also about the vulnerability of young people? There is a complete contrast in the way people have been affected—for example, there were youngsters who did not have access to the internet at home or to an iPad. It is not a consistent catch-up programme for everybody because some did not have the tech and there were children with special educational needs and so on. It is all about empowering local leaders in local schools to deliver a tailor-made solution.
Miriam Cates
My hon. Friend is absolutely right and I completely agree. All children have been affected by the pandemic—of course, certain demographics and ages have been affected more, but all children have suffered—so he is right that we need to give headteachers in particular the autonomy to decide how budgets are spent in their schools in the best interests of their children.
Let me move on to the adult education budget. We have had a chronic skills gap in this country for some time. The last census showed that in Stocksbridge in my constituency less than 50% of adults had a level 3 skill or above. The fact that there are 1.3 million job vacancies in the UK shows that our population must have a skills gap. In England, just one in 10 adults has a technical qualification; in Germany, the proportion is one in five. We have clearly fallen behind many of our developed-nation competitors when it comes to skills, so I welcome the extra investment of £3.8 billion in further education and skills over this Parliament. The £1.6 billion for the national skills fund and the funding for the lifelong learning entitlement indicate a positive change of direction by this Government that will have a huge impact on levelling up and adult skills.
I wish to focus on a particular type of adult education provider. In my constituency we have Northern College, which is one of just four residential adult education colleges in the country. Its Wentworth Castle setting is amazingly inspirational. I do not know why they built it by the motorway—it is a bit noisy—but it is a fantastic setting: the grounds are managed by the National Trust and students have access to the best Italian staircase in Europe and the longest suspended ceiling. It is an amazing setting for adults who need a second chance at education, for whatever reason.
The college offers short and long course, GCSEs, A-levels, access courses, vocational qualifications, technical qualifications and higher education courses. The residential element is so important for people who need to step out of the normal run of their lives—perhaps they do not live in supportive households—and need the space to develop their learning skills. Many of the adults at Northern College, which I have visited a number of times, have been in prison or have been victims of domestic violence. For all sorts of reasons, they need an intensive second chance in education. The students themselves speak of the transformational impact of residential education on their lives, and the outcomes—in terms of people getting good jobs and staying in work for the rest of their lives—are truly outstanding.
Residential adult education colleges are a very small aspect of adult education provision—as I said, there are only four of them in the entire country—but they are really important. Some adults want to get another chance at education and to upskill, but if someone is 35 and has been in prison, is it really appropriate for them to go to their local further education college and sit with a load of 16-year-olds with completely different life experience and priorities? Northern College and the three other colleges across the country offer a unique and successful opportunity for people who need a second chance. I must mention the inspirational leadership of the principal of Northern College, Yultan Mellor, who has seen the college go from strength to strength to the point at which it is truly transforming lives.
I very much welcome the devolution of the adult education budget; it is a good step forward. Northern College is now jointly funded by the West Yorkshire Combined Authority and the South Yorkshire Combined Authority, which is an understandable move given that that is where the majority of students are drawn from. However, as a result of this devolution, the residential uplift—the element of funding that provides residential support to the adults who need it—is now under threat. That is a problem because there is good evidence to show that this period of intensive learning, with the counselling and the study skills support that is available for these adults, can be life changing. It is also the case that Northern College is not just a local institution; it is a national provider, so there should be some sort of understanding that this residential uplift needs to continue.
The Under-Secretary of State for Education, my hon. Friend the Member for Brentwood and Ongar (Alex Burghart) is due to meet me and the principal shortly to talk about this matter, but may I ask Ministers urgently to take a decision on this uplift so that Northern College and the other three colleges can continue to be an important part of our national education strategy? I know that it is small, but it is key provision for many adults who would not otherwise have the access, the opportunity and the success in learning both academically and in skills.
I want to make two broader points about education spending. First, we must recognise the limits of our education system and what it can achieve. We often think that any issues or policies around children have to be fixed by our education system, particularly by our schools. Certainly the social demands on schools have increased in recent years. It is not just post pandemic, when, yes, children have regressed in terms of basic skills, but was an issue even before then. There are increased reports of children going to school without having been potty trained, and increased incidences of parents not being able to cope and needing the school’s support. We saw that particularly at the beginning of the pandemic when we realised how many families were completely reliant on schools not just for academic provision, but for the surrounding services that schools provide.
Robert Halfon
My hon. Friend is making a very powerful speech. She has talked about how important the tutoring programme could be if it works correctly. Does she not agree that attention needs to be paid not just to the tuition catch-up, but to mental health and wellbeing catch-up? As I highlighted a little bit in my speech, mental health referrals among young children have gone up enormously since lockdown.
Miriam Cates
I absolutely agree with my right hon. Friend. If children are not in the emotional and mental state to be able to learn, all the tutoring in the world will not get them to the place where they need to be. We do have a crisis in child mental health. Lockdown is one reason for that, but there are other reasons, too. We should not fool ourselves that any amount of catch-up spending will solve this crisis in mental health.
Mr Marcus Fysh (Yeovil) (Con)
Does my hon. Friend agree that part of getting children in the right space to be able to learn well is about looking after them in the classroom, too? Even simple things such as making sure that they have had enough water to drink and that they get enough exercise during the day are a massively important part of that picture. It is not just about catch-up spending, but about how we treat them.
Miriam Cates
I completely agree with my hon. Friend. We need to distinguish between wellbeing and serious mental issues. The vast majority of teachers and schools do an incredible job at looking after our children’s wellbeing. I know that my own children probably drink far more water at school than they do at home. There are also programmes such as a Mile a Day. Many children in school also take part in regular mind exercises and mindfulness, which contribute to their wellbeing. However, some of the more sticky mental health issues cannot be easily solved by schools, which leads us into the wider issues. There has been a lack of effective family policy for many years now. There are severe financial pressures on many families not only because we have quite an unfavourable taxation system here, but because we have very high housing costs. There are financial pressures on families.
Matt Vickers
I am sure my hon. Friend will agree that education is the answer to nearly every problem, including the impact on our local economy. In Teesside we have our fantastic new freeport with 18,000 jobs and now, thanks to devolved funding through the combined authority, the Tees Valley Mayor will hopefully be able to generate those skills among local people so we can take on those great jobs.
Miriam Cates
As a south Yorkshire MP, I grudgingly welcome my hon. Friend’s freeport, but I am afraid I do not agree that education is the answer to everything. It is incredibly valuable, and it is frustrating that the education budget has stalled while the health budget has exploded over recent years. That is an issue. However, I do not think education is the answer to everything.
Great education for everybody is clearly a target, but there are more important foundational issues, such as family life. Some of the work of my right hon. Friend the Member for South Northamptonshire (Dame Andrea Leadsom), who is no longer in her place, has shown that those first two years of life are crucial in determining the outcomes of the rest of someone’s life. Academic education plays very little role in those first two years, although development does.
We should recognise the importance of education, but we certainly should not expect our schools to solve every social issue in our country, especially the mental health crisis. We must be realistic about what education spending alone can achieve and not expect Ministers, the Department or schools to be able to solve those deep, structural social issues, which we must address, but which are not the subject of this debate.
We must also look at our overall education budget and how it is weighted across different stages of a child’s life. According to the House of Commons Library, our higher education spend is £11.6 billion a year, but our early years spend is £1.6 billion a year. To me, that seems back to front. When is the best time to invest in a child’s life? It is at the beginning, in the early years, when those foundations are being laid. As my right hon. Friend the Member for Harlow has said, 40% of the attainment gap that develops between the best-off and worst-off children develops by the age of two. I am not suggesting that we invert those two budgets, but we should certainly think about whether we should front-load our educational spend in the early years, when it could potentially have more impact.
We must also ask whether the higher education budget of £11.6 billion is money well spent. Some 50% of our young people now go to university, but five years after graduation 30% to 50% of graduates are in non-graduate jobs, and 77% never earn enough to repay their student loans. I welcome the recent reforms to make higher education spending fairer to the taxpayer and to students, but we need to go further. The cost to the taxpayer is £11.6 billion—I think it is more when we add in the local authority contributions—but only half our young people see the benefit of that enormous taxpayer spending.
We should ask whether we should more fairly distribute that £11.6 billion or more. I welcome the move to spend more on technical and vocational education, but that is not a fraction of the expenditure on higher education. Imagine if the schools budget was spent on only half the population: it would be a deep inequality, but that is what is happening in our higher education budget.
Many of our universities are phenomenal, world-leading assets to this country, but we must ask whether the massive expansion we have seen in the sector in recent years is helpful to either individuals or society. I certainly cannot find any evidence of increased social mobility as a result of the massive increase in higher education spending. I welcome the direction the Government are moving in by raising the priority, the status and the budget of vocational and technical education, because that is important, but we must go further. If we are really going to level up education and the education budget, we must look at distributing the post-18 education spending far more fairly and equitably between academic, technical and vocational routes.
Mr Fysh
Does my hon. Friend know about the wonderful work being done in Somerset around Yeovil College to bring forward new T-levels and different vocational education paths, which are making a huge difference to local businesses and providing local opportunities to develop those skills? It is amazing, and I thank the Minister for how much focus there has been on that. A central plank of my election pitch last time around was getting that skills development put at the heart of Government, and this work is absolutely delivering on that.
Miriam Cates
I thank my hon. Friend for that intervention. I am not aware of what goes on in Somerset—it is quite a long way from South Yorkshire—but I agree that T-levels are a really important development. Indeed, my right hon. Friend the Member for Harlow and I recently met to discuss some of the amazing work that university technical colleges are doing to roll out T-levels. I do think that we are raising the status of technical education, which is key, because half the battle is getting middle-class parents to see that there are alternatives to university. I really welcome that change in direction, but I think we need to go further.
In conclusion, I welcome the national tutoring programme, which I think has the potential to be transformational, but there are some key questions about its deliverability. I welcome the increase in the adult education budget and applaud Ministers for some of their spending decisions. But we must go further. We need real reform of our post-18 education spending if we are really to level up.
Matt Western (Warwick and Leamington) (Lab)
I thank all right hon. and hon. Members for their contributions to the debate and, in particular, the right hon. Member for Harlow (Robert Halfon) for securing it and for his comprehensive dissection of what is happening across the education sector—I have a lot of respect for his experience and knowledge of it. I think his analysis of the catch-up programme was fairly damning, and I will come on to echo some of those points.
The right hon. Gentleman, among his many remarks, highlighted the percentage of teachers leaving the profession, which has to be really alarming for all of us. I speak to a great many teachers and headteachers, as I am sure all colleagues do, and I pick up a sense of disillusionment, frustration and exhaustion, and a sense of being undervalued by our society, and particularly by the Department for Education. The pay freezes have really taken their toll. So many teaching assistants are having to leave the profession because schools cannot afford them, which is placing great pressure on teachers, as we heard from the hon. Member for Penistone and Stocksbridge (Miriam Cates).
I also thank the hon. Member for Twickenham (Munira Wilson) for her contribution. She was right to highlight the disappointing turnout by colleagues today, because this is a hugely important debate. I for one would have wanted to be on the Back Benches, had I been able to be so, because this is having a huge impact on all our communities, particularly on the next generation coming through. We should all be focused on what it means not only for our society and economy, but for those individuals. She also challenged the Government on their failings with the catch-up programme and rightly raised the issue of the shortage of teachers because the programme is sucking teachers out of supply pools.
I listened with great interest to the hon. Member for Penistone and Stocksbridge, a former teacher, explaining just how tough it is for teachers right now. So many constituents are feeding back to me on how this is being felt throughout senior leadership teams, by governors and by all associated with schools, and on the impact it is having on the delivery of education for this generation.
The hon. Member for Penistone and Stocksbridge also spoke about early years and the need perhaps to reconsider priorities. I think the Government should take a long, hard look at what needs to be delivered for early years. I think that we are all in agreement. The right hon. Member for Harlow also highlighted the need for early years education and just how much of the formative education starts in those first five years. So much work has been done by academics and researchers about what that means for life chances in those first few months and years of a child’s life.
I remind the House of the context in which the national tutoring programme was launched. It was in response to the large-scale disruption to primary and secondary schools caused by the covid pandemic, and the Government were right to appoint the highly respected Sir Kevan Collins as their independent education recovery tsar. His recommendations were calculated and clear: if young people were to catch up on their missed schooling, that would require no less than a £15 billion investment in teachers, tutoring and an extended school day. Instead, the Government settled on just one tenth of that figure—a mere £1.4 billion or, to put it another way, little more than £22 per child—and were widely condemned as selling children short. Of course, Sir Kevan Collins resigned in protest.
The national tutoring programme should be a key pillar of the Department for Education’s offer to schoolchildren to allow them to catch up on lost learning, but it is not. From the outset, Ministers have sought to cut costs at the expense of prioritising the needs of children recovering from the disruption caused by the pandemic. Despite the DFE being allocated a budget of £62 million for the national tutoring programme contract—not a huge amount in itself—it settled on a supplier that claimed it could deliver for less than half that budgeted figure. In fact, Randstad, a business specialising in human resources contracts, promised it could provide the contract for 40% of that figure—just £25 million. The reality is that it cannot deliver. It underpriced and underestimated what was needed. The fact that, as has been reported, Randstad undercut competitors by as much as £10 million should have rung alarm bells in the Department and for any procurement professional. Ministers have failed to get a grip on the scale of the challenge facing them, and both pupils and the taxpayer are being let down.
In January, the DFE released data acknowledging that the Minister’s flagship initiative for children in England has reached only 10% of its pupil engagement target a third of the way through the school year. This is serious. To put those percentages into absolute numbers, a mere 52,000 pupils out of the 524,000 who are due to receive tutoring this year have received it. These are the real-life consequences of this Government’s decision to spend a mere £1.4 billion on catch-up, far short of the £15 billion that Sir Kevan Collins said was needed. This is education on the cheap, and it is failing young people. Given the scale of this challenge and the time that the Government have had since the start of the pandemic to get this right, this admission is as shocking as it is damning. Can the Minister therefore update the House on how many pupils have been reached as of this month?
The Minister for School Standards (Mr Robin Walker)
I would not want the hon. Gentleman inadvertently to mislead the House about the so-called 10% figure. Across the three strands, more than 300,000 pupils were reached even under those figures, which refer to the first term of the programme in this academic year, compared with the 300,000 who were reached over the whole of the previous academic year. I will provide an update in my speech, and we will come forward with further figures in due course, but it is important to recognise that as many students have received tuition under the national tutoring programme in the first term of this academic year as in the whole of the first year of the programme. We want to build on that and deliver the 2 million sessions that my hon. Friend the Member for Penistone and Stocksbridge (Miriam Cates) referred to.
Matt Western
I thank the Minister for that point, but as I understand it from the reports in Schools Week that have been referenced by colleagues in the Chamber, there is a significant shortfall against the target. I think everyone is agreed on that. Given that the Minister has himself conceded that the Government need to keep doing better and that they still have work to do, can he really say that he has confidence that Randstad will hit its targets when, as I said a moment ago, I have it that Randstad has hit only 10% of its target a third of the way through the year? I would be interested to know just how often the Minister reviews the contract with Randstad and how often he is holding its feet to the fire over its failures. Is it weekly or monthly that the Department is getting reporting? If so, why has it not moved more quickly?
Given that it is widely accepted that the impact of the pandemic fell disproportionately on the shoulders of pupils on free school meals and those designated as benefiting from pupil premium, the priority could not be clearer, yet that is also the very group that has been most let down by Randstad. Just last week, Randstad sent emails to tutoring providers suggesting that they were
“no longer required to ensure 65% of their tuition support is provided to children receiving pupil premium.”
Can the Minister confirm specifically whether this approach was authorised by his Department? In a joint letter published by seven tutoring providers, they damningly conclude that abandoning the target will
“only serve to widen the attainment gap”.
I think that point was referenced by the right hon. Member for Harlow.
This Government evidently have no intention of guaranteeing education recovery support for those who need it most. To compound that failure, Randstad is refusing to share data with the Education Committee on the number of pupils receiving free school meals who have been reached. Indeed, calls by my hon. Friend the Member for Portsmouth South (Stephen Morgan) to publish a regional breakdown of delivery have gone unanswered, although I heard some reference to them from the right hon. Member for Harlow. Can the Minister confirm whether he has regional data? If so, will he publish it as a matter of urgency? It is not just me asking; I am sure all diligent Members, who may not be here today, would want to see that information. It is vital that we know what is happening in our constituencies in this area, which is one of the most critical elements of the impact of the pandemic.
That also speaks to a wider point about the contractual arrangements underpinning the national tutoring programme. In my life before becoming the Member of Parliament for Warwick and Leamington, I worked in the commercial sector, regularly dealing with contracts and suppliers. It is why this contract strikes me as particularly one-sided, and it further demonstrates the Government’s failure to use public money wisely. That is something we witnessed throughout the pandemic, whether on Test and Trace or suppliers of contracts for personal protective equipment.
Incredibly, the contract can be cancelled by the Government only for website failures, and not for the quality of the teaching and tutoring. By negotiating only three key performance indicators upon which the Department can rely to trigger a swift termination of the contract—none of which concern the quality or availability of the tutoring itself—the Department has prioritised websites over children’s learning. On top of that, recent reports show that Randstad’s chaotic management means tutors are turning up to empty classrooms due to confusion over targets, yet they are still being paid. Teaching empty classrooms is hardly good value for public money and hardly in the interests of the pupils who are most in need of catch-up tutoring.
Indeed, when the Government outlined their national tutoring programme, my hon. Friends the Members for Stretford and Urmston (Kate Green) and for Ilford North (Wes Streeting) set out Labour’s bold alternative proposals. Labour’s children’s recovery plan would have delivered small group tutoring for all who need it and continued professional development for teachers to support pupils to catch up on lost learning. In addition, we would have set up catch-up breakfast clubs and extracurricular activities, providing up to 1.5 billion free healthy breakfasts a year to help children bounce back from the pandemic. We would have ensured that there was quality mental health support in every school and small group tutoring for all children who needed it. It is a real missed opportunity that Ministers did not listen to my hon. Friends and work with them for the benefit of school children across this country. A generation already scarred by real-term Government cuts to school budgets during the past 12 years is being further disadvantaged by this Conservative Government.
Unfortunately, the Government’s record on adult education is similarly dismal. Whatever they may promise in the Skills and Post-16 Education Bill, their actions speak louder than words. The simple truth is that, since 2010, successive Governments have flattened opportunities—a far cry from the claim to be levelling up—by slashing further education funding by one third and the adult education budget by half. More recently, the Education and Skills Funding Agency’s decision to claw back unused adult skills funds from colleges and local authorities if they missed their 2020-21 targets by more than 10% destabilised the sector—a point that the principal of Warwickshire College Group emphasised to me. With 45% of colleges already experiencing financial difficulties prior to the pandemic, that policy only added to the uncertainty and instability in the sector. The effect was scarring, as I am sure the Minister is well aware given the closure of Malvern Hills College, part of Warwickshire College Group, in his neighbouring constituency of West Worcestershire.
With the financial sustainability of FE institutions eroded and many FE lecturers able to secure a higher wage in the private sector or in the school system, where wages are on average £9,000 higher, the Government’s action, or lack thereof, on adult education clearly does not match their rhetoric. Despite many college students, apprentices and learners being adversely affected by the pandemic, Ministers allocated funds only to hold small-group tutoring for the most disadvantaged students aged 16 to 19, with no one-to-one support. When that funding was announced, the Association of Colleges said:
“the failure to fund additional teaching hours or to extend the pupil premium to age 18 means that many disadvantaged students may fall through the gaps.”
Again, the Opposition proposed a solution in our further education recovery premium, which would have extended existing tutoring support in further education to assist those students who most needed support.
As my hon. Friend the Member for Chesterfield (Mr Perkins) has said repeatedly in this House, more than £2 billion in unspent apprenticeship levy funds have been sent back to the Treasury instead of being used to transform the life chances of our young people. We would use the levy funds to create 100,000 new apprenticeships to offer young people the first rung on the ladder to a high-quality job. With our £250-million green transformation fund, sustainable and green skilled jobs would be at the forefront of the skills agenda.
We would also invest in today’s schoolchildren to ensure that they are aware of the wide range of opportunities open to them and that they can make informed decisions about their futures. Every school child would have access to face-to-face professional careers guidance and two weeks of compulsory work experience. In spite of the Minister’s rhetoric about the importance of careers guidance, Conservative Members chose to vote against our plans to ensure that every child leaves school job-ready and work-ready.
We have heard some fine words, but the Government cannot walk or talk themselves away from their record. As the Minister said, they need to do better—900% better—and there is still work to be done. It is clear that the Opposition are putting forward sensible, costed solutions that would tackle the real issues facing our education system, while the Government appear to dither, delay and indeed move the goalposts. We cannot have a contractor changing its own targets—perhaps the Minister will clarify that—but that is what the Government are allowing to happen. That contract costs the Government just £25 million as part of their £1.4-billion catch-up plan, but it is costing young people, our society and our economy dearly and it is failing children, particularly the most deprived and the most needy, everywhere.
The Minister for School Standards (Mr Robin Walker)
First, I thank my right hon. Friend the Member for Harlow (Robert Halfon) for opening this very important debate. I am grateful for the opportunity to discuss my Department’s plans for addressing the immediate and longer term challenges facing young people and adults in education.
I find myself in a rare moment of agreement with the hon. Member for Twickenham (Munira Wilson) in my surprise that the Back Benches, certainly on the Opposition side of the House, were so empty during this debate. Her party brought in at least two Members throughout the entirety of the debate, but the Labour Benches have been strangely unpopulated for most of it. However, that has provided the opportunity for some really excellent speeches by members of the Education Committee—my right hon. Friend the Member for Harlow and my hon. Friend the Member for Penistone and Stocksbridge (Miriam Cates)—and I listened carefully to the points they made.
Since the then Minister for School Standards led a debate on the main estimates in July last year, our pupils, students and staff in educational institutions have gone through more disruption and distress, and now face a different environment as we begin to live with covid. During this period, teachers and other educational professionals have continued to show extraordinary commitment and dedication, and I echo the thanks of the Chair of the Select Committee to everybody who works in the sector. I know that people in all our schools up and down the country have done a phenomenal job in supporting the education of young people and continue to do so.
The Secretary of State has set out his priorities of schools, skills and families, and I think my right hon. Friend the Member for Harlow is right to challenge us to include social justice in that list. Given his focus in this debate, I want to talk about our focus on disadvantaged pupils and the important work of the national tutoring programme before moving on to talk about adult education. First, though, I will set out, as I believe I am supposed to do in these debates, the overall funding picture.
In 2021-22, the Department for Education resource budget is around £82 billion. While there is a small decrease since the beginning of the financial year, as the hon. Member for Twickenham pointed out, this relates primarily to an accounting movement driven by a decrease in the impairment to the student loan book, which itself is driven by macroeconomic factors. Of the £82 billion, £60.2 billion is for estimate lines relating to early years and schools, and £20.3 billion for estimate lines relating primarily to post-16 and skills. Overall, in 2021-22 the Department is targeting about £10 billion of funding to supporting additional needs and disadvantaged pupils in schools, including through the pupil premium and our education recovery programmes.
I assure my right hon. Friend the Member for Harlow and all those present that we continue to look for ways to tilt our policies towards disadvantaged and vulnerable pupils in our schools and colleges. As well as the £2.5 billion pupil premium and the £1 billion recovery premium both focusing on disadvantaged pupils, we are mindful of other pupil groups whose circumstances make academic success a greater challenge. I am looking forward to giving evidence on the Gypsy, Roma and Traveller population to my right hon. Friend and his Select Committee, which I know is carrying out an inquiry on that issue.
Following the 2019 children in need review, we have invested significantly to support the outcomes of children with a social worker. For example, last year we extended the role of virtual school heads to ensure that every child with a social worker has a local champion. For the past two years, we have funded research to test what works best in improving their educational outcomes. From September 2021, school designated safeguarding leads have a greater focus on improving the educational outcomes of children with a social worker, and we recently made changes to the school admissions code to ensure that the fair access protocol prioritises children who have been subject to a child in need plan or a child protection plan in the last 12 months.
For those who have left the care system, local authorities have a legal duty to support care leavers to engage in education, employment or training, including by appointing a personal adviser to help with the transition to independence. Care leavers studying in further education are a priority group for the 16-to-19 bursary of £1,200 a year. Incentives are in place for employers that recruit care leaver apprentices. The Government meet all training costs for young people aged 16 and 17, and this has been extended to the age of 25 for care leavers. Employers can claim an additional £1,000 for every care leaver, in recognition of the additional support they may need, and in 2018 we introduced a £1,000 bursary for care leavers starting an apprenticeship. We have published guidance to universities highlighting the areas where care leavers may need extra support, with examples of effective practice from across the sector. Many universities have now signed the care leaver covenant and published an offer for care leavers, and we provide a £2,000 bursary for each care leaver who goes to university.
We have all witnessed the impact on pupils, students and staff of school absence through illness or self-isolation. One of my Department’s clear priorities is the return of ordered school life and the recovery of lost academic ground, so I shall start my overview with the catch-up funding we have made available to all schools, directed to highly effective activities, and the tutoring revolution we have launched across all parts of England for pupils aged 5 to 16.
The recovery premium, a grant to all state schools in England for this and the next two years, is additional funding worth over £1.3 billion to help schools to deliver evidence-based approaches to support education recovery. We know that disadvantaged pupils have been hardest hit, and it is right that our recovery funding prioritises those who need it most. The recovery premium is therefore based on pupil premium eligibility to ensure that schools with the highest numbers of disadvantaged pupils receive the largest amounts. School leaders are encouraged to use the funding to address their disadvantaged pupils’ specific needs using proven practice, and those requirements are reflected in the grant conditions for the pupil premium. We have protected the pupil premium per pupil grant, and schools are sharing £2.5 billion this year, allocated according to the number of disadvantaged pupils on their rolls. School leaders have a lot of choice about how the grant is spent, but it should be on proven approaches that evidence shows make a real difference to disadvantaged pupils.
As we have heard from across the House, there is good evidence that small group tutoring works to accelerate pupils’ progress. Last year, in its first year, the national tutoring programme launched more than 300,000 tutoring courses. Feedback from schools and pupils was almost unanimous that the programme made a real difference. Given the size of the challenge, our ambition grew for this year, and we aim to supply up to 2 million high-quality tuition courses. We listened to schools’ reflections on the initial year and introduced a new option—school-led tutoring—in September 2021, to complement the tuition partner and academic mentor options.
The £579 million grant, calculated from the number of disadvantaged pupils on roll, enables school leaders to arrange subsidised tutoring themselves using existing staff who are well informed about their pupils and already known to them. That new approach has flourished. The figures we published in January for the autumn term showed an estimated 230,000 courses started by pupils through school-led tutoring, which was far ahead of the expected uptake. When added to more than 70,000 courses started with tuition partners and academic mentors, and last year’s 300,000 courses, it means that more than 600,000 pupils have started to receive tuition since 2020. A school survey suggested that 71% of responding schools felt the tutoring is benefiting academic progress, and 80% felt that it is improving pupils’ confidence.
I greatly enjoyed seeing tutoring in action through different models during my visits to Burnopfield Primary School in County Durham, which was employing an academic mentor, and Dunton Green Primary School in Kent, which was working on the school-led route and where pupils and staff were enthusiastic about the fresh approach to recovering lost education. The Department will be publishing the latest participation data shortly to update the House, the Education Committee, and the public about the progress being made. I have heard loud and clear the calls for more regional data to be available, and I am determined that we get that out at the earliest opportunity.
It was great to hear from my hon. Friend the Member for Penistone and Stocksbridge about her personal experience of teaching and tutoring, and her support for the ambition of reaching 2 million pupils over the course of this year. Although I acknowledge that take-up has been slow in parts of the programme, this Department listens to the schools it serves. Continuous improvement is built into our operation. My officials are working with our delivery partner, Randstad, to address challenges that have arisen this year. Schools continue energetically to employ academic mentors, for whom there is a healthy order book, and tuition partners continue to recruit new schools. We continue to listen to both schools and those delivering the tutoring. Last month we brought together tutoring organisations for a national workshop, and the Secretary of State and I recently met a group of the programme’s tuition partners, to hear their experiences of delivering the programme.
Overall, the programme is on track to deliver its objectives for this year. We constantly review the effectiveness of our policy delivery, making in-year adjustments to ensure that as many pupils as possible benefit from tutoring. That flexibility means that we do not anticipate a notable underspend at the end of the year. The Secretary of State and I have regularly been meeting Randstad, and our officials continue to monitor its performance on a weekly basis.
My right hon. Friend the Member for Harlow has raised many times using underspend from the tutoring programme to address the hugely important issue of attendance. That is a shared priority, and I totally understand his determination to consider that issue, as well as the strong case that has been made for attendance mentoring. I am keen that we explore and consider that, but I do not think it right to cannibalise tutoring funding to do it. I want to ensure that we find other ways of addressing that issue.
A question has been raised about the target for disadvantaged children within the national tutoring programme. I want to be clear that the 65% pupil premium target is not being removed, and the Department and Randstad remain committed to that target across the tuition partners pillar. Some flexibility was introduced for individual tutoring organisations so that schools and pupils did not miss out on valuable tutoring. They were encouraged to look at whether they could move ahead with providing tuition courses to individual schools without having to set that particular target within every single school. I appreciate that the communication of that did not necessarily come across as it should. It is important that we correct the record to be clear that the 65% target still stands and is an important part of how we are targeting this across the system. We are looking at how we can further improve the national tutoring programme for next year and will announce our plans in due course.
My hope and expectation is that more schools and tutoring organisations will get behind this concerted drive to tackle lost education. I look to all hon. Members present and colleagues across the country to champion this unique opportunity for schools in their constituencies. Together, we can ensure that the tutoring revolution delivers its benefits to every pupil who needs it and that, as my hon. Friend the Member for Penistone and Stocksbridge said, it becomes an established part of the education system.
Munira Wilson
The Minister referenced the various funding announcements for the national tutoring programme, but the House of Commons Library briefing says today:
“It is not clear how much has been spent on the NTP so far.”
For the record, can he clarify exactly how much has been spent to date and on the three individual strands: the school-led, tutor-led and mentoring parts of the NTP?
Mr Walker
I do not have those figures to hand, but it is important to state, as in a number of debates, it has been suggested that there will be a major underspend in the programme, that I do not necessarily anticipate that to be the case. I think that we can spend the money and do so effectively, and part of the reason for that is the flexibilities we have introduced to ensure that this can be delivered across all three strands of the programme.
I turn to adult education. My ambition for schools is matched by that of my ministerial colleagues with responsibility for adult education. That ambition is backed by our investment of £3.8 billion more in further education and skills over the course of this Parliament.
Apprenticeships are more important than ever in helping businesses to recruit the right people and develop the skills that they need. I pay tribute to my right hon. Friend the Member for Harlow for his work over a long period to raise the profile and esteem of apprenticeships. We are increasing apprenticeships funding, which will grow to £2.7 billion by 2024-25, and we have already seen more than 164,000 starts in the first quarter of the academic year, which is roughly a third—34%—higher than in the same period in 2020-21 and 5% higher than in 2019-20, before the pandemic. We encourage people of all ages to consider apprenticeships. There is now more choice than ever before, with 640 high-quality standards across a range of sectors.
I note my right hon. Friend’s interest in and continuing passion for teacher apprenticeships and agree that apprenticeships should give a route into a range of professions. I am assured that there is a range of apprenticeships in education, including a level 6 teaching apprenticeship. But we should continue to look at this area while of course maintaining the esteem of teaching being a graduate profession. His suggestion is absolutely in line with that.
I note that my right hon. Friend the Member for South Northamptonshire (Dame Andrea Leadsom) had to leave the debate earlier than we might have anticipated. She has been passionate about advocating the importance of apprenticeships for the early years. She has done fascinating work in that space in championing the value not only of the early years but of its workforce. I was pleased that, at the spending review, the Chancellor announced a £300 million package to transform services for parents, carers, babies and children in half of local authorities in England. That includes £10 million for trials of innovative workforce models in a smaller number of areas to test approaches to support available to new parents. With that work, we can look at some of the areas she has championed such as early years mental health support, breastfeeding support and the early years development workforce as potential areas for the development of new apprenticeship standards.
We are also supporting the largest expansion of our traineeship programme to ensure more young people can progress to an apprenticeship or work. We are funding up to 72,000 traineeship places over the next three years. As part of our post-16 reforms, as set out in the skills for jobs White Paper, employer-led local skills improvement plans will be rolled out across England. Those will help to ensure that learners are able to develop the critical skills that will enable them to get a well-paid and secure job, no matter where they live.
Sarah Owen (Luton North) (Lab)
Before I go any further, I want to declare an interest as somebody who used to help to deliver union learning in workplaces across the country, so I know that access to in-work, lifelong learning has the power to transform lives. Does the Minister accept that the decision to axe the union learning fund undermines any warm words about skills, further education and in-work learning?
Mr Walker
I do not accept that. Some valuable education was provided by Unionlearn, but the Department has to make sure that it is delivering skills in the most effective way. I am sure that the Minister responsible for skills, the Under-Secretary of State for Education, my hon. Friend the Member for Brentwood and Ongar (Alex Burghart), can speak for himself about decisions that have been taken in that respect.
My hon. Friend the Member for Penistone and Stocksbridge spoke very passionately about the role of Northern College in Barnsley and the support that it gets from the combined authority. I know that she is due to meet the skills Minister shortly and he will no doubt be able to come back to her on the residential uplift.
The Government are investing £2.5 billion in the national skills fund. That includes investment of up to £550 million to significantly expand skills boot camps and to expand the eligibility for delivery of the free courses for jobs offer. We know that improving numeracy skills can have a transformative effect, unlocking employment and learning opportunities. That is why we are allocating up to £559 million over the spending review period for our national numeracy programme, Multiply, which is launching this year. But that is not all. Many people need more flexible access to courses, helping them to train, upskill or retrain alongside work, family and personal commitments. That is why the lifelong loan entitlement will be introduced from 2025, providing individuals with a loan entitlement to the equivalent of four years of post-18 education to use over their lifetime.
I recognise the passion of my right hon. Friend the Member for Harlow for careers advice and he continues to press the case for more episodes of careers engagement at school. I have seen some fantastic examples of that, including apprentices coming into sixth-form colleges to talk about the value of what they do, but we share his aspiration in that sense.
In conclusion, the national tutoring programme and our work to reform adult education share a core mission: to help those falling behind and to provide the framework for as many individuals as possible to reach their potential, regardless of their stage of life or location. I am proud of what the Government are doing to deliver that. We will continue to target investment at changes that will make the most difference, and I unreservedly commend this estimate to the House.
Mr Deputy Speaker (Mr Nigel Evans)
The last word goes to the mover of the motion, Robert Halfon.
Robert Halfon
I will go in order through the Members who spoke. The hon. Member for Twickenham (Munira Wilson), who I hugely respect, was on the frontline in trying to keep schools open for most pupils during lockdown, alongside me and many other Members. She made the problems with the catch-up programme very clear, which my hon. Friend the Member for Penistone and Stocksbridge (Miriam Cates) and the Front Benchers reflected on. There is a cross-party view that the catch-up programme, as it is, may not be fit for purpose, particularly the Randstad part of it. As I said, I urge the Government to look at that, and I am encouraged by what the Minister said.
My fellow Education Committee member, my hon. Friend the Member for Penistone and Stocksbridge, talked powerfully not just about the catch-up programme, but about skills. What she said about universities is absolutely right. We have had a mantra in this country of university, university, university when it should have been skills, skills, skills. There has been an imbalance and I welcome the moves that the Government are making to change that. That was an important point and I am glad that she mentioned the statistics relating to Germany’s much more vocational education.
I thank the shadow spokesman, the hon. Member for Warwick and Leamington (Matt Western), for his kind remarks. He was right to highlight the problems with Randstad. He talked about breakfast clubs. Again, I am not asking for more money, but, if the Government were to use just £75 million of the £340 million raised from the sugar levy, that could reach 50% of the most disadvantaged pupils and expand the existing breakfast provision. That is quite important.
I welcome what the Minister said, particularly about the weekly meetings with Randstad and trying to get the catch-up programme working properly. It is important to acknowledge that the overall amount for the tuition programme is £5 billion, not just £1.8 billion. That is a sizeable sum of money in this economic climate. I do not mind at all where the Minister gets the money from for the “ghost children”, but we have to get those 100,000 kids back to school. If there is no underspend, that is fine, but it has to be a proper priority for the Government and there needs to be a serious effort and plan. I am glad that the Minister has explained about the target of 65% of disadvantaged children.
Finally, I do not understand why teaching degree apprentices still have to be graduates. We allow policing degree apprentices and nursing degree apprentices who have not been to university first, so why not teaching degree apprentices?
As I said in the closing remarks of my speech, we need a long-term plan. The Ministry of Defence has a strategic review; the NHS and the Department of Health and Social Care have a long-term plan for health and a funding settlement. If we had the same in education, a lot of the problems that we have talked about today could perhaps be better solved.
Question deferred (Standing Order No. 54).
Mr Deputy Speaker (Mr Nigel Evans)
I now have to announce the result of today’s deferred Division on the draft Genetically Modified Organisms (Deliberate Release) (Amendment) (England) Regulations 2022. The Ayes were 305 and the Noes were two, so the Ayes have it.
[The Division list is published at the end of today’s debates.]
Defence Supplementary Estimate 2021-22
(2 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
John Spellar (Warley) (Lab)
I rise to speak as Deputy Chairman of the Select Committee on Defence. I thank the Backbench Business Committee for agreeing to this debate. May I pass on the apologies of the Chair of the Defence Committee, the right hon. Member for Bournemouth East (Mr Ellwood), who has had a minor operation this week? As we know, he has very strong views on our defence capacity and would probably have wished to express them fairly vociferously in this debate. The defence estimates cover a vast range of work, but I will need to compress my remarks to 10 to 15 minutes to allow other contributions.
This is a dramatic time for defence issues. The agony of Ukraine intensifies, as President Zelensky’s powerful address to us yesterday made clear. The crisis has, of course, been building for a number of years, as Russia has launched successive cyber-attack warfare in the Baltic states and kinetic warfare in Georgia, Crimea and the Donbas. It has now exploded dramatically and tragically in Ukraine. We declare our solidarity with the country, the people and the military forces of Ukraine.
How are we in the UK to react to the dramatic shift in international security relations? Clearly, our Government and Parliament now have to give an urgent and positive response to the long-standing demands of our Defence Committee that we must move towards 3% of GDP for defence spending. The Budget in just over two weeks’ time has to respond positively to that imperative. Colleagues on both sides of the House will speak about detailed aspects of the consequential changes to personnel and to equipment, not least reversing the proposed reduction in numbers of the Army. To leave them sufficient time, I will focus on the broader context.
Bob Stewart (Beckenham) (Con)
I thank the right hon. Member, my friend, for giving way. Surely one of the lessons of what we have seen in Ukraine is that a small group of utterly determined trained, or indeed untrained, men and women can use small arms and anti-tank weapons and stop a hugely bigger force. We are therefore just in time to reverse some of the decisions in the integrated review, such as scrapping 2nd Battalion the Mercian Regiment, an infantry battalion that proved its worth in 2009 hugely gallantly.
John Spellar
I thank the right hon. Member for his intervention—I think he should have declared an interest. He is absolutely right; the defence estimates and the Budget need to reflect the new reality.
I want to concentrate on the broader context: the ideological battle that is taking place, and the institutional shake-up that is consequently required. Most crucially, we have to recognise the full-spectrum approach of our opponents. Commentators in the west often gabble glibly about hybrid warfare, but in the framework of cyber war as an alternative to kinetic capability, and often in a mechanistic way, rather than understanding the political context and the need for whole-of-society resilience.
The Soviet mindset, of which we are now seeing a resurgence, is quite different. For these people, politics—politik—is everything. All agencies of the state are engaged. For too long we have ignored the multidimensional attack on our society, but that is a luxury we can no longer afford. This also means that the integrated defence review has, to an extent, disintegrated, and requires a major revamp which should start immediately. This necessary intellectual rethink must now focus primarily on state-on-state conflict.
Over many years, I have posed a question a number of times to military figures, defence officials and academics. During the cold war, we based our defence and security posture on our assessment of “the Threat”, with a capital T, and I have asked what the Threat is today. Invariably, I receive the answer that we face a variety of threats, but that is not the right answer, because the question is “What is the existential threat to our nation and society?” It is not terrorism, Islamist or otherwise, ugly and vile though that is. Today we—the people of Ukraine, the people of Europe, and indeed the west more widely—know the answer. It is a revanchist Russia and its desire to re-establish the Soviet territory, although I accept that in the longer term, as the defence review states, a revisionist China may be a more significant challenge. That means that today’s estimates are fundamentally an historical document, as, indeed, is the review.
That is not just down to the violently aggressive attacks by Putin’s Russia, but is also, thankfully, a result of the vigorous response not only from NATO allies but from formally neutral countries such as Sweden and Finland, where for the first time there is a public majority favouring NATO membership. The most seismic public reaction has been in Germany, where the new Social Democratic party Chancellor, Olaf Scholz, has rewritten decades of German policy of both parties in his historic speech to the Bundestag. Equally dramatic was the wide political support, including support from the German Greens.
Chancellor Scholz stated clearly that President Putin had created a new reality which required an unequivocal response and a dramatic shift to supply Ukraine with weapons. He also made it clear that making international solidarity possible required new, strong capabilities. Essentially, that means that Germany must invest more in the security of the country. He addressed the readiness crisis in the Bundeswehr, which has been widely publicised and has featured in discussions we have had with our German counterparts. He stressed the need for aeroplanes that can fly, ships that can set out to sea, and soldiers who are optimally equipped for their mission. He has designated a one-off sum of €100 billion to set up a special fund, and has pledged an annual 2% of GDP.
I suggest to the Minister—I should welcome his observations—that we may also need to revise the ideological decision made by his Government, although not by current Ministers, to abandon our bases in Germany. I do not think the indication that we might make some minor return meets the need presented by the current challenge.
This was an imaginative, bold and historic intervention. Scholz clearly, in Bismarck’s phrase, heard God’s footsteps marching through history, and managed to catch on to His coattails as He marched past. I hope that our Ministers see the significance of that intervention, and engage rapidly and deeply with our German colleagues to build on this new reality. I hope they will also engage with our own defence industry. The Financial Times reports that after Scholz’s speech on the Sunday, on the Monday the German Defence Ministry and defence firms were engaged in detailed discussions as to how to ramp up production. The MOD and ADS should take note, because that is the sort of national response that we need. I was talking with the industry yesterday, and this does not appear to have happened, particularly not in the supply chain, which is wondering where it fits into the changed environment.
Mr Kevan Jones (North Durham) (Lab)
But this has been happening for many years. These are political decisions that have been taken, and nearly 30% of our procurement is now bought off the shelf from the United States, with no commitment from companies such as Boeing to reinvest to ensure that not only jobs but technology stay in the UK.
John Spellar
My right hon. Friend is absolutely right. It is vital to have a well-established industry to be able to respond to a crisis. The Ministry of Defence and the Treasury need to break out of the ideological straitjacket that states that domestic industry does not matter and we can buy from anywhere in the world. That is a hugely important change.
The Minister for Defence Procurement (Jeremy Quin)
In fairness, I must draw the right hon. Gentleman’s attention back to the DSIS—the defence security industrial strategy—in which we fundamentally changed our process of procurement. We have a new partnership with British industry, and in discussions with them over the last few days they have been extremely forward looking, as I know he would wish.
John Spellar
I would welcome a bit more detail from the Minister as to the nature and engagement of those discussions. I was talking to a representative from the industry only yesterday, and they are seeing precious little coming through. It is not happening in any way on the same scale or intensity as in Germany. We could argue that Germany is doing some catch-up, but it is really engaging with its industry. As my right hon. Friend the Member for North Durham (Mr Jones) has said, we give away huge orders and get little or nothing in return. Even now, the Minister’s own Department refuses to commit to building the fleet solid support ships in the UK, and his colleagues in the Home Office are giving an order for new Border Force vessels to a shipyard in Holland.
Mr Kevan Jones
It is worse than that. The Department used to hide behind European regulations, but now we are out of the European Union, we should be free to procure in the UK. I challenged the Minister before Christmas as to whether his Department was going to give a £10 million contract to Damen in the Netherlands for a special naval vehicle, and he said we should wait for the competition. Lo and behold, this week it has been announced that Damen has won that contract for a vessel that could have been built in this country.
John Spellar
My right hon. Friend is absolutely right, and we look forward to the Minister trying to give an explanation for that. My right hon. Friend mentions EU regulations. The reality was that no other country in Europe behaved like that, but that was one of the drivers for the British public thinking that the EU was not working in their interests. Had we actually behaved like every other European country, there would have been less anger in this country. Now the Government are claiming that they are bound by World Trade Organisation regulations, but the United States is a long-standing member—indeed, a founder—of the WTO, and it has a “buy American” policy. There is a deep ideology in the civil service, and unfortunately Ministers are afraid to confront it.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
The right hon. Gentleman is making a most interesting speech. He refers to countries that are thinking about joining NATO, such as Finland and Sweden, and there has been a sea change, as he says, in those countries and in Germany. I am a great believer in the British public, and I bet that every single Member here today is getting the same message that I have been getting way up at the top of the UK, which is that we need to defend ourselves against the bear, and against the threat. I believe that the public would warmly support us if we decided to reverse the dreadful cut in the size of the British Army. I think that that would give a great deal of strength to the Government’s elbow.
John Spellar
The hon. Gentleman will see that come through in my speech.
I hope this will, if not eliminate, at least reduce the facile attacks on our defence industry and its skilled, unionised workforce. Can we have no more ill-informed pressure on the City and pension funds to disinvest in defence firms, and no more blockades of their factories?
Likewise, the Foreign Office and the Ministry of Defence cannot be mere observers. They have to engage, and the Treasury has to provide the funding to enable that engagement to be meaningful. They should follow the example of the great Ernie Bevin, who coincidentally was born on this day in 1881. He had the strategic genius to create not only the biggest trade union in the country, if not the world, but the NATO alliance. Furthermore, when American Secretary of State George Marshall gave his speech at Harvard in 1947, Bevin seized on a single sentence:
“The initiative, I think, must come from Europe.”
Through his energy and persuasion, Bevin generated a European response of sufficient weight and urgency to Marshall’s implied offer of American support, and the reconstruction of Europe followed thereafter.
Incidentally, Bevin also saw the need to create the Foreign Office’s Information Research Department to engage in the battle of ideas and the battle to counter disinformation—that is a crucial part of the spectrum—not only in the UK but across Europe. Also engaged in that struggle of democracy versus totalitarianism were leading Labour figures in the IRD Denis Healey and Richard Crossman, who had of course also played a prominent role in the wartime Political Warfare Executive. This cause is currently being championed in the NATO Parliamentary Assembly by its president, US Congressman Gerry Connolly, to put at its heart the democratic values on which NATO was founded.
Now we have to make our defence and security architecture fit for purpose for this existential struggle. Some of that is about recreating past capability and restoring our vandalised capacity for watching and understanding the dynamics of the Russian regime and, indeed, of Ukraine —the neglect of that after the fall of the Berlin wall was a scandal—and some of it is about recognising the relentless political nature of this struggle and funding organisations with multiple skills to wage it, while fully integrating our capacity.
I find it unusual, if not extraordinary, that the Chief of the Defence Staff and the heads of the intelligence agencies attend the National Security Council only as and when. Resources are crucial—that is what this debate is about—but mindset and doctrine are also vital.
Mr Mark Francois (Rayleigh and Wickford) (Con)
The right hon. Gentleman and I are both former Armed Forces Ministers. I have sat on the Defence Committee for five years, and he has served far longer than me and is now our excellent vice-Chairman. He can attest to the fact that the Committee has been warning about the increasing Russian threat for several years. Some of us were derided as hawks who always said the Russians were coming. Well, the Russians have now well and truly turned up, so the Committee was basically right. Does he agree that we must now review the entire integrated review, because what happened two weeks ago was a complete game changer in security terms?
John Spellar
I thank the right hon. Gentleman for his interventions not just in the Chamber but in the Defence Committee on these important issues. This is pertinent to a debate on the estimates, because resources and finances are obviously crucial, but it is the doctrine, the mindset and the organisation that decide the outcome. It is the same in Ukraine, where the morale of the Ukrainian forces, who are fighting for their homeland, is crucial when facing a conscript army who are not sure where they are or why they are there. That is why we have to get this right. We need an increase in the Budget in a couple of weeks’ time, but we also need a reset in our thinking.
Rachael Maskell (York Central) (Lab/Co-op)
When I tabled a written question asking whether there needed to be such a review, I received a complacent answer from the Minister for Defence People and Veterans, the hon. Member for Aldershot (Leo Docherty), saying that everything is all right and that we are meeting the current requirements. That answer came on 4 March, after this conflict had begun. There needs to be a review of our mindset to build up the security of our country, rather than just defending the Government’s position.
John Spellar
I thank my hon. Friend for that. This very much shows that a week in politics can be a very long time, but it also reveals, as she rightly says, a complacency about our situation and about the international situation, which was not justified by events.
In conclusion, what we have to question today is: is there the necessary understanding in the Government of the tasks and indeed the opportunities confronting them? Are they willing to rethink and provide the funds to implement urgent and necessary charge? Bevin understood this and seized the moment, and Prime Minister Attlee backed him to the hilt. So the fundamental question today is: are this Prime Minister, the current crop of Ministers and our dysfunctional civil service up for the challenge or even up to the job?
Johnny Mercer (Plymouth, Moor View) (Con)
Thank you for calling me early in this debate, Mr Deputy Speaker. I want to start by talking about a couple of the points mentioned by the right hon. Member for Warley (John Spellar), which I completely agree with, on mindset and attitude towards defence. He was nuanced and careful on that. As everybody knows, I have campaigned on defence issues for a long time. I am no expert on procurement and I pay tribute to this Minister, whom I worked alongside when I was a Minister, for his attitude towards it. I have found that there has been a significant step change there. When it comes to finance and investment the figures are undeniable and show that over about 50 years, roughly through to the 2020s, there was a decline in investment in defence, by Governments of all colours—we have seen that across the pitch. As this Prime Minister keeps mentioning, we have seen small increases between 2020 and 2022, and the projected increases as well, but I really want to get across to Members here today and to other Members that these increases are in CDEL—capital departmental expenditure limits. The problem with that is that our RDEL—resource departmental expenditure limits—which is our spending on people, continues either to flatline or decline. That means that the experience of those serving in the military continues to go down. Despite valiant work by lots of people to try to improve it, the reality is that if we continue to ask our people to do more and more with less and less, that affects the experience and the “elastic band” in the middle that is taken up by people who do it because they are patriots and believe in defence, as many Members of this House do. That is fine, but they get worn out and are then pushed into society, and a new group comes in. If we continue to have that mindset—that we can burn these people out because new ones will come in—we will see a degradation of defence capability, which we have seen, and we will end up with an integrated review such as we saw.
I thought some aspects of the IR were good, but I have said, both in public and in private—even though it is not easy to say—that aspects of it were dishonest. I do not think we can truly focus entirely on our capital spend and say that our defence capability has expanded so much because we have all this high-tech weaponry and suddenly have this huge shift to high-tech warfare, while also talking about contributary pensions in our armed forces for the first time in the UK’s history. Again, we need to look at what that means for people who are serving. I remember some painful discussions about that, and it was quite a lonely experience. Although the capital expenditure is exciting, we have to be really careful on our resource spend, which is incredibly important.
Sir Robert Syms (Poole) (Con)
My hon. Friend is making a very good point. A smaller military would find it more difficult to go to train nations such as Ukraine. We have a very good tradition of having people train other nations to defend their sovereignty.
Johnny Mercer
That is a really fair point. That was the whole point of enforcing things such as the Ranger battalions, but it was founded really on something that is not true, which is that mass is irrelevant—it is not. Data, technology and all this stuff is important. But look at what is happening in Ukraine now. Why are the Ukrainians holding out when everybody talked about how they were going to get flattened by the Russians? They are holding out because warfare has fundamentally changed: it has changed from the cold war—this is not the cold war reheated—and it has changed from Iraq and Afghanistan. These are Ukrainians, not Iraqis or Afghans riven by tribal disputes. It is fundamentally different and the technology has changed it. What can be done with an NLAW—a next generation light anti-tank weapon—is so different. When my right hon. Friend the Member for Beckenham (Bob Stewart) was in the Army, much like when I was, people had to fly an anti-tank weapon—it actually had a wire coming out the back—and basically steer it on to the tank. The chances of doing that in combat were pretty slim—
Johnny Mercer
Perhaps not for my right hon. Friend—I am sure he hit it every time—but I can only speak for myself and I found it pretty hard to hit the target. These new NLAW weapons are fantastic. They require such a low train-the-trainer base that we can teach Ukrainians to do it. According to a study released last week by the United States special operations community, 280 of the 300 Javelins that the US has given to the Ukrainian forces have had mobility kills. That is a ratio that we have never seen before in conflict.
Let me say finally on the capital spend that yes, that stuff is important, but if we do not have the right quality of people to stand and fight, who know that they are going to be treasured and looked after by their nation—I bore everyone with that all the time—warfare does not work. We are seeing how it works now in the Ukrainian system. We need to be very careful in that space.
Bob Stewart
My hon. Friend, who is my very good friend, has cast aspersions on how good I am with a light anti-tank weapon and, of course, he was correct: useless. The point is that this NLAW, held by men and women who have a basic, infantry-type role, can sort out a Russian attack that is highly technology driven. We have to think again about why, when the integrated review is done, it is done and dusted, finished and stuck. We military people—there are a lot of us around the Chamber—know very well that no plan survives contact with the enemy. It is the same for the integrated review: adjust it. Stop these infantry battalions going, particularly the one that, as my good friend the right hon. Member for Warley (John Spellar) said, I was involved with: the Mercian Regiment. I admit to the Minister that I am biased, but for goodness’ sake he has only a few weeks to stop the cuts so that we keep our infantry. They are invaluable in the new kind of warfare.
Johnny Mercer
My right hon. Friend makes a really valid point. Of all the decisions that we make on defence, I will genuinely be stunned if the Government proceed with that reduction in personnel, given what is happening at the moment.
Let me finish by saying something about attitude and mindset. I am obviously going to bring it back to people, but let me talk about what happens if we consistently focus just on technology. I found the IR quite frustrating, because the focus was on not making bad press announcements about the removal of regiments, although we have obviously heard the example of 2 Mercian. If we have this attitude towards capital expenditure and think that we can win wars in essence just by fighting tech on tech and that people do not matter, that trickles down throughout the whole system and we end up in a place where we are prosecuting soldiers in Northern Ireland when they are 80 years old. It is all about attitude and mindset.
I have sat down so many times with Prime Ministers in this place and they have told me, “Johnny, there’re no votes in defence.” But that is not the point, because there are some things that we have to do to keep the nation safe—of course, they may then become prescient when Russia invades Ukraine and things like that—and they are the boring part. It is our job as legislators, MPs, Ministers and Prime Ministers to go ahead, bring people with us and get them to understand why defence matters. Even if they are not interested in the military, there is its long tail through communities such as mine in Plymouth and in defence industries; there is what veterans groups mean in communities like mine; and there is what it actually means for British people to see their 78-year-old grandfathers taken to court in Northern Ireland for fighting for the freedoms and privileges that we enjoy in this place, and how that feels for a whole generation of veterans. It really does trickle down and I urge Ministers to really think about that expenditure.
Tom Tugendhat (Tonbridge and Malling) (Con)
My hon. Friend is making an extremely powerful speech. He is absolutely right that people claim there are no votes in defence. I would argue that there are no votes in defeat. Sadly, in the past year we have seen a reversal of our interests and influence in places such as Afghanistan and now, sadly, in Ukraine, where deterrence has now turned into defence. Although it may be true that it is not popular to spend money on insurance premiums, the alternative—finding out we are uninsured—is a lot worse.
Mr Francois
I defer to my hon. Friend’s operational service in Afghanistan and the bravery shown by our troops on the ground, of whom he was one. It is a fact that, for all the emphasis on technology, NATO was run out of town in the end by what some ill-informed commentators described as a “bunch of country boys”, who did not have submarines, satellites, artificial intelligence and all the rest of it, but who still won. My point is that, yes, we need high technology in warfare, but we also need trained personnel who are able to use it, and an obsession with technology is not in itself enough, is it?
Johnny Mercer
My right hon. Friend is completely right. The whole end of Afghanistan should be a deep inflection point for the west and our attitude to the utility of force and what we can actually achieve in the foreign policy space. What does victory look like? What are victory and defeat actually going to look like in Ukraine?
Anthony Mangnall (Totnes) (Con)
I am sure that this will come up in the debate, but it is also about retention. We do have a problem in the military, across all the services, in retaining not only the people who are playing a supporting role, but those who are on the frontline. Can my hon. Friend say a few words about that?
Johnny Mercer
Yes, but I will finish here, as my final points are around the people. It really pains me deeply how these people feel after they have spent time in the military. For many of us, it was the most amazing time of our lives. People like me were incredibly lucky and had a great time, but there are many people, including many families, who feel very bitter about it. We have done that by the decisions we have made around investment in their housing, health, and education. They felt it when the Prime Minister decided to take £2 million out of the Office for Veterans’ Affairs.
Clearly, there is a review coming, which I am pleased about, so I say to Ministers that it would be ludicrous not to reinstate what has been cut. I also urge them to please think about the secondary and tertiary effects of how we look after people. It is not just a lonely, boring old song that some of us sing. Those of us who have been right at the tippy end of the spear in this nation’s operations will say that the most important thing to how our people fight and what makes them fight is the moral component. Our decisions in this place and how we advocate with our constituents about defence matter and they make a difference. I urge Ministers to take that with them as they move forward.
Peter Grant (Glenrothes) (SNP)
I was not convinced that I should take part in this debate, because I am possibly the least expert on defence matters in this Chamber, but I do have some comments to make.
Let me begin by saying that I do not think that asking very, very hard questions about defence spending on behalf of any of our armed forces is in any way disloyal to those who put their lives on the line. In fact, I would suggest the opposite, because, sometimes, it is our responsibility to ask the questions and to shout about the concerns that serving members of the armed forces, for obvious reasons, are not allowed to express publicly.
I wanted to speak in this debate because we can argue—no doubt we will continue to argue—about how much the defence budget should be each year. We have already seen the beginnings of an argument on the Government Benches about how much of that should be spent on small equipment, how much should be spent on major equipment and how much should be spent on people. The reality is that there will seldom be enough to spend as much as we would like to on all three areas. What concerns me is that, for far too long, the huge amounts of public money that have been spent by the Ministry of Defence have not been well spent or well managed. That means that, for the amount of money that is put into the defence budget, we do not get the number of soldiers, sailors and air personnel that we could get. We do not get the equipment that we should get, and if we do get it, we do not get it on time.
I have been looking at recent reports from the National Audit Office and from the Public Accounts Committee, which I have had the privilege of sitting on for the past two years. In June 2021, the National Audit Office published a report entitled, “Improving the Performance of Major Equipment Contracts”, because it was picking up on a catalogue of failures, of late delivery, of equipment being delivered that was not fit for purpose, and of contracts going hundreds of millions—sometimes billions —of pounds over budget. It found that in eight of the 19 major programmes under way at the time, the senior responsible owner, the military person with direct responsibility for delivering on that project rated their delivery confidence as “amber/red” or “red”. In other words, the people charged with the responsibility for delivering those projects were not convinced they could deliver what was needed where it was needed and when it wasneeded.
The Public Accounts Committee picked up on that report and took further evidence from the MOD, and our report was published in November 2021. We identified, for example, that the contract for four Astute-class attack submarines was more than £1 billion above budget and the Queen Elizabeth-class aircraft carriers were £2.75 billion over budget. It is easy to look at those numbers in the context of the total MOD budget and say that none individually is a huge percentage, but when we think what £3 billion, £4 billion or £5 billion could do to improve the accommodation that service personnel are living in, for example, and what that would do for morale, that waste of public money is simply inexcusable.
The Committee made a comment that really should have rung alarm bells throughout Whitehall—bearing in mind that this is a Committee where, by its nature, the Government have a majority:
“We are deeply concerned about departmental witnesses’ inability or unwillingness to answer basic questions and give a frank assessment of the state of its major programmes.”
In other words, there was a cultural problem at the highest levels of the MOD and they were not convinced that the Public Accounts Committee, on behalf of this House, had the right to ask such questions.
The hon. and gallant Member for Plymouth, Moor View (Johnny Mercer) said that he regarded parts of the integrated review as dishonest; I must say that some of the financial planning documents that the MOD continue to publish could well be given the same descriptor, because they simply do not give an honest and frank view of the challenges it faces in being able to afford some of its plans over the next 10 years. I mentioned improving accommodation for service personnel, and that was not a random example.
Jeremy Quin
I am grateful for the hon. Gentleman’s comments about some of the decisions made by the previous Labour Government, particularly in relation to the aircraft carriers, although I would not describe having those two aircraft carriers as a waste of Government money. They are an extremely valuable addition to our defence and have an extremely good job to do. I take issue with the idea of any document produced by the Department being, as he was implying, dishonest. We have an equipment plan now that has not been deemed unaffordable by the NAO. For the first time in many years, we are balancing our books and delivering on our programmes.
Peter Grant
I am glad the Minister mentioned the affordability of the equipment programme. I think that plan is dishonest if it describes itself as affordable, for reasons that I will come on to later.
Peter Grant
Given that the right hon. Gentleman is a best pal of mine sometimes on the Public Accounts Committee, I will give way.
Mr Francois
The hon. Gentleman missed the best bit of the November report, which was that the cross-party Committee concluded that the UK’s defence procurement system was “broken”. Does he agree that we are not going to deter further Russian adventurism with a £4 billion light tank that not only does not work, but deafens its own crew?
Peter Grant
I think the right hon. Gentleman will understand that there are far too many examples for me to quote them all. I want to leave some for him. I have no doubt he will bring his much greater knowledge to bear on the example he quoted.
Mr Kevan Jones
The Minister said the plan is in balance, but that is not what the NAO report says. It is only in balance if the Department meets the so-called efficiencies, which, on previous form, it has never met.
Peter Grant
I wish I had not let the right hon. Gentleman intervene, because he has just stolen my thunder, but never mind—“It’s nae loss whit a freen gets”, I think is the phrase we would use in Fife.
The single living accommodation, at the time the NAO started looking at it on 31 October 2010, was being used by almost exactly 80,000 armed forces personnel, or more than half the entire number of people working in our armed forces. Some 36% of those 80,000 people were living in accommodation rated grade 4 or below. The accommodation was so poor that the MOD did not even have the cheek to charge rent on it—that is how bad it was. I do not know what accommodation standards legislation is like in England, but certainly in Scotland it would be illegal to rent out some of that accommodation as a private landlord, a social landlord or a local authority.
Peter Grant
I am sorry, but I really do need to make progress. I could talk until 7 o’clock, if the right hon. Gentleman wants me to, but I think other Members wish to speak.
The Public Accounts Committee reported that the Commands—the Army, Navy and Royal Air Force—planned to use some of the £16.5 billion of additional funding to address the backlog in maintenance and repairs of that accommodation, which at the time was estimated to be about £1.5 billion. The Committee reported at the same time:
“However, this extra funding seems to have already been spent more than once before it had even arrived with the Department”.
As I am sure many hon. Members are aware, if we listed the number of times that Ministers or civil servants told us that an MOD funding problem would be fixed by that additional money, welcome though it is, it would certainly add up to many times. Perhaps that is why they are a wee bit coy about giving us a detailed breakdown of exactly what the money will be spent on, because once they do that we will find out that it will not go nearly far enough.
Peter Grant
The right hon. Member for Warley (John Spellar) is not looking, so I give way to the hon. Member.
Rachael Maskell
I have been carrying out a bit of an inquiry into Annington Homes, which owns a lot of the MOD estate. The MOD is currently leasing 7,230 vacant homes from Annington Homes. Given the refugee crisis and the fact that we have 11,000 to 12,000 people in bridging hotels, would it not be worth investing in those homes and bringing them up to standard, so that they could be used to rehouse people who have now been languishing in hotels for more than six months, not least because many of them served with our armed forces?
Peter Grant
The hon. Member makes an important point, and she reminds us that if accommodation is lying empty, it should not matter which Department or public body has its name on the title deeds; houses are there for people to live in, so whether they are evacuees and refugees from Afghanistan or anyone else, it should be possible to give them the kind of accommodation they want.
I will go through some of the findings of the NAO report, “The Equipment Plan 2021 to 2031”. I think it is dishonest to state as a matter of fact that the equipment plan is affordable, because in order for it to be affordable, as the NAO report states in paragraph 2.7, £3 billion of financial risk was not included. For example, a future combat air system had an estimated cost in its business case up to 2031 of between £10 billion and £17 billion. The equipment plan allocates £8.65 billion, so that one project alone is, at best, underfunded by £1.35 billion, and at worst it has possibly been allocated barely half the money it will cost.
Paragraph 2.17 refers to £7 billion of what the MOD terms “Planned Cost Reductions”—I think this is what the right hon. Member for Warley was referring to. At the time, according to that report, the top-level budget holders had plans to deliver less than half of the £3.1 billion. Some £2.6 billion of it needed to be achieved by 2025, within the first four years, and the first of those first four years is up in three weeks’ time. As the right hon. Member mentioned, the MOD has a dismal track record, assuming it will make massive savings all over the place and delivering very little of it. It cannot afford to get it wrong this time, but I think we all know that the chances of it getting it right and delivering that £7 billion, if its past record is anything to go by, are very slight. It is yet another hole in the affordability of the equipment plan.
Paragraph 20 of the NAO report picked up on an issue that the MOD does not like us to talk about but that I think is very important. It states that the top-level budget holders were
“deliberately spending more slowly on projects to keep within their budgets”.
In other words, they were given a budget to have something delivered and ready to use in 10 years’ time, but they spend the budget in 10 years and then the equipment is not ready until after 12, 13 or 14 years. There can be unforeseeable delays in the procurement of defence equipment, but if the MOD has assessed that the military will need that equipment in 2031, and then someone in the MOD deliberately delays procuring it for any amount of time, simply to make it look as if they are sticking to the budget, I do not see how that can possibly be acceptable.
Elsewhere, the NAO estimated that about £12 billion of savings built into the equipment plan were not savings at all, but were based on spending the money after the period of the equipment plan. They were based on delaying getting this vital equipment to our service personnel. An independent assessment carried out by the MOD’s cost assurance and analysis service, looking at projects that make up about 58% of the current year’s plan—although clearly there will be bigger expenditure on some of them later—reckoned that those projects alone were likely to cost £7.6 billion more than was assumed in the make-up of the defence equipment plan. It goes on and on. The NAO’s conclusion in paragraph 23 is that
“There is a real risk that, despite the additional funding it has received, the Department’s ambition outstrips the resources available to it.”
In layperson’s language, despite the MOD saying it has an affordable equipment plan, there is a very real risk that it does not.
Finally, the affordability of the equipment plan depends on getting an inflation plus 0.5% budget increase every year up to 2031. The Treasury has said it is comfortable with that, but given what has happened recently to public finances, the cost of living and inflation, I question whether it is still realistic to assume that is guaranteed. It is possible that it will be delivered; if it is not, that is yet another hole in the affordability of that plan. I make no apology for saying that where the equipment plan says that it is affordable and does not put all those caveats against it, it is a dishonest document for anyone to have published. It makes statements that are patently not justified, even by the information that was made available to Members of Parliament and, indeed, members of the public.
We can argue about whatever amount of money is allocated to the Ministry of Defence in this year’s budget or next year’s, or in any year coming, but we are failing our service personnel. The Government, this Parliament and the MOD are failing our service personnel, first because they are not being open and honest with them about the financial challenges they continue to face, but most importantly because surely, when somebody signs up and is willing to put their life on the line—let us not forget that two young men from Glenrothes lost their life fighting an illegal war in Iraq, and would probably be here today if they had had the best possible equipment available—the very least they are entitled to is living accommodation that is fit for human habitation, and to be given the best possible equipment available to defend themselves from enemy attack. I do not have confidence that this Government, or any future Government in this place, will genuinely honour those commitments.
That is why, whatever budget is set for the MOD through the due process, there needs to be a complete root-and-branch review of financial management—far too often, financial mismanagement—within the Ministry of Defence. It is costing billions and billions of pounds that the MOD simply cannot afford to waste, and there will be times when it risks costing the lives of our service personnel.
Dr Julian Lewis (New Forest East) (Con)
Not for the first time and, I am sure, not for the last time, the House has cause to be grateful to the right hon. Member for Warley (John Spellar) for reaching across the party divide in support of the strongest possible defence of this country and the strongest possible support for NATO. It is in that spirit, as a former Chairman of the Defence Committee, that I acknowledge the stalwart support he has given to successive holders of that post. This is an opportunity for defence-minded parliamentarians to give some initial reaction to the colossal and extraordinary events of the past fortnight in the context of what Britain was going to spend on defence, and what it should spend on defence in future.
In June 1950, five years after the end of world war two and following a time of mass demobilisation, the Korean war broke out. The effect of that conflict, quite apart from the terrible consequences for the people living in Korea, was to cause a huge reassessment of the amount of national effort that must be invested in defence in the United Kingdom. That led to a reconsideration of the level of defence expenditure, and I suggest that the seismic events of the past two weeks should lead to a similar reassessment of what we are prepared to invest in defence in the United Kingdom in the 21st century. We cannot conduct this debate as if nothing serious has happened to transform the situation in the past two weeks.
Although it is very early and the outcome of the conflict is still very much in doubt, I suggest it is possible to come tentatively to about half a dozen conclusions, and I will run through them very quickly. First, I think we can say that the advanced public messaging by the United States, NATO, the United Kingdom and other allies has been outstanding. It has prevented President Putin from seizing the narrative. By predicting accurately in advance what he was going to do, it has completely undermined his potential disinformation campaign. Every pronouncement that we hear from the Kremlin is so ludicrously at odds with reality that it cuts no ice at all, except with those totally indoctrinated.
Secondly, the events of the past fortnight dispel any illusions we might have had about the nature of our Russian adversary. As has been said rightly many times by those on the Front Bench, that is not the Russian people, but the people in control of that great, but benighted country. We must remember that people such as President Putin are the direct descendants of the regime whose ideology led them to kill millions of their own people in the decades in which Leninism and bolshevism held sway. Although the communist doctrine has collapsed, the mindset, the imperialism and the brutality have not. I have previously described President Putin in uncomplimentary terms, and I think it is worth repeating them. This man is a cynical, sneering psychopath. He does not care how many people he kills, as long as he gets his own way. Anyone thinking that there is a way to reason with these people, rather than deter, contain or, if necessary, defeat them, is living in a world of fantasy.
Thirdly, in light of Ukraine’s decision to give up—admittedly it was not a system it could operate at the time, but given time it could have done so—the third largest nuclear arsenal in the world, which it inherited from the former Soviet Union, any lingering doubts about the wisdom of the United Kingdom continuing to possess a strategic nuclear deterrent as long as Russia does so have finally been put to bed.
Peter Grant
I can assure the right hon. Gentleman that we do not have a problem with the issue; we have a problem with nuclear weapons. Is he not aware that as a matter of international law, as a successor state to the Soviet Union, Russia was the legal owner of those nuclear weapons? It was entitled to take them away. Ukraine would have been in breach of the law to try to hold on to them.
Dr Lewis
Yes, and I am also aware that as a result of Ukraine’s decision to give up those nuclear weapons, Russia guaranteed the security and the borders of Ukraine. If the hon. Gentleman is going to throw international law at me, all I can say to him is that, if he thinks that those sorts of manoeuvres and unilateral renunciations are the way to stop someone being attacked and destroyed by a ruthless adversary, it should be a long time indeed before he and people who think like him have any influence on the way in which we choose to keep the peace—by deterrence—so that we do not end up in a situation like Ukraine.
Fourthly, this horrible situation should establish whether and to what extent economic sanctions can force an aggressor to desist. It is often said that the world has become more interdependent. We will never see a more extreme example of democratic countries seeking to use economic pressures to force an aggressor to desist. If that fails to work in this instance, it will be a further argument for increased investment in hard defence capability, because that particular aspect of hoping to be able to turn war into an outmoded concept will, sadly, have been disproved. I hope that it does play a part in stopping Russia from proceeding, but I am not holding my breath.
Fifthly, the conflict has exposed the folly of fuel dependence on hostile countries and raised questions about the wisdom of a policy of unilateral net zero targets by democracies regardless of what much larger countries, that are not democracies, do. I am not seeking to pick an argument with the environmentalists; I am merely saying that there is a parallel with the question of unilateral or one-sided nuclear disarmament, because if we achieve net zero at tremendous cost to ourselves while much larger hostile countries simply flout the commitments that they have given, we will have taken that pain for no benefit to anyone. Targets must be multilateral if they are going to do anything other than weaken our ability to protect ourselves.
The last of the six lessons is that the conflict has killed the idea that conventional aggression by one state against another is an outmoded 20th-century concept. Time and again, people such as the right hon. Member for Warley on the Opposition Benches and my right hon. and hon. Friends present on the Conservative Benches have raised the question of what an appropriate level of defence investment should be, only to be told from on high, “You’ve got to realise that there are new forms of warfare. The next war will not be fought much with conventional armed forces. It will be fought in cyber-space or even in space itself.” Of course, there are new and serious threats—potentially fatal threats—in those two newer areas of conflict, but they are additional threats. They are not substitutes for the threats that we have always faced and continue to face from conventional armed forces.
Bob Stewart
I thank my right hon. Friend—who is a good friend and is gallant, because he was a midshipman once—for allowing me to intervene. One thing that the Russians are showing is that to take territory, people have to put boots on it. But, guess what? We are chucking our boots out. That is appalling and we must reverse that decision.
Madam Deputy Speaker (Dame Rosie Winterton)
Order. Before the right hon. Member for New Forest East (Dr Lewis) comes back, I think it is important to let hon. Members know that I will have to impose a time limit when he has finished, otherwise we will simply not get everybody in. The time limit will probably be around six minutes, depending on how long he takes.
Sir Robert Syms
There are one or two other lessons from the current conflict. One is the impact of mobile phone cameras and psychological ops on the way in which a country communicates with itself and the world, and I think we could learn from that. I think we have lost a lot of the skills that we had in the second world war and when we were facing the Soviet Union, and this is one area we need to look at.
Dr Lewis
I quite agree with both my right hon. Friend the Member for Beckenham (Bob Stewart) and my hon. Friend.
Bearing in mind your advice, Madam Deputy Speaker, I will conclude with one point about the budget itself. During the period in which I chaired the Defence Committee, we produced two reports—one in 2016 called “Shifting the goalposts?” and the other an update to that report in 2019—with the purpose of setting very firmly on the record what the proportion of GDP spent on defence had been historically on a like-for-like basis. It is a fact that, in the aftermath of the Korean war, defence spending as a proportion of GDP at one point was as high as 7%. In about 1963, it crossed over with spending on welfare at 6%. That was all a long time ago, but as recently as the 1980s the spending on health, education and defence was roughly the same at just over 4% of GDP.
Mr John Baron (Basildon and Billericay) (Con)
My right hon. Friend, I and probably everybody present in the Chamber have been calling since we have been Members of Parliament for much higher defence spending. I think that is accepted. However, does he agree with me that once that higher level of spending is determined, we should not necessarily link it to GDP, because economies can go up and down? There have to be real-terms increases once that higher figure is decided, otherwise the armed forces will not know where they are and it will be difficult to plan.
Dr Lewis
I do agree with that point; using GDP percentages has always been only a very rough and ready guide.
What was absolutely shocking was the way in which, given that even within half a dozen years of the downfall of the Berlin wall—as late as 1993-94—we were still spending 3.1% on the old method of calculation and 3.6% on the new method of calculation, whereby the MOD is allowed to include certain things we never used to include, it then became an argument as to whether we would even manage to achieve 2% of GDP. Our expectations have been managed down so far that when, even in recent times, a number of us have called for 3% to be a target, it was regarded as being completely out of reach. It should not be out of reach. The sort of effort we put into defending this country is the most important investment we can make, so 3% of GDP should now be seen not as a target or as a minimum, but as a stepping stone on the way to a realistic investment to meet the threat that never really went away, the reality of which in Ukraine has now been proclaimed for all the world to see.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
I shall try to be helpful and keep my contribution relatively brief. Typically of such debates, it is very good in some ways and not so good in others. It is very good in that I sense that on all sides of the House we are singing from the same sheet. That is good for our armed forces personnel, because they are hearing a message supportive to them. It is bad in that most of my speech has been covered.
However, I have read the December 2021 House of Commons Defence Committee report “We’re going to need a bigger Navy” with the very greatest of interest, and I congratulate the right hon. and hon. Members on the Committee on putting it together. It is sobering reading, and I will draw just two facts out of it. I will do this because my grandfather served with the Royal Navy at a time when the Royal Navy really did rule the waves: it was the biggest navy in the world. For the interest of the House, I will point out that my grandfather trained at “Britannia”, as it was known, in the very same two years as somebody called the honourable Reginald Drax, who is in a photograph with my grandfather—our ancestors were there together.
I would pull two things out of the report. The Type 45 destroyers having their engines repaired, which meant that so few of them were at sea, is a disgrace. We cannot have that happen. They are now projected to be re-engined or repaired by 2028. That is not good enough. We need these state-of-the-art warships at sea as soon as possible—right away—and if that takes extra money, so be it.
The report also contains a reference to the Type 31 frigates, and an eloquent argument is put forward that we will probably need more than the five that are planned. The national flagship idea has its attractions, but—I have made this point before—if we are to build the ship at roughly the same cost as a Type 31, would it not be better as a Type 31? We could have internal alterations to accommodate Her Majesty, civic leaders, or whatever we want to do with it, but we should have it as a warship, rather than as a national flagship that will, in turn, have to be escorted, I fear, by another warship.
I will end where I began: the size of the British Army. I cannot compete with the august gentlemen on all sides of the Chamber who have served in the armed forces, but many years ago I was Private Stone in the mortar platoon of C company of the Second 51st Highland Volunteers. That battalion was set up in such a way that if—perish the thought—something happened in Europe and the bear began to growl, I would give up my day job and be whizzed right off to Germany. That was what we were intended to do. We knew that and we knew it was part of the job spec. I am also bound to say that Russia—the USSR as it then was—knew that that was how those battalions of the British Territorial Army would be deployed in the event of a deteriorating national situation.
Jim Shannon (Strangford) (DUP)
I agree wholeheartedly with the hon. Gentleman’s comments about the size of the British Army and the need to return to the numbers we have lost over the past few years—the right hon. and gallant Member for Beckenham (Bob Stewart) referred to that. In Northern Ireland, we are able to recruit above the norm of what we are allocated. The Minister will be aware of that. Does the hon. Gentleman feel that extra numbers of recruits should be set aside for Northern Ireland for full time, but also for the Territorial Army and the reserves?
Jamie Stone
I would, of course, endorse what the hon. Gentleman has said, and having had two brothers-in-law who served in the Ulster Defence Regiment, I know a little about it.
I do not want to mislead the Chamber. I do not want the impression to be abroad that Private Stone, doubling forward by half section with his Carl Gustaf, made a huge contribution to the defence of the realm. But what I am saying is that I knew a bit about how things were done back then, and it was about credibility and our potential opponents seeing that we were serious about defending this country. Finally—then I will sit down, Madam Deputy Speaker—the point is well made about having numbers of armed forces personnel to train our friends, such as has been happening in Ukraine. I have said this many times before and I say it one last time: if we take the British Army below a certain size, it will not be such an attractive career choice for the brightest and best who we need to employ to defend our nation.
John Howell (Henley) (Con)
It is a pleasure to speak in the debate. As always in this debate, there are good things and bad things. I am pleased to see that the UK remains the biggest European NATO spender, second only to the United States, but there are also bad things and hon. Members have particularly mentioned the cut in the British Army.
John Howell
I see my right hon. Friend is nodding, so perhaps he will not intervene on me, having made that point. But there is another point on that—the strategic investment that the Royal Air Force will be making, which I will come back to. I am very conscious that it is not just us increasing spending now but countries such as Germany and Denmark. I encourage them to increase their spending further.
Before I come to the Royal Air Force, let me say a word about the Navy. Before the crisis between Russia and Ukraine started, I got the Navy’s leading expert on Russia to come to speak to my delegation to the Council of Europe. Hon. Members may ask why I got a naval expert to come to a delegation that has said it has nothing to do with the security apparatus of Europe. The reason is that I do not buy that argument and actually what the rear-admiral concerned said filled us with a tremendous amount of horror. He pointed out Russia’s interest in the Baltic passages in particular and, more generally, how ill-equipped we were to be able to deal with that. I therefore ask for more investment to be made in that area.
Something like £2 billion of strategic investment is to be made in the Royal Air Force. I think that that should be increased. If Russia has taught us anything, it is that investment in tanks is not a very good investment. If we look at Ukraine, a huge amount of anti-tank missiles are there already and something as fleet of foot as the Royal Air Force is to be commended. I do not want to set a hare running, but I hope that the Minister can confirm that bases such as RAF Benson are not earmarked for closure. They play a vital role and Benson does in particular in looking after the helicopters that we use all the time in our Air Force. They also have another use; they provide training.
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
I had the privilege of visiting RAF Benson just a couple of weeks ago and I reiterate my hon. Friend’s comments on that base’s contribution to training the next generation of helicopter pilots and supporting the wider RAF and, indeed, the local community. I echo his remarks and hope that the Minister will confirm that Benson is not earmarked for closure.
John Howell
I thank my hon. Friend for his remarks and support. I was going to mention some of that training—and, indeed, some of the training that I have gone through there. Benson is home to CAE, a company that provides a tremendous amount of simulator training for the RAF. He will no doubt be pleased to know that I flew a Chinook and a Puma on the simulator so successfully that I did not crash them. I think that is a tribute to the success of the training, rather than to my dexterity at the controls of two very large aircraft.
On the relationship with companies that provide equipment and larger things to the military, over the years I have tried to put across to the Minister’s Department the idea of a conflict avoidance board for such projects. They work incredibly well in industry. People who are skilled in mediation sit on them and their aim is to stop something becoming a conflict. As we all know, all projects have such problems during their lives and conflict avoidance boards are good at ensuring that we can avoid such conflicts. What is the benefit of that? It goes straight to the heart of the budget. Doing that is much cheaper than spending vast amounts of money going through the courts, with QCs and whoever else is needed to settle a particular argument. I urge the Minister to look at the scheme again for his larger projects. The feedback that I got was closer to a kick in the teeth than anything else, yet I think the boards have tremendous potential. On that note, I will finish and allow somebody else to take over.
Mr Kevan Jones (North Durham) (Lab)
I thank my right hon. Friend the Member for Warley (John Spellar) for opening the debate. He is right that our thoughts today are with the people of Ukraine and the brave servicemen and women, and civilians, who are resisting the might and cruelty of Putin’s war machine. As the right hon. Member for New Forest East (Dr Lewis) said, that focuses our minds in our debate on defence.
We need to ask how we have ended up with the smallest Army in our history. That has not happened by accident; it is a political choice. In 2010, a Conservative party came into power, in the coalition Government, that had argued before the election for more spending on everything in defence, but then, suddenly, they got into a programme of austerity, under the cloud of a mythical £38 billion black hole that the bad Labour Government had left them. That never existed and we know that because within two years, it seemed to have disappeared, given what the Government said.
That Government cut the budget by 16% because the Treasury wanted money out of that budget. The hon. Member for Plymouth, Moor View (Johnny Mercer) asked why this was about people—well, it was about people because that is how to get money quickly out of a budget. The Government did things such as making people take compulsory redundancy and losing people with vast experience, and it was absolutely shameful. If a Labour Government had done that, frankly, there would have been an outcry.
John Spellar
Is my right hon. Friend not shocked that that Government did not learn lessons from the cuts in personnel under Options for Change after the end of the cold war, which led to the same collapse in morale and loss of experience?
Mr Jones
My right hon. Friend is right, but these measures were not about that. They were about the Treasury making austerity cuts. We now have a situation where the present Government—who, again, talk in slogans—talk about the biggest cash injection ever. The budget will still be lower in real terms than it was in 2010. The fact is that, like the right hon. Member for New Forest East, I would agree with increasing the defence budget, but we have to recognise how we got to where we are today.
Interestingly, there is clearly some thinking going on in the MOD, because I asked a parliamentary written question last week, which I tend to do, as the Minister knows, on whether the cuts would be reversed. I would have expected to get a reply within days, but last night, I got a holding reply saying that the question of whether the MOD would reverse the decision on reducing the Army to 73,000 personnel could not be answered in the normal timescale, so I suspect that a lot of work is going on in the MOD on that. It has to look at that, because everyone who has spoken in this debate has said that, although we can have enough equipment and the concepts of war, at the end of the day, we need people. That is key.
As Members know, I have always been an advocate for defence and I would argue for more defence spending, but I think that argument will fall on deaf ears a lot if we look at the way that this matter is being managed internally in the MOD. The NAO report is a bit like groundhog day: every year it comes back with a catalogue of delays and overspends. Whatever the Minister says, I am sorry, but he should just read the report. The budget is not in surplus. It misses things out and looks at efficiencies. But it has been like this for the past 10 years, and efficiencies have never been achieved and never will be.
It is important that we use defence expenditure, if we actually get it, to generate capacity in the UK defence industry and ensure that we get the equipment we want. I welcome things like the national shipbuilding strategy, but I am appalled that, even this week, the MOD has given a £10 million contract to a Dutch yard for a vessel that could have been built here. The right hon. Member for Ludlow (Philip Dunne) has done a very good report that says that we should take social value into account when awarding contracts. I have asked the Department and now the National Audit Office to tell me what the formula is for that.
We are buying off the shelf from the United States and others, without any commitment to supporting our native shipbuilding and defence sector. I am one of the people arguing for more on defence, but I want to ensure that there is a proper defence industrial strategy behind it, not only to deliver for our armed forces, but to ensure that we get jobs and prosperity here. I see no evidence of that at the moment.
The last thing I would like to talk about is the nuclear deterrent. As the House knows, I have always been an advocate for our continuous at-sea deterrence, and these times have brought its importance into sharp focus. It will be important for the Department to ensure that the programme not only has finance behind it, but is actually on target. People have talked about the guarantees that Ukraine was given; whatever Putin guarantees is completely worthless, but the one guarantee that we have behind us is the nuclear deterrent. It is important that we maintain it.
These are dark times. We will hear a lot of instant judgments about what is happening in Ukraine, but we cannot have armed forces without people, and we have to invest in those people. It is not just about numbers, but about making sure that we have the right skillsets and that they continue. Frankly, the IR is now redundant and has to be revisited. And can we get away from the slogan “global Britain”? It is a great slogan, but it suggests that we are going to rule the waves and send power around the world. We will not, on our defence budget, and we never will again.
We have to ensure that we invest in what we are good at. It might be unpalatable for some Government Members, but we have to work with our European colleagues in NATO to ensure that we deliver a deterrent effect—I was going to say “on the Soviet Union”, and actually there is not much difference between that and Putin’s ideology and the way he is doing things. We have to ensure that that happens and is done in a coherent way. We have to get away from the rhetoric. Let us have a proper defence budget that is not only in balance, but puts the investment where it counts.
I will break the habit of a lifetime and agree with the hon. Member for Plymouth, Moor View, who has just come back into the Chamber: we have to invest in people. We can have all the best equipment in the world, but without the people, the skillsets and the right mix, we will not get a deterrent effect or treat our people right, as they deserve.
Sir Robert Syms (Poole) (Con)
It is quite clear that since we ran down our defence establishment following the cold war, events have proved that we need to spend a lot more on defence. One thing about the cold war was that it froze a lot of conflicts in the world, because it involved the two great powers. Since we ran down our defence spending in the 1990s, we have been committed for years and years to several conflicts, firing in some and peacekeeping in others, so there has been a tremendous strain on the military budget over a long period.
The strength and value of our defence establishment is in the leadership, training, tradition and morale of its people. Our services have quite often been deployed with kit that is older or is not that good, but because of the quality of those men and women, they have been able to fulfil their task. What is coming out clearly from this debate is that we need more boots in the military, because that gives us a lot of options.
One thing we know is that while Ukraine has a defence establishment of about 200,000, it has 400,000 veterans in the Donbas, it has militia and volunteers and there are probably several hundred thousand people with Kalashnikovs running around, which is why the Russians are having a terrible problem. Being armed with modern anti-tank and anti-aircraft missiles adds a little bit of edge to that.
I think we need to revisit the integrated defence review, and I think we will need to spend more on defence. If Members disagree with that, they should talk to their constituents, because I think most of our constituents realise that this is one area in which we have to get it right. We need only look at a country where, in blocks of flats, schools and hospitals, children are being killed to realise that our own first duty as a country is to defend our realm—within NATO, but we must also have the ability to do this ourselves, because ultimately it is our responsibility to protect our fellow citizens.
This is, I think, a wake-up call for us, and I am sure that the Government will listen to what people are saying. The only question is whether we end up at 3% quickly or slowly, because I think that that will be the direction of travel. We need new kit, but it is it is clear that unless we increase the defence budget, we will not retain the personnel and secure the equipment that we need to remain a substantial military power. There are items in the review that we were going to do without for a while, such as AWACS—the airborne warning and control system—and I think that that is very short-sighted.
Let me say to the Minister that I think the Ministry of Defence will receive substantial support, from some Opposition Members and certainly from many Conservative Back Benchers, for a review of where we are now and where we are going to go. History does repeat itself. Sometimes we think it will not because no one will be stupid enough to do what people have done before, but we need only look at the Soviet-Finnish war of 1939-40 to see many parallels with what is taking place now.
This country has much to be proud of in its support for Ukraine. I would not particularly like us to be fighting tanks at the moment, because I suspect that we are rather short of anti-tank missiles—I hope the Minister is ordering new ones just in case—but the simple truth is that we need air power, we need more power in the form of ships to support our aircraft carriers, and we need more of our Army personnel.
As I said to my hon. Friend the Member for Plymouth, Moor View (Johnny Mercer), people have been training the Ukrainians for seven years, and some 22,000 have now been trained. I am sure they are putting that training to very good use at the moment in fighting for their survival. The British Army, even when it is not fighting, can help our friends by using its skills and abilities to ensure that the military in other countries gain the benefit of our experience. Of course, we have been at the other end of wars, driving along roads when people have shot at us, and we have learned many lessons over the years that we can impart to our friends.
I also think—my right hon. Friend the Member for New Forest East (Dr Lewis) understands this—that we should take on the lessons about psychological ops, propaganda and putting one’s own side of the story. Communicating with people is very important, and the Ukrainians, whatever their military skills, have the support of the world because they were quick to do that. The Russians may be just a Soviet tribute act, but they are behaving in exactly the way the Soviets would have behaved, spreading disinformation and not being honest with people. I have been amazed at the bravery of ordinary Russian citizens who, although they do not get the full truth from their media, have been willing to demonstrate and to be arrested and beaten. I wonder how I would behave if, living in Moscow or St Petersburg, I opposed an invasion. Would I be brave enough, or would my family be brave enough, to demonstrate in the same way? People show courage in tremendously different ways. You can be brave on the battlefield, but not quite so brave when you think you are going to be beaten over the head by a policeman or chucked into jail.
I think that the direction of travel in defence has to be more resources. We have to look at the integrated defence review. There will be a great deal of support from Conservative Members for moving from 2%—however the figures were added up—towards 3% or more. As a rich nation we can afford to do that, and I think we would be foolish not to do it, because at the end of the day everything else is trivial if people are in the situation that the Ukrainians are in.
Madam Deputy Speaker (Dame Rosie Winterton)
I want to start the wind-ups at 6.30 pm, and I have four speakers left. That means that I will have to reduce the time limit to five minutes per speaker.
Anthony Mangnall (Totnes) (Con)
I will try to be brief, Madam Deputy Speaker. I was struck by a letter in The Daily Telegraph a few weeks ago from Lieutenant General Sir James Bucknall. It is short, and it should be required reading for all Members. His final paragraph ends with the line:
“There needs to be an honest, unvarnished appraisal of our current capabilities.”
As has already been said by my right hon. and gallant Friend the Member for Beckenham (Bob Stewart), plans do not survive first contact, and in these instances we need to review them, and to do so at pace.
There are just four points that would like to make in this debate, because I suspect that all the other points I would have made have already been made far more articulately and far better than I could have made them. The first is on recruitment, which my hon. Friend the Member for Plymouth, Moor View (Johnny Mercer) mentioned. It is extraordinary that the stats for the Royal Navy, the Royal Air Force and the Army are all higher. In the 12 months running up to 30 September 2021, the Royal Navy had an uplift in recruitment of 4.3%, the Army had an uplift of 25.2% and the RAF had an uplift of 8.2%. The staggering difference between the three services and the way in which the Army succeeds show that there are lessons to be learned by the RAF and the Navy on how they can encourage that level of recruitment.
As I said earlier in my intervention on my hon. Friend, the concern I have is about outflow and retention. Even the briefing document we were given for this debate talks about the fact that there is a problem with staffing and retention in the Defence Nuclear Organisation, and it is not just limited to that area. It also occurs in the Army and the Air Force, and in some of the places where we really want to have our staff because there is a national security need for it. This needs to be addressed immediately, and I hope that the Government will be able to give some clarity in their summing up.
On housing, a number of Members have touched on the idea that we must ensure that our armed forces personnel are given the best services and that they have the equipment they need. That point also stands for their families and for the housing and accommodation they are given. I am proud that I have the Britannia Royal Navy College in my constituency, as Private Stone said earlier, but we occasionally have a problem there when we find it difficult to staff people who are coming down to train future recruits, and to put them into suitable housing within the vicinity. We have been fortunate in that we have always managed to get through those difficult situations, but the problem is going to become greater, because house prices in coastal areas such as mine are shooting through the roof. I respectfully ask the Minister to refer to some points on housing for armed forces personnel, because this is going to come up time and again.
I think I have been very clear in my time in this place about my support for international development and the aid budget. One of the things that came up when we were having the debate around foreign aid was whether we should look at certain reforms, and if we return to 0.7%, I would really like us to look at ways in which some of that money could be spent through the Ministry of Defence to support our armed forces to undertake humanitarian missions. There is real value in those sorts of things—
Anthony Mangnall
The right hon. Gentleman is shaking his head. Fine, but I think there is real value in having the ability to unilaterally send in humanitarian forces using our defence budget.
The last point I would like to make is that our military academies have extraordinary export value. We attract an enormous number of foreign students who come through them and pass out, and we should cultivate that further. I am particularly pleased that the current captain of the Britannia Royal Navy College, Captain Roger Readwin, has done a fantastic job in attracting cadets from all over the world to pass through this historic college. More of that would not only give us the ability to learn from other countries but ensure that we strengthened our defence relationships with countries around the world.
The right hon. Member for North Durham (Mr Jones) says that he does not like slogans. Well, I like “global Britain”, but I think it needs to be fleshed out. If we are going to talk about global Britain, we have to prove it in the things that we do. I have said before that this is about the four pillars of trade, defence, diplomacy and development. If we can ensure that our defence is linked with other countries around the world and that we can help to train people in this country, that will send a strong, positive message and provide us with armed forces that are able to respond to some of the problems we are facing. The fragility of the world is more apparent than ever. If we are to play a part in global Britain and if that is to have real meaning, we must adapt as well as update.
Richard Drax (South Dorset) (Con)
I would be inept if I did not praise our Ukrainian friends and allies who are fighting with such courage against such appalling odds with little more than the kit we have given them and their training. It really is awe-inspiring and humbling to see what is being done by them, their population and their President, who spoke so movingly in this Chamber.
I thank the members of the Defence Committee, on which I sit. They all do a fantastic job, including the right hon. Members for Warley (John Spellar) and for North Durham (Mr Jones), who are passionate about the defence of our country and ensuring it is properly paid for.
I also praise the Minister, with whom I have had many dealings. He is an honourable man of great integrity, and he wants to do the best he can for our armed forces. I hope he will take everything we have said back to his boss.
In 1981 or 1982, when I was a soldier, I was taken on a top-secret mission to be shown where we would fight the Russians if they came west. When I asked the general in charge how long we would have to live, he said, “On the moment of contact, when the artillery falls on your position, you have about 40 seconds.” I thought, “Well, that’s time to say a few prayers, and that will be it.” We all felt it was surreal. Yes, we were professional soldiers, but to us it was a day out and it could not possibly happen, could it?
Forty years later, we face an aggressive Russian bear that is taking on a democratic country, taking it over and subjugating it. Like many colleagues and many people to whom I have spoken, I fear Russia will not stop there. Mr Putin’s dream is to have the Soviet Union back in its original shape. My fear is that he will next go south to the non-NATO countries, based on the fact we have done nothing militarily, except to offer military help, following the invasion of Ukraine.
