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Mr Speaker
I remind Members that the ballot for the election of the Chair of the Environment, Food and Rural Affairs Committee is currently taking place in the Aye Lobby. The ballot will be open until 2.30 pm. The side door between the Chamber and the Aye Lobby will be locked until the ballot has concluded.
Oral Answers to Questions
(2 years, 5 months ago)
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Christine Jardine (Edinburgh West) (LD)
The Secretary of State for Wales (Simon Hart)
I am sure the whole House will want to join me in sending love and best wishes to parents, teachers, and the village of Llanfair Caereinion in Powys following the traumatic incident involving their school on Monday. I hope very much that my hon. Friend the Member for Montgomeryshire (Craig Williams) will be able to pass on the House’s very best wishes.
I regularly discuss rail infrastructure in Wales with the Secretary of State for Transport. More than £340 million has already been provided for rail enhancements in Wales, including the core valley lines and Cardiff Central station.
Christine Jardine
From the Queen’s Speech, we learned of a new public sector body to oversee Britain’s railways. Given the importance of the railway infrastructure and the benefits of linking north Wales to HS2, and in view of the problems, delays and cuts in services that we are seeing in Scotland owing to the mismanagement of ScotRail by the SNP—[Interruption.] Have Scottish National party Members tried taking a train this week?
Given those factors, can the Secretary of State tell us what discussions the Government have had with devolved Administrations to boost connectivity across the United Kingdom, and to ensure that lines are properly funded and appropriately managed?
Simon Hart
I do not know why some Members on the Opposition Benches were being so derogatory during the hon. Lady’s extremely valid question. It was perfectly reasonable for her to highlight the fact that transport infrastructure in the UK is in the UK, and that any suggestion that it should in some way be devolved underestimates completely the economic value that it provides.
I agree with the general comments that the hon. Lady made, but the UK Government have been working alongside the Welsh Government where they can on infrastructure projects, particularly those involving rail, and the record reinforces that. We are also spending many millions of pounds on infrastructure more broadly, and I think she will support that—along with, I hope, others on the Opposition Benches.
Mr David Jones (Clwyd West) (Con)
As my right hon. Friend will know, there is considerable and long-standing support in north Wales for the electrification of the line between Wrexham and Bidston, which would link two important enterprise zones and put Wrexham and the whole of north-east Wales in commuting reach of Liverpool, and would be generally welcomed by the local business community. What discussions has he had with colleagues in the Department for Transport about advancing this project?
Simon Hart
My right hon. Friend has made a good point. The Government recognise the importance of the line to which he has referred, and I know that Liverpool City Region Combined Authority and Transport for Wales have been discussing the opportunities presented by battery-powered trains.
My right hon. Friend also made a good point about cross-border connectivity and the need for us to view these areas as economic regions and not be disrupted in any way by the artificial boundaries that devolution sometimes creates. I assure him that we will have further meetings with the Department for Transport about this issue.
Nia Griffith (Llanelli) (Lab)
This Government cancelled Labour’s plans for electrification of the line to Swansea, citing the pretext that it would not speed up journeys. However, there is an urgent need for electrification to combat climate change and decrease reliance on imported fossil fuels. Will the Secretary of State talk to his colleagues about reinstating the plans for electrification of that line, extending electrification further west through my constituency to the Pembrokeshire ports, and supporting these moves through increased investment in renewable forms of electricity generation?
Simon Hart
The hon. Lady has raised, quite reasonably, a point that she has raised before. I agree with her on most of the issues that she has raised, apart from the background to the cancellation of electrification, a decision which, as she knows, was taken in the context of bimodal trains as an equally beneficial alternative. However, her general views about rail infrastructure and net zero are entirely shared by the Government. I hope that she might be able to make the same compelling case to her colleagues in Cardiff as she makes to us.
Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)
Wales contains 11% of the UK’s railway infrastructure, but in recent years has received only 1% of the Government’s investment. As if that were not bad enough, classifying HS2 as an England and Wales project is denying Wales nearly £5 billion of investment. I know that the Secretary of State does not like it when we remind the Welsh public that his Government is short-changing Wales, but now the leader of the Welsh Conservatives agrees with us, as does the Welsh Affairs Committee. Perhaps if the Government had given Wales a fair settlement to upgrade its railways, the Chancellor would not have had to fork out £10,000 for a helicopter to make a round trip from London to Powys. When will the Secretary of State use his position at the Cabinet table to ensure that his Government cough up?
Simon Hart
A good question interspersed with some slightly trite comments; the hon. Gentleman might have done better had he avoided them. He overlooks the fact we have invested £340 million so far, with £125 million for the core valley lines, £58 million for Cardiff Central station, £76 million for the electrification of the Severn tunnel, £4.7 million for St Clears station in my own constituency, £4 million for Bow Street station—I could go on forever. He underestimates and undervalues the investments we have already made.
Daniel Kawczynski (Shrewsbury and Atcham) (Con)
Having represented a border community for the last 17 years, one is cognisant of the interdependence we have in Shropshire with Wales, with our friends across the border, with my right hon. Friend’s Department and with the Senedd. We are campaigning in Shropshire for the electrification of the line from Birmingham to Shrewsbury, which will help passengers going on to mid-Wales. Will he take an interest in that scheme to ensure that the people of mid-Wales can benefit from quicker times to Birmingham via this electrification process?
Simon Hart
I am happy to meet my hon. Friend on that point. I have travelled that route myself many times, and I would be happy to see what we can do to help.
John Mc Nally (Falkirk) (SNP)
Joanna Cherry (Edinburgh South West) (SNP)
Ms Anum Qaisar (Airdrie and Shotts) (SNP)
The Secretary of State for Wales (Simon Hart)
To alleviate the immediate impacts of this global crisis, we have injected support worth over £22 billion in 2023. For businesses, we have cut fuel duty and provided help to high energy-using businesses. In the longer term, our Plan for Jobs will ensure long-term prosperity for Wales, including the development of the Wylfa nuclear power station.
John Mc Nally
The Scottish Government introduced the Scottish child payment to tackle child poverty head on. That payment doubled to £20 and is set to increase further and be extended to children under the age of 15, resulting in 50,000 children being taken out of relative poverty. Given that Wales has persistently had the highest child poverty rate in the UK, does the Secretary of State not agree that welfare powers should now be devolved to Wales so that the Welsh Government can introduce a targeted child payment of their own?
Simon Hart
Even the Welsh Government have not made that argument to me. I think they fully recognise that the proper and fair distribution of welfare is done most effectively and cost-effectively on a UK-wide basis, but I am grateful that the hon. Gentleman has raised this issue because the money that the Scottish Government are using is available as a consequence of the Barnett formula, and the situation is the same in Wales.
Joanna Cherry
In relation to the cost of living crisis faced by people in Wales and across the United Kingdom, the Prime Minister told the Welsh Tory party conference that the UK Government would
“put our arms around the British people again as we did during covid”.
Based on the evidence of the Sue Gray report, they are more likely to be linking arms in a conga line. Can the Secretary of State for Wales tell me what discussions he has had with the Chancellor on an emergency Budget to help the poorest households in Wales and across the United Kingdom?
Simon Hart
The hon. and learned Lady rightly refers to the fact that the Chancellor may yet be making further comments about this particular issue, just as he did throughout the pandemic. For those who think that the Treasury is neither flexible nor conscious of these challenges, the fact is that there was ample evidence during the pandemic—and now, of course, during the current challenges we face—to disprove that theory. I can tell her, and everyone else in the House, that I have really regular conversations with Treasury Ministers and with the Chancellor himself about exactly these challenges.
Simon Baynes (Clwyd South) (Con)
Would my right hon. Friend agree that one of the best ways to help people during the cost of living crisis is to make sure that we have a vibrant economy and a low rate of unemployment? Would he also agree that having the lowest rate of unemployment since 1974 is helping many families across Wales and the rest of the UK at the moment?
Simon Hart
Absolutely. I think most people believe that growing our way out of a cost of living challenge is infinitely preferable to spending our way out of a cost of living challenge. My hon. Friend is right to point out that we want to be flexible, rapid and generous. When there are occasions, as there inevitably will be for Members across the House, where individual constituents somehow do not fit the solutions we have, there are other measures that I hope local authorities will be able to deploy to assist them.
Jacob Young (Redcar) (Con)
To what extent does the Secretary of State see investment in new nuclear as a way to help people with their energy costs in the long run?
Mr Speaker
Order. I am not sure that links to Wales. It is a bit off the mark. If you had tried to link it to Wales, I could understand. If not, we will go to the shadow Secretary of State, Jo Stevens.
Jo Stevens (Cardiff Central) (Lab)
We now know that the energy price cap is expected to rise to £2,800 a year in October, which means that typical household bills in Wales, having already gone up by £700, will go up by another £800.
It is now 138 days since Labour proposed a windfall tax on oil and gas producer profits so that people across Wales can get help right now. Every day the Government delay is another day they are letting down people in Wales and across the United Kingdom. The Secretary of State voted against a windfall tax last week. What is his alternative to help the people of Wales, and where is it?
Simon Hart
I suspect the hon. Lady reads the same news channels I read, so she will be aware that the Treasury will make a further announcement imminently. [Interruption.] She may be annoyed by my answer, but it is only reasonable that I suggest she waits until the Chancellor sets out precisely what his plans are.
May I suggest that the hon. Lady applies equal pressure to her colleagues in Cardiff? They have the power to intervene on things like business rates, council tax and income tax, which they have not done. In the meantime, however, they are thinking of imposing a tourism tax, costing Welsh taxpayers £100 million in the process. They are buying a farm that nobody wants and providing free musical instruments to young people under the age of 16.
Jo Stevens
Welsh voters gave their verdict on the Welsh Government in the election the week before last, and there is not a single Tory council left in the whole of Wales. The Secretary of State’s party was wiped out.
As the Secretary of State’s answer demonstrates, he does not have a plan and we have not had a plan from the Chancellor. Does he think that buying value supermarket brands, getting a better-paid job or riding around on the buses all day to keep warm is the Government’s answer to the cost of living crisis?
Simon Hart
The hon. Lady clearly did not listen, or did not want to listen, to my previous answer. When we know the Chancellor is about to make a statement in the Chamber on all these issues, would it not be more sensible to allow the Treasury to spell out exactly what its plans are and how they will benefit businesses and individual families in Wales before making such highly politicised comments?
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
I add my party’s commiserations to everybody affected by the bus accident in Llanfair Caereinion.
The Oakeley Arms in my constituency is a superb inn located in a grade II listed building at the heart of Snowdonia national park. It is off grid, it is limited by regulations on energy efficiency measures and its owners now face a quadrupling in energy bills. Does the Secretary of State agree that small businesses need more support? Will he speak to the Chancellor about extending the price cap to our hard-pressed small and medium-sized businesses?
Simon Hart
I will definitely speak to the Chancellor, as I often do about these things. Perhaps I could suggest a deal to the right hon. Lady: I will speak to the Chancellor to get further information if she will speak to her leader in Cardiff to get him to call off the dogs by cancelling the tourism tax that the Welsh Government want to impose on businesses, causing further hardship for people in her constituency.
Liz Saville Roberts
If the Secretary of State kept to the powers he has in Westminster, perhaps he would have better support. There are now no Tory councillors in any of the Plaid-held councils along the west coast of Wales.
Rumours of an economic package are rife, not because the Government care about struggling households and businesses but because, of course, they want to distract from their own lawbreaking. Household energy bills will likely increase to £2,800 in the autumn, yet the Chancellor is sitting on his hands until it proves politically convenient. Is the Secretary of State not ashamed of his Government’s behaviour?
Simon Hart
I despair sometimes, with the greatest respect. I urge the right hon. Lady to wait, for what should not be a great deal more time, to hear precisely what we have in store on the cost of living challenges. I remind her that, throughout the pandemic and the cost of living challenges, the Treasury has been unbelievably flexible, unbelievably adaptable and, in some respects, unbelievably generous. To try to pre-empt the Chancellor by making cheap political points undermines the value of what those contributions may be, and it does a disservice to the businesses and individuals that the right hon. Lady purports to support.
Paul Holmes (Eastleigh) (Con)
The Parliamentary Under-Secretary of State for Wales (David T. C. Davies)
The Wales Office has worked tirelessly to ensure there will be a freeport, which will deliver jobs and investment into Wales. As announced earlier this month, an agreement has now been reached between the UK and Welsh Governments to deliver that freeport, and this agreement will be backed by millions of pounds of Government funding.
Paul Holmes
I welcome the Government’s decision to have at least one freeport in Wales like the Solent freeport, which covers part of my constituency. Does my hon. Friend agree that, as well as bringing jobs and trade to Wales, it will bring mutual benefits to other freeports, it will be vibrant, and it is a stark reminder of why the Union between Wales and England is so important?
David T. C. Davies
I agree with both of those excellent points. We have already seen that the Thames freeport has suggested that there will be 21,000 jobs directly and indirectly created, so we know that the Welsh freeport will deliver jobs. I also agree that it is going to be good for the Union and good for Wales to have vessels of all kinds coming from all over the world, bringing their jobs and investment with them, including perhaps from across the Union—we may even look forward to seeing a few ferries from Scotland, if the SNP Government can actually get around to building them.
Ruth Jones (Newport West) (Lab)
The Parliamentary Under-Secretary of State for Wales (David T. C. Davies)
My ministerial colleagues and I fully acknowledge that there is a cost of living challenge, which has been caused by a combination of the covid-19 pandemic and the war in Ukraine. That is why we are providing £22 billion for households across the UK to try to get through this crisis.
Ruth Jones
The people of Newport West are facing the harsh effects of this Government’s failure to tackle the cost of living crisis. My constituent Hettie contacted my office because she is a single mum of two and must choose between food and heating. Both her cooker and her hot water are gas, so as the prices rise so do her bills. She works, in her words, “Every hour possible”. She is scared for her and her children’s future, and she is not alone. Local people need to see real action. If Tory Ministers will not take any fiscal steps, will the Minister do what many people in Newport West want and back a windfall tax on oil and gas companies?
David T. C. Davies
Taxes are a matter for the Chancellor, but what I can say is that I absolutely acknowledge that there is a challenge at the moment, which has been brought about by the international situation. That is why the Government are putting £22 billion aside. It is why they have changed universal credit to help people such as the hon. Lady’s constituent who are out working, and why we have increased the minimum wage. It is why national insurance contributions are going to fall, we have extended the warm home discount and put in place a whole package of other measures. While we are spending money helping people get through the cost of living challenge, the Welsh Government are spending money buying up farms in mid-Wales and increasing the number of Senedd Members.
Marco Longhi (Dudley North) (Con)
The Parliamentary Under-Secretary of State for Wales (David T. C. Davies)
The Wales Office works closely with the Department for International Trade to promote the excellent opportunities that there are to invest in Wales. Wales is an attractive destination for foreign companies to come to, to invest in and to create jobs in, as we have seen with the continued support from companies such as Airbus, which only recently announced plans to increase wing production in Broughton.
Marco Longhi
As the trade envoy to Brazil, I see the huge economic growth opportunities for both the UK and Brazil in the post-Brexit and post-pandemic environment. Does my hon. Friend agree that, like Dudley North, Wales plays a huge part in UK plc and that therefore we want to see the Welsh dragon flying just as proudly as the Black Country flag?
David T. C. Davies
I am delighted to say that Wales has an excellent trading relationship with Brazil. In 2021, we exported nearly £85 million-worth of goods to the country, while importing £165 million-worth of goods. Wales has good trade and investment with countries across the world. We have seen 72 direct investments in the last financial year, with 1,500 jobs created. Only last week, the Secretary of State for Wales and I were with the Member for the Vale of Glamorgan looking at the new Aston Martin supercar factory in the Vale of Glamorgan.
Chris Elmore (Ogmore) (Lab)
The Parliamentary Under-Secretary of State for Wales (David T. C. Davies)
The Secretary of State for Wales and I have regular discussions with ministerial colleagues on free trade arrangements. The Wales Office works closely with the Department for International Trade to ensure that Wales will enjoy the benefits that will flood in both directions from free trade deals with Australia and New Zealand.
Chris Elmore
The Government’s own impact assessment states that the Australia and New Zealand FTAs will see a reduction in gross value added in agriculture of more than £142 million. The measures are likely to have a disproportionate impact on Welsh agriculture because of its reliance on livestock and dairy farming. NFU Cymru is calling for Wales-specific impact assessments, so will the Minister ensure that they are delivered and that he starts working for Welsh farmers, rather than undercutting them and destroying the industry?
David T. C. Davies
I cannot really accept what the hon. Gentleman says. We were able to import lamb, beef and other kinds of food from Australia and New Zealand when we were members of the European Union. Both countries had an agreement that allowed them to export goods to us without paying tariffs, up to a certain quota, and the fact of the matter is that they never met that quota. It is a bit of a myth that there is cheap beef and lamb in Australia and New Zealand; anyone who wants to look at a website can see what people pay for those goods in Australian and New Zealand supermarkets. They have no plans to increase their flocks or herds. The trade deals that have been agreed are going to be good for farmers and for industry more widely throughout Wales.
Dr James Davies (Vale of Clwyd) (Con)
Danny Kruger (Devizes) (Con)
The Secretary of State for Wales (Simon Hart)
I have had no discussions with the Welsh Government on the proposals.
Dr Davies
What assessment has my right hon. Friend made of the proposed changes to the voting system at Cardiff Bay and the potential impact on democratic representation?
Simon Hart
It is mystifying that this proposal was announced on the same day as the Queen’s Speech. It will impose a £100 million burden on Welsh taxpayers and demolish a voting system that has served us well for years, and there has been no consultation with any voters at all. Even the Lib Dems describe it as a stitch-up.
Danny Kruger
The Welsh Government have decided that they want to increase the size of the Senedd, but there are real concerns that that will lead to a lack of proportionality in representation. Does my right hon. Friend agree that the money would be much better spent on public services?
Simon Hart
Indeed, I do. I have to say that if this Government were making suggestions of that nature that involved the constitution and voting measures, pretty well all Opposition Members would be saying that that should be subject to a public referendum at the very least. I suggest that the proper course of action for the Welsh Government is to seek the approval of their voters before they proceed with any of the extremely costly measures proposed.
Chris Bryant (Rhondda) (Lab)
The Secretary of State for Wales (Simon Hart)
My colleagues and I are aware that the number of people on universal credit has fallen both in Rhondda and across Wales over the past year. We will continue delivering for residents through schemes such as in-work progression, kickstart and our plan for jobs.
Chris Bryant
The thing is, 6,320 households in the Rhondda are in receipt of universal credit, and when the Government cut universal credit by £20 a week last year, that took £6.5 million out of the Rhondda economy. That is one reason why the food bank in Tylorstown—ironically, it is in the old Conservative club—now has to provide food to the tune of 3 tonnes a month, although families are not able to contribute so much. When will the Secretary of State restore the extra £20 a week in universal credit?
Simon Hart
The Chancellor will make interventions clear in due course. The context to the hon. Gentleman’s perfectly reasonable question is that there has been a 7% increase in the number of people in work in Rhondda and the number of people who are unemployed in Wales is down 23,000 in the past year—he did not mention that. I very much hope that the increases in the national living wage and the national minimum wage will help to offset some of the issues he has raised.
Michael Fabricant (Lichfield) (Con)
The hon. Member for Rhondda (Chris Bryant)—who is my occasional friend, when he is not slagging me off on Twitter—is right to talk about the Rhondda, because there are areas of real poverty, as there are in parts in Lichfield. Does my right hon. Friend the Secretary of State agree that there are many ways to help people, some of which he has named, that there is an urgent need to address food and fuel inflation, and that that can be done in other ways, which the Treasury may well talk about, and not just by raising universal credit?
Simon Hart
On that particular point, I agree with my hon. Friend—I would probably describe him as my permanent friend. It is perfectly right that we wait and see what the Chancellor says. We have tried to set out short, medium and long-term measures that will help with the current challenge and we will of course hear more in due course.
Wayne David (Caerphilly) (Lab)
The Secretary of State for Wales (Simon Hart)
I have regular discussions with the First Minister of Wales on a range of issues, including how Wales’s £585 million share of the UK shared prosperity fund will level up communities across our country.
Wayne David
Does the Secretary of State share my concern that according to a number of independent analyses, the shared prosperity fund is likely to shift resources away from the valleys, the poorest parts of Wales, to more prosperous parts?
Simon Hart
Unsurprisingly, I contest the hon. Gentleman’s assertion. I would just say this: by 2024-25, the annual funding from the shared prosperity fund will match the average annual funding that Wales would have received from the European Regional Development Fund after adjusting for inflation. If he does not take that from me, or does not believe me, I can tell him that it is from Guto Ifan, research associate at the Welsh Governance Centre. That indicates that we are going in the right direction with the shared prosperity fund. Would it not be good, just for a moment, if the Welsh Government supported those very ambitious opportunities?
Mr Speaker
Order. I know the whole House will want to join me in expressing our outrage and deep sorrow following the shooting at Robb Elementary School in Texas. I know that our thoughts and prayers are with those affected and all of the families who have lost loved ones.
Before we come to Prime Minister’s questions, I want to welcome Nick Munting and his family to the Gallery. Nick has worked in Parliament for over 30 years, primarily as a sous chef but also as an Associate Serjeant at Arms. Unfortunately, Nick has had to leave his role because of ill health and he is much missed by his colleagues. I know that all Members, particularly the hon. Member for Croydon Central (Sarah Jones), Nick’s constituency MP, will wish to join me in thanking Nick for his long service to the House and in sending good wishes to Nick and his family.
I would like to point out that a British Sign Language interpretation of proceedings is available to watch on parliamentlive.tv.
Anthony Browne (South Cambridgeshire) (Con)
The Prime Minister (Boris Johnson)
Mr Speaker, I want to begin by echoing what you have just said about the reports of the fatal shooting in a Texan primary school. Our thoughts are with all those affected by this horrific attack.
Yesterday, I welcomed the Emir of Qatar to Downing Street. It is excellent news that Qatar announced that it will invest up to £10 billion in the UK through our new strategic investment partnership. Not only will that boost local economies and support jobs; it will support our green economy and decarbonisation.
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.
Anthony Browne
Cambridge is one of the most expensive places in the country to live, but unlike many cheaper places, NHS workers in the city get no high cost of living supplement. NHS workers in Cambridge pay higher rents than NHS workers in outer-London boroughs, such as Redbridge, Croydon, Bexley and Barking, and yet they get paid 15% less. That makes it very difficult for the NHS in Cambridge, including Addenbrooke’s Hospital, to retain and recruit staff. Will my right hon. Friend the Prime Minister work with me to make sure that NHS workers in South Cambridgeshire and Cambridge get paid fairly?
The Prime Minister
My hon. Friend is a fantastic champion for his constituents and for Addenbrooke’s. We are very proud of our NHS, which is why we are putting in record investment. I hope that the independent NHS Pay Review Body will listen carefully to what he has just said.
Keir Starmer (Holborn and St Pancras) (Lab)
My thoughts and, I know, the thoughts of the whole House are with the families of the victims of yesterday’s school shooting in Texas. Nineteen children have died, some as young as seven, as well as two adults believed to be teachers. It is an unspeakable tragedy, and our hearts are with the American people.
Last weekend marked the anniversary of both the Manchester bombing and the murder of Lee Rigby, and we remember them this year as we do every year. Today is also the anniversary of the killing of George Floyd, a reminder that we must all tackle the racism that is still experienced by so many in our country and beyond.
The Sue Gray report was published this morning and I look forward to discussing that during this afternoon’s statement with the Prime Minister. For now, I want to focus on the cost of living affecting the whole country.
Since we stood here last week and I asked the Prime Minister yet again to back Labour’s plans for a windfall tax to reduce energy bills, hundreds of millions of pounds have been added to the bills of families across the country, and hundreds of millions of pounds have landed in the bank accounts of energy companies. It sounds like he has finally seen sense and the inevitable U-turn may finally have arrived, so when can people across the country expect him to use those oil and gas profits to bring down their bills?
The Prime Minister
There is nothing original about a Labour plan to tax business. Labour wants to tax business the whole time. Every day, the party wants to put up taxes on business. What we are doing is helping people. The right hon. and learned Gentleman asks when we are going to help people. We are helping people now. We are putting £22 billion into people’s pockets already, cutting council tax by £150, cutting fuel duty, and cutting national insurance contributions by an average of £330 for people who pay NICs. How can we afford that? We can because we have a strong economy, because we came out of covid fast, which would not have been possible if we had listened to Labour.
Keir Starmer
Fifteen tax rises and the Prime Minister pretends they are a low-tax Government. It has been four and a half months since Labour first called for a windfall tax on oil and gas profits. I have raised it week in, week out, and every week he has a new reason for not doing it. The Business Secretary said it is “bad”, the Justice Secretary called it disastrous, and even this weekend the Health Secretary and the Northern Ireland Secretary opposed it. The Prime Minister ordered all his MPs to vote against it last week, and now—surprise, surprise—he is backing it. Prime Minister, I am told that hindsight is a wonderful thing! [Laughter.] But while he dithered and delayed, households across the country suffered when they did not need to.
Mr Peter Bone (Wellingborough) (Con)
Will the right hon. and learned Gentleman give way?
Mr Speaker
Mr Bone, a man who always wants to catch my eye, is not going the best way about doing so. I call Keir Starmer.
Keir Starmer
While the Prime Minister dithered and delayed, households across the country suffered when they did not need to. What is it about the Sue Gray report that first attracted him to a U-turn this week?
The Prime Minister
There is no surprise about Labour’s lust to put up taxes; there is nothing original about that thought. Labour Members get off on it; they absolutely love to confiscate other people’s assets. What we prefer to do is make sure that we have the measures in place to drive investment in our country and drive jobs, and it is thanks to the steps that we took and thanks to the fact that we came out of covid faster than any other European country, which would not have been possible had we listened to the right hon. and learned Gentleman, that we now have unemployment at the lowest—[Interruption.] Listen to this—Labour used to care about this, Mr Speaker. We now have unemployment at the lowest level since 1974. Put that in your pipe.
Keir Starmer
I actually thought that, with this U-turn, the Prime Minister might get his head out of the sand, but obviously not. The reality is that every day of his dithering and his delay, £53 million has been added to Britain’s household bills. While he is distracted by trying to save his own job, the country has been counting the cost. But complacency is nothing new for this Government: back in October, the Chancellor delivered a mini-Budget that has to be reread to be believed. With inflation already climbing, he said that he understood people were concerned about it, and that the Government were “ready…to act”. Since then, inflation has risen to a 40-year high—the highest rate of any G7 country. If the Government were so ready to act six months ago, why have they not done so?
The Prime Minister
The Government have acted, and my right hon. Friend the Chancellor continues to act. This is the Government who not only put in the living wage—it was a Conservative institution—but have now raised it by £1,000, a record amount. Families on universal credit have another £1,000. Thanks to the £9.1 billion that we have already put in to support people’s cost of heating, we are abating the costs of fuel for people up and down the country, and of course we are going to do more. We are going to put our arms around the people of this country, just as we did throughout the covid pandemic. We can do that because we took the tough decisions to drive the fastest vaccine roll-out in Europe, which would not have been possible if we had listened to the right hon. and learned Gentleman. Let me take another statistic: youth unemployment—Labour used to care about it—is at or near a record low.
Keir Starmer
It was not just the Chancellor back in September—the Prime Minister called fears about inflation “unfounded”. He was the last person to spot the cost of living crisis, just as he is the last person to back Labour’s plan to help people through it. It was not just on inflation that they got it badly wrong. In the same speech, the Chancellor boasted about growth, as the Prime Minister does today, and how we would do better than all our major competitors. It was obvious that he was being complacent. Lo and behold, Britain is set to have the lowest growth of any major country except Russia, despite our brilliant businesses and all we have to offer. Why has his Government inflicted on Britain the twin-headed Hydra of the highest inflation and the lowest growth?
The Prime Minister
The right hon. and learned Gentleman loves running this country down. [Interruption.] How many times did he come to this place and say that the United Kingdom had the highest covid death rate in Europe? How many times? He was proved completely wrong. Did he ever apologise? Absolutely not. Did he ever take it back? Absolutely not. Actually, because of the steps we took, last year we had the fastest growth in the G7, and we will return to the fastest growth by 2024-25, thanks to the decisions that this Government took. [Interruption.] Labour does not care about getting people into jobs. We care about the working people of this country and making sure we have a high-wage, high-skill, high-employment economy, and that is what we are delivering.
Keir Starmer
The Prime Minister talks about running this country down; he is running this country down! It was not just complacency on Labour’s windfall tax, which he is now backing; it was not just complacency on inflation, which is now through the roof; and it was not just complacency on growth, which is now spluttering along at the back of the pack, because his Chancellor also claimed that people should
“keep more of the rewards of those efforts.”—[Official Report, 27 October 2021; Vol. 702, c. 286.]
Then he put their taxes up. Does the Prime Minister want to explain to hard-working people, whose wages are running out sooner and sooner each month and who are facing astronomical bills and prices, just how his 15 tax rises since taking office have helped them to keep more of their rewards in their pocket?
The Prime Minister
First of all, what we are doing is making sure that after a huge pandemic we are funding our vital public services, which we can because of the steps that we took. What we are also doing is making sure that we put more money back into people’s pockets through the measures I have outlined today, whether through cutting national insurance contributions, lifting the living wage or lifting universal credit. All that is made possible because we took the responsible and sensible steps to protect our economy throughout covid and then to come out strongly. The right hon. and learned Gentleman is completely wrong about this country’s growth performance. He runs it down. He was proved wrong about covid, and he is going to be proved wrong again.
Keir Starmer
Just delusional.
Last week, I raised the case of Phoenix Halliwell, whose kidney condition means he needs daily dialysis and whose energy bill has gone through the roof as a result. I am glad that as a result, Government officials got in touch with Phoenix yesterday, and I hope that will result in more support for people who are vulnerable, but it should not be left to Labour to turn up week after week to make the Prime Minister aware of the consequences of his dither and delay.
I want to raise another issue where the Government are sleepwalking into disaster. With the summer holidays looming, there are reports that the Home Office already has a backlog of 500,000 passports to issue. That is potentially more than half a million people worrying whether they will get away this summer. Can the Prime Minister reassure people that they will not miss out on their holidays due to the failures of his Home Office?
The Prime Minister
I thank the right hon. and learned Gentleman very much, but I can tell him, actually, that what we are doing is massively increasing the speed with which the Passport Office delivers. To the best of my knowledge, everybody is getting their passport within four to six weeks. That is because we are driving the leadership of this country and we are getting things done that would never have been possible if we had listened to the Opposition. We got Brexit done when he voted 48 times—48 times—to undo the will of the people. We got the vaccine roll-out done when he would have kept us in the European Medicines Agency. We were the first European country to help the Ukrainians resist Vladimir Putin. Does anybody seriously believe for a second that the Opposition would have done it? [Interruption.]
Mr Speaker
Order. Some are trying to boo; some are trying to cheer. The worst of it is that I cannot hear the Prime Minister.
The Prime Minister
Let me say very plainly: does anybody seriously think for a second that the Labour party would have done that when eight of the shadow Front Bench, including the shadow Foreign Secretary, the right hon. Member for Tottenham (Mr Lammy), who is mysteriously not in his place, voted recently to get rid of this country’s independent nuclear deterrent, and when the Leader of the Opposition campaigned to put Vladimir Corbyn—I mean, sorry, Jeremy Corbyn—in Downing Street?
We get on. We do the difficult things. We take the tough decisions. Social care: we are fixing it. We deliver; they dither. [Interruption.]
Mr Speaker
Order. Prime Minister, we cannot both be on our feet. I am trying to help you; you have to help me as well. I am sure you have got to the end, because Mr Stuart is itching to get his question in.
Graham Stuart (Beverley and Holderness) (Con)
The Prime Minister
As my hon. Friend, who I know has taken a keen interest in this for a while, Evusheld has the potential to reduce the risk of infection. We must look at the evidence before we can make a decision about whether it should be available, but I will make sure that the Department of Health and Social Care keeps him updated on the progress we are making.
Mr Speaker
We now come to the leader of the SNP, Ian Blackford.
Ian Blackford (Ross, Skye and Lochaber) (SNP)
I want to join others today in expressing my deepest sorrow at the horrific events in Texas yesterday. Some 19 children and two teachers have needlessly lost their lives. Many of us in Scotland will be remembering the tragic events that took place in Dunblane 26 years ago. The thoughts and prayers of the SNP are with the families suffering today, but we also hope that lawmakers will finally act to bring to an end the scourge of gun violence that plagues the United States.
The reports of the Prime Minister’s and Downing Street’s lawbreaking have been damning: empty bottles littering offices; rooms so crowded people were sitting on each other’s laps; and security forced to intervene because parties were so outrageous. At the centre was the Prime Minister orchestrating it and grabbing a glass for himself to toast the partygoers. For eight months, we have heard every excuse under the sun, but now we have all seen the damning photo evidence. While people stayed at home to protect the NHS, the Prime Minister was engaging in drinking and debauchery that makes a mockery of the gut-wrenching sacrifices that each and every person made. Will the Prime Minister now take the opportunity and resign?
The Prime Minister
I can tell the right hon. Gentleman that, much as I appreciate his advice, he will have a further opportunity, which I am sure he will take with his customary length, to debate that matter in the course of the statement that will follow directly after PMQs.
Ian Blackford
These are serious matters, but it is all a joke to the Prime Minister. The Prime Minister has lost the trust of the public. He has lost what little moral authority he had left. The Prime Minister has apologised many times, but not because he feels any genuine remorse. He still refuses to even admit that there were parties and that he presided over them. He apologised for one simple reason: he got caught. The reality is that no apology will ever be enough for the families of people who lost loved ones—the families who followed the rules, who stayed at home while their nearest and dearest were dying, and who are now forced to look at photographs of the Prime Minister, surrounded by drink, toasting to a party in the middle of a lockdown.
If the Prime Minister will not accept that he must resign, those on the Tory Benches must act. This Prime Minister, who has broken the law and shown a cavalier attitude to the truth, cannot be allowed to remain in office. Time is up, Prime Minister. Resign! Resign before this House is forced to remove you!
The Prime Minister
I thank the right hon. Gentleman very much, and I direct him to the report. I think it would be to his advantage to look through it and then I think we should return to it after PMQs.
Jonathan Gullis (Stoke-on-Trent North) (Con)
The Prime Minister
Hear, hear, Mr Speaker—up the Vale!
I thank my hon. Friend for his campaign, and I think he is entirely right. We have adopted the measures that he proposes in the Bill so that those who leave properties derelict unreasonably could face an unlimited fine.
Sir Jeffrey M. Donaldson (Lagan Valley) (DUP)
I was pleased to meet the Prime Minister last week in Royal Hillsborough in my constituency. We welcome his commitment to introduce legislation to deal with the protocol and the Irish sea border, and to protect the Belfast/Good Friday agreement. That will take some time. In the meantime, as in the rest of the United Kingdom, hard-pressed households in Northern Ireland are suffering from the cost of living crisis. Will the Prime Minister give me an assurance that any measures that are brought forward by the Chancellor in the near future to help hard-pressed households will apply to Northern Ireland, and that the protocol will not be allowed to prevent Northern Ireland citizens receiving the support they need from the Government at this time?
The Prime Minister
I thank the right hon. Gentleman very much. As he knows, I have already detailed to the House a package of measures to support families across the whole of the UK. I may say that I also think it would be an advantage to the people of Northern Ireland, in tackling the issues that we all face across the UK, if Stormont were to be restored.
Selaine Saxby (North Devon) (Con)
The Prime Minister
Yes, of course. My hon. Friend is a fantastic advocate for Devon and rural communities, and I will ensure that both she and Helen Hurford get a meeting with the relevant Minister to discuss her ideas further.
Ben Lake (Ceredigion) (PC)
The Prime Minister
I thank the hon. Member for his excellent question. Rural fuel duty relief is there to compensate motorists by helping retailers in some more remote rural areas where pump prices can be significantly higher. It currently operates on a geographical basis, but I am happy to ensure that he gets a meeting with the relevant Minister as fast as possible.
John Stevenson (Carlisle) (Con)
The Prime Minister
Yes, I can. I am grateful to my hon. Friend, who is absolutely right that Labour’s instinct everywhere and always is to put up tax, with all its—[Interruption.] Well, Labour Members are bragging about it today—it is ludicrous. What we are doing is not only cutting people’s contributions under national insurance but helping businesses to invest with the 130% super deduction that my right hon. Friend the Chancellor put in. That is helping us to have a high-wage, high-skill economy, with unemployment—yes, I have said this before, Mr Speaker—at its lowest since 1974.
Gill Furniss (Sheffield, Brightside and Hillsborough) (Lab)
Mr Speaker
Order. There is still an appeal, and sub judice applies, so the hon. Lady should be careful in how she words the question.
Gill Furniss
Shockingly, the party has failed to act on the report and still will not explain why. That is why Rotherham child sexual exploitation survivor Sammy Woodhouse has called for an independent investigation into the failure, warning that the Conservative party has
“broken the trust of victims”.
Will the Prime Minister personally back that call and launch an independent investigation into the failure to act so that victims can have confidence that his party will never again turn a blind eye?
The Prime Minister
I hear what the hon. Member says and the sensitivity of the issues that she raises. Given the legal proceedings that are currently going on, I do not think it would be right to comment any further.
Siobhan Baillie (Stroud) (Con)
The Prime Minister
Yes. I thank my hon. Friend very much. She and I have talked about this. This is a subject in which I take a direct personal interest. There are things we can do to make childcare more affordable. One issue is that not enough people take up tax-free childcare, so we need to have more take-up of what is on offer. We can also look at ways in which we can reform and improve the system.
Florence Eshalomi (Vauxhall) (Lab/Co-op)
The Prime Minister
Let us be clear: if there is an issue with fire safety in a building, extra steps should be taken and remediation should be made. When it comes to self-evacuation, the Home Office has launched a new consultation to support the fire safety of residents who are unable to self-evacuate, but if the hon. Lady has further representations to make on that point, I will be very happy to ensure she gets a meeting with a Minister in the Department for Levelling Up, Housing and Communities.
Mr William Wragg (Hazel Grove) (Con)
The Prime Minister
I know my hon. Friend is not a cynic; he is one of nature’s idealists. I will make sure that all relevant Ministers and civil servants appear before his Committee.
Fleur Anderson (Putney) (Lab)
The Prime Minister
What we are doing for the people of Putney, and indeed the people throughout the country, is making sure that we invest now in protecting them, as I have said to the House and I have said repeatedly, not just with the increases in universal credit, the living wage and the warm home discount and cutting fuel bills, but with the £330 cut in NICs. The reason we can do that is that we have a robust economic position and strong employment. That is giving us the revenue to pay and to cushion people at this difficult time. It would not have been possible if we had listened to the Labour party during covid.
Jason McCartney (Colne Valley) (Con)
This weekend tens of thousands of Huddersfield sports fans are coming down to London. On Saturday, Huddersfield Giants are in their first rugby league challenge cup final for over a decade, and, on Sunday, it is Huddersfield Town in the championship play-off final for a place in the premier league. As well as wishing the best of luck to both Huddersfield teams, will the Prime Minister, agree with me that the best way that Labour-run Kirklees Council can honour the sporting tradition of Huddersfield is by following through with its pledge to house the new national rugby league museum in its birthplace, the George Hotel in Huddersfield, and not pull out of that deal, as it has indicated it wants to do?
The Prime Minister
Is that the Labour council pulling out of its deal? I am not surprised. All I can say is that I congratulate my hon. Friend on his campaign for a national rugby league museum and I urge him to take it up with the Arts Council or other relevant bodies.
Andy McDonald (Middlesbrough) (Lab)
The Prime Minister
From furlough onwards everything we have done since the pandemic began has been to get money into the pockets of the working people of this country; those are the people who time and again we have prioritised. I do not for a moment doubt that things are tough—I do not doubt it for a moment—but it is our intention to get this country through it, and we will get through it very well by putting our arms around people as we can, and as we will because of the fiscal firepower we have, but also by making sure that we continue with the high wage, high skill, high employment economy that we have. The best way to get money into people’s pockets is for them to have a job.
Jill Mortimer (Hartlepool) (Con)
Does the Prime Minister agree that when the Leader of the Opposition spins his myth of a low tax Labour party, he clearly needs a memory jog? [Interruption.] May I remind Labour Members that in 2019 they all stood on a manifesto that would have inflicted the highest tax burden on the people of this country in peacetime—and that is probably why there are so few of them over there on the Labour Benches?
The Prime Minister
Yes, Labour campaigned to put up taxes on business to the highest level this country has ever seen; that was the Leader of the Opposition’s ambition, and that is what they would do again. Be in no doubt, that is what they love to do—we can feel the lust for tax rising off those Opposition Benches—and that is why there has never been a Labour Government who left office with unemployment lower than when they came in.
Christian Wakeford (Bury South) (Lab)
Mr Speaker
Order. I could not hear the question or the advice I was being given, and it might be helpful if I could hear both. Prime Minister, did you manage to hear the question?
The Prime Minister
I heard enough to have a rough idea of the nonsense the hon. Gentleman was talking. We are not only supporting people now but will continue to put our arms around the people of this country, as we did during the pandemic and beyond.
Mr Speaker
Can I just say that moderate language is what we normally use, but I do not hear it now? It does not suit the Chair and I do not think it suits the country.
Mr John Baron (Basildon and Billericay) (Con)
The Prime Minister will recall that I previously raised with him the plight of 170 British Council contractors who remain in Afghanistan in fear of their lives, 85 of whom are deemed to be at very high risk. I had a positive meeting with the refugee Minister, Lord Harrington, last week, but we face bureaucracy that is preventing the Foreign, Commonwealth and Development Office from helping these people now courtesy of the Afghan citizens resettlement scheme. Will the Prime Minister help us cut through that red tape and help these people, as we owe them a debt of obligation and time is running out?
The Prime Minister
I will see what we can do to help those particular people but I just remind the House that we not only evacuated 25,000 people under Op Pitting, which was a great credit to this country, but since then have supported 4,600 more to come to this country, and we will do what we can to help the people my hon. Friend mentions.
Alex Norris (Nottingham North) (Lab/Co-op)
The Prime Minister
Everybody in work—30 million workers—will get a tax cut in July, on top of everything that we are already doing, but that is not the end of what this Government are going to do to look after people. I told the House before this afternoon that we will continue to use our fiscal firepower to look after the British people through the covid aftershocks and beyond.
Craig Williams (Montgomeryshire) (Con)
On Monday at 3.25 pm, a school bus crashed into a group of schoolchildren in Llanfair Caereinion. Three children were airlifted to hospital, with another child and the bus driver taken by ambulance, and a fifth child was discharged at the scene. Everyone is in a stable condition. Clearly, this is a tragic accident that will stay with the community for some time. Will the Prime Minister join me and, I am sure, the whole House in sending our love and prayers to those in hospital? Will he also praise the teaching staff of both the primary and the high school, Wales Air Ambulance and Dyfed-Powys police for their heroic and continuing response to the community?
The Prime Minister
I thank my hon. Friend for raising this very sad incident. I am sure that the thoughts of the whole House will be with those who have been affected. I want to join him, in particular, in paying tribute to the emergency services and, of course, the teachers and staff at the school, who did so much to help.
Tonia Antoniazzi (Gower) (Lab)
The Prime Minister
I begin by saying how grateful I am to the hon. Member for raising that case. I am afraid that I do not know directly about the events that she describes. What she says is very concerning and I will make sure that she gets a meeting with the relevant Minister as soon as possible.
Mr Speaker
That ends Prime Minister’ questions—for those who wish to leave. I say to the House, as we come to the next statement, that I expect moderate and temperate language.
Sue Gray Report
(2 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
The Prime Minister (Boris Johnson)
With permission, I will make a statement, Mr Speaker. I am grateful to Sue Gray for her report today, and I want to thank her for the work that she has done. I also thank the Metropolitan police for completing its investigation.
I want to begin today by renewing my apology to the House and to the whole country for the short lunchtime gathering on 19 June 2020 in the Cabinet Room, during which I stood at my place at the Cabinet table and for which I received a fixed penalty notice. I also want to say, above all, that I take full responsibility for everything that took place on my watch. Sue Gray’s report has emphasised that it is up to the political leadership in No. 10 to take ultimate responsibility, and, of course, I do. But since these investigations have now come to an end, this is my first opportunity to set out some of the context, and to explain both my understanding of what happened and what I have previously said to the House.
It is important to set out that over a period of about 600 days, gatherings on a total of eight dates have been found to be in breach of the regulations in a building that is 5,300 metres square across five floors, excluding the flats—[Interruption.] Mr Speaker, I do think this is important, because it is the first chance I have had to set out the context. Hundreds of staff are entitled to work there, and the Cabinet Office, which has thousands of officials, is now the biggest that it has been at any point in its 100-year history. That is, in itself, one of the reasons why the Government are now looking for change and reform.
Those staff working in Downing Street were permitted to continue attending their office for the purpose of work, and the exemption under the regulations applied to their work because of the nature of their jobs, reporting directly to the Prime Minister. These people were working extremely long hours, doing their best to give this country the ability to fight the pandemic during—[Interruption.] Mr Speaker, I appreciate that this is no mitigation, but it is important to set out the context.
Mr Speaker
Order. I appeal to the House: I expect the statement to be heard, and I want everybody to hear it. I want the same respect to be shown to the Leader of the Opposition afterwards. Please: this is a very important statement. The country wants to hear it as well.
The Prime Minister
Mr Speaker, I am trying to set out the context, not to mitigate or to absolve myself in any way.
The exemption under which those staff were present in Downing Street includes circumstances where officials and advisers were leaving the Government, and it was appropriate to recognise them and to thank them for the work that they have done. [Interruption.] Let me come to that, Mr Speaker. I briefly attended such gatherings to thank them for their service—which I believe is one of the essential duties of leadership, and is particularly important when people need to feel that their contributions have been appreciated—and to keep morale as high as possible. [Interruption.] I am trying to explain the reasons why I was there, Mr Speaker.
It is clear from what Sue Gray has had to say that some of these gatherings then went on far longer than was necessary. They were clearly in breach of the rules, and they fell foul of the rules. I have to tell the House, because the House will need to know this—again, this is not to mitigate or to extenuate—that I had no knowledge of subsequent proceedings, because I simply was not there, and I have been as surprised and disappointed as anyone else in this House as the revelations have unfolded. Frankly, I have been appalled by some of the behaviour, particularly in the treatment of the security and the cleaning staff. I would like to apologise to those members of staff, and I expect anyone who behaved in that way to apologise to them as well.
I am happy to set on the record now that when I came to this House and said in all sincerity that the rules and guidance had been followed at all times, it was what I believed to be true. It was certainly the case when I was present at gatherings to wish staff farewell—the House will note that my attendance at these moments, brief as it was, has not been found to be outside the rules—but clearly this was not the case for some of those gatherings after I had left, and at other gatherings when I was not even in the building. So I would like to correct the record—to take this opportunity, not in any sense to absolve myself of responsibility, which I take and have always taken, but simply to explain why I spoke as I did in this House.
In response to her interim report, Sue Gray acknowledges that very significant changes have already been enacted. She writes:
“I am pleased progress is being made in addressing the issues I raised.”
She adds:
“Since my update there have been changes to the organisation and management of Downing Street and the Cabinet Office with the aim of creating clearer lines of leadership and accountability and now these need the chance and time to bed in.”
No. 10 now has its own permanent secretary, charged with applying the highest standards of governance. There are now easier ways for staff to voice any worries, and Sue Gray welcomes the fact that
“steps have since been taken to introduce more easily accessible means by which to raise concerns electronically, in person or online, including directly with the Permanent Secretary”.
The entire senior management has changed. There is a new chief of staff, an elected Member of this House who commands the status of a Cabinet Minister. There is a new director of communications, a new principal private secretary and a number of other key appointments in my office. I am confident, with the changes and new structures that are now in place, that we are humbled by the experience and we have learned our lesson.
I want to conclude by saying that I am humbled, and I have learned a lesson. Whatever the failings—[Interruption.] We will come to that. Whatever the failings of No. 10 and the Cabinet Office throughout this very difficult period—[Interruption.] And my own, for which I take full responsibility. I continue to believe that the civil servants and advisers in question—hundreds of them, thousands of them, some of whom are the very people who have received fines—are good, hard-working people, motivated by the highest calling to do the very best for our country. I will always be proud of what they achieved, including procuring essential life-saving personal protective equipment, creating the biggest testing programme in Europe and helping to enable the development and distribution of the vaccine that got this country through the worst pandemic of a century.
Now we must get our country through the aftershocks of covid with every ounce of ingenuity, compassion and hard work. I hope that today, as well as learning the lessons from Sue Gray’s report, which I am glad I commissioned—I am grateful to her—we will be able to move on and focus on the priorities of the British people: standing firm against Russian aggression; easing the hardship caused by the rising costs that people are facing; and fulfilling our pledges to generate a high-wage, high-skill, high-employment economy that will unite and level up across the whole of our United Kingdom. That is my mission, that is our mission, that is the mission of the whole Government, and we will work day and night to deliver it. I commend this statement to the House.
Keir Starmer (Holborn and St Pancras) (Lab)
The door of No. 10 Downing Street is one of the great symbols of our democracy. Those who live behind it exercise great power, but they do so knowing that their stay is temporary. Long after they have gone, that door and the democracy it represents will remain firm and unyielding. But Britain’s constitution is fragile. It relies on Members of this House and the custodians of No. 10 behaving responsibly, honestly and in the interests of the British people. When our leaders fall short of those standards, this House has to act.
For months, Conservative Members have asked the country to wait—first for the police investigation, which concluded that this Prime Minister is the first in our country’s history to have broken the law in office, and then for the Sue Gray report. They need wait no longer. That report lays bare the rot that, under this Prime Minister, has spread in No. 10, and it provides definitive proof of how those within the building treated the sacrifices of the British people with utter contempt. When the dust settles and the anger subsides, this report will stand as a monument to the hubris and arrogance of a Government who believed it was one rule for them, and another rule for everyone else.
The details are stark. Five months ago, the Prime Minister told this House that all guidance was completely followed in No. 10, yet we now know he attended events on 17 December. At least one of those attending has received a fine for it, deeming it illegal. We know that on 18 December, an event was held in which staff “drank excessively”, which others in the building described as a “party”, and that cleaners were left to mop up the red wine the next day. On 20 May, as a covid press conference was taking place, one of the Prime Minister’s senior officials was told, “Be mindful; cameras are leaving. Don’t walk about waving bottles.”
It is now impossible to defend the Prime Minister’s words to this House. This is about trust. During that 20 May press conference, the British public were told that normal life as we know it was a long way off, but that was not the case in No. 10. Even now, after 126 fines, they think it is everyone else’s fault but theirs. They expect others to take the blame while they cling on. They pretend that the Prime Minister has somehow been exonerated, as if the fact that he only broke the law once is worthy of praise. The truth is that they set the bar for his conduct lower than a snake’s belly, and now they expect the rest of us to congratulate him as he stumbles over it.
No. 10 symbolises the principles of public life in this country: selflessness, integrity, objectivity, accountability, openness, honesty and leadership. But who could read this report and honestly believe that the Prime Minister has upheld those standards? The reason the British public have had to endure this farce was his refusal to admit the truth or do the decent thing when he was found to have broken the law. This report was necessary because of what Sue Gray describes as
“failures of leadership and judgment”,
for which senior political leadership “must bear responsibility”. It is that failure of leadership that has now left his Government paralysed in the middle of a cost of living crisis. The Prime Minister has turned the focus of his Government to saving his own skin. It is utterly shameful. It is precisely because he cannot lead that it falls to others to do so. I have been clear what leadership looks like. [Interruption.] I have not broken any rules, and any attempt—[Interruption.]
Mr Speaker
Order. Can I just calm it down? Quite rightly, I wanted to hear the Prime Minister; the same goes for the Leader of the Opposition. Those who do not wish to hear, please go and have a cup of tea or something.
Keir Starmer
I have been clear what leadership looks like. I have not broken any rules, and any attempt to compare a perfectly legal takeaway while working to this catalogue of criminality looks even more ridiculous today, but if the police decide otherwise, I will do the decent thing and step down. The public need to know that not all politicians are the same—that not all politicians put themselves above their country—and that honesty, integrity and accountability matter.
Conservative Members now also need to show leadership. This Prime Minister is steering the country in the wrong direction. Conservative Members can hide in the back seat, eyes covered, praying for a miracle, or they can act to stop this out-of-touch, out-of-control Prime Minister driving Britain towards disaster. We waited for the Sue Gray report. The country cannot wait any longer. The values symbolised by the door of No. 10 must be restored. Conservative Members must finally do their bit. They must tell the current inhabitant, their leader, that this has gone on too long. The game is up. You cannot be a lawmaker and a lawbreaker, and it is time to pack his bags. Only then can the Government function again. Only then can the rot be carved out. Only then can we restore the dignity of that great office and the democracy that it represents.
The Prime Minister
The right hon. and learned Gentleman talks about what went on in No. 10 Downing Street and the events behind that black door, and about the number of events. All I will say to him is that he, throughout the pandemic, was not leading many thousands of people in the fight against coronavirus. He was sniping from the sidelines and veering from one position to the next, and today he has done it again. Week after week, he could have come to this House and talked about the economy, about Ukraine, about the cost of living—but no, Mr Speaker: time after time, he chose to focus on this issue. He could have shown some common sense, and recognised that when people are working very hard together, day in day out, it can be difficult to draw the boundary between work and socialising. And yet, after months of his frankly sanctimonious obsession, the great gaseous zeppelin of his pomposity has been permanently and irretrievably punctured by the revelation that—he did not mention this— he is himself under investigation by the police.
I am not going to mince my words. I have got to say this. Sir Beer Korma is currently failing to hold himself to the same high standards that he demanded of me. It is true. He called for me to resign when the investigation began. Why is he in his place? Why—[Interruption.]
Mr Speaker
Order. Mr Holden, for the second time, I ask you please to help me to help you, because I am sure you want to hear the rest of this.
The Prime Minister
The right hon. and learned Gentleman should at least be consistent, and hold himself to the same standards. He is still there, and so is the deputy Leader of the Opposition.
I apologised when the revelations emerged, and I continue to apologise. I repeat that I am humbled by what has happened, and we have instituted profound changes throughout No. 10, but in view of the mess in which the right hon. and learned Gentleman has found himself, it would now be sensible for him, too, to apologise, so that we can all collectively move on. That, I think, is what the people of this country want to see above all. They want to see leadership from this House of Commons, and leadership from both parties, in dealing with their priorities. That is why we are focused on getting through the aftershocks of covid, that is why I am proud of what we did to roll out the fastest vaccine campaign in Europe, and that is why I am proud that we now have the lowest unemployment in this country for 50 years. That is what the people of this country want. I appreciate that the right hon. and learned Gentleman has his points to make, but I think that, overwhelmingly, the will of this country is for us now to say thank you to Sue Gray and for us collectively to move on.
Sir Robert Buckland (South Swindon) (Con)
My right hon. Friend well knows that the rules apply to him as much as to all of us, and the rules of this House make clear that anyone who comes here and deliberately lies and misleads the House should leave their position, resign or apologise. My right hon. Friend has been asked many times about specific incidents and events that Sue Gray has outlined. Has he on any occasion come to the House in response to specific questions about specific events, and deliberately lied to us?
The Prime Minister
No, Mr Speaker, for the reason I have given: that at the time when I spoke to this House, I believed that what I was doing was attending work events, and, with the exception of the event in the Cabinet Room, that is a view that has been vindicated by the investigation.
Mr Speaker
I call the leader of the Scottish National party, Ian Blackford.
Ian Blackford (Ross, Skye and Lochaber) (SNP)
As I speak, the public are poring over the sordid detail of what went on—out of the public eye, behind the high gates and walls of the Prime Minister’s residence. The report is damning. It concludes that many gatherings and many individuals did not adhere to covid guidance; that
“events…were attended by leaders in government”
and
“should not have been allowed to happen”;
that
“junior civil servants believed that their involvement…was permitted given the attendance of senior leaders”;
that there was an “unacceptable”
“lack of respect and poor treatment of security and cleaning staff”;
and, crucially, that:
“The senior leadership at the centre, both political and official, must bear responsibility for this culture.”
That leadership came from the top, and the Prime Minister—in the words of the report—must bear responsibility for the culture. A fish rots from the head.
The Prime Minister’s Dispatch Box denial of a party taking place on 13 November is now proven to be untrue. He was there on 13 November, photographed, raising a toast, surrounded by gin, wine, and other revellers. The charge of misleading Parliament is a resignation matter; will the Prime Minister now finally resign?
This Prime Minister has adopted a systematic, concerted and sinister pattern of evasion. Truthfulness, honesty and transparency do not enter his vocabulary. That is just not part of his way of being, and it speaks for the type of man that he is. Credibility, truth and morality all matter, and the Prime Minister has been found lacking, time and again.
Ian Blackford
The Prime Minister can shake his head, but that is the reality. Ethics have to be part of our public life, and ethical behaviour has to be at the core of the demeanour and the response of any Prime Minister.
The Prime Minister brings shame on the office, and has displayed contempt, not only to the Members of this House but to every single person who followed the rules —those who stayed away from family, those who missed funerals, those who lost someone they loved. So I hope that when Tory Members retire to the 1922 Committee this evening, they will bear in mind the now infamous Government advertisement featuring a desperately ill covid patient. It says:
“Look her in the eyes and tell her you never bend the rules.”
If those Tory Members do not submit a letter—if they do not remove this Prime Minister—how will they ever look their constituents in the eye again?
The Prime Minister
I think that the right hon. Gentleman should look closely at Sue Gray’s report, and I repeat my thanks to her. I stress that the nature and length of my involvement in these events is very clear from what she says, and I take full responsibility for what happened. That is why we have taken the steps that we have to reform and improve the way in which No. 10 works. We are humbled by what has happened, and we have changed it.
Mr Peter Bone (Wellingborough) (Con)
Since my election to the House, I have been running a campaign called “Listening to Wellingborough and Rushden”. Members may recall that on one occasion members of that group asked me to present a letter at Prime Minister’s Question Time calling for a previous Prime Minister to resign. What they are telling me today is that their concerns are the terrible war in Ukraine, illegal immigrants crossing the channel, and the economy, and their message to the Prime Minister is, “Get on with the job”. Does the Prime Minister agree with the “Listening to Wellingborough and Rushden” campaign?
The Prime Minister
I agree with them profoundly and passionately, and that is exactly what I am going to do.
Catherine West (Hornsey and Wood Green) (Lab)
The Prime Minister said that on 13 November 2020, he attended the “Abba party” briefly. His defence was a job interview. Can he confirm that he was only in his flat, and that he met Henry Newman to discuss a job, and can he tell us what the other special advisers were doing? Were they part of the job interview as well?
The Prime Minister
That evening was extensively investigated, to the best of my knowledge, and I do not believe I can improve on what Sue Gray has had to say.
Mr Tobias Ellwood (Bournemouth East) (Con)
This is a damning report about the absence of leadership, focus and discipline in No. 10, the one place where we expect to find those attributes in abundance. I have made my position very clear to the Prime Minister: he does not have my support. A question I humbly put to my colleagues is: are you willing, day in day out, to defend this behaviour publicly? Can we continue to govern without distraction, given the erosion of the trust of the British people? And can we win a general election on this trajectory?
The question I place to the Prime Minister now—[Interruption.] I am being heckled by my own people. If we cannot work out what we are going to do, the broad church of the Conservative party will lose the next general election. My question to the Prime Minister is very clear: on the question of leadership, can he think of any other Prime Minister who would have allowed such a culture of indiscipline to take place on their watch? And if they did, would they not have resigned?
The Prime Minister
To answer the question that my right hon. Friend put to all of us on these Benches, I think the answer is overwhelmingly and emphatically yes, we are going to go on and win the next general election and we are going to get on with the job.
Ed Davey (Kingston and Surbiton) (LD)
The Prime Minister says he is sorry, but he is only sorry he got caught. He did not care then, as he partied during lockdown, when people could not see their dying loved ones. He did not care last year when he insisted that no rules had been broken. And he does not care now, when families across our country are struggling to heat their homes, fill their cars, and put food on the table, with a cost of living crisis that has only deepened while the Prime Minister has been scrambling to save his own skin. Can the Prime Minister look the British people in the eye and name one person, just one person, he cares about more than himself?
The Prime Minister
I can tell the right hon. Gentleman that there are people in No. 10 Downing Street, including me, who cared passionately about making sure that we had the PPE we needed, that we had the fastest vaccine roll-out in Europe, and that we protected this country from covid. That is what people were doing, and I may say that the abuse that has been directed at civil servants and officials is wholly unwarranted.
Robert Jenrick (Newark) (Con)
When I think of civil servants and advisers during that period, I think of the brilliant civil servants who helped move mountains to create the shielding programme within a matter of days and the brilliant civil servants and advisers who got 90% of homeless people off the streets within days. Does my right hon. Friend agree that these achievements and others should mean that nothing in this report is a stain upon the character of the thousands, if not hundreds of thousands, of civil servants, whether in No. 10, other Departments or across the country who helped to steer this country through the pandemic? Secondly—difficult though this is for many to say—with a war in Europe, an economic crisis and the challenges this country faces, is it not true that it is now time to turn a page, and for this country, our politics and this House to move forwards?
The Prime Minister
I agree with my right hon. Friend absolutely and passionately. We can study the report and we can draw the conclusions that we want, but the best thing now for our country is to move forwards together, and that is what we are going to do.
Dame Angela Eagle (Wallasey) (Lab)
We all understand, and the Prime Minister understands, that not being truthful on the Floor of this House requires a resignation. My hon. Friend the Member for Hornsey and Wood Green (Catherine West) asked the Prime Minister a point-blank question on the Floor of this House when he was at the Dispatch Box. She asked him if he had been to a party on 13 November in 10 Downing Street. He said he had not and that no party had happened. There are four pictures of it featured in the Sue Gray report. Will the Prime Minister account now, on the Floor of the House, for his answer to that very specific question?
The Prime Minister
Yes of course, and I tried to do it in what I said earlier. The answer is that it is part of my job to say thank you to people who work in Government, and that is what I was doing. I believed it was a work event and, indeed, there has been no fine issued to me as a result of my attendance at that event, because that is what I was doing.
Claire Coutinho (East Surrey) (Con)
I commend Sue Gray for the report and I understand why people are angry. Having looked at the pictures of the birthday party in the Cabinet Office, I think the Opposition are going to be quite hard pressed to explain why they have such moral outrage about that but not about the late-night beers that happened in Durham. However, one of the things I was very troubled by was the language used towards the custodian. Will the Prime Minister join me now—I am sure the whole House would agree—in expressing the level of respect and gratitude we have to every single cleaner and worker, including all the people in the Tea Room, who work in this place?
The Prime Minister
I agree very much with what my hon. Friend has just said. As I said in my opening statement, any rudeness towards a member of staff is absolutely inexcusable and I want whoever was responsible to apologise.
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
I feel as if I have completely let down those who showered me with so much love. Why wasn’t I by the bedside of my lovely grandmother during her final few days? Why did I let her die alone in that hospital? Why did I not attend the funeral of my uncle? It was because of worries about Government restrictions on numbers. And why did I not go to comfort my brother- in-law’s father as he was dying in a Slough care home? With all of this context, it is utterly hypocritical for those very individuals who were preaching to us ad nauseam about patriotism, the flag and the Queen to be having late-night parties, including two on the night before the Queen had to sit all alone during her husband’s funeral when the country was in a state of national mourning. Absolutely shameless. Given that the Prime Minister is not going to do the right and honourable thing, does he agree that it is not the support and sympathy of the British people that are keeping him in power, the majority of whom want him to resign, but the support and sympathy of those—
Mr Speaker
Order. I am sorry, but this is meant to be a question. Also we do not normally bring the monarchy into proceedings. I am sure that the Prime Minister will have got the gist. I understand the emotions behind this, but questions have to be shorter.
The Prime Minister
I am very sorry for the hon. Gentleman’s loss. He has a perfect right to speak with the passion that he does. All I can say is that I take full responsibility for what happened, and we have made extensive changes.
Mr John Baron (Basildon and Billericay) (Con)
I believe both leaders have a lot to answer for with regard to this issue. The British Army teaches us, or certainly believes at its very core, that we serve to lead and we lead by example. Given the extent of rule breaking in No. 10, does my right hon. Friend believe that what he has said to the House since about there being no rule breaking passes the test of reasonableness?
The Prime Minister
My hon. Friend is asking exactly the right question and I understand why he asks it. But I have tried to give my answer to him and to the House, which is that I believed that I was attending work events—those are the ones of which I had knowledge—and with the exception of what took place in the Cabinet room in June 2020, that view has been sustained by the investigation.
Joanna Cherry (Edinburgh South West) (SNP)
Neither I nor my Edinburgh South West constituents would wish to live in a state where the Government of the day can influence the police in the exercise of their duty to investigate without fear or favour, so we are puzzled as to why the Prime Minister did not receive questionnaires in respect of three gatherings for which other people in No. 10 received questionnaires. We are also puzzled as to why the ABBA party in the Prime Minister’s flat has never been investigated by either Sue Gray or the Metropolitan police. What can be done by way of an independent investigation to assure me and my constituents that the Metropolitan police have not been nobbled?
The Prime Minister
That would greatly surprise me. I think the hon. and learned Lady should look more closely at Sue Gray’s report, where she will find the answer she seeks.
Michael Fabricant (Lichfield) (Con)
I understand the outrage of people in Lichfield and Burntwood, and indeed the hon. Member for Slough (Mr Dhesi), who have lost loved ones, but I also understand, having been an employer, that attending a leaving event is considered to be a work event. My right hon. Friend clearly had guidance that turned out to be wrong, so can he now explain how the appointment of a new permanent secretary at No. 10 will make a difference?
The Prime Minister
The structure of No. 10 has changed. There is more direct command and control of the whole building, which was a little unclear, and there is a new permanent secretary with direct responsibility for the whole office—hundreds and hundreds of people—as opposed to that function nominally being addressed by the principal private secretary. As Sue Gray says, the lines of command were not clear.
Karl Turner (Kingston upon Hull East) (Lab)
After months of shuffling around, prevarication and buck passing, this report makes it absolutely clear that, when the British public were taking the restrictions seriously, the Prime Minister was taking the British public for fools. That is why the Prime Minister and his Government cannot be taken seriously. Is it not time he said goodbye so that the rest of us can say good riddance?
The Prime Minister
I really do not think the Government can be blamed for the delay that the hon. Member complains of. It took a long time for the Met to do its work, which was exhaustive, and I do not believe that it sustains the conclusion he has drawn—not at all.
Aaron Bell (Newcastle-under-Lyme) (Con)
When I asked the Prime Minister about Sue Gray’s interim findings on 31 January, he asked me to wait for the inquiry report—he asked many hon. Members that day to do the same. Subsequently, he has asked the media to wait for the findings of the inquiry report, and he knows that many Conservative colleagues have told their constituents that they are waiting for the inquiry report. So I was very surprised to read an intimation in The Times that he may have asked Sue Gray not to publish the report at all. Is there any truth to that suggestion?
The Prime Minister
What Sue Gray has published is entirely for Sue Gray. It is a wholly independent report.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
The last time I asked the Prime Minister a question on this subject, I said that the problem with him—and I have got on with him over the years—is that he is a serial offender. Even serial offenders, if they confess to doing wrong and repent for what they have done, can be forgiven because they are mending their ways. I am sorry, but his performance today shows no real remorse. He is trying to pass the buck to other people. Like many I see on the Conservative Benches, I believe he should now resign.
The Prime Minister
I have apologised and, as I said, I am deeply contrite about what happened. I take responsibility. We have already made a huge amount of change in No. 10, and it is my judgment that the best thing for the country is now to move on from this issue and to learn the lessons.
Dr Julian Lewis (New Forest East) (Con)
Given the cavalier way in which these rules were interpreted in No. 10, does my right hon. Friend agree that rules of such intrusiveness and rigidity must never again be imposed on the British people as a whole?
The Prime Minister
We were dealing with an unprecedented pandemic, and we did not have any immediate tools to control it, short of a vaccine, without asking people to restrict their behaviour. I am sure there are plenty of lessons we can learn for the future about how to do it better, and that will be a matter for the inquiry.
Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
Although the Prime Minister is still, unwittingly, a great asset for Scottish independence, the question everywhere is this: how to goodness is he still the Prime Minister of this current United Kingdom?
The Prime Minister
The answer to that question is contained in the continued support of the people of the United Kingdom for our Union. Despite everything the SNP is doing to try to overturn the democratic verdict of 2014, I do not believe it will succeed.
Mrs Natalie Elphicke (Dover) (Con)
I thank my right hon. Friend for his further apology and explanation today, which is important to many of my constituents. Does he note that paragraph 4 on page 36 of the Sue Gray report says
“there have been changes to the organisation and management of Downing Street and the Cabinet Office with the aim of creating clearer lines of leadership and accountability”?
Does he agree with Sue Gray that these changes need to bed in, that the focus of our Government must be laser-like in tackling the cost of living crisis that has come about as a result of the covid pandemic and Ukraine, and that, over and above everything else, this is the concern of my constituents?
The Prime Minister
The hon. Gentleman asks me to answer, and I will. I completely agree with my hon. Friend the Member for Dover (Mrs Elphicke), which is why we will get on with the job.
Chris Bryant (Rhondda) (Lab)
What a load of baloney. Excuse after excuse after excuse, and it simply does not wash with the British public, who are sick and tired of being taken for fools. The truth is that the Prime Minister encouraged the gatherings, he attended the gatherings, he poured the drinks at the gatherings and he even raised a toast at the gatherings, so he knew perfectly well that these gatherings had taken place. The most despicable thing of all is that Sue Gray says she saw
“multiple examples of a lack of respect and poor treatment of security and cleaning staff.”
They knew what the rules meant, even if nobody else did. Does the Prime Minister show no contrition, no sense of shame, that Downing Street, under him, has been a cesspit full of arrogant, entitled narcissists?
The Prime Minister
As I have already said to the House, it is absolutely disgraceful, in any circumstances, to be rude to the people who help us—the staff and custodians. It is intolerable, and I will make sure that those who are guilty of it apologise or are otherwise disciplined.
Jack Brereton (Stoke-on-Trent South) (Con)
Now we have had this report and the Prime Minister has repeatedly apologised, does he not agree that we should be focusing on the real issues that matter to the British public—[Interruption.]
Mr Speaker
Order. Both of you need to have a cup of tea outside, because I cannot hear the hon. Member for Stoke-on-Trent South (Jack Brereton) with you both shouting at each other.
A separate debate was trying to be created, but we do not need to worry anymore.
Jack Brereton
Does the Prime Minister not agree that we should focus on the real issues that matter to the British people: the cost of living and Russia’s invasion of Ukraine? Given what happened in Durham, the only people left to apologise in this Chamber are on the Labour Front Bench.
The Prime Minister
Yes. People in glass houses should not throw stones.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
To call this a damning report for the Prime Minister is an understatement. It states:
“The senior leadership at the centre, both political and official, must bear responsibility for this culture.”
For 168 days, the Prime Minister has used Sue Gray as a human shield against this duty. In this farce of a parliamentary system, it is now all down to Tory MPs—and there are not many of them left in the Chamber—to grow a backbone and oust this moral vacuum of a Prime Minister. Will he spare them the trouble and resign?
Brendan Clarke-Smith (Bassetlaw) (Con)
I thank Sue Gray for her report and, of course, the Metropolitan police for concluding their inquiry. Does the Prime Minister agree that investigations should be carried out without outside interference or statements towards the police or others? Will he now urge the Leader of the Opposition to respect this, too, with regards to Durham constabulary?
Afzal Khan (Manchester, Gorton) (Lab)
My mother, my father-in-law and my mother-in-law are just three of the nearly 180,000 people who have died from covid-19 in Britain. Laws were broken by the Prime Minister, the Chancellor and others, and these were not victimless crimes; these were not silly rules and meaningless red tape—they were designed to protect lives. The doctors and nurses who cared for my relatives at North Manchester General Hospital were not clocking off for “wine time Friday”. So for the first time in his life, will the Prime Minister do the right thing, and resign?
The Prime Minister
No, but I want to assure the hon. Gentleman that I understand the reasons why he feels as he does. I also want to say that everybody in No. 10 took the pandemic with the utmost seriousness. I grieve for his loss. We were doing our best to contain a very, very difficult situation.
Craig Mackinlay (South Thanet) (Con)
My right hon. Friend will be aware that I voted against much of the covid legislation over the past couple of years, because I felt that a lot of it was pettifogging, ridiculous and unnecessary. I think this entire House should apologise to the British people for allowing a lot of this nonsense legislation to be in place. Whereas I take great comfort in and have respect for the fact that the courts tend to come to the same conclusion for the same offences, it would seem that the legislation we passed allowed an individual police force to come to different conclusions and certainly allowed different police forces to do so. From the photos I have seen, I would much rather have been at the curry and beer than the birthday party the Prime Minister had in the Cabinet room.
The Prime Minister
I thank my hon. Friend very much. All I can say is that those matters are for the relevant forces.
Alison McGovern (Wirral South) (Lab)
I do not believe that the Prime Minister has any credibility left, because my constituents tell me that they do not believe what he says. So I want to ask the Prime Minister about what I think is the bare minimum in this situation: cleaning staff and security staff in No. 10 were treated with a lack of respect, so has he personally apologised to them?
The Prime Minister
This is the first I have seen of the detailed criticisms of civil servants for that abuse. I have said that I think it is intolerable and I will make sure that staff, custodians and cleaners who were treated disrespectfully get a proper apology—
The Prime Minister
I have apologised to them today already from this Dispatch Box.
Pete Wishart (Perth and North Perthshire) (SNP)
Rarely in my 21 years in this House have I heard such utter drivel as we have been presented with today. I have tried to find words to capture what the Prime Minister said: disingenuous, delusional, slippery, self-serving—I know that I cannot say “dishonest” in this place. There has been no attempt at remorse; it is all somebody else’s fault. Surely if he was half the man he thinks he is, he would summon that self-respect and just go.
The Prime Minister
I direct the hon. Gentleman to what I have already said.
Barbara Keeley (Worsley and Eccles South) (Lab)
I want to quote the following to the Prime Minister and all those on his side—we have just heard one of them—who suggest that the covid rules did not matter. It is from palliative care doctor, Dr Rachel Clarke:
“To NHS staff, it was always abundantly clear that the way you survive a pandemic is together.”
She goes on to say that, in 2020,
“Collective compliance…was really all our patients had”
to protect them, and “basic, selfless, public decency” mattered. Rules were
“Hated yet obeyed, because we care about each other... And that glass of wine in the prime minister’s hand? It’s been thrown into the faces of us all.”
How does he reply to that?
The Prime Minister
I wish things could have been handled better and I wish we had got things right in No. 10 in the way we did not. I apologise again for things that we got wrong, but we have already changed the way we work and I really think it is time that the country moved on.
Wendy Chamberlain (North East Fife) (LD)
The Prime Minister has previously stated that partygate investigations would be complied with fully, but today there are reports that senior staff simply did not answer the questionnaires and, as a result, have avoided being fined. Can he therefore confirm whether all senior staff at No. 10, including himself, met their obligations and replied to the Metropolitan police in full?
The Prime Minister
As the hon. Lady knows, those are matters for the Met.
Naz Shah (Bradford West) (Lab)
The Prime Minister said:
“I briefly attended such gatherings to thank them for their service, which I believe is one of the essential duties of leadership”.
He would not know leadership if it hit him in the face—that is where my constituents stand, and I will tell him why. Doctors gave their lives and their families were not allowed to attend their funerals. I was on the phone when the trust that I work with had to make leadership decisions to separate people and not let them see their dying relatives; I was on the phone to somebody while a person died—they were begging me to let them see him. That is what leadership is; those were difficult decisions they had to make. Nurses could not go home and had to book into hotels so that they did not spread infections. If the Prime Minister had an ounce of leadership, he would resign. So why doesn’t he?
The Prime Minister
I refer the hon. Lady to what I have already said.
Nick Smith (Blaenau Gwent) (Lab)
The Prime Minister’s credibility is like a tyre with a slow puncture. He reinflates it occasionally, but is it not the truth that his party needs a new front wheel?
The Prime Minister
I think Opposition Members really need to ask a new question.
Kate Hollern (Blackburn) (Lab)
I am absolutely appalled by the behaviour of some Members in this Chamber today. They are refusing to accept responsibility. They are jeering and cheering, and saying, “Let’s move on.” May I tell the Prime Minister that there is a young man in Blackburn who cannot move on? He had a “wart” on his head, but rather than get an appointment with a doctor he was asked to send in a picture. Three months later, he was told that he had stage 4 cancer. So the impact is widespread and the damage is long-lasting, and this young man cannot even get the treatment he needs because he is told it will not be funded. Does the Prime Minister feel no shame at totally trashing rules that he made and expected other people to live with? He wants to move on and other people are left with the consequences. Surely the Prime Minister must resign.
The Prime Minister
No, we want to get on with addressing the covid backlogs, which is what we are doing.
Marion Fellows (Motherwell and Wishaw) (SNP)
I sometimes wonder whether the Prime Minister has a neck of pure brass. Does he understand and recognise the words “honesty”, “integrity” and “accountability”? From my position, it does not seem as though he does. Many Members have spoken of personal things and personal tragedies they have gone through. The country needs a new leader. Yes, we need to move on, but we should not need to lead on with him. Will the Prime Minister now resign?
The Prime Minister
Mr Speaker, I think I am just going to repeat my previous answer.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
The Prime Minister’s leadership—his behaviour—drives the culture not only in our politics, but in our country. It also gives licence to others to behave in a similar manner. So if he is genuine in his apology, and—[Interruption.] Will he, first, ensure that the ministerial and Members’ codes have the Nolan principles incorporated into them and put them into statute? Secondly, will he condemn those Oldham Conservative candidates who delivered toxic racist and misogynistic leaflets during the recent local elections? His chairman has details of that.
The Prime Minister
I would be very happy to look at those details if the hon. Lady will send them to me.
Dan Jarvis (Barnsley Central) (Lab)
“Serve to lead” is the motto of the Royal Military Academy Sandhurst, and everybody serving in our armed forces knows that if the commanding officer of a unit presided over the kind of shambles we have seen in Downing Street, they would be discharged of their duties. Why is it different for the Prime Minister?
The Prime Minister
Is the hon. Gentleman referring to the vaccine programme, the securing of PPE, or the fact that we came out of covid faster than any other European country?
Ms Anum Qaisar (Airdrie and Shotts) (SNP)
A comment from the Sue Gray report that sickened me was:
“I was made aware of multiple examples of a lack of respect and poor treatment of security and cleaning staff.”
The Prime Minister has made a public apology at the Dispatch Box, but when will he personally apologise to those hard-working cleaning staff, who took a risk every day to keep everyone else safe?
The Prime Minister
To repeat what I said both earlier and to the hon. Member for Wirral South (Alison McGovern), when I have identified the custodians, cleaners and staff in question, I will of course talk to them myself.
Dr Rupa Huq (Ealing Central and Acton) (Lab)
One address, 20 months, 204 questionnaires, 345 documents and 510 photos—including the ones on page 38 onwards of the Prime Minister raising a toast when he should be toast—and as a result 126 fines, mostly given to 83 junior staffers, all while the police were routinely fining people greater amounts than the £50 the Prime Minister was fined, and for far lesser offences. Does this not all point to the conclusion that not everyone is as equal under the law as each other these days?
The Prime Minister
I think there is a criticism of the Metropolitan police contained in what the hon. Lady just said, which I do not agree with.
Karin Smyth (Bristol South) (Lab)
The problem with the report is that the dates that are outlined so clearly reopen many of our wounds. I am going to ask the Prime Minister the question that the hon. Member for Newcastle-under-Lyme (Aaron Bell) asked earlier but the Prime Minister did not answer: when he met with Sue Gray recently, did he ask her not to publish the report?
The Prime Minister
No. What I can tell the hon. Lady is that the report is wholly independent and the judgments contained in it are a matter for Sue Gray. I am grateful to her for what she has done, and her interim report was extremely useful to the Government in making the changes that we have made.
Hannah Bardell (Livingston) (SNP)
In the years to come, when the Prime Minister reflects on his time as PM and in government, what does he think will be his proudest moment? Will it be breaking his own lockdown laws and being fined? Will it be misleading Parliament? Or will it be lying to the Queen and presiding over such a toxic environment that, according to Sue Gray’s report, staff in his office had a lively party the night before her husband’s funeral?
The Prime Minister
I will look back, many years hence, on, from this period, the fastest vaccine roll-out in Europe, which was not half bad; being the first country anywhere in the world to put an approved vaccine in anybody’s arm; and coming out of covid faster than any other European country. Those are already very considerable achievements, to say nothing of delivering Brexit, which the hon. Lady would not have done and neither would the Labour party.
Sarah Jones (Croydon Central) (Lab)
The Prime Minister was asked whether he thought any other Prime Minister would have allowed such rule breaking on their watch. I was a senior civil servant for two Prime Ministers—Gordon Brown and the right hon. Member for Maidenhead (Mrs May)—and I can tell the Prime Minister that when I was a senior civil servant no such behaviour would have occurred. What is clear to me in the Sue Gray report is the number of comments by civil servants who knew that they were doing something wrong. They said:
“we seem to have got away with”
it; this is
“somewhat of a comms risk”;
people should not be
“walking around waving bottles of wine”
in front of cameras—and it goes on. They knew they were doing something wrong; did the Prime Minister, at any stage and at any of the events he attended, think he was doing something wrong?
The Prime Minister
No, and I have tried to be clear with the House about that. By the way, the hon. Lady talks about serving previous Prime Ministers; I thank her for her service, but I want to assure her that I have never thrown a stapler at anybody, or an ashtray.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
The Prime Minister’s utterances on partygate at that Dispatch Box have proven to be the fantasy that we all knew they were. Allegra Stratton resigned for merely joking about a party; she has more integrity in her little finger than the Prime Minister could ever hope to possess. This charlatan of a Prime Minister is without shame, without credibility and without any hope of ever winning another election. Will he sacrifice anyone or any institution—including his own party—to try to keep his ever-weakening grip on power?
The Prime Minister
I know why the SNP wants to remove me from office: because we are going to get on and win the next election. That is the reality.
Ms Lyn Brown (West Ham) (Lab)
Maybe the Prime Minister could help me, again. If no rules were broken, what on earth did Martin Reynolds mean when he said, “we…got away with” it? He was referring, of course, to the bring-your-own-booze party on 20 May. What did he mean by “we…got away with” it?
The Prime Minister
I cannot give an exegesis of what is in the report. The hon. Lady can read the report for herself.
Mohammad Yasin (Bedford) (Lab)
When the Prime Minister says he is sorry, we know he is sorry for getting caught. One of my constituents, Louise, was in hospital in November 2020. A very elderly woman lay in the bed next to hers, crying and begging for her family. She asked Louise to phone and ask them why they had not come to see her. The last thing she said to Louise was:
“I won’t be here in the morning.”
She died with a student nurse holding her hand; that haunts Louise to this day. Does the Prime Minister agree with Louise when she says that he is a liar and must resign?
The Prime Minister
I have every sympathy for Louise and all those who have suffered, but no, for the reasons I have given, I do not agree with what the hon. Gentleman has just said.
Stephen Farry (North Down) (Alliance)
The Prime Minister has presided over a culture of law breaking, entitlement and privilege in Downing Street. He cannot credibly plead ignorance on that point. In his statement, he sought to rationalise it by saying that the staff in Downing Street were working long, pressurised hours battling covid. What does he say to the thousands of doctors, nurses, care workers, emergency services workers, cleaners, security staff and, indeed, civil servants up and down the country who did not have alcohol-fuelled work events, parties or leaving dos?
The Prime Minister
I simply say to them what I have said since the pandemic began, which is that I thank them from the bottom of my heart.
Steve McCabe (Birmingham, Selly Oak) (Lab)
When previously I asked the Prime Minister to release the publicly funded photographs of these incidents, he declined because of the police investigation. Is there any conceivable reason why the full publicly funded catalogue of these incidents should not now be released so that the public can see and judge for themselves?
The Prime Minister
What I can tell the hon. Gentleman is that, to the best of my knowledge, all the evidence has been seen by Sue Gray and by the Metropolitan police. There may be issues about what else can be released more generally, but I believe that the hon. Gentleman and the public have a representative sample of the images.
Ronnie Cowan (Inverclyde) (SNP)
In a five-page statement, the Prime Minister indicated five times that he takes responsibility, but in fact he has not done so once. During the pandemic, all MPs asked our constituents to adhere to the guidelines to protect themselves, their families, their friends, their colleagues and the wider community. With the benefit of hindsight, does the Prime Minister believe he set a good example that he can look back on with pride?
The Prime Minister
Where I fell short and where we fell short, I apologise. I thank all colleagues who asked their constituents to follow the guidelines. Yes, the Government can be very proud of a lot of what we delivered during covid.
Dr Caroline Johnson (Sleaford and North Hykeham) (Con)
I have waited for the report and, having looked through it, it is clear to me that the Prime Minister did break the rules on one occasion, when he was surprised by a birthday greeting between meetings in the Cabinet Room. That was a clear rule breach, but one for which he has apologised, and I accept his apology. It is also clear from the report that there were other occasions on which the Prime Minister was not present and did not break the rules, but others did. Such events occurred repeatedly during the lockdown. What has the Prime Minister learned from the report? How will the changes he has put in place in No. 10 ensure that such behaviours, and the attitudes that allowed them to occur, do not persist?
The Prime Minister
I thank my hon. Friend very much. My hon. Friend the Member for Lichfield (Michael Fabricant) asked substantially the same question. The lines of command and responsibility in No. 10 are now much sharper, thanks to the installation of a new second permanent secretary with direct responsibility for everybody in the building.
Justin Madders (Ellesmere Port and Neston) (Lab)
The Prime Minister must see that people partying until the small hours on a regular basis at Downing Street paints an awful picture to everybody else who was following the rules. But I want to ask him specifically about the gathering in his flat on 13 November 2020, which, contrary to what he said today, has not been fully investigated by Sue Gray. Can he confirm for the record that everyone who was there that evening was working and that there was no alcohol, no music or anything else that people might reasonably conclude constituted a party?
The Prime Minister
I am grateful to the hon. Gentleman, but I think I have answered that question already. I have nothing to add to what Sue Gray says in her report and what the Metropolitan police found in their investigation.
Janet Daby (Lewisham East) (Lab)
I know the Prime Minister would love these incidents to be swept under the carpet and us to forget about them. But the “Panorama” documentary and the Sue Gray report show the utterly inappropriate and shameless behaviour that took place at No.10 during lockdowns. The Prime Minister has said that he wanted to appreciate his officials at No.10. The way he did so was by having parties that took place every Friday at 4pm with an open bar and excessive drinking. The Sue Gray report states:
“The excessive consumption of alcohol is not appropriate in a professional workplace at any time.”
To take responsibility is to resign, which the Prime Minister says he will not do, but what is he doing to appreciate his staff and officials at No. 10 now?
The Prime Minister
What we are already doing is sharpening up the management of No.10, making it easier for staff to complain and to voice their anxieties. We have to get on with the business of government; I know that the hon. Lady wants to persist with this subject, but I want those officials to focus on the priorities of the people.
Deidre Brock (Edinburgh North and Leith) (SNP)
It is rumoured that the Chancellor will shortly—finally—be announcing some further help for our constituents who are struggling with the cost of living crisis, but we know how things work in this Government with their enormous team of spin doctors. Have the Prime Minister’s Government deliberately held back the details of that desperately needed help in order to provide some cover for the damning impact of this report?
Rushanara Ali (Bethnal Green and Bow) (Lab)
I, like many in this country, have lost loved ones. My constituents have lost loved ones. Hundreds of thousands of people have lost loved ones. The longer that this goes on the more traumatising their experience is. I can tell the Prime Minister that sitting through this statement is very traumatising for many of us who have lost loved ones and our constituents. We cannot go on like this. Will the Prime Minister now do the decent thing—the honourable thing—accept responsibility and step down so that we can all move on and get on with our lives and ensure that people who have suffered so much are protected and served properly?
The Prime Minister
I thank the hon. Lady. Of course I appreciate the suffering of those on whose behalf she speaks, but I do believe that it is the duty of the Government to get on as fast as we can with sorting out the priorities of the people now.
Jim Shannon (Strangford) (DUP)
I thank Sue Gray for the publication of her report. It is good to see the final article. We all recognise that there are many lessons to be learned from the handling of the pandemic for all levels of government, as the report states. Can the Prime Minister, working alongside devolved Administrations, give an indication as to when he will be launching the public inquiry on covid-19 that he promised? The general public have questions to ask, and answers must be given. When will the general public have their say?
The Prime Minister
As the hon. Gentleman knows, Baroness Hallett—Heather Hallett—has been appointed to head the inquiry, and he can expect developments soon.
Wayne David (Caerphilly) (Lab)
It is absolutely imperative that the British public are told the whole truth. Everyone hopes that there have been no redactions or changes to the report. Indeed, Downing Street said that its intention was to publish the report in full, in its entirety, unchanged. Did anyone in No.10 receive a copy of the report yesterday, and were any requests made for sections to be removed or altered? Were any changes made, following requests, to the section relating to the gathering in the No.10 flat on 13 November 2020?
The Prime Minister
I received the report—I had not seen it before— shortly after 10 o’clock this morning. On the hon. Gentleman’s second point about the events on 13 November, I have addressed those several times.
Richard Thomson (Gordon) (SNP)
We now know that, while the Prime Minister was happy to let the bodies pile high outside Downing Street, he was also happy to let the bottles pile up high inside Downing Street. We also know that he has come to that Dispatch Box and denied point blank that events took place—events that we now know did take place—that turned Downing Street into the most notorious party flat in central London. The Prime Minister has diminished and demeaned his office. He speaks of leadership, but any leader should know when it is time to go. Why will the Prime Minister not go, so that the country can move on as it needs to, without him in office?
The Prime Minister
What the hon. Gentleman has just said of the civil servants—some of whom, I am sad to say, were fined—who worked night and day to minimise suffering and minimise casualties during covid is unworthy.
Helen Hayes (Dulwich and West Norwood) (Lab)
My constituent Ruby Fuller lived by the motto, “Live kindly, live loudly” in pursuit of social justice. Ruby died from cancer on 20 May 2020 as the “bring your own booze” party was happening in Downing Street. Her grandparents and her young friends had to say goodbye to Ruby by Zoom. What does the Prime Minister have to say to Ruby’s friends—young people in my constituency who are listening to him today blaming everybody but himself? When will he accept that every single day that he remains in Downing Street our politics is corroded further?
The Prime Minister
I repeat my condolences to those who suffered from covid, to those who could not get the treatment that they needed during the pandemic, and to the family of Ruby who could not see her when she was suffering from cancer. All I can say now is that we want to get on with our work, which is to clear the backlogs, particularly for cancer patients up and down the country.
Daisy Cooper (St Albans) (LD)
For the bereaved families of covid, this report will unleash another cruel wave of loss, grief and anger. As a bare minimum, will the Prime Minister promise that the interim findings of the covid inquiry will be published before the next general election?
Andrew Gwynne (Denton and Reddish) (Lab)
To those MPs who have clearly gone for their lunch, may I advise them that the Prime Minister’s humble pie is off? Was the Prime Minister at the party on 18 December 2020—the so-called wine and cheese evening that lasted for five hours, where red wine was “spilled on one wall”, it was “crowded and noisy”, and a cleaner was forced to clean up afterwards. Was he at it, at any stage of the proceedings?
The Prime Minister
I think the hon. Gentleman will find the answer to that question in Sue Gray’s report.
Steven Bonnar (Coatbridge, Chryston and Bellshill) (SNP)
The conclusion of the report states that Ms Gray found that
“some staff had witnessed and been subjected to behaviours at work”—
that were concerning, and that there were—
“…multiple examples of a lack of respect and poor treatment of security and cleaning staff.”
For me, that is the most damning and also the most telling part of the report. Why is it that people like the Prime Minister and the people who work at No.10 think that cleaners, security guards, nurses and teachers are beneath them and less important than them?
The Prime Minister
I condemn such behaviour. When I was running London transport, for instance, I instituted much tougher penalties for those who abused our staff. I support tougher penalties for those who abuse shopworkers. Those are the values that I stand for.
Christian Wakeford (Bury South) (Lab)
“Wine Time Friday”, karaoke, grown men drinking shots of apple sours—how can anyone on the Government Benches honestly describe these as work events? Misleading the House is a very serious issue, as the Prime Minister well knows, but taking the people of this country for fools is far worse. While he is busy trying to defend the indefensible, I would like to know how many of my former colleagues he thinks will be joining me on the Opposition Benches after today?
The Prime Minister
The hon. Gentleman will find the answers to his questions in the Sue Gray report. I really do not have anything more to add.
Dave Doogan (Angus) (SNP)
By the actions of this Prime Minister, standards of public life in the UK now lie face down in the gutter. The Prime Minister wants us all to move on, collectively. Well, let me assure this derailed Prime Minister, there is no collective in Scotland of which he is a part. As his authority lies festering in a steaming pile of incredulity, will he set out to the people of Scotland the productive and positive role he will play with the Scottish Government in allowing and enacting a referendum on independence, so that we can finally free ourselves of exactly the type of behaviour he typifies?
The Prime Minister
I will continue to work productively with the Government in Scotland, as we did throughout the pandemic, not least in delivering the fastest vaccine roll-out in Europe, the furlough programme and everything else that we did together, which shows that we are stronger together.
Rachael Maskell (York Central) (Lab/Co-op)
In response to the question put by my hon. Friend the Member for Wirral South (Alison McGovern), the Prime Minister said that he had not had time to apologise to the cleaning and security staff. Is he telling this House that Sue Gray and no official apprised him of one of the eight conclusions of this report prior to his coming to the House today—or are those staff just not his priority?
The Prime Minister
No, since I saw the report this morning I have not had time to identify the custodians or cleaners in question, but as I told her hon. Friend, as soon as I can, I will apologise to them in person.
Christine Jardine (Edinburgh West) (LD)
I am inordinately proud of the way my constituents and people up and down this country have dealt not just with the pandemic but with the economic crisis that they now face. None of that is reflected in the shameful behaviour we see set out in the report. Earlier—much earlier—I saw the Prime Minister look at his watch, and one of his colleagues suggested that perhaps we should want to turn the page on what has happened. Believe me, I think everyone in this place would like to turn the page and never have to revisit it, but the only way we can do that is if the Prime Minister accepts responsibility fully and moves on, so we can turn that page.
The Prime Minister
I am going to move on with the Government’s agenda, and that is exactly what we are going to do.
Stephen Flynn (Aberdeen South) (SNP)
I appreciate that the Prime Minister struggles with the truth, but can he vouch to me and to this House that he will do everything he possibly can to stave off his Back Benchers and instead lead the campaign to protect his precious Union?
The Prime Minister
Increasingly, the strongest advocates of the Union and the United Kingdom are the Scottish nationalist party. By their incompetence, their overtaxing, their poor educational results—they cannot even make the trains run on time, or buy some ferries without totally screwing it up—they are terrific advocates of the United Kingdom. I thank them for what they are doing.
Bill Presented
Genetic Technology (Precision Breeding) Bill
Presentation and First Reading (Standing Order No. 57)
Secretary George Eustice, supported by the Prime Minister, Steve Barclay, the Chancellor of the Exchequer, Secretary Sajid Javid, Secretary Kwasi Kwarteng and Jo Churchill, presented a Bill to make provision about the release and marketing of, and risk assessments relating to, precision-bred plants and animals, and the marketing of food and feed produced from such plants and animals; and for connected purposes.
Bill read the First time; to be read a Second time tomorrow, and to be printed (Bill 11) with explanatory notes (Bill 11-EN).
Product Security and Telecommunications Infrastructure Bill (Programme) (No. 2)
Ordered,
That the Order of 26 January 2022 in the last Session of Parliament (Product Security and Telecommunications Infrastructure Bill (Programme)) be varied as follows:
(1) Paragraphs (4) and (5) of the Order shall be omitted.
(2) Proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion two hours after the commencement of proceedings on the Motion for this Order.
(3) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion three hours after the commencement of proceedings on the Motion for this Order.—(David T. C. Davies.)
Product Security and Telecommunications Infrastructure Bill
Wednesday 25th May 2022
(2 years, 5 months ago)
Commons ChamberRead Full debate Product Security and Telecommunications Infrastructure Act 2022 View all Product Security and Telecommunications Infrastructure Act 2022 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Consideration of Bill Amendments as at 25 May 2022 - (25 May 2022)
14:57 - The House divided: - Ayes: 163 / Noes: 280 - Question accordingly negatived.
The Minister for Media, Data and Digital Infrastructure (Julia Lopez)
I beg to move, That the clause be read a Second time.
Madam Deputy Speaker (Dame Rosie Winterton)
With this it will be convenient to discuss the following:
Government new clause 2—Jurisdiction of First-tier Tribunal in relation to code proceedings in Wales.
Government amendments 1 to 3.
Amendment 14, in clause 59, page 42, line 11, after “agreement”, insert
“other than with a private landlord”.
This amendment, together with Amendments 15, 16 and 17, would apply a different regime under the Electronic Communications Code to private landlords, giving automatic upgrade rights for operators to properties owned by private landlords subject to the condition that the upgrading imposes no additional burden on the other party to the agreement.
Amendment 15, page 43, line 39, at end insert—
“(5B) Paragraph 17 of the new code (power for operator to upgrade or share apparatus) applies in relation to an operator who is a party to a subsisting agreement with a private landlord, but as if for sub-paragraphs (1) to (6) there were substituted—
‘(1) This paragraph applies where—
(a) an operator (“the main operator”) keeps electronic communications apparatus installed on, under or over land, and
(b) the main operator is a party to a subsisting agreement in relation to the electronic communications apparatus.
(2) If the conditions in sub-paragraphs (3), (4) and (6) are met, the main operator may—
(a) upgrade the electronic communications apparatus, or
(b) share the use of the electronic communications apparatus with another operator.
(3) The first condition is that any changes as a result of the upgrading or sharing to the electronic communications apparatus to which the agreement relates have no adverse impact, or no more than a minimal adverse impact, on its appearance.
(4) The second condition is that the upgrading or sharing imposes no additional burden on the other party to the agreement.
(5) For the purposes of sub-paragraph (4) a burden includes anything that—
(a) has an adverse effect on the person’s enjoyment of the land, or
(b) causes loss, damage or expense to the person.
(6) The third condition is that, before the beginning of the period of 21 days ending with the day on which the main operator begins to upgrade the electronic communications apparatus or (as the case may be) share its use, the main operator attaches a notice, in a secure and durable manner, to a conspicuous object on the relevant land.
(7) A notice attached for the purposes of sub-paragraph (6) must—
(a) be attached in a position where it is reasonably legible,
(b) state that the main operator intends to upgrade the electronic communications apparatus or (as the case may be) share its use with another operator,
(c) state the date on which the main operator intends to begin to upgrade the electronic communications apparatus or (as the case may be) share its use with another operator,
(d) state, in a case where the main operator intends to share the use of the electronic communications apparatus with another operator, the name of the other operator, and
(e) give the name of the main operator and an address in the United Kingdom at which the main operator may be contacted about the upgrading or sharing.
(8) Any person giving a notice at that address in respect of that electronic communications apparatus is to be treated as having been given that address for the purposes of paragraph 91(2).
(9) Any agreement under Part 2 of this code is void to the extent that—
(a) it prevents or limits the upgrading or sharing, in a case where the conditions mentioned in sub-paragraphs (3), (4) and (6) are met, of any electronic communications apparatus to which the agreement relates that is installed on, over or under land, or
(b) it makes upgrading or sharing of such electronic communications apparatus subject to conditions to be met by the operator (including a condition requiring the payment of money).
(10) Nothing in this paragraph is to be read as conferring a right on the main operator to enter the land which the main operator would not otherwise have, when upgrading or sharing the use of the electronic communications apparatus.
(11) References in this paragraph to sharing electronic communications apparatus include carrying out works to the electronic communications apparatus to enable such sharing to take place.
(12) In this paragraph—
“the relevant land” means—
(a) in a case where the main operator has a right to enter the land, that land;
(b) in any other case, the land on which works will be carried out to enable the upgrading or sharing to take place or, where there is more than one set of works, the land on which each set of works will be carried out;
“subsisting agreement” has the meaning given by paragraph 1(4) of Schedule 2 to the Digital Economy Act 2017.’”
This amendment, together with Amendments 14, 16 and 17, would apply a different regime under the Electronic Communications Code to private landlords, giving automatic upgrade rights for operators to properties owned by private landlords subject to the condition that the upgrading imposes no additional burden on the other party to the agreement.
Amendment 16, in clause 60, page 44, line 4, after “land”, insert
“not owned by a private landlord”.
This amendment, together with Amendments 14, 15 and 17, would apply a different regime under the Electronic Communications Code to private landlords, giving automatic upgrade rights for operators to properties owned by private landlords subject to the condition that the upgrading imposes no additional burden on the other party to the agreement.
Amendment 17, page 45, line 14, at end insert—
“17B (1) This paragraph applies where—
(a) an operator (‘the main operator’) keeps electronic communications apparatus installed on, under or over land owned by a private landlord,
(b) the main operator is not a party to an agreement under Part 2 of this code in relation to the electronic communications apparatus, and
(c) the electronic communications apparatus was installed before 29 December 2003.
(2) If the conditions in sub-paragraphs (3), (4) and (6) are met, the main operator may—
(a) upgrade the electronic communications apparatus, or
(b) share the use of the electronic communications apparatus with another operator.
(3) The first condition is that any changes as a result of the upgrading or sharing to the electronic communications apparatus to which any existing agreement between the operator and the landlord relates have no adverse impact, or no more than a minimal adverse impact, on its appearance.
(4) The second condition is that the upgrading or sharing imposes no additional burden on the landlord.
(5) For the purposes of sub-paragraph (4) a burden includes anything that—
(a) has an adverse effect on the person’s enjoyment of the land, or
(b) causes loss, damage or expense to the person.
(6) The third condition is that, before the beginning of the period of 21 days ending with the day on which the main operator begins to upgrade the electronic communications apparatus or (as the case may be) share its use, the main operator attaches a notice, in a secure and durable manner, to a conspicuous object on the relevant land.
(7) A notice attached for the purposes of sub-paragraph (6) must—
(a) be attached in a position where it is reasonably legible,
(b) state that the main operator intends to upgrade the electronic communications apparatus or (as the case may be) share its use with another operator,
(c) state the date on which the main operator intends to begin to upgrade the electronic communications apparatus or (as the case may be) share its use with another operator,
(d) state, in a case where the main operator intends to share the use of the electronic communications apparatus with another operator, the name of the other operator, and
(e) give the name of the main operator and an address in the United Kingdom at which the main operator may be contacted about the upgrading or sharing.
(8) Any person giving a notice at that address in respect of that electronic communications apparatus is to be treated as having been given that address for the purposes of paragraph 91(2).
(9) Nothing in this paragraph is to be read as conferring a right on the main operator to enter the land which the main operator would not otherwise have, when upgrading or sharing the use of the electronic communications apparatus.
(10) References in this paragraph to sharing electronic communications apparatus include carrying out works to the electronic communications apparatus to enable such sharing to take place.
(11) In this paragraph ‘the relevant land’ means—
(a) in a case where the main operator has a right to enter the land, that land;
(b) in any other case, the land on which works will be carried out to enable the upgrading or sharing to take place or, where there is more than one set of works, the land on which each set of works will be carried out.”
This amendment, together with Amendments 14, 15 and 16, would apply a different regime under the Electronic Communications Code to private landlords, giving automatic upgrade rights for operators to properties owned by private landlords subject to the condition that the upgrading imposes no additional burden on the other party to the agreement.
Amendment 12, page 45, line 18, leave out clause 61.
This amendment removes clause 61 of the Bill, which gives operators the ability to calculate rent based on ‘land value’ rather than ‘market value’ when renewing tenancies to host digital infrastructure on private land.
Amendment 13, page 46, line 42, leave out clause 62.
This amendment removes clause 62 of the Bill, which gives operators the ability to calculate rent based on ‘land value’ rather than ‘market value’ when renewing tenancies to host digital infrastructure on private land in Northern Ireland.
Amendment 9, in clause 68, page 58, line 38, leave out from “must” to “one” in line 39 and insert “use”.
This amendment, along with Amendments 10 and 11, seeks to ensure that operators engage in the alternative dispute resolution process by making it mandatory.
Government amendments 4 to 7.
Amendment 10, in clause 68, page 59, line 12, leave out from “must” to “one” in line 13 and insert “use”.
This amendment, along with Amendments 9 and 11, seeks to ensure that operators engage in the alternative dispute resolution process by making it mandatory.
Amendment 11, page 59, line 34, leave out from “must” to “one” in line 35 and insert “use”.
This amendment, along with Amendments 9 and 10, seeks to ensure that operators engage in the alternative dispute resolution process by making it mandatory.
Government amendment 8.
Julia Lopez
It is a pleasure to be making such good progress on this Bill, which seeks to deliver world-class connectivity to our constituents and to improve the security of the devices that we all rely on. I will start by explaining the need for the Government amendments tabled in the name of the Secretary of State, as those amendments are relatively straightforward. I will then move on to the more substantial matter of the remaining amendments, which I suspect right hon. and hon. Members are keener to discuss.
Beginning with new clause 1, as I explained on Second Reading, some operators with apparatus on land are currently unable to follow an existing statutory process to renew their agreement once it comes to an end. These operators also cannot use the code to get an entirely new agreement, because only the occupier of land can grant code rights. An operator already occupying land clearly cannot enter into an agreement with itself. Clause 57 was intended to ensure that operators could obtain code rights from another party in these circumstances, but subsequent engagement with stakeholders has made it clear that the clause as drafted would not cover all scenarios and that a more focused approach is required. Some operators would still find themselves effectively stuck once their agreements ended, with no means of renewing their agreement and no reasonable or practical means of obtaining a new code agreement. This can have negative consequences for consumers, and as such it is unacceptable. New clause 1 therefore replaces clause 57.
The new clause will ensure that all operators in exclusive occupation of land who do not have a statutory renewal option can still seek a code agreement. The person who can grant those code rights will usually be the owner of the land, although the new drafting makes provision for less straightforward situations. As well as resolving the problem of “stuck” operators, new clause 1 also assists operators with an existing, ongoing agreement. Where such operators need additional code rights that are not already provided by their current agreement, the new clause ensures they can seek such rights. Currently, some such operators are unable to do so because they are in occupation of the land.
John Redwood (Wokingham) (Con)
Will my hon. Friend confirm that operators still need to get the agreement of the landowner or someone else who is empowered to grant that right, so that there is no muddle or confusion?
Julia Lopez
Yes. They will be allowed to take out a new agreements, but they still have to be under the existing regime.
To be clear, this will not let an operator unilaterally change, or ask the court to impose a change to, the terms or duration of their current agreement. It allows an additional code right to be conferred on the operator via a new, separate code agreement.
Dave Doogan (Angus) (SNP)
I think we all accept the need to be able to protect continuity of service, but my constituent, Mr Ramsay, is on the receiving end of some very strong tactics by Telefonica, which is looking to reduce the value of his lease agreement by about 90%, by £5,000 from about £7,000. What does the Minister suggest my constituent do under the weight of that corporate might? It is a David and Goliath situation.
Julia Lopez
I thank the hon. Gentleman for raising the case of his constituent. I would be grateful if he took it up with my officials, as I am keen to look into it. Throughout the passage of the Bill, individuals have raised cases with me. It is fair to say that the number of cases has declined substantially as the Bill has progressed through the House, so I am content that the position is getting much better, but if there are outstanding cases of situations that any MP feels is unfair, I will be grateful if they are brought to my attention.
To return to the case I was making for new clause 1, as with an initial agreement, if a consensual agreement cannot be reached about the additional right needed, operators will be able to ask the court to impose an additional agreement conferring the additional right. Of course, in those circumstances an operator would still have to satisfy the court that its application meets the requirements of part 4 of the code, including the public interest test.
Let me give an example of how the Government intend this to work. An operator may have an existing agreement which contains a code right to install a 3 metre high mast. Subsequently, the operator realises that it needs to install a 5-metre high mast on the same piece of land. That could enable the operator to install 5G technology or to improve or expand its network. The original agreement allowing the 3-metre mast will continue to run for its remaining term, and the operator will ask the site provider to enter into a second agreement, which contains a code right allowing it to install the 5-metre high mast.
Advances in technology occur at pace, whereas a code agreement can last for a number of years. If an operator has to wait until the term of its code agreement is about to expire before being able to obtain additional code rights, it will be unable to install the latest technology on its apparatus, meaning our constituents will be deprived of faster, more reliable services such as 5G and, in time, 6G. We think that the new clause is also vital to give UK businesses access to the technology they need, enabling our economy to thrive. I hope Members will therefore agree that it must be made.
Turning to new clause 2, we want to ensure that disputes relating to the electronic communications code can be dealt with as quickly and efficiently as possible. Currently, paragraph 95 of the code allows the Secretary of State to make regulations that confer jurisdiction on either the first-tier tribunal or upper tribunal in relation to England, but only the upper tribunal in relation to Wales. The current regulations made under paragraph 95 state that all code disputes must commence in the upper tribunal, although in England, appropriate cases may then be handed down to the first-tier tribunal. The first-tier tribunal has greater administrative resources and more judges than the upper tribunal, meaning that code disputes can be processed and heard more quickly.
Moving forward, the Government are therefore considering a greater role for the first-tier tribunal in hearing code disputes, including making further regulations using the power in paragraph 95 of the code where appropriate. The new clause provides the necessary powers so that we can do just that. In future, the Secretary of State will be able to make regulations conferring jurisdiction on both the upper tribunal and the first-tier tribunal in Wales.
The final set of Government amendments is amendments 4 to 7. They have been tabled to make a minor clarification to the text of clause 68 to avoid any unintended interpretation of the legislation. Clause 68 currently makes it clear that an operator can, at any time, give notice in writing to a person from whom they are seeking code rights, stating that the operator wishes to engage in alternative dispute resolution, often known as ADR. However, nowhere is it set out that such a notice can be sent from that person to the operator. The amendments clarify that when an operator seeks code rights from a person, either the operator or that person may give notice to the other expressing a wish to engage in ADR at any time.
Sir Desmond Swayne (New Forest West) (Con)
I certainly welcome the movement that the Minister has made. I went to table exactly those amendments and was pleased to find that she had beaten me to it. Can I tempt her to go further with respect to my amendment and amendment 4 and require the operator, which has such disproportionate power against the landowner, to engage as a requirement in the alternative dispute procedure from the outset?
Julia Lopez
I am afraid that my right hon. Friend cannot tempt me, and I will say why shortly.
I thank the hon. Member for Hackney South and Shoreditch (Dame Meg Hillier) for bringing forward amendments 14 to 17 to clauses 59 and 60. They would expand retrospective rights to upgrade and share apparatus in buildings owned by private landlords, such as blocks of flats, also known as multiple dwelling units or MDUs. I begin by saying that I have considered this issue carefully. I have been lobbied extremely heavily on it by one operator in particular, and I have tested the proposition with my officials, legal advisers and other operators.
I would not like to pre-empt what the hon. Lady might say as to why she tabled the amendments and their perceived need. However, I reassure her, and any others considering supporting them, that as a fellow London MP with many MDUs in my seat I am concerned about the dangers of a digital divide emerging, and I am doing what I can to avoid that circumstance. If I thought that the amendments genuinely helped on that front, I would do all I could to incorporate them, but there is a glaring lack of consensus among the telecoms industry about their need. Indeed, only one operator has contacted me in support of them, while four separate operators and representative bodies have strongly opposed the amendments, arguing that they are anti-competitive. I will talk a little more about that in a minute.
Andrew Percy (Brigg and Goole) (Con)
I welcome the Minister’s rejection of those amendments. In my area, we have KCOM, which is a strong local performer. Had it not been for KCOM, most of my constituents, who are on the dual network, where it can be KCOM or Openreach, would not be anywhere near to getting gigabit broadband. We therefore do not want to see any changes that will give BT Openreach an advantage or preference over other providers, such as KCOM, which have got their acts together and got gigabit broadband delivered to our homes.
Julia Lopez
I thank my hon. Friend for raising the great work of KCOM and the importance of competition and how it is driving roll-out. It is changing the dynamic in the market, very much for the better. I am mindful of how we drive extra competitiveness in this field, because that is what is getting us the roll-out and the digital connectivity that our constituents need and demand.
Amendments 14 to 17 are, I think, identical to the proposals tabled in Committee. As I explained then, upgrading and sharing electronic communications apparatus offers substantial benefits. We specifically recognised that in our 2017 reforms and in the new upgrading and sharing rights that clauses 59 and 60 will create. However, as I also explained, any legislation concerning work affecting private land has to take careful care to strike the right balance between public benefit and individual rights. The automatic rights introduced in 2017 were developed to maintain that balance.
Even more careful consideration is needed for legislation that applies retrospectively. It is for that reason that clauses 59 and 60, which have retrospective effect, include tighter restrictions on the rights they confer on operators. Under those clauses, operators will have automatic rights to carry out only limited activities that will not have adverse impacts on the land in question or impose any burden on anyone with an interest in the land. However, conferring these rights will facilitate activities such as crucial upgrading work on cables installed underneath land. Industry stakeholders have confirmed that this has significant potential to provide homes and communities with gigabit-capable connections at pace. The public benefits are therefore substantial, with little to no impact on private individuals.
Further expanding these retrospective measures, as proposed by the amendments, would require us to revisit two fundamental points: first, what would the public benefit be, and, secondly, what would the impact be on individual landowners’ rights? We have considered that carefully, and we do not think that the case has been made for the changes that the amendments propose.
Looking first at the impact on landowners’ rights, if apparatus can be upgraded or shared without material alteration to land or property—for example, if works are carried out solely on or within apparatus, such as a duct—impact on the land can be negligible. Upgrading equipment in a building almost always involves some direct impact, however small, on the building. We think that works that have an impact on property should require either agreement from the landlord or imposition by the courts through the processes provided for in the code.
In any event, if an automatic right of the kind envisaged was introduced, operators would still have to successfully engage with the landlords for logistical purposes, such as to arrange access to the property or to discuss any potential health and safety issues or need for repairs. If these conversations must take place, and we think that they should, it seems sensible that the operator should at the same time ask permission to carry out the works. That brings us again to the question of whether the expanded automatic rights, as proposed by the amendments, would be proportionate. There are other ways that operators can upgrade equipment in multi-dwelling units. They can already ask for the rights to do so, and measures are being introduced that will enable them to resolve matters quickly and cheaply.
Finally, what of the public benefit? Members made the point in Committee that residents in blocks of flats urgently need gigabit-capable connections, particularly if we are to meet our levelling-up ambitions in urban areas, as well as in rural communities. I have explained that the code already contains provisions that would enable operators to seek rights to upgrade apparatus in buildings. In contrast, an automatic right could have adverse impacts that have perhaps not been fully explored. Members suggest that there is consensus in industry that these changes are needed, but that is not the case. I have received direct representations from many fibre providers that strongly oppose these proposals. They say that the proposals would create an unfair advantage for operators with equipment inside buildings, with potentially anti-competitive effects.
I hope that gives the hon. Member for Hackney South and Shoreditch assurance that the provisions in the Bill on retrospective rights to upgrade and share represent a balanced approach, and that there are substantial measures in place and under way to connect residents of multi-dwelling units. I therefore hope that she will not press her amendments to a Division.
Finally, I will address the amendments tabled by my right hon. Friend the Member for New Forest West (Sir Desmond Swayne). First, amendments 12 and 13 seek to remove clauses 61 and 62 from the Bill. This is another matter that I am familiar with. Indeed, as I suggested in response to an intervention, I have had conversations with him and other hon. Members about particular cases, as well as with the campaign group that represents landowners on the issue.
The Government recognise that, since 2017, there have been problems between some landowners and telecoms operators, and a level of discontent about the result of the valuation regime change, but we want to bring that regime more in line with that of other utilities, and we believe there are significant benefits to doing so. I must say that I have found little evidence in recent weeks and months to suggest that the regime requires a radical overhaul.
I have encouraged more collaborative discussions between operators and landowners. I have looked into specific cases, and concluded that the measures that we are introducing to encourage more collaborative negotiations will help to tackle many of the problems that I have seen. Significant information about cases has not always been forthcoming when asked for, but if hon. Members would like to discuss constituency cases, I am always happy to receive the details. Fundamentally, we need a legislative framework that keeps costs low, so that we can encourage investment and protect consumers from price increases. The code valuation framework to calculate the sums payable to landowners by operators, which was introduced in 2017, aimed to achieve that. We maintain that the overall framework creates the right balance between the public need for fantastic digital infrastructure and making sure that landowners receive a fair payment for allowing their land to be used. The purpose of clauses 61 and 62 is to make sure that the valuation framework applies consistently across the UK and to all agreements the code applies to.
John Redwood
I certainly support the Minister in the belief that the more competitive the industry, the better the results that we will get. Has she had representations from people who would like to enter the market about whether the change would make them more likely to do so?
Julia Lopez
Most of the people I have spoken to are already in the market and believe that the change will make a big difference to how they roll out. It is a very competitive market with many new entrants. I am not aware of anybody who is just dipping their toe in the water; because it is so competitive, people are already aggressively in the market. We think that the change will really help to accelerate the roll-out to our constituents of fantastic digital infrastructure of the kind that we all understand is fundamental to driving productivity gains, and to reducing the divide between areas that do and do not have that connectivity.
From the contribution of my right hon. Friend the Member for New Forest West on Second Reading, I understand that his concern relates to the effect of clauses 61 and 62 on landowners who already host telecoms apparatus on their land. I recognise that, ultimately, these changes are likely to lead to reductions in the rent received by landowners with a tenancy protected by the Landlord and Tenant Act 1954 or the Business Tenancies (Northern Ireland) Order 1996. I appreciate that that might not have been expected by those entering into such tenancies at the time they were created, but it is also fair to say that market values change over time, and there is never any guarantee that rents received by a landlord will remain constant or increase.
We have also given careful consideration to the effect of clauses 61 and 62, and have balanced the impact that they might have on landowners with the wider, substantial public benefits that we are pursuing. It is also important to recognise that the changes will not happen until any ongoing agreement expires and comes to be renewed. Furthermore, clauses 63 and 64 introduce separate provisions allowing the landowner to recover compensation for any damage to their land, reduction in its value or reasonable expenses resulting from an operator exercising their code rights.
Clauses 61 to 64 ensure that the 2017 framework will apply to all future agreements. It must be remembered that the code has an underlying purpose, which is to support the delivery of robust digital networks. Our constituents increasingly rely on those networks for critical digital services. Only recently, the National Farmers Union’s digital technology survey found that poor mobile signal and unreliable internet access are hampering farming businesses. We know that rural connectivity is a problem for many organisations, and addressing it is one of our priorities as a Government. The Bill, including clauses 61 and 62, aims to address those issues.
I am sure that my right hon. Friend had only noble intentions when tabling his amendments, but although they may benefit some landowners, they have the potential to penalise entire communities by keeping network costs unacceptably high. Clauses 61 and 62 will help to reduce the digital divide between different parts of the country, as they will help to prevent deployment being cheaper in one area than another.
Finally, I turn to amendments 9 to 11 tabled by my right hon. Friend, which would require a party to use alternative dispute resolution processes before making certain applications to a court under the electronic communications code, including where an agreement granting rights under the code is being sought. The provisions on ADR processes in the Bill aim to create more collaborative discussions between landowners and telecoms operators to ensure that litigation is used only as a last resort. I suspect that that is what the amendments seek to ensure as well. Although I sympathise with the intention behind these amendments, the Government oppose them—first, because they are unnecessary; secondly, because ADR is not appropriate in every situation; and thirdly, because they would be counterproductive to the amendments’ overall intentions.
The Bill requires operators, when requesting rights under the code, to inform the landowners of the availability of ADR. Crucially, it also creates a requirement that if an application is made to a court, the court will be required to take into account any unreasonable refusal to engage in ADR when awarding costs. Those requirements strongly incentivise the use of ADR without the need to make it mandatory. The Government therefore believe the amendments to be unnecessary.
It is also important to note that ADR may not be suitable in certain cases, such as where a disagreement is based on differing interpretations of the law. Such points of law must be resolved in the courts, and mandatory ADR would add cost and time to that process without offering any benefit.
The Government also believe that the amendments would be counterproductive to their own goals. If ADR were compulsory, some parties would be compelled to participate in an ADR process they do not want to be involved in, and so would be less inclined to actively engage in the process. That would increase the risk that ADR would fail, which would mean that parties would have to go to court anyway. If that were the case, all that compulsory ADR would have achieved is to add an additional layer of time and costs for landowners, such as charities, sports clubs and farmers. It should also be noted that, when consulted, a clear majority of stakeholders were not in favour of compulsory ADR. I hope that I have given my right hon. Friend assurance that the provisions regarding ADR in the Bill already represent the most effective way of encouraging its use, and I hope that he will not press his amendments to a Division.
Chris Elmore (Ogmore) (Lab)
You will be aware, Madam Deputy Speaker, that I have spent at least the last five and a half years as an Opposition Whip encouraging brevity, so I do not intend to keep the House too long. I will keep my remarks short and hopefully to the point. As I said on Second Reading and in Committee, I will not pretend that the Opposition do not support the wider principles of the Bill. I thank the Minister for the constructive way in which she has engaged on it with me from the outset.
I turn to the new clauses and amendments. New clause 1 is an improvement on the Government’s first attempt to change the definition of “occupier”, but the changes put forward are still not watertight when it comes to preventing unintended consequences. The new clause does not address the underlying issue that operators could theoretically use it in situations other than when existing agreements have expired, which could lead to financial consequences for small site providers who have been hard done by since the electronic communications code review in 2017. More work is needed when the Bill moves to the other place to ensure it does not unintentionally punish site providers further. We have no issue with the proposal in new clause 2 that grants the Secretary of State power to make regulations that provide for a function conferred by the code on the court to be exercisable in relation to Wales by the first-tier tribunal.
I will speak to amendment 14 on behalf of my hon. Friend the Member for Hackney South and Shoreditch (Dame Meg Hillier). She sends her apologies to the House; she is chairing the Public Accounts Committee. We have checked with the Clerks and the Speaker’s Office to check that that is appropriate. That amendment, and the consequential amendments 15, 16 and 17, seek to apply a different regime under the electronic communications code to private landlords. They would give operators automatic upgrade rights in respect of properties owned by private landlords, subject to the strict condition that the upgrading imposes no additional burden on the other party to the agreement.
The growing digital divide in our towns and cities has only been exacerbated by the pandemic. The Government’s broadband target has been downgraded twice, and the Digital, Culture, Media and Sport Committee doubts that the current 85% gigabit target will be met. The backlog is due to the difficulty in accessing a high number of properties, a disproportionate number of which are flats, whose absentee landlords have little to no incentive to respond to requests to upgrade and improve connectivity.
Ruth Edwards (Rushcliffe) (Con)
I have complete sympathy with the intention behind the amendments and with what the hon. Gentleman is trying to do, but many providers whom we have spoken to throughout the Bill’s passage oppose them on the grounds that they will give the incumbent provider an advantage. Is he concerned that an unintended consequence of his amendments might be to make it more difficult for new competitors to enter the market and provide our constituents with the services that they need?
Chris Elmore
I welcome competition in the market, but I would say to the hon. Lady that we now have broadband blackspots in parts of central London, and 15% of the constituency of the hon. Member for Hastings and Rye (Sally-Ann Hart) has these MDU blackspots. This is affecting constituents up and down the land, and the demand from all our constituencies, particularly because of the pandemic, is that we require the very best sector-leading broadband. It cannot simply be the case that some operators say this must happen and some say it should not happen, therefore nothing is resolved.
Sir Desmond Swayne
May I take it therefore that, if Madam Deputy Speaker is minded to allow separate decisions on my amendments, the hon. Gentleman will support them?
Chris Elmore
I can tell the right hon. Gentleman that we supported this in Committee. Sadly, the Members on his own side did not. I would be very glad if he pushed the amendments, through your good offices, Madam Deputy Speaker, and if he did so, I am sure we would all row in behind him. What the Minister and the Government Whips do could be a different conversation altogether, but I do not think that worries him anymore.
I now turn to Government amendments 4 to 7 and the right hon. Gentleman’s own amendments 10 and 11. We welcome amendments 4 to 7 to ensure that a person with whom an operator is seeking a code agreement may at any time give the operator notice that they wish to engage in alternative dispute resolution in relation to a prospective site-sharing agreement. While the pace of new agreements between landowners and operators has slowed down in recent years, small landowners have been unable to afford the cost of going to a tribunal to try to defend their property rights. When the Bill moves to the other place, we hope that a debate can continue on the possibility of making ADR mandatory, as suggested by amendments 10 and 11, for telecoms operators before threatening to take landowners to court for an agreement to be imposed.
As I have said from the start and certainly many times in Committee, we are not against this Bill, which is a welcome step in the right direction. However, there are certain areas that need to be tightened and improved, and I hope their lordships will have a full debate and bring forward much-needed amendments to ensure that we deliver the very best broadband roll-out right across the United Kingdom.
Sir Desmond Swayne
My amendments 9 to 11 are designed to address what was made clear in the House on Second Reading, which is that there are examples of egregious bullying by the operators and that there is a complete disproportion of power between those operators and the landowners. The Minister has spoken of her demand for more collaborative working and collaborative negotiation, but we are asking for the process of alternative dispute resolution to be a requirement from the outset precisely because the operators know that they have the power to overawe and frighten landowners with the threat of legal action.
The purpose of my amendments 11 and 12, which was spelt out very well by the Minister, is to return to the status quo ante 2017. Until 2017, compensation was based on market value, and in 2017 the new code changed it to land value, notwithstanding the explicit advice of the Law Commission not to do so. As was entirely predictable and as was predicted, the market dried up as a consequence and there were far fewer agreements. One of the purposes of this Bill is of course to address that problem of the reduction in agreements. Therefore, the obvious remedy is to restore the position as it was and return to market value, but far from doing that—far from seizing this opportunity to remedy the situation—the Government are compounding their error by wanting to make agreements previously made under the old regime renewable under land value, actually making the problem significantly worse as a consequence.
I do not know why the Government appear to have adopted the anarchist principle that property is theft. On the contrary, these measures, by denying landowners proper compensation on the basis of market value—compensation arrived at by a free and open market—and coercing them accordingly to give up their property rights, strike me as theft. These provisions in the Bill are in effect a conspiracy to promote theft: it is stealing. I just cannot understand how a Conservative Government have brought themselves to bring this measure before the House, changing the law retrospectively and so damaging property rights. I just assume that Ministers simply have not realised the enormity of the change they are making. Accordingly, I believe these amendments are vitally necessary for the Bill.
Madam Deputy Speaker (Dame Rosie Winterton)
I call the SNP spokesperson.
Owen Thompson (Midlothian) (SNP)
It is worth saying from the start that this Bill certainly takes aim at some of the key gaps in how we regulate product security, so I am genuinely grateful that the Minister is seeking to address some of the issues that have been raised. I put on record my thanks to my hon. Friend the Member for Ochil and South Perthshire (John Nicolson) for leading on Second Reading and in Committee, as well as for getting the phrase “malevolent toaster” into Hansard.
I have warned the Chamber a number of times about the various threats from technology and online spaces. For instance, I have campaigned for tougher action against so-called cyber-troops—organised malevolent forces that weaponise misinformation against our democracy. I definitely think that there has been major progress in building public awareness about the importance of cyber-security, and the experience of the botched Brexit referendum and Trump’s time in the White House was a crash course in taking online safety seriously.
However, we do remain a bit behind when it comes to the so-called internet of things, which encompasses the many household objects we now connect to the internet, from security systems to smart fridges and, indeed, toasters. This is a real Achilles heel. Last year, there was a total of 1.5 billion attacks on the internet of things—up 100% in the first half of the year. When Which? set up a fake smart home, it found that it was exposed to 12,000 attacks a week, yet our slowness in recognising that threat has got us to a place where only one in five “internet of things” manufacturers are believed to embed strong security in their devices.
Discussions around the Online Safety Bill have shown as clear as day that many companies, and especially those in the big tech sector, need to be dragged kicking and screaming to implement the bare minimum level of safety for users, whether that is to age-regulate graphic content or to stop scammers. Of course, there are some exceptions, but in any such situation where the private sector prioritises profit over protection, the Government need to step up to protect users with at least a bare minimum level of safety. The Government’s decision to do so by enshrining the principle of security design is therefore very welcome on the SNP Benches.
It is also absolutely right that we embed the idea in the law that the onus should be on the manufacturers to provide security in the design of their products, bringing the UK framework into line with the Scottish Government’s cyber-resilience strategy, which has enshrined security by design as a foundational principle in Scotland’s cyber-landscape. And yet, oversights abound. I am sad to say that oversights were raised with the Government on Second Reading and in Committee, but a number still remain. Some of that points to the Government trying to push the Bill through at breakneck speed, but the Minister should caw canny about putting speed over consumer safety as that will only cause us all headaches further down the line.
One such oversight on Second Reading was the requirement for manufacturers to declare publicly security flaws in their products without requiring that fixes are carried out when the flaw is announced. Nor is there a requirement for automatic fixes to be in place. One without the other essentially has the effect of drawing a big red circle around the product’s flaws for hackers without giving users the tools to shore up their defences. We cannot expect users to be skilled in product patching, so a laissez-faire approach would be a serious mistake. Nobody should be fixing those flaws but the manufacturers, and nobody but the Government can require them to do so.
On Second Reading, the Minister was urged to implement a requirement for automatic patching or one for manufacturers to have a solution in place by the time that the product flaws are disclosed publicly. It is frustrating that no progress has been made on that front. I hope that the Minister can see that that is an urgent issue for public safety and that we all have to get it right. There has also been no progress in plugging the gaps in products left out of the Bill’s scope such as internet-connected ovens, medical devices, routers and second-hand products. On top of that, the Government have justified the exclusion of laptops and desktops by arguing that there is already a developed security software market. That may be the case, but only 58% of people in the UK use antivirus software. With home working on the rise, it is crucial that the Minister recognises the growing risk of laptops and desktops.
The somewhat unclear definition of “distributors” in the Bill also means that online marketplaces such as Amazon and eBay could argue that they are platforms or services, which would leave them outwith the Bill’s scope. That is a major oversight considering the number of unsafe products found on those sites. Closing that loophole would be a simple case of tidying up the language and explicitly including online marketplaces.
Although it is welcome that future regulations will require manufacturers to provide transparency on how their products receive security updates, leaving that up to the regulators feels like a bit of a cop-out. The Government have given no clarity on exactly what level of transparency will be required. Why not give us the details so that we can debate them fully in this place? Without those details, how can we expect enforcement to be in any way achievable?
Which? has been campaigning heavily on those two points, and I applaud its efforts to keep consumer protection at the top of the Government’s agenda. I urge the Minister to heed Tech UK’s call for the Government to undertake work to communicate the new framework to consumers. We risk causing a surge in electronic waste if the Bill causes consumers to perceive that their old devices are obsolete, so an effective comms strategy is needed to prevent an adverse environmental impact.
Before I wind up, I repeat the point made by my hon. Friend the Member for Ochil and South Perthshire on the Bill’s enforcement mechanisms. Clause 26(5) makes it clear that the Secretary of State will not be able to bring proceedings in Scotland, but the Bill will still establish enforcement mechanisms and a body to carry out enforcement. As the Scottish courts and legal system will have to manage enforcement action brought in Scotland, and as oversight of the Scottish legal system is devolved, it is only right that the Scottish Government should have a role in developing the enforcement mechanism. That is honestly just a bit of tidying up, and it is a bit tiring to have to remind the Government constantly not to treat Scotland as an afterthought, but sadly we are here again. What consideration has been given to the Scottish Government’s call for the inclusion of a duty to consult relevant Scottish Ministers when developing the enforcement mechanism and the security requirements to be enforced? On the topic of the devolved nations, I would appreciate it if the Minister set out what impact the Bill’s passage will have on the Scottish Government’s power to regulate products in Scotland, particularly in the light of the United Kingdom Internal Market Act 2020.
Andrew Percy
It is interesting to follow the comments of the SNP spokesman, the hon. Member for Midlothian (Owen Thompson), particularly on disinformation and misinformation. If he wants to see some examples of excellent disinformation and misinformation, I refer him to some of the fake content that occasionally goes out from cybernats.
My only interest in this legislation is in what it will do for my constituents in Brigg and Goole. Some hon. Members might remember me banging on, many times in previous Parliaments and over the last few years, about the poor mobile and broadband coverage in my constituency. I used to refer to our broadband speed as two megabits a fortnight. I therefore welcome the general principles and direction of the Bill, which are so important to speeding up the roll-out of proper gigabit broadband.
In my intervention on the Minister, I highlighted my belief that it is competition that has delivered a massive increase in the roll-out of fibre-to-the-premise, gigabit-enabled broadband in my constituency. In East Yorkshire, we have a mixed network: large parts of East Yorkshire have no BT network at all and are entirely on the Kingston Communications system—now known as KCOM. That is why there are no red telephone boxes; we have white or cream telephone boxes locally. When I worked in America, someone bought me a postcard of red phone boxes to remind me of home, but of course they were entirely alien to me as I grew up in the piece of East Yorkshire where red phone boxes and BT did not exist.
In parts of East Yorkshire, we have the KCOM network. In other parts, including the part that I live in and represent, we have the BT Openreach network and we also increasingly have the Kingston Communications network. That is why I am concerned about some of the amendments tabled by the hon. Member for Hackney South and Shoreditch (Dame Meg Hillier), to which the shadow Minister spoke on her behalf, and about anything that potentially gives an anti-competitive advantage to one provider over another.
I do not have a particular problem with BT Openreach, which did a reasonably good job in the first fibre roll-out—the fibre-to-the-cabinet 24 megabit roll-out—across North Lincolnshire and my part of the East Riding of Yorkshire, which was generally delivered on time and in line with the contract. However, that is obviously not sufficient now, some years on. People increasingly demand and require proper full fibre to the premises, and I am afraid that that is where BT Openreach has not done its job. It has been left to Kingston Communications to roll out proper gigabit broadband to Goole, Broughton and, increasingly, Brigg and other communities in my constituency. We welcome that. As I said, it is purely competition and the work of Ofcom which has enabled us to have that.
Despite my praise of KCOM, those works have not been without some difficulties locally. Some of its pavement and streetworks leave something to be desired, and it has occasionally set fire to a number of residents’ hedges, which is awkward for residents and KCOM. Those problems and troubles aside, we now have significant roll-out of gigabit broadband to the premises as a result of that competition. Indeed, that is why the UK, having languished at the bottom of the full fibre league tables for some time, has begun to rise to a more respectable position.
As I said in my intervention on the Minister, I have some concerns about the amendments that seem to give preference to BT Openreach in some places. As I say, I have no problem with BT Openreach, but the Minister needs to look at some of its investment decisions. For years, it refused to provide full-fibre broadband to most parts of my constituency, including Goole. KCOM came along and did one part of it, leaving Old Goole. We put a town deal bid together to try to roll out full gigabit broadband to Old Goole, and then all of a sudden—I am sure it was entirely unconnected— BT Openreach gave notice that it planned to upgrade the exchange in Old Goole, but could not confirm whether it planned to roll out to premises. That leaves us in a quandary: should we proceed with our town deal, using public money on that project? I am sure it is all a coincidence, but it is important that the Minister looks at how many coincidences there are, where there is investment by one alternative provider and suddenly the behaviour of BT Openreach around that provider seems to take a certain pattern. As I say, I am sure it is all a complete and utter coincidence.
Sir Greg Knight (East Yorkshire) (Con)
My hon. Friend is making a very good speech. Does he accept that the point he is making about competition goes wider than Brigg and Goole? The more competition we see across the country, the better the provision will be.
Andrew Percy
Indeed, but as my right hon. Friend will know, Brigg and Goole is of course the most important place in this country, and I am therefore particularly exercised by what happens there. He is absolutely right, though: that competition, which is also seeing the KCOM network expanded and rolled out in his constituency in the northern bit of East Yorkshire, is really very important. That is not to say that BT Openreach does not have an incredibly important role to play—of course it does, and I praise it for its work in getting gigabit broadband expanded across the country, but some of its behaviour raises questions.
The shadow Minister, the hon. Member for Ogmore (Chris Elmore), who moved amendment 14 and spoke to the group I am referring to, brushed aside concerns about private property rights and the claims that BT Openreach and others will potentially have greater powers than the police to enter private property. He said that that would all be on the basis of no loss or damage. Well, that is all fine, but it is a fairly high bar in loss of personal property rights—or a low bar, depending on how you want to think of it. I was not exactly comforted by his dismissal of people’s legitimate concerns around one provider having particular rights to access property that others would not have. On that basis, I urge the Government to reject and oppose those amendments.
Julia Lopez
I am grateful to all Members who have spoken in this debate, to the Opposition for their support for the Bill, and to the hon. Member for Ogmore (Chris Elmore) in particular for the very collaborative approach he has taken throughout and his acknowledgement of the improvements we have made. I shall test officials on the further points he makes. I am also grateful to the hon. Member for Midlothian (Owen Thompson) for highlighting the product security parts of the Bill. Some of the detail he seeks will be in secondary legislation. Goods sold in online marketplaces, for instance, are not out of scope, because manufacturers, importers and distributors are covered. I would be happy to come back to him on some of the other points he raised.
On criticism of our roll-out, we are making substantial progress on our gigabit roll-out. We are now up to 68% coverage, up from 9% in 2019. I am open to any proposal to make roll-out go even faster. I have set out why competition is so important to that dynamic and why I think the amendments on MDUs are not the right way to go and could even slow the roll-out. I note the comments on BT Openreach. Other providers tell me that they have great teams negotiating wayleaves, that this is a straightforward process and that extra help on MDUs of the kind envisaged is simply not needed. I am grateful to my hon. Friend the Member for Brigg and Goole (Andrew Percy) for using KCOM as a great example of that, and for highlighting not only some of the good work that Openreach does, but the interesting example of his town deal, which I shall take away with me.
My right hon. Friend the Member for New Forest West (Sir Desmond Swayne) made a typically fruity and passionate speech. We believe our legislation incentivises greater collaboration. I set out in detail earlier why that is the case. We believe that rents were too high. As the need for digital infrastructure increases, we think rents need to become more akin to those for utilities. I should never wish to be accused of seeing property as theft. Indeed, I confess to taking umbrage at my right hon. Friend’s assertion on Second Reading. That is why I have tested his proposition—
Julia Lopez
I thank my right hon. Friend. I am glad that I have convinced him of the case. [Laughter.] As I say, I tested his proposition to death and concluded that there may be a case of creative hyperbole. I am glad he has also acknowledged that.
Question put and agreed to.
New clause 1 accordingly read a Second time, and added to the Bill.
New Clause 2
Jurisdiction of First-tier Tribunal in relation to code proceedings in Wales
In paragraph 95(1) of the electronic communications code (power to confer jurisdiction on other tribunals)—
(a) in paragraph (a), at the end insert “or the Upper Tribunal”;
(b) in paragraph (aa), for the words from “, but only” to the end substitute “or the Upper Tribunal”;
(c) omit paragraph (b).”—(Julia Lopez.)
This new clause gives the Secretary of State power to make regulations providing for a function conferred by the code on the court to be exercisable in relation to Wales by the First-tier Tribunal.
Brought up, read the First and Second time, and added to the Bill.
Clause 57
Meaning of “occupier” in relation to land occupied by an operator
Amendment made: 1, page 40, line 11, leave out Clause 57.—(Julia Lopez.)
This amendment is consequential on NC1.
Clause 58
Rights under the electronic communications code to share apparatus
Amendments made: 2, page 41, leave out lines 23 to 25 and insert—
‘(4) In paragraph 9 (conferral of code rights), after sub-paragraph (2) (as inserted by section (Persons able to confer code rights on operators in exclusive occupation)) insert—”
This amendment is consequential on NC1.
Amendment 3, page 41, line 26, leave out “But”—(Julia Lopez.)
This amendment is consequential on NC1.
Clause 59
Upgrading and sharing of apparatus: subsisting agreements
Amendment proposed: 14, page 42, line 11, after “agreement”, insert
“other than with a private landlord”.—(Chris Elmore.)
This amendment, together with amendments 15, 16 and 17, would apply a different regime under the Electronic Communications Code to private landlords, giving automatic upgrade rights for operators to properties owned by private landlords subject to the condition that the upgrading imposes no additional burden on the other party to the agreement.
Question put, That the amendment be made.
Julia Lopez
I beg to move, That the Bill be now read the Third time.
The Romans built the roads, the Victorians built our canals and railways, and our generational challenge is to make sure that the UK has world-class digital infrastructure. That is not just about the needs of today, when we depend on reliable connections for online meetings, television streaming or calling friends and family. We are rolling out, at breakneck speed, full-fibre networks that will last for decades and cater for tomorrow’s needs, alongside more extensive wireless infrastructure to end the frustration of terrible signal and slow downloads.
The Bill is one tool that we need to deliver great connectivity for everyone, and I am grateful for the cross-party recognition of the importance of our task. The Government also recognise that greater connectivity brings the greater threat of harm to individuals, organisations and networks through an increased risk of cyber-attack. If networks and devices are not secure or trusted, we undermine their potential benefit to people and businesses.
I thank the consumer group, Which?, for its campaign that supported the development of our Bill. Not only are our measures important to protect people’s online security when enjoying the benefits of technology, but they will help to protect people’s personal safety. I particularly thank Jessica Eagleton of the domestic violence charity, Refuge, for her compelling evidence at the Public Bill Committee. The Bill is backed by industry experts and I thank them for their input. Other countries are already following suit, and with this Bill, the first domestic piece of legislation in the world to introduce security requirements of connected products, we are global leaders in the cyber-security landscape.
In short, this Bill is vital to the success of our digital economy in the decades ahead. Once passed, its measures will make the UK a better connected place and more resilient against cyber-attacks. Before it moves to the other place, I extend my thanks to the departmental officials for their work preparing the Bill; to the Opposition for their pragmatic and collaborative approach; to the members of the Bill Committee and the witnesses for their commitment; to the parliamentary Clerks, without whose efforts we would not be attending this debate; and to Members from across the House, including my Parliamentary Private Secretary, my hon. Friend the Member for Clwyd South (Simon Baynes), for the scrutiny and support they have provided. I look forward to seeing this important piece of legislation come into force. I commend the Bill to the House.
Madam Deputy Speaker (Dame Rosie Winterton)
I call the shadow Minister, Chris Elmore.
Chris Elmore
I do not intend to detain the House for long. Her Majesty’s Opposition recognise that the first duty of any Government is to keep their citizens safe. That is why we are supporting the security elements of the Bill, which were developed by the Department in conjunction with the National Cyber Security Centre. As the digital sphere becomes ever more integral to our lives and livelihoods, it is of the utmost importance that citizens across the United Kingdom are protected from malign actors. We believe that the Bill will make some significant progress in that regard.
Although we think that measures in part 1, such as the ban on default passwords, are of paramount importance and will no doubt bring benefits, we have concerns about a number of other areas. The legislation establishes, through regulations, three core security requirements for “connectable products”. Rather than those three security requirements being left to be defined in future, we believe that they should be expressly set out in the Bill. That would speed up the entire process and ensure that consumers are protected sooner rather than later.
Similarly, we would like the Secretary of State for Digital, Culture, Media and Sport—it is a pleasure to see her in her place—if she is not too busy trashing another one of our great British institutions, to prepare and publish a report on the security risks to UK connected products. During an oral evidence session on the Bill, Professor Madeline Carr, a cyber-security expert, told us that she would not have an Alexa in her house due to the security risks and that there is nothing in the Bill that would change her mind. Due to that statement by an industry expert, and the prominent role that cyber-warfare is playing throughout the conflict zones of the world, we think that it is very much in the national interest to know how secure our connected products are, and we call on the Government to go much, much further.
The Prime Minister came into office promising “full-fibre” broadband by 2025. Due to a lack of application and grip from the Prime Minister and the Government that he leads, that target was quickly downgraded to full gigabit broadband by 2025. In what was a surprise to absolutely no one who follows this Administration closely, the target was downgraded again to 85% gigabit-capable broadband by 2025. There are still huge doubts—voiced by the Digital, Culture, Media and Sport Committee, the Public Accounts Committee and industry—that even that twice-reduced target will yet be achieved, selling Britain short at every opportunity.
I take no pleasure whatever in pointing out those failures. Indeed, I believe that they are hugely damaging to the future economic potential of our country and to the UK’s social fabric. That is because a digital divide exists in our country and it is only getting worse. One such divide is the fact that, when it comes to digital connectivity, many communities in rural and semi-rural areas, including my Ogmore constituency, are being left behind completely. With the increase in working from home and schoolwork being done over the internet since the pandemic, the Government urgently need to get a grip on this critical issue.
In detailing the Government’s failings when it comes to our telecommunications infrastructure, I think of our own Sir Tim Berners-Lee, who had a vision of the internet being “for everyone”. However, the Government’s inaction is ensuring that that is currently not the case. In 2010, the Labour party left behind a world-leading sector for communication and mobile phone roll-out. The Government have stagnated and stalled over the past 12 years and have failed to build on Labour’s success.
I repeat what I have said throughout the passage of the Bill: I support the Bill’s aim of both increasing the security of our connected devices and speeding up the roll-out of our telecommunications infrastructure. Our point of contention is that the Bill, as currently constituted, does not do either as well as it could. It does not deliver what people in this country desperately need: improved broadband.
As the Bill makes its passage to the other place, we hope that the issues raised about it can be taken up by their lordships to ensure that the improvements can be made and, hopefully, some amendments won. I echo what the Minister said about the constructive nature of our debates—I am not sure that we will be able to continue that with other Bills that she and I may spar over in the months ahead, but I am sure we will try.
I thank the Clerks and all House staff who worked so diligently during the Bill Committee, including the evidence sessions. I thank the witnesses for their expert advice, which was truly valuable. I thank my staff, including Alex Williams and James Small-Edwards, who did an enormous amount of work—I do not have the luxury of civil servants, but perhaps one day soon—[Interruption.] The Secretary of State says “Dream on”. She has certainly been having a few dreams of her own of late that are not working very well, particularly for the Prime Minister. I pay tribute to my staff, who have worked diligently during this process, and I thank all the Members who have played such an integral part in ensuring that the Bill passes through the House with civility and good humour throughout.
Madam Deputy Speaker (Dame Rosie Winterton)
I call the Scottish National party spokesperson, Owen Thompson.
Owen Thompson
I echo much of what the hon. Member for Ogmore (Chris Elmore) said. My comments on Second Reading remain. In particular, my points about enforcement will need further attention, but as I have said all the way through, we support the principles behind the Bill. Despite the requirement for tweaks—if I may put it that way—where we would like to see things go a bit further and done slightly differently, that does not take away from the principles behind the Bill, which we are happy to support.
Question put and agreed to.
Bill accordingly read the Third time and passed.
Ukraine
(2 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
The Minister for Defence Procurement (Jeremy Quin)
I beg to move,
That this House has considered Ukraine.
It has been exactly one month since the Secretary of State for Defence last came to this House to provide an update on Putin’s brutal, unprovoked and illegal invasion. In that time, Russian troops have failed to take Kyiv and their initial strategic plans have been thrown into complete disarray. They have suffered heavy losses on a par with those in their nine-year conflict in Afghanistan, including more than 15,000 personnel and hundreds of tanks, vehicles and helicopters. They have also strengthened the resolve of the international community in a way that has not been seen for decades.
Rather than back down, however, Putin has refocused efforts on the eastern Donbas in a bid to entrench control of a land bridge with Crimea to the south. The people paying the tragic cost of his unrelenting war are still the Ukrainian men, women and children who have been bombed in hospitals, blown up in schools and bombarded in railway stations. The number of Ukrainian civilians killed has risen to more than 3,500—including, I regret to say, 250 children—and up to 100 Ukrainian troops are reported to be dying in the battle for the Donbas every day.
The latest intelligence shows that Putin’s troops are currently bombarding and encircling cities including Severodonetsk, Lysychansk and Rubizhne, while in Mariupol, the last Ukrainian fighters have now been evacuated from the steelworks after more than 10 weeks of brave resistance. It is extremely concerning to hear appalling comments about those gallant defenders from certain Russian MPs. Russia must treat these soldiers in full accordance with the Geneva convention.
In the Black sea, Russia is continuing to block shipping lanes and reinforce its troops on Snake Island, but it is clear that their momentum has slowed, and in places Ukrainian forces are beginning to push them back to their borders. In Kharkiv, for instance, the fact that three quarters of the 1.4 million inhabitants are Russian speakers has not had one iota of impact on their resolve. Instead, Putin’s forces have been unceremoniously driven out of Ukraine’s second city—not just a major strategic blow for the Kremlin, but a symbolic one, as it peddled the lie that Russian invaders would be welcomed with open arms.
Sir Bernard Jenkin (Harwich and North Essex) (Con)
My hon. Friend will be aware that the blockade of the Black sea is one of the contributory factors to rapidly escalating food prices in global markets. In fact, 26 countries now have export bans on various foodstuffs to protect prices for their own domestic markets. This is now blockading some 15% of the world’s calorie intake, according to The Economist. Are the Government treating the reopening of the food supply from Ukraine as an urgent matter? I appreciate that it is very complex and sensitive, but will the Government confirm that they are attaching extreme urgency to it? Otherwise, we will have more starvation and more famines in some of the poorest countries in the world.
Jeremy Quin
My hon. Friend makes an acute observation. He is absolutely right to draw the House’s attention to the matter, which is of profound concern. We were in a bad situation with food supplies even before war in Ukraine; we are in a worse situation now. My right hon. Friend the Minister for Europe and North America informs me that, unsurprisingly, the matter was discussed at the meeting of G7 Ministers; it has also twice been the subject of conversations between the Prime Minister and President Zelensky. It is very much a focus for the Government, and we are in discussions with our NATO allies in the Black sea and others. It is a complex situation, as my hon. Friend the Member for Harwich and North Essex (Sir Bernard Jenkin) reminds us, but I assure him that we are very focused on it.
Geraint Davies (Swansea West) (Lab/Co-op)
Given the phenomenal impact on world food supplies, the cost of living crisis here, and the forecasts, which are now increasing, that the global economy will shrink by something like £750 billion thanks to this war, why is more not being done to invest in armoury and defence weaponry to basically kick Russia out of Ukraine? I understand that something like £7 billion of military aid has been provided. Is that enough? Should the world not be doing more, in its own self-interest?
Jeremy Quin
I remind the hon. Gentleman that I said at the start of my remarks that the world has never been more united over the past few decades. We have committed more than £1.3 billion of military equipment. The people who are doing the heavy work are the gallant defenders of Ukraine, the members of the Ukrainian armed forces; they are being supplied by this country and by many allies around the world. We have organised two donor conferences; I was at a donor conference earlier this week. Military supplies and defensive equipment are coming in from all over the world, in addition to a vast package of economic sanctions against Russia.
Dr Andrew Murrison (South West Wiltshire) (Con)
The blockade of Odesa is a matter of extreme seriousness. Unless the silos are emptied in the next few weeks, there will be nowhere for the harvest to go. Tens of thousands of people in some of the most vulnerable countries in the world will starve, with all the geopolitical consequences that that will bring. Does that not mean that we need to lift the blockade in Odesa as a matter of urgency? What are we doing to provide Harpoon missiles, for example, to ensure that the ships currently blockading Odesa are dealt with? Unless we can clean up the Black sea so that mines do not pose a threat, we cannot expect insurance companies to insure merchant shipping. That will mean that ships will not leave port.
Jeremy Quin
My right hon. and gallant Friend is right that the situation adds a significant risk to starvation globally, with many of the poorest areas of the world most affected; that has been caused directly as a result of the illegal and brutal invasion by Putin. He is also right that we need to work consistently and hard to get a solution that gets grain out of Ukraine and into world markets; I assure him that we are working on that. I can further assure him that coastal defensive missiles are absolutely a part of the package of equipment that we and others are supporting in Ukraine.
Jeremy Quin
I shall give way to the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone), as he got in first, but then I should make a bit of progress, if that is all right with my hon. Friend the Member for Brigg and Goole (Andrew Percy).
Jamie Stone
The Minister is being extraordinarily generous. As the flip side of what he says about our supplying the Ukrainians with equipment, it would be interesting to know what things are like on the Russian side. The Russians’ shells and missiles will be finite. Have we any knowledge of whether there is a chance that they might start to run short of the kit that they need?
Jeremy Quin
The hon. Gentleman raises a very good point. There is considerable evidence of significant depletion of Russian equipment and stocks. Clearly, ammunition stocks are less visible, but there has been open source reporting about T-62s—tanks that were designed 60 years ago, although some were upgraded in ’83—being brought out of garages. There is significant evidence that Russia is suffering serious depletion, as the fact of 15,000 personnel being killed in the conflict would suggest.
As I am in a generous mood, I shall give way to my hon. Friend the Member for Brigg and Goole if he is still keen to intervene, but then I must make progress.
Andrew Percy
The Minister has highlighted the outrages committed by the Russians. Those outrages include reports of attacks on ambulances and first responders, so I thank him for his work helping us to secure export licences for the battlefield ambulances produced by the brilliant team at the O&H Venari Group ambulance factory in Goole. He knows the project very well: former British military vehicles are converted into battlefield ambulances, 58 of which have been produced so far. They are now in service in Ukraine, so I thank the Minister and his team for their work on securing the export licences. Will he pay tribute to the workers at O&H?
Jeremy Quin
I pay tribute to the company’s workers and to my hon. Friend, who was very assiduous, at all hours of the day, in making certain that Ministers were aware of the project and the need to get those export licences through. I am glad that officials in the two Departments have moved very swiftly to achieve those export licences. The brutality shown by Russian forces in this conflict is shocking. I am glad that we are doing our utmost to support the humanitarian effort in Ukraine, having provided civilian ambulances, battlefield ambulances and simple things such as generators.
We were discussing the fact that Kharkiv was a real and symbolic blow to Russian plans, which we have to believe are coming unstuck. The firing of seven Russian commanders in recent weeks—including the lieutenant general who headed up the invasion of Kharkiv—reeks of a culture of scapegoating and cover-ups, and there is a record of aggression, brutality and incompetence. No wonder the veteran Russian diplomat Boris Bondarev said, as he bravely resigned his post this week, that he had “never been so ashamed” of his country.
At this critical juncture, our aim remains clear: Russia cannot win. We will continue to support our Ukrainian friends, focusing on three key aspects. First, there is the military response, which is about providing a wide range of support to Ukraine so that it can defend itself and its sovereignty. We were the first European country to supply lethal aid, and we have committed to spending at least £1.3 billion on military support. So far, we have delivered in excess of 6,500 anti-tank missiles, many of which have been used successfully to repel columns of tanks, as well as eight air defence systems, including Brimstone and Starstreak missiles—the fastest in the world, travelling at some 2,000 mph. We have also delivered 15 Wolfhound armoured vehicles, which provide increased protection for essential supplies, as well as a small number of armoured Stormer vehicles fitted with Starstreak launchers to further enhance Ukraine’s short-range anti-air capabilities.
Mr Tobias Ellwood (Bournemouth East) (Con)
I commend my hon. Friend for the work that he and the Ministry of Defence have done in supporting the Ukrainian forces in their hour of need. We face a dilemma, in that as we empty our quartermasters’ stores, they need to be replenished. If he needs help persuading the Treasury to give the Ministry of Defence money to make sure that those Starstreaks, next-generation light anti-tank weapons and Brimstones are replenished, please will he get in touch?
Jeremy Quin
I know that the door of my right hon. Friend, the Chair of the Defence Committee, is always open for such discussions. The Treasury has been very clear that we need to replenish our stocks, and that it will support us in ensuring that they are replenished. I can also assure him that we are making certain that we remain well within our tolerances. There are tasks here for which we always need to be ready, and I can assure him that we remain ready for them.
The equipment that we provide must be as effective as possible, so we are training specialist Ukrainian units in its use. Last month, for example, Ukrainian troops learned how to use our armoured fighting vehicles on Salisbury plain, and those vehicles have now started to arrive in Ukraine; the number will build to 120 in total. Our support does not end there. The House will be pleased to hear that the challenge laid down by Putin’s brutal war has been seized by UK industry. I have been delighted by the agility that the UK’s defence sector has shown, working closely with Defence Equipment and Support, in bringing through innovative ideas; in some cases, those ideas literally go from desktop to theatre in a matter of weeks. I am determined to maintain this innovative drive, so that we capture every idea, support the best of them, and then swiftly put the results in the hands of our Ukrainian friends.
Dave Doogan (Angus) (SNP)
Can the Minister set out how support for Ukrainian forces will be updated or augmented to deal with increased and intense artillery bombardment from better supplied Russian forces? They have retreated much closer to their own borders, and their supply lines have greatly opened up. Given that, how can we further support Ukraine in defending itself?
Jeremy Quin
The hon. Gentleman knows that we are doing our utmost to support our Ukrainian friends. There are intense discussions between our Ukrainian friends and the Ministry of Defence at a number of levels, including between myself, my hon. Friend the Minister for the Armed Forces and our opposite numbers in Ukraine. We are ensuring that the equipment that we source to support Ukraine is tailored to its needs and its battle plan in the weeks and months ahead. The hon. Gentleman is right that opportunities may well open up, but I do not for one second underestimate the fierceness of the fight and how intense it is at present in Donbas.
Robert Jenrick (Newark) (Con)
My hon. Friend will be aware that a small number of us in this House have constituents who have been fighting with the Ukrainian armed forces and who are now held in captivity, either by the Russian authorities or their associates. The Foreign, Commonwealth and Development Office is providing a degree of consular support to us and to their families, but could I encourage him and other Ministers to give this priority? I urge them to speak with the British and International Red Cross—I suspect that they will prove to be the best interlocutors—to help secure a satisfactory outcome and good treatment for these individuals, who are British citizens, and to help to secure their speedy release and return either to Ukraine or the United Kingdom.
Jeremy Quin
That is something that we take extremely seriously. These are, of course, British citizens who have been caught up in the conflict, and they will be provided with all possible consular assistance. My right hon. Friend the Minister for Europe and North America has confirmed that, which should come as no surprise to my right hon. Friend the Member for Newark (Robert Jenrick). Although we really do discourage anyone from going to Ukraine in these circumstances, the Ukrainian Government have made it clear that where other nationals have been combatants, they are prisoners of war and should be treated as such, in full compliance with the Geneva convention. That is exactly what we expect of every nation.
In addition to providing lethal and non-lethal equipment, we have been facilitating the delivery of equipment from other countries by convening two international donor conferences and providing logistic support. We have been speaking to partners across eastern Europe to encourage them to donate their former Soviet kit, with which Ukrainians are more familiar. For example, Poland is now donating T-72 tanks to Ukraine in return for a temporary deployment of Challenger 2 tanks from the UK.
At a time of heightened tension, it is vital that we continue to provide reassurance to our NATO allies in eastern Europe. As part of this effort, we have sent Typhoons to Cyprus to patrol south-east European skies, have deployed frigates and destroyers to the eastern Mediterranean and the Baltic sea, and have temporarily doubled our military presence in Estonia to 1,700 personnel. In other words, where Putin wanted less NATO, he is now getting much, much more.
Paul Blomfield (Sheffield Central) (Lab)
There is clearly considerable agreement across the House on these issues. One of the important areas in which we have played our part, and should play our part more, is the provision of refuge for those who are seeking a home away from the conflict. People in Sheffield responded very generously to the Homes for Ukraine scheme, but are expressing enormous frustration at the inability of the Home Office to deliver visas within the timeframe that we would expect. At the beginning of April, when Lord Harrington—for whom I have a high regard—took responsibility for the scheme, he set a public target of 48 hours from when people “download the application form” to when they are given permission to travel. I have constituency cases in which families who applied on 26 March still do not have permission to travel two months later, and it is clear that my experience is shared by Members across the House.
People have told me that they are now applying a second time, particularly when children are involved, because they face such long delays and they have no faith that their original application is still being worked on. Obviously that will only cause further complications and congestion in the system. What assurance can the Minister give me that he will take this up with the Home Office, and that we will do something to meet the obligations we took on, and the ambition that we set, when we launched the Homes for Ukraine scheme?
Jeremy Quin
The hon. Gentleman asked his question very sincerely, and I know that his experience is shared by many Members. As a constituency MP, I have encountered such cases myself.
We are all keen to see these visas processed as soon as possible. As the hon. Gentleman will know, a significant number have been provided—I think it is more than 107,000 now—but I appreciate that that makes no difference to those who are sitting outside Ukraine with diminishing amounts of money, wanting to come to this country and to a home that is desperate to have them and embrace them. I know that the Under-Secretary of State for the Home Department—my hon. Friend the Member for Torbay (Kevin Foster), who is sitting beside me—recognises that there are issues relating to children in particular; the Home Office is working assiduously to try to get on top of all these issues. In my personal experience, the system seems to be getting faster and better, but we are not there yet, and that work continues to be done by my friends in the Home Office.
Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)
Before the Minister moves on to the subject of NATO commitments, may I raise the subject of direct support for Ukraine? As he knows, it has historical debt problems, and the invasion will obviously have a huge economic impact; the statistics are clear to us all. Can the Minister say something about the co-ordination of direct international financial support for Ukraine, and how we can keep the country solvent during a time when that is a very pressing matter for it?
Jeremy Quin
We have supplied significant funds directly to Ukraine to help it through this incredibly difficult period. I cannot lay my hands on the exact amount, but the House may be blessed with the figure later in my remarks. We are also working with the G7 and others. Clearly, Ukraine is suffering from extraordinary problems at present, and the international community recognises that. It also recognises that Ukraine is standing up for a cause that means so much to us all, so the hon. Gentleman’s point is well made.
If I may, I will move on to our economic response. We are escalating our sanctions regime still further to stymie the Russian war machine and isolate Putin. The UK has now sanctioned more than 1,000 individuals and 100 entities, including oligarchs with a net worth of more than £100 billion. In recent days we have focused on his inner circle and the shady financial network surrounding him. This is alongside the asset freezes, trade bans and tariffs that we and other G7 nations have imposed in recent months. Over time, this economic contraction and the restriction of access to complex components will have an ever-deepening impact on the Russian war machine. As time goes on, despite their daily dose of propaganda, it will be harder and harder for the Russian people to ignore the evidence that their leaders are betraying them and their interests.
Jeremy Quin
I am conscious that other hon. Members want to speak, but I will of course allow the hon. Gentleman to intervene.
Geraint Davies
The Minister is probably aware that Putin signed a deal at the Olympics in Beijing for Russia to provide 10 billion cubic metres of gas per year from 2025, compared with 1.25 billion a year now, and that it is supplying more to Indonesia and India as well. Would he accept that, by working with China, Russia will be able to avoid the impact of sanctions over time, and that the imperative is to provide military assistance to get Russia out of Ukraine?
Jeremy Quin
There is an overall strategy to achieve the objective to which the hon. Gentleman refers. It is part defensive military aid, part economic and part diplomatic, and all those parts have a role in achieving our overall objective. Analysts are suggesting that, as a result of the economic package of measures delivered by the global community against the Russian economy, there has been a contraction of 10% to 15% in Russian GDP. That is extraordinary contraction. It takes the Russian people back to where they were before the Putin regime commenced, which has to have a direct impact—not only on them and the way that they think about the regime that is betraying their interests, but on the Russian war machine.
Jeremy Quin
I will, but then, if hon. Members will excuse me, I should probably make progress. I am conscious that I have perhaps been speaking for too long to allow others a chance to speak.
Janet Daby
I am extremely grateful. My intervention is similar to that of my hon. Friend the Member for Sheffield Central (Paul Blomfield). I have constituents from Ukraine. They are a family of five, but their children have been unsuccessful in obtaining visas. I recognise that there is a priority for visas for Ukrainian people who are outside the UK. Could the Minister ask his ministerial colleagues at the Home Office to look at this case and perhaps give it a degree of priority, so that this family can get their benefits and so on?
Jeremy Quin
I ask the hon. Lady to write to the Under-Secretary of State for the Home Department, my hon. Friend the Member for Torbay, who is sitting beside me on the Front Bench; he has generously said that he will assure her of a response as soon as possible to the question she has asked on behalf of her constituents.
Thirdly and finally, there is the diplomatic response. We are working intensively with our allies and partners to make it clear to the Russian Government that they must withdraw their forces and engage genuinely in peace negotiations. The Prime Minister has visited in Sweden and Finland to agree increased co-operation on security, and to discuss their applications to join NATO, which I am delighted have now been formally received. We have been clear about our view that those countries should be integrated into the alliance as soon as possible. Meanwhile, the Foreign Secretary was in Germany to attend the G7 and NATO Foreign Ministers’ meetings, where she pressed the need for further support for Ukraine. The Defence Secretary met his US counterpart, Secretary of Defence Lloyd Austin, at the Pentagon two weeks ago, and he is in Madrid today for similar discussions ahead of the NATO summit. I will likewise be heading to Canada in a few days’ time.
We are working closely with our allies to hold Putin and his regime to account for their appalling war crimes. This week we have seen the first Russian soldier jailed for life in Ukraine for murdering 62-year-old civilian Oleksandr Shelipov, but the Ukrainian authorities believe that more than 11,000 other war crimes have been committed, from the indiscriminate targeting of civilians to rape and sexual violence, so we have sent support into the country to help collect evidence, including witness statements and video recordings. We have provided additional funding to the International Criminal Court, as well as technical assistance via UK military and police personnel. We have also appointed Sir Howard Morrison to support the Ukrainian prosecutor general in her investigations.
Even as we work to stop Putin, we must continue to support the Ukrainian people who are bearing the brunt of Russian brutality. The UN estimates that more than 6 million people have been forced to flee the country, while a further 8 million have been internally displaced. That is why we have committed nearly £400 million of humanitarian and economic aid so far, including more than 5 million medical items, 42 ambulances and more than 500 mobile generators.
At home, the British public have demonstrated their great generosity once again, with more than 200,000 individuals and organisations signing up to offer help. The Ukraine family and sponsorship schemes have, together, issued more than 107,000 visas so far.
We are also preparing to help Ukraine rebuild when this war is finally over. The Foreign Secretary spoke to G7 leaders about the need for a new Marshall plan for the country, which could be paid for in part using Russian assets—the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) will be pleased to hear that.
We have already pledged £174 million in aid to help Ukraine’s economy to recover, including a three-year package of support for energy security and reform. In reference to the point raised by my right hon. Friend the Member for South West Wiltshire (Dr Murrison), the Secretary of State for Transport recently met his Ukrainian counterpart to discuss ways of getting grain out of the country, which would provide a vital lifeline to the local economy and a much-needed global commodity.
Mr Ellwood
My hon. Friend has been very generous in giving way. I was pleased to attend the Lennart Meri security conference in Tallinn last weekend, and my right hon. Friend the Minister for Europe and North America, who is in his place, also attended. The support for Britain was overwhelming, reflected not just in those who attended the conference but in the result of the Eurovision song contest, in which we rightly came second to Ukraine.
The Minister is speaking about what other assistance we can provide. Will he clarify whether there is any truth in the reports that we will now be providing hard-power support—troops—to Moldova, in addition to our support for Ukraine?
Jeremy Quin
To answer the question precisely, I am aware of no current plans to do that, but we have a close relationship with Moldova. We work co-operatively with Moldova, and it is a relationship we are keen to foster and build on.
The Ukrainians won the battle of Kyiv and the battle of Kharkiv. They are more than holding their own in bitter fighting, but there remains a long way to go before this war can be won. We must therefore continue to stand by our Ukrainian friends for the long term. They are fighting not just for their survival but for the values of freedom, democracy and justice that are the essence of our society. That is why they must succeed, and this House can rest assured that the United Kingdom will continue to do everything in its power to make sure that outcome is achieved.
Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)
I am grateful to the Minister for updating the House on the Government’s actions in Ukraine. There is cross-party support for their action to support our friends in Ukraine, and those watching this debate from the Kremlin will not find disagreement between the Opposition and the Government that Putin’s criminal invasion of Ukraine must be resisted. We will continue to support our friends in Ukraine until that free, sovereign and democratic country is back in the hands of the Ukrainian people.
Amid today’s other events, we must not forget that Ukraine faces a truly grim milestone today: three months since Vladimir Putin launched his unprovoked, heinous and unjustifiable invasion of that sovereign state. Every hour of this conflict has been an hour too long. Every family uprooted and forced from their home is a family too many. And every life lost is a life too many.
On behalf of my party, I pay tribute to the extraordinary bravery and resolve shown by the Ukrainian people, both civilian and military, during these past three months. I also pay tribute to the British public, who have opened their homes and their hearts to those fleeing the conflict. Labour stands with our allies in providing assistance to Ukraine, and we support efforts to provide military, economic, diplomatic and humanitarian assistance. It is right that Britain has provided support to Ukraine to defend itself. I believe that our country is a force for good, and we can exhibit that when we put our values at the heart of our foreign policy. Backing not only our friends in Ukraine, but our allies on NATO’s eastern flank is in Britain’s national interest, just as much as it is about protecting those countries and friends we are supporting.
The Government have enjoyed Labour’s support on this and will continue to do so. Our commitment to NATO is unshakeable. In last week’s debate on NATO, I set out our commitment to the alliance and how we want to see that strengthened and expanded in the years to come. However, we now need to shift our strategic thinking from the crisis management that has defined the first three months to a medium-term military support strategy for Ukraine and our allies, to ensure that Putin’s next offensive can be deterred and defeated. There are some crucial questions I want to ask the Minister on that. I do so in a spirit of cross-party co-operation, and I hope he will take them in that spirit.
This morning, the shadow Defence Secretary set out Labour’s thinking on defence for the coming period in his speech at Chatham House, and I will borrow a few questions from it. I am sure the Minister has already heard them, so I hope he will forgive me for repeating them. We need to make sure that, as an alliance, we are continuing to supply artillery, armour, weaponry, loitering munitions and specialist missiles to our friends in Ukraine, in addition to non-military gear, such as medical kits and defensive armour for personnel.
As an alliance, we also need to go further in providing more anti-ship and anti-drone missiles, and in making sure there is a sufficient stockpile for Ukraine to deter any future aggression and offset the Russian aggression we are seeing at the moment. To do that, we need to make sure we have sufficient stocks to provide our friends in Ukraine and ourselves with the NLAWs—Next generation Light Anti-tank Weapons—and other missiles that we need. So will the Minister tell us whether the contracts have been signed to replenish our military stockpiles to date? There is a concern that they have not yet been and that stocks for our allies are being diverted to backfill UK military stocks. What progress has been made on the transition to NATO-style weaponry for our allies in eastern Europe? It is good to redeploy Soviet-era weaponry to our friends in Ukraine, because they are more familiar with it, but we need to make sure that it is backfilled with NATO-standard gear that can be better and more easily provided and equipped for our allies, both in Ukraine and in eastern Europe. What is the training need to make that transition for those weapons systems? Will the Department fund the training as well as the weapons systems themselves?
Labour Members believe that we must continue to supply Ukraine with the appropriate weapons, and do so in a timely manner, but we know that there are problems with the UK’s military procurement system, notwithstanding the efforts that have been made to sort out the fast deployment of NLAWs in particular. I pay tribute to the provision of NLAWs and Starstreak missiles to our friends in Ukraine, who have used them with agility and skill to attack and deter Russian aggression. The Defence Committee Chair’s earlier intervention—I hope hon. Members have not used up all the interventions on the Minister and that I might get some as well—about backfilling stockpiles is a good one. We need reassurance on that, to make sure not only that we have sufficient stockpiles, but that, in the event of this conflict escalating and spreading, other allies can be reassured that there will be a steady flow of weapons and reinforcements.
Dr Murrison
The hon. Gentleman invited an intervention, which I am happy to furnish him with. He pointed out that there is a risk of escalation, which of course there is, but Ukraine is doing a very good job of containing this, to the surprise of many observers. Does he agree that at some point we are going to have to accept either a frozen conflict, as we are not going to defeat Putin—that seems unlikely and indeed it is not an aspiration that most of us have, as invading Russia is not part of our plan—or some sort of off-ramp, what Sun Tzu would refer to as a “golden bridge”? If the hon. Gentleman accepts that, what form does he think that bridge should take?
Luke Pollard
The right hon. Gentleman is my co-chair of the all-party group on the National Trust, and although we disagree on many things, we agree on some. I have to say that on this issue I do not share his view. We must continue to support our friends in Ukraine until Russia is driven out of Ukrainian territory. The Ukrainian people have the right to govern themselves in a free and democratic way. As a democracy and a sovereign country, we should support them until the point at which all Ukraine is free. That is the commitment that I believe the Prime Minister has made and that the Leader of the Opposition has made. On that, there is no distinction between us.
Dr Murrison
In that case, presumably the hon. Gentleman would include Crimea.
Luke Pollard
I am grateful to the right hon. Gentleman for putting me on the spot. I stand by what I have said. It is for the Ukrainian people to determine their own future. We in this place must not draw lines on a map on behalf of other countries. We have seen how that has gone in the past and it has not always been to the benefit of those countries or to us. I back the Ukrainian people to make their own decisions and define their own freedom in the future. I encourage all Members to take that position; otherwise, in speculating about options, we risk playing into Putin’s hands, because someone will try to clip such remarks so that they can say, “In Britain, they are saying this.” We must not give them an inch of room to do that.
Geraint Davies
Does my hon. Friend agree that the sanctions strategy can be unravelled over time? That is shown by the fact that since 2014, when the Crimea sanctions were introduced, the production of food in Russia has increased by 15%, with the production of cereals going up by 26%. Russia is now in the midst of doing oil deals with China, Indonesia, India and so on, in exchange for China supplying all the consumer markets, thereby displacing the European suppliers. Is not the imperative, therefore, to win in the sense of getting Russia out of Ukraine? What timeframe does my hon. Friend favour and what sort of objectives does he think we should have? Should we kick them out by the end of the year?
Luke Pollard
I think the Government themselves have admitted that some of the sanctions that were put in place after the invasion of Georgia, and certainly after the invasion of Crimea in 2014, have not been as effective as we would have liked them to be. We must be aware of Russia’s ability to displace its economic trade with those countries in the west that have put sanctions in place to those countries that have not yet put them in place or, indeed, those that actively support or at least do not oppose Russian aggression. One of the defining challenges of the coming years will be to make sure not only that more countries around the world share the values of those in the west and the NATO alliance, but that other countries are discouraged from, for instance, taking steps to take Russian gas, and that we make the case for those countries to introduce economic measures and sanctions to support the effort to remove Russia from Ukraine in its totality. Russia must not get around the sanctions.
When we consider our medium-term strategy in Ukraine, we need to look at wider questions, some of which relate to the Government’s integrated review. It is worth saying that there is much in the integrated review with which the Opposition agree. The assumptions and framing are good, and much of the research that fed into it is still credible and accurate, notwithstanding the invasion of Ukraine. Nevertheless, it is now prudent and wise to revisit some elements.
In our debates to date, there have been cross-party suggestions to Ministers that elements of the integrated review should be updated to ensure that it can be a relevant and accurate strategic framing document for the United Kingdom’s armed forces and our overall diplomatic approach. That means the integrated review should be updated; that we should look at the paucity of references to Europe in it; and that we should look again at the strategy of tilting towards the Indo-Pacific, perhaps at the expense of securing our own backyard in the Euro-Atlantic area.
We also need to revisit the Army cuts. Given the invasion of Ukraine, it is not justifiable for the Government to continue to cut 10,000 roles from the Army. Between October and January this year alone, Army numbers have plunged by 1,000, and they are set to be cut further. It is not wise for the Government to continue with their £1.7 billion real-terms cut in day-to-day MOD spending. The Government have put in more money, but much of it has filled black holes in procurement programmes, and Ministers’ agreement to cut day-to-day spending still stands.
We need to revisit the things I have outlined, and if the Government do revisit them, they will have Labour’s support. We need to make sure that our leadership in NATO continues to be at the forefront. We must not risk any of that, which is why I suggest to Ministers today, as I did in the recent NATO debate, that they need to correct the flaws in the integrated review, review defence spending, reform defence procurement, rethink the Army cuts and, importantly, renew our international friendships, because we need to make sure that our values and alliances speak as strongly as the strength of our weapons and armed forces. There is much to be done and I would like to see greater urgency.
Wayne David (Caerphilly) (Lab)
One thing that has become increasingly clear is that the war in Ukraine will not be a short conflict; it will go on for some time. It is important therefore that we maintain our solidarity and our practical support. That means continuing the supply of armaments, which prompts the question: have we sufficient resources of our own to maintain that constant flow?