I am not saying that we should get involved in Ukraine. I think we have adopted the right stance. Obviously, as I have said before, if Russia takes one step into a NATO country, we will have to fight, but with what? The cupboard is threadbare, in my humble opinion. I have sat on the Defence Committee, and I served my Queen and country for nine years, so I know what has happened to our armed forces.
I am particularly concerned about the Army. The hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) mentioned my esteemed grandfather Admiral Drax, who sadly passed away many years ago. If he were alive today, I am sure he would be in this Chamber right now, or being kept out by force, to tell the Minister that the Royal Navy—the senior service, as my grandfather and father, who also served in the Royal Navy, always called it—needs more ships and more equipment, and all the rest. I absolutely concur.
The evidence I receive from those serving in the Army, including many sons of friends, is that the battalions have been hollowed out to save cap badges, because it would be politically embarrassing if we again saw regiments amalgamating or disappearing. This would be quite unacceptable if, God forbid, the Russian bear puts a foot into a NATO country and our young men and women are sent to fight in perhaps not a world war but certainly a huge war in Europe. A full, properly manned battalion represents years of history, fighting and experience. Hollowing out the battalions now for political expediency is totally unacceptable.
Bob Stewart
When I joined my battalion in Bahrain in 1969, it was 750 strong. When I commanded it in 1991, it was 525. It is now less than that, but it is still called a battalion.
Richard Drax
Absolutely, my right hon. Friend makes my point.
Before I sit down, may I just refer to my hon. Friend the Member for Henley (John Howell), who touched on tanks? It is worth pointing out that we must not be fooled about them. One hears that they are a thing of the past and they are vulnerable to anti-tank missiles and so forth—to the Ukrainians’ great credit, they are showing that. However, one has to remember that the Ukrainians are in a defensive position, in trenches, fighting a defensive battle against armour that is coming at them. Fortunately, the Russians are proving themselves to be inept in using their armour, which is vulnerable to this sort of defence. But where the tank is vital and will still be needed, despite the fact that I understand that we have only two such regiments left, is if we have an offensive operation or if defence requires an offensive element. We will then need an armoured vehicle with a big gun to hold ground. Helicopters and drones cannot do that, but a tank can. All I would say is: don’t forget the poor old tank. It still has a place on the battlefield, although I quite accept that warfare is changing. Let me make a final point to the Minister. Mention has been made of the Special Boat Service and its aquatic centre. These are our special forces, they want a proper aquatics centre, so can they please have one?
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
It is a pleasure to rise to speak in this debate. I have been nearly five years in this place, and every six months or so—periodically at least—we come together to discuss defence. Usually, it is the same old voices and the same points being made, and we all go away saying, “It is good to hear a unified Chamber all speaking as one asking for more to be spent on defence and for more interest to be shown in the defence community or the armed forces in general.” Undoubtedly, we would hear a polite and eloquent response from the Minister at the Dispatch Box—I am expecting no less from today’s Minister—espousing the great extent to which the UK Government were investing more in the armed forces and where it was being spent. The difference today is that we are conducting this debate at a time when images are being shown on our television screens of events happening in Europe now that we thought we would be witnessing only in history books or documentaries—a Europe of 1942, not of 2022. That puts this debate into context. We are talking about defence spending and the estimates, so the debate gives us the chance to interrogate the MOD’s expenditure and to look at wider defence spending. As I was mentioning those on the Treasury Bench, I must pay tribute to the excellent work that Ministers, specifically those in this Department, have been doing over the past few weeks, keeping us all informed, carrying the message to the British public about what we are doing to support the Ukrainian people and ensuring that the Ukrainian armed forces got the training and the equipment that they need to stop Russia and to stop Vladimir Putin doing what he is doing.
I wish to make two points. The first is on the continual debate about percentage spending. We should always remember that 2% is the minimum we are expected to spend on defence by NATO. We now need to look very much at what that 2% is. What does the 2% mean when it comes to UK defence spending? A 2016 report by the Defence Committee called “Shifting the goalposts?” showed that now the 2% includes war pensions, contributions to United Nations peacekeeping, pensions for retired civilian MOD personnel and MOD income, among other things. Fair enough, if that is to be included in defence spending, that is to be included in defence spending, but we should not for one minute assume that if we are saying we are spending 2% of GDP on defence, it is being spent on defence equipment or on personnel; it now covers a far bigger, wider range of things than it used to when we were calculating what we were contributing to the overall NATO budget.
The report also said:
“The 2% pledge, while necessary, may not be sufficient. We believe that the focus should not be merely on a headline figure, but on whether this expenditure can possibly provide a sound defence for the UK.”
Never has that been more true than today, given what we are witnessing in Europe. As has been said time and time again, mass still matters. When the integrated review was published last year, I welcomed much of it. I think we do need to invest in cyber and psy-ops—psychological operations—and we need to spend more on the Royal Navy, in a period when our need to be in charge of the seas, to protect freedom of navigation, especially in the South China sea, with our allies over there, is very important. But it is absolutely true that, as so many Members have said today, a plan survives only until first contact with the enemy. We must now look at the assumptions made in the integrated review, because they are simply out of date. I am not saying we should review the review—goodness me, we all know how much time and effort is taken by defence reviews in general—but it is essential that we look at what we are currently doing and at where we will spend money in the near future.
It is simply inconceivable that we are about to reduce the size of our Army by 10,000 personnel. At a time when allies of ours are being invaded by an aggressive foe, it is simply untenable for us to send the signal that we are reducing the size of our armed forces. That has to be looked at again. I echo the words of so many of my colleagues when I say that we really must increase spending on defence. Defence is not a luxury item, a “might have” or an addition; it is essential to who we are and what we deliver for our allies around the world. We do deliver for our allies around the world, but we need to ensure that we do so in the most efficient manner possible.
Mr Marcus Fysh (Yeovil) (Con)
As we have heard time and again today, we need to spend more on defence. This really could not be a graver time for the world. I do not think any of us in the House imagined that we would be in such a position, discussing this issue in these circumstances. Sadly, I think our armed forces are going to have a lot more to do over the coming years so we need to make sure that we fund and equip them appropriately. As a House we need properly and diligently to shoulder that massive responsibility.
One thing on which people have not yet focused very much but which I fear will be very much the focus of discussion in the coming years is just how difficult an economic situation the world is going to be in. Because of the sanctions and everything that has been going on in respect of our not wanting to engage with Russia and its exports of energy, materials and agricultural products, there is going to be massive food-price inflation throughout the world and in some of the world’s poorest areas, including the middle east, central Asia and north Africa. I am afraid that will almost certainly cause grave circumstances for the people who live in those areas, meaning we will be called on to help in all sorts of different ways, including from a humanitarian point of view and from a climate point of view. There will undoubtedly be lots of disputes and arguments about such matters over the coming years. We need to be clear-eyed about the economic damage that is going to be done to the world and to our economy because of this situation. As a result, we need to look at absolute numbers in respect of what we need to invest in defence to achieve the things we want to achieve: we must not be hung up on a particular percentage-of-GDP target, because that is going to be a moving feast and I think we will, unfortunately, be in a fairly major recession before too long.
I wish to focus on one procurement issue that, in the context I have set out, we need to accelerate: the procurement of the medium-lift helicopter requirement that was identified in the defence review. It has been put out to competition, but the context has changed—we are not in Kansas anymore—and we need to accelerate the procurement process and demonstrate to the world how the UK can procure in a more agile and nimble way than it has done in the past. In particular, if we want to get the helicopters into service by 2024, and given the various stresses on global supply chains, it makes sense to get a decision as soon as possible.
Mark Tami (Alyn and Deeside) (Lab)
May I quickly make the point that competition is still important, because experience has shown us that, when there been no competition, we have ended up with poor procurement?
Mr Fysh
The right hon. Gentleman makes an important point, but it is also important that that happens in a timely fashion. A capable machine is proposed to be made in my constituency. Leonardo’s AW149 is not only the best helicopter for the military purpose, but the best in terms of delivering jobs and delivering on that strategic asset that we have in the UK, through Leonardo’s facilities in Yeovil, for end-to-end helicopter production. It is also the only candidate for that requirement, which will deliver exports and jobs into the future. We do need to get that done as soon as possible and to support our people with the best possible equipment.
Dave Doogan (Angus) (SNP)
I wish to thank the right hon. Member for Warley (John Spellar) for securing this debate. It is an important debate, focusing as it does on the state’s ability to defend the people of these islands, albeit under the current constitutional arrangements. Sovereignty is the precious prize that elevates countries from the ignominy of sub-state status. We see the value of that with the brave actions of Ukrainians, fighting with everything at their disposal to protect their sovereignty, their independence and the freedom of their people, and all power to them in that battle.
Value in defence terms can be for some an abstract concept, especially in times of prolonged peace at home, but in so far as that has generally been the case for the past 75 years, we should wake from that complacency now, as democracy fights for its very survival in the cities of Ukraine. We see in that conflict the criticality of having the right equipment at the right time in the right place. That necessarily turns the spotlight on the institutionally incompetent defence procurement dynamic with which the UK is encumbered. Even the Treasury does not trust the Ministry of Defence to manage its finances effectively, and categorises it in the third quartile of Government Departments for financial management and capability. I can only assume, therefore, that there is nobody in the fourth quartile.
Any one of the MOD’s headline failures would represent a multi-billion pound betrayal of the taxpayer, but the Ministry of Defence has a veritable conveyor belt of these debacles, from Nimrod to Chinook, through Warrior to Ajax. There will be a lot more said about Ajax tomorrow, but it really takes the biscuit in terms of absolute dysfunctional defence procurement. Creative accounting with rose-tinted projections, which plan for undetermined savings to accrue to the MOD’s balance sheet at some unspecified point in the future, is the culture that manifests claims that we will see the plan come in £4.3 billion under budget—no detail, no plan.
The National Audit Office report on the equipment plan states that the MOD has been
“over-optimistic in their assumptions…of targeted savings”
and has identified a number of costs savings that have no plan as to how they will be achieved—£4.2 billion of extra spending that the MOD has not included. The MOD’s own Cost Assurance and Analysis Service produced an independent assessment of the cost of projects making up 58% of the plan’s costs this year and concluded that they are likely to cost £7.6 billion more than projected.
It is expected that the Dreadnought programme—the largest one in the plan—which is already delayed by six years, will cost an additional £2.6 billion. Early business cases for the new medium-lift helicopter and Future Commando Force show that those programmes are currently underfunded. In the case of the new medium-lift helicopter, Industry primes are currently waiting for the MOD to behave like a procurement organisation that has a clue about what it wants, or even when it wants it—but that is in vain. Despite the taxpayers’ large budget increase to the Ministry of Defence, the equipment plan will go over budget in the next few years of the plan. Ministers are fooling nobody when they discuss how they will make savings somewhere, somehow, over the next 10 years.
On personnel, currently the Army’s target strength will be cut from 82,000 to 73,000 by March 2025, and other top-level budgets must make savings by 2030 equivalent to reducing their count by 6,350, while the cost of the MOD’s civilian workforce needs to be lowered by 10% by March 2025. That finger-in-the-air cost cutting is consistent with neither basic resource management principles, nor the new threat environment faced by the west. The Department’s financial plans once again assume further unspecified workforce cuts of £2.5 billion by 2030, but it has not yet announced how it intends to achieve that, and that almost certainly does not take into account inflationary pressures on either pay or costs of remaining staff.
Armed forces housing is in a shocking state, as other right hon. and hon. Members have stated. Of the armed forces members inhabiting single accommodation blocks, just under half are satisfied with their accommodation and 36% live in poorer-grade accommodation. Despite that, the MOD has failed to invest in adequate housing, and the NAO described its planned investments as not sufficient even to prevent further deterioration in the estate, much less to improve conditions for personnel. If the MOD truly wishes to make the Army smaller but more efficient, it needs to invest in making it a more attractive destination for potential recruits, and shabby accommodation is not a particularly good place to start.
Scotland currently has 2,000 fewer soldiers stationed there than we could expect given our population share, which is doubtless a function of the recruitment issues facing the Army. The range of causal factors is not limited to accommodation, but includes remuneration. Scotland’s progressive tax system mitigates that to some extent, with rank and file often paying less tax in Scotland, while those who live off estate in Scotland pay less council tax on average, and of course they all benefit from free prescriptions.
The financial chaos leading to flip-flopping on base closures and disposals, selling off land at RM Condor in my Angus constituency and then back-pedalling on that, is not helpful either. What is the future for Redford barracks, Fort George and HMS Caledonia, and how long will the MOD stick with today’s vague disposal plans? This culture leaves communities reeling from uncertainty and saving plans that are volatile and not credible.
Scotland has 32% of the UK’s landmass and 63% of its maritime area, yet only 7% of the defence personnel, and no surface warships are stationed in Scotland. That means that when Russia comes knocking on Scotland’s door, the Royal Navy is busy at the other end of this island and takes fully a day to engage.
Jeremy Quin
I have been containing myself during the hon. Gentleman’s speech, because I know there are other contributions to get through before I have my own go, but I cannot let him say what he has just said about the Royal Navy. It is there to protect the whole of the United Kingdom and our interests overseas. We have a huge commitment to the High North going on as I speak. We will also have the whole of our submarine fleet based in Scotland in the future, including our continuous at-sea nuclear deterrent, which is so vital to our interests right now.
Dave Doogan
There is a lot of chest-beating about the nuclear deterrent, but much less discussion about the cost of it. We have heard from hon. and gallant Members how much they would like to see numbers in the Army go up, but they do not talk so much about the cost of the Defence Nuclear Organisation, which is 50% higher than that of the next department, the Army. They are not so focused on that cost. Incidentally, I note the Minister in his intervention did not point out which surface warships there are in Scotland, because there are none.
Dave Doogan
That is not a surface ship. The UK’s breakneck pivot away from the European domain has been dramatically overtaken by recent events in Ukraine. The mercifully long period of relative stability in Europe is under threat in a way not seen since the war, so it is clearer than ever that the top defence priority on these islands is, and must always be, ensuring peace and stability in the Euro-Atlantic area, as we on the SNP Benches have long argued. The MOD must re-profile its equipment plan, troop numbers and finances accordingly. In conclusion, this debate affords an excellent and very necessary opportunity for Ministers to reformulate the MOD’s finances, the force numbers and the equipment plan.
Mr Francois
On a point of order, Madam Deputy Speaker. There are breaking media reports of a Russian artillery strike on a maternity hospital in Mariupol, which unfortunately has resulted in a large number of casualties. I understand that the Prime Minister has condemned this as depraved. Bearing in mind the subject that we are debating, if anything that has only focused our minds. This is a tragedy that should be condemned by the whole House.
Madam Deputy Speaker (Dame Rosie Winterton)
I thank the right hon. Gentleman for his point of order. As I am sure he realises, it is not a matter for the Chair, but he has put his point on the record.
Chris Evans (Islwyn) (Lab/Co-op)
I thank the right hon. Member for Rayleigh and Wickford (Mr Francois) for raising that point of order. If anything proves the heartlessness of Vladimir Putin, it is that news. I join the Prime Minister, as I am sure everyone in the House does, in condemning that action.
I begin by thanking my right hon. Friend the Member for Warley (John Spellar) for opening this timely debate. Like him, I wish the Chair of the Defence Committee a speedy recovery from his minor operation. In this debate we have also witnessed the unique sight of my right hon. Friend the Member for North Durham (Mr Jones) finally finding some common ground with the hon. Member for Plymouth, Moor View (Johnny Mercer)—those of us who know both of them will know that that is an amazing sight. Both spoke of how spending decisions affect the morale of our troops.
The management of MOD spending, our equipment and the numbers of our armed forces are always important, but in the current international climate there is no room for mis-steps. The Government must respond to the threats to the UK and to European security that a Russian invasion in Europe poses. Just as Labour reassessed defence spending after the 9/11 attack on the twin towers, we expect the Government to bring forward a budget boost when the Chancellor comes to the House in exactly two weeks’ time.
Other European allies have already made this move. In the light of Russia’s invasion, Germany has announced an increase in its defence spending, including a €100 billion fund to upgrade its armed forces. Denmark also announced at the beginning of the week that it will significantly increase its defence budget. I welcome these announcements. European countries have been quick to respond to Russia’s actions, recognising that they threaten the security of Europe. As my right hon. Friend the Member for Warley mentioned, Germany’s recent decisions have reversed defence and foreign policy positions that have been held for decades. Chancellor Olaf Scholz has described Russia’s invasion of Ukraine as
“a turning point in the history of our continent”
and made it clear that, in order to ensure the freedom and democracy of Europe, an increase in defence spending is needed.
I want to be clear that if the Government act to increase defence spending in the next Budget, they will have Labour’s full support in doing so.
Mr Baron
I was in the House when the shadow Secretary of State made that announcement during the Defence Secretary’s statement earlier today. If we are to move the dial on defence spending, we need the support of both sides of the House. Can the hon. Gentleman confirm that when the official Opposition ask for that increase in defence spending, it will not be just a one-off? It has to match our interests’ requirements, but it has to be sustainable.
Chris Evans
I think the hon. Gentleman has just written my speech for me. If he will allow me, I will develop that argument further.
Any increase in defence spending would benefit the UK economy. If done well, taxpayers’ money can be spent in a way that enables more apprenticeships, the growth of small and medium-sized enterprises, and for the UK to be a world leader in design, innovation and engineering. However, mismanagement and delays of contracts, or contracts being awarded to foreign companies, will damage the UK defence sector. Unfortunately at present, public money is not being used in a way that brings the most benefit to the UK. Without steady investment and supply of contracts, British shipyards, British aerospace and, ultimately, British jobs will suffer.
When I speak with industry representatives, they tell me they want fairness, not favours; all they ask for is a level playing field. UK bids are competing in a race to the bottom with international companies that enjoy state backing. The feast and famine cycles of defence contracts leave British companies unable to prepare, or to sustain investment in apprenticeships and jobs over a long period of time. If these companies suffer, we lose our domestic defence manufacturing sector.
Labour supports the UK defence industry, which is why we believe in a “British built by default” approach to defence procurement. Our shipyards and our steel industry are national assets, and we need to see a clear plan from the Government on how we enhance these capabilities.
Concerns have been raised by the National Audit Office, the Defence Committee and the Public Accounts Committee about the running of the MOD. Now more than ever, at a time when European security is most under threat, Ministers must ensure that the deep-rooted problems in the MOD are urgently addressed. As the NAO suggests, the Government’s new equipment plan still fails to ensure that our armed forces will get all the equipment they need. Sadly, value for money for the British taxpayer is not being guaranteed. Then, of course, there is the Ajax-shaped hole at the heart of the British Army’s future, which I am sure we will hear more about in the coming days.
In 2020, Labour welcomed the Government’s extra £16.5 billion investment in defence spending, with more scope for high-tech research and development, but the Government’s plan only papers over the cracks in the MOD’s budget. Too much of that new money will be swallowed up by the MOD’s budget black hole. The National Audit Office also states that too little has been done to reform the MOD’s controls in order to deliver this plan on time and on budget. There is also no plan to deal with massive MOD waste, despite at least £13 billion of taxpayers’ money being wasted through MOD mismanagement or misjudgment since 2010, with £4 billion wasted in the past couple of years alone while the present Defence Secretary has been in post. Unfortunately, it all points to the conclusion that the MOD is a uniquely failing Department.
If wasted expenditure had been avoided or reduced, funding would have been available to strengthen the UK’s armed forces. There would have been no need for the cuts to troops, planes, ships and equipment forced by financial pressures. For example, in last year’s integrated review, the Government cut main battle tank numbers by a third. Restoring the Challenger fleet to full strength would cost an estimated £430 million, equivalent to the money wasted by the MOD.
Jeremy Quin
As ever, I am listening closely to the hon. Gentleman’s remarks, and we believe the £4 billion figure is wholly spurious. I seem to recall that, when we cut assets, the document called it waste, and when we invested in assets, that was also waste. It is a very odd document.
Chris Evans
I am very pleased and quite proud that the Minister has looked into that document so well—it shows his due diligence. However, many of the figures in the waste dossier he refers to came from the National Audit Office’s figures. I was a member of the Public Accounts Committee for five years, and sat through many of those uncomfortable hearings with Defence civil servants. It is not just land capabilities that have suffered: last year’s defence Command Paper announced that the entire fleet of Hercules aircraft would be scrapped. At a cost of about £150 million per aircraft, the fleet of 14 would have cost £2.1 billion, comparable to the amount of money that the MOD has wasted on write-offs since 2010.
I am sure Government Members will ask, “What would Labour do differently?” In Government, we would commission the NAO to conduct an across-the-board audit of MOD waste. We would also make the MOD the first Department subject to our proposed office of value for money, with a tough regime on spending decisions. The Public Accounts Committee concluded last year that the MOD’s procurement system is “broken” and “repeatedly wasting taxpayers’ money”—those are the independent Public Accounts Committee’s words, not mine. With any spending announcement on defence, a similar announcement must be made outlining the methods for tackling waste.
As the Minister refers to, Labour’s dossier on waste in the MOD between 2010 and 2021 found 67 officially confirmed cases of waste, the cost of which could have been reduced by better management. All defence projects carry a degree of financial waste, but the level of waste in the MOD goes far beyond this. Some examples that Labour has uncovered are simply embarrassing, such as £64 million wasted on admin errors. When waste on this scale is occurring alongside cuts to our armed forces and cancellations of, or reductions to, armed vehicle projects, Ministers must ensure the chronic mismanagement within the MOD is immediately addressed. Can the Minister guarantee that our troops will get the right kit when and where they need it, and does he accept that defence spending plans are forcing further cuts to our personnel?
Given the threat that Europe now faces from Vladimir Putin’s aggressive regime, it is clear we must do all we can to halt the cuts to our armed forces. Now is the time to reassess our defence spending. We must ensure that our armed forces have the equipment they need, when they need it. We must build a strong defence industry and use public money effectively. We must respond to the new threats in Europe. Labour stands ready to support an increase in defence spending, support our NATO allies, and—above all—support the brave men and women who are serving in our armed forces.
The Minister for Defence Procurement (Jeremy Quin)
It has been a fascinating debate, ably kicked off by the Deputy Chairman of the Defence Committee, the right hon. Member for Warley (John Spellar). He, like so many of the Labour contributors to this debate, is part of the respectable wing of his party. It is, I think, a great relief to the country that we have my right hon. Friend the Member for Uxbridge and South Ruislip (Boris Johnson) as our Prime Minister at this time, rather than the proposition presented to us by the Labour party at the last election. The leadership he is showing in these difficult circumstances is exemplary.
This has been a fabulous debate, and it is a sadness to me that the time allocated is in no way sufficient to reflect the passion of the contributions and their quality, the huge admiration we have for our serving personnel, or the vital importance of what my hon. Friend the Member for Tonbridge and Malling (Tom Tugendhat), the Chair of the Foreign Affairs Committee, referred to as this critical insurance premium for our country.
As my hon. Friend the Member for West Aberdeenshire and Kincardine (Andrew Bowie) said, and as my right hon. Friend the Member for Rayleigh and Wickford (Mr Francois) referred to so poignantly in his point of order, it is so shocking that we are debating these issues while war rages in our own continent—that ghastly barbarity to which my right hon. Friend alluded.
Like so many speakers this afternoon, I pay tribute to the extraordinary defence of their country that has been mounted by the Ukrainian forces and civilians. Last summer, I was privileged to attend the 30th anniversary of Ukraine’s freedom celebrations and saw President Zelensky among his own people. I would never have imagined then the emotional scenes we saw yesterday in this House. As the integrated review recognised almost a year ago, the view that post the Berlin wall coming down we would enjoy a perpetual peace dividend could not and should not be assumed. Old aggressors have been reanimated and new dangers have arisen, requiring a forward-leaning and agile armed forces. We need to be prepared to defend and deter threats emanating from Russia and from states that violate international law in such reprehensible and egregious ways.
Mr Francois
We have seen in Mariupol today what the Russians are truly capable of. We must now deter further adventurism. On that point, will the Minister conduct an urgent review of the operational availability of all our equipment? Where things need to be brought up to scratch quickly, will he issue urgent operational requirements—UORs; he knows what I am talking about—to do whatever we need to do to have all our equipment on top line, should we need it, and can we start with Type 45?
Jeremy Quin
I reassure my right hon. Friend that we are absolutely focused on making certain that we have proper operational availability. On Type 45, as he may be aware, Dauntless has come out of the power improvement project and is now on sea trials. Daring has gone into Cammell Laird. We are looking at ways we can advance that process, but I would say that we have two Type 45s out on station doing their job even as I speak.
As the integrated review and defence Command Paper set out a year ago, Russia poses
“the greatest nuclear, conventional military and sub-threshold threat to European security.”
The IR also emphasised the need to strengthen NATO, which is critical to preserving our security and prosperity in the Euro-Atlantic area.
Bob Stewart
I thank my very good friend the Minister for allowing me to intervene on him. The point is that the IR is broken. We clearly need more people in our armed forces, particularly in the infantry. If there is a message from the House, which seems to be in agreement, it is that we need to spend more on defence—up to 3%—and to reverse the cuts, before it is too late, to the infantry. I declare my interest as an ex-Mercian Regiment officer.
Jeremy Quin
I recognise what my right hon. and gallant Friend says and his particular interest in the 2nd Battalion the Mercians. I will not repeat everything that my right hon. Friend the Defence Secretary said in his statement today, but I ask him to bear in mind what we have done over the past two weeks to show our commitment from the eastern Mediterranean, to the high north, to Estonia. By land, sea and air, we have proved our ability to act fast to maintain deterrence alongside our NATO partners.
To reassure my hon. Friend the Member for Poole (Sir Robert Syms), one aspect of the IR was the importance of continuing to train and look after the forces of other friendly nations outside of NATO. He is absolutely right that 22,000 Ukrainian troops are defending their nation now, having had the benefit of training with the British armed forces. As the House knows, we have continued to provide defensive weapons to their support. In reference to the Chair of the Intelligence and Security Committee, my right hon. Friend the Member for New Forest East (Dr Lewis), having defence assets is one aspect, but as he rightly alluded to, having intelligence to inform our actions and showing leadership are the multipliers that enable us to play an even greater role within our alliances, of which our support to Ukraine is a prime example.
We are aware of that growing threat. This Government provided defence with a four-year settlement and a £24 billion increase in the defence budget. That money, which takes the annual defence budget to more than £47 billion for 2022-23 and our equipment plan to more than £238 billion over 10 years, enables us to modernise and improve the defence enterprise. The International Institute for Strategic Studies independently confirmed that the UK maintained its position as the second largest defence spender in NATO and the largest defence spender in Europe.
Consequently, to reassure the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) and his Carl Gustaf, in the coming years, the Royal Navy will have new ships as our fleet increases beyond the 19 frigates and destroyers that we already have, with the steel cut for our first Type 31 frigate, HMS Venturer; HMS Glasgow in build on the Clyde; and consideration already beginning of the Type 32s. That will be underpinned by the doubling of investment in the shipbuilding sector over the life of this Parliament to more than £1.7 billion a year.
To the point made by my hon. Friend the Member for Henley (John Howell), we are continuing to invest in the RAF and particularly in cutting-edge capabilities such as the European common radar system mark 2, which is a fantastic radar system, to meet the operational threats of the future. We are also investing more than £2 billion over the next four years in the sixth generation future combat air system.
Finally, but perhaps most importantly given hon. Members’ comments, the Army is receiving significant investment. It may be leaner but it is more agile and will have greater lethality. We are modernising the Challenger main battle tank; my hon. Friend the Member for South Dorset (Richard Drax) is absolutely right that there is a role for tanks on the battlefield of the future and we recognise that. There will be 50 new Apache attack helicopters on top of the investment of more than £3 billion over the next decade in the accelerated procurement of Boxer to help to modernise our fleet and ensure that our Army is better integrated with its NATO allies.
We have established the National Cyber Force. We are spending an additional £1.4 billion over the next decade on space. If anyone believes that investing in those new domains is discretionary, it is not: only last November, in an act of dangerous irresponsibility, Russia tested an anti-satellite missile. We all know how much we depend on space and space intelligence, surveillance and reconnaissance.
Critically, thanks to our defence Command Paper, we have reversed a long decline in research and development expenditure, which has been ongoing since 1989, with £6.6 billion ringfenced for R&D over the next four years. On procurement, I know that hon. Members support the Government’s commitment to maintaining the nuclear deterrent, as shown by the overwhelming majority of this House who voted to renew it in July 2016.
We remain the leading European NATO ally, clearly exceeding our 2% of GDP defence spending target. We will ensure that the extra £24 billion that we have to invest in defence is spent wisely and appropriately. We will also ensure that, as we made clear in the IR, with that £24 billion of extra investment in defence, we will have the armed forces that we require to deter and defend. We are equally determined that our defence investment continues to match the threat of the future. I commend these estimates to the House.
John Spellar
With the leave of the House, tonight the Minister has heard a clear message. The peace not only of Ukraine but of Europe and the wider world is under threat and we must restate our commitment to our collective security through NATO backed by our nuclear capability. We must also have a reset of our plans and budget; our defence procurement process; and our doctrine, intelligence and messaging. I hope that that message has been heard loud and clear not only by the Minister but by the Treasury. The first test of that will be in the Budget debate at the end of the month. Can the Minister convey that message clearly to the Chancellor?
Question deferred (Standing Order No. 54).
Madam Deputy Speaker (Dame Rosie Winterton)
With the leave of the House, I will put the Questions on motions 3 to 6 together.
Supplementary Estimates 2021-22 (Navy) Vote A
Resolved,
That, during the year ending with 31 March 2022, modifications in the maximum numbers in the Reserve Naval and Marine Forces set out in Supplementary Votes A 2021-22, HC 981, be authorised for the purposes of Parts 1, 3, 4 and 5 of the Reserve Forces Act 1996.
Estimates 2022-23 (Navy) Vote A
Resolved,
That, during the year ending with 31 March 2023, a number not exceeding 39,550 all ranks be maintained for Naval and Marine Service and that numbers in the Reserve Naval and Marines Forces be authorised for the purposes of Parts 1, 3, 4, and 5 of the Reserve Forces Act 1996 up to the maximum numbers set out in Votes A 2022-23, HC 980.
Estimates 2022-23 (Army) Vote A
Resolved,
That, during the year ending with 31 March 2023, a number not exceeding 109,670 all ranks be maintained for Army Service and that numbers in the Reserve Land Forces be authorised for the purposes of Parts 1, 3, 4 and 5 of the Reserve Forces Act 1996 up to the maximum numbers set out in Votes A 2022-23, HC 980.
Estimates 2022-23 (Air) Vote A
Resolved,
That, during the year ending with 31 March 2023, a number not exceeding 36,500 all ranks be maintained for Air Force Service and that numbers in the Reserve Air Forces be authorised for the purposes of Parts 1, 3, 4 and 5 of the Reserve Forces Act 1996 up to the maximum numbers set out in Votes A 2022-23, HC 980.—(Gareth Johnson.)
Estimates, Excesses 2020-21
[Relevant documents: Fortieth Report of the Committee of Public Accounts, Excess votes 2020-21: Serious Fraud Office, HC 1099.]
Resolved,
That, for the year ending with 31 March 2021:
resources, not exceeding £144,494,000, be authorised to make good excesses for use for current purposes as set out in Statements of Excesses 2020-21, HC 1006 and HC 1154.—(Gareth Johnson.)
Supplementary Estimates 2021-22
Resolved,
That, for the year ending with 31 March 2022:
(1) further resources, not exceeding £307,383,532,000, be authorised for use for current purposes as set out in HC 1005, HC 1120, HC 1135 and HC 1152,
(2) further resources, not exceeding £6,407,284,000 be authorised for use for capital purposes as so set out, and
(3) a further sum, not exceeding £21,485,755,000, be granted to Her Majesty to be issued by the Treasury out of the Consolidated Fund and applied for expenditure on the use of resources authorised by Parliament.—(Gareth Johnson.)
Estimates, Vote on Account 2022-23
Resolved,
That, for the year ending with 31 March 2023:
(1) resources, not exceeding £351,632,860,000, be authorised, on account, for use for current purposes as set out in HC 1004, HC 1119, HC 1126, HC 1134, HC 1153, HC 1155 and HC 1159,
(2) resources, not exceeding £58,924,316,000, be authorised, on account, for use for capital purposes as so set out, and
(3) a sum, not exceeding £361,722,188,000, be granted to Her Majesty to be issued by the Treasury out of the Consolidated Fund, on account, and applied for expenditure on the use of resources authorised by Parliament.—(Gareth Johnson.)
Ordered, That a Bill be brought in upon the foregoing Resolutions relating to Estimates, 2020-21, 2021-22 and 2022-23;
That the Chairman of Ways and Means, the Chancellor of the Exchequer, Mr Simon Clarke, Lucy Frazer, John Glen and Helen Whately bring in the Bill.
Supply and Appropriation (Anticipation and Adjustments) Bill
Presentation and First Reading
Lucy Frazer accordingly presented a Bill to authorise the use of resources for the years ending with 31 March 2021, 31 March 2022 and 31 March 2023; to authorise the issue of sums out of the Consolidated Fund for those years; and to appropriate the supply authorised by this Act for the years ending with 31 March 2021 and 31 March 2022.
Bill read the First time; to be read a Second time tomorrow, and to be printed (Bill 279).
Business without Debate
Madam Deputy Speaker (Dame Rosie Winterton)
With the leave of the House, I will put the Questions on motions 10 to 12 together.
Motion made, and Question put forthwith (Standing Order No. 118(6)),
Medicines
That the draft Human Medicines (Amendments Relating to the Early Access to Medicines Scheme) Regulations 2022, which were laid before this House on 7 February, be approved.
That the draft Human Medicines (Coronavirus and Influenza) (Amendment) Regulations 2022, which were laid before this House on 7 February, be approved.
Building and Buildings
That the draft Energy Performance of Buildings (England and Wales) (Amendment) Regulations 2022, which were laid before this House on 31 January, be approved.—(Gareth Johnson.)
Question agreed to.
Jim Shannon (Strangford) (DUP)
On a point of order, Madam Deputy Speaker. The disgraceful and murderous attack on the hospital in Mariupol in Ukraine was mentioned earlier. As the right hon. Member for Rayleigh and Wickford (Mr Francois) said, it has been reported that many hundreds of people have been injured and killed. Are you aware of whether there will be a statement on this tomorrow? We are very conscious that these are innocent people unable to help themselves, as well as the doctors and nurses who were helping them. I believe what we have seen is a war crime—an indiscriminate attack by Russia on the innocent—and I believe that the House would agree with that. Madam Deputy Speaker, will there be a statement on this tomorrow? I think it warrants a statement, and I would like to think we in this House would have a chance to express our views tomorrow.
Madam Deputy Speaker
I thank the hon. Gentleman for that point of order. He is quite right, as others have, to draw attention to this terrible attack, which I know we are all finding very distressing. I have not been informed that there will be a statement tomorrow. Of course, he is aware that there are other ways—for example, by an urgent question—that this matters can be raised. However, Defence Ministers are here, and they will have heard the concern expressed around the Chamber.
Shared Transport: Government Policy Objectives
(2 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Ben Bradshaw (Exeter) (Lab)
I secured this debate because, having joined the Transport Committee about a year ago, I became struck by how little attention is being given to the multiple ways in which car clubs and other shared transport can help national and local governments meet their multiple policy objectives. Shared transport is about giving people access to cars, bikes, and other vehicles, without the need to own them. I should perhaps declare an interest: my husband and I have not owned a car for more than 25 years. When we need one, which is much less often than we thought we would, we use the south-west’s fantastic car sharing scheme, Co Cars, which is a co-operative based in Exeter of which I was one of the founder members.
For those who do not know how such schemes work, they can vary a bit, as can the ownership models. Essentially, however, someone registers, then they book the car or van nearest to them online, using an app in some cases. They pick it up using a smart card, and they drive it away, returning it when they are finished. It is simple, and much cheaper than buying and owning a car oneself, and there are no insurance, maintenance, or parking headaches.
As well as the cost, there are climate change, air quality, local amenity and congestion advantages to car sharing. According to the RAC Foundation, the average private car sits doing nothing for 96.5% of its life. What a waste of money and valuable urban space. As we transition to e-vehicles as a country over the next few years, simply replacing private internal combustion vehicles with electric ones will not be enough to meet our zero carbon targets, and it will do nothing to tackle congestion. In fact, one could argue that with people feeling less inhibited to drive if they are driving an e-vehicle, it is likely that congestion will get worse, without a reduction in the total number of private vehicles on our roads.
Jim Shannon (Strangford) (DUP)
The right hon. Gentleman is making an important point, and this issue concerns us all across the whole United Kingdom of Great Britain and Northern Ireland. Does he agree that by not involving and co-ordinating with car clubs and the shared transport sector, we are missing the potential for getting people off the roads and into shared transport? That would benefit the environment—he has referred to that—and it would also help people’s pressed finances.
Mr Bradshaw
I agree with that. Car clubs represent a fantastic resource for both national Government and local government to achieve exactly those aims.
There are currently around 6,000 car club vehicles in the United Kingdom. The number of active car club members—that is people who have joined, renewed their membership or used a car club in the last 12 months— is approaching half a million, which is a massive 96% increase in just one year. Total membership is 784,122, which is a 24% increase on the previous year. The transport sharing umbrella organisation, CoMoUK, has found that for every car club vehicle, 18.5 private cars are taken off the roads, taking into account the reduction in the number of cars owned by members and purchases that do not take place.
Nationally, because car club vehicles are on average just over 1.5 years old, their carbon emissions are an average of 26% lower than the average car in the United Kingdom. In Exeter we are lucky to have more than 50 Co Cars, including 20 electric vehicles, and more than 150 electric bikes—they are somewhere on a street near you. Some 11% of car club cars nationally are electric, compared with less than 1% of privately owned cars across the United Kingdom. That makes driving an electric car not just possible for those who cannot afford it, but easily accessible. Access and social equity are crucial, and 20% of car club members stated that although they could not afford to buy a private car, joining a car club gave them access to one when they needed one.
Car sharing also accelerates modal shift. Since joining a car club, 16% of people said that they had walked more, 10% said that they had cycled more and 26% said that they had cut their car use overall. I stress that shared transport covers a range of other modes including bikes, e-scooters—in trial areas only, of course—demand-responsive transport such as flexible buses and lift share. It also includes so-called mobility hubs: places that enable people to switch easily between public, active and shared transport modes. Bicycle sharing has been shown to be a powerful tool to re-engage lapsed cyclists, with 50% of bike share members in the UK saying that it was the trigger to get them back on a bike again and 53% saying they would have made their last trip by car or taxi if bike share had not been available.
The COP26 declaration on accelerating the transition to 100% zero-emission cars and vans, signed by the UK Government, states:
“We recognise that alongside the shift to zero emission vehicles, a sustainable future for road transport will require wider system transformation, including support for active travel, public and shared transport, as well as addressing the full value chain impacts from vehicle production, use and disposal.”
The Secretary of State for Transport, in the foreword to the transport decarbonisation plan in 2021, said:
“We cannot simply rely on the electrification of road transport, nor believe that zero emission cars and lorries will solve all our problems.”
The Minister—I am pleased to see her in her place—told the conference of CoMoUK in December last year that shared mobility must become the norm across the UK and that the country needed to do more to move away from
“20th century thinking centred around private vehicle ownership”
and introduce
“greater flexibility, with personal choice and low carbon shared transport.”
Hear, hear to that.
So everyone agrees that shared transport is a positive thing that can help us meet multiple policy objectives. The challenge is to create a coherent cross-Government departmental policy framework and support for it. I will give a few examples.
First, on electric vehicle charging, car clubs are explicitly excluded from on-street residential charging schemes and are not positively included in any public funding framework or guidance. We have been told that an EV infrastructure strategy is coming “soon” for a while now, and there is also potentially a new EV infrastructure fund, but again we have not had any publication or details about that, and we have had no indication of whether any of that will necessarily improve the current position. That is despite, as I said earlier, car clubs having 11 times the proportion of EVs in their fleets as the general UK car fleet and providing access to EVs at a fraction of the cost of leasing or owning one.
Secondly, on guidance to local authorities, the transport decarbonisation plan promised a local authority toolkit in 2021, but that has yet to appear. It also stated that the Department would support car clubs to go fully zero-emission, recognising that, as car club fleets contain newer vehicles, they can lead the transition to zero-emission vehicles. However, again, we have not yet had any further details on that.
Thirdly, national planning policy still does not do enough to favour decarbonising options such as shared transport in spatial planning. Shared transport is not usually included in scheme design at all, and the national planning policy framework makes it difficult for councils to refuse applications that do not go far enough on shared transport proposals. Many good councils such as my own in Exeter want to limit parking provision and require mobility hubs and transport sharing schemes as well as good cycling and walking provision in development plans, but the planning system neither recognises nor encourages that. Mobility hubs play a particularly valuable role in areas with high levels of pollution and low sustainable transport accessibility levels, and they should be pursued by national and local government.
Local government should also be required to actively support shared transport to achieve modal shift, placing it at the heart of its transport strategies. It should also develop sustainable transport hierarchies to recognise the different role that shared cars play as opposed to privately owned vehicles, and include data from shared transport in official transport statistics for the area.
Fourthly, traffic regulation orders are cumbersome and expensive. A consultation on improving the system to make it quicker and more innovative and adaptable was promised, but again it has not appeared.
Fifthly, public transport accessibility levels should be updated to sustainable transport accessibility levels, which would encompass all forms of sustainable transport, including shared transport.
Sixthly, on taxation, the current system is based entirely on the private ownership of cars, with shared transport paying the same full rate of VAT as privately owned ones. The Treasury could help a lot by tweaking the tax regime in a revenue-neutral way, if needs be, to incentivise vehicle sharing.
Seventhly, we would like to know where the future of transport Bill is. It appears to be stuck somewhere in Government, meaning that we will soon reach the second anniversary of the e-scooter trials at a time when every other developed nation has either legalised and regulated them or has committed to doing so.
I know that the Minister shares my enthusiasm for shared transport as a multiple solution to her transport challenges and those we all face, and I look forward with interest to her response.
The Parliamentary Under-Secretary of State for Transport (Trudy Harrison)
I am delighted to be speaking about shared transport, but I was even more delighted to hear the right hon. Member for Exeter (Mr Bradshaw) refer to his co-forming the car club in his local area. I would welcome a meeting to discuss in more detail exactly how he went about that and the lessons learned, and perhaps that can inform how we help other areas. I am thinking particularly of rural areas, because I represent my home village in the Lake District, and I see an opportunity for car clubs to be of great assistance to people living in rural and urban areas.
I congratulate the right hon. Member on securing this debate on shared transport. He clearly set out seven measures relating to how we could improve shared transport and make it more accessible to everyone. I listened to the issues that he raised and I will do my best to address them all. As he knows, we are committed to creating a future transport system that works for absolutely everyone. My Department and I are making sure that transport is accessible to all, meaning that people in our cities, towns, villages and everywhere else have greater choice and greater freedom to get around. We want to see safer streets, more accessible and fairer travel, smoother journeys and better infrastructure to create the cleaner, quieter and less congested transport system that we all want.
Before I talk about the work that is already under way in my Department, I want to mention why we are doing this. Shared transport has the potential to improve choice, creating greater freedoms when travelling. Shared transport such as car clubs and lift sharing is about using what we have more efficiently. I love cars. I have been driving for 28 years, would you believe, Madam Deputy Speaker?
Trudy Harrison
I thank the hon. Member for that comment.
I do not personally own a car, and it is perhaps not a car club that I have with my husband, who does own our car. However, when I think about my personal circumstances—we drive a seven-seater, primarily because I have four daughters, although nowadays it is more about the pub run than the school run—I ask: do I always want to drive a seven-seater? Sometimes it might be more appropriate to drive a smaller car or maybe, living in the Lake District, a convertible car to really enjoy the scenic views in my community. That is the choice. This is not about people not being able to own cars. We welcome that ability, but this is about the opportunity to do things differently.
As the right hon. Member for Exeter mentioned, the average car is parked at home for 80% of the time. It is parked elsewhere for 16% of the time and is on the move for only 4% of the time, on average. That shows the massive potential for greater sharing to allow people without cars greater access to the economy and flexibility in how they travel. Some 7 million front gardens—the equivalent of 100 Hyde Parks—now contain concrete and cars, rather than flowers, grass, bees, butterflies and biodiversity. We also know that about 25% of adults in England do not hold a full driving licence, and only a quarter of people aged 17 to 20 are in that category. In our area, learning to drive is often considered a passport to adulthood, but it should not have to be. It is about flexible choice.
New transport options can mean greater access for those who are not able to travel independently or who do not currently have many choices. Car clubs can provide a cheaper alternative; 20% of car club users say that they joined a club because they could not afford a car. If we can show that sharing is a safe, efficient and cost-effective alternative, it could be a major benefit to our communities, meaning less isolation, less loneliness and greater access to the economy and services.
Major changes are already under way in the transport sector. Services are becoming more digital and more data-driven, with apps to plan and pay for journeys becoming the norm. Electrification and the move towards zero-emission vehicles is well under way as we roll out charging infrastructure across the country. We are already seeing early self-driving vehicle technology on our roads, and the UK is a world leader in the testing and deployment of self-driving vehicles.
Business models such as car clubs, and a greater emphasis on sharing, provide greater choice to the public while helping to cut emissions and decongest our roads. As the right hon. Member for Exeter mentioned, we are also trialling rental e-scooters across the country, including in my constituency of Copeland, which can help to decongest our roads and reduce emissions, particularly for shorter journeys. In making regulations to enable trials of rental e-scooters, my Department had significant support from local areas keen to trial them in a safe and controlled way. The trials supported my Department’s green restart of local transport and helped to mitigate the reduced capacity on public transport that resulted from the pandemic. They also enable us to gather robust and meaningful data to decide whether e-scooters should be more widely and permanently legalised, as well as assessing their safety and their wider impact.
Shared bikes are now a common UK service available in cities, providing us with more choice and flexibility in getting from A to B. I was delighted to hear that the right hon. Member’s local club provides bikes as well as cars.
These are just some of the ways in which transport is already changing. We can expect the transport system of tomorrow to look radically different from today’s. As things expand and evolve, the changes will present opportunities for more people to have access to training and jobs. They will also enable businesses to have access to highly skilled staff, which will help to level up places that are left behind. The ability for people and goods to move around efficiently and cleanly is a key driver of the change that we want to see, and more access to shops and services will provide a boost for the economy. That is why we are determined and are working to support businesses and communities to ensure that the changes are positive and make a genuine difference to the way we travel.
The right hon. Member mentioned our transport decarbonisation plan. Supporting the changes under way in transport will improve how we get around, but there are major environmental challenges ahead and we need to make the most of those changes to meet the challenges head on. That is why we have set such high ambitions for the future of transport in this country. Last summer, my Department published the first TDP in the world, which sets the transport sector on the path to net zero by 2050, and in which we have set ourselves a wide range of ambitious commitments across all modes of transport. The plan also shows the benefits of decarbonisation that are there to be seized: significant economic growth, job creation and the emergence of new technologies to improve transport in the UK.
Our commitments to supporting shared transport mean greater choice and freedom and more efficient ways to travel. We have committed to measures that will ensure a better, more flexible transport system while delivering on our net zero ambitions. We are helping businesses to see the benefits of shared transport and more sustainable transport, and are providing guidance to help local authorities manage and deliver schemes to support businesses and communities.
Let me update the House on the progress that the Department has made on shared transport, and respond to the points raised by the right hon. Member. We have worked closely with leading stakeholders since the publication of the transport decarbonisation plan to start delivering on our commitments. I have met leading shared-transport organisations such as CoMoUK—which the right hon. Member mentioned—Liftshare, which I understand was instrumental in the commissioning of the car club in Exeter, and the Urban Mobility Partnership, which represents leading operators including Enterprise and Stagecoach. In November I visited California, where I signed a memorandum of understanding between the UK and the city of Los Angeles to foster co-operation on the challenges of decarbonising transport, supporting innovation and growth, and accelerating the deployment of emerging technologies that can improve our communities.
We have already launched a consultation on Mobility as a Service, and we aim to publish new guidance to help shape the emergence of these platforms in the UK. This will mean that planning and paying for a journey will be easier, quicker, and more accessible.
The right hon. Member mentioned the transport decarbonisation toolkit, which my Department will publish soon. We recognise that local authorities are key partners in rolling out the infrastructure, developing and implementing new policies, and learning from best practice, and the toolkit will enable them to start delivering schemes that will benefit local communities. It provides practical advice on setting up car clubs and other shared transport schemes, and on helping to improve transport planning by putting shared and sustainable modes at the heart of local transport plans. That means support for zero- emission car clubs too, so that communities throughout the UK can benefit from electric vehicles. My Department, through the Office for Zero Emission Vehicles, is supporting charging infrastructure rollout to meet this demand. There are currently about 27,000 public charge points in the country, of which 5,200 are rapid. We know that the process needs to be accelerated, and we are working apace to do just that. Project Rapid, for example, will ensure that we have at least six rapid chargers of at least 150 kW in all 117 motorway service areas in England.
The right hon. Member referred to the on-street residential chargepoint scheme, which supports public on-street electric vehicle charging. While it does not fund chargepoints dedicated to car club vehicles, such vehicles can and do use the infrastructure, which means that they are still able to benefit from the roll-out of the infrastructure. Officials are currently developing the scope and design of the upcoming local electric vehicle infrastructure scheme, and we will be able to say more about that in the infrastructure strategy, which the right hon. Member also mentioned and which we aim to publish very shortly in the coming weeks.
We are developing the Commute Zero programme with the aim of reducing the number of single-occupancy journeys. Reducing it by just 10% could remove half a million tonnes of carbon dioxide each year, the equivalent of doubling rail use. We published “Future of Mobility: Urban Strategy” in 2019, setting out clear principles for the development of our transport systems in cities and towns. This year we will publish a “Future of Transport: rural strategy” to ensure that the benefits of innovation are felt by our rural and remote communities.
On accessibility, I am committed to the inclusivity of our transport networks, and our inclusive transport strategy is intended to create a transport system that is accessible to all. Our future of transport strategies highlight the need for future transport technologies to be inclusive by design, designed with disabled people in mind from the outset. We have been working with organisations such as Motability. We know that shared transport can provide more opportunities and options, helping us to meet our ambition for disabled people to have the same access to transport as everyone else and to be able to travel confidently, easily and without extra cost.
The national planning policy framework includes policies to facilitate access to high quality public transport and indicates that all development should address the needs of disabled people in relation to all modes of transport. We are also considering how we can empower local authorities to locate development around areas of high levels of access to sustainable transport modes, and where high quality walking and cycling routes can be developed, actively promoting sustainable transport and active travel as the first choice for journeys. As the Prime Minister has set out, we want half of all journeys in towns and cities to be walked or cycled by 2030, and to do just that, we have appointed Chris Boardman as the interim chief executive of Active Travel England to work with the Department and local authorities, and to support and—in his words, I believe—not just encourage but enable people to walk and cycle.
With regard to the consultation on the proposed reforms to the traffic regulation order process mentioned by the right hon. Member, I am pleased to say that that consultation was launched on Monday. Digitisation of the TRO process will bring an archaic system up to speed with the modern world while providing rich geospatial data to support the better management of traffic, deliveries and parking. He also mentioned legislation. I am pleased to say that, as soon as parliamentary time allows, we intend to bring forward legislation that will bring about wider reforms to prepare the UK for the future of transport in the technological revolution that is under way.
On the matter of taxation, this is a matter for Her Majesty’s Treasury, as the right hon. Member knows, and I will follow up on his points on taxation with the Financial Secretary to the Treasury. I want to conclude by thanking the right hon. Member for securing this debate. As I hope I have explained, shared transport is a vital part of how we secure a future transport system that is sustainable, accessible and available to everyone in society. Today he has raised a number of important issues that my Department and I are working hard to tackle through our transport decarbonisation plan and our future of transport programme. We are working to ensure that all parts of the country benefit from the innovations in transport, building on the rich heritage and the motor industry through which the UK is proud to have played a part in the global way that people have got from A to B. We are working to ensure that the people have greater freedom and choice in how to travel, and we are doing our part to make our communities cleaner and safer.
Question put and agreed to.
Deferred Divisions
Draft Grants to the Churches Conservation Trust Order 2022
(2 years, 9 months ago)
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The Parliamentary Under-Secretary of State for Digital, Culture, Media and Sport (Nigel Huddleston)
I beg to move,
That the Committee has considered the draft Grants to the Churches Conservation Trust Order 2022.
It is a pleasure to serve under your chairmanship again, Ms Elliott. The order is required so that the Government may continue to provide funding for the Churches Conservation Trust. The trust takes into its care some of the most impressive examples of our churches that are no longer required for regular worship. All these churches are listed—mostly grade I and grade II* —and some are scheduled ancient monuments.
Historic places of worship are a valuable and vital part of this nation’s heritage. Around 45% of all grade I listed buildings are Church of England churches or cathedrals. They represent some of the finest examples of our historic buildings and heritage, and showcase the most accomplished design and workmanship.
The trust currently cares for over 350 churches in towns, villages and cities across England, ranging from small hidden treasures to grand urban Victorian buildings. The churches the trust has saved are some of the finest examples of architecture and craftsmanship, spanning more than 1,000 years of history, architecture and archaeology. The trust keeps these buildings open to the public and does not charge an entry fee, instead believing that historic churches belong to everyone in the community.
The trust is a charity and was established by ecclesiastical legislation in 1969 as the Redundant Churches Fund, aimed at protecting an essential part of our heritage. It demonstrates a successful partnership between the Church, the Government and communities.
The trust’s strategy for 2019 to 2024 has seen an investment in staff to create the infrastructure to support local communities to use and love their historic church buildings. Those staff provide community support, learning, fundraising, conservation and maintenance expertise, and major project support, as well as funding.
The trust needs our funding, but it has not rested on its laurels and has increasingly made use of its statutory grant to raise new income from other sources, such as donations, legacies and grant-giving foundations. That independent income demonstrates great initiative, with a variety of activities helping to bring the CCT’s buildings back to life at a time of pressure on public funding.
Following the call from the Government to move offices from central London to areas outside the south-east, the trust will be taking the opportunity to highlight an innovative regeneration project in Northampton to create a new national office. The derelict grade II listed Old Black Lion in Northampton will be brought back to life as a pub to support the management and maintenance of St Peter’s church next door, while also becoming home to the CCT’s national team.
This year has seen the successful opening of two new church buildings by the CCT—St Peter’s, Tickencote, and St Nicholas, Gamston. Over £2 million of works have been undertaken to CCT buildings thanks to round 2 of the Heritage Stimulus Fund. This year will also see the vesting by the CCT of St Torney, North Hill, in Cornwall and St Wilfrid in Brougham. In addition, the major projects at St Swithun’s, Worcester, and Holy Trinity, Sunderland, have now completed construction, and these fully repaired and repurposed church buildings will be opening to their local communities shortly.
The trust has done a great job of diversifying its income and finances, and I will speak about just a couple of examples. One of its many initiatives is champing, or church camping, which is a scheme offering overnight stays in historic places of worship. The scheme, which began in 2015, continued to thrive in the 2020 season, as there is now a greater emphasis on UK-based breaks.
Filming has also been an important contributor to diversifying the CCT’s income streams, offering another creative route to supporting and conserving the estate. Over the last few years the organisation has facilitated film and TV productions from the BBC, Sky, HBO and Netflix across its sites. There remains considerable potential to attract more film and TV productions to the CCT estate.
The trust’s staff are award-winning experts in conservation when it comes to regenerating historic churches for new uses. The organisation also has an international reputation for innovation in the field of historic church buildings. In 2015, the CCT won the European Union prize for cultural heritage, the Europa Nostra award, in recognition of its role in promoting the architectural significance of historic places of worship and their essential function as centres of community life.
Consultancy work is also a positive income stream for the trust, working on projects with dioceses, churches and community groups, as well as new maintenance business initiatives. The trust is also participating in the management knowledge transfer partnership, funded by the Department for Business, Energy and Industrial Strategy, with the Saïd Business School at the University of Oxford. Membership of the trust has grown during the pandemic, predominantly through the Thursday lunch time lecture series, which has attracted more than 200,000 viewers to date. It has also created an online community of interest in the work of the CCT.
It was almost a year ago to the day that we sadly lost Peter Ainsworth, who died unexpectedly. Peter was a great chair of the CCT and a committed public servant who supported the charity through the first year of the global pandemic. He is greatly missed. After 15 years with the CCT and nearly five years as chief executive, Peter Aiers is leaving to become the 34th Master of the Charterhouse in London. Peter set up the successful regeneration team in the CCT, which has continued to innovate and deliver such projects as All Souls Bolton, St Mary at Quay, Ipswich, and the Old Black Lion. Peter also invented champing, which I referred to earlier, as a means of raising tourism income for the CCT, which has a worldwide audience now. He also put in place the current CCT strategy, and we thank him for his work and dedication.
I am extremely fortunate to have three CCT churches in my constituency: All Saints’ church in Spetchley, which is a 700-year-old church next to Spetchley Park and gardens; St Michael’s church, Churchill, which is an atmospheric church mainly from the 14th century; and St Lawrence’s church in Evesham, which is a large, imposing church rebuilt on Norman foundations in the 16th century. Those historic buildings remind us of communities of old, and the work of the Churches Conservation Trust means that they will be preserved for generations to come. They anchor us to our history and our communities in a way that we should never take for granted. I hope that the Committee shares my enthusiasm for the important work of the trust, and the key role that it plays in preserving and promoting a vital aspect of our nation’s heritage, and that it will consent to approve the Grants to the Churches Conservation Trust Order 2022, which provides for three years of funding to the trust.
Chris Elmore (Ogmore) (Lab)
It is a pleasure to serve under your chairship, Ms Elliott. I thank the Minister for his introduction to the draft statutory instrument. I am pleased to be able to respond on behalf of the Opposition. This is a broadly non-contentious order, which we do not intend to oppose. The order makes provision for a three-year statutory funding settlement, which will allow the Churches Conservation Trust to continue to care for and maintain its stock of 356 historic church buildings in England—a number that will almost certainly continue to rise. The CCT has indicated that it is pleased with the settlement. It does not amount to a real-terms cut, and it is right that the Government continue to fund its work, which is so important for our heritage.
In turn, through careful management, the trust is able to more than double the statutory funding it receives. That is good news for communities with disused church buildings. Instead of falling into disrepair or ruin, the trust ensures that those buildings, and all the architecture, archaeology and art they house, are kept open and in use by people of all faiths and none. The buildings under the CCT’s care attract almost 2 million visitors a year. They are widely enjoyed as cultural, social, tourism and educational resources, as well as being able to be used for occasional worship. As the Minister mentioned, the CCT even introduced the concept of champing to the world. We are satisfied that the funding laid out in the order will help it to continue all that great work.
I have a couple of questions for the Minister, because there is a broader context to the order, as he mentioned. There is a strong trend in the decline of parish church use in the UK, as across western Europe and America. The pandemic has accelerated the existing trend of declining congregation numbers, already driven by an ageing religious population and an increasingly secular society. There are real financial pressures on churches for their building maintenance. The Church Commissioners’ review paper of the Mission and Pastoral Measure 2011 from last year, which included figures from a diocesan survey, suggested that up to 368 church buildings could be at risk of closure over the next five years. That will undoubtedly affect the number of churches that come under the care of the CCT, a number that, as I mentioned earlier, will continue to rise. What thought has the Minister given to the future needs of the trust, in terms of statutory funding? Will he stand ready to keep the figure under review if its work grows?
The Church Commissioners plan to bring forward a White Paper with proposals for legislative change from their review to the July 2022 session of General Synod. Any changes, if implemented, will have bearings on parish governance, pastoral reforms, financial models and the future of church buildings. What initial thought has the Minister given to how that might affect the CCT’s work? How do the Government plan to engage with the review and the wider debate on the future of parish churches? This is a specific and focused order which we do not oppose, but the wider context raises some important questions and I look forward to hearing from the Minister.
Nigel Huddleston
I thank the hon. Member for Ogmore (Chris Elmore) for his contribution. I know that across the whole House we share a passion for heritage and concern about the future of our churches.
In answer to some of the points the hon. Gentleman raised, we always keep the funding for the Churches Conservation Trust under review. He is right that, unfortunately, as time goes by, more and more churches fall under the CCT remit. In an average year, about 20 churches are moved out of direct Church control, of which only about two or three fall into the CCT arena. Others go into private ownership or are renovated for other purposes, which itself generates income for the Church. The key point about funding is that we have been very impressed by the CCT’s ability to find savings of its own volition. We appreciate the efforts it has made and the pattern we both recognise of identifying additional income streams. We are always happy to engage with the Church and the CCT.
The hon. Gentleman talks about the wider implications of the number of people attending Church of England churches and other institutions. We are in constant dialogue with Churches through a variety of means. The Second Church Estates Commissioner, my hon. Friend the Member for South West Bedfordshire (Andrew Selous) has a role in that respect. We frequently have conversations with him and we are always willing to offer help.
The Government’s funding for the CCT is an effective and successful part of the support we give to our heritage sector. The trust is fully committed to making sure that these remarkable buildings of cultural importance are still in good repair, and are open now and for many generations to come. I extend my grateful thanks to the trustees, the staff of the CCT, and the many volunteers up and down the country who ensure that the churches are open and welcoming.
It is thanks to the important work of the CCT that these historic buildings continue to thrive. Buildings looked after by the CCT across England are enjoyed as cultural, social, tourism and educational resources. They are kept open and in use, and are living once again in the heart of our communities. We thank them for that.
Question put and agreed to.
Draft Flood Reinsurance (Amendment) Regulations 2022
(2 years, 9 months ago)
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The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Rebecca Pow)
I beg to move,
That the Committee has considered the draft Flood Reinsurance (Amendment) Regulations 2022.
It is a pleasure as ever to have you in the Chair, Mr Robertson. This statutory instrument makes important changes to the Flood Re scheme, which is a joint Government and industry initiative, launched in 2016, designed to improve the availability and affordability of UK household flood insurance.
In 2019, Flood Re, the scheme administrator, published its first quinquennial review of the scheme. This is a statutory requirement. Flood Re made a number of recommendations to Government. We have since considered and consulted on proposals, leading to the changes set out in this statutory instrument.
Since its launch, Flood Re has helped to provide cover for flood insurance to over 350,000 households at risk of flooding across the UK. Before Flood Re, only 9% of policy holders with a prior flood claim could get flood insurance quotes from two or more insurers and none could get quotes from five or more insurance companies. Following the scheme’s launch in 2016, availability of flood insurance policies for those with prior flood claims has increased; around 96% of customers can now get five or more quotes, and four out of five householders with a prior flood claim see price reductions of over 50% since the scheme’s launch. Building on this success, the statutory instrument makes technical changes to the scheme to improve its efficiency and effectiveness and changes to drive the uptake of property flood resilience measures, helping the United Kingdom to become more resilient to future flooding and the changing climate. I will set those changes out in turn.
First, there are several technical changes. The statutory instrument designates a revised scheme, as described in the new scheme document dated 19 January 2022. This provides the framework within which the scheme administrator, Flood Re, will administer the scheme. The new scheme document will allow Flood Re to propose a revision to levy 1 every three years instead of every five, and reflects the Government’s assurance process. The levy is the scheme’s primary source of income, raised from UK household insurers based on their market share. The revised levy amount will be subject to parliamentary approval every three years. The change will allow Flood Re to obtain better value for money when purchasing reinsurance and to be more dynamic to the potentially changing risk profile. The statutory instrument amends the figure for the levy from £180 million to £135 million per year for the next three years. That ensures the amount of levy being raised is not higher than it needs to be.
The new scheme document will allow Flood Re to set the liability limit, which sets the maximum amount of claims Flood Re is liable to pay to insurers in any one financial year, every three years instead of every five. This will align it with the levy setting cycle and afford Flood Re greater flexibility to respond to the scheme’s changing income needs and risk profile.
The new scheme document also makes a technical clarification to make it clear that surplus levy 1 funds will be returned to Government when the scheme ends, in line with the agreed position between the Government and Flood Re when the scheme was established.
Recently, we saw the devastation that can be caused by flooding and the impact it can have on the lives of those affected. We are making important changes to help to drive the uptake of property flood resilience. Property flood resilience gives households the tools to manage the impact that flooding has on their property and their lives, enabling them to respond and recover more quickly and reducing the cost of damage and, in turn, the cost of insurance claims. The new scheme document will allow Flood Re to pay claims from insurers ceding to the scheme that include an amount of resilient repair up to a value of £10,000 over and above the cost of like-for-like reinstatement of actual flood damage. That will allow UK householders to build back better after a flood, making their homes more resilient to future flooding. That involves using products such as air brick covers, flood doors, water-resistant kitchens and plasterboard. I have seen lots of things being used, and the people who had them put in are generally pleased that they did so. That is what the new claim will enable. Resilient repair will enable homeowners to get back into their houses more quickly following a flood and reduce the cost of future claims.
The Build Back Better scheme is being introduced on a voluntary basis. Insurance companies who cede to the scheme can choose whether to offer it to their customers. Participating insurers will be able to start offering Build Back Better as soon as the draft regulations come into force. Flood Re will require insurers choosing to participate in the Build Back Better scheme to offer it across all their home insurance offerings, rather than just on insurance policies ceded to Flood Re, to ensure consistency and fairness for all customers. By providing Flood Re with the power to pay claims to fund resilient repair over and above—what has largely been happening at the moment—normal reinstatement, Government and Flood Re aim to drive a cultural shift across the insurance market and positive changes in supply chains, to raise awareness and demand for property flood resilience, and to help capture the evidence on the benefits of property flood resilience to support future changes in the market.
The Government will publish a property flood resilience road map at the end of this year to identify the action that Government and industry need to take to accelerate uptake of property flood resilience measures and to underpin the market successfully. That will ensure that all relevant bodies play their part and that consumers can have assurance about the quality of products and their installation.
Any future regulations proposed to make further changes to the Flood Re scheme would receive parliamentary scrutiny through the affirmative procedure, as required under the Water Act 2014. Flood risk management policy is devolved, but insurance policy, including the operation and application of the Flood Re scheme, is a reserved policy. Any changes to the Flood Re scheme, including those in the draft instrument, take effect across the UK. Government have engaged extensively with the devolved Administrations throughout the development of the changes, and they have given their full support for their implementation.
No impact assessment has been prepared for the draft instrument. That is because it has no significant impact on business, charities or voluntary bodies. Most impacts on business are anticipated to be neutral or positive. There is also no impact on the public sector. On those grounds, I commend the draft regulations to the Committee.
Alex Sobel (Leeds North West) (Lab/Co-op)
It is a pleasure to serve with you in the Chair, Mr Robertson. I thank the Minister for introducing the draft regulations.
In recent years, we have seen a sharp increase in extreme weather events all over the world. In the UK, storms and increased rainfall have destroyed homes and claimed lives. We are now at a point where communities are faced with flooding on a semi-regular basis. For those communities, flooding brings misery and huge inconvenience. It can also be financially devastating, which is why people living in flood-risk areas must have access to good, affordable insurance.
In my constituency, that happened on Boxing Day 2015, when the River Wharfe flooded parts of Otley. Since being elected in 2017, I have had to support flooding victims on the difficulties of getting reinsured due to the increased risks. Flood Re has been useful to my constituents, so I am particularly pleased to be responding to the draft legislation. Independent research shows that the availability of insurance for householders at risk of flooding is improving, so I am pleased that Flood Re has been successful in that respect. I am also glad that the scheme is financially secure—it has met its initial liquidity and capital requirements, and has a high solvency ratio.
For those reasons, I agree that reducing the levy on insurance companies from £180 million to £135 million a year makes sense. The figure needs to be kept under review, as climate risk will mean that insurance risk will vary. I will continue to monitor that and hold the Minister to account in future years if more support is needed for flooding victims.
Her Majesty’s Opposition have some questions, which I would be thankful if the Minister will help to address. Flood Re proposes to reimburse insurers up to £10,000 for the Build Back Better scheme in order to reduce the future risk of the property flooding and/or the cost of repair. That will mean that property owners can pay for repair after a flood, which makes the home more resilient to flood damage than before. I was pleased that the Minister mentioned air brick covers and other such innovations in her introduction.
I am very much in favour of the support, but I am concerned that, under the proposals, insurers are not obligated to participate in the Build Back Better scheme. Does the Minister not agree that it should be compulsory for all Flood Re policies to participate in the scheme, when we consider the increased threat of flooding and subsequent need to make buildings more flood resilient? Has she considered making the measure compulsory and, if so, what are the reasons for her rejection of that?
In addition, I will express concerns that I know have been raised in the past, but that I am not convinced have yet been adequately resolved. The existing proposals protect only homeowners. Will the Minister consider widening access to the scheme to protect those in tenanted and rented properties? Renters are likely to be more vulnerable to the financial impact of flooding and yet, under the proposals, they are the least protected. Renters are also less likely to realise the flood risk of their property and many renters are in precarious employment that might be dependent on equipment which could be destroyed in flooding, leaving them without income. Insurance becomes the difference between them working and not.
I have also been in contact with farmers, who are concerned that their homes are not protected under the scheme. Will the Minister clarify the status of farmhouses, which fall into a grey area between residential and business premises?
The scheme is targeted towards households at high risk of flooding across the UK. If recent years and the extreme weather events that have defined them are anything to go by, however, we know that high risk—risk in general—is broadening its scope, and areas previously deemed to be safe now experience flooding events never seen before. Therefore, how is “high risk” defined by the Environment Agency, and how are areas reassessed in a way that keeps up with the impact of extreme weather events? I want to know whether the Minister has had discussions with the Environment Agency about risk. I am interested to hear what assessments were made about the changes that might be needed.
Finally, I draw attention to the fact that more than 5,000 new homes in flood-risk areas of England were granted planning permission last year, despite the Environment Agency advising against such developments. Does the Minister agree that the Environment Agency should be given power to ensure that homes are not built against its advice? In my view, that is a crucial change to avoid unnecessary future flooding and the devastation that comes with it. I hope that the Minister will address my concerns.
I can see the Minister desperately looking for her papers, so I will talk for a few more seconds to give her time.
Alex Sobel
The Minister is doing very well. I am sure she will give a full response to all my queries. People up and down the country, whether homeowners, renters or farmers, are all keen to get clarification on those points. She shares my concerns about the increased number of flooding events and the impact of climate change on our rivers. We need to be constantly mindful of the risks involved in potential flooding events. If she does not need more time, I will conclude.
Richard Thomson (Gordon) (SNP)
It is a pleasure to serve under your chairmanship, Mr Robertson.
Sadly, I can speak with some personal experience of how much of a violation it can feel like when people’s properties are flooded. In many ways, it is worse than a burglary: all the stuff is still there, but it is damaged beyond repair. People have the heartache of throwing it out themselves and seeing everything done to their home to improve it damaged beyond recovery.
The often tortuous process that one has to go through when it comes to making insurance claims—getting the works done, reacquiring the goods that are replaceable and trying to forget about what is not replaceable—is as absolutely nothing compared to the agonies people have gone through in years past, when they were unable to get insured because of the risk that the properties were felt to be in. We therefore very much welcomed the flood reinsurance scheme when it was introduced. It has been a vital intervention in the market to ensure that insurers are able to serve the public in the manner that we would all hope they are able to. Also, the operation has successfully managed to increase the uptake of flood protection measures for those covered under its auspices.
Clearly, the draft regulations are designed to improve the efficiency and effectiveness of the existing scheme, and to create greater opportunities to improve quality so that what goes back in structural repairs to properties is better than that which was damaged and required replacing.
We hope and believe that that will be the effect of the measures. On that basis, the regulations enjoy the support of my party. I look forward to hearing the Minister’s answers to the questions posed by the Labour spokesperson, the hon. Member for Leeds North West.
Jesse Norman (Hereford and South Herefordshire) (Con)
I thank my hon. Friend the Minister for her comments, as well as for the work she has done on this legislation and on the related area of the cleanliness of the River Wye, which is itself a function, in part, of flooding and the sweep of phosphates into the river. I thank her and her Department very much for the work that they have done on that.
In relation to flooding, the Minister may recall that in early 2020 there was some serious flooding in Herefordshire that resulted in the sweeping away of an entire causeway, and the undermining of the road down to Fownhope. For various different reasons, no support—or very little support—was forthcoming from central Government for the restitution of the causeway and that road. They did not fall under the Department for Transport funding for local road restoration, and as Herefordshire is a county of 190,000 people—fewer than even small London boroughs—it was entirely struggling to pay for the costs of those roads. Nor were the costs paid for by the Bellwin funding, which extends only to surface impediments and other disturbances to the use of a road, and is quite narrowly interpreted even for that.
May I ask the Minister to take back to her Department the question of whether there is a gap in the legislation and in the provision, and whether counties such as Herefordshire, which are completely dependent on their roads because they are so rural and have very small populations, should be asked to bear the extremely large costs of such floods? Indeed, they may in some sense require reinsurance, because that is a serious concern. Of course, this greatly affects the question of levelling up, with which the Government are widely and properly concerned.
Daniel Kawczynski
I know that the River Severn flows through your constituency, Mr Robertson. I am the chairman of the caucus of 45 Conservative Members of Parliament through whose constituencies the River Severn flows. We represent 12% of the Conservative parliamentary party. Unfortunately, flooding is now an annual disaster for our constituencies. The sheer damage and economic chaos for places such as Shrewsbury following the annual flooding of the River Severn is wholly unsustainable for our communities.
I am extremely grateful to the Minister for taking the time to visit Shrewsbury last year, when she had the opportunity to meet the River Severn Partnership, a consortium of councils that represent communities across the whole of the River Severn, Britain’s longest river. Let us not forget that we are the communities that live by the River Severn. I am particularly pleased that the Minister has spoken about her interaction with devolved Assemblies and, following my discussions with her earlier this week, I am grateful to her for visiting the source of the River Severn and for initiating dialogue with her counterparts at the Welsh Assembly.
Will the Minister give the assurance that she will continue to work with the River Severn Partnership and with me, in my role as chair of the caucus of 45 Conservative Members of Parliament who have the River Severn flowing through their constituencies? I can tell her unequivocally that this is the single biggest detrimental economic barrier to the development of our constituencies.
My hon. Friend is a very effective Minister, if I may say so. I look forward to her ongoing negotiations with the Treasury and other parts of Government, and with the Welsh Government, to ensure that we find a long-term, holistic solution to managing Britain’s longest river.
Rebecca Pow
I thank Members for all their comments on the statutory instrument. Of course, flooding affects so many of us. I come from Somerset, and we have had to deal with very serious flooding over the years, including just before I arrived in Parliament. It has to be said that the Government, with their funding, have really helped us to address that down in Somerset.
I thank the shadow Minister, the hon. Member for Leeds North West, for his support for the SI. I know that he has some knowledge of flooding in his constituency. He raised some very valid questions. He asked whether the scheme should not be made compulsory for all insurers. In the approach that we are taking, we are trying to encourage a cultural shift in the insurance industry. We have done a huge amount of engagement. Insurance companies are very pro what we have brought forward, and many are already taking the scheme on board; they are either getting it in writing or just about to start offering it anyway once the SI goes through.
We are optimistic that the scheme will be very widely picked up, and that it will have a really positive impact on supply chains, awareness and demand. Once one lot of insurance companies start offering it, we anticipate that the majority will take it up. That is why we are confident that introducing it on a voluntary basis is what we need to achieve what we are hoping to achieve, which is basically more people being more sure of their property’s flood resilience and being able to get hold of the right money to build back better—to put their houses back in a better state than they were.
At the moment, as I said, houses are often just reinstated as they were. It is awful to think that one might flood again, but in some areas people have to be mindful of that. Therefore, putting down tiles or waterproof plasterboard—you can get that now, Mr Robertson—rather than carpets might make full sense, but it might cost more; that is why this extra bit of funding will be really helpful. We are fully optimistic that we have the necessary measures in place. I hope that gives the hon. Member some reassurance.
The hon. Member also asked about landlords and tenants. All types of landlord insurance are classified by the insurance industry as commercial business insurance, since such insurance, including for larger leasehold premises, is often bespoke. However, leasehold properties consisting of three or fewer blocks, where the freeholder him or herself lives in the block, are eligible for Flood Re, and tenants and leaseholders are able to obtain contents insurance supported by Flood Re regardless of the size of the block. A number of insurers also offer solutions to those struggling to access flood insurance, including parametric insurance and a scheme that amends a lease for the remaining lifetime of Flood Re to allow the individual leaseholders in a block to insure their individual flats. Quite a lot of thinking has gone into that, and quite a number of tenants and leaseholders are covered.
Following the 2019 flooding, the Government commissioned an independent review of flood insurance in Doncaster, which the hon. Member might remember. Following that report, we are taking forward action, which includes repeating some research into the availability and affordability of flood insurance, because there was a small group of people, which included some tenants, that still fell out of getting cover. Work is continuing on that.
We have also been working with the insurance industry to set up a new flood insurance directory, to which customers can be signposted by insurers and brokers when they themselves cannot offer flood cover. The directory, which has recently been launched, aims to reduce the number of policies sold with flood exclusions and drive uptake of suitable flood cover. The directory can be found on the British Insurance Brokers’ Association website. I hope that gives some reassurance.
The hon. Member mentioned farming and farmers. What happens to farmers when their land gets flooded has been raised with me many times. Farmers have to work with temporary flooding in many areas—that probably applies to your area around Tewkesbury, Mr Robertson—but there are issues when the water stays longer on the land. A lot of new schemes, particularly the environmental land management scheme, give particular mention to working with farmers to take water in flood-risk areas. It is a changing landscape for farmers, but we are very aware of that particular issue, especially as we are going to get more extreme weather events. Whatever we do about climate change—and we have to do everything we can to tackle it—we still have to adapt, and many of our policies are working towards that.
I thank all hon. Members for their comments. I thank the Scottish shadow Minister, the hon. Member for Gordon, for welcoming the policies. We were very pleased to work with the devolveds on this, because there was all-round support.
My right hon. Friend the Member for Hereford and South Herefordshire is a great advocate for the River Wye. As he knows, I made a visit to look at what is going on there. We are doing so much work now to tackle the issue of pollution in his area, but, as he says, there have also been flooding issues. I will write to him on his point about the road, as it comes under the remit of the Department for Transport and is linked to its road investment strategy.
It is important to address how we tackle the flooding of wider infrastructure. We are at pains to work even more closely on flooding with all other Departments. When we allocate our flood funding money—it is a huge budget worth £5.2 billion of investment—we can get an awful lot of wider spin-offs if we work with other Departments. There are benefits if we tackle the issue effectively. There are huge benefits for the economy from sorting out the flood risk for businesses.
Jesse Norman
I perfectly understand that the Minister will write to me, including in relation to DFT, and I am of course happy with that. This bears on DEFRA because there is a hole in the Bellwin approach that has the effect of not providing funding to address the catastrophic destruction of roads, and that cannot be remedied by small authorities that simply do not have the funds to address such large-scale devastation. That is the problem. I would be grateful if the Minister could look at that in her response.
Rebecca Pow
The Bellwin scheme comes under the Department for Levelling Up, Housing and Communities. Although I am the floods Minister, there is only one significant fund that comes under DEFRA, and that is for farmland. That is why we have to work with other Departments. The Bellwin fund is very much for local authorities to cover the urgent and drastic clean-up required after a flood. I will write to my right hon. Friend on the issue of flooding on the roads, but I take his point.
I thank my hon. Friend the Member for Shrewsbury and Atcham, who talks to me regularly and is a massive advocate for his constituency. I am sorry that it has had flooding recently. He knows that there are schemes under way, and we are going to have a meeting about some additional ones. I welcome his work chairing the partnership of 45 MPs who represent constituencies up and down our enormous and important River Severn. He will know that we have recently given funding to do some much wider, innovative and creative thinking about how to tackle flooding right up and down the whole catchment. Some pilots have already started. A lot of that involves nature-based solutions, as well as hard flood defences and so on. It also involves speaking with our devolved colleagues in Wales. I am really working hard on that, because the river does of course have two sides—in England and in Wales.
Daniel Kawczynski
My hon. Friend is doing a very good job. I am grateful to her for visiting Shropshire and the River Severn. Bearing in mind that we are seeing an increased frequency in flooding and the devastation it is causing to our communities, does she agree that £5.3 billion of extra funding for DEFRA is not sufficient and that we need to lobby the Treasury for even more money for flood defences?
Rebecca Pow
I would say that my hon. Friend is being a bit cheeky, actually. It is £5.2 billion—an extraordinary amount of investment in flood defences and coastal erosion, covering up to 2,000 defences, and an awful lot of other schemes and projects. It is not the only money, either. That is why I say it is so important to work with other Departments to attract levelling-up funds and so on.
I will give an example. I recently launched flood defences in Hull; £42 million was spent on eight different schemes along the Humber estuary. Because that has made people feel more secure and businesses now know they are not at risk of flooding, they are flooding into Hull and setting up. One of the big manufacturers of safety equipment that businesses use, including covid safety equipment, moved there. It was encouraged to go because it knew that it could now get insurance and that it would be safe. There are so many things in addition to that money, but we have to make sure that it is well spent. Of course, the money has to come from somewhere, and the Government have to be very mindful of how we spend our funds.
I hope that I have covered all the questions. This SI will improve the efficiency and effectiveness of the Flood Re scheme and help to build a nation more resilient to future flooding, which is what we need, and that is better able to cope with the changing climate. Once again, I thank everyone for their contributions, and I thank you, Mr Robertson.
Question put and agreed to.
Resolved,
That the Committee has considered the draft Flood Reinsurance (Amendment) Regulations 2022.
Draft Combined Authorities (Borrowing) Regulations 2022
(2 years, 9 months ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister for Housing (Stuart Andrew)
I beg to move,
That the Committee has considered the draft Combined Authorities (Borrowing) Regulations 2022.
It is a pleasure to serve under your chairmanship, Mr Pritchard.
The draft regulations, which were laid before the House on 31 January, will implement a commitment made by the then Chancellor of the Exchequer, the right hon. Philip Hammond, back in 2016 to extend the borrowing powers of mayoral combined authorities that have agreed debt caps with Her Majesty’s Treasury. That is reflected in the devolution deals agreed with the Government for North of Tyne, South Yorkshire and West Yorkshire. The extension is another important step towards empowering mayoral combined authorities to invest in the right infrastructure while giving local leaders the tools needed to stimulate local economic growth, increase productivity and seize the levelling-up opportunities available to their areas.
In the levelling-up White Paper, we set out plans to transform the fortunes of places across the UK by spreading growth and prosperity in areas that feel Westminster has forgotten about them. The paper set out a series of long-term missions to put us on a trajectory towards that goal, including one to give every part of England a devolution deal by 2030. Proper devolution is a central part of our levelling-up agenda. We want to give areas the powers that they need, along with a simplified long-term funding settlement. We are committed not only to extending devolution, but to deepening it.
The draft regulations will live up to that ambition, deepening devolution in North of Tyne, South Yorkshire and West Yorkshire in line with commitments that we have already given, by providing new and deeper powers to local leaders so that they can act more flexibly and innovatively to respond to local need, and be held to account by local citizens. Put simply, the new powers will allow those three combined authorities to borrow not only for their transport functions, but for any of the other functions conferred on them as a result of their bespoke devolution deals. Those areas will be able to make the most of new opportunities by borrowing for their investment programmes, delivering improved public services and greater prosperity for their areas.
At the moment, the primary legislation in place allows combined authorities only to borrow for transport or where the Mayor is also the police and crime commissioner. The primary legislation also provides that the Secretary of State may, by regulations, confer the ability to borrow for additional functions. The draft regulations provide specifically that the three named combined authorities may borrow for all their functions. Each of the three mayoral combined authorities, and each of their constituent authorities—15 in total—has given consent to the regulations.
If Parliament approves the draft regulations and they are made, the North of Tyne, South Yorkshire and West Yorkshire Mayoral Combined Authorities will be able to borrow for all their functions. Through regulations made four years ago, that is already the case for the six other mayoral combined authorities. It is also the position for the generality of local authorities, which are empowered to borrow for all their functions.
In the same way as a local authority, combined authorities are subject to the requirements for borrowing provided under the Local Government Act 2003. The prudential borrowing regime requires that an authority can borrow lawfully only if it can demonstrate that servicing and repayments of debt are affordable. As such, that gives the necessary assurance that the proposed borrowing powers will be used appropriately. In the case of combined authorities, that ability to borrow is also subject to a debt cap agreed with the Treasury. Each agreed cap specifies the cumulative ceiling for the mayoral combined authority’s debt for 2021-22. The caps for future years are currently being agreed with all nine mayoral combined authorities.
The draft regulations will fulfil our existing promise to deepen the devolution deals of those three combined authorities and to extend their borrowing powers to bring them in line with the other six mayoral combined authorities. With that extension, they will be able to borrow to make the investments in infrastructure that are essential to an area’s growth. We believe firmly that that will also lay the groundwork for further levelling up in those areas. I commend the regulations to the Committee.
Mike Amesbury (Weaver Vale) (Lab)
It is always a pleasure to serve under your chairmanship, Mr Pritchard.
I thank the Minister for his thorough and detailed explanation of this draft statutory instrument. I am sure that hon. Members in Committee will be pleased to know that we will not oppose it. It is something that each combined authority has been calling for; I spoke with Mayor Tracy Brabin, for example, and her office has been calling for it for some considerable time. As the Minister outlined correctly, the commitment was made some time ago by a former Chancellor. The flexibility to regenerate and invest in a broader range of opportunities—whether housing, transport or other infrastructure that we would all like to see developed in our communities—is most welcome.
I spoke briefly to the Minister earlier, before the Committee sat, and told him that I would ask a couple of questions. I do not expect an immediate answer; a reply in writing would be satisfactory and helpful. Clearly, some local authorities have made investments that they thought were sound, but turned out to be risky. Surrey County Council, for example, made a number of investments in shopping centres right across the country, but they resulted in a £50 million bill, or deficit, for its locality. It is not the only local authority to have done that, up and down the country.
How will the Department, working with combined authorities, ensure that the check and balance is there as devolution expands rapidly—I hope—right across England? Is there the scrutiny to ensure that the taxpayer gets maximum bang for their buck, so to speak, and the assurance that strong checks and balances are in place and investments are sound? As I say, I do not expect an immediate answer, but I would like some correspondence from the Minister and his Department.
Dr Dan Poulter (Central Suffolk and North Ipswich) (Con)
It is a pleasure to speak under your chairmanship, Mr Pritchard. I was not expecting to speak in this debate—it is the first time that I have spoken in a Delegated Legislation Committee in my time in the House—but the shadow spokesman, the hon. Member for Weaver Vale, made a very valid point about what checks and balances are in place for public bodies that are borrowing, or in effect going into debt, to invest.
The most recent example of that going very badly wrong was Croydon Council, with its borrowing to invest in the Westgate shopping centre. I believe that the council had, in effect, to declare itself bankrupt and insolvent because of that error. I will be grateful for clarification of what monitoring and checks are being put in place by the Government to ensure that local authorities are monitored properly in their use of the money that they are borrowing.
I have a second question and point of clarification. In such situations, under the 2003 Act referred to in the draft regulations some local authorities have set up companies or other arm’s length organisations to manage the money that they borrow. Auditing transparency is much more challenging in such circumstances. I would be grateful to understand how the Government intend to ensure proper transparency of accounts, as that lack of transparency led to the problems in Croydon. Will the Minister outline the answers to my questions in written correspondence, if he is unable to do so today?
Mr Richard Bacon (South Norfolk) (Con)
It is a great pleasure to serve under your chairmanship, Mr Pritchard.
Like my hon. Friend the Member for Central Suffolk and North Ipswich, who is my parliamentary neighbour, I was struck by the comments of the shadow Minister, the hon. Member for Weaver Vale. It is now 50 years since Tony Crosland, a Labour Environment Secretary—as it was in those days, but the position covered local government—used the famous words, “the party is over” in relation to local government borrowing.
The regulations provide for an extension of borrowing powers by local government. As has been said, a variety of councils from across the country undertook investments that they thought were sound. In my constituency, a neighbouring council bought a golf club, which it was pleased by and thought was excellent; I was told that it was going to produce a 7.5% return. I may have commented in the local media at the time that councils owning golf clubs was not necessarily what council tax payers expected. I do not think that anybody assumed that a Government of the future would at some point make the playing of golf a criminal act, but that is of course exactly what happened.
Colleagues’ question about what kind of scrutiny is in place is a first order question, and I hope that the Minister will take it to heart and undertake to write to Committee members with more detail than we have heard today about the scrutiny measures that will be in place.
Section 1 of the Localism Act 2011 is entitled,
“Local authority’s general power of competence”,
and subsection (1) states:
“A local authority has power to do anything that individuals generally may do.”
Section 1 (4) reads:
“Where subsection (1) confers power on the authority to do something, it confers power (subject to sections 2 to 4) to do it in any way whatever, including…power to do it anywhere in the United Kingdom or elsewhere…power to do it for a commercial purpose or otherwise for a charge, or without charge, and…power to do it for, or otherwise than for, the benefit of the authority, its area or persons resident or present in its area.”
There are therefore already very wide powers.
I was particularly interested that the Minister said that the extra powers will apply not only to the existing combined authority, but to the bespoke deals available locally. Will he confirm or refute—now or later in writing—whether the regulations go beyond the bespoke powers of the combined authority and extend to the broad powers in section 1 of the Localism Act 2011 to which I referred? Although we all want, at least on paper and in theory, for local government to be accountable to local citizens, we have seen this process go wrong repeatedly in the past, and the framework—the failure regime—that the Government put in place when the extra powers become law will be very important.
Stuart Andrew
I thank members of the Committee for their contributions. They are right to raise those questions. We have seen examples where things have gone terribly wrong and, of course, it is people’s money that is put at risk. Hon. Members have asked me specific questions. With respect, I will write to them with more detail and will now outline how the prudential borrowing process works.
Combined authorities are subject to the regime provided for in the 2003 Act, just as local authorities are. The underlying principle of the regime is that authorities can raise finance for capital expenditure when they can afford to service the debt without Government support. The key feature of prudential borrowing is that authorities are under a broad duty to determine and keep under review the amount that they can afford to borrow.
Regulations further specify that authorities must have regard to the practical rules for deciding whether borrowing is affordable, as laid down by the “Prudential Code for Capital Finance in Local Authorities” issued by the Chartered Institute of Public Finance and Accountancy. Each authority sets its own prudential limit in accordance with the rules, subject to the scrutiny of external auditors. Authorities are required to balance their revenue budgets and not finance long-term revenue expenditure by borrowing. The Government are aware that some local authorities have taken excessive risk with taxpayers’ funds by investing primarily for profit, and pursuing novel and risky investments.
On 28 July 2021, the Government published the policy paper “Local authority capital finance framework: planned improvements”, which set out our plans to strengthen the capital system to prevent excessive risk.
Grahame Morris (Easington) (Lab)
I am listening carefully to the Minister’s explanation and his answers to various Members. I appreciate that the regulations are limited in scope to areas in England that have an elected Mayor, but will he elucidate in relation to investments? The hon. Member for South Norfolk mentioned a golf course, but in my experience most local authorities have been selling off assets. When I was a member of the local authority, we had a huge caravan park, which we were compelled to sell off. I am aware that Mayor Ben Houchen bought an airport that is losing considerable sums of money. The Minister is saying that it is down to the elected Mayor and the combined authority to determine what is prudential and what is in the public interest, so would the measures cover such cases?
Stuart Andrew
I will speak to the Under-Secretary of State for Levelling Up, Housing and Communities, my hon. Friend the Member for Harborough (Neil O’Brien) —the Minister responsible for this area—to highlight the point made by the hon. Member for Easington. My understanding is that such matters are subject to external auditors, but I will happily give him a more detailed answer in writing.
Question put and agreed to.
Ministerial Corrections
(2 years, 9 months ago)
Ministerial CorrectionsRead Full debate Read Hansard Text
Education
(2 years, 9 months ago)
Ministerial CorrectionsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Nadhim Zahawi
I respectfully remind the hon. Lady that someone from a disadvantaged background today is 80% more likely to go to university than they were a decade ago.
[Official Report, 24 February 2022, Vol. 709, c. 491.]
Letter of correction from the Secretary of State for Education, the right hon. Member for Stratford-on-Avon (Nadhim Zahawi).
An error has been identified in the response given to the hon. Member for Houghton and Sunderland South (Bridget Phillipson).
The correct response should have been:
Nadhim Zahawi
I respectfully remind the hon. Lady that an 18-year-old from a disadvantaged background today is 82% more likely to go to university than in 2010.
Nadhim Zahawi
Non-graduates continue to pay— at the moment, all taxpayers fund higher education in England at 41p in the pound.
[Official Report, 24 February 2022, Vol. 709, c. 494.]
Letter of correction from the Secretary of State for Education, the right hon. Member for Stratford-on-Avon (Nadhim Zahawi).
An error has been identified in the response given to the hon. Member for Aberdeen North (Kirsty Blackman).
The correct response should have been:
Nadhim Zahawi
Non-graduates continue to pay—at the moment, all taxpayers fund higher education in England at 44p in the pound.
Nadhim Zahawi
If the hon. Lady looks at the Government’s track record, she will see that someone from a disadvantaged background is 80% more likely to go to university than was the case a decade ago.
[Official Report, 24 February 2022, Vol. 709, c. 496.]
Letter of correction from the Secretary of State for Education, the right hon. Member for Stratford-on-Avon (Nadhim Zahawi).
An error has been identified in the response given to the hon. Member for Newcastle upon Tyne Central (Chi Onwurah).
The correct response should have been:
Nadhim Zahawi
If the hon. Lady looks at the Government’s track record, she will see that an 18-year-old from a disadvantaged background today is 82% more likely to go to university than in 2010.
Work and Pensions
(2 years, 9 months ago)
Ministerial CorrectionsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
David Rutley
Children living in households where all adults work were six times less likely to be in absolute poverty before housing costs in 2019-20 than those in workless households. We have been making a difference: there are 100,000 fewer children in absolute poverty before housing costs, and nearly 580,000 fewer children are living in workless households than in 2010.
[Official Report, 2 March 2022, Vol. 709, c. 398WH.]
Letter of correction from the Under-Secretary of State for Work and Pensions, the hon. Member for Macclesfield (David Rutley):
An error has been identified in my contribution to the debate.
The correct information should have been:
David Rutley
Children living in households where all adults work were six times less likely to be in absolute poverty before housing costs in 2019-20 than those in workless households. We have been making a difference: there are 100,000 fewer children in absolute poverty before housing costs, and nearly 540,000 fewer children are living in workless households than in 2010.
Westminster Hall
(2 years, 9 months ago)
Westminster HallRead Full debate Read Hansard Text
Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Bus Service Improvement Plans: North-west England
(2 years, 9 months ago)
Westminster HallRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
Each debate is chaired by an MP from the Panel of Chairs, rather than the Speaker or Deputy Speaker. A Government Minister will give the final speech, and no votes may be called on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Charlotte Nichols (Warrington North) (Lab)
I beg to move,
That this House has considered funding for bus service improvement plans in the North West.
Thank you for chairing the debate, Ms Nokes.
In Warrington, we are proud of our municipal bus company. It provides connections between our homes and communities, between jobs and opportunities, between healthcare facilities and between our friends and families. For those without cars, like me and thousands of my constituents, buses are essential, and good, reliable bus services are a huge part of the wider picture of reducing carbon emissions and dependence on foreign oil.
Because millions of people across this country rely on buses—they cannot just hop into a car if services are slashed—and they cannot find extra cash if fares rise, bus cuts mean being cut off. Deregulation and a decade of Tory decline have meant that more than 3,000 bus routes and more than 350,000 passenger journeys have been lost. The majority of short trips, under 5 km, are made by car. As a result, our region has a significant air pollution issue. In the Liverpool city region alone, more than 1,000 deaths a year are linked to that silent killer. On public transport, 80% of journeys are taken by bus, yet bus fares have risen by 40% and routes have been mercilessly cut nationally. The millions of people who use buses and the communities who depend on them have been ignored for far too long.
Mike Amesbury (Weaver Vale) (Lab)
I thank my hon. Friend for opening such a vital debate. One route in my patch that has been or is about to be decommissioned is the No. 62 from Runcorn to her patch, Warrington. That just shows that reregulation is vital. I hope that the judicial review today comes out on the side of those who want to give regulation teeth.
Charlotte Nichols
I thank my hon. Friend for that important intervention. As he says, services being cut means communities being cut off from one another. The millions of people who use buses and the communities who depend on them have been ignored for far too long. They have been an afterthought in decisions made far away in Westminster by politicians who have no understanding of them. The shockingly bad services left behind have made public transport increasingly unviable. In Warrington over the last decade, almost 50% of services have been cut. That is absolutely appalling. It means that people in our community—in particular, elderly residents who do not drive—are completely cut off from other parts of the town.