Luke Pollard
I agree with my hon. Friend. I want to see reform of our procurement system to ensure that it is sufficient and agile, and, dare I say it, more cost-effective than it has been to date. That is why I am arguing for a medium-term strategy. The steps that we have taken so far have been important, but, rather than just considering the immediacy of the situation, we need a longer-term look at what we need to do.
Jonathan Edwards
Following on from what the hon. Member for Caerphilly (Wayne David) said, I, too, believe that it will be a long-term conflict. Does the shadow Minister agree that, on top of the containment strategy that we will have to have in place for Russia, we will also need a strategy that offers Russia an alternative path for the post-Putin era, whenever that comes, so that it can resume normal international relations if it respects its neighbours?
Luke Pollard
It will be a very hard way back for Russia if President Putin remains in power. The off-ramp option that was spoken about in the early days of the war is now very difficult for President Putin to consider, but in discussing future options for how the war can end, we need to make it very clear that the war will end only when Russia leaves Ukraine in its entirety and returns Ukraine to a peaceful situation in which its people can make their own decisions.
I realise that time is passing, so I will briefly raise the Homes for Ukraine issue. There has been enormous support from the British people in opening up their homes to people fleeing Ukraine. My boyfriend and I have signed up to the Homes for Ukraine scheme, but without a matching service, it is difficult to ensure that we can fill our spare room. There are tens of thousands of people in a similar situation.
Janet Daby
The cases coming to my attention in my constituency involve families waiting for up to two months for visas for the Ukraine family scheme and the Homes for Ukraine scheme. That is unacceptable. Does my hon. Friend agree that the Home Office must address that matter, as well as the issue of staff having to wait up to two hours on the phone to get through to the Home Office?
Luke Pollard
All of us in this place will have seen the queues snaking around Portcullis House. Our parliamentary staff, who have an awful lot on their plates regardless of whom they work for, are sitting in a queue to try to get answers out of the Home Office system. It should not take an intervention by a Member of Parliament to make the system work properly. It should certainly not take hours and hours of our staff’s time to try to get a decent answer. The Under-Secretary of State for the Home Department, the hon. Member for Torbay (Kevin Foster) is in his place and will have heard what I have said. We wish him luck with fixing this broken system. At the moment, it is not delivering on the promise made by him and the Home Secretary of a swift, efficient system to help people fleeing conflict to get to a place of safety and to get there quickly. There are people now who question how long it will take for families to get here, and that even includes those who have contact with a Ukrainian family. We need to ensure that the system works.
In Plymouth, we have families across the city who want to take up the offer, but they are waiting for that matching service. I pay tribute not only to those families, but to our schools, our health services and our mental health services across the country who are assisting Ukrainian families and individuals who have been fleeing such difficult circumstances.
Geraint Davies
I was in Lithuania with an all-party group. At the reception centres for refugees, women were coming in with children and were being processed within 12 hours. They were simply given biometric and other checks and then associated with a family, with a kindergarten and with work, and then they were done. They were regarded as friends and as people helping in the workforce rather than as Russian spies. The men were put in another place, because they were expected to fight.
Luke Pollard
I am grateful for that intervention, which prompts me to say to the Minister that the generosity of the British people needs to be matched by the generosity of our immigration system, especially for our friends fleeing Ukraine. At the moment, they do not match up as they should.
Labour stands unshakeably with our NATO allies on the eastern flank next to Russia; we stand unshakeably with our Ukrainian friends, and we will continue to do so during this brutal invasion. We need to make sure that we are supporting them in any way we can—indeed, the support required must now go much further than just military matters. I am grateful to the Minister for Defence Procurement for setting out the support that has been provided to deal with the hideous number of war crimes and the long-term consequences of the Russian military’s using rape as a weapon of war. There are considerable long-term consequences for women in particular in Ukraine who have been abused by Russian forces, and we must ensure that there is long-term support, not just to prosecute those responsible but to help the communities of victims of torture, murder and rape.
Had time allowed, I would have spoken about the need to provide more humanitarian assistance and about food security. Food security is national security. As a Parliament, we must do much more to improve our own national food security, and also recognise that Ukraine’s grain exports in particular support some of the most vulnerable and fragile countries in the world. We must ensure that Ukraine is able to export its grain. That is not just a Ukrainian priority but a global prior-ity.
The Opposition continue to support the Government in their measures to support Ukraine, but there are improvements that need to be made if we are to have a successful long-term strategy of continuing support for our friends there.
Mr Tobias Ellwood (Bournemouth East) (Con)
It is a real pleasure to participate in this important debate. I begin by commending the Ministers on the Treasury Bench for the regular drumbeat with which they bring this subject to the House to allow us to understand what is happening, to take stock and to comment on the clearly very difficult situation in Ukraine.
If invading Ukraine was an effort to rekindle Russian superpower status, it has been a complete flop. There was no clear initial strategy, no effective command and control, no logistical support and absolutely no appreciation of the Ukrainian people’s fearless desire to stay and fight. For Russia, this has been a dismal campaign. The body bags returning to Russia have piled up in their thousands, and dozens of wrecked Russian T-72 tanks now litter Ukrainian roadsides after a failed attempt to take the capital. With international sanctions starting to bite and countries such as Britain replenishing the arsenal of the brave Ukrainian forces with NLAWs and the like, surely Putin knows he cannot win. But sadly, this is far from over. With little care for the accepted rules of war or even for the loss of Russian life, Russian forces have now regrouped in the south-west of the country and have begun bombing entire towns and cities from afar, carrying out barbaric war crimes to gain territory, specifically in the Donbas region, and exploiting the west’s timidity about getting directly involved.
As NATO leaders head to the Madrid summit in June, there are lessons for the west to learn. Step back from events in Ukraine and we begin to realise that this is not just about Ukraine; it is another turning point in our history—indeed, in European security. We have had it quite easy over the last 30 years, since the end of the cold war, but the next few decades will be extremely bumpy indeed. State-on-state aggression is clearly back. If we do not help to put this fire out in Ukraine, it will spread to other parts of Europe, yet today it seems we are doing only enough to ensure that Ukraine does not lose, and not enough to guarantee that Ukraine can win. Putin may have misjudged Ukraine’s resolve to hold ground and fight, but he was spot-on in believing that NATO would have no appetite for getting directly involved.
Putin’s invasion did not come out of the blue. His vice-like grip on his own media has, over decades, convinced the majority of Russians that the west—specifically NATO—is a threat and must be confronted. He has publicly expressed a desire to regain control of those countries that were once governed by Stalin. And now, he is sidling ever closer to China, which shares Russia’s disdain for western standards and values.
This is indeed a dangerous turning point in our history, and the threat picture is certainly beginning to change fast. I put it to the House that how we conduct ourselves over the next few months—how we regroup and how we choose to stand up to this growing authoritarianism across the world—could have major implications for how things play out over the next decade. I recall speaking when Parliament was recalled after we decided to withdraw from Afghanistan. I made the statement that our departure could well be the high-tide mark of western liberalism since the second world war. I fear that if we do not get Ukraine right, I might be right in that analysis.
If we are to do things correctly, we face three big tasks, which I put to the Minister today. First, on Ukraine itself, we must agree on what exactly victory looks like. Even in the debate so far this afternoon, there has not been disagreement, but there have been different views on what success actually is. For me, it is the flushing out of all Russian forces from mainland Ukraine—I park Crimea, because it is a more complex issue to be revisited at a later date. Ultimately, I encourage President Zelensky and the Ukrainian armed forces to clarify that that is what they want to do, because that then makes clear how we can fully support them.
There must be clarity of that mission, because there seems to be a little disagreement taking place across our European allies. France and Germany are suggesting that a chunk of the Donbas could remain in Russian hands. We need to agree what that mission is, because that then helps to define operations, tactics and the equipment that is required. Eastern Ukraine, for those not familiar with it, is open, flat, tank terrain. It is perfect for that form of mobility and firepower. That indicates the sort of equipment we need to give.
The second task—slightly bigger, and stepping back from Ukraine—is to rekindle those cold war statecraft skills and the ability to react robustly to events without assuming that we will lose control of the escalatory ladder and trigger a nuclear war when dealing with Russia. NATO, let us not forget, remains the most formidable military alliance in the world. It is no wonder Sweden and Finland both want in. Yet future generations may ask why NATO formally sat on its hands while a democracy on its doorstep was partially destroyed. Let us remember what happened in 1938 when we hesitated. Too often, we have been spooked by Putin’s rhetoric. We should be shaping events, not reacting to them.
In fairness to the west and in particular to Britain, we have come a long way since our initial hesitance to answer President Zelensky’s pleas for help. Thankfully, NATO allies are catching up with the scale of Britain’s military support for Ukraine, which actually began way back in 2014. However, NATO refuses to formally get involved. It is consensus-driven, and it is clear that some countries do not want to lean forward. It is time therefore to form a coalition of like-minded nations, working together to better co-ordinate military support for Ukraine, increasing the quality and quantity of equipment and assisting with supply chains and training, all united by a mission to see Ukraine push Russian forces entirely out of its mainland.
We must be proactive in limiting the economic harm that Russia is causing. We should establish a humanitarian corridor around the key port of Odesa, so that the grain that much of the world depends on can continue to reach international markets. That is in our interests, because it will help directly tackle the cost of living crisis affecting us here, too.
Our final task is to form a strategy to handle an ever-assertive Russia-China axis that is attempting to exploit our fragile world order. Putin would not have invaded Ukraine if President Xi had not given his backing and support. Both countries share a common goal of building an illiberal alternative world order where authoritarian states can flourish, and Ukraine is just the start of that new axis of autocracy flexing its muscles. We must recognise that the last 30 years have been a walk in the park compared with what lies ahead. All NATO countries must increase defence spending to a minimum of 3% and the recent cuts to our troop numbers, fighter jets and ship numbers must be reversed.
Jonathan Edwards
The right hon. Gentleman speaks with great authority and knowledge. Given the emergence of the axis between China and Russia, how concerned is he about reports of a joint military exercise in the last few days over the Sea of Japan?
Mr Ellwood
I look forward to the hon. Gentleman’s contribution. I will focus on what happens in the European theatre of operations, but he raises an important question about the tilt to the Pacific, which was mentioned earlier, and what is happening in Ukraine. If we now recognise that Russia and China are working together, we must also appreciate that what Russia is doing in Ukraine is in China’s interest, because it has kept us, Europe and the United States busy and distracted so we have not kept an eye on what is going on in other parts of the world. We need to recognise that we must lean into what is happening in the South China sea. I would like to see a development of the Quad—Japan, India, United States and Australia—with Britain and France being invited into that strategic partnership to look after and take a greater interest in the security of that part of the world. I hope that the Government will look forward to that in the discussions at NATO.
Geraint Davies
Does the right hon. Gentleman agree that the west has been very timid because of its fear of a nuclear reaction? On the evidence of Putin’s threat, he said that if we imposed sanctions on him through SWIFT, that would be an act of war by the west, but then he did nothing. The Kremlin’s position is that nuclear weapons should not be used unless there is an existential threat to Russia, and nobody is suggesting invading it, so should we not just get Putin out of Ukraine?
Mr Ellwood
There is no doubt that, when dealing with a country such as Russia that is armed with tactical low-yield nuclear weapons, which we do not have in huge numbers in our arsenal, we need to have a sense of caution. However, there would be a stigma attached to Russia using those weapons systems, and countries such as South Africa, Saudi Arabia, India and even China might stop sitting on the fence or supporting Russia and move away from it. Let us not forget that, as we saw in Mariupol, Russia can achieve the same outcome as a tactical low-yield nuclear weapon using conventional systems and without testing its friendship with other nations around the world by crossing such a threshold.
When I visited NATO recently, I asked what NATO’s response would be. It could be that it is tucked away in an envelope in a drawer somewhere to be pulled out, read and acted on if such an event happens. I would like us to respond robustly, because it will take us into a new era of the character of conflict if we say that low-yield nuclear weapons can be used. If one is used in Ukraine, I would like every F-35 in NATO’s arsenal to take out every single Russian asset on the ground, and I would like us to look Russia in the eye—yes, this would be a “Who’s going to blink first?” moment—and say, “We will punish anybody who uses these weapons.” If we do not respond and we do not react, we again allow Russia to gain more confidence, be more assertive and, no doubt, use low-yield nuclear weapons again in the surrounding areas of eastern Europe. How would we respond then? Let us not forget the mistake that we made in Syria. We said that there was a red line on chemical weapons, but what did we do? We blinked. We must not do that again.
The integrated review was an important document. Its threats assessment was correct, but it was incorrect about the speed with which those threats were going to come over the horizon. It was also, as I am afraid we all recognise, tied to a peacetime defence budget. I offer my support in making the case not just that the world is more dangerous now, but that it will get even more dangerous from here. It will be not lull, mop-up, conclusion in Ukraine and then back to normal, but a new era of insecurity. If we want to lead as Britain has, we need to spend more on our hard power. The big NATO strategic concept document on operating together is about to come out, and greater demands will be placed on all members, including the UK. That, I hope, will be a useful opportunity to take stock of our own position—our numbers of armoured fighting vehicles, troops and so forth—to see how we might advance and revisit the integrated review.
European security is once more in peril. Our adversaries are in plain sight, but I fear that we are still a little in denial. We continue to hesitate, and Europe needs leadership. One thing I can say from visiting conferences and from being in America last week is how impressed much of the world is by how Britain has stepped forward, but there is so much to do. I repeat that Russia is now winning in Ukraine, and it is moving to the point where Putin can claim a success and stay in power. If he stays in power, this does not end in Ukraine. That must be very clear.
I seek support from the House not only in praising the Government’s having leant in operationally but in recognising what we need to do strategically to see victory in Ukraine, put that fire out, humiliate Putin and let the Russian people decide whether they want to continue with that leader.
Alyn Smith (Stirling) (SNP)
It is a pleasure to see you in your place, Madam Deputy Speaker.
It is right that we take stock of events in Ukraine, which deserves our support and our continuing focus. I commending Ministers on the Treasury Bench for their openness in the debates we have had and about the actions we have taken on Ukraine. The SNP is a firm part of the coalition in Ukraine’s defence. We are a party that stands for international law and for self-determination, democracy and human rights, so of course we are part of the coalition in Ukraine’s defence. Where I have supported the UK Government, I hope I have been vocal enough in doing so. The Ukrainians deserve our support, and I salute their bravery in defence of their homeland. Ukraine has a right to its independence, and a right to live without fear of, and without interference from, its neighbour. On that, we are all on the same team, and I am glad to express my support.
Much has already been said on Ukraine, so I will limit my remarks to a few specific points, which I hope I can rattle through fairly quickly. I was concerned that the UK was not making sufficient progress on sanctions, but I think we are there now. However, I have called previously for the assets that have been sanctioned to be seized and to go towards a Marshall fund for the reconstruction of Ukraine. I am glad to hear that that was discussed at the G7, but perhaps we could have some more details of where we are with that. I am conscious of the legal difficulties, and I am also conscious that Ministers are working on it, but I would like to see some progress.
On sanctions avoidance, when the SNP supported the statutory instruments bringing forward the sanctions, I raised concerns, particularly about the overseas territories. There was an assurance that the overseas territories would sign up to these sanctions and that loopholes would not be allowed to be created. I would like that reassurance again now that we are a few months further down the tracks on that, because we are dealing with some particularly slippery individuals, who are advised by the most slippery, and most expensive, professionals in this field. They will be quick to exploit a loophole if one exists, so I offer our support in closing them.
The SNP supports the provision of arms—if anything, we have called for more and faster provision—for Ukraine to defend itself. I would like some words from the Minister on what assessment has been made of the evolving nature of events in Ukraine. As my hon. Friend the Member for Angus (Dave Doogan) said, we see a much better supplied and better dug-in Russian force in Donbas, so there is a danger not of a frozen conflict, but of a conflict that does not go very far. What assessment has been made of the supply needs? In particular, there is the evolving situation in the Sea of Azov and the Black sea, which is so pivotal to exports from Ukraine—of food especially, but also of lots of other things—and to supply for Ukraine itself. How is the evolving nature of that threat being taken forward?
The biggest area of disagreement between the SNP and the Government is on refugees. I have long said that the UK should have done the same as the EU did: to waive visas, not to wave flags. The EU demonstrated what should have been done. It said, “For three years, if you are fleeing harm and fleeing Ukraine, come in. We’ll keep you safe and we’ll sort out the paperwork later.” That was what should have been done. I regret the decisions that the UK Government have made on that.
On the Homes for Ukraine scheme, the British Association of Social Workers has drawn concerns to all our attention in its useful brief, which highlights in particular the risks in the safeguarding of refugees and the proper checks that must be run on potential host families. Safeguarding is not an optional add-on. Failure to safeguard is not simply an ethical issue; it is a false economy, because when hosting arrangements collapse, new hosting arrangements need to be identified. I have made my position on the Homes for Ukraine scheme clear, but let us ensure that it works and that it does what it claims. The association also makes the point:
“An effective Homes for Ukraine Scheme would have a government portal to match Ukrainians with UK hosts and undertake basic screening and would ensure hard pressed local authorities are properly funded to meet this humanitarian responsibility.”
I strongly endorse that and would be grateful for a response from the Minister. That seems like a sensible addition to the scheme.
On the wider implications of Ukraine, I was struck by the remarks of the Chair of the Defence Committee, the right hon. Member for Bournemouth East (Mr Ellwood), about a turning point. It is rare for us to see a turning point as we are experiencing it—we usually see them in hindsight—but the world around us is changing right now and a lot of the assumptions on which we all based decisions have been upended. We are seeing a massive evolution of NATO and the EU in the light of events in Ukraine, with the NATO accession applications of Finland and Sweden. I am glad that the Government support them; likewise, the SNP strongly supports them. We think that they will be strong additions to defensive capabilities and we would like to see them integrated as soon as possible now that the Finns and the Swedes have made their democratic intentions clear.
On UK-EU relations, the EU’s defence and foreign affairs capability has evolved at lightspeed in the last few months with the peace instrument, the strategic compass and the permanent structured co-operation growing arms and legs. There are an awful lot of developments in the EU that I would like to see the UK hand in glove with. I regret Brexit deeply and regret that the UK left the EU. I want to see Scotland get back into the EU—that is a discussion for another date—but, in the meantime, surely let us build on the good co-operation happening between the UK and the EU on defensive matters. Now is the time for a deep and comprehensive UK-EU security and intelligence treaty to formalise that co-operation and ensure that the UK is not left behind as the EU develops its own competences in that field.
A number of hon. Members have raised the issue of food prices. I draw attention to the sobering briefing given to us by the Red Cross, which says:
“The UN projects that a further 8-20 million people will now be left hungry from the knock-on effects of soaring prices and broken supply chains for grains, cooking oil, fertiliser and fuel.”
The UK Government, working with local and international partners, must look beyond the borders of Europe and act urgently to prevent a food crisis. That is global Britain’s litmus test. Global Britain is not the SNP’s project, but if we see serious action from the UK Government on world food prices, I will be the first to support them. For the best part of two decades—hon. Members can check my record in the European Parliament—I have been banging on about food security and the food supply chain, and I am deeply concerned that we are weeks away from a catastrophe for many of the most vulnerable in the world. We need to act together to fix it.
Many things have changed in the world. I echo the comments of the Chair of the Defence Committee on the integrated review. The SNP contributed constructive suggestions to the review, but surely we can all agree that it is now badly out of date and needs to be urgently refreshed and reassessed. We will continue in a co-operative spirit on that.
A number of things have changed about Ukraine, but the people of Ukraine deserve and have our support. I am glad to continue the SNP’s constructive approach with the UK Government on this matter.
Dr Liam Fox (North Somerset) (Con)
Over the last three months, we have seen a war of choice in Europe. Putin and his close allies have revealed their callous and barbaric nature, plumbing new depths of human depravity and reaching new peaks of human wickedness. Putin has shown a casual and contemptible disregard for human life and a vile disinterest in the suffering of men, women and children as a result of the choice he made, suffering and death that we hoped we would never see on the European continent again. Putin has shown a casual and contemptible disregard for human life and a vile disinterest in the suffering of men, women and children as a result of the choice he made, suffering and death that we hoped we would never see on the European continent again.
A few weeks ago, I was speaking to young people at a university in Poland. There were Polish, Ukrainian and Russian students in the audience. They were bewildered, afraid and angry about what they had seen. It struck me that those young people had no memory of the Berlin wall, the cold war or the Soviet Union—all the more reason for us to repeat to them the lessons we have learnt from history—but what we have seen comes, or should come, as no real surprise to us. Putin told us who he was and what he believed at the Munich security conference in 2007. He told us primarily that he was in denial about the end of the cold war. He believed it had come to an end, rather than that the Soviet Union had been defeated. He said:
“we should not forget that the fall of the Berlin Wall was possible thanks to a historic choice—one that was also made by our people, the people of Russia—a choice in favour of democracy, freedom, openness and a sincere partnership with all the members of the big European family.”
If that was not utterly out of line with the reality of what was happening, I do not know what is.
Putin also made it very clear in that speech that he viewed NATO as an aggressor from the outset, when he said:
“I think it is obvious that NATO expansion does not have any relation with the modernisation of the Alliance itself or with ensuring security in Europe. On the contrary, it represents a serious provocation that reduces the level of mutual trust. And we have the right to ask: against whom is this expansion intended?”
No expansion was intended; it was there as a defensive alliance. If there has been an expansion now, it is because of the threat posed to other European states. Putin has shown that he has been more than willing to carry out that threat in Ukraine.
There is something else in that speech that we should remember, which says something about Putin’s values. He was talking about the unipolar moment. He said:
“I consider that the unipolar model is not only unacceptable but impossible in today’s world…What is even more important is that the model itself is flawed because at its basis there is and can be no moral foundations for modern civilisation.”
We knew from that what Putin was like. How did we get it so wrong? We did it because we in the west substituted wishful thinking for critical analysis. We wanted there to be a peace dividend, understandably, but we wanted it so much that we did not look at the evidence, in rapid succession, in front of our eyes. We had Chechnya, with Grozny razed to the ground in the way we see today in Donbas. The pattern of behaviour is clear. We then saw, in 2008, the invasion of Georgia and we did very little. We saw the annexation of Crimea. When I wrote in February 2015 in an article in The Sunday Telegraph that we should be arming the Ukrainians to stop Putin because they would be next, I was actually described by a senior member of the coalition Government as a warmonger. I am still waiting for the apology, but I guess it will not be coming. Now, in a bizarre and horrible echo of history, we see Putin willing to use the grain supplies that sit in Ukraine as a weapon of war well beyond the European theatre, willing to cut off the supply to the developing world who will starve if they do not get it, in an awful echo of what Stalin did in using famine as a weapon against the Ukrainian people.
Sir Robert Goodwill (Scarborough and Whitby) (Con)
Is it not the case that even on the verge of the invasion, when our intelligence sources made it clear an invasion was going to take place, many of our allies in Europe refused to believe it would actually happen?
Dr Fox
That is right. I will not dwell on that point, because I do not think it takes us much further forward, but there was again the substitution of wishful thinking for critical analysis. The evidence was there that the troops were being massed on the Ukrainian border. We knew there was an intent to use them and yet in a number of European capitals there was still the triumph of hope over experience. That lack of preparedness among some of the western nations put the Ukrainians at a disadvantage at the beginning of the conflict.
A number of Members have said that the sanctions on Russia cannot be lifted until all Russian troops leave Ukraine. I would go further: the sanctions on Putin and Lavrov and the architects of this war can never be lifted. That is a different question from what happens to the rest of Russia. Of course, there must be a potential new course in a post-Putin era, but our aim must be to increase the tensions within the Russian regime by making it clear that those who stick with Putin and those who are the architects of the war in Ukraine cannot escape from the sanctions—they crossed the Rubicon; they are war criminals. On the other hand, those who choose a different path for the future can have an alternative future. It is very important that our messaging is consistent and utterly clear.
Mr Ellwood
My right hon. Friend is linking the impact of sanctions to the military progress and what we should be doing on the ground; he is therefore in danger of coming close to having a strategy, and Britain, the west and NATO must have a grand strategy to deal with a resurgent, adventurist Putin.
Dr Fox
I am always very wary of compliments paid in the House of Commons as there is generally a sting in the tale. All I will say to my right hon. Friend is that I think we were guilty collectively in the west of wilfully misunderstanding what Putin was doing even when the evidence suggested otherwise. There will be no change in Putin: his behaviour will be repeated if we allow it to be repeated. That is why I agree with what my right hon. Friend said earlier in the debate: unless Putin is defeated in Ukraine, others will follow. That is the nature of Putin—it is the nature, literally, of the beast.
I want to touch briefly on the question of famine. The consequences of the conflict in Ukraine will reverberate far beyond Russia, Ukraine or even Europe. There will be people, especially in the developing world, who will starve to death if we do not get grain stores and other materials released from Ukraine. Putin is waging this war not just on the Ukrainians but on some of the most vulnerable people on our planet today. That is why I refer to the height of the wickedness his regime represents. We must do all we can; I will not go back over the points already raised on why we must if possible move grain through the port of Odesa. If we cannot do so, we must move it by rail to the northern Baltic ports to get it out. But, whatever we have to do, we have to do it together with our allies, because the consequences of failure will go well beyond our own strategic objectives to the suffering of people in this world who have already been hit post pandemic and are already facing supply shocks.
Another question raised earlier in the debate— it was a point also made recently by the Foreign Secretary—is that if Chechnya was crushed, then Georgia, then Crimea, and then Ukraine, what will be the next domino to fall? The next one is Moldova. We still have time to avoid the mistakes we made with Ukraine by ensuring that we arm and train our allies in Moldova who could well be the next target should Putin survive this adventure he is having.
NATO has, again, been referred to. We must ensure that we raise spending among not just the biggest nations in NATO but all nations in NATO. We must make it clear that countries that want the insurance policy have to pay the premiums for the policy as well. But we need to give this a lot more thought too, because we do not want unnecessary duplication of what NATO does, for example by a European Union force. We need to ensure, in procurement, that we are not duplicating and have wise policies across NATO. There has always been resistance in NATO to the idea that some countries specialise in some areas while other countries specialise in others. The bottom line, however, is that the United States is the only country big enough and rich enough to have a full spectrum of military capabilities. Others will have to choose wisely where they spend their money.
We in the United Kingdom provide NATO with a nuclear deterrent, carrier strike, our F-35s, our Tornadoes —[Interruption.] Sorry, our Typhoons; that was a slip back to 2010. We have our investment in space and cyber, but we cannot be expected to have everything. The countries who are more vulnerable to land attack must be willing to carry the burden of those defensive capabilities. They certainly cannot continue to take a ride on the American taxpayer in the way that they have done in recent years, because sooner or later—we had a warning with the Trump Administration—there will be an Administration who are not willing to carry that burden on behalf of European defence. We should regard current events as a very clear warning to us of what could happen if Europe is not willing to carry its defensive burden.
In commending our Ministers for the clarity and generosity of the briefings that they have given us during this conflict and the very clear leadership exhibited by the Defence Secretary and his team, we have to accept, painfully, that what we have seen in Ukraine is—at least to a large extent—a failure of deterrence, because given our lack of reaction to previous incursions by Putin, he believed that we would not act. We can console ourselves with the fact that we have acted and that NATO has been strengthened not just in its military co-operation, but in an understanding of its political nature. Our belief in democracy, the rule of law and human rights has been strengthened by the shared experience that we have just gone through. We have shown that we can, and are willing to, supply Ukraine with the necessary armaments to defend themselves, and we have shown our willingness to sanction Russia and its leaders in a way that we have never done before with a major economy, particularly through central bank sanctions. We must follow those positive developments through with increases in our defence expenditure and a much clearer idea across NATO of which roles are appropriate for which nations and where they need to invest in their procurement budgets. The final lesson for us is that weakness in any of these areas is no friend of peace—only strength is.
Several hon. Members rose—
Madam Deputy Speaker (Dame Eleanor Laing)
Order. I briefly interrupt the debate to announce the result of the ballot held today for the election of a new Chair of the Environment, Food and Rural Affairs Committee. There were 474 votes cast with no invalid ballot papers—it is a relief that Members of Parliament know how to cast a vote. The counting went to four rounds. In the fourth round, 420 valid votes were cast, excluding those ballot papers whose preferences had been exhausted. The quota to be reached was therefore 211 votes, and the candidate who has been elected Chair, with 243 votes, is Sir Robert Goodwill, who will take up his post immediately. I congratulate him on his election. The results of the count under the alternative vote system will be made available as soon as possible in the Vote Office and published on the internet.
Sir Robert Goodwill (Scarborough and Whitby) (Con)
On a point of order, Madam Deputy Speaker. I thank the officers of the House and the Clerks who carried out this election so efficiently and all those involved. I also thank my fellow candidates for the very good-natured way in which it was carried out. I thank all the people who voted for me, and I hope that I can carry forward the Committee and follow on from the excellent work done by my predecessor, Neil Parish.
Madam Deputy Speaker
I do not need to answer that point of order, but it was a perfectly reasonable one. I am glad that the right hon. Gentleman had an opportunity to thank the House. I also offer the commiserations of the whole House to all the other excellent candidates who took part in the fiercely contested election.
Geraint Davies (Swansea West) (Lab/Co-op)
May I offer my warmest congratulations to the right hon. Member for Scarborough and Whitby (Sir Robert Goodwill), the newly elected Chair of the Environment, Food and Rural Affairs Committee? I have had the joy of being the Committee’s interim Chair. [Interruption.] He is obviously slightly deaf and preoccupied. Anyway, over to the main issue.
We all condemn the unprovoked, barbaric and illegal attack on Ukraine. It is an attack on a peaceful people. It is a land grab targeting the natural resources of the biggest country in Europe other than Russia, including the uranium that this country may rely on for its nuclear ambitions and the grain that is feeding the world. It is an appalling attack on our fundamental values of democracy, human rights and the rule of law. It also means a diminution of all our economic futures because of the cost of living crisis; the world economy is set to reduce by something like £750 billion this year.
I support sanctions, but let us be realistic: they are likely to shrink the Russian economy by 8.5% in the next year, according to the International Monetary Fund, but they will not stop a rolling Russian tank. Putin expected Ukraine to roll over, but thanks to the great bravery and solidarity of the Ukrainian people, the great leadership of Zelensky and the military support that has been provided from outside and inside, he has been resisted. Now is the time to look again at the balance of military and economic support that we provide, so that our ambition can be to drive Russia out of Ukraine and, possibly, resume relationships in future.
As we speak, Russia and China are reconfiguring their economic relationships in order to move forward, even in a world of sanctions. At the Beijing Olympics, they signed up to a deal under which Russia would provide some 10 billion cubic metres of gas per year from 2025, compared with the 1.25 billion cubic metres that it provides at the moment. More gas and oil is being sold to India and Indonesia. In Russia, the price of oil has been reduced so that food supplies can be transported more economically from the south to the north, for example, and logistics costs have been reduced to boost the manufacturing that has been denied through sanctions. Meanwhile, in Britain and elsewhere, energy prices are going up and economic activity is being hit. That suggests that we should continue to impose sanctions, particularly those targeted at Putin and his allies, but time is not necessarily on our side in supporting the military imperative to get the democracy and economy of Ukraine back into a healthy state.
When we step back and look at the track record of President Putin—invading Georgia, invading Crimea, taking control of Belarus—we can see that invading Ukraine is part of a wider plan. Finland is clearly in his sights; we welcome its application to be a member of NATO. Moldova has already been mentioned as vulnerable.
Matt Rodda (Reading East) (Lab)
I offer my wholehearted support for Finland and Sweden’s inclusion in NATO, and for the important work that NATO does on collective security. Does my hon. Friend agree that, on a parallel track, there should be much better support for refugees? The Government need to step up their support, particularly with respect to family reunification. I have recently dealt with some very difficult cases in which families have been separated. May I ask my hon. Friend to focus on that point?
Geraint Davies
I am grateful for that intervention. We are not just talking about economic costs and sanctions; the main cost of this war is the loss of human life, and the 5 million refugees who have left Ukraine. There is a lot of talk in this place about the need to stop people getting into boats and crossing the channel, but we are simply are not doing enough for those 5 million Ukrainians.
When I visited Lithuania, I went to centres at which hundreds and hundreds of people were arriving each day. People—usually women with young children—were processed within hours. Biometric and basic checks would be done, and then the individuals would be associated with a family, a kindergarten, work and so on. I talked to the head of the civil service about immigration and refugees, and she said that they regarded those people not as refugees, but as friends or part of their family, and as a support to their labour market. In Britain, the view tends to be, “Hold on, what about the cost to the health service, education and so on?” That is despite the fact that we have labour shortages, as 1.4 million Europeans who were registered to work here have stayed in Europe. Obviously, we should open our hearts and homes to the people of Ukraine, who share our values. We share their suffering, and we should support them in every way we can. Not enough is being done, and we need to do much more, much more quickly and effectively.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
Does the hon. Gentleman share my concern about the discrepancy between refugees taking part in the Homes for Ukraine scheme, for whom funding is available, and those involved with the family visa scheme, for whom it is not? There is an assumption that people who arrive on family visas will be funded through their families, but not all families are the same. Some people are brought over by grandparents, and they now have to carry the costs themselves. I think the Government have already been asked to change that inconsistency, and it would be wonderful to reiterate the question of why refugees are treated differently depending on the route by which they arrive.
Geraint Davies
The right hon. Lady makes an excellent point, which I fully concur with. Frankly, the reason for this discrepancy has been the mean-minded culture in Britain—the idea that we somehow have a refugee problem. Across Europe, we are 17th for the number of asylum seekers we take per head of population, and fifth overall. It is not as if we have a huge burden. In Poland and elsewhere—I have mentioned Lithuania—there is a massive burden of people coming over. A lot of them are in a state of psychological flight, and they think, “Actually, we want to go to Britain.” Getting to Britain is being made out to have been made easy, but it has not. People are taking months, not days, to get here, and that should be resolved straight away.
Sarah Owen (Luton North) (Lab)
Does the hon. Gentleman agree that there is deep concern about reports that Ukrainian refugees are becoming homeless after falling out with hosts in this country? There is a problem not only with the matching of Ukrainian refugees and their hosts, but with maintenance. We are not checking that those refugees—they are incredibly vulnerable, and many of them are women—are safe when they get to this country.
Geraint Davies
The hon. Lady makes a critical point about the need to follow through on the association with families to ensure that sufficient support is provided, and that those who are received are safe and secure. The Government may need to put their hand deeper into their pocket to ensure that people are given a safe haven, and that these matches are made properly. More resource might be needed in the Home Office to facilitate that. It comes against a backdrop of other members of the Government saying, “We need to slash arbitrarily 90,000 people from the civil service.” This war, alongside other changes, means that more public management will be required for our own security and the safety of the people who come over, and I welcome the point that she makes.
I was saying that we need to co-operate more across Europe. We have the facility, and we have taken leadership in terms of unilateral action and military support. We need to be closer to our European allies who share our fundamental values of democracy, human rights and the rule of law, in order to get them to raise their game. Germany has now said that it will provide support, but there is a lot of talk in both France and Germany along the lines of “We had better give Russia a bit of this,” and “Maybe we should just settle and give them a bit, as we did with Crimea.” As has already been pointed out, we do not want allow the creeping, partial success of Putin. It is something that we want to work against, alongside our allies. I am a member of the Council of Europe, which shares those fundamental values. Russia, of course, was a member, but we ensured that it was ejected for a clear breach of democracy, human rights and the rule of law. I should like to see a route map showing that, at some time in the future, Russia will readopt those values and come back into the fold, rather than permanently being driven, along with China, into a partnership that pushes us towards a more totalitarian way of thinking globally.
This is a time of reckoning. There have been debates about how we can integrate economically with people who do not have our interests at heart when it comes to, for instance, supply chains or the Uyghurs, and this is a time to stand back and think about our global strategy. Obviously, we would all like to be able to secure respect for human rights, get the Russians out of Ukraine and have an economic co-existence that made sense, but sadly, we have recently seen the use of gas and grain as instruments of war; and we have seen sanctions used in China as well. We need to think in an integrated way about how to move forward. However, in the very short term, our focus and resolve must be concentrated on supporting Ukraine in delivering the democracy, the sovereignty and the working economy that it naturally craves.
Bob Seely (Isle of Wight) (Con)
In the relatively short time that I have, I will make a few general points. It is a pleasure to follow the hon. Member for Swansea West (Geraint Davies), and I agreed with much of what was said by my right hon. Friend the Member for North Somerset (Dr Fox). This cold war started in 2007 with Putin’s Munich speech. It was a great shame that the political classes both in this country and elsewhere in the European Union did not take that to heart; we have been paying an increasingly high price ever since.
I want to talk about the potential speed of the Russian collapse and what that may mean, and about the nuclear threat, but first I will mention some issues involving kit. A few weeks ago I was in Odesa, talking to the regional governor and members of the county council. They had been trying to buy medical kit from this country—they were not looking for freebies—but they found the export licences very difficult to obtain, although this was medical kit. They were also trying to purchase body armour. I wrote a letter to the Secretaries of State for Defence and for International Trade, and perhaps I could ask one of the two Ministers who are sitting on the Front Bench to follow up on that letter. I would like an answer, simply because I was asked very directly about kit.
Let me raise the more general issue of the southern front, which I think will be a very significant inflection point, and a decision point for both the Ukrainians and the Russians. Everyone is saying that this will be a long war. I am not quite sure that I buy that, because I have always distrusted conventional wisdom. I lived in the Soviet Union back in 1991, and the conventional wisdom was that the Soviet Union would not collapse. That went well. The conventional wisdom was that the nationalities issue was not a problem in the Soviet Union, when it was actually one of the critical factors. Now the conventional wisdom is that this will be a long war. I am not saying that that is necessarily wrong, but the Russians got this war wrong. Even our Ukrainian friends got it wrong. They were saying to us, “Look at doctrine. Russia does not have the kit or the personnel. It is not going to do anything until August this year.” Well, our Ukrainian friends were wrong, and the Germans and the French were wrong in saying that the Russians were not going to invade. We got it right, but then we did not expect the Ukrainians to survive. The battle of Kyiv was won, when we expected it to be lost. The battle of Kharkiv is now probably coming to an end as the Russians pull back and can shell increasingly from a distance. I was talking to a Ukrainian MP from Odesa just two days ago, and the Russians are digging in around Kherson to defend their territory.
The Russians are now making some gains on the eastern front, but I question how long that will go on. There is a considerable chance, given the amount of kit that is coming into Kyiv and being spread throughout the country, that an eastern front will stabilise. The question then is: how likely does a Ukrainian counter-attack become? Kyrylo Budanov, the head of Ukrainian intelligence, said that Ukraine was going to be ready for a counter-offensive in August. The critical question for me at this point is whether that counter-attack will simply be in the east of the country or whether it will be on the southern front. When I was talking to the commander of the southern front near Mykolaiv about two weeks ago, he told me that they did not even have armoured personnel carriers in which to put their commanders for units to attack on the southern front. It is clear that if the Ukrainians can open up a second front to the south, challenge the Russian positions around Kherson and push through to break that land corridor, there would be a real danger to Russia of a wider collapse, and a growing ineffectiveness of the Russian armed forces in Ukraine.
The Russians are continuing to push forward and threatening Severodonetsk, but I think there is potential, come September, for a significant Russian fall-back and significant Russian damage. When we talk about Russian conscripts coming into the war, we have to remember that it takes at least six months for conscripts to be made ready and trained on kit. We have already seen how badly treated and undermotivated they are. Meanwhile, the Ukrainians are training increasing numbers of their own people to go forward, and they now have the kit as well. It is absolutely true, as some of us in this country think, that the Ukrainians have not yet quite mastered combined arms, when it comes to the broader kit that the Government are supplying.
The Government are doing a great job, and the Secretary of State for Defence is doing a wonderful job of effectively being the external quartermaster for the Ukrainian army. I congratulate him wholeheartedly on his role in trying to find NASAMS—national advanced surface-to-air missile systems—air defence kit, planes and tanks. What the Ukrainians say they desperately need now are MLRS—multiple launch rocket systems. These are guided artillery systems that can strike at 30 or 40 kilometres. The significant problem up to now is that the Ukrainians have had only Soviet-era artillery, in the form of the 152, which has a range of approximately 25 kilometres. Now they have the 155, they are able to mildly overmatch the traditional artillery of the Russians, because the 155 has, all things considered, about 5 kilometres of further range. So the Russians are either pushing back or having to go deeper, in which case they expose themselves further. If we can supply MLRS, that will make our position considerably stronger.
Having said that, there is clearly a danger. I take seriously what the Russians say about a nuclear threat. Some of it is undoubtedly bluff. In 2016, the Russians threatened Denmark with a nuclear response if it took part in the American nuclear missile shield. That was bluff. The threats to Finland and Sweden are almost certainly bluff. But, to my mind, there will be six decision points within the next six months where Putin will go over and have to consider whether to use nuclear weapons. There is absolutely no guarantee that he would, but if Crimea were threatened, I think we would start to live in extremely dangerous circumstances.
Those six points are: the collapse and withdrawal of Russian positions around Kharkiv; the collapse of the Russian advance in Donbas, which has not yet happened but may do within the next two or three months; the eventual collapse of new Russian positions this summer; the collapse of Russian positions in Kherson, where they are currently digging in; the entry of Ukrainian forces into the separatist Donbas republics if the Russians start to lose the territory they seized in 2014; and the potential entry of Ukrainian forces into Crimea.
Will Putin use tactical nuclear weapons because of the collapse on the Kharkiv front? No, because it has not happened. Would he be tempted to use nuclear weapons if he were losing Crimea? I am not sure I would want to take that risk, and I cannot answer that question, but I think there is a significant likelihood. The bigger question is: what happens when the Russian land corridor collapses come September and October?
There is a fine line between a Russian victory, which clearly nobody wants, and a Russian collapse, which may become a decision point for a series of catastrophic moves by Putin, the beginning of a significant weakening of the Russian position and its loss of dominance in the Sea of Azov. Looking at the map, the Sea of Azov is on the right-hand side of what was called Novorossiya, the Russian-speaking territories that are fighting just as hard as the rest of Ukraine. That is the point where, for an optimal outcome of this war, they start to negotiate because Putin will try to keep some of the land he has gained. As everyone has said, that is a decision for the Ukrainians and we in this country should not be armchair generals.
When I spoke to some American diplomats a few days ago, I was relieved to hear that they are thinking through and wargaming these very dangerous scenarios. I very much hope the MOD and the Foreign Office are, too. NATO, as far as I can see, does not wargame this because it does not have nuclear weapons, but we and the Americans do, and I hope we are wargaming these scenarios.
I am worried not only because of the big decision-making points but because, first, the use of nuclear weapons is justified in Russian military doctrine where there is an existential threat to the state. Nobody in their right mind thinks Russia is existentially threatened. However, the Russian narrative and the Russian media portray this war as an existential threat to Russia and a defensive war because Russia is trying to seize its territory from NATO. Whether we like it or not, it is being presented as an existential threat.
Secondly, there is a debate about whether the Russians will escalate to de-escalate. They might use a nuclear weapon to try to de-escalate. That is not Russian doctrine—I certainly have not seen it in the Russian doctrine I have read—although there is writing to say that this is some of the thinking.
Thirdly, it is absolutely true to say that the Russians take a very different approach from the rest of the world to nuclear weapons and nuclear war. The Soviets always saw nuclear war as fightable and winnable, which is why they built bomb shelters in so many cities. They do not necessarily have our mindset, which worries me because I think we look at them through our own mindset. We do not understand them on their own terms.
Finally, it is sometimes overlooked but highly dangerous that human beings and nations get trapped by their own narratives. Those of us who have listened to and watched Russian TV over the last five or 10 years know there is a normalisation of the idea of war, including nuclear war, with the west. That is why Russian polling since 2018 shows that something like 50% of Russians polled believe that war with the west is inevitable, and a large number of them believe that nuclear war with the west is inevitable. We are dealing with a different mindset and with people who have been propagandised for 20 years. That is also a danger with China, but it is certainly a danger with Russia.
Do we think that, by our logic, nuclear war is likely? No, because nobody thinks there is an existential threat to Russia—the war is an existential threat to Ukraine but not to Russia. However, in the narrative of the paranoid, conspiracy-driven mindset of the Russian media, which is reflected in the Russian leadership, there is a sense of an external, existential threat, if only to the incredibly amoral, incredibly foolish, Sovietised, sort-of bastardised Slavophiles who are currently running Russia and who see paranoid conspiracy theories in every pothole in Moscow. I say that as a word of warning, because we are dealing with people who think very differently from ourselves.
I respect my right hon. Friend the Minister for Europe and North America and my hon. Friend the Minister for Defence Procurement. They have been absolutely superb. We need to see a Russian defeat. At the same time, we need to remember that this is not Berlin in 1945. Limited wars end in negotiation and, whether we like it or not, there will be some kind of negotiation at the end of this war, otherwise it simply will not end. We should remember that.
I agree with what has been said about the integrated review, on which we need a rethink. The integrated review was a good document, but it did not look enough at deep strategy. It brought together all the policies around a theme, but it could have been better. We now need to look at it again. I agree with what many people, including my right hon. Friend the Member for Bournemouth East (Mr Ellwood) and the hon. Member for Plymouth, Sutton and Devonport (Luke Pollard), have said about not cutting back on defence spending. Cutting back on defence spending would not make any sense and would not be logical, because we will need that defence spending to confront the Chinese threat or the Russian threat.
I wish to make an additional and important point that has not yet been raised, which relates to the national security strategy. Our national security structures are not fit for purpose, and I personally do not think the National Security Adviser is up to the job. I listened to him in Bahrain a couple of months before the war started and he basically said, “Look, climate change is the biggest threat to humanity.” This was in a city that had Iranian weapons pointed at it, in the week when the Chinese were wargaming over Taiwan and in the month when the Russians were building up over in Ukraine. My somewhat flippant response is, “Try doing climate change in the nuclear winter.” The avoidance of state-on-state warfare is still the short-term and medium-term primary aim for this state. Yes, global poverty is incredibly important, as is getting the grain out, however we manage to do so, and I am not dismissing climate change for one second, as it is incredibly important, but it is difficult to tackle climate change and to reach out to states such as Russia and China if we are at war, close to war or in confrontation with them.
I wish to make a final point about ceasefires, because it is important. There is a slight shattering in the western response currently, and we see a slight foot-dragging from not only the Germans and French—this may be surprising —but, potentially, from the US Administration. I well recall, as I was there at the time, that in Georgia the Russians used ceasefires very effectively to solidify their control of the territory they had taken. Again, this summer we are probably going to see a concerted attempt—this is already happening because the Russians are hinting at it—to get the French and the Germans and others to press the Ukrainians for a ceasefire now. Everyone will say, “Stop the war”, because, obviously, there is an overpowering moral and humanitarian argument there, but the reason the Russians would do this is to solidify their control over the ground they have taken. If the Ukrainians are wobbling on this, we need to say to them, “Clearly, you must do what is right, but we must remind you that the Russians have a very aggressive negotiating strategy, that they negotiate ceasefires, as they did in Georgia, often in bad faith and that one of their war aims will be to grasp, solidify and Russify—handing out passports, as we see happening today—those areas that they have taken.” Indeed, the Estonian Prime Minister has said that it is important that we do not get a bad peace. A ceasefire this summer, as attractive as it sounds, would, without further Ukrainian gains, result in a bad peace, further warfare and further bloodshed in the future.
Margaret Ferrier (Rutherglen and Hamilton West) (Ind)
I want to highlight a case my office is currently handling, in the hope that the voice of the young girl I am about to tell you about will finally be heard. I am grateful that the immigration Minister, the Under-Secretary of State for the Home Department, the hon. Member for Torbay (Kevin Foster) is in his place to hear this. Nataliia is 15 years old. When war broke out her parents made an impossible decision in order to keep her safe—this was a decision no parent ever wants to have to make: so that their daughter could reach safety in the UK and start a life away from the conflict, they handed over legal guardianship of Nataliia to her mother’s cousin, Millena. The pair then fled, hoping to reach the UK under the Homes for Ukraine scheme.
Millena’s visa was approved in mid-April, but Nataliia is still waiting for hers. Unbelievably, I understand that Nataliia’s guinea pigs have been given the green light to enter the UK by the Department for Environment, Food and Rural Affairs, but their 15-year-old owner has not. I will not go into the ins and outs of every failing in this case, as I would be here literally all day, in the same way my team has been, when on hold to the MP hotline or when writing to the latest contact the Home Office has directed them to. What I will say is that it is clear that the Home Office has not provided the UK Visas and Immigration team with the resources they need to handle these cases in the right way.
Millena and Nataliia are running out of time and money. They are currently in Budapest, having travelled from Moldova. They cannot wait there indefinitely, and sooner or later Millena is going to have to make a similar impossible choice to the one Nataliia’s parents faced. She can come to the UK, but Nataliia cannot join her. That means that this 15-year-old girl faces two options: sheltering at a refugee camp or returning to the warzone. This is a disgrace. She is a child, vulnerable and needing protection. She cannot be left to fend for herself. I ask colleagues across the House to bring to mind any teenage girls they know, perhaps a daughter, a niece or a family friend. I ask them to think about what it would mean if she were left alone in an unfamiliar country, with no family, unable to speak the language, and with no means to support herself.
I have written to the Minister for Refugees, Lord Harrington, about the case, and I hope with every fibre of my being that Nataliia’s pleas are heard. I hope Ministers will do everything in their power to ensure that, moving forward, no child finds themselves in such a situation. I do not place blame on the civil servants who are working hard day and night doing everything they can for Ukrainians who are trying to reach the UK, but nor do I accept that Ministers have done what they can to resolve the situation.
The Parliamentary Under-Secretary of State for the Home Department (Kevin Foster)
I hear what the hon. Lady says, and I will not go into the specific differences in respect of children travelling without their parents or closest relatives, but I am certainly happy to pick up and look at that case.
Margaret Ferrier
I welcome the Minister’s intervention. I am really pleased to hear that because I want to fix the situation for Nataliia.
Let me leave the House with the letter that Nataliia wrote to plead her case—not that a child should ever feel that they have to do that. I want Ministers and Members to hear, in her own words, what the situation feels like to Nataliia. It is important that she has a voice and can tell Members herself. She says:
“Hi there! My name is Nataliia, I’m 15 and I’m from Kyiv.
I spent the first two months of the war near Kyiv with my grandmother. It was really scary to be there. I saw destroyed houses hit by a rocket, I saw dead people, I saw tanks and machine guns. I felt what it’s like when your house is shaking from the bombing, when you’re sitting in a shelter and just hoping it wouldn’t get hit, when you sleep fully dressed and with the lights on, to get your stuff quickly and go to a safer place.
It was really traumatizing to read the news of dead children and understand that you are no different from them and you are just lucky. Or to hold your mother’s hand while trying to sleep, because you’re just scared to fall asleep. But almost two months ago, I applied for the homes for Ukraine scheme and I hoped that after a little while I would be able to get to a safe place. I got this chance from my cousin Millena. We spend a lot of time together every summer and, in general, I am very close to this part of the family…so I’m happy to go with her. I’m very comfortable.
A month ago I left Ukraine. Our travel was long and exhausting and since then I have been in Budapest. Now I check my mail every morning, and every time it’s empty. I never wanted anything so much. Every day my faith that I will be able to come decreases. Time is running out and I can’t wait for the visa any longer. I will have to return to Ukraine, return to danger, return and live again with the war outside my window. And I just started to get used to safety. I stopped being afraid of loud sounds and the noise of planes. I stopped listening to the sirens outside the window and thinking about the closest shelter I’ll be able to run to.
I really hope to get a chance for a peaceful life in a country I admired so much as a child and till this day. From the age of 8 I read everything I could find about Scotland and its traditions. I dreamt to go to this country as far as I remember. I’m feeling really connected and related to Scotland. Because of this, I believe that I will feel most comfortable in your country, while I can’t live in mine.
I can’t go home now. I can’t go back to war now. Please give me my visa. This is very important to me.
Thank you, Nataliia.”
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
I compliment the hon. Member for Rutherglen and Hamilton West (Margaret Ferrier) on her moving contribution. After church last Sunday, while having tea and coffee, I met three young Ukrainian refugees. They were three females, probably in their middle teens. One could speak a tiny bit of English and the other two could not, but even talking with them in a limited way did not half bring home to me why we support Ukraine in the way we do. These young people were frightened, but they were brave and had come to Scotland. I am sure they share some of the sentiments that the hon. Lady just read out to the House.
The hon. Member for Isle of Wight (Bob Seely) has clearly researched this subject very fully and I was most interested in his contribution, which provoked in me a memory of when I went with other Members to visit the 3rd Yorks in Estonia before the covid pandemic. I remember asking the commanding officer—I do not think I am betraying any armed forces secrets here—“You have a huge Russian army group bang opposite you. What happens if the balloon goes up?” What he said to me was very interesting: “Well, there are several factors. The morale is not good among the soldiers opposite us. They see themselves as poorly paid. They are conscripts. And there is a slight problem with alcohol.” He also said that they were not the top-quality troops that we might expect. Have events in Ukraine not proved just how prophetic his words were?
I associate myself with other speakers and say that my party stands four-square with the Government in our efforts to support the people of Ukraine and to recognise their extraordinary courage and valour in taking on an army, which, harking back to what I was told in Estonia, some of us thought was invincible. That is not the case and that is why the thoughts of the hon. Member for Isle of Wight are useful.
Twice before in this place, I have raised the issue of the murderous legacy of the mines left behind in the north of Ukraine—and now, possibly, in the north and east of Ukraine—as Russian forces have retreated. My plea was then, as it is today, that we offer the maximum help we can in knowhow, kit and expertise to get rid of that murderous legacy. Alas and alack, a number of Ukrainians have been killed in their own brave efforts to get rid of this menace. I seek an assurance from the Minister—if not today then at some suitable point—that we are putting our shoulders to the wheel on this, because it is one way in which we can really help.
The horrifying images of Russian tanks exploding that we have seen online and on television show what is called “the jack-in-the box effect”. It happens, so we read, because of the method and manner in which ammunition is stored in the tank, which is why they explode in the fearful way that they do. My first thought is that we should check our own armour and how we hold our ammunition to make sure that there is no danger that we could fall into the same trap.
Arising from that is a reflection on the manner in which the Moskva, the flagship of the Russian Black sea, was sunk. We have all read varying accounts of American reconnaissance aircraft possibly being involved and what exact missiles were fired or not fired. If we think about two of our most precious military assets, namely our two aircraft carriers, we should look very carefully indeed at what happened to the Moskva. How exactly was it sunk, and are we sure that our defences for these priceless pieces of military hardware are absolutely up to scratch?
Let me give an example. Five years ago, in the summer of 2017, HMS Queen Elizabeth called in on Invergordon in my constituency, and some person light-heartedly, but irresponsibly, flew a drone and landed it on its deck. I asked the then Defence Secretary whether we could be sure that we were completely equipped to deal with that sort of thing. Had that drone, run by some person having a bit of fun, been flown deliberately into the radar assembly, they could have disabled HMS Queen Elizabeth.
We have seen, harking back to Ukraine, the use of drones, not least in taking out Russian armour. Again, I say to Her Majesty’s Government that we need to look very closely at all the aspects of warfare and at what has happened to the Russians.
Bob Seely
I am listening intently to what the hon. Gentleman is saying about the how the Moskva was struck. Is he questioning whether the Neptune missiles destroyed it? Completely by coincidence, I was on the southern front in the air raid shelter the night the Moskva was sunk, and while I was waiting to go back on to the street in Odesa, a general showed me the pictures of the Moskva being sunk and explained it quite carefully.
The intelligence came from Turkish Bayraktar drones and it was two ground-based Neptune missiles that were used. The drones acted as a decoy. The Russians had been very sloppy in their drills—they were just sailing round in the same old pattern and not changing it. They were over-focused on the drones monitoring them, and that allowed the two Neptune missiles in. The Ukrainians themselves are absolutely adamant, and that evening they showed me the pictures of the strike on the ship. I hope that provides some useful clarity, but the hon. Gentleman is absolutely right in what he is saying: big items can be destroyed very quickly, as we have seen with both tanks and aircraft.
Jamie Stone
There we have it again—an example of the hon. Gentleman’s knowledge of and great interest in this subject, and I thank him for his intervention. It underlines and reinforces the point that we must look at all potential threats to our precious surface fleet, including the two aircraft carriers which will transform the United Kingdom’s defence capability.
I could stray into arguments about whether we should concentrate on the north Atlantic and the home waters nearby, and ask what we are doing in the far east, but that is not for today. However, no debate of this nature, when we are looking at ourselves, would be complete without my echoing the points about the cuts in the size of the British Army. At the start of the war in Ukraine, we saw extraordinary images of a Russian convoy of armoured vehicles and other vehicles essentially using a road or motorway. Having once upon a time served as a private soldier in the Territorial Army, I fell to wondering where on Earth was the infantry integration with armour? Why did the Russians not have, or appear to have, flanking troops in the woods on either side of the column? When we come to study what happened, we have to examine the Russian tactics and ask what has happened to the army that defeated Hitler, which now seems to be verging on incompetent? Maybe I am wrong—who knows?
Like other speakers, I thank the Defence Ministers. It was a generous move by the Secretary of State for Defence to invite a number of us to a gathering at Belvoir Castle to meet the Foreign or Defence Ministers of the Joint Expeditionary Force countries. I attended with the shadow Secretary of State and the Scottish National party defence spokesperson. Ever since then, that same spirit has prevailed; it is a co-operative spirit, and I give credit where it is due. It sends a good message to our own armed forces that we are prepared to work together on these matters.
I remember well the talk at Belvoir Castle about Finland and Sweden possibly joining NATO. Sweden was represented at the gathering; I cannot remember whether Finland was. One could see what was developing to get us where we are today, with the application to join NATO. I strongly hope that they do join NATO. Having been to Norway—again through the armed forces parliamentary scheme—and seen part of the dreaded Bardufoss training that the Royal Marines do, I have seen with my own eyes just how committed the Norwegian armed forces are. They were very welcoming and work extremely well with us, so I think we have a great deal to gain if Sweden and Finland join NATO.
Dave Doogan (Angus) (SNP)
I am sorry that the immigration Minister, the hon. Member for Torbay (Kevin Foster), is no longer in his place, because my principal motivation for coming along to this debate was to highlight some of the deeply frustrating, upsetting and challenging circumstances being experienced by constituents of mine in Angus who are trying to sponsor people on the Homes for Ukraine scheme. Of course, my situation in Angus is no different from that of MPs across the House who are trying to expedite that humanitarian assistance at a very human level.
The Homes for Ukraine scheme sits in stark contrast departmentally with the role of very hard-working Ministers in the Ministry of Defence, who have discharged their responsibilities with enthusiasm and efficacy and to great effect. I hope it is acknowledged that they will not often hear a comment like that from an SNP MP in this place, and I do not make that observation lightly. It is in sharp contrast to Ministers in the Home Office. That is not just a rhetorical observation or a political point—I genuinely wish it was not so, but it is.
The evidence is there for all to see in comparative analysis between what the United Kingdom has managed to achieve under the Homes for Ukraine scheme and what others in Europe have achieved where a Government’s ambition has matched the ambition manifest in the communities of those countries. We see that in Ireland, which has given refuge to considerably more refugees per head of population than the United Kingdom. The same is true of Denmark, which has received one Ukrainian per 194 members of the population. In the UK, that is depressingly one Ukrainian per 1,249 members of the population. The United Kingdom has not even managed double what Ireland has achieved, and Ireland is 15 times smaller than the United Kingdom.
As if that were not bad enough, in answer to my written parliamentary question about unaccompanied minors trying to access the Homes for Ukraine scheme, the Home Office has confirmed that unaccompanied minors are only eligible if they are travelling to reunite with a parent or legal guardian in the UK. My constituents in Angus are suffering from the same predicament that was so eloquently outlined by my hon. Friend the Member for Rutherglen and Hamilton West (Margaret Ferrier) in regard to young people. In my case, it is two young 17-year-old boys. As she said, we all know 17-year-old kids. Can the House imagine what it is like being stuck in Budapest, alone and barred from refuge in the United Kingdom? It is to the United Kingdom’s shame that that situation has been allowed to come to pass.
Unlike the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone), I will not shy away from looking at the integrated review, because if we have learned anything over the past couple of months, it is that events have a terrible habit of catching up with us if we find ourselves in any way unprepared. If the United Kingdom prosecutes its integrated review in the way it has set out, it will have an Indo-Pacific tilt. It was never a great policy to begin with, in my view—it reeked slightly of a post-Brexit rebound effect, trying to get as far away from the European continent as possible, and before tensions required it, a bit like someone turning up at a party in the afternoon with their carry-out before anybody else is on the same page. That particular strategy did not merit being advanced before the events in Ukraine, and it certainly does not merit continued investment down that path since then.
Jamie Stone
The hon. Member gives me the opportunity to enlarge on something I touched on. He is completely correct to say that we have to look carefully at where we should have our fleet and where we should be amassing our forces. I personally believe it is the high north and the north Atlantic—the bit opposite the top of my constituency.
Dave Doogan
A rare moment of accord between the hon. Member and I. He is absolutely right. If we look at the dysfunctionality of Russia’s land forces in Ukraine, we can contrast that with Russia’s sub-sea naval forces and secure precisely no comfort from thinking that that reads across. They are among the very best in the world, crewing some of the very best submarines in the world and deploying some of the very best tactics in the world. If we think that we can combat that threat in the South China sea, we are very much mistaken. That alone is an opportunity to quickly have a root-and-branch review of the integrated review.
The Minister for Europe and North America is in his place to reply for the Government. We have touched on the grain situation in Ukraine. It is not NATO’s, the west’s or Ukraine’s responsibility, but humanity’s responsibility to get that grain out of Odessa and into global markets where it can provide a lifeline—literally, sadly—to the poorest in the global community. If it is sufficiently, or even remotely, close to his area of responsibility, he might consider whether there is some mechanism that clever people in the Department for International Trade, or his Cabinet colleagues, could look at to forward buy the value of the grain in Ukraine so that it is already sold before it leaves. That would deny Russia the opportunity, however tenuous it might be, of saying that it is aiding the Ukrainian war effort with finance.
If the finance is already in place, that argument no longer stands and it will be evidence that, if Russia still blockades outward transit of grain from Odessa, that is purely a malign act of belligerence that will cost hundreds of thousands of people their lives. Getting the grain out would also vacate the silos and storage facilities in Ukraine so that they can receive this year’s harvest and not store up the same problem for years to come. It is vital that we co-ordinate the best ideas around that priority, so I look forward to hearing how we might do that.
Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)
It has been three months—91 days—since President Putin began his illegal and unjustifiable invasion of Ukraine. I am sure that I speak for Members on both sides of the House when I say that I continue to be deeply moved by the bravery, resilience and spirit of the Ukrainian people. It has been excellent to hear contributions from right hon. and hon. Members on both sides of the House. The House is at its best when Members speak with one voice and send a clear message to tyrants and autocrats across the world of our commitment to shared values and our resolute determination to support Ukraine.
We heard a number of contributions. We heard frustrations with the Homes for Ukraine scheme from my hon. Friend the Member for Sheffield Central (Paul Blomfield) and other powerful voices, such as the hon. Members for Rutherglen and Hamilton West (Margaret Ferrier) and for Angus (Dave Doogan). I am sorry to say that I had a similar experience this morning when I was sitting in the Home Office area in Portcullis House dealing with people who have not been dealt with since March. I know the Minister for Immigration was listening and I urge Ministers to get their act together on that scheme. The British people have shown great will to support the people of Ukraine and our system needs to match that by living up to their expectations.
The right hon. Member for Bournemouth East (Mr Ellwood) rightly spoke about the long-term implications of how we respond to this long crisis and the implications of our withdrawal from Afghanistan, which of course was heavily criticised this week. The right hon. Member for North Somerset (Dr Fox) rightly said that we should have listened to what Putin said in 2007, but instead we all engaged in wishful thinking. He also rightly highlighted that Putin is now using food as a weapon of war. I hope that that is recognised by some of those around the world who have, to date, sat on the sidelines in some of the diplomatic votes and others. That is President Putin’s agenda—he does not care about their populations and he is happy to let their people starve by stopping that grain being exported. That is the level of his wickedness. My hon. Friend the Member for Swansea West (Geraint Davies) also spoke about those humanitarian consequences.
We have heard other powerful speeches. The hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) spoke of his engagement with the 3rd Yorks in Estonia. I am pleased to say that the Royal Welsh are there as well doing a fantastic job to hold up the eastern flank of NATO alongside our excellent Estonian partners. As ever, the hon. Member for Isle of Wight (Bob Seely) gave us the benefit of his expert knowledge and made an excellent and interesting contribution.
This war is a heinous and flagrant violation of international law, and it has been rightly condemned in the strongest possible terms across the world. President Putin’s military failures in the initial stages of the invasion have morphed into wanton barbarity and destruction as this conflict enters a bloody new phase in violation of all standards of humanity. We should, of course, not be surprised at that barbarity, as has rightly been said on a number of occasions; we only have to look at his history in Grozny, Aleppo and elsewhere.
President Zelensky has told us that, last Tuesday, 87 people were killed in a Russian airstrike on the village of Desna in Chernihiv. We have heard of bodies piled up and crushed under collapsed buildings, and we have seen the civilians slaughtered in the streets with their hands tied behind their backs. In Kramatorsk, Bilohorivka, Kharkivska and countless other urban centres in Donbas, we are confronted with a litany of atrocities that refute any of the Russians’ attempts to skew the truth through their concerted information war. We know what is happening: we have seen those crimes being committed.
As of 20 May, nearly 4,000 civilians are confirmed to have been killed, but the Office of the UN High Commissioner for Human Rights believes this figure could be much higher. Despite fierce and courageous resistance by Ukraine and the remarkable Ukrainian efforts, particularly around Kyiv and Kharkiv, the invasion shows no sign of abating and the tide no sign of definitively turning. Indeed, in Donbas, particularly in the Luhansk oblast, the worst seems yet to come. Here, Ukrainian prisoners of war face the horrifying prospect of show trials staged by the authorities and senior Russian politicians calling for their execution.
The humanitarian situation is equally perilous. While it was a relief to see some women, children and elderly people evacuated from conflict areas, the plight of the Ukrainian people is more critical today than at any time in the conflict. The statistics speak for themselves: more than 14 million have been forcibly displaced; as I have said, almost 4,000 civilians have lost their lives; and 4.6 million now do not have access to safe and clean drinking water, while another 1.4 million have no access to water at all.
The sad reality, as in many conflicts, is that children in Ukraine are paying the highest price for this horrific war. The deputy director of UNICEF has told the UN Security Council that children are paying an “unconscionably high price”, with 239 confirmed killed and 355 wounded, although he believes the actual figure is far beyond that. Schools in Ukraine have been turned into mass graves—a true reflection of the evil driving this war. Older women make up two thirds of those aged over 65 and 71% of those aged over 75, and they are particularly vulnerable in this conflict, facing loneliness, hunger, sexual violence and killings. We heard earlier the estimate of 11,000 war crimes being committed—sickening scenes—and those responsible must be brought to justice.
I would therefore like to ask what recent conversations the Minister has had with the United Nations, human rights bodies and leaders of aid organisations relating to the situations facing particularly the women, children, elderly and vulnerable groups still in Ukraine. I have met many of those organisations in recent weeks, and indeed today I met UN representatives as well. I would also urge him to rethink some of the feared cuts that we see coming. I know there has been generous support for Ukraine, but this is really not the time for some of the cuts to multilateral agencies that have been suggested by the Government. The cuts also risk a diversion from other crises in which we see women, children and the elderly at risk, whether that is in Afghanistan, Yemen, Tigray or elsewhere in Africa, and I have spoken many times about the situation in Ethiopia. This suffering is not just in Ukraine, but is on a global scale, and, as we have heard, it will be exacerbated by the conflict in Ukraine, particularly with the food and energy price shocks.
The situation in the Black sea has rightly been raised, and I hope the Minister can say something about what efforts we are making with others to open those routes for grain exports, and what assessment he has made of the alleged theft of grain by the Russian forces and their attempts to sell it on the open market. What steps are we taking to ensure that that does not happen and that money does not flood into Putin’s coffers? What discussions has he had, particularly with Turkey, about potential assistance to ensure the safety of any commercial exports of that grain from Ukrainian ports?
Britain has a long and proud history of standing up to dictators and tyrants, and our defence of the values we cherish is needed now more than ever. Regrettably, it has taken us until now fully to appreciate the threat posed by Putin to our partners in Europe and beyond. To that end, I would like to reiterate the unshakable commitment to NATO of my hon. Friends in the Labour Opposition, and our support in providing all necessary assistance to the people of Ukraine as they heroically defend themselves. We also offer our support to others in the region, including Moldova, which has rightly been raised many times in this debate. We still have time to ensure that Moldova does not face a fate similar to that in the east and south of Ukraine.
I would like to put on record our clear support for Finland’s and Sweden’s applications to join NATO. Indeed, some of my right hon. and hon. Friends have travelled to Finland and Sweden, as they have to Estonia, Germany and many other allies in recent months. We welcome their willingness to stand with us in defence of democracy and the rule of law. Can the Minister say a little bit about what conversations he has had with Turkey in recent days on the worrying threats that seem to be emanating from there about attempting to block their accession? I certainly hope that that does not come to pass. We need to stand together as NATO in welcoming in Finland and Sweden, and those who wish to join.
The Government can continue to rely on Labour’s unequivocal support for the steps that they are taking to reinforce the alliance and build on partnerships. However, it is clear that the war in Ukraine will fundamentally alter the European security order, so we need to work with our European allies across the board—whether EU or non-EU, NATO or non-NATO—to ensure the broadest possible coalition, and not, I am sorry to say, engage in unnecessary public fights in other areas. This is not the time to have those fights, as I made clear in responding to the Foreign Secretary the other day.
On sanctions, while I welcome the many steps that the Government have taken, and the willingness of the Minister and his officials to discuss them with me, at times we have been playing catch-up. I am glad to see that much progress has been made, but a series of things still needs to happen. A further statutory instrument is, I think, coming forward after the recess. There are still some loopholes in the sanctions; some trusts are not fully covered, some ownership thresholds are too high, and some oligarchs have not yet been designated. Of course, we also need the fundamental reform of Companies House. I hope that the Government will therefore bring forward further measures urgently. Labour will support them, as we have to date. We have called for such measures for many years, both to deal with illicit finance and to implement the findings of the Intelligence and Security Committee’s Russia report.
I press the Minister again on the seizure of assets. The European Commission has identified that it is considering repurposing such assets. On the legal thresholds for seizure and the potential use of assets, there was a decision today relating to the disposal of Chelsea. I understand that the proceeds will be used to help charities and organisations in Ukraine. Could we not go further with some of the other assets that we have seized and ensure that the money is used to support those who are suffering from the outcomes of Putin’s barbaric invasion?
What are we doing to support others around Europe, such as those who are part of our coalition and bearing a significant brunt from implementing the sanctions? I have just been travelling in Cyprus, which has rightly joined the efforts against Putin’s regime, but it has significant Russian influence in its tourist economy and financial sector. We must ensure that we work to support all those who are taking a hit as a result of being part of the coalition, as well as those in the western Balkans and elsewhere who are being targeted by Putin, and who may be destabilised.
We have heard in this debate, and in many others, about energy dependency and cutting off the decisive economic lever driving Putin’s war machine. Many of us will agree that over-reliance on Russian energy has been a Europe-wide failure that has prevented the continent from acting decisively in opposing Putin’s aggression. Radical and bold measures are needed to ensure energy security, bring down energy bills for working people across Europe, and release Putin’s grip. We need unity, too. Will the Minister say a bit about reports that Hungary may be blocking Europe-wide measures? What discussions have we had to enable us—EU and non-EU countries across Europe—to move as one? What support is being given to those countries whose energy systems will take the biggest hit, for entirely understandable historical and other reasons? Fundamentally, it is only by transitioning with haste to clean and renewable energy, and supporting our allies and partners, that we will end our reliance on Putin’s regime and, indeed, other autocratic and despotic regimes around the world.
The war in Ukraine has shown us the very worst of humanity, but also the very best—we have seen the response of the Ukrainian people and armed forces, and Britons offering up their homes. Putin seeks to recast Europe in a mould that fits his warped sense of nationhood, so that Russia and other despots can act with impunity and flagrant disregard for international law and human life. What happens will matter for decades to come—I am thinking not just of Russia’s activities, but the activities of other regimes around the world—so Putin cannot be allowed to succeed.
President Zelensky has iterated many times that Ukrainians are courageously fighting not just for their homeland and freedom, but on behalf of all Europeans—and, indeed, all those who love liberty, freedom and democracy. The war will shape our continent for decades. Our role, as it has been on so many occasions, is to stand for democracy, freedom and the rule of law. However, we must also complete the job of tackling malign influence in the UK, including that of kleptocrats and oligarchs. We must root out those who would use our City of London, and indeed our country, as a bolthole. We must also protect political and economic institutions, not just in this country but across the democratic world, from Putin’s insidious interference.
The Government can continue to rely on the Opposition’s support in going further and quicker, and being bolder, on sanctions and on the provision of military support and humanitarian relief. As has been pointed out in the debate, as this blood war continues and Putin becomes more frustrated, the UK and our allies will undoubtedly face more challenges. It is our duty to stand with unshakable conviction alongside our NATO allies and others in support of the heroic citizens of Ukraine, and in defence of all the values we hold dear.
The Minister for Europe and North America (James Cleverly)
I am grateful to hon. and right hon. Members for their thoughtful contributions to the debate. In response to the hon. Member for Cardiff South and Penarth (Stephen Doughty) and to other Opposition Members, let me put on record that the Government recognise and value the unanimity of voice with which we speak on these issues. There is, of course, always the opportunity here to engage in partisan and party political attacks. That is a part of the job that we do, and there is nothing wrong with it, but there are also times when we come together and stand shoulder to shoulder in defence of values that we all share. We have seen in this afternoon’s debate a strong demonstration of this House speaking largely with one voice. Members are highlighting concerns, issues and problems when they arise, but are fundamentally standing shoulder to shoulder with each other, as is right.
The stoicism, courage and determination shown by President Zelensky and the Ukrainian people in the face of this onslaught is an inspiration to us all. If we are to realise a world where peaceful, sovereign nations are free to choose their path, and to prosper without fear of invasion, then Ukraine must win. We are working intensively with our allies and international partners to support our friends in Ukraine. The Prime Minister is in regular contact with President Zelensky. They spoke last Thursday and again on Sunday. The Prime Minister has spoken recently to the G7, European leaders, NATO and the UN Secretary-General. Last week, he was in Sweden and Finland to agree increased co-operation on security, and to discuss their application to join NATO. Meanwhile, the Foreign Secretary was in Germany to attend the G7—as was I, attending the G7 Development Ministers’ meeting. The Foreign Secretary was also at the NATO Foreign Ministers’ meetings, where she galvanised work with allies to help win the battle for Ukraine. As mentioned earlier by the Minister for Defence Procurement, the Defence Secretary met his US counterpart at the Pentagon two weeks ago. They spoke about the joint UK-US efforts to support Ukraine, including through the supply of military aid and the co-ordination of donations from other partners. The Defence Secretary is in Madrid for similar discussions with the Spanish Defence Minister.
The hon. Member for Plymouth, Sutton and Devonport (Luke Pollard) asked about replenishing the equipment we have donated and, by extension, NATO countries flushing Soviet-era equipment through the system, and replacing it with NATO-standard equipment. As he was speaking, I discussed that quietly on the Government Front Bench with the Minister for Defence Procurement, who assures me that we are in active dialogue with the defence manufacturing industry on those issues. I am not able to go into more detail at the Dispatch Box at the moment, but I assure the hon. Gentleman that his concerns are being thought about by the Government. We are discussing those issues to ensure that we can defend ourselves and our partners, not just in the here and now, but in the future.
My right hon. Friend the Member for Bournemouth East (Mr Ellwood) raised a number of incredibly important points about how we progress towards, hopefully, the end state of this conflict. I reassure him that we will be guided by the Ukrainian people on any negotiated settlement that comes about. We would not countenance their being forced into a conclusion to the conflict that they are not comfortable with. That would be counterproductive to the long-term peace and security of the continent, and for Ukraine. The UK is consistently pushing at the front of the pack in its support for Ukraine.
My right hon. Friend the Member for Bournemouth East mentioned relevance to the integrated review, and mentioned China’s posture on the conflict. He highlighted conversations between the Russian and Chinese leaders; because of those conversations, the integrated review rightly places great focus on the Indo-Pacific region. The integrated review highlighted Russia as a major state threat actor to the UK—to our interests and the security of our friends and allies. I understand the points made by my right hon. Friend and a number of other Members about ensuring the IR is fit for purpose, and we will of course always keep our defence and security thinking up to date in light of what is happening in Ukraine, but the IR remains a strong foundation on which to build our defence, security, diplomatic and development policy for the period set out in it.
A number of Members spoke about sanctions. They are an important part of our response, but they are not the complete picture. The hon. Member for Swansea West (Geraint Davies) highlighted the importance of sanctions; we will continue to push them forward in order to hamper Vladimir Putin’s ability to fund his aggression, and to isolate him and the cabal around him. I again put on record the Government’s recognition of the work done by Opposition Members in meetings on sanctions-related statutory instruments. I have always found their views to be thoughtful; they are sometimes critical, but always ultimately have a desire to ensure that our sanctions packages are robust and effective, and that any attempt to circumvent them is curtailed.
Geraint Davies
That being said, does the Minister accept that each day that the war goes on comes at an enormous economic and humanitarian cost to the world that dwarfs the investment put in to help Ukraine defend itself and push back the Russians? Is there not therefore a compelling military, humanitarian and economic case for investing more sooner, so that we get this war ended and won sooner?
James Cleverly
The hon. Gentleman makes a strong point about the need to bring this conflict to a successful conclusion, with Ukraine winning. I was struck by the point my hon. Friend the Member for Isle of Wight (Bob Seely) made about rushing to a ceasefire that might counterproductive for the Ukrainian people and an asset to the Russians. We will of course do everything we can to help Ukraine defend itself and expel Russia from its territory, but I urge caution to those in the Chamber and those listening to the debate: this conflict needs to be won, and won properly, if we are to ensure that we do not revisit these conversations for months and perhaps years to come.
The hon. Member for Swansea West raised the issue of circumvention and the overseas territories. I assure him that the UK sanctions regime applies in all UK Crown dependencies and overseas territories, either through legislation in those jurisdictions, or through Orders in Council. We of course work with our international partners to ensure that we prevent, as far as we can, circumvention and evasion of the international sanctions.
The hon. Member for Stirling (Alyn Smith) was absolutely right to raise a point about international co-operation. I have no doubt that the collective response to Russia’s invasion has been a huge disappointment to Vladimir Putin. Where he sought division and conflict, he sees instead solidarity, unity and resolve.
The hon. Gentleman asked specifically about the Black sea, and that plays into a number of points that right hon. and hon. Members made about food security. I was in Romania at the beginning of this week. Several issues that were triggered by the conflict on the Black sea coast because of Russia’s attack towards Odesa were very much topics that I discussed directly with the Romanians and in other meetings, including the G7 Development Ministers meeting last week, when we talked about grain exports, food security and the ability to move the grain in ships through the Black sea. Sadly, I cannot give him the reassurance that he and others desire, but I assure him that that remains very much at the top of the agenda.
I think the hon. Member for Plymouth, Sutton and Devonport made the point, as others have, that food insecurity is being used as a wider weapon of war. The message—this was reflected in his speech—that I would pass to countries around the world that are suffering from food price inflation, food shortage and food insecurity is that that is a direct result of Putin’s invasion, and is not, as Putin would have them believe, any kind of response to sanctions. There are no sanctions on food or food movements. The shortages are a direct result of his aggression and nothing else. That said, we will continue to work with our international friends to do what we can to find export routes for that grain from Ukraine, whether that is by sea or land.
My right hon. Friend the Member for North Somerset (Dr Fox) spoke with huge clarity and great accuracy, sadly, about the warnings that were missed and the lessons that were not learned. I remember that, long before it was fashionable, he spoke and wrote about global insecurity, our need to defend ourselves against aggression and the importance of the UK thinking about these global trends. He still speaks with great authority on these issues. He made some important points on sanctions and said that we must learn the lessons of what is happening now to ensure that we do not see aggression such as this again.
A number of Members raised the issue of sexual violence and rape as a weapon of war, including the hon. Member for Cardiff South and Penarth. The evidence that we have seen is truly horrific and barbaric. Last month, the Foreign Secretary announced a £10 million fund that will help expert civil society organisations to work with victims of conflict-related violence. Earlier this month, my right hon. and learned Friend the Attorney General visited Ukraine for talks with its prosecutor general as part of our support for Ukraine’s investigations into Russian atrocities. I assure the House that, in response to the barbaric tactics of Putin’s forces—from levelling residential buildings in cities such as Mariupol to the slaughter, rape and torture of innocent civilians in towns such as Bucha—we will work with international partners so that those who have perpetrated or ordered such atrocities will be held to account by the international community.
We have led efforts to refer Russia’s actions in Ukraine to the International Criminal Court. Those efforts have now secured support from 42 other countries. We have committed to providing the Court with the resources necessary to secure evidence and conduct prosecutions, starting with a contribution of £1 million.
Several hon. Members highlighted one of the by-products of Russia’s aggression: Finland and Sweden’s applications to join NATO. I make no apology for repeating my point about the unanimity of voice on the Opposition Benches with respect to the UK’s support for NATO and our welcome for Finland and Sweden’s applications to join. We need to bolster NATO’s eastern flank. The Government welcome and support Finland and Sweden’s applications; I do not want to do too much crystal ball gazing about this House’s appetites, but I think it a relatively safe bet that whatever process it needs to take to facilitate their membership will happen quickly and with little disagreement.
Stephen Doughty
Can the Minister say whether he has spoken to his Turkish counterparts about the objections that they have raised?
James Cleverly
I can assure the hon. Gentleman that whatever conversations are necessary to ensure that Finland and Sweden successfully join NATO will happen. We enjoy a very strong bilateral relationship with our NATO ally Turkey; we will listen to whatever concerns it has and do whatever we can to address them, but I have no doubt that the UK Government will take whatever actions are necessary to facilitate Finland and Sweden’s membership.
Hon. Members across the House have rightly raised the subject of Moldova, which is very much in our thinking. The partnership between the UK and Moldova is flourishing, thanks to the strong links between our peoples and Governments. Our bilateral agreement on strategic partnership, trade and co-operation provides a solid basis for developing that relationship. My right hon. Friend the Foreign Secretary has made it clear that we will work to help Moldova to protect itself; indeed, at bilateral meetings in Romania this week I discussed our desire to support its self-defence.
Wider humanitarian need is a subject that concerns us all. Almost a third of Ukrainians have fled Putin’s invading forces, and nearly 16 million are in need of humanitarian support. The UK will continue to provide humanitarian support to people in and outside Ukraine, and to countries that are supporting Ukrainian refugees. Hon. Members raised the situation with regard to the sale of Chelsea football club; we will ensure that any receipts from that sale are used to provide humanitarian support for those who need it, in Ukraine and more broadly.
I can assure the House that my hon. Friends in the Home Office have taken particular note of the individual cases that were raised. Hon. Members will understand if I do not speculate too much on those cases, but I assure them that notes were taken. If they feel the need to provide details that they were not able to furnish in the House—I understand that it is not always right to go into too much detail in what is a public forum—the Home Office will be more than willing to listen to their concerns.
The invasion of Ukraine helps to illustrate the power of free nations and the weakness of autocrats. Russia’s assault on Ukraine was unprovoked, premeditated and barbaric, and as long as Russia continues to pursue its military objectives, it cannot be seen as willing to negotiate in good faith. While this is the case, the UK and our partners will continue to provide military, economic and humanitarian support to Ukraine, apply sanctions and increase international pressure on Russia. The UK and the international community stand against this naked aggression, and for freedom, democracy and the sovereignty of nations around the world. The UK and our allies will support Ukraine’s effort to secure a settlement that delivers sustainable peace and security.
Putin has used his iron grip on Russian television to present to his people an alternative reality and fundamental lies about the motivations for his invasion, but the truth and the facts are clear. Putin thought that the Ukrainian people would roll over. They did not. Putin thought that we and the international community would lack the resolve to face him down. We did not. Putin has united Europe and NATO, and he has reinforced our shared resolve that Ukraine and the Ukrainians must win. With our continued support, I have certainty that they will.
Question put and agreed to.
Resolved,
That this House has considered Ukraine.
Business without Debate
Delegated Legislation
Births and Deaths Registration Act 1953
(2 years, 5 months ago)
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Mrs Emma Lewell-Buck (South Shields) (Lab)
Thank you very much, Mr Deputy Speaker, for granting me this debate on the operation of the Births and Deaths Registration Act 1953. This is not just a debate about the operation of an Act or our campaign to make changes to it; it is a debate about the enduring pain of loss. It is about unimaginable heartbreak and how the Government can inject some humanity and empathy into this decades-old legislation.
Margaret Ferrier (Rutherglen and Hamilton West) (Ind)
I commend the hon. Member for securing this debate on such a sensitive and important issue, and for the early-day motion that she has tabled. Losing someone, especially a child, is traumatic and can often make someone feel that their life has suddenly spiralled out of control. Does she agree that this is about dignity for the families, and a final opportunity to regain control over their last goodbyes?
Mrs Lewell-Buck
I thank the hon. Member for that intervention, and I could not agree more. I will be echoing her comments later in my speech.
Last Sunday marked five years since 22 people were murdered in the Manchester Arena terror attack. My constituents Chloe Ann Rutherford, aged 17, and Liam Thomas Allen Curry, aged 19—a young couple deeply in love, full of hope for their futures—were brutally taken from their families in this attack. Since 2020, Chloe and Liam’s parents have spent days in the public inquiry, listening to every agonising detail of that horrific night. As the inquiry sessions have come to an end, they have been told that, owing to the Births and Deaths Registration Act, they cannot register their own precious children’s deaths.
Maria Eagle (Garston and Halewood) (Lab)
I congratulate my hon. Friend on securing the debate. She is aware, I know, that I too have constituents who lost a child in those events. They have said to me that the lack of ability to register the death of their child has taken from them the last thing they felt they could do for her. Does my hon. Friend agree that reform of this provision would be a blessing for some of the families—although not all—who find themselves caught up in such dreadful public disasters, and feel that they are carried away with no control and no capacity to have an input in the final way in which their child is dealt with by the state?
Mrs Lewell-Buck
I thank my hon. Friend for her powerful intervention. She is, of course, right: families need to be able to grieve, and they cannot grieve if they cannot carry out this final, official act for their children. Instead, the registration will be done on their behalf by a registrar, effectively a stranger, a person who never knew their children. As their mams say,
“Look in the mirror, look in your heart, and you tell me, as a parent, if it was your child, you would be happy with a stranger registering your child's death?
“It’s the last thing we feel we can do as parents. As Chloe’s Mam I want to be the person who gives that information, because it’s personal and she’s my baby”.
We have been told that the rationale for this arrangement is that it would be too distressing for the families to register their children’s deaths, but it is surely not up to Governments or Ministers to decide what is and what is not too distressing for a family. Only a family can know how they feel. My constituents registered their children’s births; they should be able to register their deaths. Being unable to do so is what is causing them distress. We have a two-tier system, in which those whose loved ones died outside such horrific events can register their deaths, yet those who are feeling a pain that most of us will never experience cannot. It is in the gift of the Government to change this legislation, to introduce choice for families and to let them decide whether they wish to register the deaths of their loved ones.
If you will permit me, Mr Deputy Speaker, I would like to share some of Chloe and Liam’s story with the House. Their story, and their family’s pain, should help the Minister and those listening to understand the importance of the small yet very significant legislative change that we are requesting.
As a baby, Chloe was happiest swaddled and wrapped up in the love of her family, and Liam equally loved cuddles and being surrounded by the love of his family. Liam loved sport. He loved cricket, cycling and skiing. At just six years old, he picked up a cricket bat and never looked back, following in his dad’s footsteps as a left-handed batsman. In later years, it was at the cricket club that he made friends with Scott, Chloe’s older brother.
Chloe had always been a natural performer, her modesty making her talent even more striking. Chloe loved singing, dancing, playing the piano, ballet and tap. Being close to her big brother, she would sometimes pop along to the cricket, and it was there that she and Liam must have noticed each other, because it was not long before they started chatting to each other online. Dates followed, they fell in love, and their families were so happy that they had found each other. They said that they
“were made for one another, at their best when they were together”.
Their busy lives with work, study, sports and performing progressed in harmony, with Chloe at college and Liam at university, both also holding down jobs in the Hilton hotel in Gateshead. Liam’s cocktail-making skills earned him the enviable title of “the Tom Cruise of the Tyne”, while Chloe enjoyed the odd porn star martini and singing in her band, TwoNotes.
They also shared a love of travel. Chloe had an apprenticeship lined up at our local travel agent, Westoe Travel, and Liam was planning a future in the police force. Chloe and Liam had so many holidays planned—in fact they had planned their lives together, saving for a flat, marriage and children. It was all on the cards. In the words of Chloe’s dad, Mark, there was
“so much living to be done, all the stories not yet told, all the dreams not yet dreamt.”
Liam’s mam, Caroline, said:
“Two beautiful young people with so much love in their hearts and hope for their life together. The greatest thing we ever learn in life is just to love and be loved in return.”
On 22 May 2017, just eight weeks after Liam’s dad, Andrew, had sadly passed away, Chloe and Liam went to see Ariana Grande at the Manchester Arena and never came home. The lives of their parents Lisa, Mark and Caroline, their brothers Scott, Ryan and Zack and their entire families were shattered forever. These families have had everything taken from them. The whole inquiry process can leave people feeling powerless. As Lisa said, they feel like insignificant cogs in a very big wheel. To find that this one important final official act for their loved ones is denied to them feels cruel and heartless.
I sincerely thank the Under-Secretary of State for Justice, the hon. Member for Corby (Tom Pursglove) for meeting me and my hon. Friend the Member for Garston and Halewood (Maria Eagle), whose constituents also want the legislation to be changed. I also sincerely thank him for our meeting today with Chloe’s and Liam’s mams. I know he is in no doubt about how important this is and that he fully acknowledges how mentally exhausting and painful it is for them to be denied this choice. They and I know that legislative changes can take a long time, but we see no justifiable reason why this small change cannot be expedited, or at least why the families cannot be told whether it is possible. We have previously seen this Government rush through contentious and complex legislation for Brexit and covid, some of it in just one day. This does not seem overly complex or contentious, and I understand that it could be done though secondary legislation amendments to the Births and Deaths Registration Act 1953 and the Coroners and Justice Act 2009. When the will is there, the Government can and do act, and from today’s meeting with the Minister I am reassured that the will is very much there.
Lisa, Mark and Caroline, in the time I have known them, always think of others. It is clear to see where their lovely children got their kindness, drive, intelligence and passion from, so it is not surprising that they used their pain and grief to set up the Together Forever Trust, which gives grants for sports and performance to young people so that their children’s legacy can help others to achieve their dreams. So far, they have handed out 250 bursaries that have changed the lives of hundreds of children. These are families who always give; they have never asked for anything until now.
In our meeting today, Lisa spoke about how at the outset they were told that their children did not belong to them, and that they belonged to the state as a crime scene. She said that, despite the rhetoric we always hear about families coming first, they do not, but by making this change the Government can prove for once that families do come first. Caroline explained that registering Liam’s death will allow her to begin grieving, and that if she cannot do this last thing for him, she will feel like she has failed him. Lisa rightly told her that she will not have failed him, as it is the state who has failed him.
I am convinced that the Minister will come good on his promise to the families that he will urgently look at whether and how these changes can be made, and I know that he will let us know as soon as he possibly can. South Shields is a small town with a big heart, and we are all pleading with the Minister to make this change, because Chloe and Liam will always remain in our hearts and minds, together forever. Their parents will never give up fighting for what is right for their precious children, and as their MP, I won’t either.
The Parliamentary Under-Secretary of State for Justice (Tom Pursglove)
I thank the hon. Member for South Shields (Mrs Lewell-Buck) for securing a debate on this most difficult and sensitive of issues, and for the way in which she and the hon. Member for Garston and Halewood (Maria Eagle) have approached the issue entirely constructively and in a spirit of wanting to resolve it on behalf of their constituents.
As the hon. Member for South Shields said, this debate marks the fifth anniversary of the terrible events at Manchester Arena, about which she spoke so movingly. I know the past few days have been particularly difficult for all the families caught up in that terrible tragedy. I know I speak for the House, and for the country as a whole, in saying that our thoughts are with them at this most difficult of times—I know it feels particularly acute as the anniversary is marked. Of course, our thoughts are also with those who were injured and with all those who responded so professionally and thoroughly on that terrible evening. We thank them for their heroic work in making sure people were safe.
I respond to this debate as the Minister responsible for coroner and inquest law and policy, but I am also privileged to be the victims Minister. It is in that capacity that I place on record my deepest sympathy and condolences to all those who lost loved ones or were affected by these shocking events five years ago. Their bravery is an inspiration to us all.
It is never easy to cope with bereavement in any circumstances, but I cannot imagine how difficult it must be to deal with the distress of losing a loved one—and, for many of those involved in the Manchester Arena tragedy, a child—in such shocking and traumatic circumstances. I pay tribute to the dignity and courage with which the families have faced their terrible losses and the subsequent investigations. As the public inquiry into these dreadful events continues, I take this opportunity to acknowledge the assistance and support provided to the bereaved, particularly by the inquiry team.
The chairman of the Manchester Arena inquiry has outlined that its report will be published in three volumes. Volume 1 was published on 17 June 2021 and addresses the security arrangements at the Ariana Grande concert. Volume 2 will examine the emergency response to the attack and what happened to each of the deceased. Volume 3 will consider whether the Security Service and counter-terrorism police could and should have prevented the attack.
The inquests into these tragic deaths are formally suspended pending the outcome of the public inquiry. Sir John Saunders, the chairman of the public inquiry, is also the coroner dealing with these tragic deaths. I assure the House that this is normal in such circumstances.
With the inquiry having completed hearing oral evidence and proceeding towards the publication of volumes 2 and 3, its chairman will, in due course, conclude his responsibilities as coroner for the victims’ inquests. At that stage, he will provide the relevant information to the registrar to enable each death to be recorded in the death register in the appropriate way.
Maria Eagle
I thank the Minister on behalf of my constituents for his swiftness in arranging to see them tomorrow. They very much look forward to putting their points to him directly.
Does the Minister agree that it is natural for families in such circumstances, no matter how helpful the state has been to them throughout the public inquiry and the coroner’s inquest, not to feel like a party to the proceedings, because they are not technically a party to them? Does he understand, therefore, how important it is for them to be able to come in at the end and do right by their lost children? That is the key to this. Does he agree that it is important that they have the choice? No one is saying that everyone should be forced to do this, but the families must have the choice. That is what is being sought.
Tom Pursglove
I am very grateful to the hon. Lady for her intervention. Again, I feel privileged to be meeting her constituents tomorrow to discuss this and to hear from them precisely how they feel these matters have been handled. Of course, I would expect the investigations team to handle this with extreme care, real sympathy and due regard to the victims’ families, making sure that they are kept informed and that their needs are properly attended to. I hope that through what I am able to say in the remainder of my remarks, I will be able to provide her with reassurance about my thinking on this. I entirely take on board the point she raises about optionality, and the gravity of a death being registered and the desire for families to be involved in that process. I will continue with my remarks and I hope that they will help to provide some of the reassurance that I know she is seeking.
I have been truly sorry to learn, both in previous exchanges with hon. Members and directly from some of the families, that the requirements for registration in these circumstances have added to the pain and distress felt by some of the victims’ families. We have heard this evening about the commitment of the families of Chloe and Liam in fighting for the ability to complete this one final act for their children. I had the privilege of meeting Lisa Rutherford, Chloe’s mum, and Caroline Curry, Liam’s mum, earlier today, and I would like to put on record my thanks for their time and for setting out so clearly why this issue matters to help them with the grieving process. What they have been through is almost impossible to comprehend. Chloe and Liam were clearly exceptional young people who had great talents, and their lives were taken far too soon. That is a terrible tragedy for their families to have to bear and a huge loss not just to their families, but to their wider community, to which they were clearly contributing, in their different ways. In a moment, I will set out the reasons why that responsibility lies with the coroner, rather than the family, in cases involving an inquest, but first I want to restate the Government’s commitment to ensuring that bereaved families remain at the heart of the coroner service. With that in mind, I want to stress that I am committed to learning, both from the specific concerns we are debating tonight and from the families’ wider experience of the formal processes following the Manchester Arena attack.
But now let me explain the reasons behind the existing arrangements for registering a death following an inquest and, crucially, why they differ from the registration of deaths where no inquest has taken place. The Births and Deaths Registration Act 1953 requires all death registrations to be completed by a registrar. For the majority of deaths, a “qualified informant” provides the information recorded in the register, and this is supported by a cause of death certificate provided by either a medical practitioner or a coroner. The “qualified informant” is usually a family member, and I understand that it is this role that some families, such as those of Liam and Chloe, want to be able to fulfil. But where an inquest takes place, as it has for the Manchester Arena victims, it is, by law, the inquest process itself that must establish the deceased person’s identity and the details of how, when and where they died. To ensure that the inquest and registration details fully align, it is also a legal requirement that, following the inquest, this information is provided to the registrar by the coroner. Because of these requirements, there is no further information that the family can provide for the purposes of registration, over and above what has been established by the inquest and submitted by the coroner. I understand, of course, that the families whom the hon. Members for South Shields and for Garston and Halewood are representing, and others like them, want to have a role in the registration of their loved one’s death. So I also understand why they are pressing for a change in the law to support that. I can assure both hon. Members and the House more widely that I am actively following up on my commitment to consider, as quickly as possible, whether there might be an appropriate solution to this difficult and sensitive issue, with which I have real sympathy.
We must also remember that, as the hon. Member for Garston and Halewood alluded to, many bereaved families, having already experienced the inquest process, might find that the additional responsibility of registering the death adds to their distress rather than eases it. We know that to be the case in some circumstances and for some families, so choice is important. Some families may not want to have to attend the register office to be questioned again about the information they have already provided in the inquest. Some families might not be able to do so, or simply may not understand that they are expected to carry out the responsibility. We have some insight into this from the fact that a number of deaths—around 200 or so each year—remain unregistered because there has not been an inquest and the bereaved family, for whatever reason, do not follow up on the necessary process.
Given the need to balance different experiences and wishes, I have discussed with both hon. Members the possibility of providing families with the choice, rather than an obligation, to be involved in the registration arrangements. We have also discussed options relating to combining the family’s involvement with the coroner’s existing role. Those are possibilities but, as our discussion this evening has shown, this is a complex issue that involves more than one system. As such, we have to be mindful of a real concern about the potential for unintended consequences. This issue needs to be thought through carefully and sensitively. We must not make any changes that, although well-intentioned, might cause confusion or additional stress for bereaved families because of additional complexity in the system.
I absolutely reiterate my commitment to looking at this issue with the utmost priority and to keeping both hon. Members updated every step of the way. I hope that the families of Chloe and Liam will be able to take comfort from the fact that, by raising this very important issue for the sake of the loved ones they have lost, they have provided a voice not only for others bereaved by the dreadful events of five years ago but for the families who, sadly, will lose loved ones in difficult circumstances in times to come. I hope they will see this debate as part of the legacy they have been working to establish in their loved ones’ names and memories, to which I pay tribute. I also pay tribute to the charitable work that the hon. Member for South Shields set out.
In addition to looking at whether we can introduce choice for families, I will look at how information for the bereaved at inquests can be improved to ensure that the arrangements for the registration of their loved one’s death is clearly explained to them as early as possible in the investigation process—an issue we have touched on in previous conversations on this issue.
It remains for me only to thank hon. Members once again for the opportunity to discuss this issue tonight, and to say to the families of Liam and Chloe, to the constituents of the hon. Member for Garston and Halewood, and to all those affected by the terrible events of five years ago, that my thoughts are with you at this very difficult time, and for the future.
Mr Deputy Speaker (Mr Nigel Evans)
I thank the hon. Member for South Shields (Mrs Lewell-Buck) for holding this debate and for the manner in which she presented her argument. All our thoughts are with the families and friends of the victims—those who died and those who live with injuries—of that appalling attack.
Question put and agreed to.
Draft Public Procurement (International Trade Agreements) (Amendment) Regulations 2022
(2 years, 5 months ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Parliamentary Secretary, Cabinet Office (Mrs Heather Wheeler)
I beg to move,
That the Committee has considered the draft Public Procurement (International Trade Agreements) (Amendment) Regulations 2022.
It is a pleasure to serve under your chairmanship for I think the first time, Mr Hosie. This instrument will give legal effect in domestic regulations to the United Kingdom’s procurement obligations under the free trade agreement between the UK and the EEA-EFTA states of Iceland, Liechtenstein and Norway. The European Free Trade Association agreement has sought to reflect much of the provisions of the EU-EFTA agreement, by which the UK was bound as a member of EU. This is part of the Government’s wider approach to provide continuity as far as possible in existing trade and investment relations with third countries that had an agreement with the EU before we left the EU.
The UK-EFTA agreement was signed on 8 July 2021 and completed the scrutiny period prescribed under the Constitutional Reform and Governance Act 2010 in October 2021. This instrument implements the procurement obligations contained in that agreement.
In terms of coverage under the agreement, the UK is an independent member of the World Trade Organisation’s agreement on government procurement, or GPA, along with Iceland, Liechtenstein, Norway and other major world economies. The GPA aims to mutually open global public procurement markets and is worth some £1.3 trillion in guaranteed access to global procurement opportunities for UK firms. Importantly, these amendments do not add any burdens to the UK procurement process, nor do they reduce any UK procurement standards. I hope colleagues will join me in supporting the draft regulations, which I commend to the Committee.
Rachel Hopkins (Luton South) (Lab)
We have no further points to add and will not be pressing the regulations to a vote.
Mrs Wheeler
No, thank you very much, Mr Hosie. It has been a very lively Committee and I am grateful to everybody who came. I hope colleagues will join me in supporting the regulations.
Question put and agreed to.
Westminster Hall
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
Foreign Lobbying
(2 years, 5 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
Bob Seely (Isle of Wight) (Con)
I beg to move,
That this House has considered foreign lobbying in the UK.
As ever, it is a pleasure to serve under your chairmanship, Dame Angela.
I am going to use this debate on foreign lobbying to lobby the Government. They have published their National Security Bill, and the foreign lobbying registration element is still being written and decided upon. It is great that that is there, and it is great that we have the chance—I hope—to influence the Government. I thank the Minister very much for taking the time to be here.
I am going to argue three points. First, we need a substantially improved lobbying law—in fact, lobbying laws. What we have is arguably no longer fit for purpose, if it ever was. Secondly, there is a specific problem with foreign lobbying, which has been getting worse over the past decade. Indeed, the problems that we have had with lobbying arguably go back some 20 years at least. Thirdly, and perhaps most importantly for the theorists of war and conflict, in this era there is a blurred line between espionage, agent recruitment and covert, malign, unhealthy, unethical influence, and overt lobbying. One should see those not as being separate, but as being, effectively, on a continuum from dark to light, and perhaps quite an unhealthy continuum with respect to some elements.
To ensure the health of our democracy, we need a stronger and more transparent system, and I want to use my speech to make suggestions for the Government’s National Security Bill. I would be grateful if the Minister confirmed that the Government are still committed to having a substantive—I hope—and broad foreign agent registration process in the Bill. By that, I mean a registration process that involves not only those people who work within a narrow definition of lobbying, but a broader definition, which, in our era, should include the lawyers, the public relations people, the strategists and the enablers not only for foreign states—that is another critical element—but for the formal and informal proxies such as oligarchs, major corporations and broadcasting entities that are obviously linked to those states, especially when they are effectively one-party states with a different and non-democratic tradition.
Primarily, I am talking about Russia—in the past three months, the situation with Russia has changed from light to dark—as well as China, Iran and their proxies. Some in this country argue that such measures should cover countries such as Saudi Arabia, which is an ally—a close ally—but which does a great deal of lobbying in this country, as do other friendly states.
There is also a debate about how we treat people and about whether we should have one set of standards or a sliding scale. Do I think that Oleg Deripaska should be treated in the same way as New Zealand’s tourist board? No. It would be welcome to have a light regulatory process for foreign entities such as Sweden’s trade authority or New Zealand’s tourist board, but for a Russian oligarch—many of whom have been sanctioned, so this is slightly hypothetical—or a firm such as Huawei, we should insist on much higher standards.
Let me say by way of background that we know that, around the world, Governments and their proxies make extensive use of overt lobbying and influence campaigns. There is nothing inherently illegal about that, although some might consider it unethical. However, a number of hostile states—including, but not limited to, China and Russia—have utilised lobbying as part of their operations against our national interest. Arguably nowadays, covert influence is part and parcel of hybrid forms of conflict. Indeed, in both Russian and Chinese doctrine, hybrid conflict is specifically talked about in terms of military and non-military tools. In Russian doctrine, the first characteristic of modern contemporary conflict is the linkage of military effect with non-military effect, be that information politics, economics or suchlike, of which overt and covert malign lobbying are very much part.
I am glad that the Government have said that this is a problem. In 2019, they declared they would reduce the threat posed by hostile state activity in the UK; that is great.
Mr Steve Baker (Wycombe) (Con)
May I ask my hon. Friend to explain what he means by covert influence? Does he mean intelligence agents using the cover of being lobbyists, or something else?
Bob Seely
That is a good question; I am not sure I can define it. It is possible to define the outcome, which is trying to influence events in an unethical, potentially illegal way, while not doing so overtly—for instance, by the Russian intelligence service, the GRU. It is apparently not illegal for someone to be a PR person for the GRU. If they were given secret documents, it would be illegal.
Do I think a definition of covert influence should just be somebody working for what they believe to be a foreign state intelligence agency? No, I think it is much broader than that. It would cover people such as Russian oligarchs and Chinese corporations. The issue is that, in a one-party state, it is difficult to make a distinction between state entities, and significant and powerful individuals, who are using covert, non-declared forms of influence to project either their own power, or their own and state power. That is the issue.
I used to hate definitions, and then I did a PhD and found that definitions are rather useful, because one has to decide what one is talking about. One thing I thought was slightly disappointing, though maybe understandable, occurred when the Select Committee on Foreign Affairs looked at the National Security and Investment Bill. We put forward a suggestion for a definition of national security, which the Government did not want to include. A definition of some of these things would be highly valuable. I would certainly welcome attempts by the Government in that regard. In fact, I may do it myself, so I thank my hon. Friend for the question.
The Government said they would adopt a form of foreign agent registration, by looking at
“like-minded international partners’ legislation.”
The two most important, by some distance, are the Foreign Agents Registration Act process in the United States, and the Foreign Influence Transparency Scheme Act in Australia. FARA, in the US, came in in 1938 as a result of covert Nazi lobbying, and was very timely, three years before the US entry into the war. In 2018, the Australians adopted their own foreign influence transparency scheme, largely because of the role of Chinese covert influence in Australia. That has been well documented by the author Clive Hamilton, in his book “Silent Invasion”, which I recommend.
In the US alone, foreign agents spent nearly $1 billion a year over a three-year period influencing the US Government. In the US, it is big business, and I suggest it is also big business in the UK.
Stephen Kinnock (Aberavon) (Lab)
The hon. Gentleman is making an excellent speech. On the point of how clearly to define lobbying and influence, I can briefly give an example. In 2019, I wrote to the then chair of the Conservative party, the right hon. Member for Great Yarmouth (Brandon Lewis), who is now the Northern Ireland Secretary, raising concerns about a gentleman called Ehud Sheleg, who at the time was treasurer of the Conservative party. I raised concerns around national security and permissible donations, because of Mr Sheleg’s very close connections to Russia; his father-in-law was a pro-Kremlin politician in Ukraine at the time. The right hon. Member for Great Yarmouth chose to reply by threatening to sue me for libel. I would welcome the comments of the hon. Member for Isle of Wight (Bob Seely) regarding that response.
Last week, The New York Times revealed that Mr Sheleg had made a large donation to the Conservative party, which was connected to a gift he said he had received from his father-in-law that had bounced around five or six different bank accounts in Europe before landing in Mr Sheleg’s account. Does the hon. Gentleman believe that somebody like Mr Sheleg would meet the threshold for being registered as a foreign agent, even at the time that he was treasurer of the Conservative party?
Bob Seely
The hon. Gentleman raises a valuable point. I am not sure I can argue the details of that because I do not know enough about the individual case. Simply put, if that individual is deemed to be an informal agent of influence, he should be on a registration process. But that is a big if—if he is deemed to be. The question is, who would deem it?
There is a wider question. Would any Government willingly put China as one of those states that are using covert influence? They absolutely should do, but perhaps several years ago they would not have done so, because any Government, including new Labour, would wish to curry favour with China.
On the wider point about questionable behaviour, there are a number of Members of the House of Lords whose behaviour has frankly been questionable, and that is, I am afraid, on both sides of the House. There is a very well known and senior former new Labour Minister who set himself up as a strategist in order to avoid, frankly, giving up almost any information at all on who his clients are. Considering that that person was also a senior EU Commissioner, he was one of the most powerful people in the land, and he was conducting, probably—I do not know, because we know so little about his business—very powerful, high-level and discreet lobbying, including for Russian clients. There is also a former Labour Attorney General who has taken time out of the House of Lords primarily to give legal advice, seemingly to Russian state or proxy interests.
Is that healthy? Should those people be in Parliament? No. There are, unfortunately, Conservative Ministers who have also behaved, frankly, shamefully, including people who have advised Deripaska. What on earth these individuals are doing and why on earth we allow any of them in Parliament I do not know. I do not say, “Everything we do is fine and everything you do is rubbish,” because that is pitiful and embarrassing. This is a political class problem, not an issue with one particular party. That is the only thing I would say on that. I should probably crack on and make some progress, Dame Angela.
In the UK, no FARA-like legislation exists. The closest thing we have to it is the Transparency of Lobbying, Non-Party Campaigning and Trade Union Administration Act 2014. Which was brought in by the coalition Government. It made some progress, but not enough. It brought in a mandatory register for written and oral questions to Ministers and permanent secretaries by so-called consultant lobbyists. That said, the definition of consultant lobbyists is very narrow. In addition, the Act does not differentiate between clients and those represented, or between foreign and domestic clients.
Thus, a UK entity—be it a peer, a PR company, a finance house or a law firm offering a one-stop shop to oligarchs and other companies—can act on behalf of a foreign entity without that foreign entity being registered. To my mind, that is highly questionable. We know that hostile states are engaged in covert and overt lobbying activities. Most recently, and slightly embarrassingly for the Member concerned, we found out that our secret agencies were discussing one particular case of a Chinese lady working for a Member of Parliament—we all know which one that is.
Cultivating legal and overt, but also questionable and illicit, relationships with serving and retired politicians, civil servants—we often overlook them, but they, not MPs, are the policy experts and policy wonks—academic institutions, think-tanks and regulatory bodies, and using power and influence through an enabling class of finance and legal firms, buys power. Most repugnantly and obviously, this has been practised through the use of lawfare: intimidating legal actions designed to silence those who have attempted to look into, for example, Putin’s oligarchs. There are people here who have spoken out very eloquently on that issue.
The Intelligence and Security Committee’s Russia report highlighted the role of lobbying in the Kremlin’s subversive activities. We know from The Guardian’s leak of secret Russian documents that there was an attempt to influence the UK and US. We have had testimony from Bill Browder, talking about Russia indirectly employing public relations firms and helping Russian individuals to avoid EU sanctions. We have had the excellent book and work from Edward Lucas, who has argued much the same. We have also had this from the former Secret Intelligence Service agent Christopher Steele, who said that lobbyists are used to penetrate “British political and business life”.
None of this is ethical. We know about some of it not because we have good laws in this country to protect us, but because of the work of FARA—the Foreign Agents Registration Act in the United States. The only reason that we found out about the extensive lobbying done by one Member of the House of Lords, Lord Barker, on behalf of Deripaska—
Dame Angela Eagle (in the Chair)
Order. I remind everyone who will be contributing to the debate that the rules say that if you are going to identify a Member of the House of Commons or indeed the Lords—not necessarily by name—you have to have informed them in advance. Has the hon. Member done so?
Dame Angela Eagle (in the Chair)
I know this is a very difficult area. May I ask those who are speaking in the debate—not only the hon. Gentleman—to bear those rules in mind when they make their speeches?
Bob Seely
Obtuse and obscure.
Together with lawyers, accountants, estate agents, public relations professionals and other enablers, lobbyists have formed a buffer around these people. I know that the case with Russia is clearly changing very dramatically—it has been rather forced on us by conflict—but China is another important case that concerns me. I say that as someone who knows that the Government are moving in the right direction, and who is incredibly grateful for the work that the Secretary of State for Defence and the Foreign Secretary have done in this area.
It concerns me greatly that we have not yet made the link between China and Russia. The west has economic dependency on both, be it through trade or energy. Both those countries have dictators for life, and we know that power corrupts and that absolute power corrupts absolutely, so do we really think that President Xi will turn out to be better than President Putin? I would be sceptical. Both covet territory outside their control, both have aggressively rearmed and, perhaps most importantly, both propagandise their people against us and are shaping their people for war in the information and narrative space. China is more sophisticated and richer, and it arguably treats some of its people, especially its Muslim people, worse. It is a rising power, whereas Russia is a declining power, but there are too many similarities between them to claim that China is not Russia. It is a more sophisticated version and, as people such as Clive Hamilton argue, many of its covert activities are just more sophisticated versions of the same thing.
Like the Kremlin, the Chinese Communist party uses state, non-state and quasi-state actors through the United Front Work Department and “cultural and ‘friendship’ associations”. It is alleged to spend some $10 billion a year on external propaganda efforts. The Chinese state also makes use—perhaps more than Russia does—of quasi-state entities, and Huawei is a case in point. It has provided trips, sports tickets and donations to all-party parliamentary groups, and has employed a former head of GCHQ and a former UK chief information officer. It has also used several lobbying firms, and has employed a former head of Ofcom and even a former head of the Foreign Office.
In September 2019, Huawei gave £150,000 to Jesus College, Cambridge, which later produced a White Paper that was favourable to Huawei’s inclusion in the UK’s 5G network. It has done many other things; what I have mentioned is just the tip of the iceberg. What concerns me is that, while this was happening, Ministers whom I respect very much were arguing that Huawei was a private entity—a private firm. I do not expect Ministers to be geniuses, but that situation was uncomfortable.
Martin Docherty-Hughes (West Dunbartonshire) (SNP)
On the point about higher education selling its soul to the Chinese Communist party, surely it is not just the Government’s role to regulate their engagement with foreign actors. It is also for other entities in the country, such as higher education.
Bob Seely
The hon. Member makes a very important and valuable point. Cambridge University’s relationship with China is very unhealthy, and Professor Stephen Toope’s leadership of Cambridge has been pretty depressing and questionable. He is not here to defend himself, so I will be careful what I say, but I note that the more woke Cambridge has become, the more it seems to have sold itself to the Chinese state, which I do not think is necessarily a defence of the values that it should be standing up for.
I think that higher education would say it needs clear guidance from the Government. On the foreign agent registration process, it would be excellent if the Government had something to say on the need for universities to register and to explain why they are taking on some students, because we have had Chinese military students coming to study PhDs in sensitive dual-use areas. We need to question that to ensure that we are doing the right thing and that we are not aiding countries to develop technologies that will be used against us.
I will wrap up in the next five minutes, because I am aware that I have taken a long time—my apologies.
We need to improve lobbying laws. I suggest to the Government—I will write separately, but the Minister has the study I produced for them two years ago—five major reforms to tackle the issue of foreign lobbying in the UK, which I hope would create better law and a better National Security Bill when it comes up.
First, we must create laws to compel individuals and entities that lobby in the UK on behalf of hostile states and their proxies to record their activities on a national register. I hope the Minister will take this on board in the constructive way that it is intended. Consultant lobbyists are important, but they are only one part of the problem, as many of us know. Hostile or potentially adversarial states make use of non-lobbyist individuals and entities—cultural entities, educational entities, public relations consultants, research firms, reputation managers, law firms and banks. If someone does work that impacts on policymaking or the political world, they need to be registered. In this day and age we need a broad, not narrow, understanding of what that means for the public good, and for the honesty, integrity and transparency of the political system, which we all want to see improved and strengthened. Nobody wants to sleazify our political, economic or legal system, so we need a belt-and-braces approach, while understanding that the demands we put on the New Zealand tourism board would probably be very different from those we place on a foreign entity, such as Huawei or the Confucius institutes. I note that the normally rather left-wing country, Sweden, has banned Confucius institutes. Should we?
Secondly, we should create laws to force foreign Governments and their proxies to disclose when they spend money on political activities in the UK. Thirdly, we should create laws to bar foreign Governments and their proxies from providing political, financial and other support during election periods. As at least two hon. Members have said, there is a question mark about donations, and I know from previous debates that people with dual nationality are an issue. That debate is obviously not going to go away.
Fourthly, we should create laws to compel foreign Governments and their proxies to label and disclose materials and campaigns undertaken in the UK, including online, not only during election periods but more generally outside election periods, so that we know where advertising is coming from. People should be able to see those messages, which are perfectly legal, but they should understand their provenance. Fifthly, I would make those laws enforceable by significant criminal penalty, so that people who break the law and do not uphold high standards have an expectation that the punishment will be a bit more than a slap on the wrist.
There is a further series of options; they include the following. Should we have a one-tier or one-size-fits-all regime? Should we have a weak, moderate or strong regime? Should we have a two-tier system that either requires nothing of some foreign entities or has a low bar for the sort of information that is required? We have a laissez-faire approach, which is not entirely unhealthy; it is good for our economy. I recognise that we want people to be free to set up in business, and set up what they are doing in this country. My suggestions are not about creating layers of bureaucracy for the Swedish food producers association or the New Zealand tourism board, but every time Huawei hires a lobbyist, we should know. Every time Huawei approaches a Member of the House of Lords or the House of Commons, we should know. If people want to do work for these people, we should know.
People complain about MPs, but I do not think MPs are necessarily the biggest problem—I am not trying to do a mea culpa for us all. The biggest problem is the law firms and people with significant legal and financial power, who do not exist in as transparent a world as we do. Although clearly some of the most outrageous and obvious—how should one say it?—lapses of judgment are often seen in the political world, real power is also influenced by civil servants and Spads. It used to be influenced by the European Commission, though clearly no more in this country, and it is also influenced by significant legal and finance firms. If they are impacting, via lobbying, the business of politics and policy in this country, they should be covered.
I will give one example: Huawei. There is a case to argue that Huawei did not do that much direct lobbying for much of its existence in this country, but that it worked through BT, which effectively became the Huawei spokesman in this country and Huawei’s chief defender. BT may say, “It is rather more complicated than that,” but Huawei was, arguably, effectively influencing UK policy through UK firms that were in business with and economically aligned to Huawei. I think that became a significant problem in the last few years. I am delighted to have played a modest role in the campaign to ensure that Huawei was not part of the 5G network, which was absolutely the right decision. I thank the Government for listening to me and other Members on that issue, and indeed the US Administration as well.
To sum up—I thank hon. Members for giving me a little more time than I said I would take; my apologies—we need to substantially improve lobbying laws, because the laws we have are genuinely not fit for purpose. Do we really want to have these endless lobbying scandals in our legal and political culture, which come around like a carousel every few months, every couple of years? We have the chance to do something better; I very much hope that the National Security Bill will tighten that up. The Minister has been generous enough to say that she is sympathetic towards these arguments, and I thank her.
Within the domestic lobbying framework, there is a specific issue with foreign lobbying. As I said at the beginning, it is important to understand that, whether we think it and see it or not, other states see this action as part of a hybrid conflict model. It is almost the first line of attack—to try to shape our opinions, to try to separate us from the US and to try to get a narrative and message into our economic, legal, political and informational debates in this country. We want a free society, but we need to understand that we have to protect that free society. At the very least, people need to know where some of the messages and campaigns come from.
In this era, there is a battle between open and closed societies. We have seen that most recently from the Ukraine war, but we might see it in the future from China in a Taiwan war, or a confrontation with the wider world. We need to do what we can to defend the open society. The way we best do that is by ensuring transparency, honesty and integrity in our political system. Ensuring that we have strong and fair laws over lobbying and foreign lobbying is one of the critical ways we can do that.
Chris Bryant (Rhondda) (Lab)
It is a great pleasure to serve under your chairmanship, Dame Angela. The hon. Member for Isle of Wight (Bob Seely) can speak as long as he likes on this subject as far as I am concerned. I have had quite a lot of conversations with him in private. He is the House’s expert on this issue and he does us all an enormous favour in raising these issues.
I agree with him; I think we have been too naive for too long—ineptly naive, in some cases. The most striking statistic in this field that I have come across recently is that of the people sanctioned this year by the British Government in relation to the activity in Ukraine, at least 10—10 that we know of—were people who were given tier 1 visas by the British Government in the last few years. In other words, we were inviting people in, letting them sit down and purvey their view of the world in the UK, largely because we were just interested in their money. In the end, Putin has seen us be so craven about Russian bling and he has felt that we are weak and corrupted, and that has emboldened him. It is one of the things that has assisted in what has eventually happened in Ukraine.
Stephen Kinnock
I absolutely welcome, as my hon. Friend does, the Government’s decision to stop the golden visas scheme. Does he not think it would be incredibly helpful for the Government to publish their review into the scheme, which Parliament has been waiting for for more than a year?
Chris Bryant
I completely agree with my hon. Friend. Indeed, I am absolutely confident that the Minister will tell us later when it is going to be published, because the Home Secretary has repeatedly said, in answer to questions from me in the Chamber, that it will be published soon. “Soon” in ministerial language means pretty much anything the Minister feels like it means, but we are beginning to lose patience with the soon-ness, or the lack of soon-ness. The Minister is looking wry and quizzical, but I am sure she will help us out later.
I want to refer to one specific issue. On 8 March I wrote a letter to the Foreign Secretary following her appearance the previous day before the Foreign Affairs Committee. I published the letter on my Twitter feed. I wrote to her to address her allegation that I had obstructed the progress of sanctions legislation through Parliament. In the letter I quoted from various speeches made in Parliament, one of which included allegations made in 2018 against Mr Christopher Chandler. It was not my intention to repeat those allegations, which I accept have subsequently been disproved. I am happy to set the record straight today in Parliament and regret any distress caused to Mr Chandler.
Mr Steve Baker
I am most grateful to the hon. Gentleman for recognising that the allegations have been disproved. Will he join me in imploring all Members who engaged in making those allegations to accept that they have now been disproved?
Chris Bryant
I think it is a matter for individuals to make their decisions on that. I have said what I said and the hon. Gentleman knows why I said it. There is not a formal process for a Back-Bench Member to correct the record. That exists only for Ministers, although they have been notoriously poor at doing it. As the Speaker said at the beginning of this debate: if Members are able to correct the record, it is important that they do so.
I used to be a lobbyist for the BBC and I was always trying to persuade Governments to do things. In and of itself, lobbying is not a bad thing. Indeed, the word “lobby” comes from Parliament because it was the entrance to St Stephen’s Chapel, which was the lobby where people could grab hold of a Member before they went into the House.
I remember sitting on the Public Bill Committee for the Mental Health Act 2007. I was not an expert on the treatment of mental health patients, and my participation in that Bill Committee relied on lobbyists, some of them from mental health charities, some from patients groups, and some from the pharmaceutical industry. In the end I had to make astute judgments when people were trying to influence me, but of itself lobbying is not wrong, although it needs to operate under strict standards. Even foreign lobbying is okay, or we would not have a Foreign Office. Of course, it was Sir Henry Wotton, a Member of Parliament from 1614 to 1625, who, when he was a British diplomat in Augsburg, said:
“An ambassador is an honest”
gentleman
“sent to lie abroad for the good of his country.”
The Minister is nodding. I am not sure whether she is in favour of an honest gentleman or lying.
In this country, in the modern era, we have to be very careful about covert operations in the UK. I think that particularly because we are a free society, believe in the rule of law and have a democratic process that is very open, sometimes we are more vulnerable than others might be, and we have to be cautious and alert to pernicious lobbying from state actors and their proxies who do not wish this country well. That applies to not just a few countries, but quite a significant number.
I am aware, not just because of what I get myself but other Members as well, of attacks that are co-ordinated directly out of St Petersburg on individual Members of this House and the House of Lords, particularly those who have been critical of the Putin regime. The attacks are co-ordinated and are deliberately inciting. They hide behind anonymity and often they are fake accounts. It looks as though 100 people have attacked the individual Member, but that is because there are 100 fake accounts all created by the one person. We do far too little in this House to make sure that that is exposed and made clear.
I have often worried that the Government have repeatedly refused to investigate the Russian activity and determination to try to undermine the political process in this country. I note that this Prime Minister and the previous Prime Minister both said that they had not seen successful attempts to undermine British democracy. I do not know what success means in their minds when they say that. It seems preposterous that they will not investigate.
As the hon. Member for Isle of Wight says, the law courts are a very useful tool for proxies of state actors overseas who want to ensure that any criticism of them is closed down. We have seen several journalists and authors dragged through the courts, at extreme expense, by people with very deep pockets. I am hopeful that the Government will address that in legislation later this year. I also point to some broadcasters, such as Russia Today. I do not think any British politician from any political party should have taken money from Russia Today. It is a scandal that many took many thousands of pounds from Russia Today. All those who did should be completely open about it, because they have effectively and knowingly been not just useful idiots but deliberate agents of a foreign state. The same would apply to other broadcasters from other states, including Iran.
The hon. Member for Isle of Wight rightly mentioned advertising on Facebook. One of the ways in which Russia has sown discord and misinformation around the world is illustrated by the situation in Catalunya, which I am particularly aware of. There they put across all sorts of imagery that was later proven to be completely false. None the less, it got lots of clicks and got everyone very excited and condemning the Spanish Government, even though it was all proven to be untrue. We must take that deliberate attempt to sow discord in western societies very seriously. I have always wanted, and I still want—notwithstanding the objections—to end anonymity on social media. For some reason, people feel able to write things on social media under the cloak of anonymity that they would never think of saying to another person or writing in a letter that they had to put their name to. I think that is cowardice, but it is also disrupting the British democratic system.
I am not sure whether you, Dame Angela, are among the Members of Parliament on the Russian sanctions list. It is quite interesting that none of the Members of the Foreign Affairs Committee who wrote the “Moscow’s Gold” report a few years ago, which is deeply critical of the Russian Government, is on the sanctions list. I can only presume that we are on the hit list instead.
I wrote to the Russian ambassador to make the point that although they are alleging that all these British MPs are Russophobic, we are not Russophobic. We love Russia; we have loved the Russian people, though sometimes the television presenters do make one doubt their sincerity when saying that they love people regardless of their nationality. We are not Russophobic; it is just that we have a beef with the actions of the Russian state under President Putin. The ambassador wrote back to say that the list provided was just one of several sanctions lists that already existed, and that was one that they were now revealing. I can only presume that other people are sanctioned but we do not know about it.
Parliament is particularly vulnerable. I hope the Minister will take that away from this debate. We have hundreds of all-party parliamentary groups. The Committee on Standards, which I chair, has produced a report on this. The head of security here is very concerned, as are the two Speakers, about the vulnerability of the Parliamentary system because of the way that APPGs are funded, sometimes directly by foreign Governments and sometimes indirectly, and sometimes probably not as accountably as we would like. Some countries forbid members of their legislative body from taking any form of hospitality of any kind, let alone several thousand pounds-worth of trips abroad, from a foreign state. We should consider that.
I believe that it is important that British Members of Parliament have strong working relationships with Members of Parliaments in other countries, but we should fund that, not let it be funded on an ad hoc basis by other countries who may want to do us harm. I am one of the Members who went to Qatar. I went as a guest of the Qatari Government because I wanted to argue with them, really, about the way they intend to hold the World cup. I note that a large number of Members have been taken to Qatar at great expense by the Qatari Government over the past year. Is that appropriate? In the end, I wish I had not gone on that trip. I suspect we need to address that issue. Incidentally, the director of security in Parliament told us that the biggest anxiety was that these groups are not necessarily funded directly by the Governments, but by their proxies, through third, fourth or fifth parties. We need to tackle that.
In the US, Congress has to produce an annual report on the lobbying of Congress by foreign actors. Why do we not do that here? One of the House’s Committees should produce an annual report to Government, perhaps with the assistance of Government, on foreign states’ actions in lobbying Parliament.
I also think we ought to have a new offence of aiding and abetting a foreign state as a Member of Parliament or as a peer. I am not quite sure how I am going to word this—I hope somebody is going to help me with it; the Clerks are normally very good—but I think that there should be an amendment to clause 3 of the National Security Bill to address that.
My argument is that lobbying must always be in the open. Transparency is how we ensure that there is nothing pernicious, vicious or inappropriate going on. Ministers should reveal all significant attempts to lobby them in a timely fashion. The Standards Committee has produced a report today stating that we must end the current exemption whereby, if two Members of Parliament go to the same event that is paid for by a foreign Government or by anyone else, a Minister does not have to declare it for months and months and does not have to say how much it cost, but a Back-Bench or Opposition Front-Bench Member has to declare it within 28 days. Surely all Members should be treated equally.
That is why it is important that Ministers should reveal all significant attempts to lobby them, including via hospitality, tickets, dinners, accommodation, holidays, travel and individual meetings. For instance, it is an absolute mystery to me why the UK took so long to sanction Deripaska. Greg Barker—who is, I think, no longer a Member of the House of Lords—was effectively acting as an agent of Deripaska, who is now sanctioned because of his corrupt involvement in the Russian state. However, we did nothing about it. Why was that? I want to know.
What about Abramovich? Why did that take so long? There was even a moment when the Prime Minister though that Abramovich had been sanctioned, but it turned out he had not. I suspect that that was because the Home Office was saying, way back in 2018 and 2019, that Abramovich was a person of interest; in other words, he was dodgy and it did not want him coming to the UK, and therefore it was not going to allow his tier 1 visa to be renewed. However, the Foreign Office refused to sanction him. Was that because of the direct engagement of Abramovich with individual Ministers? I ask the question because we need to know the answer.
Finally, the hon. Member for Isle of Wight is absolutely right about the need for a proper register of lobbyists working on behalf of foreign agents. I do not think someone should be able to simply say that they have lots of clients in this House; they should have to list all clients in both Houses. For my money, I would also say that Arron Banks should have been on that list. Of course, when anybody is on that registered list, there should be a ban on Members of either House engaging with them financially or in any other manner.
We have been naive for far too long. We need to tackle all these issues, especially as they apply to state actors from Russia and China. Otherwise, we will lose the precious democracy that we believe in.
Jim Shannon (Strangford) (DUP)
Thank you, Dame Angela. It is a special privilege to speak in this debate. I thank the hon. Member for Isle of Wight (Bob Seely) for bringing this important issue to our attention and for his knowledge. It is a pleasure to follow the hon. Member for Rhondda (Chris Bryant), who has a deep interest in this matter. Both he and the hon. Member for Isle of Wight bring real knowledge to the debate.
I am someone who sees the benefits of lobbying, as referred to by the hon. Member for Rhondda, in certain circumstances in this place. Lobbying for the right reasons has changed my opinion and opened my eyes to many issues. It has helped to increase my knowledge and better understand subjects, and has provided me with information as a Member of this House.
Seeking to unduly influence a Member changes that. While we must all hold ourselves accountable for decisions, there is a role for restrictions or protections—a term that I would rather see used—to be put in place in this House, which should not point the finger.
On several occasions over the past few years, we have seen the impact that foreign lobbying can have on a democracy and the undue influence of some lobbying, which many Members have highlighted, that probably has its roots in Chinese or Russian politics. While the impact of some of that lobbying may inevitably have been over-emphasised, there is a root of truth that this House has not been untouched by Chinese and Russian influence.
It is a crucial that the UK has a platform to introduce safe lobbying, as there is nothing wrong with lobbying as long as it is done correctly and does not put our democratic process at risk. Democracy is the heart of the United Kingdom of Great Britain and Northern Ireland, so it is great to be here and to discuss how we can strengthen that in a positive fashion.
I thank the hon. Member for Isle of Wight for putting together his briefing on foreign interference. It had much detail and was powerfully put. It provides a real insight into the steps we can take to regulate our lobbying. Lobbying is a key characteristic of politics, domestically and internationally, for foreign agents. The issue lies in lobbying being part of the operation of foreign agents to undermine political institutions. That has been seen many times, not only in relation to China and Russia, but to other countries as well.
Countries such as Australia and the United States of America want to adopt legislation, such as FARA and the Foreign Influence Transparency Scheme Act, that aims to regulate foreign lobbying. It will mean that foreign agents and their proxies will be legally obliged to register themselves and make their activities public knowledge. I look to the Minister for her response about our future plans. Do the Government intend to do something similar to what Australia and the USA have done?
The UK and its respective devolved Administrations are also at risk of foreign interference. We are a leading democracy and, as the hon. Member for Isle of Wight stated in his report,
“a centre for the international finance, legal and media worlds”.
We are very much a kernel—a core—for that. The briefing notes accompanying the 2019 Queen’s Speech stated that the UK would work to
“reduce the threat posed by Hostile State Activity”.
We have seen attempts to manipulate devolution, which the Government confirmed in its own information relating to the Scottish referendum. It is my responsibility to ensure that Northern Ireland is protected against any foreign threat through illegitimate lobbying. Attention must be given to the four Governments within the UK, not just our Westminster Government. I return to my original question to the Minister and ask what action will be taken to ensure that the devolved Administrations —the Northern Ireland Assembly in my case—can have direct contact with the Minister in order to ensure that we can protect and rebuff the groups that are unduly lobbying?
Alongside the debate about lobbying is the issue around social media, which has never been more prominent in political life. Covert digital influence campaigns increase the scope for misleading information when it comes to election time, when foreign influences may pay an instrumental amount of money to portray false information. There are lots of false stories, and the media must address that as well.
Oligarchs, in particular those from Russia and other authoritarian regimes, act in the shadows with no regulation. As the UK is an open society with no legislation to check such things, that leaves us vulnerable to outside interference and cyber-attacks. Russia has used both state and non-state entities to partake in unauthorised activity in the UK. These have been described by the Chief of Defence Staff as the “grey area” between peace and war—how true that is.
Many tools involve military influence, but we must not forget political, economic and social influences as well. Owing to the UK’s lack of legislation, there is little transparency about what is actually illegal and worthy of punishment. The 2014 lobbying Act is narrow and out of date. Does the Minister intend to address that? If so, perhaps a timescale for consultation and ultimate legislative change would be helpful. That should allow for fuller discussion of the steps we can take to protect and preserve the political institutions of the United Kingdom of Great Britain and Northern Ireland.
In conclusion, I welcome ideas for the reform of foreign lobbying in the UK—particularly a law that compels individuals and entities lobbying in the UK on behalf of hostile and authoritarian states to record their activities on a national register so that we know who they are and so the protections that we need and desire can be delivered. The British public have a right to feel protected and deserve to know the full extent of foreign influence in the UK and the devolved institutions of Northern Ireland, Scotland and Wales.
This debate has been helpful, Dame Angela. I thank the hon. Member for Isle of Wight for bringing it forward, and thank others for their contributions. I very much look forward to what the Minister has to say and, indeed, to the shadow Minister’s contribution too.
Martin Docherty-Hughes (West Dunbartonshire) (SNP)
It is good to see you in the Chair, Dame Angela. As I sum up on behalf of my party, I cannot help but feel that this is a very British debate. I am unsure whether anyone here is particularly opposed to better rules for those lobbying on behalf of foreign Governments. The evidence—which the hon. Member for Rhondda (Chris Bryant) has alluded to on many occasions, not only in Westminster Hall but in the main Chamber—that it has damaged the fabric of our society, and of the national security risk, has been clear.
I fully expect the Minister to rise to their feet, acknowledge the issue and the pertinence of the rhetoric deployed by all of us here today, declare that something must be done, and, if they will forgive me, then do absolutely nothing about it. I would be delighted to be proven wrong, but this type of action has been trailed for quite some time without any evidence that we are any closer to either the stricter regulation of lobbying or any sort of foreign agent registration.
Now, that is not to denigrate the quality of any of the contributions made here today—from the hon. Member for Strangford (Jim Shannon), the hon. Member for Rhondda and, indeed, the hon. Member for Isle of Wight (Bob Seely). We did at least agree, I think, on the issues of higher education across these islands. I would say to the higher education sector that it must not only look in the mirror and reflect on what it sees in its relationship with the Communist party of China, but change what it sees.
On my party’s position, our ask is simple: the UK Government must follow the example set by ourcolleagues in the Scottish Government and create a fit-for-purpose lobbying register to improve transparency and accountability. The Lobbying (Scotland) Act 2016 came into full operation in 2018 and was designed to improve transparency of face-to-face lobbying contact between organisations and Members of the Scottish Parliament, members of the Scottish Government—including Scottish Law Officers and junior Scottish Ministers—special advisers, and the permanent secretary of the Scottish Government. Transparency International has called on the UK Government to replicate that and set up a comprehensive lobbying register for the United Kingdom Parliament that includes relevant information, and for the Advisory Committee on Business Appointments be replaced by a statutory body with sufficient authority and resources to regulate all that goes on here.
Members who pay attention to such things will know that my parliamentary group wrote to the Government’s anti-corruption tsar, the hon. Member for Weston-super-Mare (John Penrose), asking him to rapidly reform lobbying rules following the second invasion of Ukraine by the Russian Federation. When that secondary invasion began in February, as some Members have already intimated, we had a dismal roll-call—I will not mention any by name, Dame Angela—of the assorted MPs, Lords, former MPs, former civil servants, and the like, who had sold their expertise to firms linked to the Russian state. While it was certainly the most dismal example, anyone who had been paying attention—quite a few of them are in this room right now—had been warning about the dangers of allowing that sort of activity to go on unchecked.
I think the hon. Member for Aberavon (Stephen Kinnock) mentioned the Russia report, but it is vital that we do not get somehow embarrassed about bringing it up. The findings of this report, from a cross-party Committee with a Conservative majority, were clear: the arrival of Russian money resulted in a growth industry of enablers—individuals and organisations who manage and lobby for the Russian elite in the United Kingdom. Yet nothing—absolutely hee-haw, as I say in my part of the world—was done to implement it.
The biggest fear, especially when we are about to listen to a Minister smother—forgive me—an attempt at a proper legal framework for lobbyists with kindness, is that if we are unable to take full responsibility for those who lobby on behalf of a hostile regime such as the Russian Federation, then I wonder, really, who is going to take responsibility when this sort of thing happens again and again. Because we not just talking about Russia, as many here have alluded to today; plenty of people in debate have mentioned “communist” China. The resources and the global reach of Chinese Communist party-linked companies simply dwarf that of those from the Russian Federation. It might not be the most agreeable thing to say, but I think that one of them happens to be the Asian Infrastructure Investment Bank, which the UK led in setting up. While China is not necessarily a hostile state—I agree with my friend the hon. Member for Strangford—we certainly know that it is a hostile, anti-democratic economic and political competitor.
My biggest worry about those who work on behalf of states that are also nominally neutral, which I think the hon. Member for Isle of Wight alluded to—
Martin Docherty-Hughes
I will not disagree with the hon. Member on that, but I go back to the point I was about to make about states that are nominally neutral or even allied to the UK and how we hold them to account. I am thinking particularly about the Gulf states—nominally allies, yet ones whose Governments have shown themselves capable and willing to act in the most heinous ways on the territory of ostensible allies.
The jamboree for the real estate, legal and general enablers of Russian money might have ended, but let us be in no doubt: it is going to keep rolling on for all the rest of them, allies or not. The increasing gentrification and sterility of much of central London will become emblematic of the hollowing out of UK institutions on behalf of this global capital.
If that sounds bleak, that is because it is. But let me end with one final appeal to the Minister. It would give even this inveterate Scottish nationalist great joy to see our devolved Administrations lead the UK in implementing a proper system of lobbying regulation, which I alluded to earlier in my speech; but I am afraid, Dame Angela, that I will not be holding my breath.
Fleur Anderson (Putney) (Lab)
It is a pleasure to serve under your chairship, Dame Angela. I congratulate the hon. Member for Isle of Wight (Bob Seely) on securing this timely debate, ahead of future debates on the National Security Bill. There is much in his remarks that I and my colleagues would agree with. I absolutely share his concern at the insidious and growing influence of hostile state actors on these shores and in these very corridors, here in Westminster.
I agree with my hon. Friend the Member for Rhondda (Chris Bryant), who pointed out that we must be alert to pernicious lobbying from countries, but that not all lobbying is suspect, as the hon. Member for Strangford (Jim Shannon) also said. Much lobbying is necessary. Experts really do help us to understand the issues that we are making decisions on and can bring together constituents from across the country to tell us their views. I used to work for Christian Aid and WaterAid and was involved in coming to talk to Members of Parliament. What we need is an open and transparent system that we can trust and that does not give hostile actors undue influence or allow them to undermine that system. As my hon. Friend said, this debate should be enlarged to include not just Parliament but law courts, broadcasters, social media and all-party parliamentary groups.
We have heard myriad examples today from colleagues of how deeply foreign states have penetrated British political life and our economy. I am sure there are far more that we do not know about, which is really what much of this debate is about. From public relations firms employed by Russia to help individuals to avoid EU sanctions, to lobbyists who advocate for Kremlin-connected Russian clients and a whole host of pinstripe-clad enablers of states with interests and values counter to our own, foreign interference is a multibillion-dollar industry.
A particularly disturbing sector of this industry is lawfare, as Members have pointed out. Our courtrooms are not battlefields to be used to silence and destroy activists, journalists and politicians who are brave enough to shine a light on the places that foreign actors do not want anyone to see—or they should not be. The UK is becoming the global capital of the lawfare industry. According to a survey of 63 journalists in 41 countries, more cases were brought against journalists in the UK than in America and Europe combined. I hope that the Minister will address that later.
We also need to have a conversation about all-party parliamentary groups. Questions must be asked about their regulation and reform, and whether they are acting as conduits for improper access by lobbyists and hostile foreign states. Again, APPGs are useful; indeed, they are a really valuable part of our parliamentary system. However, we need to make sure that they are open, transparent and not being used by malign actors, in order for the system to be maintained and not brought into disrepute; otherwise, down the line, we may face having to stop this way of parliamentarians meeting to discuss important issues.
The hon. Member for Isle of Wight has put forward a number of practical proposals, some of which Labour has already supported or proposed. For instance, Labour would expand the scope of the statutory register of lobbyists to cover those who commercially lobby Government as well as consultant lobbyists, who are also known as in-house lobbyists. I agree that more definition is needed, because of the continuum that the hon. Gentleman talked about. We should not just give up on having a register because we cannot define things; we need definition, a register, and then for that register to be used.
In the hon. Gentleman’s report on foreign interference, which I have read, he rightly called for new legislation to curtail the influence of lobbyists during election times. That is quite right, which is why the Opposition have called for it too. I was on the Elections Bill Committee last year, and the shadow Front Benchers tabled a new clause that would have required the Government to consider measures to address foreign interference in elections, including the Office for Security and Counter-Terrorism taking the policy lead for protecting democracy and the operational role being given to MI5. Labour also proposed measures to stop overseas electors from being able to donate to political parties here in the UK, noting the concerns of the Russia report about the influence of foreign money in our politics.
Stephen Kinnock
My hon. Friend is making an excellent speech. Does she agree that it seems that there is a loophole, because the National Crime Agency and the Electoral Commission both say that they will not look into the real source of financial donations to political parties? They say that it is permissible if a donation has come from a British citizen or somebody who is on the electoral roll, and then they do not look into where the money may actually have come from. If a British citizen has received a large sum of money from someone who is not on the British electoral roll, the agencies do not look into the source of that money. What would my hon. Friend say needs to happen to close that loophole, which seems to be a massive gaping hole in our defences?
Fleur Anderson
I agree with my hon. Friend that more needs to be done about that clear loophole. The register that we are talking about needs to apply not only to Members once they are elected but to the time before elections, or that issue needs to be addressed with a separate register. It must be very clear where the money comes from. Too often, in the whole of this system, UK entities can be used as a cover for foreign entities. That is the problem we have now and it is not being addressed. I hope that the National Security Bill will address it; if it does not, it will not be addressing our national security issues.
For two years now, Labour has been calling consistently for the Government to implement in full the recommendations of the Russia report of the Intelligence and Security Committee, which was published in July 2020. However, those recommendations remain unimplemented.
Malign Russian money cannot continue to pollute our economy, our politics and our democratic institutions. However, I say to the hon. Member for Isle of Wight that I am afraid that his own Government’s record in this area suggests that they do not share our concerns. His party has accepted millions of pounds in donations from Russian-linked money in recent years.
Take Ehud Sheleg, for example, who has been mentioned already. He is a wealthy London art dealer whose most recent position was as the Conservative party’s treasurer. In February 2018, Mr Sheleg donated $630,000 to the Conservative party. The money was part of a fundraising blitz that helped to propel the Prime Minister to victory in 2019. However, Barclays bank has established that the money originated in a Russian account of Mr Sheleg’s father-in-law, Sergei Kopytov, who was once a senior politician in a previous pro-Kremlin Government in Ukraine. Again, it is a question of where the money comes from, which involves looking behind the initial donors.
There is the case of financier Lubov Chernukhin. Ms Chernukhin has donated £700,000 to the Conservative party, and in March, the Electoral Commission confirmed that the party had accepted another £80,000 from her. Chernukhin is the wife of a former Russian deputy Finance Minister under Vladimir Putin. She has now donated almost £2 million to the Conservatives, almost £800,000 of that during the Prime Minister’s leadership. The Prime Minister himself—I notified him that he would be mentioned—once played a game of tennis with the wife of a Russian former Minister in exchange for a $270,000 donation.
Successive Conservative Governments have promised for years to clamp down on foreign lobbying and dirty money. We have to ask why it has taken so long to do that. Is it connected to those donations? The Conservatives’ own politics has kept tripping them up.
The Conservative party does not have a monopoly of such connections, but Labour does share the concern so excellently articulated by the hon. Member for Isle of Wight, who introduced the debate, and does take foreign lobbying seriously, as shown by the amendments we tabled to the Elections Bill, which were voted down.
Labour would expand the scope of a statutory register of lobbyists. We would also establish an integrity and ethics commission. That would replace the current failing system and have power to influence the content of the ministerial code, initiate investigations of possible breaches of the code, and impose a range of binding sanctions. We would also ban people from lobbying for five years after leaving public office, and give the commission power to issue penalties for breaking the business appointment rules.
The hon. Member for Isle of Wight is right that foreign lobbying is a problem that must be addressed. The gap in legislation regulating foreign lobbying is threatening the UK’s national interest and its national security. The Conservative Government have paused, delayed and dithered, but now they must take action. I hope to hear from the Minister what that action will be.
The Parliamentary Secretary, Cabinet Office (Mrs Heather Wheeler)
It is a pleasure to serve under your chairmanship, Dame Angela, I think for the first time, and I thank you for the timely opportunity to debate this important topic. I thank in particular my hon. Friend the Member for Isle of Wight (Bob Seely), who introduced the debate, and express my gratitude to the good number of Members who are present today for their active participation in the debate.
As several Members have noted, the UK is a vibrant, international, open and welcoming country with which to do business. The Conservative Government will continue to welcome foreign investment and business to this country. However, in order to protect that openness and vibrancy, it is critical that we have robust measures to provide transparency on legitimate lobbying and have powerful tools to hand to deter illicit or harmful activity when that arises. To ensure transparency of legitimate lobbying activity, the Government regularly publish details of ministerial meetings with third parties, so everyone can see who Ministers meet with, and about what.
On illicit activity, let me first be clear that we have robust structures in place to identify foreign interference and, where necessary, take proportionate action to mitigate the threat. The recent Christine Lee case is an example of that.
We are going further. The Government have announced their plans to strengthen powers to tackle illicit finance, reduce economic crime and help businesses to grow. As noted in the Queen’s Speech, the Government will bring forward the economic crime and corporate transparency Bill, which will include measures to reform the role of Companies House and improve transparency over UK companies.
Martin Docherty-Hughes
Will the Minister confirm whether there will be an additional commitment from the Government to reform Scottish limited partnerships, which are a valuable conduit for dark money coming into the UK to undermine our democratic process?
Mrs Wheeler
I thank the hon. Gentleman for his pertinent question, and we will write to him with an answer to it.
The legislation will include measures to reform the role of Companies House and improve transparency with respect to all UK companies, and it will build on measures in the Economic Crime (Transparency and Enforcement) Act 2022, which was passed in March, to establish a new register of overseas entities, requiring those behind foreign companies who own UK property to reveal their identity.
Furthermore, as has been stated several times today, the National Security Bill, which was introduced to the House on 11 May, will provide our law enforcement and intelligence agencies with new offences, tools and powers to detect, deter and disrupt threats from those acting on behalf of foreign states with a harmful purpose in the UK, such as seeking by illegitimate means to influence public figures or target our democratic way of life. As my hon. Friend the Member for Isle of Wight helpfully mentioned, the Government have made it clear that there is a threat and they are seeking to address it.
Mr Steve Baker
During the course of the debate, I have checked the website of the Security Service, MI5. It defines espionage and concludes the definition as follows:
“It may also involve seeking to influence decision-makers and opinion-formers to benefit the interests of a foreign power.”
That firmly fits within this debate.
The Minister mentioned using illicit means, but could she please be clear? The Security Service does not refer to illicit means, but just “seeking to influence”. The crucial point is this: could MI5 be doing more to help Members of Parliament? The hon. Member for Rhondda (Chris Bryant) referred to people being “ineptly naive”. Is there more that the Security Service could do to brief Members of Parliament about what to look out for if we are to play our part in counter-espionage?
Mrs Wheeler
My hon. Friend makes an interesting point. One or two nights ago, a meeting about security was held for Members, which led to a very wide-ranging conversation. People have taken his point, and I am sure there will be another meeting. I am grateful for his suggestion.
As part of the National Security Bill, the Government will bring forward a foreign influence registration scheme, which will require individuals to register certain arrangements with foreign Governments to deter and disrupt state threats activity in the UK, bringing the UK into line with our allies, such as the USA and Australia, with their FARA and FITSA, as mentioned by my hon. Friend the Member for Isle of Wight.
Bob Seely
It is completely true that, hastened by war, we are now moving in the right direction; two economic crime Bills and the National Security Bill are going to be very positive. However, can the Minister give an indication of whether the Government will have a broad understanding of what constitutes lobbying, or whether they will have a narrow definition that lobbying is done only by “lobbyists”? It is the former, broader understanding of lobbying that would be the biggest help in framing the lobbying elements of the National Security Bill.
Mrs Wheeler
My hon. Friend has come to the kernel. He has put his point on the record, and I am sure the people in the Home Office will have heard his plea.
It is welcome that Parliament is paying close attention to this topic. I congratulate the Committee on Standards on its recent report on APPGs, mentioned today, which notes that improper influence and lobbying by hostile states is a key threat facing APPGs today. I welcome that report but, of course, it is a matter for the House to decide on the rules governing APPGs. The Government welcome any approaches that mitigate the risks.
I also want to confirm, with regard to foreign lobbying, that a business or organisation undertaking consultant lobbying on behalf of a Government outside the UK or an international organisation would be required to register and declare that Government or organisation as a client. To answer the right hon. Member for Rhondda—
Mrs Wheeler
Well, it is only a matter of time, I am sure. Regarding the Home Office report, I can confirm that the Home Secretary will provide an update imminently, in due course.
Mrs Wheeler
It is both.
Members have taken so much interest in the debate, and I appreciate the level and depth of information that they have brought to it.
Jim Shannon
I asked a question about contact with the regional devolved Administrations, in particular the Northern Ireland Assembly, regarding those in privileged positions, to ensure that the protocol and protections that will happen here can filter out to the regional devolved Administrations.
Mrs Wheeler
The hon. Gentleman is absolutely right. We must work in close conjunction with the devolved Assemblies on anything that happens in the UK Parliament.
Martin Docherty-Hughes
I hope that is reciprocated, and that things come from the devolved Administrations to this place. The Scottish Government already have the Lobbying (Scotland) Act 2016, which was implemented in 2018. I hope the Minister will listen to them on how that has impacted lobbying north of the border.
Mrs Wheeler
Indeed. That is a very fair point, and I am sure the Home Office will have heard it. To conclude—
Chris Bryant
We have a few minutes, so we might as well take them up. I will intervene twice, if the Minister lets me. The Committee on Standards has said that at the moment some Members chair an awful lot of APPGs for foreign territories. We have wondered whether we should not have a limit so that a Member is allowed to chair, say, only six or 10—certainly not 28. Perhaps it would be a good idea if Members were not able to receive any financial support from foreign Governments. Would the Government support those two measures?
Chris Bryant
I shall try another one. The hon. Member for Wycombe (Mr Baker) made a really important point, which is that most hon. Members have no understanding of whether somebody who comes through the door is operating on behalf of a foreign state. Of course it is up to us to make our own judgment calls, but there probably ought to be a means for a Member to ascertain confidentially whether the person they are dealing with is a person of concern to the Government. The Minister will not be able to answer that today, but will she take away the serious point that the hon. Gentleman makes?
Mrs Wheeler
I will take that away and reflect on it. That is a perfectly reasonable question.
Mr Steve Baker
Just as a point of information, there is a leaflet available to Members of Parliament—I think it is A5, folded over; a very short booklet—from the Security Service, which tells them what to look out for when they are targeted by foreign intelligence services. I hope all Members will take the opportunity to get one from the Vote Office.
Mrs Wheeler
This debate is giving us all more information than we had an hour and a half ago. That is very good news.
Thank you very much for chairing this debate so well, Dame Angela. I thank all Members for their contributions, and I wish everybody a good day.
Stoke-on-Trent: Video Games Enterprise Zone
(2 years, 5 months ago)
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Dame Angela Eagle (in the Chair)
I will call Jonathan Gullis to move the motion, and I will then call 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.
Jonathan Gullis (Stoke-on-Trent North) (Con)
I beg to move,
That this House has considered the potential merits of a video games enterprise zone in Stoke-on-Trent.
It is a pleasure to serve under your chairship, Dame Angela. I am delighted to be joined by my fellow Stoke-on-Trent Members of Parliament for the debate, as well as by the Minister—although she may feel that she has drawn the short straw in dealing with the combined might of the Stoke mafia.
In 2019, during the historic general election campaign, I first raised the idea of Silicon Stoke—a bright new future for our great city, which was once the heart of this country’s industrial revolution. I believe we have a huge opportunity in Stoke-on-Trent to be at the forefront of the new revolution, which will be digital. Having set out a vision for what Silicon Stoke could mean for the Potteries, I am incredibly grateful to Councillor Abi Brown and her city director, John Rouse, for buying into the idea. Since then, we have been united in promoting our vision for a Silicon Stoke, and we have taken it forward by setting up the Silicon Stoke board to create and drive progress. We have published our Silicon Stoke prospectus, setting out how Silicon Stoke could transform our city and local economy. Our prospectus sets out a vision in which Stoke-on-Trent can stand alongside the most hi-tech smart cities of the world.
In the same vein as Leamington Spa, which has its Silicon Spa down the road, we believe that Stoke-on-Trent has a massive opportunity to become a hub for the UK video games industry, as well as for digital and creative jobs more broadly. There is a huge prize waiting for us if we can make this a reality.
Jack Brereton (Stoke-on-Trent South) (Con)
I congratulate my hon. Friend on securing this excellent debate. We in Stoke-on-Trent know that we are the best connected for gigabit fibre broadband in the whole UK. We now have absolutely fantastic connectivity—better than any city in the country—and are putting massive investment into skills, including gaming skills. We also have much cheaper office space than almost any other city in the country. Does my hon. Friend agree that our city is the perfect location for these industries to move to and create the jobs we need to level up places such as Stoke-on-Trent?
Jonathan Gullis
I could not agree more with my hon. Friend, who is Stoke-on-Trent-born and bred. He is doing his city proud in representing it. There are so many fantastic reasons why Stoke-on-Trent is the right location for these industries, and I will discuss the gigabit installation that was provided by VX Fiber and Stoke-on-Trent City Council, with funding from the Department for Digital, Culture, Media and Sport that came under budget. We sent £600,000 back to DCMS because we are that efficient in Stoke-on-Trent—I look forward to boasting about that later.
The gaming industry is one of the most exciting sectors of the worldwide economy and it is growing year on year. It is far from the niche hobby that it used to be, and it now dwarfs the value of other entertainment media. The global market for video games is huge: approximately 3 billion people play games, and the market is worth around $180 billion. In the UK alone, there are more than 32 million players, and the domestic market for video games reached a record £7 billion in 2020.
Unlike other sectors, video games have been pandemic-proof. Last year, UK games revenue was up by 32% compared with 2019. Research by the international game developers’ association, TIGA, shows that between April 2020 and December 2021, the game development sector’s annual contribution to UK gross domestic product increased from £2.2 billion to £2.9 billion.
We should be proud that the UK is already a world leader in this area, with well-known developers such as Rockstar North in Scotland and Codemasters in Leamington Spa putting out some of the best known games, such as the Grand Theft Auto series. The industry is immensely valuable, and offers fantastic opportunities that are well paid, satisfying and future-proofed. About 80% of the games development workforce is qualified to degree level or above, and Rockstar alone has more than 650 staff in its headquarters in Barclay House in Edinburgh. TIGA has revealed that between April 2020 and December 2021, the number of creative staff in studios surged by almost 25%, and by an annualised rate of 14.7%, from 16,836 to 20,975 full-time and full-time equivalent staff. Additionally, the number of jobs indirectly supported by studios rose from 30,781 to 38,348.
The video games industry is also very much in line with the levelling-up agenda. The industry supports economic growth in clusters throughout the UK, with approximately 80% of the workforce based outside London. The UK has the largest games development workforce in Europe. In the era of global Britain, games development also offers us a fantastic chance to showcase the UK to the world. Games development is hugely export focused. with around 95% of games studios exporting at least some of their content.
Not only is the market for video games huge and ever growing, but there is a raft of media produced using the same techniques and technology. For example, Disney’s recent smash hit series, “The Mandalorian”, was produced using Epic’s Unreal Engine, which is one of the platforms that developers use to make games. Silicon Stoke is not just about games development; we very much hope it will propel Stoke-on-Trent to the forefront of other digital and creative sectors as well.
Jo Gideon (Stoke-on-Trent Central) (Con)
My hon. Friend makes a strong case for the video games enterprise zone. Our city is looking to attract the best creative businesses as part of Silicon Stoke. Already the pathways for future employment have been created through the work of the university, and the new digital and creative hub at Stoke-on-Trent College, with courses in virtual reality, 3D printing and drone technology. Creative company Carse & Waterman, which specialises in animated content using green screen and computer-generated imagery, reaches out to schools in our city to enthuse the next generation. Does my hon. Friend agree that we now need to incentivise more employers to develop our Silicon Stoke ambitions?
Jonathan Gullis
My hon. Friend is a doughty champion for the people and businesses of Stoke-on-Trent Central. I have had the pleasure of meeting the award-winning animators of Carse & Waterman, who have even worked on “Ant and Dec’s Saturday Night Takeaway.”
I know that my hon. Friend took the Chief Secretary to the Treasury to see the new technological hub at the Cauldon campus of Stoke-on-Trent College in her constituency. She is absolutely right that it is about incentivisation. As my hon. Friend the Member for Stoke-on-Trent South (Jack Brereton) said, we have the office space, the digital fibre connectivity, and the college and university-level education. All the infrastructure is there. What we need is for the Government to send a big message to the sector that Stoke-on-Trent should be its home, because there is no reason why it should not. With the exciting e-sports potential of the indoor arena—the only one that would be in existence outside London—I cannot think of a more exciting place than Stoke for the games industry to thrive.
The plan is for Stoke-on-Trent, which fired the flames of the industrial revolution and is famed for its coalmining and ceramics heritage, to be at the heart of the new digital revolution. What does Silicon Stoke mean in reality? As we set out in our Silicon Stoke prospectus, it means making Stoke-on-Trent the most digitally advanced city in the UK, achieving once again the renown it already enjoys for ceramics—a small but mighty city, punching way above its weight in the national economy. That will be achieved through a mixture of digital infrastructure, skills and securing opportunities for our home-grown talent to stay in Stoke-on-Trent and establish the Potteries as the best place in the UK to work in video games.
Harnessing the power of our city-wide full-fibre network and 5G data, we will: expand the provision of digital skills with the establishment of a full-fibre academy and by ensuring that every school is connected to the full-fibre network; grow the small and medium-sized enterprises digital sector, with support from Stoke-on-Trent City Council and the UK’s leading video games university, Staffordshire University; maximise the opportunity to deploy internet of things technology in our existing manufacturing sector; transform health and social care through improved digital connectivity; integrate smart technology into our city’s energy and transport infrastructure; and expand our reach as a leading hub of video games development and digital production, cementing our status as a leader in the sector with the construction of a specialist e-sports arena in our city centre.
Let me set out just one example of how we are going to realise this ambition and make Stoke-on-Trent the main character in the UK’s digital story. Since December 2021, the Potteries Educational Trust has been running a digital schoolhouse across the city. UK Interactive Entertainment’s digital schoolhouse is a national not-for-profit programme that provides primary schools with an opportunity to experience free creative computing workshops. The programme is supported by large gaming companies such as Nintendo, PlayStation and Sega. The trust has been offering primary schools across the city a free day of programming workshops: 17 primary schools have taken up the offer, with 1,694 pupils benefitting from 16,311 hours of digital enrichment. Staff are also benefiting, with 93 hours of staff continuing professional development delivered.
To further our ambition to establish a new digital cluster, Stoke-on-Trent City Council has commissioned a gaming report from TIGA—the network for games developers and digital publishers, and the trade association representing the video games industry—with Staffordshire University. Overseen by Dr Richard Wilson, who was kind enough to share his thoughts on Silicon Stoke in advance of today’s debate, the report will set out how we can grow the video games industry in Stoke-on-Trent. I look forward to presenting the report, with my hon. Friend the Member for Stoke-on-Trent South, to the Minister in the near future.
Having spoken to Dr Wilson, I suggest that we can grow a video games cluster in Stoke-in-Trent in the following ways. The Minister might want to take notes, because this is where our asks come in. First, building on the success of the video games tax relief, which was first introduced in 2014 and has led to average growth in industry headcount of almost 10% a year, the Government should raise the rate of that relief to match Ireland’s planned 32% rate. TIGA research shows that increasing the rate of video games tax relief from 25% to 32% would yield nearly 1,500 additional skilled development jobs, more than 2,700 indirect jobs and almost £200 million in additional GDP contribution per annum by 2025. Increasing the rate of video games tax relief would enhance the environment for making games in the UK and therefore indirectly support a games cluster in Stoke-on-Trent.
Secondly, the Government should introduce a video games investment fund. Difficulty accessing capital has consistently been one of the top factors holding back many games developers in the UK. The UK Government should introduce a video games investment fund to provide pound-for-pound match funding, up to a maximum of £500,000, for original intellectual property game projects. A video games investment fund would be able to support start-up studios and small studios, including in Stoke-on-Trent. Currently, no dedicated seed funding schemes are available to support start-ups in the games industry in the area, although the UK games fund, based in Dundee, does provide prototype funding of £25,000 for small studios. Research from TIGA and Games Investor Consulting has estimated that introducing a video games investment fund would, between 2021 and 2025, add £72 million in additional tax receipts for Her Majesty’s Revenue and Customs, while costing £26.5 million. In terms of yield, that is a 170% return on investment.
Lastly, we must enable Staffordshire University to support start-up studios. Other successful games clusters have that link already. For example, Abertay University in Dundee has a strong connection with local industry and operates the InGAME programme, which provides research and development funding to games businesses. In a similar manner, we must enhance the links between industry, higher education and local government locally in the Potteries. One way to do that would be through a new video games enterprise zone for Stoke-on-Trent. Since their introduction in 2012, enterprise zones have been a major success across the country, and there are now 48 nationwide. In 2015 the Government reported that the enterprise zones had created 19,000 new jobs and attracted £2.2 billion of private investment and more than 500 new businesses.
Locally, we have our own hugely successful enterprise zone: the Ceramic Valley enterprise zone. Located along the strategic A500 corridor and launched in 2016, Ceramic Valley has attracted thousands of new jobs, from JCB, Jaguar Land Rover and Amazon, all creating jobs locally. Backed by £3.4 million of investment by Stoke-on-Trent City Council and the benefits that come with enterprise zone status—including a business rates discount worth up to £275,000 over five years for businesses that move to one—Ceramic Valley has been a huge success for our city.
By setting up a new enterprise zone focused on games and interactive content, we could create a unique opportunity to put Silicon Stoke at the heart of the UK’s digital economy. The success of that kind of policy at national level is clear in the massive boom in the UK video games industry since 2014, when the video games tax relief was brought in. Having a similar tax break for local companies via a new enterprise zone would have a similar effect, turbocharging our local games industry. That enterprise zone could take the form of a more formal partnership with Staffordshire University. For example, there are already a number of university enterprise zones across the country.
Originally, four pilots were backed by £15 million of funding from the Department for Business, Energy and Industrial Strategy, with the universities required to match-raise £2 of match funding for every £1 of Government investment. The pilot schemes will be fully evaluated at the end of the scheme in 2023, but an interim report from 2018 found that the university enterprise zones had been successful in attracting new businesses on to sites at the universities, with tenants confirming that the university enterprise zone had led to a positive impact on their business activities. The four pilot university enterprise zones were set up specifically to attract high-tech firms to locate near universities.
We should adopt a similar model, but instead of focusing on high-tech firms it should focus on complementing what is already going on in Silicon Stoke. Potentially linked in with the existing centre of excellence that is Staffordshire University, which has a strong relationship with Epic Games, the creator of Fortnite, that initiative could rocket-jump Stoke-on-Trent’s ever growing digital offer. Staffordshire University has been exploring how to support video games businesses to set up locally, and a new video games enterprise zone could be the final piece in that jigsaw.
To some, Stoke-on-Trent may not seem like the natural choice for a burgeoning video games and digital cluster. However, as was written in The Guardian only recently, “something is stirring” in the shadows of our industrial heritage, and the scene is already set for us to become the heart of the UK’s video games sector.
Stoke-on-Trent is one of the new Zoom towns or cities where remote and flexible working is king. According to the recruit company Indeed, we are the third biggest growth area of that kind of work. We have an incredibly strong base to build on. We were one of the first cities in the UK to benefit from VX Fiber’s fibre-to-the-premises open access model, which brought gigabit-capable internet to the doorstep of homes across our great city. VX Fiber has hooked up just over 50% of homes across the city, and aims to have 150,000 serviced by the end of 2023. That £50 million network, in which the Government invested £9.2 million, will unleash a staggering £625 million into our local economy and form the bedrock of our digital -revolution.
Thanks to our successful levelling-up funding bid—again, done with my hon. Friends the Members for Stoke-on-Trent Central (Jo Gideon) and for Stoke-on-Trent South—Stoke will become the first city in the UK to have a stadium that specialises in e-sports. We will be able to make the most of the ever-growing e-sports market, which has a global audience of 500 million people.
Based in the constituency of my hon. Friend the Member for Stoke-on-Trent Central, the City of Stoke-on-Trent Sixth Form College was one of the first 44 trailblazer colleges that started teaching the new digital production, design and development T-level. It is one of the Government’s computing hubs, driving forward the teaching of computing in schools and colleges across the country.
Stoke-on-Trent College has formed a partnership with VX Fiber to open a full-fibre academy, which will offer courses on a huge range of digital skills, from motion capture, software engineering and drone mapping to underground radar surveying and electrical equipment maintenance and testing. As my hon. Friend the Member for Stoke-on-Trent Central pointed out, the college has also recently opened its new digital and creative hub at its Cauldon campus, part-funded by the Stoke-on-Trent and Staffordshire LEP with £250,000 to create sector-leading digital and creative learning facilities.
Staffordshire University, on our doorstep, is the leading university for video games in the country. The university set up its first video games course in 2004, with 55 students enrolled; it now offers roughly 20 different courses in this sector, with more than 2,000 students enrolled. The university is internationally recognised and ranks as the 13th best institution in the world for games design and development. Talent trained in Stoke-on-Trent has gone on to play a big role in the UK’s leading games studios. Some 31% of Codemasters’s staff come from Staffordshire University, while 20% of Rare’s staff are Staffordshire alumni and 13% of the staff at powerhouse studio Rockstar Games were trained in Staffordshire.
We now need to keep that talent in Stoke-on-Trent and avoid the brain drain. It is great that the games industry in the west midlands has already seen the biggest growth in the UK of 132% between 2017 and 2019, much of which is based in Birmingham and Leamington Spa. The next step is to get the games industry to take off in Stoke-on-Trent and Staffordshire. With our almost unrivalled digital infrastructure and local skills base, we make the perfect location for the UK’s next video games cluster.
I am pleased to say that, on the back of this strong foundation, businesses are taking note. With the size of our local talent pool and the shortage of talent elsewhere in the country, we are already starting to see companies set up in Stoke-on-Trent. Last year, the leading advertising agency VCCP opened a new office, in partnership with one of our leading digital businesses, Carse & Waterman, and staff from VCCP London have been working locally to raise awareness and provide training, work experience, mentoring and paid internships.
In conclusion, we have the perfect building blocks to make Silicon Stoke a reality. We have the top-notch infrastructure needed to capitalise on the innumerable opportunities the new digital revolution will bring. We have a long conveyor belt of locally trained talent, which starts in our primary schools—thanks to the Digital Schoolhouse—and continues all the way to Staffordshire University. We have a clear vision of how to seize this opportunity and the backing of the fantastic leadership team on Stoke-on-Trent City Council for our vision of Silicon Stoke. Levelling up is key to most video games, and with the extra boost a video games enterprise zone can provide, video games will be key to levelling up Stoke-on-Trent.
The Minister for Media, Data and Digital Infrastructure (Julia Lopez)
Thank you for your chairing this debate, Dame Angela. I am grateful to my hon. Friend the Member for Stoke-on-Trent North (Jonathan Gullis) for highlighting the important role that the video games industry plays in supporting very high-skilled jobs and levelling up across the UK. I appreciate the characteristic forcefulness with which he makes the case for his exciting vision of Silicon Stoke.
As my hon. Friend says, something is stirring in Stoke. It is a fantastic city with a very bright future and, through our investments in gigabit broadband—another area that I lead on—it is one of the best connected places in the UK. It is represented by three MPs who have great belief in and passion for the place they represent, and it has great local leadership from Councillor Abi Brown and one of our nation’s youngest Lord Mayors, Councillor Hussain.
I am glad to see Stoke’s three MPs in the Chamber—they are giving Teesside a run for its money as a powerful parliamentary lobby. They are united in their efforts to keep building on the city’s success story and proud history in the creative industries. I pay tribute to my hon. Friend the Member for Stoke-on-Trent Central (Jo Gideon) for her close working with Stoke-on-Trent College, Staffordshire University and creative businesses such as Carse & Waterman. I also pay tribute to my hon. Friend the Member for Stoke-on-Trent South (Jack Brereton), who was banging and clattering his pottery drum for the city in the dark days of the previous Parliament, long before these two 2019 upstarts came along.
I want to set out how we are supporting the video games sector to build on very strong growth, and how we think video games can contribute to our mission of levelling up the country. I will also talk about the importance of skills in achieving those goals. It is great to hear about the really strong partnership working between local MPs, councillors and educators in Stoke.
Jack Brereton
Can my hon. Friend the Minister think of a possible reason why the video games industry would not locate to Stoke-on-Trent? I cannot think of a single one.
Julia Lopez
I agree. With great digital connectivity and the partnership working between central and local government, there is a great story to tell about Stoke. It is certainly something that I will take back to my Department after the debate, as we look at the initiatives we are focusing on in the creative industries.
The video games sector, as my hon. Friend the Member for Stoke-on-Trent North rightly pointed out, is flourishing. It contributed about £2.8 billion to the UK economy in 2019, and that is reflected in the number of people employed in the sector, which has grown from 13,000 in 2011 to 27,000 in 2019.
The Department for Digital, Culture, Media and Sport is incredibly proud to support the growth of our creative businesses, and we are doing a lot of work to ensure that the games sector, in particular, can thrive. We are putting together a £50 million creative industries programme—a sector vision—as part of our spending review settlement, and I will take away some of the really exciting ideas that have been put forward. That includes up to £18 million invested in the Create Growth programme, which will help high-growth, creative businesses access finance across six regions in England outside London so that they can reach their growth potential. We will be announcing the regions for the Create Growth programme this summer. That builds on the success of our £400 million Creative Scale Up pilot programme, which to date has supported more than 200 businesses across three regions, increasing a total aggregate turnover of £13.5 million.
We have also announced specific support for the video games sector through a £800 million expansion of the UK Games Fund, which will accelerate the growth of the UK games industry. Since 2015, the fund has supported more than 190 early-stage video game development projects, and supported businesses that have the potential to grow and flourish. That builds a strong vibrant SME developer community. I am interested to hear some of the ideas that have been put forward, and I very much encourage small businesses in Stoke to apply for that programme.
My hon. Friend asked what more we can do to support local businesses through tax incentives. Obviously, a lot of this is outside my remit, but we recognise that the future growth of the games sector requires us to maintain our competitive edge in tax reliefs. We must ensure we that continue to be an attractive place to do business, given the global competition. Our games tax relief has strengthened the UK’s reputation as one of the leading destinations across the world to make video games, and it has really worked. Since it was introduced in 2014, it has supported 1,640 games, with UK expenditure of £4.4 billion. In 2020-21, the relief supported the development of 640 games. We have to ensure that we continue to be internationally competitive. We keep all these tax incentives under close review, and I will continue those discussions with the Treasury in advance of any economic statement.
In the 1970s, “Dungeons & Dragons” coined the term “levelling up” for when the player reached certain milestones. Since then, the notion has become a central feature of many popular video games. We take that forward as a mission in our levelling-up agenda. We think the creative industries play a critical role in supporting regions across the UK, and game development has been key, from Sheffield to Leamington Spa, from Newcastle to Bristol, and from Knutsford to Dundee. Some 55% of game development roles are outside London and the south-east, so it truly is a UK-wide industry. Video game clusters are engines for local economic growth and jobs throughout the country. The £39 million Creative Industries Clusters programme, run by the Arts and Humanities Research Council, has supported Dundee’s video games cluster through InGAME. I am keen to look at the lessons we can learn from that to see whether any of them can be applied to Stoke. The funding has created 337 new companies since 2020, and created or safeguarded 477 jobs.
We are committed to continuing that kind of cluster work and I want to see that success replicated in Stoke. It is great to see the investment in the Ceramic Valley enterprise zone and the announcement last week about the £56 million levelling-up funding that will be going to development opportunities in Etruscan Square and the transformation of Stoke’s Spode site.
We are also working extremely hard on digital connectivity. We invested more than £8.5 million through the local full-fibre network project, which has helped to incentivise commercial investment in the region, including the VX Fiber plan, which will be targeting more than 30,000 properties for a gigabit-capable connection. For those not in line for the commercially or publicly funded roll-out, we will be investing more in Project Gigabit. The procurement for Staffordshire, which includes Stoke, is anticipated to cover another 70,800 premises and will be taking place later this year.
Alongside robust growth and relentless innovation, we need to make sure that the skills are in place to help the video games industry reach its full potential. That is why we are working very closely with some of the bodies that my hon. Friend the Member for Stoke-on-Trent North mentioned. Our creative careers programme has given 27,000 young people hands-on experience with industry, through immersive events and work experience opportunities. The next phase of that programme, with a three-year grant competition launched this month, will launch fully later this year and do even more to support people, particularly those from lower socioeconomic backgrounds.
Specialist skills are needed to support video games, from development and production to art and sound design. In Stoke, there are a range of further and higher education study opportunities in place for routes into the video games industry, from diplomas in games design and programming at Stoke-on-Trent College, to games courses at Staffordshire University and Keele University. I know that Staffordshire University, in particular, provides an excellent pathway to a career in gaming. The university won the 2021 excellence in university and industry collaboration award from the UK video games industry trade association, TIGA—you say tigger, I say tiger; I am not entirely sure which one is correct, but we should probably call the whole thing off. The award is supported by a partnership with UK Games Fund’s Tranzfuser programme, which supports graduates to take an idea for a game to a playable reality.
Staffordshire University was the first university in the UK to offer a degree in e-sports in 2018, and now offers postgraduate courses too. That shows that Stoke-on-Trent remains committed to becoming a hub for gaming. I am really interested to hear more about the e-gaming stadium and hope to learn more as the proposal is developed.