Just a year ago, the Prime Minister and the Transport Secretary launched the “Bus Back Better” strategy and they pledged to provide a great bus service for everyone everywhere. They promised that it would be one of the great acts of levelling up. This was the ambition: £3 billion of transformation funding was supposed to level up buses across England towards London standards, with main road services in towns and cities to run so often that people would not even need a timetable, and better services in the evenings and at weekends; and to provide simple, cheap flat fares that people could pay with a contactless card, and daily and weekly price capping across operators and rail and trams, too.
In Warrington, our Labour-run council has shown real ambition with a plan to increase bus use by between 5% and 15% through excellent council working with partners to make buses more frequent, faster, reliable, cheaper, easier to use and better integrated. This is a local community backing buses.
Jim Shannon (Strangford) (DUP)
I want to make a plug if I may, Ms Nokes. The hon. Member for Warrington North (Charlotte Nichols) may be well aware of the advances being made in top-of-the-range buses—for instance, Wrightbus buses in Northern Ireland—hydrogen buses, and the technology that is in use there to make bus travel more environmentally friendly and more environmentally effective. Does the hon. Lady agree that we need to invest in a reliable, frequent bus service like that in order to get people to forgo car journeys in the knowledge that they will get to their destination in time? Hydrogen buses are the buses of the future; they are not hampered by breakdowns.
Charlotte Nichols
I thank the hon. Gentleman for his intervention and absolutely agree that greening our transport infrastructure is a really important part both of meeting our climate objectives as a country and of ensuring that people have good-quality services they can rely on. I am proud of the fact that in Warrington we have bid to become one of the country’s first all-electric bus towns. Hydrogen for transport also has a really important part to play. With a lot of hydrogen production taking place across the north-west and in the Liverpool city region in particular, it is something that we are very excited about locally. I know that hydrogen trains are being manufactured in the constituency of my hon. Friend the Member for Weaver Vale (Mike Amesbury). We are excited to be leading in the north-west and hope this can be rolled out more widely.
As we await the funding announcement in full, it looks as though Warrington will be one of the lucky places to receive this investment from the Government. Across the length and breadth of the country, particularly in the north-west, many are counting the cost of broken promises, because for all the rhetoric about levelling up, the small print reveals that “Bus Back Better” is in tatters. A letter sent to local transport authority directors by the Department for Transport on 11 January makes it clear that the budget for the transformation of buses—a pot from which local regions can bid for funds—has shrunk from £3 billion to £1.2 billion for the next three years.
The letter that let the cat out of the bag says:
“Prioritisation is inevitable, given the scale of ambition across the country greatly exceeds the amount.”
We know that bids for almost £8 billion have been submitted by local transport authorities, representing a blueprint for transformation up and down the country, but the levelling-up White Paper confirms that communities will see a fraction of that. Despite that, last month the Secretary of State said it was “absolutely incorrect” to say that funding to transform services has been slashed. One of his most senior colleagues, the Conservative Mayor of the West Midlands, directly contradicted him. In a letter he said:
“Funding specifically pledged for transformation has been substantially reduced.”
He concluded that he is “gravely concerned” that, far from seeing transformation, many areas face losing their services altogether.
I mentioned the 50% loss of passenger numbers in Warrington. With the price of labour and fuel currently extremely high, it will be difficult for operators to hold down fares and for routes to continue, particularly those that serve more deprived areas where the profit margins are smaller.
Yasmin Qureshi (Bolton South East) (Lab)
I thank my hon. Friend for giving way and for securing today’s debate. May I give an example of the daily commute of one of my constituents? They get on at Farnworth train station to go to Moses Gate. They get off and take the 521 bus, operated by Vision Bus, for about 20 minutes. They then walk 10 minutes to Ladywood School in Little Lever to drop off their child. To get back into Bolton town centre in time for work, they walk 15 minutes to the bus stop and jump on the 524, operated by Diamond Bus, which takes 25 minutes. Quite often, the buses do not turn up or they are cancelled. People end up being late for work and some have even lost their jobs. Does my hon. Friend recognise that that is a concerning situation for many people in our region?
Charlotte Nichols
I thank my hon. Friend for that intervention, and I could not agree more, particularly when we look at the deregulation of bus services, with operators in some regions scrabbling for the same fares and most affordable routes rather than what best serves their community, so we end up with a mismatch of multiple operators running the same route.
The Manchester Oxford Road corridor is the busiest bus corridor in Europe, yet people a mile away are left without bus services to get into Manchester city centre. For towns and cities that have multiple operators, it is an even bigger issue. When I lived in Salford, for example, the franchise changed from First to Stagecoach on part of my route. Overnight, my monthly bus pass trebled in cost, because I could no longer buy a First-only bus pass. Because I had to change from First on to Stagecoach, I had to buy one of the much more expensive multi-operator passes. That is an issue across our region. I am glad that the Labour metro Mayors for the Liverpool city region and for the Greater Manchester region are looking to address that within their combined authorities.
From Greater Manchester to Lancaster, places bypassed by good public transport for far too long have been demanding real change. They put forward an ambitious blueprint to use buses to connect people to jobs, families and opportunities, and tackle the climate crisis in the process. Despite the challenges, they have plans to completely overhaul and reregulate the bus network as part of the bus service improvement plan. It was supposed to be about improved accessibility across the network, including level access from train to platform, and it is part of the work that is beginning on networks of cycling and walking routes across our region.
Labour leaders in power in towns and cities nationwide have real ambition to reverse the decline that we have seen under the Tories. We want a London-style system and to make buses quicker, cheaper, greener and more reliable, but we need a Government whose ambition matches our own. It is now becoming clear that, far from matching the ambition of our communities, Ministers have pulled the rug out from underneath them. Will the Minister now own up and admit what the Transport Secretary will not: that many areas will now not see a single penny of the transformation funding? Will she today detail exactly how much local transport authorities are set to see in transformation funding, and come clean that there will be areas in the north-west that will miss out altogether?
Justin Madders (Ellesmere Port and Neston) (Lab)
It is a pleasure to see you in the Chair this morning, Ms Nokes. I congratulate my hon. Friend the Member for Warrington North (Charlotte Nichols) on securing this important debate on funding—or the lack thereof, as we have heard—and on her excellent introduction. As on many other subjects, she is an excellent advocate for her constituents.
I have spoken before about how the proportion of people in Ellesmere Port and Neston who use private motor transport to get to work is much higher than the national average. Perhaps we should not be surprised about that—we build cars in the constituency, and have done for many years—but I believe it is more a reflection of the poor public transport links that we have in the constituency. The threat to bus services and changes to bus routes are common issues that have come up on many occasions since I was elected. The subject is raised regularly with me by constituents, particularly elderly constituents who rely on public transport to get around, and of course those who travel by bus for work or for education.
The situation is a challenge across the whole constituency, but particularly in the Parkgate and Neston areas. On top of existing services being inadequate to meet my constituents’ needs, it is fair to say that over at least the last decade, there has been a battle to save a service probably once every couple of months. We have not even begun to think about what will happen because of the increase in fuel costs over the last few months—indeed, they spiked over the weekend as well.
Sometimes when facing such threats, we have managed to persuade the bus company to keep the route open. Sometimes the service is retained but rerouted, usually to maximise profit rather than convenience for customers, and sometimes we lose the route altogether. When that happens, it has a huge impact on the people who rely on the services to get to school, get to work, and access medical appointments or other public services.
A current example is the proposal by the Cheshire police and crime commissioner to close Ellesmere Port police station to the public. He proposes that those who need to speak to an officer in person will be able to go to Blacon in Chester. When I asked him how those who do not have a car will be able to get there, answer came there none. There is no direct bus route to Blacon from Ellesmere Port—again showing the lack of strategy and of thinking through the consequences of decisions of that nature.
I shall outline a few examples of how my constituents have been affected over the years by changes to bus services to highlight the really inadequate state of affairs at the moment. About four or five years ago, the No. 7 bus service, which catered for a number of retirement bungalows and people with no other option than to get a bus, was rerouted due to parking issues and the Saturday service was removed altogether. The council intervened but could only negotiate an arrangement to keep the Saturday service for 10 months. Unfortunately, the impact of losing a rural bus grant unfortunately was that we the service was not retained thereafter.
In 2019, Stagecoach, one of the main operators in my area, carried out a consultation regarding changes that it was proposing to services, which it sold as meaning better co-ordination and frequency of buses travelling through the constituency between Chester and Liverpool, as well as a Sunday service via Overpool, and more buses for the Hope Farm estate. What resulted, however, was that the 22 bus service, which was a vital route for my constituents in Neston and Parkgate to attend Arrowe Park Hospital in the constituency of my hon. Friend the Member for Wirral West (Margaret Greenwood), was removed altogether due to low passenger numbers. Stagecoach proposed that customers use a different bus service, but the reality of that, one constituent told me, was having to catch three buses, taking more than an hour, just to attend a hospital appointment. That is not the better co-ordination of bus services that was being sold at the start of the consultation.
The proposed changes also left the Groves estate without any bus service at all along Chester Road between the Strawberry Roundabout and the Whitby High School, leaving a number of elderly constituents who use the bus service to get to the town centre and Ellesmere Port Hospital with a lengthy walk just to get to the nearest bus stop. One constituent told me:
“I will be 88 next month and like my friends and neighbours want to remain independent in my own home, but this lack of public transport is not helping”.
That brings home to me just how vital a proper co-ordinated bus service is.
Yasmin Qureshi
On funding, in Bolton we need £30 million, otherwise one third of all buses will be cut. That will impact my constituency massively. Proper funding is so important. Does my hon. Friend agree?
Justin Madders
Yes, I agree. At the heart of this, clearly, is a bus service that has been under-resourced for many years. There are two problems: lack of support for operators and lack of strategy, so we keep facing chopping and changing decisions based on commercial considerations that do not necessarily serve the communities. The example of the bus service I have just mentioned means that someone who wants to get to the hospital, even though if it is only a mile from their home, must now take two buses. It is too far for them to walk.
What was also clear from the process was that the consultations were not adequate. Numerous comments were lodged by constituents, but they seemed to make no difference to the results. As I set out, the 22 bus service was not even mentioned as under threat during the consultation. It is hard for people to argue to retain a service when they are not aware that it is threatened. Greater transparency is needed from service providers when they enter such consultations.
The last local change to mention was that, last year, the route of the No. 5, which is an hourly service between Mold and Ellesmere Port calling at Cheshire Oaks—a major employer in the area—was altered, leaving the Stanney Grange estate with reduced access. One constituent who contacted me was distressed about the impact that that would have on her learning-disabled son, who relied on the bus service to get out and about. When we made inquiries, we were advised that Stagecoach had served notice and it intended to reprocure the route and consider costs. Arriva received the contract on a temporary basis and, when there was a further reprocurement, it got an alternative timetable as part of the bid. Some of the routes were retained, but many roads previously served no longer are. Unfortunately, again, constituents lose out.
Those are examples of not only a lack of resources, but a lack of joined-up thinking and strategy on what bus services are for. They are for serving our communities and, clearly, this constant chopping and changing, reducing routes and leaving areas out altogether does not benefit our constituents at all. As my hon. Friend the Member for Warrington North said, 10 years of cuts have left bus coverage at its lowest level in decades. Since 2010, more than 3,000 bus routes and more than 350,000 passenger journeys have been lost, leaving people cut off from friends, family, work and education opportunities, and other public services.
It seems to me that the Prime Minister has no intention of keeping his promise of
“great bus services to everyone, everywhere”,
because, as my hon. Friend said, hidden away in the levelling-up plan is a massive cut to bus funding of £1.8 billion. Figures show that the cost of funding bids submitted by 53 out of 79 local authorities totals more than £7 billion, so it is clear that many areas will miss out. With this Government’s record of picking and choosing winners and losers, I have little confidence that my constituency will benefit from that funding at all.
I am sick of my area missing out on funding for improvements to the community, bus services and other local infrastructure. If we have ambition for the country, it should be for the whole country. We need real ambition; we do not need any more empty promises. We want a real say in the way services are run. We do not want to keep putting in bids for pots of money and then being left at the whim of commercial operators. We want control of our bus services and we want resources to be able to deliver them properly for the benefit of our communities.
Labour leaders in power in cities and towns across the country have the ambition to reverse the decline we have seen over the last decade. We want a London-style system that is run in the public interest, to make buses quicker, cheaper and more reliable for our communities. When I was first elected to this place, I was amazed that I could stand at my local bus stop and wait only a matter of minutes for a bus to turn up, and that I was paying £1.60. I could not get anywhere on a bus in Ellesmere Port for £1.60, never mind across half the city, which is what we can do here in London. It is chalk and cheese. The whole country should have that level of service. It is an ambition that is right for our country, and it is what I want for my community. It is what we deserve, because bus services are a vital part of our community.
How can we level up if we cannot get anywhere on a bus after 6 o’clock at night? How can we level up if bus services are removed at a moment’s notice by operators, without any regard to the effect that will have on the communities they are supposed to serve? How can we level up if we have no power or resources to direct where and when buses go? Let us get on with some delivery. Let us take back control of our buses and serve our communities the way that we want them to be served.
Caroline Nokes (in the Chair)
I remind Members that if they wish to contribute, they are meant to bob up and down. I call Margaret Greenwood.
Margaret Greenwood (Wirral West) (Lab)
Thank you, Ms Nokes. It is a pleasure to serve under your chairmanship this morning.
Since the Conservatives deregulated buses outside of London in the 1980s, services have suffered. That has been felt on Merseyside where, under the current operating model, private bus companies set routes, ticket prices and timetables. It is a system designed around profit, not passengers, in which services can be withdrawn at short notice if they are not profitable enough.
A report last year by the academic Philip Alston, the former United Nations special rapporteur on extreme poverty and human rights, found that the deregulation of buses has
“provided a master class in how not to run an essential public service”,
leaving residents at the mercy of private actors who have total discretion over how to run a bus route or whether to run one at all. That is the Conservative legacy on buses. Since 2010, more than 200 bus services have been lost across the Liverpool city region—a shocking statistic.
A number of my constituents in Wirral West have been in touch with me in recent months about a reduction in the service of the No. 71 bus, which runs from Heswall to Liverpool via Irby. I know from that correspondence just how important these services are to local people. Lost and reduced services can impact on people who need to get to work, to hospital appointments, to school or college or to meet friends.
Public transport is immensely important if we are to tackle climate change and the issue of air quality. It is important that we encourage people to use it, and that will happen only if services are reliable and affordable.
Thanks to the hard work of Metro Mayor Steve Rotheram and local leaders, services in the Liverpool city region are on the way to being publicly controlled again. Last week, members of the Liverpool City Region Combined Authority signed off on proposals for a franchising system to be the preferred method of running bus services. That will bring the system back under local control, allowing the combined authority to specify the network, control fare policy and drastically improve ticketing. I echo the words of Mayor Rotheram, who described the move as “momentous”. He has long advocated a London-style transport system across Merseyside, which is nothing short of what local people deserve.
Transport authorities in the north-west and across the country are waiting to learn their funding allocations for their bus service improvement plans. The Government have said they will announce details on how the funding will be allocated in due course. Authorities have been waiting since October to find out their individual allocations and need to know as soon as possible how much they are getting so that they can put their plans into action.
Analysis by the Confederation of Passenger Transport has suggested that more than £7 billion will be needed to fully deliver the measures that local transport authorities have included in their bus service improvement plans. The Government have set aside £1.2 billion for the plans, creating a huge funding gap between what local authorities want to deliver and the funding that the Government are making available.
Liverpool City Region Combined Authority has asked for £667 million from the Government for its bus service improvement plan. At the heart of the plan are measures to improve affordability, reliability and the environmental impacts of bus services.
The Campaign for Better Transport has said:
“It is doubtful that the current funding available will be sufficient…to achieve real transformation in ambitious authorities.”
When the Minister responds, can she tell us whether she agrees? Will she guarantee that the Government will come forward with the funds that we so desperately need for public transport systems, to make them affordable, reliable, and ensure that they meet the needs of passengers?
Mike Amesbury
Does my hon. Friend concur that the regulation, which Steve Rotheram and the leaders have announced, is mightily vital, but it does need those resources for a first-class affordable public transport system in our patch?
Margaret Greenwood
My hon. Friend is absolutely right; it is as if he had read the last line of my speech. It is absolutely vital that local authorities get the funding that they need, so that constituents like mine, and those of Weaver Vale, can benefit.
Sam Tarry (Ilford South) (Lab)
It is a pleasure to speak under your chairship, Ms Nokes. We seem to be getting through the debate rather quickly this morning, which means that I can read my whole speech. I am sure you will enjoy it.
I start by thanking my hon. Friends who made the effort to come here this morning to speak on this issue, which is so important—not just to us as MPs but, more importantly, to our constituents. It will, I believe, define the outcome at many seats at the next election; it is that important to many constituents.
I thank my hon. Friend the Member for Warrington North (Charlotte Nichols) for securing this debate, at a time when bus services across the country are at such a risk from the Government’s over-egged promises, which many constituents, I am afraid, feel have been broken. I also particularly thank my hon. Friend the Member for Ellesmere Port and Neston (Justin Madders), who mentioned that it has been months since the Prime Minister launched the centrepiece of his levelling-up agenda, the national bus strategy—trumpeting from the hilltops his love for buses and how “Bus Back Better” would address the vast disparities between services in London and the rest of the country.
My hon. Friend the Member for Wirral West (Margaret Greenwood) explained the paucity of funding—I will touch on that later—and how desperately that will affect her constituents. My hon. Friend the Member for Weaver Vale (Mike Amesbury) explained his almost annual campaigning efforts to save bus routes. I think, unfortunately, he must run those campaigns again this year.
My hon. Friend the Member for Bolton South East (Yasmin Qureshi) mentioned the struggles of her constituents over the affordability of fares, and the routes that do not actually meet the needs of local residents. Of course, I also thank the hon. Member for Strangford (Jim Shannon) for his contribution; buses are an important issue in Northern Ireland as well.
Less than a year on, I am genuinely disappointed about the Government’s ambition. It was limited from the outset but has declined even further now, to a point where funding can only realistically satisfy the ambitions of just two transport authorities. There is such a vast gap between the amount of money bid for and what is available that many parts of the country will be bitterly disappointed that their ambitions are not being met.
Let us be clear: prior to the pandemic, more journeys were made on buses than on any other form of public transport—almost 4.5 billion journeys. However, after 12 years of Conservative cuts, the loss of 134 million miles of bus lanes and an inadequate statutory framework, vital transport links have been left to decay. Bus coverage is now the lowest it has been in decades. The situation has deteriorated to such an extent that the Campaign to Protect Rural England now uses the term “transport deserts” to describe many rural communities.
It is mostly Labour MPs who have turned up today. However, when I talk to colleagues from other parts of the country, they are equally concerned, whether they be Conservative MPs from Cornwall or parts of the home counties. They are also suffering from those transport deserts. Austerity has seen the Government slash public subsidies for buses, with more than 3,000 bus routes cut across the country, leading to passenger numbers slumping by 10%, while fares have increased, in some places, by as much as 32%—well above even the rapidly-increasing rate of inflation.
As my hon. Friend the Member for Wirral West mentioned, underfunding over such a long period by the Government has become so severe that in his report into the privatisation of the bus sector, the former UN special rapporteur, Professor Philip Alston, highlighted a broken and fragmented system, with skyrocketing fares, plummeting service standards and disappearing routes, which often deprived bus users of an essential public service.
Margaret Greenwood
My hon. Friend is making an excellent speech. Does he agree that funding for bus services is essential to improve our economy? We have such disparity of income and grotesque levels of inequality in the country. Unless we do something about bus services, those people who are currently left behind will be even further left behind, as it is harder for them to secure and to keep jobs.
Sam Tarry
I absolutely agree. A proper, fully funded, affordable and accessible bus network that can get people to college, university and jobs is a vital part of rebuilding our economy and of any serious levelling-up agenda for any part of the country. The cost of having an electric vehicle and of fuel—I paid £1.81 for a litre of petrol last week, which was pretty eye-watering—means that many ordinary people will have to rely more on public transport than they do at the moment. My hon. Friend is absolutely right.
Yasmin Qureshi
On the issue of affordability, I know this does not happen in London, but in my constituency there may be two sets of bus providers on the same route, with one charging a much higher fare than the other. Constituents ask me why they are paying one set of fares in the morning and a different one in the evening.
Sam Tarry
I thank my hon. Friend for making that really good point. I have travelled to parts of the country, including Bolton, and have seen the disparity in fares at different times of the day, having been told to pay £6.50 for a single bus fare. It is no wonder that people are thinking, “I might as well take an Uber rather than get on public transport.”
An issue we have in this country, clearly pointed out in the UN special rapporteur’s report, is that deregulation has led to disastrous disparity in the type of service provided and network across the country. That is why I am hoping for positive news today. Andy Burnham, the Mayor of Greater Manchester, who has been battling for the right to franchise buses in Greater Manchester, is taking the right approach. Although there are some benefits to enhanced partnerships, the reality is that with more direct public control, services can be directed not at the behest of what is commercially viable but at what is economically viable for constituents to get to jobs and colleges. That is something that we all have to reflect hard on as we move forward with the Government’s programme. I hope that Andy Burnham gets a successful result.
Philip Alston’s report also suggested that the UK has failed its human rights obligations by allowing this essential service to deteriorate. The right to physical accessibility, which is the bedrock of many economic, social, civil and political rights is, for many, contingent on access to reliable and affordable public transport. Let us be clear: the deterioration of essential bus networks is not just a transport issue—it is a human rights issue, be it for older citizens, pensioners or people with disabilities unable to use other types of public transport. Buses can be made accessible. It is shameful that we have been singled out globally for such a terrible state of affairs when it comes to our bus network.
Research by the Common Wealth think-tank found that since bus services were deregulated, the real cost of bus and coach fares has risen by 102%. That speaks to the point a number of Members made, and is just unbelievable. Our service standards have dropped off a cliff, which coincides with a dramatic reduction in Government spending on local transport, which has fallen by more than £900 million since 2010. That is nearly £1 billion since 2010. That has clearly been exacerbated by the pandemic—industry revenue has fallen by £250 million, as people stayed at home and did not use public transport.
Now more than ever, bus services need to be bolstered in areas such as the north-west of England. The national bus strategy was an opportune moment for this Government to right the many wrongs since Thatcher privatised the network in the first place. Sadly, the Prime Minister promised just £3 billion of spending to level up buses across England towards London standards. I repeat the point made by my hon. Friend the Member for Ellesmere Port and Neston: as a London MP paying £1.50 fares, I find it astonishing when I go to other parts of the country and see people pay as much as an hour’s wage for an average worker to have one or two bus tickets. It seems unbelievable that people in many parts of the country have to spend their first hour’s wages just to get to work.
Unfortunately, the Prime Minister’s strategy offered nothing to those who were looking for the bold vision that had been promised to reverse the millions of miles of lost bus routes across the country. It was a huge missed opportunity to revolutionise the bus industry and ensure that funds were properly directed to deliver the transition to electric and low emission vehicles that had been promised. We are still waiting for the vast majority of the 4,000 EV, hydrogen and other low and zero emission buses that have been promised. I have spoken to bus manufacturers, and those buses are still not on order.
Another frustration is the fact that the Government are already backtracking on their meagre promises. Leaked documents recently made clear that the budget for the transformation of buses—a pot from which local regions can bid for funds—has now shrunk to just £1.4 billion for the next three years. Sadly, that means cuts are inevitable, with the Department for Transport stating that
“the scale of ambition across the country greatly exceeds the amount”.
This was an opportunity to transform our bus networks for what is not a huge of sum of money, compared with the amount that would be needed for rail projects or aviation. It is scandalous that this money has not been made available and that that promise is now not going to be met.
Figures compiled by colleagues in the shadow Transport team revealed that the total amount in the funding bids made to the extra funding pot by 53 out of 79 local transport authorities—approximately 80% of all bids—adds up to almost £7.5 billion, so they are going to have to fight for the scraps of the £1.4 billion in that funding pot. This indicates that the total amount in the submissions is almost certainly in excess of £9 billion and that the Government are putting forward far too little funding. It is really only a sticking plaster or it could perhaps fund a more transformative programme in one or two parts of the country, while the rest have to stagger on with some of the awful services described by my colleagues today.
As I have said before in this House, the reality is that the Tories promised transformational investment in bus services but in fact millions of passengers have instead seen managed decline. They have dramatically downgraded the ambitions of many local communities, with bus services being slashed nationwide. This is proof that the Government simply will not and cannot deliver for the people who need it most.
As many of my hon. Friends have alluded to, Labour would be far more ambitious in the scale of its plans for buses and many of our metro Mayors are leading the way in doing that. They have empowered and delivered for people right across the country, including in Greater Manchester where Andy Burnham has seized the powers afforded to him in the Bus Services Act 2017 to ensure that a municipal service, or the best that he can achieve under franchising processes, will be in place by 2024.
Labour-run Nottingham City Council has shown what can be done if the right approach is adopted. Indeed, in Nottingham the city’s bus company, founded as a completely council-owned company in 1986, has won UK bus operator of the year five times and has remarkable satisfaction ratings. Last year, Nottingham City Transport won an environmental improvement award for reducing the emissions from its fleet of buses by 90% after a £42 million investment in low emission vehicles.
There are more plans in the combined authorities in the west midlands, the west of England, South Yorkshire, West Yorkshire, Liverpool and the North of Tyne, to name just a few Labour administrations that have ambitious plans to revolutionise bus services. The same is the case in the north-west, and that ambition could be backed by the Government if they chose to do so.
As many colleagues have pointed out, Labour have leaders in power in towns and cities nationwide who have real ambition to reverse the decline. With more than 3,000 services slashed, fares rocketing and passenger numbers down, action needs to be taken and Labour leaders are beginning to take that action where the Government are lacking.
We need a bus service fit for the climate crisis that creates good-quality, reliable jobs across communities that are victims of rural poverty. This is exactly the radical offer on buses that towns and cities across the country so desperately need as we attempt to grow our way out of an economic crisis.
The research that I mentioned before revealed that the true figure for what is required by local authorities to enable them to deliver their bus transformation plans is around £9 billion, six times what is currently on offer by the Government. The Greater Manchester Combined Authority has submitted a bid for £630 million to help improve services across the region and to enable it to deliver its bus service improvement plan up to 2025, including its drive to create the Bee Network, which is an integrated London-style transport system that would join together buses, trams, cycling, walking and other shared-mobility services, making public transport more efficient and, hopefully, much cheaper.
Andy Burnham has led the way on that bus transformation in recent years as the first metro Mayor to use those powers set out in the Bus Services Act 2017. That ambition risks being undermined because of the lack of Government investment. Greater Manchester’s own request for £630 million of bus service improvement plan funding would be almost half of the Government’s allocation for the whole country. It demonstrates how inadequate the current amount is and how empty the “Bus Back Better” slogan is. That is why Andy, alongside seven other metro Mayors, including the Conservative Mayor of the West Midlands, wrote to the Transport Secretary and the Chancellor last month to jointly express their grave concerns about the downgrading to just £1.4 billion of what was originally earmarked for transforming bus services. Quite clearly, the new figure means many areas will now receive no funding at all and almost every region will fail to receive exactly what they have requested.
I finish by urging the Minister to provide assurances to all present that the ambitions of local authorities across the country, including the north-west, to improve bus services will be met by this Government. At present, there are very real fears based on the meagre £1.4 billion that is being proposed that this will be a missed opportunity to level up services once and for all and give our bus services the transformation they need to take us forward over the next 100 years.
Without that long-term investment, there is a real risk that communities will face the prospect of losing their bus services, which would have a detrimental impact on economic prosperity as we attempt to grow our way out of the pandemic. Until the Government match the ambition of local transport authorities, their levelling-up agenda will unfortunately be like the buses we too often have in these places: we wait for them to come, but they do not arrive.
The Parliamentary Under-Secretary of State for Transport (Trudy Harrison)
It is a pleasure to serve under your chairmanship, Ms Nokes, and to hear the appreciation of and ambition for buses and public services, particularly in the north-west, which, as I am sure the hon. Member for Warrington North (Charlotte Nichols) understands, is my home region as well.
Like the hon. Member for Ellesmere Port and Neston (Justin Madders), I too was pleasantly surprised when arriving in London at the complete contrast to my area of West Cumbria in the provision, regularity and ease of payment of bus services in London. That is absolutely what we want to see being rolled out across the country. I congratulate the hon. Member for Warrington North on securing the debate and discussing in depth why we value buses. It is, of course, because buses are the foundation of our public transport network and an efficient bus sector is key to levelling up the country.
It is a shame that the hon. Member for Strangford (Jim Shannon) is no longer in his place. He mentioned bus manufacturing in Northern Ireland. I had the joy of visiting Wrightbus a few months ago. I went to Ballymena to see the factory. That is just one example of how bus manufacturing is also levelling up the UK. Buses provide access to employment, apprenticeships, training opportunities, leisure, education and crucial connections between friends and family, especially in the more deprived areas where fewer people have access to a car.
We know that covid-19 has knocked people’s confidence to travel on public transport. The patronage of public transport has dropped, and I want to work with hon. Members across the House to increase that patronage, because that is the most important aspect. Others are not travelling at all due to the shift to working from home, which adds to the difficulties that public transport operators now face. We have seen demand reduce to well below pre-pandemic levels. The Government have supported the bus and light rail sector since March 2020 to mitigate the impacts of the pandemic through a variety of emergency and recovery grants, totalling almost £2 billion. We are absolutely committed to supporting bus services, and our spending reflects that.
I have heard reference throughout the debate to the £3 billion of new funding. I will go into detail about exactly how that funding is being spent. It is new funding for buses over the course of this Parliament. It includes £1.2 billion for transformational bus service improvements, more than £500 million for zero-emission buses and more than £500 million for the city region sustainable transport settlements that will directly fund bus infrastructure.
Let me provide some detail on how various funds are improving the bus network in the north-west. First, I am delighted at Warrington’s commitment to transform its entire fleet. Some 120 battery-electric buses will be gracing the streets of Warrington over the next few months. That is brilliant. Through the ultra-low emission bus scheme in Greater Manchester, over £6.9 million will provide 32 electric buses, including the crucial charging infrastructure. In Liverpool city region, the low emission bus scheme is contributing more than £4.9 million, which will bring 12 electric buses, including the charging infrastructure, and 60 hybrid buses.
In the Liverpool city region, the transforming cities fund will award a total of £172.5 million, which will bring 20 hydrogen buses. In Greater Manchester, which we have heard much about today, the city region sustainable transport settlement will contribute over £1 billion. The detail of the final settlement and actual programme is yet to be agreed, but there is over £710 million for Liverpool. In Blackpool, the ZEBRA—zero emission bus regional areas—scheme will contribute to the roll-out of zero-emissions buses, and similarly in Liverpool and Greater Manchester.
We are committed not only to the provision of buses, but also to helping people find out about services, improving the way that they pay and helping them have confidence in the reliability of the service. Most importantly, this is about how we transition from a fossil-fuelled economy to a decarbonised transport system using clean buses—hydrogen, hybrid or battery-electric.
Margaret Greenwood
The Minister is giving us lots of detail on Government funding but, as I mentioned, analysis by the Confederation of Passenger Transport suggested that over £7 billion was needed to deliver the measures that local transport authorities have included in bus service improvement plans. The Government have set out a fraction of that—£1.2 billion. What can the Minister do to secure more money for the bus services that we so desperately need?
Trudy Harrison
I thank the hon. Member for her intervention. Over this Parliament there will be over £3 billion of new funding for buses. We are doubling dedicated bus funding from spending review ’21 compared with spending review ’15. It is made up of £1.2 billion of new funding for bus transformation deals to deliver those London-style services that we keep talking about, with the infrastructure and the service improvements.
Margaret Greenwood
That is less than half of the £3 billion that is needed. What are the Government going to do to meet the ambition of our authorities, which really want to deliver a modern, reliable transport service? The Minister spoke earlier about the importance of getting people to use buses, but unless they are reliable and affordable, people will not use them. People need to know that they can get to work. It is fundamental that we have that investment. What can the Minister do to make sure that we secure it?
Trudy Harrison
The hon. Lady makes the obvious point, so I will continue. There is £525 million to deliver zero-emission buses over this Parliament, of which £355 million is new funding, announced in the spending review. There is the £1.5 billion of covid support to maintain the service levels during covid until next April, and over £500 million from the city region sustainable transport settlement. There will always be more to do, but the Government, in particular my Department through the transport decarbonisation plan, have set out how we are spending billions in transforming the public transport network.
It is important to say how we can ensure people that get to the places they need to be, using the products they need. It is particularly relevant to the north-west that we recently appointed Chris Boardman as the interim chief executive for Active Travel England. With over £500 million of funding, he will have the ability to increase the infrastructure to encourage and enable people to walk and cycle. That will ensure that those networks that are proposed by our local authorities meet the essential criteria for a safe network. We are working with car clubs, such as Enterprise Car Club and Liftshare. Buses are a very important part of the network in getting people to the places they need to be, but they are not the only way that we will be able to do that in the future. It would be a good to offer a meeting to all of my colleagues across the north-west to discuss that in more detail. I understand that Members in this House are excellent enablers, champions and ambassadors for the way that their constituents can get about.
Justin Madders
I was struck that the Minister recognised the surprise that I felt, when I first arrived in the capital, at the ease and affordability of bus services. My constituents want to know when they will no longer be paying twice the fare to get half the distance on their local buses.
Trudy Harrison
I will return to my main points and hopefully address the hon. Gentleman’s queries. As has been said, the national bus strategy will be critical; we believe it is the biggest shake-up in a generation. We are absolutely committed to delivering the transformational changes that have been called for this morning, which passengers throughout the country deserve. Our strategy explains how we will make buses more frequent and reliable, easier to understand and use, better co-ordinated and cheaper. It sets out how we want to see fares, including low flat fares, maximum fares and daily price caps, become the norm in cities and towns.
English local transport authorities outside London have developed bus service improvement plans, setting out local visions for the step change in services that is needed, driven by what passengers and would-be passengers want. The central aim of our bus strategy is to get more people travelling by bus, and we will achieve that only if we make buses a practical and attractive alternative to the car for more people. Strong local plans, delivered through enhanced partnerships between authorities and bus operators or franchising arrangements, are crucial to achieving that. We have been clear that enhanced partnerships or franchising arrangements must deliver more comprehensive services, including those that are socially or economically necessary to drive forward the Government’s levelling-up agenda.
Authorities will submit draft versions of their enhanced partnership plans and schemes to the DFT by the end of April this year. Liverpool city region announced its decision to adopt franchising for local bus services on 4 March. On 2 February the Secretary of State for Levelling Up, Housing and Communities and Minister for Intergovernmental Relations, my right hon. Friend the Member for Surrey Heath (Michael Gove), unveiled the Government’s levelling-up White Paper, which sets out a plan to transform the UK by spreading opportunity and prosperity to all parts of our country. Local public transport connectivity across the country will be significantly closer to the standards of London, with improved services, simpler fares and integrated ticketing. The Government will fund ambitious plans for bus improvements in areas where that can make the most impact, including the mayoral city regions, Stoke-on-Trent, Derbyshire and Warrington.
We must address the long-term decline in bus patronage; the bus industry cannot do so on its own. We need to develop a much closer collaborative working relationship with the industry; we recognise that this relationship has improved through the pandemic, and it must continue to deepen. The Government have made it clear through the national bus strategy that close partnership working, via enhanced partnerships, will be a condition of Government funding for buses.
We believe that only through such collaboration can the right combination of LTA action—for example, through more bus priority and operator action by improving services on the ground—and targeted Government funding increase overall bus patronage. Of course bus operators should do their part, by making long-term investments in buses and services to ensure that buses are an attractive alternative mode of transport to the car. It is vital that we go further and faster to decarbonise all vehicles, including buses, because they have an essential role to play in transport achieving net zero and driving our green transformation. A double-decker bus can take 75 cars off the road, helping to reduce the impact of transport on the environment. However, we know that we will achieve that only if we can demonstrate to more people that buses are a practical and attractive alternative to the car.
So we remain committed to supporting the introduction of 4,000 zero-emission buses and achieving an all zero-emission bus fleet. I will just repeat how pleased I am that Warrington has taken the lead in transitioning its entire fleet—all 120 buses—to battery-electric vehicles, because such action will support our climate ambitions, improve transport for local communities and support high-quality green jobs. In the spending review 2021, the Government announced £355 million of new funding for zero-emission buses and we are providing £525 million of funding for zero-emission buses in this Parliament.
It is also important to talk about the infrastructure that will be introduced at a brand-new bus depot in Warrington, which is part of the Warrington town deal. Over the past two decades, the bus and coach industry has made tremendous efforts to bring fleets into line with the Public Services Vehicles Accessibility Regulations, revolutionising access to public transport for millions of disabled people.
Significant progress has been made already, with over 99% of buses on local routes meeting the minimum legal accessibility standards and almost every bus operator requiring its drivers to complete disability awareness training. However, just as the nature of transport provision changes, so do the needs of our passengers, which is why, in the national bus strategy published in March 2021, we committed to review the ongoing efficiency of the accessibility regulations by the end of 2023. We have committed to require the provision of audible and visual information on board local services throughout Great Britain, and to consult on regulatory changes to improve access to wheelchair spaces.
The bus strategy also seeks to improve the convenience, integration and value for money of bus ticketing, through the introduction of multi-operator contactless capped fares within each LTA area. Work is under way to ensure that technology is in place to support that aspiration. Locally set fare caps should ensure that passengers making multiple journeys on a pay-as-you-go basis are charged no more than the price of a daily ticket, with little or no premium levied for using more than one operator, effectively converting a bank card and mobile phone into a virtual travelcard.
All enhanced partnerships will be encouraged to consider the development of a multi-operator ticketing scheme, to help make multi-leg journeys feel more joined-up. In turn, these partnerships will help to support the use of public transport to out-of-town employment, education and healthcare sites, among other journey purposes.
We want to improve passengers’ access to accurate journey planning information, including timetables, fares and location data, so that passengers can plan their journeys, find the best value tickets and receive real-time updates on the services they use. The bus open data service is a new digital service provided by the Department for Transport that is transforming the delivery of bus passenger information across England. Using open data and intelligent services, the aim of the service is to enable passengers to plan their journeys easily, find best-value tickets and receive real-time service updates at the touch of a button.
Perhaps now is also a good time to reflect on the work that our safety champions have been doing. Yesterday, which was International Women’s Day, I travelled to Birmingham to meet Laura Shoaf and Anne Shaw, in order to discuss the 13 recommendations that we very much hope will protect the most vulnerable people on our transport network. They are specifically aimed at improving the safety of women and girls across the transport system, but they are particularly relevant to the public transport system. They include, for instance, ensuring that we can design out crime, the natural surveillance that comes from a well-designed—
Caroline Nokes (in the Chair)
Order. May I remind the Minister that she does not need to fill up all the time, and that she should try to stick to buses in the north-west?
Trudy Harrison
I appreciate that word of advice, Ms Nokes. My point was that as part of our digital transformation, we will be using data to advise passengers on when their buses are coming, so that there is absolutely no need to linger at the bus stop or the train station. That is an important point, because we are moving to an on-demand and more convenient transport system. Open data will transform how we travel by providing an on-demand service and real-time journey planners, which will empower customers to make the best choices for their travel needs. Regulations will mandate that bus operators must release information to help passengers make better informed and cost-effective travel choices.
The bus strategy recognises the need to address long-term skills deficits and staff shortages in local transport authorities and the bus industry. Some £25 million has been allocated to a range of measures to support an increase in staff capacity and capability; that includes additional funding for LTA resource, and the development of a bus centre of excellence. The centre of excellence will help LTAs and operators to work in partnership more effectively, achieve more with Government funding, and find mechanisms to increase demand and reduce inefficiencies in bus service delivery.
In summary, I hope all this demonstrates that the Government are committed to improving bus services. The Government are clear that ensuring that better bus services are delivered across England will be one of our major acts of levelling up. As we recover from the pandemic, good bus services will be vital in ensuring that communities are connected to family, employment, educational opportunities and much, much more. I thank the hon. Member for Warrington North for the opportunity to speak so positively about buses.
Caroline Nokes (in the Chair)
I call Charlotte Nichols, who has two minutes to wind up.
Charlotte Nichols
It is a pleasure to serve under your chairmanship, Ms Nokes. I thank my hon. Friends the Members for Ellesmere Port and Neston (Justin Madders), for Weaver Vale (Mike Amesbury), for Bolton South East (Yasmin Qureshi) and for Wirral West (Margaret Greenwood), and the hon. Member for Strangford (Jim Shannon), for their contributions to today’s debate. Although we represent very different and diverse communities across north-west England—and even further north-west, in the case of the hon. Member for Strangford —the story for buses is the same.
Having to take multiple bus services for a journey that would be straightforward by car is a daily reality across our region, not least because of a lack of orbital routes, as they tend to be less profitable, but also because of a lack of connecting services between our towns and cities. Levelling up requires the investment to enable integrated, affordable and green public transport. I am glad that the Minister highlighted some of the incredible achievements of Warrington’s Own Buses, but so much of that is possible because we do not have the broken franchise model that causes so many of the problems elsewhere that we have heard about today. I believe that we are now one of only 10 municipal bus companies left, which means that we seek to operate in the public interest, not for private profit.
In Warrington, Government covid subsidy funding is now secured through to September 2022, but there could well be a cliff edge after that, particularly if fuel costs continue to skyrocket and the funding spoken about today just keeps us where we are. We need to receive our full funding ask through the BSIP—the bus service improvement plan—including capital and operating expenditure funding streams if we are to be able to improve. My hon. Friend the Member for Ellesmere Port and Neston was exactly right to highlight the fact that, for hon. Members who split our week between London and our north-west constituencies, the gulf between the service provision at home and the service provision here is staggering. If it is good enough for London, it is good enough for the north-west. I hope the Minister will take away our concerns and comments to her Department and ensure that the Government’s ambition finally begins to be met in our regions.
Question put and agreed to.
Resolved,
That this House has considered funding for bus service improvement plans in the North West.
Multi-hospital NHS Trusts: Transportation
(2 years, 9 months ago)
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Caroline Ansell (Eastbourne) (Con)
I beg to move,
That this House has considered transportation between sites in multi-hospital NHS trusts.
It is a pleasure to serve under your chairmanship, Ms Nokes. First, I put on record my huge gratitude for the work of my local trust, and for all who have worked so assiduously and faithfully during these long months and years of the pandemic, and before that. I also pay tribute to those at my hospital trust for their journey from special measures to “good” and “outstanding”. That reflects so well on their determination and commitment to raising standards and providing the best patient care.
Let me give something of the context for my hospital trust. The East Sussex Healthcare Trust consists of three linked hospitals, the Conquest in St Leonards- on-Sea, Eastbourne District General Hospital and, in between those, Bexhill Hospital, which offers additional ophthalmology, rehabilitation and intermediate care services. ESHT has nearly 7,100 dedicated staff, and 74% of them report having to travel between sites for work.
The region has a statistically higher proportion of residents who are more advanced in years, and the road between the main two hospitals is single carriageway and fraught with delay and disruption. It can prove to be quite a challenging journey. Over the past years, however, the hospital story is one of reconfiguration of services; reconfiguration of maternity, paediatrics and, most recently, cardiology and ophthalmology services are under consideration in the name of the pursuit of clinical excellence.
I recognise the value of clinical excellence and specialisms. My little boy has journeyed his way, through the years, from Great Ormond Street to King’s College and St Thomas’s just over the road. I recognise the value of ever-increasing specialist care, but access is at stake. The sorry truth is that for the one in four families in Eastbourne in my constituency who do not have a car, the journey is costly and difficult when services are reconfigured.
For example, none of our hospitals is located next to a train station. They are near bus stops, but there are no direct bus routes between the sites, so those travelling to and from them are heavily reliant on cars. Method No. 1 of travel might be: walk, then get the first bus, for which there is a 43-minute wait, then get the second bus, and then walk. That takes approximately two hours and 36 minutes, but there are commonly delays, and it costs £8 to £10. The second scenario is: walk for one mile, then get a train from Hampden Park to St Leonards Warrior Square, and then get a bus. That takes approximately one hour and 30 minutes, subject to delays, and costs £10 to £20. A taxi or private hire vehicle takes 26 minutes to one hour at peak times, and costs £35 to £50. For the fortunate three in four who drive their own vehicle, the journey takes 26 minutes to one hour at peak times, and costs £3 to £6 in petrol or diesel.
Given those travel options, it is unsurprising that almost everyone attempts to drive between hospital sites, rather than using public transport. Those who do not own a car are substantially disadvantaged, in terms of time, cost and practicality, in accessing healthcare or, importantly, visiting loved ones.
The hospitals recognise the challenge. Their focus is provision for their staff. I quote from their 2019 survey. I humbly recognise that it was published just before the pandemic, which will arguably prove to be the ultimate disruptor of normal work patterns. There will have been an increase in video conferencing and a change in virtual appointments, so all of this must be looked at through that prism. None the less, the trust recognises unique challenges in supporting its staff. A freedom of information request in April 2020 about travel spend in the year ending 2019-20 showed that 2,519,848 miles were claimed. In cost, there was £1,261,327 reimbursed.
Some of those claims, of course, will be community based, and cannot be easily designed out by any more direct bus routes or a shuttle service, but the hospital trust asked its staff whether they would use a shuttle bus service, should that be required. Of the 201 EDGH-based staff, 83% said that they would use a shuttle bus; 91% of Conquest-based staff said they would, too. They cite some positives; first, on productivity, if there was wi-fi and USB charging points on board, they would be able to work on the journey; secondly, there would be a reduction in stress. Unfortunately, although the survey was very comprehensive, and its results were compelling, after the review, the ESHT senior management team agreed not to take forward the project. The financial risk of investing the required funding outweighed the potential benefits. The biggest factor in that decision was that the team could not guarantee that passenger numbers would be sufficient to cover overall travel expenses.
The staff are one, clearly significant, group; but what of the patients, and their carers and visitors? The findings of my own survey work is reflected in these comments from a doctor, a nurse, a patient and a carer. The doctor said:
“Due to car parking problems, changing sites during the day is currently a huge waste of time…Car park ‘rage’ incidents are not unheard of and savvy staff allow as much as half an hour extra to be sure of a place to park.”
Another said:
“I found myself struggling to attend appointments at the eye hospital in Bexhill, unable to properly see, and unable to rely on public transport…I spent £200 per week on taxis instead.”
One patient’s mother—this was really difficult to read—said:
“It was enough to be dealing with a dying child; I didn’t need to be doing that journey by car every day. I didn’t feel like I was in the right frame of mind to be driving, but I had no choice.”
My office recently conducted a survey that had just 200 responses—a small-scale sample, but none the less representative. The number of missed appointments cited by respondents was 50. That is hugely expensive. Again, some of the commentary was really difficult to read and understand. One respondent said:
“Husband was having lymphoma treatment and consultations. Often very long journey with him in a very poorly state by the time we arrived.”
Even more difficult to read was one who said:
“I have been to Hastings hospital about 5 times in the last 12 months. I’ve gone as a patient as well as with my daughter. We have been lucky; a couple of times I’ve got lifts there but the rest we have had to get a taxi and when we do that we lose our food shopping money to do so.”
Very clearly, there is an impact on patients. There is also an impact on their clinical outcomes. In an October 2019 survey, nurses working in acute hospital settings identified that two fifths of patients without visitors would require additional support from the nursing team. The lack of visitors was felt by nurses to have a detrimental effect on patients’ health and the speed of their recovery. They were likely to be less mobile, less likely to be stimulated through conversation, and less likely to follow medical advice. A considerable number were more likely to have a longer stay in hospital.
There are a number of precedents across the land for hospital trusts providing this kind of shuttle-type service. They are successful, well established and comparable. Ashford and St Peter’s Hospitals NHS Foundation Trust in Surrey carries 110,000 passengers annually on its free inter-site hospital hopper shuttle service. The service was created 20 years ago as a result of a merger. Oxford University Hospitals NHS Foundation Trust and Newcastle upon Tyne Hospitals NHS Foundation Trust are just two more examples; there are many others. Manchester University NHS Foundation Trust and the Sheffield Teaching Hospitals NHS Foundation Trust use electric shuttle buses. That is notable at a time when we are considering the impact of transport on the environment and its carbon cost.
The potential benefits are readily understood. One benefit is around road congestion. Road congestion in our part of the world is forecast to increase by 36% to 60%, so there could be a significant benefit to the wider network. There have been 61 deaths in Eastbourne attributable to air quality; parking stress, productivity and greenhouse gas emissions are also issues. A hospital shuttle survey demonstrated that having a shuttle service, instead of a wave of individual cars going to and from hospitals, could bring about a carbon dioxide saving equivalent to 3,800 new trees being planted every year. Then there is the cost; at over £1 million for the trust, it is weighty, and there is the opportunity cost that sits behind that.
Others have mentioned recruitment and retention, which are important dynamics, but for me this is about providing a far better hospital service. Whether we have a fully fledged green hydrogen shuttle bus service, or make improvements to bus providers such as Stagecoach, improvements will end a penalty being paid by those who can least afford to make the journey. Ultimately, this is about access to hospital services and health equalities. When a hospital trust decides on good, clinical grounds that it will reconfigure services, what responsibility does it have towards those who are potentially left behind?
I have a number of asks of the Minister, as he will expect. One is around consultations. When my hospital consults on changes, it asks about ethnicity, race, gender—a host of important characteristics. It does not ask whether people have a car, yet that is the single determinant of whether someone will continue to be able to access services as they should. In consultations, what place does transport have? How important is it in the dynamic around clinical change?
I understand that there is a review of the criteria for patient transport support. I would be interested to know more about when that is coming down the line, and how it might benefit constituents in Eastbourne who are struggling with the costs of travel. Would the Minister join me in urging my hospital trust to revisit its 2019 survey and to, this time, include the patient voice? I know that it cares about its patients first and foremost, but the transport needs and access requirements need to be given far greater prominence when change is considered.
To what extent does the improvement strategy that is coming, and the funding that sits behind it, recognise the strategic significance of access to hospitals? My understanding from engagement with Eastbourne ECO Action Network is that, while there are improvements coming in our local plans, they do not feature inter-hospital transport, only transport from the town to each hospital in isolation.
I end by thanking my hospital teams, who work so hard. I want to thank my local paper and its reporter India Wentworth, whose reporting has reached right across the town. She has uncovered many of the stories that sit behind this issue. I thank the Minister, who, over a long period has been generous with his time and his interest.
The Minister for Health (Edward Argar)
It is a pleasure to serve under your chairmanship, Ms Nokes. I congratulate my hon. Friend the Member for Eastbourne (Caroline Ansell) on securing this important debate. As she alluded to, she has been a regular and persistent—albeit always courteous—campaigner for the NHS in her constituency, for her local hospital and, most importantly, for her constituents and their ability to access the services they need. I am aware of her long-standing interest in the issue. It is fair to say that her constituents are incredibly lucky to be represented by someone with such a passion for Eastbourne.
I join her in paying tribute to her hospital trust and everyone who works there, across the three sites, for what they have done, not just over the past two years in extraordinary circumstances, but what they do every day, year in, year out. I also join her in paying tribute to the Eastbourne Herald, of which I am maybe not as assiduous a reader as I should be. The latest story I read was about disco public lavatories. I have followed the important work undertaken by India Wentworth, since she joined the Herald in 2020, in campaigning on the issue and drawing to public attention the challenges faced by my hon. Friend’s constituents and others in Sussex.
It is rightly the responsibility of clinical commissioning groups—CCGs—or what will soon become integrated care boards and trusts, to plan for reconfigurations of NHS services. It is important that any such plan commands local legitimacy and confidence. I will respond to my hon. Friend’s questions. One was about consultation around reconfigurations, and how public transport and accessibility featured in that. All reconfigurations are subject to four Government tests. The first is strong public and patient engagement. To her point about the 2019 survey, I encourage her trust to continue engaging with that patient voice, including specifically around access. I will come on to access in a moment in the reconfiguration criteria.
Other tests are consistency with current and prospective need for patient choice: a clear clinical evidence base; and support for proposals from clinical commissioners. It is important to hear from as many local people as possible about the practical impacts and concerns. None of the decisions on reconfigurations is easy or straightforward. They are about balancing different needs and benefits. Rightly, in the different reconfigurations my hon. Friend alluded to—ophthalmology and cardiology —as we would expect in any reconfiguration, clinical needs and safety in achieving the best clinical outcome for patients are obviously paramount.
Achieving that sometimes comes with challenging changes to where people may access services, compared with where they previously did so. We would expect, among that consideration of benefits and challenges, patient transport, inequalities and equality of access to feature heavily. I expect my hon. Friend’s trust, in reaching decisions, will have given due weight to such considerations.
I am well aware of the geography of her constituency and that of her near neighbour, my hon. Friend the Member for Hastings and Rye (Sally-Ann Hart), having grown up on Romney Marsh and having late grandparents who lived in the Icklesham/Winchelsea area of my hon. Friend’s constituency. I know the area well, going across to Hastings and further to Bexhill and Eastbourne. I also know the horror which is the A259, on most days. I was going to say at rush hour, but it is not just at rush hour these days. My hon. Friend’s comments about congestion going up from 36% to 60%, certainly on that road, chime with me; and that is going back 20 to 25 years to when I was last regularly in that part of the world.
The challenges of getting between the three sites are considerable. My hon. Friend alluded to the bus routes. There are bus routes but she is right that, certainly in one case, a change must be made to make the connecting journey. A patient going into hospital wants to minimise the stresses and challenges faced in getting there and back.
My hon. Friend alluded to two specific reconfigurations. With regard to the ophthalmology reconfiguration, the travel analysis summary, included as part of the consultation documents, set out that proposals would affect outpatients and people who come to the Conquest Hospital, in the constituency of my hon. Friend the Member for Hastings and Rye, for procedures but do not stay overnight. That is around 27% of all ophthalmology patients who attend East Sussex Healthcare NHS Trust hospitals for treatment and care. The analysis indicates there will be an increase in travel time for around 21% of patients who would use public transport and for 8% of patients who might travel by car—their own car, taxi or similar.
Were the proposals to go ahead, some people would have a shorter journey and others a longer journey to their appointment. The longer journeys would cost more, but, as the trust pointed out to me, people would, hopefully, have fewer appointments overall, would therefore not have to go to the hospital as often, and would not incur cumulatively the cost for the extra appointments that were no longer required, so they should not pay too much more.
My hon. Friend set out the impact on people on low incomes—the 25% who have no car and for whom a taxi or private hire vehicle might be prohibitively expensive—and she gave a moving example in her remarks about the choices that some people might have to face. I expect the trust to consider that extremely carefully.
My hon. Friend touched on the shuttle bus service and gave an example of where it has worked well in providing a service that works for patients, and it has environmental benefits as well. I encourage her trust to continue looking at such options. If it is helpful to my hon. Friend, I will speak to NHS England’s south-east region to see whether it can convene a meeting to discuss that further with her and her trust to see what options might help fill the gap, even if what was initially put forward might be deemed impractical by the trust.
My hon. Friend focused on patients and the impact on them, but she talked about staff as well, and it is important that in considering services and transport services for people to get to, from and between hospital buildings in the same trust, we do not forget the impact on staff. Although I know that sunny Eastbourne, Hastings and Bexhill are wonderful places to live, work in and visit, I will not tempt my hon. Friend to talk about the challenges of the rail links between her constituency and London. Because of the location of the hospitals and trusts, there is still a degree of temptation or ability for highly qualified professionals to perhaps say, “I will have a longer commute and work in London”, or, “I will go and work in a big London teaching hospital”, so we need to do everything we can to make it attractive and easy for people to make the conscious choice to work in the local hospitals to make sure we have the workforce that we need.
My hon. Friend raised other issues. As well as thanking the team and her local paper, she has talked in the past about getting me down to Eastbourne to visit her local hospital—something I have agreed to—and I will see whether that might be possible during the Easter recess. I hope sunny Eastbourne will be sunny by the time we get to April.
Sally-Ann Hart (Hastings and Rye) (Con)
I am sure the Minister will join me in congratulating my hon. Friend the Member for Eastbourne (Caroline Ansell) on her well-presented and organised argument. Will the Minister also consider the community volunteering work that went on during the pandemic at HEART, for example, in Hastings? Perhaps a helping hand could be given there. It took patients to hospital and helped in that way, but sometimes these organisations need a bit more resourcing. Will he look at how we could maximise the potential of the community volunteer groups that have really grown throughout the pandemic to see how best we can utilise them in taking people to hospital for appointments?
Edward Argar
Before my hon. Friend’s intervention and although my private secretaries will wince at the logistics, I was about to offer to try to come down to Eastbourne, via Bexhill, and then go to see my hon. Friend in Hastings and visit the Conquest. I may then re-live the experiences of travelling along the A259 and possibly regret doing so. None the less, I will be happy to visit her at the same time. She mentioned, rightly, the hugely important role played throughout the pandemic—and in more normal times—by organisations of volunteers, charities and third-sector organisations to help with patient transport.
My hon. Friend mentioned HEART—I entirely endorse what she says about the value of such organisations. I encourage local authorities and NHS trusts to recognise that value and seek to work collaboratively with such organisations to enable them to continue doing that vital work. In same spirit, I am also an occasional reader of the Hastings and St Leonards Observer. I enjoy my local papers. I tend to find the news I get in local newspapers rather more interesting and accurate than some of what I read in national newspapers. Perhaps when we go down to visit her, we might talk to both local papers if that would be helpful.
My hon. Friend the Member for Eastbourne raised a number of points about the bus improvement strategy and the broader approach to improving public transport links in this country. My right hon. Friend the Member for North East Somerset (Mr Rees-Mogg) set out recently in the House that the Government are investing more than £5 billion in buses and cycling during the course of this Parliament. Local authorities have published bus improvement plans, which provide an assessment of existing services in the area, including details of current provision for rural and coastal communities. It is right that those plans are driven by local authorities, who know their areas best and have that local engagement. I encourage them to think broadly, about not just links between a town centre and other areas but the broader transport links that might exist in an area and how public transport can help enhance them, reflecting the patterns of travel that individuals have for particular purposes, be it work, going to a hospital appointment or otherwise.
We recognise that for those unable to travel independently, NHS-funded patient transport services are essential. Those services are commissioned locally for eligible patients with a specific need for transport assistance to and from their care provider for planned appointments and treatment. Although most people can travel to treatment independently or with support from family and friends, as my hon. Friend set out, those services play a hugely important role for those whose medical condition, severe mobility constraint or financial circumstances make that challenging. They deliver around 11 million to 12 million patient journeys each year, covering around half a million miles each weekday.
In August 2021, NHS England and NHS Improvement published the outcome of a review into patient transport services. The review’s final report sets out a new national framework for the services, with the aim of ensuring that they are consistently responsive, fair and sustainable. The first component of the new national framework is a commitment to update the national guidance on eligibility. That commitment responds to the concerns raised by patient groups and others during the review process that access to patient transport services is inconsistent between areas.
Caroline Ansell
One of the issues we have seen is reimbursement. It is a hugely bureaucratic process that also involves up-front costs for those who need to access that support. My concern remains that eligibility is still very narrow, yet there is significant movement across the piece, not least from maternity and paediatrics, where transport often involves taking little people. I hope that features in the review.
Edward Argar
My hon. Friend is right to highlight the breadth of people and groups who need to be included and reflected in that. We have consulted on the new national eligibility criteria. They have been developed through engagement with a wide range of stakeholders, including patient groups and charities, transport providers, healthcare providers and commissioners. On her question of when, we look forward to publishing them very shortly. If she wishes to make any last-minute representations to the team, she is welcome to write to me.
In the final few seconds I have left, I pay tribute once again to my hon. Friend the Member for Eastbourne for securing this debate and to my hon. Friend the Member for Hastings and Rye for speaking in it, and for their work in this place as such vocal champions of their local communities.
Question put and agreed to.
Large Solar Farms
(2 years, 9 months ago)
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Sir Charles Walker (in the Chair)
Before the debate starts, there are quite a lot of speakers. We have had great co-operation from both Opposition Front-Bench spokespeople, who have kindly agreed not to take their allocated 10 minutes. If you are on the list to speak, I urge you, but I cannot force you, to be restrained in making interventions. We will start with a four minute time limit, but if that proves to be too long I will have to drop it.
Brendan Clarke-Smith (Bassetlaw) (Con)
I beg to move,
That this House has considered large solar farms.
It is a pleasure to serve under your chairmanship, Sir Charles. I thank colleagues from across the House who are attending this debate, many of whom will be highlighting issues around large solar farms in their own constituencies. I thank the Minister for attending and all those watching at home on Parliament TV.
I will briefly outline the planning process for solar farms. Solar photovoltaic panels, known as solar panels, generate electricity from the sun, and large-scale solar installations are known as solar farms. Planning is a devolved issue, but energy plants that generate more than 100 MW for offshore and 50 MW for onshore generation are treated as nationally significant infrastructure projects and a development consent order must be sought from the Secretary of State for them; solar farms that generate power below that threshold require planning permission only from the local planning authority.
The national planning policy framework provides the framework in which local planning authorities draw up local plans and determine planning applications, and encourages them to promote renewable development and identify appropriate sites for it. The goal, which is admirable, is to meet the challenges of climate change, flooding and coastal change, including our transition to a low-carbon future.
Layla Moran (Oxford West and Abingdon) (LD)
I congratulate the hon. Gentleman on securing this incredibly important debate and on his excellent speech so far. Does he agree that his assessment of the planning situation so far is the core of the issue? While we all accept that net zero is an important goal and the need for many farmers to find extra subsidies, the problem with the planning framework as it stands is that many large solar farms are being put up that generate just under the 50 MW limit, so they do not require an environmental impact assessment or the level of community input that they so deserve. Does he agree that that would be a welcome addition to the national planning policy framework that the Minister should consider?
Brendan Clarke-Smith
I thank the hon. Member for her input. I agree that it is extremely important that we move on and invest in renewables, but having community input and ensuring that we choose the right sites, that people have been consulted properly and that the planning process works for everybody, is incredibly important. That is the key issue. Few people are against renewable energy, and solar farms in general are not the issue; it is very much a planning issue of getting things in the right place at the right time.
Sir John Hayes (South Holland and The Deepings) (Con)
There is another point, too. Recent events in particular have shown us that we need more security, including food security, but these solar farms are often sited on grade 1 or grade 2 agricultural land, which should be used for food production. Does my hon. Friend agree that the production of energy should be as close to its consumption as possible, to minimise transmission and distribution costs? Until we have solar on every large building, there should be none in fields at all.
Brendan Clarke-Smith
I thank my right hon. Friend for his comments. The threat to agricultural land is the crux of the problem, certainly in my own constituency, as I will describe a little later. With the situation in Ukraine at the moment, we have to look to our wheat supplies, and we want to source more of our food locally, because that contributes to reaching net zero, which is important too. Getting that balance right and making sure that we do not throw the baby out with bath water, so to speak, as we move forward is key. Of course, solar needs to be used in a mix with many other energy sources, so that we have a secure supply of energy, bring less of it from abroad and generate more of our own. I very much agree with my right hon. Friend.
The planning practice guidance provides more detail on renewable and low-carbon energy. It notes that
“large-scale solar farms can have a negative impact on the rural environment, particularly in undulating landscapes. However, the visual impact of a well-planned and well-screened solar farm can be properly addressed within the landscape if planned sensitively.”
That is key. The guidance also states that solar farms should be focused on
“previously developed and non-agricultural land…that it is not of high environmental value”,
as my right hon. Friend just mentioned.
The Planning Act 2008 introduced a new consent process for nationally significant infrastructure projects in order to speed up the approval process, especially for large-scale developments. A development consent order removes the need to obtain several of the consents that would have otherwise been required, including planning permission, compulsory purchase order and the like, with the idea of speeding up the process that we had before. Applications for DCOs are decided in accordance with national policy statements. In the absence of one, the Secretary of State has the power to make a decision. Although the current NPS argues for more renewable energy, it does not explicitly mention solar energy. However, a revised version is currently being considered, and an inquiry has been undertaken by the Business, Energy and Industrial Strategy Committee. The revised draft suggests guiding development away from the “best and most fertile” agricultural land and, where possible, utilising developed brownfield sites, contaminated land, industrial land or agricultural land that is preferably classification 3b, 4 or 5 rather than 1 or 2. Of course, we want to extend that to the underground cabling and access routes that will also be required with such developments. As Bassetlaw has been badly hit by flooding in the past, my constituents would add to the revised draft a requirement to make any development safe without increasing flood risks elsewhere.
Solar installations greater than 5 MW can also bid for competitive Government funding through contracts for difference, and installations up to that level can receive payments from energy companies for the electricity that they export to the grid through the Government-backed smart export guarantee. The energy White Paper refers to solar and wind, including unsubsidised rooftop solar, as part of a low-cost approach to energy generation. It also mentions green skills boot camps, including for solar.
Although many people agree that we need to further increase the supply of green energy, significant concerns have been raised by constituents in Bassetlaw about proposals put forward by West Burton Solar Project Ltd and developed by Island Green Power. They have submitted plans to build a 600-acre solar farm and energy storage infrastructure, which will be one of the largest single solar farm sites in the UK. Many believe that it is disproportionate and not appropriate. The site abuts two special conservation villages, Clayworth and Gringley on the Hill, and many people would emphasise the local landscape, which is rich in wildlife such as badgers, brown hare, deer and a vast array of farm birds, which has been enjoyed for generations. There are also related plans to develop several sites across the border in Lincolnshire, which I am sure we will hear about later.
Many people find it very strange that although they are unable to have solar panels on their roofs because they live in conservation areas, they now face the prospect of a large solar farm effectively connecting both villages. The installation would be visually intrusive for miles around, and any screening would therefore provide very little improvement. I have raised some concerns about the loss of countryside, the environmental impact and the flood risk, and there is also the issue of the water management system in Clayworth, which is a concern for us.
In contrast to similar projects that Members have raised, greenfield developments are supposed to be targeted at poor-quality farmland. From the feedback we have received, it is vital that we retain our countryside for the benefit of those who live there and that we make sure it continues to work for us.
Sir John Hayes
I am sorry to intervene on my hon. Friend again—I know that time is pressing. None the less, he may know that the Secretary of State for Levelling Up, Housing and Communities—and more or less everything else—has made it absolutely clear that beauty should be at the heart of the planning process. Indeed, the planning process was altered by his predecessor and has been confirmed by him to do just that. No solar park of the kind my hon. Friend is describing or industrial wind turbine placed in the middle of the countryside could pass any test of beauty, except the most perverse and corrupted one.
Brendan Clarke-Smith
I thank my right hon. Friend again. That is certainly an issue in our green and pleasant land. That is why I find it encouraging that there has been a move to utilising brownfield sites, not just for energy, but for housing and so on, making sure we make full use of brownfield sites before we look at our green fields and develop for the sake of developing.
Feedback from the consultants for Island Green Power claims that the soil quality is grade 3b, which would open it up to the process we have described. There are several questions about that given the high-yield crops that are grown there, including potatoes, which only grow in higher quality soils. We have already mentioned food security and energy. There is a lot of scepticism about the soil quality analysis, which is arguable, and I understand that Bassetlaw District Council is carrying out its own analysis. We need to grow more of our own food locally, not only to cut carbon emissions, but to mitigate wider problems such as the soaring price of wheat resulting from the situation in Ukraine, which is a particular concern at the moment.
I thank my constituents, including the “No Solar Desert” campaign group, who have worked hard to bring the issue to public attention and to engage thoughtfully. I had the pleasure of attending their coffee morning last week. Many are watching the debate today. It is worth emphasising some arguments made about the plans, and why local people believe the proposed site is not suitable.
The site does not meet many of Island Green Power’s selection criteria. It is not low-grade agricultural land or a brownfield site. It is near protected areas, such as the Idle Valley nature reserve. It is not flat or south-facing, and it is not near a viable grid connection, which creates another issue. Questions therefore remain about the efficiency of solar panels on this site, with some estimating it could be a low as 27%. I want to use this opportunity to throw in a reference from “Robin Hood: Prince of Thieves”—I do so regularly, as a Nottinghamshire MP:
“Is there no sun in this cursed country?”
There is, but in many cases there is not enough of it— we could all do with a little sunshine now—and perhaps this site is not the best place to utilise the sunshine most effectively.
Island Green Power is a UK-based developer that specialises in large-scale developments. It has developed projects in Australia, Ireland and so on. It has signed an options agreement with the Henry Smith Charity to explore the potential of the 600-acre site between Clayworth and Gringley—a huge development. I thank Island Green Power for its engagement with me on the issue, which I look forward to continuing. The Henry Smith Charity, which owns the site and other land in the area, along with several properties, has an option agreement with Island Green Power. It is a charitable trust—one of the biggest grant givers in the country—with assets of around £1 billion, and this is one of its investments. The charity is governed by a board of trustees appointed by the Archbishop of Canterbury. I know that many have a desire to protect the British countryside. I encourage them to engage with me and my constituents on this issue, which has not happened so far.
We must not reach a situation where we have a wild-west style gold rush, with developers looking to increase the value of their land and their financial gains—
Virginia Crosbie (Ynys Môn) (Con)
Ynys Môn is known as energy island, as we have wind, wave, tidal, hydrogen, solar and, I hope, nuclear energy, if I have anything to do with it. My hon. Friend has spoken eloquently about the need for balance and that we are addressing efficiencies. Could he reflect on the number of jobs that solar energy creates locally?
Brendan Clarke-Smith
I thank my hon. Friend for raising one of the key points. Solar is important as part of our mix, as are the other forms of energy that she mentioned. I certainly welcome the huge range of energy sources, which I know my hon. Friend campaigned hard for in Ynys Môn. The only thing that I would say to people around the country is, “Please stay away from the fusion project,” because that will happen in Bassetlaw, ideally.
The Government have made an admirable push towards renewables, but we do not want areas that would previously have been off-limits to be taken advantage of. We must cut that off at the pass. Many have also mentioned things such as greenwashing, and have rightly questioned where there is actually any local benefit to some of the schemes.
I believe that sensitive planning has an important role to play in addressing the visual impact of solar farms and, more widely, in the development of low-carbon infrastructure. It should include consideration of the character and beauty of the countryside, and whether the land is best used for solar or agricultural purposes. Thank you, Sir Charles. I look forward to hearing the contributions from colleagues in today’s debate.
Several hon. Members rose—
Ian Paisley (North Antrim) (DUP)
Thank you very much, Sir Charles. It is an honour to follow my hon. Friend from across the House, the hon. Member for Bassetlaw (Brendan Clarke-Smith), as a co-sponsor of the debate. I thank him for introducing this important subject so well. Principally, it is about large solar farms here on the British mainland, but we have similar issues challenging us in Northern Ireland. I am all for harvesting our natural resources for energy, but that policy must be consistent with others. We cannot just have carte blanche for one of them.
I will make six points, very briefly. First, solar cannot deliver power output value for land use. Secondly, large-scale solar is useless without battery energy storage plants, which can pose inherent dangers to human health and the environment. Thirdly, large-scale solar developments are a poor use of valuable agricultural land.
Fourthly, there are human rights abuses in the solar supply chain, and the UK taking economic advantage and benefit from those abuses should be called out and challenged. Fifthly, the use of coal-powered electricity in the solar panel supply chain means that we reduce our carbon footprint here at the expense of somewhere else. That is not right. Finally, there is a lack of consideration of end of life recycling of solar panels, or of those subject to being upgraded. That should also be examined.
I will focus on only three of those matters, which you will appreciate, Sir Charles. The first is the value for land use. Take, for example, Sunnica’s proposed solar development in Cambridgeshire. Sunnica claims that it will be a 500 MW solar power station, delivering 23.5 million MWh over 40 years, and it will occupy 11 sq km of valuable arable land. That is impressive. However, when you break down the facts, per year that is 588,000 MWh, which, when divided by 8,760 hours per year, is only 67.2 MW, not 500 MW. That is an important distinction because 67.2 MW is less than one seventh of the rated power of the scheme.
Matt Hancock (West Suffolk) (Con)
The Sunnica scheme is largely in my West Suffolk constituency, as well as in east Cambridgeshire; it is across the boundary. The hon. Member is quite right to draw attention to that point, but will he comment on the fact that the biggest generator of energy in the proposed scheme is a battery farm rather than a solar farm? It seems absurd that the two must be lumped together. One might almost argue that Sunnica has put a smaller solar farm on a battery project to try to build a battery farm in the middle of the Suffolk countryside.
Ian Paisley
I think that the right hon. Member has just put his finger on a very important point. That was flagged up in some of our constituencies in Northern Ireland, where it is used as cover for other applications and other things.
The Sunnica solar power station that has been applied for will take up 600 times more land to deliver the same average power as the local gas power station, so the land use is not good value for money. Those figures encapsulate just how problematic it is to expect any significant power from large solar farms.
The second issue I want to touch on briefly is that large-scale solar developments are a poor use of valuable land. In Ukraine, vast harvests of grain are gathered each year, but it is very unlikely there will be a planting season this year because of the war, and there will certainly be a very narrow harvest period at the end of this year. We get some of our grain from there; it is a bread basket for part of the world. As our country did in the last great war, we need to start setting aside vast swathes of our arable countryside and insist that we become food secure and grow our own food. I am very proud of Northern Ireland food production. With fewer than 40,000 farmers, we feed more than 10 million people in the UK. We have to multiply, develop and increase that.
It is essential that we address the key issue of allowing developers to get away with putting vast industrial plants on good, grade 1, arable land that we could grow grain on, or have cattle graze on, to develop our food security. For me, that is an essential point. The war that Russia is illegally conducting in Ukraine should be a warning signal to us all. We should get ahead of that now by ensuring we have the land planted for next year’s harvest, which is a very important point.
Finally, I want to make a point about human rights abuses. A 2021 report by the Helena Kennedy Centre for International Justice at Sheffield Hallam University, entitled “In Broad Daylight: Uyghur Forced Labour and Global Solar Supply Chains”, concluded that the solar panel industry in China has high exposure to supply chain compromise by human rights abuses—in other words, child labour and abuse of people working in those plants. We are buying plant equipment to put in this part of the UK, but allowing the abuse of people’s rights in China to do it. We should not allow China, which now dominates the world in these markets, to dominate our valuable production of—
Sir Charles Walker (in the Chair)
Order. The hon. Gentleman went more than 30 seconds over. I tolerated it from him because of the issue he was discussing, but I will not tolerate it from any other colleagues. The clock is the clock. I call Alicia Kearns.
Alicia Kearns (Rutland and Melton) (Con)
I thank my hon. Friend the Member for Bassetlaw (Brendan Clarke-Smith) for allowing me to co-sponsor this important debate. I am a big advocate of green, clean, renewable energy, and a member of the Conservative Environment Network. I find myself at a difficult crossroads. The people of Rutland want to play our part but are faced with an impossible situation, where our heartfelt determination to go green is being attacked by egregious, cynical and unacceptable proposals that would destroy England’s smallest county.
The current system for nationally significant infrastructure projects bypasses the will of communities. It creates a loophole that gags them, and goes against the Conservative mantra of community ownership and pride of place. This is not a fair situation. We need to take steps to ensure that NSI projects and planning rules are not hijacked into becoming a fast-stream planning approval conveyor belt for big developers. That is why NSI programmes can no longer be assessed on an individual basis but as part of a national solar plan.
In Rutland, we are facing the imposition across Rutland and Lincolnshire, on which my neighbour and right hon. Friend the Member for Gainsborough (Sir Edward Leigh) will speak in a moment, of a solar plant of 2,175 acres. That is 1,400 football pitches—eight times larger than the current biggest solar plant in the country, and bigger than Monaco or the Vatican. I have already made my opposition to that very clear and I plan to fight it, because I will not see that imposed on England’s greatest, smallest and most beautiful county.
I want to touch on Uyghur blood labour and will make two key points, because I think many others will cover agriculture and biodiversity. The Sheffield Hallam report, mentioned earlier, was an in-depth investigation into supply chain links between solar and forced labour in Xinjiang. As we know, the primary material for solar panels and modules is polysilicon: 45% of the world’s polysilicon is produced in Xinjiang. Mallard Pass solar plant is the best example of that. Canadian Solar are a company who are seeking to infiltrate our country with Uyghur blood labour. They are the company proposing to build in Rutland.
Despite their name, Canadian Solar are a de facto Chinese company. The vast majority of their production is in China, with only two small manufacturing facilities in Canada. Their founder, Shawn Qu, lives in China. Since 2019, they have had a supply contract with a company called GCL-Poly, who operate a production facility for solar cells in Jiangsu. But who are GCL-Poly? They are one of the four largest producers of polysilicon in China. An investigation into GCL determined that they actively participate
“in the resettlement of ethnic Uyghurs from…areas of Xinjiang”,
and
“contribute to and implement re-education programs that impose political and military training on resettled populations.”
They are putting Uyghur people into concentration camps and using them to build solar panels, and I will not see those imposed on Rutland.
The US Government have already seized four shipments from Canadian Solar due to their supply chain links with blood labour and genocide. I call on the Government to sanction Canadian Solar and their supplier GCL-Poly, and absolutely not allow them to build in Rutland. As a member of the Foreign Affairs Committee and as a member of the British public, I do not expect to see blood labour on our soil.
I will not touch on the biodiversity and agriculture points, which will be well made by many colleagues, but that is good agricultural land, graded 2 and 3, and Rutland is the bird capital of the UK, with ospreys, ground-nesting quails, red kites, buzzards and so on.
I thank the Mallard Pass Action Group for all the work that it has done, and I promise the Minister that we will deliver a petition to Parliament that makes clear the opposition from across Rutland. Ultimately, we need a national policy on solar farms. We cannot see this constant competition for the biggest possible solar plant being imposed all across the UK. We need to make sure that we do not have tainted supply chains, and we must protect our natural environment and our ability to feed our people. I thank my hon. Friend the Member for Bassetlaw again for calling this important debate.
Wera Hobhouse (Bath) (LD)
It is important that we are aware where companies operate in this country that use absolutely unacceptable labour practices in foreign lands, so I echo what the hon. Member for Rutland and Melton (Alicia Kearns) said about the investigation into Canadian Solar, if what she says is true, but nobody in this Chamber will be surprised that I am going to make a strong case for solar.
Global gas prices are soaring to the point where many more families will struggle to heat their homes. We obviously need to wean ourselves off Russian oil and gas, but we need to wean ourselves off all oil and gas. Now is the time for a green energy revolution. Solar farms are an integral part of the UK’s bid to get to net zero and to reduce our reliance on oil and gas, yet there are many myths around solar. The first is that solar is expensive, but that is not true. Solar is the most affordable energy in history, according to the International Energy Agency, and the most affordable energy source in the UK. It is efficient and reliable.
Since 2010, the cost of solar panels has plummeted by 60%. At the same time they have become much more efficient, meaning that solar is a very effective way of reducing spending on energy costs. In 2021, solar provided almost 5% of the UK’s total electricity supply, but there is plenty of room for growth. All UK solar markets are subsidy-free. If the UK can achieve 40 GW of solar capacity by 2030, solar could meet 15% of the UK’s power needs.
Some Members today have outlined their concerns about the environment. In fact, studies indicate that solar farms can be used to boost biodiversity, improve land quality and promote the growth of pollinating species. Under the Environment Act 2021, all new developments are required to demonstrate a biodiversity net gain, and solar farms are no exception. They often go above and beyond that requirement, typically showing a biodiversity net gain of 20% to over 100%.
In terms of community support, polling shows that there is the strongest support for solar farms—over 50%—from those living closest to them, and that those living near them become more supportive over time. Once people have a solar farm in their community, they know what they get and they are supportive.
Solar projects deliver a range of benefits to their local communities, and I pay tribute to Bath and West Community Energy in my constituency, who have used their community fund to provide grants for other environmental projects in the local area. I urge the Government to review and revise Ofgem’s strategy and policy statement as a matter of urgency. The net zero target must become mandatory. It will unlock the potential investment in urgently-needed grid capacity. One of the largest constraints on solar is grid capacity. Every DNO region in the country is affected. Solar Energy UK has identified at least 45 solar projects, equating to over 40 GW of generation capacity and £1.6 billion in capital investment, that are being blocked by a lack of grid infrastructure. Many of those projects accepted offers to connect this year or next, but are now being told that they will not be able to connect until the end of this decade. That is not acceptable. The problem will get worse before it gets better.
We have the capacity to be a world leader in renewable energy, with the right political will. Now is the time for our green energy revolution. There should not be blockage but further support from the Government for the solar energy sector.
Sir Edward Leigh (Gainsborough) (Con)
It is an honour to take part in this debate introduced by my constituency neighbour, my hon. Friend the Member for Bassetlaw (Brendan Clarke-Smith). He was talking about the solar farm application in his constituency. That runs over the River Trent into my constituency of Gainsborough, and Gainsborough is going to be ringed by a solar farm of no less than the equivalent of 4,000 football pitches. It is a huge development. The hon. Member for Bath (Wera Hobhouse) represents a lovely city surrounded by beautiful green countryside; I suspect her attitude might be quite different if somebody proposed a solar farm of 4,000 football pitches in the countryside around Bath.
I personally believe that this is, in a way, a cheat on the planning system. The applicants accumulate land just to get it over a certain acreage, so that it becomes a nationally significant infrastructure project and bypasses the local planning process. Nobody is against solar farms because they are against solar farms. The point we are making is that we want a proper planning process and we want local people to be involved. We fear that this will go straight to a Government inspector, who will be working towards national guidelines to create more solar energy, and our concerns will be overridden.
Surely, West Lindsey District Council, representing the good people of the part of Lincolnshire that I represent, should have a right to have its say, and its say should be enforceable. I have done quite a lot of travelling around the proposed site. There could be mitigation in terms of landscaping and the growing of woodland, hedges and so on, but we want to be absolutely assured that that will take place.
Before my time is up, I want to refer to a very good answer that the Minister for Energy, Clean Growth and Climate Change, my right hon. Friend the Member for Chelsea and Fulham (Greg Hands), made to me on 22 February:
“The Government recognise the importance of preserving the most productive farmland. Planning guidance is clear: where possible, large solar farms should use previously developed land, and projects should be designed to avoid, mitigate, and where necessary compensate for impact.”—[Official Report, 22 February 2022; Vol. 709, c. 162.]
That was an impressive answer. I ask the Minister who will reply to this debate, given that wheat prices are going through the roof and that there will be severe constraints on food supplies and wheat production, why are we taking good agricultural land? Why is that in the national interest? Dare I say, before we are too introspective and just talk about ourselves and our interests, that countries like Lebanon and Egypt are almost wholly reliant on Ukrainian wheat. That gives us even more responsibility to plan not just for our own food supplies, but for other parts of the world.
My main point is this. We want a properly enforceable planning process so that we can get real mitigation. We want to be assured by the Minister that when it comes to applications for solar farms, he will agree with his right hon. Friend the Member for Chelsea and Fulham and we will avoid taking good agricultural land and will try to put these developments on brownfield sites. The point made earlier that this is really an opportunity to create a battery farm is very apposite. We are littering the Lincolnshire countryside with not just a solar farm but a battery farm. It is simply not acceptable.
Jim Shannon (Strangford) (DUP)
It is a pleasure to speak in this debate, Mr Walker. I thank the hon. Member for Bassetlaw (Brendan Clarke-Smith) for setting the scene so well. It is great to be here to discuss the potential ways that we can advance our solar energy. Although planning provisions are different in the devolved nations, as the hon. Gentleman said, the benefits and the issues surrounding solar farms remain the same. There is much discussion on ways in which we can advance our solar power system with the goal of transitioning to a low-carbon future.
In addition, the invasion of Ukraine by Russia has, as others have said, damaged our fuel provision even further. The impacts are being felt throughout the United Kingdom of Great Britain and Northern Ireland, forcing us into self-sufficiency. The Russian invasion of Ukraine has made solar energy a priority. Through our solar farms, we must put more preparations in place for the future, although some elements of planning by devolved nations are needed to approve them.
The Chair of the Environment, Food and Rural Affairs Committee, the hon. Member for Tiverton and Honiton (Neil Parish), who was at this morning’s meeting of the eggs, pigs and poultry all-party parliamentary group, made an interesting point in his contribution. According to others in the sector, that becomes a real issue. The right hon. Member for Gainsborough (Sir Edward Leigh) mentioned the price of feedstuffs for cattle and sheep. They can graze for eight months of the year, but for eggs, pigs and poultry, I am afraid it is very different. The price of feedstuffs for the coming year could go through the roof. Some of the other producers who were at the meeting—the pig producers and the poultry men in particular—were telling me that Spain gets 70% of its grain from Ukraine. That will put pressure on everyone else, so we must consider what we can do differently.
Northern Ireland has installed photovoltaic power on a wide range of farms over the last four years. In addition, the businesses of my Strangford constituency have been working actively to distribute more solar farming materials to companies. Just up the road from me in Carrowdore, a local farm produces the vast majority of its electricity through solar energy. Areas such as Comber and Killinchy, which are also in Strangford, also use solar panels for sustainable electricity purposes. Northern Ireland’s most notable solar farm would be that of Belfast International airport, which, in its first 10 months of usage, saved the airport more than £100,000. Some 27% of the airport’s electricity, in cost terms, came from solar farm panels, which highlights that despite the cost, they are a worthwhile investment. Solar energy cannot be ignored.
At the same time, I recognise, like my hon. Friend the Member for North Antrim (Ian Paisley), that there are concerns about the installation of solar farms. As someone who lives in a rural area and on a farm, I want assurances—as do my constituents—that risk assessments are undertaken for solar farms. The national planning framework encourages the promotion of renewable energy and identifies appropriate sites. It aims to assess the sites for risks, such as those posed by climate change, coastal change, flooding and soil. Planning systems should support the transition to a low-carbon future, and will identify probable and possible risks, while increasing plans for the use of sustainable energy.
I put this question to the Minister. Flood-risk consultants have concluded that there is cause for concern in relation to solar farms and flooding, including the location of solar panels, the location of inverters within the flood plain, and the increase of impermeable surfaces. In addition, flooding can also cause some interference. The most common risk is the reflection of the panels, which means that 100% absorption from the sun is not always possible.
With all those things in mind, we need to focus on the use of non-agricultural land. We should not use agricultural land, which will become more important to us in the next 12 months and in the years to come. To conclude, I believe that there must be greater provision for solar energy throughout the UK, but at the same time we must take into account the concerns of the agriculture sector, and I declare an interest as a farmer and a landlord.
Matt Hancock (West Suffolk) (Con)
I stand as an avowedly pro-solar politician. Indeed, I was the Energy Minister. I am very proud that 99% of the solar on the roofs of houses and buildings in this country has been put on those roofs since 2010. I have supported solar scheme after solar scheme in my constituency, including in Wickhambrook—close to my own house—and elsewhere. The case that I will make today is that solar must be in the right place, with the right engagement and the right technology, and the proposal for the largest solar farm in the country, at 2,500 acres, affecting 16 parishes across east Cambridgeshire and West Suffolk, undermines local support.
There has been much discussion of the food security issue, so I will not go into that detail, but I will make three critical points in the time available to me. First, why is there no requirement for an independent, whole-life carbon assessment to be carried out for all developments? The advice that I have received is that the Sunnica proposal will have a net-positive carbon impact over its lifetime, which would make a mockery of the net zero ambitions and the importance of tackling climate change.
The second point is about battery safety. Although the energy farm will cover 2,500 acres, a very significant chunk of the energy—a much bigger chunk than the solar energy generated—will be from a battery farm. We may need battery farms, but they should be in the right place—they should not be in the middle of the countryside. Furthermore, there are significant safety issues. I was sceptical of the arguments about safety issues until I looked into them in detail; there have been 38 fires at battery energy storage systems across the world in the last three years. There was one in Liverpool in September 2020, and the report into that fire still has not been released. There is a suspicion—and I understand and share this suspicion—that it has not been released because it demonstrates that very large battery installations are inherently dangerous. The battery technology means that water cannot be used to put out fires. As the fire authorities say, once one of those fires starts, there is nothing that can be done to stop it except wait and hope that it does not lead to toxic fumes. In areas of my constituency downwind of this proposed development, there are large areas of homes, such as Red Lodge, where this is a very significant problem.
The final point I will make is about process. The developers are being allowed to pick and choose how they get their developments through; there is minimal public engagement. Sunnica has refused to meet me; it has refused to attend any public meetings. It has had next to no engagement. It has not, as far as I know, set foot in the villages and towns affected to answer residents’ questions since July 2019. As a supporter of solar, I find that the proposal, which will affect areas in and close to my constituency, is actively undermining local support for solar energy. It should be stopped and sent straight back to the drawing board, so that we can have a reasonable conversation about where solar will be welcomed locally. We can put the battery technology where it ought to be—in an industrial area—and we can make sure that we bring the community together with us in support of vital renewable technologies, rather than trying to ram projects through against the wishes of local people.
Robert Largan (High Peak) (Con)
I want to talk about the proposal to build a 77-acre solar farm off Dolly Lane, near the villages of Buxworth and Furness Vale. The site sits entirely within the green belt and is adjacent to the Peak District national park. It is on the back slope of Chinley Churn, which is best known for its dramatic quarried face, known as Cracken Edge. It is an iconic landscape not just for Chinley, but the whole Peak district. I am a keen walker and it is one of my favourite routes, especially if I can find a way to end the walk at one of the brilliant local pubs, such as The Lamb on Hayfield Road or the Old Hall Inn in Whitehough.
I will come on to my concerns about the proposed solar farm, but before I do, I want to be very clear that I am not a net zero sceptic. Climate change is the greatest long-term challenge we face globally, and I am fully committed to fighting it. I am an enthusiastic supporter of renewable energy. The events in Ukraine in recent weeks, and the subsequent spike in wholesale oil and gas prices, demonstrate the importance of energy security. Clearly, we need to end our reliance on global fossil fuel prices and transition to clean renewable energy sources. We have made very good progress over the last decade, particularly on off-shore wind. The Government are also rightly pushing ahead with modular nuclear reactors. Solar should be a key part of that strategy. However, I have a number of concerns about the proposals on Chinley Churn.
Unlike most proposed solar farms, which sit on relatively low-lying flat sites, this one would sit on the slope of Chinley Churn, in a very elevated position, completely changing the iconic Peak district landscape for miles around. The site would be visible from thousands of homes, particularly those in Furness Vale and New Mills. It would also have significant impact on local wildlife. The Peak District National Park Authority has already made it clear that it is opposed—with good reason. The Peak district is a special place; it is the home of the Kinder trespass, and the first ever national park. We have a responsibility to conserve it for future generations. It is also doubtful that the solar farm would generate enough energy to be economical. High Peak is a very beautiful part of the world, but we are not blessed with an abundance of sunshine.
A full planning application has not yet been submitted, but Kronos Solar has applied for an environmental impact assessment. I understand that it is also in pre-application discussions with High Peak Borough Council. Government guidance encourages local planning authorities to prioritise developed and non-agricultural land for large-scale solar farm developments, so long as the land is not of high environmental value. The national planning policy framework is also clear that when
“located in the Green Belt, elements of many renewable energy projects will comprise inappropriate development.”
Projects can proceed only in “very special circumstances”, which may include
“the wider environmental benefits associated with increased production of energy from renewable sources”,
but the proposal by Kronos Solar for a 77-acre solar farm on the back slope of Chinley Churn in the heart of the Peak district simply does not match those criteria. The cost of development to our local environment will be simply too high.
Gareth Davies (Grantham and Stamford) (Con)
I congratulate my hon. Friend the Member for Bassetlaw (Brendan Clarke-Smith) on calling this debate. For me, the debate is not about whether we need to diversify our energy supplies; of course we do. I want us to reduce our dependence on foreign energy, and to do that, we need renewable infrastructure. For me, it is not about “whether”, but about “how”—how we achieve our energy ambitions in a way that is fair and proportionate and has the support of our constituents, and how we build our renewable energy infrastructure in a way that does not harm the beautiful nature that surrounds us, the farmland that feeds us and the communities that bind us together.
It is a great pleasure to be joined by two right hon. Friends from Lincolnshire: my right hon. Friends the Members for Gainsborough (Sir Edward Leigh), and for South Holland and The Deepings (Sir John Hayes). Lincolnshire has very flat land. It also has a large number of applications pending across the county. Some of the proposed developments are small, but some are extremely large. There is one in particular that I want to mention today: Mallard Pass, which my hon. Friend the Member for Rutland and Melton (Alicia Kearns) mentioned. It involves 2,170-odd acres of development land. This is obviously causing tremendous concern to local people.
I want to use the limited time that I have to put on record my thanks to the Mallard Pass Action Group: Keith Busfield, Sue and all the other campaigners, who have put forward to the developer extremely reasonable points, including on the impact on the local ecology and the biodiversity of the site; the loss of agricultural land for 40 years while it is covered in solar panels and the national implications that that might have for food production; and the implications that drawing power from the solar farm will have for energy storage and large lithium battery facilities.
As the local MP, I have taken these concerns of thousands of residents and put them to the developers, and I have to say that the response has been unconvincing. They have done little to directly address the concerns of my constituents, and they are relying on statutory requirements to take measures that would be undertaken regardless of whether there was local concern. The promise that the issues that have been raised will be considered as part of the development consent order submission means little, as that is the final stage of the planning process.
I suggest three things. First, we need to ensure that the Planning Inspectorate fully takes into consideration the concerns of local residents. The fact that all consultations are run by the developers leaves local people disillusioned about their effectiveness. Secondly, it is critical that we have, as my hon. Friend the Member for Rutland and Melton said, a national strategy for solar farms. It must encompass both nationally significant and locally approved applications in order to ensure that counties such as Lincolnshire are not dominated by significant developments and small developments that add up to complete domination by solar farms across the county. Above all—I say this to anybody listening in the Grantham and Stamford constituency today—I want you to have a voice, so when there is a consultation, please let your voice be heard. Be part of it; contribute to any consultation; and have your say, because if you do not put your views forward, that makes it a lot harder for MPs like me in debates like this.
Neil Parish (Tiverton and Honiton) (Con)
It is a great pleasure to speak in this debate. I thank my hon. Friend the Member for Bassetlaw (Brendan Clarke-Smith) for bringing it to the House. I concur with him: if we can get fusion right and roll it out economically, that will very much be our energy future.
Sir Charles, you would expect me to talk a little about food security. That issue is being highlighted now. Given the terrible situation with the Russians invading Ukraine and all the destruction going on, not much food will be produced in that breadbasket of the world. We need to stand up to that and produce food and wheat; we can do it. We need to produce poultry and pigs, which need grain. We need this land for grain and food production, so that we can produce really good food and ensure high-quality welfare. Let us ensure that we keep land for food production.
By its very nature, land is finite. At the moment, it is being asked to produce food; however, we are also asking for greater biodiversity, which is highly laudable and right to do, but as we aim for greater biodiversity and more environmental schemes, we will see a reduction in production of food. We do not want to couple that with large solar farms.
We all believe that solar panels have a role to play, and that they produce good-quality electricity, but I would like us to go back to having feed-in tariffs for people’s homes. It does not have to be as high a tariff as it was, because solar panels are very competitively and narrowly priced. Only about 4% of houses have them. Residents in houses that have them love to see the energy coming in and the meter going round, especially when they have high energy bills, as they are being paid for that electricity, rather than paying out for it. This very much involves individual house owners and tenants, and keeps our energy costs down.
From an infrastructure point of view, Western Power Distribution and others have a great deal of difficulty in wiring up and connecting large solar farms. Solar power should therefore be spread across the community, and should be generated on brownfield sites and in industrial buildings. How many industrial buildings do we have in this country? Very few have solar panels on them. We can have both industrial buildings and solar panels, but we must not keep putting the panels on land. We have an opportunity with these large farms.
Another large solar farm of some 200 acres has been proposed near Cullompton. The south-west is God’s own country because of the light, and that makes it popular for solar panels. We have an awful lot of solar panels in Devon and across the west country; we have had our fair share of them. The community needs to be involved when more are proposed.
Solar farms are not beautiful and have industrial-style fencing around them. Why do people come to many of our great constituencies? Because they are beautiful. Tourist love to come to them, but I promise that they do not come looking for solar or wind farms. They come looking for beautiful cattle and sheep grazing peacefully in our countryside. We must be careful how we deal with the situation. As I have emphasised, we are asking our farmers, our landowners and those looking after our countryside to do so much for the environment. We can have energy, but for goodness sake let us put the panels on people’s homes and industrial sites, and not on more good, agricultural land.
Sir John Hayes (South Holland and The Deepings) (Con)
I am grateful for your indulgence, Sir Charles, and I will speak briefly as a former energy Minister. Before I do so, I draw the attention of the House to my entry in the Register of Members’ Interests.
The point that my hon. Friend the Member for Tiverton and Honiton (Neil Parish) made at the end of his speech is the first salient point that I want to amplify, and that is that of course there is an argument for renewables. It is not an a priori argument, by the way; it has to be legitimised by renewables’ efficiency, their ability to supply productive energy, and by the goods and virtues they displace. Every kind of energy production needs to be measured against those kind of criteria, as does every specific proposal.
There is a case for renewables in an energy mix—an energy mix that allows us to deal with our environmental footprint, as it is known in the modern idiom; that can guarantee steady supply; and that provides the flexibility necessary to ensure that we can deal with the peaks and troughs of demand. But renewables should be measured by their cost effectiveness, too. The point made by the hon. Member for North Antrim (Ian Paisley) about the cost-effectiveness of solar was one that I identified when I was energy Minister, before my right hon. Friend the Member for West Suffolk (Matt Hancock) did the job.
It is critical that energy supply be placed as close as possible to areas of demand. It is absolutely right that we should populate industrial, commercial and domestic buildings with solar panels long before we consider putting them in fields, which are remote from demand and entail all the transmission costs I mentioned.
My second point is about food security, which I mentioned at the outset of the debate and has been raised several times since. It is vital that we protect grade 1 and 2 agricultural land, such as the land in Lincolnshire that is now being suggested for these very large-scale solar parks. They are not being suggested for some rocky outcrop; it is proposed that they be placed on the very land that can grow the food to guarantee the food security that so many in this House have called for. The Minister needs to make it absolutely clear, again, that the Government will not tolerate that, as we move into a future in which we protect our economy to the greatest degree possible, in terms of both food supply and energy provision—as I have always wanted us to do. We are moving happily into the post-liberal age for which I have clamoured so long.
I have also clamoured for the protection of our green and pleasant land—indeed, for our green and pleasant land to become a new Jerusalem, one might say. A Conservative Government should understand the aesthetic argument associated with solar farms—and wind turbines, too, by the way. It is critical that we preserve the character of settlements, and that we believe in the sense of place that helps to deliver our sense of worth and identity. Again, a truly Conservative Government—and I know that the Minister is truly Conservative, so I have high expectations of him—would do just that.
In summary, it is right that we consider renewables as part of the energy mix, but not on any terms or at any cost. I congratulate my hon. Friend the Member for Bassetlaw (Brendan Clarke-Smith) on being such an outstanding servant of the people of his constituency; I am proud to have contributed to a debate sponsored by him. I look forward to the Minister’s response with eager —one might say gleeful—anticipation.
Greg Smith (Buckingham) (Con)
It is a pleasure to serve under your chairmanship, Sir Charles. Like other Members who have spoken, I am in no way, shape or form an opponent of solar energy. However, like others, I believe that solar technology and solar farms would be best placed on our factories and brownfield sites, away from the beautiful Great British countryside. I very much agree with my right hon. Friend the Member for South Holland and The Deepings (Sir John Hayes) about preserving and protecting the character of an area.
Planning guidance is already clear: where possible, large solar farms should use previously developed land. Projects should be designed to avoid, mitigate and—where necessary—compensate for impact. However, my constituents have been bombarded with applications for large solar farms across north Buckinghamshire. Since I was elected just over two years ago, I have already opposed five applications for solar farms, including in Little Horwood, the village of Kingsey, on Callie’s Farm and between the villages of Ford and Dinton. All those solar farms would have dominated rural villages and completely changed the character and rural nature of those places; in one case, it would have destroyed ancient farmland.
Most recently, I have objected to two solar farms in the peaceful villages of Leckhampstead and Slapton. My constituents have expressed concerns about the inappropriate scale and nature of the proposals. The solar farms will add no net benefits to the local area and will have a considerable impact on the environment and wildlife. They will fundamentally alter the character of those villages and the surrounding countryside.
The Leckhampstead solar farm site is on rising ground, bounded and clearly visible from the surrounding high and low ground from the west and south. The woodland bordering the northern edge of the site is a prominent feature in the local landscape. Slapton village already has one smaller-scale solar farm, which is ugly and visible from Ivinghoe Beacon. The scale of that application is such that it completely surrounds and overwhelms the northern end of Slapton.
The company behind this development, having seen my objection, tried to make out in a letter to me the other day that it would not be a blight and sent me photos of other schemes as evidence. Yet every single one of the photos it sent me were of ugly masses of grey and black plastic, metal and glass, in place of natural beauty, grass and crops. Let us be absolutely frank: there is no way on earth that replacing our beautiful British countryside with hundreds of thousands of acres of these monstrosities up and down the land could possibly be considered anything other than total vandalism and blight.
With Buckinghamshire facing a tidal wave of these solar farms and of development on greenfield sites and working agricultural land, it is vital, as others have said, that we take a step away and recognise that agricultural land is a finite resource. We need to come up with a new solution that puts solar on brownfield, and on the top of the factories and tall buildings in our cities and towns, and that protects the Great British countryside.
Stephen Flynn (Aberdeen South) (SNP)
It would be remiss of me not to start by congratulating the hon. Member for Bassetlaw (Brendan Clarke-Smith) on securing this important debate, and all his colleagues on their impassioned views. I am not sure I necessarily agree with everything they said, particularly about some of the planning aspects, but I will leave that to the Minister to address, especially as planning is devolved.
Thankfully, in Scotland—and, indeed, everywhere else—direct sunlight is not required for a solar panel. We are fortunate enough in Scotland to still have daylight, though, which means that solar panels do work—as I am sure the hon. Member for Kensington (Felicity Buchan) will recall from her years in the north-east of Scotland, we are not exactly blessed with sunlight. However, solar panels have a key role to play in the wider energy mix, as the right hon. Member for South Holland and The Deepings (Sir John Hayes) said.
It is my understanding that around 400 MW of installed capacity for solar panels exists in Scotland. Will that be sufficient to supply our needs in the long term? No, of course it will not, which is why we are so fortunate to have a whole host of other renewable sources on our doorstep, be that tidal, offshore wind, onshore wind or hydro pumped storage, or moving into the likes of hydrogen and so on. That energy mix is incredibly important, and I was a little surprised to read that, in 2018, solar panels provided Aberdeen, my own city, with 136% of household electricity demand. I am told that that was during a summer heatwave—I do not quite recall that heatwave, but there was obviously significant supply from solar panels.
One issue on which I am sympathetic to Members’ comments is where solar panels are located. There are plans afoot—they have been talked about for many years—for a fairly significantly sized solar farm in my constituency, but on the site of a former tip, which makes sense, because that land cannot be used for anything else. More importantly, that solar farm will provide the renewable electricity that will hopefully power a hydrogen station nearby, completing the green hydrogen journey that we need to be on. If we can secure renewable electricity that goes right into the hydrogen mix, that has to be the aim, as I am sure the Minister would agree wholeheartedly.
As I said earlier, solar panels are not necessarily the panacea for the UK or Scotland. I touched earlier on some of the other renewable energy sources we have in Scotland. At this moment, in the midst of this energy security situation, which is of concern to us all, we are blessed in Scotland to have the capacity to provide 98% of our electricity from renewable sources alone. That is quite a remarkable feat, considering that we have not even started on the 25 GW that has been approved through the ScotWind round.
I want to pause briefly on the topic of energy security. As I recently said to the Secretary of State when he made his statement in the Chamber on the reduction in oil and gas imports from Russia, what we urgently need now from the UK Government is a plan for how they intend to accelerate renewables at a speed never seen before. It is fair to say that a lot of good has been done—the likes of contracts for difference and so on—but if we are to treat energy security with the seriousness it deserves, we need the Government to buck up their ideas, to invest more and to come forward with a clear and collegiate plan. Solar will not be the bedrock of that plan, but it will play a role in it. Given that the Secretary of State was not able to answer my question on that earlier, I am sure the Minister will be able to do so in due course.
Sir Charles Walker (in the Chair)
I thank the SNP spokesperson for finishing in four and a half minutes, not five. My gosh, he has no future in this place if he is so polite.
Dr Alan Whitehead (Southampton, Test) (Lab)
I will attempt to follow the hon. Member for Aberdeen South (Stephen Flynn) in being as brief as possible and finishing within five minutes, but right hon. and hon. Members will understand that we have a large number of issues to discuss.
The first thing to say is that I congratulate the hon. Member for Bassetlaw (Brendan Clarke-Smith) on securing the debate, because it gives rise to all the issues that we have to consider in the development of renewables and particularly solar. He has drawn attention to a particular scheme in his constituency, which is quite right, given his role as a constituency MP. However, I caution against expressing proper and justified concerns about the siting of particular solar farms in particular places while failing to understand just how much we need renewables, especially of the solar variety, over the next period.
I have just come from the statement in the main Chamber, and all sides agreed that our way out of the oil and gas problem, which has been driven by the situation in Ukraine and Russia, is to go very fast on renewables. The point is that if we go fast on renewables, the renewables have to be somewhere, and it is really not sufficient for people to say, “Yes, I’m very much in favour of renewables, but I’m not in favour of them being in any particular place.” I am not saying that that is what right hon. and hon. Members have said this afternoon, and a number of Members were very thoughtful and clear about the circumstances under which solar should be developed. I think that should perhaps be the watchword, and I agree with a number of Members that we need a much more strategic and planned approach to the arrangements. We need to understand what renewables we need, but also where we need them. However, it is not an option to have them nowhere at all.
In that context, we know that solar has already been a considerable success in the UK. It is being developed at the moment on no subsidies. We have 14 GW installed across the country, and 65% of that is ground-mounted solar. Frankly, it is a fantasy to believe that we can get to the sorts of targets we now need on solar—perhaps 40 GW by 2030, which is what the Climate Change Committee says—by simply installing them in small numbers on roofs in cities and towns. Of course we should go with that, and we ought to have a lot more imagination about how we put solar in towns and cities or alongside motorways and various things such as that.
Wera Hobhouse
I agree with everybody that not engaging with communities is simply not on, and it is important that those who want to install renewable energy installations and solar farms need to engage with their communities. What does the hon. Gentleman think should be done to improve community engagement?
Dr Whitehead
The hon. Member is quite right. Any form of renewable power—indeed, any form of power—ought to be based on extensive community consultation and the community being on board with the idea of that particular power source coming to their area. Hon. Members have raised a number of issues about agricultural land and its quality, the visual aspects of particular solar farms, and various other things, which need to be discussed in great detail at the local level by communities faced with these proposals.
Solar farms, and particularly the West Burton solar farm, which was the subject of the concerns raised by the hon. Member for Bassetlaw, actually have quite a good grid connection. That solar farm would potentially be based around the West Burton A power station, which as I am sure the hon. Member will be aware is going offline in 2022, as is the Cottam power station just down the road. However, if we had had a discussion when someone decided to build the West Burton A power station and the Cottam power station in the middle of the countryside—which is where they are—a number of years ago, we probably would have had exactly this sort of debate in the Chamber.
That underlines the fact that, although we are transferring what we do as far as power stations and power are concerned, the issue remains just the same: where we put those power stations and renewables into operation, not whether we put them into operation. It is imperative that we have this amount of renewable energy across our country for the future. Be it offshore wind or onshore wind, city-based solar or field-based solar—all of those have to be considered as imperative for delivering our renewable power supplies. Solar happens to be the cheapest power available, and it is one of the quickest to introduce if we are thinking about a dash for renewables in the future.
Sir John Hayes
The hon. Gentleman and I have been debating these issues for longer than either of us care to remember. I am sure he will acknowledge that against that backdrop—the objective he set out—it is important to measure the environmental cost of renewables. The manufacture, siting and anchoring, for example, of wind turbines bring an environmental payback period. The same applies to solar. We need to test these things on a specific basis against the very criteria he set out.
Dr Whitehead
The right hon. Member is absolutely right that we need to test these things and take the environmental benefits as a whole, but these tests have pretty much been carried out, and there is an overwhelming environmental benefit to solar, which is a cheap and reliable power source. By the way, the batteries associated with it that make it more reliable do not need to be sited in the same place as solar farms, so things can be designed in such a way that the environmental disbenefits are not all concentrated in one place.
Matt Hancock
In the case of the Sunnica proposal, the battery farm is much bigger than the power that would come from the solar that is part of the same proposal. That being the case, and the argument he is making being important and thoughtful, would the hon. Member not agree that keeping the public onside with the development of solar and its location is an incredibly important part of meeting the very environmental objectives he so cherishes?
Dr Whitehead
Yes, the right hon. Member is absolutely right. The public should be on board with any development that is going on anywhere concerned with anything. That is a starting point as far as the developments are concerned. It is worth reflecting on the Government’s onshore wind policy. Despite the fact that the public in many areas of England and Wales were in favour of hosting onshore wind, the Government put a moratorium on it. We do not want to go in the other direction as far as public support and renewables are concerned.
I have indulged myself by taking interventions and have gone a little over my time. I hope that Members will understand, however, that my comments are founded on the imperative of solar for the future. Solar needs public support, and a sensible approach must be taken to its deployment if it is to take its desired place in our future renewable firmament.
Sir Charles Walker (in the Chair)
Minister, could you sit down at 3.58 pm, so that our mover can wind up after you have wound up?
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (George Freeman)
Do feel free to remind me at two minutes to 3, Sir Charles.
George Freeman
It is a pleasure to serve under your chairmanship. May I start by congratulating my hon. Friend the Member for Bassetlaw (Brendan Clarke-Smith)? The scale of attendance and the passion with which colleagues have spoken speaks to the importance of his advocacy and the issue.
I am standing in today for my right hon. Friend the Minister for Energy, Clean Growth and Climate Change, but I am absolutely delighted to be doing so, for a number of reasons. First, I come from a rural, agricultural constituency that is itself facing the introduction of substantial, industrial-scale infrastructure connected to offshore wind energy. The industrialisation of rural constituencies in pursuit of the noble aims of net zero is a local issue. It is very important and we have to get that planning process right. I have seen that for myself. I also drive through the Cambridgeshire-Suffolk border on my way to my constituency and see the Sunnica proposal, the signs in every field around the area and the concern locally.
As the former Minister for agritech, I am passionate about the importance of this country leading the world in net zero farming and showing how we can pioneer the technologies for and approaches to net zero agriculture. Nobody in this Chamber needs to be reminded that agriculture is the next dirty industry on the block. We are cleaning the energy system, but we will then have to decarbonise agriculture and transport globally. That is a big opportunity for this country.
As the Minister for Science, Research and Innovation, including for fusion, I see it as fundamental to my role to ensure that we turbocharge our drive towards the technological solutions that will allow the planet to grow and develop sustainably in the longer term. I am also committed to the science of the data metrics of sustainable development, by which I mean both agrimetrics, so that when consumers pick up a pint of milk or a piece of British food they are clear about its environmental footprint—that is the best way to reward advanced, progressive farming—and carbon metrics, so that consumers can be harnessed on the journey to net zero, confident that they are making enlightened choices. That requires good science, which a number of colleagues have touched on.
Alicia Kearns
I know that my hon. Friend the Minister is a strong advocate of human rights. He mentions enlightened consumers wanting to know what they are purchasing and what is in their community. Does he agree that we should not install solar panels when we know for a fact that they are being produced in genocidal camps where people are being exterminated? I am talking about the Uyghur in China.
George Freeman
My hon. Friend makes her point powerfully. I absolutely agree that we should not be supplying to consumers and citizens goods whose production involves torture and illegal practices. I am not the consumer affairs Minister, but I will raise that point with those who have that responsibility.
In the time available, I will set out the Government’s policy on solar, acknowledge the 16 very important points made today by colleagues from across the House, summarise the process in terms of disapplication and more broadly, and then make what I hope will be some important and helpful undertakings.
It is striking that, for all the concerns raised today, there is unanimity in the Chamber about the urgency of tackling the climate emergency. I think that everyone present supports the commitment, as enshrined at COP26, to reduce global temperature increase to 1.5°. There is good science behind that, and I think that many comments were made in that spirit. That is why the Government have adopted carbon budget 6, which is the world’s most ambitious climate change goal, to reduce emissions by 77% by 2035—that might sound a long way away, but it is rapidly drawing near—compared with 1990 levels. With limited time until that date, the UK’s electricity supply is in urgent need of decarbonisation. That is why, in the net zero strategy that was published in 2021, the Government committed that all UK electricity will be from low-carbon sources by 2035, subject to security of supply. At the end of my comments, I will come back to some of the changes relating to the global markets, the Ukraine emergency and the Prime Minister’s announcement of a review of energy policy.
I want to touch on the benefits of solar, which merit highlighting. It is a very flexible technology. As my right hon. Friend the Member for West Suffolk (Matt Hancock) has pointed out, we can be proud that we have deployed 99% of solar at huge scale, quite small scale and high scale across the country. Solar generates large amounts of electricity even on cloudy days, and from indirect sunlight. Solar also works at cooler temperatures, so its carbon footprint is normally much lower than that of coal or gas. Most solar panel components can be recycled.
Solar can complement other variable generation sources, such as wind, to balance the grid on summer days when wind speeds tend to be lower. We see solar as key to the Government’s strategy for low-cost energy and decarbonisation, and large-scale solar is one of the UK’s cheapest renewable generation technologies; I will come in my closing comments to where the externalities of cost may lie. That is why in the net zero strategy, the Government committed to a sustained increase in deploying solar in the 2020s and beyond, embedded through the contract for difference scheme.
I want to pick up the points that several colleagues have made, because those points are hugely important and need to be acknowledged seriously. The first was about the scale of what is being proposed. As the equivalent of 4,000 football pitches, this is not a small-scale development or even, by most people’s standards, a medium-scale one. This is huge, industrial-scale development in the countryside. There were fears about a wild west and a solar rush, and about precedent in the planning system—if one of these developments gets approved, it may be a signal that we are locked into precedent. There were concerns, which I share, about the use of good agricultural land and, particularly in the light of the Ukraine situation, about food security.
Concerns were raised about the solar supply chain—both the human rights point that my hon. Friend the Member for Rutland and Melton (Alicia Kearns) made, and the carbon footprint point. There were concerns about the lack of metrics of sustainability, and about taking into account the full externalities of the carbon footprint of developments. There were concerns about the abuse of the local planning system. I have been very struck in my constituency by the fact that because this is critical national infrastructure, the views of local people and local MPs—frankly, anybody locally—are very downgraded. The planning advice states that those local views are important, so I think that there is a real issue there.
There were specific concerns about Rutland and habitat impact, and calls for a clearer national policy on tackling these policy tensions. Points were made about the impact of the Ukraine emergency on food supplies, food security and food prices. Points were also made about the link to surreptitious approvals of, effectively, battery farms in inappropriate locations, about fire risk, about the impact on rural tourism and about the need for better co-location of generation, where possible, with use. My right hon. Friend the Member for South Holland and The Deepings (Sir John Hayes) made a point about beauty, identity and character, which is not just a magnificent ethereal concept; it also underpins tourism in the countryside. Some very important points have been made, and they deserve to be repeated and acknowledged. Forgive me; I am not going to list everybody, but Hansard will report what has been set out.
Matt Hancock
I am grateful to the Minister for giving way, because I have made several interventions. On the point about fire safety, will he take on board, and comment on, the need for transparency about past fires? I should also have mentioned in my speech that the Financial Secretary to the Treasury, my right hon. and learned Friend the Member for South East Cambridgeshire (Lucy Frazer), cannot speak because she is a member of the Government, but she wholeheartedly endorses my views and is a great campaigner for her constituency when it comes to the Sunnica plant—and more broadly.
George Freeman
I will happily pick that point up. My right hon. Friend invites me—wisely, perhaps, given the time—to clarify that at the end of this debate, I will raise all the points that have been made today with the relevant Ministers, including, perhaps, the Minister for fire safety. When such a number of colleagues meet in the Chamber, their points deserve to be heard and passed through.
I want to pick up on the planning point. Colleagues will be aware, but those listening may not be, that planning applications for projects below 50 MW are determined by the local planning system. Many hundreds of them around the country have been approved satisfactorily. Projects up to 350 MW in Wales are devolved, with decisions made either by local authorities or the Welsh Government. Planning in Scotland and Northern Ireland is fully devolved. For projects over 50 MW in England and over 350 MW in Wales, planning decisions are made by the Secretary of State for Business, Energy and Industrial Strategy.
Kevin Hollinrake (Thirsk and Malton) (Con)
Local authorities’ declaration of a climate emergency seems to be overriding the requirement to avoid developments on best and most versatile land. Should there not be an absolute prohibition of solar farm developments on BMVL?
George Freeman
My hon. Friend makes his point well. Let me come to the point I was going to make about planning, which tries to deal with that.
In 2021, the Government set up a national infrastructure planning reform programme, bringing several Government Departments together with the aim of refreshing how the nationally significant infrastructure project regime works to make it faster, better and greener. The Government will shortly consult on reform proposals—we will do so later this year. As a part of that, the Government are reviewing the national policy statements for energy. It seems to me that quite a lot of what has been said today is a call for a clearer national policy statement, and colleagues might want to raise that with the Minister for Energy and the Planning Minister. The draft revised national policy statement for renewables includes a new section on solar projects, providing clear and specific guidance to decision makers on the impact on, for example, local amenities, biodiversity, landscape, wildlife and land use, which must be considered when assessing planning applications. The Government plan to publish a response to the consultation on the revised national policy statement shortly.
Under both local and NSIP planning systems, developers must complete proper community engagement as part of the application process. Communities should and must be able to participate in the formal examination process run by the Planning Inspectorate. All large solar developers under the NSIP must complete an environmental statement for any application, to consider all potential impacts. Planning guidance is also clear that the effective use of land should be prioritised by focusing large-scale solar farms on previously developed and non-greenfield land. It seeks to minimise the impact on the best and most versatile agricultural land. It requires developers to justify using any such land and to design their projects to avoid, mitigate and, where necessary, compensate for impacts.
I am conscious of the time—I think I have one minute left—but I want to highlight that in relation to the planning process colleagues will understand that I cannot comment on the specifics of this individual case, because I do not want to prejudice it in any way. However, we anticipate that once an application is submitted to the planning inspector, it will be 15 to 18 months before it comes back to the Secretary of State after all the various consultations. Interestingly, in terms of precedent —all-important in planning—only one large-scale solar application has been approved, in Kent. One in Wales, Strawberry Hill—devolved, of course—was turned down on the agricultural land use point. I understand that one in Scunthorpe is imminent, and that Sunnica and one or two others are in the pipeline. The point about precedent is important: we all know that when a big decision is made it can trigger a wave of subsequent applications.
Let me close by congratulating and thanking colleagues for coming today. They have raised important points that I will undertake to pass on to Ministers who have responsibility for energy, planning, farming, tourism and fire safety. Colleagues have made a very important case for a stronger and clearer national policy statement, reflecting the situation in Ukraine and the Prime Minister’s emphasis on food and energy security. I will undertake to make sure that the points raised today are picked up by all the relevant Ministers.
Brendan Clarke-Smith
I thank everybody for their outstanding contributions—there are too many to name individually in the time—on energy security, the move to renewables, our energy mix, protecting our countryside, our agriculture, where we get our food from and the importance of solar, while ensuring it is used in the most sensible locations, including brownfield sites. Once again, I thank the Minister, and the Opposition spokesmen, the hon. Members for Aberdeen South (Stephen Flynn) and for Southampton, Test (Dr Whitehead). And I thank you, Sir Charles, for your excellent chairmanship.
Sir Charles Walker (in the Chair)
I thank all colleagues for the generous way in which they have conducted the debate and treated each other. Everyone got in.
Question put and agreed to.
Resolved,
That this House has considered large solar farms.
Allergy Research and Treatments: Government Support
(2 years, 9 months ago)
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Sir Charles Walker (in the Chair)
Order. I will call on Christian Matheson to move the motion, then on the Minister to respond. As is the convention for 30-minute debates, there will not be an opportunity for the Member in charge to wind up. However, I understand that there might be interventions from a couple of colleagues, which I shall take during Mr Matheson’s speech.
Christian Matheson (City of Chester) (Lab)
I beg to move,
That this House has considered Government support for allergy research and treatments.
It is a great pleasure to see you in the Chair today, Sir Charles. I was at the Chester gang show not long ago, and was looked after very well on an excellent evening by a gentleman called Tim McLachlan. Tim, it turns out, runs the Natasha Allergy Research Foundation, a memorial foundation that campaigns on allergy research. The House will remember that Natasha Ednan-Laperouse was the victim of an allergy. She ate a sandwich with sesame in it and died on an aircraft. It was an utter tragedy. In memory of her, her parents set up the charity that Mr McLachlan now runs, which really caught my imagination.
Yasmin Qureshi (Bolton South East) (Lab)
I thank my hon. Friend for giving way, and for securing the debate. He referred to a young lady called Natasha; I want to refer to my own niece who, because of her allergy, ended up on a ventilator machine three times in the space of three years.
Christian Matheson
That is an awful situation. I pay tribute to my hon. Friend’s family. That three times in three years is a shocking statistic, which we will come back to because there is a burgeoning rise in allergic disease in the UK. It is an issue of great importance to people across the country, as the recent parliamentary petition demonstrated. Indeed, I thank the Petitions Committee for incorporating that petition into the debate.
It is estimated that here in the UK one in three people are living with allergies and 3 million with food allergies. It is not only about food allergies. I was contacted today by a lady called Sue. She, her daughter and her grandson have a latex allergy. Her daughter has had to write, on behalf of her son—Sue’s grandson—to all the manufacturers of school sportswear equipment to find out whether their equipment contains latex, because of that allergy. Her daughter has lost 3½ stone in two years because of her allergies and has finally, after about two and a half to three years, got a treatment. However, it should not take that long.
Jim Shannon (Strangford) (DUP)
I congratulate the hon. Gentleman on securing the debate. My second son was born with allergies, and has just the one now—I am thankful that he managed to grow out of some of them. Does the hon. Member agree that as one in four people suffer from some type of basic allergy, and have to live their lives with medication to deal with the symptoms, we must see extra investment into research on the varied multitude of allergies that people are suffering from throughout the UK?
Christian Matheson
I thank the hon. Gentleman for that intervention. I absolutely agree. Research shows that in the 20 years to 2012, there was a 615% increase in hospital admissions in the UK for anaphylaxis, a potentially life-threatening allergic reaction mainly caused by food allergies.
Members may be familiar with a tragic list of recent fatalities, mostly of young people, from anaphylaxis: Sadie Bristow, aged nine; Shanté Turay-Thomas, 18; Karanbir Cheema, 13; Ava-Grace Stevens, nine; James Atkinson, 23; Owen Carey, 18; Ellen Raffell, 16; and, of course, Natasha Ednan-Laperouse, 15. Those are just some of the entirely avoidable deaths we have witnessed in recent years.
Thankfully, because of the powerful campaign run by Nadim and Tanya Ednan-Laperouse, Natasha’s parents, we now have a new allergen and ingredient-labelling law in the UK, known as Natasha’s law. It will save lives and prevent others from suffering the terrible grief that those families will always bear. I pay tribute to the Government in this case for their swift response in ending the loophole in the law that Natasha’s death—caused by sesame seeds hidden in a baguette—exposed. I am sure that the Government’s actions on that are welcomed throughout the House.
Much more needs to be done. I will highlight two areas where I challenge Ministers, in this time of great need, to rise up and offer real hope to hundreds of thousands of families who live daily with the fear of a loved one suffering a severe—or worse, fatal—anaphylactic reaction: research and treatment. Turning to the latter, for too long allergy services have been the Cinderella services in our healthcare system. There is a national postcode lottery, and too many patients take too long to get specialist appointments, as we heard from Sue who emailed me. There are too few specialist allergy clinics, too few specialist allergy doctors and consultants and too little training for GPs. The pathway between GP and hospital allergy services is deeply disjointed. No specific treatment for allergies is readily available in the UK, and an individualised avoidance strategy with an adrenaline auto-injector is the only practical advice offered. That negatively affects quality of life.
The care that people with allergies receive is at best patchy, and at worst has led to avoidable deaths. Without greater priority given to allergies, those problems will continue and sadly more lives might be lost unnecessarily. Those are just a few of the reasons why colleagues on the all-party parliamentary group for allergy recently published their excellent report calling for the appointment of a national lead on allergy. I thank my hon. Friend the Member for Dagenham and Rainham (Jon Cruddas) for his dedicated work and leadership on the matter—he may seek to intervene later in the debate.
That is also the view of the Ednan-Laperouses’ charity, the Natasha Allergy Research Foundation, which has ran an excellent campaign calling for an allergy tsar. That was also the topic of the petition considered in this debate —someone to work across Government to tackle those issues. It is fair to say that the allergy community—patients, families, charities and the clinicians—are united as one in believing that there is an urgent need for a national lead to be appointed. I know that the Minister of State recently met members of the APPG and the national strategy group. I ask the Minister what plans the Government have on the appointment of a national lead on allergies. I hope that the Minister can provide the leadership and drive that the allergy community has called for.
Turning now to the matter of research, I urge the Minister to respond to the request from the Natasha Allergy Research Foundation for a meeting, sent in early January. There is a strong belief in the scientific community that, given the right amount of research funding, in the next couple of decades treatments can be found that could potentially eradicate allergies. I am aware that the Natasha Allergy Research Foundation intends to be a lead player in the research field and in its mission to make allergy history. I take the opportunity to thank everyone at the foundation for all the crucial work they have already done in the field. I understand that they will shortly announce their first research project, a £2.2 million study across five university hospital sites in England. That investment is roughly the same as the Government have donated as a whole to allergy research funding over the last five years.
If I may quote the Minister, on 29 October, she stated:
“Over the past five years, the Department of Health and Social Care has awarded the National Institute for Health Research over £2 million for research into food allergies.”—[Official Report, 29 October 2021; Vol. 702, c. 597.]
I am fearful that this is not sufficient. Without enough funding, there is not enough research. Without research, there is no treatment. Without treatment there is no change for the millions of people and families affected. I ask the Minister why, given the acknowledged growing epidemic of allergies in this country, research funding is not being given a significantly higher priority? Why is research into food allergic disease so underfunded compared with other diseases? Will the Minister consider other areas of allergy such as, for example, the case of latex that I mentioned earlier?
I am aware that the Food Standards Agency is undertaking a research programme into food allergy and intolerance, but it is not researching cause and prevention or developing treatments. I am also aware that the Department for Education is currently running a food standards pilot. However, flying in the face of the evidence from staff in our schools of a food allergy epidemic, it has not even bothered to include food allergy in its remit. That is another example of how individuals with food allergies are being forgotten and excluded. That is another reason why, as the petition states, we need an allergy tsar to work across all the Departments and Government agencies.
The Natasha Allergy Research Foundation is heavily leveraging the major food companies to help fund and play their part. They cannot do that work alone. I, and many others, believe that the Government now need to show direction and deliver investment into food allergy research, including cause, prevention and treatments. We need to be moving, and at pace. We should not be waiting for other young lives to be tragically lost before we step up to the mark.
Jon Cruddas (Dagenham and Rainham) (Lab)
I rise to make a couple of quick points.
I commend my hon. Friend the Member for City of Chester (Christian Matheson) on his outstanding speech. He mentioned the scale of allergic disease and the epidemic that we are witnessing across the country, and he listed some of the tragic deaths from anaphylaxis. While welcoming Natasha’s law, he acknowledged how much more needs to be done on research and treatment.
In this regard, the recent report, “Meeting the challenges of the National Allergy Crisis”, made four general recommendations on treatment: first, as my hon. Friend mentioned, a national plan for allergy, led by a designated civil servant or NHS lead; secondly, an expanded specialist workforce to ensure training programmes that prioritise allergy; thirdly, to ensure all GPs and healthcare professionals in primary care have adequate knowledge and training about allergic issues; and fourthly, ways for local commissioners to understand and address the allergy needs of their local populations.
My hon. Friend touched on all those points, but he also opened up new ground in this debate on the question of research, which I welcome. We could eradicate allergies with appropriate financial support and Government backing. The £2.2 million from the Natasha Allergy Research Foundation is vital. I commend the family on everything they have done over the last few years. They are literally matching total Government research spend. As my hon. Friend said, surely we can do better than that and become a global leader in research to overcome this epidemic.
I have spent many years engaging with Ministers from different Governments on this subject, Sir Charles, but the present Minister has already demonstrated real commitment to this agenda. Consequently, we have a work programme and an ongoing dialogue between civil servants and representatives from the National Allergy Strategy Group. I commend the Minister for this, but I urge her to go further and faster, and positively respond to the comments made by my hon. Friend the Member for City of Chester on research expenditure. Lives depend on that, as well as the quality of life of many millions of our fellow citizens.
The Minister for Care and Mental Health (Gillian Keegan)
It is a pleasure to serve under your chairmanship, Sir Charles. I thank the hon. Member for City of Chester (Christian Matheson) for securing this debate on this important issue and the hon. Member for Dagenham and Rainham (Jon Cruddas) for his comments. In my short few months in this role, we have already talked about this important topic on a number of occasions. I take it very seriously and I appreciate the tone in which this debate is taking place.
Allergies affect around 20 million people in the UK. Thankfully, most allergic reactions are mild and people can manage their symptoms effectively. However, for some people, as we heard from the hon. Member for Bolton South East (Yasmin Qureshi) when she spoke about her niece, management of allergies can be complex and reactions to allergens can be severe and cause much distress, and can even, sadly, be fatal on some occasions.
For people living with allergies, everyday activities can be challenging and navigating the world can be an anxious experience. The Government recognise the challenges faced by people with allergies and are committed to ensuring that all children and adults living with allergies are well supported.
As has been mentioned, investing in research is a key component in supporting people living with allergies. It plays a vital role in providing those working in the NHS, public health and social care with the evidence they need to better support parents and families, and supports access to pioneering treatment, diagnostics and services.
The Department of Health and Social Care funds research through the National Institute for Health Research. In the past five years we have provided the NIHR with over £14.1 million in funding for research into allergies. We would welcome funding applications for research into allergies, including potentially into more unusual types of allergies, as more funding is available but on an application basis. There has been a wide breadth of research across the life course on a range of allergic conditions, from hay fever, eczema and allergic or atopic asthma, to food and drug allergies, which can cause severe anaphylaxis, as has been mentioned.
In addition to directly funded projects into allergies, the NIHR clinical research network also supported the recruitment of participants into 79 studies of allergies over the past five years. In 2020-21 alone, the NIHR biomedical research centres had 56 active projects related to allergies, and those projects can make a real difference to people’s lives.
One trial of a new peanut oral immunotherapy treatment in children showed a high rate of desensitisation, with many of the participants able to consume a very small quantity of peanuts following the treatment. The families involved in the trial said that oral immunotherapy had transformed their lives, reducing anxiety and allowing them more freedom in terms of food choice.
Further research is being carried out into the effectiveness and safety of immunotherapy to see whether it can be used to help others. For example, there is a project looking at peanut oral immunotherapy in adults and another investigating cow’s milk oral immunotherapy in babies. I know those will be welcomed by many people. I am very much struck by the stories of Monty and Arlo, which I took to heart, and by the anxiety felt by the children having to deal with this on a daily basis. I am also struck by the maturity with which they both approached it.
In terms of new treatments, in December last year NHS England announced that children in England will be the first in Europe to receive Palforzia, a life-changing treatment for peanut allergies, after NHS England secured the first deal of its kind in Europe. The National Institute for Health and Care Excellence published its final guidance on Palforzia in February 2022, so it is very recent. Up to 600 children aged four to 17 are expected to benefit from the treatment this year, with that number rising to as many as 2,000 in 2023.
It is important that, while we continue to look for treatments, we also consider how best we can support families living with allergies.
Dr Dan Poulter (Central Suffolk and North Ipswich) (Con)
My hon. Friend is right to highlight the advances in allergy treatment. I congratulate the hon. Member for City of Chester (Christian Matheson) on securing this debate and the hon. Member for Dagenham and Rainham (Jon Cruddas) on his work in this area over a number of years.
May I push the Minister on one point? The key challenge for many families is access to diagnostics and the link between primary and secondary care. As well as highlighting many of the successes, will she outline what more can be done to improve timely access to diagnostics for families?
Gillian Keegan
I appreciate my hon. Friend’s intervention and will go directly to that point. General practitioners are responsible for ensuring that their own clinical knowledge remains up to date and for identifying learning needs as part of their continuing professional development. I am sure he is aware of that. That activity should include taking into account new research and developments in guidance. All doctors are expected to meet those standards, and the Royal College of General Practitioners has developed an allergy e-learning online resource to support continuing professional development and revalidation, which aims to educate GPs about the various presentations of allergic disease to aid with diagnosis. We appreciate that that has to go through a large number of GPs.
I was talking about families living with allergies. Other NIHR-funded research at the University of East Anglia is developing a psychological toolkit that aims to help parents to learn skills to manage their own anxiety around their child’s food allergy, as well as addressing children’s anxiety. We know that people with allergies are often advised to avoid the substance that they are allergic to, but we also know that that is not always easy or practical, and we have seen tragic examples of where that has not been the case—indeed, Natasha was mentioned. The Government are taking steps to protect those with allergies and intolerances. That includes the introduction of Natasha’s law, named after that sad case, which came into force on 1 October 2021, making it a legal requirement for all food retailers and operators to display full ingredient and allergen labelling information on every food item they sell that is pre-packed for direct sale.
Additionally, food hypersensitivity, which includes food allergies, is a strategic priority for the Food Standards Agency. As an evidence-based organisation, the FSA has been at the forefront of world-leading research, which has had a significant impact on our understanding of food. The FSA is currently undertaking a programme of work to improve the quality of life for people living with food hypersensitivity and provide support to make safe, informed food choices to effectively manage risk. The Medicines and Healthcare products Regulatory Agency is also planning next steps to support the wider availability of adrenalin auto-injectors in public spaces. We have had debates on that here as well. That is a medicine used for the emergency treatment of severe acute allergic reactions. We know there is more to consider about how we might protect people further.
I know that this issue matters to many Members, and to many constituents. I thank all hon. Members for the points they have made and the continued discussion we have had on this topic. I hope they will accept that real progress is being made. I hope I have been able to assure them that we will continue to support people living with allergies through NIHR research and exploring and investing in new treatments. With the engagement and involvement of patients and the public across the country, I hope we can improve the lives and outcomes for everyone living with allergies and their families.
Question put and agreed to.
Smart Road Pricing
(2 years, 9 months ago)
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Elliot Colburn (Carshalton and Wallington) (Con)
I beg to move,
That this House has considered smart road pricing.
It is a pleasure to serve under your chairmanship, Sir Charles. I thank the House of Commons Library, the Transport Committee, whose report is tagged on to the debate, members of the Greater London Authority, and many others who helped with the research ahead of the debate. I also thank Members of all parties who have shown an interest in speaking in today’s debate, and I look forward to hearing everyone’s contributions.
Before I bite into some of the meat of this policy, I want to briefly set out some of the constituency context in Carshalton and Wallington. The London borough of Sutton is ranked 29th out of the 33 London boroughs for transport infrastructure, and that includes the City of London. Sutton is the only borough in London that does not have access to a London Underground station, a London Overground station or Crossrail, nor it is not on the map for Crossrail 2. According to a report from City Hall, Sutton is the least-funded transport borough in the entire city. As we might expect, given that it is on the geographical fringes of London, Sutton has some of the highest private car ownership and usage rates in the capital. Put bluntly, Carshalton and Wallington residents rely heavily on cars for their work and personal life, and any policy that impacts on road transportation impacts on my constituency and constituents. As we work towards achieving our net zero ambitions, we must ensure that we strike the right balance for our constituents in order to create truly sustainable alternatives to high-emission modes of transport.
Road pricing—or road charging, as it is sometimes known—essentially involves making a direct charge for the use of a road or network of roads. Sometimes that charge is based on certain factors, such as the distance travelled, the time at which one is travelling, or the environmental impact of the journey, which relates to the vehicle itself. Of course, road pricing is not a brand-new concept. Much of the modern road network in my constituency of Carshalton and Wallington—I feel like I am going back to my maiden speech here, but I hope the House will indulge me—was built around historic toll roads. The Carshalton to Ewell turnpike was built in the 1750s and is still an arterial route going through my constituency today. It is known better as the A232, Carshalton Road, Croydon Road or the high street, which is an historic road that passes between the picturesque Carshalton ponds and All Saints Church, which has been in situ for over 1,000 years.
Thankfully, the toll road, like so many others, has been consigned to the dustbin of history. However, we are seeing calls for a resurrection of road charging across not just London but much of the UK. Londoners will know very well about the congestion charge and the ultra low emission zones, which I get regular complaints about from constituents, who describe the impact that such zones have on their journeys in and out of the capital. We have also recently heard about potential plans for a Greater London boundary charge, which would mean that those living just outside London, rather than Londoners specifically, would pay between £3.50 and £5.50 to enter the capital. That was heavily lobbied against and has now been taken off the table as a potential option.
As part of the consultation, however, Londoners are now being asked to share their views on extending the ultra low emission zone from the North and South Circulars, to which it has recently been expanded, to the whole of Greater London by the end of next year. However, it does not stop there. Plans were also announced in a report commissioned by the Mayor of London, which recommended the introduction of smart road pricing in London as early as mid-2020. That was further reinforced by an exchange that took place between the Mayor of London and Assembly members during a question time session about Transport for London’s finances.
In order for us to have a comprehensive debate on this issue, it is important to distinguish between road pricing in its broadest form and smart road pricing specifically. Smart road pricing uses technology to charge users based on the following factors: the distance driven; vehicle characteristics, such as the type, its emissions, the weight, the axles and so on; the time of day, day of the week or even time of the year that the car is being driven; and the segment of the road being used. In very simplistic terms, smart road pricing could take a number of forms. It could look like a taximeter fitted into private vehicles, with a charge sent directly to City Hall, or other regional authority, every time it is used. More likely in the early stages of this technology, it could look like a smartphone app, which allows the car to be started when someone wants to use it.
Smart road pricing has become an area of interest in discussions around net zero, although at City Hall discussions have predominantly focused on its potential for TfL finances. The main sources of revenue that fund roads and other Government spending are vehicle excise duty and fuel duty, which are predicted to decline due to decarbonisation, essentially the replacement of the internal combustion with electric vehicles. That revenue represents about 1.5% of UK GDP, and zero-emission transport has the potential to wipe out that funding. I appreciate that that presents a dilemma. How do we decarbonise transportation while continuing to raise money and invest in roads and other public spending commitments?
I can see why the Select Committee on Transport has already done work in this area. I will not dive into every detail of its report, but I want to highlight its findings. The Committee made a number of recommendations, including that smart road pricing must be a national project, not a regional one. It concluded that we must wait for technology to be ready to implement such a project. It stressed that there must be no additional costs to drivers, compared with current fuel and vehicle excise duty. Most importantly, for my constituents at least, it must be subject to public consultation. That is serious for my constituents, because they have experienced so many examples of schemes being implemented when they have said no in a consultation. If we want to have faith that the public’s views will be listened to, that simply must not be allowed to happen.
We are presented with a glaring problem. If we price people out of their vehicles, without potential alternatives available, we will not just be hitting people’s pockets by charging them more to use private vehicles; we could be costing them their livelihoods. They might no longer be able to afford to use their private cars, with no alternative available. Rather than looking into this scheme, I urge the Government and regional authorities to revisit their public transport offer. I hope the Minister can tell us how the Government will address the dilemma and future-proof our road networks in a way that is fair to all road users.
Sarah Olney (Richmond Park) (LD)
It is a pleasure to serve under your chairmanship, Sir Charles. I welcome this debate and congratulate the hon. Member for Carshalton and Wallington (Elliot Colburn) on securing it. He will be interested to know that the Liberal Democrat leader of Sutton Borough Council would agree with many of the points he has raised. She wrote to the Mayor recently about this issue, highlighting the points raised by the hon. Member for Carshalton and Wallington about the lack of public transport in Sutton and how that needs to be addressed before further plans for road pricing can be progressed.
The hon. Gentleman’s constituency and mine face many of the same issues. My constituency also lies in the suburban outskirts of London and has relatively high car usage. I certainly sympathise with some of his remarks and concerns about taxes imposed on car users. My constituents also have reservations about the ultra low emission zone, which has been in place since late October and cuts right through the middle of my constituency. I welcome any move to improve air quality, but it has created issues by cutting people off from essential services such as Mortlake crematorium and Townmead recycling centre.
Despite my reservations about the arbitrary boundary divisions of the ULEZ, I firmly believe that action needs to be taken to dissuade car usage. I am strong advocate for the implementation of a simpler, fairer and more sustainable road pricing solution. London is extremely congested, our air quality is poor, and current levels of car usage cannot be maintained if we are to achieve our net zero goals. A report published by the Greater London Authority earlier this year found that car traffic must reduce by at least 27% across the capital, in order to achieve net zero by 2030.
There is a cross-party consensus that some kind of road pricing scheme that charges motorists on a per-mile basis would be beneficial, especially in London. It now seems inevitable that such a scheme will be implemented in due course. Current taxes on fuel and vehicle ownership will raise nearly £37 billion this year, but those revenues will dwindle as fossil fuels are replaced by zero-emission alternatives. The need for change is pressing if the Government are to retain current levels of tax revenue while also reducing toxic air pollution and cutting congestion.
The majority of road users would be set to benefit financially from smart road pricing. Those who are not high mileage users would bear only a small cost if other road charges and vehicle excise duty were removed.
Dr Dan Poulter (Central Suffolk and North Ipswich) (Con)
The hon. Member is making some good points about London, but I urge her to think about the solution recommended by the Transport Committee that this should be at national level. Certainly, those people who live in rural communities and counties outside metropolitan areas could be very adversely affected by per-mile road pricing. It could, in fact, put people out of work; it could affect the ability of families to take their children to school and all sorts of other issues. I urge her to look at that and consider it in the suggestions and remarks she makes to the Minister.
Sarah Olney
The hon. Member raises an important point. What we are trying to achieve is a certain amount of equity. He is absolutely right about the contrast between rural and urban car usage and ownership. Although my remarks focus on what might be best for my constituents, I accept that it would be an entirely different matter in his part of the country. Per-mile road usage charging may not be the most equitable solution across the country. Certainly, for my constituents, a per-mile scheme would mean less cost than now in terms of the taxes they pay on petrol and vehicle excise duty.
Polling undertaken by YouGov for the Institution of Civil Engineers in 2019 suggested that a pay-as-you-go model of road pricing has popular support—47% of British adults stated that they would support a pay-as-you-go model if it replaced both vehicle excise duty and fuel duty, and just 23% opposed. For those living in urban areas, the first means of transport should automatically be public transport but, presently, in constituencies such as Richmond Park, and Carshalton and Wallington, public transport is both underfunded and unreliable.
It is not right that those who use cars simply because they have no other practical way of getting around should face large increases in taxes. Any new road pricing scheme must also be matched with adequate investment in public transport. In London, that begins with a long-term funding settlement for Transport for London. Constituencies on the outskirts of London require a central London-style public transport system that allows my constituents and others to travel across the borough and between neighbouring boroughs easily and quickly, in order to decrease car usage.
In addition to public transport options being made available, they must also be accessible and affordable. This month, the Government have increased rail fares by 3.8%, with another increase set for July. The Liberal Democrats have proposed to scrap this rail fare increase and to further implement a five-year freeze on fares to encourage people in urban areas out of cars and on to trains. If residents in urban areas are properly supported to reduce car usage through increased availability of affordable public transport, a smart road pricing scheme can offer a fair alternative to current vehicle and fuel duties. Such a scheme will be coming in some form. In principle, I think we can all agree it is necessary.
The conversation must now focus on how we can best support our constituents to reduce car usage and to ensure that the design of any road pricing scheme is given adequate consideration. Consultation must be undertaken with key stakeholders to avoid unfairly disadvantaging car users with no other practical means of transportation.
Gareth Bacon (Orpington) (Con)
It is a pleasure to serve under your chairmanship, Sir Charles. I thank my hon. Friend the Member for Carshalton and Wallington (Elliot Colburn) for securing this important and increasingly topical debate.
Finding new ways to justify charging motorists to drive their cars is becoming increasingly fashionable among certain politicians in this country, especially in London. Just last week, the Mayor of London, Sadiq Khan, announced a consultation on expanding the ultra low emission zone to the Greater London boundary. He claims, of course, that it is to do with air quality and congestion, but it is not.
I am holding up a map taken from Transport for London’s website at the time when it was investigating setting up the ultra low emission zone. There is a colour code. Yellow is the legal limit for air pollution in London. The worse the air gets, the redder or more orange the map gets; the better the air gets, the bluer or greener it gets. As hon. Members can see, bad air quality is located in central London, around Heathrow airport and on some of the trunk roads into and out of those areas. There is not bad air quality outside the North and South Circulars or in outer London.
The expansion of the zone is actually about raising revenue—not surprising, given the financial mess that Transport for London is in. It is true, of course, that the pandemic hurt Transport for London grievously, and it would not be sensible to deny that. However, a catalogue of blunders preceded the pandemic, such as the unaffordable fares freeze, which, by its own calculation, cost Transport for London at least £640 million although likely much more. There was the failure to maximise the commercial revenue for Transport for London and of course the complete mess that Sadiq Khan made on the oversight of Crossrail. The Mayor’s TfL business plan was predicated and extremely reliant on the revenue that Crossrail was going to deliver if it was on time and on budget. But thanks to the Mayor’s failure to adequately scrutinise Crossrail despite his role as chairman of Transport for London, which is the overseeing body, TfL is now short of billions of pounds of fares revenue that it would otherwise have raised.
Expanding the ultra low emission zone to the Greater London boundary will have shattering consequences for people living in outer London. It will cost the owner of an older vehicle who uses it every day £4,500, even before they have paid for fuel or road tax. That will hit everybody, of course, but the poorest Londoners—those less able to replace their vehicles—will be hit hardest.
Sarah Olney
I just want to challenge the hon. Gentleman on the point that the charge will hit everybody. Obviously, I have experience of ULEZ coming into my constituency. It applies only to diesel vehicles and petrol vehicles over a certain age. I was worried about the impact, but I have to say that the number of people actually affected has been much less than I thought.
Gareth Bacon
The hon. Lady is correct. The charge will hit petrol vehicles registered in 2006 or before; as I just said, poorer Londoners will own those. It will hit diesel vehicles registered in 2014 or before. A car registered in 2014 is not particularly old. I had a diesel vehicle that was registered in 2012, which I got rid of the minute Sadiq Khan was elected Mayor of London. I knew that the charge was coming, that it would be unaffordable and that there would soon be no second-hand market for the vehicle. I was fortunate enough to be able to afford a newer car, but many people in London will not be able to, and the charge will hit them. The point that I have made using the map in my hand is that the charge will be hitting them completely unnecessarily.
There will be a devastating hit on an economy struggling to recover from the pandemic—for no reason. This is the thin end of the wedge. We know that Sadiq Khan’s ultimate ambition is to introduce road pricing in London. He has not hidden that. The letter to every London MP accompanying the announcement of the ultra low emission zone actually said that his ultimate objective was to replace all forms of charge in London with a road pricing scheme. The Mayor’s transport strategy of 2018 says that he will give consideration to the development of
“the next generation of road user charging systems. These could replace schemes such as the Congestion Charge, Low Emission Zone and Ultra Low Emission Zone. More sophisticated road user charging…could be used to contribute to the achievement of the policies and proposals in this strategy…to help reduce congestion on the road network and support efficient traffic movement. In doing so, the Mayor will consider the appropriate technology for any future schemes, and the potential for a future scheme that reflects distance, time, emissions, road danger and other factors in an integrated way.”
In the same document, which is revealing of the Mayor’s thinking, he says that people need to address
“the fundamentally inadequate and unfair way in which road use is paid for in London, with motorists paying too little, and in effect being subsidised by public transport fare payers. Measures such as road user charging (where appropriate), land value capture and the devolution of financial powers to local level are essential to delivering an efficient and fair funding system.”
I want to concentrate on the claim that motorists are subsidised by public transport users. That claim simply does not stack up. Setting aside the fact that most Londoners use a mixture of travel modes and cannot easily be categorised as motorist, pedestrian or cyclist, it is notable that at the time at which the strategy was launched, the Transport for London annual bus subsidy amounted to £722 million and, in addition, Transport for London provided in excess of £318 million for concessionary travel across its network, taking the level of publicly funded subsidy to well over £1 billion per annum. By contrast, London’s 2.6 million drivers were collectively paying £1.9 billion in motoring taxes, so I do not see how the Mayor can make the claim that motorists are being subsidised by public transport users. It is actually very much the reverse.
For many people, driving represents freedom. We should not be sanguine about the state seeking to undermine people’s ability to get into their own car and drive directly to wherever they want to go. Owning or having access to a car can significantly increase an individual’s travel opportunities, but road pricing is a policy that seeks to curb, undermine or remove that.
I would like to make a further point regarding freedom and it touches on a point that my hon. Friend the Member for Carshalton and Wallington made in his introductory remarks. The technology required to make this form of road pricing work would almost inevitably have to include some form of global navigation satellite system technology. In other words, there would have to be in every vehicle a black box that would be capable of identifying exactly where each car had been located at any given time. That creates both practical and civil liberties considerations.
In practical terms, there is the question of how the technology would be imposed on those driving in London—if indeed we are talking about road pricing solely in London. Currently, some British motorists choose to install a black box in order to get cheaper car insurance, but a situation in which the technology was mandatory would be very different. How would the Mayor ensure that anyone who wished to drive in London had a black box in their car? Londoners drive around London, but people from outside London also drive across the Greater London boundary, so how would that work? Trying to introduce road pricing in Greater London alone, rather than in the whole of the UK, would be, as has been touched on by colleagues, fraught with difficulties for that very reason. In terms of civil liberties, many people would be very uncomfortable with the idea that the state might be able to track their every move via their car. As yet, that issue has not been addressed by anyone advocating any form of road pricing.
Therefore there are significant economic, practical and civil liberties problems with this idea, but it is the impact on people’s everyday lives that merits the highest consideration. If Sadiq Khan tries to force Londoners out of their cars by increasing the cost of driving, he will inevitably catch those who have little choice but to drive. Even if there are exemptions for specific individuals —for example, blue badge holders—there will still be ordinary Londoners who need to drive but can no longer afford to do so. For a great many of my constituents, in common with those of the hon. Member for Richmond Park (Sarah Olney) and of my hon. Friend the Member for Carshalton and Wallington, a car is an essential feature of their everyday lives, not least because there are few genuine alternatives for many journeys. In much of outer London and particularly in south London, the choice for those using public transport is the train or the bus. Trains are mostly a radial option; they are very useful for travelling into central London, but they are of little use if people want to make an orbital journey. Buses are much more useful for orbital journeys, but by their very nature, they are both relatively slow and often indirect. Many Londoners feel that their car is their best option for journeying outside London. That is particularly the case when the public transport alternative would involve travelling into central London and then out again. Road pricing, even if applied only to the London-based section of a journey, would increase the cost of those journeys without doing anything to improve them.
In conclusion, it is not a surprise that the current Mayor of London would prefer to squeeze more money out of Londoners and, ideally, outer Londoners, who are less likely to vote for him. Nor is it a surprise that he should seek to dress this cash grab up with high-minded justifications about air quality and emissions. Such a policy is fraught with difficulties and has so many downsides that it should be a non-starter, but if the Mayor of London decides to proceed with expanding the ultra low emission zone or, worse, introduce per-mile road charging, the Government should step in and stop him.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
It is a pleasure to see you in the Chair once again, Sir Charles. I congratulate the hon. Member for Carshalton and Wallington (Elliot Colburn) on securing the debate. He started by making a strong point—I am not sure whether it was about his constituency or whether it was about Sutton being the only London borough without a tube station. I have sympathy with that, growing up and living for most of my life in Renfrew, which is the largest town in Scotland without a train station. I thought that he made a powerful contribution at the start of the debate.
The hon. Member for Richmond Park (Sarah Olney) said that the case for change was pressing, if we are to maintain taxation levels and reduce road transport’s carbon footprint; Members will hear from my speech that that is something I wholeheartedly agree with. She also referenced the report by the Institution of Civil Engineers, which means I do not have to; for the purposes of time, I am grateful for that.
The hon. Member for Central Suffolk and North Ipswich (Dr Poulter), who is no longer in his place, made an important point about the difference between rural and urban. Any scheme that came in would have to take that difference into account, and there would have to be variations or exceptions for those in rural areas for that very reason.
The hon. Member for Orpington (Gareth Bacon) clearly had issues with TfL and the Mayor of London, but he made a very stark point about the £4,500 cost before running costs of any other expansions of ULEZ. I should declare that I am a member of the Transport Committee, which the hon. Member referenced in terms of road pricing. It is true: we said recently that there is no viable alternative to road pricing moving forward—certainly that we can see at the moment. The hon. Member for Central Suffolk and North Ipswich also reiterated the point that the scheme must be national. Unless he meant Scotland having a national scheme, that is something I have a slight disagreement with, but I will come on to that later.
If road pricing is to be workable, it needs to be part of a wholesale review and replacement of our complex taxation system. The current arrangements are increasingly not fit for purpose in the 21st century, with a system that—apart from some tweaks and amendments over the decades—is, at its core, the same system that has been in place for nearly a century.
Net zero and reducing carbon emissions are obviously policies that go far beyond transport. They straddle all aspects of our society. Reducing car usage, improving public transport and developing active travel as a real alternative to private transport will have a huge impact on us all and on how we live our lives. Getting people out of cars is intrinsically linked to improvements in public transport, which, in turn, helps to support our town and city centres; again, in turn, that helps to develop local economies and provide better employment in our communities.
With private cars accounting for around 40% of transport-related emissions, bringing down levels of car usage is a key strand in the Scottish Government’s drive towards a net zero society. Their target—which, I admit, is hugely ambitious—is to reduce overall car kilometres by 20% by the end of this decade. There is no doubt that it is a tough target, but it will result in huge gains in carbon reduction if it can be met.
To salami slice road pricing as something that can be leveraged to promote those reductions while leaving other policy levers in the hands of the DFT and Treasury —as we have seen with buses, aviation and, notably, trains, for the last 20 years or so—is a recipe for delay and the danger that our large-scale ambitions will not be met. To have a situation where portions of charging and taxation policy are devolved while some remain at Westminster is a recipe for confusion and, above all, being unable to fully realise the potential that could be unleashed with the full devolution of powers over motoring taxes to the Scottish Parliament—the Minister probably did not expect me to say anything less.
Sales of electric vehicles are at record levels, despite—I would say—the UK Government’s policy at times. While we have some way to go to match the astonishing progress in countries such as Norway, the trend is clear: EVs are replacing internal combustion engines and, by 2032, every car sold will have to be zero-emission. As that switch happens, the revenues from fuel duties will drop at an ever-increasing pace; as overall emissions from private vehicles drop, so too will revenue from vehicle excise duty based on CO2 emissions without further reform. The Transport Committee heard evidence that, without action, taxation revenues from motoring will drop to zero by 2040 if UK targets for net zero are met. Clearly, that is neither sustainable nor healthy for road users or our wider economy.
I do not pretend that the transition to a modern taxation regime will not involve a real and sometimes difficult national debate and conversation about vehicle taxation and its impact on motorists and other road users; one has only to look at the debate around a workplace parking levy in Scotland at the moment. However, the alternative is a long-term disaster on our roads, for our environment and for our wider economy. The transition must include: as I said, the full devolution of power over motoring taxation—all taxation, if in the Minister’s power, but certainly motoring taxation—to the Scottish Parliament.
The enhanced incentivisation of the extra grants for home chargers, a scheme whose scope the UK is inexplicably slashing in April, and interest-free loans, along with significant investment in much more comprehensive electric vehicle charging infrastructure in Scotland, compared with most of England, serve to highlight the differences in policy and, more importantly, the urgency with which it is delivered. Without the taxation powers to tie together the changes in duty revenue, however, along with the wider policy objectives of the move to net zero, the Scottish Government are fighting with one hand tied behind their back. Yet still, over the past 10 or 20 years, they have outperformed the UK Government on all those metrics.
Transferring full control over vehicle and motoring taxation to the devolved Administrations will allow policy to reflect the different pace at which things are moving. On nearly all indices, Scotland is outstripping the rest of the UK in the transition to net zero, and yet the fiscal and financial framework in which the Scottish Government have to operate is stuck in the last century. It takes little to no account of the different priorities of the respective Governments.
To conclude, the Chancellor has made a commitment in writing to the Scottish Government to engage with Scottish and other devolved Governments on motoring taxation. I hope that the Minister will get the ball rolling for colleagues as quickly as possible, to ensure that serious discussions can take place with the devolved Administrations on how and when those powers can be transferred to Holyrood, Cardiff and Stormont as timeously as possible. What might work for Greater London—Greater London has been mentioned a lot in this debate—cannot be copied and pasted into Scotland or Wales. To sum up, I hope that the Minister will provide us with an update on that proposed engagement.
Today alone, we have seen action by the Irish Government, temporarily cutting fuel duty by 15 cents and 20 cents for petrol and diesel, respectively—to help the haulage industry and to keep the cost of living down. Whether that should happen here is a debate for another day, but it shows how a Government with the will and the power to act quickly in the face of changing circumstances can take real action on motoring and haulage costs. Road pricing and the renewal of modern motoring taxation will give Governments here in Westminster and in Edinburgh the opportunity to respond and react far more nimbly and responsively to such challenges and to provide the kind of support needed by road users and industry alike. I urge the Minister to speed her colleagues along in delivering the road taxation system of the future.
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
It is a pleasure to serve under your chairmanship, Sir Charles.
I congratulate the hon. Member for Carshalton and Wallington (Elliot Colburn) on securing this important debate. It comes at an extremely important time, following the COP26 conference and a renewal of global efforts to reduce our reliance on the use of fossil fuels. I also take this opportunity to thank the much respected Transport Committee for its work exploring the issue and its recommendations. Some hon. Members have concentrated their remarks on London—rightly so, as they are fighting on behalf of their constituents. However, the problem is a much wider national one, and the solution required must also be national.
The Labour party welcomed the Government commitment to ban the sale of new petrol and diesel vehicles by 2030, for which we had been calling for some time. As electric vehicles become more accessible to consumers and charging infrastructure improves, the prevalence of electric cars and vans on our roads will increase sharply, in particular as we approach 2030, thereby impacting on tax revenue. We need to look carefully at funding shortfalls because of the increase in electric vehicles, but we must ensure that grants and support schemes are available for those making the change.
Grants for electric vehicles were cut twice last year, falling by half. The upper price limit for eligible models also fell twice, first to £35,000 and then to £32,000. That is down from £50,000 in March. Similar grants for small vans also fell. As someone who made the transition to an electric car a couple of years ago, I personally attest to the benefit, both environmentally and financially. Serious concerns, however, remain on the lack of charging points, with only a fifth of what will be needed by 2025 currently installed. Manufacturers, planners and council officials have all been critical about the slow progress in providing charging points. Last year, a survey conducted by the Local Government Association of 84 local authorities found a lack of coherent strategic direction at the national level and no vision of clarity on the role that local authorities play in delivering charging points.
The Competition and Markets Authority has determined that a third of households will rely on public infrastructure—those without access to a drive or a garage, where installation of a charging point is more difficult. It has criticised the roll-out as too slow and said that it has resulted in a postcode lottery. The analysis shows that of the 5,700 charging points, only 1,000 are outside London. For example, the total number of charging points per head in Yorkshire and the Humber is a quarter of those in London.
I want to draw attention to several aspects of the report, which the Labour party welcomes. We welcome the recommendations, mentioned by the hon. Member for Central Suffolk and North Ipswich (Dr Poulter), who is no longer in his place, to consider the impact on vulnerable groups and those in rural areas who are more reliant on their own personal vehicles. We also welcome the report’s inclusion of the need to encourage people to use active travel or public transport options.
There are some aspects of smart road pricing that I ask the Minister to address in her remarks. Smart road pricing would rely on the installation of a telematics device in vehicles. As the hon. Member for Orpington (Gareth Bacon) mentioned, people may not actually wish for one to be installed as they are fearful of a Big Brother society. How will the Government address this balance of privacy and data collection? In implementing a new scheme, it is important that motorists are part of a conversation and do not feel that a new scheme costs them more. The Government must ensure that any proposals do not add to the already desperate cost of living crisis faced by people across our country. Will the Minister commit to ensuring that any proposals brought forward are part of a wider conversation?
Finally, another consideration is that some schemes around the world have higher rates for driving during peak times or when using arterial routes. No conversation on the future of clean transport and road pricing can be had without considering public transport, as hon. Members have rightly mentioned. Just a year ago, the Prime Minister and the Transport Secretary launched the “Bus Back Better” strategy. They pledged a great bus service for everyone, everywhere. They promised it would be one of the great acts of levelling up. That was the ambition. The £3 billion of transformation funding was supposed to
“level up buses across England towards London standards”
with
“main road services in cities and towns to run so often that you don’t need a timetable”.
There would be
“better services in the evenings and weekends”
and
“simple, cheap flat fares that you can pay with a contactless card, with daily and weekly price capping across operators, rail and tram too.”
In reality, across the length and breadth of our country and particularly in the north-west, many are counting the cost of broken promises. A letter sent to local transport authority directors by the Department for Transport on 11 January made clear that the budget for the transformation of buses—a pot from which local regions can bid for funds—has now shrunk from £3 billion to just £1.2 billion for the next three years. Towns and cities across the country have put forward an ambitious blueprint to use buses and rail to connect people to jobs, families and opportunity, and to tackle the climate crisis in the process. They have plans, despite the challenges, to completely overhaul and reregulate the bus network as part of the bus service improvement plan.
Labour leaders in power in towns and cities nationwide have real ambition to reverse the decline we have seen under the Tories. They want to build a London-style system and make buses quicker, cheaper, greener and more reliable, but they need a Government that matches their ambition. Now it is becoming clear that, far from matching the ambition of our communities, the Government have pulled the rug from under them. Will the Minister own up and admit what the Transport Secretary will not—that many areas will now not see a single penny of this transformation funding?
Will she detail exactly how much local transport authorities are set to see in transformation funding and will she come clean that there will be areas that will miss out altogether? Will she also commit to building a public transport system that helps our transition to a cleaner, greener economy?
The Parliamentary Under-Secretary of State for Transport (Trudy Harrison)
It is a pleasure to serve under your chairmanship, Sir Charles. Despite having the title “Smart Road Pricing”, the debate has been wide-ranging. I pay tribute to my hon. Friend the Member for Carshalton and Wallington (Elliot Colburn). I know that he has now mentioned his constituency in Parliament well over 100 times; he is an excellent champion for the area, which was clear in the way that he described the challenges it has faced.
I turn to some of the measures that were raised, almost in reverse order. The shadow Minister, the hon. Member for Slough (Mr Dhesi), veered on to the subject of electric vehicle charging. That is not strictly the subject of the debate, but with your permission, Sir Charles, I will briefly explain that we have 27,000 public chargers in the UK, of which 5,200 are rapid chargers. Project Rapid would see a minimum of six rapid chargers of 150 kW or more at all 170 motorway service areas in England.
We know that we need 10 times the charging infrastructure that we have at the moment. I am pleased that the hon. Gentleman welcomed the Government’s decision to phase out the sale of new petrol and diesel cars. I would like to clarify that that is not a ban on the sale of petrol and diesel cars; it is a phasing out of their sale from 2030. I accept that the sale of second-hand petrol and diesel cars will continue for many years.
On the subject of road pricing and how we rely on our roads, my hon. Friend the Member for Orpington (Gareth Bacon) expressed the challenges faced by people who cannot afford to upgrade their car but who desperately need to use it, whether because of their job, their shifts, the route they need to take or where they live in the country. I represent a rural area in the Lake district and my four daughters would not be able to do the jobs they do if they depended on public transport alone, so I have incredible sympathy for people’s need to continue to use cars, whether privately, via car clubs or through other ways that enable people to travel when they need to.
We rely on the roads for journeys not just in cars but on buses. The shadow Minister said that our spending has reduced from £3 billion to £1.2 billion. If he had listened to the debate that I responded to earlier, he would have heard me set out quite clearly how that £3 billion is being used. That was another debate, so I will let him look at that this evening.
Trudy Harrison
I will not, because time does not allow.
There is significant public interest in road pricing and its potential to either enhance or interfere with the way we live our lives. Any proposal must not just be smart about how people really live; it will be about technology too, but the priority is how people get to the places they need to get to.
London already has several road-user charging schemes in operation, introduced by Mayors past and present. These schemes deliver against policy objectives to reduce congestion and tackle air pollution in the capital. Before speaking to the current Mayor’s plans to extend those charges, I will say something about road pricing in local areas more generally.
I thank the Scottish National party spokesperson, the hon. Member for Paisley and Renfrewshire North (Gavin Newlands), for the work that he has done on the Transport Committee, which I look forward to speaking to next week. Once again, the Committee has provided a comprehensive report. We certainly appreciated the work that the Committee did on smart motorways, and we really value the time, effort and dedication of its members.
Road pricing is a broad term. It can be applied to any charge levied directly for the use of roads, as opposed to more indirect duties based on vehicle ownership or fuel. Examples of road pricing include tolls for using a specific road, bridge or tunnel; charges designed to reduce congestion or to discourage the use of the most polluting vehicles in a defined area; and methods of charging vehicles according to how far they are driven, at what time and on which road. That includes the smart road pricing we are discussing. To come back to the comments made by my hon. Friend the Member for Orpington, road pricing must be done in a way that is fair and does not discriminate against people because they have to travel further due to where they live or the job they do, or because of their ability to upgrade to a cleaner vehicle.
In England, the Department for Transport has policy responsibility for tolls and charging zones, although in most cases such charges are applied and managed by others, such as local highways authorities or private companies. Transport in London is of course devolved to the Mayor of London and Transport for London. That includes decisions on road user charging in the capital. General motoring taxation across the United Kingdom is the responsibility of Her Majesty’s Treasury. As with other taxes, any changes are considered and announced by my right hon. Friend the Chancellor. Consequently, I will discuss the position on road pricing only at local level in England, including in London, rather than any potential to apply road pricing nationally.
Road pricing in the UK has taken the form of tolls, congestion charging and low-emission zones. All the tolling operations continue to use toll booths and barriers, which force vehicles to slow or stop to pay with money or an electronic tag in the windscreen. In contrast, charging zones introduced over the last 20 years have relied on cameras and automatic numberplate recognition to record when vehicles enter the zone. Motorists are required to pay online, through an app, by phone or in person at a participating outlet.
A local smart road pricing scheme would involve going a step further, making use of the latest technology to set, administer and enforce a more targeted charging structure. That does not necessarily mean the use of black boxes. As the mother of four daughters who taught them all to drive, I understand some of the challenges of black boxes, or telematics more generally. However, one option—it is not the only option—would be to use in-vehicle technology to record aspects of a vehicle’s use. For example, the time, distance or place of the journeys made could be recorded and used to calculate the cost of each specific journey. However, that would not be straightforward to implement locally, and not only from the technical and administrative perspective, which alone would be significant.
It would also be important to ensure proper balance between simplicity of use and understanding by motorists, and effective detailed design to unlock the greatest potential traffic management benefits. Any design would need to reflect people’s interests in ensuring fairness, freedom and privacy, and account for issues around the cost of living, supporting small businesses, and helping people.
Last Friday, the Mayor of London confirmed that he has asked TfL to consult on expanding the existing ultra low emission zone London-wide, aiming to move London towards a greener future and net zero carbon emissions by 2030. TfL and the Mayor will need to progress that through public consultation, and I heard what my hon. Friend the Member for Carshalton and Wallington said about his disappointment in those consultations seemingly not taking notice of his constituents. I very much hope that they will be listened to.
Back in January, the Mayor of London also said that he is looking at a new kind of road-user charging scheme to implement in London by the end of the decade at the latest. The scheme would look to charge drivers per mile, with different rates depending on how polluting vehicles are, the level of congestion in the area, and access to public transport. The Mayor has said that such a scheme could replace all existing road-user charges, such as the congestion charge and the ULEZ. The technology required for such a scheme means that the earliest date that it could be implemented would be 2025 to 2026. As I have said, transport in London is devolved to the Mayor of London and TfL. That includes decisions on road-user charging.
I conclude by thanking hon. Friends present, and in particular my hon. Friend the Member for Carshalton and Wallington for bringing forward the debate. This is a complex matter, and we do not have answers to the questions at the moment, but I appreciate the willingness of Members present to think about the future of taxation and how the transition from a fossil fuel transport system to a decarbonised economy will work in practice. We are all interested in understanding what new technology can offer to improve traffic management and reduce the impact of road use on the places in which people live and the environment that they love; however, technological capability is certainly not the whole picture, and any proposal for road pricing needs to help people to live their lives and run their businesses well.
Elliot Colburn
I thank all Members for taking part in today’s discussion, which has centred on London. I am sure that my hon. Friend the Member for Orpington (Gareth Bacon) and the hon. Member for Richmond Park (Sarah Olney) would agree that we do not get to talk about London very often in this place, so it makes a nice change.
There has been a lot of talk throughout the debate about the environmental benefits of a potential smart road pricing scheme, but to come back to a point raised by my hon. Friend the Member for Orpington, the discussion in London is centred very heavily, if not prominently, on TfL’s finances and not on air quality or the environmental impact. The Lib Dem Assembly member who has been pushing for this measure in City Hall did so on a question around TfL’s finances, but I welcome the fact that the shadow Minister, the hon. Member for Slough (Mr Dhesi), said that he agreed with the Transport Committee that it should be national. I therefore look forward to him telling the Mayor of London that the Labour party does not support his efforts to try to introduce the measure in London alone.
Question put and agreed to.
Resolved,
That this House has considered smart road pricing.
Written Statement
(2 years, 9 months ago)
Written StatementsRead Full debate Read Hansard Text
Online Advertising Update
(2 years, 9 months ago)
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The Parliamentary Under-Secretary of State for Digital, Culture, Media and Sport (Chris Philp)
I am today, along with my right hon. Friend the Minister of State for Security and Borders (Damian Hinds), announcing a package of work regarding the regulation of online advertising.
Recognising the devastating impact of scam adverts on people in the UK and the need for immediate action, the Government will be making a change to the Online Safety Bill to require the largest online platforms and search services to implement proportionate systems to prevent the publication of fraudulent adverts on their service.
This change responds directly to calls from the Online Safety Bill Joint Committee, the Treasury Select Committee and the Work and Pensions Select Committee, as well as others, who recommended that the Online Safety Bill be used to combat online fraudulent advertising.
The new duty will apply to the services that are designated as category 1 and 2A services: the largest user-to-user and search services. This will ensure that people using the largest platforms and where there is greatest risk of harm are protected from scams, and ensure these services do not profit from illegal activity. Ofcom will create and publish specific codes of practice that will set out how services can comply with the new duty.
In addition, the Government will publish a consultation on the Online Advertising Programme, to seek views on a range of options for regulatory reform to improve transparency and accountability across the online advertising supply chain. Led by my colleague, Julia Lopez MP, the Minister for Media, Data and Digital Infrastructure, the aim of the programme is to create a more holistic approach to regulating online advertising that builds trust and tackles the underlying drivers of harm in online advertising.
In relation to fraud specifically, the Online Advertising Programme will address whether other actors in the supply chain, such as intermediaries, have the power and capability to do more. It will focus on the role of intermediaries in onboarding criminal advertisers and facilitating the dissemination of fraudulent content through using the targeting tools available in the open display market. This will ensure that we close down any vulnerabilities and add defences across the supply chain, leaving no space for criminals to profit.
The Online Advertising Programme’s wider objective is to determine whether the current regulatory regime is sufficiently equipped to tackle the challenges posed by the rapid technological developments in online advertising. The consultation identifies a broad range of both illegal and legal harms to consumers, including misleading and offensive content, as well as fraudulent adverts. It also looks at the impact of targeting and placement of adverts and how these practices can exacerbate harmful content for consumers. The roles and responsibilities of all actors involved in the supply chain of online advertising will be considered as part of the consultation.
Any subsequent changes to regulation of online advertising as a result of the consultation will build on the fraud-specific duties in the Online Safety Bill. This will ensure a coherent, comprehensive regulatory framework for all actors across the online advertising supply chain, where individuals are protected from harmful online advertising content, wherever they encounter this.
Together, the Online Safety Bill and Online Advertising Programme will complement the Government’s wider reforms on competition, data protection and user-generated content, ensuring that the online advertising market—which is at the heart of our digital economy—protects consumers and users while continuing to thrive.
[HCWS667]
Grand Committee
Arrangement of Business
The Deputy Chairman of Committees (Lord Faulkner of Worcester) (Lab)
My Lords, Members are encouraged to leave some distance between themselves and others and to wear face coverings when not speaking. If there is a Division in the Chamber, which I am not expecting, the Committee will adjourn when the Division Bells are rung, and resume after 10 minutes.
Social Security Benefits Up-rating Order 2022
(2 years, 9 months ago)
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Baroness Stedman-Scott
That the Grand Committee do consider the Social Security Benefits Up-rating Order 2022.
The Parliamentary Under-Secretary of State, Foreign, Commonwealth and Development Office and Department for Work and Pensions (Baroness Stedman-Scott) (Con)
My Lords, I am required to confirm that the draft Social Security Benefits Up-rating Order 2022 and the draft Guaranteed Minimum Pensions Increase Order 2022 are compatible with the European Convention on Human Rights and I am happy so to do.
The Social Security Benefits Up-rating Order increases state pensions and benefits by 3.1% from April 2022, in line with the increase in the consumer prices index in the year to September 2021. This represents an additional £4 billion of expenditure on benefits for pensioners and £2.6 billion on benefits for people below state pension age in 2022-23. In November 2021, Parliament passed the Social Security (Up-rating of Benefits) Act, which made amendments to the Social Security Administration Act 1992, setting aside the earnings link in the state pension triple lock for the year 2022-23. This was in response to exceptional circumstances caused by the distorting effects of the pandemic on the earnings statistics used in the triple lock formula. Setting aside the earnings element is temporary, only for one year. We are committed to reapplying the triple lock in the usual way from next year and for the remainder of the Parliament.
From April 2022, the basic state pension will rise to £141.85 a week for a single person. This means that the basic state pension will be over £2,300 per year higher in cash terms than in April 2010. The full rate of the new state pension will increase to £185.15 a week and additional state pensions and protected payments in the new state pension will also increase by 3.1%. The pension credit standard minimum guarantee for a single pensioner will rise to £182.60 a week and the rate for a couple will rise to £278.70 a week. The personal and standard allowances in jobseeker’s allowance, employment and support allowance, income support and universal credit will increase by 3.1%. Certain elements linked to tax credits and child benefit will be increased in line with those payments. The monthly amounts of universal credit work allowances will also increase in April to £344 and £573.
Benefits for unpaid carers and those who have additional costs as a result of a disability or health condition will increase by 3.1%. These benefits include disability living allowance; attendance allowance; carer’s allowance; incapacity benefit; personal independence payment; the carer and disability-related amounts in pension credit and other means-tested benefits; the employment and support allowance support group component; and the limited capability for work and work-related activity element of universal credit.
I am aware that the noble Lord, Lord Davies of Brixton, has tabled a regret Motion against the uprating order and I respect his position on the matter. The regret Motion will be debated at a later date, but today we must agree the uprating order to ensure that my department can introduce the new rates of benefits and pensions from 11 April.
The Guaranteed Minimum Pensions Increase Order provides a degree of inflation protection for members of formerly contracted-out defined benefit occupational pension schemes. It requires schemes to increase guaranteed minimum pensions built up from April 1988 to April 1997. As set out in primary legislation, a guaranteed minimum pension in payment must be increased in line with the increase in the general level of prices as at September 2021, which was 3.1%, or 3%, whichever is less.
To conclude, with the Social Security Benefits Up-rating Order, the Government propose to spend an extra £6.6 million in 2022-23 on increasing benefit and pension rates. Furthermore, the Guaranteed Minimum Pensions Increase Order increases the guaranteed minimum pension by 3% in line with primary legislation. I beg to move.
Baroness Lister of Burtersett (Lab)
My Lords, it was tempting to do no more than recite the contributions from the Conservative MPs who spoke on the social security order in the Commons, as they said much of what needs saying about this shamefully low increase in social security benefits in the face of forecast inflation of 6% to 7.25% this April, which will go even higher later this year following the horrifying assault on Ukraine. It does not take a mathematician to work out how a 3.1% increase will mean a significant cut in benefits’ real value, without even taking account of the differential impact of inflation on people on low incomes, who spend a disproportionate amount of their income on the basics of fuel and food.
The Government’s answer to the cost-of-living crisis has been widely criticised as inadequate and poorly targeted towards those who will suffer most, including by the Conservative MP Peter Aldous in the Commons debate on the order. A huge increase in fuel poverty is now predicted, despite the measures taken. Why have the Government ignored the calls from a wide range of organisations, including the Institute for Fiscal Studies, the Resolution Foundation, Citizens Advice and the Joseph Rowntree Foundation, to raise benefits by 6%, 7% or even 8% in line with the anticipated inflation rate? At the relaunch of the book by the noble Lord, Lord Freud, Neil Couling of the DWP said that it would be technically feasible to do so for universal credit. Even if it is not possible to do this for other benefits immediately, recipients could presumably be given a delayed uprating or a lump sum grant in lieu.
Had the Government listened to us in the autumn when we debated the triple lock Bill, this would of course have been less of an issue, though at that point we had not anticipated inflation going quite so high. It is clear that the current uprating mechanism, based on inflation around half a year earlier, is not fit for purpose, as the Resolution Foundation, the IFS and Nigel Mills MP, in the Commons debate, have argued. Will the Minister undertake to take back the message that there needs to be a review of the uprating procedure?
To return to the immediate crisis, in order to understand just how damaging this uprating will be, we need to put it into context, as the noble Lord, Lord Freud, made clear in the debates on the triple lock Bill. It is a context in which benefits have been cut or frozen for much of the period since 2010. Families with children have been particularly badly hit, thanks to the two-child limit and benefit cap, described by the noble Lord as “excrescences” that should be got rid of. It is worth noting here that, according to the Child Poverty Action Group, of which I am honorary president, 180,000 families will see no benefit increase next month because of the cap, which has not been uprated at all since it was set in 2016.
Moreover, the withdrawal of the welcome £20 uplift means that the Government will have been responsible for two cuts in the real value of benefits in under six months, as pointed out by the JRF. It estimates that 400,000 people could be pulled into poverty by the April cut. However, the underlying issue is the inadequacy of benefits to meet people’s needs. I quote the Tory MP, Nigel Mills, who is a member of the Work and Pensions Committee:
“I genuinely fear that many of the benefits we have are now lower than people need, so a lower than inflation rise for benefits that are already too low leaves people in an impossible position … It should not be a big challenge or a contentious point of debate to want to ensure that the benefits we are giving the poorest in society are enough for them to live on”.—[Official Report, Commons, 7/2/22; cols. 723-24.]
There is plenty of research that shows that all too often they are not. It was a recurrent theme in the Covid Realities research, conducted by a number of universities in association with the CPAG. It underlined that inadequate benefits contribute to the insecurity that many people living on benefits feel. One participant, when asked how she felt about the withdrawal of the £20, answered that she was “terrified”. She explained:
“We only started to claim universal credit in the middle of the pandemic due to my husband being made redundant, so up until recently I had no idea we were in receipt of any ‘uplift’ … To be told that now all of a sudden £86 per month will be taken is horrifying.”
Another participant commented:
“I’d like people to think about why it was necessary to introduce a £20 uplift … Surely this is an acknowledgement in itself that the support given to low-income households just isn’t enough for them to live on.”
Evidence about the inadequacy of the benefits received by disabled people can be found in the NatCen report on the uses of health and disability benefits that the DWP tried to suppress but which was eventually published in an unprecedented move by an exasperated Work and Pensions Committee, although a whistleblower revealed that some references to “unmet need” had already been excised following pressure from the department. While overall the ability to meet needs depended on the extent to which recipients had other sources of income, those of limited financial resources reported often not being able to meet not only health-related needs but also essential day-to-day living needs such as heating their house or buying food.
The Minister in the Commons, Chloe Smith, disputed such a reading of the research, arguing that it showed that
“health and disability benefits … help to meet almost all identified areas of additional need.”—[Official Report, Commons, 7/2/22; col. 666.]
But helping to meet needs is not the same as being sufficient to meet them. The health and disability Green Paper made no mention of the question of benefits adequacy. As Minister with responsibility for research in the DWP, will the noble Baroness give us an assurance that the White Paper will do so, taking account of this research which was commissioned by the DWP? Will she take back the message that we need a proper review of the adequacy of social security benefits more generally?
In conclusion, the Minister in the Commons tried to reassure MPs that there was nothing to worry about because of the smoothing effect, which meant that this April’s inflation rate would be reflected in next year’s uprating. However, Torsten Bell of the Resolution Foundation dubbed it more of a “rollercoaster” on yesterday’s “Today” programme—anything but smooth. The Minister demonstrated his complete lack of understanding of what it is like to struggle on a low income. If you are already facing difficulties feeding your children adequately and keeping your home warm, it is no help or comfort to know that today’s rocketing inflation rate will be smoothed out in benefit rates in a year’s time. Indeed, some of those affected might not even be claiming some of those benefits in a year’s time, so they will, in effect, have been cheated of what is arguably rightfully theirs. I urge the Minister not to use the smoothing argument in her response because, frankly, it is cruel when parents and others on benefits are worried sick about how they are going to manage and she is not a cruel woman.
Lord Jones (Lab)
My Lords, it is good to follow an informed speech. The uninitiated may find, as I do, these many details in so many pages difficult to follow. One finds on page 34 of the order, in Schedule 5, that Regulation 20(9)(c) refers to an enhanced disability premium of £25.35 concerning polygamous marriage. My reference is not an objection but an instance of facts buried in the necessary but challenging minutiae. But it is heartening to read of increases, for example, in adoption, maternity, bereavement and disability benefits. The late Lord McKenzie—Bill—is surely watching over this Committee. All this was made for the late, lamented Bill. He always mastered regulatory detail.
Lord Shipley (LD)
My Lords, I thank the Minister for introducing this uprating order. The problem is that the combination of rising inflation and tax rises is creating a cost-of-living crisis that will affect practically every household in the UK but will be especially difficult for those on low incomes who make use of welfare payments.
Before the crisis in Ukraine, the Resolution Foundation reported that an average family will see household budgets reduced by £1,200 a year through a combination of soaring energy prices, the freezing of the income tax personal allowance and the rises in national insurance and council tax. Those on low incomes will find it hardest to make ends meet, because the major benefits are due to go up in line with a lagged measure of inflation. The September CPI rate had it at 3.1%, whereas the Bank of England expects inflation to peak at 7.25% in April and to average around 6.2% in the course of 2022—and all that is before the impact of the crisis in Ukraine is taken into account. Many commentators are forecasting an inflation rate for the UK of more than 10% later this year.
The Government really must not allow a situation to develop that means a deep cut in benefits year on year for people less able to withstand the impact of the rising cost of living. For example, those who must use meters to pay for their gas and electricity will be put under even greater financial strain because of their high cost compared with other methods of payment.
Even before the impact of the Ukraine crisis on the cost of living, this policy would have led to a £290 real fall in benefit income year on year for the 10 million households in receipt of these benefits. That would be an unacceptable cut in the incomes of millions of people who are already among the most vulnerable. The Spring Statement later this month provides an opportunity for the Chancellor to do something about this crisis, which was unnecessarily deepened by the removal of the £20 per week boost to universal credit.
Paragraph 12.1 of the Explanatory Memorandum on impact is hopelessly out of date. The assertion that the
“impact on business, charities or voluntary bodies is negligible”
is flawed. The impact will be very great, particularly on charities and voluntary bodies, which will see a huge increase in demand for their help as prices rise steeply and real incomes decline for millions of households.
I hope that the Minister will agree that this uprating order is out of date and that the Spring Statement needs to bring proper solutions to the deepening crisis in our cost of living and its impact on those with low incomes.
Baroness Sherlock (Lab)
My Lords, I thank the Minister for introducing these orders and all noble Lords who have spoken. I agree with my noble friend Lord Jones that it would have been preferable had the uprating order been taken in the Chamber. Many of the orders that we deal with are technical; this one affects the incomes of some 20 million people at a time when we have never seen a cost-of-living crisis like this. Had it been taken in the Chamber, we perhaps would not have had a regret Motion, but here we are.
I thank my noble friend for mentioning my late and much-lamented noble friend Lord McKenzie. Every time we gather here, we miss him very much. I just wanted to read his name into the record.
First, a word on the guaranteed minimum pensions order, which is rather more technical. I have raised the question of equalisation in most previous years, but we have had a new development. A new Private Member’s Bill has just arrived in the Lords from the other place that aims to address the legal uncertainty that the current legislative situation can pose when a pension scheme tries to adopt a process for addressing GMP equalisation. The Government smiled on it at the other end. At Second Reading in the Commons, the Pensions Minister, Guy Opperman, accepted that what the Bill does is key because it
“gives the Government the ability to set out in regulations the details of how survivor benefits will work for surviving spouses or civil partners of people with guaranteed minimum pensions.”
He also made the point that the Bill
“gives the Government the ability to set out in regulations details about who must consent to the conversion of guaranteed minimum benefits.”—[Official Report, Commons, 26/11/21; col. 627.]
The Minister confirmed, at col. 628, that the Government backed the Bill. However, when the Commons got to Third Reading on 25 February—a long gap—he said:
“The reality is that there is no real way for my hon. Friend’s Bill to get through this House and the House of Lords in the time allowed”.—[Official Report, Commons, 25/2/22; col. 659.]
The Government have accepted that there are problems to be addressed on the matter of GMP equalisation, so can the Minister assure the Committee that if that Private Member’s Bill fails to get through, the Government will none the less speedily moved to address the outstanding issues?
I turn to the Social Security Benefits Up-rating Order, which we gather to debate every year, except of course during the years of shame, when the Government refused to update social security benefits as they should have done. I cannot remember a year when the context was so worrying for so many people. The cost of living is rising so fast that even those on middle incomes are struggling and it is a catastrophe for those on lower incomes. People are genuinely frightened about how they are going to manage. Demand for help from food banks is already skyrocketing, as it is for financial advice and debt support. The noble Lord, Lord Shipley, made a good point that the Explanatory Memorandum had not taken account of the impact on those organisations.
Baroness Stedman-Scott (Con)
My Lords, I start with an apology. In my opening comments, I said the Government propose to spend an extra £6.6 million in the uprating order; it is actually £6.6 billion. Forgive me.
I thank all noble Lords who took part in today’s debate. I am not a bit surprised by the points that have been raised and completely agree with all noble Lords that we are in a difficult position. People are struggling and it is not nice to see.
The noble Baroness, Lady Lister, gave me my homework to take back to the department. I give her my word that I will take back every issue and make sure that people understand the sense of injustice that the noble Baroness and others feel. She and other noble Lords mentioned the cost of living. We have begun our recovery from the pandemic, but things have been exacerbated by the ongoing conflict in Ukraine, which is putting an additional strain on households. We are coming out of the pandemic and trying to work on that but have been further hammered by that position.
We have taken steps to ease financial pressures. The noble Baronesses, and the noble Lords, Lord Jones and Lord Shipley, will tell me that we have not done enough, but we have not done nothing. We have raised the national living wage, reduced the universal credit taper rate, increased work allowances and provided £140 million a year in discretionary housing payments and cold weather payments of £25 a week to up to 4 million people. These will have made a difference, but there is clearly more to do in the current situation.
The noble Baroness, Lady Lister, raised the point about the justification for using the September CPI figure. The Secretary of State undertakes an annual review of benefits and pensions, and the consumer prices index for the year to September is the latest figure the Secretary of State can use to allow sufficient time for the required legislative and operational changes before new rates can be introduced at the start of the next financial year. All benefit uprating since April 1987 has been based on the increase in the relevant price inflation index in the 12 months to the previous September.
As noble Lords have already said, uprating affects over 20 million customers and there are interdependencies across government. The DWP needs all benefit rates to be confirmed by the end of November, plus all the subcomponents of those benefits, so that the first IT system can be uprated in December. Any deviation will have significant implications for citizens, potentially resulting in underpayments or no payments being made. Given the volumes involved, the technical and legislative requirements and the interdependencies across government, it is not possible to undertake the uprating exercise any later than currently timetabled.
Baroness Lister of Burtersett (Lab)
If that is the case, how come it was possible to add £20 to universal credit at such short notice? If such a long lead-in time is needed, and I recognise that a longer time is needed for legacy benefits—but not necessarily that long—how come it was possible to uprate universal credit by £20 in a matter of weeks during the pandemic? As I said, according to Mr Couling of the DWP, universal credit can be uprated at very short notice. As my noble friend said, that is supposed to be part of its agility. There is growing pressure on the department to look again. I quite understand that it has been like this for X number of years, but we now have more powerful computers and so forth. I really think that the DWP should look at it and see what might be possible, because we may well be going into a longer period of volatile inflation.
Baroness Stedman-Scott (Con)
I think that the noble Baroness appreciates that the UC system is more modern and able to do things, but her point about the £20 uplift is already on my list to take back to the department. I will write to the noble Baroness and place a copy of the response in the Library.
The noble Baroness, Lady Lister, the noble Lord, Lord Shipley, and others raised the issue of inflation and anticipating peaks. Benefits are paid over the course of the year and looking at the peak alone is a little misleading. Any move to implement a mechanism to anticipate peaks would require a mechanism to do the same to account for troughs. DWP believes that this kind of complex adjustment mechanism is not appropriate. For shorter-term shocks such as the current energy price increases, the Government have other responses which do not permanently commit the taxpayer to fund higher benefits.
The noble Baroness, Lady Lister, mentioned disability benefits. The department is considering contributions to the Green Paper and it would not be right for me to prejudge now what might be in the White Paper later this year. I shall talk to the Minister for Disabled People, Chloe Smith, and pass on the points.
The noble Lord, Lord Jones, as ever, took us on focused journey to Wales. It is a wonderful country—I am sure that my noble friend Lady Bloomfield, who is no longer in her place, would agree. I would get myself into a lot of trouble, which I know the noble Lord would not want, if I started talking about devolution and what might happen.
Lord Jones (Lab)
So as to avoid trouble, would the Minister undertake to write as best she might on the points that I have raised, having put on the record not only points about devolution?
Baroness Stedman-Scott (Con)
I shall certainly write about the points raised by the noble Lord in relation to the uprating order, but I shall also try to do a little better and write to DLUHC and ask it to answer those points, if that is all right with him.
The noble Lord, Lord Jones, made a valid point about people not getting by. While I cannot promise anything—I can promise only to talk to colleagues—I am absolutely confident that the Secretary of State and others realise the difficulties that people are in. More than that I cannot say because I do not know, but the point will be made.
I say to the noble Lord, Lord Shipley, that the impact assessment refers to direct costs to charities and private sector organisations as employers. The order brings direct costs to the Exchequer but not to employers. The noble Lord spoke about people who use meters, the keys and how much more expensive that system is. I know that people are fully aware of that. It is not ideal.
Baroness Sherlock (Lab)
I thank the Minister; I definitely have not had that answer before. In her mind, then, what is the point of this debate?
Baroness Stedman-Scott (Con)
The point of the debate is to approve the order. Here we go.
Baroness Sherlock (Lab)
Perhaps the Lord Chairman will allow me a little licence. I understand why the Minister said that, but I want to get to the bottom of what it is we think we are doing here. So the computers are changed in December and, if either House rejects this order, the increase goes ahead anyway; it just does not have any legal underpinning. Perhaps I have been spoiled, but I am accustomed to thinking that, when the House is asked to take a decision, that has a consequence: if we say yes, something happens; if we say no, something does not happen. This is the first time that I have been aware of being asked to take a decision and being told that, if we said no, it would not make any difference. Does the Minister not think that that is a little unusual?
Baroness Stedman-Scott (Con)
Further information: if the House votes the order down, that is a sign that the Government must change the process.
Baroness Sherlock (Lab)
May I suggest a pay rise for whichever member of the cavalry sent a note in her direction? To be clear, we will not oppose the order. I just wanted that point to be clear and I thank her very much.
Baroness Stedman-Scott (Con)
I am not giving pay rises, I can assure the noble Baroness.
Lord Shipley (LD)
Before the Minister sits down, she raised two matters in response to what I said. Perhaps she would arrange to write about the high cost of meters. That might be able to be adjusted in the interests of those who are paying higher costs. It is the kind of thing that would sit very nicely in the Spring Statement. Secondly, I take up the issue of the impact on businesses, charities and voluntary bodies. Paragraph 12.1 of the Explanatory Memorandum states that it is negligible, but of course all those organisations will have to employ more staff to deal with the huge rise in queries that they will get.