I am pleased to see that funding from the Build Back Better scheme has been secured to create a virtual reality hub for Stoke-on-Trent College. We continue to invest in important opportunities for young people across the United Kingdom to get the resources and knowledge they need to progress exciting careers in the creative industries. I look forward to working with my hon. Friends to support regional hubs, not only to keep local talent, but to attract new talent from across the country.
As we have already said this morning, Stoke is a great place to do business, with low office rents, great digital connectivity and inspired leadership. With a vision like Silicon Stoke, there is a really exciting future that we can build here. I will take away some of the comments on tax reliefs. We will continue to work in partnership with local colleges and I want to look at the potential for a creative cluster. With the levelling-up funding in place as well, all kinds of things are going on here. I say to businesses across the UK, “Go to Stoke; it has got inspired parliamentarians who are working very closely with us in Government and with a diligent and energetic local leadership.”
Jonathan Gullis
We would love to welcome the Minister to meet the Silicon Stoke board members, and to have a joint MPs’ roundtable with leading actors in the sector—some are in Stoke and some are not—so we can help get the message out about why Stoke is a great place to be.
Julia Lopez
I thank my hon. Friend for his generous invitation, which I am sure I will be able to take up shortly. I commend him and my hon. Friends the Members for Stoke-on-Trent South and for Stoke-on-Trent Central for their passionate vision for the great city that they represent. I thank them for the debate today.
Question put and agreed to.
Cost of Living: Fiscal Approach
(2 years, 5 months ago)
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Dan Jarvis (Barnsley Central) (Lab)
I beg to move,
That this House has considered the fiscal approach to tackling rises in the cost of living.
It is a pleasure to serve under your chairship, Mr Twigg. I am grateful to see so many Members present, although they appear—almost without exception—to be on the Opposition Benches. It is good to see the Minister and the shadow Minister in their places. I want to put on the record my thanks to Unison, which is working tirelessly to help its members through these toughest of times, and to Anna Birley, for her efforts with the research I will be quoting shortly.
It is not my intention to speak at great length. I am aware that colleagues wish to contribute and I want to ensure they get the opportunity to speak up for their constituents. However, before I begin, I would like to say a few words about the tone of the Government’s response to this crisis—not just for the next 90 minutes, but beyond. This is the most serious issue facing our country. Some of my constituents in Barnsley Central are facing an emergency, and the Government are providing nowhere near enough relief.
I want to share the words of a working single mum who contacted my office as an example of the indignity, pain and sacrifice happening up and down the country right now:
“I have not eaten for 2 days due to saving as much as possible for my son to get by until payday. I honestly can understand why so many people feel there is no other way than to end their life. It is humiliating to beg for food.”
She does not want Ministers telling her to work more hours when British workers already put in the longest shifts in Europe. She does not want Ministers telling her to buy non-branded food on the weekly shop when people are so desperate that baby milk is now being security-tagged in supermarkets. Most of all, she does not want Ministers telling her that the Government cannot ease her pain when that is simply not the case.
We are all aware that the effects of this crisis are almost boundless, but I will focus my remarks on the impact on public sector workers. Barnsley was left devastated by the pandemic. The suffering endured will live long in our memory, but so too should the resolve of those who pulled us through—not least our NHS staff, our carers and our educators. They are too often taken for granted, but their true value was there for all to see during our darkest hour. How quick we are to forget.
Unison research found that two in five health workers have had to ask family or friends for financial support in the past year. Roughly the same number are taking on extra work just to make ends meet. Nearly every member of school support staff that Unison surveyed—96%—was worried that they did not have enough cash to cope with the rising cost of living, meaning that a quarter have had to take on a second or, in some cases, third job.
The treatment of those on whom we relied so heavily and so recently is unacceptable and untenable. It is unacceptable because they deserve better. They paid their dues 100 times over, and the Government need to do right by them. It is untenable because it is exacerbating a staffing crisis. Public sector pay is lagging behind the private sector, and the long-term effect could be severely detrimental to services.
Take our NHS as an example. Already, 500 nurses and midwives quit every single week. We are at risk of losing thousands of low-paid staff because of that gulf in pay with the private sector. While Morrisons guarantees workers £10 an hour, there is an ad for a porter on the NHS website for £9.65 an hour. While UPS pays drivers more than £16 an hour, the NHS pays just £10 an hour. Public service workers have already endured more than a decade of pay restraint, and it cannot continue. Public sector workers need a pay rise that reflects not only the cost of living crisis, but their true value to wider society.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
The hon. Gentleman is making an excellent speech. The public sector workers in my vast, remote constituency underpin life—I am thinking of health workers, people who keep the roads clear and everyone else. Given the sheer distance involved, however, everything we buy up in my part of the world, from a bar of soap to a washing machine, is that much more expensive due to the cost of getting the stuff there. However, these people are on similar rates of pay to those mentioned by the hon. Gentleman. Does he agree that, in addressing this hugely important issue, the remote location of parts of the UK, such as the west country or Wales, should be taken into account?
Dan Jarvis
The hon. Gentleman is fortunate to represent a beautiful part of our country. There are some particular pressures on the rural economy, and he is absolutely right to highlight them.
An NHS worker in Barnsley with two decades of service recently contacted me to say that 63% of the meagre pay rise she received went back into the Treasury coffers because she was on universal credit. She said:
“Having worked throughout the pandemic, pushing my children from pillar to post as after school clubs and usual childcare arrangements were cancelled, so that I could work on the front line—often with COVID positive patients—please can you tell me how the government can morally justify this?”
Perhaps the Minister can try to justify it. If not, will she outline what progress the Treasury has made in making the funds available for a long overdue and much deserved pay rise for those who quite literally risked their lives for us?
Soundings from No. 10 suggest that several Ministers, including the Prime Minister, are pushing for further public service pay restraint, but wage inequality is going through the roof. Research by the High Pay Centre reveals that the ratio of chief executive officer pay to that of medium earners is 63:1—almost doubling in a year—so it is telling whose pay Ministers are willing to restrain. By giving porters in our NHS enough money to put enough food on the table, the Government would protect public finances by avoiding a staffing crisis. Awarding a fair pay rise is morally and, critically, economically the right thing to do. Problems are being caused not just by what our key workers are seeing in their payslips each month, but by what is being taken out by stealth—the cost of working.
I have two suggestions for the Minister, both of which would lessen the burden on key workers and have an immediate impact. The first is about mileage rates. According to a survey by Unison, three out of four health workers who use their cars for work say that the current mileage rates do not cover prices at the pump. Care workers, environmental health inspectors, social workers and community healthcare staff are all out of pocket for doing vital work. Some 9% report that high petrol prices and out-of-date mileage payments mean that they have had to cut down on patient visits. More than half the workers at one South Yorkshire hospital say that mileage payments not covering costs is having a severe financial impact on them.
Her Majesty’s Revenue and Customs is responsible for setting approved mileage rates, but they have not been updated since the 2011-12 tax year. National Joint Council rates for local government workers have not changed since 2010, and NHS rates have not been updated since 2014. Ending the mileage rates freeze would put an average of £150 back in the pockets of workers over the course of a year.
The Minister will no doubt point to the Chancellor’s 5p fuel duty cut, which—let’s be honest—is modest, but some retailers stand accused of failing to pass on half that amount. Petrol and diesel prices are at record highs, so more needs to be done. Will the Minister provide an assurance today that the Treasury will conduct an immediate review of mileage rates—a review that would encourage and include provisions for the NJC and the NHS to do the same?
My second suggestion is on car parking fees. Not everyone can use public transport to get to work. Between a quarter and a third of the healthcare workers Unison spoke to in South Yorkshire use a car because of the lack of public transport. That is what makes reintroducing hospital car parking charges so wrong. Three out of five staff at one South Yorkshire hospital said that the reintroduction of car parking charges will have a high or extremely high impact on them financially.
Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)
Does my hon. Friend agree that it would be wise for the Government to look to the Welsh Labour Government, who have scrapped all car parking charges at NHS hospitals in Wales? It is a small measure, taken with a number of others, but supports the hard-working staff he is talking about.
Dan Jarvis
My hon. Friend raises an important point. Yes, I would point to the story that is being told in Wales, and to the benefit and value of Labour in power, leading by example.
I am aware that night shift workers remain exempt from car parking charges. However, it will still cost NHS staff £90 million a year to park. The Government cannot allow the price of parking their car to become the straw that broke the camel’s back for our health workers. Will the Minister provide an assurance that she will meet with ministerial colleagues in the Department of Health and Social Care as soon as possible to find a way to scrap all car parking charges for NHS staff? It is plain for everyone to see that the Government’s plan is not working. When plan A fails, the Government’s reaction should not be to keep repeating the plan, it should be to formulate plan B. Let us see what tomorrow brings.
Finally, the incredible Barnsley Foodbank Partnership supplied 8,000 food parcels in the 12 months to March—that is up 60% on pre-covid levels. Now demand is up and donations are down, as more people struggle with the cost of living crisis. I honestly do not know how some people have got through the last few months, and I dread to think about the sacrifices they will have to make to get through the next few. It does not have to be this way. If the Government grasp the seriousness of what people are facing, and act now, we can avoid a social catastrophe. I hope the Minister will consider the suggestions that I have made, and that others will no doubt make today, in the spirit that they are offered. Our public sector workers—indeed, our entire country—deserve better than this.
Several hon. Members rose—
Derek Twigg (in the Chair)
I am not going to impose a hard and fast rule, but I hope that Members will be considerate and keep their speeches to no more than five minutes. That will ensure that all colleagues get in on the debate. I am going to implement a hard and fast rule on the start time for the wind-up speeches. The SNP spokesperson will start no later than half past three.
David Linden (Glasgow East) (SNP)
It is a pleasure to serve under your chairmanship, Mr Twigg. As I am sure other Members will do, I pay tribute to the hon. Member for Barnsley Central (Dan Jarvis) for securing this debate and setting the scene so eloquently. I also pay tribute to Unison for its work on the issue. Most of us will have seen the briefing note that came out; I commend everything in it. As the hon. Member for Merthyr Tydfil and Rhymney (Gerald Jones) made reference to hospital car parking charges, he will be aware that it was the SNP Government in Scotland who lead the way on that—not helped by private finance initiative contracts organised by the previous Scottish Labour Executive. I will not seek to be party political any further in the course of this debate.
Something that I have found difficult over the last few months, particularly since the beginning of the Ukraine crisis, has been people talking about the cost of living crisis as if somehow it is a new thing; it is not a new thing. It has been exacerbated by 12 years of Conservative austerity. In many respects, we are right to call it a crisis, but it is something we have been dealing with for quite some time. I would argue that it is not just a cost of living crisis. Ultimately, at its most fundamental level, it is a low pay crisis.
The UK Government like to talk about the living wage, and I am sure we will hear the Minister do so, but we know that to refer to it as a living wage is to inadvertently mislead the House. It is not a real living wage. It does not reflect the true cost of living for many of our constituents, and it is nowhere near the benchmark set by the Living Wage Foundation.
The UK Government must look at whether that real living wage is fit for purpose. As most of us know from our constituency postbags and surgeries, it is definitely not. The Government should also look at the pay discrimination baked into wage rates in the UK. The reality is that 16-year-old apprentices are still being paid roughly only £4 an hour. A young person on £4 an hour certainly does not get cheaper products at the supermarket as a result of their age. They should not be getting a lower rate of pay.
There are other things we can do. We should absolutely look at a windfall tax. That has become incredibly topical in this place, with people talking about putting a windfall tax on the likes of Shell and BP. I would like them to pay a windfall tax. There is no doubt that they are doing immensely well out of the current crisis. Why not also consider an additional windfall tax on supermarkets and Amazon? We know that the future of work is changing and that our high streets are struggling very much. That is a natural consequence of consumers using big, out-of-town supermarkets and getting goods delivered from Amazon. Given that they are doing very well out of this, perhaps we should consider putting a windfall tax on them as well.
The UK Government should also increase benefits in line with inflation. I was really disappointed when they legislated for a real-terms cut to benefits earlier this year. The people whose benefits are being cut are among the poorest and most vulnerable in society. This is no time to leave them behind. They do not have the disposable income to make a slightly more difficult choice at the supermarket. Let us increase benefits in line with inflation.
If the Scottish Government, who have a fixed budget, can uprate benefits by 6%—I accept that that is still below inflation—the UK Government, with all of their borrowing powers, should be able to do so, too. In reality, the biggest difference between the UK and the Scottish Government is that the UK just puts it on borrowing.
We should also reinstate the pensions triple lock. Pensioner poverty is on the rise and we do not talk anywhere near enough about it in this House. The fact that we have one of the lowest state pensions in western Europe should be a stain of embarrassment for this Government. They like to go around talking about being a global Britain, while pensioners are literally having to choose between eating and heating. I ask the Minister to reflect on that.
We should also reinstate the £20-a-week uplift to universal credit in the social security system. The Government were right to concede at the beginning of the pandemic that social security was inadequate in its current form. It was inadequate in March 2020, and, by the way, it is still inadequate now. Taking that £20 a week away from families means that they are losing £1,000 a year when they can least afford it.
Jamie Stone
Carers for the elderly, the infirm and the sick are crucial in remote parts of Scotland such as my constituency. I have carers pulling out, giving up and calling it a day right now. I am sure the hon. Gentleman agrees with the hon. Member for Barnsley Central (Dan Jarvis) that we must look again, as a matter of extreme urgency, at—how shall we put it?—payments for carers and the regime for taxation on mileage for them and other health workers who have to travel. It is a crisis right now.
Derek Twigg (in the Chair)
Order. I remind Members who take interventions to bear in mind that I am trying to keep speeches to around five minutes.
David Linden
Thank you, Mr Twigg. I am coming to the end of my remarks. I pay tribute to the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone), who is himself a carer. More can be done on mileage, and I certainly echo the calls for HMRC to reform it. The Government need to look again at the carer’s allowance, because it is inadequate, particularly south of the border.
There is one last thing that I would like the Government to reflect on. I appreciate that there are massive ideological differences between me, as someone who believes that the state has a big role to play in people’s lives, and the Government, who undoubtedly do not believe that. However, given that Select Committees are receiving evidence from senior figures that the economy is in an apocalyptic situation, the Government should be considering placing price controls on food. I appreciate that they would not be naturally comfortable doing that, but we cannot end up in a situation where our constituents are not even able to choose between heating and eating and are instead left with nothing at all. I know that that view will be borne out.
In closing, many of my constituents have less than £10 in their bank account. They cannot afford to nip down to the local shop for the most basic provisions. Yet we have a Chancellor, who is responsible for the fiscal approach, who managed to spend £10,000 to nip down to Wales for a Tory gala dinner. That strikes me as the action of someone who is quite out of touch, which might be why we are having this debate today.
Derek Twigg (in the Chair)
I remind Members that you can see on the clock what time it is.
Emma Hardy (Kingston upon Hull West and Hessle) (Lab)
It is a pleasure to serve under your chairmanship, Mr Twigg.
On Sunday, Michael Lewis, the chief executive of E.ON, announced that 1 million of its customers were already in arrears with their fuel bills. He expects that to rise to half of all its customers—4 million people—by October. The National Institute of Economic and Social Research predicts that more than 1.5 million households will see a rise in food and energy bills that will outstrip their disposable income. That means a quarter of a million more families sliding into destitution. Of course, the Bank of England already expects inflation to reach double figures and fears that a recession is on its way. This situation is unprecedented and it demands urgent action from the Government, but none appears to be forthcoming. I am very grateful to my hon. Friend the Member for Barnsley Central (Dan Jarvis) for securing this debate and I hope that the Minister can take away some suggestions for the Chancellor.
I want to focus in particular on the poverty premium. The rising cost of living hits those on the lowest incomes the most, through what is known as the poverty premium, which is a term for the hidden costs of poverty. Why does it exist? There are a number of reasons. Ideas about the fairness of essential products and services are based on an idealised version of the average person as a super-consumer. A super-consumer never becomes ill, always has a steady income that is sufficient to meet their outgoings, is able to understand all terms and conditions, and always has the time, energy and resources to shop around for and find the best deal. Clearly, that is a long way from reality for most people. There is a disconnect between policy makers and regulators, and the everyday experience of poverty and exclusion. This idealised consumer plays a role in that disconnect, as does the growing lack of social mobility, which means that an increasing number of policy and decision makers have no first-hand knowledge of what choices are actually like for someone experiencing hardship.
The ideological belief is that competition can meet all consumer needs and that freedom of choice exists for everybody. Even though we have seen markets fail time and again, with disastrous consequences, this nonsense is still held as an article of faith by the current Government. The question, then, is this: if the market is king, what happens to those people the market does not want? What that means is that policies and regulations are failing to acknowledge reality or to meet the needs of this large section of our population for whom the market does not wish to provide.
The poverty premium means, for example, that if someone cannot afford a direct debit bill for fuel payments and their income is uncertain, they pay more. If they are put on a prepayment meter because of problems paying the bill, they pay more. If they cannot afford to buy items in bulk or take advantage of multi-buy offers, they pay more. If they have an insecure income or a non-salaried job and they need a loan or credit card, they pay more. If they live in a deprived area and need car insurance to get to work, they pay more. That all adds up to extra costs that have a huge impact on those living in low-income households.
A study by Fair By Design shows that some households in places such as Hull face a poverty premium of £490. That is equivalent to 14 weeks of shopping—at least it was at the time of the study, but we expect that that sum will only have gone up. We can guarantee that, with inflation rising, the poverty premium is increasing all the time, such that the amount of food that people can buy is decreasing.
Whenever solutions to the poverty premium are proposed, or whenever questions are raised, the buck is passed between different Government Departments and regulators, and we go back to the earlier point—namely, that the market will provide. However, markets are not designed to be inclusive, and they do not have the necessary policies and guidance to achieve that. Therefore, the products that they provide are not designed to be inclusive either.
The good news, however, is that there is an opportunity to change this situation. The proposed financial services and markets Bill provides an opportunity to ensure that the Financial Conduct Authority “must have regard” to financial inclusion. A “must have regard” requirement would not pull the regulator into carrying out social policy, but ensure that the FCA has a statutory requirement to consider financial inclusion issues across all its work, wherever appropriate. It would also require the FCA to obtain the evidence it needs on market failures around financial inclusion, so that it can determine the areas of most detriment, how those issues can be resolved and which bodies are best placed to resolve them.
It is important to stress that neither the new consumer duty on which the FCA is currently consulting nor its consumer vulnerability guidance will address the situation, because both primarily deal with the treatment and the experience of consumers who already have access to those retail products, not the people I am talking about who are priced out of essential services because of the poverty premium. The only way to ensure that low-income or vulnerable customers can access essential services and products is to give the FCA a clear remit on financial inclusion.
This is a cost-free measure—it would not cost anyone anything. I will table amendments based on financial inclusion and I urge the Government, the Minister and all Members here to work with me in supporting them.
Grahame Morris (Easington) (Lab)
It is always a pleasure to serve under your chairmanship, Mr Twigg. I congratulate my good and hon. Friend the Member for Barnsley Central (Dan Jarvis) on securing this important debate and on the powerful way in which he articulated the arguments in his speech.
I want to focus on one issue: the need to replace council tax with a proportional property tax. I want to demonstrate the inherent unfairness of council tax. I have some figures that I hope the Minister will find interesting, as they compare my constituency with hers. A proportional property tax would help families to address the cost of living crisis. It would also support the Government’s levelling up agenda and protect those on low incomes who may be disadvantaged by the reforms. I will explain how that will work.
I start by highlighting that 77% of households—more than 18 million—would benefit through a proportional property tax, with the average household saving £556 every year. A proportional property tax would replace council tax, bedroom tax and stamp duty. Outside London, regional economies would benefit from an overall reduction in property taxes of £6.5 billion, which would be a substantial stimulus for communities in need of levelling up and support those communities most in need. For example, under a proportional property tax my constituents would gain, on average, £900 a year compared with council tax. In the Minister’s South East Cambridgeshire constituency, two thirds of households would save money under a proportional property tax, averaging £350 a year. I hope this is something on which there could be cross-party consensus.
If we look at the effect on the constituency of the Minister’s colleague, the Chief Secretary to the Treasury, the right hon. Member for Middlesbrough South and East Cleveland (Mr Clarke), we will see that his constituents would receive almost £900 a year, similar to the amount that would be received by my constituents. Most people would benefit from this policy.
Grahame Morris
As I was saying before the Division, most people would benefit from the policy of moving from council tax to a proportional property tax. It is certainly true that there will be a small minority of cases where people on a low income but living in a high-value property could struggle, but that is perfectly possible to mitigate at the point of transition. Those struggling to pay the increase could have any rise capped at £100 a month. For those still unable to pay, options could be made available to defer payment until they can afford to pay or until the property is sold.
Council tax is unfair and the inequalities are stark. A £3 million property in Wandsworth pays less than 0.1% of its property value in council tax. We can contrast that with my constituency, where the average household pays more than 2% of the property value in council tax.
A simple system would also reduce admin costs by up to £400 million a year. The tax levied would reflect current property values, instead of the values as they were in 1991. Councils would no longer be forced to chase down council tax debts from people who were unable to pay, as payment can be deferred under a proportional property tax until the sale of the property.
Council tax is one of the most unfair and regressive taxes, taking a disproportionate amount from communities and individuals that can ill afford to pay but that often have a much higher demand for council services. Will the Minister explain why the current system of council tax is fairer than a proportional property tax? If she cannot, will she make the case for change to the Chancellor? I ask my Front Bench, in all humility, to reach out to the Fairer Share campaign. I would be delighted to facilitate a meeting. I think there will be substantial electoral dividends for the political party or parties willing to pick up the baton of a proportional property tax to replace council tax and include it in their manifesto at the next election.
Tim Farron (Westmorland and Lonsdale) (LD)
It is a pleasure to serve under your chairmanship, Mr Twigg. I congratulate the hon. Member for Barnsley Central (Dan Jarvis) on his excellent opening remarks and on securing this debate.
There is a tide of poverty, terrifyingly large, growing in every single community in our country. I wonder what the point of this place is if we do not seek to meet the needs of people who literally cannot see how they can put food on the table for their children, pay their bills or pay their rent or mortgage. It is a crisis like no other facing this country.
I will focus my remarks on how that tide of poverty is affecting rural communities such as mine in Cumbria and elsewhere in the country. In my constituency, we have incredibly low unemployment—very low. Pretty much everybody I know, particularly those on low wages, are working multiple jobs. The idea that they can do extra hours or get a better-paid job is a colossal insult to them, as they work tirelessly to provide for their families. The massive majority of people in receipt of universal credit in our communities in Westmoreland, South Lakeland and Eden are in work. They work incredibly hard, but their wages do not keep pace with the rapidly rising cost of living.
The cost of living in an area such as our is exacerbated by the cost of housing. The average house price in my constituency is about £270,000 and the average household income is about £26,000. Do the maths: nobody on an average income can afford anything like an average home in our community. There is extra pressure, because the pandemic has massively increased the housing need in our area. We have seen the absolute evaporation of the long-term private rented market into the holiday let market. In my community, there has been a 32% rise in one year in the number of homes going into the holiday let sector. What were those holiday lets beforehand? They were people’s homes—family homes. People were evicted via section 21s—something the Government said they would abolish in their manifesto—and the availability of properties for those families to live in was diminished.
In parts of Devon, there has been a 70% reduction in the availability of long-term lets that are affordable to local families. It feels like the lakeland clearances are going on in our community. In Ambleside, a couple, both of whom worked, with children in the local school, were given their marching orders—they were evicted via section 21 from the rented property they had lived in for several years. There was nowhere else available in their community to rent, as everything else had gone to Airbnb or become a second home, so they had to give up their jobs, their children had to be removed from their school, and the family had to move to the next county in order to start all over again. It is miserable, and the consequence for our economy is huge.
What does it mean for our workforce? In the dales town of Sedbergh, which is a relatively small place, with fewer than 2,000 houses, there were 103 job vacancies as of last week because there is nowhere affordable for anybody on a modest, moderate, average or low income to rent, never mind buy—that is for the birds in the current era. That impacts on business. Some of the poorest people I know in communities such as mine run their own businesses. They pay and keep their staff—they cannot recruit enough staff—and they pay themselves less than the minimum wage. They live on next to nothing; they live in poverty.
Another huge problem that affects rural communities such as mine is fuel costs. Many of my constituents are not on the mains, so there are no energy price caps, no matter how high and ridiculous the prices are for people who run their property off liquid gas or oil. If someone wants to get the bus just one way from Kendal to Ambleside to get to their job, they have to spend more than an hour’s pay. Likewise, fuel costs are much more impactful when people have to travel miles and miles. My hon. Friend the Member for Caithness, Sutherland and Easter Ross (Jamie Stone) also mentioned the huge impact on the care sector. We cannot recruit people to care for people in their homes.
We cannot miss the impact that the Government’s fiscal policies are having on farming. This year the Government are taking 20% of farm incomes without replacing them for 98% of the farmers in my community. That has an impact on rural poverty in communities such as mine throughout Cumbria. It also impacts on our ability as a country to produce food, and that means rising food prices for everybody else. It is morally wrong and incredibly stupid.
Of course the Government should be taxing the energy companies and redistributing that money to ensure that people are not in penury. Of course they should be cutting VAT to help people. The bottom line is that press releases will not pay bills. The Government need to act now.
Derek Twigg (in the Chair)
I will now impose a four-minute limit on Back Benchers, and I will call the SNP spokesman no later than 3.41 pm.
Rachael Maskell (York Central) (Lab/Co-op)
It is a pleasure to serve under your chairmanship, Mr Twigg. I thank my hon. Friend the Member for Barnsley Central (Dan Jarvis) for bringing forward today’s debate.
I will always recall Mo Mowlam telling the story of a pensioner who came to her surgery, put their pension book in front of her and laid out the bills they had to pay—the sums did not add up. When Labour came to power, we restored respect and dignity to people and made a difference to them. We never thought we would return to the days in that story, but we have—and worse. When my constituents make hard choices because their bills and income do not add up, they too struggle to understand how they will get through the next three months, let alone the autumn and winter. They are having to make those hard choices every day, making pristine accounts and budgets just in order to survive. One constituent debated whether she would end going to the day centre, her only social contact. Another said that, when she went to the food bank, she had to select foods that did not require cooking. Those are real choices that my constituents are making right now.
If the bill drops through the door, and you dare to open it before reaching for help, your mind is in the echo room, with your mental resilience evaporated. That was the case for one of my constituents when they fell short by £3.45 on their utilities bill. That spiralled out of control and did not end well. That is the reality that people are living in. As many hon. Members have said, the Government have solutions in their hands, if only they would see this as a priority.
Wages are so low that people cannot survive on them. These are the people who never received those promised pay increases, particularly in the public sector, which did not even get 1%. Meanwhile, people paid themselves profits in the many multibillion-pound companies that benefited from Government handouts during the pandemic. The Government need to put the money where it will make the greatest difference. People will spend that money in the local economy, which is how we can get the economy moving. The pay remits should focus on those at the bottom of the pay scales, ensuring that they get not just percentage increases, which benefit the best paid in the workplace.
I, too, want to concentrate on housing. In York, we have a low-wage economy but an extortionately high cost of living because of the housing crisis. The house price to earnings ratio in York is 8.21 and rising. The rental cost figures published just this week show a rise of 10.2% over the past year, averaging £945 a month—35% of people’s income. We need rent controls to hold down those rents. People are not only using their hard-earned money to pay for a roof over their head, but that money is being extracted from the local economy.
We have seen family homes, which people would have bought and lived in in the past, being bought by investors who turn them into Airbnb lets. We have lost 1,785 homes into the Airbnb market, extracting more money out of our local area. We need those reforms now, to stop the crisis getting worse.
Yasmin Qureshi (Bolton South East) (Lab)
It is a pleasure to serve under your chairmanship, Mr Twigg. I thank my hon. Friend the Member for Barnsley Central (Dan Jarvis) for securing the debate.
My constituency, a place I am proud to represent, is the 38th most deprived in the UK. We have a wage crisis, a job crisis and a housing crisis. Now we have a Tory-made cost of living crisis, which my constituents literally cannot afford. It is a major issue, and it is filling my constituency mailbag and, I am sure, those of other Members. A recent survey by 38 Degrees found that it is the No. 1 issue facing constituents: 80% faced higher bills, 76% faced higher petrol prices, and 24% have lost income due to the universal credit cut. I wish I could stop there, but the testimony is even more telling. A constituent who wished to remain anonymous said:
“I am a pensioner with a lung health problem. I cannot afford to heat my home, which makes the health problem require greater medical attention, putting more strain on the NHS.”
Petrol is becoming almost unaffordable. In just eight months, a tank of petrol has gone up by roughly £17.50, so 5p off fuel duty will not begin to cut it. In areas such as mine, people are dependent on cars, because we have poor public transport links. As a result, the only affordable option has now become incredibly expensive. As my hon. Friend the Member for Barnsley Central said, we must ask the Treasury to rethink the mileage cost allowance, at least for public sector workers, and to abolish hospital car parking charges.
The Bank of England is predicting a recession, interest rates will go up, as will the energy cap in October and again in 2023, and the inflation rate could pass 10%—the list goes on. There is so much that the Government could do but have refused to. Labour has called for a windfall tax to provide support to households. We could increase universal credit back to what it was throughout the pandemic, and cancel the national insurance rise. Those are measures that the Government could take, but they are refusing to do so.
Short-term policy responses will not put money into the pockets of working people; only a long-term plan to address the crisis will do so. The war in Ukraine has shown how important energy security is. We need to invest in renewables and nuclear energy, as the Labour party has pushed for, to end our dependency on foreign nations. That would create proper jobs on a living wage. We also need to invest heavily in our infrastructure—trams, trains and metros—to create further economic effects and to green up our nation. Again, that will create jobs.
As I find myself saying time and time again, this is an issue not of how but of political will. Sadly, I think it is an issue that the Government will continue to avoid, while the Opposition parties rightfully make the case for proper support. Our constituents are suffering; it is about time that the Government did something to help them. It is not surprising that no Conservative Back Benchers are present—they know that what is happening is indefensible.
Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)
It is a pleasure to serve under your chairmanship, Mr Twigg. I congratulate my hon. Friend the Member for Barnsley Central (Dan Jarvis) on securing what is an extremely timely debate, given that this is the biggest issue facing our country and our constituents.
The cost of living crisis is causing great hardship in Merthyr Tydfil and Rhymney, and right across the country. We desperately need measures to tackle it and, at the very least, an emergency Budget that introduces a windfall tax to bring people’s bills down now. Yesterday’s news that the energy cap could increase to £2,800 in the autumn is truly frightening.
The Government do not seem to have a plan. During the Queen’s Speech debate, the Prime Minister hinted that help would be announced “in the coming days”, only for the Treasury to announce in the following hours that that was not the case. That is an example of the lack of a joined-up approach across Government.
Recently, I met my local citizens advice bureau, which highlighted growing hardship across the constituency. I was alarmed to hear that overall client numbers have doubled in recent months. Queries about energy have increased by 250%, which is evidence of the fuel poverty crisis, and are now mainly about support to pay fuel bills. Debt numbers have increased by 200%, and council tax debt is now the biggest issue. That is worrying, as those are household debts. Probably most worrying, however, is the massive increase—more than 500%—in requests for food bank vouchers and other charitable support. My local food banks operate in challenging times and, on a number of occasions recently, have come close to running out of food, given the huge demand.
The fact that nothing in the Queen’s Speech tackled this growing crisis demonstrates that the Government are not listening or, if they are, that they are failing to act, which shows a shameful lack of compassion. A windfall tax would be a start. As we have heard, it is grossly offensive that energy giants are announcing their highest ever profits—recently, Shell announced profits of more than £7 billion in the first quarter of the year—and yet the Government have so far refused to implement a windfall tax. At the same time, people are struggling to choose between heating and eating. The Government must rethink their approach. We need a proper plan, and we need it now.
We also know that many public service workers are out of pocket from just doing their jobs. Many use their cars to do their job, such as care workers and social workers, who visit vulnerable adults and children. They are now repaid less than what they spend on petrol, thanks to the out-of-date HMRC mileage rates. I support the call of my hon. Friend the Member for Barnsley Central to review those rates.
It is clear that public sector pay is also key to levelling up, as public sector workers make up one in seven employees in every region of the UK. In the north-east, Wales, Scotland and Northern Ireland, increasing public sector pay would provide a boost to the economic regeneration of the country, given that we are seeing the steepest drop in living standards since the 1950s. The Government have levers at their disposal, and they must use all of them to help ease the huge pressure on thousands of families across the country. Talk on this issue simply is not enough; we need action, and we need it now. I look forward to the Minister’s response and hope that she can demonstrate that the Government will act, and act quickly.
Derek Twigg (in the Chair)
I am afraid I will have to reduce the limit again, to three minutes. I call Jim Shannon.
Jim Shannon (Strangford) (DUP)
Thank you for calling me, Mr Twigg. I am very pleased to speak in the debate, and I congratulate the hon. Member for Barnsley Central (Dan Jarvis) on leading it and setting the scene.
I will give some examples of how the cost of living crisis is affecting my constituents. There are people in my constituency who have to choose between putting on their heating and feeding their children. Increasingly, they have to decide whether they can help their widowed, elderly parent to heat their home as well. These decisions are happening in my constituency each and every day, and I have no doubt whatever that they are the same everywhere else.
Inflation has reached its highest rate since 1982, and gas prices have increased by 95%. Consumer prices are up by 9%, electricity prices are up by 54%, and 11% of the working-age population of Northern Ireland live in absolute poverty, so I look to the Minister for help. A constituent has informed me that she pays her gas bill by direct debit, which means that if she does not put the money in, she does not get gas. She has gone from paying £54 a month to £178 a month, and her electricity bill has risen three times in the past year. She and her husband both work full time, and even with her husband’s second job it is impossible to make ends meet. I would probably refer to them as the middle-class poor. She has a seven-year-old, who is a talented young musician. Even if the violin is rented, there is still money to be spent on the girl. My constituent is on the threshold for aid, but the Government have refused to lift the threshold in line with inflation, and she simply does not have the money.
At a time when costs are skyrocketing, people in employment are paying more national insurance than ever before and it cannot be sustained. After the luxury of a music lesson, there is a school visit, the school play or other essential extracurricular activities. The middle-class working poor have been under incredible pressure for the last few months, but they are even more so now. Those currently earning above £25,000 will pay more national insurance contributions and income tax after 2022-23. The Government keep on telling us that they are helping, but would they consider delaying the increased payments for now, given that it would have a significant impact on workers who are already struggling? The Ofgem chief has referred to the energy price cap, which is expected to rise by £830 and reach £2,800 in October. Again, we need reassurances about the long-term strategy to enable us to get beyond the next six months.
No longer are working families saving to go on a foreign holiday or putting in new kitchen cupboards. They are living from hand to mouth. As that is the case, I believe that the Government can and must intercede in a constructive and practical way. I have asked about delaying the increase in national insurance contributions, and I have asked for a six-month strategy to enable people to have some idea of what the costs will be. In the next six months, prices will rise by £600.
Matt Rodda (Reading East) (Lab)
It is a pleasure to serve under your chairship, Mr Twigg. I thank my hon. Friend the Member for Barnsley Central (Dan Jarvis) for his excellent work in securing the debate, and for his powerful speech.
In the time allowed, I would like to raise three key points about the cost of living crisis that is facing families and pensioners throughout the country—first, to raise some matters relating to my constituency; secondly, to point out some of the additional pressures on public service workers and key workers; and thirdly, to call for a robust response from the Government.
I will start with the points about my constituency. For Members who do not know Reading and the neighbouring town of Woodley, we are lucky to have a buoyant local economy. However, wealth is not spread evenly throughout our community, and many people live in older properties, which are very hard to heat. We have a large number of Victorian terraces, which are attractive to look at but very costly to the residents.
I want to highlight a couple of powerful cases that have come into my office. More than 60 people have contacted me and my team in the past few weeks about the cost of living crisis, which illustrates that this crisis is being felt everywhere, including in the south-east of England.
The first instance is of a woman who is a teaching assistant, who contacted my team in February in deep financial distress. Before the hike in energy bills, she was already struggling to make ends meet. Her take-home pay at that point was around £1,600 a month, but the cost of renting in our area was £1,150. She is extremely worried about the dramatic rise in her energy bills and, as a single parent, is very concerned about looking after her son.
I heard from another constituent—a young man living in a shared house—who is also single. He describes himself as working full time “on an OK wage,” meaning that he is not entitled to any kind of benefits. With rising costs, especially after the update in energy prices, his monthly bills are already above his earnings. He has spoken to his employer, who has very kindly listened and tried to respond, and he is due to get a pay rise. However, that will still not be enough to make ends meet. At the moment he is having to dip into his savings to cope, which is obviously not sustainable.
These cases show the scale of what we are facing around the country, including in areas with quite a buoyant economy. They highlight the need for urgent Government action.
My second point is about the particular pressures facing public service workers and key workers. I am sure that everyone across the House would agree on the vital role that those workers have played during the past couple of years. Whether that is our wonderful NHS, teachers, police officers or people working in supermarkets, it is absolutely incredible what they have taken us through, and I ask the Minister to consider the position they face.
Richard Burgon (Leeds East) (Lab)
Today, I want to make a proposal. We have heard a lot recently about a windfall tax. We have even heard that the Prime Minister might be about to U-turn and deliver one. To make a real difference to people’s lives, it must raise serious funds, so today I call for £10 billion to be raised via a windfall tax on North sea oil and gas giants to help deal with the cost of living emergency.
Let us be clear: people’s bills are so high because North sea oil and gas companies are making vast excess profits. Those excess profits are not the result of innovation or extra investments; they are an undeserved and unexpected windfall that has come about simply because oil and gas prices have spiked as a result of the horrific war in Ukraine.
We have a choice. Either oil and gas companies continue to make eye-watering levels of excess profits or we use a windfall tax to help people through this crisis. Using figures from the Office for Budget Responsibility, we can estimate that North sea oil and gas companies will make post-tax profits of £15 billion in the financial years 2021-22 and 2022-23, which is almost £13 billion more than they would have made based on their average annual post-tax profits in the three years before 2020-21, when oil and gas prices started to increase. I therefore think it perfectly reasonable for £10 billion of that £13 billion to go to the taxpayer.
Before we hear the claim that such a tax would undermine investments, let us remember that BP has even admitted that a windfall tax would not affect its planned investments. Of course, some in the Conservative party who put profit before people may scream and shout about such a plan. However, the truth is that this is an emergency that people are living through, and in that context we need emergency measures.
Of course, the level of windfall tax that I propose will not be enough by itself. We will need windfall taxes on the wider energy sector and across other sectors that are making excess profits. We will need price caps on key essentials and we will need wealth taxes. However, a windfall tax to raise £10 billion will make a real difference to people’s lives, and we should get on with delivering it. The Government can and should do it. It is necessary and it is the right thing to do. They should get on with it now.
Peter Grant (Glenrothes) (SNP)
I am pleased to begin the summing up for this debate, Mr Twigg. I commend the hon. Member for Barnsley Central (Dan Jarvis) for securing the debate and for his introductory remarks. Given that he devoted a lot of his speech—a number of other Members have mentioned this—to the debt we owe public service workers, I hope I may crave Members’ indulgence for a few seconds to give a shout out to one public sector worker in particular. Dr Fiona De Soyza retires today after 37 years as an NHS doctor—31 and a half years at Leslie Medical Practice in my constituency. She is not planning to retire from the 38 years she has served so far as my wife. Obviously, I would rather be there, but my duty means that I have to be here.
The Bank of England Governor, Andrew Bailey, told the Treasury Committee that we should expect “apocalyptic” food price rises before the end of the year. Archie Norman, the chairman of Marks & Spencer, said that food prices could rise by 10% this year, on top of the increases that we had already started to see last year. There are warnings that schools will have to cut the size of school meals to keep their budgets under control. The Institute for Fiscal Studies has reminded us that there is not a single rate of inflation; everyone has their own rate of inflation, and the poorer someone is, the bigger that inflation rate is. That is because, the poorer someone is, the more of their household money, by necessity, is spent on the things that are now spiralling out of control. Someone on an MP’s salary does not have to spend three quarters of their money just to keep themselves and their family fed and warm. Someone on minimum wage—or below—does.
At the same time, the number of billionaires in the United Kingdom is the highest it has ever been. The wealthiest people in the United Kingdom saw their personal fortunes increase by 10% last year. We are very definitely not all in this together. While I have no question about the sincerity of all those who have spoken against Government policy today, I do need to gently point out to Labour colleagues that right now their party in Scotland is doing deals with the Tories, all over Scottish local government, to help the Tories have an influence that the voters of Scotland wanted to deny them at the ballot box in the first week of May. When we are talking about the iniquities of this Government at a UK level, why are some parties in Scotland putting the Tories into power to run, and all often probably ruin, local government services?
The Government’s response so far has been nothing short of shocking. First, they pretend it is nothing to do with Brexit. They say that it is partly caused by the war in Ukraine, and that there is no doubt that covid has had a significant impact. Then somebody called “global” seems to get the blame for everything the Government get wrong these days. We have got a Chancellor who increases the burden of taxation and thinks it is a tax cut; a Chancellor who thought it was silly to give money to people who are poor to help them pay their bills; a Chancellor who tweets figures showing that the economy is shrinking and says, “Isn’t it good that the economy is growing?”; a Chancellor who increases national insurance, knowing perfectly well that it will hit people who work for a living and benefit people who are able to make a fortune from investment and property ownership. I wonder who the Chancellor knows who might benefit from that.
Valid points were made about the inadequacy of mileage rates paid to a lot of public sector workers, but people who work in the private care sector very often do not even get those—they often have to pay their own mileage and drive on their own time between appointments. It is now widely leaked by the Government that there is an emergency package of support coming. We might even see a U-turn on the windfall tax, not because it is morally the right thing to do, but because they need something—anything—to keep the Prime Minister with his glass of beer off the front pages for the next couple of days. What an example! What a perfect metaphor for the utter iniquity of this Government that they will not spend money to help people because they need it, but they will spend public money on trying to keep the Prime Minister’s misconduct off the pages of the newspapers.
What could they be doing? The windfall tax has been mentioned, and I am quite happy to support that in principle—not just for oil and gas companies, as has been mentioned, but for anybody who has made huge profits through good luck during the last two desperate years. The Government could follow the example of Germany, which has cut fuel duty five times as much as the United Kingdom. It is giving a €300 payment to everybody, plus €100 for every child. Ireland is giving a €200 energy rebate for everybody—not a loan that they have to pay back, but a grant. Belgium cut VAT on energy to 6%. That was something the Government told us we were not allowed to do when we were part of the European Union. How come Belgium was able to do that?
Scotland, without even the full powers of a normal nation, will be increasing the Scottish child payment by the end of the year to £25 per child. That has been described by the Child Poverty Action Group as a “game changer”. The Scottish Government are currently spending more than £360 million above Barnett funding on benefits, including through seven new benefits that do not exist anywhere else in the UK. The Scottish Government were not set up to spend Scotland’s money fixing the failures of the United Kingdom Government, but all too often, that is what they are having to do.
Poverty is not an essential part of today’s life. Poverty is not inevitable in the United Kingdom today. The United Kingdom boasts about being one of the wealthiest nations—or collections of nations—anywhere in the world. Scotland certainly, and probably the United Kingdom in its entirety, is self-sufficient in energy. We could be self-sufficient in food if the food production and distribution system had not been so destroyed over the years. Energy companies are now warning that half of their customers will not be able to pay their bills by the end of the year. That is not essential; it is a deliberate political choice by a Government whose days are up.
Abena Oppong-Asare (Erith and Thamesmead) (Lab)
It is a pleasure to serve under your chairship, Mr Twigg. I begin by thanking my hon. Friend the Member for Barnsley Central (Dan Jarvis) for securing and leading this extremely important and timely debate. He is a great champion for working people across this country. I thought his opening speech set out clearly the challenges that are facing his constituents, as well as all hon. Members’ constituents, at this moment.
I would like to thank UNISON, a trade union I am proud to be a member of, for the briefings it provided in advance of this debate. I will come on shortly to how the cost of living crisis is affecting public sector workers. This has been a good debate, with hon. Members from across the House speaking with passion and sincerity about the impact of the cost of living crisis on their constituents. We have also heard repeated pleas to the Government to end their inaction and provide more support to the families who are really struggling. I will come on to some of these suggestion shortly.
The hon. Member for Glasgow East (David Linden) made some very important points about low pay, which I will address shortly. My hon. Friend the Member for Kingston upon Hull West and Hessle (Emma Hardy) made an excellent speech on the poverty premium. I thought the point she made about the difference in cost between direct debit and prepayment meters for energy was particularly relevant to the current situation. I hope the Minister will address that point directly.
My hon. Friend the Member for Easington (Grahame Morris) made some interesting points about the taxation of property and possible reforms to how it is done. The hon. Member for Westmorland and Lonsdale (Tim Farron) spoke about the particular challenges of rural poverty and the issue of second homes and Airbnb making the housing crisis worse. My hon. Friend the Member for York Central (Rachael Maskell) spoke about the housing crisis, particularly the challenges for renters and the knock-on effect on the rest of the economy. My hon. Friends the Members for Bolton South East (Yasmin Qureshi), for Leeds East (Richard Burgon) and for Merthyr Tydfil and Rhymney (Gerald Jones) set out some short and long-term solutions to the current crisis, including a windfall tax.
I totally agree that this is a matter of political will. The hon. Member for Strangford (Jim Shannon) spoke about the impact of the increase in national insurance as well as energy prices on his constituents,. My hon. Friend the Member for Reading East (Matt Rodda) gave some heart-wrenching examples of the struggles facing his constituents and public sector workers.
I want to start by setting out how this cost of living crisis is affecting workers, families and businesses. In recent weeks, we heard the news that inflation had hit a record 40-year high, rising to 9%. It is the highest one-year increase in consumer prices since records began. The average household energy bill has gone up by more than £1,000 this year. The food shop has gone up by 5% and the Bank of England has warned of further, “apocalyptic” food price rises. The cost of filling the car with petrol has jumped by £20 a time. Since January, 2 million people have gone a whole day without eating, because they cannot afford to eat.
We have heard awful accounts from my hon. Friend the Member for Barnsley Central, who shared stories on behalf of his constituents. I know some of my constituents cannot even afford a bus fare to get to the food bank to receive help. I am sure that each and every hon. Member will have similar stories in their inbox.
As well as rising prices, there is a wage crisis in this country. Weekly pay for a full-time worker is expected to reach £652 by 2023, but if weekly pay had grown in line with inflation since 2010, it would have reached £695 by 2023. The last 12 years of Tory Government have seen pay squeezed, costing workers hundreds of pounds a year, even before the Tory tax rises. As several hon. Members have mentioned, the pay squeeze has also hit public sector workers. Stories of NHS workers having to use food banks are shameful. They and other key workers kept our country going through the darkest days of the pandemic.
My hon. Friend the Member for Barnsley Central set out some of the specific challenges facing public sector workers, including HMRC-approved milage rates falling behind the cost of driving and charging staff to park in NHS car parks. I hope that the Minister can address these important issues when she responds. Public sector workers deserve better from this Government on pay and other workforce issues, including workload, progression and staff wellbeing.
Of course, the cost of living crisis has also hit businesses. Consumer confidence is at an all-time low and businesses’ costs have rocketed. The cost of living crisis is adding to 12 years of low economic growth. In fact, over 12 years growth has averaged just 1.4%—the worst record of any Government since the second world war.
That is a cost of living crisis, a wage crisis and an economic growth crisis all at the same time, and what is the Government’s response? So far I have heard nothing except more dither and delay. Reports suggesting that the Chancellor is considering some form of windfall tax are all well and good, but we have been calling for that for months. Where is the urgency from the Government? Where is the recognition that people need help now? It is simply not good enough. We have said that the Government should bring forward an emergency Budget to deal with the immediate crisis, and that it should contain five priorities to make material difference to millions of workers and their families.
First, we have called for a windfall tax on oil and gas producers in order to cut home energy bills. The arguments for a windfall tax have been well stated by hon. Members today, so I will simply say that when leading business figures, charities and politicians from across the political spectrum are urging the Government to get on with this and do it, there is simply no excuse. We believe that the windfall tax should be used to remove VAT on domestic energy bills and expand and increase the warm home discount. That will save most households around £200, but those who most need it could save £600.
Secondly, we have called for support for struggling businesses through a discount on business rates for small and medium-sized enterprises, to be funded by a tax on online giants. Thirdly, the Government must scrap the national insurance increases, which are hitting workers at the worst possible time. This is not the time to implement a national insurance increase.
Fourthly, we need a clear plan to ramp up home insulation and upgrades, making homes more energy efficient and saving households, on average, £400 every year. Fifthly, we have said that the Government must go after the fraudsters who stole from the public during the pandemic. Why are the Government not allowing the National Crime Agency to investigate the £11.8 billion lost to tax from fraud? That money could have been used to help people out of hardship right now. These five policies would make a real difference to workers and families across the country.
To conclude, unlike the party opposite, Labour has a plan to put money back into people’s pockets, grow the economy, boost jobs and wages and tackle this terrible cost of living crisis. We are still waiting for the Government’s plan but we cannot wait very much longer. Now is the time for action and for a windfall tax, and to finally give the people the help they need.
The Financial Secretary to the Treasury (Lucy Frazer)
It is a pleasure to serve under your chairmanship, Mr Twigg. I thank the hon. Member for Barnsley Central (Dan Jarvis) for organising this important debate, and all Members for their valuable contributions.
Hon. Members have set out the concerns and struggles of their constituents. I assure hon. Members and their constituents that the Government absolutely recognise that families up and down the country are facing an unprecedented cost of living challenge at the moment. We understand that the cost of food is rising and that the cost of goods going up is hitting people’s pockets. It would be wrong of me to pretend that these issues are going to subside. We all know that the next few months are going to be difficult. I know that people are really worried. It would also be wrong of me to suggest that the Government can wave a magic wand and that there is some quick fix that no one has thought of to reverse all the price rises that are happening at the moment. These are global trends and they are driven by global challenges.
We recognise that these are serious issues facing our society, as the hon. Members for Barnsley Central and for Merthyr Tydfil and Rhymney (Gerald Jones) said. We are doing a significant amount. We have already done a significant amount to help the many families that hon. Members have spoken about. We have provided £22 billion of direct support to families grappling with the cost of living pressures, including the £1,000 that people on universal credit will get or the £1,000 that people on the national living wage will get, through the changes that we have made to those measures. Our support includes £9 billion of energy support to ensure that fuel duty is cut, and the council tax rebates of £150 for band A to D payers in England, as well as the warm home discount, which we have expanded to £150, and the £1 billion of household support that people are getting through their local authorities.
I recognise that it is important not just to talk about statistics or investment in global terms; we recognise that the cost of living pressures are affecting individual families. I listened very carefully to the hon. Member for Barnsley Central when he spoke about a public sector worker on universal credit who was struggling. I emphasise that a low-earning family with one adult working and two children under five will be £1,610 better off a year as a result of the recent changes we have made to national insurance contributions and the universal credit taper rate.
Peter Grant
Has the Minister bothered to work out how much of that £1,600 has disappeared in increased food and fuel bills since the announcement was made?
Lucy Frazer
Obviously, different people will experience different rises in the cost of living, depending on their circumstances. We absolutely recognise the rising cost of living, which is why we have already made a number of changes.
I will move on to the point that the hon. Member for Barnsley Central made about public sector pay, as did the hon. Members for Reading East (Matt Rodda) and for Glenrothes (Peter Grant) by analogy. I recognise the important work that public sector workers have been doing during the pandemic and in the ordinary course of business, helping to support our world-class public services. Hon. Members will know that last year’s spending review confirmed that public sector workers will see pay rises across the whole spending review period from 2022-23 to 2024-25. Pay for most frontline workforces, including nurses, teachers, the armed forces and police officers, is set through an independent pay review body. We will consider all recommendations from pay review bodies this summer, once those final reports are submitted. I also point out that many public sector workers will benefit from the increase in the national living wage that I mentioned. Two million people, many of them public sector workers, will benefit from that.
The approved mileage allowance payments, which the hon. Members for Barnsley Central and for Bolton South East (Yasmin Qureshi) raised, reflect all the running costs of a vehicle, including fuel and other vehicle expenses, such as servicing, insurance and depreciation; fuel is only about a third of the cost included in the rate. It is up to an employer what expenses they pay their employees. They do not have to use the allowance payment amounts, and can instead agree to reimburse the actual cost incurred. Individuals are not liable to pay tax on the difference as long as they can provide evidence of the expenditure. As with all taxes and allowances, we keep the rate under review.
The hon. Member for Barnsley Central talked about NHS car parking charges. I am pleased that he recognised that NHS staff working night shifts benefit from no car parking charges, as do disabled people, frequent out-patient attenders and parents of sick children staying overnight, but I am happy to look into the matter further with officials.
I listened carefully to the ideas raised by the hon. Members for Glasgow East (David Linden), for Kingston upon Hull West and Hessle (Emma Hardy), and for Easington (Grahame Morris). I have previously spoken to the hon. Member for Westmorland and Lonsdale (Tim Farron) about the housing issue he raised. I valued that conversation, and I thank him for raising those points again.
The hon. Member for York Central (Rachael Maskell) said that Labour restored people’s dignity, but the latest data shows that, compared with 2009-10, there are now 2 million fewer people in absolute poverty. The Chancellor, the Government and I are very proud of that statistic. I am very proud that, when Conservative Governments are in office—particularly this one—we have record unemployment, which allows people to earn a wage and support their families, whereas every single Labour Government has left office with unemployment higher than when they entered it.
I have set out a number of the measures that we have already taken to support people with the cost of living, which we absolutely recognise. We are also taking steps to boost the UK’s economy. I have not got time to go into all the measures today, but hon. Members know that the Chancellor has set out a long-term plan to boost the economy through capital, people and ideas, building on the progress that we have already made in in this area.
Emma Hardy
Before the Minister sits down, I want to push her a little further on financial inclusion. Will she meet me and the campaign group Fair By Design to look at the FCA’s remit with regard to financial inclusion and how we can reduce the poverty premium for people with the least money?
Lucy Frazer
I or another Minister would be very happy to meet the hon. Lady to discuss that.
We are helping to deal with the cost of living, but the only way out of the rising inflation that we face is to grow the economy more broadly, and that is what we are doing. I reiterate that the Government stand ready to do more to support people across the UK who are struggling with cost of living pressures. We will take action to ease these burdens, where we can, in the short term, while exercising responsible economic leadership to deliver the conditions we need to prepare the UK economy for the future.
Dan Jarvis
This has been a very useful and timely debate. Again, I thank Unison for the support that it has provided and for the work that it does. I also thank hon. Members for their contributions. Although minds have rightly been focused on the terrible time that many of our constituents are having with the cost of living crisis, the reality, as some hon. Members have commented upon, is that what we are actually talking about is the grinding effects of poverty, which many of us have known about for a very long time indeed.
In this debate we have heard concerns expressed about really important issues such as low pay, pensions, the poverty premium, reform of council tax, windfall tax, the cost of parking, the cost of mileage, housing costs, fuel costs, transport costs and a number of other things as well. I think that hon. Members have made a significant number of sensible and reasonable suggestions, and I very much hope that the Minister will think on them and that the Government will act at pace.
The Minister mentioned that she had worked with her officials to look specifically at the issue of NHS parking charges. I would be very grateful if she wrote to me with her conclusions following the piece of work on that issue that she said she would do.
Finally, although the Government of course have a crucial role to play, I will take this brief opportunity to recognise the very important contribution being made by the charitable and voluntary sector, which, as it always does, has stepped up to support those who are in crisis. In particular, I will just put on the record my thanks to the wonderful British Heart Foundation shop in Barnsley, which I had the pleasure of visiting last Friday. The staff there and the staff in charity shops right across the country are doing amazing work during these very difficult times, providing brilliant service and good-quality products at an affordable price. We owe them a huge debt of gratitude.
Question put and agreed to.
Resolved,
That this House has considered the fiscal approach to tackling rises in the cost of living.
India’s Foreign Contribution Law: NGOs
(2 years, 5 months ago)
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Derek Twigg (in the Chair)
I will call the Member to move the motion and I will then call the Minister to respond. There will not be an opportunity for the Member in charge to wind up, as is the convention for 30-minute debates.
Stephen Timms (East Ham) (Lab)
I beg to move,
That this House has considered the impact of India’s foreign contribution law on NGOs.
I am very pleased to serve under your chairmanship this afternoon, Mr Twigg.
This time last year, India had a devastating covid surge. By 6 May 2021, the country had recorded over 400,000 covid cases. Oxfam India, which was founded in India by the British charity Oxfam, provided urgent supplies and support. It worked with India’s health departments, district administrations and local organisations, and its staff set up oxygen plants, provided ventilators and delivered food to vulnerable communities. India’s Prime Minister, Narendra Modi, was among those who praised the response to the pandemic by civil society organisations, and Oxfam India played a key part in that response.
Yet in January this year, the charity received some very bad news. The renewal of its Foreign Contribution (Regulation) Act licence had been refused; the decision was apparently made last December. The result is that Oxfam India is no longer able to receive funds from abroad. Its annual income will fall from around €15 million to €2.1 million; at least 11 of its 15 development projects will close; and its former reach of over 1.5 million people, mainly Dalits, indigenous populations, minorities, women and girls, will be drastically cut. No explanation for this decision has been given.
Charities and non-governmental organisations in receipt of foreign funding in India must be registered under the Foreign Contribution (Regulation) Act 2010—the FCRA—which regulates how foreign funding can be received. Charities and NGOs now need to operate through a designated FCRA account at the State Bank of India’s main branch in Delhi. According to Christian Solidarity Worldwide, local human rights monitoring groups say the purpose of that is to supervise and monitor NGOs’ activity. The Act now gives the Government huge powers to inquire into what NGOs are doing, each time putting their work on hold until the inquiry is complete.
Jim Shannon (Strangford) (DUP)
I congratulate the right hon. Gentleman on securing this debate. On 6 January this year Members highlighted another charity, the Missionaries of Charity, who were reinstated some days after the debate. Organisations such as Oxfam, Greenpeace and Compassion are also affected. Some of the NGOs are of Christian heritage and some have a Muslim background. Some 250 Hindu NGOs have been closed because they are anti-Government. Does the right hon. Gentleman agree with me that this is an early warning bell of increased human rights abuses in India? It harms India’s poorest and is a symptom of the continuing pressure from Hindu nationalism.
Stephen Timms
The hon. Gentleman is absolutely right about that. It seems clear that the FCRA is being used to make life difficult for organisations that from time to time might be critical of the Government. In 2016, a commission appointed by the UN Human Rights Council called for the repeal of the Act, but in 2020 it was tightened up even further on the grounds of bringing greater accountability.
Of course, what is happening to NGOs is part of a wider pattern in India. We all grew up thinking of India as the greatest democracy on the planet. The briefing for this debate from the all-party parliamentary human rights group is absolutely right to refer to
“India’s rich tradition and constitutional status as a secular democracy.”
Afzal Khan (Manchester, Gorton) (Lab)
I was simply stunned when the reputable organisation Amnesty was forced to close its office in India. The suffocation of minority rights and the lack of freedom of expression has also been illustrated by the ongoing conflict in Kashmir, the farmers’ protest and the persecution of minorities, as has been mentioned, including the Christians and the Dalits. Today, Mohammed Yasin Malik and other leaders have been sentenced to life, and their only crime is wanting freedom from Indian illegal occupation. Does my right hon. Friend agree that India is a diminishing democracy?
Stephen Timms
I do agree with that. The situation is very worrying. I remember vividly the pride of Muslim constituents with roots in India, their home country, when I was first elected, but that has all drastically changed. There have been new laws to make things difficult specifically for Muslim citizens. Our Prime Minister’s state visit to India last month took place against a backdrop of inter-religious violence in Delhi and the demolition of Muslim-owned buildings.
The Christian charity, Open Doors, which launches its watchlist every year in Parliament, now designates India as the tenth worst country in the world in which to be a Christian. It has been sliding down other indices as well. It is ranked 150 out of 180 countries in the latest World Press Freedom index. Freedom House ranked India as only “partly free” in its Freedom in the World report this year, noting that:
The constitution guarantees civil liberties including freedom of expression and freedom of religion, but harassment of journalists…NGOs…and other government critics has increased significantly”.
The Economist Intelligence Unit’s latest Democracy Index categorises India as a “flawed democracy”. Civicus, the Johannesburg-headquartered global civil society alliance, categorises Indian civil society as “repressed”, which is the second worst category in its ranking, having downgraded in 2019. Not one of those indices proves there is a problem, but the overall message that they all convey is unmistakable.
The 2020 changes to the FCRA have effectively banned NGOs from research, advocacy and campaigning. They have also created new bureaucratic and practical hurdles, a ban on NGOs transferring funds to other NGOs, other restrictions on fund distribution, a cap on administrative costs, and delays from the necessity of additional form filling. It is claimed that all of that is to strengthen transparency and accountability, but it is fairly clear that the Government are targeting charities and non-profits that question their policies. Will the Minister urge the Indian authorities to review carefully the FCRA for compliance with international human rights standards and to suspend aspects of the law that restrict charities from providing urgently needed relief?
The Centre for Promotion of Social Concerns is a prominent human rights organisation in India. It lost its licence under the FCRA in 2016. The Ministry of Home Affairs said that was on the basis of a field agency report. The group challenged the decision in the High Court and, in the Ministry’s evidence to the court, it complained that the organisation used foreign funding to pass information to United Nations special rapporteurs and to foreign embassies, that that was
“portraying India’s human rights record in negative light…to the detriment of India’s image”,
and that such acts were
“undesirable activities detrimental to national interest”.
My hon. Friend the Member for Manchester, Gorton (Afzal Khan) was right to draw attention to Amnesty International being forced to put an end to its covid support. The head of Amnesty International India said at the time:
“Even if you’re working on Covid, the law makes it very difficult for you to be able to even accept foreign aid coming in without being in violation of the law”.
Greenpeace, too, has lost its licence. The Ford Foundation has been suspended. NGOs from other overseas countries are telling their own Governments how hard this is making things for them.
Oxfam—I started with this case—has been sending help to India since 1951. Oxfam India became a fully Indian organisation in 2008. Today, it is one of the country’s largest NGOs, providing food, shelter, clothing, medicine and medical equipment. It was reaching more than 1.5 million people, but has now lost its FCRA licence, so that number will be reduced drastically. Oxfam India applied to renew its licence on 1 April last year, in good time, but it appears that the application was rejected on 15 December, although the organisation has received no official communication from the Indian Government about that decision. Now, it can only raise resources within India, but its previous income was 75% made up of foreign aid. A lot of staff will lose their jobs, and crucial humanitarian and social work has ended.
In the five years after the current Indian Government first took office in 2014, more than 14,000 NGOs were barred from accessing foreign funding, seemingly mainly to hamper criticism of Government policies. Nearly 6,000 did not have their FCRA licences renewed last year. One notable organisation affected, as the hon. Member for Strangford (Jim Shannon) pointed out in his intervention, was the Missionaries of Charity, founded by Mother Teresa. It was blocked from accessing international funding on the grounds of “adverse inputs”, but nobody knows what that means, or what the problem with Mother Teresa’s charity was thought to be. As the hon. Gentleman rightly said, the decision has been reversed, which at least suggests that external pressure can help to deliver renewal of an FCRA licence.
Oxfam India applied well before the deadline. No reasons for the refusal were given, simply a statement that the decision had been taken in the “public interest”, but one of the problems is that the FCRA definition of
“activities prejudicial to the public interest”
is extremely vague. Will the Minister seek from the Indian Government an explanation of why Oxfam India’s activities are regarded as
“not in the public interest”?
Oxfam India has now filed a petition to the Indian Government for a final administrative review. There has as yet been no response.
On 10 February, the permanent secretary at the Home Office, Sir Matthew Rycroft, raised this issue with his counterpart at the Indian Home Ministry. In response to my written question, the Under-Secretary of State for the Home Department, the hon. Member for Torbay (Kevin Foster), said on 17 May:
“The Permanent Secretary addressed the difficulties that some NGOs in India have faced due to the enforcement of the FCRA, which is impacting both on the work we are funding and the work of UK-headquartered global NGOs in India.”
I very much welcome the permanent secretary’s intervention on this issue, but as I understand it, the Indian Government have given no assurances at all about whether these cases will be reviewed. There is clearly a lot more to do. In answering my question, the Under-Secretary of State for the Home Department said that the UK continues
“to monitor developments related to the Foreign Contribution Regulation Act, especially impacts on UK Government-funded programmes in India, and the work of British NGOs in India.”
However, we need more than monitoring. I am sure the Minister will agree with me about the negative impact of the FCRA, and I ask her and her colleagues to press the Indian authorities to review the legislation and lift some of the restrictions. They should also press for greater transparency of FCRA licence determination.
I will finish with the words of Amitabh Behar—the chief executive of Oxfam India, whom I met on a recent Zoom seminar—about what is happening in India. He told the BBC:
“The Ministry of Home Affairs’ decision to deny renewal of FCRA registration will severely hamper these collaborations which were providing relief to those who needed it the most during times of crisis.”
I hope the Minister will be able to reassure us that Her Majesty’s Government recognise the importance of this issue, and that the influence of her Department will be brought to bear in order to promote freedom of expression, even where it makes Governments uncomfortable at times.
Derek Twigg (in the Chair)
If it is helpful, Minister, the debate needs to finish by 16.43. It is a matter for you whether you take all the available time.
The Minister for Asia and the Middle East (Amanda Milling)
Thank you, Mr Twigg. Fortunately, I wrote down the time that we started, so I have had an eye on what time I need to sit down. It is a real pleasure to serve under your chairmanship, and I thank the right hon. Member for East Ham (Stephen Timms) for securing the debate. I also thank hon. Members who have contributed to it. It is always a pleasure to see the hon. Member for Strangford (Jim Shannon)—I think we have been in this Chamber several times over the last couple of days—and the hon. Member for Manchester, Gorton (Afzal Khan), and I will address some of the points that have been raised.
It is important to start by saying that the Government firmly believe that a vibrant civil society is central to any democracy. NGOs and civil society organisations in the UK and overseas make huge contributions by holding Governments to account and promoting respect for human rights. The Government support and work with a wide range of NGO partners through our programmes around the world, including in India. India is the world’s largest democracy, and it has a proud democratic tradition and a history of inclusive government. As with all democracies, we look to work with the Government of India to uphold their democratic values, norms and principles.
The Foreign Contribution (Regulation) Act, which is otherwise known as FCRA for the benefit of brevity, regulates how NGOs and other civil society organisations can receive foreign funding for their programmes and activities in India. Versions of the legislation have been in force since 1976. It was amended by the previous Government of India in 2010, and by the current Government of India in 2020. Any NGO that receives foreign funding now needs to apply for a FCRA registration number and renew its registration every five years. Since the FCRA was last amended, a number of NGOs have had their applications to renew foreign funding licences rejected, and I will talk about the number of cases in a moment. They include organisations with which we work directly, and it has had a significant impact on their ability to operate. As has been mentioned, some organisations, such as Missionaries of Charity, have succeeded in having their registration restored, but others have not. The UK’s strong and growing partnership with the Government of India enables us to discuss concerns where we have them. We continue to believe that NGOs make a vital and positive contribution to society. As with all countries, we will always welcome more progress on these issues.
Through the British high commission in New Delhi, we monitor developments relating to the Foreign Contribution (Regulation) Act. In particular, we look out for any impacts on UK Government-funded programmes and the work of British NGOs in India. We talk to the NGOs affected and encourage them to seek recourse, including through the Indian courts, where it is appropriate. We have also raised their cases with the Indian Government directly, at ministerial and senior official levels. That includes the issues faced by Oxfam India, the recent cancellation of the foreign funding licence of the Commonwealth Human Rights Initiative, whose headquarters are in Delhi, and the freezing of Amnesty International India’s bank accounts.
As mentioned by the right hon. Member for East Ham, in February the Home Office permanent secretary raised difficulties facing Oxfam India with his Indian counterpart, during our home affairs dialogue.
Jim Shannon
This has been a week where we have been regularly in debates, as the Minister knows. The figures are that 12,580 NGOs had their licences revoked. That is reaching almost epidemic proportions. Has the Minister had a chance to oversee that number of organisations? If so, is there a programme of trying to address all those 12,580 NGOs that have had their licences revoked? I do not expect an answer today.
Amanda Milling
The hon. Gentleman is passionate on so many different issues, particularly defending freedom of religion or belief. Regarding the number he referred to, we do raise cases with the Government of India directly. I would happily pick this up after the debate and write to Members.
Stephen Timms
I welcome the intervention of the Home Office permanent secretary. Can the Minister tell us whether the case of Oxfam India has been taken up by Ministers, perhaps by the Prime Minister when he recently visited India?
Amanda Milling
With regard to the case of Oxfam India, the British high commissioner to India met with the CEO of Oxfam India on 14 January, to understand their concerns and offer support. As I said, that was discussed by the Home Office permanent secretary during the home affairs dialogue in February, as well. Turning to Amnesty, we remain in contact with Amnesty, and officials last met Amnesty International UK on 4 May this year.
In addition to financial regulations, some NGOs and civil society activists have faced difficulties in India as a result of security legislation. We have also raised that issue with the Government of India. Our relationship with India is very important and central to our foreign policy tilt towards the Indo-Pacific. Our 1.6 million diaspora community provides a unique living bridge of people, commerce, ideas and culture between our countries. A year ago, the UK and Indian Governments committed to strengthen our relationship through the new comprehensive strategic partnership.
Afzal Khan
There is no doubt about the importance of our good, strong relationship with the Indian Government but, as I said earlier, Mohammed Yasin Malik and other Hurriyat leaders have today been given life sentences for a very basic thing—wanting freedom. It is India that is occupying that place. As good friends of India, should we not be reaching out and telling it to obey the UN resolutions?
Amanda Milling
There are a couple of points I want to make. No aspect of our strong relationship with India prevents us from speaking frankly about issues with it. On the case that the hon. Gentleman refers to, we are monitoring the trial. We note that Mohammed Yasin Malik has been charged under Indian law, and we cannot intervene in the independent judicial process of another country, but we urge all countries to respect and uphold their international obligations regarding the treatment of detainees. These strong relationships enable us to have meaningful dialogue, and we can speak frankly where necessary.
Our relationship with India supports regional and global security and prosperity. A year into the road map, we have made excellent progress. As has been mentioned, the Prime Minister visited India last month to build on it further. He and Prime Minister Modi discussed the need for democracies to work together. On regional global security, they reiterated their commitment to transform defence and security relations and enhance co-operation in support of a free, open and secure Indo-Pacific.
There are lots of other areas of importance, such as joint work on research and development to deliver next-generation capabilities across land, sea, air, space and cyber. The Prime Minister also announced a raft of commercial agreements to boost our trade, investment and technology partnership. During the visit, UK and Indian businesses confirmed more than £1 billion in new investment and export deals in sectors from software engineering to health, creating almost 11,000 jobs in the UK.
Our Prime Minister also set a target to conclude the majority of talks on the comprehensive and balanced free trade agreement by the end of October 2022—a deal that could supercharge our trading relationship and boost jobs and wages here in the UK. Moreover, the Prime Ministers underlined their firm commitment to take ambitious action on climate change, and co-operate closely to deliver on the Glasgow pact. The visit reflected the breadth and depth of our relationship, and how it continues to deliver for the people of both countries.
Stephen Timms
I am grateful to the Minister for setting out the increasingly close nature of the relationship. Can she assure us that Ministers will make representations to the Indian authorities about the position of Oxfam India in order that it can continue to obtain income from outside the country?
Amanda Milling
As I have said in relation to a number of cases, hon. Members should be reassured that they are raised by senior officials and Ministers. We continue to monitor and raise the difficulties faced by some NGOs in India. We also continue to support Indian civil society and NGOs through programmes and the endorsement that comes from our relationship with them.
Our relationship with India, as democracies and friends, is important and will continue to grow. It is a partnership with the potential to deliver for the people of both our countries and beyond.
Question put and agreed to.
Resolved,
That this House has considered the impact of India’s foreign contribution law on NGOs.
Agriculture Sector: Recruitment Support
(2 years, 5 months ago)
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Wendy Chamberlain (North East Fife) (LD)
I beg to move,
That this House has considered recruitment support for the agriculture sector.
It is a pleasure to serve under your chairmanship, Mr Twigg.
The agriculture sector and those who work in it are the backbone of our nation. With energy prices soaring, food shortages looming and concerns over our global supply chains, this debate is incredibly timely. Farmers must be listened to, and my hope for the debate is that we can air some of their voices and fears, and address what it is that they actually need. I hope that the Minister will deal directly in her response with some of the points that I raise. Farmers in rural communities are listening and waiting for real answers.
I will cover two sides to recruitment support. The first is farmers’ specific need to recruit workers now—they need them to harvest crops, tend to animals and make sure that we get produce into our supermarkets and on to our plates—and to secure a labour supply for the years ahead. The other is more holistic. There are almost half a million people in the agricultural labour force in the UK. The rural economy, and farmers in particular, are arguably being ignored, putting the entire industry and all those livelihoods—and, arguably, the wider rural economy—in danger.
Let me start with the direct interventions. I acknowledge that the seasonal agricultural workers visa, which is a critical issue in my constituency of North East Fife, falls under the remit of the Home Office, but I hope that the Minister can confirm that her Department has conversations with the Home Office and advocates for the needs of the farming community. The scheme has been beset by problems since its inception. Last year, sponsors were brought into the scheme too late, leaving farmers scrambling to secure their workers for harvest. Farmers have been unable to plan for this year or the years ahead, with announcements about the number of visas and how the scheme would operate made as late as December. Now it is harvest time for those summer foods we love so much, such as asparagus, salad and fresh fruit—North East Fife is famed for its soft fruit—and for flowers and plants for our gardens and homes. For that, we need workers.
I spoke directly to farmers in my constituency yesterday, and at the weekend I attended the Fife show in Cupar. That was the first time the show had been held since covid, and the first time I had attended as MP for the constituency. I have engaged with the National Farmers Union of Scotland and local NFUS members, and they tell me that there are simply not enough seasonal workers, that those who are coming are coming too late, that there is no time to provide training, and that the costs associated with them are going through the roof.
We were promised 30,000 visas. They have been issued—I am grateful for that—but that simply is not enough to cover all the farms in the UK. The Government have told us that that number was based on last year’s figures. In many ways, that might seem logical, but I wrote to them last year warning that it would not work, and I know that the NFU warned them too. I am sure that MPs from rural parts of the country will have heard the same from their constituents.
The delay in setting up the scheme last year meant that not enough farmers were able to apply. For some, the picking season was half over before workers were able to arrive—that was particularly true in Scotland. This year, more businesses are eligible to get workers under the scheme, as one of the few improvements is the inclusion of the horticulture industry. Like the SNP spokesperson, the hon. Member for Edinburgh North and Leith (Deidre Brock), I am a member of the Scottish Affairs Committee, and we were pleased to visit the horticulture industry in Perthshire earlier this year. However, as a result of its inclusion, 30,000 visas arguably is not enough.
We have been promised 10,000 more visas, but as yet they have not been released. I hope that the Minister will give us an update or go and speak to the Home Office and report back, because those additional visas are needed as soon as possible. When I asked my farmers in North East Fife yesterday what one thing they wanted me to impress upon the Minister in this debate, they said that they need those visas immediately. That is the thing that would make a fundamental difference to them.
When those visas are issued, we need workers to get access to them and then to be able to travel without delay. The farm in North East Fife with its soft fruit crop needs to know the date when its workers will arrive so that it can plan to train them and get its plants picked—we all know that strawberries do not stay fresh for long. What it does not need is what is happening now. Delays in visa processing mean that workers are arriving seven to 10 days later than expected. That might not sound like a lot, but when people are staring at their investment and livelihood, knowing that their chance to realise it is time-critical, seven to 10 days is a lifetime. Arriving late means crops might start to go over and workers will need to be rushed straight to harvest without time for enough training. There are safety implications from that, and we know that there are safety concerns in the industry at the best of times.
Historically, a significant number of workers coming to the UK have come from Ukraine. That is clearly not the case this year, meaning that many staff are new to the task and are not returning as they have done in previous years. They need training to work efficiently and well. Training, which takes time, is not available if they arrive late.
There is a very real side to all this. I was told yesterday of people having to choose between picking their harvest or planting their crops. I have been told of farmers who are already making decisions not to plant next year. They are making decisions to either let fruit rot or face empty fields down the line. In some respects, it is simple. Do the Government want a food shortage now or next year? If nothing is done, that is the inevitable outcome.
I have set out the immediate short-term crisis. I also want to know about the Government’s long-term plan to provide recruitment support for the agricultural sector. Every expert in farming and migration in food supply chains says that we cannot rely on domestic workers alone. We are now seeing the tightest labour market in decades, with staff shortages everywhere. Migrant workers will continue to be a feature of farming recruitment. That is the simple fact. For the arable farmers I have talked about, that means securing a future or some certainty around the seasonal agricultural worker scheme. That means announcements for years ahead being made now so that they can plan accordingly.
Our food supply may be just-in-time, but business planning is not, and just like any other business, farmers need certainty to plan. Indeed, the Environment, Food and Rural Affairs Committee recommended earlier this year that announcements be made on a five-year rolling basis. I ask the Minister if she will endorse that plan. It also means considering whether more visas need to be made available. I would argue that the data used for this year’s allocation is flawed. The Government must make a proper analysis, looking at demand on a month-to-month basis, to assess what farms actually need to function.
For livestock farmers—I am aware I have not yet mentioned them—future planning requires a proper, long-term solution in order to get the skilled workers they need. We can all remember last year when a lack of butchers led to thousands of animals being culled. The Government responded by issuing emergency short-term visas, but that was too little and too late. One of the issues with these skilled workers is the English language requirement. We can agree that having some level of English—and I have already mentioned safety—will be useful for workers to do their jobs well and to fit in with their wider communities. However, the amount of English needed to work as a nurse and as a butcher are arguably very different. I ask whether consideration is being given to having some flexibility in those rules.
Part of the picture in the long term will be the recruitment of more domestic labour. Agricultural workers and farmers are an ageing cohort, with fewer and fewer young people being attracted. Indeed, in my constituency we have the Scottish Rural University College in Cupar, and I have visited it on a couple of occasions to look at the people who are coming through. There is a big growth in dog grooming, but we are not seeing the numbers that we need coming into other parts of the industry. To reverse this trend, we must make farming an attractive profession. It must start from school, with vocational training and appropriate signposting in job centres. I hope the Minister will say what conversations she is having with the Department for Work and Pensions in that regard.
Turning to the agricultural sector more generally, what is the Minister’s plan to support businesses? In Scotland alone, the sector employs 67,000 people directly and supports a further 320,000 jobs. The rural economy is massive. At a time when the Government are saying they want to secure our domestic food supply, what is their actual plan to put food on our plates? If their goal is to have us eating British food and not to suffer shortages from global supply chains that are disrupted, they are failing. In the first three months of this year, we imported an extra £1.7 billion worth of food and live animals compared to the end of last year.
There is lots that the Government could but are not doing to secure the future of British farming. Farmers are under extreme financial pressures, like many of us. Grain prices are up. Energy and gas prices are up. Fertiliser prices are up a staggering 200%. To top it all off, the Government have increased the labour bill by imposing an additional wage requirement for workers under the seasonal agricultural worker scheme.
Many of the farmers I have spoken to entered into contracts to sell their spring produce last year, agreeing a price based on the actual legal minimum wage. I completely understand that supermarkets and other shops do not want to increase prices on the shelves because of the cost of living crisis that people are experiencing. However, the Government’s late decision to impose that higher minimum wage cannot be passed on by farmers, so it is taking money directly out of farmers’ pockets.
Profit margins in farming are tiny. There are a lot of hard-to-control variables, such as the weather, pests and plants simply not thriving. Imposing unavoidable costs on farmers is beyond unhelpful. Can the Minister say what the Government plan to do to support farming communities during this cost of living and cost of farming crisis? What conversations have taken place with the Home Office in relation to this wage requirement?
Let us look to the future and long-term investment in the rural economy. It is inevitable that more and more agricultural processes will be automated, but that requires investment and training. Are the Government consulting farmers? Where is the plan for support? The sector needs confidence to move forwards. Meanwhile, the Environment, Food and Rural Affairs Committee reports notable concerns about the mental health and wellbeing of those in agriculture. Clearly, something is not adding up.
Finally, what are the Department’s plans to monitor the impact of other Government initiatives on the agriculture sector? International trade agreements are being made with seemingly no thought to the need to protect our farmers, who have higher welfare standards, from cheaper competition. The Subsidy Control Act 2022 controversially includes farming subsidies in its scope, even though they have always been excluded from state aid regulations. The Act also risks undermining the devolved Governments’ abilities to make policies to support their own farming communities with their own specific needs.
Farmers are vital to this country, but they have been let down by this Conservative Government for too long. Recent media reporting shows that the Government know that, and so do farmers. I want farmers to not only survive, but thrive. I want food on our shelves and on our plates. I have been listening to farmers in North East Fife and their needs are clear: 10,000 seasonal worker visas now, an end to Home Office delays, a long-term plan and investment in their future. I look forward to the Minister’s response.
Jim Shannon (Strangford) (DUP)
I am always happy to support the hon. Member for North East Fife (Wendy Chamberlain) in the debates she brings forward. Obviously, when I saw the subject of this debate, I wished to participate. It will be no secret that I declare an interest as a member of the Ulster Farmers’ Union. Back home, we own land; we are farmers.
The Minister will know that I am especially pleased to see her in her place, because I know that she is someone who sets out to give us answers. I am very pleased with that. I also look forward to the contributions of the two Front-Bench spokespeople, the hon. Members for Edinburgh North and Leith (Deidre Brock) and for Cambridge (Daniel Zeichner).
I want to make three points. My first point is about a scheme that is already in place. Secondly, I will refer to the contributions from the Department of Agriculture, Environment and Rural Affairs back home in Northern Ireland and the young farmers’ clubs. Thirdly, I will refer to the visa scheme, which the hon. Member for North East Fife referred to in some detail. As the Member of Parliament for Strangford, I represent a very urban but also very rural constituency, so I am greatly exercised by this issue. I am particularly pleased to speak in this debate and congratulate the hon. Lady on bringing it forward.
Last week, I learned of a scheme—it was one I had not been aware of—because of an event held in this House. I was particularly encouraged to attend, especially when I found out exactly who was there. It was the 10-year celebration of the McDonald’s progressive young farmers programme. I know that the hon. Member for North East Fife was there. From the moment I walked into the Churchill Room, I was beset by Northern Ireland accents. It is such a pleasure to come here and hear my accent bouncing back from other people in some numbers—it is quite unusual in Westminster.
Of the four young people speaking, two were from Northern Ireland. One was young Carys Martin from Greyabbey in my constituency. When she told me who she was, I knew at once—as you do, Mr Twigg—that I knew her mother and father, as well as her grandfather, Billy Martin, who used to be the president of the Ulster Farmers’ Union in Northern Ireland. It is a family that is steeped in agriculture production. There were three other young farmers—one was from the constituency of my hon. Friend the Member for Upper Bann (Carla Lockhart). It is great to see our prominent agrifood work being recognised by McDonald’s. It is a great scheme.
Over the past 10 years, the programme has given progressive young farmers the opportunity to kick-start their careers in the food and farming industry by spending a year with McDonald’s, tracing every step of the supply chain. Throughout the programme, they receive mentorship from a host farmer, as well as some of the UK’s leading food supply companies, and gain in-depth experience in key agricultural sectors. This is a smashing scheme, one that does just what the title of the debate says: recruitment support for the agriculture industry.
The young people on the placement develop the broad range of knowledge needed to succeed in today’s world of food and farming. McDonald’s success in the United Kingdom and Ireland is underpinned by British agriculture. I am always very proud to say the United Kingdom of Great Britain and Northern Ireland—I have said it so many times. It is not meant to be offensive to anyone; it is how I feel. I feel the strength of the Union.
McDonald’s said:
“We are committed to sourcing quality ingredients and spend approximately £1 billion each year on our British supply chain.”—
that is significant, and tells us how important the scheme is. They continued:
“As part of that, we work with over 23,000 farmers across the country to source our products. All our beef is 100% British and Irish and we source all our pork from British, RSPCA Assured farms.”
What a wonderful programme this private enterprise has taken on and committed to over the last 10 years. How great to see Northern Ireland playing such a prominent role. The question we must ask is: are we supporting our young farmers and agri-workers in the same way. I believe we are, through the schools and colleges.
I move on to my second point, about the young farmers’ clubs of Ulster and those across this whole great United Kingdom of Great Britain and Northern Ireland. I used to be a member of the Ulster young farmers’ club when I was a wee boy in Ballywalter, which was not yesterday. It was a social occasion, but the activities it involved encouraged recruitment support for the agriculture sector, the very title of the debate—good things happen. We have Greenmount college as well.
I know that Minister Edwin Poots of the Department of Agriculture, Environment and Rural Affairs meets the Minister regularly—they both tell me the same—which shows a strong governmental and ministerial partnership and input, which is beneficial for everyone, which is really good. I am greatly encouraged by what happens.
I move to my third point, about an issue that the hon. Member for North East Fife referred to. I voted leave in the referendum. By the way, it was a vote for the whole of the UK to leave, and not this—with respect—piecemeal deal that has so adversely affected people throughout the country, particularly in Northern Ireland. We are looking forward to addressing that issue with the support of the Prime Minister and others.
When I voted leave, it was with the understanding that farm workers would continue to have easy access to and fishermen would have easier access to our visa programme. The Under-Secretary of State for the Home Department, the hon. Member for Torbay (Kevin Foster), has been incredibly helpful in his support for the fishing organisations. The Minister here today works with them regularly—in the corridors of Westminster last week, she told me she had occasion to meet the representatives of the two fish producers organisations, Harry Wick and Alan McCulla. I know she looks forward to that and that they do as well. It is always about how we can help, which is why the Minister is appreciated so much by the fishing organisations.
Some of the agrifood producers, such as Willowbrook Foods in my constituency, have highlighted the fact that things are still complex. I know it is not the Minister’s responsibility, but we need to smooth those issues so that we can offer greater support to ensure that no harvest is left in the field and that producers have the support they need. Willowbrook Foods was very keen, along with Mash Direct—two of the major producers in my constituency—to offer help to the Afghan refugees. They were the first people to contact me. The war started on the Saturday and on the Sunday, they were on the phone to say, “Jim, if any of those refugees need placements or jobs, we are here.” I am always greatly encouraged by those who take their hands out of their pockets, get them dirty and do the work. Those people—those two companies—are examples of just that.
I will finish by saying that we must offer greater support to ensure that no harvest is left in the field, and that producers have the support they need. McDonald’s has sown into their programme; are we sowing to meet our needs? If not then, to the best of our ability, can we do better? I genuinely look forward to the Minister’s response. I have in Strangford a constituency that I believe is second to none—no offence to any other Member of Parliament, by the way. I see people who want to help, and I think that is what the Minster is looking for.
Tim Farron (Westmorland and Lonsdale) (LD)
It is a pleasure to serve under your chairmanship, Mr Twigg, not least because you are so lenient. I appreciate you giving me the opportunity to speak, given that I was not here at the beginning.
I pay tribute to my hon. Friend the Member for North East Fife (Wendy Chamberlain) for introducing this debate on the hugely important issue of recruitment in the agricultural sector. If we enjoy the benefits of eating food, if we enjoy the environment, if we think tackling climate change is important, and if we think water management and flood prevention or tourism and hospitality are important, then we should be very grateful to our farmers and those who work in agriculture. We should be determined to protect that industry, not do it harm.
My great concern is that the average age of a farmer in the United Kingdom is 59. The Government are transitioning from the old common agricultural policy to the new environmental land management scheme, and while there is a golden goodbye programme in that scheme, which many people will take advantage of, there is no golden hello. My concern is that we are seeing people leave the industry, but we are not seeing people coming into it, either from farming or non-farming families.
The recent closure of Newton Rigg College, an agricultural college outside Penrith for the UK’s second-largest farming county, was outrageous and unnecessary. The Department of Agriculture, Environment and Rural Affairs in Northern Ireland directly fund agricultural education there. Why could we not do that in the UK, given that we now have that freedom? Why did DEFRA not choose to invest in saving our college in Cumbria, so that we can reach farming families while also recruiting people from other communities to be the farmers of the future? That seems a terrible wasted opportunity, and I call upon the Government to put it right, even at this late stage.