Baroness Stedman-Scott (Con)
As I said, I fully appreciate the issue of people who use keys to pay their energy costs, which are higher. Let me take that back as a special project. I will speak to the Secretary of State, who I will see tomorrow, and she may well have a thought on that. When it comes to the Spring Statement, all noble Lords tell me to speak to the Treasury. I have nothing to tell your Lordships about the Spring Statement; we will have to wait to see what, if anything, comes out in relation to this. I take the point of the noble Lord, Lord Shipley, about charities, but that is an indirect effect, if it happens. I cannot add more than that at this stage.
The noble Baroness, Lady Sherlock, talked about poverty, a subject that we have discussed many times. The Government are committed to a sustainable long-term approach to tackling poverty, and to supporting people on lower incomes. We will spend £110 billion on welfare support for people of working age in 2021-22. With around 1.29 million vacancies across the UK, our focus is firmly to support people to progress into work as the best way to substantially reduce the risks of poverty.
I know that there are people who cannot work, and I know the passion with which the noble Baronesses, Lady Lister and Lady Sherlock, and others talk about us wanting to help that group. Our multi-billion-pound plan for jobs, which has been expanded by £500 million, is helping people across the country into work. I know that our new Way to Work programme has raised some issues. As I have said before, when I opened the jobcentre in Hastings, the staff were alive with the freedom that it would give them to do more, and in more detail, to help people at the lowest point of their lives. I trust those work coaches implicitly to do what they can and, more importantly, to feed back if something is not working so that we can fix it.
The noble Baroness, Lady Sherlock, asked whether I still believed a Statement that I made. Perhaps she can write to me, as I did not quite catch the context. I will be very happy to write back.
Baroness Sherlock (Lab)
If the Minister reads Hansard, that might cut out a stage.
Baroness Stedman-Scott (Con)
I shall do so. The noble Baroness also raised the benefit cap not being increased. Again, there is a statutory duty to review the levels of the cap at least once in each Parliament. I am advised that this will happen at the appropriate time.
Baroness Lister of Burtersett (Lab)
Given that we have asked about the benefit cap a few times during this Parliament, can the Minister tell us what the “appropriate time” will be?
Baroness Stedman-Scott (Con)
I am afraid that I cannot. I am sorry.
On support for people affected by the benefit cap, as I have said, our work coaches are cognisant of all these things, and I am sure they will try to find people work that helps them and alleviates some of the impact of the cap. Claimants can also apply to their local authority for a discretionary housing payment if they need help to meet rental costs.
The noble Baroness, Lady Sherlock, talked about the Private Member’s Bill. The Government continue to support this Bill and hope that it achieves Royal Assent in due course. I thank all noble Lords for their contributions.
Guaranteed Minimum Pensions Increase Order 2022
(2 years, 9 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Stedman-Scott
That the Grand Committee do consider the Guaranteed Minimum Pensions Increase Order 2022.
Goods Vehicles (Licensing of Operators) (Amendment) Regulations 2022
(2 years, 9 months ago)
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Baroness Vere of Norbiton
That the Grand Committee do consider the Goods Vehicles (Licensing of Operators) (Amendment) Regulations 2022.
Relevant document: 29th Report from the Secondary Legislation Scrutiny Committee
The Parliamentary Under-Secretary of State, Department for Transport (Baroness Vere of Norbiton) (Con)
My Lords, I beg to move that these regulations be considered. This instrument amends legislation governing the goods vehicle operator licensing regimes in Great Britain and Northern Ireland. The changes must be implemented, as they are commitments included in the EU-UK Trade and Cooperation Agreement, or TCA, which come into effect during 2022. The changes contained in this SI reflect new requirements for transporting goods to, through or within Europe. These changes will also come into force for EU member states by May 2022. They ensure continued and reciprocal access for goods transport between the UK and the EU.
The primary objective of this instrument is the extension of the goods vehicle operator licensing regime to include some light goods vehicles, or LGVs, such as vans or pickup trucks. The vehicles involved weigh between 2.5 and 3.5 tonnes in maximum laden weight, either alone or as combined weight when used with a trailer, and operate internationally for hire or reward. These regulations also introduce minor changes to the wider goods vehicle operator licensing regime, affecting operators of heavy goods vehicles, or HGVs.
There are three principal areas of change within the instrument. First, these regulations will potentially bring an estimated 21,000 LGVs, spread across 4,200 operators, into the scope of the operator licensing regime. From 21 May 2022, if these vehicles are used to transport goods to, through or within the EU, including Ireland, they will need to be listed on an operator licence. However, to be clear, these changes do not affect vehicles used domestically. Furthermore, they will affect only commercial hire or reward goods transport and not, for example, moving equipment or materials used by an individual or organisation in the ordinary course of business internationally using a van.
Secondly, these regulations will create a distinction in the existing operator licensing regime between a heavy goods vehicle operator licence and a light goods vehicle operator licence. To avoid imposing a disproportionate burden, we have chosen to extend to LGVs only those aspects of the HGV regime required by the TCA. However, taking this approach has meant that the instrument is long—perhaps longer than might be expected
Thirdly, the regulations will introduce changes relating to the role of a transport manager, which is a requirement of operator licensing. This will be required for the new LGV operator licences. To reduce this immediate burden, we are allowing a temporary exemption from the requirement to hold a transport manager certificate of professional competence for those who can show that they had been managing light goods vehicle fleets continuously for 10 years in the period up to 20 August 2020, as specified in the TCA. For those who qualify, the application service is already open and is intended to close in May 2024.
Once granted, these “acquired rights” will be valid for up to three years, expiring on 20 May 2025. The exemption is time-limited to ensure that standards of professionalism within the industry are maintained, while also allowing a transition period to enable qualifications to be undertaken. The limits applicable to external transport managers for HGVs, namely a maximum of 50 vehicles between up to four operators, will also apply to LGVs. Transport managers must also reside in the jurisdiction, UK or EU, where the fleet they are managing is based, as per the TCA. There is a transitionary provision ensuring that those who live and work in different jurisdictions can continue in their current jobs.
At this point, I draw the Committee’s attention to an error in these regulations, leading to a disconnection between the policy intention and the legislation as laid. While the instrument is correct in so far as it is legally effective, it goes beyond the policy intentions. The SI was intended to apply only to the operation of goods vehicles, but one provision inadvertently also applies to the operation of passenger vehicles. In doing so, it disrupts the Public Passenger Vehicles Act 1981, making the regulation of the industry more complex. As a result, we laid a second, correcting instrument using the draft negative procedure on 25 February. This is of course subject to the views of the sifting committees and, while I hope it will not be necessary, the correcting instrument may need to be debated if it is decided that the affirmative procedure should be followed.
Baroness McIntosh of Pickering (Con)
My Lords, perhaps I could ask for a point of clarification. I am here for the next business; I was not intending to speak. My noble friend the Minister eloquently moved the regulations, for which I am grateful. If we are going further than was originally intended, does this put us out of kilter with the flow of traffic across to the EU or is it neutral in that regard? That is my only question.
Baroness Randerson (LD)
My Lords, I start by thanking the Minister for her explanation, including of the error. I am happy to accept that it will be corrected in due course.
The Government are going to some lengths here to comply with the terms of the TCA—but only just. This SI certainly follows the letter of our obligations under the TCA but does the absolute minimum required to do so, and in doing that, actually creates a more complex situation. As with so much associated with the post-Brexit legislation, it makes life more difficult and complex for small businesses.
The new EU regulations are tightening road safety requirements—that is obviously the intention of all this—by applying licensing to heavy goods vehicles that are less heavy than was previously the case. The Secondary Legislation Scrutiny Committee notes that this will apply to around 4,200 goods vehicle operators. It also notes that the legislation applies to Northern Ireland, too. In the case of Northern Ireland, the realities of the situation include, of course, not just the protocol but the fact that, in practice, goods vehicles cross and re-cross the border all the time, and can do so even if, for example, they start out in Northern Ireland to deliver goods to Northern Ireland, going east to west and west to east; the route can take them across the border several times. That is the way the road runs. So this could be a requirement for Northern Ireland operators a great deal more often than it will be in GB as a whole. So my question to the Minister is: am I right to assume that the vast majority of operators in Northern Ireland will have to adopt these new licences, at least as a precautionary principle?
In Britain as a whole, people will not need the licence for passenger vehicles—or they will not once the Minister has corrected the legislation. That seems simple enough, but it will also not be needed if the vehicle is not to be used internationally for hire or reward. That is a more complex issue. It is quite obvious if the vehicle you are running is a passenger vehicle, but it is less obvious if it is going to travel abroad. If you are running a Tesco delivery vehicle, you will know that it is not going abroad. But suppose you do small-scale removal of domestic equipment; you might operate for months or years without ever going abroad, then suddenly get a job that involves doing so. For a long time, you would have assumed that you do not need this licence, but that might prove a mistake and you might need to get it. That is why transport managers are so important. As the people responsible for licensing and insurance, it is their job to make sure that that sort of error does not happen, but there are some very small companies in which this kind of role might be overlooked.
The SI allows for a period of exemption so that companies and their managers can gain the required certificates. The Explanatory Memorandum says that efforts have been made to do this in time to allow companies to prepare, but in fact it comes into force on 21 May, which is a very short time span. I accept that the Government will do their best on this from this day onwards, because it comes into force tomorrow, but it is not long for people to prepare.
I welcome the limitation on who can take up acquired rights based on their previous experience. From paragraph 7.18 of the Explanatory Memorandum, it is obvious that training for transport managers increases safe working practices. I welcome the much more stringent requirement for transport managers generally, such as the limitation on the number of vehicles they can supervise, but it is illogical that they can operate an unlimited number of domestic vehicles. If you run a company with hundreds of vehicles, you will have little time to deal with the relatively small number of vehicles that are used internationally. My question to the Minister is: does the nation have a ready supply of properly qualified and experienced people for the role of transport manager, as it will obviously become more complex? Will the lack of transport managers be yet another hurdle for the freight industry to face this year?
I have a question to the Minister about paragraph 7.30 of the Explanatory Memorandum, which says that there will not be local advertising of the need for the new licences. So how will the industry know about them? What are the Government doing to inform freight operators in general, especially small companies? The big companies will know, but the small companies will need help.
I have another question for the Minister, about the enhanced role for traffic commissioners that comes from this legislation. They clearly have an important regulatory role, but what additional resources are they being allocated for this important additional work?
Finally, paragraph 7.35 sets out a new requirement for operators to try to prevent “bogus operations”. This is clearly informed by bitter experience of the past. I do not think it is necessary for the Minister to explain it to us here, but there is clearly a problem. As this is obviously a significant and specific problem that is being dealt with in this legislation, can the Minister tell us how such activities will be inspected to ensure that the requirement in paragraph 7.35 is as effective as the Government clearly hope it will be?
Lord Rosser (Lab)
I too thank the Minister for her explanation of the content and purpose of these regulations. I take the same view as the noble Baroness, Lady Randerson, does about the error. I thought I heard the Minister say that a wider review of the SI process is taking place. The only comment I would make is that this is not the first time we have had an error in a Department for Transport SI. I am sure that is much to the Minister’s frustration. Perhaps it is understandable that a wider review of the process is going on. I do not wish to say any more about that subject than that.
I noticed that the Explanatory Memorandum says, under the heading “Purpose of the instrument”:
“The UK is obliged to implement these changes following commitments included in the … Trade and Cooperation Agreement”.
I suppose that is an effort by the Government to make it clear that they are not really doing it willingly; it is because they have to. But some of us thought, perhaps incorrectly, that the trade and co-operation agreement had been freely entered into—in the way that the Northern Ireland protocol was freely entered into—and that the Government thought it was a good agreement. Judging by the Prime Minister’s comments at the time, he thought that was a pretty good deal. I only make the comment—I think this is something the noble Baroness, Lady Randerson, alluded to—that whenever we come across anything to do with the EU there is always wording that makes it fairly clear that if the Government had their way they would not be doing anything along the lines of that particular instrument, which is perhaps unfortunate.
As I understand it, the Government are not introducing environmental requirements for HGV operators that stem from UK law. In the Commons, the Minister said that these
“are not required by the TCA.”
Is that now the test when it comes to environmental requirements: it is not whether they are desirable or needed, but simply whether they are “required”? Should environmental issues not be looked at on the basis of whether they are desirable or needed, rather than whether you are required to do it in some agreement or another? Perhaps I misunderstood the point that appears to have been made.
As has been said, these requirements apply only to LGVs on international trips, primarily to the EU. They do not apply domestically in the UK market. It is clear that the UK Government have no plans to regulate further, yet I think I am right in saying that the Minister in the Commons said that the operator licensing system
“continues to be vital to properly manage the use of large vehicles within the UK market.”—[Official Report, Commons, Second Delegated Legislation Committee, 28/2/22; col. 4.]
I am just interested to hear the response. Why do the Government think that the licensing system would not be needed for LGVs in the UK market? Which parts that are needed for LGVs for international trips are deemed unnecessary and bureaucratic to apply within the UK markets? I presume that that is the Government’s argument for them not wanting to apply in the UK markets, because the Government consider them bureaucratic but are obliged to apply them because of the trade and co-operation agreement, which the Government freely entered into.
Baroness Vere of Norbiton (Con)
My Lords, as ever, I thank the noble Lord, Lord Rosser, and the noble Baroness, Lady Randerson, for their contributions to this DfT SI. Once again, I express my regret that an error has occurred; as the noble Lord, Lord Rosser, pointed out, the department is very aware of recent errors. This SI was drafted long before the reform programme within the department was under way, and I shall do my absolute best to ensure that errors do not happen again in future.
I shall briefly cover some of the questions raised. My noble friend Lady McIntosh wanted reassurance that the flows of traffic would be maintained. Indeed, this is precisely what we are doing here—making sure that measures in the EU are reciprocated in the UK, so that there is a level playing field and international traffic can continue as we would expect.
The noble Lord, Lord Rosser, made quite a significant point about this being linked to the TCA, and the noble Baroness, Lady Randerson, said that it was the minimum required—doing what was set out in the TCA. The noble Lord asked whether we felt obliged to do only what is in the TCA. At this moment in time, to be honest, that is absolutely right. Standing here as a Transport Minister, I would not want to put this additional burden on the domestic industry knowing what is going on in the logistics sector, so we are in a situation whereby we are doing what we are required to do in the TCA to maintain the flow of international traffic. I am not considering extending this domestically; I do not think that the logistics sector needs it right now.
The noble Lord, Lord Rosser, said that some of the organisations which responded to the consultation wanted it. Some of them did indeed: a handful. I also note that there are 4,200 operators which operate internationally and of course many tens of thousands more which operate just domestically. I am not entirely sure that that is a representative sample of people who would want this sort of regulation extended domestically at what is a challenging time for our nation.
The noble Baroness, Lady Randerson, mentioned Northern Ireland. She is right that operators in Northern Ireland will need to be licensed. We have had many conversations with Ministers and their officials in the Department for Infrastructure in Northern Ireland and they have an entire communications strategy setting out how to make sure that their operators are fully aware of the requirement. However, the major courier companies in Northern Ireland and the Republic of Ireland tend to have separate distribution networks within each particular area. Therefore, parcels tend to be moved in bulk through the land border and then more localised distribution networks are used. But it is the case that anybody going across the border in Northern Ireland would need to have one of these new licences.
The noble Baroness, Lady Randerson, then talked about it being a much more complex situation and could people cope, et cetera. I do not see that as an issue because these international journeys are happening already and transport managers already exist. What we are doing is potentially formalising the role of those transport managers that already exist in the system. What is our alternative here? We could have done nothing and that would have stopped all the international journeys, which I am fairly sure no noble Lord would want to see happening.
I think we have reached the right balance here. I accept that transport managers who have many years of experience will now need to take their certificate of professional competence. That will be a cost, probably, to their business. The noble Lord, Lord Rosser, asked how much it costs. It depends on the sort of training one does: it can be online, materials or face to face. For an HGV transport manager, it goes up to about £1,300. We would have thought for LGVs it would be lower than that but, of course, this is an industry that will grow and develop as these transport manager qualifications come on stream. It is something that we will keep an eye on, but it is a one-off cost to train somebody in some skills to get a licence. It will be a burden on business, but not an insurmountable one, I think. The lack of qualified or potentially qualified people is not something that has been particularly raised by industry. I think the cost is a greater concern because people see that there is a cost of having the licences.
The noble Baroness asked how we are going to communicate with the industry. I have quite a lot of information about that because we have done a lot. We started communicating about this to make sure that we hit both the large and the smaller operators back in August last year. We have had advertising campaigns on Facebook, Instagram, Twitter and government channels—DVSA Direct has been doing industry updates—and obviously GOV.UK has set out exactly what is required. We employed a commercial agency and worked with partners such as Biffa, John Hudson Trailers and DAF Trucks and Moto, Roadchef and Welcome Break motorway services. I think they know. We have done everything we possibly can to make sure that people who operate LGVs internationally know that they will need a transport manager if they have a single journey or more.
Traffic commissioners are already well versed in the provision of licences, the maintenance of the fit and proper test, and taking to tribunal or equivalent those people who do not meet the fit and proper test. I am content that they are appropriately resourced to ensure not only that the licences can be issued in a timely fashion but that the licensees are fit and proper and are held to account if they are not. However, should it not be the case that licences are issued in time, we are looking at providing interim licences at a cost of £68, which will tide over whatever bow wave of applications comes through. I believe we have the right arrangements in place, but I would not want any operator to be held up because it does not have a licence, whether an interim licence or a full licence.
The noble Lord, Lord Rosser, mentioned environmental issues and of course we take them seriously, but we will look at them on their merits and at the right time. As I said, they will probably not be at the top of my inbox right now, but we are considering all manner of environmental interventions on vehicle standards. There will be more on that in due course.
One reason why there is no urgency to extend these regulations to LGVs domestically is that from an economic perspective it would not be brilliant, but another is because HGVs need a firm operating licensing system because the vehicles are far more dangerous. They have strict maintenance regimes. It is essential that those vehicles are in tip-top condition and are kept by fit and proper people. The LGV system is slightly lighter-touch in that, for example, the level of financial standing an operator must have is less than for HGVs. The system is slightly different from that for HGVs.
This is my last point, I promise. The noble Lord, Lord Rosser, said something about the SI not being in force and asked how many applications we have had so far. If he does not mind, I shall go back to Hansard to try to understand the point a bit better and will write. In the meantime, I commend these regulations to the Committee.
Baroness Randerson (LD)
One of the environmental aspects that are being disapplied by these regulations is the requirement to have an appropriate place to park vehicles. The Government have made great play in recent months of the importance of having good facilities for lorry drivers. Does the same argument not apply to the drivers of these vehicles, who might be part of the same workforce? Is this not cutting across the Government’s declared policy on improving conditions for drivers?
Baroness Vere of Norbiton (Con)
The noble Baroness is covering a point that I deleted from my briefing, sadly, because I did not think it would come up, and therefore it is not at the top of my mind. There are two issues here. One is where the vehicles are parked overnight in storage by the operator and the other is where they are parked when they are on the road and making journeys. I will write to the noble Baroness with more details on that because unfortunately I do not have them to hand.
Motion agreed.
Cumbria (Structural Changes) Order 2022
(2 years, 9 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Greenhalgh
That the Grand Committee do consider the Cumbria (Structural Changes) Order 2022.
Relevant document: 29th Report from the Secondary Legislation Scrutiny Committee
The Minister of State, Home Office and Department for Levelling Up, Housing & Communities (Lord Greenhalgh) (Con)
My Lords, this order was laid before this House on 24 January 2022. The other place approved it on 1 March. If approved by this House and made it will implement a proposal submitted by Allerdale and Copeland councils for two new unitary councils on an east/west geography, covering the entirety of Cumbria, to be known as Cumberland council, and Westmorland and Furness council, respectively.
This order will establish for the people of Cumbria two new unitary councils. Implementing this proposal and establishing these unitary authorities will enable stronger leadership and engagement, at the strategic level and with communities at the most local level. It will pave the way, as envisaged in the levelling-up White Paper, for a significant devolution deal, involving a directly elected mayor for Cumbria, if that is an option which local leaders wish to pursue.
This locally led process for reform began on 9 October 2020, when the then Secretary of State, my right honourable friend the Member for Newark, Robert Jenrick, invited the principal councils in Cumbria to put forward, if they wished, proposals for replacing the current two-tier system of local government with single-tier local government. That invitation set out the criteria for unitarisation.
Unitary authorities will be established that are likely to improve local government and service delivery across the area of the proposal, giving greater value for money, generating savings, and providing stronger strategic and local leadership, and which will be more sustainable structures. They will command a good deal of local support as assessed in the round, and where the area of each unitary authority is a credible geography consisting of one or more existing local government areas with an aggregate population which is either within the range 300,000 to 600,000, or such other figure that, having regard to the circumstances of the authority, including local identity and geography, could be considered substantial.
Four locally led proposals for local government reorganisation in Cumbria were received in December 2020—one for a single unitary and three for two unitary councils. Before deciding how to proceed, the Government consulted widely. Around 3,200 responses were received by the Government in response to their statutory consultation on the Cumbria proposals. This consultation was launched on 22 February 2021 and ended on 19 April 2021. Of these responses, some 2,400—73% of the total responses—were from residents living in the area affected.
There was a very good deal of local support for local government reorganisation across the categories of respondents, from residents, local authorities, public sector providers, parish councils and the business sector. However, across these categories, there was a spread of responses in favour of each proposal. This meant that each proposal had some support. The east/west proposal had the support of local businesses, especially in relation to supporting the diverse nature of local economies better, particularly the advanced manufacturing base and supply chain around Sellafield. There was some resident support for the east/west proposal, with those in favour considering that the new authorities would be more accessible local organisations, better able to respond to local needs. Among local government organisations, there was a view that the geography of the east/west proposal would ensure equal levels of population density across the two proposed new council areas and that this would contribute to a balanced service delivery, including addressing deprivation, and credible geography.
Based on the consultation responses, the Secretary of State considered that, if implemented, the east/west proposal would command a good deal of local support, as assessed in the round overall across the whole area of the proposal, and that the criterion had been met. In considering the locally led unitary proposals against our long-standing assessment criteria, he concluded that the north/south proposal did not meet the credible geography criterion, that the bay proposal did not meet the improving local government and service delivery and credible geography criteria, and that while the county council’s proposal for a single unitary met the three criteria, the east/west proposal was more appropriate on grounds of geography.
Noble Lords will recall that my right honourable friend the then Secretary of State announced his decisions on the proposals. A Written Ministerial Statement was made on 21 July 2021, which I repeated in this House. In reaching this decision, my right honourable friend made a balanced judgment, assessing all the proposals against the three criteria to which I have referred and which were set out in the invitation on 9 October 2020. He also had regard to all representations received, including responses to the consultation, and to all other relevant information available to him. He concluded that the east/west unitary proposal for Cumbria met all three criteria.
The Government believe that there is a powerful case for implementing this locally led proposal for change. The east/west unitary proposal will improve local government for half a million people in Cumbria by enhancing social care and safeguarding services through closer connection with related services such as housing, leisure and benefits. It will also improve local government by offering opportunities for improved strategic decision-making in such areas as housing, planning and transport. It will provide improvements to local partnership working with other public sector bodies by aligning with arrangements in existing public sector partnerships.
The proposal will generate savings estimated by the Allerdale and Copeland councils in their unitary proposal of between £19.1 million and £31.6 million per annum; this is a wide spread, and the savings actually achieved will depend on the new councils. These are savings that can be reinvested for the improvement of local services; they are not cuts in service provision. It will also deliver proposals aimed at maintaining and strengthening local community identity, and integrate local services, while reflecting the challenges of rurality in the areas of both new unitary councils. If Parliament approves this order, there will be, from 1 April 2023, two unitary councils for Cumbria delivering the improvements I have just outlined.
In response to an issue raised previously by the noble Baroness, Lady Hayman of Ullock, and the noble Lord, Lord Campbell-Savours, I put on the record, categorically, for the avoidance of any scintilla of doubt, that if this order is approved and Carlisle City Council is abolished, the city status of Carlisle will be preserved. My officials are already working with the officers of Carlisle to ensure that we follow past precedents for maintaining city status. The arrangements for maintaining city status will be to establish charter trustees. The council has asked us to do this, and we have agreed.
We have prepared this order in discussion with all the councils concerned. I take this opportunity to thank everyone involved in this process, and for their work undertaken together constructively and collaboratively, notwithstanding the county council’s leader seeking a judicial review, for which the courts refused permission on 22 February.
Our discussions with the councils have included transitional and electoral arrangements. These are key to how the councils will drive forward implementation. Where there has been agreement between all the councils, we have adopted their preferred approach. Where there were different views as to the detailed way forward, the Secretary of State has considered all the differing views and reached a decision accordingly.
Turning to the detail of the order, I will highlight the key provisions. The order provides that on 1 April 2023 the districts of Allerdale, Barrow-in-Furness, Carlisle, Copeland, Eden, and South Lakeland, and the county of Cumbria, will be abolished. The councils of those districts and county will be wound up and dissolved. In their place, the functions will be transferred to the new unitary Cumberland council and Westmorland and Furness council. I add that the order ensures there is no change to the ceremonial county of Cumbria, and hence the roles and responsibilities of the lord-lieutenant and high sheriff of the county of Cumbria are unaltered.
The order also provides for appropriate transitional arrangements. These include that in May 2022 there will be elections for the new unitary councils, which will assume their full powers from 1 April 2023. These elections will be on the basis in Cumberland of a 46-member authority, with 46 single-member wards, and in Westmorland and Furness a 65-member authority with 33 wards of between one and three members. Subsequent elections to the unitary council will be in May 2027 and every four years thereafter. We expect that the Local Government Boundary Commission for England will undertake a full electoral review before the May 2027 elections. Parish council elections will remain unchanged. There will be a duty placed on all existing councils to co-operate during the transitional period until 1 April 2023.
There is also provision in the draft order relating to the establishment of a combined authority for Cumbria. I can make it clear that these are designed to be enabling powers for the shadow authorities to be able to do necessary preparatory work if they so wish. We thought that this was prudent, given that the establishment of a combined authority was mentioned in the unitary proposals. The inclusion of these provisions does not represent a requirement for the shadows to pursue arrangements for a combined authority.
If this order is approved and made, to support councils in the transitional period until 1 April 2023, we intend to use our powers under the Local Government and Public Involvement in Health Act 2007 to issue a direction. This direction would replace the voluntary arrangements which the Cumbria councils have already adopted about entering into contracts and the disposal of land during this transitional period. This is in line with the approach adopted in most previous unitarisations. This will ensure that the new unitary councils have appropriate oversight of the commitments that predecessor councils may enter into during the transitional period and which the new unitary councils will take on from 1 April 2023. Before issuing any such direction, we will invite councils’ views on a draft.
Finally, with sincere apologies, I must draw the Committee’s attention to the correction slip issued to correct a minor error in Part 2 of the Schedule of the draft order, which lists the existing wards that will go to make up the new wards of Westmorland and Furness council. This is to correct the name of an existing ward in the new High Furness ward, currently shown as “Dunnerdale-with-Seathwaite (Part)”. It should be shown as simply “Dunnerdale-with-Seathwaite”. We are very sorry indeed for this minor error in the original text of the draft order.
In conclusion, through this order, we are seeking to replace the existing local government structures in Cumbria, which were set up in 1974, with two new councils that will be able to deliver high-quality, sustainable local services for the people of Cumbria. These unitary councils will be able to provide stronger and more effective leadership at both the strategic and most local levels. This will open the way for a significant devolution deal if local leaders want this, as referred to in our levelling-up White Paper. I commend this order to the Committee.
Lord Henley (Con)
My Lords, I start by thanking my noble friend for the fact that he is going to preserve the city status of Carlisle. I think that will be welcomed on all sides. I was born there 60-something years ago, and am very grateful that its city status shall be continued. I also declare an interest, first, as a Cumbrian, but secondly, as an active member of Penrith and The Border Conservative Association. I refer to that because the Penrith and The Border constituency is the one constituency that will straddle the two new authorities—I think that is correct, but no doubt others will correct me if it is not. I want to ask my noble friend about the electoral arrangements we will face in May because, as he made quite clear, we will be electing the shadow authority, which will then take over as the substantive authority in April 2023. At some time after that, as my noble friend made clear, the boundary commission will get into action and produce new boundaries for the various wards or divisions—I am not sure how we shall refer to them—in both authorities. But for the elections, we are going to have to deal with rather arbitrary selected wards or divisions in both authorities.
I do not know what the numbers on the two councils will be in future, once the boundary commission has done its work. Initially, and for the first five years of the two shadow authorities, the western division, which will be referred to as Cumberland, will use the existing county council divisions. Therefore, as I understand and remember it, there will be 42 councillors, one for each division, in that authority.
Lord Liddle (Lab)
My Lords, I declare my interests in this matter. I was born in Carlisle and attended Carlisle Grammar School. I live in Cumbria now and have an interest on the present county council, as the councillor for Wigton.
I have three things to say at the start. First, I am delighted by what the Minister said about maintaining Carlisle’s city status. It means a lot to me. I remember, as a little boy in 1958, attending the 800th anniversary of the foundation of the city.
Secondly, I am glad to know that the lord-lieutenancy for Cumbria is being maintained; my wife, as deputy lord-lieutenant, will be very pleased by that. Thirdly, it is very good to have as a Minister someone with the great experience and success in local government of the noble Lord, Lord Greenhalgh, dealing with these questions. I hope he might listen carefully to what I have to say about the proposal, which I would oppose as it stands, but I know that is not the way the House proceeds and I shall obviously not do that. But I will make the case for why the Government should take the remaining opportunity to pause and think a bit about what they are doing in the case of Cumbria.
My starting point is simple. I am a passionate supporter of unitary authorities, and have been for a long time, but the proposal for Cumbria, splitting it in two, does two things. First, it removes the strategic role that the county council presently plays; secondly, it divides in two the services that the county council currently provides. These services are vast by comparison with what the districts provide. The county council’s net revenue budget, excluding the schools grant, is of the order of £400 million a year. The six district councils all together are little tiddlers: their spending together is less than £100 million. The order is, in effect, cutting in two the most effective bit of local government in Cumbria.
The justification that this makes for more local government does not stand up to serious examination. The new unitary authority of Westmorland and Furness embraces both the Barrow shipyard and the remote Pennine communities 60 or 70 miles to the north of it. They are as different as heaven and hell. I shall not say which I think is which, but they are totally different. As for the new county of Cumberland, Penrith, to which the noble Lord, Lord Henley, referred, is torn out of the historic county of Cumberland. I always remember Willie Whitelaw affectionately describing his constituency of Penrith as being a place of slumbering calm—we probably need more of that in our lives. That is removed, and for Cumberland, there is my home city of Carlisle, together with what is largely post-industrial west Cumbria. My forecast is that that will be a rather uneasy partnership. Cumbria is a county of great diversity: great beauty mixed with shocking deprivation; a very proud history, with all the problems of modernity.
What I and the majority of my colleagues on the county council think the Government should have done was to go for a single, strategic authority but then allow for maximum devolution to towns, with their rural hinterlands, for local access to services and the capacity for genuinely local decision-making over genuinely local matters. My town council in Wigton should certainly have been expanded and given a greater role.
Given the decision taken, the county council—rightly, in my view—sought to challenge the Government’s plan through a judicial review. After a very detailed consideration in a judgment that took Mr Justice Fordham, who is very eminent in this field, an hour and three-quarters to deliver, he refused leave for a judicial review. It is important to emphasise, however, that this is not an endorsement of the Government’s plan; it is only a legal judgment that the Minister had not overstepped his powers in ignoring his own criteria in deciding on the current plan.
We are now put in a very difficult position in Cumbria as a result of this split. The Minister referred to savings estimated by Allerdale and Copeland— goodness how they could calculate them, because they know nothing about the main services—of between £19 million and £30 million a year. We were expecting much bigger savings from having a unitary authority—as much as £40 million or £50 million a year. The truth is that we need those savings to reinvest in what are badly overstretched services, and we now will not be able to do that. That overstretch is apparent in all the main services one looks at. Our children’s services are under great pressure. For the last few years, they have overspent their budget every year. For social care, we were forced to put in an extra £10 million last autumn simply to keep a creaking system going so that the hospitals in Cumbria would not be completely clogged up with people who could not be given care in the community. Of course, the consequence of that would have been even longer waiting lists for patients.
People complain about highway maintenance in Cumbria—potholes are a big issue; I am always lobbied about them—but we have no extra money to spend on that. Indeed, the Government have this year cut the highway maintenance grant by some £10 million.
The situation is serious. At the same time, whereas the creation of a single unitary authority would have been a relatively simple matter, splitting the services in two is highly complex. The existing councils, and I hope that the people who support this scheme are prepared to defend this, have already had to put aside some £18 million to spend on management consultants to work out how the new authority will work. I suggest that the Minister inquires about this; a lot of money is being spent on trying to work out how to divide the services we have.
Supporters of the plan argue that we are being ridiculously pessimistic. They say that the two new authorities can form a mayoral combined authority that will deal with strategic planning, can negotiate a growth deal with the Government and could run county-wide services that it does not make sense to split—that is the argument. However, the truth is that the Government currently do not, as I understand it, have any power to force a mayoral combined authority on Cumbria. It all depends on the decision of the new authorities as to whether they want one. From what I know and from what I gather, particularly from my Liberal Democrat friends in Westmorland and Furness, there is no enthusiasm for establishing such a combined authority. Therefore, I think this is a bit of a fantasy.
However, in the House of Commons, when John Stevenson, the Conservative MP for Carlisle, whom I like a lot, asked Secretary of State Gove what the position was, the Secretary of State implied that the Government could force a mayoral combined authority on the new councils. Can the noble Lord, Lord Greenhalgh, clarify that very important point for us? I can send him chapter and verse on what was said in the House of Commons, and I would like to know what he thinks about what his boss said on that occasion.
Lord Liddle (Lab)
Okay. I am trying to explain that there are serious risks in what is now planned. A pause could well be necessary. I do not see any problem with the Government revising their plans. What will happen if it becomes clear that the current timetable is not workable? The Government need to form a judgment on this quite quickly. I am not advocating this for any personal reason, but they could keep the county council going for longer than another year so that there would be more time to plan for the division of services, which would then have some prospect of stability.
In the light of their Levelling Up White Paper, which came after this proposal was made, the Government could think about keeping a single unitary authority in Cumbria but doing a deal with that council that it will have an elected mayor. I am not against elected mayors in principle; I am actually rather in favour of them. I think they have worked quite well in metropolitan areas. In the Levelling Up White Paper, if you are going to get maximum devolution of power, you have to have an elected mayor to achieve that. Why not put that proposal to Cumberland, to a united Cumbria, and see whether it would be acceptable?
I am very worried about what is happening, not from a party-political point of view, but simply from the point of view of how all this is going to work in practice. I hope that the Minister might take away what I have said and have a think about it.
Lord Jopling (Con)
My Lords, there are good many issues on which I have sympathy with the noble Lord, Lord Liddle. I am bound to say, however, that I have played no part whatever in the evolution of this scheme and was intrigued to see the decision the Minister has come to. Like the noble Lord, Lord Liddle, I have always been an enthusiast for unitary authorities, and I am glad to see that that is coming to Cumbria.
I have a good deal of experience of Cumbria. I went to school there and represented Westmorland and then Westmorland and Lonsdale for 33 years, and like the noble Lord’s wife—perhaps she is not former—I am a former deputy lieutenant of Cumbria. Therefore, I believe I have some locus to speak in this debate.
I am bound to say that if we are going to split Cumbria in two, having a compartmentalisation of east and west seems logical. In the west of the county, the barrier from the coast to Dunmail Raise and Shap Fell is a very real barrier with the mountains. I can see the logic of that. The eastern part of Cumbria as it is now, with the M6 motorway, is much more accessible than the western part, therefore I can see the logic of an east/west divide.
What I really wanted to say is that I am delighted to see the proposal to reintroduce the name of Westmorland. I can remember my dismay when the county of Westmorland disappeared following the 1972 Act. In fact, one of the few things of Westmorland that continued was because of something that happened immediately after the 1972 Act. A celebrated historian from Appleby approached me and said: “Don’t you think that the tragedy of losing the name Westmorland could be revived by renaming Appleby as Appleby-in-Westmorland?” I remember putting an Early Day Motion down in another place and gathering a great many signatures around the bars and restaurants at the other end of this building. In the end, Peter Walker, who was then the Secretary of State, agreed that we should rename the ancient capital of Westmorland as it is now well known.
I have one or two queries over this. When he introduced this provision, the Minister said that there would be no change with regard to the lord-lieutenant. If we are going to have two county councils, and if it should become desirable to have two lords-lieutenant—and I cannot see why it should not—what is the procedure to create new lords-lieutenants? Can he tell us? He may not have it, although I see that he has just been handed a piece of paper. Clearly, Her Majesty has to come into this but, at the moment, there has been an informal convention in Cumbria, or there was one in my time, that the lieutenancy tended to alternate between north and south of Shap Fell. As the noble Lord, Lord Liddle, said, there is great diversity in Cumbria, and I have always noticed the diversity between those who live north and those who live south of Shap Fell. They are very different communities in all sorts of ways. Perhaps the Minister cannot tell me immediately what the procedure would be for allowing there to be a lord-lieutenant for each of the new counties.
Finally, I want to ask another question. When Peter Walker introduced the 1972 Act, which did away with the historic county of Westmorland, which was exactly what my old constituency used to be, there was a threat to some of the old traditions. I am thinking particularly of the mayoralty of Kendal, a historic borough with a mayor, historic connections to Catherine Parr and Henry VIII, a whole regalia and a number of things that surround the mayoralty. That was threatened and, again, a number of us who represented areas similar to the one that I had in Kendal formed up to Peter Walker and insisted that those old historic traditions would continue. I hope that the Minister can tell us that there will be no change whatever with regard to the mayoralty of Kendal. Of course, Kendal has been part of South Lakeland District Council for all those years, and that was really the way we got around it.
As I say, I have played no part in the arguments over the creation of these two new authorities, and I wish them well.
Lord Shipley (LD)
It has been very interesting to listen to the noble Lords, Lord Henley, Lord Liddle and Lord Jopling, giving to the Committee the benefit of their personal experience and opinion on what should happen. I shall try to avoid taking a perspective about Cumbria from my vantage point on the east of the Pennines. It suspect is a complicated matter. Cumbria is a very large county, geographically, and has a substantial population, and it has a diversity to which I think the noble Lord, Lord Jopling, referred, which is extremely important. I hope that when he replies, the Minister will give specific answers to the points raised by those noble Lords who reside in the county of Cumbria or have represented it and know it, and others will be following to talk about that.
Baroness Hayman of Ullock (Lab)
My Lords, I thank the Minister for introducing this statutory instrument, which is the first of three instruments on structural changes that we will discuss today. I have a particular interest in this instrument as it is about changes to the council structure in Cumbria, which is where I live. In fact, I live in the west, so I can vouch for its complete inaccessibility, as mentioned by the noble Lord, Lord Jopling. It is another issue that we should return to another day. I was a member of Cumbria County Council alongside my noble friend Lord Liddle.
I am sure that the Minister is aware that the Secondary Legislation Scrutiny Committee marked this and the two other draft statutory instruments we are going to discuss as instruments of interest, because some questions remain on the criteria for the approval of unitarisation. The Explanatory Memoranda set out the feedback received during consultation on the different proposals. The noble Lord, Lord Shipley, noted that according to the Government this should be locally led and command a good deal of local support. The Explanatory Memoranda show that not all chosen proposals received majority support from local residents during consultation. The noble Lord, Lord Henley, mentioned his concerns about the consultation on these proposals. Can the Minister confirm that the Government are properly applying the criteria when making decisions on new unitary authorities?
The area where concern has been expressed is about local support for the proposals. I am not particularly convinced that there has been genuine public enthusiasm for the proposals in Cumbria. My noble friend Lord Liddle eloquently expressed, in great detail, the concerns about splitting the county in two and the impact it will have on critical services such as education, social care, children’s services and highways, all of which are in need of greatly improved resources and support.
In his introduction, the Minister reminded noble Lords that the Government were presented with four proposals and eventually went with the east/west proposal we have been discussing, which creates two unitary authorities, one in the east and one in the west of the county. He also said that the east/west proposal received “some support”. But it did not receive support from the majority of respondents to the local consultation; only the proposal for the Bay did that. We have heard what that would do so I will not go into the details.
Basically, the residents did not believe that the east/west proposal offered a reasonable geography, which is one of the criteria for the creation of a unitary authority set out by the Government. The Government’s criteria also state that successful proposals need to deliver good public services and improve local governance, yet the residents who were consulted did not all believe that this was the right proposal for Cumbria in that regard. My noble friend Lord Liddle talked about the concerns around delivering public services well in Cumbria, after dividing the county into two unitaries.
The parish and town councils were also more in favour of the proposal for the Bay than others, with 28% saying that it would improve services. Even among local businesses that proposal was more highly favoured than the east/west proposal, because it was felt that it had the most credibility when it came to geography— another criterion that the Secretary of State looked at. So I ask the Minister: why was an option chosen that received less support and was not felt by a majority of local people to fulfil the Government’s criteria?
My noble friend Lord Liddle mentioned the fire service. This is particularly important when it comes to Cumbria because, unlike in most areas, fire and rescue services are still delivered by the county council. The Fire Brigades Union is particularly concerned about how this will affect the responsibilities of the fire and rescue service, and about funding pressures and the potential cuts the service might face due to restructuring, as it might have to be divided between the two new unitary authorities.
I know that DLUHC has said that further secondary legislation will be brought forward once a decision has been made on this. The Government have said that they intend to maintain the fire service on a county-wide basis, subject to local consultation. It would be really helpful if the Minister could expand on this and provide an update. If he does not have that now, it would be good if we could all be kept in touch with that as those proposals go forward. As noble Lords have said, there is not a lot of time. We are on a fairly tight timescale.
Before I talk briefly about the issue I discussed with the Minister earlier today, I say that I am particularly interested to hear his response to the different concerns raised by my noble friend Lord Liddle.
Finally, I discussed with the Minister earlier—and I thank him for his time and attention in this matter—the concerns that there is a significant omission in the order, in that it would mean that Carlisle would lose its city status. A similar order has been laid that abolishes the district and county councils in North Yorkshire and establishes the North Yorkshire unitary authority. My concern is that these have been set up differently. The former MP for Carlisle, Eric Martlew, drew this to our attention, and I thank him for that.
Carlisle has a rich history and has enjoyed the title of city since 1133. Its original charter was lost in 1292, when much of the city was destroyed by fire, but a new royal charter was granted in 1352 by Edward III. I am sure noble Lords can appreciate Carlisle’s rich history but, because it is an unparished area, there is no parish or town council for Carlisle’s charter to pass to when this legislation comes into force. So the options open to Carlisle are to either form a town council or create charter trustees, so that the city charter can pass to them and it does not lose that status.
I thank the Minister for confirming that charter trustees will be appointed and that Carlisle will not lose its city status. My concern with this, which I raised with the Minister earlier, is that where this issue arose with regard to the change order for North Yorkshire, and the rights and privileges held by Harrogate and Scarborough, to ensure that their charters remained, the structural changes order for North Yorkshire, which we will debate next, makes specific provision for charter trustees in the unparished areas of Harrogate and Scarborough, thereby ensuring that
“any historic rights and privileges associated with those local government areas which will be abolished can be maintained and vest in the Charter Trustees for the relevant area where there is no parish or town council.”
Again, I thank the Minister for his attention. Is the reason why they are different just an admin error? I am interested to know why they have been set up differently. I planned to ask for this statutory instrument to be withdrawn until this was corrected, but I am happy to take the Minister’s assurances at the Dispatch Box that Carlisle will not lose city status, which were extremely helpful. Can he also confirm that a confirmation order will be laid to set up the charter trustees, as he explained to me earlier? It is important that the historic rights and privileges of the city of Carlisle are maintained when the city council is abolished.
Lord Greenhalgh (Con)
My Lords, I am ashamed to say that in my time on this earth, I have not set foot in glorious Cumbria, so I have learned an awful lot. One thing that I will take away is that I must visit the place. I understand that it is very rural. It is quite interesting to note how the geography is such that there are natural divisions too. That was set out incredibly helpfully by my noble friend Lord Jopling.
I always enjoy the experiences that noble Lords bring to bear. I listened very carefully to the speech from the noble Lord, Lord Liddle. However, I am calculating, at 59 minutes and 38 seconds, and having had quite a late night the night before, when we are likely to finish these three statutory instruments. However, I will do my best to respond.
My understanding of the point around preserving the city status of Carlisle is that Cumbria simply did not ask for it, whereas North Yorkshire did. It is just a process of responding to the customer, rather than an intention not to do it. Therefore, the assurance is very sincere. We will produce whatever orders that we must. It has been written out, so we have that assurance that the process will go ahead irrespective of what we have set out in the order. It does not have to be done in the same way to get to the same end point. Noble Lords have had my assurance at the Dispatch Box. It is clear that the councils want that, so it is not a problem.
I have some experience in delivering council services, so I will respond directly to the central point made by the noble Lord, Lord Liddle. Philosophically I agree with him that where possible you build bridges rather than walls, and that with services such as adult social care, which is typically about a third of a council’s budget, you had better not split the overhead of commissioning the service, but it is very possible. For instance, when I was the leader of the council in Hammersmith and Fulham we had a voluntary arrangement with neighbouring councils to bring together the commissioning of adult social care across three London boroughs, but we had very different entry criteria into the social care system. You could save on the overhead by collaborating with other councils but have very different criteria. I am very proud that my council had the best entry criteria into the social care system, extending right through to people in greater moderate need, which is very rare in local government these days, particularly with the increasingly ageing population. Therefore, you can do both if you want to. That requires local leadership, above all, but there is nothing in this structure, east/west, that would stop that sort of arrangement taking place as a possible outcome, where you can create two different entry points but share the overhead of the delivery of the service.
I really appreciated the point made by my noble friend Lord Jopling. The reality is that the units of local government, if we think strategically, become awfully large. A stat that is not in my speaking notes but which really interests me is that the average unit of local government in Switzerland is 3,733. In the United States it is 8,333. In Germany, it is 7,454. In the United Kingdom, it is 155,000. Therefore, I have great sympathy with the point raised by the noble Lord, Lord Shipley, that we must ensure that we do not forget the tiers, the town and parish councils, and their contributions to their local areas, particularly more rural areas as opposed to cities. There is no intention of changing that structure from this order. I give that reassurance. It is about ensuring that the funding flows down through local government to the lowest tier. Sometimes it does, sometimes it does not, but we are not changing that structure in this order. I note the important contribution that parish and town councillors make to their local area.
I will respond directly to the noble Baroness, Lady Hayman, who speaks with great experience of Cumbria—I have admitted my own failings in that regard. I understand that the criterion is not about a majority: it is whether there is a good level of support. In this case, two proposals had a good level of support. It is not a referendum, where you win if you get more votes. That is essentially the answer to that question. In the round, there are three criteria and then you form a judgment. I tried to set that out as best I could in my speech. Any Government will take those three points and form a view. There are pluses and minuses for different routes, and the Secretary of State took a decision in the round on the three criteria that I set out in my speech.
I was worried by some of the comments about elections, but I assure noble Lords—and the noble Lord, Lord Shipley, in particular—that elections to the new unitary authorities will take place as scheduled in May 2022. The councils will be in shadow form until they take on their new, full powers on 1 April 2023, and they will serve until May 2027. We are on track to deliver that. In response to my noble friend Lord Henley and the noble Lord, Lord Shipley, the order provides for the returning officers for the May 2022 elections, so we can be confident about the administration of those elections. The May elections will go ahead; we are on track for that. That is very important, given that, presumably, candidates are out there pounding the streets already.
My noble friend Lord Henley asked why 65 and why the wards are as they are. The warding arrangements are a local choice, and councils in both areas made their choices. It has been very much a bottom-up process. These arrangements are for the 2022 elections only. As I know from my experience in local authorities, the Electoral Commission will review ward boundaries and so forth, and then there will be representations, but this has been very much a bottom-up process.
I now have a series of attempts to respond to the very many points raised by the noble Lord, Lord Liddle. Candidly, I am unlikely to succeed in answering every question. If he wants to approach me afterwards, I will do my best to get a full response.
I have addressed the central issue, which is that you can split into two councils but not necessarily split services. It is also fair to say that many of the services are area-based and they may be a smaller part of the budget. Sometimes it is better to recognise that fact. Universal services are often organised on area lines, and so forth; it depends on the service areas of the council.
The noble Lord, Lord Liddle, invited me to comment on something said in the other place by my current boss, rather than my previous one. We do not have that interpretation when he said the word “yes”, which has been interpreted as there being great support for a particular person, as opposed to imposing mayors on a particular place. It is all down to interpretation. Of course, you cannot impose a mayor on a particular area, but yes, there is support for a particular candidate—if there were a mayor.
Lord Liddle (Lab)
Since this has caused quite a lot of local confusion, I ask that the Minister writes a letter to that effect explaining what Secretary of State Gove meant.
Lord Greenhalgh (Con)
I think I have my “get out of jail free” card. I will write a very careful note responding to the point raised on the debate in the other place and ensure that I lay a copy in the Library.
I move on to a topic that I know a little bit better. I have spent just up to two years as Fire Minister now, which is actually quite a long time to survive as a Fire Minister for England, which includes Cumbria. We are about to launch a White Paper looking at reforming fire and rescue services. I assure people that we have thought very carefully about governance models that enable a move from the scrutiny-based arrangements we have typically seen to a more executive-based arrangement. That provides a county council model, as well as a PCC and mayoral model where appropriate. You can get single-person leadership and accountability through different governance models.
The PCC is currently consulting on fire going to the PCC. He needs to consult. Local people will have their say on that. Time will tell where we end up there, but that is the status at this time. We recognise the need to continue investing in our fire and rescue services to ensure that response times are effective and that we continue to see the downward trend in fires, as well as investment in capability, because they do so much more than that as a fire and rescue service, dealing with flooding and other events of considerable concern to the people of Cumbria.
I move on to the ceremonial points raised by my noble friend Lord Jopling. Everyone seems to have a special interest in the lord-lieutenancy, or the deputy lord-lieutenancy, whether current or past. We leave that alone with this order, so the current arrangements remain as they are. It is a matter for the Crown if it wishes to change the arrangements to reflect the new east/west divide. I am delighted that one of the benefits is to reinstate the proud status of Westmorland, as my noble friend raised. That is a matter for the Crown rather than the state, if you like, but it could come to pass. This order does not push that one way or the other.
Just for completeness—this will be my last point—in response to my noble friend Lord Jopling, the Kendal mayor is the mayor of Kendal Town Council. There will be no change to this town council or any other existing town council, as I said in response to the noble Lord, Lord Shipley.
This order seeks to respond to the local area. I say to people of clear Cumbrian heritage, who have served the people of Cumbria, that in essence the order will largely restore a structure that local people will recognise, which will provide much benefit and, I hope, stand the test of time.
North Yorkshire (Structural Changes) Order 2022
(2 years, 9 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Greenhalgh
That the Grand Committee do consider the North Yorkshire (Structural Changes) Order 2022.
Relevant document: 29th Report from the Secondary Legislation Scrutiny Committee
The Minister of State, Home Office and Department for Levelling Up, Housing & Communities (Lord Greenhalgh) (Con)
My Lords, this order was laid before this House on 24 January 2022. The other place approved it on 22 February 2022. If approved by this House and made, it will implement a locally led proposal submitted by North Yorkshire County Council for a single unitary council for the whole of North Yorkshire county.
In my introductory words for the Cumbria order, I set out the Government’s views on the benefits of strong local leadership. The order will establish for the people of North Yorkshire a new single unitary council. Implementing this proposal and establishing this unitary authority will enable stronger leadership and far greater engagement both at the strategic level and with its communities at the most local level. The order will also pave the way, as envisaged in the levelling-up White Paper, for a significant devolution deal involving a directly elected mayor for North Yorkshire together with York.
I set out the full detail of the process for all three areas undergoing unitarisation in my previous speech regarding Cumbria. I will not repeat the detail of the invitation, the criteria or the dates of the statutory consultation here, but will highlight the matters specific to North Yorkshire. When issuing the invitation to the principal councils to submit proposals for unitary local government, the then Secretary of State, my right honourable friend the Member for Newark, Robert Jenrick, invited City of York Council alongside North Yorkshire County Council and its seven district councils. Two locally led proposals for local government reorganisation in North Yorkshire were received, one for a single unitary council and one for two unitary councils.
Baroness McIntosh of Pickering (Con)
My Lords, I thank my noble friend for racing through the provisions of this order. I have sat through three SIs this afternoon and it is a matter of regret that each of them has had to have a minor correction. Perhaps if we spent a little longer preparing the SIs before we brought them before the House, we would save all departments some time.
I am possibly in a minority of one, but I am afraid that I am very wedded to the two-tier system. It has served extremely well. My connection to North Yorkshire goes back years. I grew up in an area that, until 1974, represented on my western flank North Yorkshire, on my eastern flank County Durham and, to the north-west, Cumberland. I think that people appreciated and felt wedded to those areas. I went to school in what was then Harrogate, West Yorkshire, and is now Harrogate, North Yorkshire. One begins to see how confusing it becomes with all these changes, and I believe that there is such a thing as voter fatigue.
I was very fortunate to be returned a number of times—I think, four. I served 18 years for two separate constituencies in North Yorkshire. I want to pay tribute to one of my predecessors, my noble friend Lord Jopling, who looked after me during one of the elections. I think we had some fun at the time, so I hope that continues in elections for constituencies. I also stood in Cumbria in 1987, where again my noble friend was my neighbour, took me under his wing and saved me from some of the errors that I might otherwise have made—which I hope he will not remember and repeat during this debate.
According to Wikipedia, there are 159 district council wards across North Yorkshire. That goes to the rurality of what is the largest, most rural and most sparsely populated county in the country. This has led me to believe that successive Governments—I cannot accuse one particular Government—have simply failed to understand how to deliver public services effectively in rural areas. I do some outside work with the Dispensing Doctors’ Association, as declared in the register of interests. Its headquarters is in Kirkbymoorside, which was in my constituency for the last five years that I was in the other place. Dispensing doctors come into their own particularly in rural areas where there is no community pharmacy. That shows to me the lack of understanding of one particular department of how difficult it is to deliver health services in this regard. We are building bigger hospitals that are further away and more difficult for patients to get to.
I turn to the subject of the orders presented to us by my noble friend. If I understand correctly, we are going to have a situation created from 2023 whereby we have a unitary authority for North Yorkshire. At some undetermined time in the future, it will then be possible to have a metro mayor—and I would like to understand whether the mayor will cover the city of York alone or is intended to cover the rural areas as well. I have great difficulty in understanding how a mayor for a rural area such as North Yorkshire can possibly do that work. I still live in North Yorkshire for a good deal of the time when I am not in London, and I think that it has definitely lost out in the stakes to, for example, the Tees Valley mayor. He is a very effective mayor and gets a lot of funding for a lot of infrastructure and other facilities.
My understanding is that we are going to be told in North Yorkshire that we simply will not get these funds if we then do not vote for a metro mayor. Travelling in what was my second consistency—my last constituency— of Thirsk, Malton and Filey, I was easily driving 200 miles a day. I was trying to co-ordinate the meetings as best I could in the particular corner of the constituency I wanted to be in that day, but it often meant that I could not do interviews on television, because they had to be miles away, in Leeds or, heaven forfend, Newcastle, because there were two different broadcasting areas for one constituency.
My first point is that there is a lack of understanding of how this will work in rural areas, yet great pressure will be put on metro mayors for rural areas such as North Yorkshire that, if we do not subscribe to them, we simply will not get the funds. There is also a misunderstanding. We are asking people to vote—and I have had a leaflet from one of the candidates already for the election this year, which I presume is for the county, yet we are told that the existing district councillors will remain in place until next year. Possibly that makes sense, but it is very confusing. I am told that I must vote for the candidate for unitary this year, but I am told that some of the responsibilities may be taken away and I do not quite understand what the timeframe for that would be. It would be helpful to know how long we expect the unitary to be in place before it is to be taken over by a metro mayor.
I would also like to understand what the consultation will be of local people, when they put their views forward. I am slightly concerned that paragraph 10.3 of the Explanatory Note says:
“The Government’s consultation was conducted online using ‘Citizen Space’, the department’s dedicated platform for consultations, with online capture of responses and an alternative option of email responses or post.”
We should bear in mind that we have probably the most woeful internet capability in many of the dales—in Rosedale, Bransdale and all the North Yorkshire moors, and I am sure that it is the same in the Yorkshire Dales. I hope that there was also a more traditional means, perhaps through newspaper advertisements, for people to respond. If there were only 4,297 responses on the two proposals for north Yorkshire, I draw the conclusion that the vast majority of people simply did not respond. I do not think that we can conclude that there is overwhelming satisfaction with the proposals before us.
I could go on, but I think I have made my point. There is no huge demand for this unitary authority. People work closely with their district council. In my experience, in my surgery appointments, most of what I was asked about, with it not being a big area of immigration and that sort of issue, was related to planning—and most of the planning, as we know, goes through the district council. With those few remarks, I look forward to hearing the response from my noble friend.
Lord Newby (LD)
My Lords, following earlier discussions about errors in statutory instruments, when I worked for Customs and Excise, there was a VAT instrument in which I had a passing interest which had one word wrong. The view was taken that the Under-Secretary whose responsibility it was would never be promoted again as a result. Sadly, he never was, although there may have been more fundamental reasons for that. I am sure that will not be the fate of the Minister.
My interest in this is that I am a resident of Ripon, which is affected by this change. From looking at the two orders we have so far discussed, the similarities and the differences strike me. North Yorkshire is bigger than Cumbria in every way. Cumbria has a population of 498,000; North Yorkshire’s population is 602,000. Cumbria is 60 miles long from north to south; Scarborough to Bentham is 108 miles or three hours’ drive. This is a big place and even some of the wards are huge. I draw the Minister’s attention to Upper Dales, which has Hawes, High Abbotside, Upper Swaledale, Lower Swaledale and Arkengarthdale, and is 20 miles long. It would take you at least 40 minutes to drive from one end to the other and for a fair bit of winter it is impassable, because you have to go over from Wensleydale to Swaledale. This is a very different type of country, as is Cumbria, to much of the rest of England and the rest of the United Kingdom.
As the noble Lord will be aware, whether this is the best proposal was the subject of a massive amount of in-fighting in his party, and a lack of consensus in my party and every other party, about which is the best way forward, because getting it right is extremely complex. I shall not argue the toss about whether there should be a division down the A1, which was highly supported in some places. There was also no effective consultation. People may have responded to an online petition but, having done some canvassing in Ripon, I know that nobody knows it is happening, and far less have they expressed a view.
Although this is nominally the creation of a unitary authority, it will work only if there are two tiers of local government, and the second tier is different from the district. It will be the local. At the moment, Ripon is part of Harrogate district and North Yorkshire county, and there is huge resentment to being part of Harrogate. I knocked on a door and a man answered who was not a natural Liberal Democrat. He made that clear by ripping up the leaflet that I was attempting to give him. I asked him who he was supporting and he said, “I am supporting UKIP because, if UKIP were in here, we would have had our independence from Harrogate by now.” This sort of parochialism is rampant in far-flung parts of North Yorkshire.
Unless there is an effective form of very local government, that feeling of distance will inevitably grow because of the increasing distance. Harrogate is just down the road compared with Northallerton if you live in Ripon, so that man and people generally who live in Ripon, who are fed up with what they see as their subordinate position to Harrogate, will be looking for Ripon, which already has a city council having a cathedral which celebrates its 1,350th anniversary this year, to take on more responsibilities, and that poses major problems.
At the moment, Ripon City Council is a modest affair when it comes to doing things. It is very good when it comes to appearing in the cathedral wearing gowns and being proceeded by the macebearer, but the issue which occupies more of the time of that city council at the moment is the provision of Christmas lights. This will not do in future. There needs to be much more devolution of small powers down to Ripon City Council so that the people of Ripon feel that they can have a real say about small things that matter a lot to them.
North Yorkshire has submitted to Ripon and more generally a list of 27 areas of responsibility, which it says it is prepared to discuss in principle with parish councils and town councils, with a view to devolving. They go from running car parks to providing dog wardens and library services and a whole raft of those sorts of minor things. I know there is an appetite in Ripon for those powers to be taken back, but there is no capacity to do it at the moment. The town hall is a wonderful building but there is no space to do it. The people who work for the city council are estimable, but they do not have the scope to take on many of these powers. I cite Knaresborough Council, which has taken the majority of powers that it can exercise under the current arrangements, as an example of already doing this well. It has a very detailed plan about how it can slowly take on more powers and reckons it will take over a decade to build up the capacity to take on all 27 powers that it could conceivably have. I think, having looked at it and talked to the council, that it is probably right.
I have two questions for the Minister. First, if a parish or town council is taking on a power with expenditure attached, can the Government give an assurance that the resources that come with that new devolved power will not be cut and will be the same as they are currently? Secondly, and more importantly, how do the Government plan to empower local parish and town councils to take on the responsibilities that will be essential if this scheme is going to retain public support?
At the moment, there is not the funding for staff, offices and expertise. It seems to me that this is a very big gap. North Yorkshire says positive things about undertaking this process of devolving things down but, in an area the size of North Yorkshire, you will need a lot of new organisations at very local level and even more resources put into existing ones to turn them from worthy but very limited bodies to ones that exercise real authority and responsibility for delivering the majority of those local services. Northallerton, 50 miles east or west, and the people who work in Northallerton are not going to be the best people to manage those 27 local responsibilities that I have discussed.
This is a challenge to everybody involved in politics in North Yorkshire and a real challenge to the Government because, unless they help, we simply will not get the kind of further devolution away from Northallerton that is essential if this new arrangement is to command popular support over the longer term.
Lord Jopling (Con)
My Lords, I was intrigued to listen to the noble Lord’s stories about Ripon in his speech. I was born in Ripon and have lived within 10 miles of it my entire life, so am familiar with many of the points that he raised. However, as I said in the previous debate about Cumbria, I have always been an enthusiast for the unitary arrangement and I say that in spite of being a former member of a rural district council at Thirsk.
I was lobbied some months back by Harrogate Borough Council, which asked me to support the east/west arrangement. I tried to look into it and make my own mind up. I came to the conclusion that the unitary body for the whole of North Yorkshire was the best way out, and that, in spite of the reservations of Harrogate and others, I would support what we are considering this evening.
It is a wide area—noble Lords only have to look at a map—but there is a difference between North Yorkshire and Cumbria. Largely it is with regard to the administrative centre. I have heard few, but not very many, complaints about the accessibility from Skipton to Northallerton, but that is in no way as difficult as the problems of travelling from Barrow-in-Furness to Carlisle, which is a much more serious problem of remoteness. Whereas I have heard a good many complaints about remoteness over my days in Cumbria, particularly by people who live on the Furness peninsula, I have heard few similar ones in North Yorkshire.
Now that this proposition has been made by the Government through the Minister, I am told that those early differences that I talked about have now largely been resolved and that all of North Yorkshire’s Members of Parliament support the scheme we are discussing. I am told that the preparations are going well. I have been talking to members of the county council about this, and have asked them particularly about how well it is going. I am told that it is going well, especially with regard to the staff who serve the various local authorities, some of whom are going and others of whom will be expanded.
I am particularly pleased that there will be area constituency committees based on parliamentary constituency boundaries. That seems a sensible and constructive idea. I hope this will remove accusations of remoteness and demonstrate that local concerns and problems are being heard and dealt with. I certainly welcome the way in which the various councils at the two levels are co-operating to create the new level. As I ended my remarks on the Cumbria discussion, I wish it well.
Baroness Pinnock (LD)
My Lords, I am in the happy position of agreeing totally with my noble friend Lord Newby—that is a good start, is it not—particularly with reference to the absolute importance of having a two-tier approach to local governance in all rural areas, but particularly in North Yorkshire. That obviously means that I agree with many of the comments made by the noble Baroness, Lady McIntosh, who put her cards on the table and said that she prefers a two-tier system.
I bring to the Committee’s attention my relevant interests as a member of Kirklees council and a vice-president of the Local Government Association.
Lord Jopling (Con)
The noble Baroness says she is concerned about the unitary arrangements. We are returning to my ministerial days, when Ministers were served with advice from behind them. I have had some advice on my email from the leader of North Yorkshire County Council, Councillor Les, which may be some consolation to the noble Baroness. I will briefly read what he said: “We do intend to introduce devolution to parish and town councils, where they want it, and we will help them to do it. All is possible in time”. That seems to be a helpful contribution to this debate.
Baroness Pinnock (LD)
I thank the noble Lord, Lord Jopling, because, as we heard from my noble friend, it will be very important for there to be devolution to parish and town councils—if they have the capacity to do so, which is one of the key challenges of this arrangement.
What concerns me about this statutory instrument, the previous one and the next one is that they are all about creating a convenient administrative unit. There is no mention in the instrument of the extent of the area covered, its population, its representation, nor a word about people, and we are talking about local government. People are at the heart of any local government: people who can have their voice heard, engage in influencing decisions, know their elected representative and can readily contact them. That is what local government is about, and there is no mention of it in the instrument.
For me, this is about creating efficient local government —whether it will be is a different matter. Whether it will be effective is a moot point. I know from long experience in local government that there is always pressure to make decisions at the expense of listening to the local voice, because that takes time and commitment, and can be difficult. That will be a challenge for North Yorkshire.
I understand that North Yorkshire and the local districts have considered the importance of devolving some decisions to the town councils, and to the area constituency committees being set up. That has been really good, compared with other reorganisations, and they are also setting up local networks to engage local businesses and other partners who deliver public services. That part of what is being done is positive, and I am pleased that where there are no town councils—Harrogate and Scarborough—we will have the chartered trustees referred to in the instrument.
I shall just mention Councillor Les. I worked with him years ago on Yorkshire matters, so he and I know each other, but I totally disagree with him about having a mayor for North Yorkshire. I do not think that will work, and the Government must think of a different way to devolve funding for strategic priorities to the unitary authorities they create such as this one.
The local government map is being reshaped in England bit by bit. There is a strategy somewhere that somebody in the department knows, because it is being eaten away gradually: getting rid of the district councils and replacing them with unitaries, whether they like it or not. The local is gradually being extinguished from local government in the name of getting an efficient—convenient, maybe—local administrative unit. In this case, I think a lot of thought has gone into how North Yorkshire might work, which I applaud. It will face huge challenges. I am not convinced that it will make for local government that listens to local voices and provides an effective response to what local people want for their area, but I hope it works, for the sake of the people who live in North Yorkshire.
Baroness Hayman of Ullock (Lab)
My Lords, I thank the Minister again for his introduction to this draft statutory instrument and other noble Lords for giving me so much in-depth information about North Yorkshire. It has been very interesting to listen to the debate.
I shall be brief and shall not repeat the questions that I asked earlier. As with the previously instrument, the Secondary Legislation Scrutiny Committee marked this one as being of interest, particularly around the concerns about the implementation of criteria in decision-making. The Minister went into that in his previous answer about Cumbria, and the noble Baroness, Lady Pinnock, has talked about it, so I shall not go into any more detail.
One thing that has been particularly interesting in the debate, which is important in Cumbria as well, is the issue around identity. People talked about Ripon, Scarborough and Harrogate, and how different parts of North Yorkshire are distinct areas. The thing that I am interested in is how we ensure that they continue to have a distinct ownership of place and locality, as well as services. How can they have a genuine say in what is happening going forward, to ensure that, as we move from one council set-up to the new unitary, there is no democratic deficit? The noble Lord, Lord Jopling, talked about constituency committees, but I imagine that those are quite large groups. Of course, the noble Baroness, Lady McIntosh of Pickering, drew our attention to the fact that there were 159 district wards. That is a lot—and I imagine that there are probably more parish councils within that. It is important that powers are not just devolved up to the new body but that there is strong interplay between local communities and the new council being set up. That is something that has come across very strongly to me in the debate—that this is important to local people. I am sure that the Minister will have taken it on board.
The noble Lord, Lord Newby, also talked about the importance of resources, which will obviously be critical, but I would also be interested to know whether there are any investments that need to be transferred or budget surpluses or debt that need to be consolidated. We know that local government has had serious cuts over the past decade, so there may well be debts that need to be resolved. I would be interested to hear about that from the Minister, and whether it is likely to cause any difficulties.
The noble Baroness, Lady McIntosh of Pickering, also raised concerns about what could happen if there was a metro mayor for the area, and her concerns around the pressures put on local authorities and people that this is the route that they have to go down to get the sufficient resources and funding that everyone has been talking about. Having lived in rural Cumbria, I totally appreciate that having a metro mayor for a large rural area is not the same as having one for an urban area, and that really needs to be taken into account. I would be very interested in the Minister’s reply on that as well.
Finally, the noble Lord, Lord Newby, seemed to imply that North Yorkshire was bigger than Cumbria in every way. I would just like to say that we have some rather large mountains. I am sure that, if we took all the area of the mountains into account, we would probably have more than North Yorkshire.
Lord Greenhalgh (Con)
My Lords, this debate has shown a humongous knowledge of North Yorkshire. I remember a school visit to Scarborough and many conferences in Harrogate, but I have a fleeting knowledge of some of the places mentioned by noble Lords. I thank my noble friend Lord Jopling. In these debates, I have never had covering fire as effective as that provided by him, and I wish that he turned up to every statutory instrument that I had to deliver. I would ask him to please be here more often, with his forensic knowledge of every single part and corner of this country, from Cumbria to North Yorkshire. It is stupendous in every respect.
Noble Lords very helpfully said that there was unanimity of support from MPs representing constituencies in North Yorkshire for this proposal, and it is tremendously helpful to know that. In response to the noble Baroness, Lady Hayman, it actually preserves the service delivery over a county-wide area and has an established local identity which is easily understood by residence. It maintains the brand of North Yorkshire. That is important as well, and I think it is recognised by the MPs who have been elected in constituencies within North Yorkshire. It also aligns with arrangements in existing public sector partnerships and will allow existing relationships and partnership working to be maintained without disruption.
Responding to my noble friend Lady McIntosh of Pickering, when we hear a number such as 4,300, those are not individuals. Very often they are small, medium and large-scale organisations responding to the consultation. Of course we can always make consultations more effective, but we need to see individual responses from groups, not just the individual citizens of North Yorkshire.
I thank the noble Baroness, Lady Pinnock, for reminding me on the criterion of size that I was leader for only 16 years of my life in a terribly small London borough. She is always tremendously helpful in pointing these things out. We have a population approaching the size of Bern in Switzerland, and it has its challenges, but none the less, I agree with her that it is far smaller than North Yorkshire. The whole of Yorkshire, in aggregate, seems to envelope the vast majority of the north of England. All I will say is that Lancashire has definitely lost the Wars of the Roses when it comes to geography and scale.
However, the criterion is not simply around numbers. The criterion makes a specific point that a credible geography can be outside the 300,000 to 600,000 range if its population is a figure which, having regard to the circumstances of the authority, including local identity and geography, could be considered substantial. I am happy to set that out in writing if the noble Baroness, Lady Pinnock, wants to understand the issues, but there is a tolerance around the 300,000 to 600,000 figure, in essence. I do not need to write that out.
I enjoyed most the speech by the noble Lord, Lord Newby, which pointed out the horrendous antagonism between Ripon and Harrogate. It is true. My father grew up in Derbyshire and pointed out that there is sometimes antagonism between Long Eaton and Ilkeston. That is just the reality of where we are. You can see it in any part of continental Europe as well; villages that abut each other are often big rivals. Dare I say that it was ever thus?
I thank again my noble friend Lord Jopling for his covering fire. He invoked the name of Councillor Carl Les, who I had not heard of, but I now know is leader of North Yorkshire County Council and is clearly known by the noble Baroness, Lady Pinnock. His assurance that there is an intention to have that strategic authority but to devolve power and responsibility to town councils is incredibly helpful because the unitary will send that funding flow down to the town. Not every leader should be held at the centre. He has strong decentralising and devolutionary instincts, and it is tremendously helpful to have that assurance.
My noble friend Lady Pickering let me know that she would ask about the mayoralty. This order, in and of itself, allows a mayoralty to happen but does not impose it. I assure her that the introduction of a mayoral combined authority and devolved powers requires local support, but it is understood that any such move would require a full public consultation run by the area. A summary would then be submitted to the Secretary of State, who must be satisfied that there has been adequate consultation, so there is that proviso.
Baroness McIntosh of Pickering (Con)
My Lords, what is the timeframe and is the public consultation more than just online, as in the unitary?
Lord Greenhalgh (Con)
Regarding how the consultation is conducted, I will have to respond to my noble friend in writing. Regarding timeframes, I think they will probably be indicative from other areas, but again it must come from the bottom up, as opposed to the top down. I understand that there is some strong support in the local area for potentially having a mayor, but I will set all that out in a letter.
The last question concerns assets and debts. Within the current structure, although the top layer does not change, all the assets and debts essentially transfer to the unitary. All the assets, liabilities and debts just transfer, so that is a very simple matter.
We have had a very interesting debate. I continue, lord-lieutenant or not, to become a more rounded exponent of the virtues of local government in different parts of the country. I thank noble Lords for their contributions.
Somerset (Structural Changes) Order 2022
(2 years, 9 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Greenhalgh
That the Grand Committee do consider the Somerset (Structural Changes) Order 2022.
Relevant document: 29th Report from the Secondary Legislation Scrutiny Committee
The Minister of State, Home Office and Department for Levelling Up, Housing & Communities (Lord Greenhalgh) (Con)
My Lords, this order was laid before this House on 24 January 2022. The other place approved it on 28 February. If approved by this House and made, it will implement a proposal submitted by Somerset County Council for a single unitary for the whole of the Somerset County Council area.
In my introductory words for the Cumbria order, I set out the Government’s views on the benefits of strong local leadership. This order will establish for the people of Somerset a new single unitary council. Implementing this proposal and establishing this unitary authority will enable stronger leadership and far greater engagement at the strategic level and with its communities at the most local level. While Somerset is not among the areas for an early county deal, we will continue discussions with Somerset about a future devolution deal. The reform for which the order provides can help pave the way for such a deal.
I set out the full detail of the process for all three areas undergoing unitarisation in my speech regarding Cumbria. I will not repeat the detail of the invitation, criteria or dates of the statutory consultation here but will highlight the matters specific to Somerset. When issuing the invitation to the principal councils in Somerset to submit proposals for unitary local government, the then Secretary of State, my right honourable friend the Member for Newark, Robert Jenrick, also wrote to the neighbouring unitary councils of Bath and North East Somerset and North Somerset. Two locally-led proposals for local government reorganisation in Somerset were received in December 2020, one for a single unitary council and one for two unitary councils.
Turning now to the responses to the statutory consultation, we received almost 5,500 responses on the Somerset proposals. Of them, 5,167 responses, 94% of the total, were from residents living in the area affected. Both proposals received of a good deal of support. Some 3,000 residents, or 57% of those who responded, supported the two unitary councils option, while some 2,000 residents, or 35% of those who responded, supported the single unitary option. Some 72 % of respondents from the business sector supported the single unitary option and 88% of respondents from other public service providers also supported that option.
The district councils in Somerset ran a poll of residents about the unitary proposals. My right honourable friend had regard to the results of that poll and the representations he received about the way it was conducted. In essence, the poll showed similar levels of resident support as the consultation. Namely, there was a good deal of support for both proposals, with greater support from residents for the two unitary proposal.
However, I stress that the decision about the proposals is not a decision on the basis of any form of poll or referendum, nor is it on the basis of which proposal is most popular among a group of consultation respondents. It is a decision on the basis of the criteria to which I have referred and which were set out in the invitation of 9 October 2020.
Noble Lords will recall that my right honourable friend the then Secretary of State announced his decision on the proposals. A ministerial Statement setting this out was made on 21 July 2021, which I repeated in this House. In reaching this decision my right honourable friend made a balanced judgment assessing both proposals against the three criteria to which I have referred. He also had regard to all representations received, including responses to the consultation, and to all other relevant information available to him. He concluded that the two unitary proposal did not meet the criterion of improving local government and service delivery across the area. He also concluded that it did not meet the credible geography criterion. He concluded that the single unitary proposal for Somerset met all three of the criteria set out in the invitation of 9 October.
The Government believe that there is a powerful case for implementing this locally-led proposal for change. It will improve local government by enhancing social care and safeguarding services through closer connection with related services such as housing, leisure and benefits. It will improve local government by offering opportunities for improved strategic decision-making in areas such as housing, planning and transport. It will provide improvements to local partnership working with other public sector bodies and generate savings, estimated by the county council to be £52.6 million over five years. It will preserve service delivery over a county-wide area that has an established local identity and is easily understood by residents and provide a single point of contact so that residents, businesses and local communities will be able to access all council services from one place. If noble Lords approve this order, there will be, from 1 April 2023, a single unitary council for Somerset delivering the improvements I have just outlined.
We have prepared this order in constructive and collaborative discussion with all the councils concerned. I would like to take this opportunity to thank everyone involved in this process. Our discussions with the councils included the transitional and electoral arrangements. They are key to how the councils will drive forward implementation. Where there has been unanimous agreement between all the councils, we have adopted their preferred approach. Where there were different views about the detailed provisions, my right honourable friend the Secretary of State considered all differing views and reached a decision accordingly.
Turning now to the detail of the order, I shall highlight the key provisions. The order provides that on 1 April 2023 the districts of Mendip, Sedgemoor, Somerset West and Taunton and South Somerset will be abolished. The councils of those districts will be wound up and dissolved. In their place, their functions will transfer to the new unitary Somerset Council. The order also provides for appropriate transitional arrangements including that in May 2022 there will be elections for the new unitary council, which will assume its full powers from 1 April 2023. These elections will be on the basis of a 110-member authority with 55 two-member electoral divisions. Subsequent elections to the unitary council will be in May 2027 and every four years thereafter. We expect that the Local Government Boundary Commission for England will undertake a full electoral review before the May 2027 elections. Parish council elections due in May 2023 will be brought forward to May 2022 to align with the unitary council election cycle. A duty will be placed on existing councils to co-operate during the transitional period until 1 April 2023.
As I set out in the previous debates, we intend, if this order is approved and made, to issue a direction. This direction would ensure that the new unitary council has appropriate oversight of the commitments that predecessor councils may enter into during the transitional period and which the new unitary council will take on from 1 April 2023. Before issuing any such direction I will be inviting councils’ views on a draft.
In conclusion, through this order we seek to replace the existing local government structures that were set up in 1974 in Somerset with a new council that will be able to deliver high-quality, sustainable local services to the people of Somerset. This council will be able to provide effective leadership at the strategic and most local levels. All the existing councils have made clear they share these aims and are committed to the very best services for Somerset residents. This order delivers this, and on that basis, I commend this order to the Committee. I beg to move.
Baroness Pinnock (LD)
My Lords, I understood that we ought to be here at the outset of a debate. I do not want to cause an issue, but I would like clarification.
Baroness Bloomfield of Hinton Waldrist (Con)
I was just sending a text. Although the noble Lord was nearly four minutes late, as the only representative from Somerset here, I ask that he be allowed to speak.
Baroness Pinnock (LD)
I am very happy for the noble Lord speak. He has been here most of the evening waiting for this to come, but I was seeking clarification because we do not want to set a precedent for other issues.
Lord King of Bridgwater (Con)
The noble Baroness is of course right. I apologise to those present. The speed with which the Minister finished off North Yorkshire completely fooled me about when he was about to start on Somerset. I thank the Committee because as the only representative of Somerset here, and having represented a Somerset constituency in Parliament for 30 years, I would like to comment on the changes that are taking place without the Minister looking too worried that I am going to seek to overturn the proposals that he has made. He can relax on that.
In my earlier career, I was, among other long-forgotten things, Minister for Local Government for three and a half years and I was in the Department of the Environment, as it was then. My noble friend Lord Heseltine and I worked together in that field looking at the activities of local government.
Baroness Pinnock (LD)
My Lords, I start by adding an additional interest to the ones that I declared earlier, as I have a family member who is a councillor in Somerset, so I know a bit about what is going on. I am glad we have heard from the noble Lord, Lord King, because I agree with him about the danger of local government becoming remote from people, which is a comment I made earlier about North Yorkshire. It then loses the “local” out of the government. What you might gain in strategic oversight, you lose in terms of local voice and listening to local people. I think the Government would do well to listen to the points made by the noble Lord, Lord King. I think I will repeat some of the remarks I made earlier. It is a done deal. Everything is in train to create this unitary authority in Somerset. It is not necessarily something that I think is completely right—I agree with the comments that have been made.
One of the issues that arises with the Somerset local government reorganisation is that one of the three criteria that lead the Government to determine whether to have a one-or two-unitary council model is that it commands a good deal of local support. The Minister whizzed through what the Explanatory Memorandum says, but I will repeat some of the figures because they are important in this regard. The views of residents, where they have been asked, are very clear on this issue: 58% of those who live in the area support a two-council model. Some 67% of parish and town councils support a two-council model. The voluntary and community sector supported a two-council model by 53% to 20%. When the district councils set up the online poll, to which there was a huge response—100,000 people responded—65% supported the two-council model. Although there was the counterview from Somerset County Council, which stuck up for what it had already, the people wanted a two-council model. Unfortunately, that has been overridden by this decision.
This is the point at which I draw the Committee’s attention to the comments of the Secondary Legislation Scrutiny Committee, to which I would like the Minister to respond. It said:
“Given the Government’s commitment to unitarisation”—
horrible word—
“being ‘locally-led’ … it is not clear whether or how the three criteria are prioritised.”
What weight is given to each of them? The people of Somerset clearly said no to having one council, and the Government said, “Hard luck, you’re going to have it.” The Secondary Legislation Scrutiny Committee invited those of us debating this to ask the question. I am asking it, and I would like an answer.
I heard what the Minister said about credible geography being important in this case. Perhaps he can explain what that means, given that Taunton, as we heard from the noble Lord, Lord King, is in the bottom left-hand corner, if I can put it like that, so it is nowhere near the middle. It is at the south-west edge of the county, which is very rural. A consequence is poor connectivity and access to services that are to be administered miles away from the northern part of the county. To get to Taunton from the north—from Frome or somewhere such as that; that is a new town for the Minister to know—would take an hour and a half. There is no public transport to get there, so unless you drive you cannot get there. It should be a matter of concern that the administrative centre of a new council is not easily accessible for people who live in one part of the county.
As I said, what has really upset me about these instruments is that there is no mention of people in them. I do not want any further instruments to come here without mentioning people, who are at the heart of local government. There is no mention of them at all, except in the consultation. Somerset has a population of 500,000. It is very rural. As we heard from the noble Lord, Lord King, it is proposed that there will be 110 councillors for the initial interim council, but I have heard it suggested that 85 will be the maximum number once the local government boundary review is done.
Each councillor will represent 2,000 households in the interim council and probably 2,700 households when the Boundary Commission has spoken, which is a very significant cut in representation. It makes them quite large in terms of numbers of councillors per household. I take as a random choice the London Borough of Hammersmith and Fulham, just as a comparator. It has a population of 180,000 in 80,000 households, and there are 46 councillors, so each represents a mere 1,700 households—a mere nothing. My colleagues and I represent 9,000 households between us, by the way. On top of that, in London there are also Assembly members providing additional local representation—and you have a compact borough, with excellent connectivity. So what is the problem with Somerset having equivalent levels of representation at a local level?
I applaud what the council is doing about the local community networks; that is something to agree with—it is trying to get something done. But there is no coherent plan for devolution to local communities at all, as there was in North Yorkshire, and no devolution plan for parish and town councils or, as they have in North Yorkshire, area constituency committees. There is much to be concerned about.
Of course, residents understand that some decisions, such as on highways, are best made at a county-wide level. But what is less acceptable, particularly in this case, is for decisions on planning or bus services to be made in Taunton by a Cabinet of 10 members out of 110 who will not understand the practicalities. Those who live near and around the Somerset Levels, for instance, or live in the north of Somerset, in Shepton Mallet, Frome or Street or any of those small towns in the north, do not want their planning decisions to be made in Taunton. Currently, the plan is for planning not to be devolved to area committees, which is a huge mistake. I hope that those with influence in Somerset, such as the noble Lord, Lord King, will do their best out of this to get some devolution at a local level, because that is the only way that these vast unitary authorities will work.
Noble Lords can see that I am not enamoured by this plan, because that is what it is—we do not have a choice today. The focus and purpose of the change is being driven by administrative and financial demands. Local democracy has been steamrollered out of the equation; it is entirely about process and not people.
These big unitary authorities may be more efficient because they can take a strategic view of what is needed across the area. I have served a community on the edge of a big metropolitan authority of 450,000 people for 30 years, and I can tell you how difficult it can be to make the voices of the villages I represent heard at the centre. It might be more efficient in administrative terms, but it will not be more effective at hearing the voices of local people. For me, local democracy is about local people, and their representatives listening to them and doing something about what they have said. There is not much point if they do not.
As noble Lords can hear, I am very concerned about what is happening in Somerset. It is going to happen, so I hope it is made to work. It will only work if there is proper devolution. I wonder whether the Minister will be able to put some pressure on his colleagues in Somerset to insist that that happens. With those few words, I look forward to what he has to say.
Baroness Hayman of Ullock (Lab)
My Lords, this is the third and last of the SIs on structural changes we have been debating. I will be brief, as we seem to have been here for some time. I thank the Minister for his introduction and the noble Lord, Lord King, for giving the perspective of someone from Somerset. As always, it was helpful and useful to hear that. My credentials are that my husband is a Somerset boy—well, not such a boy anymore, but he is from Somerset.
I understand from the consultation that
“The Secretary of State has concluded … that the proposal for a single unitary council meets all three criteria and that the proposal for two unitary councils meets only the criterion on local support”,
not those on improving local government and being a credible geography. From looking at the consultation, it seems the people of Somerset supported a proposal for two councils. Both the noble Baroness, Lady Pinnock, and the Minister mentioned the poll that was run by the four district councils, with a good number of people taking part—more than 100,000—of which 65.3% voted for the district council’s “Stronger Somerset” proposal, which would have created two councils, western Somerset and eastern Somerset.
As referred to by the noble Baroness, Lady Pinnock, Somerset County Council did not like that proposal. My understanding is that it described the poll as “deeply flawed” and “biased”, but the Member of Parliament for Bridgwater and West Somerset, Ian Liddell-Grainger, said that the Secretary of State “cannot afford” to ignore the poll. Could the Minister explain why the then Secretary of State ignored that poll? Did he agree with the county council that it was deeply flawed and biased? Will the Minister and the department assure the people of Somerset that their views in the consultation will not be ignored, and will be heard loud and clear in the transition phase to the new unitary authority? The people of Somerset need to be fully involved in the process at every stage. I hope the Minister can give specific assurances on this.
Noble Lords have said it is important for local people’s voices to be heard. Local decision-making must be part of any future structures. If the Minister could give reassurances on these matters, I would be grateful.
Lord Greenhalgh (Con)
My Lords, this is almost like a well-oiled relay. First, we had my noble friend Lord Jopling stepping in to provide covering fire. Then we had my noble friend Lord King of Bridgwater, with his Somerset credentials, stepping in to cover my lack of them. I went to a school in Somerset once—I think Blundell’s is in Somerset—and I did a prize-giving there, but that was about the first time.
Lord Greenhalgh (Con)
Is it in Devon? Gosh, that was not particularly good; I am probably not best placed to sell the virtues of Somerset. I wanted to say that I learn something every time, such as the fact that my noble friend was a Local Government Minister under the noble Lord, Lord Heseltine. You succeeded him, did you not? That was your first Cabinet position and you continued to serve with great distinction, for almost a decade, in the Cabinets of Margaret Thatcher and John Major. Each time I see my noble friend I am reminded of “Spitting Image”; he has not changed a bit in all those years, I have to say.
Most importantly, my noble friend raised the issue that Governments need to be strategic but also deliver. As someone who has served in the town hall, in City Hall and now as a Minister, I absolutely recognise that. It is possible to do both. It is possible to be strategic and focus on delivery. That is what local leadership is all about. That is what I would say in response to my noble friend.
It has been very difficult to listen to some of the passages from the noble Baroness, Lady Pinnock, because I was being lectured by someone from Yorkshire about Somerset and about Hammersmith and Fulham. In response to her and the noble Baroness, Lady Hayman, I would say that the process was done properly. The key point is that both options had a great deal of support in Somerset. As I set out in some detail for the first statutory instrument, the three criteria are considered in the round. Residents are central to the criteria that have led to this order, in the sense that this reform is all about better delivery of services to the residents of Somerset.
Before I conclude, I will just say that the electoral arrangements are clearly for an election in May 2022. That was proposed by the Somerset councils. There will be a review by the Local Government Boundary Commission for England before the second election in 2027.
This has widespread support from residents, local businesses, and the voluntary and community sector in Somerset. I commend the order to the Committee.
Greenhouse Gas Emissions Trading Scheme (Amendment) Order 2022
Baroness Bloomfield of Hinton Waldrist
That the Grand Committee do consider the Greenhouse Gas Emissions Trading Scheme (Amendment) Order 2022.
Baroness Bloomfield of Hinton Waldrist (Con)
My Lords, I beg to move that the draft Greenhouse Gas Emissions Trading Scheme (Amendment) Order 2022, which was laid before the House on 9 March 2022, be approved.
The UK Emissions Trading Scheme, or UK ETS, was established under the Climate Change Act 2008 by the Greenhouse Gas Emissions Trading Scheme Order 2020 as a UK-wide greenhouse gas emissions trading scheme to encourage cost-effective emissions reductions which will contribute to the UK’s emissions reduction targets and net-zero goal. This scheme replaced the UK’s participation in the EU Emissions Trading Scheme, and the 2020 order applied EU ETS rules on the monitoring, reporting and verification of emissions, with modifications to ensure that they work for the UK ETS.
The 2020 order was subsequently amended by the Greenhouse Gas Emissions Trading Scheme (Amendment) Order 2020 to include provisions for the free allocation of emissions allowances and to create the UK ETS registry. Regulations under the Finance Act 2020 established the rules for auctioning allowances and mechanisms to support market stability. The UK ETS launched on 1 January 2021 and the first auction successfully completed on 19 May. The scheme has been running well since this launch, but there is a need to continue to improve its operation.
Further amendments to the scheme were made by the Greenhouse Gas Emissions Trading Scheme (Amendment) Order 2021, which was subject to the negative procedure and came into force on 7 February 2022. In broad terms, the 2021 order made various technical and operational amendments to the UK ETS across a number of scheme aspects, including providing for installations in the hospital and small emitter opt-out scheme to be able to increase their emissions targets and for installations in both opt-out schemes that return to the main scheme to benefit from free allocation.
The purpose of this order is to amend the 2020 order to address several residual operational issues identified in the development of and legislation on the scheme, and to support the scheme’s technical operation. This legislation also addresses an issue of doubtful vires relating to the previous amendments raised by the Joint Committee on Statutory Instruments.
This proposed order consists of various operational issues that were identified by BEIS, the devolved Administrations and the national scheme regulators during the establishment of the scheme but were required to be legislated for via an affirmative procedure. In particular, this order introduces a civil penalty to enforce an existing obligation to return overallocated allowances; creates an offence of intentionally obstructing the scheme regulators exercising enforcement powers; makes it clear that some enforcement powers previously introduced by the negative procedure are valid; and provides that, when an installation’s permit is surrendered or revoked, the notice given to the operator will include a requirement to surrender any deficit of allowances from previous scheme years.
The Government consulted on the policy in these regulations between July and September 2021. The consultation generated seven responses from a range of stakeholders. Responses were largely considered clarification-based, none of which impacted on the proposed policy changes. Alongside the consultation, the UK Government and the devolved Administrations jointly sought the advice of the Committee on Climate Change on the public consultation. The Committee on Climate Change reviewed the consultation on the proposed amendments and had no comments on the content.
The amendments made to the surrender and revocation notice provisions were not included in the public consultation. The department took the view that the policy represented by these amendments is within the scope of the consultation previously carried out on the future of UK carbon pricing in 2019 and is covered by the Government’s response to that consultation, which was published in June 2020. The scheme regulators were consulted and agreed with the proposed amendments. The Committee on Climate Change was advised of the additional provisions and had no comments.
The overall level of climate ambition in the UK ETS is unchanged by the proposals. There is no overall impact on the monetised costs and benefits to businesses. There is no change to the supply of allowances or the expected emissions from participants. There is also no expected change to the general administrative burden for emitters. In terms of other impacts, these provisions are also designed to address a number of specific circumstances for regulators and the registry administrator, including options to apply penalties specifically if operators or aircraft operators fail to return allowances. Again, these are not expected to apply generally, but might take effect in specific circumstances.
In conclusion, this order will help to improve the effective operation of the UK ETS. This in turn will help to ensure that the scheme plays its part in reducing emissions. I commend the draft order to the Committee.
Lord Kennedy of Southwark (Lab Co-op)
My Lords, I do not intend to speak for long. This order is fairly uncontroversial, so I do not want to detain this packed Committee. The one thing that I want to mention is that the Minister mentioned consultation and said that only seven people responded. I have stood here many times and looked at consultations, and it always strikes me how woefully few the responses are. This order may not cover very much, but it seems to me that we have to consult. The Minister need not come back but, if only seven people respond, have we got the consultation right? That is a general comment across a number of departments. I shall not detain the Committee, because I do not have a huge objection; the order is fairly uncontroversial. However, I understand that this order amends a previous order, so the question is why we did not get it right in the first place. Perhaps the Minister can respond on that point in particular and about consultation. I will leave it there.
Baroness Bloomfield of Hinton Waldrist (Con)
I thank the noble Lord for his kind comments and his contribution to this debate. I take his points about the consultation. I wondered why we had had so few responses, but it is a general point about consultations.
The UK ETS was designed by the UK Government jointly with the Scottish Government, the Welsh Government and the Northern Ireland Executive. It came into force on 1 January 2021, only 15 months ago, replacing the UK’s participation in the EU scheme. The UK Government and devolved Administrations are committed to the use of carbon pricing as a key policy lever to ensure that the UK reaches its ambitious climate targets, including net-zero emissions by 2050, cost effectively. We will in due course also consult on aligning the UK ETS cap with our ambitious net-zero target—and I am sure the officials behind me will take note of the consultation procedures for that. The UK ETS will promote cost-effective decarbonisation, allowing businesses to cut carbon where it is cheapest to do so. It will help mobilise the scale of capital investment necessary to deploy clean energy technologies and to capture new trade opportunities on the back of the energy transition. Alongside our UK ETS, we are also supporting and incentivising business to invest in key technologies such as hydrogen and carbon capture, which, as the noble Lord will know, is also supported by the Government.
Small Business, Enterprise and Employment Act 2015 and Pubs Code etc. (Amendment) Regulations 2021
Baroness Bloomfield of Hinton Waldrist
That the Grand Committee do consider the Small Business, Enterprise and Employment Act 2015 and Pubs Code etc. (Amendment) Regulations 2021.
Baroness Bloomfield of Hinton Waldrist (Con)
My Lords, I beg to move that the Small Business, Enterprise and Employment Act 2015 and Pubs Code etc. (Amendment) Regulations, which were laid before the House on 30 November 2021, be approved.
The Pubs Code was introduced in 2016 to ensure the fair and lawful treatment of tied pub tenants of large pub-owning businesses. These regulations would improve its practical operation. A tied pub tenancy is where the tenant has agreed to purchase beer and other stock from their pub-owning landlord in return for a lower rent and other benefits. That agreement means that the tied pub tenant is unable to negotiate deals in the open market for beer and other products, but also means that their landlord has a shared interest in the success of the pub and works in partnership with the tied tenant. This has not worked well in all cases, and evidence from tenants to several Select Committees identified failures in the tied pubs sector and led the Government to introduce the Pubs Code to regulate this relationship. The Pubs Code creates certain rights and protections for tied tenants, including better information prior to signing a contract; no upward-rent-only reviews; no tied gaming machines; a right, at certain points, to break their tied arrangement and opt for a free-of-tie tenancy, by way of the market-rent-only process; and a system of redress through the Pubs Code Adjudicator.
The tied model is not inherently bad. In many cases, if not most, tenants are positive about their tied arrangements and welcome the partnership with the pub-owning business. It is therefore crucial that the Pubs Code strikes the right balance between creating rights and protections for the tied tenant, the property rights of pub-owning businesses and their ability to realise the value of their investments. To ensure the Pubs Code continues to operate as intended, a statutory review must be conducted every three years. The first such review concluded with the publication of the Government’s report in November 2020. This found that although there had been improvements, there were some aspects of the code’s practical operation that could be improved. Following a public consultation, the Government committed to make several changes to the Pubs Code.
The most significant changes in these amendments are the improvements to how the process for the market-rent-only option works in practice. The MRO process enables the tied tenant to request a proposal from their pub-owning business that sets out the terms for a free-of-tie tenancy where the tenant would pay a market rent. That rent will likely be higher with the removal of the contractual agreement to purchase tied products from the landlord and is a matter for the parties to negotiate.
The SI will improve the MRO process, first by requiring the initial MRO proposal from the pub-owning business to include a rent proposal, so that parties can negotiate both terms and rent at the same time. Secondly, it will create a single resolution period of up to three months. Unlike the current process, where the tenant has 14 days to decide whether to refer an MRO proposal to the PCA, the parties will have time to negotiate the proposed free-of-tie terms and rent. This change has been welcomed by most stakeholders, including the PCA. Only the tenant can end this period early, at any time after 21 days, enabling them to refer the proposed terms to the PCA, or the proposed rent to an independent assessor.
Finally, the SI makes other changes, adjustments and clarifications to the MRO process, reflecting the introduction of the resolution period. For instance, where there is a procedural defect in the MRO proposal, such as the omission of the rent offer, the tenant has 14 days to refer this to the PCA to resolve such technicalities more quickly. It also provides expressly for rereferral to the PCA where the tenant considers that the pub-owning business’s revised response is still not MRO-compliant.
Schedule 1 to the statutory instrument uses powers in the Small Business, Enterprise and Employment Act 2015 to amend the qualification period for a business owning tied pubs to come into or out of scope of the Pubs Code. This amends the requirement from having owned 500 or more tied pubs for six months in the previous financial year to three months. No new pub-owning business has met this threshold since 2016, but noble Lords will be aware of the merger and acquisition activity that is a feature of the pub sector.
Currently, tied tenants could wait for nearly 18 months after their landlord reaches the 500 tied-pub threshold before acquiring the rights and protections of the code. For example, under the legislation as it stands, a pub company meeting this 500 tied-pub threshold through tied pub acquisitions in October 2022 would not come under the code until April 2024. Under the amendment, the maximum period is reduced to 15 months, so a pub company meeting that 500-pub threshold in October 2022 would come under the code in April 2023. Similarly, a pub-owning business reducing its number of tied pubs to below 500 would remain regulated for a longer period, but this also means that the minimum period of full protection for the remaining tied tenants increases from six to nine months and would help to manage such changes, which are beyond the tenant’s control.
In Schedule 2, the comparison period, used to determine whether a significant price increase for a tied product or tied service has occurred, is amended from 56 weeks to 52 weeks. This is one of the events allowing a tied tenant to request an MRO proposal, and therefore serves to disincentivise significant price increases for tied beer, et cetera, under the tie.
The Government are cautious about changing this arrangement, but there is a case for amending how the comparison period is calculated. A 56-week comparison period could capture two annual price increases, raising complications for the more traditional 12-month business planning cycle. The proposed change amends the comparison period to 52 weeks but continues to disincentivise price increases, thereby protecting tied tenants.
Lastly, I move to notification of the PCA regarding extended protection, which applies where a tied pub is transferred to a landlord not regulated under the code. Tenants with extended protection continue to benefit from many of the code’s provisions for a limited time, including access to the PCA. Currently, the PCA will have no direct knowledge of such transfers. This amendment will require a regulated pub-owning business, before the transfer, to inform the PCA when it is transferring a tied pub where the tenant will enjoy extended protection. This enables the PCA to contact new owners, raising awareness of their tied tenants’ rights and protections.
In conclusion, this SI makes important changes to improve the practical operation of the Pubs Code, most notably in creating a longer period to enable the tied tenant to negotiate a free-of-tie tenancy or, indeed, a better tied deal. I commend these regulations to the Committee.
Lord Kennedy of Southwark (Lab Co-op)
My Lords, I should make it clear at the start how much I like a pub. I have spent my adult life visiting pubs all over the country and am a big supporter of them. I see them as the heart of the community and as a very British thing. We are very well served. Having said that, we all know about how many pubs are struggling and are closing. During the pandemic, I think that 40 pubs a week were going bust. That is something that we should all regret. Even outside the pandemic, I think that we have all known for years that many pubs have struggled. Publicans, those who are tied to a company and those who are not, have to work very hard to have an offering that actually serves their community. We will all know of very different pubs that know their customers well. Good pubs know what their customers want and serve them well.
The code itself is a good thing, but in practice it has not always worked to the benefit of the tied tenant. It is a bit like a David and Goliath battle, in that even when individual tied tenants seem to get changes, they are still tied into the agreement they have. I think sometimes it is very difficult for them. Yes, the tie means that they get a cheaper rent, but they are then tied into buying the beer and other things to sell often at a slightly higher price. If they want to change to a market rent, getting out of that can take a long time. There is not really speed here. Yes, the changes make some progress, but I think that, generally speaking, the adjudicator and the process have not particularly served the landlords of tenanted pubs particularly well. I still think that, even with these changes, tied tenants are getting a bit of a raw deal in some respects. We need to do much more, otherwise it will always be the tenant who has to wait to make the change and to pay. All those things go further to ensure that we lose more and more pubs.
What I would like to hear from the Minister when she responds is what further is going to be done. If anything I am saying today has any resonance with her, what are we going to do then to ensure that we will not be sitting here in years to come with more and more pubs lost, or saying that we are going to make further changes to the code? As it is now, it is not going to be good enough and we are going to see more pubs lost.
Baroness Bloomfield of Hinton Waldrist (Con)
I thank the noble Lord, Lord Kennedy, for those perceptive comments. I too am a big fan of pubs. We have a free house in the next village that gets a lot of our custom.
The points the noble Lord raised demonstrate the importance of the Pubs Code itself and the broad support to improve its practical operation. As I said in my opening speech, a number of tied tenants are very happy with the arrangements with the larger brewers, but I reiterate that the clear and narrow purpose of the Pubs Code is to regulate the relationship between large pub-owning businesses that own at least 500 tied pubs and their tenants to ensure that there is fair and lawful treatment.
The Government will commence the second statutory review this year. Ministers are considering how they wish to approach the review, but stakeholders will again be invited to share their views about how well they think the code is operating. The second review will cover the three years to the end of March this year. Stakeholders’ responses and publicly available evidence will be considered to assess the practical operation of the code to inform the Government’s conclusions. The first review did not find that the tied pub arrangement had been a significant driver of pub closures, although a number of responses to the review gave examples where they believed that the tie had contributed to the failure of a tenant’s business.
We acknowledge that these are exceptional times for the hospitality sector, including the wider pub sector. It will take time to assess the longer-term impact of Covid on the pub sector. Prior to the Covid pandemic, however, the main causes of pub closures, as identified by the Office for National Statistics, were changes in demand because of short-term economic factors and longer-term changes in consumer habits. I acknowledge that there was a worry that pub-owning businesses might have used Covid as an opportunity to punish former tied tenants for exercising their right to a market rent only free-of-tie tenancy under the code by not giving them the same support, but that is one of the reasons why the Government have introduced these streamlined arrangements to allow tenants to use the market rent only process, and why we have tweaked the Pubs Code Adjudicator to help resolve these dispute under the code.
The Pubs Code was drafted to balance those important rights and protections for tied tenants against the property rights of pub-owning businesses to operate their tied pub estate and to secure a return on their investments. We believe these amendments are proportionate in improving the practical operation of the Pubs Code and achieving real improvements for tenants without placing undue constraints on pub-owning businesses, particularly at a time that remains difficult for the tied pub sector. As I said, the next consultation is already well under way. It will be interesting to see what lessons can be drawn out of that. For the moment, I commend this instrument to the Committee.
House of Lords
Green Skills
(2 years, 9 months ago)
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Baroness Hayman
To ask Her Majesty’s Government what consideration they have given to introducing a national green skills strategy to ensure that the workforce has the necessary skills to meet the United Kingdom’s net zero emissions commitments.
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
My Lords, the Net Zero Strategy sets out our plans to work with industry to create the skilled workforce needed to deliver our net-zero targets. This includes green apprenticeships and retraining boot camps. The Government are establishing a green jobs delivery group, co-chaired by a government Minister and an industry representative, where government, industry and other key stakeholders will work together to deliver the skills needed for net zero.
Baroness Hayman (CB)
My Lords, I declare my interests as set out in the register and thank the Minister for that Answer. Green skills will be fundamental to economic growth and the levelling-up agenda, as well as to achieving net zero. While I recognise that much is going on in various parts of the forest, will the Government now bring together all the various agencies and departments with business and industry to provide a comprehensive and systematic strategy for skills? I also take the opportunity of the Minister being at the Dispatch Box to ask whether, given the reports in today’s papers about onshore wind, the Government will now give my Private Member’s Bill on the issue fair passage.
Lord Callanan (Con)
I thank the noble Baroness for her question. Before I answer, I will detain the House for a moment to acknowledge that, after 52 years of distinguished service in Parliament, this is the final appearance of my noble friend Lord Tebbit, who is joined by his family in the Public Gallery. I am sure I speak for the whole House in saying that we have been greatly enhanced by his presence here and wish him the very best for his long and happy retirement. We on these Benches will miss him.
Going back to the question of the noble Baroness, she makes a very good point. We are bringing together the Green Jobs Taskforce, chaired by my right honourable friend Minister Hands, with representatives from the DfE, the DWP and all the key departments in Whitehall. With regard to her Private Member’s Bill, we have an energy Bill coming up which will deal with many of these matters.
Baroness Fookes (Con)
My Lords, is my noble friend aware of the great amount of consideration that should be given to the horticultural sector, which can offer so much? It has a shortage and is crying out for skilled jobs. What can my noble friend do to assist?
Lord Callanan (Con)
My noble friend makes a very good point. There are a number of different apprenticeship standards supporting green skills. The horticultural sector is very much a green skill, so I totally agree with her that we want to do all we can to encourage this important sector.
Lord Kennedy of Southwark
My Lords, I join the Minister in paying tribute to the noble Lord, Lord Tebbit, for his long and distinguished service to this House and the other place.
Could the Minister set out for the House the specific skills that the workforce needs to develop and obtain to meet the UK’s net zero commitments?
Lord Callanan (Con)
That is a very wide-ranging question. There are a number of them, but I can give some examples: the wave 1 and 2 skills bootcamps in green subjects, such as housing retrofit, solar and nuclear energy, vehicle electrification. We have 40-plus apprenticeship standards in digital, STEM, nuclear, forestry, manufacturing et cetera—there are a number of them.
Lord Howell of Guildford (Con)
My Lords, the International Energy Agency confirms that global emissions are again rising fast. Sadly, it looks as though even if we achieve the UK net zero aim, which is commendable and something that we all want to see, those emissions will continue to rise fast and take us further and further away from the Paris targets. Is it not necessary to think about not only skills for our own net zero but skills to develop entirely new initiatives both in the production of low-carbon energy and in carbon absorption, which has been rather neglected and can be met on a much bigger scale—not only by trees but by entirely new strategies which are now being discussed?
Lord Callanan (Con)
Indeed, my noble friend makes a very good point. The UK is responsible for only 1% of worldwide emissions; it is very much a global problem that we have to work internationally to tackle. There are many exciting new developments in a whole range of industries and technologies that we want to encourage as much as possible. Technology could be our friend here.
Lord Foster of Bath (LD)
My Lords, over one-third of our homes are inadequately insulated, and yet after many failed green deals, the industry that will actually deliver the solution to the problem has lost confidence. It says that if it is going to invest in research, equipment and skills training, it wants the confidence of the Government’s home insulation targets placed firmly into legislation. Why have the Government refused?
Lord Callanan (Con)
We are working very closely with the retrofitting insulation industry. The noble Lord is aware that we are spending billions of pounds helping low-income families to upgrade their accommodation in the low-income private sector, social housing and through local authorities. This is a well-advanced programme, and we also have the ECO scheme which spends up to £1 billion a year on green retrofitting measures, so there is a lot going on this sector.
Lord Clark of Windermere (Lab)
My Lords, over four decades ago there was a similar scheme to try and push green jobs, based on a fairly similar tripartite-plus system. It was not a great success, although it had a lot of support. Will the Minister ask his civil servants to see if there are any lessons to be learned from that experience that will make sure it works now?
Lord Callanan (Con)
I thank the noble Lord for his suggestion based on his long experience in government. I will certainly pass on that suggestion to my ministerial colleague, and I am sure we would want to learn lessons from past experiences.
Lord Lilley (Con)
My Lords, if my noble friend believes the Government’s strategy when it says that green energy will create more jobs at higher pay than producing an equivalent amount of conventional energy, does that not mean it is wasteful, and that green energy must be more expensive than conventional energy?
Lord Callanan (Con)
It is the entire sector, not just the generation of energy; it includes all the retrofitting standards, the upgrading of insulation, new homes built to higher standards and others that have been mentioned. We are confident that there will be a net increase of jobs, but we do have a legally binding commitment to net zero which we need to pursue.
Lord Brownlow of Shurlock Row (Con)
My Lords, I join the Minister in paying tribute to Lord Tebbit, who was inspirational to me, as an 18 year old, to get involved in politics, and I thank him for all his service.
I have a background in recruitment: can the Minister tell me how many individuals he estimates would be needed in, say, the next five years to join a green skills workforce?
Lord Callanan (Con)
It is very hard to put a precise number on that, but I can give my noble friend some figures. Our net zero strategy supports up to 190,000 jobs by the middle of the 2020s, and up to 440,00 jobs by 2030.
Baroness Bennett of Manor Castle (GP)
My Lords, the major IPCC report out this week said that the shift from incremental change to transformational change was crucial, given the fact that carbon emissions are heading in the wrong direction. Do the Government really think they are finding the true innovation, the true change, rather than just doing business as usual with a bit of greenwash added?
Lord Callanan (Con)
It is very much not business as usual. As the noble Baroness will be aware, we have one of the most ambitious decarbonisation targets in the western world. We have decarbonised faster than most other industrialised countries. I am sorry if the noble Baroness does not like that, but it remains a fact. As I said in an earlier answer, we are responsible for 1% of worldwide emissions. Yes, we need to make progress in this country, but we also have to look at a global scale and work with partners across the world to bring down their emissions as well.
Lord Teverson (LD)
My Lords, can I make a plea to the Government? So often when we talk about green jobs—as has been mentioned already, in fact—it is nearly always around green energy, renewable energy and all of that side, whereas there is a huge need for those skills that are meeting the biodiversity emergency in this country and globally, as the noble Baroness, Lady Fookes, said. In particular, I mean biologists, ecologists, horticulturalists and farm advisers—there is a real shortage of these. If we want that emergency to be solved as well, we need jobs and training in that sector.
Lord Callanan (Con)
Yes, I am very happy to agree with the noble Lord on that point. He makes some good observations.
Lord St John of Bletso (CB)
My Lords, there is no denying that environmental illiteracy is a major problem in both the public and private sector. What measures are being taken to embrace technologies such as smart meters to change behaviours?
Lord Callanan (Con)
One of my ministerial responsibilities is the smart metering programme, which has quietly gone ahead in the background. I forget the exact figures, but I think we now have 25 million smart meters installed in this country, and the programme is already delivering net benefits. We have launched a publicity drive to drive take-up even further, and we are looking to see what we can do to expand it even more, because smart meters are a very good thing.
Trade Talks with India, Greenland and Israel
(2 years, 9 months ago)
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Baroness Hayter of Kentish Town
To ask Her Majesty’s Government, further to the opening of trade talks with the governments of India, Greenland, and Israel, what steps they intend to take to support parliamentary scrutiny of the negotiating objectives.
The Minister of State, Department for Business, Energy and Industrial Strategy and Department for International Trade (Lord Grimstone of Boscobel) (Con)
My Lords, the Government welcome parliamentary scrutiny of our negotiation objectives. The India objectives were recently published, and we will publish our negotiating objectives for our updated Israel agreement in due course. The Government are negotiating to swiftly restore the terms of our trading relationship with Greenland. If the IAC should publish a report on these objectives, of course the Government will consider it with interest and facilitate a debate on the objectives, subject to parliamentary time.
Baroness Hayter of Kentish Town (Lab)
My Lords, in addition to that, I should say that the Minister very nicely, at 10 pm last night, sent me an extremely helpful letter which said that, as the International Agreements Committee had been asking, there would be an exchange of correspondence between the Government and our committee about how we deal with scrutiny. We have been asking for that since September, so I welcome the letter sent last night. In light of that, it would be a bit churlish, perhaps, to say that it was a shame that the New Zealand agreement was published before it had been shared with our committee, so let us put that to one side. For the moment, I thank the Minister for managing to engineer this big move forward and just ask him to confirm that when that exchange of letters has been agreed, it will be published in the normal manner.
Lord Grimstone of Boscobel (Con)
My Lords, it is a great pleasure to be congratulated by the noble Baroness; I have a high respect for her and for the committee she chairs. I apologise that there was a little bit of confusion in the timing of the New Zealand publication. It was a bureaucratic error because so much was going on, and I apologise to the noble Baroness and the House for that short delay.
The Earl of Kinnoull (CB)
My Lords, Article 218 of the Treaty on the Functioning of the European Union deals with all agreements between the EU and third countries. It says:
“The European Parliament shall be immediately and fully informed at all stages”.
Through this article, the scrutiny processes of the committee of this House were engaged. Why was this piece of EU law not retained?
Lord Grimstone of Boscobel (Con)
My Lords, the Government have put in place a suite of enhanced scrutiny arrangements that go well beyond our statutory obligations, so we have no need to refer back to EU law in that instance.
The Lord Speaker (Lord McFall of Alcluith)
I call the noble Baroness, Lady Brinton, to speak virtually.
Baroness Brinton (LD) [V]
My Lords, the Government have inserted in the Health and Care Bill, which is currently going through your Lordships’ House, a clause on reciprocal healthcare agreements beyond the existing arrangements with the EU, EEA and Switzerland, because we know they work well. Will reciprocal healthcare agreements form part of the trade talks with India, Greenland and Israel?
Lord Grimstone of Boscobel (Con)
My Lords, I am not yet in a position to give an answer on that. We are at the very beginning of our journey with India but, as always, we will report progress to the House as the talks progress.
Lord Leigh of Hurley (Con)
My Lords, does the Minister agree that it is incumbent upon all of us to do everything we can to promote trade with all countries, particularly the three countries listed in the Question? Therefore, does he hope, as I do, that the whole House condemns the approach taken by certain local authority pension funds in imposing boycotts, divestment and sanctions on just one country: Israel?
Lord Grimstone of Boscobel (Con)
My Lords, I think the House recognises that trade is one of the surest ways to economic advancement for a whole range of countries. The UK is strongly committed to our trade and investment relationship with Israel, one of the Middle East’s most dynamic and innovative economies.
Lord Cunningham of Felling (Lab)
My Lords, will the Minister commit the Government to including in the parliamentary scrutiny of the negotiating objectives the aim that global companies that try to abuse and infiltrate food markets—I am not suggesting that any of the three countries mentioned are included in that—should be excluded? Should we not exclude in our negotiating commitments all companies that have proven criminal records in food markets?
Lord Grimstone of Boscobel (Con)
My Lords, the Government and I have made clear on a number of occasions that we will never enter into a free trade agreement which in any way diminishes the high standards of food in this country.
Baroness McIntosh of Pickering (Con)
My Lords, I congratulate my noble friend on opening negotiations with Greenland, and I declare my interest as someone of half-Danish heritage and co-chair of the All-Party Parliamentary Group on Denmark. How will this negotiation differ from the arrangements we had through our membership of the EU? Will he join with me in recognising the importance of Greenland, with its rich fisheries, oil and minerals, and its lithium deposits?
Lord Grimstone of Boscobel (Con)
My Lords, my noble friend always makes a good point, and the negotiations with Greenland provide the opportunity to recognise the UK’s broader bilateral relationship with it. Greenland is an important strategic partner for us, and this agreement will allow us to identify areas for future co-operation, including on UK priorities such as science, research, sustainability, gender equality, critical minerals, a stable Arctic and climate change.
Baroness Liddell of Coatdyke (Lab)
My Lords, I am grateful for this opportunity and I am not as kind as my noble friend Lady Hayter, so I will be churlish. Can we return to the issue of parliamentary scrutiny? The letter that my noble friend alludes to is about trade treaties and is not much wider than that. Is the Minister aware that the diplomatic missions of the countries with which we are seeking to strike agreements watch how Parliament discusses these issues? If there is not proper scrutiny, they will conclude that there is an attempt to hide our failure, there is incompetence, or we have a Government who do not take parliamentary scrutiny into account.
Lord Grimstone of Boscobel (Con)
My Lords, “churlish” is an adjective that I would never like to apply to the noble Baroness. I think I have made our attitude towards scrutiny of free trade agreements very clear. Of course, I will draw to the attention of my colleagues in the Foreign, Commonwealth and Development Office her comments on other treaties and agreements.
Lord Wallace of Saltaire (LD)
My Lords, it is very encouraging to hear that we are now negotiating with Greenland. Can the Minister tell us what British export sectors will benefit most from a trade agreement with Greenland, and does he think that that will help in a significant way to counterbalance the deterioration of our trade with the European continent?
Lord Grimstone of Boscobel (Con)
My Lords, I am very happy to deal with that. Greenland is an important exporter of seafood to the UK, accounting for 40% of the total value of UK imports of cold-water prawns in 2020. For those who enjoy their prawn cocktails, I can think of no better statistic.
Lord Kerr of Kinlochard (CB)
While I join the noble Lord and the noble Baroness, Lady Hayter, in congratulating each other on the Government deciding not to resile on trade agreements and commitments made by the noble Lord himself at the Dispatch Box, I do find their letter a little unsatisfactory in that it is limited to trade, thus meaning that we are still much less well informed than we were when Article 218 of the treaty applied. Also, it casts some doubt on the Ponsonby rule, which has governed the Government’s provision of information on international agreements to Parliament for 98 years. Would the Minister confirm that the Government have no intention of resiling from the Ponsonby rule?
Lord Grimstone of Boscobel (Con)
My Lords, first, if I may just offer a small correction to the noble Lord, the Ponsonby rule survived for 86 years before it was supplanted by CRaG. I can completely confirm that now that they are governed by CRaG, the Government will abide by CRaG in all the appropriate circumstances.
Lord Hamilton of Epsom (Con)
My Lords, does my noble friend accept that however much Parliament oversees free trade agreements, it cannot amend them?
Lord Grimstone of Boscobel (Con)
My Lords, I recognise the point, but free trade agreements are negotiated under the royal prerogative. The House has full opportunities to scrutinise these agreements as they move to ratification, and I believe this should be sufficient for noble Lords.
Lord Foulkes of Cumnock (Lab Co-op)
My Lords, could the Minister and any of his colleagues who have contacts with the Government of India suggest they take a more robust attitude in relation to the Russian invasion of Ukraine?
Lord Grimstone of Boscobel (Con)
My Lords, I will make sure that those comments are passed on to the appropriate parties.
Horizon Europe
(2 years, 9 months ago)
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Viscount Stansgate
To ask Her Majesty’s Government whether they intend to join the Horizon Europe programme; and if not, why not.
Viscount Stansgate (Lab)
My Lords, I beg leave to ask the Question standing in my name on the Order Paper—and, if I may, I would like to wish the noble Lord, Lord Tebbit, well in his retirement. He is a man I have disagreed with all my adult life, and I am sorry he did not quite last long enough in the Chamber to listen to the exchanges on what is my first Oral Question.
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
My Lords, in line with the agreement made in December 2020, this Government are committed to finalising our association to Horizon Europe at the earliest opportunity. We continue to push the EU swiftly to formalise our association to Horizon Europe, as international co-operation is more important than ever now. We will support the UK R&D sector in all scenarios, either by associating to Horizon Europe or by implementing an alternative UK programme.
Viscount Stansgate (Lab)
My Lords, I thank the Minister for the reply, but it is very dispiriting. On Monday this week in the other place, the annual STEM for Britain competition was held, which features early-career scientists from the UK and Europe, with brilliant work on display. It is the very week when our chances of co-operation with Europe are slipping away, which will be terribly damaging. Indeed, does the Minister agree with me that not joining Horizon Europe is
“harming scientific research and collaboration”?
He certainly should, because that is a direct quote from the meeting held before Christmas of the Specialised Committee on Participation in Union Programmes.
Finally, may I also ask him about the money? Money has been allocated in the Budget for our participation in Horizon Europe. The financial year is drawing to an end, and we have not yet joined. Can the Minister assure the House that the money allocated for Horizon Europe will not be lost to science but will be carried over, either for the UK’s participation in Horizon Europe or for such other plan B as may eventually be necessary?
Lord Callanan (Con)
I agree with the noble Viscount; it is indeed very disappointing that the EU is refusing to abide by the agreement we made with it. I am sure that some of the EU’s supporters in this House will want to urge it to press ahead with this agreement. The UK stands willing and able to associate. We have an agreement to that effect, and we hope the EU will also abide by its commitments. The noble Viscount will be aware that the spending review allocated funding for full association to EU programmes. In the event that the UK is unable to associate, the full funding allocated will go to UK programmes; £5.6 billion was set aside over the spending review period.
Lord Fox (LD)
My Lords, the head of policy at the Wellcome Trust is quoted as saying:
“There is a real prospect that bright young scientists will decide it will be best … if they leave the UK.”
Meanwhile, recruitment of postgraduates in some of our elite universities is reported to be seeing a huge drop in candidates. This is because young researchers fear for the future progression of their careers. The Minister said we were seeking to resolve this at the earliest possible opportunity, and I take him at his word. However, these people are making decisions now—the brain drain is already happening. In the meantime, what is the plan to attract and retain the talent we need in this country?
Lord Callanan (Con)
I reiterate the point: we want to associate with Horizon Europe. It is not the UK that is holding up association but the EU. We want to do that at the earliest possible opportunity. If the funding we have set aside is not used for Horizon Europe, we intend to spend equivalent sums on a UK programme, co-operating with other third countries if necessary. Hopefully that will attract the talent the noble Lord refers to.
Lord Hannay of Chiswick (CB)
My Lords, does the Minister take pleasure from the fact that your Lordships’ European Affairs Committee has written to the Commissioner and the Foreign Secretary about seeking to unblock Horizon? Does he not recognise that we and the EU are now basically in a lose-lose situation in which both sides are being damaged by failure to reach agreement? In the months ahead, could we see an effort by both sides to get that unblocked?
Lord Callanan (Con)
I am delighted that the European Affairs Committee has supported our position on this. As I say, the blockage is not on our side. I hope that in its letter it acknowledged where the fault lies in this situation. The EU has an agreement to associate, which we signed up to in good faith. We stand willing to associate; it is the EU that is currently blocking progress.
Baroness Chapman of Darlington (Lab)
My Lords, we need to be pragmatic about this. The truth is that this is being held up and delayed because the Government have made such a hash of negotiations on the Northern Ireland protocol. I do not see any prospect of getting it resolved until that problem is sorted out. As this may take some time, are the Government reaching out to counterparts in the EU to make sure that, even if some further months elapse, we can still join the Horizon programme, albeit at a late stage?
Lord Callanan (Con)
I am sorry that the Opposition seem to be supporting the EU position on this. The Northern Ireland protocol is a completely separate part of the agreement, and of course we stand willing to negotiate in good faith on that as well. The two are not linked. The EU has signed up to an agreement and should honour it; we will continue to press it to do so. The Northern Ireland protocol is also part of the same agreement.
Lord Trees (CB)
My Lords, does the Minister agree that the European Horizon programmes have been hugely important in catalysing research collaborations and networks, not only between British scientists and European ones but with scientists in low and middle-income countries? Moreover, does he agree that they have also been an invaluable funding bridge between the basic science funding that our research councils provide and the much more downstream R&D funding that industry provides? Her Majesty’s Government are committed to funding successful applications to Horizon while negotiations to join continue, but how long is that commitment for? Will it continue if our application to join ultimately fails?
Lord Callanan (Con)
I agree with the noble Lord that the Horizon project is very valuable. That is why we want to continue association with it and why the funding has been allocated. With regard to the funding guarantee, of course we will want to provide certainty as quickly as possible. We will have announcements to make in that regard in due course.
Lord West of Spithead (Lab)
My Lords, the Minister will be aware that one of the key areas of research in the Horizon programme is space, which we see as very important; the Government have done a considerable amount in that area. One area where there was great advance is OneWeb. Have the events in Ukraine effectively stopped the disposition of that satellite system? If not, where do we stand on it?
Lord Callanan (Con)
The noble Lord makes a very good point. Of course, there is currently a dispute ongoing with Russia about the launch of the OneWeb satellite. My right honourable friend the Secretary of State is closely involved in this and is trying to unblock it as quickly as possible. But we will not be held to ransom.
Lord Patel (CB)
My Lords, accepting that the ideal scenario would be for the UK to be part of the Horizon Europe programme, we are, I understand, in a similar situation to Switzerland. In that respect, what plan or negotiation are the Government having with the Swiss research council to collaborate with it?
Lord Callanan (Con)
The noble Lord asks a very good question. I know that the Minister for Science has had productive discussions with the Swiss on that. They have an extremely good, advanced and able scientific programme, and we will be looking to step up our co-operation with Switzerland.
Baroness Garden of Frognal (LD)
My Lords, in headier days the Government assured us that Brexit would not mean leaving either Erasmus or Horizon. One is tempted to ask what went wrong, because it certainly is not all the EU’s fault. If the Government have an alternative, why can they not start spending now?
Lord Callanan (Con)
I am afraid it is indeed the EU’s fault, and no amount of spinning from the Liberal Democrats will get away from that. We want to associate with the programme, we stand ready to do so and the money is available. If it proves to be not possible, we will spend equivalent sums on supporting UK science.
Lord Watts (Lab)
My Lords, when the Government negotiated, did they make an “in principle” decision agreement or a cast-iron agreement? It is hard to believe that something that the European Commission agreed to as cast iron is now being rejected by it.
Lord Callanan (Con)
I am sorry that the noble Lord cannot believe that the European Commission could do anything wrong, but this is actually part of the trade and co-operation agreement that the EU and the UK signed up to. We want to see all parts of that agreement implemented.
Lord Flight (Con)
My Lords, Horizon Europe is the EU’s key funding programme for research and innovation, with a budget of £95.5 billion. It tackles climate change, helps to achieve the UN’s sustainable development goals, and boosts the EU’s competitiveness and growth. Legal entities from the EU and associate countries can participate. Can our participation and our expenditure be on the basis of having the ability to benefit from items that we are financing?
The Earl of Kinnoull (CB)
My Lords, the noble Lord, Lord Hannay, referred to our letter. Our letter came after an evidence session, when it was clear that it was mutually harmful to science communities of the UK and Europe not to have the UK participating in the programme. That is not surprising, because the joint declaration, which is the foundation of this agreement, says:
“The Parties recognise the mutual benefit”.
Can the Minister assure us that both parties understand that there is a mutual harm in the programme not starting with UK participation?
Lord Callanan (Con)
I agree totally with the noble Earl that it is to the benefit of both parties. It provides value for money for the UK, which is why we agreed to associate with it. We thought that we had a legally binding agreement with the EU, as part of the trade and co-operation agreement. We will continue to try to unblock that and work towards agreement. We want to associate with it precisely because we think that it is to the benefit of both parties, and we hope that will be obvious to the EU as well.
Ukraine: Disasters Emergency Committee Appeal
(2 years, 9 months ago)
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Lord Balfe
To ask Her Majesty’s Government what assessment they have made of the value of charitable donations made to the Disasters Emergency Committee appeal for Ukraine; and what plans they have to increase their commitment to match donations.
The Minister of State, Foreign, Commonwealth and Development Office (Lord Ahmad of Wimbledon) (Con)
My Lords, it is testament to the great generosity of the British public that the Disasters Emergency Committee appeal for Ukraine reached £100 million in just four days. This is a hugely valuable contribution and public donations have been boosted by £25 million of government funding, the largest ever aid match donation by any British Government. As of yesterday, the DEC Ukraine appeal stood at £121.5 million, including the FCDO UK aid match contribution of £25 million. Of course we have also committed more support to Ukraine during this crisis, which has reached almost £400 million.
Lord Balfe (Con)
I thank the Minister for his Answer, which is a tribute to the generosity of the British people. One problem has been the number of people sending goods rather than money. I hope the Government can encourage people to make cash donations, which are much easier to process. Is the FCO supporting people on the ground to buy up goods with the money donated so that it is spent in the most effective way for the relief of the people of Ukraine?
Lord Ahmad of Wimbledon (Con)
My Lords, if I may, I must first correct my noble friend: it is the FCDO. The development element of our work is extremely important and it links in with the humanitarian support. I confirm that through rapid deployment teams, including the assessments they are making, we are working directly with the Ukrainian authorities and the Ukrainian Government to determine exactly what is required on the ground. I agree with him; as my right honourable friend the Foreign Secretary has said, what is best for the Ukrainian people is for people to make cash donations, and the DEC appeal demonstrates the importance of that.
Baroness Northover (LD)
My Lords, I thank the noble Lord and his colleague alongside him—the noble Baroness, Lady Williams—for their help in relation to a case flagged to me by World Jewish Relief, and which I flagged in your Lordships’ House on Monday, of an elderly lady in her 90s who was waiting for a visa in Warsaw. What action is he taking to ensure that the system to assist refugees in such a desperate situation is fit for purpose and properly funded, so that we do not have to come to him and his colleague with individual cases?
Lord Ahmad of Wimbledon (Con)
My Lords, I thank the noble Baroness for flagging that issue. I speak for my noble friend as well as myself, and I know that I speak for the whole of the Front Bench in saying that wherever there are issues it is our job to respond to Members’ inquiries directly to us in our own roles. If we can assist, as we have managed to do in this case, that is a tribute to the noble Baroness and indeed to the whole of your Lordships’ House about the importance of working collaboratively on this crisis. My noble friend will be taking an Urgent Question shortly on fitness for purpose, but I am assured by her and the Home Office that, for example, visa applications are being received. Over 10,000 people have already started their applications, and as of this morning over 1,000 visas had been issued by the United Kingdom.
Lord Blunkett (Lab)
My Lords, the incredible generosity of the British people in the donations that we are discussing is equally matched by the desire of business, of faith and community groups, and of families to take hold of and be able to use the sponsorship scheme that was announced this time last week but about which we have no detail. Surely we should be matching the financial contribution with the personal giving that people are now offering to those who will come to their home and receive sustenance and support from the British people.
Lord Ahmad of Wimbledon (Con)
My Lords, I agree. Again, through this crisis we have seen the best of humanity as people have opened up their doors and given their homes and support to people they do not know—strangers—across Europe. That applies equally to the United Kingdom. I know that my noble friend will be providing the House with an update shortly on the very point that the noble Lord raises.
Lord Howard of Lympne (Con)
My Lords, I begin by paying tribute to my noble friend Lord Tebbit, who has been such an inspiration to so many of us on the Government Benches for so very long. We were all deeply moved yesterday by the words of President Zelensky. I am sure his words will lead to further donations to the committee. Sadly, the torrent of words which have registered support for Ukraine has not always been matched by action. Given the lamentable decision of President Biden to veto the ability of Poland to send its MiG-29s to an American base in Germany, will Her Majesty’s Government match the courage of the Government of Poland—not to mention of the Government of Ukraine—and make available facilities in this country to which those MiGs could be flown and collected by Ukrainian pilots, then flown to Ukraine?
Lord Ahmad of Wimbledon (Con)
My Lords, I join my noble friend in the tribute he paid to my noble friend Lord Tebbit. I remember that one of my first appearances at the Dispatch Box was reflective of an ongoing cricket analogy that we have played out. I greatly respect the support that he has given to me over the years. I am sure I speak for many across the House in paying tribute to my noble friend Lord Tebbit for his services to your Lordships’ House and the country over many years. On the specific question, the United Kingdom has been at the forefront of support for Ukraine, including supporting its defence requirements. Defence is playing a central role in the UK’s response to the Russian invasion. We are working very closely with our allies and partners to fully understand the nature of what is required on the ground. We were reminded of this by President Zelensky, who is in daily contact with my right honourable friend the Prime Minister. I listened very carefully to what my noble friend Lord Howard said, and I will certainly take that back to the Ministry of Defence.
Lord Harries of Pentregarth (CB)
My Lords, I will follow up the question asked by the noble Lord, Lord Blunkett. Yesterday the Government made the very welcome announcement that they are opening out this humanitarian sponsorship scheme, but they did not say anything about how all these people who want to offer their homes can link with those who want to come here. Are the Government yet able to reveal how this contact is to be made?
Lord Ahmad of Wimbledon (Con)
I know that my noble friend Lady Williams and my colleagues in the Home Office are working on the very points that the noble and right reverend Lord raises about the detail of the scheme. I am sure that she will update the House on progress very shortly.
Lord Collins of Highbury (Lab)
My Lords, the noble Lord, Lord Howard, mentioned President Zelensky’s moving address to Parliament yesterday. He described the horrific conditions—the killing of children, the bombing of orphanages, schools and hospitals. Earlier this week UNICEF called for greater protection for unaccompanied and separated children crossing borders. What will the Government do to support those children to get to a place of safety?
Lord Ahmad of Wimbledon (Con)
My Lords, I join the noble Lord; I am sure I speak for the whole House when I say that we are taken by the horror of what is happening in Ukraine, particularly the targeting of humanitarian corridors, the specific targeting of civilian centres of population and the tragedy we now see of families being separated. He is right to raise the issue of vulnerable children, particularly unaccompanied minors. We have RDTs working on the ground in all neighbouring countries. I am in regular touch with all the UN agencies. Only this morning I exchanged messages with Filippo Grandi on specific requirements. I assure the noble Lord that I will provide regular updates on the specific support we are giving to particular vulnerable communities and, most importantly, to vulnerable children.
Lord Lamont of Lerwick (Con)
My Lords, while I agree with what my noble friend Lord Balfe said—that it would be better if donations were given in cash rather than goods—my noble friend will be aware that a number of individuals, charities and companies have attempted to supply goods and medicines through the EU to the people of Ukraine or people on the border, but have experienced great difficulty with customs and form-filling. Will my noble friend look at this and see what could be done to simplify the administrative burden for those who are trying to supply goods in kind?
Lord Ahmad of Wimbledon (Con)
My noble friend makes a very important practical point. I will certainly take that up. Later today I am leaving for meetings in Vienna with European partners at the OSCE. I am sure this point will be raised, particularly when we look at the OSCE’s set-up on civil society groups’ support for humanitarian efforts, which are also based across the border in Poland. I will update my noble friend accordingly. He makes a point which I am aware of, and we are working with European partners to unlock this particular issue.
Business of the House
(2 years, 9 months ago)
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Baroness Evans of Bowes Park
That, in the event that the Supply and Appropriation (Anticipation and Adjustments) Bill has been brought from the Commons, Standing Order 44 (No two stages of a Bill to be taken on one day) be dispensed with on Monday 14 March to allow the Bill to be taken through its remaining stages that day.
Business of the House
(2 years, 9 months ago)
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Baroness Evans of Bowes Park
That Standing Order 44 (No two stages of a Bill to be taken on one day) be dispensed with on Monday 14 March to allow the Economic Crime (Transparency and Enforcement) Bill to be taken through its remaining stages that day and that therefore, in accordance with Standing Order 47 (Amendments on Third Reading), amendments shall not be moved on Third Reading.
Ukraine: Urgent Refugee Applications
(2 years, 9 months ago)
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Lord Rosser (Lab)
The Home Office has not stepped up to the mark in processing urgent Ukrainian refugee applications—no doubt in part because the Home Office culture, as shown by the Nationality and Borders Bill, is geared towards keeping refugees out rather than welcoming them in.
On Monday, the Home Secretary claimed that a visa application centre had been set up en route to Calais and was staffed. Yesterday, however, the Commons Minister said that
“we are looking to establish a presence in Lille ... and we expect that to be set up within the next 24 hours.”—[Official Report, Commons, 8/3/22; col. 198.]
Has the Lille centre now been set up, opened and staffed, and how many visas can it process per day?
A week ago, the Home Secretary announced the introduction of a humanitarian sponsorship visa. Yesterday, the Government said in this House:
“The sponsorship scheme … should be up and running very shortly.”—[Official Report, 8/3/22; col. 1265.]
When exactly is the sponsorship scheme going to be “up and running”? Why does the Home Office still not know? What is needed now is an emergency visa scheme for those fleeing Ukraine. Are the Government going to do that?
The Minister of State, Home Office (Baroness Williams of Trafford) (Con)
I thank the noble Lord for his questions. As of 9.30 am this morning, 17,700 applications had been made, and there were 1,000 grants of visas. We are expecting a further 1,000 grants of visas by the end of the day. I think that noble Lords will agree that that is a positive trajectory.
The Lille VAC will indeed be set up.
In total, we had almost 1,000 offers for the humanitarian sponsorship pathway, which I counted up from across this House, given the details I received from the right reverend Prelate and another noble Lord yesterday. I want to take back to the Home Office—as I said yesterday that I would—the offers of support which are not just from within your Lordships’ House but are coming in thick and fast from all over the country. They will be very helpful when those families and people arrive in the UK.
Lord Paddick (LD)
My Lords, Ukrainian refugees arriving in Bucharest and applying to join families in the UK today are being given appointments on 28 March to have their biometrics taken. What are they supposed to do for two weeks in a foreign city where they know no one, have few belongings and little or no money, when they could be here in the UK with their families?
Baroness Williams of Trafford (Con)
The noble Lord makes a very understandable point. As I said yesterday to the House, I know that we are training people as we speak, and surging the capacity and capability of our VAC teams from that region.
Lord Cormack (Con)
My Lords, what are we doing to liaise with the Polish authorities, who have received so many of these refugees from Ukraine? Surely, if they have been accepted into Poland, we can arrange quick transfers to the UK for those who wish to come here—many of whom have family members here.
Baroness Williams of Trafford (Con)
My noble friend will have seen footage of my right honourable friend the Home Secretary there over the weekend. We are in very regular contact with Poland. I just turned to my noble friend to clarify the contact we are having with the UNHCR: it sounds regular and very thorough in enabling refugees to come to this country as quickly as possible. If someone is in Poland, and has had their visa issued in Poland, they are absolutely ready to come to this country. That is the very positive benefit of having VACs in Poland.
The Lord Bishop of Leeds
My Lords, I heard yesterday that one of the refugee application centres in Poland has no available appointments until the end of April—the end of next month. This seems to be a bureaucratic answer to a humanitarian question. I received an email last night asking, “Is the UK Government ill prepared, incompetent or unwilling?”—and I do not know how to answer it.
Baroness Williams of Trafford (Con)
Well, I hope I can help the right reverend Prelate in saying that we are surging capacity and capability in the VACs. It is not acceptable if people are being told that they have to wait until the end of April. I certainly hope that, when I next return to this House with an update, it will be a far more positive picture.
Lord Harris of Haringey (Lab)
My Lords, the whole House recognises that the noble Baroness the Minister is a very empathetic person, and she is quite clear about her sincerity in trying to help refugees from Ukraine. However, the Minister for Justice in Ireland today met Ukrainian refugees arriving in that country and ushered them to a separate room, where they were given national insurance numbers or the equivalent and told how to get help with medical and housing requirements. Why is it that we, a similar nation, are requiring that people apply—very bureaucratically—hundreds of miles away and fill in numerous forms, rather than simply directly accepting people from Ukraine and dealing with them here?
Baroness Williams of Trafford (Con)
There is one area where I will depart from the noble Lord, which is on the need to make sure that people are who they say they are. If someone says they are Ukrainian and in fact are not—particularly if they are someone who we might not wish to have in this country because of their behaviour—it is really important that that place is not taken by someone who has no genuine right to be here. So I do not make an apology for that, but I otherwise completely concur with the noble Lord. We are country that welcomes people and tries to provide as much support as we can—and, as I said, my right honourable friend the Home Secretary was in Poland at the weekend.
Lord Alton of Liverpool (CB)
My Lords, the FCDO has organised excellent morning briefings and, this morning, the Foreign Office representative suggested that as many as 2 million people may have now been displaced in Ukraine. Would it not be sensible at those briefing sessions for the Home Office also to be represented? The information that the noble Baroness has been giving would be very useful. Can the noble Baroness confirm reports that 227,000 people have now fled from Ukraine across the Romanian border? Has she seen the representations made to her department by James Grundy, the Member of Parliament for Leigh in the north-west of England, about a small charity that has a house where they have already taken a couple of hundred Ukrainian refugees? Would it not be sensible for the Disasters Emergency Committee to include small charities that are not part of DEC so that they too can be funded to ensure that people can be kept in safe places in Romania or Poland without having to make journeys to other parts of the world?
Baroness Williams of Trafford (Con)
I think that what the noble Lord has done is outline how the people of Ukraine would actually like to get back to Ukraine. His suggestion about small charities that are able to help, whether here or in Romania, is really sensible. In terms of the numbers crossing into Romania, I cannot verify those figures, but I am absolutely sure that it must be a very high number indeed. On the subject of the morning briefings, he must be able to lip-read, because my noble friend Lord Ahmad and I were in fact talking about that just before we stood up.
Baroness Meyer (Con)
My Lords, given the extraordinary nature of our times, exemplified yesterday by the eloquent and historic address by President Zelensky, might the Home Office not rise to the moment and welcome Ukrainian refugees in Calais with open arms, instead of chips and KitKats?
Baroness Williams of Trafford (Con)
First, I pay tribute to my noble friend’s son, who has opened up his heart and accommodation to Ukrainians. As for welcoming with open arms rather than bureaucracy, I have looked at the figures for the VACs where Ukrainian refugees are fleeing to. By and large, they are in Poland. In Calais, there have been one or two instances where people are not who they say they are, so it is important not only to keep them safe but also to make sure that we are giving refuge to those we want to give refuge to.
Lord Wigley (PC)
My Lords, the noble Baroness will be aware of the offers made by the Governments of both Scotland and Wales to take in refugees, reflecting the overwhelming good will among people throughout these islands who want to help in these matters. Is the announcement at Question Time this morning by the Prime Minister, concerning the new responsibilities for the Minister for Levelling Up, an indication that the Government may be rethinking this matter?
Baroness Williams of Trafford (Con)
I heard not much of the noble Lord’s question, but I am guessing that it concerned the appointment of my very dear friend Richard Harrington as Minister for Refugees. I know him well and he will be a superb appointment.
The Deputy Speaker (Lord Duncan of Springbank) (Con)
My Lords, the time allowed for this Question is now up and I will allow a moment or two to clear the Chamber for those who want to escape before the next business takes place.
Public Service Pensions and Judicial Offices Bill [HL]
Wednesday 9th March 2022
(2 years, 9 months ago)
Lords ChamberRead Full debate Public Service Pensions and Judicial Offices Act 2022 View all Public Service Pensions and Judicial Offices Act 2022 Debates Read Hansard Text Amendment Paper: HL Bill 118-I Marshalled List for Consideration of Commons Amendments - (8 Mar 2022)
Viscount Younger of Leckie
That this House do agree with the Commons in their Amendments 1 to 47.
(a) pensionable service under a Chapter 1 legacy scheme,
(b) pensionable service under a Chapter 1 new scheme that would have been pensionable service under a Chapter 1 legacy scheme but for the person’s failure to meet a condition relating to the person’s attainment of normal pension age, or another specified age, by a specified date, or
(c) excess teacher service.
The second condition is met if all of the service in question falls within paragraphs (a) to (c) (even if it does not all fall within only one of those paragraphs).”
(c) is, as a result of a local government contracting-out transfer, pensionable service under a pension scheme that offers pension arrangements that are broadly comparable with those offered to the person before the transfer.”
“(3A) In a case in which any of the person’s remediable service in the employment or office in question is excess teacher service, “the relevant Chapter 1 legacy scheme”, in relation to so much of the person’s remediable service as is excess teacher service, means the local government new scheme mentioned in section 98(2).”
“(da) provision about the benefits payable in respect of a child of a deceased member where—
the member has remediable service in an employment or office, and
the child is not living in the same household as an adult survivor of the member;”
“(db) provision about cases in which a person has remediable service in an employment or office any of which is excess teacher service;
(dc) provision about cases in which a person has remediable service in an employment or office and also has service in an employment or office as a teacher which—
(i) takes place in the period beginning with the day after the closing date and ending with 31 March 2022,
(ii) is pensionable service under a Chapter 1 new scheme, and
(iii) is not remediable service;”
“(dd) provision about cases in which a person has a partnership pension account;”
“(de) provision about cases in which a person is made redundant;”
““adult survivor”, in relation to a member of a Chapter 1 scheme who has remediable service, means a surviving spouse, civil partner or other adult who is entitled under the scheme to a pension determined (to any extent) by reference to the member’s remediable service;”
““child”, in relation to a member of a Chapter 1 scheme, means any individual who—
(a) is entitled to receive benefits under the scheme in their capacity as a child of the member, or
(b) would have been entitled to receive benefits under the scheme in that capacity on the assumption that any election under this Chapter was, or was not, made in respect of the member;”
““made redundant”: a reference to a person being “made redundant” includes, in relation to a member of the armed forces, a person becoming entitled to a redundancy payment under—
(a) Part 2 of the Armed Forces (Redundancy, Resettlement and Gratuity Earnings Schemes) (No 2) Order 2010 (S.I. 2010/ 832),
(b) the Armed Forces Redundancy Scheme Order 2006 (S.I. 2006/55), or
(c) the Armed Forces Redundancy Scheme Order 2020 (S.I. 2020/1298);”
“The second condition is met if all of the service in question falls within paragraphs (a) and (b) (even if it does not all fall within only one of those paragraphs).”
“Meaning of “remediable service”
(1) For the purposes of this Chapter any continuous period of service of a person in an employment or office is “remediable service” in that employment or office if the following four conditions are met.
(2) In this section “the service in question” means the service mentioned in subsection (1).
(3) The first condition is that the service in question takes place in the period—
(a) beginning with the day after the closing date, and
(b) ending with 31 March 2022 or, if earlier, the date on which the person attains legacy scheme normal pension age.
(4) The second condition is that the service in question is pensionable service under a local government new scheme (including where the service is excess teacher service that is so pensionable by virtue of section 2(1)).
(5) The third condition is that the person was, on 31 March 2012 or any earlier day, in pensionable service under—
(a) a Chapter 1 legacy scheme (within the meaning of Chapter 1),
(b) a judicial legacy scheme (within the meaning of Chapter 2), or
(c) a local government legacy scheme.
(6) The fourth condition is that there is no disqualifying gap in service falling within the period—
(a) beginning with the day after the most recent day in relation to which the third condition is met, and
(b) ending with the day before the first day of the service in question.
(7) In subsection (3)—
“the closing date” means—
(a) 31 March 2014 in relation to service which is pensionable service under regulations under section 7 of SA 1972 which relate to persons in England and Wales;
(b) 31 March 2015 in relation to service which is pensionable service under any other local government new scheme;
“legacy scheme normal pension age” means—
(a) in a case in which the person meets the third condition in relation to a local government legacy scheme, the person’s normal pension age under that scheme;
(b) otherwise, the age of 65.
(8) In subsection (6) “disqualifying gap in service” means a period longer than 5 years at no time during which is the person in service in an employment or office which—
(a) is pensionable service under—
(i) a Chapter 1 scheme (within the meaning of Chapter 1),
(ii) a judicial scheme (within the meaning of Chapter 2), or
(iii) a local government scheme,
(b) is, as a result of a Fair Deal transfer, pensionable service under a Fair Deal scheme, or
(c) is, as a result of a local government contracting-out transfer, pensionable service under a pension scheme that offers pension arrangements that are broadly comparable with those offered to the person before the transfer.”
“Power to pay final salary benefits
(1) Scheme regulations for a local government new scheme may make provision under which the benefits payable under the scheme, so far as they are determined by reference to a member’s remediable service in any employment or office, are final salary benefits.
(2) The reference in subsection (1) to remediable service includes—
(a) remediable service within the meaning of Chapter 1 that has been transferred in from a Chapter 1 scheme, and
(b) remediable service within the meaning of Chapter 2 that has been transferred in from a judicial scheme.
(3) Scheme regulations made by virtue of subsection (1) may, in particular, include provision under which final salary benefits are only payable under the scheme to or in respect of a person who has service in multiple employments or offices if—
(a) so much of the service as is otherwise pensionable under another local government scheme, or under a Chapter 1 scheme or a judicial scheme, is transferred in to the scheme, or
(b) the service is aggregated for the purposes of determining those benefits.
(4) Scheme regulations for a local government new scheme may make provision under which the benefits payable under the scheme, so far as they are determined by reference to a member’s final salary transferred-in service in any employment or office, are final salary benefits.
(5) For the purposes of subsection (4) a member’s service in an employment or office is “final salary transferred-in service” if—
(a) the service has been transferred in from another pension scheme, and
(b) before the transfer, the benefits payable under that other scheme, so far as determined by reference to the service, were final salary benefits.
(6) Except as provided by the preceding provisions of this section, scheme regulations for a local government new scheme may not make provision under which the benefits payable under the scheme that are determined by reference to a member’s pensionable service in an employment or office are final salary benefits.”
“Section (Power to pay final salary benefits): transitional provision
(1) Any provision of scheme regulations that—
(a) was, at any time before the coming into force of section (Power to pay final salary benefits)(1), made (or purportedly made) in relation to a local government new scheme under—
(i) section 18 of PSPA 2013 or section 18 of PSPA(NI) 2014 (restriction of existing pension schemes), or
(ii) any other enactment, and
(b) could have been made under section (Power to pay final salary benefits)(1) if it had been in force at that time,
is treated as having been made under section (Power to pay final salary benefits)(1).
(2) Section (Power to pay final salary benefits)(6) does not affect the continued operation of any scheme regulations made before the coming into force of that provision.”
“Pension credit members
(1) Scheme regulations for a local government new scheme may make provision about the benefits payable to or in respect of a relevant pension credit member and the corresponding pension debit member.
(2) In this section “relevant pension credit member”, in relation to a local government new scheme, means a member of the scheme who has rights under the scheme—
(a) which are attributable (directly or indirectly) to a pension credit, and
(b) the value of which was determined (to any extent) by reference to the value of benefits payable in respect of the remediable service in an employment or office of another member.
(3) In this section “the corresponding pension debit member”, in relation to a relevant pension credit member, means the member mentioned in subsection (2)(b).
(4) The provision that may be made by scheme regulations under this section includes, in particular—
(a) provision modifying any provision of this Chapter in its application to persons of a description specified in the regulations;
(b) provision corresponding to, or applying, any provision of this Chapter, with or without modifications.
(5) In this section—
“modifying” includes disapplying or supplementing (and cognate expressions are to be construed accordingly);
“pension debit” means a debit under section 29(1)(a) of WPRA 1999 or Article 26(1)(a) of WRP(NI)O 1999;
“pension credit” means a credit under section 29(1)(b) of WPRA 1999 or Article 26(1)(b) of WRP(NI)O 1999.”
“Further powers to make provision about special cases
(1) Scheme regulations for a local government new scheme may make further provision relating to a member who has remediable service in an employment or office.
(2) The provision that may be made under subsection (1) includes, in particular, provision about cases in which a person has remediable service in an employment or office any of which is excess teacher service.
(3) Scheme regulations for a local government new scheme may make provision about injury and compensation benefits payable under a relevant injury and compensation scheme to or in respect of a member who has remediable service in an employment or office.
(4) Provision made under subsection (3) may in particular be made by amending the relevant injury and compensation scheme.
(5) In subsections (3) and (4) and this subsection—
(a) “injury and compensation scheme” means a pension scheme that is listed in Schedule 6 to PSPA 2013 or Schedule 6 to PSPA(NI) 2014 (existing injury and compensation schemes);
(b) an injury and compensation scheme is “relevant”, in relation to a local government new scheme, if it is connected with the local government new scheme;
(c) a reference to “injury and compensation benefits” payable under an injury and compensation scheme is a reference to—
(i) in the case of an injury and compensation scheme in relation to which Schedule 6 to PSPA 2013 or Schedule 6 to PSPA(NI) 2014 specifies particular benefits, those benefits;
(ii) in the case of any other injury and compensation scheme, any benefits payable under the scheme.
(6) The provision that may be made by scheme regulations under this section includes, in particular—
(a) provision modifying any provision of this Chapter in its application to persons of a description specified in the regulations;
(b) provision corresponding to, or applying, any provision of this Chapter, with or without modifications.
(7) In this section “modifying” includes disapplying or supplementing (and cognate expressions are to be construed accordingly).”
“Power to pay compensation
(1) The scheme manager for a local government new scheme may pay amounts by way of compensation in respect of compensatable losses incurred by members or, in the case of deceased members, their personal representatives.
(2) Scheme regulations for a local government new scheme may make provision under which an employer in relation to the scheme is required to reimburse the scheme manager for amounts paid under subsection (1).
(3) For the purposes of this section a loss incurred by a member, or by a member’s personal representatives, is “compensatable” if and to the extent that—
(a) either of the following conditions is met, and
(b) the loss is of a description specified in Treasury directions.
(4) The first condition is that the loss is attributable to, or is reasonably regarded as attributable to, a relevant breach of a non-discrimination rule.
(5) The second condition is that the loss is attributable to the application of any provision of, or made under, this Chapter.
(6) In this section (subject to subsection (8)) “loss” includes a loss of any kind including, in particular, a Part 4 tax loss.
(7) In this section “Part 4 tax loss”, in relation to a member, means a loss arising as a result of the member—
(a) incurring a charge, or incurring an increased charge, under Part 4 of FA 2004, or
(b) not being entitled to a relief, or being entitled to less relief, under that Part of that Act.
(8) In this section “loss” does not include an amount that is payable under this Chapter or under regulations made by virtue of this Chapter.
(9) In this section “non-discrimination rule” means a rule that is, or at any time was, included in a local government scheme by virtue of—
(a) section 61 of EA 2010, or
(b) paragraph 2 of Schedule 1 to EEAR(NI) 2006.
(10) For the purposes of this section a breach of a non-discrimination rule is “relevant” if it arises from the application of a provision of scheme regulations made before 1 April 2022 under which the benefits payable under the scheme that are determined by reference to a member’s pensionable service in an employment or office are final salary benefits.
(11) Subsection (1) does not confer power to pay amounts by way of compensation in respect of compensatable losses so far as—
(a) any person has already received amounts by way of compensation in respect of them, or
(b) amounts that any person has paid the scheme have been reduced by amounts in respect of them,
whether pursuant to an order of a court or tribunal or otherwise.”
“Indirect compensation
(1) Scheme regulations for a local government new scheme may make provision under which, where a member has incurred a compensatable loss that is a Part 4 tax loss—
(a) the member is not paid an amount under section (Power to pay compensation) by way of compensation in respect of the loss, and
(b) the member is instead paid such additional benefits under the scheme as may be determined in accordance with the regulations.
(2) In this section “compensatable loss” and “Part 4 tax loss” have the same meaning as in section (Power to pay compensation).”
“Interest and process
(1) Scheme regulations for a local government new scheme may make provision—
(a) under which interest is required to be calculated and paid on relevant amounts;
(b) about the process by which relevant amounts (and any interest on them) are to be paid.
(2) Scheme regulations made by virtue of subsection (1)(b) may, in particular, include provision—
(a) about when relevant amounts (and any interest on them) are to be paid (including provision under which they are paid in instalments);
(b) under which relevant amounts (and any interest on them) may be paid only on the making of an application;
(c) conferring rights of appeal against decisions taken under the regulations.
(3) In this section “relevant amounts” means any amounts that are payable by the scheme to a person under or by virtue of this Chapter.”
“Treasury directions
(1) The powers mentioned in subsection (2) must be exercised in accordance with Treasury directions.
(2) The powers are—
(a) the power to make scheme regulations by virtue of section (Pension credit members) (pension credit members) and any powers exercisable by virtue of such regulations;
(b) the power to make scheme regulations by virtue of section (Further powers to make provision about special cases) (further powers to make provision about special cases) and any powers exercisable by virtue of such regulations;
(c) the power of a scheme manager under section (Power to pay compensation)(1) (power to pay compensation);
(d) the power to make scheme regulations by virtue of section (Power to pay compensation)(2) (power to require employer to reimburse compensation paid by scheme manager) and any powers exercisable by virtue of such regulations;
(e) the power to make scheme regulations by virtue of section (Indirect compensation)(1) (indirect compensation) and any powers exercisable by virtue of such regulations;
(f) the power to make scheme regulations by virtue of section (Interest and process)(1) (interest and process) and any powers exercisable by virtue of such regulations.
(3) Treasury directions under this section may provide for amounts that are to be paid by a scheme in relation to a member to be determined—
(a) taking into account the particular circumstances of the member and (if different) the person to whom the amount is to be paid, or
(b) without taking into account any or all of the particular circumstances of that person or those persons.
(4) Treasury directions under this section that relate to the calculation and payment of interest, and variations and revocations of such directions, may only be made after consultation with the Government Actuary.
(5) For the definition of “Treasury directions”, see section (Interpretation of Chapter)(1).”
“Interpretation of Chapter
(1) In this Chapter—
“Chapter 1 scheme” has the same meaning as in Chapter 1; “final salary benefits” has the meaning given by subsection (2); “judicial scheme” has the same meaning as in Chapter 2;
“local government legacy scheme” has the meaning given by section 79(3);
“local government new scheme” has the meaning given by section 79(2);
“local government scheme” has the meaning given by section 79(1); “scheme regulations”—
(a) in relation to a local government new scheme within section 79(2)(a) has the same meaning as in PSPA 2013 (see section 1(4) of that Act);
(b) in relation to a local government new scheme within section 79(2)(b) has the same meaning as in PSPA(NI) 2014 (see section 1(4) of that Act);
“Treasury directions” means—
(a) in relation to a local government scheme within section 79(2)(a) or (3)(a), directions given by the Treasury;
(b) in relation to a local government scheme within section 79(2)(b) or (3)(b), directions given by the Department of Finance in Northern Ireland.
(2) For the purposes of this Chapter, benefits payable under a pension scheme to or in respect of a member are “final salary benefits” if they are determined by reference to the member’s pensionable earnings, or highest, average or representative pensionable earnings, in a specified period ending at, or defined by reference to—
(a) the time when the member’s pensionable service in relation to the scheme ends, or
(b) the time when the member attains normal pension age under a local government legacy scheme.
(3) Where—
(a) a member of a pension scheme has service in multiple employments or offices that is pensionable service under the scheme, and
(b) the service is aggregated for the purpose of determining the amount of any benefit under the scheme,
the service is treated for the purposes of this Chapter as service in a single employment or office (and references to the employment or office in relation to the service are to be read accordingly).”
Viscount Younger of Leckie (Con)
My Lords, with the leave of the House, I will also speak to the other amendments and the Motions in the name of the noble Lord, Lord Davies of Brixton. Before I turn to the Commons amendments, I will take a moment to remind your Lordships of what the Public Service Pensions and Judicial Offices Bill will achieve. The Bill ensures that those who deliver our valued public services continue to receive guaranteed benefits in retirement that are among the best available, on a fair and equal basis. It is also vital in addressing the resourcing challenges facing the judiciary, recognising the unique constitutional role of judges. As has been acknowledged throughout the Bill’s passage, this is a complex and technical matter. The Bill covers more than 40 schemes, each of which has its own individual layers of detail and complexity.
Since the Bill’s introduction, the Government have continued to work closely with each of the public service pension schemes, with stakeholders and with departments to check and re-check the Bill to ensure that it will deliver our commitments to remove the discrimination and offer a complete and effective remedy. This has been crucial and has led to a number of refinements being made to the Bill during its stages in the other place.
I recognise that a large volume of amendments is being considered today but I hope noble Lords will agree that the Bill returns to this Chamber in an even stronger position than when it left. I therefore propose that the House agree with the Commons in its Amendments 1 to 81. The House will, I hope, be pleased to hear that I will not set out the detail of each and every amendment, but I hope that your Lordships will find it helpful if I briefly explain the themes that they address. I will of course be happy to turn to specific amendments if your Lordships have any questions they would like to ask.
The first theme is reforms to the cost control mechanism, which relates to Amendments 48, 49 and 52. Your Lordships may recall that the cost control mechanism is designed to ensure a fair balance of risk between public service pension scheme members and taxpayers with respect to the costs of these schemes. The Government asked the Government Actuary to review the cost control mechanism after the provisional results of the 2016 valuations suggested that the mechanism was too volatile and not operating in line with its objectives. Following publication of the final report in June 2021, the Government consulted on three of the recommendations and published their response in October 2021. These reforms will be implemented from the 2020 valuations onwards.
Commons Amendment 48 would implement the framework for two of these three reforms: the reformed scheme-only design and the economic check. I will take each of these in turn. The reformed scheme-only design means that legacy scheme costs are excluded from the mechanism. This would make it more stable and reduce intergenerational unfairness because comparatively younger members’ benefits or contributions will not change based on the cost of legacy schemes they had little, or no, access to. Although this transfers the risk associated with legacy scheme costs to the Exchequer, it ensures consistency between the set of benefits being assessed and the set of benefits potentially being adjusted.
As the Government Actuary’s report makes clear, it does not seem possible for the mechanism to be able to protect the taxpayer unless it considers the wider economic outlook. The economic check—the second reform—will therefore ensure consistency between member benefit or contribution changes and changes in the wider economic outlook. There will be a higher bar for benefit reductions or contribution increases if the country’s long-term economic outlook has improved. This will equally apply to benefit increases or contribution reductions if the long-term economic outlook has worsened.
Therefore, the economic check will operate symmetrically for the benefit of both members and taxpayers. It will operate in a transparently and be linked to an objective and independent measure of expected long-term earnings and GDP growth from the OBR. Given that the economic check can only offset or prevent breaches, not cause them, the likelihood of changes to member benefits or contributions will decline. The reforms will make the mechanism more stable and allow it to operate more in line with its objectives, giving members greater certainty with respect to their retirement incomes.
The second theme concerns amendments relating to the local government workforce, where a number of amendments to Chapter 3 of Part 1 were brought forward by the Government in the Commons to ensure a full and robust remedy for local government workers; for reference, these are Commons Amendments 2, 28 to 30, 36 to 47, 50, 51, 55 to 60, 62, 64, 65, 72 and 75 to 77. The amendments are largely technical, including a significant number designed to ensure that many of the complexities relating to other public service pension schemes that have already been addressed in the Bill are also addressed in local government.
The Government are also making an important change to align the eligibility criteria for protection in local government with other public service pension schemes. Under the amended approach, members who were in pensionable service on or before 31 March 2012 would be in scope of remedy if they leave local government and return within five years, as well as meeting qualifying criteria.
I turn next to a single amendment that concerns a change to regulatory procedure for implementing regulations with respect to the reformed judicial pension scheme. Commons Amendment 61 will simply allow the regulations to be made under the “made affirmative” procedure instead of the draft affirmative, which is the usual process for judicial scheme regulations. This is simply a matter of timing. As the draft affirmative procedure could take four to six weeks, we must rely on the “made affirmative” procedure in order to launch the scheme on 1 April 2022. The change ensures that the reformed pension scheme is in place for all judges on 1 April and that there will be no gap in judicial pensions arrangements. Allow me to reassure the House that the “made affirmative” procedure means that Parliament will still get to scrutinise and debate the draft Judicial Pension Scheme Regulations 2022. This scrutiny is important, given the unique constitutional role of the judiciary. Furthermore, the power is narrowly drawn—it can only be exercised for regulations made within 28 days of Royal Assent and will not apply to any future amendments to judicial pension schemes.
The Ministry of Justice has carried out extensive consultation both on the principles of the new scheme and the draft Judicial Pension Scheme Regulations 2022. This has demonstrated broad support for the new scheme, which provides significantly improved benefits for all members of the judiciary compared to the 2015 scheme. There is agreement that the scheme should help address the recruitment and retention issues in the judiciary, which are considered to be primarily due to the introduction of the 2015 scheme.
I turn next to the issue of guidance on investment decisions for the Local Government Pension Scheme, which, as your Lordships may know, is different to the other main public service pension schemes as it is funded rather than unfunded. My right honourable friend Robert Jenrick, the Member for Newark, in the other place proposed Commons Amendment 54, which would expand existing powers in the Public Service Pensions Act 2013 to allow the responsible authority of a public service pension scheme to issue guidance or directions to the scheme managers to cover investment decisions that it is not proper for the scheme manager to take in light of the UK’s foreign and defence policy.
The Government support that amendment, which is in line with the Government’s manifesto commitments to stopping public bodies from pursuing their own direct or indirect boycotts, divestment and sanctions campaigns against foreign countries, known as BDS. Rather than promoting coexistence, debate and dialogue, these boycotts undermine community cohesion. There is evidence of divisive BDS campaigns in public bodies, including local authorities attempting to declare boycotts. Administering authorities can of course make decisions based on sound environmental, social and governance—so-called ESG—considerations. For example, funds may well choose to not invest based on legitimate concerns over a company’s polluting activities or its poor governance. However, what is clearly inappropriate is for a fund to adopt divisive BDS policies that are inconsistent with UK foreign policy. Sanctions should be determined by the UK Government alone. It is not for local authorities or public bodies to be pursuing their own foreign policy agendas.
Your Lordships may be aware that the Government intend to bring forward wider legislation on BDS, when parliamentary time allows, to ban public bodies from imposing such boycotts and divestments. This will of course be subject to scrutiny in both Houses in the usual way. This amendment signals the Government’s intent and provides the powers for the responsible authority to issue guidance or directions on this matter. It is important to note that the amendment would place no immediate duty on scheme managers to take any such investment or divestment decisions.
If the responsible authority were to issue guidance or directions, this would be subject to the usual 12-week consultation. I hope that this gives the House reassurance that the devising of any parameters related to this amendment would involve extensive engagement with the LGPS community over a number of months, during which time all views and concerns would be considered, so as to ensure they do not inadvertently restrict proper account of ESG matters.
Finally, I will cover the remaining amendments—Amendments 1, 3 to 13, 15 to 21, 25, 26, 31 to 35, 53, 63, 66 to 71, 73 and 79 to 81, which are minor and technical. These amendments are for clarification and are primarily to ensure that the Bill offers a comprehensive pensions remedy for eligible members in particular circumstances or special cases. For example, Amendments 15, 19 and 20 ensure that where a member has died and a child pension is already in payment which would be impacted by a decision taken by someone outside the child’s household, schemes have the powers to make regulations to allow that pension to be protected. A further example under this theme is in Commons Amendments 79 and 81, which change the reference to the Special Educational Needs Tribunal for Wales to the Education Tribunal for Wales, as the tribunal was renamed during the passage of the Bill.
Lord Davies of Brixton (Lab)
My Lords, while I do not have a current interest to declare, it would be appropriate for me to mention that, until last August, I was a consultant to a number of trade unions, advising them in this specific area. It appears in the register of interests, but I no longer undertake that work. I thank the Minister for providing more background to the legislation. He has been extremely helpful in ensuring that the fullest information is available on the changes being made at this stage.
However, it is worth recalling that, when the Bill was introduced last July, it dealt with two main issues: first and principally, it provided the remedy for the Government’s unlawful age discrimination in the Public Service Pensions Act 2013; secondly, it established a one-of-a-kind pension scheme for judges and, as a bit of an add-on, increased their retirement age. That is how it left your Lordships’ House.
In the Commons, two significant new issues were added. In Committee, amendments were introduced that made significant changes to the cost control mechanism that applies to public service pension schemes—this is Amendment 48—and then, on Report, Amendment 54 was introduced, which will allow the Secretary of State to issue directions to the trustees of local government pension schemes about how they invest their members’ money. It must be stressed that both these issues are completely new and have no direct connection with what was in the Bill when we considered it previously. Therefore, it is entirely proper—indeed, necessary—that we should give both amendments adequate consideration. I will argue that they are both objectionable.
I will come back to local government pension schemes, but I start with Amendment 48, which provides for significant changes in the cost control mechanism. This is complicated stuff and time is limited, and I am sure that many noble Lords want to get on with subsequent business, but the Government need to rethink their approach—hence the Motions in my name. The key change to the mechanism proposed by the Government is the addition of what is described as an “economic test”. This is completely new; it constitutes a significant change to the mechanism and is clearly outside the repeatedly given guarantees that there would be a 25-year stable regime to administer public service pensions.
Whatever was decided back in 2011 was meant to remain for a generation, and repeated promises were made that there would be no surprises. It is important to understand that these promises went beyond what was ultimately included in the subsequent legislation. For example, following the negotiations that took place on the reforms, the then Chief Secretary to the Treasury, Danny Alexander, said that reform along the lines the Government had proposed could endure for 25 years:
“It will be a sustainable deal that will endure for at least 25 years”.—[Official Report, Commons, 2/11/11; col. 929.]
In the same vein, the Minister for the Cabinet Office, the then Francis Maude MP, gave a guarantee that
“outside of the scheme designs parameters”
there would be
“no further reform for the next 25 years.”—[Official Report, Commons, 20/12/11; col. 151WS.]
This proposal, the introduction of the economic test, is a clear breach of the commitment given by the Government in 2011. The agreement reached then was difficult for many unions and members to accept, as it amounted to public servants paying more, working more and getting less, but unions engaged in the negotiations in good faith and most accepted the resulting deal. The cost-control mechanism set out at that time was a key part of that arrangement.
From the hard information we have been given so far about the economic test, it gives the appearance of being designed to allow the Government to override the results of the cost-control mechanism in the event of what is termed a downward breach of the cost cap. A downward breach is when the value of members’ benefits falls by a significant amount—by a tenth or more, roughly speaking. Such a fall in the value of members’ benefits can arise from a combination of factors, but principally from a reduction in longevity compared with what was expected or from lower rates of inflation, to which benefit increases are linked.
The situation is that the value of members’ benefits might fall significantly and, consequently, they are entitled to an offsetting increase in their benefits to restore their value. But with this amendment the Government are given the power to cancel the increase on a basis that so far is ill defined. The Government and the Minister emphasised the potential for the economic check to be used to override an upward breach and stop the consequent cuts in members’ benefits, if the existing benefits are considered affordable.
To summarise, on the one hand, when growth in the economy is greater than expected, members will not have to suffer cuts in benefits. On the other hand, if economic growth is less than expected, members will not enjoy increases in benefits to which they would otherwise have been entitled. The problem is that it introduces a large degree of subjectivity and potential for political considerations to influence what should be a transparent and objective process. This need for objectivity is only increased by the mistrust generated by the Government’s response to the initial 2016 valuations of public service schemes.
The Minister in the Commons said that the cost-control mechanism
“will operate in a transparent way and be linked to an objective and independent measure of expected long-term earnings and GDP growth from the Office for Budget Responsibility”.—[Official Report, Commons, Public Service Pensions and Judicial Offices Bill Committee, 27/1/22; col. 33.]
But we have no idea in any detail how this will operate. We have no idea how transparent and open to debate it will be.
The detail will be set out in Treasury directions, which never come before this House, let alone the Commons. Treasury directions are not like delegated legislation. They are made by the Government with no form of accountability, so the Government will effectively be able to tear up the cost-control mechanism that unions were promised would last 25 years. That is why I believe Treasury directions are unsuitable for something so significant that will affect the terms of employment of our public sector workers.
The Minister needs to look again at how to restore trust and confidence in public service pensions in future without resiling from the promises given 10 years ago. At the very least, will the Minister spell out for the House in more detail how the Government propose to get from the figures provided by the Office for Budget Responsibility to the ultimate decision not to proceed with increases to which members are entitled?
Having addressed the issue of Amendment 48, I will shift gear somewhat and move on to Amendment 54. I am opposed to the new clause, which was introduced in the Commons on Report—a very late stage of the Bill’s progress through the Commons. It gives the Secretary of State the power to issue guidance or directions to authorities that administer public sector pension schemes that would ban them from taking investment decisions that conflict with the UK’s foreign and defence policy. In practice, as has been explained, this affects only the Local Government Pension Scheme, as it is the only significant public sector pension scheme that has investments.
The new clause would reverse the decision of the Supreme Court in the case involving the Palestinian Solidarity Campaign. The full judgment is worth reading as it sets out the argument against ministerial involvement in trustee decisions with force and clarity. The court found that the Secretary of State was wrong to claim that the Local Government Pension Scheme administrators were part of the machinery of the state. This claim fails to recognise that the administrators have duties which, at a practical level, are similar to those of trustees and that they consider themselves as quasi-trustees who should act in members’ best interests. The court also found the Secretary of State’s claim that contributions to the scheme are ultimately funded by the taxpayer equally misleading, as the fund represents the contributing employees’ money, not state money.
The proponents of the new clause tried to make BDS the issue, but it is actually about government overreach. The Supreme Court ruled that the power of the Secretary of State to issue guidance to local authorities has to respect their primary responsibility as quasi-trustees of the fund. The Secretary of State was not entitled, therefore, to make authorities give effect to his own policies in preference to those that they themselves thought it right to adopt in fulfilment of their fiduciary duties.
I want to make it clear that I do not want to be thought of as simply wishing to dodge the issue of BDS. I would welcome a debate on BDS, but that is not what we are discussing here today. This amendment does not mention BDS and potentially goes much wider, with a potential impact on the whole environmental, social and governance agenda.
The House will be aware that there is general support for initiatives that help pension schemes with assessing ESG-related risks. Indeed, the Government have enacted legislation that requires schemes to consider ESG objectives. It is now accepted that pension funds’ fiduciary responsibilities to members, which prioritise generating investment returns, permit scope to allow the removal of investments on non-economic grounds if they do not materially harm investment fulfilments.
It should also be understood that the Local Government Pension Scheme advisory board for England and Wales has produced guidance on responsible investment and provided investment decision-makers with a range of information, case studies and tools to help them meet the challenges involved. This guidance should be sufficient, and it is not necessary, therefore, to consider further legislative intervention in the operation of their investments or changes to the long-standing law in this area.
I understand that the Pensions and Lifetime Savings Association—the body that represents workplace pension schemes, including the Local Government Pension Scheme—has written to the Treasury to urge the Government to give more time and thought to how this would work in practice before it is adopted into law. We know, as the Minister has explained, that the Government are also considering more widely what role investment funds can play, particularly in promoting local investment, as part of their levelling-up agenda.
I have three more points. First, it should be recognised that in the context of the Local Government Pension Scheme, investment decisions have a potential impact on the contributions paid by employers and members of the scheme. Decisions made to align with government policies may result in additional costs to local government employers and employees, and to the many private sector operations included in their schemes.
Secondly, there is some doubt as to whether the amendment in its current form will work in the way that is intended. It fails to resolve the potential conflict between the Secretary of State’s directions and the trustees’ continuing duties to their members. It calls into question the relationship between the power of the state over individual property rights. At the very least, there is a question about interference with rights under the European Convention on Human Rights.
Baroness Deech (CB)
My Lords, let there be no obfuscation. We know what local authorities have already been trying in relation to BDS. We should be clear that the boycott which the noble Lord, Lord Davies, is anxious to facilitate is aimed at one state only. Local authorities have not been trying to divest from China, Myanmar, North Korea, nor even Russia, but only one state—Israel. The BDS movement is intended to delegitimise Israel, and ultimately destroy the state. Singling out Israel for boycott is out of all proportion to other states in this troubled world, and it is anti-Semitic. That is because it applies double standards and denies the Jewish people own right to self-determination, as defined in the IHRA definition.
The noble Lord, Lord Davies, is also reckless as to the interests of public pension holders, who, if asked, would not want to be drawn into a Middle East conflict and are likely to wish to continue to enjoy the fruits of investment in Israeli technology and medical products, not to mention technology that goes into iPads, iPhones, electric car batteries, and other important everyday products. BDS almost always equates to anti-Semitism, which is why Sir Keir Starmer has come out against it and continues his efforts to rid the Labour Party of the anti-Semitism found to be present in it by the EHRC. It does not help the peace process; BDS fuels a rise in anti-Semitic incidents, and the growing number of assaults on Jews and Jewish community buildings. We cannot allow local authorities to make flag-waving foreign policy decisions, bringing their communities into conflicts which are not relevant. Do we want local government pensions scheme investing in Russia? There is no reason why government policies should not be determinative of this.
Bearing in mind our discussions this afternoon, in the Second World War, over 1 million Jews died in Ukraine. Today, Israel has taken in thousands of refugees from Ukraine, Jewish and non-Jewish. Never again will persecuted Jews have no safe place to go, for Israel is the haven for them and the home for survivors of the Holocaust. This is the moral choice that faces your Lordships in relation to Amendment 54A. It is clear that the amendment of the noble Lord, Lord Davies, is not it.
Baroness Sheehan (LD)
My Lords, I speak at this stage of the Bill because Commons Amendment 54 was tabled so very late on Report in the Commons, after it had already been through this House where it started. How extraordinary it is that an amendment with such potentially wide-ranging impact should have been tabled so that no meaningful scrutiny was possible, with so little notice that the local government pension scheme advisory board was only able to publish its consent after the amendment was passed in the other place.
The concerns the amendment raises are substantial. They go to the heart of who takes the decision on how an individual’s money is invested. Should it be the Government, or should it be the representatives of the people whose money is being invested, which in this case would be the scheme administrators who fulfil the same functions as pension fund trustees? The crux of Amendment 54 is that it is the Government’s money, and the Government should be the final arbiter of the decision. However, when that was tested in 2020, the Supreme Court disagreed and ruled against that contention, asserting that the funds of members of public centre pension schemes belong to the members. It is not public money.
Amendment 54 from the Government seeks in effect to negate that decision. If it were to become law, the Government could issue guidance or directions—and I quote from the explanatory guidance—that
“public sector pension schemes, including the local government pension scheme … may not make investment decisions that conflict with the UK’s foreign and defence policy.”
The crucial decision of who will make the divestment decisions based on ESG and ethical considerations, if Amendment 54 were in place, becomes more blurred.
Some examples may help to illustrate the frictions that could arise. What is happening in Ukraine is uppermost in all our minds. This is not about anti-Semitism; this is about humanitarian concerns. That is why those decisions are taken. What is happening in Ukraine is something we all care about enormously. Many people are outraged by the Russian regime’s callous disregard for innocent civilians who dare to resist their advance. Suppose an LGPS scheme decided to divest from a Russian-owned organisation that is not on the sanctions list—this was the situation not so long ago with Gazprom —the existence of Amendment 54 on the statute book could have deterred that scheme. That, in effect, would be its consequence, given its vague wording and potentially broad application.
Local councils should have a duty to invest ethically, and they should be able to do so unequivocally in alignment with the UN guiding principles on business and human rights. If what is in those principles are not clear to any noble Lords in the Chamber, perhaps they should Google it. It speaks to a very specific example. In areas of the world where states are in breach of international law with clearly documented and verified violations of the human rights of civilian populations, such as is occurring on a regular and sustained basis in the occupied Palestinian territory, local authorities should be able to exercise their ethical judgment and divest from companies that produce and deal in goods from the illegal Israeli settlements in Palestinian territories. However, through Amendment 54, the Government could mandate that if they were to do so, they would be in conflict with the UK’s foreign and defence policy. That cannot be right.
On another issue, fund administrators also have a responsibility to invest in alignment with domestic legislation, such as meeting our net-zero target by 2050, and with international agreements, such as the Glasgow climate accord, agreed at COP 26 just last year. It is not just a responsibility to safeguard environmental and natural assets that is at stake: ultimately, it is the fiduciary duty of fund managers to act in the financial interests of their members.
In 2020, in his annual letter to CEOs, Larry Fink, CEO of BlackRock, the world’s largest assets manager with $10 trillion of assets under management, stated that
“climate risk is investment risk.”
Mark Carney, too, has warned that continued investments in fossil fuels risks write-offs and stranded assets. Local authorities must be able to divest from sources of oil, gas and coal wherever in the world they happen to be, regardless of whether that decision is in alignment with the Government’s foreign and defence policy. Not only must local authorities be able to meet their ESG requirement, they must also be able to fulfil their fiduciary duty. This amendment will hamper their ability to do both, and it should not be included in this Bill.
Baroness Altmann (Con)
My Lords, I will address both amendments from the noble Lord, Lord Davies, with whom I so often wholly agree on pension matters; but I am afraid that, in these instances, I find myself in disagreement.
As regards Amendment 48, I would like to make it clear that I support both the amendments that were passed in the Commons. I also believe that public sector workers deserve good pensions. They have good pensions. This stems from the changes that were made in the Hutton review in 2011. I confess that I was astonished at the time that a 25-year settlement seemed to have been agreed in the context of defined benefit pensions, for which costs can change so dramatically in that kind of timeframe. Indeed, employers have found that the costs have significantly increased.
In 2010 or so, the cost of providing a standard public sector pension would have been, perhaps, between 30% and 40% of salary. Subsequent to that, the costs have risen to at least 40% to 50% of salary, if not more than that. So, in effect, there has been a significant pay increase—albeit in deferred pay—for local government workers and public sector workers in general.
The 2016 valuation, based on various assumptions, also does not necessarily mean that the costs at the time would be the ones that are experienced today. Were a valuation to be conducted, say, three years later, four years later or five years later, there would be a significant increase in cost, but by relying wholly on the 2016 valuation and not factoring in the judgments of the courts in terms of the transitional protections agreed, it would appear that the workforce should have increased pension offers, which would subsequently need to be potentially reversed under this economic test.
Part of the problem stems from the expectation—which is wholly unrealistic—that there can be a 25-year guarantee for the kind of defined benefit pensions that are underwritten by taxpayers. That is also an important consideration because local government pension schemes do not belong to the Pension Protection Fund. The benefits promised to the workforce are underwritten by what are called employers, but they are actually taxpayers across the whole country, whether it is council tax payers or ultimately general taxpayers. Given the fiscal situation that we are currently in, and given the changes in the fiscal situation that can accrue, I believe that there is clearly a government interest and a taxpayer interest in the delivery of the benefits of these schemes. It is not just individuals’ money; it belongs to all of us, because we underwrite the full value of all public sector pensions, including the LGPS—which is not, as I say, part of the Pension Protection Fund, so there is no other underwriting available.
Lord Macdonald of River Glaven (CB)
My Lords, I entirely agree with the noble Baronesses, Lady Deech and Lady Altmann, that BDS is a discriminatory and racist movement whose object is the destruction of the state of Israel, and unmistakably so. However, I do not agree with them that that is a reason in itself for supporting Amendment 54. For all the reasons articulated by the noble Baroness, Lady Sheehan, my view is that this amendment represents overreach by the Government and has hardly received the sort of scrutiny that such an important measure clearly requires.
Baroness Kramer (LD)
My Lords, I had not intended to speak in this debate except to say a few words on the cost control amendments, at the request of my noble friend Lady Janke, who is leading for us on this issue. I shall now say very little on cost control, except that I am very much in the same camp as the noble Lord, Lord Davies.
My answer to the noble Baroness, Lady Altmann, is that if the Government decide that a commitment they made to a 25-year agreement is one that they no longer wish to keep, they should reopen the negotiations, not turn to Parliament in the late stages of the passage of a Bill and take for themselves powers to simply override the commitment that they once made. This was supposed, from a public pensions perspective, to be a Bill that simply corrected unlawful parts of the structure that the Government had entered into that were struck down by the courts in the McCloud judgment. The Government used that as an opportunity to go far beyond that.
I have problems with the cost control mechanism altogether, because it basically says that the mistakes the Government made need to be paid for by the scheme members as a whole: we will correct the injustice to a particular group, but the cost of that will be picked up by the other pensioners in the scheme. Now the Government have essentially said that if they mismanage the economy, that cost needs to be picked up by the members in the scheme as well. At the very least, they should have gone back and negotiated with the parties with whom the original arrangement was structured.
I shall now speak to the other amendment, partly because of a word used by the noble Baronesses, Lady Deech and Lady Altmann: “anti-Semitism”. When I read Amendment 54, it is a direction—I think the Minister tried to emphasise that it is guidance, but it is not guidance, it is a direction, and it says that very clearly in the amendment. I was told that various people were very concerned not to vote against it in the Commons because they were afraid that they would be labelled anti-Semitic. I thought, “Nonsense, not in a Parliament like this, not among people of the standing we have in the House of Commons and the House of Lords.” Yet, I heard very clearly from the noble Baroness, Lady Deech, the notion that opposing the amendment is anti-Semitic. I oppose it, and I dare her ever to say that I am anti-Semitic.
When I see those crowds of refugees coming out of Ukraine, they are to me an evocation of my grandparents, my aunts, my uncles and my cousins who were taken to concentration camps or as slave labour for the Hungarian army on the Russian front. In every political campaign I have waged, I have been attacked for being a Jew. In the most striking attack, a physical attack on my son and on me with eggs and flour, we had to be barricaded into a room and rescued by riot police. I dare the noble Baroness to label me anti-Semitic, but I oppose that amendment, and precisely for the reason that the noble Lord, Lord Macdonald, gave: this is total overreach. Israel and that issue is the excuse.
I look at the actions of the Government in so many ways. When I look at the powers they have taken away from local government, essentially trying to reconstruct it just as an agency of central government departments; when I look at what happens in this House, with skeleton Bills and Henry VIII clauses; when I look at the way that powers that came from the European Union were transferred directly to regulators, becoming, in effect, no longer either visible or, certainly, accountable, I see a constant shift of a central Government that feels they have the right to reach in and take and do whatever they please. With their 80-seat majority in the Commons, they can achieve exactly that and this measure is exactly part of that.
I referred to my family and will do so again. My grandsons have not only the heritage of those who died in the Holocaust but the heritage of those who were slaves. Had this particular amendment been available when Margaret Thatcher was Prime Minister, she could have—and I think we know would have—directed local government pensions to invest in apartheid South Africa and would not have permitted anyone who objected who was part of those pensions to have refused that investment. To me, that is outrageous and it is the fundamental flaw that sits within this amendment.
Looking at this amendment, I say to the noble Baroness, Lady Altmann, who suggested that these pension funds are somehow owned by the taxpayer, that these pension arrangements are in lieu of salary. I do not believe that anyone would say that the salary paid to a local government official should be invested under government direction, so why should the pension of a local government official be invested under government direction?
I will speak later on the economic crime Bill, very much in support of sanctions against Russia. However, those sanctions apply to everybody; they apply to every asset, public and private, and to every pension. The rules are universal. I do not have a problem with universal rules, used in extremis, which is exactly the proposition that the Government will make to us today. I do have a problem, however, when local government is singled out—when the pensions of local government servants now come under the direction of the political interest of a Government. If the Government feel so strongly that the current trustees are behaving inappropriately, they could easily have made an arrangement whereby investment decisions are put to the members; they could let them decide what they think is ethical from their perspective and how their money should be used.
I agree very much with those who have said that this is overreach. If anybody uses that word “anti-Semitism” to address opposition to this, it tells you how utterly empty the policy is in and of itself.
Lord Mann (Non-Afl)
My Lords, we could have a long and interesting debate on the question of anti-Semitism, but I fear that issues are getting slightly confused. Unless I have read this government proposal inaccurately, the Government are not proposing to give themselves powers to instruct any local authority on what it should do; they are giving themselves powers to prevent local authorities involving themselves in what local authorities might like to describe as foreign policy.
I am, on balance, in favour of this proposal, but I could put an argument against it, which would be about its impact on the BDS movement—which is, I think, in my lifetime, the most unsuccessful political campaign that I have seen. It has attempted to close down links between British academics and Israeli universities and academics and, as a consequence, those links have been greatly enhanced and deepened. It has attempted to target all sorts of investments and has failed to do so. There is an example, though, of a local authority attempting to do what might be caught out by this amendment. Sussex County Council, in 2021, following a big campaign—well, not very big, but noisy—by a small number of people demanding that it boycott Israel, made a decision. But when one looks at the decision that it made, it was not making a foreign policy statement expressly; it was fiduciary duty, the council claimed.
Did the council boycott Israel, or the alleged targets, the settlements—that was the original concept of the BDS campaign—but, having failed in that, then shift to Israel? No, it did not. It went to where things have now shifted again. It targeted multinational companies that were, it alleged, operating in Israel. The precise companies that it targeted and the products that it cited were exactly—and I mean exactly—the same products and companies that Zelensky and the Ukrainians are repeatedly requesting to defend themselves from the Russian invasion. That is what that would have meant in terms of disinvestment. The BDS campaign was not a success anywhere. It is about the impact on the Jewish community—particularly the young Jewish community, which gets this and worse thrown in its face repeatedly and constantly. It is about virtue-signalling, when the people who did it did not even have the bottle to say what it was about but pretended, in that one example, that it was fiduciary duty. That is what is particularly abhorrent to me.
Lord Leigh of Hurley (Con)
My Lords, it is always a great privilege to follow the noble Lord, Lord Mann, whose excellent speech has clarified a number of things for me—and the rest of the House, I hope—about how we should look at Amendments 54 and 54A. I am somewhat puzzled by the assertion from the noble Lord, Lord Davies of Brixton, that Amendment 54 has nothing to do with BDS. I have listened to the debate in the House of Commons and, indeed, the debate this afternoon, and that does not ring true with me.
The predominant drive of the BDS campaign and its leadership is not criticism of Israel’s policies, which would be fair enough, but a demonisation and delegitimisation of Israel using other people’s money—and it is other people’s money. The BDS campaign promotes a biased and simplistic approach to the complex Israeli-Palestinian conflict and presents this dispute over territorial and nationalist claims as if it is the fault of just one party: Israel. The BDS campaign does not support Israeli-Palestinian peace negotiations and, by the way, rejects the two-state solution to the conflict that many people in this House would like to see. Many of the founding goals of the BDS movement, including denying the Jewish people the universal right to self-determination, along with the strategies employed in the BDS campaign, are anti-Semitic. Let us be clear. Many individuals—not all, of course—involved in the BDS campaign are driven by opposition to Israel’s very existence as a Jewish state.
I was in Manchester with my daughter, who is a student at Manchester University. We went shopping in the city centre and encountered a BDS rally. The people there were chanting a chant that noble Lords may have heard: “From the river to the sea”. Do you know what that means? My daughter asked me, “What does that mean for my friends in Israel?” It means their annihilation.
BDS campaigns create tensions in communities in the UK, particularly on college campuses, which result in harassment or intimidation of Jews and non-Jewish Israeli supporters. This sometimes includes overtly anti-Semitic expressions and acts. As I said, this uses taxpayers’ money. This dynamic can create an environment in which, apart from anything else, anti-Semitism can be expressed more freely. I would not wish to suggest that anyone who supports the amendment of the noble Lord, Lord Davies, is anti-Semitic at all; I want to make the point about the BDS.
The Government are preparing legislation for the next parliamentary Session to stop public bodies from pursuing BDS activities because of their harmful impact on our foreign policy and trade interests. As has been said, the 2019 Conservative Party manifesto pledged to
“ban public bodies from imposing their own direct or indirect boycotts … against foreign countries.”
The Prime Minister himself has previously criticised public policies for adopting
“their own pseudo foreign policies against countries which with nauseating frequency turns out to be Israel.”
To his credit, in 2021, the Labour leader, Sir Keir Starmer, stated that:
“Labour does not—and will not—support BDS.”
I hope that Amendment 54 will receive full support from all Members of this House, and that all Members of this House will oppose Amendment 54A. Abstaining is not sufficient.
Lord Polak (Con)
My Lords, it is a pleasure to follow my noble friend. I will be brief. The UK is Israel’s third largest trading partner, with £2.7 billion-worth of British exports and an overall trade relationship worth £4.8 billion. With improved and growing relations in the Middle East between the Arab world and Israel—the Abraham accords were referred to—and the UK’s very strong connection with Israel, I must say that the BDS campaign is a relic of a past war which is no longer being fought in the region, but rather by a small and divisive minority here in the UK.
Amendment 54, which has passed in the other place, will put an end to the politicisation of public sector pension funds. The main goal of local authorities—in my view as someone who is not a pensions expert—is to improve community cohesion, create local jobs and increase economic growth opportunities in their area. Supporting this amendment will allow the Government to send a clear message that global cohesion on an international scale—and the enhancement of economic growth and opportunity on a local level—should not be jeopardised by the divisive politics of a very small minority.
Baroness Janke (LD)
My Lords, I too thank the Minister for his presentation and the noble Lord, Lord Davies, for bringing forward these amendments. I also declare my interest as set out in the register.
As my noble friend Lady Kramer said, Amendment 54 is a crude and oppressive attempt to fetter the discretion of local government pension schemes. It was introduced late and with minimum scrutiny. The Government should not be in the business of directing how local government pension schemes should invest their funds. These funds are set up under strict legal requirements, as we have seen. Their members are very often vocal about wishing to have ethical considerations considered as part of their investments. As far as I can see, schemes do not appear to have been damaged in any way by investments of local government pension schemes.
The job of pension scheme managers should not be to look at UK foreign policy when setting their investment strategy. That really is not their job. Foreign policy changes, and Governments change, so are we really expecting local government pension scheme fund managers to change their long-term investment strategy every time the UK’s foreign policy changes?