Young people are not likely to be attracted to agriculture if the opportunity to make a living is badly reduced. The hon. Member for Strangford (Jim Shannon) talked about his support for leaving the European Union. Members will know that I did not agree with him on that. Nevertheless, if I was asked to find positives of us being outside the European Union, I would pick getting away from the perverse incentives of the common agricultural policy.
There is an opportunity for the UK to build a better agricultural policy than the one that we used to have and are moving away from—if we do things right. The intention of the Government to move towards the environment land management scheme, and public money for public goods, is good. I want to be clear that in principle the Liberal Democrats agree with that. My concern is that the transition is being botched, which will damage farming and recruitment into farming, thereby damaging our ability as a country to feed ourselves, care for our environment, and provide the backdrop to the hospitality and tourism industry that is vital to my community and those in the south-west, as well as rural places such as Northumberland and other rural parts of this country.
I have got about 1,000 farms in my constituency. Every single one of them has lost 20% of its basic payments this year. Of those 1,000 farms, a grand total of 13 will be getting something through the new sustainable farming incentive. What does it mean for recruiting people into farming when they realise that farm incomes are evaporating and new sources of income are not available any time soon? If we care about recruitment into agriculture, surely it makes sense to park the reduction in basic payments while we continue to develop the new environmental scheme, so that we can recruit people into agriculture.
There is a huge problem in rural communities such as mine. Cumbria is the second biggest agricultural county in England—the biggest is Devon. There has been a 70% drop in the number of private-rented properties available to local people in the past two years. Why? House prices have gone bananas because of a huge increase in demand for holiday lets and an increase in the number of Airbnbs. What has that done? It has squeezed out the working-age population. That is affecting Devon and Cornwall, Somerset, Cumbria, North Yorkshire, Northumberland and other rural communities. That is why action is needed right now.
In our community, hospitality, tourism and agriculture are absolutely intertwined. So many farms are viable only because they have diversified into the hospitality and tourism market. If I say that last year 63% of hospitality businesses in Cumbria were operating at less than capacity because they could not find enough staff, that gives a sense of the recruitment crisis facing much of rural Britain. It is caused by three basic issues.
The first is the lack of affordable housing for people to live in. If there is nowhere for the working-age population to live, there is no working-age population and no workforce. That is why, despite the huge demand for tourism businesses last year, there was no availability. People could find a house to stay in for a week, but they could not find anywhere to eat or drink, or any way of having a pleasurable experience on a lake, because no one could recruit any staff.
The lack of affordable housing for a local workforce is a crucial part of the crisis, and the Government’s failure to have sensible visa rules is another. If we want to control our borders, great. But why not control them in our interests rather than doing ourselves damage? There is a desperate need for us to use youth mobility visas, for example. We have spoken to the Home Office about them to ensure that we try to do something to arrest the agricultural and hospitality labour shortages.
Finally, we have huge distances to cover in areas such as ours, with very expensive travel and a lack of affordable and accessible bus services. That is another major reason why there is a problem. There is no doubt that in communities such as mine and in Devon, Cornwall and other rural parts of the United Kingdom, a staffing shortage—a recruitment crisis—is undermining hospitality and tourism and undermining agriculture. If we undermine agriculture, particularly at a time such as this, we run the risk of not being able to feed ourselves as a country, which will make us more dependent on imports from other countries. We will put ourselves in the morally questionable position of fishing in the same markets for grain as the poorest countries in the world, thereby inflating the prices they pay or robbing them of the grain altogether.
I would argue that the farming policy the Government are now enacting, which is almost deliberately designed to reduce the amount of food that Britain produces and the number of farmers Britain has, is not just strategically stupid but morally abhorrent.
Deidre Brock (Edinburgh North and Leith) (SNP)
It is a pleasure to serve under your chairship, Mr Twigg, and I commend the hon. Member for North East Fife (Wendy Chamberlain) for securing this important debate. Things are at a crisis point in some parts of the UK. I was shocked to discover that seasonal worker shortages of up to 75% have been reported in some parts of the UK. Many food producers, farmers and horticulturists have very real fears that there will not be enough labour to pick their crops this year.
The hon. Member for North East Fife outlined very well the various problems experienced with the seasonal agricultural workers visa scheme and spoke movingly about the conversations she is having directly with constituents who are deeply affected by these problems and shortages. The Government often talk of the low employment rate in the UK—as we all know from sitting in the Chamber, they like to mention it frequently—but the consequence is that there are not enough workers to fill the gaps in supply.
The hon. Member spoke of food security and domestic production—I shall return to that soon—as well as about the increased reliance on imported foods, and asked how farming communities will be supported. She also mentioned automation, which I have to say seems like an impossible dream for many farmers. It is simply beyond their ability to afford the sorts of mechanical pickers and diggers that could make the difference and make them less reliant on agricultural workers’ support. It kind of irritates me, to be honest, when it is spoken about as though it is an easy option for your average farmer when it just is not.
The hon. Member for Strangford (Jim Shannon) did a fine job of speaking up for McDonald’s and its farming support scheme, and he usefully outlined the more general need to attract young entrants to farming. If that is not addressed rapidly with genuine support for younger entrants, the sector will experience problems in the face of an ageing and retiring farming population.
The hon. Member for Westmorland and Lonsdale (Tim Farron) continued on the importance of doing everything possible to attract new entrants to farming and ensuring that farming continues to be an attractive option. That is such an important point. If young farmers—they might be sons and daughters of farmers—look at the work that their parents go through to make farming a viable career, and think that it will just not be worth it because they do not make enough money to survive, that will clearly affect who becomes a farmer in future. The hon. Gentleman also spent time dwelling on the effects of Brexit, to which I will return, as well as, crucially, the recruitment crisis in rural areas—not simply in farms, but in hospitality and the other organisations around farming that rural communities rely on so heavily.
The SNP has long warned that the obsession of some in this place with Brexit and ending freedom of movement would cause significant problems. The EFRA Committee confirmed in March what we have been saying for years: that although the pandemic certainly exacerbated labour shortages, their cause was ultimately and largely Brexit. We must remember that a disproportionate share of the UK’s agricultural workforce—14%—is employed in Scotland. The labour challenges that our industry faces will be keenly felt, as we have heard, and industry bodies have repeatedly cited the shortage of labour as the biggest challenge they face—and they say that, let us not forget, in the face of rocketing prices for fuel, fertiliser, seed and feed, among many other extra costs.
Scotland’s horticulture industry, for example, has grown significantly since 2013 thanks largely to freedom of movement. Here is another extraordinary statistic: until the last two years, 99% of seasonal workers in the horticultural sector came from outside the UK every season. Since Brexit, the number of full-time staff has been plummeting, which threatens the delivery of home-grown produce and the viability of so many business. That was made clear to the hon. Member for North East Fife and me when we visited, with Scottish Affairs Committee colleagues, horticulturalists and soft fruit providers in Perthshire and near Dundee. Those providers made it clear to us that without support, their businesses could, and in all likelihood would, go under.
That view is supported by the UK Trade and Business Commission, which found that workforce shortages as a result of leaving the EU have crippled businesses across the country. The commission’s annual report identified a “unique set of challenges” for small businesses in Scotland and Wales, which are made worse by
“the UK Government’s general reluctance to seriously consult with the devolved administrations, whether on trade policy or economic support schemes.”
We have made cross-party calls to tailor immigration policy to suit Scotland’s needs, for example, and I am sorry to say that they have been repeatedly ignored. In January, our Holyrood Parliament voted in favour of calls for the UK Government to reform the immigration system and commit, with the Scottish Government, to a joint taskforce on labour market shortages. The Scottish Government then had to make 19 requests before the Minister for Safe and Legal Migration attended a meeting. I hope that the Minister here today will take that up with her Home Office colleagues.
That was extremely disappointing and brought back memories of a predecessor in that role, who insisted that she would not give any extra powers to Scotland that she would not also give to Lincolnshire. That comment enraged not a few in Scotland. The difference between the second largest nation in the Union and a single English county council seems fairly obvious. Of course, that is not to say that there is not a case for differentiation between English regions as well. The Migration Advisory Committee has acknowledged the need for a more bespoke approach, especially for more remote communities. I wonder whether the Minister can tell us how the UK Government are evaluating that in detail. What proper consideration has been made of that advice? It would be really helpful if she could tell us that, because of the importance of this issue to remote areas and the people who live in them.
Of course, migration is a key lever to address depopulation. Scotland’s rural communities are suffering from a real decline in the working-age population, and the salary threshold for the UK’s immigration system and the shortage occupation list are not attracting working-age people to them. As a consequence, Scotland’s Cabinet Secretary for Rural Affairs and Islands wrote in January to inform UK Ministers that the Scottish Government intended to press ahead, along with local government and business partners, and explore three proposed models for a rural migration pilot—as the Migration Advisory Committee recommended—to help to address rural population decline and the employment problems those areas are experiencing. The proposals were: expanding the skilled worker route, a Scottish visa aimed specifically at designated areas within Scotland, and a remote and rural partnership scheme. I would be interested to hear the Minister’s thoughts on those.
That was followed up in February with a joint letter from the three devolved Administrations, which was prompted by the UK Government’s failure to work constructively on the respective migration needs of each nation. That letter called on Ministers to revisit urgently their previously proposed 12-month temporary worker route and called on the Home Office to immediately reintroduce regular quadrilateral meetings with the devolved Governments. I do not know how much say the Minister could have on that, but that would be a useful thing to reintroduce and would go a long way to mending relations with the different devolved Governments.
Unfortunately, the UK Government also failed to consult with the devolved Administration on their introduction of narrowly targeted, short-term temporary visas, which many in the industry just feel is too little, too late. The EFRA Committee’s report, which I referred to earlier, identified criticisms of that scheme relating to the number of visas, the timing of their launches, the duration of the visas and the choice of operators to run them. For example, Scottish Land and Estates wrote that the schemes for the poultry sector and HGV drivers
“would appear to be wholly inadequate and unlikely to have a material benefit”.
As we have already heard from other Members, the cap of 30,000 on the seasonal workers pilot falls far short of the 70,000 visas per year that farmers’ unions have asked for. NFU Scotland and many others have warned that if the cap is not increased, we will again see millions of pounds-worth of crops lying rotting in the fields.
The fact that Ukrainians have made up 60% of the seasonal workers scheme since the UK left the EU only adds to the uncertainty. Russia’s appalling war is causing devastation in Ukraine, as we all know, while also threatening the security of food supply chains right across the world. Our farmers have long warned about skyrocketing costs for fertiliser, fuel, energy, seed and feed, and the conflict has unfortunately escalated those concerns.
In that context—as again has been commented on, I think, by every Member who has spoken so far—promoting sustainable and resilient domestic production is even more important, but that is not possible without the workforce. Of course, domestic production is also further undermined by the pursuit of laissez-faire post-Brexit trade deals and the possibility of importing cheaper food with lower environmental and animal welfare standards.
The Scottish National party has repeatedly asked for immigration to be devolved to Scotland, so far to no avail, but at the very least we want to see immigration policy being greatly overhauled and properly targeted, with genuine collaboration between the Home Office, DEFRA and the devolved Governments, to ensure that we attract the seasonal and permanent staff that our industries desperately need. I hope that we can hear from the Minister about the discussions she is having with the Home Office on this really important matter and the progress that DEFRA is making in this area.
Daniel Zeichner (Cambridge) (Lab)
It is a pleasure to serve with you in the Chair, Mr Twigg. I congratulate the hon. Member for North East Fife (Wendy Chamberlain) on securing the debate, and introducing it in such a calm and measured way. We have heard excellent speeches, and the point raised by the hon. Member for Westmorland and Lonsdale (Tim Farron), about the failure to introduce a scheme to bring people into farming, having introduced a scheme to get them out, speaks volumes.
The hon. Member for North East Fife was calm, but frankly I think we should be angrier because what is going on is a shambles. The front page of the Farmers Guardian this week says “Exodus”, because of the people leaving. Vegetable growers are planning to switch out of vegetables to go into cereals, which is exactly the opposite of what we would like to see. The Government should hang their heads in shame, although not this Minister, as I think the problem lies mostly with the Home Office, which is a Department that seems always to be capable of making a bad situation worse.
This afternoon, we are electing a new Chair of the EFRA Committee. Before Christmas, the previous Chair was incensed by the performance of one of the Home Office Ministers, who was incoherent on the language requirements. Frankly, some of this is so bad one could not make it up. The Conservatives were once the party of business, but they are now the party driving business out of the UK.
The severity of the crisis has been clear for a long time. In August last year, a group of many major organisations—the NFU, the Food and Drink Federation and so on—commissioned a report from Grant Thornton, which pointed out that there are over half a million vacancies out of 4.1 million jobs in the food and drink sector. That situation is only getting worse. We have heard some of the figures, including a 75% shortage of seasonal workers in parts of the UK. As has been said, the situation has now been exacerbated by the tragedy in Ukraine, as last year 67% of seasonal agricultural visas went to Ukrainians and 11% to Russians and Belarusians, so the situation will get worse.
There is an irony in all this, in a sense, because it looks as if we will have to turn to other parts of the world, which will mean bringing people into the UK from further and further afield. These are not people who are returning to the UK as normal, with the requisite skills, which adds to costs and makes things even more difficult for businesses.
Let me focus on a couple of sectors. We have often talked about the pig sector, which was one of the first to feel the problem. Partly because of the lack of pork butchers, we have ended up with 200,000 pigs backed up on farms and 35,000 healthy pigs culled. That was caused by a mix of factors, but frankly it was because the Government waited too long and were too slow to act, exactly as has been said by other hon. Members.
The horticultural sector is suffering enormously, with some businesses reporting workforce shortages of between 20% and 50%, which is far worse than in the first half of the year. I visited one of our major rose growers in the east of England, which was at pains to point out just how much it depends on a few, key skilled people, whom it cannot get nearly as easily now, because of the difficulties in getting in and out of the country. What will that grower do? It will move production somewhere else—not in this country. That is quite incredible. As we come up to the pinch point for the soft fruit industry this year, I fear that the same will happen again.
We have heard many of the figures. It is extraordinary how slow the Government were to act when they were warned. Looking back at discussions before Christmas, it is extraordinary that some decisions were left right up until the verge of Christmas itself. The number of visas available was much discussed and negotiated, but it was still nowhere near the number that we need.
The Horticultural Trades Association and the EFRA Committee have called for an additional 10,000 visas. The NFU says demand could be as high as 55,000. We are told that another 10,000 visas may be available at some point, but businesses will have to wait until the end of June to learn more. Even when they are allocated, I am told by many in the industry that it takes a long time for issues to be resolved and for people to get here. Unite the Union has told me about the poor treatment experienced by many seasonal workers. Will the Minister comment on what her Department is doing to check on this long-standing problem, which is not getting any better?
We need a better plan for the agricultural labour force; we cannot go on like this. Surely we have to start by having a discussion with employers across sectors in order to know the workforce requirement. I am afraid that we are seeing a failure of workforce planning in so many areas; we see it in the health service, but also in the agricultural sector. We need to take into account the workforce that our businesses need.
Of course we want to encourage the indigenous workforce, but I am afraid that we saw the limitations of the Pick for Britain scheme a couple of years ago. It was mired in rhetorical flourishes, but when push came to shove, it did not work. We have to be realistic about these things. It is no good waxing lyrical and pretending that somehow we will magic up a workforce. The choice will be quite simple: if employers cannot find the workers, as in the hospitality sector, businesses will go elsewhere. We are seeing it with our own eyes, so we need to analyse what is needed, have a proper discussion and ensure that we have the skills the country needs. We will then have a vibrant rural economy. If not, we will be relying on imported food in the future, and that is not a good idea.
Derek Twigg (in the Chair)
I confirm that the debate should finish by 5.43 pm. Of course, the hon. Member in charge of the debate should have some time to wind up at the end.
The Minister for Farming, Fisheries and Food (Victoria Prentis)
Do not worry, Mr Twigg—I will not take that long. As ever, it is a pleasure to serve under your chairmanship.
It is true to say that much of this debate is possibly for the Immigration Minister— the Under-Secretary of State for the Home Department, my hon. Friend the Member for Torbay (Kevin Foster)—but I undertake to discuss with him the issues that are specifically for him, and to give feedback as and where necessary. I urge hon. Members either to deal with him directly or to use me as a conduit in the agricultural or fishing space, if that is more convenient.
I, too, thank the hon. Member for North East Fife (Wendy Chamberlain) for securing this debate on an important issue. As I think she knows, I have family links to Pittenweem, so was particularly pleased to hear that the Fife Show in Cupar is up and running again. I hope that she enjoyed that at the weekend, as I am sure many of her constituents did. Her debate has highlighted that there are short-term and long-term challenges to recruitment in the agricultural sector, which was a point ably made by the hon. Member for Strangford (Jim Shannon), who speaks with such authority on farming issues.
I agree with the hon. Member for Westmorland and Lonsdale (Tim Farron) that we should be grateful to our farmers, but I take issue with his fundamental misconception about our future farming schemes. I agree that we need to keep food production at current levels. Indeed, we have ambitions in DEFRA to increase food production—particularly in areas such as fruit and veg, where we traditionally have low levels—which is why today’s conversation is so important. The new entrant schemes will be set out in great detail next year; some details will come out this year, but it was always planned for that point of the agricultural transition.
The hon. Member for Westmorland and Lonsdale and I possibly need to have another meeting. This is not the place to go into great detail on the new farming schemes, but I reiterate that our sustainable farming incentive scheme is open to all farmers this year. There is a soil standard—all his farmers have soil and can apply. The countryside stewardship scheme has been taken up by 52% of farmers, so I am sure that many of his farmers will very much be a part of it too. I know the area well, as my husband comes from just next door to the hon. Gentleman’s constituency, and I hope we will be spending some time there over the next week. The upland farmers in his constituency, and those who farm on marginal land, will need special, bespoke schemes, and tomorrow afternoon I am going to a two-day upland conference to ensure that we make the right choices and put in place the right schemes for them.
The short-term challenges of the pandemic and the war in Ukraine have been considerable. Last autumn, which was obviously before the war but after the pandemic, we provided a range of emergency visa schemes and other forms of support to some food sectors. Several hon. Members have spoken about the challenges in the pig sector. As a result, we have provided a package of measures, including temporary work visas, which did not include an English language requirement, for pork butchers and, of course, the private storage aid and slaughter incentive payment schemes, which have assisted in reducing the backlogs of pigs on-farm. We are now undertaking a really serious review of the pork supply chain, the results of which I look forward to sharing with the House.
We heard from several Members that, before the war in Ukraine, about 78% of seasonal workers came from Ukraine, Russia and Belarus. We have been working closely with our seasonal worker visa route operators—I have met all of them—and they have proved resilient and innovative in sourcing labour from new sources, such as Kazakhstan and Mongolia. There is no silver bullet for meeting the diverse and seasonal labour needs of agriculture. That requires action on three fronts: migrant labour, domestic labour and automation. We cannot—and I never would—ignore the current importance of migrant labour to bring in the harvest, particularly in the horticultural sectors, which have particularly high seasonal peaks in demand.
Following a review of the seasonal worker visa route to date, the Government have decided to place the route on a more substantive footing. I remind Members that this is the only such route for visa applications, because the Government recognise that the needs of horticulture and those seasonal peaks are special and different. The seasonal worker route will now operate until the end of 2024, with a further assessment of need to be made as we reach that point. The visa route will no longer be defined as a pilot. I know that the seasonal horticultural workforce are particularly important to Scotland, which produces so many of our delicious strawberries and other fruits. Scotland uses about 13% of the seasonal worker route.
I reassure the hon. Member for North East Fife that, despite the significant challenges that the Home Office has had to deal with this year in dealing with Ukrainian people coming to this country, the process for dealing with seasonal worker visas is much further forward than it was at this point last year. We currently have about 13,000 workers on-farm, with 13,000 who have already completed the certificate of sponsorship stage of the visa application route. I will continue to monitor that extremely closely with the Home Office. I reassure hon. Members that I speak regularly to the Home Office Minister who leads on this matter, and my team do so probably on a daily basis. We are extremely aware of where in the process the applications are at any one time.
I understand the pressures that farmers are under and their concerns regarding seasonal workers’ pay, but it is important that we make it clear that these are not low-paid jobs; they are well-paid jobs and it is right that they are rewarded as such.
We have expanded the seasonal workers scheme to include ornamental as well as edible horticultural crops, and have generally worked with the Home Office and the four operators to make the scheme as accessible as possible. As the hon. Member for North East Fife said, 30,000 workers can come to harvest for up to six months, with the potential to increase that by up to 10,000 if there is clear evidence of need. We are currently at the stage, just before the main part of the picking season, of evidencing that need, but I have absolutely no doubt that when we can do so, those 10,000 extra visas will be immediately forthcoming.
I am genuinely reassured by the Home Office figures for this year that it has now dealt with the backlog essentially caused by the outbreak of war, and that it is now processing visas in much more normal time. I accept that there was a delay in the last two months, but I am assured by the Home Office that that is no longer the case and things are broadly getting back to normal.
Daniel Zeichner
The 10,000 extra visas would of course be very welcome, but surely that puts extra pressure on the 30,000—the rest. Does the Minister agree?
Victoria Prentis
I am not sure that I entirely understand the hon. Gentleman’s point. I am sure that if we are able to evidence that need, helped by the agricultural sector, the horticultural sector and hon. Members around the country, the 10,000 visas will be forthcoming. That has been agreed with the Home Office, and I have no doubt that that will be the case.
The Government intend to commission a review of the shortage occupation list by the Migration Advisory Committee later this year. My door is always open to hon. Members who want to feed in to what we have to say about it.
We keep reinvigorating the potential of the domestic workforce—I say that as somebody whose first job was picking plants. We need to improve awareness of and access to the jobs on offer, in both primary production and processing. That includes a greater recognition of the agricultural and processing skills, qualifications and the fabulous careers in our sectors. We have always been clear about the need to shift the UK towards a high-skilled, high-wage economy, and business can and must do more to attract UK workers. I appreciate the challenge, particularly for seasonal work, which by its very nature is short term. That clearly means that it is not attractive to much of our domestic workforce in an extremely tight labour market. I commend the efforts by businesses that have taken steps to recruit more UK workers, and I am glad to see steady increases year on year in this space. Real efforts have been made, and there have been improvements in the numbers.
We are working very closely with the Department for Work and Pensions to develop and deliver a long-term recruitment strategy. With key trade associations, we have developed a regional recruitment approach, which is pretty much what the hon. Member for Edinburgh North and Leith (Deidre Brock) asked for. My colleagues in the DWP and I would be delighted to discuss that with her at greater length if she would like. It uses the DWP’s Jobcentre Plus network to foster strong local links between employers and work coaches, and give jobseekers the skills and knowledge they need to enter the sector.
We need to look at the labour and time-saving potential of automation. In many cases in this sector, that will mean machines for moving pallets around. I have never pretended that automation is a complete answer to horticultural labour needs, but more can be done to complement the need for labour and remove some of the jobs that can be done by machines. DEFRA has led a review of automation in horticulture, which will be published soon. It will provide a better understanding of what is required to accelerate the development and uptake of automation technologies in the edible and ornamental sectors.
We know it will take time to have a wide-scale roll-out of automation, but we should be doing it, and indeed we are. There are a number of initiatives across Government to bring such technologies to market as fast as possible, including some of our grant schemes in DEFRA. Our farming innovation programme and farming investment fund have schemes that are genuinely practical and ground-level for farmers to apply for. Indeed, they have done. We had to more than double the money in the scheme because it received such successful, sensible applications from the farming world.
By taking action across those three fronts, we can deliver the workforce needs of agriculture productively and sustainably for the future. I accept that more still needs to be done, and we must do it.
Wendy Chamberlain
I thank all hon. Members who have spoken this evening. As I have a little time, I will make reference to what they said.
I recognise what the shadow Minister, the hon. Member for Cambridge (Daniel Zeichner), said about the work that DEFRA has done and the engagement that it has had. That has been my experience. I have had good engagement with the Scotland Office on my concerns about seasonal agricultural worker schemes, but the Home Office has been a real barrier. The SNP spokesperson, the hon. Member for Edinburgh North and Leith (Deidre Brock), and I sent a cross-party letter with the Scottish Conservatives outlining our concerns about the seasonal agricultural worker scheme after our visit to Arbuckle’s just outside Dundee. We pretty much got a flat rejection of the quite reasonable request that we made.
I will forgive the hon. Member for Westmorland and Lonsdale (Tim Farron) for not hearing my speech, because he is such a great advocate for the farming community in his constituency and elsewhere. I absolutely agree with him. Indeed, I contributed to his debate on second homes, a number of which are in the East Neuk and Pittenweem. We face a real challenge if we want to encourage domestic workers into the sector; if they cannot live near the sector, they cannot work in it.
On automation, there are clearly some parts of the industry—as I have seen, certainly in later parts of the process—where it is not an option. As consumers, we are picky about our soft fruit, and we are right to be. It is difficult to expect it to be picked by anything other than hand. If farmers do not have the certainty of an income, how can they invest? Arguably, it makes our whole industry less competitive. I am always impressed with the diversity with the farming community. Things like retail and accommodation cannot exist if the core farming business is not there.
On the point made by the hon. Member for Strangford (Jim Shannon), I too was at the McDonald’s young farmers scheme event. I met three former participants of the scheme, and it was great to hear that they are all still working in the sector. Our role as policymakers is to ensure that they can stay in the sector. I accept that the Minister and DEFRA are not wholly responsible for all the issues and challenges we have spoken about today, but I believe there is a responsibility to ensure that the Department collaborates across Government—on education, for example, and certainly with the Home Office—to ensure that the policies it brings forward are not to the detriment of our farming communities.
Question put and agreed to.
Resolved,
That this House has considered recruitment support for the agriculture sector.
Written Statements
(2 years, 5 months ago)
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Higher Education and Skills in Local Communities
(2 years, 5 months ago)
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The Minister for Higher and Further Education (Michelle Donelan)
Today I am announcing a national programme which will be delivered by The Open University. The Open University will partner with 10 to 12 further education (FE) providers in England to support the delivery of high quality level four and five courses in areas where there is currently limited provision.
As a Government we are working to level up the country, and access to high quality education at level four and above is a vital part of this. There are too many communities who do not currently have access to local, convenient, high quality higher education (HE) and I am determined to address this.
We want people wishing to train and upskill throughout their life to have local access to a new type of HE, focused on providing the higher level skills to meet local employer needs, with shorter courses that deliver the skills they require rather than only three year degrees.
The Open University will be working in partnership with a selection of FE providers and employers at a local level to understand the skills the economy needs and ensure the education system give people those skills.
We know FE providers are at different stages and require different levels of support to take the important step into delivering good quality level four and five courses that employers want. So I have asked the Office for Students to commission an HE sector leader to provide validation and course support to help FE providers develop and deliver high quality higher technical courses that meet local skills needs.
We are delighted that the Office for Students has appointed The Open University to deliver this vital programme. The Open University will work with FE providers who need support developing and delivering courses and having them validated. They will help people in areas currently underserved by HE courses to access a high quality course accredited by a known and recognised institution. The Government are providing up to £10 million to support The Open University with the costs of setting up and running the programme over the next three years.
The Open University is inviting bids now from local FE providers who are ambitious about delivering high quality level four and five courses. They will be announcing which organisations they will be supporting in the autumn, and we look forward to working with them and the Office for Students to level up opportunity.
This new programme comes alongside a £32 million Higher Technical Education Skills Injection Fund for colleges and universities, which will be invested in equipment and facilities to support technical studies, and boost training opportunities with businesses in key areas such as digital, construction and healthcare.
I would like to use this statement to encourage education sector leaders to engage with these programmes of support. Together we can build an even better HE offer that is fit for the 21st century and delivering on the priorities of local employers and learners in every part of the country.
[HCWS55]
Unit for Future Skills
(2 years, 5 months ago)
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The Parliamentary Under-Secretary of State for Education (Alex Burghart)
In February, it was announced in the Levelling Up White Paper that the Department for Education would be setting up a new Unit for Future Skills. The White Paper recognises that good information is necessary for the skills system to respond effectively to emerging needs. The unit has therefore been set up to improve the quality of jobs and skills data, working across Government to make this publicly accessible.
Rich sources of information on skills and jobs already exist. However, this information is often held by various parts of Government and in different or incompatible formats. Furthermore, data in the public domain is typically not presented in a way that is most useful for its intended audience, whether learners, providers, local areas, businesses, or researchers.
Today, the unit has officially launched with its first data release. This covers the jobs, sectors and regions people work in after gaining a qualification. This is the first time we have brought together data on higher and further education to make it easier for people to see where their training can take them: for example, showing the routes young people take through high-quality technical education to get good jobs where they live. This data is an early example of what the unit can do, and we will work with others to improve this and release more useful information.
The unit will work extensively with a variety of stakeholders to enrich our employer-led skills system and make it more responsive to the economy’s needs. The unit covers England only, but will work with devolved Administrations to share learning and insights.
Alongside the data from the Unit for Future Skills, the Skills Productivity Board has also published its remaining reports, concluding its work. The board is an expert committee set up in 2020 to provide independent, evidence-based advice on skills and their contribution to productivity. Findings from the board emphasise the need for sustained focus on data improvements and formed the basis of the unit’s priorities.
You will be able to follow the unit’s work and access its products through a dedicated website, which has also gone live today at: https://www.gov.uk/government/groups/unit-for-future-skills.
The unit will continue to work with other Government Departments to bring together different datasets and make these widely available, including through APIs—application programming interfaces.
Specific priorities for the unit over the next six months include:
Improved dashboard on career pathways providing users with more detail on which post-16 qualifications support successful employment in specific sectors within a local area—improvements to be designed based on user feedback on dashboard released today.
A skills demand dashboard. Development of a product based on newly available data from the ONS, showing what types of jobs are being advertised in which local area
Research projects on future skills demand forecasting and a UK specific skills taxonomy. The latter will underpin better linking of data, enriching its potential
Roundtables and stakeholder workshops, to gather feedback on the unit’s launch products and define its longer-term priorities.
[HCWS54]
Delivering Justice for Victims
(2 years, 5 months ago)
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The Lord Chancellor and Secretary of State for Justice (Dominic Raab)
Today the Government are publishing a draft Victims Bill for pre-legislative scrutiny, ensuring we will deliver on our manifesto commitment to pass and implement a victims law.
We are also publishing a wider package of measures that put victims firmly at the heart of the criminal justice system. These are set out in the Government’s response to the consultation “Delivering justice for victims - a consultation on improving victims’ experiences of the justice system”. The consultation launched in December 2021 and ran for eight weeks. It received over 600 responses, alongside important feedback gathered through 39 engagement events with frontline professionals and victims.
In response, we have set out a wide range of measures to send a clear signal that the justice system must deliver justice for victims. The Government are also announcing the new cross-Government victims funding strategy, which will drive better outcomes for victims by tackling barriers to sustainable funding and ensuring consistent commissioning.
Collectively these measures will amplify victims’ voices in the criminal justice process, improve the support victims receive, and strengthen oversight of criminal justice agencies. In doing so, they will help victims to have confidence that there is the right support available and that if they report crime, the criminal justice system will treat them in the way they should rightly expect.
The draft Victims Bill will:
Enshrine the overarching principles of the Victims’ Code in primary legislation and set out key entitlements in secondary legislation, to send a clear signal about what victims can and should expect from the criminal justice system.
Introduce a joint statutory duty on PCCs, health and local authorities to collaborate when commissioning support services for victims of sexual, domestic, violence, and serious violence so that services are more holistic and better co-ordinated.
Introduce a statutory definition of Independent Sexual Violence Advisors (ISVAs) and Independent Domestic Violence Advisors (IDVAs), accompanied by statutory guidance at a later date, to increase awareness and consistency of these roles.
Place a duty on criminal justice agencies to collect data and keep under review their compliance with the Victims’ Code and to take into account feedback from victims about their experiences. It will also introduce a duty for Police and Crime Commissioners (PCCs) to take a convening role in monitoring compliance locally so that there can be a better view of how the system treats victims. As a result, the Victims’ Commissioner will no longer be responsible for reviewing the operation of the Victims’ Code but will still be able to engage on compliance at a national level through their other functions.
Provide the Justice Secretary, Home Secretary and Attorney General with the power to require criminal justice inspectorates to undertake regular joint thematic inspections on victims’ issues, to ensure clearer and sharper focus on how victims are treated.
Require the Victims’ Commissioner to lay their annual report in Parliament, and require relevant agencies and Departments to respond to recommendations in that report, to enhance scrutiny of the actions being taken.
Remove the need for victims of crime to raise a complaint via an MP before it can be investigated by the Parliamentary and Health Service Ombudsman, to simplify the process for victims wanting to escalate complaints against public bodies. This will be an exception for victims of crime, for whom approaching an MP to share a potentially traumatic experience is more likely to be a barrier to making a complaint and does not constitute an indication that the Government intend to remove the ‘MP filter’ more widely.
The accompanying measures announced within the consultation response will:
Increase the victim surcharge by 20% so that offenders pay more towards vital victim support services. This change is being made via statutory instrument.
Introduce a duty in the Victims’ Code requiring the Crown Prosecution Service (CPS) to meet victims in certain cases before a hearing takes place, where the victim is willing to do so.
Work with criminal justice inspectorates to enhance their oversight of victims’ experiences and use ratings to improve performance, including more regular focus on victims’ issues and experiences in all inspections.
Improve agencies’ communications on complaints, ensuring clear and accessible points of contact to help victims make and progress their complaints.
Raise the profile and professional standing of ISVAs and IDVAs, through the introduction of a non-public register, a network for support providers and an annual report.
Include information about community impact statements in the Victims’ Code to promote their use in appropriate cases and amplify the voices of communities impacted by crime.
Work with the judiciary to introduce a Victims’ Code entitlement for victim personal statements in the Mental Health Tribunal where the release of offenders is being considered, so that victims are able to explain the impact of the crime on them.
Give victims the right to attend a parole hearing in full for the first time, should they wish to and subject to the circumstances of the case and agreement of the Parole Board.
Allow victims to ask questions within submissions to the Parole Board and require that the Board takes account of these when reaching their decision, so that victims’ voices are amplified in the process.
Together these measures will contribute to our plan to give victims the justice they deserve, and build back a better, stronger, fairer country.
[HCWS53]
Recognition of Ulster Scots as a National Minority and Funding for An Ciste Infheistíochta Gaeilge,
(2 years, 5 months ago)
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The Secretary of State for Northern Ireland (Brandon Lewis)
Today, the Government are recognising officially Ulster Scots as a national minority under the Council of Europe framework convention for the protection of national minorities, and are announcing £4 million in funding for An Ciste Infheistíochta Gaeilge, the Irish language investment fund. This delivers on two of the Government’s commitments in the New Decade, New Approach agreement (NDNA).
NDNA placed an emphasis on respect for, and mutual understanding of, Northern Ireland’s diverse national and cultural identities. The carefully balanced package of measures within it will benefit everyone in Northern Ireland.
Ulster Scots have a proud history and a distinct language, heritage and culture, and this recognition will afford them the same status as other minorities in the UK. The recognition of Ulster Scots is without prejudice as to whether they meet the definition of a “racial group” under the Equality Act 2010, as only the courts can rule on this matter.
The Irish language forms another key part of Northern Ireland’s rich tapestry of identities, languages and cultures. Through the NDNA financial package, the UK Government will make available £4 million to be provided to An Ciste Infheistíochta Gaeilge for capital grant funding to non-profit organisations promoting the Irish language.
The Government are proud to deliver on the commitments they made to the people of Northern Ireland in NDNA, and today’s announcement will support that vision of greater inclusion, tolerance and openness in Northern Ireland.
[HCWS56]
Grand Committee
Financial Exclusion (Liaison Committee Report)
Baroness Tyler of Enfield
That the Grand Committee takes note of the Report from the Liaison Committee Tackling Financial Exclusion: A country that works for everyone?: Follow-up report (10th Report, Session 2019–21, HL Paper 267).
Baroness Tyler of Enfield (LD)
My Lords, I am delighted to open this very timely debate on the Liaison Committee’s follow-up report on financial exclusion. Perhaps I should explain the use of the word “timely”. I am referring not to the fact that it is now over a year since the publication of that report and 11 months since the Government’s response, but rather to the extreme salience of financial inclusion and exclusion, given the unprecedented cost of living crisis which is affecting so many people so acutely. First, I declare my interests in the register, particular as a member of the Financial Inclusion Commission and as president of the Money Advice Trust.
Turning briefly to the history of the report, I reflect that it has had a long gestation period. The original Select Committee, which I had the honour to chair, reported in March 2017, with 22 wide-ranging recommendations calling on the Government, the Financial Conduct Authority and the banks to give much greater priority to tackling financial exclusion and ensuring that vulnerable customers were getting a fairer deal. When we debated the report alongside the Government’s response, in December 2017, I well recall expressing my disappointment with what I felt was a somewhat lacklustre and dispiriting response, particularly the rather dismal tally of recommendations that had been accepted. As we debate today the Liaison Committee’s follow-up report, published in June last year, and the Government’s response, I have to confess to a rather similar feeling.
I thank all the members of the original Select Committee and am absolutely delighted that the noble Lords, Lord Shinkwin and Lord Holmes, with all their commitment and expertise in this area, are both speaking today. I thank the Liaison Committee for conducting a follow-up inquiry. I think these follow-up inquiries are an excellent innovation, helping to ensure transparency and hold the Government to account on their response to Select Committee reports. Finally, I thank the excellent committee staff who assisted both the original Select Committee and with the follow-up report. I must particularly thank Lucy Molloy for her outstanding support.
The follow-up report contained 19 recommendations, covering such critical issues as access to cash, digital inclusion, basic bank accounts, bank branch and ATM closures, the role of the Post Office, control options, affordable credit, the Help to Save scheme, financial education, government leadership and the need for proactive regulation, and more besides. This demonstrates how multifaceted any serious attempt to tackle financial inclusion needs to be and why a strategic and co-ordinated approach among all the key players is vital. I will be able to focus on only a small number of these issues today, but before doing so I wish to reflect on the current state of financial inclusion in the UK.
I begin by acknowledging that there have been some positive steps, most particularly the inclusion in the Queen’s Speech of legislation to safeguard access to cash—albeit two years after it was first announced in the 2020 Budget. I strongly welcome this as a means of ensuring that the 5.4 million adults in the UK who rely on cash are financially included. Three years ago, the Access to Cash Review warned that Britain was
“sleepwalking into a cashless society.”
This has been exacerbated by Covid. As recent research from the RSA has shown, some 10 million people would struggle to cope in a cashless society and 48% of the population would find it problematic if there was no cash available.
I also recognise and welcome the steps the Government are taking, including the recent consultation, to bring “buy now, pay later” products within the scope of FCA regulation—a good example of the need for more proactive regulation. However, there was no specific mention of it in the Queen’s Speech and I would be grateful if the Minister could say exactly when the “buy now, pay later” regulation is expected to come into force.
With so many bank branches and ATMs closing, it is vital that other facilities—such as enhanced Post Office services or new shared banking services or hubs, based on the existing pilots—come on stream. The recent levelling up White Paper mentions bank closures in both rural and urban areas but contains no specific policy measures to address them, hence my disappointment that our recommendation that the Government formally review the powers available to the FCA to mitigate the negative effect of the closure of bank branches and free ATMs was rejected.
More government action is urgently needed to ensure that the rapid expansion of alternatives for people wishing to use face-to-face services, including community banking hubs and Post Office services, are available within a reasonable distance, taking account of public transport and accessibility needs. Indeed, I still have the words to the committee of the money advice expert Martin Lewis ringing in my ears:
“To answer your question whether it is socially responsible for banks to be closing branches in the middle of this, I never attribute social responsibility to banks; that it is something that banks need to do. They are there to make money for their shareholders. Surely, it is for regulators and politicians to make sure that, if we need them to keep the bank branches open, they do so.”
While we must protect access to cash, we also need effective action to support cash users who can do so to make the move to digital payments; this needs focused and co-ordinated work on digital inclusion, and I ask the Minister to set out what the Government are doing in that area.
Since our follow-up report in 2021, which reflected the massive impact that the pandemic had had on people’s financial resilience, the soaring costs of living, with prices now rising by 9% a year, have placed yet more pressure on the most financially vulnerable. Indeed, when we made our recommendations last year, the evidence suggested that 27 million adults in the UK—more than half the adult population—were financially vulnerable. It is clear that this has become more dire for millions of people across the country, with many now unable to afford basic food and heating.
Research from the Money Advice Trust shows that some people are already having to go without in order to try to get by financially. Specifically, the research shows that, in the past three months, 12% of UK adults —equivalent to 6.2 million people—had gone without heating, electricity or water due to the rising cost of living, 8% had gone without food, and 25% had used credit to pay for food or bills because they had no other way to pay for them. Given that some price rises have only just come in, and with the strong likelihood of worse to come, particularly with energy prices rising again in October, there is great concern that more people will fall into debt, particularly on household bills, or end up going without essentials.
Equally worrying is the poverty premium, which means that poor people still pay more for essential goods and services compared to those on higher incomes. The poverty premium costs the average low-income household £490 a year, meaning that low-income and vulnerable consumers still struggle to afford, have to pay extra for or are unable to access appropriate products and services such as utilities, insurance and credit.
The energy poverty premium is particularly acute. Research commissioned by Fair By Design found that being on the best energy prepayment meter tariff could still be £131 more expensive than the best online-only fixed tariff. This must end. For households living below or around the poverty line, it has been estimated that the elimination of the poverty premium could potentially release an extra £4 billion per year into the local communities and economies that need it the most. So I ask the Minister to explain what immediate action the Government are taking to help to alleviate the poverty premium.
I want to focus on the case set out clearly in chapter 3 of the report for more proactive leadership and regulation by the Government and the FCA. I am particularly disappointed that our recommendation for a statutory duty for financial inclusion for the FCA was not given more consideration. The financial services Bill that was announced in the Queen’s Speech is a once-in-a-generation opportunity to redesign financial services regulation to ensure that the regulator and the industry better serve the needs of customers. I strongly believe that this can be achieved only by giving the FCA a “must have regard” duty to financial inclusion, to ensure that it is both prioritised and enforced within the financial services sector.
I recognise that there are different views and different ideological approaches here, but I still have the words of so many of the eminent witnesses to the follow-up inquiry ringing in my ears. With the exception of Ministers, they were adamant that clear FCA objectives and a duty of care to customers were required to bridge the gap between the commercial interests of the financial services providers and the societal needs to achieve financial inclusion. As Natalie Ceeney, who chaired the Access to Cash Review, told the committee:
“the fundamental issue [is that] there are market segments that commercial models will never address. They are never going to be commercially viable to support the most vulnerable and the poorest.”
The sometimes glaring gap between social policy and regulatory policy—with the Government and the FCA pointing the finger at the other as being responsible for action—lies at the heart of many of our recommendations.
The new consumer duty, currently being consulted on by the FCA, as well as its consumer vulnerability guidance, will not address this as it deals with the experience of consumers who currently do have access to financial products and services, rather than the accessibility of those products for those currently totally excluded. The only way to ensure that low-income or vulnerable consumers can access essential products and services is to give the FCA a clear remit on financial inclusion.
Many of our witnesses lamented the lack of an overall financial inclusion strategy. While the deliberations of the Financial Inclusion Policy Forum clearly continue to be helpful, and the national financial well-being strategy produced by the Money and Pensions Service is welcome, our expert witnesses felt that they were no substitute for a strategy that could galvanise financial inclusion efforts at a national level, bring together the various strands of work across all sectors and monitor implementation. I agree.
I still strongly maintain that if such a strategy were presented to Parliament annually as a Command document, as we originally recommended, it would allow for proper scrutiny and parliamentary debate. Of course, the Government now produce an annual financial inclusion report, including, for the first time, forward plans and activities. I looked at the most recent report, published on 21 December 2021, and saw that the forward plans section comprised four whole paragraphs covering just over one side of paper. That is not a strategy.
To conclude, despite my disappointment at the lack of progress in key areas since we reported, I firmly believe that this is an issue whose time has come. I look forward to hearing the expert contributions of other noble Lords and the Government’s response. I beg to move.
Lord Holmes of Richmond (Con)
My Lords, it is a pleasure to take part in this debate and to follow the noble Baroness, Lady Tyler. I was also privileged to serve on the original committee. The noble Baroness said that it has been a while since the updated committee report. I am not saying that the first report on financial exclusion was done a long time ago, but I was a young man then. Things take time.
This afternoon, I shall focus on cash, debt, regulation and financial technology, hereafter referred to as fintech. As the noble Baroness, Lady Tyler, pointed out, it is positive that, in the upcoming financial services and markets Bill, we have the opportunity to see the Government’s commitment to the future of cash in the UK. Can the Minister tell me what is the Government’s intention for the acceptance of, as well as access to, cash? The difficulties around being able to access cash are one thing, but if there is no place to spend it, what is the purpose of cash? It loses its currency. So many places are going cashless. I do not single it out, but I saw earlier today that Center Parcs is cashless. As many families approach the Whitsun break, they will find that their cash has no currency there, as well as in many other venues around the country.
In last year’s Financial Services Bill, I was delighted that the Government accepted my amendment on cashback without a purchase. The purpose was largely to try to fill the gap where so many banks have stepped away, with closed branches and ATMs, to enable cash to get into the hands of consumers in the community. More than that, research published in December last year demonstrated that the vast majority of uses of cashback without a purchase had been for £20 and below. It serves a market that even ATMs had not really served prior to that point, so it was a very positive intervention.
As the noble Baroness, Lady Tyler, pointed out, it is critical for the Minister and for everybody to understand and appreciate that cash still matters. It matters materially to millions. They cannot just be shut out of economic and thus social activity or society itself. As the noble Baroness also pointed out, it would be helpful for the FCA, as the regulator, to adopt a key role when it comes to promoting and having regard to financial inclusion. Will the Government reconsider the role that the FCA can play in this space?
Similarly, so much of the regulatory approach looks to areas around enabling financial services, but it is also important to look at the whole question of debt. Does the Minister agree that it is high time that we regulated debt advice services, which are often not performing the purpose that we might imagine? Online particularly, they are taking money for debt advice off people who are already in financial dire straits. Whatever we may think about debt, its devastating impact cannot be overstated. Of those in debt, 400,000 contemplate suicide, and 100,000 attempt it.
I have always believed that financial technology—fintech—has a potentially transformational role to play when it comes to financial inclusion. In saying that, I declare my fintech and technology interests as set out in the register. For example, as we saw at the outset of the pandemic, Starling Bank, a new neobank, produced its Connected card to instantly, effectively and positively help those who were socially isolating at that stage and throughout the pandemic. Fintech offers the opportunity to reimagine risk and take a whole new view of credit, not to increase risk in lending activities but to reimagine and reassess it, crucially in real time, and to use that data positively to enable and financially include.
I believe that open banking and open finance can have an incredibly positive role for all consumers. They can bring people into financial inclusion if we get it right. To illustrate the problem briefly, let us imagine a payment app. It could be the best piece of financial technology ever created, yet if it is in the hands of somebody who does not have the digital skills to use that app, that payment is not being made. Similarly, if that app is in the hands of someone who does have the skills to use it but is in an area of low or no connectivity, that financial payment is not being made.
This underscores the multiple nature of what is required for financial inclusion and how it is inextricably linked with digital inclusion and financial education. A good example of where this comes together in a positive way is what GoHenry, an excellent fintech business, is doing in its tremendous work with financial education for young people through their teenage years.
The initial Select Committee report and the Liaison Committee’s follow-up report make the case clearly. There is much to be done if we are going to enable and deliver financial inclusion for everybody across the United Kingdom. It makes economic sense and it makes social and psychological sense because if we financially include, everybody benefits.
Lord Balfe (Con)
My Lords, I note that the noble Lord, Lord Davies, is not able to be with us, so the Committee get me. I thank the noble Baroness, Lady Tyler, for introducing the debate. I hope that I will not upset too many people by the time I finish speaking, but the most obvious point of the lot seems to me to be that one way of tackling financial exclusion is to give people more money. We can try all the sticking plasters in the world, but the fact is that a lot of people in society are struggling to get by, and their number seems to be going up. Their financial problems will not go away because the FCA passes a regulation. Having said that, there are, of course, many very useful things in here.
I gave up money when Covid arrived and our local shop put up a notice saying, “We no longer accept cash”. I said to the very nice Turkish gentleman who runs it, “Why is that?”. He said, “Because the coins could give me Covid”. I said, “I don’t think they could, but I am quite happy to use my debit card in here.” I then thought about it and decided that I do not need money. I can honestly say that I have not carried any money for well over two years—so I am useless to tramps, for instance.
When we look at access to cash, let us realise that the world is changing. I am old enough to remember the Daily Express launching the “Save our Sixpence” campaign. It did not get very far, and most people today do not know what a sixpence is. Time moves on, and we are using less and less cash. When I go into my local stores today, very few people appear to be paying with money—and I am talking about the local Co-op, not expensive stores in expensive locations. We have to realise that we are heading towards if not a cashless society then one where cash is less of a factor. I do not think that we should resist this. It is rather like cheques. I got my cheque book out the other day to write a cheque—incidentally to a Member of this House for one of the APPGs—and it was the first time I had used it for a year, and that was because the APPG did not know how to accept electronic payments. You can see that there is still some education needed, even in this House. The world is changing; that is the point I am making.
Part of digital inclusion has to be to put some effort into getting people, particularly of my generation, behind the computer. It is, of course, gradually catching on, and most of my friends transfer money electronically. It is also an education and class issue. We need more digital inclusion. I notice that all the schemes which were running around the time of the Labour Government —which my wife made quite a bit of money out of, incidentally—to teach the silver generation how to use a computer seem to have disappeared. They did some good—not a lot, but a certain amount. Their weakness was that, when the Government sent money to Cambridge City Council—a very good Labour Council, let me say—it looked very carefully and decided to put its money into local libraries in the poorest areas of Cambridge. This was 20 years ago, when I was much less competent with technology, so I thought I would slip down there; it was a bit much, but I went down to see. I drove down there and, lo and behold, the car park was full of Chelsea tractors, Mercedes-Benz and BMWs, as the middle class of Cambridge had pounced on the idea that there were free lessons to be got from the council in a very poor area. The one thing I did not notice was any people who looked particularly poor. When we are looking at digital inclusion programmes, we need to target them.
Similarly, I just say a word on basic bank accounts. They are an extremely good idea but one of the groups with the greatest difficulty with bank accounts that I have come across is people newly arrived in Britain. I do not just mean refugees on the shores of Dover, but also students. EU nationals used to have tremendous difficulties in opening bank accounts because they could not provide most of the documents; they did not have a council tax bill, utility bill or whatever. In a university town such as Cambridge, it was a major problem faced by many overseas people—and indeed still faced by many.
I have another one or two small points. I welcome the resolution to better regulate buy now, pay later. It is an anomaly. It has crept through, because it is a new idea that managed to get round all the regulation. Clearly, it is another form of credit and it should be subject to some rules, so I certainly welcome that. I hope that the Minister can tell us what the phrase in the government response means when, in answer to our point that
“This legislation should be brought forward without delay”,
it states:
“The Government will publicly consult on policy proposals, and will then bring forward secondary legislation … as soon as parliamentary time allows.”
Does the Minister have any estimate that he can give us? I notice that we have a little time spare in the Lords. We managed to get the Second Reading of a Bill through in about an hour and a half yesterday and I do not think that this one would take much longer.
I turn to my next point. I am interested to read about the no-interest loan pilot. I counsel the Government to be very careful. A no-interest loan is still a loan and will still go into that order of priorities, and the one who chases the softest gets the least. More years ago than I remember, I was involved in advising the system in Bangladesh, of all places, on setting up loans for the village co-operatives. The one abiding lesson that I came away with was that you needed to have community contribution and coherence. If you just gave a loan to an individual person, they tended to disappear or put it right down the scale; if you gave it to a community group—an identifiable source—you would find that the community would exert some moral pressure on it getting paid back.
I have one other point. Financial learning begins at home, of course. We all know that the first seven years of a child’s life is when most of it is shaped, and that includes their attitude to money and to parents and many other psychological things. I was brought up by a grandmother born in Victorian England. She had a very strict attitude to credit—she did admit that mortgages could exist but she did not go much further than that. She used to say, “If you can’t afford it, boy, save up for it. Don’t you borrow—all the banks will get your money.” I think she saw banks roughly as most people see terrorists; she was not very fond of banks. It is important that, through schooling and through parental education, we help to educate children about money. What they learn in those first 10 years they will probably carry through the rest of their lives.
Lord Sikka (Lab)
My Lords, I thank the Liaison Committee and all its members for the excellent report. It is a pleasure to follow the noble Lord, Lord Balfe, in this debate. I should just tell him that I applied for a credit card not so long ago. I put down that I am a retired pensioner and put in only my state pension amount. Very soon, a sign appeared saying that I was not eligible for a credit card, which was just a reminder to say, “You’re too old, you’re too poor, go away”. It is a form of financial exclusion encountered by many people every day.
A major cause of financial exclusion and any social exclusion is poverty, which is increasing but the Government are doing little to tackle it. Trickle-down economics does not work: the rich keep getting richer while normal people struggle to make ends meet. The Government’s tax policies are regressive, employment laws are not enforced—as clearly shown by the P&O Ferries case—workers’ share of GDP continues to decline, pensions are inadequate, benefits lag behind inflation and redistribution is not a government priority. Is it any surprise that we have financial exclusion, which is really the tip of an exclusionary iceberg?
Financial services have increasingly moved from brick and mortar buildings and humans to cyberspace. According to Ofcom, some 1.5 million people do not have access to the internet. Broadband is expensive and paying £30 to £40 a month is beyond the reach of many, especially now that they are facing a cost of living crisis. Even if people manage to buy a computer, the rate of obsolescence is increasing as operating systems rapidly change. It is hard to see how many of the poor can continue to replace their computers every four or five years.
Might the Government consider adopting the Labour policy of giving free broadband to everybody? I remember during Covid going to a supermarket and seeing some young schoolchildren outside, huddled around a tablet. I asked them what they were doing; they did not have broadband at home and this was the only way they could catch a signal. It was bitingly cold, but there they were. Maybe the Government should provide free iPads to the needy as well as free broadband, which is essential.
I will confine the rest of my comments to banks, which are a vital part of our social infrastructure. The branch network plays a major role in the provision of savings, borrowings, financial services and finance for businesses, SMEs and local entrepreneurs. However, the bank branch network has been shrinking at an accelerating rate. Many villages and districts no longer have a bank branch, and post offices are closing too. People are left without financial services. The closure of local branches is a major reason why some traders—as they told me for a research project I did—demand payment by credit or debit card. They do not want to hang on to cash overnight as it is simply not secure; in the absence of a bank branch, they do not want any cash, which means a lot of poor people cannot afford to buy their goods and services.
Why are we witnessing this disappearance of bank branches? There are many reasons, one of which is mergers and consolidations. Lloyds TSB, HBOS and Halifax combined to form Lloyds Banking Group; inevitably, many branches vanished as they were not going to compete against each other. Santander acquired Abbey National, Alliance & Leicester and Bradford & Bingley; once again, lots of branches had to close.
The merger and takeover policy has been informed primarily by the need to compete at the global level, rather than ending financial exclusion. The social consequences of those mergers do not appear to be considered at all. Banking executives have sought to increase the size of banks to justify their mega pay packets. Maintaining an effective and efficient branch network is not part of any of their performance-related pay algorithm—it does not come into it at all. The bank websites continue to tell us that they are socially responsible, but that does not come into it either. A programme of bank branch closures has been pursued to cut costs and increase profits, rather than do what is good for the community. SMEs are left without good financial and banking advice; bank managers, because there are no bank branches, have absolutely no idea what is happening in the local community—where they could invest better, or what kind of diamonds or winners they can pick.
Under FiSMA, the FCA is required to
“promote effective competition in the interests of consumers”.
The FCA website says that one of its duties is to
“make markets work well—for individuals, for business, large and small, and for the economy as a whole.”
It is hard to see how any of these duties are met by unrestrained bank branch closures. Branch closures result in exclusion. Many citizens, especially the elderly and low-income groups, do not have access to a good broadband connection or a computer. Some people are told to go to libraries—so I went to look at the libraries, where many of the computers appeared to be steam-powered, incredibly slow and utterly unsafe. Nobody should really be accessing their financial services and banking from the library computers—and about 20% of libraries have vanished since 2010. We had a banking crash, and what did the Government do? Did they punish the bankers? No, they shut libraries everywhere. I do not know what the link is, but that was their solution. So again we have a problem.
Those who have mobile phones may not have access to strong wi-fi signals. Trekking to another town is not an easy option for the elderly, infirm, women with small children and local entrepreneurs. People have said that they could not afford to go to another town, or that they are a one-man operation and it basically means that they have to shut down their business for an afternoon; they are really stuck. Branch closures are actually transferring costs from banks to people, in the form of transport, time, pollution, road congestion, search and cyber risks, and many more. It is not a costless thing for banks to do; all they are doing is to shuffle costs.
ATMs can dispense cash, but they are dependent on the vagaries of the banks’ IT systems. How many times have we read that those systems have failed? They also need to be replenished, and they always offer a very limited amount of cash. Again, that hinders many who are less well off. Even worse, I visited for this research project many poorer areas, and what did I find? Every ATM was charging a fee for withdrawal of cash, which is punishing people for poverty.
SME lending growth is restricted on average by 63% in areas where a bank branch closes, and where the last bank in town is closed the reduction in lending to banks was about 104%—a massive reduction. If people go to a bank branch in another town, they will do their shopping there and spend their money there, which means that their local town goes into a spiral of decline, because people are simply not shopping there at all.
I suggest that we need to put responsibilities on banks to do certain things. At the moment, banks rely on voluntary codes for closures. That is simply not acceptable. Stakeholders are consulted after a decision to close a branch has been made, but not before. I asked the bank to show me the financial calculations explaining why the local branch was being shut, and they said, “Oh, we can’t show you that.” If they had shown me, I could have unpicked the financial numbers quite easily and made an alternative case, but they were not willing to show me. People have hardly any notice, and basically human interest is not really taken into account. Banks should consult local customers first and show their financial numbers, explaining why a branch is being closed, and there should be an ombudsman to adjudicate on disputes. If a bank wants to shut down a branch, it should not be able just to get away with it.
We need a simple test: a bank must show that after the closure of a branch the local financial infrastructure is no worse off. If it is, the bank cannot close the branch; it can move it into a post office or a supermarket but it cannot simply walk away. Banks should have to pick up the costs. That fact is shown in the US Community Reinvestment Act 1977, which ought to be examined, as we can learn something from it.
Banks will not like that suggestion but I shall tell the Committee what we are doing for the banks, and I am asking for very little in return. We bail them out; we shower them with billions in quantitative easing; the public or the state acts as their lender of last resort; the Government provide the Financial Services Compensation Scheme; the Government send millions of customers to banks by ensuring that pensions and social security are paid through the banking system; and banks get their raw material, which is cash, almost free, while charging 40% interest on overdrafts. All I am saying is that banks need to give something back to the community. They should not be able to destroy local economies by simply closing local branches and walking away.
Lord Bilimoria (CB)
My Lords, the Liaison Committee follow-up report is called Tackling Financial Exclusion: A Country that Works for Everyone? The recommendations made in the original 2017 Select Committee report found that, four years on, financial exclusion is still highly prevalent in the UK—that is,
“the inability, difficulty or reluctance to access mainstream financial services, which, without intervention, can stimulate social exclusion, poverty and inequality.”
Particularly at risk are those on low incomes, those living in poverty, young people, older people, people with difficulty in accessing banks and those lacking digital access.
The committee found that, despite the UK being at the forefront of the global financial industry and a leader in the fields of financial services, technology, fintech and innovation, financial exclusion is still a significant problem, saying that
“a sizeable number of UK citizens lack access to even the most basic financial services, while still more are forced to rely on high-cost and suboptimal products which can prove damaging to their long-term financial health.”
We heard earlier about the role of the “poverty premium”, where poor people pay more, which exacerbates the effects of financial exclusion. We have heard from virtually every speaker about the closure of bank branches and the growing emphasis on digital services. In one way that is a good thing, but it also intensifies financial exclusion.
The committee has made lots of recommendations, calling on the Government, regulators and industry to help those experiencing these difficulties. The recommendations also focus on supporting the financial capabilities of future generations. For example, the report says that financial education should be added to the primary school curriculum. Will the Minister confirm whether that is happening?
The Government responded, of course, and made the distinction between financial inclusion and financial capability. The noble Baroness, Lady Tyler of Enfield, said that the response lacked a sense of urgency and ambition. Does the Minister agree that there is a lack of urgency and ambition? On that note, I thank the noble Baroness for leading this debate.
In April 2021, as we have heard, the Liaison Committee published a follow-up report examining the progress by the Government and key stakeholders. The date shows that it came in the midst of the pandemic, and the Covid-19 pandemic made it particularly important to not only understand but take action on tackling financial inclusion. The follow-up report found that, four years on, financial exclusion is still highly prevalent in the UK, exacerbated by the pandemic, with millions experiencing low financial resilience. That is an important point: financial resilience is the ability to cope financially when faced with a sudden fall in income or unavoidable expenditure. Of course, as has been mentioned earlier, we are living through this now with the cost of living crisis, which, again, is exacerbating the situation. We need inclusive financial services, leadership from government and proactive regulation, and of course there is now the Financial Inclusion Policy Forum.
We have heard lots about access to cash already, and the noble Lord, Lord Sikka, spoke about digital exclusion. During the pandemic, I saw that this was so sadly apparent. Take digital access for schoolchildren as an example. On the one hand there is the child in their own room in their own house, with fast wi-fi and their own laptop, with a school providing education, and where they did not miss a single class, not even a singing lesson or an art lesson. At the other extreme there is the child in a 10th-floor council flat, with no wi-fi and no laptop, missing out completely on their education. There were issues of digital access, digital poverty and digital literacy, and it was sad to see.
On the lack of skills, according to the noble Lord, Lord Sikka, 1.5 million people have no access to the internet. We are the sixth largest and one of the most advanced economies in the world; how can we have a situation like that? There should be 100% broadband coverage in the country. Have the Government urgently raised their ambition from 85% percent to 100% broadband coverage?
Basic bank accounts are an essential requirement. We have bank branch and ATM closures. We still need cash. There is the role of post offices, affordable credit, the Help to Save scheme, debt advice, financial education, control options, the FCA’s objective, the duty of care to customers, which we heard about, and the Government’s financial inclusion strategy.
The FCA responded to the committee’s follow-up report, saying
“there are themes that relate to areas we are actively working on”,
which included a financial inclusion objective, a duty of care, control options, affordable credit, bank branches and ATM closures, digital inclusion and access to cash. The Financial Inclusion Commission, which is an independent body, commented on the report and also spoke about the adoption of regulation for “buy now, pay later” products. On one hand, these give financial access; on the other hand, they can be very dangerous.
The Financial Inclusion Commission gave some facts: 12.5 million UK adults have little or no confidence in their ability to manage money; 22% of all adults in the UK have less than £100 in savings; one in five adults would not be able to cover more than one month of living expenses if they lost their source of income. Just imagine what is staring us in the face with the cost of living crisis at the moment. One million people in the UK do not have a bank account and 16% are borrowing to pay for essentials because they have run out of money.
The Money and Pensions Service’s excellent report, The UK Strategy for Financial Wellbeing 2020-2030, said that
“a financially healthy nation is good for individuals, communities, business and the economy.”
Its vision, according to the report, is
“Everyone making the most of their money and pensions.”
It suggested five ways to drive change at scale: financial foundations; a nation of savers; credit counts; better debt advice; and a future focus for all adults. It says that while financial well-being is good for individuals, communities, business and the economy, poor financial well-being affects tens of millions of people and is holding our country back. The report says that
“9m people often borrow to buy food or pay for bills.”
That figure has probably escalated hugely since then because of the cost of living crisis; does the Minister agree? The report also said that
“22m people say they don’t know enough to plan for their retirement. And 5.3m children do not get a meaningful financial education.”
OECD figures place the UK well down the rankings of G20 countries, behind France, Norway, China, Indonesia.
The MaPS states:
“Financial wellbeing is about feeling secure and in control. It is knowing that you can pay the bills today, can deal with the unexpected, and are on track for a healthy financial future. In short: confident and empowered.”
If this is the case, businesses also benefit, because if people do not fall behind on their bills and their payments businesses have healthier profits and cash flows and do not need to write off debts. People with good financial well-being will spend in a way that is sustainable, and the wider economy, of course, benefits as well.
In a recent survey when it produced this report, the MaPS found that 1.7 million people said that they had received debt advice. It estimated that a further 3.6 million people needed debt advice because they had regularly missed payments throughout the previous six months. On targeting the strategy at those most in need, of the 40 million people of working age, 22 million said that they do not know enough to plan their retirement: 66% of 18 to 24 year-olds; 64% of working-age women; 48% of those approaching retirement. These are stark figures. In addition, there are 12 million people aged 65 and above, among them 5.4 million aged 75 and above.
When we talk about financial exclusion we are talking about vulnerability. We are talking about people with physical and mental health issues, individual personal circumstances, age—as I outlined—financial crime and gender. We are also talking about tackling digital inclusion; some 11.9 million people do not have the basic digital skills for day-to-day life in the UK.
The noble Lord, Lord Holmes, spoke about fintech. The Kalifa Review of UK FinTech in 2021—led by my friend Ron Kalifa, a fellow Zoroastrian Parsi—talked about “Inclusion and Recovery”, and
“Supporting citizens and small businesses to access more, better and cheaper financial services—and doing so in a sustainable way to help ‘build back better’.”
The report recommends industry-wide coalitions on key issues such as financial inclusion. Does the Minister agree that there should be industry-wide coalitions?
I make one final point. Regardless of technology, people need to have the ability to speak to somebody. The branch in which I opened a bank account before I started at university does not exist anymore. The ability to walk in there and speak to someone does not exist. That is the case for so many people. It is so important that you can speak to somebody when you need to; we have to enable that access.
To conclude I will quote the Money and Pensions Service:
“a financially healthy nation is good for individuals, communities, businesses, and the economy. A successful strategy will need to influence a wider system of regulations, products, services and culture.”
Lord Shinkwin (Con)
My Lords, it is a pleasure to follow the noble Lord, Lord Bilimoria. I congratulate the noble Baroness, Lady Tyler of Enfield, on securing this important and, as she reminded us, timely debate. I am pleased to have this opportunity, despite the amount of time that has passed since the original committee issued its first report, to thank her for her continuing leadership on this issue, both as chair of the original ad hoc Select Committee—on which I was privileged to serve, with my noble friend Lord Holmes and others, when a new Member of your Lordships’ House—and in persuading the Liaison Committee that the issue we are considering today merited a follow-up inquiry and report.
The challenge of tackling financial exclusion is surely worthy not just of the work on which the noble Baroness has so ably led but of ongoing attention by the Government, the Financial Conduct Authority and the wider financial sector. For if there is one clear message that emerges from this report, and from what I am sorry to describe as a rather underwhelming response from the Government, it is that there is still a lot more to be done in this space, as my noble friend Lord Holmes of Richmond has already said.
As other noble Lords have also said, it is important to consider the current context of today’s debate. That context is rapidly worsening as the poorest in society, as the noble Lord, Lord Bilimoria said, in particular face massive cost of living pressures, which does not seem to be reflected in the Government’s response. I ask myself how best to describe the Government’s response. “Detached”, “sedate” and “academic” are words that come to mind, as do the terms “divorced from the wider context”, “no sense of urgency”, as the noble Baroness and the noble Lord, Lord Bilimoria, mentioned, and “a missed opportunity”.
As a committee, we were mindful of our chair’s helpful advice that our original recommendations should be measured and realistic. The recommendations in the follow-up report, which include reiterations of our original recommendations and some new recommendations, are consistent with that advice. Of course, the original and subsequent recommendations were made before rising inflation, interest rates, food prices and utility bills combined to such toxic effect, compounding the difficulties already faced by those who are financially excluded. Like others, I would have thought that that would make the recommendations even more pertinent; however, the Government’s response has disabused me of such logic.
At a time when Gus Alexiou, a journalist at Forbes who draws on his own lived experience of disability, writes of some disabled people worrying about not just how they will put food on the table but how they can afford to power the vital medical equipment necessary to keep them safe at home, the Government’s equivocal response to the report seems surprisingly counterintuitive. Mr Alexiou explains that the medical equipment includes ventilators, nebulisers, oxygen concentrators, feeding pumps, SAT machines, seizure alert mats, kidney dialysis machines and rising beds. According to the UK-based pan-disability Scope, there are currently 900,000 people with disabilities living in fuel poverty, which could rise to about 2.1 million in October if typical annual domestic bills reach their predicted figure of £3,000. I speak with some personal experience of the medical equipment he mentioned because I have had to use nebulisers and have relied on oxygen concentrators and I still bear the scars, literally, of having a PEG—a feeding pump—to keep me supplied with essential nutrients when I was unable to swallow for five months following neurosurgery some years ago. I have been there—I have worn the T-shirt, as it were—and that was without having to worry about any financial considerations because I was in hospital at the time and I was not financially excluded. Mr Alexiou concludes:
“What is far less difficult and actually, all too easy, is to get away with side-lining the suffering of millions of disabled people because you can be confident that everyone else just has too much on their plate and is busy looking the other way.”
Hard-hitting stuff maybe, but I suspect that it will resonate with a lot of disabled people, a lot of whom identify as financially excluded. I am not saying that this is deliberate, but I am saying that, ultimately, a key factor in the Government’s failure to seize the opportunity that responding to this report presents stems, I believe, from a lack of lived experience of financial exclusion and of disability at senior levels of the Government, the Treasury and the DWP. Otherwise—to pick just three examples of recommendations in the report that have already been touched on and that the Government have rejected—the Government would understand the importance of formally reviewing the powers available to the FCA to mitigate the negative effects of bank branch and free ATM closures; of expanding the remit of the FCA to include a statutory duty to promote financial inclusion as one of its key objectives; and of introducing a requirement for the FCA to make rules setting out a reasonable duty of care for financial services providers to exercise towards their customers. This would, of course, as has already been explained, be very different from the new consumer duty proposed by the FCA.
I think that the Government can do better than this. I hope that my noble friend the Minister will be able to show in his remarks that the Treasury, in particular, is willing to revisit the committee’s modest, measured proposals in the light of a rapidly deteriorating economic situation both globally and here in the UK. In my view, the Prime Minister has given fantastic leadership on Ukraine. That now needs to be replicated here at home with the cost of living measures to be announced imminently. I really hope that they will include measures to tackle financial exclusion, as outlined in these recommendations.
This report reflects well on your Lordships’ House. It is carefully considered and is testimony to the added value that your Lordships’ House brings to political debate. I close by once again thanking the noble Baroness, Lady Tyler of Enfield, for her leadership. I am sure that this is far from the final word that she and others will have on this issue.
Baroness Kramer (LD)
My Lords, I start with a couple of thanks, echoing the noble Lord, Lord Shinkwin, both to the Liaison Committee task force that worked on the original report and drove the follow-up report and to my noble friend Lady Tyler of Enfield for her leadership. I also think that we need to give an award today to the noble Lord, Lord Balfe, for the most radical solution that has been brought before us. It is one of those “the emperor has no clothes” moments: if you want people not to be financially excluded, make sure that they have enough money to be able to manage.
However, we all know that that is not the reality of the world that we live in today. Financial exclusion, as so many people have said, has become even more of a disadvantage with the cost of living soaring. Excluded people have even fewer tools for managing costs. The noble Lord, Lord Bilimoria, talked about the low financial resilience that so many people experience, but I was also very focused on the discussion by the noble Lord, Lord Shinkwin, of people with disability. They carry an absolutely undue burden that becomes far more acute in times like this, particularly people who are dependent on electricity, but even beyond that.
Others, including my noble friend Lady Tyler, have referred to the poverty premium, with examples of people on prepayment meters paying more for energy than those on direct debits, and by far. Finally, there is the process of claiming the Government’s £150 council tax reduction, which I think we will hear today is far more difficult for those on prepayment meters. We are in a very difficult and critical time.
I want to focus, though, on the issue of banking. Some 1.5 million people have no bank account and many more lack access to short-term affordable credit, with something like 2 million to 7 million people a year using high-cost credit—and within that group, as many as 66% could be classified as vulnerable. I have thought for many years that these people could be helped by better education and capability, by keeping bank branches open or by replacing them with community banking hubs—a project on which I will say a little more in a few minutes. But looking at a report from Barclays, I was stunned to see that it said that most people who do not have a bank account today have had one in the past. For many of these people the experience of a perilous fall into an overdraft, with its costs and fees, proved such a negative experience that they left banking altogether. Frankly, I do not know whether most people at the bottom end of the scale who find themselves in overdraft realise that, as bank customers, they are really paying for the costs of free in-credit banking for far better-off people. We have a real inequity in the banking system as it functions today.
It is also true that many people find it much easier to control their money when they rely exclusively on cash. It may not be the most effective or efficient way of managing payments but it allows them control. With cash disappearing, I am very glad that we now have an access-to-cash provision that will be engaged through the financial services and markets Bill. However, I share the concern of the noble Lord, Lord Holmes. It is not just the supply of cash that matters; it is whether or not entities will accept cash. Like him, when I went through my community I found so many places that now want only contactless payment, even for the smallest of purchases, and will no longer take cash. We have a far more complex problem here, unfortunately, than that which I suspect the financial services and markets Bill will tackle.
The answer I often hear is that fintech has a great deal to offer. I fully accept that fintechs have been springing up, providing mechanisms such as “jam-jars” to help people budget or using a broader set of factors in their credit judgments. But as so many have said—the noble Lords, Lord Sikka and Lord Holmes of Richmond, and others—this requires access to the internet, probably a smartphone and a confidence with technology, as described by the noble Lord, Lord Balfe, that does not exist in many of the excluded segments of the population. Even open banking offers a path only for those who have an existing financial product. The use of the internet as the key to financial access also carries the disadvantage that it makes impulse spending very easy and opens people up to pressure from irresponsible marketing. I hope that the Government have taken note of that from many of the civil society groups which have been tracking those kinds of behaviours.
Over and again, we have tried to find an answer by using the Post Office. Of course post offices are important, but I am frankly becoming completely disillusioned with their potential to provide more than very basic banking services. Community hubs are the latest idea: a shared banking services arrangement, with the Post Office actually providing the front counter. But as proposed, they will exist only where the banks have no branches and if those banks themselves actually agree. The banks should not be the decision-makers on whether a community hub should exist or not. As they are conceived now, community hubs continue the notion that financial inclusion is defined by access to a high street bank and the facilities it offers.
I find myself turning to routes that have worked well in other countries but never seem to have gathered sufficient momentum in the UK. The noble Lord, Lord Sikka, touched on this in a sense when he referred to the Community Reinvestment Act in the United States, which started out as a civil rights Act but evolved into a mechanism to create banking organisations dedicated to and set in their local community and which targeted services to it. Sometimes you find them in the form of credit unions and sometimes in the form of community banks, which are quite blended in the United States. Their great advantage is that they do not “put up with” disadvantaged or low-income people or see them as a way to perhaps offset fees from their better-off customers; they welcome these people as the core of their customer base and design services to meet their needs. The issue is achieving this at the scale and with the coverage required. That in turn means very significant investment.
Giving the FCA some powers—at the very least to have regard to financial inclusion—might help us drive towards a network of something like community banks and credit unions, which would meet some of this need. I would hope that it would make the FCA more proactive. However, frankly, after so many years of discussion I am pretty much out of patience and wonder whether the only way to achieve this is basically through legislation. I ask the Government to consider making it a condition for a banking licence for a bank above a certain size—in effect, the high street banks—to either provide effective services to the unbanked and underbanked sectors of the population or invest in an organisation that can, which is usually the preferred option in the United States.
When I was in the US, I saw really successful partnerships between the equivalents of the major high street banks and local community banks and credit unions. Ironically, they were really popular with the executives of the significant major banks. They would almost fight each other for the opportunity of having a day or two working at the community bank because it was a chance to interact with normal people. Big banks were able to provide very low-cost technical services, regulatory advice, human resources and all kinds of back-up for the relatively small local banks. The costs of running a community bank are much lower than those of trying to provide the same services out of the equivalent of a high street bank because they do not have the burden of trying to carry the high costs of the investment banking portion of an organisation or the very high exceptional salaries of so many senior bankers in the major banks.
Would-be entrepreneurs get to start businesses and go on to become significant clients of sponsoring major banks, and it becomes a route to opportunity. Even more importantly, in the United States you find that charities and civil society groups join the partnerships, providing a huge range of support and advice for individuals and helping the community bank target what it does so that it directly meets the needs of the clients that come in through its doors.
I feel that this has always been rejected in the UK because it does not have a “Made in Britain” stamp on it. In some ways, you could say it is picking up some of the roles of the old savings and loans, and perhaps of the branch banks we used to have long before the days of mergers and acquisitions. I ask the Government to get serious and look at this. We have talked and talked—I have been in webinar after webinar—and we are really making very little progress. Today’s economic crisis ought to underscore to us that this problem, above all, must be treated with urgency.
Lord Tunnicliffe (Lab)
My Lords, I congratulate the noble Baroness, Lady Tyler of Enfield, on securing this debate. It returns us to the topic of her committee’s 2017 report. This was, of course, supplemented by the Liaison Committee’s follow-up inquiry, which is the formal subject of this debate. I am grateful to both committees for their work in this important area, and to the noble Baroness, Lady Tyler, and the noble Lord, Lord Shinkwin, for their ongoing interest. I pay particular tribute to the noble Lord, Lord Holmes of Richmond, who has pursued many of these issues tirelessly across different Bills. He enjoyed some success on the matter of cashback during last Session’s Financial Services Bill. I suspect that we will revisit some of his other amendments when the financial services and markets Bill is brought forward.
Five years have passed since the publication of the original committee report. Tackling financial exclusion is a long-term project; we cannot expect every aspect of that challenge to be addressed in a few years, and there can be no doubt that the pandemic slowed progress. However, it is regrettable that solving many of these problems remains as urgent in 2022 as in 2017. Thankfully, in recent times, we have seen some innovative approaches from financial institutions to improve financial inclusion.
During an Oral Question on 22 March, I cited a joint project between HSBC, Shelter and other homelessness charities to ensure that certain individuals with no fixed address can access basic banking services. These kinds of initiatives are hugely important, helping people to break the cycle which prevents them claiming social security or holding down a job. Welcome as these schemes are, they can only ever benefit a relatively small proportion of those who find themselves excluded from the financial system. What we really need, and what I hope the financial services and markets Bill will finally offer, is a coherent, joined-up approach to financial inclusion. That means the Treasury taking responsibility where that is appropriate to empower the regulators if they are lacking the right tools to act.
The Government recently published a summary of responses to their access to cash consultation. That document also outlined in brief terms how they intend to use the forthcoming Bill to preserve cash for those who want to continue using it. We broadly welcome the intent, but I hope that the Minister will use today’s debate to signal how the Treasury intends to act in other areas. For example, even if access to cash is preserved, what about protecting access to physical bank branches? Research from Which? published in April warned that almost half of the UK’s bank branches have disappeared. Those that remain are increasingly offering reduced services or closing earlier in the day. This is by no means a new phenomenon, so why have the Government not acted to prevent these closures?
Elsewhere, the Financial Conduct Authority’s regulation of the “buy now, pay later” sector is gradually coming on stream. However, the regulator has been clear that it expects the worsening cost of living crisis to push more people towards these new credit options, increasing the overall risk level. What assessment have the Government made of people’s increased reliance on personal credit? Will the new Bill address that? Can the Minister comment on the FCA’s consumer duty and whether the upcoming legislation will seek to strengthen it? It is worth remembering that the Government moved in these two areas only because of sustained pressure during the last Financial Services Bill. Much of that pressure was exerted by my noble friends Lord Stevenson of Balmacara and Lord Eatwell, but they were supported by noble Lords across the House and campaigners outside this place. How can we be confident that external voices are being heard as the Government put their legislative package together?
We may have come a long way on tackling financial exclusion, but the job is by no means done. I hope the Minister will recognise that fact in his response, and that the Treasury will avail itself of the experience of those who have spoken in this debate.
I will end on a slightly tangential point, if noble Lords will allow. These are very tough times for many across the country. Those with good access to financial products are struggling enough, but those excluded from them face what can only be described as an impossible task. Yesterday, people found out that the energy price cap is likely to increase by a further £800 in October. This situation is simply not sustainable so, while we await the financial services and markets Bill with interest, will the Government—I hope today or tomorrow—do the right thing and bring forward an emergency Budget? The Chancellor’s stubborn refusal to act can only harm efforts to provide people of all backgrounds with the financial security that they so desperately crave.
Viscount Younger of Leckie (Con)
My Lords, I too thank the noble Baroness, Lady Tyler, for initiating this important debate, as well as other noble Lords for their helpful and thoughtful contributions. There is much to cover; I will do my best. Tackling financial exclusion to ensure that everyone in all corners of the UK, regardless of their background or income, has access to fair and affordable financial products and services remains a key priority for the Government—more so in the context of the cost of living challenge, to which I will turn soon, which is already impacting the most vulnerable.
The Liaison Committee’s initial report on financial exclusion, and its follow-up report to which the Government responded a year ago, made some important suggestions. To reassure the noble Lord, Lord Bilimoria, we really are taking those suggestions seriously. Some progress has already been made; I listened carefully to the remarks by the noble Baroness, Lady Tyler, and I think she acknowledged that, but I say at the outset that much more needs to be done. I very much relish the opportunity to discuss these issues again today. I wish to address the themes raised, and I will start by focusing right away on banking and cash.
In the space of just a few years, technology has transformed the way that we access and make use of financial services. Until only a few years ago, I went into my local bank branch for any financial transaction; now I happily conduct pretty well everything online and have found it relatively straightforward. New opportunities and flexibility are of course welcome but, importantly, we also have an obligation to make sure that no one is excluded, which is of course the subject of today’s debate.
While eight out of 10 consumers use contactless payments and seven out of 10 use online banking, which are significant figures, the Government understand that physical cash—old-fashioned notes and coins that may still be kept under people’s mattresses—as well as access to a physical bank branch are still an important part of millions of people’s lives. The noble Baroness, Lady Tyler, eloquently gave her own statistics in this respect and it was alluded to strongly by my noble friend Lord Holmes.
I take note of my noble friend Lord Balfe’s point about educating people, especially the elderly, to become more digitally aware. He is right but he should recognise, as I think we all do, that there are some who simply will not pick up the bat. That is why, for example, the Government have made legislative changes to support the widespread offering of cashback without a purchase by shops and other businesses, and why we will be legislating to protect access to cash in the upcoming financial services and markets Bill as soon as parliamentary time allows.
My noble friend Lord Holmes and the noble Baroness, Lady Kramer, asked about helping those who wish only to use cash, which is a fair point. The Government’s plan for legislation will ensure that people can continue to take out or pay in cash in order to support the use of cash in daily life and its continued acceptance by business. Following the Government’s commitment to legislate, firms are working together through the Access to Cash Action Group to develop new initiatives to provide shared services.
As mentioned by the noble Lord, Lord Sikka, the Government understand people’s concern when their bank takes the commercial decision to close a local bank branch, and I have seen this locally where I live. Firms themselves are best placed to make the commercial decision required to operate their businesses for their customers but we believe that the impact of branch closures should also be understood, considered and, where possible, mitigated so that all customers, wherever they live, continue to have access to face-to-face banking services.
This matter was a strong theme in this debate. It was raised by the noble Lords, Lord Tunnicliffe and Lord Sikka, and the noble Baroness, Lady Tyler, herself. Let me expand on this and take account of the comments by Martin Lewis which were alluded to. In September 2020, the FCA published guidance for regulated firms setting out its expectations for banks, building societies and credit unions when they are considering closing branches or ATMs. It requires them to notify customers and the FCA of upcoming branch closures and to consider the provision of alternatives for customers. Alternative options for access can be via telephone banking, digital means such as mobile online banking, and the Post Office. The Post Office banking framework allows 99% of personal banking customers and 95% of business banking customers to deposit cheques, check their balance and withdraw and deposit cash at 11,500 Post Office branches in the UK.
The noble Lord, Lord Sikka, expanded on this theme and asked about banks consulting customers when closing. Although I have alluded to that, I shall add to what I said because in September 2020, the FCA published guidance for regulated firms setting out its expectations for banks, building societies and credit unions when they are considering closing branches or ATMs.
Noble Lords should also be aware of the introduction of shared bank hubs, an important industry initiative which was launched last year. This was alluded to by the noble Baroness, Lady Kramer. I took note of her scepticism about this initiative but also very much took note of her ideas, particularly those that have come from the US. I will certainly take them back. We believe that these hubs provide cash and basic banking services, including counter services run by the Post Office, as well as a dedicated space where community bankers from major banks can meet their customers, and that this is a viable alternative solution to offering bank services. That will help to answer questions asked by the noble Lord, Lord Sikka, and the noble Lord, Lord Bilimoria, who made the point that it is important to have an individual—a person—with whom you can have a face-to-face meeting, and I agree with him.
Eight additional bank hubs have been announced following independent assessments by LINK of the access-to-cash needs of local communities after the closure of a core cash service, in areas such as Brixham in Devon, Carnoustie, which I happen to know is near Dundee, Knaresborough and Syston. The industry has committed that from summer 2022 communities can also request a review. The Government very much look forward to seeing the results and their impact on communities.
The noble Baroness, Lady Kramer, asked about whether there is a condition for high street banks to provide services for the unbanked or to invest in an organisation. The Government believe that it is vital that everyone is able to open a bank account if they wish to do so. That is why the nine largest personal current account providers in the UK are legally required to offer fee-free basic bank accounts to customers who are unbanked, so that people can manage their money on a day-to-day basis effectively, securely and confidently.
Linked to this is the important issue of digital inclusion, which was raised by the noble Baroness, Lady Tyler. Banking hubs are potentially vital for those who might be vulnerable, digitally excluded with no access to a computer or the internet or, indeed, simply do not wish to access financial services digitally. We have to recognise that. The Government recognise that digital inclusion needs to be promoted alongside financial inclusion, and we are committed to ensuring that everyone has access to the digital infrastructure and skills necessary to participate fully in society, including in rural areas where staying connected can, as we know, be more challenging.
The noble Lord, Lord Sikka, asked about access to broadband; I think this was also raised by the noble Lord, Lord Bilimoria. To help those in financial difficulty to stay connected, social tariffs are available which offer low-cost landline and broadband services. The Government and Ofcom also agreed a set of commitments with the UK’s major broadband and mobile operators to support vulnerable customers.
A question was raised by the noble Lord, Lord Bilimoria, about broadband, and I want to expand on this a bit further. In 2021, the Government launched Project Gigabit, which committed a landmark £5 billion to support the rollout of gigabit connectivity in the hardest to reach areas. I am pleased to say that more than 67% of UK premises can now access—
Lord Sikka (Lab)
My Lords, I am grateful to the Minister. On that £5 billion, it seems that it is given to Openreach and others, and they keep the resulting assets as well as the income stream. What do we get, as members of the public, in return? It seems it is a win-win situation for the providers. They should be providing public access through their normal service, but they do not want to do that. They seem to be winning on every count and the public are left with empty pockets.
Viscount Younger of Leckie (Con)
That is a very specific question from the noble Lord. I will write to him about those services, particularly how the £5 billion is used, which is a very fair question. What I can say, which the noble Lord, Lord Bilimoria, will not like, is that it is not 100% coverage, but we have, I have to say, made a great leap forward since 2019, when coverage was a mere 8%. From his particular position at the CBI, he will acknowledge that—I hope that he will.
Of course, all these issues are relevant to help people manage their personal finances, particularly when things turn tight. That was another theme that I expected to be raised today, as indeed it was, particularly by the noble Lord, Lord Tunnicliffe, with his question about an emergency Budget, and by the noble Baroness, Lady Tyler, on affordability matters. Let me just say a little bit about that. The Government really appreciate that families up and down the country are facing an unprecedented cost of living challenge, with the rising price of food, fuel and goods hitting people’s pockets. I listened very carefully to the speech from my noble friend Lord Shinkwin on how the disabled in our society are particularly negatively affected. Of course he is right, and he will know about that.
The next few months will be difficult, and we know that people are concerned. These are partly, indeed mainly, global trends driven by global challenges, and Russia’s invasion of Ukraine has deepened a severe shock in energy prices. While the Government cannot eradicate these global pressures, we are helping where we can and are providing more than £22 billion of support to families this financial year. We are providing direct support for energy bills, with a £9 billion energy package announced in February. This will provide 80% of households with at least £200, with the vast majority receiving £350. We are also making sure that work pays. We have increased the national insurance threshold to £12,570 from July, saving the typical employee £330 a year. We are supporting the most vulnerable in society with the cost of essentials such as food, clothing and utilities by providing an additional £500 million for the household support fund.
The noble Baroness, Lady Tyler, asked what the Government are doing to alleviate the poverty premium, and I hope that I can give her an answer to that. On universal credit, we are increasing work allowances and reducing the taper rate, which means that the lowest-earning 1.7 million people in society receive an extra £1,000 per year. An analysis shows that fiscal decisions made by the Government are progressive and place the highest burden on the highest earners.
Along the same theme, the noble Lord, Lord Sikka, raised a question about the Government’s tax policy. I think he stated that he thought it was regressive. I just come back to him on that to say that Treasury analysis published as part of the Spring Statement shows that fiscal decisions made since the 2019 spending round are progressive, placing the largest burden on the highest-income households as a proportion of income. The poorest 60% of households receive more in public spending than they pay in tax, and households in the lowest income decile will, on average, receive more than £4 for every £1 that they pay in tax.
My noble friend Lord Shinkwin raised a point about disability and fuel poverty. In answer to that, 2.2 million low-income households will receive a £140 rebate through the warm homes discount. The Government are increasing the WHD by one-third, with 3 million households now receiving £150. I hope that that provides small examples of what the Government are doing. As I say, we recognise that this is a challenging and uncertain time for people. Just as we stood by people throughout the pandemic, the Government stand ready to do more to support people across the UK with their costs of living. However, I am afraid that is all that I can say on that subject at the moment.
I turn to the important area of access to fair and affordable credit, which can be life-changing for people, helping them to meet a sudden expenditure or to take steps to build a better life. The Government recognise the important role that credit can play in helping people to manage their finances, but also crucially understand the need for it to be handled carefully so that it does not turn into unsustainable debt. We are committed to supporting initiatives that expand the provision of fair and affordable credit.
The noble Lord, Lord Tunnicliffe, asked about the assessment that the Government have made about people’s increased reliance on personal credit, which is a fair question. The Treasury regularly monitors changes in the consumer credit market, including the impact of economic developments, as part of its normal process of policy development.
The Government have allocated £100 million of dormant assets to Fair4All Finance, whose work has focused on supporting affordable credit. This includes £3.8 million funding for that initiative to pilot a no-interest loan scheme, which is specifically designed for consumers in vulnerable circumstances and is already, we believe, improving lives. The NILS pilot is novel and unlike anything that the Government have done previously in this space, so it is right that the pilot is allowed to be tested for optimal methods for delivering these loans. The pilot aims to test the benefits to consumers, society and the economy and to show whether a permanent, nationwide NILS can be delivered in a sustainable way. It will test several variables, including loan amounts, repayment periods and terms, eligibility and payment rates. My noble friend Lord Balfe is right that it needs to operate with care so that debt is managed prudently, a point that I made earlier. We are pleased that industry also recognises the value of expanding provision, with JP Morgan’s corporate social responsibility fund planning to contribute £1.2 million to expand this pilot.
I move on to buy now, pay later, expanding further on the theme of credit. I note some noble Lords’ concerns about this area, as raised by the noble Baroness, Lady Tyler. We recognise that it can give rise to consumer detriment, which is why the Government announced their intention to regulate these products and published the consultation last October. It closed on 6 January, and we are now reviewing responses and considering next steps, including timings. We will take this work forward as quickly as possible. I am afraid that that is the best that I can do to answer the question from my noble friend Lord Balfe.
Along the same theme, we are taking further measures to help people who are experiencing financial difficulties and will require additional support. That is why, among other things, the Government continue to provide record levels of funding for debt advice via the Money and Pensions Service, which noble Lords will recognise used to be the old MAS. We know that debt can feel overwhelming; often what people most need is the time and space to find a sustainable way out of it.
My noble friend Lord Holmes asked whether the Government agree that debt advice should be regulated. Yes, debt advice is a regulated financial activity, which means that most firms that provide debt advice must be authorised and regulated by the FCA. When a person gets debt advice, they can check that a firm is regulated on the FCA register. That is also why the Government launched the Breathing Space scheme, which gives those in problem debt legal protection against creditor action, enabling them to seek professional advice and rebuild their finances.
Given the clear connections between people’s mental and financial health—another theme that has been alluded to today—the scheme also ensures that those who are undergoing mental health crisis treatment can access even stronger protections. I am pleased that over 60,000 people have already taken advantage of Breathing Space in its first year, including almost 1,000 people who have entered a mental health “breathing space”.
However, that is just the first part of the scheme and we are now working on the second element: the statutory dept repayment plan. This will enable people struggling with problem debt to enter formal agreements with creditors so they are able to repay what they owe over a more manageable timeframe. On 13 May, the Government launched a public consultation on draft SDRP regulations with the aim of laying those by the end of the year. We intend for the scheme to start in 2024.
I hope I can cover everything. I have a little more to say, particularly on financial education, which was raised by my noble friend Lord Holmes, the noble Lord, Lord Bilimoria, and the noble Baroness, Lady Kramer. This is a very important area that is rather close to my heart; I personally firmly believe in it. It is important that people grow up to make sound decisions about how to run their financial lives, whether that is to secure a mortgage, take out credit, save up for a holiday or plan their retirement, an issue that was also raised. Financial education in England is covered within both the citizenship and the mathematics curricula. Primary schools, for their part, are strongly encouraged to teach citizenship, including financial education. I recognise, as the noble Lord, Lord Bilimoria, said, that it is not just the young who need educating; it is the less young too, particularly those who are looking to plan for retirement, as he mentioned.
I want to say something about saving. I recognise that this is a difficult subject because we know that many people are not able to save and are struggling simply with the business of managing the costs of living. So in fear of being frowned upon by the grandmother, I think it is, of my noble friend Lord Balfe, I draw noble Lords’ attention to the Government’s Help to Save scheme, which offers a 50% bonus on up to £50 of monthly savings for a maximum possible bonus of £1,200 over four years to help people to build a savings buffer for a rainy day. I just wanted to touch on that.
Finally, and importantly, the theme was raised of the FCA and the matter of “having regard to”. The Government take a comprehensive and strategic approach to tackling financial exclusion, including working closely with the regulator, industry and the third sector. This was touched on by the noble Lord, Lord Bilimoria. A key mechanism to foster that collaboration is the Financial Inclusion Policy Forum, co-chaired by Treasury and DWP Ministers, launched in 2018 to provide leadership and develop solutions, including some that I have already highlighted. I know that some noble Lords are slightly sceptical about that; I have read the report and the comments made by the Liaison Committee, and I have read our own response. I know that the noble Baroness, Lady Tyler, and my noble friend Lord Holmes have called upon the Government to formalise collaboration on financial inclusion further by asking the Financial Conduct Authority to have regard to financial inclusion in the context of the future regulatory framework review. I want to give some reassurance that I know senior officials and Ministers in the Treasury are considering these suggestions carefully and will respond as soon as possible.
To conclude, clearly there is more to be done but, as today’s debate has demonstrated, a good of deal of work is already in train to tackle financial exclusion and to help those who are vulnerable or who face financial difficulties. I thank everyone who has contributed today. It has been a very informative and useful debate, and I have certainly learned a lot myself.
Baroness Tyler of Enfield (LD)
My Lords, this has been an absolutely excellent debate. I thank all noble Lords who have contributed and the Minister for his response. I know that time is extremely tight so I will really say only two things.
First, I very much agree with the noble Lord, Lord Shinkwin, that the recommendations made in the original 2017 report, and reiterated in the Liaison Committee report, are even more important today than they were then given the context in which we are operating. Many noble Lords have given excellent ideas and suggestions, which I really hope will be pursued. I agreed with most things that most of them said—not quite all, but I do not have time to go into that. I totally take the point that the problem for many people at the moment is simply not having enough money, a point acknowledged in the Select Committee report.
Secondly, like other noble Lords, I very much hope that we see very soon from the Government a package of support, particularly on increases to benefit and state pensions to help people who are struggling so much at the moment. Perhaps the Minister could convey my request to the two designated Ministers for Financial Inclusion, John Glen and Guy Opperman, to consider meeting me and other former members of the Select Committee so that we can see what more can be done in this area.
AI in the UK (Liaison Committee Report)
(2 years, 5 months ago)
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Lord Clement-Jones
That the Grand Committee takes note of the Report from the Liaison Committee AI in the UK: No Room for Complacency (7th Report, Session 2019–21, HL Paper 196).
Lord Clement-Jones (LD)
My Lords, the Liaison Committee report No Room for Complacency was published in December 2020, as a follow-up to our AI Select Committee report, AI in the UK: Ready, Willing and Able?, published in April 2018. Throughout both inquiries and right up until today, the pace of development here and abroad in AI technology, and the discussion of AI governance and regulation, has been extremely fast moving. Today, just as then, I know that I am attempting to hit a moving target. Just take, for instance, the announcement a couple of weeks ago about the new Gato—the multipurpose AI which can do 604 functions —or perhaps less optimistically, the Clearview fine. Both have relevance to what we have to say today.
First, however, I say a big thank you to the then Liaison Committee for the new procedure which allowed our follow-up report and to the current Lord Speaker, Lord McFall, in particular and those members of our original committee who took part. I give special thanks to the Liaison Committee team of Philippa Tudor, Michael Collon, Lucy Molloy and Heather Fuller, and to Luke Hussey and Hannah Murdoch from our original committee team who more than helped bring the band, and our messages, back together.
So what were the main conclusions of our follow-up report? What was the government response, and where are we now? I shall tackle this under five main headings. The first is trust and understanding. The adoption of AI has made huge strides since we started our first report, but the trust issue still looms large. Nearly all our witnesses in the follow-up inquiry said that engagement continued to be essential across business and society in particular to ensure that there is greater understanding of how data is used in AI and that government must lead the way. We said that the development of data trusts must speed up. They were the brainchild of the Hall-Pesenti report back in 2017 as a mechanism for giving assurance about the use and sharing of personal data, but we now needed to focus on developing the legal and ethical frameworks. The Government acknowledged that the AI Council’s roadmap took the same view and pointed to the ODI work and the national data strategy. However, there has been too little recent progress on data trusts. The ODI has done some good work, together with the Ada Lovelace Institute, but this needs taking forward as a matter of urgency, particularly guidance on the legal structures. If anything, the proposals in Data: A New Direction, presaging a new data reform Bill in the autumn, which propose watering down data protection, are a backward step.
More needs to be done generally on digital understanding. The digital literacy strategy needs to be much broader than digital media, and a strong digital competition framework has yet to be put in place. Public trust has not been helped by confusion and poor communication about the use of data during the pandemic, and initiatives such as the Government’s single identifier project, together with automated decision-making and live facial recognition, are a real cause for concern that we are approaching an all-seeing state.
My second heading is ethics and regulation. One of the main areas of focus of our committee throughout has been the need to develop an appropriate ethical framework for the development and application of AI, and we were early advocates for international agreement on the principles to be adopted. Back in 2018, the committee took the view that blanket regulation would be inappropriate, and we recommended an approach to identify gaps in the regulatory framework where existing regulation might not be adequate. We also placed emphasis on the importance of regulators having the necessary expertise.
In our follow-up report, we took the view that it was now high time to move on to agreement on the mechanisms on how to instil what are now commonly accepted ethical principles—I pay tribute to the right reverend Prelate for coming up with the idea in the first place—and to establish national standards for AI development and AI use and application. We referred to the work that was being undertaken by the EU and the Council of Europe, with their risk-based approaches, and also made recommendations focused on development of expertise and better understanding of risk of AI systems by regulators. We highlighted an important advisory role for the Centre for Data Ethics and Innovation and urged that it be placed on a statutory footing.
We welcomed the formation of the Digital Regulation Cooperation Forum. It is clear that all the regulators involved—I apologise for the initials in advance—the ICO, CMA, Ofcom and the FCA, have made great strides in building a centre of excellence in AI and algorithm audit and making this public. However, despite the publication of the National AI Strategy and its commitment to trustworthy AI, we still await the Government’s proposals on AI governance in the forthcoming White Paper.
It seems that the debate within government about whether to have a horizontal or vertical sectoral framework for regulation still continues. However, it seems clear to me, particularly for accountability and transparency, that some horizontality across government, business and society is needed to embed the OECD principles. At the very least, we need to be mindful that the extraterritoriality of the EU AI Act means a level of regulatory conformity will be required and that there is a strong need for standards of impact, as well as risk assessment, audit and monitoring, to be enshrined in regulation to ensure, as techUK urges, that we consider the entire AI lifecycle.
We need to consider particularly what regulation is appropriate for those applications which are genuinely high risk and high impact. I hope that, through the recently created AI standards hub, the Alan Turing Institute will take this forward at pace. All this has been emphasised by the debate on the deployment of live facial recognition technology, the use of biometrics in policing and schools, and the use of AI in criminal justice, recently examined by our own Justice and Home Affairs Committee.
My third heading is government co-ordination and strategy. Throughout our reports we have stressed the need for co-ordination between a very wide range of bodies, including the Office for Artificial Intelligence, the AI Council, the CDEI and the Alan Turing Institute. On our follow-up inquiry, we still believed that more should be done to ensure that this was effective, so we recommended a Cabinet committee which would commission and approve a five-year national AI strategy, as did the AI road map.
In response, the Government did not agree to create a committee but they did commit to the publication of a cross-government national AI strategy. I pay tribute to the Office for AI, in particular its outgoing director Sana Khareghani, for its work on this. The objectives of the strategy are absolutely spot on, and I look forward to seeing the national AI strategy action plan, which it seems will show how cross-government engagement is fostered. However, the Committee on Standards in Public Life—I am delighted that the noble Lord, Lord Evans, will speak today—report on AI and public standards made the deficiencies in common standards in the public sector clear.
Subsequently, we now have an ethics, transparency and accountability framework for automated decision-making in the public sector, and more recently the CDDO-CDEI public sector algorithmic transparency standard, but there appears to be no central and local government compliance mechanism and little transparency in the form of a public register, and the Home Office appears to be still a law unto itself. We have AI procurement guidelines based on the World Economic Forum model but nothing relevant to them in the Procurement Bill, which is being debated as we speak. I believe we still need a government mechanism for co-ordination and compliance at the highest level.
The fourth heading is impact on jobs and skills. Opinions differ over the potential impact of AI but, whatever the chosen prognosis, we said there was little evidence that the Government had taken a really strategic view about this issue and the pressing need for digital upskilling and reskilling. Although the Government agreed that this was critical and cited a number of initiatives, I am not convinced that the pace, scale and ambition of government action really matches the challenge facing many people working in the UK.
The Skills and Post-16 Education Act, with its introduction of a lifelong loan entitlement, is a step in the right direction and I welcome the renewed emphasis on further education and the new institutes of technology. The Government refer to AI apprenticeships, but apprentice levy reform is long overdue. The work of local digital skills partnerships and digital boot camps is welcome, but they are greatly underresourced and only a patchwork. The recent Youth Unemployment Select Committee report Skills for Every Young Person noted the severe lack of digital skills and the need to embed digital education in the curriculum, as did the AI road map. Alongside this, we shared the priority of the AI Council road map for more diversity and inclusion in the AI workforce and wanted to see more progress.
At the less rarefied end, although there are many useful initiatives on foot, not least from techUK and Global Tech Advocates, it is imperative that the Government move much more swiftly and strategically. The All-Party Parliamentary Group on Diversity and Inclusion in STEM recommended in a recent report a STEM diversity decade of action. As mentioned earlier, broader digital literacy is crucial too. We need to learn how to live and work alongside AI.
The fifth heading is the UK as a world leader. It was clear to us that the UK needs to remain attractive to international research talent, and we welcomed the Global Partnership on AI initiative. The Government in response cited the new fast-track visa, but there are still strong concerns about the availability of research visas for entrance to university research programmes. The failure to agree and lack of access to EU Horizon research funding could have a huge impact on our ability to punch our weight internationally.
How the national AI strategy is delivered in terms of increased R&D and innovation funding will be highly significant. Of course, who knows what ARIA may deliver? In my view, key weaknesses remain in the commercialisation and translation of AI R&D. The recent debate on the Science and Technology Committee’s report on catapults reminded us that this aspect is still a work in progress.
Recent Cambridge round tables have confirmed to me that we have a strong R&D base and a growing number of potentially successful spin-outs from universities, with the help of their dedicated investment funds, but when it comes to broader venture capital culture and investment in the later rounds of funding, we are not yet on a par with Silicon Valley in terms of risk appetite. For AI investment, we should now consider something akin to the dedicated film tax credit which has been so successful to date.
Finally, we had, and have, the vexed question of lethal autonomous weapons, which we raised in the original Select Committee report and in the follow-up, particularly in the light of the announcement at the time of the creation of the autonomy development centre in the MoD. Professor Stuart Russell, who has long campaigned on this subject, cogently raised the limitation of these weapons in his second Reith Lecture. In both our reports we said that one of the big disappointments was the lack of definition of “autonomous weapons”. That position subsequently changed, and we were told in the Government’s response to the follow-up report that NATO had agreed a definition of “autonomous” and “automated”, but there is still no comprehensive definition of lethal autonomous weapons, despite evidence that they have clearly already been deployed in theatres such as Libya, and the UK has firmly set its face against laws limitation in international fora such as the CCW.
For a short report, our follow-up report covered a great deal of ground, which I have tried to cover at some speed today. AI lies at the intersection of computer science, moral philosophy, industrial education and regulatory policy, which makes how we approach the risks and opportunities inherent in this technology vital and difficult. The Government are engaged in a great deal of activity. The question, as ever, is whether it is focused enough and whether the objectives, such as achieving trustworthy AI and digital upskilling, are going to be achieved through the actions taken so far. The evidence of success is clearly mixed. Certainly there is still no room for complacency. I very much look forward to hearing the debate today and to what the Minister has to say in response. I beg to move.
Lord Holmes of Richmond (Con)
My Lords, what a pleasure it is to follow the noble Lord, Lord Clement-Jones. It was a pleasure to serve under his chairmanship on the original committee. I echo all his thanks to all the committee staff who did such great work getting us to produce our original report. I shall pick up a number of the themes he touched on, but I fear I cannot match his eloquence and nobody around the table can in any sense match his speed. In many ways, he has potentially passed the Turing test in his opening remarks.
I declare my technology interests as set out in the register. In many ways, the narrative can fall into quite a negative and fearful approach, which goes something like this: the bots are coming, our jobs are going, we are all off to hell and we are not even sure if there is a handcart. I do not think that was ever the case, and it is positive that the debate has moved on from the imminent unemployment of huge swathes of society to this—and I think it is just this in terms of jobs. The real clear and present danger for the UK is not that there will not be jobs for us all to do but that we will be unprepared or underprepared for those new jobs as and when they come, and they are already coming at speed this very day. Does the Minister agree that all the focus needs to be on how we drive at speed in real time the skills to enable all the talent coming through to be able to get all those jobs and have fulfilling careers in AI?
In many ways this debate begins and ends with everything around data. AI is nothing without data. Data is the beginning and the end of the discussion. It is probably right, and it shows the foresight of the noble Lord, Lord Clement-Jones, in having a debate today because it is time to wish many happy returns—not to the noble Lord but to the GDPR. Who would have thought that it is already four years since 25 May 2018?
In many ways, it has not been unalloyed joy and success. It is probably over-prescriptive, has not necessarily given more protection to citizens across the European community, and certainly has not been adopted in other jurisdictions around the world. I therefore ask my noble friend the Minister: what plans are there in the upcoming data reform Bill not to have such a prescriptive approach? What is the Government’s philosophy in terms of balancing all the competing needs and philosophical underpins to data when that Bill comes before your Lordships’ House?
Privacy is incredibly important. We see just this week that an NHS England AI project has been shelved because of privacy concerns. It takes us back to a similar situation at the Royal Free—another AI programme shelved. Could these programmes have been more effectively delivered if there had been more consideration and understanding of the use of data and the crucial point that it is our data, not big tech’s? It is our data, and we need to have the ability to understand that and operate with it as a central tenet. Could these projects have been more successful? How do we understand real anonymisation? Is it possible in reality, or should we very much look to the issue around the curse of dimensionalisation? What is the Government’s view as to how true anonymisation occurs when you have more than one credential? When you get to multiple dimensions, anonymisation of the data is extraordinarily difficult to achieve.
That leads us into the whole area of bias. Probably one of the crassest examples of AI deployment was the soap dispenser in the United States—why indeed we needed AI to be put into a soap dispenser we can discuss another time—which would dispense soap only to a white hand. How absolutely appalling, how atrocious, but how facile that that can occur with something called artificial intelligence. You can train it, but it can do only pretty much what datasets it has been trained on: white hands, white-hand soap dispensing. It is absolutely appalling. I therefore ask my noble friend the Minister: have the Government got a grip across all the areas and ways in which bias kicks in? There are so many elements of bias in what we could call “non-AI” society; are the Government where they need to be in considering bias in this AI environment?
Moving on to building on how we can all best operate with our data, I believe that we urgently need to move to have a system of digital ID in the UK. The best model to build this upon is the principles around self-sovereign distributed ID. Does my noble friend agree and can he update the Grand Committee on his department’s work on digital ID? So much of the opportunity, and indeed the protection to enable opportunity, in this space around AI comes down to whether we can have an effective interoperable system of digital ID.
Building on that, I believe that we need far greater public debate and public engagement around AI. It is not something that is “other” to people’s experience; it is already in every community and impacting people’s lives, whether they know it or want that to be the case. We see how public engagement can work effectively and well with Baroness Warnock’s stunning commission decades ago into IVF. What could be more terrifying than human life made in a test tube? Why, both at the time and decades later, is it seen as a such a positive force in our society? It is because of the Warnock commission and that public engagement. We can compare that with GM foods. I make no flag-waving for or against GM foods, I just say that the public debate was not engaged on that. What are the Government’s plans to do more to engage the public at every level with this?
Allied to that, what are the Government’s plans around data and digital literacy, right from the earliest year at school, to ensure that we have citizens coming through who can operate safely, effectively and productively in this space? If we can get to that point, potentially we could enable every citizen to take advantage of AI rather than have AI take advantage of us. It does not need to be an extractive exercise or to feel alienating. It does not need to be put just to SEO and marketing and cardboard boxes turning up on our doorstep—we have forgotten what was even in the box, and the size of the box will not give us a clue because the smallest thing we order is always likely to come in the largest cardboard box. If we can take advantage of all the opportunities of AI, what social, economic or psychological potential lies at our fingertips.
What is AI? To come to that at the end rather than beginning of my speech seems odd. Is it statistics on steroids? Perhaps it is a bit more than that. AI, in essence, is just the latest tools—yes, incredibly powerful tools, but the latest tools in our human hands. It is down to us to connect, collaborate and co-create for the public good and common good, and for the economic, social and psychological good, for our communities, cities and our country. If we all get behind that—and it is in our hands, our heads and our hearts—perhaps, just perhaps, we can build a society fit for the title “civilised”.
Lord Browne of Ladyton (Lab)
My Lords, it is a significant pleasure to follow the noble Lord, Lord Holmes. I admire and envy his knowledge of the issue, but mostly I admire and envy his ability to communicate about these complex issues in a way that is accessible and, on occasions, entertaining. A couple of times during the course of what he said, I thought, “I wish I’d said that”, knowing full well that at some time in future I will, which is the highest compliment I can pay him.
As was specifically spelled out in the remit of the Select Committee on Artificial Intelligence, the issues that we are debating today have significant economic, security, ethical and social implications. Thanks to the work of that committee and, to a large degree, the expertise and the leadership of the noble Lord, Lord Clement-Jones, the committee’s report is evidence that it fully met the challenge of the remit. Since its publication—and I know this from lots of volunteered opinions that I have received since April 2018, when it was published—the report has gained a worldwide reputation for excellence. It is proper, therefore, that this report should be the first to which the new procedure put in place by the Liaison Committee, to follow up on the committee’s recommendations, should be applied.
I wish to address the issue of policy on autonomous weapons systems in my remarks. I think that it is known throughout your Lordships’ House that I have prejudices about this issue—but I think that they are informed prejudices, so I share them at any opportunity that I get. The original report, as the noble Lord, Lord Clement-Jones, said, referred to lethal autonomous weapons and particularly to the challenge of the definition, which continues. But that was about as far as the committee went. As I recollect, this weaponry was not the issue that gave the committee the most concern—but that was as far as it went, because it did not have the capacity to address it, saying that it deserved an inquiry of its own. Unfortunately, that has not yet taken place, but it may do soon.
The report that we are debating—which, in paragraph 83, comments on the welcome establishment of the Autonomy Development Centre, announced by the Prime Minister on 19 November 2020 and described as a new centre dedicated to AI, to accelerate the research, development, testing, integration and deployment of world-leading artificial intelligence and autonomous systems—highlighted that the work of that centre will be “inhibited” owing to the lack of alignment of the UK’s definition of autonomous weapons with the definitions used by international partners. The government response, while agreeing the importance of ensuring that official definitions do not undermine our arguments or diverge from our allies, responded further, and at length, by acknowledging that the various definitions relating to autonomous systems are challenging and, at length, set out a comparison of them.
Further, we are told that the Ministry of Defence is preparing to publish a new defence AI strategy that will allow the UK to participate in international debates and act as a leader in the space, and we are told that the definitions will be continually reviewed as part of that. It is hard not to conclude that this response alone justifies the warning of the danger of “complacency” deployed in the title of the report.
On the AI strategy, on 18 May the ministerial response to my contribution to the Queen’s Speech debate was, in its entirety, an assurance that the AI strategy would be published before the Summer Recess. We will wait and see. I look forward to that, but there is today an urgent need for strategic leadership by the Government and for scrutiny by Parliament as AI plays an increasing role in the changing landscape of war. Rapid advancements in technology have put us on the brink of a new generation of warfare where AI plays an instrumental role in the critical functions of weapons systems.
In the Ukraine war, in April, a senior Defense Department official said that the Pentagon is quietly using AI and machine-learning tools to analyse vast amounts of data, generate useful battlefield intelligence and learn about Russian tactics and strategy. Just how much the US is passing to Ukraine is a matter for conjecture, which I will not engage in; I am not qualified to do so anyway. A powerful Russian drone with AI capabilities has been spotted in Ukraine. Meanwhile, Ukraine has itself employed the use of controversial facial recognition technology. Vice Prime Minister Fedorov told Reuters that it had been using Clearview AI—software that uses facial recognition—to discover the social media profiles of deceased Russian soldiers, which authorities then use to notify their relatives and offer arrangements for their bodies to be recovered. If the technology can be used to identify live as well as dead enemy soldiers, it could also be incorporated into systems that use automated decision-making to direct lethal force. That is not a remote possibility; last year the UN reported that an autonomous drone had killed people in Libya in 2020. There are unconfirmed reports of autonomous weapons already being used in Ukraine, although I do not think it is helpful to repeat some of that because most of it is speculation.
We are seeing a rapid trend towards increasing autonomy in weapons systems. AI and computational methods are allowing machines to make more and more decisions themselves. We urgently need UK leadership to establish, domestically and internationally, when it is ethically and legally appropriate to delegate to a machine autonomous decision-making about when to take an individual’s life.
The UK Government, like the US, see AI as playing an important role in the future of warfighting. The UK’s 2021 Integrated Review of Security, Defence, Development and Foreign Policy sets out the Government’s priority of
“identifying, funding, developing and deploying new technologies and capabilities faster than our potential adversaries”,
presenting AI and other scientific advances as “battle-winning technologies”—in what in my view is the unhelpful context of a race. My fear of this race is that at some point the humans will think they have gone through the line but the machines will carry on.
In the absence of an international ban, it is inevitable that eventually these weapons will be used against UK citizens or soldiers. Advocating international regulation would not be abandoning the military potential of new technology, as is often argued. International regulation on AWS is needed to give our industry guidance to be a sci-tech superpower without undermining our security and values. Only this week, the leaders of the German engineering industry called for the EU to create specific law and tighter regulation on autonomous and dual-use weapons, as they need to know where the line is and cannot be expected to draw it themselves. They have stated:
“Imprecise regulations would do damage to the export control environment as a whole.”
Further, systems that operate outside human control do not offer genuine or sustainable advantage in the achievement of our national security and foreign policy goals. Weapons that are not aligned with our values cannot be effectively used to defend our values. We should not be asking our honourable service personnel to utilise immoral weapons—no bad weapons for good soldiers.
The problematic nature of nonhuman-centred decision-making was demonstrated dramatically when the faulty Horizon software was used to prosecute 900-plus sub-postmasters. Let me explain. In 1999, totally coincidentally at the same time as the Horizon software began to be rolled out in sub-post offices, a presumption was introduced into the law on how courts should consider electronic evidence. The new rule followed a Law Commission recommendation for courts to presume that a computer system has operated correctly unless there is explicit evidence to the contrary. This legal presumption replaced a section of the Police and Criminal Evidence Act 1984, PACE, which stated that computer evidence should be subject to proof that it was in fact operating properly.
The new rule meant that data from the Horizon system was presumed accurate. It made it easier for the Post Office, through its private prosecution powers, to convict sub-postmasters for financial crimes when there were accounting shortfalls based on data from the Horizon system. Rightly, the nation has felt moral outrage: this is in scale the largest miscarriage of justice in this country’s history, and we have a judiciary which does not understand this technology, so there was nothing in the system that could counteract this rule. Some sub-postmasters served prison sentences, hundreds lost their livelihoods and there was at least one suicide linked to the scandal. With lethal autonomous weapons systems, we are talking about a machine deciding to take people’s lives away. We cannot have a presumption of infallibility for the decisions of lethal machines: in fact, we must have the opposite presumption, or meaningful human control.
The ongoing war in Ukraine is a daily reminder of the tragic human consequences of ongoing conflict. With the use of lethal autonomous weapons systems in future conflicts, a lack of clear accountability for decisions made poses serious complications and challenges for post-conflict resolution and peacebuilding. The way in which these weapons might be used and the human rights challenges they present are novel and unknown. The existing laws of war were not designed to cope with such situations, any more than our laws of evidence were designed to cope with the development of computers and, on their own, are not enough to control the use of future autonomous weapons systems. Even more worrying, once we make the development from AI to AGI, they can potentially develop at a speed that we humans cannot physically keep up with.
Previously in your Lordships’ House, I have referred to a “Stories of Our Times” podcast entitled “The Rise of Killer Robots: The Future of Modern Warfare?”. Both General Sir Richard Barrons, former Commander of the UK Joint Forces Command, and General Sir Nick Carter, former Chief of the Defence Staff, contributed to what, in my view, should be compulsory listening for Members of Parliament, particularly those who hold or aspire to hold ministerial office. General Sir Richard Barrons says
“Artificial intelligence is potentially more dangerous than nuclear weapons.”
If that is a proper assessment of the potential of these weapon systems, there can be no more compelling reason for their strict regulation and for them to be banned in lethal autonomous mode. It is essential that all of us, whether Ministers or not, who share responsibility for the weapons systems procured and deployed for use by our Armed Forces, fully understand the implications and risks that come with the weapons systems and understand exactly what their capabilities are and, more importantly, what they may become.
In my view, and I cannot overstate this, this is the most important issue for the future defence of our country, future strategic stability and potentially peace: that those who take responsibility for these weapons systems are civilians, that they are elected, and that they know and understand them. Anyone who listens to the podcast will dramatically realise why, because already there are conversations going on among military personnel that demand the informed oversight of politicians. The development of LAWS is not inevitable, and an international legal instrument would play a major role in controlling their use. Parliament, especially the House of Commons Defence Committee, needs to show more leadership in this area. That committee could inquire into what military AI capabilities the Government wish to acquire and how these will be used, especially in the long term. An important part of such an investigation would be consideration of whether AI capabilities could be developed and regulated so that they are used by armed forces in an ethically acceptable way.
As I have already referred to, the integrated review pledged to
“publish a defence AI strategy and invest in a new centre to accelerate adoption of this technology”.
Unfortunately, the Government’s delay in publishing the AI defence strategy has cast doubt on the goal stated in the integrated review’s commitment of security, defence, development and foreign policy that the UK will become a “science and technology superpower”. The technology is already outpacing us, and presently the UK is unprepared to deal with the ethical, legal and practical challenges presented by autonomous weapons systems. Will that change with the publication of the strategy and the establishment of the autonomy development centre? Perhaps the Minister can tell us.
Lord Evans of Weardale (CB)
My Lords, I draw attention to my entry in the register of interests as an adviser to Luminance Technologies Ltd and to Darktrace plc, both of which use AI to solve business problems.
I welcome the opportunity to follow up the excellent 2018 report from the Select Committee on Artificial Intelligence. In 2020 the Committee on Standards in Public Life, which I chair, published a report, Artificial Intelligence and Public Standards. We benefited considerably from the work that had gone into the earlier report and from the advice and encouragement of the noble Lord, Lord Clement-Jones, for which I am very grateful.
It is most important that there should be a wide-ranging and well-informed public debate on the development and deployment of AI. It has the potential to bring enormous public benefits but it comes with potential risks. Media commentary on this subject demonstrates that by swinging wildly between boosterism on the one hand and tales of the apocalypse on the other. Balanced and well-informed debate is essential if we are to navigate the future successfully.
The UK remains well-positioned to contribute to and benefit from the development of AI. I have been impressed by the quality of the work done in government in some areas on these underlying ethical challenges. A good example was the publication last year of GCHQ’s AI and data ethics framework—a sign of a forward-looking and reflective approach to ethical challenges, in a part of government that a generation ago would have remained hidden from public view.
The view of my committee was that there was no reason in principle why AI should not both increase the efficiency of the public service and help to maintain high public standards, but in order to do so it had to manage the risks effectively and ensure that proper regulation was in place, otherwise public trust could be undermined and, consequently, the potential benefits of AI to public service would not be realised. The Liaison Committee report gives me some encouragement about the Government’s direction of travel on this, but the pace of change will not slow and continuing attention will be required to keep the policy up to date.
Specifically, I welcome The Roadmap to an Effective AI Assurance Ecosystem by the CDEI, which seems to me, admittedly as an interested layman rather than a technologist, to provide realistic and nuanced guidance on assurance in this area—and it is one where effective independent assurance will be essential. I therefore ask the Minister how confident he is that this guidance will reach and influence those offering assurance services to the users of AI. I welcome the consultation by DCMS on potential reforms to the data protection framework, which may need to be adjusted as advances in technology create novel challenges. I look forward to seeing the outcome of the consultation before too long.
The Government’s AI strategy suggests that further consideration will be given to the shape of regulation of AI and is to be published later this year, specifically considering whether we are better to have a more centralised regulatory model or one that continues to place the responsibility for AI regulation on the sectoral regulators. Our report concluded that a dispersed vertical model was likely in most areas to be preferable, since AI was likely to become embedded in all areas of the economy in due course and needed to be considered as part of the normal operating model of specific industries and sectors. I remain of that view but look forward to seeing the Government’s proposals on the issue in due course.
One area where we felt that improvement was needed was in using public procurement as a policy lever in respect of AI. The public sector is an increasingly important buyer of AI-related services and products. There is the potential to use that spending power to encourage the industry to develop capabilities that make AI-assisted decision-making more explicable, which is sometimes a problem at present. The evidence that we received suggested that that was not being used by government, at least as recently as 2020. I am not sure that we are doing this as well as we should and would therefore welcome the Minister’s observations on this point.
The Lord Bishop of Oxford
My Lords, it is a pleasure to follow the noble Lord, Lord Evans, and thank him in this context for his report, which I found extremely helpful when it was published and subsequently. It has been a privilege to engage with the questions around AI over the last five years through the original AI Select Committee so ably chaired by the noble Lord, Lord Clement-Jones, in the Liaison Committee and as a founding board member for three years of the Centre for Data Ethics and Innovation. I thank the noble Lord for his masterly introduction today and other noble Lords for their contributions.
There has been a great deal of investment, thought and reflection regarding the ethics of artificial intelligence over the last five years in government, the National Health Service, the CDEI and elsewhere—in universities, with several new centres emerging, including in the universities of Oxford and Oxford Brookes, and by the Church and faith communities. Special mention should be made of the Rome Call for AI Ethics, signed by Pope Francis, Microsoft, IBM and others at the Vatican in February 2020, and its six principles of transparency, inclusion, accountability, impartiality, reliability and security. The most reverend Primate the Archbishop of Canterbury has led the formation of a new Anglican Communion Science Commission, drawing together senior scientists and Church leaders across the globe to explore, among other things, the impact of new technologies.
Despite all this endeavour, there is in this part of the AI landscape no room for complacency. The technology is developing rapidly and its use for the most part is ahead of public understanding. AI creates enormous imbalances of power with inherent risks, and the moral and ethical dilemmas are complex. We do not need to invent new ethics, but we need to develop and apply our common ethical frameworks to rapidly developing technologies and new contexts. The original AI report suggested five overarching principles for an AI code. It seems appropriate in the Moses Room to say that there were originally 10 commandments, but they were wisely whittled down by the committee. They are not perfect, in hindsight, but they are worth revisiting five years on as a frame for our debate.
The first is that artificial intelligence should be developed for the common good and benefit of humanity; as the noble Lord, Lord Holmes, eloquently said, the debate often slips straight into the harms and ignores the good. This principle is not self-evident and needs to be restated. AI brings enormous benefits in medicine, research, productivity and many other areas. The role of government must be to ensure that these benefits are to the common good—for the many, not the few. Government, not big tech, must lead. There must be a fair distribution of the wealth that is generated, a fair sharing of power through good governance and fair access to information. This simply will not happen without national and international regulation and investment.
The second principle is that artificial intelligence should operate on principles of intelligibility and fairness. This is much easier to say than to put into practice. AI is now being deployed, or could be, in deeply sensitive areas of our lives: decisions about probation, sentencing, employment, personal loans, social care—including of children—predictive policing, the outcomes of examinations and the distribution of resources. The algorithms deployed in the private and public sphere need to be tested against the criteria of bias and transparency. The governance needs to be robust. I am sure that an individualised, contextualised approach in each field is the right way forward, but government has a key co-ordinating role. As the noble Lord, Lord Clement-Jones, said, we do not yet have that robust co-ordinating body.
Thirdly, artificial intelligence should not be used to diminish the data rights or privacy of individuals, families or communities. As a society, we remain careless of our data. Professor Shoshana Zuboff has exposed the risks of surveillance capitalism and Frances Haugen, formerly of Meta, has exposed the way personal data is open to exploitation by big tech. Evidence was presented to the online safety scrutiny committee of the effects on children and adolescents of 24/7 exposure to social media. The Online Safety Bill is a very welcome and major step forward, but the need for new regulation and continual vigilance will be essential.
Fourthly, all citizens have the right to be educated to enable them to flourish mentally, emotionally and economically alongside artificial intelligence. It seems to me that of these five areas, the Government have been weakest here. A much greater investment is needed by the Department for Education and across government to educate society on the nature and deployment of AI, and on its benefits and risks. Parents need help to support children growing up in a digital world. Workers need to know their rights in terms of the digital economy, while fresh legislation will be needed to promote good work. There needs to be even better access to new skills and training. We need to strive as a society for even greater inclusion. How do the Government propose to offer fresh leadership in this area?
Finally, the autonomous power to hurt, destroy or deceive human beings should never be vested in artificial intelligence, as others have said. This final point highlights a major piece of unfinished business in both reports: engagement with the challenging and difficult questions of lethal autonomous weapons systems. The technology and capability to deploy AI in warfare is developing all the time. The time has come for a United Nations treaty to limit the deployment of killer robots of all kinds. This Government and Parliament, as the noble Lord, Lord Browne, eloquently said, urgently need to engage with this area and, I hope, take a leading role in the governance of research and development.
AI can and has brought many benefits, as well as many risks. There is great openness and willingness on the part of many working in the field to engage with the humanities, philosophers and the faith communities. There is a common understanding that the knowledge brought to us by science needs to be deployed with wisdom and humility for the common good. AI will continue to raise sharp questions of what it means to be human, and to build a society and a world where all can flourish. As many have pointed out, even the very best examples of AI as yet come nowhere near the complexity and wonder of the human mind and person. We have been given immense power to create but we are ourselves, in the words of the psalmist, fearfully and wonderfully created.
Lord Bilimoria (CB)
My Lords, the report Growing the Artificial Intelligence Industry in the UK was published in October 2017. It started off by saying:
“We have a choice. The UK could stay among the world leaders in AI in the future, or allow other countries to dominate.”
It went on to say that the increased use of AI could
“bring major social and economic benefits to the UK. With AI, computers can analyse and learn from information at higher accuracy and speed than humans can. AI offers massive gains in efficiency and performance to most or all industry sectors, from drug discovery to logistics. AI is software that can be integrated into existing processes, improving them, scaling them, and reducing their costs, by making or suggesting more accurate decisions through better use of information.”
It estimated at that time that AI could add £630 billion to the UK economy by 2035.
Even at that stage, the UK had an exceptional record in key AI research. We should be proud of that, but it also highlighted the importance of inward investment. We as a country need to be continually attractive to inward investment and be a magnet for it. We have traditionally between the second or third-largest recipient of inward investment. But will that continue to be the case when we have, for example, the highest tax burden in 71 years?
AI of course has great potential for increasing productivity; it helps our firms and people use resources more efficiently and it can help familiar tasks to be done in a more efficient manner. It enables entirely new business models and new approaches to old problems. It can help companies and individual employees be more productive. We all know its benefits. It can reduce the burden of searching large datasets. I could give the Committee example after example of how artificial intelligence can complement or exceed our abilities, of course taking into account what the right reverend Prelate the Bishop of Oxford so sensibly just said. It can work alongside us and even teach us. It creates new opportunities for creativity and innovation and shows us new ways to think.
In the Liaison Committee report on artificial intelligence policy in the UK, which is terrific, the Government state that artificial intelligence has
“huge potential to rewrite the rules of entire industries, drive substantial economic growth and transform all areas of life”
and that their ambition is for the UK to be an “AI superpower” that leads the world in innovation and development. The committee was first appointed in 2017. At that stage, it mentioned that the number of visas for people with valuable skills in AI-related areas should be increased. Now that we have the points-based system, will the Minister say whether it is delivering what the committee sought five years ago?
That was in February 2020, from the noble Lord, Lord Clement-Jones, whom I congratulate on leading this debate and on his excellent opening speech. What policies have the Government recently announced? There is the National AI Strategy. One of the points I noticed is that the Office for Artificial Intelligence is a joint department of the Department for Business, Energy and Industrial Strategy and the Department for Digital, Culture, Media and Sport, responsible for overseeing the implementation of the national AI strategy. This is a question I am asked quite regularly: why in today’s world does digital sit within DCMS and not BEIS? They are doing this together, so maybe this is a solution for digital overall moving forward. I do not know what the Minister’s or the Government’s view on that is.
The CBI, of which I am president, responded to the UK Government’s AI strategy. I shall quote Susannah Odell, the CBI’s head of digital policy:
“This AI strategy is a crucial step in keeping the UK a leader in emerging technologies and driving business investment across the economy. From trade to climate, AI brings unprecedented opportunities for increased growth and productivity. It’s also positive to see the government joining up the innovation landscape to make it more than the sum of its parts … With AI increasingly being incorporated into our workplaces and daily lives, it’s essential to build public trust in the technology. Proportionate and joined-up regulation will be a core element to this and firms look forward to engaging with the government’s continued work in this area. Businesses hope to see the AI strategy provide the long-term direction and fuel to reach the government’s AI ambitions.”
An important point to note is that linked to this is our investment in research and development and innovation. This is a point that I make like a stuck record. We spend 1.7% of GDP on R&D and innovation, compared with countries such as Germany and the United States of America, which spend 3.1% and 3.2%. If we spend just one extra percent of GDP on research and development and innovation, an extra £20 billion a year, just imagine how much that would power ahead our productivity and AI ability. Do the Government agree?
We have heard that the White Paper on AI governance has been delayed. Can the Minister give us any indication of when it will be published? Business has recognised the importance of AI governance and standards in driving the safe and trustworthy adoption of AI, which is complicated by the variety of AI technologies that we have heard about in this debate. Use cases and government mechanisms, such as standards, can help simplify and guide widespread adoption. What businesses need from AI standards differs by sector. To be effective, AI standards must be accessible, sector-specific and focused on use cases, and the AI standards hub has a critical role in delivering and developing AI standards across the economy.
The report AI Activity in UK Businesses was published on 12 January this year and had some excellent insights. It defined AI based on five technology categories: machine learning, natural language processing and generation, computer vision and image processing/generation, data management and analysis, and hardware. The report says:
“Current usage of AI technologies is limited to a minority of businesses, however it is more prevalent in certain sectors and larger businesses”.
For example,
“Around 15% of all businesses have adopted at least one AI technology … Around 2% of businesses are currently piloting AI and 10% plan to adopt at least one AI technology in the future … As businesses grow, they are more likely to adopt AI”.
Linked to this is the crucial importance of start-ups and scale-ups, growing companies and our economy:
“68% of large companies, 34% of medium sized companies and 15% of small companies have adopted at least one AI technology”.
It is used in the IT and telecommunications sector, the legal sector—it is used across all sectors. Large companies are more likely to adopt multiple AI technologies and there are innovative companies using multiple AI technologies as well.
Tech Nation had an event, “The UK and Artificial Intelligence: What’s Next?”, in which there were some useful insights. For example, Zara Nanu, the CEO of Applied AI 1.0, talked about gender diversity in AI and how important it is that you have more women. Just 10% of those working in the talent pool are women; for STEM it is 24%. As president of the CBI, I have launched Change the Race Ratio to promote ethnic minority participation across all business, including in AI. Sarah Drinkwater made the point that the UK is well positioned to continue attracting talent on the strength of its investment landscape, world-class universities and culture. We are so lucky to have the best universities in the world, along with the United States of America. I am biased, but the fact is that a British university has won more Nobel prizes than any other, including any American university, and that is the University of Cambridge. It was of course excellent that the Government announced £23 million to boost skills and diversity in AI jobs by creating 2,000 scholarships in AI and data science in England. This is fantastic, music to my ears.
To conclude, I go back to the 2017 report Growing the Artificial Intelligence Industry in the UK. It asked, “Why does AI matter?” and said that:
“In one estimate, the worldwide market for AI solutions could be worth more than £30bn by 2024, boosting productivity by up to 30% in some industries, and generating savings of up to 25%. In another estimate, ‘AI could contribute up to $15.7 trillion to the global economy in 2030, more than the current output of China and India combined. Of this, $6.6 trillion is likely to come from increased productivity and $9.1 trillion is likely to come from consumption-side effects.’”
This is phenomenal, huge, powerful and world-changing. However, it will happen only if we have sustained collaboration between government, universities and business; then we will continue to deliver the amazing potential of AI in the future.
Lord St John of Bletso (CB)
My Lords, I join in congratulating the noble Lord, Lord Clement-Jones, on his able chairmanship of the Liaison Committee report as well as the report that he chaired so ably in 2017. I was fortunate to be a member of that committee, and it was a steep learning curve. The noble Lord has comprehensively covered the key areas of the development of data trusts, the legal and ethical framework and the challenges of ensuring public trust. I had planned on speaking to the threat of bias in machine learning and the threats in some rather unfortunate circumstances, but that has been ably covered by the noble Lord, Lord Holmes of Richmond, so I can delete that from my speech and speak for two minutes less.
In welcoming the national AI strategy published in September last year, I shall focus my remarks on what needs to be achieved to retain—and I stress the word “retain”—the UK’s position as a world leader in AI and, in the words of Dame Wendy Hall, to remain an AI and science superpower fit for the next decade. I am cognisant of the three pillars of the national AI strategy being investing in the long-term needs of the AI ecosystem, ensuring that AI benefits all regions and sectors, and, of course, the governance issues, which I shall not address in my short speech today.
AI has already played, and continues to play, a major role in transforming many sectors, from healthcare to financial services, autonomous vehicles, defence and security—I could not possibly speak with the able knowledge of the noble Lord, Lord Browne—as well as climate change forecasting, to name but a few. Fintech has played, and continues to play, a major role in embracing AI to tackle some of the challenges in financial exclusion and inclusion, a subject ably covered in the previous debate. The healthcare sector also provides some of the most compelling and demonstrable proof that data science and AI can generate with advances in robotic surgery, automated medical advice and medical imaging diagnostics. Autonomous vehicles are soon going to be deployed on our roads, and we will need to ensure that they are safe and trusted by members of the public. Moreover, the Royal Mail is planning to deploy 500 drones to carry parcels to remote locations.
Are we building AI to the right applications? It is difficult to apply standards for AI when it is constantly evolving. AI can be equipped to learn from data that is generated by humans, systems and the environment. Can we ensure that AI remains safe and trusted as it evolves its functionality? To build AI that we can export as part of our products and services, it will need to be useful to and trusted by those countries where we seek to sell those products and services. Such trustworthiness can be achieved only through collaboration on standards, research and regulation. It is crucial to engage with industry, universities and public sectors not just within the UK but across the globe. Can the Minister elaborate on what the UK Government are doing to boost strategic operation with international partnerships?
I join in applauding the work of UKRI as well as the Alan Turing Institute, which has attracted and retained exceptional researchers, but a lot more investment is needed to retain and expand human resource expertise and further implement the AI strategy. It was conceived during the pandemic, but new threats and opportunities will invariably arise unexpectedly: wars, financial crises, climate disasters and pandemics can rapidly change Governments’ priorities. Can the Minister clarify how it will be ensured that the AI strategy remains relevant in times of change and a high priority?
The noble Lord, Lord Bilimoria, spoke about how the UK and various businesses are embracing AI, and I shall talk briefly about the AI SME ecosystem. Our report in 2017 recommended that the Government create an AI growth fund for UK SMEs to help them to scale up. Can the Minister elaborate on what measures are being taken to accelerate and support AI SMEs, particularly on the global stage?
I share the sentiments of the noble Lord, Lord Clement-Jones, that the pace, scale and ambition of the Government do not match the challenge of many people working in the UK. I hope there will be more funding and focus on promoting AI apprenticeships, with digital upskilling as well as digital skills partnerships. For the AI strategy to succeed, we need a combination of competent people and technology. We are all aware of the concerns about a massive skills shortage, particularly with data scientists. We have been hearing about the forthcoming government White Paper on common standards and governance, although it is difficult to apply standards for AI when it is constantly evolving.
In conclusion, while we have seen huge strides and advances in AI in the UK, we need to ensure that we do not take our foot off the pedal. How do we differentiate UK AI from international AI in terms of efficiency, resilience and relevance? How can we improve public sector efficiencies by embracing AI? China and the United States will invariably lead the way with their huge budgets and established ecosystems. There is no need for complacency.
Lord McNally (LD)
My Lords, I welcome the quality of this debate. In their speeches the noble Lords, Lord St John and Lord Bilimoria, have given us some of the more optimistic sides of what AI can deliver, but every one of the speeches has been extremely thoughtful.
I look forward to the speeches of the noble Baroness, Lady Merron, and the noble Lord, Lord Parkinson of Whitley Bay, two Front-Benchers who, I may say, I always admire as they speak common sense with clarity. Thus having blighted two careers, I will move on.
I also thank noble Lords—because he will be too modest to do so—for their comments about my colleague, my noble friend Lord Clement-Jones. He told us that a new AI development could do 604 functions simultaneously. I think that is a perfect description of my noble friend.
I come to this subject not with any of the recent experience that has been on show. This might send a shiver down the Committee’s spine but in 2010 I was appointed Minister for Data Protection in the coalition Government, and it was one of the first times when I had come across some of these challenges. We had an advisory board on which, although she was not then in the Lords, the noble Baroness, Lady Lane-Fox, made a great impression on me with her knowledge of these problems.
I remember the discussion when one of our advisers urged us to release NHS data as a valuable creator of new industries, possible new cures and so on. Even before we had had time to consider it, there was a campaign by the Daily Mail striking fear into everyone that we were about to release everyone’s private medical records, so that hit the buffers.
At that time, I was taken around one of the HM Government facilities to look at what we were doing with data. I remember seeing various things that had been done and having them explained to me. I said to the gentlemen showing me around, “This is all very interesting, but aren’t there some civil liberties aspects to what you are doing?” “Oh no, sir,” he said, “Tesco knows a lot more about you than we do.” However, that was 10 years ago.
I should probably also confess that another of my responsibilities related to the earlier discussion on GDPR. I also served before that, in 2003, on the Puttnam Committee on the Communications Act. It is very interesting in two respects. We did not try to advise on the internet, because we had no idea at that time what kind of impact the internet would have. I think the Online Safety Bill, nearly 20 years later, shows how there is sometimes a time lag—I am sure the same will apply with AI. One thing we did recommend was to give Ofcom special responsibility for digital education, and I have to say, although I think Ofcom has been a tremendous success as a regulator, it has lagged behind in picking up that particular ball. We still have a lot to do and I am glad that the right reverend Prelate the Bishop of Oxford and others placed such emphasis on this.
I note that the noble Baroness, Lady Merron, has put down a Question for 20 June, asking, further to the decision not to include media literacy provisions in the Online Safety Bill, whether the Government intend to impose updated statutory duties relating to media literacy and, if so, when. That is a very good question. Perhaps we could have an early glimpse at the reply.
A number of colleagues mentioned education. Many of us are familiar—although he never actually said it, as often with quotes—with Robert Lowe at the passing of the 1867 Act, not that he was very much in favour of it: “I suppose we must educate our masters”. I think there is a bit of a reverse now and the challenge is to ensure that both parliamentarians and the public have enough knowledge and skills to ensure that AI and other new technologies do not become our masters. In many ways, Parliament is still an 18th-century concept and I worry whether we have the structures to take account of these matters. What I have always refuted, though, is that AI and the related technologies are too complex or too international to come within the rule of law. It is important that we do not allow that.
I also think that we should take a couple of lessons from science fiction. Orwell’s Nineteen Eighty-Four warned of the capacity, particularly of the totalitarian states, to usurp civil liberties using technologies which in themselves may have positive value but have sinister implications. The noble Lord, Lord Browne, made a very powerful speech about some of the questions about defence—and one could also say about our police and security services—and how those are kept within the rule of law and proper political accountability. I have always been governed by two dictums. One was Eisenhower’s warning against the power of the military-industrial complex, a very powerful lobby now reinvigorated by Ukraine to urge on all of us a new arms race. Of course, we must respond to the threats posed by the Russians, but also to watch on what roads we are being taken. A number of points have been made on this.
The other dictum came from my old boss, Jim Callaghan, when it was just me and him together. He had been briefed by one of our security services and he said to me, “Always listen to what they say but never, never suspend your own political judgment.” I think it is important, in this fast-moving, complex world, for politicians not to be frightened to take on the responsibilities. One of my favourite films is “Dr. Strangelove”, where we saw how preordained plans could not be prevented from disaster. These are very high-risk areas.
I welcome the efforts to promote ethical AI nationally and internationally but note that paragraph 28 of the document we are considering today says:
“This guidance … is not a foundation for a countrywide ethical framework which developers could apply, the public could understand and the country could offer as a template for global use.”
This is all work in progress, but this debate is important because, as Parliament develops its skills and expertise, it must take on the responsibility to make informed decisions on these matters.
Baroness Merron (Lab)
My Lords, I am glad to follow the noble Lord, Lord McNally, not least because of the generous observations he made about the similarity between me and the Minister, in a way that I am sure we both welcome.
I start my comments by expressing my congratulations to the noble Lord, Lord Clement-Jones, and all members of the committee. It is quite clear from this debate and the worldwide acclaim the committee has received just how insightful and incisive its work was. We also understand from the debate what a great catalyst the report has been for the Government to take action, and I am sure we will hear more about that from the Minister.
The development of artificial intelligence brings endless possibilities for improving our day-to-day lives. From its behind-the-scenes use in warehouse management and supply chain co-ordination to medical diagnosis and the piloting of driverless cars, artificial intelligence is being increasingly used across the country. The Government’s own statistics show that 15% of businesses already utilise it in at least one form.
I thank your Lordships for what they have brought to this extremely enlightening debate. I am struck not just by the amount of potential benefits and advances AI brings but by how those advances and potentials are matched by questions—ethical and practical challenges, with which we are all wrestling. This debate is a fantastic contribution to airing and addressing those points, which will not be going away.
As a nation, the UK is in a fortunate position to harness this potential. We have world-class universities, a culture of technological development and our strategic position, but the industry will need the support of the Government if it is to prosper. As the noble Lord, Lord Evans, rightly said, this includes the deployment of public procurement as an impact and lever. I hope the Minister will reflect on how that might be case.
However, as we have heard throughout this debate, there are associated risks with the development of new technologies and AI is no exception. As my noble friend Lord Browne so expertly set out, we have before us a changing landscape of conflict. Within that, AI can play a key role in weapons systems. On my point about the number of questions it raises, to which the right reverend Prelate also referred, is it right to delegate a machine to decide when and if to take a life? If the answer is so, it raises another set of questions which there will be no dodging.
In the last few weeks alone, we have seen more evidence of privacy breaches in the AI industry, and there have been numerous incidents globally of facial recognition technology, in particular, inheriting the racial bias of engineers. For that reason, ethics have to be central to our support for artificial intelligence and a condition for any projects that receive the support of government. If AI is developed in a vacuum of regulation, it will reflect biases and prejudices, and could reverse human progress rather than facilitate it.
The right reverend Prelate reminded us that, as with the Online Safety Bill and in fact so much of the legislation that we concern ourselves with, this is very much a moveable feast and we have to keep pace with it, not hold it back. That is a huge challenge in legislation but also in strategy.
As with any development of technology that brings prosperity, jobs and economic benefits, steps must also be taken to ensure that the benefits are experienced by towns and cities across the UK. That means driving private investment but also placing the trust of public support in new and emerging markets that are outside London and the south-east.
It is also important that new developments are sustainable and considerate of their implications for the natural environment, with AI being seen as a tool for confronting the climate crisis rather than an obstacle. Around the world it is already being adapted for use in mitigation and adaptation to climate change, and there are clear opportunities for this Government to support similar innovations to help the UK to meet our own climate obligations. I would be grateful if the Minister could comment on how that may be the case in respect of the environment.
We have to be alert to the consequences of AI for the world of work. For example, Frances O’Grady, the general secretary of the Trades Union Congress, pointed out earlier this year that employment rights have to keep pace. Again, we have to keep up with that moveable feast.
The question for us now to consider is what role the Government should take to ensure that the development of AI meets ethical, economic and environmental objectives. The committee was right to point to the need for co-ordination. There is no doubt that cross-departmental bodies, such as the Office for Artificial Intelligence, can help in that regard. Above all, we need the cross-government strategy to be effective and deliver on what it promises. I am sure the Minister will give us some indication in his remarks of what assessment has been made of how effective the strategy has been to date in bringing various aspects of government together. We have heard from noble Lords, including the noble Lord, Lord Clement-Jones, that some areas certainly need far greater attention in order to bring the strategy together.
Given the opportunities that this technology presents, the plan has to come from the heart of government and must seek to combine public and private investment in order to fuel innovation. As the committee said in the title of the report, there is no room for complacency. I feel that today’s debate has enhanced that point still further, and I look forward to hearing what the Minister has to say about the strategic plans for supporting the development of artificial intelligence across the UK, not just now but for many years ahead.
Lord Parkinson of Whitley Bay (Con)
My Lords, I am grateful to the noble Lord, Lord Clement-Jones, and all noble Lords who have spoken in today’s debate. I agree with the noble Lord, Lord McNally, that all the considerations we have heard have been hugely insightful and of very high quality.
The Government want to make sure that artificial intelligence delivers for people and businesses across the UK. We have taken important early steps to ensure we harness its enormous benefits, but agree that there is still a huge amount more to do to keep up with the pace of development. As the noble Lord, Lord Clement-Jones, said in his opening remarks, this is in many ways a moving target. The Government provided a formal response to the report of your Lordships’ committee in February 2021, but today’s debate has been a valuable opportunity to take stock of its conclusions and reflect on the progress made since then.
Since the Government responded to the committee’s 2020 report, we have published the National AI Strategy. The strategy, which I think it is fair to say has been well received, had three key objectives that will drive the Government’s activity over the next 10 years. First, we will invest and plan for the long-term needs of the AI ecosystem to continue our leadership as a science and AI superpower; secondly, we will support the transition to an AI-enabled economy, capturing the benefits of innovation in the UK, and ensuring that AI benefits all sectors and parts of the country; and, thirdly, we will ensure the UK gets the national and international governance of AI technologies right to encourage innovation and investment, and to protect the public and the values that we hold dear.
We will provide an update on our work to implement our cross-government strategy through the forthcoming AI action plan but, for now, I turn to some of the other key themes covered in today’s debate. As noble Lords have noted, we need to ensure the public have trust and confidence in AI systems. Indeed, improving trust in AI was a key theme in the National AI Strategy. Trust in AI requires trust in the data which underpin these technologies. The Centre for Data Ethics and Innovation has engaged widely to understand public attitudes to data and the drivers of trust in data use, publishing an attitudes tracker earlier this year. The centre’s early work on public attitudes showed how people tend to focus on negative experiences relating to data use rather than positive ones. I am glad to say that we have had a much more optimistic outlook in this evening’s debate.
The National Data Strategy sets out what steps we will take to rebalance this perception from the public, from one where we only see risks to one where we also see the opportunities of data use. It sets out our vision to harness the power of responsible data use to drive growth and improve services, including by AI-driven services. It describes how we will make data usable, accessible and available across the economy, while protecting people’s data rights and businesses’ intellectual property.
My noble friend Lord Holmes of Richmond talked about anonymisation. Privacy-enhancing technologies such as this were noted in the National Data Strategy and the Centre for Data Ethics and Innovation, which leads the Government’s work to enable trustworthy innovation, is helping to take that forward in a number of ways. This year the centre will continue to ensure trustworthy innovation through a world-first AI assurance road map and will collaborate with the Government of the United States of America on a prize challenge to accelerate the development of a new breed of privacy-enhancing technologies, which enable data use in ways that preserve privacy.
Our approach includes supporting a thriving ecosystem of data intermediaries, including data trusts, which have been mentioned, to enable responsible data-sharing. We are already seeing data trusts being set up; for example, pilots on health data and data for communities are being established by the Data Trusts Initiative, hosted by the University of Cambridge, and further pilots are being led by the Open Data Institute. Just as we must shift the debate on data, we must also improve the public understanding and awareness of AI; this will be critical to driving its adoption throughout the economy. The Office for Artificial Intelligence and the Centre for Data Ethics and Innovation are taking the lead here, undertaking work across government to share best practice on how to communicate issues regarding AI clearly.
Key to promoting public trust in AI is having in place a clear, proportionate governance framework that addresses the unique challenges and opportunities of AI, which brings me to another of the key themes of this evening’s debate: ethics and regulation. The UK has a world-leading regulatory regime and a history of innovation-friendly approaches to regulation. We are committed to making sure that new and emerging technologies are regulated in a way that instils public confidence in them while supporting further innovation. We need to make sure that our regulatory approach keeps pace with new developments in this fast-moving field. That is why, later this year, the Government will publish a White Paper on AI governance, exploring how to govern AI technologies in an innovation-friendly way to deliver the opportunities that AI promises while taking a proportionate approach to risk so that we can protect the public.
We want to make sure that our approach is tailored to context and proportionate to the actual impact on individuals and groups in particular contexts. As noble Lords, including the right reverend Prelate the Bishop of Oxford, have rightly set out, those contexts can be many and varied. But we also want to make sure our approach is coherent so that we can reduce unnecessary complexity or confusion for businesses and the public. We are considering whether there is a need for a set of cross-cutting principles which guide how we approach common issues relating to AI, such as safety, and looking at how to make sure that there are effective mechanisms in place to ensure co-ordination across the regulatory landscape.
The UK has already taken important steps forward with the formation of the Digital Regulation Cooperation Forum, as the noble Lord, Lord Clement-Jones, and others have noted, but we need to consider whether further measures are needed. Finally, the cross-border nature of the international market means that we will continue to collaborate with key partners on the global stage to shape approaches to AI governance and facilitate co-operation on key issues.
My noble friend Lord Holmes of Richmond and the noble Lord, Lord Evans of Weardale, both referred to the data reform Bill and the issues it covers. DCMS has consulted on and put together an ambitious package of reforms to create a new pro-growth regime for data which is trusted by people and businesses. This is a pragmatic approach which allows data-driven businesses to use data responsibly while keeping personal information safe and secure. We will publish our response to that later this spring.
My noble friend also mentioned the impact of AI on jobs and skills. He is right that the debate has moved on in an encouraging and more optimistic way and that we need to address the growing skills gap in AI and data science and keep developing, attracting and training the best and brightest talent in this area. Since the AI sector deal in 2018, the Government have been making concerted efforts to improve the skills pipeline. There has been an increased focus on reskilling and upskilling, so that we can ensure that, where there is a level of displacement, there is redeployment rather than unemployment.
As the noble Lord, Lord Bilimoria, noted with pleasure, the Government worked through the Office for AI and the Office for Students to fund 2,500 postgraduate conversion courses in AI for students from near and non-STEM backgrounds. That includes 1,000 scholarships for people from underrepresented backgrounds, and these courses are available at universities across the country. Last autumn, the Chancellor of the Exchequer announced that this programme would be bolstered by 2,000 more scholarships, so that many more people across the country can benefit from them. In the Spring Statement, 1,000 more PhD places were announced to complement those already available at 16 centres for doctoral training across the country. We want to build a world-leading digital economy that works for everyone. That means ensuring that as many people as possible can reap the benefits of new technologies. That is why the Government have taken steps to increase the skills pipeline, including introducing more flexible training routes into digital roles.
The noble Lord, Lord St John of Bletso, was right to focus on how the UK contributes to international dialogue on AI. The UK is playing a leading role in international discussions on ethics and regulation, including our work at the Council of Europe, UNESCO and the OECD. We should not forget that the UK was one of the founding members of the Global Partnership on Artificial Intelligence, the first multilateral forum looking specifically at this important area.
We will continue to work with international partners to support the development of the rules on use of AI. We have also taken practical steps to take some of these high-level principles and implement them when delivering public services. In 2020, we worked with the World Economic Forum to develop guidelines for responsible procurement of AI based on these values which have since been put into operation through the Crown Commercial Service’s AI marketplace. This service has been renewed and the Crown Commercial Service is exploring expanding the options available to government buyers. On an international level, this work resulted in a policy tool called “AI procurement in a box”, a framework for like-minded countries to adapt for their own purposes.
I am mindful that Second Reading of the Procurement Bill is taking place in the Chamber as we speak, competing with this debate. That Bill will replace the current process-driven EU regime for public procurement by creating a simpler and more flexible commercial system, but international collaboration and dialogue will continue to be a key part of our work in this area in the years to come.
The noble Lord, Lord Browne of Ladyton, spoke very powerfully about the use of AI in defence. The Government will publish a defence AI strategy this summer, alongside a policy ensuring the ambitious, safe and responsible use of AI in defence, which will include ethical principles based on extensive policy work together with the Centre for Data Ethics and Innovation. The policy will include an updated statement of our position on lethal autonomous weapons systems.
As the noble Lord, Lord Clement-Jones, said, there is no international agreement on the definition of such weapons systems, but the UK continues to contribute actively at the UN Convention on Certain Conventional Weapons, working closely with our international partners, seeking to build norms around their use and positive obligations to demonstrate how degrees of autonomy in weapons systems can be used in accordance with international humanitarian law. The defence AI centre will have a key role in delivering technical standards, including where these can support our implementation of ethical principles. The centre achieved initial operating capability last month and will continue to expand throughout this year, having already established joint military, government and industry multidisciplinary teams. The Centre for Data Ethics and Innovation has, over the past year, been working with the Ministry of Defence to develop ethical principles for the use of AI in defence—as, I should say, it has with the Centre for Connected and Autonomous Vehicles in the important context of self-driving vehicles.
The noble Baroness, Lady Merron, asked about the application of AI in the important sphere of the environment. Over the past two years, the Global Partnership on Artificial Intelligence’s data governance working group has brought together experts from across the world to advance international co-operation and collaboration in areas such as this. The UK’s Office for Artificial Intelligence provided more than £1 million to support two research projects on data trusts and data justice in collaboration with partner institutions including the Alan Turing Institute, the Open Data Institute and the Data Trusts Initiative at Cambridge University. These projects explored using data trusts to support action to protect our climate, as well as expanding understanding of data governance to include considerations of equity and justice.
The insights that have been raised in today’s debate and in the reports which tonight’s debate has concerned will continue to shape the Government’s thinking as we take forward our strategy on AI. As noble Lords have noted, by most measures the UK is a leader in AI, behind only the United States and China. We are home to one-third of Europe’s AI companies and twice as many as any other European nation. We are also third in the world for AI investment—again, behind the US and China—attracting twice as much venture capital as France and Germany combined, but we are not complacent. We are determined to keep building on our strengths, maintaining and building on this global position. This evening’s debate has provided many rich insights on the further steps we must take to make sure that the UK remains an AI and science superpower. I am very grateful to noble Lords, particularly to the noble Lord, Lord Clement-Jones, for instigating it.
Lord Clement-Jones (LD)
My Lords, first I thank noble Lords for having taken part in this debate. We certainly do not lack ambition around the table, so to speak. I think everybody saw the opportunities and the positives, but also saw the risks and challenges. I liked the use by the noble Baroness, Lady Merron, of the word “grappling”. I think we have grappled quite well today with some of the issues and I think the Minister, given what is quite a tricky cross-departmental need to pull everything together, made a very elegant fist of responding to the debate. Of course, inevitably, we want stronger meat in response on almost every occasion.
I am not going to do another wind-up speech, so to speak, but I think it was a very useful opportunity, prompted by the right reverend Prelate, to reflect on humanity. We cannot talk about artificial intelligence without talking about human intelligence. That is the extraordinary thing: the more you talk about what artificial intelligence can do, the more you have to talk about human endeavour and what humans can do. In that context, I congratulate the noble Lords, Lord Holmes and Lord Bilimoria, on their versatility. They both took part in the earlier debate, and it is very interesting to see the commonality between some of the issues raised in the previous debate on digital exclusion —human beings being excluded from opportunity— which arise also in the case of AI. I was very interested to see how, back to back, they managed to deal with all that.
The Minister said a number of things, but I think the trust and confidence aspect is vital. The proof of the pudding will be in the data reform Bill. I may differ slightly on that from the noble Lord, Lord Holmes, who thinks it is a pretty good thing, by the sound of it, but we do not know what it is going to contain. All I will say is that, when Professor Goldacre appeared before the Science and Technology Committee, I think it was a lesson for us all. He is the chap who has just written the definitive report on data use in the health area for the Department of Health, and he deliberately opted out, last year, of the GP request for consent to share data, and he is the leading data scientist in health. He was not convinced of the fact that his data would be safe. We can talk about trusted research environments and all that, but public trust in data use, whether it is in health or anything else, needs engagement by government and needs far more work.
The thing that frightens a lot of us is that we can see all the opportunities but if we do not get it right, and if we do not get permission to use the technology, we cannot deploy it in the way we conceived, whether it is for the sustainable development goals or for other forms of public benefit in the public service. Provided we get the compliance mechanisms right we can see the opportunities, but we have to get that public trust on board, not least in the area of lethal autonomous weapons. I think the perception of what the Government are doing in that area is very different from what the Ministry of Defence may think it is doing, particularly if they are developing some splendid principles of which we will all approve, when it is all about what is actually happening on the ground.
I will say no further. I am sure we will have further debates on this and I hope that the Minister has enjoyed having to brief himself for this debate, because it is very much part of the department’s responsibilities.
House of Lords
Costs of Living
(2 years, 5 months ago)
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Lord Allen of Kensington
To ask Her Majesty’s Government what plans they have to help consumers with rising energy bills and the increased costs of living.
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
My Lords, the Government understand the pressures people are facing with the increased costs of living caused by high global energy and goods prices. To help with energy, the Government are providing a £9.1 billion package, worth up to £350 each, for over 28 million households. The energy price cap ensures that prices fairly reflect the underlying cost of supply. The vulnerable continue to receive support through the warm home discount, the winter fuel payment and the cold weather payment.
Lord Allen of Kensington (Lab)
I thank the Minister for his reply. He will be aware that the UK inflation rate is now at a 40-year high and expected to rise further, that energy prices are at an all-time high and expected to rise further—in fact, today we are paying £1.70 per litre for fuel—and that interest rates are at their highest for more than a decade and expected to rise further. But rather than giving families a helping hand, our Chancellor has dipped his hand into their pockets, with the biggest cut in out-of-work benefits in 50 years, the biggest cut in pensions in 50 years, and the biggest tax burden in 70 years. Can the Minister say what the Government will do to reverse this situation—where more than 4 million people say they have gone without food, more than 6 million people say they have gone without heating, water or electricity, and more than one in five adults say they are worried about being able to pay their bills?
Lord Callanan (Con)
I do not doubt that it is an incredibly difficult time, and the Government are fully aware of the pressures facing many households. I can tell the noble Lord that we are monitoring the situation very closely, and the Chancellor and the rest of the Government stand ready to take any further steps, if they are needed, to support households.
Lord Teverson (LD)
My Lords, the Government are going to make a windfall gain—because of the electricity price contracts for difference, the price of the market will move above the strike price. How many billions extra will the Treasury get over the next year, and will that be fed back to hard-pressed consumers?
Lord Callanan (Con)
Of course, those payments do not go back to the Treasury. They are all contained within the electricity price system, so, ultimately, they go into either subsidising further renewable energy or providing additional policies that are paid for through levies on bills.
Lord Cormack (Con)
My Lords, as the expression “Conservative ideology” is an oxymoron, why is it being called in evidence by those who are arguing against putting a windfall tax on fuel?
Lord Callanan (Con)
This is a complicated issue, and there are clearly a variety of views. I think everybody across the House wants to see huge amounts of extra investment going into our renewable energy system in particular, and it is important to bear in mind that that will, of course, be provided by those same companies.
Baroness Greengross (CB)
My Lords, the Institute for Fiscal Studies has pointed out that, since council tax is still based on 1991 property values, the recent £150 support for people in council tax bands A to D in England will mean that some people are missing out on the support that neighbours in similarly valued properties receive, just because their home is worth more than their neighbours’ were 30 years ago. How will the Government address this issue to ensure that support is targeted where it is really needed?
Lord Callanan (Con)
The noble Baroness makes a very good point. This is caused by the fact that council tax bands have not been revalued for a considerable time. That is why the Government are providing £144 million of discretionary funding for local authorities to support households that need support, regardless of the council tax band they are in—precisely the kind of people to whom the noble Baroness refers.
The Lord Bishop of Oxford
My Lords, the Minister and other noble Lords will be aware of the paradox that it is often the very poorest people in society who pay a higher tariff for their electricity through pre-payment meters and the like. They may not have bank accounts or the ability to pay on any kind of credit. Are the Government proposing to do anything to help and support those who are locked into these higher energy prices when they can least afford then?
Lord Callanan (Con)
I understand the point that the right reverend Prelate is making, but, of course, those households are also subject to a price cap. The slightly higher price for prepayment meters reflects the fact that they cost energy suppliers more to serve.
Baroness Jones of Moulsecoomb (GP)
My Lords, can the Minister explain to me very simply why energy prices are going up when renewable energy prices are as cheap as they have ever been, and falling? Does that mean that the Government did not invest enough in renewable energy when, for example, the Greens started telling them that they should?
Lord Callanan (Con)
As the noble Baroness knows—and we have debated this extensively—we have the largest offshore renewable sector in Europe, so we have been investing considerable sums in renewable energy. In fact, in the energy Statement a couple of weeks ago, we announced an even further ramping up of what has been a very successful sector.
Baroness Hayman of Ullock (Lab)
My Lords, I have been listening very carefully to the Minister’s responses about everything that the Government are doing, but more families are falling into poverty. We need more than the monitoring he talked about: we need steps, and we need them now. I genuinely do not understand his response to the noble Lord about the windfall tax. Why will the Government not bring that in now?
Lord Callanan (Con)
I know that the Opposition like to use these easy soundbites, as if there were an enormous pot of free money that we can somehow access, but, of course, money that is taken off those companies is also money that does not go to shareholders, many of which are pension funds that pay the pensions of people up and down this country. They are not greedy plutocrats who can just absorb the money. We are, of course, keeping all options under review, but it is not a cost-free option: it would result in lower investment in the renewable energies, which everybody keeps telling me they want to see in the future.
Lord Howell of Guildford (Con)
My Lords, since China has stopped demanding extra gas because its rate of growth has come to a halt, and as there is now plenty of gas available on the high seas, for both contract and spot prices, why can we not get some benefit from that for our consumers? Why do we have to assume that gas prices remain five or six times as high as last year, when there is plentiful gas—LNG in particular—around?
Lord Callanan (Con)
The noble Lord makes a good point, but, as a result of the price cap, most energy companies are hedging their supplies, based on current prices. There are plentiful supplies of LNG, but, of course, capacity able to be injected into the system is limited, due to our number of offshore loading points. We actually have a good number in the UK, but they are being fully utilised.
Lord Rooker (Lab)
What is the technical difficulty of changing benefits mid-year? Surely the big advantage of universal credit, bearing in mind that probably 60% of those who are really badly affected are in work, is that there is no distinction between being in or out of work. I do not understand the technical problem that has been raised. Universal credit is the quickest, easiest, most targeted thing for the Government to do. They do not need to wait, so why are they waiting?
Lord Callanan (Con)
As I said, the Chancellor is considering a range of options to mitigate the expected further energy price cap rise in October, and we keep that and all other matters under constant review.
Lord Lancaster of Kimbolton (Con)
My Lords, supply is a key factor when it comes to price, so, given the conflict in Ukraine, can my noble friend outline what the Government are doing to ensure that we have security of energy supply?
Lord Callanan (Con)
My noble friend makes an important point. The best thing we can do to ensure security of supply is to generate more of our supply here in the UK. For that, we need to keep producing as much oil and gas as we can from the North Sea during the transition period, and to ramp up the amount of homegrown renewables and nuclear, which we are also doing.
Baroness Watkins of Tavistock (CB)
My Lords, some of the Government’s current plans to improve the situation—I recognise that that is what they are trying to do—will not necessarily benefit those who are on disability benefits. We must accept that people who cannot move easily in order to stay warm demand greater help with the resource of fuel. Will the Minister please comment on that?
Lord Callanan (Con)
The noble Baroness is referring to the warm home discount. We are increasing the amount of money generated for the warm home discount and it is going to a wider cohort of people, but we are trying to concentrate those payments on those who need them most.
Border Checks on Imported Goods: New IT Systems
(2 years, 5 months ago)
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Baroness Randerson
To ask Her Majesty’s Government what progress they have made with developing the new IT systems required to implement the planned border checks on imported goods; and when they expect to be able to implement those plans.
The Minister of State, Cabinet Office (Lord True) (Con)
My Lords, IT systems required for the introduction of border import controls are in place and have been live since 2021. The Government set out plans for border import controls more fully in a Written Ministerial Statement on 28 April.
Baroness Randerson (LD)
My Lords, the Government recently announced the fourth postponement of the introduction of SPS tests on goods from the EU, until the end of next year. Previous postponements were excused on the grounds that the ports needed more time to build the infrastructure required, but they have now done that and they are complaining that they have invested £100 million in redundant equipment. Vets and farmers are warning of the dangers of importing disease along with unchecked goods. Do the Government still intend to introduce those checks; how will they manage the risks until they do so; and will they be compensating port authorities for the cost of expensive investment at a time when life is very hard indeed for all those involved in international trade?
Lord True (Con)
My Lords, there were a number of questions there. My right honourable friend has decided that we hope to accelerate to the end of 2023 the move to a new regime. In that light, a decision was taken to continue with the present system, with the changes he has announced. As for the ports, I recognise what the noble Baroness said. We are aware that ports will have questions about the decision, and we will certainly be working with them to understand the implications. However, it is important that we invest in a more mechanised border, and that is our objective: a fully modern border, the most modern in the world, as soon as possible.
Viscount Hailsham (Con)
My Lords, on the matter of border checks, is my noble friend aware that those boarding the Eurostar at St Pancras have to pass through two passport controls separated by a few yards—the United Kingdom one and the French one? Is it not possible to have a single passport control, or is this one of the hitherto unidentified benefits of Brexit?
Lord True (Con)
My Lords, I fear I have not had the pleasure of travelling on Eurostar lately. I will take up my noble friend’s comments with the appropriate authorities and provide him with an answer.
Lord Bassam of Brighton (Lab)
My Lords, while the decision to delay the imposition of new import checks spared businesses additional costs at a challenging time, it also called into question the Government’s commitment to preserving high standards of animal and human health. Does the Minister think it fair that our domestic farmers must meet such stringent export controls while their European competitors enjoy comparatively simple access to the UK market, with all the attendant public health risks that that brings? Could not this situation be partially resolved by a mutual veterinary agreement?
Lord True (Con)
My Lords, we have taken the decision. As the noble Lord referred to in the first part of his question, the fact is that, at the moment, one does not wish to add particular difficulties against the international background. However, we have introduced, and will maintain, checks on high-risk animal and plant products. The noble Lord’s point is important. I can assure him that we respect the input of the British Veterinary Association—this was referred to in a previous question—and that of other expert bodies, and we will work closely with it over the next year and a half to design the new regime of control.
Viscount Waverley (CB)
My Lords, it certainly appears that secure, digital and paperless are synonymous with tomorrow’s world. However, would the Minister care to expand on his initial response as to what assessment has been made of business readiness for the closure of CHIEF and migrations to the CDS for imports and exports? How does this align with the Government’s timeline for border changes as part of the border 2025 strategy?
Lord True (Con)
My Lords, the replacement of CHIEF with the CDS, which is proceeding, is the responsibility of HMRC rather than my department, although I obviously answer for the whole Government. It is a major contributor to the strategy overall. The Cabinet Office and HMRC are working closely to ensure that work is aligned but it is still the expectation that CHIEF will close and migrate when the new procedure is in place. I can assure the noble Viscount that we will maintain close liaison with business on that matter.
Lord Bellingham (Con)
My Lords, when it comes to the movement of goods between the British mainland and Northern Ireland, could the Minister look urgently at IT systems that incorporate trusted trader schemes and the implementation of red and green channels? Surely, with a dose of common sense, the current impasse over the protocol could be sorted out.
Lord True (Con)
My Lords, as my noble friend will know, consideration is being given to these matters. I will not tread into that in this particular answer, but I can assure him that elements of trust should certainly play a part in any wisely conducted border. That is why my right honourable friend Mr Rees-Mogg has set up a pilot project called Ecosystem of Trust—not my phrase—to work with the private sector. It is designed to prove the concept of trusted supply chains across the board, not simply in relation to Northern Ireland.
Lord Wallace of Saltaire (LD)
My Lords, the Prime Minister promised two-and-a-half years ago to get Brexit done. It seems extremely inefficient that this key element of our future trading relationship with the European Union has to be postponed time and again. Does the Minister not think it is time that the Minister for Government Efficiency has some sharp words with the Minister for Brexit Opportunities?
Lord True (Con)
My Lords, I am sure that my right honourable friend is capable of almost any form of conversation. I repeat: this is not a delay. It is a deliberate decision to take a different approach and part of that decision is that the 2025 target is being brought forward, as I explained to your Lordships earlier.
Baroness Blackwood of North Oxford (Con)
My Lords, as the Minister develops the border protocols for 2025, will he reconsider prioritisation for medicines and other life-saving products? If we have learned anything for the pandemic, it is that some of these supply chains really are quite fragile. This could do with another look.
Lord True (Con)
My Lords, my noble friend makes an important point. I will certainly take it away and discuss it with colleagues.
Lord Foulkes of Cumnock (Lab Co-op)
My Lords, if this is not implemented by the new deadline, who will, in the words of the Prime Minister, accept full responsibility? Will that also mean blaming everyone else?
Lord True (Con)
My Lords, it will be implemented. We will publish a target operating model this autumn, which will set out how and when the new and improved global regime—not just with the EU—of border import controls will come in. As the noble Lord on the Front Bench opposite asked, that will be based on a proper assessment of risk. It will, as the noble Viscount asked, harness the power of data and technology. Also, as I have told noble Lords, we will target the end of 2023 as a revised introduction date for this regime.
Lord Purvis of Tweed (LD)
My Lords, this is the fourth deliberate and previously unannounced delay. The Minister has said that it is to save businesses’ costs, so what are the estimated business savings of this deliberate delay?
Lord True (Con)
My Lords, we have estimated that there are significant potential savings in annual costs, but I repeat my fundamental point that this is not a delay but a deliberate decision to move towards a new target date.
Lord Kirkhope of Harrogate (Con)
My Lords, pursuing the issue raised by my noble friend Lord Hailsham, I seem to recollect that at the time of the construction of the tunnel, we agreed in writing with the French that a little piece of England would become French and, on the other side of the channel, a little bit of France would become England for the purposes of border checks. Can my noble friend the Minister confirm that that arrangement is still in place, or have we now asked our friends in France to give us back that territory?
Lord True (Con)
My Lords, I am not aware of any such suggestion, but as I have said to my noble friend Lord Hailsham, I will look into the operation of passport controls on Eurostar. I will take into account the other border that he refers to and will write to noble Lords.
Sugar Reduction Programme: Bread
(2 years, 5 months ago)
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Lord Brooke of Alverthorpe
To ask Her Majesty’s Government why the recent sugar reduction programme, which challenged businesses to reduce the amount of sugar in food, did not include bread.
The Parliamentary Under-Secretary of State, Department of Health and Social Care (Lord Kamall) (Con)
The sugar reduction programme focuses on those products which contribute the most to children’s intakes of sugar. Sweeter bread products such as buns, fruit loaves and bagels are within scope of the programme. Plain and savoury breads—for example, garlic bread—are included in the salt reduction programme, as these products make greater contributions to salt intakes than sugar intakes. Garlic breads are also included in the calorie reduction programme.
Lord Brooke of Alverthorpe (Lab)
I thank the Minister for that reply. Sugar is in so many products these days and is so damaging. As the Minister knows, we have a crisis with diabetes and with obesity. Does he not agree that we should endeavour to remove sugar wherever we can? There was no sugar in bread 60 years ago. Why is there sugar now? Why do the Government not look at this again and stop it?
Lord Kamall (Con)
I pay tribute to the noble Lord. Since my first day at the Dispatch Box, he has challenged me on both sugar reduction and alcohol abuse. There comes a stage where it is diminishing returns. I know that the noble Lord and I are very keen on puns and dad jokes. When bread is being made, sugar is needed—kneaded; excuse the pun—because it extends shelf life by reducing the oxidation which causes food to deteriorate, it reduces the rate at which bread becomes stale, it activates yeast for fermentation, it adds the colour during the baking process, and it adds to the texture. The sugar contributes only about 2% of free sugars intakes in children. Therefore, it is much more worth while and targeted to focus on products that are higher in sugar.
Baroness Walmsley (LD)
My Lords, will the Minister join me in congratulating Tesco and Sainsbury’s? They have announced that, even though the Government are backtracking on the proposed ban on volume promotion offers of foods high in sugar, salt and fat, they will do it voluntarily anyway, and on time, to support the anti-obesity campaign. Will he encourage other retailers to join them and to work with their suppliers to reformulate and reduce sugar?
Lord Kamall (Con)
We should welcome moves by those in the industry, including retailers; if they can meet deadlines earlier, that is all to be welcomed. Perhaps I might correct the noble Baroness on one inaccuracy. The Government have not backtracked; we have delayed location measures until October 2022.
Lord Kamall (Con)
Next time I will bring a copy of the Oxford English Dictionary. Volume price will come in in October 2023 and advertising in 2024. We did that in full consultation with industry, and it is welcome when industry asks for deadlines and is able to meet them early.
Lord Mackenzie of Framwellgate (Non-Afl)
My Lords, if the Minister is right that the Government are not backtracking but delaying, perhaps he could persuade the supermarkets that, instead of reducing the price of foods that are bad for you, they should reduce the price of good foods such as fruit and vegetables.
Lord Kamall (Con)
That is a very sensible suggestion. Across government, and with the Office for Health Improvement and Disparities, we are trying to work with both the food-supply industry and retailers to look at how we can pull customers towards healthier products and work with companies to reduce sugar, salt and other bad things in terms of food reformulation to make sure that we have a healthier population in the longer term.