As I said, local government pension schemes aspire to invest ethically, with the members of such pension schemes having the right to express their ethical views and to have them taken into account. Why should these people not require ethical considerations? As my noble friend Lady Kramer mentioned, a clear example in the 1980s was disinvestment from South Africa. The then UK Government were obdurate and determined to defend South Africa from financial sanctions despite the violence, discrimination and widespread human rights abuses of apartheid. I, for one, cannot see why pension schemes should not reflect the views of their members when they want to protest against human rights being abused, as was happening in South Africa.
In the mid-1980s one in four Britons were boycotting South African goods. Many local councils followed their local communities and measures were taken to disinvest from South Africa, including pension schemes, and there were boycotts of South African goods and the boycott of Barclays Bank, which pulled out of South Africa. It was certainly said at the time that foreign banks calling in South African loans was one of the reasons given by the South African President that enabled him to agree with his party the release of Nelson Mandela. So I do not accept that pension schemes should not be used for these purposes.
I feel that this is a measure introduced by a Government with an authoritarian record who wish to take more and more powers to themselves and using the whole idea of BDS to justify that. The amendment is also so loosely worded—as my noble friend Lady Kramer has said, it is directions, not advice, that is being given— that it could easily prevent local government pension schemes making prudent investment decisions based on environmental, social and governance considerations, as is part of their code of conduct. For example, the local authority pension scheme of my former authority, Bristol, sought to disinvest from the tobacco industry as a result of the campaign by Smokefree Bristol. I know of local authorities that wish to disinvest from Saudi Arabia on the grounds of arms sales, and others are looking at boycotting investment in China on the basis of its treatment of the Uighurs and its conduct of the affairs of Hong Kong. As my noble friend Lady Sheehan has said, carbon-neutral boycott is now a common principle, and many local authority pension schemes wish to disinvest from further investment in local gas and coal.
We have experienced in other legislation the relentless expansion of government powers. There is an opportunity in this amendment for the Government to interfere in pension scheme investment when it is not in line with their own views—and I have to say that Governments are notoriously slow in catching up with public opinion.
I thank the noble Lord, Lord Leigh, for clarifying that criticism of the Government of Israel is not at all anti-Semitic. I would also like to thank the noble Baroness, Lady Deech, for her contribution—although she seemed to imply that if we support this Motion then we are somehow being anti-Semitic. I disagree with the noble Baroness, Lady Altmann, with whom I have had the pleasure of working on many pension schemes issues: I do not believe that there is any anti-Semitic intention behind this. I do not see why, if people object to the Israeli Government’s treatment of the human rights of Palestinians, they should not demonstrate that and campaign for disinvestment from Israel if that is part of their beliefs.
The amendment is ill thought-out, badly worded, hastily constructed and has been introduced with no scrutiny, and I do not believe we should support it. If the noble Lord, Lord Davies, moves his amendment and tests the opinion of the House, we will support him.
Lord Ponsonby of Shulbrede (Lab)
My Lords, I thank the Minister for his presentation, and I shall speak first to Amendment 48, on the cost control mechanism. We agree with the points made by my noble friend Lord Davies of Brixton, reiterated and added to by the noble Baronesses, Lady Kramer and Lady Janke. In the Commons, we raised these concerns over the introduction of what the Government call the “symmetrical economic check” and voted that this particular reform of the mechanism should not be added to the Bill. I will not repeat the background, which has been expertly put forward by my noble friend, but will just echo the concern that this breaks the Treasury’s 25-year guarantee that there would be no further fundamental reforms.
In 2011, the Government’s Paymaster-General said that those reforms represented a settlement for a generation, and they arose out of the 2011 Hutton review. Further, does the Minister recognise our concern that these reforms risk undermining the faith of public service workers in their pension schemes? What does the Minister expect of future reforms? Since the Government are clearly set on pushing ahead with the economic check, what would be most helpful now are answers to the questions put by my noble friend Lord Davies on how that would work in practice.
We raised concerns in the House of Commons that the check was insufficiently transparent and gave too much room for ministerial interpretation. As has been said, the Government’s answer is that discretion will be limited as the check will be linked to objective and independent figures from the OBR, although that particular element is not set out in the Bill. I should be grateful if the Minister confirmed that. I am hopeful that he will be able to provide some more detailed answers on the process that we should expect and how the OBR figures will be used—a point made by my noble friend Lord Davies.
Turning to Amendment 54, it is fair to say that it is an unexpected addition to what is in reality a technical Bill. It causes one to reflect on the Government’s lack of control of their own Back-Benchers in the House of Commons. The Labour Party supports the broad thrust of the new clause but shares concerns over its wide scope and possible unintended consequences. We also agree with the noble Baronesses, Lady Kramer and Lady Janke, that there is a huge element of government overreach here and we are mindful that the amendment represents directions, not guidance.
We in the Labour Party are unequivocal in our opposition to the divisive and discriminatory use of BDS against the State of Israel. We do not believe that such an approach is appropriate or would enhance the prospects of peace through a negotiated settlement to the conflict, based on a two-state solution. However, regrettably, the clause is poorly worded, too broad in scope and, as we have heard, could cause difficulties for local authorities wanting to take a principled stance on, for example, China’s treatment of the Uighurs. Many other examples have been given in the debate. It is clear that the Government have chosen to progress the Bill with this additional clause but also intend to introduce further legislation in the Queen’s Speech that will be more detailed in this area. It would be helpful if the Minister clarified what comes next and how concerns raised in today’s debate will be considered. What ongoing engagement are the Government having with the Local Government Association, which has raised concerns, and many other bodies interested in this area? I understand that a full consultation process is required before any guidance or directions can be issued under the new clause. What will that consultation process look like? Are there plans to launch a consultation, or will that not be entered into until further legislation is brought forward at the Queen’s Speech?
Finally, I repeat a question on Russia asked by a noble Lord. If schemes want to divest quickly, for example because of links to Russia—Gazprom was mentioned—would anything in the directions under this clause of the Bill put that ability to act in jeopardy in the future? Can the Minister talk to this specific point? It is obviously extremely pertinent right now but there may well be similar issues in future.
Just to be clear, if my noble friend were to press his amendment to a vote, we would abstain.
Viscount Younger of Leckie (Con)
My Lords, I am pleased to know that the great majority of the amendments have been well received. I thank all noble Lords for their considered contributions. There was quite a bit to cover and a number of questions. As noble Lords would expect, I will do my best to answer them all, or as many as possible within the timeframe allowed.
As the noble Lord, Lord Davies, said, two key themes have emerged in today’s debate. The first is guidance on investment decisions for the Local Government Pension Scheme, and the second is the economic check element of the cost control mechanism reforms. I will start with the latter and turn first to the CCM, as it is called, and in particular the economic check, as raised specifically by the noble Lord, Lord Davies of Brixton. I will speak to Amendment 48. I understand from the noble Lord’s contribution that his concern is specifically with this check, but it is important to note that the effect of rejecting Commons Amendment 48 would be also to reject the framework for the reformed scheme-only design, which, as the noble Lord will be aware, is widely supported overall.
I turn to why we think the economic check is needed. It will ensure consistency between member benefit or contribution changes and changes in the wider economic outlook, as I addressed in my opening speech. To address the question of whether this is objective, the economic check will be linked to the OBR’s independent and objective measure of expected long-term GDP growth and the long-term earnings assumption. It will operate purely mechanically, with no scope for interference from individuals or groups from within government or outside. It will therefore operate transparently and be linked to an objective and independent measure of expected long-term earnings and GDP growth. Further details on the design and operation of the economic check have been set out in the Government’s consultation response published, as the noble Lord in particular will be aware, in October 2021.
I will go a little further on the clause making reference to different sectors of the economy. The Bill implements the framework for the economic check, which will ensure consistency with member benefit and contribution changes. The Bill will allow Treasury directions to set out how the economic check should operate its scheme valuations, including whether and to what extent the growth in the economy, or any sector of the economy, of the UK or any part of the UK should be taken into account. This will allow the economic check to be based on the OBR’s independent projections of long-term UK GDP growth. I will talk more about directions in just a moment. We believe that these reforms will make the mechanism more stable from the 2020 valuations onwards and allow it to operate more in line with its objectives, giving members greater certainty with respect to their retirement incomes.
I turn to points raised by the noble Lords, Lord Davies and Lord Ponsonby, my noble friend Lady Altmann and others on the 25-year guarantee. I took note of the points raised, but the Government do not believe that these reforms breach the 25-year guarantee. The elements protected by the 25-year guarantee are set out in legislation—namely, Section 22 of the Public Service Pensions Act 2013—and the cost control mechanism is not included.
The Government are making these changes following a thorough and independent review of the mechanism by the Government Actuary and a full and open consultation process. As I have noted, the Government Actuary’s report makes clear that it does not seem possible for the mechanism to be able to protect the taxpayer unless it considers the wider economic outlook. The symmetrical operation of the economic check will also protect members. Furthermore, the reforms will lead to a more stable mechanism, with both benefit reductions and improvements becoming less likely, which aligns with the spirit of the 25-year guarantee.
I turn to the original objectives of the cost control mechanism, on which I will again delve into more detail to try to give noble Lords some reassurance. The noble Lord, Lord Davies, asked for greater clarity on the CCM. As I set out in my opening remarks, the Government asked the Government Actuary to review the mechanism following provisional results from the 2016 valuations. This was the first time the mechanism was tested, and the provisional results indicated floor breaches across all schemes for which results were assessed, leading to concerns that the mechanism was too volatile.
As part of this review, the Government Actuary was asked to assess whether and to what extent the mechanism was working in line with the original policy objectives for the mechanism. These objectives are to protect taxpayers from unforeseen costs, to maintain the value of schemes to members and to provide stability and certainty on benefit levels, so the mechanism should be triggered only by extraordinary, unpredictable events. These objectives have been retained since the mechanism was first introduced in the Public Service Pensions Act 2013.
The mechanism was introduced following the recommendations of the Independent Public Service Pensions Commission in 2011. The commission, as the House will know, was chaired by the noble Lord, Lord Hutton of Furness, and specifically recommended a mechanism to protect the Exchequer from increased costs. However, the final mechanism negotiated between the Government and member representatives is symmetrical and so also maintains the value of pensions to members when costs fall.
Let me now turn to the second theme of BDS, as raised by several noble Lords. I hope I can give some reassurances. It was particularly raised by the noble Lord, Lord Davies, and the noble Baronesses, Lady Sheehan and Lady Kramer. I thought the remarks from the noble Lord, Lord Mann, were interesting, very balanced and very helpful. I hope my remarks chime to a large extent with what he said.
As I set out in opening, Commons Amendment 54 does not put a requirement on schemes to make any immediate decisions regarding their investments. It expands existing powers for the responsible authorities to issue guidance or directions, both of which would be drafted and consulted on. I reiterate that this would involve extensive engagement with the LGPS community over the usual 12-week consultation period, during which time all views and concerns would be considered. Any guidance or directions produced would set the parameters out in detail.
There will be consultation with the LGPS community when framing such parameters to ensure that all views and concerns are considered, including on ESG matters, which were raised by the noble Baroness, Lady Janke. I understand that the contributions made by several noble Lords, including the noble Baroness, were to do with ESG. I hope I can ease concerns by assuring the House that this amendment is strictly in relation to UK foreign and defence policy, as reiterated very strongly by the noble Lord, Lord Mann. Any guidance or directions issued would not seek to restrict decisions that meet the Law Commission’s test for investment decisions influenced by non-financial considerations except in a very narrow area concerned with UK foreign and defence policy.
In all other areas the existing tests would apply, namely that scheme managers must have good reason to think that scheme members would share their particular concern and the decision does not involve a risk of significant financial detriment to the fund. If issued, such guidance would seek to provide protection to LGPS funds by preventing decisions which would otherwise have been subject to challenge under the aforementioned Law Commission tests. To reiterate, this power would not be used to restrict the proper account of ESG matters in investment decisions.
To go a little further, I reiterate that these anti-boycott provisions are not about fossil fuels or climate change. The Government have passed legislation to require pension schemes to state clearly their policy on how they take account of climate change and its risks. Clearly, climate change will have long-term financial consequences. Notwithstanding that, fuels like natural gas will continue to play a vital role in Britain’s energy mix, particularly in the production of hydrogen as we transition to a net-zero economy. We need fossil fuel companies to invest in the new technologies to help deliver what we must do to reach net zero.
I will move on to focus on the use of “directions” as opposed to “guidance”—or just to discuss both—a point raised in particular by the noble Lords, Lord Davies and Lord Ponsonby. Administering authorities must have regard to guidance issued by the responsible authority. Directions allow responsible authorities to direct specific action by a scheme manager. For example, a direction may be considered appropriate if the responsible authority is satisfied that the administering authority is failing to act in accordance with guidance.
Viscount Younger of Leckie
Moved by
That this House do agree with the Commons in their Amendment 48.
“Employer cost cap
Amendments relating to employer cost cap
(1) Section 12 of PSPA 2013 (employer cost cap) is amended in accordance with subsections (2) to (9).
(2) After subsection (1) insert—
“(1A) Subsection (1) must be complied with before the end of the period of one year beginning with the day on which the scheme’s first valuation under section 11 is completed.”
(3) For subsection (2) substitute—
“(2) A reference in this section to “the employer cost cap” of a scheme under section 1 is a reference to the rate set by virtue of subsection (1) in relation to the scheme.”
(4) In subsection (3)—
(a) after “cap” insert “of a scheme under section 1”;
(b) after “set” insert “, and the changes in the cost of such a scheme are to be measured,”.
(5) In subsection (4)—
(a) in paragraph (a), for “the cap” substitute “the employer cost cap of the scheme”;
(b) in paragraph (b)—
(i) for “subsequent valuations” insert “the second or any subsequent valuation”;
(ii) for “the cap” substitute “the employer cost cap of the scheme”;
(c) in paragraph (c)—
(i) for “the extent to which” substitute “whether and if so to what extent”;
(ii) for “of this section” substitute “mentioned in paragraph (b)”;
(d) after paragraph (c) insert—
“(d) that the data, methodologies and assumptions that are to be used for the purposes mentioned in paragraph (b) are to relate, to any extent, to—
(i) the growth in the economy, or any sector of the economy, of the United Kingdom or any part of the United Kingdom,
(ii) the growth in earnings of any group of persons over any period, or
(iii) the rate of inflation (however measured) over any period.”
(6) After subsection (4) insert—
“(4A) The power to give directions by virtue of subsection (4)(d) is not affected by any statement made before 27 May 2021 by the Treasury, or any Minister of the Crown, relating to the data, methodologies and assumptions that are, or are not, to be used for the purposes mentioned in subsection (4)(b).”
(7) In subsection (5)(a) for “(and any connected scheme)” substitute “(determined, if and so far as provided for by virtue of subsection (4)(c), taking into account the costs of any connected scheme)”.
(8) In subsection (6), in the opening words—
(a) for “the scheme” substitute “a scheme under section 1”;
(b) for “the margins” substitute “either of the margins specified under subsection (5)(a)”.
(9) After subsection (7) insert—
“(7A) Treasury directions may specify the time at which any increase or decrease of members’ benefits or contributions that is provided for under subsection (6) is to take effect.
(7B) Treasury directions may require that provision contained in scheme regulations under subsection (6) permits steps to be—
(a) agreed by virtue of paragraph (a) of that subsection, or
(b) determined by virtue of paragraph (b) of that subsection, only after the scheme actuary has certified that the steps would, if taken, achieve the target cost for the scheme.
(7C) Treasury directions under subsection (7B) may specify—
(a) the costs or changes in costs that are to be taken into account, or
(b) the data, methodologies and assumptions that are to be used,
for the purposes of determining whether any steps would, if taken, achieve the target cost for the scheme.
(7D) In subsection (7B) “the scheme actuary”, in relation to a scheme under section 1, means the actuary who carried out, or is for the time being exercising actuarial functions in relation to, the valuation under section 11 by reference to which it has been determined that the costs of the scheme have gone, or may go, beyond either of the margins specified under subsection (5)(a).”
(10) Section 12 of PSPA(NI) 2014 (employer cost cap) is amended in accordance with subsections (11) to (19).
(11) After subsection (1) insert—
“(1A) Subsection (1) must be complied with before the end of the period of one year beginning with the day on which the scheme’s first valuation under section 11 is completed.”
(12) For subsection (2) substitute—
“(2) A reference in this section to “the employer cost cap” of a scheme under section 1 is a reference to the rate set by virtue of subsection
(1) in relation to the scheme.”
(13) In subsection (3)—
(a) after “cap” insert “of a scheme under section 1”;
(b) after “set” insert “, and the changes in the cost of such a scheme are to be measured,”.
(14) In subsection (4)—
(a) in paragraph (a), for “the cap” substitute “the employer cost cap of the scheme ”;
(b) in paragraph (b)—
(i) for “subsequent valuations” insert “the second or any subsequent valuation”;
(ii) for “the cap” substitute “the employer cost cap of the scheme”;
(c) in paragraph (c)—
(i) for “the extent to which” substitute “whether and if so to what extent”;
(ii) for “of this section” substitute “mentioned in paragraph (b)”;
(d) after paragraph (c) insert—
“(d) that the data, methodologies and assumptions that are to be used for the purposes mentioned in paragraph (b) are to relate, to any extent, to—
(i) the growth in the economy, or any sector of the economy, of the United Kingdom or any part of the United Kingdom,
(ii) the growth in earnings of any group of persons over any period, or
(iii) the rate of inflation (however measured) over any period.”
(15) After subsection (4) insert—
“(4A) The power to give directions by virtue of subsection (4)(d) is not affected by any statement made before 27 May 2021 by the Department of Finance, or any other department, relating to the data, methodologies and assumptions that are, or are not, to be used for the purposes mentioned in subsection (4)(b).”
(16) In subsection (5)(a), for “(and any connected scheme)” substitute “(determined, if and so far as provided for by virtue of subsection (4)(c), taking into account the costs of any connected scheme)”.
(17) In subsection (6), in the opening words—
(a) for “the scheme” substitute “a scheme under section 1”;
(b) for “the margins” substitute “either of the margins specified under subsection (5)(a)”.
(18) After subsection (7) insert—
“(7A) Directions given by the Department of Finance may specify the time at which any increase or decrease of members’ benefits or contributions that is provided for under subsection (6) is to take effect.
(7B) Directions given by the Department of Finance may require that provision contained in scheme regulations under subsection (6) permits steps to be—
(a) agreed by virtue of paragraph (a) of that subsection, or
(b) determined by virtue of paragraph (b) of that subsection, only after the scheme actuary has certified that the steps would, if taken, achieve the target cost for the scheme.
(7C) Directions under subsection (7B) may specify—
(a) the costs or changes in costs that are to be taken into account, or
(b) the data, methodologies and assumptions that are to be used,
for the purposes of determining whether any steps would, if taken, achieve the target cost for the scheme.
(7D) In subsection (7B) “the scheme actuary”, in relation to a scheme under section 1, means the actuary who carried out, or is for the time being exercising actuarial functions in relation to, the valuation under section 11 by reference to which it has been determined that the costs of the scheme have gone, or may go, beyond either of the margins specified under subsection (5)(a).”
(19) In subsections (3), (4), (5), (8), (9) and (10) omit “and Personnel”.”
Lord Davies of Brixton (Lab)
My Lords, I make no apology for promoting this debate; this is an important issue that the House has an obligation to consider carefully. I listened to what the Minister said about the economic test. I still feel there is a lack of information but, particularly in light of his statement that there was no scope within the mechanism for intervention—presumably by the Government—I look forward to seeing the directions in some detail and will try to promote some discussion in this House. However, for the purposes of this debate, I will not move my amendment.
Viscount Younger of Leckie
Moved by
That this House do agree with the Commons in their Amendments 49 to 53.
(1) The requirement in provision made under section 12(5)(a) of PSPA 2013 that the cost of a section 1 scheme must remain within a margin above the employer cost cap of the scheme does not apply, and is treated as never having applied, in relation to the cost of the scheme that is calculated by reference to the scheme’s 2016/17 valuation.
(2) Accordingly, provision made under section 12(6) of that Act does not apply, and is treated as never having applied, in relation to a case in which the cost of a section 1 scheme that is calculated by reference to the scheme’s 2016/17 valuation goes beyond a margin above the employer cost cap of the scheme.
(3) In subsections (1) and (2) and this subsection—
(a) “section 1 scheme” means a scheme under section 1 of PSPA 2013;
(b) “the employer cost cap”, in relation to a section 1 scheme, has the same meaning as in section 12 of PSPA 2013;
(c) a reference to a section 1 scheme’s “2016/17 valuation” is to the scheme’s valuation under section 11 of PSPA 2013 the effective date of which is a date in 2016 or 2017.
(4) The requirement in provision made under section 12(5)(a) of PSPA(NI) 2014 that the cost of a section 1 scheme must remain within a margin above the employer cost cap of the scheme does not apply, and is treated as never having applied, in relation to the cost of the scheme that is calculated by reference to the scheme’s 2016/17 valuation.
(5) Accordingly, provision made under section 12(6) of that Act does not apply, and is treated as never having applied, in relation to a case in which the cost of a section 1 scheme that is calculated by reference to the scheme’s 2016/17 valuation goes beyond a margin above the employer cost cap of the scheme.
(6) In subsections (4) and (5) and this subsection—
(a) “section 1 scheme” means a scheme under section 1 of PSPA(NI) 2014;
(b) “the employer cost cap”, in relation to a section 1 scheme, has the same meaning as in section 12 of PSPA(NI) 2014;
(c) a reference to a section 1 scheme’s “2016/17 valuation” is to the scheme’s valuation under section 11 of PSPA(NI) 2014 the effective date of which is a date in 2016 or 2017.
(7) The actuarial valuation with an effective date of 31 March 2016 that was signed on 18 December 2018 under regulation 123 of the Local Government Pension Scheme Regulations (Northern Ireland) 2014 (S.R. (N.I.) 2014 No. 188) is of no effect.”
“(6A) In section 8 of PSPA 2013 (types of scheme), after subsection (4) insert—
“(4A) The extent to which a scheme under section 1 is a career average revalued earnings scheme is not affected by provision contained in scheme regulations that is made under section (Power to pay final salary benefits) of PSPJOA 2022 (local government schemes: power to pay final salary benefits).””
“(13A) In section 8 of PSPA(NI) 2014 (types of scheme), after subsection (4) insert—
“(4A) The extent to which a scheme under section 1 is a career average revalued earnings scheme is not affected by provision contained in scheme regulations that is made under section (Power to pay final salary benefits) of PSPJOA 2022 (local government schemes: power to pay final salary benefits).””
“Amendments relating to pension schemes for members of the Senedd
In section 30 of PSPA 2013 (new public body pension schemes), after subsection (4) insert—
“(4A) The following provisions of this section do not apply to a new public body pension scheme which is made under section 20(3) of the Government of Wales Act 2006 (remuneration of members of the Senedd: pensions)—
(a) subsection (1)(e) (cost control);
(b) subsection (3) (Treasury consent).””
Viscount Younger of Leckie
Moved by
That this House do agree with the Commons in their Amendment 54.
“Guidance to public service pension scheme managers on investment decisions
(1) The Public Service Pensions Act 2013 is amended in accordance with subsection (2).
(2) In Schedule 3, in paragraph 12(a), at end insert “including guidance or directions on investment decisions which it is not proper for the scheme manager to make in light of UK foreign and defence policy”.”
Lord Davies of Brixton (Lab)
I have to say that I understand and respect the strength of noble Lords’ feelings on BDS, but I hold to my view that it was not the subject of today’s debate. Today’s debate was about whether the decisions about local government investments held on behalf of scheme members should be taken by the trustees, who have a fiduciary responsibility, or by the Government, who do not. It is notable that the Pensions and Lifetime Savings Association and local government as a whole consider that this amendment is unnecessary and ill thought-out, with unknown consequences.
However, I take it from the Minister’s words that, in practice, full consideration of this issue will be deferred until the Government come forward with their own legislative proposals, at which time we can give it proper consideration. I suspect that I will still oppose those proposals, but clearly we have not had the time to give this change sufficient attention. In light of what the Minister has said, I will not move my amendment.
Viscount Younger of Leckie
Moved by
That this House do agree with the Commons in their Amendments 55 to 81.
(c) a compensatable loss for the purposes of section (Power to pay compensation) (power to pay compensation under Chapter 3).”
“, or (c) a member of a local government new scheme within section 79(2)(a) who has remediable service that is pensionable service under the scheme.”
“(c) in paragraph (c), “local government new scheme” and “remediable service” have the same meaning as in Chapter 3.”
(c) a compensatable loss for the purposes of section (Power to pay compensation) (power to pay compensation under Chapter 3).”
(c) a member of a local government new scheme within section 79(2)(b) who has remediable service that is pensionable service under the scheme.”
“(c) in paragraph (c), “local government new scheme” and “remediable service” have the same meaning as in Chapter 3.”
“Parliamentary procedure for judicial schemes: transitory provision
(1) This section applies to scheme regulations for a scheme relating to the judiciary that are made at any time within the period of one month beginning with the day on which this Act is passed.
(2) A statutory instrument containing scheme regulations to which this section applies must be laid before Parliament after being made.
(3) Regulations contained in a statutory instrument laid before Parliament under subsection (2) cease to have effect at the end of the period of 28 days beginning with the day on which the instrument is made unless, during that period, the instrument is approved by a resolution of each House of Parliament.
(4) In calculating the period of 28 days, no account is to be taken of any whole days that fall within a period during which—
(a) Parliament is dissolved or prorogued, or
(b) either House of Parliament is adjourned for more than four days.
(5) If regulations cease to have effect as a result of subsection (3), that does not—
(a) affect the validity of anything previously done under the regulations, or
(b) prevent the making of new regulations.
(6) If regulations otherwise subject to the negative procedure are combined with scheme regulations to which this section applies, the combined regulations are subject to the procedure set out in this section.
(7) Section 24 of PSPA 2013 (other procedure) does not apply to scheme regulations to which this section applies.
(8) In this section, the following expressions have the same meaning as in PSPA 2013—
“the judiciary” (see paragraph 2 of Schedule 1 to that Act); “negative procedure” (see section 38(3) of that Act); “scheme” (see section 37 of that Act);
“scheme regulations” (see section 1(4) of that Act).”
(a) connected within the meaning of PSPA 2013 (see section 4(6) and (7) of that Act), or
(b) connected within the meaning of PSPA(NI) 2014 (see section 4(6) and (7) of that Act);”
““excess teacher service” has the meaning given by subsection (2)”
““Fair Deal scheme” means—
(a) a pension scheme that, in accordance with the Fair Deal Statement of Practice, has been certified by the Government Actuary’s Department as offering, to persons who have been subject to a Fair Deal transfer, pension arrangements that are broadly comparable with those offered to them before the transfer, or
(b) a pension scheme in relation to which the obligation to give such a certificate has been waived in accordance with that statement of practice;
“Fair Deal Statement of Practice” means the statement of practice entitled “Staff Transfers in the Public Sector” issued by the Cabinet Office in January 2000, as supplemented and modified from time to time;
“Fair Deal transfer” means a transfer of a person’s employment from a public sector employer to a private sector employer in accordance with the Fair Deal Statement of Practice;”
““local government contracting-out transfer” means a transfer of a person’s employment that was required to be conducted—
(a) in accordance with directions given, and having regard to guidance issued, for the purposes of section 101(1) of the Local Government Act 2003 (contracting out: staff transfer matters), or
(b) having regard to guidance issued for the purposes of section 52 of the Local Government in Scotland Act 2003 (asp 1) (guidance on contractual matters);”
““teacher” means teacher within the meaning of PSPA 2013 (see paragraph 4 of Schedule 1 to that Act) or PSPA(NI) 2014 (see paragraph 4 of Schedule 1 to that Act);”
“(2) In this Part “excess teacher service” means a person’s service in an employment or office as a teacher where (disregarding section 2(1))—
(a) the service is pensionable service under a local government new scheme, or
(b) the service—
(i) is pensionable service under a Chapter 1 new scheme for teachers, and
(ii) would have been pensionable service under a local government new scheme but for the person’s failure to meet a condition relating to the person’s attainment of normal pension age, or another specified age, by a specified date.
Service in an employment or office is “excess teacher service” if all of the service falls within paragraphs (a) and (b) (even if it does not all fall within only one of those paragraphs).
(3) In subsection (2)—
“Chapter 1 new scheme” has the same meaning as in Chapter 1; “local government new scheme” has the same meaning as in Chapter 3.”
“(ba) scheme regulations for a local government scheme (within the meaning of Chapter 3 of Part 1), or”
“(1A) In Schedule 3 (judicial offices)—
(a) Part 4 extends to Northern Ireland only;
(b) Part 5 extends to England and Wales only.”
(a) confers a power to make subordinate legislation or give directions, or
(b) otherwise relates to”
“(d) Chapter 3, and sections 97 and 98 so far as they apply for the purposes of that Chapter, come into force in relation to a local government scheme within section 79(2)(a) or (3)(a) on—
(i) 1 October 2023, or
(ii) such earlier day as the Treasury may by regulations appoint;
(da) Chapter 3, and sections 97 and 98 so far as they apply for the purposes of that Chapter, come into force in relation to a local government scheme within section 79(2)(b) or (3)(b) on—
(i) 1 October 2023, or
(ii) such earlier day as the Department of Finance in Northern Ireland may by order appoint;”
(b) Chapter 3, or sections 97 and 98 so far as they apply for the purposes of that Chapter, in relation to a local government scheme within section 79(2)(b) or (3)(b).”
“President of the Education Tribunal for Wales
Member of the legal chair panel, or the lay panel, of the Education Tribunal for Wales”
“Member of the legal chair panel of the Education Tribunal for Wales”
Commercial Rent (Coronavirus) Bill
Wednesday 9th March 2022
(2 years, 9 months ago)
Lords ChamberRead Full debate Commercial Rent (Coronavirus) Bill 2021-22 View all Commercial Rent (Coronavirus) Bill 2021-22 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 116-I Marshalled list for Report - (7 Mar 2022)
“(6) “English business tenancy” means a business tenancy comprising premises in England.(7) “Welsh business tenancy” means a business tenancy comprising premises in Wales.”Member’s explanatory statement
The amendment would define “English business tenancy” and “Welsh business tenancy”.
The Minister of State, Department for Business, Energy and Industrial Strategy and Department for International Trade (Lord Grimstone of Boscobel) (Con)
My Lords, the amendments proposed to Clauses 2, 9, 23 and, to some extent, 27 are the result of extensive discussions with Welsh Ministers, who expressed their wish that the delegated powers in the Bill be redrafted to clarify areas of Welsh competence in recognition of the importance of the Bill’s policy to Welsh businesses.
The amendments to Clause 9, regarding extending the period for making a reference to arbitration, clarify that the power to extend the arbitration reference period can be exercised for English business tenancies or for Welsh business tenancies, as well as for both. The amendments to Clause 23 decouple the moratorium period and the period for making a reference to arbitration. The moratorium period will end six months from Royal Assent, unless extended.
New Clause 23A provides that the UK must seek the consent of Welsh Ministers to extend the Bill’s moratorium period for Welsh business tenancies in respect of devolved matters. In relation to Clause 27, which is the power to reapply the Bill to a future period of coronavirus, I have tabled an amendment to enable regulations under this clause to be made just for English business tenancies, or just for Welsh business tenancies, or for both. The amendments to this clause also provide that the UK Government will seek the consent of Welsh Ministers on the use of powers to reapply the Act for Welsh tenancies in response to future periods of coronavirus-related business closures, where the provisions are devolved. In addition, in the event of new coronavirus restrictions in Wales, new Clause 27A has been included to enable Welsh Ministers, concurrently with the Secretary of State, to use the power to reapply the relevant moratorium provisions to Welsh business tenancies. I am pleased to confirm that the Senedd has now voted to support the legislative consent Motion in relation to this.
As noble Lords will be aware, the Delegated Powers and Regulatory Reform Committee published its report on 3 February. Following careful consideration of this report, I have now made several amendments to Clause 27 in order to address issues raised by the committee. I thank the committee for bringing this matter to the attention of the House. Primarily, the amendments limit the breadth of the Secretary of State’s powers to reapply the provisions of the Bill in the future. The amended power would allow for targeted modifications to accommodate new dates and to make adjustments to moratorium provisions to take account of new timeframes. However, it would not permit changes to the operation of the arbitration process or policy. The Secretary of State would retain the ability to make different provision for England and Wales, and to make incidental, supplemental, consequential, saving or transitional provisions. I beg to move.
Lord Fox (LD)
My Lords, it is pleasing to see so many more noble Lords attending this debate than there were in Committee, when there were just four of us—two of whom have subsequently come down with coronavirus. So your Lordships have been warned.
This group of amendments is testimony to the fact that the Minister listened in Committee, and has attended many meetings and taken note. For that, the Minister and the Government should be congratulated and thanked in broad measure. I highlight in particular Amendment 21, which, as the Minister set out, addresses the issues highlighted by the DPRRC. This was a serious issue, and the Minister has effectively addressed it. It is a welcome change and something these Benches were particularly concerned about it, and it was good of the Minister to have taken it on. Also, conversation with the Welsh Government has been extremely successful, and that is borne out by the legislative consent that the Minister and Government have received. Overall, we welcome this group of amendments and think them a very good improvement to the Bill as we now see it.
Lord Lennie (Lab)
My Lords, as the House may have spotted, I am not the noble Baroness, Lady Blake, as she is one of the two noble Lords who have fallen victim to Covid. We all wish her well for a quick recovery.
On this side of the House, we also welcome the Government’s moves, which follow on from representations made by the Welsh Government and the DPRRC. They show that the Government have listened and have acted upon the concerns raised. Perhaps the Minister could confirm in response that the Welsh Government are fully satisfied with these changes too, in which case we too are satisfied.
Lord Lennie
“(2A) The Secretary of State must ensure that bodies approved under subsection (1) have adequate resources and sufficient numbers of arbitrators as are (whether alone or as a member of a panel of arbitrators) required to conduct arbitrations under this Part.”Member’s explanatory statement
This amendment would require the Secretary of State to ensure that the approved arbitration bodies collectively have sufficient capacity, and resourcing, to hear all arbitrations under this Part.
Lord Lennie (Lab)
My Lords, Amendment 2 builds on the debate in Committee. The House will be pleased that I will not repeat all the arguments put forward then, but it is worth saying at the outset that this amendment is in response to severe pressures that businesses, tenants and landlords are under following an extremely difficult trading winter, plus the economic pressures of national insurance increases, energy price rises and escalated inflation. The clock is ticking loudly.
Arbitrators will be dealing with the cases that could not be resolved through voluntary measures between the parties. These will include in the main the most complex, as well as those where a failure to act was in the hope that debt would just disappear. As a point of interest, it would be beneficial to know from which sectors these outstanding cases come—not geographically, but from which sectors of economic activity. Perhaps the Minister could respond.
In Committee, the Minister—whom I paraphrase—told us not to worry about the arbitration service and that all would be well and sorted out in due course. Can he tell us what his optimism is based on? Have the Government made an assessment about the demands that will be made on the service, beyond simply the number of outstanding cases? If so, can we see the evidence of that assessment? Also in Committee, the Minister said that the Government supported the market-based approach in which arbitration firms would move things around to get over the expected spike in demand. The Minister said that he had been reassured by the arbitration firms of their ability to cope. But, without a detailed assessment or understanding of both the volume and complexity of cases, coupled with a change in the nature of the work that arbitrators will be asked to carry out—which the noble Lord, Lord Fox, will introduce in a later amendment, on behalf of the noble Earl, Lord Lytton—this would appear to be wishful thinking.
If in reality there is either an insufficient number of arbitrators, or too many complex cases, or both, this reliance of the market-based approach may be something the Government come to regret. So will they keep the progress in clearing the backlog of cases under review and report back to Parliament from time to time? I have no doubt about the quality and excellence of the arbitration service itself across the whole of the UK, but we are concerned that the Government have not undertaken an assessment of the numbers and the resources available in order to be fully satisfied that all arbitrations can be conducted in good time.
Amendment 15 proposes that, when the Government issue guidance to arbitrators aimed at enabling better outcomes, Parliament should be informed. Some concern has been expressed, in particular by small businesses, that the draft guidance produced may not be fully appropriate to the arbitration process. This is turn raises the prospect that arbitrators’ decisions are likely to be distorted. So Amendment 15 adds a layer to safeguard against such an occurrence by asking the Government to bring statutory guidance to Parliament before it is issued. In both the Commons and in Committee we raised the need for a review of the Bill’s provisions to ensure that the process is being applied transparently, fairly and consistently. While we may not have convinced the Government to include a specific review mechanism, can the Minister assure the House that the operation of the Bill will be carefully monitored?
Finally, on the many thorny questions of viability, can the Minister tell us what engagement is being undertaken with stakeholders to stress test the Government’s draft guidance on this to make sure that it is fit for purpose? I look forward to the noble Lord’s response.
Lord Fox (LD)
My Lords, I will speak to Amendments 2 and 15 in my name. Amendment 2 is important because it is important to have the arbitrators in place to deliver this service. The purpose of Amendment 15 is to probe the guidance notes, because in Committee that guidance was out for consultation. It is important to get a chance to air some of the issues thrown up from it and to get a sense from the Minister of where we are and when your Lordships’ House will see the final draft—I hesitate to use the phrase “final draft”, because I hope he can confirm that it is a live document and will develop over time alongside experience of this process.
The noble Lord talked about stress testing. It would be helpful if the Minister, during the process of monitoring the guidelines, talked to those who have been involved in arbitration about their experience so that they can be improved over time. Can he confirm that he will?
The Government’s instinct to try to keep this simple is correct, but sometimes simplicity can leave ambiguity. I think some of that has come through in the responses they may well have received. One way of removing that ambiguity is better use of templates, which is one of the responses I have received from people on this. Can the guidelines be better used to genuinely short-circuit the process and therefore reduce costs for the proponents’ way?
A second real issue is the definition of “viability”. We had a debate on that at Second Reading and in Committee; I do not propose to return to it, but there are issues around viability that concern businesses, particularly seasonal ones. There is scope within the guidelines—I have been given this advice by some seasonal businesses—to better define the role of seasonality when looking at the viability of these businesses. I would appreciate the Minister’s thoughts on those issues.
Finally, there is an underlying suspicion from some tenants that large-scale landlords, some of whom have experience in previous types of dispute, will game the system and use their financial muscle to take advantage. They fear that these well-resourced landlords will go for the most expensive options, bid up the costs and put the process beyond the means of small independent traders. Will the Minister ensure that the arbitrators are vigilant in this regard? I would be a bit hesitant here, because there is a potential conflict of interest for those arbitrators—the bigger the job, the larger the potential fee. We then come to important issues around fees. The Minister needs to set very clear guidelines to the arbitrators on that issue, such that they are not bidding up the process or creating the opportunity for big companies to flex their financial muscle.
Lord Grimstone of Boscobel (Con)
My Lords, I am grateful to the noble Baroness, Lady Blake of Leeds—originally—and the noble Lord, Lord Fox, for raising their concerns about ensuring that arbitration bodies have adequate arbitrator capacity and administrative capability. I am sorry that the noble Baroness cannot join us today and wish her a speedy recovery, although of course I welcome the noble Lord, Lord Lennie, who is participating in her place. I agree that a number of crucial points have been made in this short debate. The need for arbitrator capacity has been a key consideration in designing the scheme.
The Bill adopts a market-based approach. This means that several arbitration bodies will be approved and deemed suitable to administer the scheme, a point which I will return to in a moment. I believe this is the best way to ensure that we maximise capacity, because arbitration bodies will be able to use their intimate knowledge of matching arbitrator skills and experience to cases. This Bill also helps maximise capacity by empowering approved arbitration bodies to design and optimise their internal workflows to make best use of their own and their arbitrators’ capacity.
The Government designed an approvals process which specifically asked arbitration bodies to evidence their capacity. The deadline for applying has now passed and an internal sifting process is under way. As the sift is ongoing, I cannot comment on the details yet, but I can state that 12 arbitration bodies have applied. This is a very pleasing indicator of the interest being shown in the scheme. To an extent, it shows that the market mechanism looks to be working. Given the breadth and content of the applications, I am confident that the approach we have taken quite rightly empowers arbitration bodies to apply their experience and expertise.
The noble Lord, Lord Lennie, asked about the number of cases. In light of recent intelligence from the mediation policy in New South Wales, Australia, we have adjusted our current estimate of the expected number of arbitration cases. It is important to note that there is still some uncertainty around these estimates, but in the central case we now estimate 2,500 arbitration cases in England and Wales. This is a significant reduction from the previous estimate of 7,500 cases in the central case. On that basis, if we were to discuss this Bill for the next few months, we might have no cases left at all. The noble Lord also asked about the sectors involved. I can confirm that closed sectors included retail, hospitality, personal care, leisure and the arts, and some others, but our evidence suggests that most outstanding rent debt falls within these sectors.
The reduction in estimated cases is a positive sign for both the scheme and the capacity of the arbitration market. As I have stated, I hope this number will reduce further as landlords and tenants continue negotiations. My officials are engaging extensively with arbitration bodies to ensure that we offer as much support as possible in helping them deliver this scheme. I hope that reassures noble Lords that we are engaging with the arbitration bodies on capacity and therefore request that this amendment be withdrawn.
Turning to Amendment 15, I am grateful to the noble Lord and the noble Baroness for raising the matter of laying statutory guidance before Parliament. There is no doubt that the statutory guidance will be very important to arbitrators’ performance of their role. The Government take this very seriously. We want to ensure that the guidance is genuinely useful to and used by arbitrators. That is why we have already published a draft of the guidance to allow for stakeholder input. This draft has been very well received by stakeholders—in particular the guidance on the assessment of the tenant’s viability, in answer to the noble Lord, Lord Lennie. My officials are having ongoing discussions with stakeholders which will inform the final version. This will take into account the comments made by the noble Lord, Lord Fox. We expect the final guidance to be published as soon as possible after Royal Assent.
We are committed to ensuring that the guidance is accessible to all. That is why the final version will also be published on GOV.UK. I am pleased to confirm that we will also write to all Peers to share a copy of the guidance when published and place a copy of it in the Libraries of both Houses. I assure the noble Lord, Lord Fox, that if experience shows that the guidance needs to be updated in any respect as the scheme unfolds, we will do so and make sure that any such changes are publicised.
I hope that noble Lords are reassured by this. We plan to make the guidance widely available and share it with your Lordships. I hope that, on this basis, the noble Lord will feel able to withdraw his amendment.
Lord Lennie (Lab)
My Lords, I thank the Minister for his detailed response to the contributions and questions raised. It is good to know that only 2,500 cases remain. He is quite right that the longer we talk, the fewer cases will be left. I am not entirely convinced that this is proof that the market-based approach is working. It is something else, probably about the voluntarily nature of agreements entered into by people under the threat of the arbitration process. Nevertheless, it is a positive sign.
As for the statutory guidance, we welcome being informed of updates, but our preference would probably have been to have it approved, although that is neither here nor there. I beg leave to withdraw the amendment.
Member’s explanatory statement
This amendment and the others in the name of the Earl of Lytton to Clause 8 are to avoid any ambiguity as to the role of the appointing body and independence of the arbitrator pursuant to the Arbitration Act 1996, to prevent unilateral objections that might delay or frustrate the process and to rely instead on the parties’ existing rights under the Arbitration Act 1996 jointly to remove an arbitrator.
Lord Fox (LD)
My Lords, I rise to speak on behalf of the noble Earl, Earl Lytton, who, as previously advertised, is the second member of the “Covid 2” in this team. His absence is disappointing for two reasons. First, he is not here to make these speeches and I have to do so on his behalf, and secondly, his wisdom on the issue of property is second to few in your Lordships’ House. The nature of these amendments points to the direction of the advice that he would have given your Lordships’ House had he been here, and I will do my best to represent that. I am given to understand that the amendments that the noble Earl tabled are supported by the RICS, which focuses their purpose.
I will speak to them in groups. In the Clause 8 amendments, the noble Earl’s point is that the appointing body that oversees the function should not carry out more than a general monitoring of the administrative good order of the process. The reason behind the noble Earl’s point is that he is anxious to ensure that the terms of Arbitration Act 1996 are not circumvented, so perhaps the Minister can set the Bill in this context with respect to the Act.
At the heart of the Clause 10 amendments is the expectation that the appointing bodies do not materially alter their screening and selection processes. The noble Earl’s point is that on potential conflicts of interest, they are almost wholly reliant on self-disclosure by potential appointees, so they would frequently have no means of checking the responses for accuracy. I would welcome the Minister’s view on this.
The purpose of the Clause 19 and Clause 20 amendments is to make it permissible in a complex case, or cases, for the appointing body to demand from the parties that a clear statement of the issues and scope of evidence be placed before the arbitrator. Any fee specified in advance should be able to rely on the statement, but also on providing a broad estimate of the applicable arbitrator time and rate, where a fixed fee is impractical. I think what the noble Earl is driving at is that the arbitrators should not be signing a blank cheque for the work they are going to do; they deserve to have a scope to understand what it is they will be arbitrating.
Those are the groupings as the noble Earl set out. For my part, I hope to hear how the Minister and his department will balance these important points from the noble Earl, Lord Lytton, and the RICS, with the need to keep things as simple and cost-effective as possible. I think this is possible but I want to hear how the Government will absorb these two issues. I beg to move Amendment 3.
Lord Lennie (Lab)
The noble Lord, Lord Fox, raises the central concerns of the struck-ill noble Earl, Lord Lytton, about the expectations of arbitrators. I would add that he seemed to suggest in Committee that the role of arbitrators in this legislation is inconsistent with the expectation of arbitrators in the Arbitration Act—that is, they decide either one way or the other between two competing cases, rather than trying to filter between the cases to find some remedy between the two.
Lord Grimstone of Boscobel (Con)
My Lords, I apologise—I was caught short by the speed with which we are moving through these amendments. Before I respond to these points, I thank the noble Earl, Lord Lytton, for the amendments he tabled. I think everybody who heard him in Committee was impressed by his erudition. I am sorry he is not able to join us to debate these points, but on behalf of the House I thank the noble Lord, Lord Fox, for stepping into the breach and for his impressive grasp of the technical matters underlying these amendments.
I start by saying that I am fully aware of the concerns of arbitration bodies seeking approval under the Bill and my officials have been in continual contact with them to ensure that their views are registered and dealt with appropriately.
The Bill differs in some aspects from the Arbitration Act 1996, and provides that approved arbitration bodies have oversight over arbitrators where they have appointed them. In answer to the noble Earl, Lord Lytton, this was deliberate, and it gives certainty to landlords and tenants that arbitration will be managed efficiently and any issues with the process dealt with expeditiously. I can assure noble Lords that the oversight function is not intended to be onerous and is primarily administrative to ensure that the process runs smoothly. We do not expect bodies to continually monitor proceedings, but only step in where a party has a legitimate complaint or new information comes to light, raising a concern. I hope this reassures the noble Lord, Lord Fox.
Under the Bill, arbitration bodies can decide on unilateral removal requests, and this was also deliberate to avoid adding to pressure on the court system. The bodies should apply the same principles in case law as the court, including that there is a high bar to removing an arbitrator, and the parties should raise any concerns promptly. Frivolous, vexatious or unsubstantiated complaints should be quickly dismissed. Complaints of any substance should be rare, given the rigorous pre-appointment checks that bodies will doubtless carry out. I am pleased to clarify the point raised by the noble Earl in Committee: it is open to the approved arbitration bodies to charge a fee for dealing with a removal application. The intention is that this may disincentivise frivolous or vexatious complaints. In addition, the arbitrator can require an obstructive party to pay a greater share of the arbitration fees. We will include this clarification in the guidance to which I referred earlier.
I appreciate that there is concern about the extent to which arbitration bodies have immunity in respect of their functions. This is an important point that has been raised; I am considering it and will return to this issue at Third Reading.
Lord Fox (LD)
I appreciate that latter point, and the conflict of interest is a concerning issue, particularly around how arbitrators are able either to sign off on that or not be required to do so.
Lord Grimstone of Boscobel (Con)
The noble Lord makes a good point on that, and I hope that all this provides reassurance to the noble Lord, Lord Fox, in his proxy role regarding Amendments 3, 4 and 5 and that he will now not press them.
Turning to Amendments 8 and 9, the Bill’s arbitration scheme is for parties that cannot reach agreement. It should not apply if the protected rent debt is covered by a company or individual voluntary arrangement, or by certain restructuring plans and schemes under the Companies Act 2006. The Bill therefore does not allow a reference to arbitration where such an arrangement has been approved. If, when the Bill scheme is open, such an arrangement has been proposed but not decided, the Bill seeks to preserve the parties’ positions. This is why a party may apply for arbitration but an arbitrator may not be appointed while the decision on the arrangement is pending. If the proposed arrangement is then approved, arbitration should not be available, so, in that instance, the Bill prevents an arbitrator being appointed.
This is important, but it should not be burdensome for approved arbitration bodies. We will set out in guidance a clear and quick process based on tenant disclosure to check whether there is an approved or proposed arrangement to limit administrative burden on the bodies. However, we should not use limited arbitral capacity to determine this. I hope that I have explained convincingly why Amendments 8 and 9 are not necessary or appropriate.
Finally, I thank the noble Lord for raising the important issue of arbitration fees. I turn first to Amendment 10. A cap on fees differing with the complexity of the dispute may seem helpful; however, complexity is subjective and difficult to define and measure. It would therefore be hard to monitor adherence to such a cap. Landlords and tenants may worry that their case would be considered complex, resulting in higher fees, which may discourage SMEs from applying. Of course, a key tenet of this Bill is that this should be an inclusive process and open to all. I hope that explains, for reasons of practicality, why I cannot accept the amendment from the noble Earl and noble Lord on the fee cap.
Amendments 11, 13 and 14 in effect remove the requirements for advance payments of arbitrators’ fees and expenses and oral hearing fees. However, it is fundamental that the parties know in advance how much arbitration will cost to avoid deterring them from using the scheme. A key gain—another key tenet—is that this scheme is intended to be fast and low cost. The arbitration mechanism is focused and based on the parties’ formal proposals and supporting evidence. Oral hearings should concern those proposals and evidence and should not require lengthy cross-examination or experts. Consequently, costs should be predictable.
Requiring fees to be paid in advance prevents a party frustrating the process by refusing to pay. It also avoids arbitration bodies having to take action to recover unpaid fees. Arbitration bodies should be reassured that it is perfectly acceptable under the Bill for them to set a higher fee for large-scale disputes, and vice versa. For these reasons, I hope that the noble Lord will understand that I must stick to the position that fees should be paid in advance.
Finally, I turn to Amendment 12. The scheme must of course be accessible to SMEs, as I have previously said, but the general rule of splitting approved arbitration body fees and expenses 50:50 is important. That even split means that neither side is incentivised to make the process more complex or lengthier than it needs to be. I believe that we should be wary of interfering with this. Of course, the exception is where a party has behaved obstructively, in which case the arbitrator can require them to pay more than 50% because of their conduct. As I have mentioned, it is perfectly acceptable for approved arbitration bodies to set fees payable in advance that differ depending on the size of the parties involved. I hope that all provides a satisfactory explanation to the noble Lord, Lord Fox. I thank him and of course the noble Earl, Lord Lytton, for their close attention to these matters, and I hope that he will not press these amendments.
Lord Fox (LD)
My Lords, I thank the Minister for his comprehensive answer on these amendments. I am not sure how much cheer the noble Earl will be getting from the answer, but he will I hope be able to respond on his own account at Third Reading.
For my own part, I think the Minister’s response that neither side is incentivised to increase the costs is a bit—if he does not mind me saying so—naïve, because that is exactly what has been happening where the big operators have flexed their muscle to, in a sense, push the smaller operators into a corner. So I do not agree with that point, and it is perhaps something that the Minister could reconsider. With that, I beg leave to withdraw the amendment.
(a) English business tenancies,(b) Welsh business tenancies, or(c) English business tenancies and Welsh business tenancies.”Member’s explanatory statement
The amendment would clarify that the power to extend the period for making references to arbitration can be exercised for English business tenancies or for Welsh business tenancies only, as well as for both.
Member’s explanatory statement
The amendment would omit a definition that is redundant if Lord Grimstone’s proposed amendment to Clause 23 at page 14, line 27 is made.
Member’s explanatory statement
The amendment would mean that the moratorium period is no longer defined directly by reference to the period under Clause 9(2) for making of references to arbitration. Instead the period under Clause 23(2)(b)(i) will end 6 months from Royal Assent, unless extended.
“(2A) Subsection (2) is subject to any extension of the period mentioned in paragraph (b)(i) that—(a) is made by or by virtue of section (Alteration of moratorium period), and(b) has effect in relation to the protected rent debt.”Member’s explanatory statement
The amendment would acknowledge that the period ending as specified in Clause 23(2)(b)(i) may be extended as provided for in the new Clause proposed by another amendment in the name of Lord Grimstone.
“Alteration of moratorium period
(1) In this section “extension regulations” means regulations under section 9(3) extending the period allowed by section 9(2) for making references to arbitration.(2) Where extension regulations made by virtue of section 9(3)(a) or (c) extend that period in the case of English business tenancies, the period specified in section 23(2)(b)(i), so far as it applies in the case of a protected rent debt under an English business tenancy, is extended for the same period of time.(3) Subsection (4) below applies where extension regulations made by virtue of section 9(3)(b) or (c) extend that period in the case of Welsh business tenancies.(4) The Secretary of State may by regulations made by statutory instrument extend the period specified in section 23(2)(b)(i), so far as it applies in the case of a protected rent debt under a Welsh business tenancy, for the same period of time.(5) Regulations under subsection (4) must provide for the extension referred to in that subsection—(a) to have effect for the purposes of this Part including the purposes of Schedule 2, or(b) to have effect for the purposes of this Part other than the purposes of Schedule 2.(6) The power to make the provision referred to in subsection (5)(a) is exercisable only with the consent of the Welsh Ministers to the extension having effect for the purposes of Schedule 2 other than the purposes of paragraph 3(6) and (7).(7) A statutory instrument containing regulations under subsection (4) is subject to annulment in pursuance of a resolution of either House of Parliament.”Member’s explanatory statement
The amendment deals with the effect of use of the Clause 9(3) power on the moratorium period under Clause 23(2). For debts under Welsh business tenancies the effect will depend on regulations, which would require the consent of the Welsh Ministers if a change in the moratorium period affects Schedule 2 (apart from paragraph 3(6) and (7), dealing with reserved matters).
“(1A) Regulations under this section may—(a) be made so as to apply in relation to—(i) English business tenancies,(ii) Welsh business tenancies, or(iii) English business tenancies and Welsh business tenancies;(b) exclude the provisions mentioned in subsection (7B)(a) to (c) from the provisions being re-applied in relation to Welsh business tenancies.”Member’s explanatory statement
The amendment would enable regulations under Clause 27 to be made just for English business tenancies or just for Welsh business tenancies (as well as for both) and also to exclude (in the case of Welsh business tenancies) provisions of the Act which deal with devolved matters in Wales.
“(7) Regulations under this section may—”Member’s explanatory statement
The amendment would omit the current specific power to exclude any of the provisions of the Act from applying again by virtue of regulations under Clause 27.
Member’s explanatory statement
The amendment would limit the power to modify the provisions of the Bill being re-applied to modifications necessary for the re-applied provisions of the Act to work in the circumstances in which the power is being used.
Member’s explanatory statement
The amendment would limit subsection (7)(c) to making different provision for England and for Wales.
“(7A) For the purposes of subsection (7)(b)—(a) “modifications” means omissions, additions or variations, and(b) modifications are “necessary” if they appear to the Secretary of State to be necessary for the provisions being re-applied to operate correctly in relation to business tenancies adversely affected by the closure requirements in question.(7B) The power under this section is exercisable only with the consent of the Welsh Ministers so far as it relates to the re-application, in relation to Welsh business tenancies, of—(a) Schedule 2 apart from paragraph 3(6) and (7),(b) section 23 so far as relating to Schedule 2 apart from paragraph 3(6) and (7), and(c) Part 1 and this Part, so far as relating to the provision mentioned in paragraphs (a) and (b).”Member’s explanatory statement
The amendment would require the consent of the Welsh Ministers to regulations re-applying the moratorium provisions of Part 3, with the exception of paragraph 3(6) and (7) of Schedule 2 (the subject-matter of which is reserved under Welsh devolution legislation).
Member’s explanatory statement
This is a drafting amendment that would secure consistency of expression in Clause 27.
“Concurrent power for Welsh Ministers to apply moratorium provisions again
(1) The Welsh Ministers may exercise the power conferred by section 27, concurrently with the Secretary of State, so far as it relates to the re-application, in relation to Welsh business tenancies, of—(a) Schedule 2 apart from paragraph 3(6) and (7),(b) section 23 so far as relating to Schedule 2 apart from paragraph 3(6) and (7), and(c) Part 1 and this Part, so far as relating to the provision mentioned in paragraphs (a) and (b).(2) Section 27 has effect in relation to regulations made by the Welsh Ministers by virtue of this section as if—(a) references to the Secretary of State were to the Welsh Ministers,(b) subsection (1A)(a)(i) and (iii) and (b) were omitted,(c) in subsection (7)—(i) the references in paragraph (b) to provisions of this Act were references to provisions mentioned in subsection (1)(a) to (c) above, and(ii) the reference in paragraph (d) to an Act of Parliament included a reference to an Act or Measure of Senedd Cymru,(d) subsection (7B) were omitted, and(e) in subsection (8)(b), for “each House of Parliament” there were substituted “Senedd Cymru”.(3) In Schedule 7B to the Government of Wales Act 2006 (general restrictions on legislative competence of Senedd Cymru), in paragraph 11(6)(b) (exceptions to restrictions relating to Ministers of the Crown)—(a) omit the “or” at the end of paragraph (vii), and(b) after paragraph (viii) insert “; or(ix) section 27 of the Commercial Rent (Coronavirus) Act 2022.””Member’s explanatory statement
The amendment would insert a new Clause enabling the Welsh Ministers, concurrently with the Secretary of State, to use the section 27 power to apply again the moratorium provisions specified in subsection (1)(a) to (c) of the new clause in relation to Welsh business tenancies affected by new coronavirus restrictions in Wales.
Economic Crime (Transparency and Enforcement) Bill
Wednesday 9th March 2022
(2 years, 9 months ago)
Lords ChamberRead Full debate Economic Crime (Transparency and Enforcement) Act 2022 View all Economic Crime (Transparency and Enforcement) Act 2022 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 126 Running list of amendments - (9 Mar 2022)
The Minister of State, Home Office (Baroness Williams of Trafford) (Con)
My Lords, in light of Russia’s invasion of Ukraine, it is vital that we take new action to crack down on Russian dirty money and corrupt elites in the UK. The measures in the Bill—passed with cross-party support in the other place—will enable us to better identify, investigate and sanction the illicit wealth of those who wish to abuse our open economy. While we are rightly focused on taking action against Putin’s regime, these measures will strengthen our framework for tackling economic crime for the long term.
I have been heartened by the previous offers from those across all parties, including on the Opposition Front Benches, to support and co-operate with the Government on emergency legislation and to offer practical support to ensure that the Economic Crime (Transparency and Enforcement) Bill is implemented. I very much hope that we can continue to work in this spirit.
The Bill comprises some emergency measures, developed in light of Putin’s outrageous actions in recent weeks, and other measures that have been planned for quite some time. The first is a new register of overseas entities, which will require overseas companies owning or buying property in the UK to give information about their true owners to Companies House. This will provide more information to help law enforcement identify those using UK property as a money laundering vehicle.
Secondly, there will be reforms to unexplained wealth orders, which are a key tool for the investigation of suspicious assets. Through this Bill, we will improve their effectiveness and make sure that they can be applied to complex ownership structures.
Thirdly, we will streamline the sanctions Act to enable even swifter sanctioning of oligarchs and businesses associated with the Russian Government. The Bill also includes amendments to financial sanctions legislation, including strengthening the Treasury’s power to impose monetary penalties on those who violate our financial sanctions laws.
These are the actions that we can take most swiftly but they are not the sum total of our ambition. We will introduce a second economic crime Bill with further measures as early as we can in the next Session. This will include major reform of Companies House, reforms to prevent the abuse of limited partnerships, new powers to make it easier to seize crypto assets from criminals and measures to provide businesses with more confidence to share information on suspected money laundering. This second Bill will be a substantial piece of legislation. I know that some of the measures it contains have long been called for. I can assure the House that drafting is under way and we will bring it forward as soon as we are able.
I will now provide more detail on the measures in today’s Bill. The Bill will create a register of overseas entities which will require anonymous foreign owners of UK property to reveal their real identity, ensuring that they can no longer hide behind secretive chains of shell companies. We know that corrupt wealth is stored in property in this country, and this new register will help us to find it. Too often, investigators at the National Crime Agency and other bodies reach a dead end when they find that a property of interest to them has its title registered in the name of a foreign company. It can be very difficult to obtain adequate information about that company, depending on where it is registered.
This new register would apply essentially the same beneficial ownership requirements to these companies as already apply to domestic companies registered at Companies House. An overseas entity that owns or wishes to own land in the UK will be required to take steps to identify its beneficial owner or owners and register them with Companies House. They will be required to verify that information and evidence that verification, and they will be required to update information annually. The provisions will apply retrospectively as far as Land Registry data allows: 1999 in England and Wales, and 2014 in Scotland. Should a foreign company not comply with these new obligations or submit false filings, its managing officers can face criminal or civil penalties. In many cases, these officers may be overseas and beyond the reach of UK law enforcement. That is why the key sanction will be the loss of rights to sell or lease the property until the register is populated with verified information.
I emphasise to the House that this is an information measure—an additional tool for law enforcement to use to inform investigations, including the case for making an unexplained wealth order. It is not a necessary underpinning of the actions we are taking right now to sanction allies of Putin. Rather, it will help to clean up our property market over the long term. However, I am mindful that many in your Lordships’ House will want to see it implemented as swiftly as possible, and I can assure the House that work to deliver the register will begin as soon as the Bill receives Royal Assent. A transition period will be in place as an essential protection for the many legitimate businesses and individuals who are likely to be holding property through overseas entities. Noble Lords will know that the Government have already amended the Bill in the other place to reduce this period to six months. We have committed to looking at how any entity in scope of the register selling its property before the register is operational should not be able to evade that scrutiny.
I turn now to the reforms to remove barriers to the use of unexplained wealth orders. These changes will increase the time available to law enforcement to carry out investigations, allowing them to be more comprehensive. We will also reform cost rules so that agencies will not be required to pay respondents’ costs unless they act dishonestly, unreasonably or improperly. This will remove a key barrier that discourages the use of UWOs and will increase and reinforce operational confidence in their use.
With this legislation, unexplained wealth orders will become more effective against those who hold property in the UK through trusts and other complex ownership structures. By targeting those who manage the properties on behalf of the beneficiaries, law enforcement will be able to obtain information that may be obscured by the beneficiaries. Individuals will not be able to hide behind shell companies and foundations any more.
I turn now to the amendments introduced to the Bill in the other place by which we propose to revise the sanctions Act. They will allow us to sanction oligarchs and businesses associated with the Russian Government even more swiftly, in concert with our allies. The new measures will ensure that we have the power to use urgent designation procedures to temporarily mirror the listings that have already been adopted by our allies. The United States, Canada, Australia and the EU are listed in the Bill, and others may be added by regulation.
We will remove the statutory test of appropriateness for making designations, thus simplifying the process. Ministers will still need to be satisfied that there are reasonable grounds to suspect that the person to be designated is “an involved person”, usually on the basis that have been involved in a specified activity. In the context of Russia, the activities specified in regulations include destabilising Ukraine, undermining or threatening its territorial integrity and supporting the Government of Russia. This is the right test to focus on in sanctioning an individual, without unnecessary statutory hurdles.
The Bill will remove some of the constraints on designations by description so that the Government can designate groups of individuals more quickly—for example, members of defined political bodies such as the Russian Federation Council. The Bill will also remove burdensome requirements to formally review each and every sanction every three years, freeing up vital resource to focus on developing new designations. However, designated persons will continue to have the opportunity to ask for their designation to be reviewed through an administrative review, and for the outcome of that review to be considered by the courts. Ministers will continue to be under a duty to revoke a designation where the relevant tests are no longer met in respect of it. The Bill will streamline reporting requirements while ensuring that Parliament can continue, rightly, to hold Ministers to account.
We are seeking to protect the public purse by permitting the payment of damages in connection with designations only in the case of bad faith. The Bill also provides a power to impose a cap on damages applying to any proceedings issued after 4 March, when the amendments were originally tabled in the other place. This will limit the ability of deep-pocketed oligarchs to claim massive payouts from sanctions challenges.
The Bill will also enhance the enforcement of financial sanctions. It will make it easier for the Treasury to impose significant monetary penalties, to name publicly those who have breached financial sanctions and to expand information-sharing powers.
We are collaborating with the devolved Administrations on this Bill. Provisions in it relating to the register of overseas entities and unexplained wealth orders engage devolved powers in both Scotland and Northern Ireland. We will continue to work with them on implementation and I am confident that we can rely on their continued support, for which I am very grateful.
The Government have consulted on the measures in the Bill. The register of overseas entities was the subject of extensive consultation and pre-legislative scrutiny. The Government accepted and acted on most of the Joint Committee’s recommendations. We have designed the reforms of unexplained wealth orders in close consultation with law enforcement agencies and representatives from the accountancy, financial and legal sectors. The Treasury will engage with industry on updating the guidance for financial sanctions before this reform takes effect. I can therefore assure the House that the Government are not acting rashly, and I urge it to support the Bill.
The Bill will ensure that our economy becomes more transparent and stronger at the same time. It will give our enforcement agencies the powers they need to effectively tackle dirty money. The House will be in no doubt, and will have noted, that the other place overwhelmingly supported the Bill when it was considered there on Monday. The Government worked with the Opposition there to strengthen and accelerate the package, and there was a clear and strong desire across party lines to present a united front by passing the legislation as swiftly as possible. I urge noble Lords to take a similar approach in this House. With that, I beg to move.
Baroness Chapman of Darlington (Lab)
My Lords, we warmly welcome the arrival of the Bill and we are pleased that the Government have promised to introduce a further economic crime Bill in the next Session. In warmly welcoming the Bill, I would just like to make some points to noble Lords. This is significant progress compared with the position outlined by the noble Lord, Lord Agnew of Oulton, in January, when it appeared that the Government did not want to treat this as a priority issue. But now Putin has left them with no choice. Until now, I am afraid there has been a persistent and troubling lack of political will to act on these issues from the Government. It has taken war to bring about this change of position, and the Government should have acted sooner.
This is welcome, but we do not kid ourselves. The Bill does not resolve all our issues, but it is a stopgap and we will support it. It is the first instalment and we await the detail in part two. I welcome the noble Baroness’s assurances in her speech that part two will be extensive and we look forward to it. The Bill introduces a register of overseas entities, revisions to the function of unexplained wealth orders and changes to the Government’s sanctions regime.
There has long been a case for a new register such as the register of overseas entities. We have been promised it time and again, as far back as the Anti-Corruption Summit of 2016. But the Government have always failed to produce the goods when pushed to do so, and this we regret. We have had multiple consultation exercises on this issue, yet it has taken until now for the Government to move. We have known about weaknesses in the UK’s anti-money laundering regime for some time, with the Financial Action Task Force noting in 2018 that there was a need for substantial increase in resources devoted to financial intelligence as well as a series of other, fundamental reforms.
The truth is that for too long the Government have turned a blind eye to illicit funds being funnelled through the British economy—up to £100 billion per year according to the NCA. There is, as we know, no silver bullet to fight against economic crime. This new register is a much-needed tool, but it will not work unless we get the next Bill right, including by addressing the long-running concerns about the resourcing and powers of key investigatory and enforcement bodies.
Turning to unexplained wealth orders, this tool has not been as effective as hoped so far, so we welcome the various moves to strengthen the unenforced wealth order regime. It is vital that these orders are used. It is important that we understand why so few of those orders have been implemented so far—only 15 orders and four cases. This cannot be explained away entirely by the risk of legal costs. The capacity of the NCA, SFO, FCA, HMRC and CPS to handle these orders also needs to be considered. The Government’s new Clause 31, requiring the Secretary of State to publish annual reports into the use of unexplained wealth orders, is definitely a positive step and we welcome it.
The Bill amends the Sanctions and Anti-Money Laundering Act 2018. The Government are making it easier to replicate the EU’s decisions in this and we welcome the collaborative working in this area with our international partners. This is a demonstration of strength and we back it. The campaign for an effective sanctions regime, though, began following the death of Sergei Magnitsky in 2009. The measures we are finally seeing now are welcome, but we do ask ourselves whether we will not be looking back and wondering whether we would be in a stronger position today had we acted sooner.
If we are to isolate Putin and his network of oligarchs and kleptocrats, the Government need to use these new powers immediately, bringing both pace and breadth to their response to events in Ukraine. While the Bill is not solely about Russia’s illegal and immoral invasion of Ukraine, it is regrettable that recent events have had to unfold before the Government have been prepared to bring these measures forward. Nevertheless, we will show solidarity with Ukraine by assisting the Government in the swift passage of this legislation. It is a common-sense approach to beginning to crack down on the shocking level of economic crime that has taken root in this country.
The Opposition have worked constructively with the Government since they announced the Bill and I am grateful to Ministers in the other place for adopting several of our key asks, including a reduced grace period for registering beneficial ownership and much harsher fines for those who break the rules. There remains, though, more to do. The grace period may have fallen from 18 months to six, but we on these Benches think it is still too long. Properties will be sold and other assets disposed of in far less time, severely undermining the effectiveness of the new register.
As drafted, the Bill does not yet do enough to crack down on the so-called enablers of money laundering and other forms of economic crime. They are arguably as guilty as those who seek to bring illicit funds to our shores in the first place. We know that Ministers are looking to bring forward amendments in a number of areas; we hope they will respond to concerns voiced by noble Lords in this debate today. Can the Government also offer us assurances that the follow-on Bill will be subject to normal processes, allowing both Houses to study and debate all the relevant measures in detail? I hope your Lordships will pass the Bill without undue delay but, in doing so, can we commit this evening to finally tackling the shameful spectacle of illicit money being laundered through our country?
Baroness Kramer (LD)
My Lords, every day’s delay in bringing in these measures costs Ukrainian lives, so these Benches join in wishing to pass the Bill urgently. We have, however, been calling for the key property ownership elements in the Bill for years, and we wish we had had them at a time when we could have gone through it carefully, clause by clause, and amended their various flaws.
I am delighted that the Minister has given us an assurance that she will bring the sequel to the Bill promptly. We will be watching for that. It must, as she said, deal with Companies House, limited partnerships and cryptocurrencies, which I am glad she mentioned. I take note that Russia, on the day of the invasion of Ukraine, moved to control key crypto exchanges, and I say to the Government that it may be necessary to move on that issue ahead of part two, because it is an obvious escape hatch that Russia is taking full advantage of. We also hope that in part two the Minister will address two other areas: trusts, which appear not to be fully covered by Schedules 2 and 3, and freeports, with their secrecy privileges. There will be a great deal to do in part two.
As for this Bill, let me start with provisions that deal with the public register of the beneficial ownership of property in the UK. Why have those with property interests purchased with dirty money and hidden by shell companies been given a six-month transition period, during which implementation is suspended? I accept that this is less of an escape hatch than the original 18-month transition period in the first version of the Bill, but it still gives any oligarch plenty of time and scope to alter their arrangements, including by liquidating and moving assets out of the United Kingdom into a safe haven. I understand that the office of the registrar needs to be staffed, resourced and trained, but that should be done urgently and, if necessary, the registrar should be loaned staff to bring its capacity up as quickly as possible.
Surely, penalties for breaching the rules should be retro-effective. It is a technique used by HMRC, particularly against small taxpayers under the loan charge, and it seems ideal to be adapted to this particular set of circumstances. Perhaps the Minister could also tell us whether there are existing powers that could be sharpened to cover the transition period.
Why does the Bill give the Secretary of State sweeping powers to exempt anyone from the register in the interests of the economic well-being of the United Kingdom? That is an incredibly broad criterion, but particularly inappropriate in this country, where allies of Putin are utterly enmeshed as major players in our economy, from media to sport to manufacturing. I am sure that no Minister would dream of making an exemption now, during the Russian invasion of Ukraine, but the clause is a message—and not a subtle one—that, once the crisis fades, anyone with a significant investment in the UK economy, regardless of the source of their money, can expect the privilege of an exemption.
Again and again in this House, your Lordships have warned that the Bill must deal with the network of enablers: the legal firms, the accountants, the developers, the banks—in effect, those who have opened the gate to dirty money and used all their skills to keep it open. I said a few days ago that this would be painful. Enablers include many respected names with very close ties to the political establishment; but why does the Bill not crack down on them and why is there no failure-to-prevent clause included in the Bill, or some equivalent kind of action? It is absolutely vital.
I will say only one thing about unexplained wealth orders. I do not wish to belittle them but, given the extraordinarily high income that oligarchs and kleptocrats enjoy from their many business interests, how useful are these orders and these clauses in our current emergency? Do they really have very much practical relevance? I am not opposed to them, but let us not put undue weight on them.
I welcome the strengthening of sanctions, but I say to the Government that, whenever anything is done in hot haste—and it has to be done that way on this occasion; I fully accept that—it is very sensible later to do a review and work out whether what was needed was done, whether there was any overreach and whether the measures were entirely appropriate. I hope we will hear that from the Government.
Lastly, enforcement absolutely matters. How confident are the Government that the Crown dependencies and overseas territories have adequate sanctions and controls and enforcement capacity? For us, what is the Government’s resourcing plan? The registrar’s office, which will have to verify all this hoarded information, will face a mountain of data and process. When will it be staffed? At the last asking, the National Crime Agency, on which we heavily depend for enforcement, had only 118 staff to investigate all financial crime, despite its complexity and the powerful lawyers and accountants used by the other side. How many additional staff, rather than transferred staff, will there be in the new kleptocrat cell and when will it be up and running, effective and fit for purpose?
If ever there was a time when we needed whistleblowers—and fast—it is now. They are not even mentioned in the Bill. The United States recently passed the Kleptocracy Asset Recovery Rewards Act, with cross-border and extraterritorial jurisdiction. Are we seriously telling whistleblowers, “Go to the Americans—we can’t be bothered”? Or will the Government commit to tackling this omission, hopefully in this part of the Bill, but, if not, absolutely, definitely in Part 2?
Lord Vaux of Harrowden (CB)
My Lords, I remind the House of my interest as a chartered accountant—which I hesitate to do after the last speech, I have to say. Like most noble Lords, I welcome this Bill, although I greatly regret the Government having to introduce these measures in such circumstances and in such a rush. We have tolerated for far too long the UK—and London in particular—becoming a haven for the ill-gotten gains of criminals. Of course, we need to get this Bill onto the statute book quickly, so that we can effectively sanction those responsible for the atrocities taking place in Ukraine.
Economic crime, however, is a much wider subject than Russia, and we have a lot of work to do to remedy the laissez-faire attitude to economic crime that has pervaded government policy—or, perhaps, lack of policy—in the last decade. The resignation speech of the noble Lord, Lord Agnew, said it better than I ever could. There is much more to do than is covered in this Bill, and I was pleased to hear the reassurances about the follow-up Bill.
In my comments, I will concentrate on the overseas entity register, but I have one observation on the unexplained wealth order clauses. The Government have blamed the aggressive use of legal action by oligarchs as the major reason why UWOs have not been successful so far. I am sure that there is some truth in that, but I am unconvinced that it is the main issue. More likely, the major problem is the lack of a properly resourced enforcement agency—something we also see in the wider issue of fraud more generally. I understand the reason for introducing legal costs clauses, but I do feel uncomfortable that someone who is entirely innocent will not be able to recover the potentially huge legal costs to defend themselves.
The overseas entity register is a good start, but I am afraid I do not expect it to make much practical difference. Innocent people will provide the required information—which is useful in itself—but those who are using offshore structures dishonestly to hide their identity will still be able to do so. There are many other ways of hiding ownership, including discretionary trusts, undisclosed nominees, complex corporate structures and so on. The current alleged situation of Graham Bonham-Carter and Oleg Deripaska is a good example of how this can happen.
So, in the spirit of being helpful, how might we improve this? First, while the reduction from 18 months is welcome, the time period of six months is still too long. In fact, the period is more than six months, because these clauses do not commence until such date as the Secretary of State decides. Can the Minister say when that will be? Six months still gives a lot of time for people to rearrange their affairs to avoid the rules. I would have favoured 28 days, but perhaps the three months that the Institute of Chartered Accountants has suggested might be a good compromise.
Secondly, while the new rules will prevent a property being sold once the rules are in force until the entity is registered, this does not stop the sale of the company, or, indeed, of a company further up the chain. The Bill will therefore not prevent a criminal realising the value of the property. Frankly, there is probably not a lot we can do about that, but I note that the register will only have to be updated annually, so it may be a very long time before we discover the change. It would be better if the changes to the beneficial ownership had to be updated on the register immediately after the transaction takes place. The Companies Act 2006 requires the persons of significant control register to be updated within 14 days. Perhaps the Minister could explain why the overseas entities register is different from that?
Thirdly, the register will be pointless if there is no real verification of it. One way to improve that would be to leverage the due diligence that should already be happening under anti-money laundering legislation, although clearly this does not always happen as well as it should do. At the moment, we rely on the passive, risk-based requirement to report suspicious activity. It would seriously concentrate the minds of lawyers and accountants who advise those using offshore entities if there was an active requirement for them to place a statement on the register that they have carried out their due diligence and are satisfied that the beneficial ownership is correctly stated, and if we also made sure they were liable for that statement under Clause 15. As well as improving the integrity of the register, this would have the additional impact of making those who are enabling the hiding of assets to think very seriously about it. The requirement for such a statement could easily be included in the regulations to be made under Clause 16. Is that something the Minister would consider?
This Bill is a start, but it is a rushed Bill, issued to deal with an emergency situation, and scrutiny is being substantially curtailed. It is not without flaws. As I said, the subject of economic crime is much wider, and deserves much greater work and consideration. I was pleased to hear the details of the follow-up Bill, which needs to be comprehensive. Can the Minister please make a clear statement that the follow-up Bill—given the curtailed nature of the scrutiny here—will allow the matters covered in this rushed Bill to be looked at again, with the more detailed scrutiny the subject needs and deserves?
The Lord Bishop of Leeds
My Lords, I welcome this Bill and the speed with which it is being brought to us, but I share some of the concerns that have been represented already. I do not intend to go into any of the detail of matters that have already been spoken about; I am sure other noble Lords would be better at that than I might be.
I hesitate to bring an ethical argument because, in my experience in this House, ethical arguments simply get ignored. Indeed, one Minister replied to an ethical argument made on a different Bill by saying, “We will not listen to strictures on morality from anyone.” That led me, at the next stage—on Report—simply to say that that implies there is no place in politics for ethics. But it is my ethical concerns, which one might represent as cultural, that cause me to stand now.
Culture is not cleaned up by one act or one reaction to a particular stimulus, albeit a serious one such as the invasion of Ukraine. Some months ago, the Foreign Secretary threatened that sanctions would be introduced if Vladimir Putin invaded Ukraine. At the time, I thought that we should not be threatening that as a reaction to something else that happens. This stuff is immoral. The money that is sweeping through the sewers of London needs to be cleared up for its own sake, not simply as a bargaining chip in relation to Ukraine. If we are going to get rid of dirty money, we ought to do so because it is a moral obligation, not because it is a tactic.
If money is dirty and people are—we keep hearing the word—corrupt, is it that the money is indeed dirty and these people are indeed corrupt, or is it just that the game has changed, so it is now convenient for us to label them in that way? They were not corrupt six months ago, a year ago or five years ago—that was just the reality of the world in which we lived. If it is just the game that changes, and therefore we react to that, I think we have an ongoing ethical, cultural problem. We are tactical, and that is all. If we are going to change the culture, we have to be led by conviction rooted in values, not simply the pragmatics of the particularity of the case we are dealing with.
I am very pleased that an amendment will be tabled in Committee to Clause 18, so I will not say more about that now. I welcome the Bill, but I am concerned about the wider culture within which it sits; I hope that that will be registered, even if disagreed with.
Lord Garnier (Con)
My Lords, I thank my noble friend the Minister for her clear opening to this debate on this very important piece of legislation. It is also a pleasure to follow the right reverend Prelate and to hear what he had to say.
I refer to my interests in the register and declare that, as a barrister in private practice, I have been instructed both by the Serious Fraud Office and by companies and individuals in whom the Serious Fraud Office has taken an interest.
Sadly, the context in which we debate this Bill this evening is the Russian invasion of Ukraine. We are reviewing a Bill that has been passed through the other place in a single day and which will, I am sure, go through your Lordships’ House, if not in a day, quite quickly. Not surprisingly, the criminal and, some may say, paranoid behaviour of Mr Putin in launching this savage attack on Ukraine has led us into thinking that something must be done—and done quickly—to curb the financial freedom of Putin’s benefactors, his nominees and his enablers. These are people who, over the past 25 years, have grown rich through the redistribution to them of what used to be Russian state assets, first by President Yeltsin and then by the current incumbent. They remain rich because Putin permits them to be so, and because they hold vast holdings of valuable property and money throughout the West on his behalf. Although they pretend to be independent operators, they are puppets controlled by a sick and dangerous man, and it is right that our laws do not allow villainy to hide in plain sight.
Two points, however, flow from this. First, although the policy behind the Bill is well understood and universally shared by right-thinking Members of both Houses, the Bill that contains many complicated provisions, which are being considered very speedily. Of course, the war in Ukraine has forced us to act quickly, but the problems caused by passing legislation in a hurry are well known. Although I entirely accept the need for speed, we must be careful that we do not pass bad law which fails to hit the targets that we have identified. As my noble friend the Minister said, another economic crime Bill will be introduced in the forthcoming Session. The Government must stand ready to correct any defects in the current Bill which, through lack of proper consideration, are left in it. I hope it may be used to reform the law of corporate criminal liability—a subject on which I know I must sound like a cracked record.
Secondly, I do not want to be misunderstood in what I am about to say, but we must be careful not to allow our understandable moral indignation to cloud our judgment about what we need to do through this Bill. If there is one thing worse than failing to scrutinise legislation because of haste, it is to pass legislation while caught in a moral spasm. Hard as it is, although I have no doubt that your Lordships’ House and the Government are both capable of doing this, and although it is correct to have a moral purpose behind the policy—here I wholly agree with the right reverend Prelate—we have to pass a Bill now that works effectively for all times and all circumstances against all money launderers, every corrupt actor and kleptocrat from across the globe, not just the Russian ones currently propping up Putin.
Now is not the time to drill too far into the detail of this Bill, nor to lament that, had legislation of this sort been introduced soon after David Cameron’s anti-corruption summit in 2016 or shortly after the work of the Joint Committee on the Draft Registration of Overseas Entities Bill was completed in 2019—I was a member of that committee under the chairmanship of my noble friend, Lord Faulks—we would have considered it in an altogether less fraught atmosphere. That committee made a number of recommendations, which are now in this Bill, but we have lost three years. So I find it a little strange that in the other place Ministers claim to be acting with all due speed. But now is better than next year or never.
Having got that off my chest, I want to pick out a few points from the Bill for later consideration. We need to make sure that, in preventing the criminal concealment of the ownership of property in this jurisdiction, we encompass not only relevant individuals and overseas companies but the owners of shares in those companies, be they individuals, other companies or trusts, and the legal and beneficial owners of the shares. It is not difficult to set up a shell company in an overseas jurisdiction through a nominee. Unless the Bill and those tasked with enforcing the law, once enacted, can get to the actual owner, as opposed to being blocked through a series of impenetrable veils, we will get nowhere.
If what the Government want, as suggested in some government statements, is to reveal the real identities of foreigners who own UK property, we need to ensure that the Bill will achieve precisely that. The legislation, as currently drafted, does not require the disclosure of the ultimate beneficial owner of the property, but rather the disclosure of the beneficial owner of the overseas entity which in turn owns the property. By Clause 33(1), the Secretary of State may by notice require an overseas entity to apply for registration in the prescribed manner within six months.
I agree with the concerns of the noble Lord, Lord Vaux, about the timing issues and the need to register entries on to the register, and I also agree with the noble Baroness, Lady Kramer, on the reduction of the 18-month period to six months. The Government should urgently take accountancy, legal and other professional advice about whether even six months is too long. Nowadays, money flows around the world at the press of a computer button. Should we not think of a far shorter period, with discretion for the Secretary of State or the High Court to extend that period on reasonable grounds in an individual case?
Unexplained wealth orders have not worked as well as they were expected to when they were introduced. Clause 53 allows for urgent designation of named individuals in certain circumstances. I hope the necessary work has already been done, because it may be that many such designations will need to be made immediately on Royal Assent. I have no doubt that the people we want to target will already have anticipated the Minister, and only the unwary minnows will end up being subject to these orders.
Finally, I need convincing that Companies House is the right body to enforce the provisions relating to the registration of overseas entities. It is essentially a recording organisation, a keeper of information provided to it by others. It is not, or not notably, an investigating or prosecuting body, but if it is to have this work, it will need a large injection of specialist staff from the Treasury, the sanctions sections of the FCDO, the National Crime Agency, the City of London police, which is the lead police force in relation to economic crime, and the Serious Fraud Office. It will also, I dare say, need to take additional advice from the security services, and all those agencies will need to be properly resourced to assist in this work.
The Bill must pass, but we must not think it answers all the questions that money launderers and other economic criminals will throw at us. If it assists us, even if indirectly, to get the Russian army out of Ukraine and persuade those supporting Putin to think again, it will most certainly have achieved some good.
Lord Eatwell (Lab)
My Lords, a considered assessment of this Bill requires some reflection as to why measures to thwart economic crime have failed so dismally up to now. At the centre of the Bill stands the registrar, embodied in Companies House. It is Companies House that is the prime source of the failings that have made London the money-laundering capital of the world. One of the political pantomimes of the last 10 years has been the spectacle of Conservative Prime Ministers referring regularly to the register maintained by Companies House as a gold standard, a beacon of openness, an example to the rest of the world. In reality, the manner in which the register is constructed has been and remains the key element in the inability of this country to stem the inflow of dirty money and the total failure to slow the growth of economic crime.
As has been known for years, the scandal derives from the fact that Companies House does not verify the beneficial ownership of the companies registered. Companies House is a library in which any shameful book can be deposited, as the noble and learned Lord, Lord Garnier, has just argued. That so many shameful books have been deposited is a matter of record. By the way, Companies House has led one prosecution in 150 years. That was of a person who deliberately registered a false company in the name of government Ministers to show how hopeless Companies House was at verifying the data. It then prosecuted this man when he owned up to what he had done.
Today, the Companies House register includes about 4.5 million UK businesses, but it operates in much the same way as it did 150 years ago, meaning that criminals have been able to set up seemingly legitimate shell companies without even the most basic identity checks. A study by Professor Jason Sharman of Cambridge University found that it was impossible to establish a shell company in the Cayman Islands, the Bahamas or Jersey, but easy to do it in London. A further study by Transparency International, in November 2020, reported that British shell companies were implicated in nearly £80 billion worth of money-laundering scandals. On top of that, the anti-corruption group Global Witness reported in 2019 that more than 336,000 companies on the register did not disclose their beneficial owner. It also found that just over 2,000 company owners were actually directors who had been disqualified, yet they were accepted by Companies House. It is this same organisation that we now ask to do more: to manage the new register of beneficial ownership of real property envisaged in the Bill.
In assessing whether Companies House can actually do the job, it is important to dismiss the comfortable fantasy that an open register provides sufficient scrutiny to detect wrongdoing. Protection against even moderately sophisticated financial crooks is provided only by verification and regular reverification of beneficial ownership by skilled forensic accountants. This fact was acknowledged by the noble Lord, Lord Callanan, in his foreword to the September 2020 White Paper Corporate Transparency and Register Reform—note that this was a document published two years ago.
The section on verification is to be found in Clause 16. Clause 16(1) refers to verification of information before an application is made by the overseas entity—that is, before the registrar is even aware of the application. I am sure that noble Lords have noticed that the wording of Clauses 4(1)(c), 7(1)(d) and 9(1)(e) indicates that the task of verification is assigned to the overseas entity. The Government may take some comfort from that, but I assure them that I do not. Clause 16(2) refers to
“the person by whom the information must be verified”,
and
“evidence or other information to be delivered to the registrar”.
Again, this suggests verification by a person other than the registrar, Companies House, to which the information is to be delivered, all ready, tied up with a fancy ribbon and a label reading “Nothing to see here.”
Nowhere in the Bill can I find a statutory obligation for the registrar, Companies House, to verify the data submitted to it. The Institute for Government has noticed the same omission, saying that
“without strengthening the organisation—expanding its powers of inquiry and resources to investigate and remove false information, and requiring mandatory identity checks on those incorporating companies, on company directors and on those who ultimately control companies—the new register could have little impact.”
There is also a clear suspicion that the Government are not willing to provide the resources the job requires, as the noble and learned Lord, Lord Garnier, pointed out earlier. To quote the Institute for Government again:
“the provisions in the new bill will make little difference unless authorities are provided with additional resource to enforce them … the UK already has strong tools to target illicit funds but law enforcement agencies have struggled to make full use of them because of resourcing issues.”
In her introduction, the Minister informed the House that a new economic crime Bill, including reform of Companies House, will be brought forward in the next Session. This has been promised time and again by this Government: it is always in the next Session—and the next Session never comes. On verification, we must act now. Making the verification of data by the registrar a statutory requirement is essential if the Bill is to be a meaningful measure and not just another PR exercise. Without a statutory requirement for verification by the registrar, and without the resources to do the job, this House will be participating in a sham. We must ensure that this is not the case.
Lord Carlile of Berriew (CB)
My Lords, it is a pleasure to follow a speech of such forceful clarity as we have just heard from the noble Lord, Lord Eatwell. I should start by declaring my interests. The first is similar to those declared by the noble and learned Lord, Lord Garnier, as a practising barrister, although these days I do not do contentious advocacy in courtrooms. The second is that I am the director of a consultancy company that provides advice to foreign entities and foreign individuals—although, I hasten to add, not Russians. I shall say a little about the sort of interests that arise in a few moments.
In ordinary circumstances, I suspect that many of us in your Lordships’ House would be reluctant to support a Bill such as this without the normal debating time that we are given in conventional legislation. A high degree of trust is being placed in the Government to ensure that the Bill reaches the statute book fit for purpose and is applied in a way that means it will bite. However, we are in extraordinary circumstances. There is no doubt that the war being conducted by President Putin, and indeed Russia, against Ukraine is funded at least in part by the product of money that has passed, and passes, through the United Kingdom, and that it is in many ways money that has been obtained illegitimately through the plundering of the public purse of Russia.
That is brought into high relief today by the news that the Mariupol children’s hospital was bombed by the Russians, including its maternity unit, and the photographs of what is left are terrifying and ghastly. Russia has now become a clear enemy of international law, and its agents, including its oligarchs, have no right to expect us to apply in full our normal ethical legal standards to their behaviour, as in their complicity with the Russian state. Indeed, our prime task, alongside doing whatever we can to assist Ukraine, is to protect our own country, the United Kingdom, against being used as an unwitting instrument of international crimes against humanitarian law.
I shall start in substantive terms by referring, as others have, to unexplained wealth orders. I echo what was said by the noble and learned Lord, Lord Garnier, and my noble friend Lord Vaux in their very eloquent speeches. UWOs have been around for a long time but it is a fact that very few proceedings have been taken by the National Crime Agency. There have been four cases, of which one failed. I can tell your Lordships that around the members of the legal profession that I speak to, and there are many on a daily basis, there is astonishment that the NCA has not brought scores of applications to court for UWOs. The reason for that is plain and twofold: one is the risk of costs, which can be dealt with, but the other, which is more difficult to deal with, is that the NCA is simply horribly understaffed to deal with these cases. It is not that there are not people who could do it, but we have to commit to employing those people and they have to be of sufficient quality. They need to be good lawyers and good investigators so that we are not standing here in a few months’ time saying, “The NCA really hasn’t been effective”.
Then, as the noble Lord, Lord Eatwell, referred to, there is the role of Companies House. It just so happens that professionally, in my consultancy company, I made an application on behalf of a client to Companies House some weeks ago now, in full detail, for a company to be deregistered. The evidence in the case could not be clearer. The company concerned is an impostor; it is pretending by its name and its fraudulent activities to be a very great international entity, but it is not—it is just a bunch of fraudsters. It is probably six weeks since I sent that application to Companies House. It is not just that they have not done anything; they have not even acknowledged—apart from the most formal immediate acknowledgment—the receipt of the application that I put in on behalf of my client. So I am absolutely with the noble Lord, Lord Eatwell: Companies House either is not fit for purpose or has to wake up and achieve that part of its purpose. Companies House, like the NCA, needs the staff to deal with these issues because it does not have them.
I have two other substantive points. The first I raised in the debate on Ukraine on 28 February, which was answered clearly, eloquently and helpfully by the noble Lord, Lord Ahmad of Wimbledon. My point relates to law firms and, indeed. other professionals—I deliberately turn to a chartered accountant when I say that—who, mostly in perfectly proper circumstances before this conflict arose, without any breach of law or ethical standards, have been involved in actual or intended transactions that may well have brought financial benefit, and therefore belligerent facilitation, to the Russian state. Some of those are property transactions, although not all, and some are transactions that are worked on but not fulfilled. A great deal of work is going on in law and other professional firms in relation to transactions that benefit the Russian state and it could tell us a great deal about what the Russian state is doing, as well as revealing criminal activity. I hope there is no single lawyer in the UK, whether in the square mile or elsewhere, who would find it ethically acceptable to bring benefit to an enemy of the United Kingdom, but the opacity of the sorts of transactions that I am describing means that lawyers and other professionals may well be complicit—entirely unintentionally, although there are of course rogues in every profession—in the sorts of transactions that I have referred to.
It is important that legal professional privilege should continue to apply to legitimate transactions. I hope that no one in this House wants to wipe away legal professional privilege in a transaction because someone happens to be a Russian; after all, there must be some very respectable Russians around because quite a lot of them have given money to one of the major political parties in this country. I hope that will not be taken amiss, but as far as I can tell it is true. So how do we achieve the scrutiny of such transactions?
After the debate on 28 February, I wrote to the noble Lord, Lord Ahmad—I have not heard from him yet but this was very recently so I would not have expected a reply—suggesting that we should adopt the architecture of the National Security and Investment Act 2021, an architecture that is now up and running in, among other places, the Ministry of Defence, with a substantial group of people working on it. They are applying the national security principles, the 17 national security categories, that are exactly relevant to the sorts of transactions that I am referring to. I respectfully suggest to the Government that they should adapt the NSIA architecture to a register of transactions by lawyers that lawyers and other professionals would have to report in clearly described circumstances, even though legal professional privilege would continue to apply as an inviolable principle unless there was an effect on our national security, as described in the NSIA. It seems to me that that sort of architecture would satisfy what is in my view a need for professional firms, if they participate in transactions that now seem to be politically dubious apropos the Russians, to be examined.
The other issue I wish to raise is about non-Russians who own property in London. A significant number of special purpose vehicles have been created for well-known foreign people to purchase. These people are huge investors in this country—entirely honestly, in good faith and with strong ethical standards—who do not wish it to be known that they, as individuals, are the beneficial owners of those properties. They have good reasons. One good reason, as one might think, is simply to protect their privacy from unwelcome curiosity and criminals. Another possibly legitimate interest may be to protect themselves from unwanted curiosity from overcurious journalists. A third reason, and possibly the most important, is for national security issues—not ours, but theirs for the country in which they live.
I will briefly give a couple of examples. I remind your Lordships of the events of 2 October 2018 when Jamal Khashoggi was murdered in Istanbul by agents of Mohammed bin Salman and the Government of Saudi Arabia. This is an example of a Government finding out everything they need to know so that they can take out an enemy of the state in completely unlawful circumstances—in a friendly country—through an outrageous and brutally executed crime. People are entitled to defend themselves against that, as are the victims of Russian-led incidents. On 23 November 2006, in Bloomsbury, just yards from my own office in Gray’s Inn Square, Alexander Litvinenko was taken out by the Russians. By whose agents was he murdered on our territory using radioactive material? Vladimir Vladimirovich Putin. Perhaps we should have been warned then. Afterwards, there were the shocking events which took place in Salisbury and affected life in one of our most beautiful cities.
When he replies, I would be grateful if the Minister could confirm that, when registration is required, the legitimate privacy and interests of good foreign investors will be protected under the provisions of this Bill, particularly Clauses 21 to 25.
Finally, I apologise for not being able to be here next Monday when the Committee takes place. This is because I have a long-standing commitment aboard, otherwise I would have come to contribute further.
Lord Thomas of Gresford (LD)
My Lords, for over 50 years, it has always been a privilege and a pleasure to speak either before or after the noble Lord, Lord Carlile.
Last Friday, the Guardian reported that the Foreign Secretary, Liz Truss, has asked government lawyers to “find literally any way” to crack down on SLAPPs—strategic lawsuits against public participation. On the same day, Reuters reported the view expressed by a number of Members of Parliament, including Conservative MPs, that British sanctions on Russian oligarchs are being partly delayed over concerns that wealthy businessmen will take the Government to court unless they have built solid legal cases against those targeted. As the noble Lord, Lord Carlile, pointed out, they do not have the cash—or the organisation within the police departments which deal with this—to do that. I ask the Minister: does this account for the Government dragging their feet on sanctions—particularly now, as others have already mentioned, that they are giving six months to Russian oligarchs in this country to liquidate their assets? I regret that the Government have not taken the opportunity in this Bill to deal with the urgent problem of SLAPPs; nor was it in the list announced for Part 2 by the Minister.
The British justice system is undoubtedly not world-leading in this area. Other common-law countries, including the United States and Canada, have brought in anti-SLAPP laws which enable a journalist or publisher to apply to the court at an early stage for a law suit to be dismissed, if it relates to content which is in the public interest. Consequently, the Foreign Policy Centre has described the UK as
“the most frequent country of origin”
for foreign legal threats against investigative journalists. The journalist Catherine Belton wrote a book called Putin’s People: How the KGB Took Back Russia and Then Took on the West. Among other things, she wrote that sources had informed her of Putin’s plan to acquire Chelsea Football Club through Abramovich to increase his influence and to raise Russia’s profile, not only with the elite but with the British people. If that was his plan, the chanting of Chelsea supporters last weekend, interrupting the applause for Ukraine at Burnley, shows that Putin has succeeded in his object. Putin has succeeded in distorting British values of freedom and democracy, at least among Chelsea fans. Catherine Belton’s book was highlighted by the opposition leader Alexei Navalny from his prison cell in January last year when he revealed, among other things, that Putin secretly owned a £1 billion Black Sea palace. She was hit with libel actions from Abramovich, who was quickly joined by other oligarchs and the leading state oil company, Rosneft. Abramovich also sued her in Australia, where the book had been published. Miss Belton’s publishers, HarperCollins, stood bravely by her. The result of this hugely expensive litigation was some minor alterations to a few sentences in her book without the payment of any damages or costs. Another similar case was brought against the Financial Times investigative journalist Tom Burgis by the Kazakh mining company ENRC. As my noble friend Lady Kramer said, there are enablers. Solicitors for the oligarchs in this litigation include the well-known London firms Mishcon de Reya, Schillings, Harbottle & Lewis, CMS and Carter-Ruck.
I have answered Ms Truss’s call by drafting a Bill which is currently in the queue for a First Reading in this House. I am very happy to share this with the Government at this early stage. It is based on the Ontario legislation which was recently considered and approved in the Supreme Court of Canada. Essentially, my Bill provides for a defendant to apply to the court at an early stage to dismiss the proceedings where the judge is satisfied that the proceedings arise from a publication relating to a matter of public interest. It is then for the claimant to satisfy the judge that the proceeding has substantial merit, and that the public interest in permitting the proceedings to continue outweighs the public interest in protecting the publication. In weighing the public interest, the judge may take into account a variety of factors, including the chilling effect of the proceedings on any future investigative journalism and any disproportion between the resources deployed and the amount of damages likely to be awarded. The judge would have power to award damages to the journalist or publisher where he concludes that the proceeding has been brought in bad faith or for an improper purpose. I had thought of seeking to amend this Bill with these provisions, but I do not think they would come within the Long Title, nor would there be time—as the noble Lord, Lord Carlile, said—to adequately debate them. But this is a way to crack down on this abuse of our judicial system, and I look forward to the Government giving time for my Bill, or their own time to deal with the matter.
Lord Rooker (Lab)
My Lords, I very much agree with the contents of virtually all the speeches we have heard so far. The right reverend Prelate the Bishop of Leeds said that he wanted to introduce some ethics into the debate. I deeply regret that before I finish I shall introduce some politics into it. The constant theme in the House of Commons on Monday was that alarm bells have been ringing for years and been ignored by the Government. It is sad to say that this is an entirely fair point to make. I shall therefore go through a bit of the history. I make no apology for saying “I told you so”.
In March 2015, Transparency International published a detailed analysis, Corruption on Your Doorstep: How Corrupt Capital is Used to Buy Property in the UK. I will not go into any of the details given there but the Government knew about it because I initiated a debate on it on 18 June 2015. The present Government Chief Whip replied.
Another alarm bell around the same time was rung in the Financial Times on 6 June 2015, when it reported that more than half the homes costing £1 million-plus were being bought with cash. The newspaper reported that 76% of the most expensive homes costing above £5 million were paid for by entirely by cash. Alarm bells?
In Singapore in July 2015, the then Prime Minister made what I have said previously was a seminal speech on corruption, which was never really followed up with action, even though that Prime Minister said in his 2017 lecture on corruption that he thought action was being taken forward. He was taken in.
In early 2016, Roman Borisovich launched the Kleptocracy Tours. The idea was to show people what it was all about—to visit locations and explain about the owners, or what was known about the owners, the lavish properties and something about the sources of wealth. That was before the emergence of unexplained wealth orders, a matter raised in the original Transparency International report. The tours started in Whitehall and went through Knightsbridge, South Kensington, Hampstead, Highgate and so on.
I shall highlight just two examples and I shall do so because I have done it before—at least four times. There is no argument about what has been going on and been ignored by the Government. The start was outside the Igor Shuvalov’s property at 4 Whitehall Court, which are two apartments, now knocked into one—138a and b—and are above the Farmers Club for those familiar with the location. This apartment was worth more than 80 times Mr Shuvalov’s annual income as a Russian government official. Due diligence there was none. The extract from the Russian registry of companies disclosed the beneficial ownership of Sova Real Estate by Shuvalov and his spouse. The purchase price of £11,440,000 is well known. The lender: none. The London end was cared for by Tulloch & Co of Hill Street.
My other example is relevant for two reasons. The person is Ukrainian and the sellers of the property were the UK Government. There is much more detail. When I prepared this speech, I saw the “Long Read” in yesterday’s Guardian by Oliver Bullough, so the details are there. It relates to a property that I have driven past for decades on my way here—a dwelling attached to the old Brompton Road Tube station. Dmytro Firtash paid over £100 million for it. He made his fortune selling Russian gas to Ukraine. He was living in Austria fighting extradition to the United States on bribery and racketeering charges. That continues today.
The matter is relevant because the Tube station closed in 1934 and during the war was used for various matters related to the Anti-Aircraft Brigade. In 2014, while Mr Firtash was still in Austria fighting the extradition charges, the owner of the site—the Ministry of Defence—sold it to him. He claimed that he wanted to convert it to residential use. He paid £53,375,000 to the Secretary of State for Defence. The property now still appears to be three separate buildings but is in fact one. In June last year, according to Reuters, the Ukraine Government headed by President Zelensky imposed sanctions on Firtash for selling products that ended up being used by Russian military enterprises. Did the MoD do any due diligence before the sale of its property? It was known that Firtash was in Austria—he was not living there. I asked about this some years ago and was simply fobbed off.
I should say in passing that the tour went past the house of Roman Rotenburg, owned through a Cypriot company. He received his father’s and uncle’s sanctioned foreign assets in 2015. I mention that only because others in this House are more capable than me of explaining the background, although they are not here tonight.
If the Government are still pleading ignorance, in 2018 along came Moneyland by Oliver Bullough. I will quote a brief extract from the flyleaf, which states:
“Once upon a time, if an official stole money, there wasn’t much he could do with it. He could buy himself a new car or build himself a nice house or give it to his friends and family, but that was about it. If he kept stealing, the money would just pile up in his house until he had no rooms left to put it in … And then some bankers in London had a bright idea.”
These matters and other examples were raised again and again, especially during the passage of both the Criminal Finances Act 2017 and the Sanctions and Money Laundering Act 2018. So why has no action been taken until Ukrainian blood is being spilled at the level it is today? The Bill is a token because it has been brought about only because of that. The issue was always there anyway. Our economy is being distorted at a crude level because if half the money disappears all at once it will be highly damaging. But we knew that because we knew that the money was coming in.
The impact assessment for the Bill, which the Minister signed on 25 February 2022, on page 5 uses as a reason for action the very report from Transparency International in 2015 that I mentioned at the start. That was seven years ago. The impact assessment to justify the Bill is based on something that the Government knew about seven years ago and has been repeatedly raised with them—but they did nothing about it.
I am not going down the road of the former Prime Minister, when Home Secretary, refusing the inquest into the death of Alexander Litvinenko because of “international relations”. Then there is the present Prime Minister, who is so close to the Russian KGB family that he dumped his security detail to go to meetings and parties—one of which was the in the week of the first Covid lockdown in March 2020. Missing five COBRA Covid meetings was okay because the top priority was to report to the Russian he could not get into this House at the time.
The common theme is the active involvement of both those top UK Government members in fundraising events—all on the record—to obtain Russian-based money into the Conservative Party. This has spread to many other Ministers. I cannot understand it. Constituency parties in this country have received donations from people who are living here legitimately and are on the electoral register. Did those constituency parties not ask why this money is coming in? We do not really need to ask any more, do we?
Lord Faulks (Non-Afl)
My Lords, I am not sure I can follow that. I should declare an interest as a practising barrister, but not one with any relevant interests so far as this debate is concerned. We of course understand why the Bill is being rushed through Parliament, but I fail to understand why the Government have taken so long to respond to what was staring them in the face.
To take up the story from the noble Lord, Lord Rooker, I was excited by the Criminal Finances Bill in 2016. It borrowed ideas from other jurisdictions but did not, in my view, go far enough. The noble Baroness, Lady Williams, not currently in her place, will recall the criticisms I offered then of unexplained wealth orders and of the omission altogether of a property register that would help to identify the true owners of choice London property. My amendments were not accepted by the Government. Sadly, not many in your Lordships’ House, with notable exceptions—I see some of them here today—seemed particularly interested in that Bill.
Then came the Sanctions and Anti-Money Laundering Bill in 2018, which attracted rather more interest—although most noble Lords seemed concerned to protect those who might be capriciously or unfairly sanctioned. The noble Lord, Lord Hodgson, and I put down amendments in 2018, once again to set up a property register—mysteriously omitted from the Bill. I was prepared to vote against my own party on this. I was placed under considerable pressure to withdraw my amendment. I was told, among other things, that it was too complicated to do in the 12 months I suggested in the amendment. I was given lavish assurances by the Government, and a timetable. Neither the assurances nor the timetable were adhered to.
In the meantime, other noble Lords had rather more luck with their amendments to the Sanctions and Anti-Money Laundering Bill. The noble Lord, Lord Pannick, who has recently been much criticised in the newspapers, and the noble and learned Lord, Lord Judge, put down amendments that were in fact perfectly conventional, rule-of-law safeguards. They were supported in those amendments by the Labour Party and the Liberal Democrats. In fact, the Liberal Democrats wanted to go further; it seemed to me that the effect of one of their amendments would have made areas of our foreign policy justiciable. This is partly explicable by the fact that the debate on these sanctions came immediately after Brexit, and everybody’s minds, at least for the most part, were not directed towards Russia.
In Committee and on Report I spoke against all the amendments. It was not that I wanted arbitrary imposition of sanctions, but it seemed to me that our foreign policy needed a degree of flexibility. It must be remembered that sanctions are essentially a tool of foreign policy. The Government were wrong to compromise, as they did, in relation to these amendments. The position now, of course, is that the oligarchs we wish to sanction will have the benefit of the finest legal minds that money can buy to represent them.
I recommend that noble Lords read pages 46 and 47 of the Explanatory Notes to the Bill. They are certainly the longest Explanatory Notes I have ever read in relation to the European Court of Human Rights. It seems to me that the civil servants advising the Minister have said that, as a result of the amendments to the Sanctions and Anti-Money Laundering Act and elsewhere, it will be very difficult indeed to sanction anybody. Paragraph 230 says that Part 3 of the Bill
“potentially engages the following provisions of the European Convention on Human Rights: Article 6 (right to a fair trial), Article 8 (right to respect for private and family life) and A1P1 (respect for peaceful enjoyment of possessions).”
I am sure we all hope that the oligarchs can have peaceful enjoyment of their possessions. The European Convention on Human Rights was not designed to protect people like them.
I hope the Minister can assure me that the government amendments will be enough to defeat the legal might of the oligarchs. In this context I recommend the suggestion made by Professor Ekins and Sir Stephen Laws in their Policy Exchange paper, published this week in the Spectator, about a way of doing this without encountering some of the difficulties I foresee.
On the subject of the Human Rights Act, in 2015, together with the now Deputy Prime Minister, I was given policy responsibility for a British Bill of Rights. It never saw the light of day, despite our best efforts. In your Lordships’ House I was regularly upbraided at the Dispatch Box for even contemplating an amendment to the Human Rights Act, let alone leaving the Council of Europe. I was told it would send a bad message to Russia and Belarus as fellow members. We are still members of the council, but it does not seem to have much inhibited Russia or Belarus as they trample over the human rights of the brave people of Ukraine.
Then there was the Joint Committee, which I was privileged to chair, with the noble and learned Lord, Lord Garnier, as a member. It was entirely apolitical in the sense that all parties agreed to a number of important things that we thought could be done to the draft Bill, including verification—already much mentioned—and trying to get rid of the problems of trusts that could be used to bypass some of the protections. We stressed how important the timing was and how urgent it was. The timetable is in fact recorded in our report—a timetable not adhered to by the Government.
We have allowed ourselves to be the receivers of stolen goods in this country. We have seen the murder of Litvinenko and the Salisbury poisonings. Reputable sources suggest that as many as 10 or more murders are attributable to Russia. Ukraine is not our fault, but we have embraced the Russian oligarchs and Putin’s henchmen.
The Explanatory Notes say the Bill has been introduced as part of Her Majesty’s Government’s
“urgent response to the Russian invasion of Ukraine.”
It contains some useful provisions, which I thoroughly support and which can no doubt be improved when the next Bill comes along. But it should never have been necessary to come to this.
Lord Hannay of Chiswick (CB)
My Lords, the Bill we are debating today is long, long overdue. Part of this delay resulted from the shameful decision to block publication of the report produced by the Joint Committee on Intelligence and Security on Russia’s activities in this country. Whatever excuse was dreamed up to justify that delay, it can now be seen as a blunder and as being responsible for the fact that in this instance the UK is not, as the Government like to claim, a world leader but rather a “world catcher-up”, well behind the US and the EU.
However, it would be wrong not to welcome the Bill’s likely passage into law later this month—all the more so as during my intervention in the emergency debate on Ukraine on 25 February, the day after the Russian invasion, I called for the Bill to enter into force during this Session of Parliament and not the next. This will now happen, and it is right to applaud that, as well as the announcement today of a further Bill for the next Session to go into greater detail. But, since speed is of the essence, it would surely make sense to cut the six months allowed for registration to a figure close, or at least closer, to the 28 days suggested in the other place. Surely the Government could accept some compromise on that.
Legislative action of the sort proposed—the sort we are debating this evening—is only a first step in a complex operation. Of far greater practical significance will be the skill and energy with which it is implemented and enforced once it is on the statute book. I hope that when the Minister replies to this debate he can assure the House that serious and detailed preparatory work is already being put in hand, so that action under the new law will not be unduly delayed. Will he also undertake to keep Parliament regularly informed of progress in enforcement if and when the Bill becomes law?
Of course, the Bill is about more than just bringing to book Russian institutions and individuals linked with illegality in general, and in particular with the war crimes being committed daily in Ukraine by the Russian state. It is another very necessary step in the battle against corruption worldwide, which began promisingly —if, again, somewhat belatedly and after considerable delay—with the Bribery Act. Like this Bill, that Act recognised that corruption anywhere in the world invariably involves more than one person or entity, and that the proceeds of corruption often end up an awful lot closer to us than we would wish.
It is all too easy to comfort ourselves with the thought that most corruption occurs somewhere else, often thousands of miles away, and has nothing to do with us—easy, but wrong. This Bill should provide a shot in the arm for the battle against corruption, which is a proclaimed and worthy objective of successive British Governments but has so often fallen short in the execution; just look at the reports of Transparency International if you doubt that. Russia’s aggression against Ukraine, in contravention of its international obligations from the UN charter onwards, is a salutary reminder of the urgent need for us to defend the rules-based international order.
This Bill is part of that defence but mere words will not be enough, especially as, only yesterday, on our Order Paper was another Bill—the Nationality and Borders Bill— that seeks to allow the Government to act in contravention of the 1951 refugee convention. It is, frankly, Orwellian to assert that Parliament alone has the right to interpret what is and what is not in conformity with the convention. That is the language of President Putin and not ours.
Lord Londesborough (CB)
My Lords, as we know, Russia’s invasion of Ukraine has triggered the fast-tracking of this Bill to address the burgeoning and multifaceted industry of economic crime. If this Bill is viewed as a quick fix to address the UK’s shameful and enabling embrace of corrupt oligarchs, we should note that the so-called London laundromat has also been exploited by kleptocrats across a wide range of nationalities, not just Russians.
The British sense of fair play is an expression we hear less of these days. That is not hard to understand when you read the Treasury Select Committee’s somewhat embarrassing but honest sizing up of economic crime in the UK:
“It seems that it can reasonably be said to run into the tens of billions of pounds, and probably the hundreds of billions.”
The actual cost to the UK economy of serious and organised economic crime is conservatively estimated at £37 billion per year. That is more than three times the expected increase in revenues generated by the new rise in national insurance contributions.
Given the urgency, this Bill is necessarily narrow in scope, with a focus on the registration of overseas entities and land and property ownership. However, as we know, UK service firms and their clients have been involved in a whole range of enabling activities across numerous sectors, including banking, private company investment, consulting and advisory services, estate agency, sportswashing and lifestyle management.
This Bill seeks to address the troubling issue of unexplained wealth given that we have become a magnet for rich businessmen from poor countries with abnormal levels of wealth. I include Russia as a poor country; last year, its GDP per capita was just over $11,000 and it was ranked 85th in the world. This year, it is likely to fall below 100th, yet it boasts 117 billionaires; that is the fifth-highest number in the world. My point is that you do not need to be a forensic economist to spot unexplained wealth.
I witnessed this at first hand 15 years ago. A Russian media company launched an unsolicited takeover offer for an information business that I was running at the time. The offer was way in excess of the fair market value and the company conducted zero due diligence. We resisted after discovering that our suitor had powerful political connections in both Moscow and Beijing, and had a seemingly bottomless war chest despite never having generated a penny of profit in its history. The most unedifying site was the long line of British advisers, lawyers and accountants acting on its behalf. I see much in this Bill aimed at the sources of dirty money but little to address the enablers.
Turning to the Bill’s specifics, I have four brief points to make. First, as many noble Lords have already pointed out, shortening the transition period for overseas companies to register their beneficial owners from 18 months to six months is inadequate. I suggest that three months strikes the right balance between urgency and the important aspect of allowing bona fide beneficiaries the time to register.
Secondly, fines need to be proportionate and a deterrent. The average property transaction value for oligarchs in the UK is around £15 million, so fines of £500 or £2,500 a day are insufficient. I suggest that, for the first day of contravention, a fine of around 1% of the property value would be more appropriate.
Thirdly, I am an entrepreneur, not a lawyer, but the drafting of the overseas property legislation seems to need tightening up. I believe that individuals would still be able to hide their true identities through nominee agreements with professional service firms. Closing the “no person of significant control”, or PSC, loophole is another key priority.
Finally, as many noble Lords have pointed out, enforcing the new rules of the Bill requires proper resourcing. Our spending for national agencies fighting economic crime is around £850 million per year, set against the money laundering cost to the UK economy of perhaps as high as £100 billion. No wonder conviction rates have been so low.
This Bill is far from perfect but I will support it, mindful that the Government are planning to bring in a second economic crime Bill in the next parliamentary Session that should—indeed, must—address the many other issues of a complex and menacing industry.
Viscount Colville of Culross (CB)
My Lords, I was the BBC’s Moscow producer for “Newsnight”. I have been back many times to make television programmes in Russia. Throughout that time, Russians often spoke admiringly of the UK as a bastion of political stability and democratic freedom. It is ironic that the British ideals and institutions they so admire have been repeatedly traduced by the Russian elite. Few Russians have had the political influence and absolute ruthlessness to become oligarchs, but they have been drawn to the great honey pot of the City of London to hide their wealth and live lives of unimaginable opulence. Many are people who surround Putin.
They live in stark contrast to the vast majority of Russians, who are desperate pawns in his heinous plans. As if proof was needed, only yesterday, the mothers of Russian soldiers fighting in Ukraine told how their sons had been forcibly signed up to the army for a salary of £180 a month—a subsistence wage that barely helps you live in rural Russia. They even had to buy their own uniforms. One mother said that she had a text from her son Nikolai two weeks ago saying that he was on a drill and was going to continue drilling. Since then, she has not heard from him and fears the worst.
I am pleased that our Government have started to sanction Putin and the elite who surround him. I hope that this Bill will be used to extend sanctions to at least 1,000 people around Putin—not just Ministers but members of the Duma, all the military and security service leaders and, most importantly, their families. Putin does not care what happens to the people of Russia but he does care about what happens to those around him. I, like many noble Lords, welcome the Economic Crime Bill and add my calls for its companion Bill to follow shortly.
According to Transparency International—it has been mentioned many times in this debate—hundreds of oligarchs from around the world own property in the United Kingdom, many of them Russians. If you count corrupt politicians and public officeholders, the figure is higher. The NGO calculates the known value of assets in the UK bought with suspect wealth to be at least £6.7 billion, although it adds that this is likely to be the “tip of the iceberg” given how little we know.
I welcome the property register of oversea entities set out in this Bill. It is good to know that the United Kingdom Government have finally decided to track down the beneficial owners of so much property in this country. My concern is that much of it is held by companies registered in the Crown dependencies and overseas territories.
The sanctioned oligarch Alisher Usmanov, said to be worth £13.4 billion, bought the grade 2 listed Beechwood House in Hampstead in 2008 for £48 million. It is owned by a company called Hanley Ltd, based in the Isle of Man. Likewise, the industrialist Oleg Deripaska, who is sanctioned in the United States—but not yet here—for close links to President Putin, has a multimillion house in Belgrave Square. It is owned by Ravellot Ltd, registered in the British Virgin Islands. Transparency International estimates that £1.5 billion-worth of London property is owned by Russians, 55% of it registered in the CDOTs. I am pleased that the new register will identify the true beneficial owners but, like my noble friend Lord Faulks, I am concerned about what happens if they decide to sell the company’s shares to a new owner, possibly another friendly oligarch. The new beneficiary will have to be notified in the register, but only during the annual update. That gives the original beneficiaries plenty of time to salt away their wealth from the shares they have sold. I ask the Minister to consider more frequent updates of true beneficiaries on the register.
The registers of companies established in the CDOTs allow UK authorities only to make a search on individual companies, but many oligarchs and money launderers hide their money in a web of companies. The only way this can be uncovered is for the Government to request full access to their registers so that authorities can take an overview and piece together the web. At present, the registers will be open in over 21 months’ time. Some overseas financial centres such as the BVI, however, already have a professionally maintained up-to-date BOSS register. It would take only a short time for that to be made public. I ask the Minister to ensure that the Government do everything in their power to open these registers this year and uncover the truth about the wealth of so many Russian oligarchs, including Putin and his friends.
The other area which concerns me is the huge growth in SLAPP orders, so eloquently described by the noble Lord, Lord Thomas of Gresford. Recently they have been used aggressively by oligarchs and corrupt players around the world to close down exposure of their wealth and, in the case of many Russians, their links to the Kremlin, by journalists and writers in this country. I am proud to have helped shape the Defamation Act 2013. Its threshold of a publication that
“has caused or is likely to cause serious harm to the reputation of the claimant”
was successful for a time in controlling libel tourism. But new threats of defamation, breach of privacy and data protection are being used by British lawyers to intimidate journalists and writers. These cases can be time-consuming and costly, involving an expensive and lengthy disclosure process, continuing for many years and dragged out by rich claimants. The noble Lord, Lord Thomas, mentioned the cases of Catherine Belton and Tom Burgis, to name but a few.
In researching this speech, I have spoken to a number of journalists writing about Russian wealth, who have received very aggressive legal letters. Not only do they threaten a list of legal actions, but even the letters themselves are secret. The recipients were threatened with actions for breach of confidentiality or even copyright if they made the letters public. I have obtained one such letter from a leading London law firm to a freelance journalist who exposes corruption on a regular basis. They were threatened with breach of privacy and given severe warnings against mentioning the law firm unfavourably. I fear that these SLAPP orders pose a chilling effect on free speech in this country. During the debate on the Bill in the other place, the Minister announced that Dominic Raab has made a call for evidence. I hope that this includes setting up a bespoke judicial mechanism tailored to look at these orders at an early stage to decide whether publication is in the public interest. I also support the noble Lord, Lord Thomas, if his Private Member’s Bill comes before the House. Meanwhile, can the Minister confirm the scope of this call for evidence and when it might conclude its findings?
We need to rid this country of its reputation as a safe haven for corruption and criminality. We need to clamp down on the activities of Putin’s people and their families. I look forward to a second Bill coming before the House very soon to close the other glaring loopholes, especially at Companies House.
Lord Rogan (UUP)
My Lords, the scenes in Ukraine that the world has observed in our newspapers and on our television screens over the past two weeks—
Lord Sharpe of Epsom (Con)
I am afraid that the noble Lord was late to the start of the debate.
Baroness Bennett of Manor Castle (GP)
My Lords, I will set out the context for the Bill and look at some of the bigger ways forward, while my noble friend Lady Jones of Moulsecoomb will concentrate more on its details.
Baroness Bennett of Manor Castle (GP)
I am sure she will.
Unoriginally, I begin by noting that a year is a long time in politics. In January 2021, we had Second Reading of the Financial Services Bill in your Lordships’ Chamber. The noble Lord, Lord Agnew of Oulton, was on the Front Bench, proclaiming with apparent pride that the UK had
“unwavering commitment to high-quality, agile and responsive regulation”.—[Official Report, 28/1/21; col. 1810.]
I said:
“We are a major global centre of corruption. The City is an Augean stables and the Bill is clearly sparing in its distribution of shovels.”—[Official Report, 28/1/21; col. 1861.]
It is clear that Greens lead in recognising problems, with others following eventually, and we offer solutions. I have joined many others—I note the leadership of the noble Lord, Lord Wallace of Saltaire, in particular—in calling for an end to golden visas, a long and disgraceful saga threading through Governments of three political hues that eventually, very late in the day, has finally been cut off.
The noble Lord, Lord Agnew, is no longer sitting on the Front Bench. It was the Government’s refusal to tackle another, largely unconnected corruption issue that led to his dramatic resignation. Our issue with corruption is clearly not contained to one sector, area or type. It is a pervasive UK issue.
As a nation, we are today like a guilty individual hastily pushing an illicit lover out of the window of their bedroom as the world’s media comes storming through the front door, this Bill being scanty garments hastily donned in ill order. The world, with its attention focused in particular down the road on the City of London, will clearly not be deceived about our state of disarray. According to the International Monetary Fund, as much as 5% of the world’s GDP is laundered money, and only 1% of it is ever spotted. Collectively, developing countries have lost $16.3 trillion to illicit leakages since 1980. A very significant chunk of that flows just down the road from here. The Thames is dwarfed by a far dirtier and deadlier stream of corruption, as the right reverend Prelate the Bishop of Leeds noted.
It is worth noting that we are here today because of President Putin. His actions forced our Government to react. We should not be reacting; we should have been proactive many years ago. As the right reverend Prelate said, we should not need this spur, yet clearly the Government are like a horse that has been baulking at the gate, not wanting to be pushed away from a lush, tasty pasture even when it has been made deadly ill by the colic of ill-gotten gains.
Colic is not a contagious disease, but our corruption is. Look at how Russia got to the state it is in today; back in the time of President Yeltsin, the guidance for reshaping the post-Soviet economy was largely handed to western lawyers, accountants and businesspeople. The Russians were told that the neoliberal market model was the way forward, and it actively encouraged what amounted to a 19th-century robber baron-dominated wild east, with what had been Soviet-era senior apparatchiks almost seamlessly switching to champions of the market. We still see some of them today, very close to home.
Of course, the oligarchs bear responsibility for their choices and actions, but so do those who encouraged and enabled them. The sicknesses of our society are many. We often talk about our productivity problem and our labour crisis, but what if the bankers, instead of serving the oligarchs, put their talents to optimising the outputs of our manufacturing? What if the accountants were tracking the movements of nutrients and micro-organisms, with the aim of producing good, healthy food? What if the lawyers were caring for our old and sick?
I am indebted to the noble Lord, Lord Sikka—I am very sorry that we will not hear from him shortly—for the figure that there are around 400,000 professionally qualified accountants in the UK. That is the highest per capita figure in the world. We have an economy that focuses on spreadsheets, not on the quality of our society. And what have we done in terms of delivering the rule of law? It is frequently claimed that we are at the centre of the camp defending it, but we have actually been leading its absolute undermining.
A book entitled Butler to the World: How Britain Became the Servant of Tycoons, Tax Dodgers, Kleptocrats and Criminals will be published tomorrow. It is definitely in the contest for the best-ever timed publication of a book. The author, Oliver Bullough, notes that we do not just need changes to legislation—we need changes to enforcement, as many noble Lords have noted, and to culture and politics.
In 2016, the Government estimated that the amount of corrupt money flowing into the UK had reached £100 billion a year, and Transparency International has identified at least £1 billion of suspect property bought with Russian money alone. But the flow is not just of money; of course, there has been a massive flow into the West of Russian oil and gas. The trashing of our planet and our economic and political systems are all intimately interlinked. The impoverishment of many and the destruction of our environment are linked to the benefit of the few.
I have some specific proposals and questions for the Minister. First, will the Government now reconsider their plan for freeports? Studies by the European Parliament and the Financial Action Task Force, among others, have shown that the secrecy and extraterritorial nature of freeports are a magnet for money laundering and tax evasion. These are the kind of things we are supposedly trying to act against.
Secondly, in terms of the Russian targets for these sanctions, we are talking about an opt-in system, identifying those oligarchs that are apparently close to Putin and his regime. Robert Reich, the former US Secretary of Labor and now a professor of public policy at the University of California, suggested the freezing of all offshore holdings of Russian nationals in excess of $10 million. He estimates that this would affect 10,000 to 20,000 Russians—those who, by definition, have benefited most from Putin’s rule. How about an opt-in system instead of an opt-out one?
Thirdly, due to the prod that led us to this Chamber today, we are of course focusing on Russia, but what about many other parts of the world? I think it was the noble Lord, Lord Carlile, who referred to the vicious actions of the Saudi state and our friends in the Middle East and arms customers. What are we going to do to address where Saudi money is in London and where it has come from?
I also stress to the Minister that the problem is not only people in the global south or in places that speak different languages or have different cultures from our own. There are also the tech billionaires and mining magnates, with their overweening wealth, tax dodging and exploitation of their workers. Illegally acquired wealth is far from our only problem. Unexplained wealth orders are meant to tackle that, but I suggest that we also need “all too well explained” wealth orders—you might call it a wealth tax. Many noble Lords have focused on the need to fund far better the enforcement of our laws; perhaps some of the money from a wealth tax could go towards that.
I have a final, practical question. The proposed registration will apply only to property bought in England in the last 20 years, or since 2014 in Scotland. Why not look at what is concealed by previous arrangements? Is it to be considered laundered clean, rather than just more dirty washing? Maybe there is not much desire to go further back. How much of the wealth of people in a place like this has deeply corrupt origins, stolen in the colonial and post-colonial periods?
The Greens can do nothing but support this Bill, which is a small step in the right direction. You can, however, sail even a modestly scaled superyacht through the gaps in it. I thank the Minister and his colleagues for a useful briefing that focuses on the need for a second Bill as soon as possible, but we need much more, and an acknowledgement that the problem is not simply the narrow legal framework, or individuals; the problem is our system.
Lord Cromwell (CB)
My Lords, although it does not say so on the Bill, it was perfectly clear before we even started, and has become manifestly clear throughout, that this Bill is largely about Russia. For that reason, I declare my interest as a director of the Britain-Russia Centre and British East-West Centre, an NGO set up in 1959 during the height of the Cold War. All noble Lords will agree that our disagreement is with the regime and particularly the man who leads it; it is not with the people of Russia, who suffer under that totalitarian system. We need to remember that, because many Russians are fed up with being referred to as “mafiosi” just because of their nationality.
As has been eloquently said by many, this Bill has been long awaited. It has been rapidly adapted in the light of current concerns about Russia and Ukraine, so it inevitably has gaps and shortcomings. We are told that ECB 1, if I may call it that, is going to be followed soon by ECB 2. I hope so, and that, in winding up, the Minister will assure us that the issues addressed today and by the NGOs, and the wider set of issues that have been identified, will be picked up in ECB 2 rather than it having a narrow focus.
I would like to spend what remains of my time—so many good points have already been made that I am skipping through my remarks—on the theme that compliance begins at home. The right reverend Prelate made a point about ethics; if he will forgive me for saying so, the only way is ethics.
Enablers such as law firms, accountancy firms and, if we are in a confessional mood, banks—I am a former banker—working with international clients whose source of wealth is opaque, have many questions to answer. The temptation of substantial new fee-earning opportunities has led some firms to take an accommodating, light-touch approach to anti-money laundering regulations—just within the letter of the rules, although sometimes not even that, and largely on a self-regulating, self-reporting basis: what we might call “marking your own homework”. Some enablers, as part of their onboarding process, actually coach clients in how to answer. They are tactical in what they ask—and do not ask—of clients, or accept pretty modest levels of proof, or even provide clients with services to mask their wealth and ownerships, or distance themselves from a rather disreputable hinterland.
I had hoped that the unexplained wealth orders that feature in the Bill would address this, and perhaps interim freezing orders, which do not seem to have been touched on tonight, might address some of the issues about the short notice required. But they appear to be directly almost exclusively at PEPs, politically exposed people, and those involved in serious and organised crime, which is not really defined in the Bill. I am not sure what “unserious and disorganised” crime would look like.
In asking Ministers about this narrow scope, I was told that existing anti-money laundering requirements on lawyers, banks and so on already require them to determine a client’s source of wealth and that they cannot take on clients who do not meet those requirements. “There’s no such word as can’t” is a weary old adage for anyone like me who had an old-fashioned upbringing. There are firms that can—and some of them do. Working in a private bank, it used to baffle me how we never took on Russian clients because it was just impossible to get them through all the tests, and yet I knew people who worked in other banks that were eagerly taking them on. I could not understand how they were doing it, but I think I know now.
For the past 25 years, I have worked with countries across the former Soviet Union, particularly Russia. Subsequently, for a period of about nine years, I worked in the private banking world, which bears out some of the points I have just made. For some, an occasional fine is just the cost of doing business. I do not know the full details but I noticed that, on Monday, the FT reported that an ex-partner of a leading firm was fined a mere £17,500 for lack of adequate due diligence in Russian transactions. That is a derisory amount.
The Bill needs to be strengthened in this area in two ways. First—this was touched on by the noble Lord, Lord Vaux—we want a named, senior-level sign-off by an enabler firm’s management to confirm that all wealth has been properly explained and evidenced, in compliance with the regulations. Given the existing rules, that may sound like belt and braces to some, but my goodness, that simple addition is needed. There is nothing like having a senior person sign off and remain on the hook. Could this perhaps be introduced as a modest but vital amendment to either this Bill or its successor, which, we are told, is imminent?
Secondly—this has been touched on by other noble Lords—with responsibility must come transparency. I am in no doubt that, unless there is properly resourced enforcement, abuse, rule-bending and blind eye-turning will continue. The National Crime Agency and others are almost on their knees from being understaffed; they are struggling and underresourced, as many noble Lords have said. Resourcing was also raised via amendments in the other place; I hope that this issue will be taken up by the Government to ensure that compliance is not only said to be done but regularly, independently and forensically checked. I would be grateful for the Minister’s commitment to that in winding up.
Finally, I want to touch on one aspect of the enablers’ work that has become a stain on the reputation of the UK. Many noble Lords have touched on this, notably the noble Lord, Lord Thomas—I look forward to supporting his Private Member’s Bill if we get the chance. Some call it strategic litigation against public participation. If you have a lisp, as I do, that is extremely difficult to say. I prefer to call it what it is: lawfare. It is the deliberate use of UK legal firms to intimidate and overwhelm authors, publishers, journalists and others who seek to bring into the light matters of public interest concerning the origins of unexplained wealth. Everyone has the right to defend their reputation robustly but what we have here goes way beyond that.
Examples abound but let me cite just one tactic. No matter how hard they have sought to engage with the parties they are reporting on, a journalist finds both themselves and their publisher receiving, at the last moment before publication, voluminous—there is sometimes truckloads of it—complex and menacing correspondence from heavy-hitting law firms threating ruinous legal action. Being on the receiving end is not only extremely intimidating; it also requires delay and specialist work that few can afford. It is indeed a brave journalist or publisher who, faced with this inequality of arms, still proceeds. Many, of course, do not. I also highlight—I do not think that we have touched on this tonight—that there are cases where human rights defenders, for example, working in other countries have, as a means of intimidating them, been sued or threatened with being sued in the UK courts.
UK firms have been systematically involved in these practices for far too long. I understand that there is a consultation going on; Dominic Raab’s work was mentioned earlier and I look forward to seeing the results. There are lessons that I believe we could learn, for example, from Australia’s model litigant principles in this area, which I will not elucidate now.
In closing, I ask the Minister: is he able to confirm, or at least offer some guidance on, whether the Government recognise the problem that I have highlighted, which arises directly from UK firms taking on wealthy clients of the sort that this Bill seeks to address? Will the Government, in ECB 2, include appropriate curative measures?
Lord Clement-Jones (LD)
My Lords, I draw attention to my entry in the register of interests. This is important and welcome legislation, which rightly we want to see pass through the House as a matter of urgency. But it must have teeth. As someone who, I confess, until recently held a solicitor’s practising certificate for 45 years, I say that it is toothless in a major respect, which has been touched on all around the House today. Whether under the beneficial owner register requirement, the unexplained wealth orders or the sanctions regime, there is a lack of provisions which comprehensively tackle enablers—the professionals used by those seeking to evade the impact of these provisions. A number of noble Lords, starting with the noble Baroness, Lady Chapman, have raised this.
As Edward Lucas put it in the Times last week:
“Putin’s ‘enablers’ live and work among us. They include bankers, lawyers, accountants, fixers and political bigwigs. Seemingly the epitome of respectability, for three decades they have prospered mightily, laundering Kremlin cronies’ fortunes and reputations.”
We have heard from my noble friend Lord Thomas of Gresford how they try to gag brave journalists, such as Catherine Belton, the author of Putin’s People, through what are called strategic lawsuits against public participation, also mentioned by the noble Lord, Lord Cromwell. But it goes much further than that. These professional advisers provide nominee and shell companies to hide disclosure of beneficial ownership of property and other assets; help to shelter unexplained wealth and freezing orders; and evade other tax, money laundering and economic crime legislation. They intimidate regulators with a mounting burden of costs if they are challenged.
As the OECD report Ending the Shell Game: Cracking Down on the Professionals who Enable Tax and White Collar Crimes, published last year, puts it:
“Over the last decades, the world has witnessed increasingly sophisticated financial crimes being perpetrated across borders—and the public interest in addressing such issues has also grown, as has been evidenced in the media through widely publicised leaks such as the Panama and Paradise Papers … These crimes are often facilitated by lawyers, accountants, financial institutions and other professionals who help engineer the legal and financial structures seen in complex tax evasion and financial crimes. The small segment of professionals that generate opportunities to facilitate the commission and/ or concealment of such crimes undermine not only the rule of law, but their own profession, public confidence in the legal and financial system, as well as the level playing field between compliant and non-compliant taxpayers.”
The report makes a very clear call to OECD countries to adopt strategies to address these issues in relation to professional enablers. But I see very little sign that such a strategy is being adopted by our Government. Last December’s Chatham House paper, The UK’s Kleptocracy Problem, makes very similar points. Where are the legal sanctions for professional enablers? Where are the measures to prevent abuse? Where are the mandatory disclosure rules? Where are the penalties for false statements? Where is the necessary whole-of-government approach that is recommended in this respect? The Prime Minister seems to think that regulation by the Solicitors Regulation Authority is a sufficient deterrent.
What is in the Bill as regards legal costs is fairly feeble too. We should be limiting costs payable by law enforcement bodies and regulators acting in the public interest in all civil cases under the Proceeds of Crime Act, as with criminal proceedings. These can represent a severe detriment to enforcement action, and I am very grateful to Spotlight on Corruption for pointing out, for instance, that the costs order against the NCA was in the region of £1.5 million in the case of the Aliyev unexplained wealth order—that is £1.5 million out of the total annual anti-corruption budget of £4 million. It is totally unacceptable. The courts should, of course, still be able to award costs against a law enforcement body or regulator where it has acted unreasonably in bringing or defending proceedings and the interests of justice or fairness would be offended, so there will still be some protection.
I will be tabling amendments in Committee which I hope noble Lords will support. We must tighten the net around these enablers. If not now, when?
Viscount Waverley (CB)
My Lords, as a brief declaration I remind noble Lords that I introduced a debate on relations with Russia in January 2018, then Salisbury occurred. Shortly thereafter, I introduced a debate on relations with Ukraine. In the same spirit, I also state that in 1997, I travelled in a delegation made up of Europeans to explore mechanisms to have Ukraine admitted to the European Union. I regret that that initiative did not advance.
I welcome the Bill. However, while the catalyst for it has been the war in Ukraine, it is a much-needed staged process, having been on the drawing board since 2018, to usher in overdue fiscal discipline to the United Kingdom. Once again, it is an illustration of the type of principled country we should be.
Put into context, the Bill has three elements—tactical, strategic and political—which should be considered. First, I shall deal with the tactical. The current draft leaves the door open to companies that hold UK property claiming they have no beneficial owner. This is already a common problem with the company register. The number of companies registered using overseas addresses that have been dormant since conception surprises me. It was explained to me that overseas people can have an accountant register a company and open a bank account; once established, there is an exchange of shares to the actual and final beneficiary. Alternatively, the horses have bolted, and I am told that moveable assets have already taken flight to such destinations as Hong Kong or Nauru in the Pacific.
Some 1,892 property titles were purchased by overseas companies before January 1999. These would be exempt from having to declare their owners under the current drafting. I favour research being done retrospectively, asking questions where concerns arise. There are concerns that the legislation will allow individuals to hide ownership of companies through nominee agreements with professional services firms. Such agreements could allow the true owners to claim that the offshore companies are controlled by, for example, a nominated law firm which is named on the register, rather than the true owner.
The Chartered Institute of Taxation, which sent a note to a number of your Lordships, raised a central point, however: it believes there is a lack of clarity over what the Government are trying to achieve. The Government might want to respond specifically to that point. If the Government’s aim is, as suggested in some government statements, revealing the real identity of foreigners who own UK properties, the institute does not believe the Bill will achieve this. This is because the legislation, as currently drafted, does not require the disclosure of the ultimate beneficial owner of the property, but rather disclosure of the beneficial owner of the overseas entity which, in turn, owns the property. Its response is that if a separate nominee company is set up for the particular beneficial owner, then it thinks they would be caught. But if a non-UK law firm’s general nominee company is used and acts for hundreds of different clients, it will be difficult to see that any one of them exercises significant influence or control of the nominee company. So says the Chartered Institute of Taxation.
The combination of the imposition of fines for sanctions breaches and the expansion of the unexplained wealth order regime should be a central plank, however, as they will be effective in allowing the NCA and other prosecutors to disrupt criminal activity.
It is with some trepidation, in the presence of such fine judicial minds, that I venture to move on to my next point. Clause 49 amends Section 146 of the Policing and Crime Act 2017, introducing a strict liability offence for the breach of financial sanctions. Significantly, the individual or entity did not, therefore, have to know, or have reasonable cause to suspect, that they were breaching a financial sanction. A defence is to illustrate that appropriate policies are in place that illustrate compliance with the law, as is the case under the Bribery Act 2010.
Secondly, on the strategic element, the Bill probably shall not decisively weaken the Russian regime. It is wrong to believe that kleptocracy measures equate to a massive blow to the Russian leadership. The relationship of many oligarchs with the Putin power structure is often ambiguous. If anything, the proposed measures will be vocally lauded by much of the Russian public. The power structure of the regime is based on the siloviki, translated literally as “the powerful ones”, consisting of the intelligence apparatus, the higher echelons of the military structure and the deep-state bureaucracy at federal and local levels. They are the people who need to be followed: they are estimated to be around 1% of the population. These people—and it is they who will decide the future of a Putin presidency—are normally not allowed to travel abroad or own any assets overseas. They are the people the Government need to keep an eye on.
Other measures will affect Putin’s cost-benefit analysis on the war in Ukraine, with a notable measure being the announcement that Russia’s central bank would have its foreign reserves frozen. The banning of all transactions with the Russian central bank, with the United States establishing the list of specially designated nationals, which would prevent financial brokers and central security depositories dealing with it, will have considerable effect.
Thirdly, on the political element, while this Bill is introduced in the context of Russia’s attack on Ukraine, it is important to note that its impact will not be limited to Russian entities or persons but will affect all non-UK entities and individuals in Britain. The purpose of this Bill is not to disrupt legal arrangements in our haste to target certain Russians.
Any law is only as effective as its enforcement. The provisions in the new Bill will make little difference unless authorities are provided with additional resource to enforce them. The UK already has strong tools to target illicit funds, but law enforcement agencies have struggled to make full use of them because of resourcing issues.
The Bill will place additional administrative burdens on Companies House and the Land Registry. Will the Government confirm today that funding for the enforcement of new powers—including the enforcement of the register of overseas entities and the sanctions proposed in the Bill—will be put in place?
In conclusion, and more generally, I will focus on what has brought us together this evening. Consequences for sanctions are a small price to pay for the blockades, the bombing of population centres, the targeting of hospitals, the abuse and mining of humanitarian corridors, the destruction of essential infrastructure and food supply disruption.
The situation is sickening, and those responsible must be held to account. The building blocks and justifiable slow drumbeat of a European war, defending our values and Ukraine, are possibly just on the horizon. President Zelensky’s call to arms to Parliament may be a precursor to Britain’s accepting engagement. Ukraine’s war is our war.
Baroness Jones of Moulsecoomb (GP)
My Lords, I am going to say something that I do not think I have ever said before: I have really enjoyed this debate. Virtually every noble Lord who has spoken has said, “I support this Bill but …”—and then has proceeded to give a list of reasons why it really is not a very good Bill. My noble friend Lady Bennett suggested that I was going to go into detail but, until this debate started, I thought I was going to follow the noble Lord, Lord Sikka, who has written an excellent 11-page briefing on the Bill, with three and a half pages that outline all the problems with it. I recommend that the Minister takes my copy afterwards and does something over the weekend to brush the Bill up a little.
The past two weeks have been very stressful, even being on the sidelines of watching a European war, and this seems to be the least we can do to actually fight part of that war for Ukraine. We all know that global capitalism is out of control—at least we really ought to know that by now. The mega-rich have been able to abuse their power and their wealth for far too long through investor visas, complex trusts and corporate structures, political donations—more of that in a moment—private schools, aggressive tax avoidance and legal tax loopholes. The mega-rich are actually able to pick and choose whether they obey the same rules and obligations as the rest of us have to do. It seems to me that we really need to get to grips with this. Governments all around the world allow them to get away with it. Worse, they lay out the red carpet and cut the red tape to try to attract them. We are told that cracking down on such people will just create unintended consequences and force them to flee to other countries. Well, we can hope.
These problems have been obvious for a long time, and this Government have ignored them for their 12 years in office. While I also welcome measures in the Bill and accept that it is urgent—because of course it has been urgent for quite a number of years—the Government have to face the shameful fact that they have dithered and delayed, until they have been forced to act by an illegal war. When a hard-line version of Brexit was pushed through Parliament in 2020—and I voted for Brexit; I did not realise that any Government could mess it up to this extent—we had 14 Ministers in Boris Johnson’s Government who had received donations from individuals or companies linked to Russia. Is that the reason why this economic crime Bill is so late and the measures in it so limited? Do the £3.5 million in Russian donations in the decade following 2010 explain why we have ignored Russian interference in our politics, why our intelligence services were not allowed to dig deep into the network of rich Russians and Conservative Party politicians, and why Parliament failed to push forward with the concerns brought to light by the Russia report?
I asked, I think last week—time goes so strangely here—what Russian donors to the Conservative Party get for their money. This is a question that the whole country would like to know the answer to. Is that money stopping the Government putting sanctions on large numbers of rich people who are close to Putin? Do the donations explain why we have fewer sanctions on Russia than the EU, Canada or even Switzerland? There are only just over 300 UK sanctions against Russia, 35 of which have been introduced since 22 February; and, before that, so few. By comparison, the US has sanctioned almost 1,200 individuals and companies, and a fifth of those sanctions have been introduced in the past two weeks.
So London is still a playground for oligarchs, oil barons and outright financial fraudsters—and, as has been said, it is not just Russians; there are unsavoury elites from almost every country on earth. This new legislation has to be used against all illegitimate, dubious members of the global elite, not used simply as a political tool against whoever we think our enemies are at that particular point. There has to be a constant tightening of the laws that constrain the mega-rich. The Government cannot be allowed to rest on this singular piece of legislation—or this double piece of legislation—and say, “We did it”. I regret that there is no sort of sunset clause so that we can look beyond this—the Bill definitely needs better writing.
The Bill can only be a starting point. The upcoming Queen’s Speech must include a raft of legislation to take these issues forward further and faster than many Tory voters or Back-Benchers might feel comfortable with. We really have to do more, and the Bill is only the start. The noble Lords who have explained this evening where we should be going really have to be listened to.
Baroness O’Loan (CB)
My Lords, it was a privilege yesterday to listen to the brave and compelling words of President Zelensky on the situation in Ukraine. We are at a pivotal moment in the history of this world and we stand again at an abyss. Brave people in Russia are trying to stand up against the invasion of Ukraine by their own leaders, but their efforts are being ruthlessly suppressed. We should pay tribute to those who go out on the streets of Russia to protest, knowing that there is no right of freedom of speech in that country and that their actions will inevitably attract sanctions.
President Zelensky asked that we do all we can to increase the sanctions against Russian kleptocrats and other criminals. The economic crime Bill is but one small measure that will allow that to happen; we must not escalate the conflict, but this measure should help a little. There is a widespread view that its effects need to be more immediate. I welcome the Bill, limited though it is, as so many noble Lords have observed.
I want to make one small point. Clause 48 creates a more robust power to impose monetary penalties by amending the Policing and Crime Act 2017 so that a person will be liable to sanction if a breach of a prohibited act or failure to comply with an obligation can be proved. Whether they had knowledge or reasonable cause to suspect that their actions were in breach of a sanction is irrelevant. If there has been a breach, fines, which can be very substantial, may follow. The clause enables greater flexibility in the decision-making process, permitting decisions to be made by other officials in the department rather than a Minister. It could be argued that the power in this section is so extensive that decisions should continue to have to be made by Ministers. At the very least, guidance should ensure that any official given such a power should be of an appropriately senior level.
Taken together, Clauses 48 and 46—the latter changes the costs regime following enforcement action—may give rise to questions about the Government’s assertion that the safeguards available in the legislation fully protect a person’s rights. There is an urgent need to prevent the kind of money-laundering activities to which the Bill is directed. Judges will have discretion as to the kind of costs orders that are made. It is important, though, that the procedures we adopt are capable of withstanding scrutiny and challenge.
Clause 46 amends the Proceeds of Crime Act 2002. Of course, that Act has many deficiencies, not least that the person subject to the inquiry and to the POCA proceedings sells the property identified, often at a price significantly lower than the normal market price. However, this is an amendment to the Proceeds of Crime Act relating to who bears the costs of proceedings, as other noble Lords have stated, associated with unexplained wealth orders, where a person who is not found guilty of any breach or any offence may have to pay very substantial costs, possibly greater than any fine, unless they can prove that the enforcement authority acted either unreasonably or, alternatively, dishonestly or improperly—whatever “improperly” may mean. Notwithstanding this, there are concerns that, given the complex and sensitive nature of such proceedings and the investigation that precedes them, it could prove profoundly difficult to meet this test of improper behaviour, dishonesty or unreasonableness.
I ask Her Majesty’s Government whether they can assure the House that these provisions fully protect a person’s rights not to find themselves with a very large costs bill resulting from an unfounded allegation or action, so that those with legitimate funds to invest in the UK will not be deterred from so doing. In saying this, I do not in any way detract from the condemnation of what is happening in Ukraine at present.
Lord Empey (UUP)
My Lords, there have been many excellent speeches this evening from people who have pointed out deficiencies in the legislation. I sincerely hope that the Government, over the weekend and before Committee, will listen to what has been said and make running repairs as required. If ever there was a case of closing the stable door after the horse has bolted, this is it. We have known for years what people were up to in this city and this country, and we have turned a blind eye. Now, it has come back to haunt us. I must point out to colleagues that the warning signs have been there. We know that this legislation, however belated, is fundamentally the right way to go, and I support the principle of it. However, I sincerely hope that the valid points which have been made in some excellent speeches will be listened to and acted upon as we move towards the conclusion of the Bill’s legislative stages.
I was privileged to serve on your Lordships’ Select Committee that undertook post-legislative scrutiny of the Bribery Act, under the chairmanship of the noble and learned Lord, Lord Saville of Newdigate. We were looking at how the legislation had been operating over a five-year period. In some respects, we probably should have looked at it at a slightly later stage. However, one thing which stood out from our committee’s inquiry—and which is again before us tonight—is the total inadequacy of the enforcement resource involved and required. We were looking at bribery in the context of ordinary commercial activities. We were not looking at it in terms of something very specific, as we are tonight. At that stage, we had representatives come before the committee pointing out that they just did not have the resources. We all know that if you are going to carry out an inquiry—whether it involves the police, the National Crime Agency or another organisation—it takes time. But we are giving half a year for people to go and do what they do best. I do not believe for one minute that, if they ring up or knock on the door of some of the professional houses in this city, they will be turned away for advice or help. They will get the best that money can buy. I sincerely ask the Government to look very closely at that.
In her opening remarks, the Minister referred to legislative consent motions from the devolved jurisdictions. I understand that the timescale was such that this has not been possible. However, can the Minister assure the House that we will not be leaving any back doors open as this legislation proceeds, so that part of our country could be used in a roundabout way to thwart its purposes? I hope that we can have an assurance to that effect.
The Minister will also be wearing his other hat, as Energy Minister. The war has been possible because it has been funded by the sale of fossil fuels by Russia, which accounts for some 65% to 70% of its economy. Unfortunately and understandably, we had COP 26 and a general view in this country and around the world that we must move away from our dependency on fossil fuels. As a former Energy Minister, I fully understand and accept that. However, we have not advanced to the point where we can survive in this country without almost 100% fossil fuel back-up, because wind is not dependable in all circumstances and we have not sufficiently developed wave and tidal power. These are 10 to 15 years away.
I understand that, being a relatively small country geographically speaking, things like fracking and the development of resources on land and in our own North Sea are controversial. But the fact remains that next week, we are going to pump concrete into wells in the north-west of England, which means that it will no longer be possible to extract gas from them. At the same time, we are leaving ourselves and our European partners very dependent on gas. There have been some disastrous decisions, particularly in Germany regarding the development of its energy policies. I ask the Minister to address that issue, because although it is not quite within the remit of the Bill, it is fundamental. Where are we going to get our resources from? They are not going to appear out of nowhere.
I support the fundamental principle of the Bill, but please can we have some clarity—if not tonight then as we move through the remaining stages—on what plan is in place to ensure that the bodies being given a role under this legislation will have the resources to investigate and enforce? Those are roles that bodies such as Companies House do not have. Where are the people who will be doing this work going to come from? Who, on the Monday morning after the Bill is passed, is going to open the file and start an inquiry? Where are they? That is very much the message that we in the post-legislative scrutiny committee got from looking at the Bribery Act: that the resources are not there to match our ambition. I hope the Minister can reassure the House when he winds up.
Lord Macdonald of River Glaven (CB)
My Lords, the noble Lord, Lord Carlile of Berriew, mentioned Alexander Litvinenko, and I should like to do so too. I was serving as Director of Public Prosecutions when he was murdered in London, dying of radiation poisoning in University College Hospital, a stone’s throw from here. Those of us charged with investigating and assessing this crime were left in no doubt at all that there had been Russian state involvement in its conception, planning and commission, most likely at the very highest levels. We believe that this was a state execution, carried out in the most public way possible, on the streets of our capital city, of a man under the protection of the British state.
I recall having a conversation at the time with the head of my counterterrorism division, in which we agreed that from this moment, everything had changed. If the Russian dictator was prepared to do this, where in future would the line be drawn? Perhaps we felt, “nowhere”. Nothing that has happened since then—Syria, Salisbury and a multitude of other provocations and crimes—has changed that view. In a real sense we may conclude that the invasion of Ukraine was inevitable; it was an outcome hiding in plain sight, and one which we, frankly, did too little to anticipate or prevent. Clearly, though, this also a watershed and time for us to reassess the way we have responded—or failed to respond—over the years to Putin, to his enablers and to their Russian money.
I support the Bill so far as it goes but I believe that it must presage a much broader and deeper rebalancing and retooling of our defences against the violence of the Russian regime and the financial corruption it brings in its wake. That corruption, in the form of looted funds, has found a home in London. We all know that. We all know that London has been the playground and piggy bank of choice for oligarchs, including those who owe their wealth to Putin and give him their public fealty. Beyond them, of course, are those who are less connected to the dictator but who, for the sake of their riches, agree not to challenge him and pay court at the Kremlin in a more surreptitious but equally shameful form of support.
It seems that we all now agree that the unfettered ability of these people to conceal their property and wealth in the United Kingdom beyond any sensible scrutiny is contrary to our national interest—good. Particularly welcome in this Bill, therefore, are the provisions in Part 1 around the transparency of property ownership. They are long overdue and urgent but we cannot delay. Six months is too long; it would defeat the very purpose of the Bill. Transparency of ownership is the most basic anti-corruption tool, and the Government have resisted it for far too long. It is beyond time for us to discover which parts of our cities and countryside these people own but we will not discover anything unless we move quickly and—as the noble Lord, Lord Eatwell, said—unless verification is effective.
Let me turn to the question of lawyers, which has occasioned much comment, including in the other place. I start by confessing that, as a criminal lawyer, I have represented many men and women over the years whom I would not invite home for tea. However, in matters of litigation, it is equality of arms that is the real problem. Oligarchs are rich; they can afford the very best advice. The risk is that, in doing so, they can out-gun enforcement bodies, not because their cases have merit but because they are rich. This is not necessarily to criticise their lawyers; it is to criticise the system for having no solution to this conundrum.
Having run the main prosecuting authority for five years, I know how pressing this problem can be. A single case lost against the richest of opponents can take a huge chunk out of your budget in costs orders. This has been a critical issue in the area of unexplained wealth orders. Frankly, it has helped to hobble them. Going for one is simply too financially risky: if you lose it, it costs you a small fortune. That is one reason why there have been so few, but it is not the only reason. I absolutely promise the Minister that, without properly funded enforcement agencies, we will make no progress—costs orders or no costs orders. This reform is toothless on its own. The NCA needs to be funded to conduct this work. It needs to employ the right people and it needs to have confidence that the Government will back it in doing so by putting their money where their mouth is.
Finally, let me deal with the question of our adoption of sanctions measures imposed by allied states with due process-compliant justice systems, dealt with in Part 3 of the Bill. I have heard many civil liberties lawyers complain about this proposed provision but I have no difficulty with it at all. We are talking, in essence, about the Five Eyes countries: the United States, Canada, Australia, New Zealand and the European Union. These are democratic societies and long-standing allies of the United Kingdom—our very closest allies—and each is demonstrably attached to the rule of law. In a moment of exceptional international crisis in which we all stand together, this is a proportionate—indeed, laudable—proposal.
From Alexander Litvinenko to Salisbury, the shelling of Kharkiv and the destruction today of a children’s hospital, the Putin regime has proved itself to be utterly contemptuous of the law. In the face of this, we must use ours more intelligently. I am glad that the Government have brought forward this Bill—it has my support—but Ministers should be under no illusions: there is much more left to do.
Lord Fox (LD)
My Lords, it is a pleasure to follow the noble Lord, Lord Macdonald. I think it is the first time I have ever had to do so; it is quite a daunting prospect having heard such an important speech. We on these Benches welcome the belated realisation by this Government that the City of London and other parts of the economy in this country need to be cleaned up. Just as the noble Baroness, Lady Williams, asked, we certainly aim to support this Bill practically.
This has been a strong debate. Some of your Lordships—the noble Lords, Lord Faulks and Lord Rooker, and the noble Viscount, Lord Waverley, to name but three—have, with justification, been able to say that this issue has been on their agendas for some time. Others, such as the right reverend Prelate the Bishop of Leeds, have highlighted the purpose of and focus on ethics that we should also dwell on. There was a sense of frustration in all the speeches that it has taken the terrible events in Ukraine—the onslaught on civilians—to cause this Government finally to act. They are acting, and we should take advantage of that, but it is awful that it has taken that to get to this point.
In welcoming this Bill, we are not blind to its shortcomings. Your Lordships have been wise to set out whole areas of action that need to be resolved before we can start the process of cleaning out the dirty money in the United Kingdom’s economy. I will not seek to paraphrase everything that was said but we heard about SLAPPs and the use of lawfare from the noble Lords, Lord Thomas and Lord Cromwell, and the noble Viscount, Lord Colville. We heard about company shells from the noble and learned Lord, Lord Garnier, and about trusts, freeports and whistleblowers from my noble friend Lady Kramer. The need to be more deeply retrospective was introduced by the noble Viscount, Lord Waverley, and the noble Baroness, Lady Bennett, as well as the issue of speeding up disclosure from Crown dependencies and overseas territories. Those are just some of the issues put by your Lordships before this House.
Virtually none of those substantive issues appear in Part 1 of this Bill. It seems that most of them might turn up in Part 2 but we heard the curriculum that the noble Baroness, Lady Williams, is putting forward for that part: limited partnerships, crypto assets, money laundering and Companies House. To digress on Companies House, the noble Lord, Lord Eatwell, very much paraphrased the issue: this is not just about resources. The cultural change required to make that organisation in any sense capable of doing any of the things that this legislation asks of it is huge. By the way, it is not just Russians; if Companies House had been doing what it should have, literally billions of pounds would not have been defrauded from taxpayers during the Covid crisis. A small fraction of that money could have been used as seed to produce a Companies House that is fit for purpose. Now we have lost that money but we still need to do the job.
Coming back to the Bill, all the issues that have been set out need to be tackled in its second part. I am looking for the Minister to acknowledge that, although the four issues set out by his colleague, the noble Baroness, Lady Williams, are important, a number of really important issues need to be added to that list. If it becomes an even bigger and more complicated Bill, I guarantee that those on these Benches will work hard to make sure that we can get that legislation through as quickly as possible. As the noble Lord, Lord Vaux, and the noble and learned Lord, Lord Garnier, said, we also need a process that reviews how Part 1 is getting along because it is clear that the speed with which this legislation is being implemented—and, indeed, the fact that it was written for one purpose and is being delivered for another—will inevitably mean that there are things not right with it.
We will work to help ensure that when the final Act—this part of the process—emerges, the Government will get the tools they say they need. When they get those tools, there will be no excuses for not following up on the people we have heard described to your Lordships this afternoon. As we have also heard, to do that will take well-resourced, highly qualified and motivated people to investigate and prosecute. The noble Lords, Lord Macdonald, Lord Carlile and Lord Empey, to name but three, set out the issue here. Unless the agencies tasked with cleaning up the kleptocrats have the resources and the support, the Bill does not amount to a hill of beans.
To date, this is an area the Government have been defunding. For example, the National Crime Agency—the principal body leading this fight, as we have heard—has seen its overall budget fall in real terms. The last inspection by Her Majesty’s Inspectorate of Constabulary and Fire & Rescue Services in July 2021 pulled no punches and highlighted how resource limited the NCA is. Further, the inspection also noted the difficulty in recruiting staff for investigating roles. There are remuneration and status issues around why that is not happening. It gets worse: within the NCA, the body specially configured to investigate kleptocrats is the international corruption unit. As we know, the ICU’s role is to investigate money laundering resulting from corruption by high-ranking overseas officials, bribery involving UK-based companies or nationals that has an international element, and cross-border bribery where there is a link to the UK. I am afraid the ICU seems to have fared even worse. Can the Minister confirm that it has had its budget slashed by 13.5% this year?
Meanwhile, over the past couple of weeks the Government have said they will set up a new kleptocracy cell within the NCA to target sanctions evasion and corrupt Russian assets hidden in the UK. The press release said that oligarchs in London will have “nowhere to hide”—there is a joke in there, but I decided not to use it. How exactly will the new NCA kleptocracy unit mesh with the existing ICU? For that matter, how will the kleptocracy unit relate to the complex web of underfunded joint committees and task forces that litter this area of investigation? The agencies we have are underfunded and there is a confusing web of different organisations and crossing accountabilities. Together, this adds up to the enforcement agencies being massively outgunned by the oligarchs, as we see and have heard from your Lordships. Is it any wonder that so few unexplained wealth orders have been issued?
The Government do not have to wait for the passage of the Bill. They could say now that they are going to reverse their defunding of the international corruption unit and announce now a funding boost for the NCA. We do not need a new unit or a new invention. We need the organisations that we have to be properly funded, targeted and supported to deliver the outcomes that I think your Lordships all hope for.
Next Monday we will have the opportunity to address the Bill before us in some detail. One thing is clear: the Government should embrace the issue of enablers more firmly. As we have heard, these are the lawyers, estate agents and accountants helping the kleptocrats. This theme, among others, was picked up in the Chatham House paper entitled The UK’s Kleptocracy Problem. It noted:
“Financial and professional services firms have long made the UK a comfortable home for dirty money.”
That is Chatham House, not some campaigning organisation that people might feel free to dismiss.
This Bill needs to explicitly target those professional services that knowingly create the comfort that has been enjoyed by Russian kleptocrats, and indeed by other thieves from around the world. They need to feel the heat. This is an issue that we will come back to on Monday, following up the excellent speech by my noble friend Lord Clement-Jones and the amendment that I know he has tabled.
Then there is the self-created loophole that was referred to by the right reverend Prelate the Bishop of Leeds: Clause 18. This allows all aspects of the register to be ignored if the Secretary of State decides that it is in the interests of national wealth to hide an oligarch’s assets. How big does the factory have to be for the theft to be ignored? How many jobs can a kleptocrat wash their soul with in this country? That is the nature of that clause—it hits right at the heart of what the right reverend Prelate had to say. It is, frankly, a continuation of what happens now; in other words, “The money is all right, so we won’t look at where it has come from.” My noble friend Lady Kramer was very strong on that issue. If we are to allow this line to continue in the Bill, it would essentially mean selling our moral soul in a different way—and it would put it into statute. We will have to address this issue when we get there.
There are issues that, following the debate in the Commons, we are looking forward to seeing how the Government will address. One is whistleblowers and another is freezing assets. We are looking forward to the Minister responding on that today or tabling some amendments before close of play tomorrow so that we can see where the Government are headed.
Finally, I know that the noble Lord, Lord Callanan, is an experienced Minister who knows how to read a room. If he is reading this Room, he knows that six months will not wash with your Lordships; that is very clear from almost every speaker, for lots of practical reasons. Money is already moving; the kleptocrats are cutting and running. To give them another six months’ head start essentially makes most of this pointless. I am sure that noble Lords on the adjacent Bench will be bringing forward an amendment, which we will certainly support when it comes before your Lordships’ House.
As the noble Lord, Lord Carlile, put it, in participating on this Bill in the way that we are—speeding it through Parliament—we are putting a lot of trust in the Government. We hope that trust is justified. We look forward to further constructive discussions on this Bill on Monday.
Lord Coaker (Lab)
My Lords, it is a pleasure to wind up for Her Majesty’s Opposition on this incredibly important debate and indeed to follow the noble Lord, Lord Fox, who made a powerful speech. I agreed with everything, really; there were other things that I might have highlighted, but I thought it was an excellent speech. It followed on from the many excellent speeches that we heard from across the House.
I start by setting the context because, as we debate this Bill in the Chamber, we are united in a common cause: to defend freedom and democracy and to stand shoulder to shoulder with Ukraine and its people against the illegal and immoral invasion by Russia of their territory. I highlight the speeches of the noble Lord, Lord Macdonald, and the noble Viscount, Lord Waverley, for pointing out and reminding us so powerfully of that. It really set the context for this debate and discussion today.
Many noble Lords have reminded us of this context, and indeed the Government themselves have said that the Bill is in part an urgent response to the Ukraine crisis. Our political outlooks may differ, but we all share a common belief about injustice, and there can be no bigger injustice than an unwanted invasion of a country’s sovereign territory. I remind us all of that, because it is why there is wide and general support across this House—and, I would say, within the country—for this economic crime Bill being rushed through in the way that it is. I say “rushed through” not as a criticism to the Government, but as something that it is important to do.
We as Her Majesty’s Opposition welcome it and, as we did in the other place, will support the Government in taking this through as quickly as we can. Although, as the right reverend Prelate the Bishop of Leeds, my noble friend Lord Rooker and the noble Lord, Lord Empey, and others have argued, should we not have acted before now? If money is dirty, then it is dirty. We must crack down; the UK’s role as a global centre for Russian money laundering has to stop. As the noble Viscount, Lord Colville, reminded us, Russian oligarchs secretly hiding money—as with all dirty money from anyone from anywhere—has to be stopped. There must be no hiding place or safe haven with hidden investments.
I say to the Minister that all the questions and challenges from me and other noble Lords are because we want the Bill to work. We want the sanctions to work and this economic crime Bill and the one that will follow it in due course to succeed. We all want the Government to succeed in this. It is not in any of our interests for the Government to fail or for these measures not to work. As the right reverend Prelate the Bishop of Leeds said, let this be the beginning of the new economic and monetary framework because it is ethically the right thing to do.
Turning specifically to some of the measures in the Bill on registration, these target those who exploit the UK property market by establishing a public register of beneficial ownership of overseas companies which own or want to buy real estate in the UK. Many noble Lords, including the noble Lords, Lord Macdonald, Lord Vaux, Lord Thomas of Gresford and Lord Faulks, the noble Baroness, Lady Kramer, the noble and learned Lord, Lord Garnier, pointed out the importance of this. We all welcome the reduction of the transitional period for certain overseas entities registering as such from 18 months to six months.
However, I do not think anybody who has spoken does not believe that six months is too long. As the noble Lord, Lord Fox, pointed out, we will table an amendment in Committee to further reduce that period. I think it was the noble and learned Lord, Lord Garnier, who pointed out that if you have six months to register it, it can be moved. I am not a genius in legalese and moving property, but if you have time to move the money we are trying to find out about, I suggest that many of these people—if they are bright and can pay for the advice, which they seriously can—will be able to do that. I say to the Minister that this is not out of anything other than that we do not believe six months will work in the way the Government want it to. I hope the Government will be able to listen to my remarks and those of noble Lords across this Chamber.
The noble Lord, Lord Carlile, and my noble friend Lord Eatwell pointed out Companies House. How will we ensure that it is fit for purpose? Companies House is essential to the functioning of the Bill. It is essential that Companies House works and is fit for purpose. In a brilliant speech, my noble friend Lord Eatwell—who brings an experience far beyond mine and that of, I suggest, many noble Lords—asked how the data will be verified. If the data is not verified as accurate, how can Companies House work effectively? Again, my noble friend Lord Eatwell is not bringing that forward to undermine the Bill or make a political point; he is bringing it forward as a man with all the experience in these areas that he has. He says to the Government that without the verification of the data, we cannot achieve. Without embarrassing the Minister, I think I am right in saying that my noble friend Lord Eatwell pointed to a book, or a preface to an article, that the Minister had written saying exactly the same thing. I hope the Minister can explain that and see how it will be done.
Unexplained wealth orders—again, measures to pursue and investigate unexplained wealth where property has been acquired with illegitimate cash—raise a question. We have had unexplained wealth orders; we all want to know what will make this version of them work this time, when the unexplained wealth orders that exist currently have not worked. Again, we all want them to work; but why will these work when others have not? The noble Lords, Lord Empey, Lord Carlile and Lord Macdonald, have again raised the issue of resources for the NCA to take the necessary action, as did the noble Viscount, Lord Waverley. If we are to have unexplained wealth orders, let them function in such a way that people who have unexplained wealth are fearful of the state taking action. At present, they do not fear it at all and do not expect anything to happen. We all want to see a solution to the issue of resourcing for the NCA.
The noble and learned Lord, Lord Garnier, in another powerful speech, noted that we must ensure that these measures are implemented sufficiently quickly to prevent people who have unexplained wealth shifting it before an order has been made affecting them. Again, that is an important point.
On sanctions, we have heard about the NCA, but the Government also talk about improving the Office of Financial Sanctions Implementation, giving it intelligence and information-sharing powers as stronger tools to carry out enforcement action. I had never heard of OFSI and had to look it up—it is in the Treasury—but these are people we will give stronger powers to. I have heard of the NCA, but what is happening with respect to giving these extra powers to OFSI?
As for sanctions, as the noble Baroness, Lady Bennett, and the noble Lord, Lord Hannay reminded us, how the Bill is enacted and enforced is essential, or else it is just warm legislative rhetoric. What we want to see is action. The noble Lord, Lord Clement-Jones reminded us that the Bill cannot be toothless. The Minister needs to reassure this Chamber that we have a Bill that will work and will carry sanctions with sufficient clout to take on the enablers and others.
As the noble Lord, Lord Fox, the right reverend Prelate the Bishop of Leeds, and the noble Baroness, Lady Kramer, mentioned, the Government need to explain the provision that someone will not be sanctioned if doing so is not in the economic interests of the country. The Bill as currently drafted appears to read as though there will be exemptions for occasions when it is not in the economic interests of the country for us to take action against a company or individual. Are we really saying that? Some clarification on that from the Minister will be welcome.
In his response, can the Minister explain and answer these comments made to him, and say who in government has ultimate responsibility for this legislation and its enforcement? Which Minister and which department will drive this forward? Will the resources to do it be made available? What further amendments are the Government considering and when will they be published? Will they be ready for Committee next week? What measures are the Government considering in their second economic crime Bill?
To conclude, we of course hope that this crackdown on Russian oligarchs and Russian dirty money will help undermine the regime and play its part in ending the war in Ukraine. The Bill allows us to take action against those who flaunt their wealth, predominately in London and the south-east, as the noble Lord, Lord Macdonald, reminded us. As the noble Lord, Lord Cromwell, said, however, it is those who are criminal whom we must act against, to stop them acting with impunity. Yes, the economic crime Bill is overdue, but it is a way we can act against Russia and those who support Putin now. Let us all hope that it plays its part in the defeat of Russia and the ending of the invasion of Ukraine, but also perhaps opens up the prospect of a more transparent financial system, not one so dominated by oligarchs with dirty money. We support the Bill and want it to work. It is in all our interests that it does.
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
I start by thanking all noble Lords for their constructive engagement in advance of and during today’s debate, and for the support generally expressed for the swift passage of this Bill. The noble Baroness, Lady Jones, was right—she is occasionally—that this was a good debate with many insightful points. I would not go so far as to say that I enjoyed it but it was nevertheless a good debate. It has underlined the importance of taking action on the dirty money flowing through the UK, following Russia’s brutal and barbaric invasion of Ukraine. I totally agree with the noble Lord, Lord Coaker, that it is more important than ever to ensure that we have the powers we need to take swift action to tackle economic crime. In doing so, we should ensure that the UK remains the place for legitimate investment to flourish. I am confident that this legislation strikes the right balance.
I know that many noble Lords—the noble Lord, Lord Fox, in particular—have a strong interest in Companies House reform and limited partnership reform. So do I, as the Minister responsible for implementing these important policies. Let me assure the House that these measures will be included in a wider Bill in the coming months. They will come alongside new powers to make it easier to seize crypto assets from criminals and measures to provide businesses with more confidence to share information on suspected money laundering.
Lord Callanan (Con)
I may be about to address some of the noble Lord’s points about Companies House reform so let me finish this paragraph; if I do not address his points, I will come back to him, if that would be helpful.
I can say to the noble Lords, Lord Fox and Lord Coaker, and others that reform is already under way at Companies House. It has received £20 million for this financial year. A further £63 million was announced at the spending review. However, the full Economic Crime Bill will be very significant. I understand why noble Lords are questioning me about why it is not being included at this time; to be frank, it is purely a matter of drafting time. This will be the biggest change to our system of company registration in some 170 years—the biggest change to limited partnership law since 1907. Drafting has already begun and I can assure the House that we will bring it forward as soon as we possibly can in the next Session. I hope that what I have been able to say will provide some reassurance to the noble Lords, Lord Eatwell and Lord Coaker, the noble Baroness, Lady Jones, and the House as a whole.
Lord Eatwell (Lab)
Given the wide level of expertise evident in this debate, will the Minister commit to pre-legislative scrutiny of the new economic crime Bill? That would be the way both to exploit the talents available in this House and to ensure that the Bill, when it arrives on the Floor, will have a smooth passage.
Lord Callanan (Con)
Let me come back to the noble Lord on that. I certainly commit to full scrutiny of the Bill when it is ready, which I think the noble Baroness, Lady Chapman, also asked me about. It will not be emergency legislation; we expect it to have the full scrutiny of this House. I think that pre-legislative scrutiny would probably be a bit time-consuming; it is probably better just to bring the legislation forward, then it will get its full scrutiny. However, as I say, we are getting it drafted as quickly as possible. It is something like 150 pages of legislation so it will be substantial.
Lord Fox (LD)
About that: with many other Bills, the Government go out for consultation for six or eight months, redraft the Bill, then have two more White Papers. Then, sometime after three Christmases, we get the Bill. So, does “as quickly as possible” mean a few months or weeks? Are we looking at the latter half of the next Session, or are we looking at it being one of the first Bills to come out in the next Session?
Lord Callanan (Con)
I cannot win on this one: if I give too much time to pre-legislative scrutiny, for consultation et cetera, I will be criticised. I cannot give the noble Lord, a definitive time because, of course, it is not purely in my hands; it depends on parliamentary time, on the Whips, on the usual channels and on the availability of the House of Commons. It is certainly my intention to get it in front of noble Lords in a matter of months but I cannot be more specific than that. It will depend on when it gets drafted and when we can get parliamentary time. It is a firm commitment that we will bring it forward in the next Session—ideally towards the start of the next Session, if that helps the noble Lord.
I welcome the support from across the House, particularly from the Opposition Front-Benchers—I thank them very much. As I just said, I can reassure the noble Baroness, Lady Chapman, and the noble Lord, Lord Vaux, that the economic crime Bill will progress under normal procedures. I am sure there will be a full and detailed discussion about it. I will speak later to some of the points of the noble Baroness, and the noble Baroness, Lady Kramer. The noble Baroness, Lady Kramer, also raised the subject of the Crown dependencies. I can tell her that I spoke to the Crown dependency Ministers earlier today, just before I came in for this debate, and they are also fully on board with these measures, looking to help wherever they can and to progress similar measures in their own jurisdictions.
Moving on, many noble Lords, including my noble and learned friend Lord Garnier and the noble Lords, Lord Rooker and Lord Faulks, raised the legitimate question of why it has taken the Government so long to introduce the legislation. I can assure them it is not for the want of trying on my part; it is purely about the pressure on the legislative programme. They, as well as the right reverend Prelate the Bishop of Leeds, stressed the importance, and I totally agree, of stopping dirty money flowing from Russia and, indeed, other countries. This is not just about Russia. It benefits us in terms of Russia but, frankly, this reform is long overdue and it will also help us in the fight against money laundering from other jurisdictions. What matters is that, despite the long delay, we are now urgently bringing this legislation forward. We were planning to put this in the wider economic crime Bill but we decided to introduce these measures earlier, to put them into effect shortly. I am grateful for the support of the Opposition in doing that, and the wider economic crime Bill measures will follow in due course.
I take the opportunity to thank my noble friend Lord Faulks again, for all his work to develop the legislation and for some of the powerful points he made today. I reassure him that since we took the measure thorough pre-legislative scrutiny, we have been able to improve the legislation to reflect some of the pre-legislative scrutiny committees’ recommendations and to align it with the broader reform of Companies House, which I completely agree we need to do, to make the measure effective. I think the legislation as a whole will be more effective as a result of the scrutiny that has taken place. This has been central to ensuring the new requirements are workable and proportionate and that the register strikes the right balance between improving transparency and minimising burdens on legitimate economic and commercial activity.
I thank the noble Baroness, Lady Kramer, the noble Lords, Lord Hannay and Lord Vaux, and my noble and learned friend Lord Garnier for their points on the transition period. I think the noble Lords, Lord Coaker and Lord Fox, made similar points. Let me explain our logic on this. We have already reduced the transition period from 18 months to six months. I understand the importance that noble Lords attach to this, but it is important to remember that the majority of properties held via overseas entities will be owned by entirely law-abiding businesses and people. To give noble Lords an idea of the scale, we are talking about roughly 95,000 properties in England and Wales owned by some 32,000 overseas entities. It is a fact that only a tiny fraction of these are likely to be held by criminal or corrupt interests.
The transition period is an important protection for the rights of those legitimate owners of property and we have to be careful about interfering with individuals’ property rights, interference that could not reasonably have been expected when those rights over the properties within scope of the register were originally acquired. This legislation has considerable retrospective effects. We have to ensure that we are respecting those rights in a way that cannot be challenged—not least under human rights legislation. No doubt, those who wish to avoid these requirements and are able to afford expensive legal teams will take advantage of any opportunity to do so.
Many of the ultimate owners will be law-abiding British companies that have adopted these structures for legitimate commercial reasons. They could include real estate investment trusts, which are public companies whose core business is to manage and own properties that generate income, or particular pension schemes that hold land and properties. Others will be British nationals who have adopted the arrangements for legitimate reasons of privacy—a point made from the Cross Benches but I forget who made it. That may involve, for instance, celebrities who do not want their address to be known publicly.
As the noble Lord, Lord Fox, observed, I am aware of the strength of feeling expressed that corrupt people must not be allowed to sell up and escape the transparency that the register will bring. The Government see merit in requiring all those selling property to submit a declaration of their details at the point of transfer of land title during the transition period. This would mean that a zero-day transition period to provide certain information immediately would be given to anyone selling. They would have to register ownership if selling, and that way we either get their ownership details immediately or, if they do not sell, we get it at the end of the transition period but in a way that still protects legitimate owners. We are urgently looking at this idea and giving it some serious consideration, but we need to get the drafting right and legally watertight, so that it is workable, effective and achieves what we want to achieve. Officials are working on this at the moment and I hope to get the proposal to noble Lords for consideration before we reach Committee.
Although the register will not be operational immediately, we expect the measures to have an immediate dissuasive effect on those who are intending to buy UK property with illicit funds. I can assure the noble Lord, Lord Faulks, that work on implementing the new register will begin as soon as we have achieved Royal Assent, and we will look to have the new register in place as soon as practicably possible—as soon as this House is able to consider and pass the relevant statutory instruments, and when some of the other measures are put in place. I should also add in response to many of the comments that all conveyancers and estate agents are already required to assess transactions for money-laundering risks and to alert authorities about suspicious activity.
I turn to the question from the noble Baroness, Lady Bennett, on the retrospective application of the register. It will apply retrospectively, thereby compelling overseas entities to register if they have property bought since January 1999 in England and Wales and December 2014 in Scotland. Those dates have been selected because they relate to when jurisdiction of incorporation was originally required by Her Majesty’s Land Registry and the Registers of Scotland when registering title documents for land. This information has never been recorded by the Northern Ireland land registry, so we are unable to make any retrospection apply there.
As set out in the Bill, if a foreign company does not comply with the new obligations, every officer in default can face criminal sanctions, including fines of up to £2,500 per day or a prison sentence of up to five years. We have also included a power to make secondary legislation that can allow the registrar to impose financial penalties for non-compliance without the need for criminal prosecution. Critically, non-compliant overseas entities will face significant restrictions over dealing with their land. That is important because by their very nature, it might be difficult to impose criminal penalties on people who are overseas. But a restriction on them being able to deal with and dispose of their land will be particularly important because that will in effect prevent sales and render the property worthless.
I thank noble Lords and others who have made insightful and important points on the importance of robust supervision and the need to tackle the so-called professional enablers. Those noble Lords include the noble Baroness, Lady Bennett, the noble Lords, Lord Londesborough and Lord Cromwell, the noble Baroness, Lady Chapman, the noble Lords, Lord Faulks, Lord Carlile, Lord Thomas and Lord Rooker, and others.
The UK supervisory regime is comprehensive. The UK regulates and supervises all businesses most at risk of facilitating money laundering, including accountants, estate and letting agents, high-value dealers, trust or company service providers, the art market and so on. We strengthened the money laundering regulations in June 2017, thereby bringing UK legislation in line with the latest international standards. This includes requiring estate agents to carry out due diligence on both buyers and sellers of property.
To be very clear to the noble Viscount, Lord Waverley, any money obtained through corruption or criminality is not welcome in the United Kingdom, including that linked to Russia or other countries. That is why we are at the forefront of global action, spanning the operational, policy and diplomatic communities to target the money launderers and enablers who underpin corrupt elites and serious and organised crime.
Baroness Kramer (LD)
I am sorry to intervene, but perhaps the Minister could explain why, if there is such an effective system in place, we have a problem today. Surely there is a flaw.
Lord Callanan (Con)
This is what we are attempting to address in this legislation. We are trying to make the system as transparent as possible, to improve the action on unexplained wealth orders, et cetera.
Lord Clement-Jones (LD)
My Lords, the noble Lord has contradicted himself. He said that there was a robust system in place, but he has just talked about money laundering for enablers.
Lord Callanan (Con)
I said there was a robust system in place under the money laundering regulations in response to the various points that were made about financial services professionals, estate agents, et cetera. That is not to say that we cannot improve the system; we certainly look to do that. Providing information and transparency on property ownership, unexplained wealth orders and the sanctions regime, which is what we are doing, will help to supplement that system.
In July 2021, the CPS amended its legal guidance on money laundering offences for prosecutors to make it clear that it is possible to charge someone under Section 330 of POCA, which relates to the failure to disclose money laundering in the regulated sector. This closes a long-standing gap in law enforcement’s toolkit, which will better enable us to tackle the small minority of complicit professional enablers.
In addition, the Solicitors Regulation Authority—the largest legal PBS which supervises approximately 75% of regulated legal service providers in the UK—undertook a broad range of enforcement action in 2021. This included issuing 14 fines totalling £163,000, suspending membership three times and cancelling membership 13 times, effectively preventing an individual conducting regulated activity.
To take another example, the Institute of Chartered Accountants in England and Wales—the largest accountancy PBS—undertook a broad range of enforcement action. This included issuing 59 fines, totalling £178,000, and cancelling the membership of firms six times—again, effectively preventing an individual conducting regulated activity.
The noble Lord, Lord Carlile, suggested that we should consider how we can make legal professionals report matters relating to national security in a structured way and without the benefit of legal professional privilege. This is a complicated matter and not for this Bill, but I certainly welcome his contribution and his engagement, and we will certainly look at that.
The noble Baroness, Lady Kramer, raised an important point on protecting whistleblowers. We recognise how valuable it is that whistleblowers are prepared to shine a light on wrongdoing and believe that they should be able to do so without fear of recriminations. The whistleblowing regime enables workers to seek redress if they are dismissed or suffer detriment because they have made a so-called protective disclosure about wrongdoing. It is right and proper that the Government review the whistleblowing framework once we have had sufficient time to build the necessary evidence of impact of the most recent reforms. We are considering the scope and timing of a review.
A number of noble Lords—the noble Lord, Lord Macdonald, in particular— raised an important point concerning the wording “knowingly and recklessly”. The wording is drafted on precedent, coming from the Companies Act. This clause is intended to provide a necessary and proportionate deterrent to those who may otherwise provide inaccurate or misleading information on the register of overseas entities. This was debated at length in the other place and the Government have already made a commitment to reconsider the drafting. I also welcome the comments of the noble Lord, Lord Macdonald, on the sanctions proposals.
The noble Baroness, Lady Kramer, and the noble and learned Lord, Lord Garnier, asked about the issue of the register and trusts. If the assets are owned via an overseas legal entity, then this entity is within the scope of the draft Bill and will be required to register the trustees as beneficial owners with Companies House and state the reason that they are the beneficial owner—that is, because they are the trustees of that trust.
Her Majesty’s Revenue and Customs introduced a register of trusts in 2017. Trustees of trusts that acquire UK land or property are required to register and provide information on the beneficial ownership of the trust. The information on the register can be shared with law enforcement authorities and enables them to access information on the trustees and beneficiaries of all trusts. Reforms to unexplained wealth orders will also allow law enforcement to investigate the origin of any property held via trusts.
I now turn to the points raised by the noble Lords, Lord Vaux and Lord Eatwell, on verification. Clause 16 requires the Secretary of State to make regulations requiring the verification of information before an overseas entity makes an application for registration, complies with the updating duty or makes an application to be removed from the live register. To ensure that regulations are laid in a timely way, we have added a requirement for regulations to be made before applications may be made for registration in the register of overseas entities. We expect that UK anti-money laundering supervised professionals may have a part to play in this, and we will set out details on the verification scheme in regulations. Overseas entities will be required to update their information annually, and Companies House will be given broad powers to query information it holds via the further legislation to come later in the year. Also, the very public nature of the register means that there will be many eyes viewing the data, which will of course aid in identifying any inaccuracies. I thank my noble and learned friend Lord Garnier for his comments on whether we are capturing the ultimate beneficiaries of property. This is an important point.
Lord Vaux of Harrowden (CB)
The Minister has not answered the question about why the register is updated annually, not 14 days after a transaction in the way that the PSC rules have to be updated.
Lord Callanan (Con)
I will come to that in a second. The new register is designed to allow investigators to get behind opaque companies. Whether a title is held by a company or an individual, the noble Lord is right that there may be a different beneficiary of the property. That is something investigators may explore further. The task of this register is to look through the company, and that is where we are focused in scope. The question of recording the ultimate beneficiaries of property is a far wider point and would apply to properties held by individuals and UK companies too.
I thank the noble Lord, Lord Carlile, for sharing his experiences with Companies House. We have outlined in the White Paper, published last week, what we are proposing to do under register reform. We are seeking to limit the risk of the misuse of companies by ensuring more reliably accurate information on the companies register, reinforced by identity verification of people who manage or control companies and other UK- registered entities. We will give greater powers to Companies House to query and to challenge the information it receives, and we will give enhanced protection of personal information provided to Companies House. There will be more effective investigation and enforcement and better cross-checking of data with other public and private sector bodies. Companies House will be able to proactively share information with law-enforcement bodies where they have evidence of anomalous filings or suspicious behaviours.
I move on to unexplained wealth orders. I thank the noble Baroness, Lady Chapman, the noble Lords, Lord Vaux and Lord Carlile, and my noble and learned friend Lord Garnier for the points that they raised on the use of UWOs. The threat of substantial legal costs has been a barrier to the use of UWOs. Likely subjects of UWOs are the most litigious persons. To ensure that unexplained wealth can be investigated in the maximum number of cases, we are reforming the cost rules to ensure that agencies will not be burdened with high legal costs if they act with integrity. If an agency acts dishonestly, unreasonably or improperly, it may still be ordered to pay the costs of those subject to a UWO, which is to ensure fairness. An important point to raise regards the changes to the cost rules to limit law-enforcement liability following an adverse court ruling. Protection from costs means that the court has discretion to award costs against an enforcement agency only if it acted dishonestly, unreasonably or improperly. This will remove a key barrier that has discouraged the use of UWOs, while of course providing a safeguard against arbitrary use of the powers.
The noble Lords, Lord Vaux and Lord Carlile, expressed concerns relating to resourcing for law enforcement agencies. The Government have developed a sustainable funding model that demonstrates our commitment to tackling economic crime. The combination of this year’s spending review settlement and private sector contributions through the levy will provide economic crime funding totalling around £400 million over the spending review period. That includes the £63 million that I mentioned earlier for Companies House reform. Since 2006-07 nearly £1.2 billion of the assets recovered under the Proceeds of Crime Act has been returned to law enforcement agencies, prosecutors and the courts to fund further asset-recovery capability or work that protects the public from harm.
Account freezing and forfeiture orders are a hugely impactful tool in the law enforcement toolkit. AFOs have proved their worth in a wide range of cases and are seen by law enforcement agencies as a quick and effective method of disrupting criminals and recovering their assets. In 2020-21 just under £219 million of the proceeds of crime were recovered within England, Wales and Northern Ireland. This continues the general trend of improved performance since 2016-17.
The noble Baroness, Lady Kramer, raised an important point on Clause 18 of the Bill and the exemptions for which it provides. The phrase used in the draft Registration of Overseas Entities Bill, published in 2018, was that the Secretary of State may exempt a person from the requirement to register only for “special reasons”. This was intended to mirror the wording used in the Companies Act 2006 in respect of the persons with significant control regime. However, the pre-legislative scrutiny committee that examined the draft Bill in 2019 was of the opinion that the reasons why an exemption could be granted should be explicit in the Bill. The Government accepted the committee’s concern that otherwise the power may be too wide, and we amended the Bill accordingly—I think that also addresses some of the points made by the noble Lord, Lord Carlile. The circumstances outlined in the Bill have been carefully considered to provide clarity but also flexibility for unforeseeable but legitimate scenarios. Given that the key objectives of this register are to improve transparency and combat money laundering, these exemptions will be used very carefully, and only for evidenced and legitimate reasons.
The noble Baronesses, Lady Bennett and Lady Kramer, raised the subject of freeports. Throughout the bidding prospectus and subsequent business-case processes, prospective freeports were required to set out how they would manage the risk of illicit activity. Those plans were scrutinised by officials in Border Force, HMRC, the National Crime Agency and others. The Government already require each freeport governance body to take reasonable efforts to verify the beneficial ownership of businesses operating within the freeport tax site and to make that information available to HMRC, law enforcement agencies and other relevant public bodies. Given the nature of the information, we do not think it would be appropriate for the freeport governance body to release that information publicly because it is a third party and does not have the locus to release such information about a business to the public. Furthermore, the requirement would also partially duplicate the people with significant control register at Companies House, where there is already an onus on the company itself to provide information.
I fear that I am running out of time—
Viscount Waverley (CB)
My Lords, I apologise. Would the Minister consider this as a subject for the upcoming Commonwealth Heads of Government Meeting in Kigali? Will he represent the Government in fully engaging with all Commonwealth countries, including the Overseas Territories, so as to encourage the English-speaking world to understand fully all these measures, because they should all engage with this, and we do after all share a common judicial system?
Lord Callanan (Con)
I am sure we will want to engage with all other parts of the world, not just the English-speaking world, through the Commonwealth Heads of Government Meeting. We will want to engage with as many countries as possible to see that this regime is extended.
I apologise; there were a number of other points made that I wanted to answer, but I have run out of time. However, I shall pick up one point made by the noble Lord, Lord Empey, about Northern Ireland. We are working with Northern Ireland Ministers on the devolved matters in the Bill. As he will be aware, due to the ongoing situation with the Northern Ireland Executive we are unable to formally seek a legislative consent Motion, but the noble Lord can be assured that we would not proceed without the support of Northern Ireland Ministers. I have had meetings with Ministers from Northern Ireland and from Scotland to discuss this matter.
I know I have not addressed some points, but I am sure we will examine them in Committee. I have already been speaking for 30 minutes, the hour is late and the Chief Whip is getting unsettled, so I will draw my remarks to a close. We have to respond to this illegal invasion and the Bill enables us to do so. We need to rid this country of dirty money, and I am greatly encouraged by the support given to us by all parts of the House. I apologise for taking a long time over my response, but I commend the Bill to the House.
Economic Crime (Transparency and Enforcement) Bill
(2 years, 9 months ago)
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Lord Callanan
That it be an instruction to the Committee of the Whole House to which the Economic Crime (Transparency and Enforcement) Bill has been committed that they consider the bill in the following order:
Clauses 1 to 4, Schedules 1 and 2, Clauses 5 to 32, Schedules 3 to 5, Clauses 33 to 65, Title.