Baroness Boycott (CB)
My Lords, in respect of the cost of living crisis and healthy food, why do the Government not make automatic enrolment in Healthy Start vouchers immediately happen? At the moment, only about 60% of people take up this good measure to spend on healthy food. This would certainly be a good counteraction to the delay in banning two for the price of one on sugary foods.
Lord Kamall (Con)
On the direct question that the noble Baroness asked, I will have to go back to find out more and will write to her. The Government are very keen on some campaigns that she will be aware of, such as the Better Health campaign, launched in July 2020. In January 2022 it took over from Change4Life. We now have the NHS Food Scanner app; with a quick scan of a barcode, families can see how much sugar, saturated fat and salt is in their everyday food and drink. There is also a campaign on on-demand video, as well as on YouTube, and we encourage people to download the app from the App Store or Google Play. More campaign resources are available, and I am sure that noble Lords would like to help promote them.
Lord Suri (Con)
My Lords, the staple food of many people’s day is bread. The sugar content in the average slice of processed bread varies but can be up to 3 grams. Sugar is formed naturally in the baking process, but it is often added into it. The benefits of adding sugar are favourable for the bread-making process but not for the people consuming it. Bread can be baked without adding sugar and, yes, that will indeed alter its texture, taste, freshness and the speed of its rise. If we look at the ancient history of bread, we see that making it uses grain and wheat flour; chapatis, naans and numerous Middle Eastern flatbreads usually do not have sugar added. These recipes are healthy and are still being consumed today. Health is wealth; take care of it.
Lord Kamall (Con)
Right. I begin by thanking my noble friend for that very comprehensive question. As I said earlier, some sugar is needed in the process, but he makes an important point about how we reduce the unneeded additional sugar that is added. I have already given the reasons why there is some sugar, and no doubt the chemical processes will be improved over time: as mankind’s innovation and ingenuity increase, we will see more substitutes for sugar. I was also interested in the point made by the noble Lord about chapatis; next time I go to a restaurant I will ask about their sugar content.
Baroness Merron (Lab)
My Lords, with the UK attending the 75th World Health Assembly in Geneva as we speak, it is concerning that the Government have delayed their planned measures to encourage a move away from foods that are high in fat, sugar and salt. To compensate for this, particularly for those who are experiencing higher levels of deprivation, can the Minister tell your Lordships’ House in what specific ways the Government intend to show the leadership that is so urgently needed?
Lord Kamall (Con)
I thank the noble Baroness for raising that point. Part of my role is in international health diplomacy, where other countries come to the UK wanting to learn from us. It is very interesting that a number of other countries are asking to learn from our sugar and salt reduction programmes, our alcohol and anti-tobacco programmes and our campaigns for healthy eating—not just telling people they should not do things but encouraging them to have a healthier lifestyle
Baroness Hayman (CB)
My Lords, the Minister has said that the Government accept the need for sugar in bread, which is controversial with many authorities and Members of this House, but they seem to be taking an extraordinarily long time to accept the fortification with folic acid of the flour used for bread. As the Minister has heard many times, this would have undoubted health benefits. Since the noble Lord, Lord Rooker, is not in his place, I felt the need to ask the question.
Lord Kamall (Con)
I would have hoped that the noble Baroness would have lined up the noble Lord, Lord Rooker, to be in his place. Only yesterday, I had a meeting with him, the noble Lord, Lord Patel, and a number of other noble Lords, together with departmental officials.
We have to do this within the general picture of the Bread and Flour Regulations. At one stage, the dispute was about the upper limit of folic acid. We have agreed that we will push forward as quickly as possible. We were waiting for the Northern Ireland elections. It has now been confirmed that the Northern Ireland Minister will remain in place until a new Executive is formed. He has promised to push his officials to give approval so that we can get on with the consultation and get this measure in place as soon as possible. I hope that the noble Lord, Lord Rooker, was happy with the progress we made yesterday. I am sure he will tell us in due course.
Baroness Uddin (Non-Afl)
My Lords, addiction to sugar begins very early. It is included in baby foods. Will the Minister ensure that manufacturers attend to this sector as a critical component of the Government’s strategy? Does he accept that many people who are digitally excluded may not have adequate access to these campaigns and information from the Government?
Lord Kamall (Con)
The noble Baroness makes a very important point. Following our commitment in the Advancing Our Health: Prevention in the 2020s Green Paper, we launched a consultation on baby food. We are aware how important it is to reduce sugar intake. Those aged four to six should have no more than 19 grams of sugar—five cubes—per day. From the age of 11, this increases slightly to seven cubes. This shows the importance of addressing this issue at a very early age, and we are speaking to manufacturers about possible formulations.
The Lord Speaker (Lord McFall of Alcluith)
My Lords, for the next Oral Question, the noble Baroness, Lady Brinton, will be contributing virtually.
High-rise Buildings: Evacuation of Disabled Residents
(2 years, 5 months ago)
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Baroness Brinton
To ask Her Majesty’s Government what steps they are taking to provide for legally-binding evacuation plans for all disabled residents in high-rise buildings.
The Minister of State, Home Office and Department for Levelling Up, Housing & Communities (Lord Greenhalgh) (Con)
My Lords, the Government have launched a new consultation on proposals to support the fire safety of residents unable to self-evacuate in an emergency. These include a person-centred fire risk assessment for these residents, simultaneous evacuation of buildings and the provision of information to fire and rescue services to feed into their emergency response. The Government’s response to the PEEPs consultation was published on 18 May. It sets out the difficulties in mandating PEEPs in high-rise residential settings.
Baroness Brinton (LD) [V]
My Lords, the Government’s consultation says that PEEPs would not be proportionate, practical or safe. Instead, it proposes that they stay put. But staying put is what killed 40% of disabled residents in Grenfell Tower. Sir Martin Moore-Bick’s inquiry recommended PEEPs and a premises information box. The fire chiefs’ guidance makes it clear that PEEPs and an information box would help them to evacuate disabled people. Inside Housing has reported that the Government rejected PEEPs after a single meeting with building owners. So how will disabled people be able to get out of a burning high-rise building if fire and safety officers cannot get to them?
Lord Greenhalgh (Con)
It is quite clear that, while we are not mandating PEEPs in high-rise residential buildings, we are consulting on these EEIS proposals. This does not remove the ability of responsible persons to implement PEEPs if they agree with residents that it is appropriate.
Baroness Masham of Ilton (CB)
My Lords, would it be possible to have evacuation lifts in all high-rise buildings? This would benefit everybody.
Lord Greenhalgh (Con)
Having evacuation lifts in high rises, as well as more than a single staircase, is the sort of thing we need to capture and make very clear in building regulations. This will become something of the purview of the new building safety regulator. It is a very good point.
Baroness Sanderson of Welton (Con)
My Lords, I declare my interest as a community adviser on Grenfell, so I really do understand the anger at the decision not to implement PEEPs. In this instance, it is important to acknowledge that this was done not just on a whim or after a single meeting. The truth is that a tremendous amount of work has been done on this behind the scenes, but we have not arrived at a satisfactory place. To that end, would my noble friend agree that it is hugely important that all the interested parties follow the lead of Andy Roe, the LFB commissioner, take part in the new consultation and make their concerns known so that we can make progress and get to a better place?
Lord Greenhalgh (Con)
I thank my noble friend for her recognition of the hard work it has taken to get to this position. There were nearly 400 responses. All were carefully gone through and responded to as part of the previous consultation. I join her in encouraging all parties to come forward and respond to the EEIS+ consultation. The Government really are listening and it is important that we hear from as many diverse stakeholders as possible.
Lord Kennedy of Southwark (Lab Co-op)
My Lords, I draw the attention of the House to my relevant interest as a vice-president of the Local Government Association. As the noble Baroness, Lady Brinton, said, the Government’s position is that personal emergency evacuation plans for people who would struggle to get out of a burning building are not proportionate, practical or safe to implement. Can the noble Lord please explain the Government’s reasoning for coming to that conclusion? I am sure he can acknowledge that disabled people, their families and friends and campaigners are very worried about that. We need an explanation of why the Government have taken this position.
Lord Greenhalgh (Con)
There are real concerns based on the previous consultation around practicality—the measures that get mobility-impaired residents out in advance of fire and rescue services, which on average respond in six to seven minutes—proportionality in a residential setting, where there are rarely 24-hour staff to carry out evacuations, and safety around evacuation of all residents that does not hinder the fire and rescue services fighting the fire. Those are the concerns we have outlined in the current consultation.
Lord Young of Cookham (Con)
Does my noble friend agree that the need to evacuate disabled residents from high-rise flats would be greatly reduced if the remediation measures to reduce fire risks took place? Following the passage of the Building Safety Act, can my noble friend now say what progress is being made in eliminating those risks from high-rise buildings?
Lord Greenhalgh (Con)
My noble friend is right that the concern is ultimately for those buildings where simultaneous evacuation is in place. We are making progress in ACM buildings and high-rises with other forms of flammable cladding. Most importantly, we now have a situation where we are getting the polluters to pay and the funding in place to get remediation done as quickly as is practical.
Lord Stunell (LD)
My Lords, the Prime Minister gave an undertaking that every recommendation of the Grenfell inquiry would be implemented in full. PEEPs were a clear recommendation of that inquiry. That commitment was underlined by the Secretary of State for what was then the Ministry of Housing, Communities and Local Government. The Minister himself made similar comments during the passage of the Building Safety Act. Can he not understand the anger, fear and frustration of disabled people living in high-rise blocks about what, from an earlier question, appears to be what we might understand to be a delay but might be a U-turn on the Government’s commitment to implement PEEPs?
Lord Greenhalgh (Con)
I genuinely understand the concerns and frustrations, but we have come forward with what we believe to be a sensible proposal. This is a genuine consultation with a call for evidence for examples of practical, proportionate and safe PEEPs and other fire safety initiatives. It also includes a working group with responsible persons, residents and disability groups to examine the role that neighbours and friends can play in supporting the evacuation of vulnerable residents. We are listening and it is important that we get a policy position that works.
Baroness Altmann (Con)
My Lords, I congratulate my noble friend on all the work being done and encourage him and his department to make sure that it is completed as soon as possible. May I ask for an assurance that the needs of frail elderly people, who might not be registered as disabled, are also taken into account, as they might be equally unable to self-evacuate in an emergency?
Lord Greenhalgh (Con)
My noble friend is right that we need to capture those people who may not present themselves as disabled but who clearly have mobility impairments. That is the purpose of the EEIS proposal, which is around ensuring that we can identify those people, that we can organise person-centred fire risk assessments and have home safety visits to come up with measures that do the best to keep them safe. That applies to all mobility-impaired residents.
Lord Berkeley (Lab)
My Lords, behind all these fine words is a practical question: how do you evacuate someone in a wheelchair from an 11, 12 or 13-storey building? The Minister seems to be saying that there will not be any more fires in buildings because of the insulation that the noble Lord, Lord Young, mentioned, but there are practical problems in getting people out in a wheelchair down one staircase when the fire people are trying to come up and do other things. Is there a solution?
Lord Greenhalgh (Con)
This is the real issue, which is why I think the noble Baroness raised the importance of evacuation lifts and having means of exiting a building in that very case. We need to recognise that fire and rescue services need to work as fast as possible to respond and contain the fire. Above all, we need to keep all residents in that building safe.
Baroness Walmsley (LD)
Did I understand the Minister to say in a previous answer, that in the absence of PEEPs, in the case of a fire, it could be up to family and friends to get a disabled person out?
Lord Greenhalgh (Con)
No, I was saying that we have a working group looking at the role that friends, neighbours and other residents may play in supporting the evacuation. That is essentially what I was saying: it is a working group to bring together evidence and information as part of the consultation.
Baroness Uddin (Non-Afl)
My Lords, is the fundamental question not why people with mobility issues are housed in these unsafe environments and conditions? Is it because there is simply not enough accommodation available to local authorities and housing associations? What are the Government doing to address mobility issues in their housing planning?
Lord Greenhalgh (Con)
Obviously we need to provide more affordable housing, which I think is what under- pinned the question. We have invested £11.5 billion as part of the affordable homeless programme and plan to build around 32,000 socially rented homes, double the current amount.
Identity and Language (Northern Ireland) Bill [HL]
Wednesday 25th May 2022
(2 years, 5 months ago)
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Heritage Railways and Tramways (Voluntary Work) Bill [HL]
Wednesday 25th May 2022
(2 years, 5 months ago)
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Climate and Ecology Bill [HL]
Wednesday 25th May 2022
(2 years, 5 months ago)
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Pharmacy (Preparation and Dispensing Errors—Hospital and Other Pharmacy Services) Order 2022
(2 years, 5 months ago)
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Lord Kamall
That the draft Order laid before the House on 28 April be approved. Considered in Grand Committee on 23 May.
Passport (Fees) Regulations 2022
(2 years, 5 months ago)
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Baroness Williams of Trafford
That the draft Regulations laid before the House on 25 April be approved. Considered in Grand Committee on 23 May.
Xinjiang Internment Camps: Shoot-to-Kill Policy
(2 years, 5 months ago)
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Lord Collins of Highbury (Lab)
My Lords, for some time this House has called on the United Kingdom Government to back a UN visit to Xinjiang to assess the scale of human rights abuses, which we have now seen so shockingly illustrated by the BBC report. Michelle Bachelet has finally arrived. However, it is reported that her access is being restricted, with the UN stressing that the visit cannot be considered an investigation. While Amanda Milling reiterated yesterday the call for unfettered access, can the Minister tell us what steps the Government are taking, with our allies, to secure proper access for the UN?
On future policy, Amanda Milling said the Government
“will continue to develop our domestic policy response, including introducing further measures to tackle forced labour in UK supply chains.”—[Official Report, Commons, 24/5/22; col. 159.]
An opportunity starts with the Procurement Bill, which has its Second Reading this afternoon, to protect British customers and consumers from complicity in the Uighur genocide. Will the Minister support amendments to back British businesses which generally want to do the right thing?
The Minister of State, Foreign, Commonwealth and Development Office (Lord Ahmad of Wimbledon) (Con)
My Lords, the noble Lord, Lord Collins, and I have been working together, and I am conscious of and grateful for the strong support on the issue of Xinjiang. The continuing trials, tribulations and persecution of, and indeed violations against, the Uighur community in Xinjiang are appalling and abhorrent, and my right honourable friend the Foreign Secretary has put out a statement to that effect.
On the noble Lord’s first point on Michelle Bachelet, the High Commissioner is well known to me. Indeed, the United Kingdom was the first country to call, both directly in a bilateral meeting with her and at the Human Rights Council, for a visit to Xinjiang, which, as the noble Lord acknowledged, is under way. However, he is quite right that it is, to use quite diplomatic terms, a managed visit. Clearly, access will be quite limited. We are certainly working with our friends and partners. We also press the High Commissioner for a specific report on the situation in Xinjiang. Earlier today I was scoping as to either a direct call or a visit to Geneva to pursue that very issue. I will update your Lordships’ House on that specifically.
The Government are committed to tackling the issue of Uighur forced labour in supply chains. In September 2020, there was an ambitious package of changes to the Modern Slavery Act. I am sure the noble Lord noted that these measures will be included in the modern slavery Bill, which was announced as part of the Queen’s Speech in May this year. On the other point he raised on procurement, I do not know and cannot predict what amendments will come forward, but the Procurement Bill is also looking quite specifically at supply chain issues. From experience, I am sure that many a noble Lord will look at that Bill quite specifically.
Lord Purvis of Tweed (LD)
My Lords, the fact that we have been able to witness this dreadful information is testimony to there being a free and open media, in stark contrast to what the people of China themselves will be denied seeing by their Government. I have asked this on three occasions now. Given that we are trade dependent on China for goods, with a trade deficit now of more than £40 billion—the biggest trade deficit with a single country in our country’s history—our leverage is limited, but what are the areas in which preferential access to UK markets will be restricted by state-owned enterprises, especially in the financial services sector? The Government have signed a number of agreements with the People’s Republic of China, but the Government have not been able to say whether any triggering mechanisms on human rights abuses exist. Are there any areas in which the Government will restrict access to China on the basis of these grotesque human rights abuses?
Lord Ahmad of Wimbledon (Con)
First of all, I agree with the noble Lord about the issue of human rights abuses. As the UK’s Human Rights Minister, it is something very specific to the agenda that I am following directly and with partners through all networks. We raise issues and concerns directly and bilaterally, and through various UN and multilateral fora.
On the specific issues of our trade with China, we must make sure that our trade with China is reliable, but that it avoids any kind of strategic dependency, and of course the important issues that the noble Lord draws to our focus about human rights abuses. One hopes also that, through some of the measures we are taking in the Bill that I announced on modern slavery, and also the discussions that we will have on whatever legislation comes forward, we will continue to focus on eradicating those human rights abuses, and that those companies which still seek to trade in that capacity will be held to account.
Lord Alton of Liverpool (CB)
My Lords, I declare an interest as a member of the All-Party Parliamentary Group on Uyghurs. It was the Foreign Secretary, Liz Truss, who said that a genocide is under way in Xinjiang: the ultimate human rights violation, the crime above all crimes. At a meeting with her and the Prime Minister, held with sanctioned parliamentarians, we were promised that government policy on genocide determination would be reformed. Will the noble Lord tell us how this can be expedited, and whether he will arrange a follow-up meeting with the Foreign Secretary? Will he urgently draw John Sudworth’s admirable BBC documentary to the attention of the UN’s Michelle Bachelet during her current visit to the region?
Lord Ahmad of Wimbledon (Con)
My Lords, on the noble Lord’s final point, that documentary—I have certainly seen part of it, not in full, but I have also seen many of the images associated with it—really makes your stomach churn, in every sense. It is abhorrent, in every sense. I was pleased that my right honourable friend the Foreign Secretary, and the Prime Minister, met with the noble Lord, amongst others. I am also aware that the PM at that meeting demonstrated how seriously we are taking this issue. I will follow up and of course update the noble Lord.
Lord Polak (Con)
My Lords, 20 months ago I asked my noble friend whether he could confirm that we will not support China’s election to the Human Rights Council. It seems clear that China continues to abuse its position at that council. I ask my noble friend the Minister, following John Sudworth’s harrowing report, whether the UK Government will now do the right thing, and lead a campaign to suspend China from the Human Rights Council.
Lord Ahmad of Wimbledon (Con)
My Lords, first of all I pay tribute to my noble friend’s persistent focus on this particular issue. On the issue he raises about the Human Rights Council, every country that stands for election to the Human Rights Council, and is present in its 47 members, needs to demonstrate a strong human rights record domestically. There is now precedent established within the UN, but removing a particular country from a particular UN body is never easy. However, what I would say to my noble friend is that the fact that China persists and seeks to campaign for continued membership of the Human Rights Council also provides a huge opportunity—notwithstanding the fact that its human rights record is deplorable—for us to raise issues with it quite directly, and also demonstrate and showcase the consistent abuse that takes place, particularly against the Uighur community.
Lord Mackenzie of Framwellgate (Non-Afl)
My Lords, these horrific matters have been raised many times in your Lordships’ House. There is clear evidence of genocide, forced organ harvesting and other human rights abuses, clearly recorded by Sir Geoffrey Nice. We did not act decisively enough when Putin seized Crimea eight years ago and went on to commit murder in Salisbury, and we saw the consequences. Could the Minister say what further action the UK will take, in conjunction with democratic partners, to call China to account, or will history simply repeat itself with the invasion of Taiwan?
Lord Ahmad of Wimbledon (Con)
My Lords, we are certainly working with our partners. As I am sure the noble Lord acknowledges, we have acted to hold to account senior officials and organisations who are responsible for egregious abuse of human rights within Xinjiang. That said, we keep policy constantly under review and it remains very much on the table. We will continue to work in co-ordination with our partners in that respect.
Baroness Bennett of Manor Castle (GP)
My Lords, the Answer given in the other place made no reference to an asylum response to these shocking reports. As it is very clear that the Uighurs are being persecuted because of their religion and ethnicity, and are in need of legal protection, will the Government issue visas for Uighurs fleeing persecution in China, including or perhaps particularly those who are in countries where they face the risk of deportation to China?
Lord Ahmad of Wimbledon (Con)
My Lords, the noble Baroness raises a very valid point, and I assure her that the United Kingdom has been and remains very much a place where people seek sanctuary. That applies to the Uighurs specifically and indeed to any other persecuted community around the world. This is a tradition and a right that continues to be alive—and long may it continue.
Baroness Sugg (Con)
My Lords, can my noble friend share the Government’s assessment of British business’s supply chain activity in Xinjiang? What support is being provided to enhance transparency for British consumers who wish to know the origin of the products they are purchasing?
Lord Ahmad of Wimbledon (Con)
My noble friend raises a valid point. In terms of practical steps, the Department for International Trade is very much focused on the provisions we will bring forward in the modern slavery Bill. Within that, we will seek to provide advice to business on this specific issue. Alluding to the sourcing of particular products is a valid suggestion, and I will certainly share that with colleagues at the FCDO and DIT.
Procurement Bill [HL]
Wednesday 25th May 2022
(2 years, 5 months ago)
Lords ChamberRead Full debate Procurement Act 2023 View all Procurement Act 2023 Debates Read Hansard Text Read Debate Ministerial Extracts
The Minister of State, Cabinet Office (Lord True) (Con)
Since the British people voted to leave the European Union, and we finally got it done, this country is being freed from many bureaucratic and process-driven regulations that stifled our country and businesses for many years—
Lord True (Con)
Noble Lords opposite laugh at the concept, but one of the most prominent of these regulations was the EU public procurement network. Frankly, I would have thought that noble Lords would have heard that cry from businesses up and down this country. We now have the opportunity to reform it. I am delighted that the Second Reading of this important Bill has come to your Lordships’ House because it has a particular capacity to scrutinise complex matters. I look forward to working with your Lordships across the House on that basis.
Public procurement is one of the most important and influential duties of Her Majesty’s Government: £1 in every £3 of public money—some £300 billion a year—is spent on public procurement. Imagine the power of the most efficient and effective use of that money every year. Imagine the extra small businesses that we could help to hire more workers, expand their operations and contribute to the wealth of this nation. Imagine the efficiencies that we could achieve so that we could spend more on our National Health Service and other vital public services.
The Procurement Bill reflects over two years of intense policy development—I pay tribute to all those involved—a Green Paper, government responses and meetings with hundreds of stakeholders. This work is being carried forward by my right honourable friend the Minister for Government Efficiency, Mr Rees-Mogg. The Bill will reform the UK’s public procurement regime, making it quicker, simpler, more transparent and better able to meet the UK’s needs, while remaining compliant with our international obligations. It will introduce a new regime that is based on value for money, competition and objective criteria in decision-making. It will create a simpler and more flexible commercial system that better meets our country’s needs, and it will more effectively open up public procurement to new entrants such as small businesses and social enterprises, so that they can compete for and win more public contracts.
Before rising to speak, I listened to your Lordships’ concern on the matter of human rights abuses in China; I agree with many of the comments that were made. The Bill will strengthen the approach to excluding suppliers where there is clear evidence of their involvement in modern slavery practices—for example, in the increasing number of reports of human rights abuses in Xinjiang. Running through each part of the Bill is the theme of transparency. We want to deliver the highest possible standards of transparency in public procurement, and the Bill paves the way for that.
Leaving the EU has provided the UK with the responsibility and opportunity to overhaul the public procurement regulations. The current regimes for awarding public contracts are too restrictive, with too much red tape for buyers and suppliers alike, which results in attention being focused on the wrong activities rather than on value for money. There are currently over 350 different procurement regulations spread over a number of different regimes for different types of procurement, including defence and security. The Procurement Bill will consolidate these into a single regime that is quicker, simpler and better meets the needs of the UK. We have removed the duplication and overlap in the current four regimes to create one rulebook which everyone can use. The Bill will also enable the creation of a digital platform for suppliers to register their details once for use in any bids, while a central online transparency platform will allow suppliers to see all opportunities in one place. We hope that this will accelerate spending with SMEs.
This is a large and technical Bill. It includes a number of regulation-making powers, and I have no doubt that your Lordships will want to consider those carefully. We submit—and hope to convince your Lordships—that these powers are necessary to ensure that the legislation will continue to facilitate a modern procurement structure for many years to come, so that we can put in place a lasting model which will allow us to keep pace with technological advances and new trade agreements, and to stay ahead of those who may try to use procurement improperly. As we continue to scrutinise this legislation, we will revisit some of the powers included and will seek to improve on those, if necessary. I also accept that there are some areas that will need refinement, and we will come back at Committee with appropriate amendments.
I will now provide a more detailed overview of some of the key aspects of the Bill. Turning first to territorial application, we have delivered this Bill in a spirit of co-operation with the other nations of the United Kingdom—I welcome this. As part of the policy development process, we welcomed Welsh and Northern Irish policy officials into our team so that they had a critical role in shaping this legislation from the very beginning. The result is legislation whose general scope applies to all contracting authorities in England, Wales and Northern Ireland. This will ensure that contracting authorities and suppliers can benefit from the efficiencies of having a broadly consistent regime operating across the constituent parts of the United Kingdom. The Scottish Government have opted not to join the UK Government Bill and will retain their own procurement regulations in respect of devolved Scottish authorities. This is similar to how the current regulations operate, with the Scottish Government having transposed the EU directives into their own statute book. There may be some in both Houses who will regret this. I am sure that we would all welcome our Scottish friends if they wished to join the new system proposed by the Bill; taxpayers and public services alike would benefit across the whole United Kingdom.
Part 1 of the Bill sets out which authorities and contracts it applies to. It covers contracts awarded by most central government departments, their arms-length bodies and the wider public sector, including local government and health authorities. This also includes contracts awarded by utilities companies operating in the water, energy and transport sectors, and concession contracts. The Bill also sets out a small number of simpler rules which apply to lower-value contracts, and it makes provision to carve out those procurements regulated by the Health and Care Act in order to ensure clarity about which regime applies.
The Bill consolidates the current procurement regimes and therefore extends to defence and security contracts. Defence procurement will benefit from the simplification and increased flexibility of the core regime. There are a limited number of derogations that meet the specific needs of defence and security procurements, and which will support delivery of the Defence and Security Industrial Strategy published in March 2021. A national security exemption has also been retained to protect our national interest. The Bill also includes a separate schedule to enable reforms to the Single Source Contract Regulations 2014. The proposed reforms seek to ensure that these regulations fully support the delivery of the Defence and Security Industrial Strategy by supporting a more strategic relationship between government and the defence and security industries. My noble friend Lady Goldie will be assisting your Lordships on these provisions.
Part 2 of the Bill is focused on the principles and objectives that must underlie the awarding of a public contract. Contracting authorities must have regard to delivering value for money, maximising public benefit, transparency, and acting with integrity. Integrity must sit at the heart of the process. It means that there must be good management, prevention of misconduct, and control to prevent fraud and corruption.
Part 5 of the Bill sets out the particular requirements on contracting authorities to identify and manage conflicts of interest.
Public procurement should also support the delivery of strategic national priorities, and this part of the Bill makes provision for a national procurement policy statement and a Wales procurement policy statement to support this.
In Part 3, the Bill sets out how a contracting authority can undertake a procurement and award a contract. Competition is at the heart of the regime. The Bill introduces a new procedure for running a competitive tendering process colloquially known as the “competitive flexible procedure”—I am not quite sure how colloquial that is—ensuring for the very first time that contracting authorities can design a competition to best suit the particular needs of their contract and market.
There will continue to be a special regime for certain social, health and education services, specifically identified by secondary legislation, which may be procured as “light-touch contracts”, leaving room for authorities to design procurement procedures that are more appropriate for these types of services. These light-touch contracts are still subject to the necessary safeguarding requirements.
The Bill also continues the existing ability to reserve certain contracts for public service mutuals and for supported employment providers. There are a limited number of circumstances in which it may be necessary to award a contract without competition. The Bill sets these out, including new rules governing the award of contracts to protect life and public order.
Part 3 also sets out the circumstances in which a supplier may be excluded from a procurement due to serious misconduct, unacceptably poor performance or other circumstances which make the supplier unfit to bid for public contracts. Contracting authorities will be able more easily to reject bids from suppliers which pose unacceptable risks.
Part 3 also legislates for the introduction of a public debarment list for serious cases of misconduct. For far too long, too many unscrupulous suppliers have continued to win public sector contracts due to the ambiguity of the rules, multiplicity of systems and lack of central effective oversight.
The important work on procurement does not stop once a contract has been awarded, so Part 4 of the Bill sets out steps that must be taken to manage a contract. This includes the strengthening of rules ensuring that suppliers are paid on time and new requirements to assess and publish information about how suppliers are performing.
Running throughout the Bill are requirements to publish notices. These are the foundations for the new standards of transparency which will play such a crucial role in the new regime. Our ambitions are high, and we want to ensure that procurement information is publicly available, not only to support effective competition but to provide the public with insight into how their money is being spent. Part 8 of the Bill provides for regulations which will require contracting authorities to publish these notices, resulting in more transparency and greater scrutiny.
In respect of Covid-19 contracts, the Government are clear that all offers for PPE, regardless of the route through which they were identified, underwent rigorous financial, commercial, legal and policy assessment led by officials from various government departments.
Part 9 details what remedies are available to suppliers for breach of the new regime by contracting authorities where that has resulted in loss or damage. Having an effective and well-functioning remedies regime is essential to the successful operation of any public procurement regime.
Any claims made during an applicable standstill period—between the award decision and the entering into of the contract—will result in the procurement being automatically suspended. We will introduce a new test for the court to consider, when hearing applications for the automatic suspension to be lifted, that is better suited to procurement than the one currently applied.
Part 10 of the Bill gives an appropriate authority oversight over contracting authorities and the power to investigate their compliance with this new Act as part of a new procurement review unit.
The UK is already party to a number of international agreements which guarantee valuable market access for UK suppliers. For example, our membership of the WTO’s Agreement on Government Procurement gives British businesses access to £1.3 trillion in public procurement opportunities overseas. Access to these markets is a two-way street and requires the UK to ensure that treaty state suppliers have equivalent access to UK markets. Part 7 prohibits a contracting authority from discriminating against suppliers from those states. This part also contains a power to make regulations specifying the agreements listed in that schedule. This provides greater flexibility to be able to extend the procurement regime to cover matters covered by the UK’s international procurement agreements, both current and future. This is a well-defined and tightly restricted power which will enable the procurement aspects of future trade agreements to be enacted efficiently, but I have no doubt we will discuss this in Committee. It is not an open door to changing UK procurement regulations to meet international commitments. This power allows only for the extension of the UK procurement regime to cover overseas suppliers covered by such agreements. Amendment of the UK’s procurement rules is outside the scope of this power, even if it were to be required as part of an international agreement. It would not, for example, allow the opening up of NHS clinical healthcare procurements to private providers from any state. To do so would require broader legislative changes, and this power has been carefully drafted so as not to allow for that.
In conclusion, there has never been a piece of UK procurement legislation as comprehensive as this. I hope that I will be able to demonstrate, in our discussions on the Bill, how this Government plan to reform procurement so that we can collectively boost business, spread opportunity, level up the country and strengthen our union. I very much look forward to taking the Bill through your Lordships’ House and I will be keen to hear any questions and suggestions your Lordships may have, today and throughout our proceedings. I commend the Bill to the House, and I beg to move.
Baroness Hayman of Ullock (Lab)
My Lords, I thank the Minister for his comprehensive introduction to the Bill, which is quite complex in some areas. I begin by saying that we welcome this Bill. Changes to the procurement regime are long overdue, not least as a procurement Bill was promised in the last Session, so it is good that we finally have it before us today. I know from my experience of navigating OJEU just how complicated the EU procurement regime can be, so we support the Government’s stated ambition of speeding up and simplifying the processes. We welcome particularly the move from awarding contracts based on most advantageous tender, or MAT, rather than MEAT, the most economically advantageous tender, which will allow more flexibility around procurement, and the duty to consider breaking contracts into lots will also help social enterprises and SMEs.
The first part of the Bill, which replaces definitions that came about from long negotiations between EU member states with clearer definitions, has been welcomed across the board, as has the ambition to simplify rules and bring a range of existing rules together into one place. Having said that, recent events and investigations have shone a light on the clear failures of the current procurement regime and government practices during the Covid pandemic, with huge concerns raised in a time of great sacrifice for many people.
I heard what the Minister said on this matter in his introduction, but taxpayers’ money was wasted— £9 billion spent on PPE was written off, with £2.6 billion spent on items that were “not suitable” for the NHS. That is one in 10 of all items. There is also £800 million of additional stock that has not been used. We also know that there were major issues with direct awards. We appreciate that Governments have to act quickly during a crisis, but contracts worth tens of millions that were given out through the VIP fast lane, totalling almost £2 billion, lacked scrutiny or transparency. This Bill gives us the opportunity to fix that—to put in place a rigorous procurement regime which would prevent these practices happening again.
We are concerned that transparency seems to have slipped down the agenda when compared to the original proposals in the Green Paper. The Public Contracts Regulations 2015 have more on transparency than the Bill before us, so why are the Government taking a step backwards? Since the Government did not comply with the current transparency rules during the pandemic, can the Minister reassure noble Lords that this is not because they are finding transparency rules a little bit tricky to comply with? While we welcome the Bill, we do have concerns that many of the positive changes proposed in the 2020 Green Paper and the Government’s response to the consultation appear to be either missing or watered down, despite being welcomed by business, industry, trade unions and other stakeholders.
What we need from this Bill is a genuine commitment to reshape procurement to the very highest standards—from the integrity of the process to the delivery of real social and economic value. While we will no doubt explore these issues in more detail in Committee, I would like to raise some of my key concerns with the Minister at this stage. I look forward to clarification in his response today and further discussion on how improvements can be made as the Bill progresses through your Lordships’ House.
Turning first to the principles, the majority of the more than 600 respondents to the Green Paper consultation supported legal principles for procurement. In their response, the Government stated that they would
“introduce the proposed principles of public procurement into legislation as described”.
The proposed principles are
“public good, value for money, transparency, integrity, fair treatment of suppliers and non-discrimination”,
and we absolutely support them.
However, disappointingly, Part 2—“Principles and objectives”—does not have the principles laid out clearly in a clause on the face of the Bill, despite doing so for the objectives. The principles are an integral part of procurement. They are a vital tool for setting out what legislation is designed to achieve and by what its success will be judged. The rest of the world knows this; almost every other piece of procurement legislation in the world starts with clear principles, so it is surprising that this is not in the Bill, and we believe that this needs to be revised. Furthermore,
“acting, and being seen to act, with integrity”,
as set out in the objectives, could also include a wider duty of transparency. Even in the midst of a crisis, integrity and transparency should be non-negotiable.
Looking at the objectives, we believe that the Government are wasting a huge opportunity to put the environment and tackling climate change right at the centre of how public money is spent. Why is there no mention of this in the objectives, no commitment to sustainable procurement, and no duty for all government departments to comply with the carbon reduction plan and demonstrate sustainable procurement performance? If the Government are to achieve their goal of net zero, climate and nature goals must be an integral part of any new legislation that will have an impact on its delivery. Does the Minister not agree that sustainable procurement will help avoid damage to the environment while at the same time generating benefits for business, society and the economy?
Another gap in the Bill is a commitment to social value, which does not appear at all. There should be specific reference to social value being part of the public benefit in order to provide clarity to public bodies, companies and social enterprises. Social value should be embedded in the procurement system through appropriate guidance and reporting requirements for public bodies, as seemed to be the case in the Green Paper proposals. In fact, the Government’s response to the consultation stated:
“A procurement regime that is simple, flexible and takes greater account of social value can play a big role in contributing to the Government’s levelling-up goals.”
I absolutely agree. As a matter of principle, social value will improve circumstances for residents by bringing money and jobs to local areas, which should in turn go some way towards helping to level up the country.
This is especially true in more disadvantaged areas. A more responsive, community-focused supply chain spreads the social value net further, helping to maximise environmental and social well-being at every level, and would contribute positively to the Government’s levelling-up ambitions. So why is it no longer in the Bill? Have the Government already given up on their levelling-up goals, or does the Minister recognise that this is an oversight in the drafting that needs to be corrected?
The Government’s 2019 manifesto asserted that the public sector should
“‘Buy British’ to support our farmers and reduce environmental costs.”
Public procurement has the potential to create thousands of jobs for UK farmers and food producers and to help deliver the Government’s climate and nature emergency commitments. Can the Minister outline how the Bill before us will achieve those commitments? We need to do what we can to ensure that far more public contracts are awarded to British businesses—something that will have a positive effect on our economy but also support those who are struggling to get through the current cost of living crisis.
Moving on to the fair treatment of suppliers, we have concerns that the language on requiring contracting authorities to make impartial decisions without conflict of interest has been weakened, as too has the important principle of non-discrimination. I hope that the Government will therefore commit to tightening up these areas of the Bill as we move into Committee.
The Green Paper included a positive commitment to the digital single suppliers portal, operating on a “tell us once” principle. This would not quite level the playing field between supersized corporate bidders such as Serco and SMEs from across the country, but it would certainly be a step in the right direction, removing an unnecessary obstacle for smaller, less well-resourced options. My understanding is that this is still the Government’s intention, but I can see nothing in the Bill to ensure that it will actually happen. Do the Government remain committed to putting this on a statutory footing, or will further regulation and guidance be published? If this is linked to other digital systems such as Contracts Finder—again, I hope the Minister can confirm that this is still happening—it could also help to level the playing field when contracting authorities are making decisions.
There are also several areas of exemption in the Bill. Part 13 includes powers
“to disapply this Act in relation to procurement by NHS in England”
and
“to amend this Act in relation to private utilities”.
Schedule 2, “Exempted contracts”, includes defence and security contracts, which my noble friend Lord Coaker will consider further in his winding-up speech. What criteria were used to draw up this group of exemptions? Following the Minister’s introduction, can he clarify exactly how ministerial discretion for NHS procurement will apply? For example, what services is this intended to cover? Will it apply just to clinical services? I am sure your Lordships’ House will agree that we do not want to see a repeat of what happened during the pandemic.
The Minister mentioned—and we are aware—that there is going to be a six-month lead-in for the implementation of the Act’s provisions once it is passed. Even so, there will be significant challenges to meet the timescales, considering the number of changes proposed in the Bill. Does the Minister agree that the Government will need to provide substantial support; for example, for staff training, for communicating the many changes to the system to prospective suppliers, and to cash-strapped local authorities? If so, will he outline what that support will look like?
This really is an opportunity for the Government to be bold, to address these concerns, and to help rebuild public confidence in how taxpayers’ money is spent. There is much in the Bill that I have not had the time to cover today, and we will, of course, be tabling amendments to try to improve it. I offer the Minister our constructive support to work closely with him and his department officials so that, by the time it leaves this place, it will be truly fit for purpose.
Lord Fox (LD)
My Lords, it is a great pleasure to be working on this Bill with a new set of colleagues: a new set of Front-Bench spokespeople from Her Majesty’s loyal Opposition and a new Minister. I look forward, as the noble Baroness does, to a fruitful process in working on this Bill.
In framing the Bill, the Government explained that they had three options: to do nothing, to do the minimum or to carry out wholesale reform. They have chosen reform, which we welcome; the Bill is the result of that reform process. What is it for, and how wholesale are those reforms? The reforms are less wholesale than the Green Paper suggested they might be, as the noble Baroness, Lady Hayman, just said in her excellent speech. I will not try to cover the same ground that she did, but I associate myself with all of her comments.
I will, however, start with the point with which she started: the missing principles for the Bill. Without those principles, it will be difficult to guide the rest of what we are doing. There are objectives, and they appear in Clause 11. As we have seen, they are value for money, maximising public benefit, sharing information and acting with integrity. We would all sign up to those. Elsewhere in the Bill documentation, there are all sorts of other lists that are all similar, but different in a subtle way. This is not nit-picking, because it is important to understand where the Bill is headed and what it is seeking to achieve. Some of the objectives are potentially conflicting, and we need to know where the priority lies.
For example, to create greater opportunities for small businesses and social enterprises, which I understand and agree is one of the important elements of the Bill, there might be a higher initial cost attached. How will the Government calculate the public benefit that they get from the process of broadening the remit? What priority will they give to value for money? The impact assessment says that the highest priority is value for money. However, it also says that the Bill will be required to take into account national strategic priorities such as job-creation potential, improving supply resilience and tackling climate change. There is no help as to how these trade off, and there is no understanding of what “take into account” means. Of course, none of these is on the face of the Bill, so we do not have a definition of “public benefit” anywhere.
All the language so far completely avoids the issue of supplier ethics and human rights. I know that the noble Lord on my left and others will bring this up, and I expect to agree with them. My noble friend Lady Parminter will no doubt speak to the need for a central role for procurement in fighting climate change. I also believe that that has to be written into the Bill and I hope that the Minister will hear that from others as well.
There are other definitions in the Bill which are not helpful. The Explanatory Notes refer to “fair treatment”, so perhaps the Minister could explain what “fair” means in the context of this new process. Perhaps he will agree with me that “equal” might have been a better word. Here is an example: it is unclear how the Bill, in its present form, will replace the regulatory framework for accessibility within public procurement legislation. Therefore, can the Minister please explain how the new regime will ensure that specifications take into account accessibility criteria and design for all users? This is just one example of what is potentially dropping out.
For the Bill to be implemented, it needs to be understood. For that to happen, the Government need to differentiate what they are seeking to achieve and be very clear about the Bill’s moral, as well as economic, objectives. I am sure that we will give Ministers plenty of opportunity to do that in Committee.
One of the benefits paraded in various government publications is that the new data platform will deliver centralised data. How will the Government use that data and who will use it? On the data protection front, the UK has to date employed GDPR as its tool. However, changes in data protection law heralded by the new data reform Bill set out in the consultation Data: A New Direction call into question the level of proper oversight of that data. We already see companies from the US sweeping up and using data that is currently available; for example, within the NHS. They operate free, in effect, from proper scrutiny. Without explicit safeguards in the legislation, there will be a real opportunity for data abuse.
The Government talk of visibility and transparency in the Bill. If those are realised that will be thoroughly welcome and we encourage that process. However, if we needed an example of how the lack of visibility leads to corruption, there is the example given by the noble Baroness, Lady Hayman, and which I think my noble friend Lord Strasburger will give, of the abuses of what I might describe as a system based on Ministers’ WhatsApp rather than a transparent system. That was a scandal, and we must have a system that ensures that that sort of thing can never happen again.
How transparent is the legislation? I note that, alongside defence and security interests, the Advanced Research and Invention Agency—ARIA—is exempted. Not only is ARIA carved out of the Freedom of Information Act, it is able to procure in secret. Why should we not know from whom this agency buys its electricity? Overall, much of the information the public might seek about public contracts has been or is being put beyond the reach of the Freedom of Information Act. Although the Government talk about transparency, their legislation seems to demonstrate a drift—if not a jump—in the opposite direction.
The Minister sought to defuse the treaty state supplier issue by using the NHS opt-out as an example but, of course, that is in only one sector. My noble friend Lady Brinton will be talking to that issue, but let us remember what Clause 82(1) says:
“A contracting authority may not, in carrying out a procurement, below-threshold procurement or international organisation procurement, discriminate against a treaty state supplier.”
Can the Minister confirm that if a UK contracting authority wanted specifically to buy British food from a British farmer, it would be unable to do so at the expense of a treaty state supplier such as, in future, an Australian farmer, selling a similar product at a lower price? That not only flies in the face of many social objectives, it seems to fly in the face of the Subsidy Control Act, which includes provision for purchasing under a subsidy scheme to support local businesses and certain products. Which of these two factors prevails? Is it the treaty state supplier rule or the subsidy control rule, because they do not work in the same direction?
More broadly, essentially, if the market is opened by a treaty, the contracting authority is bound to buy the product that offers the best value for money—remember, that was the number one criterion of the four set out in the government documents. I fear that that will be headline price, irrespective of what it does to local capability in future. Other countries may be looking at reshoring; the Bill delivers the opposite.
The regulation-making power in Clause 8(2) relates to common procurement vocabulary—or CPV—codes, which the Cabinet Office has explained will be used to decide which contracts benefit from the light- touch regime. Understandably, this legislation does not include the long list of what might be on that CPV list, but I feel sure that there will be some important issues here.
I would like to ask the Minister what “light touch” actually means. If it means service contracts of the sort that the Minister hinted at, then far from “light touch”, “rigorous oversight” might be more appropriate. I give the example of the children’s homes issue, which is currently live. Perhaps the Minister can help us before we get to Committee by publishing either a draft or an indicative list of what the Government expect to be in the statutory instrument that will bring the CPV codes to your Lordship’s House.
I am also in the dark about how this Bill, the Sewel convention, the Trade Act and the UK Internal Market Act intersect. For example, if a Scottish-based public authority seeks to purchase a product from a treaty state supplier, does the Minister agree that it is up to the Scottish Government whether the regulations in Scotland need to be the same as those in the rest of the United Kingdom?
Secondly, can the Minister please explain what happens if that Scottish public authority offer then extends to the rest of the United Kingdom—for example, across the border to England? The Procurement Bill seems to say that once it crosses the border and there is a difference, Westminster regulations need to be applied, not Edinburgh’s. However, I suggest that the non-discrimination parts of the UK Internal Market Act mandate the exact opposite, and I think an interpretation of the Sewel convention is a moot point. Further, there is the common frameworks process, which is still live. Can the Minister please reconcile all these issues for your Lordships’ House?
As I reach the end, I turn to implementation, which will not be trivial. We know that the Government are very challenged when it comes to digital projects. In its report, The Challenges in Implementing Digital Change, the National Audit Office reviewed the implementation of digital programmes by government, going back, I think, over 25 years.
Its comments are extremely apposite. It said:
“Initiating digital change involves taking a difficult set of decisions about risk and opportunity, but these decisions often do not reflect the reality of the legacy environment and do not fit comfortably into government’s standard mechanisms for approval, procurement, funding and assurance.”
The report also found that digital leaders
“often struggle to get the attention, understanding and support they need from senior decision-makers”
who lack sufficient digital expertise. It will be important to remember that as this project progresses. We know from past government IT disasters that delivery is always harder than it is portrayed when launched at the Dispatch Box.
As far as I can tell from the impact assessment, the estimated cost of launching this platform is £36 million, which seems ambitious to say the least, given the Government’s 25 years of underperformance on digital projects. In Whitehall alone, this involves a lot of people. The Cabinet Office Civil Service statistics for 2021 say there were 12,340 civil servants in the procurement commercial function that year. Of course, as we have heard, there are many more people in local authorities and public utilities being brought into this system.
For some of the Whitehall departments, these numbers are huge. In the Ministry of Defence, including agencies, more than 2,000 employees are involved in procurement. In the Minister’s own Cabinet Office, again including agencies, it is more than 1,700 employees. I know from experience of working in the private sector that when a large enterprise implements a cross-business digital programme, the systems analysts always meet the same response. They go into a department, which says, “Yes, I agree that this is a very good idea, but you have to understand that we are different”.
There are two ways of dealing with this response. One is to instigate local variations to comply with all the perceived differences; the other is to use this digital platform to lead cultural change. In my experience— I have helped on a number of company-wide ERP implementations, and in a way this is a much bigger version of that—if you choose the variation route, it is a road to confusion and cost. But the second one, invoking real cultural change, is still a challenge. These departments are supertankers of departmental culture that will take years of sustained activity to turn around. A couple of days’ training here or there will not do it; these people have to own this system, believe in it and want it to succeed.
Any Bill that seeks to do what this Bill seeks to do is ambitious. It is a long Bill and covers all sorts of different departments. The process we are about to embark on will be long and detailed. There is a lot of work to do before the Bill is fit to be enacted, but we will work very hard with the Minister and Her Majesty’s loyal Opposition to help that to happen.
Lord Stevens of Birmingham (CB)
My Lords, I may be a relatively new Member of your Lordships’ House, but I suspect that the Second Reading of the Procurement Bill may not capture the public’s imagination today in quite the way that certain other events and reports taking place in Westminster will. But that should not in any way detract from the importance of the measures before us, because the Bill represents an important advance on a number of the predecessor EU procurement regimes that we have been subject to and generally moves us in the right direction. As the Minister said, it has the potential to simplify and accelerate public procurement and to deal with some of the lessons, both positive and negative, that have arisen during the coronavirus pandemic.
I will briefly mention three avenues that may be worth considering further as the Bill progresses through your Lordships’ House. The first is the connection between the procurement regime and supply chain resilience for the UK. No doubt we will discuss multiple times this afternoon the experience that arose as the UK Government and the Department of Health and Social Care sought to procure PPE and testing for the National Health Service during the pandemic and, as was the case with many other European countries, faced a supply crunch as Chinese factories closed down. The problem has been sustained as China pursues its zero Covid policy, now overlaid with Ukrainian disruptions as a result of the war.
The question is not simply: what are the procurement mechanisms that the Government use in spot markets at times of crisis? It is: what strategic assessment have the Government made of which aspects of our supply chains need onshoring? The orthodoxy for many years has been that just-in-time logistics are the most efficient way—until you get a shock such as the pandemic, in which case it becomes blatantly obvious that they are not. At that point you wish you had stockpiles or onshore capability. In the same way that, for example, Sir John Parker’s national shipbuilding review looked at what the supply chain might look like for naval vessel procurement, I wonder whether the Minister can tell us how he thinks a similar approach will be taken to supply chain resilience for other aspects of what the public service will need in the future.
Secondly, I suspect that your Lordships will be looking for greater clarity, as this Bill proceeds, on aspects of these proposals which at the moment are remitted to regulation or guidance. Only a few short weeks ago, Royal Assent was given to the Health and Care Act 2022. Many noble Lords participated in the extensive discussions around what the procurement regime that was set out in that Act should be as it applies to the National Health Service. On the Health and Care Act 2022, the Cabinet Office memo of 11 May to the Delegated Powers and Regulatory Reform Committee says:
“It has not been possible to set out on the face of that Act the scope of procurement Regulations made under it, so this Bill”—
the Procurement Bill—
“needs to be able to make provision to manage the overlap.”
Therefore, Clause 108 would grant Ministers the power to “disapply” provisions in relation to
“services or goods to which health procurement rules apply”.
I suspect that your Lordships will want much greater clarity on the circumstances under which those will or will not be disapplied.
Frankly, that will go in both directions: there will be some services where, having had the debate as part of the Health and Care Act, we will be clear that they should not be subject to competitive market principles; and there will be other areas where they must be, even where industry partners will sometimes try to exclude them from that scope. An example of this is the importance of using competitive procurement mechanisms for the purchase of medicines, where in some cases, I am afraid, some of our life sciences partners would rather that market mechanisms were not used to drive value for taxpayers and for patients. Indeed, when the National Health Service was seeking to procure medicines for hepatitis C so that we could eliminate that virus and save hundreds of millions of pounds in the process, it was sued for daring to use procurement mechanisms in those circumstances.
So we must be quite precise as to the circumstances under which we will and will not do this. Simply leaving it to regulatory guidance is not good enough, because some of us—I say this gently—have buyer’s remorse about some aspects of the Health and Care Act, including aspects which were left to regulation or ministerial discretion. I am thinking particularly of the debate we had around childhood obesity just a few short weeks ago, where we were promised that we would indeed be cutting out junk food advertising on TV aimed at kids. Days later, however, that commitment was ditched—actually, the noble Lord, Lord Kamall, said that it was not a backtrack but a delay. I read elsewhere that this is part of scraping the barnacles off the boat. Most of us do not regard children’s health as a barnacle to be scraped off the broadcasting boat. Therefore, we will want more clarity on some of these distinctions, rather than leaving them purely to regulation and future ministerial fiat.
Thirdly and finally, as we think about the application of these new procurement rules to infrastructure and big capital projects, we should have the humility to recognise that, by themselves, the rules will not speed up delivery. To will the end is to will the means. Frankly, the root cause of stalled and delayed infra- structure—be it energy, defence or health—is more often not the procurement rulebook per se but the absence of multiyear capital allocations funded at the correct level, the result of delayed business case approval and the result of a lack of constancy in political direction on the results we seek to achieve.
We have seen that in the defence sector: the House of Commons Defence Committee made the point in respect of naval procurement in its memorably named report published before Christmas, We’re Going to Need a Bigger Navy. I am afraid that we are seeing that right now in connection with the proposed building of 40 new hospitals. This is going to be a major piece of procurement for the Government and the National Health Service. It was a very welcome commitment that the Prime Minister made in the run-up to the 2019 general election on a visit to North Manchester General Hospital. As I pointed out at the time, that hospital was opened in 1876 when the then Prime Minister was Benjamin Disraeli. So there is a need to get on with it, but the fact is that we have only a three- year capital allocation—£3.7 billion—and that does not buy you 40 hospitals. Matt Hancock, the then Secretary of State, said back in 2019 that the first eight of them hospitals were “ready to go”, but we now see in the latest Department of Health and Social Care publication that their planned start date is “TBC”.
So the fact is that the procurement processes will help but by themselves they will not get us the result. We need greater clarity on how the totality of the Government’s effort can help advance these important goals, we need greater clarity on the circumstances under which these rules will or will not apply in the health sector and elsewhere, and—that is not my phone, by the way—we need greater clarity in respect of the way in which other social goals will be advanced.
Finally, no doubt we will hear a certain amount this afternoon about the net-zero agenda and how that could be incorporated. A friendly suggestion would be that the Government could follow their own precedent in very wisely incorporating a set of amendments in the Health and Care Act. All we really need is for the amendments the Government accepted there to be incorporated in this Bill and perhaps we will be 9/10ths of the way home and dry.
Lord Lansley (Con)
My Lords, I am very glad to follow the noble Lord, Lord Stevens. He very helpfully reminded us that we might legislate but it is the Government’s job to execute. The ability with which the execution of policy is carried out is a fundamental part of this. I might also say that, as the noble Lord unfortunately discovered in the particular respect he mentioned, we can legislate but if we leave loopholes we allow the Government to drive coaches and horses through them from time to time. That is why we sometimes have to look very hard at Bills to make sure they very clearly express Parliament’s intentions. Important and detailed as this Bill is—the way my noble friend Lord True very clearly set out the Bill’s intentions was most helpful —as the noble Baroness, Lady Hayman, said, we want constructively now to engage with that and to seek to improve the Bill before we send it to the other place.
In terms of interests, I am a director and adviser to LOW Associates, which is a beneficiary of procurement contracts with the European Union. I have looked quite carefully: we have a number of contracts with the European Commission and we advise on European procurement. Although that gives me experience in this respect, I do not think it gives rise to any direct conflict of interest—but I make the declaration in case anybody wants to check it out.
The noble Lord, Lord Stevens, is absolutely right. Where the NHS is concerned, “light touch” should not mean without proper transparency, processes and the ability to understand what is being bought and why. Indeed, there has been some activity in the NHS that should be paralleled across government. Procurement is increasingly seen as an essential part of the quality of management. That is happening through things such as Getting It Right First Time and the benefit of the report from the noble Lord, Lord Carter of Coles, on procurement in the NHS, which included building a procurement profession inside the NHS, which hardly existed. Right across government, we need chief procurement officers to be seen as often as important as chief financial officers in getting the quality of service and value right.
Because this is Second Reading and time is necessarily short, I will mention just two things—there will be further detail on the Bill—that I want to raise in this debate and that I hope to follow up in Committee and on Report. The Chancellor the Exchequer, in his Spring Statement in March, said that
“over the last 50 years, innovation drove around half the UK’s productivity growth, but since the financial crisis, the rate of increase has slowed more than in other countries. Our lower rate of innovation explains almost all our productivity gap with the United States.”—[Official Report, Commons, 23/3/22; col. 341.]
It is clear from the research that innovation and procurement are intimately related in an economy. Procurement, as a mechanism for fostering innovation in an economy, is probably more important than the grant-led systems that we often focus on. We often operate on the supply side, saying, “We must have more scientists, start-ups and grants for innovation”, but actually we need to remember that the demand side may have at least equal impact, because demand pulls through innovation. The home market—the UK market—in particular can be of additional and significant importance to innovative suppliers, enabling them to establish and bring forward innovation in an economy. Innovation needs to be an essential part of our procurement process.
I acknowledge that the objective of procurement is not innovation but to secure quality and value in public services and to do so in a transparent and fair way. But the consequences of procurement to society are terrifically important. What the noble Baroness and the noble Lord, Lord Fox, were saying about social value is terrifically important. We should acknowledge and understand the externalities of procurement, and, through the legislation, we should tell the public contracting authorities that they should take account of them. There was an interesting exchange on this.
The Government’s national procurement policy statement, published in June 2021, acknowledged that the national priority is social value. In that context, “social value” was defined as
“new businesses, new jobs and new skills; tackling climate change and reducing waste, and improving supplier diversity, innovation and resilience.”
This relates to the point that the noble Lord, Lord Stevens, was making, and to my own point about innovation. These things are all in there, but they are not in the Bill, because the day after the Bill comes into force, the Government could write a new national procurement policy statement.
My initial submission at Second Reading is that government should be very clear that the procurement objectives include not only public benefit but social value, and the latter must be defined in the national procurement policy statement in the ways that we specify in the Bill. I hope to include all those points, including the issues relating to climate change, supply chain resilience and the importance, from my point of view, of procurement-led innovation in the economy.
I will make one other point about treaty state suppliers—this is not the point that was previously made. The International Agreements Committee, of which I am a member, is scrutinising the Australia and New Zealand free trade agreements, which are the first of their kind. The Trade (Australia and New Zealand) Bill has been introduced in the other place, and the purpose of this legislation will be to repeal that when the time comes. So, at the same moment, we have a Bill at each end, with one repealing the other—why is that the case? Looking at the Explanatory Notes to the Bill in the other place, I see that it is clearly because the Government expect that Bill to pass rapidly and this one to pass slowly. Therefore, the consequence is that they need that legislation quickly but will subsequently repeal it using this legislation. This is the way that such legislative matters proceed.
My problem is that Schedule 12 to this Bill simply repeals that legislation. So, if we were to amend the Trade (Australia and New Zealand) Bill at any point in the future, it could—or, in fact, would—be repealed by government by virtue of Schedule 12, so any debate on the Trade (Australia and New Zealand) Bill is pointless. I hope that we make sure that that does not happen. We must therefore have a serious debate about whether we are happy for future free trade agreements with procurement chapters to be implemented solely by secondary, rather than primary, legislation. We had this debate on the Trade Act, and I think that we will need to come back to it.
Overall, this is an important Bill, very well introduced by my noble friend—
Lord Wallace of Saltaire (LD)
There are only 11 schedules to my copy of the Bill.
Lord Lansley (Con)
Forgive me—it was actually added to Schedule 9. But I am referring to paragraph 3 in Schedule 11, on repeals. None the less, I welcome the Bill and look forward to our debates on it.
Lord Mendelsohn (Lab)
My Lords, I thank the Minister for his very impressive introduction. This is an important new framework, representing some progress and some decent measures of reform. Of course, as ever, language overstates the problems and usually the benefits, but ambition is no bad thing in this area. We saw from the excellent speeches of my noble friend Lady Hayman of Ullock and the noble Lord, Lord Fox, that there are a lot of issues here which will lead to a very interesting and useful debate.
The Minister said that this would deliver an effective and efficient regime. As we heard from the last speakers, a variety of things not inherently in the Bill would lead to an effective and efficient regime. We must give due regard to those and ensure that we have the right skills, the right capacity, and the right objectives. A few areas are not present which I would be keen for the Minister or this House to give a view on, to ensure that we get them right.
I am concerned that the Minister gave a clean bill of health to the Covid procurement process. In my experience in business, it is untenable to say that there were rigorous evaluations. If you were procuring based on selecting people who did not have one moment’s experience in being able to source effectively, and if you do not know how to do quality control or logistics, then it is untenable. The number of companies in that list that got it shows that it was not done properly. I am concerned that we do not have the mechanisms reflected in this Bill to ensure that those things which are important once you have a framework are there.
I also think we must consider one of the things that is not there, and which has led to many unsuccessful procurements: late changes being made to the system. Whether that is mending or meddling—I hope that it is more the first than the latter—these are significant areas which affect the capacity of procurement and its success. We must work out how those can be done better, not least with the changes to parcelling to allow for small businesses to be part of it.
I reinforce the point so excellently expressed by the noble Lord, Lord Stevens, that our supply chain resilience is an important part of this. The noble Lord, Lord Lansley, talked about innovation, but the general use of market-making, not as a central mechanism but as an important function of £300 billion-worth of expenditure, and the way that has been so successfully used by many other countries to improve their capacity to deal with cybersecurity, regional variations, or other things—that resilience—is really important.
Notwithstanding that, I greatly congratulate the Government. I am very heartened by the increased focus on small businesses and on late payment and payment terms. This is to be warmly applauded and welcomed, and I am very grateful to the Government for making these changes. I can see a wry smile from a previous Minister because I am banging the same drum, but I will carry on doing so.
In Part 4, Clauses 63 and 64 set a maximum 30 days for payment, so there is no real change for government. However, if my interpretation of Schedule 2 is correct, this is all-encompassing, and this deals with supply chains and utility companies—a major step forward, so again I greatly congratulate the Government on doing that. I hope that this means that they will amend the late payment of commercial debts Act by setting maximum payment terms of 30 days for all suppliers, bringing the procurement Act, the Prompt Payment Code and the Late Payment of Commercial Debts Regulations into alignment.
I would also be very keen for the Minister to guarantee that after the Government have defined supply chains, they will have also dealt with the increasing practice of putting in a financial service company between the main contractors, with whom they contract and where there is an obligation for 30 days in the supply chain, to offset the supplier to a contract with another party which gives them 90 days. That is a way in which that mechanism has been subverted. I hope that the Government can be consistent in ensuring that this is applied throughout. It would be of great benefit to small businesses.
In Clause 65, there are strong provisions on information about payments under public contracts. Again, this appears to require public bodies to submit information along the lines of the duty to report. It would be sensible for the Government to use the existing mechanism available under duty to report, which gives a single point of reference for businesses to review public and private payment performance, and it would be a helpful addition.
In Part 8, Clauses 85(2)(a) and 85(2)(b) concern some potential exclusions to the duties to publish and provide information, and it talks about prejudicing interests. I would be grateful if the Minister could ensure that payment terms are never part of those exclusions, to make sure that that information continues to flow consistently.
The Bill provides for a contracting authority’s duty to comply with Parts 1 to 5, 7 and 8, saying that only enforceable and civil proceedings are covered under this part. The Government really need to recognise the litigation costs required. Lord Justice Jackson’s review of civil litigation costs found that the claimant’s costs for cases in the £50,000 to £110,000 region are likely to exceed £110,000, while the defendant can expect costs in excess of £129,000. It is unrealistic to expect small businesses that are trying to break into this market to be able to rely on that as a protection. I therefore suggest that, as an alternative, small businesses be able to report abuses to the Small Business Commissioner so that it can investigate them. I further suggest that the Small Business Commissioner be given both the budget and autonomy to act independently on such claims.
In Part 10, Clause 96(1) and Part 13, Clause 111(1)(a), an appropriate authority may investigate compliance under the Act. The appropriate authority is, of course, a Minister of the Crown. I remind the House that the Small Business Commissioner is already well versed in matters pertaining to late payments and, with that in mind, I strongly suggest that it could also be called upon to perform that duty.
Finally, in Schedule 2 there is one area of concern on which it would be useful if the Government expanded during Committee: how far do the 30-day terms extend? Is it just government purchases—for example, the petrol for ambulances—or does it fully affect the whole supply chain of a utility company’s expenditure on, for example, branding, refit costs and so on? If it is the latter, this is even more excellent news and a first step in reducing all contracts to a maximum of 30 days, and it is to be warmly welcomed.
Although there are many wider issues, which I look forward to examining, I welcome the provisions on small businesses and hope that the Minister and his department will take extra care to make sure that they remain consistent, and that the advances they have developed to the benefit of small businesses are carried through the entirety of the Bill.
Baroness Smith of Newnham (LD)
My Lords, speaking on defence matters, I am not used to having detailed legislative scrutiny. We rarely have legislation, and when it comes forward it is often like the Armed Forces Act (Continuation) Order, which is on half a side of A4, and the Explanatory Notes are equally short and, in most cases, rather unnecessary. The message is essentially: “We need this legislation in order to carry on having the Armed Forces”.
On this occasion, I rise to speak with some trepidation on the Procurement Bill, because as the noble Lord, Lord True, pointed out in his opening remarks, it is a very detailed Bill and not one to which I would normally put my name. On this occasion, therefore, I am extremely grateful for the Explanatory Notes. I will speak to the core part of the Bill that I welcome: the fact that if we are to have a single procurement regime, it should include defence. However much we might endorse Her Majesty’s Armed Forces and welcome what they do, it is very rare for anybody to stand up and say that the defence procurement regime works incredibly well and cannot be improved. So in that sense, this is a welcome Bill.
By way of preamble, I would very much like to welcome the comments of the noble Lord, Lord True, in introducing the Bill and in his response to a previous question from the noble Baroness, Lady Sugg—that this Bill could have relevance to genocide and modern slavery. I assume that my noble friend Lord Alton will raise this issue in his contribution. The opportunity for us to raise questions about values in procurement is hugely welcome. That the Government were willing to make some amendments to the then Health and Care Bill was also very welcome in this regard. If a single procurement regime were to lead to best practice, ensuring that contracts which could be seen as corrupt were not let, or that people’s What’s App groups were not relevant to procurement, this would all be very welcome.
The noble Lord, Lord Mendelsohn, has just pointed out that procurement is sometimes about trying to change the spec—maybe mending or meddling. In defence procurement, contracts regularly run over length and over budget. Many civilians, many of whom are not interested in defence, may not have noticed, for example, questions about the A400M or Ajax armoured vehicles. It is a bit similar to Crossrail, now welcomed as the Elizabeth line, being four years over time and over budget. In a whole series of reports, most recently in November 2021, the House of Commons Public Accounts Committee has pointed out some of the problems with defence procurement. Cumulatively, various pieces of defence equipment are running 21 years behind schedule—although one assumes that no single item is 21 years overdue.
The noble Lord, Lord West of Spithead—he is not in his place today, although he may appear at some later point in proceedings on the Bill—has on many occasions asked questions of the noble Baroness, Lady Goldie, about the number of ships and the procurement process, including when a certain class of ship will come on stream. We keep being told that this may be in the mid or late-2020s. Delay is a perennial problem in defence procurement. If this legislation is to offer a single approach to procurement, of which defence is part, that sounds very welcome.
As my noble friend Lord Fox pointed out, there are a number of exemptions in the legislation. A whole clause lists various exemptions, chief among them being those relating to defence. I would be grateful if the Minister, either today or in writing, or the noble Baroness, Lady Goldie, when preparing for the Bill Committee, could indicate to your Lordships the Government’s thinking on exemptions, particularly those linked to defence. Some would appear straightforward. If a tank or armoured vehicle is in another country, it would not necessarily be brought back to the United Kingdom to be repaired. If there are larger procurement issues to do with repairs, maybe we need to think about not exempting these provisions. What is Her Majesty’s Government’s thinking on exemptions?
As is so often the case, there are some weasel words in the schedules about national security, which is mentioned twice as an exclusion and as an exemption. Procurement might be exempted from this regime if there are national security reasons to do so. Who determines whether something is a matter of national security? Is it the National Security Council? Is it the Home Office if it is a domestic matter? Will it be the organisation seeking to procure—whether that be the MoD, the Home Office or some other body—who say: “This is a matter of national security, and therefore it should be exempt”? Is the legislation sufficiently clear on that? If not, then that is an area where perhaps we need to bring some amendments to tighten the legislation. Those who advocated Brexit would say that this new approach to procurement legislation gives us more control over procurement and allows this House and the other place to scrutinise legislation so we should be doing it properly. Exemptions in terms of national security are a concern.
There will also be exclusions on the basis of national security. That clearly sounds very sensible on the face of it. You would not seek to procure equipment—particularly defence equipment—from a provider which might jeopardise British security. That seems a no-brainer. But again, who is making that decision about providers potentially jeopardising national security? Will there be a register? Will companies be on a list of providers that cannot be used because they jeopardise national security? That might be an area where there could be some probing amendments.
In terms of defence, having some improved procurement mechanisms might be very welcome. In its November report, the Public Accounts Committee argued that:
“To meet the aspirations of the Integrated Review, the Department’s—
that is, the MoD’s—
“broken system for acquiring military equipment needs an urgent rethink, led by HM Treasury and the Cabinet Office.”
Is this Bill the Cabinet Office’s response to the need for the MoD to improve its behaviour and its procurement provisions? Personally, I think it would be quite good to keep Her Majesty’s Treasury out of these things because, while we might want value for money in defence procurement, we also need to ensure that we are procuring the right things, and the Treasury’s approach to the bottom line might not be the right way forward.
In defence procurement in particular, having the right legislation will matter, but so will scrutiny of the actual contracts that are being let. It will be vital not just to get this legislation right but to ensure that, in major complex procurements in the future, we do not allow the politicisation of procurement to allow Ministers and officials to keep going back asking, “Could we just amend this contract? Could we add a few more bells and whistles?” Every time that happens, the cost of a contract goes up and the overruns go on longer.
This legislation offers some opportunities, but it will still be incumbent on your Lordships’ House and the other place to ensure that, in defence procurement, we really scrutinise everything that the MoD is doing.
Lord Alton of Liverpool (CB)
My Lords, with his customary thoroughness in opening today’s debate, the noble Lord, Lord True, outlined the purpose of this Procurement Bill with its 13 parts, 116 clauses and 11 schedules. We have just heard a very incisive speech from my good friend the noble Baroness, Lady Smith of Newnham, about defence procurement. I will not follow her on that particular line of argument today—I certainly will be interested in amendments later on—but I simply draw to her attention, and that of the noble Baroness, Lady Goldie, and the noble Lord, Lord True, the evidence given this morning by Sir Nick Carter, former Chief of the Defence Staff, and expert witnesses on procurement by the Royal Navy to the International Relations and Defence Select Committee, which I think will have a bearing on what the noble Baroness has just said to the House.
At the very outset, I thank the noble Lord, Lord True, for setting aside time to meet on two occasions to discuss the Government’s policy in connection with the procurement of goods made in states credibly accused of genocide and states using slave labour. I particularly welcome what he said at the very outset of the debate, following that Urgent Question earlier on about John Sudworth’s harrowing documentary, which was broadcast by the BBC, documenting the terrible excesses taking place in Xinjiang. He, and the noble Lord, Lord Fox, are right that work is being done across both Houses already to bring forward amendments to tackle ethical procurement, slave labour and national resilience. So, although I welcome this Bill, and the intentions which lie behind it—not least the ambition outlined in the Green Paper and in the Explanatory Notes that value for money must always be conditioned by the public good, transparency, integrity, equal treatment and non-discrimination—I would add to that list, as the noble Lord, Lord Lansley, added in his remarks, words like “ethical” and “resilience”.
In drawing attention to my non-financial interests in the register, I think the House will not be surprised to learn that, as the Bill proceeds, I would like to return to the purchase of products made by slave labour in terrible conditions by Uighurs in the genocidal state of Xinjiang, which I have pursued as an issue with others, including the noble Baroness, Lady Smith, and the noble Lord, Lord Fox, during the passage of recent legislation. I see the noble Lord, Lord Coaker, is in his place, and it has been a pleasure to work with him too on the Health and Care Bill, the Nationality and Borders Bill, the telecommunications Bills and the Trade Bill, in bringing in amendments on this theme.
The very welcome decision of Parliament to insist that the eradication of slavery is a lodestar for the National Health Service procurement is a curtain-raiser for this Bill, and I congratulate the Government on that. Some of these issues are addressed in the—still undebated—report of the International Relations and Defence Committee, published in September last, on China, trade and security, which we subtitled A Strategic Void. This Bill offers an opportunity to fill some of that void, and I would commend the report to the noble Lord, Lord True, as a very good background document to these specific issues.
Essentially, procurement should strengthen national resilience. It should reduce dependency on states which pose risks to our national security. It should protect British manufacturing from competitors that use slave labour, or grossly exploited labour, and send a signal to the private sector that it is simply unethical to buy cheap goods from states where citizens are being subjected to appalling inhumanity, including genocide. After all—this is not hyperbole or some piece of sloganeering or virtue signalling—it is the Foreign Secretary, Elizabeth Truss, who has said that a genocide is under way.
A third of all UK public expenditure, around £300 billion a year, is earmarked for public procurement. This is a staggering amount of money, which—as the noble Baroness, Lady Hayman, was quite right to say —can be used to achieve a great deal of public good. I know the noble Lord well enough to know that he is not lighting a bonfire of 350 regulations simply to create a fertile ground for anarchy. It is a perfectly reasonable public policy objective to try and accelerate and simplify public procurement, but we must use this opportunity to do more than that. I know that the noble Lord shares my strongly held belief that we should tackle the strategic void, the incoherence, and in some quarters the unwillingness to squarely face the threat posed by rising authoritarianism. I am certain that this Bill provides an admirable opportunity to put flesh on the bones.
When it comes to challenging authoritarianism and ridding companies and actors that do their bidding from our procurement supply chain, we are streets behind our Five Eyes partners, like Australia and the bipartisan approach now being evidenced in the United States. We must better co-ordinate procurement policies with our allies. Let me give just two examples. Two years ago, the US Government blacklisted Hikvision and Dahua Technology from their procurement supply chain and, alongside Australia, has actively been removing Chinese cameras and technology from sensitive government buildings.
Since January 2020, on 25 occasions in speeches and questions in this House, I have raised the UK’s decision to procure 1 million Hikvision cameras. Yet we continue to use them in government departments, local authorities, NHS trusts and schools. I am told that they may even be bought and placed alongside the entire length of HS2—perhaps the Minister could tell us if that is indeed the case. A negligent procurement policy means that we will ultimately end up stripping them out, as we did with Huawei, at huge public cost.
Last week, IPVM, the world’s leading video surveillance information source, released a 32-page white paper on Hikvision. It noted that the company has been
“contracted to design, implement, and directly operate Xinjiang surveillance”
as part of the network of concentration camps where over a million Uighur Muslims are detained until 2040. Hikvision even actively collaborates with the Chinese Government as a co-author of national and provincial standards of surveillance and the development of cameras that target Uighurs. More than 42% of Hikvision is owned by the Chinese state. During the first half of 2021, the company received RMB 223 million in state subsidies, and its chairman, Chen Zongnian, is a member of the National People’s Congress.
I believe the Government privately recognise the threat posed by Hikvision and Dahua Technology, and I welcome the steps taken by the Secretary of State for Health and Social Care, Sajid Javid, who acted recently to remove their cameras and technology from his department. What is needed is a cross-departmental strategy to remove cameras not only from government departments but from the UK procurement supply chains as a whole. In a letter to the Cabinet Secretary dated 21 April, Professor Fraser Sampson, the Biometrics and Surveillance Camera Commissioner, said he was
“encouraged to see reports … that the Secretary of State for Health and Social Care has now prohibited any further procurement of Hikvision surveillance technology by his department”.
Will the Minister undertake to share his own department’s response to that letter from Professor Sampson, and will he explain why, if this is the right thing to do in one department, is it not right to do it across government? It cannot be right that the domestic surveillance market is dominated by a Chinese company which is complicit in genocide and has been blacklisted by our closest partner, and yet is able to use state subsidies to undercut its competitors.
On 2 February, in a debate on a Motion to Regret, I set out at length the arguments about Hikvision, and pointed out:
“In the 1940s, we did not allow the widespread use of IBM’s machines, or other tools of genocide used in Nazi Germany and manufactured by slave labour in factories and concentration camps, to be sold in the United Kingdom”.—[Official Report, 2/2/22; col. 987.]
This Procurement Bill should set a bar as high as that. Mass surveillance systems have always been the handmaiden of fascism. The Government should come forward with a timetable to remove these cameras and technology from the public sector supply chain, and campaign to encourage and support businesses in the private sector to do the same. We simply cannot allow the tools of genocide to continue to be used so readily in our daily lives.
My second and very brief point concerns resilience and dependency. I have regularly raised my concerns about the potential sale of Newport Wafer Fab, the country’s biggest producer of semiconductors and microchips, to a company with links to China and, inevitably, the CCP. We will always be purchasers of microchips and semiconductors; perhaps the Minister can tell us how many contracts it has had over the past 10 years with the Ministry of Defence, and their worth —and it is particularly helpful that the noble Baroness, Lady Goldie, is in her place to help him with that response. What is more, there is an urgent need for a strategic, joined-up and coherent approach.
To conclude, I hope the Minister will consider amending Part 2 of the Bill to include a duty to have regard to national resilience, and to reduce dependency on states with interests that are hostile to those of the United Kingdom. Like my noble friend Lord Stevens of Birmingham and the noble Lord, Lord Mendelsohn, I have pointed regularly to the £10 billion we have spent with China on 1 billion items of PPE. That amount is about the size of our entire reduced budget for our overseas aid programme. A duty to have regard to national resilience might be a good way of challenging this.
I thank Minister for his courtesy and his time in meeting to discuss these issues and I look forward to participating during the passage of this important and timely Bill.
Lord Maude of Horsham (Con)
My Lords, it is a pleasure to follow the noble Lord, Lord Alton. I start by drawing attention to my entry in the register of interests, particularly my majority shareholding in FMA, a company that supports the implementation of reforms for Governments outside—I stress “outside”—the United Kingdom; this includes supporting them on the reform and operation of their procurement systems. I should also draw attention to the 2020 review that I conducted pro bono for the Government, the Cabinet Office and the Treasury on cross-cutting functions across the British Government, including the commercial and procurement functions.
There are not many people for whom public procurement is a subject that sets the pulse racing, but they are all here in the Chamber. For those of us who have lived and breathed this subject, it is a pleasure to speak on it and welcome the Bill that my noble friend the Minister has introduced.
A number of contributions so far have pointed to things that noble Lords would like to see in the Bill but are not in the Bill. My concern is slightly in the other direction. I would prefer the Bill not to be too constraining and restrictive because I have observed that it is possible to have perfect procurement law and terrible procurement outcomes, and really bad procurement law and much better procurement outcomes.
The legacy regime includes the EU’s public procurement directives, the first iteration of which I was involved in negotiating way back in the 1980s. They became somewhat more convoluted subsequently, it is fair to say, but they were not terrible. Yet, in 2010, when the coalition Government were formed—the noble Lord, Lord Wallace of Saltaire, will remember this—we discovered a horrendous legacy of dreadful contracts that the Government had entered into right across the piece. Our task, which was to drive out cost from the overhead running costs of government, involved us renegotiating many of those contracts and making substantial savings very quickly. However, it was not the fault of the law, which was not bad at all; it was all about the way in which the laws were being operated. Through the efficiency drive we led at that time, with enormous support from our coalition partners in the Liberal Democrat party—particularly Danny Alexander, the then Chief Secretary, and the noble Lord, Lord Wallace—we made savings, cumulatively over five years, of some £52 billion, essentially from the running costs of government.
So the law is not the most important part of government procurement. I urge your Lordships, as this Bill goes through its time, to resist the temptation that there will certainly be—we have heard some of this so far—to add things to it. At the end of it, procurement is primarily, although not exclusively, about buying goods and services that are needed to serve our security and citizens in the most effective way. That is about quality and cost and requires good practices; the practices have not always been good.
When we came into government in 2010, I discovered that the time taken for formal tender processes to be completed was double what it was in Germany. The rules were followed properly yet the time taken was, on average, twice as long. We made changes and cut the time for British procurements to half of Germany’s average time, all without making any changes to the law—that is, just by reforming practices. Suppliers would tell me that it cost them four times as much to bid for public sector contracts as it did for private sector contracts.
There are two malign effects of that. One is that the extra costs involved in bidding for such contracts get put on to the price bid, and the taxpayer picks up the tab for that. The second, of course, is that the extra costs and the restrictive practices which are completely unnecessarily incorporated into so many procurements mean that smaller and younger vendors are often—generally, actually—frozen out. Just in the field of IT and digital, we found that 87% of the Government’s spend on IT was with seven vendors, all multinationals.
One of the problems with building a really successful tech sector or ecosystem in the UK was that vendors had no, or very little, opportunity to bid for and win public sector contracts due to a combination of turnover thresholds, the routine requirement for companies to show three years of audited accounts, the requirement to show that you had insurance in place to cover the cost of the bid at the time of bidding, often huge performance bonds, and excessively complicated pre-procurement questionnaires—none of which was necessary under the law. All were avoidable but they had the effect of freezing out smaller, newer, and often more dynamic and innovative, suppliers. My noble friend Lord Lansley is quite right to say that supporting innovation is not the purpose of procurement, but innovation can be incredibly important in making procurement more effective and enabling newer ideas to come to the service of the country. It is really important that that should happen.
Within the constraints of the EU procurement regulations and directives, we exceeded our aim of 25% of government procurement by value going to SMEs. Understandably, we were not allowed to discriminate in favour of UK suppliers but, of course, SMEs are much more likely to be local and UK-based, and that was a big part of supporting the supply side of the economy. There was a tendency for too many contracts to be large—huge—multi-year contracts which smaller businesses were unable to bid for.
On central procurement, I found that there were 800 people employed at the centre of government—at that stage, under the aegis of the Treasury—yet they could not tell me who the 20 biggest suppliers to government were. We had to guess at that, write to the chief executives of the companies we guessed were the biggest suppliers, and invite them to give us full transparency, or full visibility, over it. Of course, there are huge savings to be made by central procurement, for the whole of government, of commodities, goods and services. However, as the noble Lord, Lord Fox, rightly said, when you try to do that—we succeeded in making some limited progress down that path—it is amazing, with the rich vein of creativity you tap into, to hear the reasons why it cannot possibly be done. People say, “We totally agree with it in principle. It makes very good sense, but our needs are completely unique and distinctive”, and exceptionalism becomes a religion. Again, the law does not operate on that area—these are operational decisions to be made by the Government when it comes to implementing and executing this law.
This brings me to the most important part—the people who operate procurement. There are three parts in any procurement: pre-tender market engagement, the formal tender process and post-award contract management. However, in most Governments, it is the middle part of that—the formal tender process—which attracts all the attention. Just as in the world of defence and security there is a class of public servants we affectionately know as “securocrats”, I came to know the people—often many people—who work in procurement, and I fondly refer to them as “procurocrats”. They are people for whom process is king, and for whom process will always trump the outcome. They thought that if they could say that they followed the process, even if it arrived at a stupid outcome with poor value for money, no one could criticise them.
You need to have commercial DNA injected into public procurement so that the pre-tender market engagement can be done in a confident and knowledgeable way, and therefore to frame the procurement tender in much more effectively. The process of tenders is often embarked on too early, without real knowledge of what you are trying to achieve or what it is possible to achieve, and then of course you get into endless alterations and changes to the procurement, which is where the suppliers make their money. Some suppliers told me that changes in the operation of a contract could deliver them a rate of return of 40%. Then there is post-award contract management, which we discovered was weak across the Government. Again, that is where the suppliers were too often making too much money.
It is that lack of experienced, confident, commercial operators inside government that often leads to these problems. I would sometimes hear procurement people in government saying, “But, Minister, we’re not allowed to exercise judgment”. What? Surely that is what we pay them for. The danger of excessively prescriptive procurement processes is that the focus is all on just buying what looks like it is cheapest so that no one can criticise you; it is just about the maths. If you have not allowed innovative vendors to look at new and different ways of delivering the goods or services, it just boils down to whatever is cheapest—and that is a bad outcome for the Government and the taxpayer.
The National Audit Office and the Public Accounts Committee fulfil an important function but cast a long shadow, and officials can become nervous of exercising judgment and not going for what looks like the cheapest option, for fear that they will subsequently be taken to task. That is one reason why the role of departmental boards can be so important. Strong and experienced commercial non-execs on those boards can support officials in exercising judgments effectively.
I submit that the professionalisation of the procurement function is more important than the precise letter of the law that we are debating today. I believe that a full assessment of the commercial function is now nearly complete, with accreditation of those professionals and support for those who fail to meet the standards to meet them subsequently.
On the Bill itself, I urge the House not to make the mistake of thinking that the law is the only thing that matters. Of course, it is important and necessary to replace the EU regime, but I urge us not to import into it more and more changes that make the Government a prisoner of the process. Some changes were made under the law to require pre-procurement questionnaires to be much more standardised and unified, supporting smaller companies to be able to bid for and win these contracts. I support the single digital platform, which builds on the Contracts Finder website that was created, and the transparency.
The noble Baroness from the Opposition Front Bench talked about the absence of references to social value in the Bill. Unless I am mistaken—perhaps the Minister can deal with this when he closes the debate—the social value Act of 2012 has not been repealed and is still in existence. It allows social value to be incorporated in procurements on a permissive basis.
The debarment register is welcome. It is important for procurement-contracting authorities to be able to look across the piece at the track record of suppliers, not just at what has been done with that particular contracting authority. We sometimes found ourselves obliged to give contracts to companies that were suing the Government, and I know of no other commercial organisation where that would be regarded as remotely accessible.
So I commend the Minister for the elegant way in which he has recommended this Bill and I look forward to discussing it in the course of its passage through the House.
Lord Whitty (Lab)
My Lords, like others, I thank the Minister for his meticulous introduction to this Bill. It is also a great pleasure to follow the noble Lord, Lord Maude. His vast experience as a Minister and an adviser to successive Governments in the public procurement area is important to us, as is his contention that it is not just the law that is important. However, the law does set the context, and that is what we are debating today.
As has been explained, this Bill is supposed to be part of the Brexit dividend, replacing a complex and allegedly heavy-handed EU system and the four sets of regulations transposed into British law into one single place. I am not sure that a Bill of 115 clauses, 11 sections and umpteen possibilities of secondary legislation is quite the simplification that is sometimes claimed.
Together with the Subsidies Control Act, which we passed a few weeks ago, the Bill, in effect, redefines the formal contractual interface between the private sector and the various aspects of the state. It is bound to be complicated; it is at least as complicated as the EU system. In some senses, it is actually more complicated. I welcome the intentions of the Bill, but I regret, as I will come to, the watering down of some of the intentions that were in the earlier consultative process.
I have a few preliminary questions about the Bill. First, in the EU, the public contracts operation was overseen and enforced by the Commission, which had a degree of independence from the wrangles on the Council of Ministers and, indeed, from the mainstream activity of the Commission itself. It was not entirely immune from that, for obvious reasons, but it had a clear authority. Who is the authority in enforcing this and in ensuring that the umpteen public authorities abide by it and that companies understand it? In the Subsidies Control Act, there is an authority for the CMA. There is no central authority so far—that I can discern—in this Bill.
Secondly, we have to accept that there is a degree to which this is more ambitious than the EU system was. The main aim of the EU system was to ensure that companies in member states had equal access to procurement in member states. It ensured that the contracting and bidding processes went through an EU-defined system, but it did not actually put an obligation on the member states that their contract content should be exactly the same and go through similar processes and similar forms. This Bill goes further in that direction, with the contracts that are going to be extended by public authorities, the devolved Administrations—importantly—and local authorities, and in the actual content of the contracts themselves. So the Bill is actually more ambitious than the EU system in some ways, and goes a long way to defining the contract form itself. It applies to all public authorities within England, Wales and Northern Ireland—but not Scotland. This in itself raises a number of questions if Scottish companies, for example, bid for English-based or Welsh-based contracts.
It also raises certain questions in Northern Ireland. I do not want to go into the morass of the protocol but, because the single market provisions apply in Northern Ireland to a degree, that complicates the system in terms of Northern Ireland adopting it.
I welcome many of the approaches in the Bill. I particularly welcome, as did my noble friend Lady Hayman, the shift away from “best economically advantageous” to simply “most advantageous”. That is an important signal, but it is not necessarily followed through. It reflects the representations of many groups that the interests in various levels and types of public sector contracts go well beyond minimising the immediate cost to the taxpayer, the ratepayer and the businesses funding the public authority. Value for money, however, is still seen as the prime objective and is defined in pretty narrow terms.
In reality, local authorities, for example, would need to consider not only the cost minimisation and the cost of delivery of what are the defined aims of a particular contract but the wider economic effects on their communities and local business, and the environmental effect on their areas and beyond. That goes beyond the normal understanding of value for money.
I mention a few of those wider social value issues—the noble Lord, Lord Maude, referred to the social value of legislation—that need to be taken into account in awarding state public authority contracts. They include overseeing the list of potential contractors, including overseas contractors—which I shall come back to. These social value issues also include an environmental dimension, I suggest—especially climate change and greenhouse gas emissions—local preference issues for local companies and local employment, human rights issues, employment rights issues, and accessibility to public services.
The Bill also needs to recognise much more explicitly some of the general points that were made in the consultation and have been made again today. For example, the transparency provisions are not particularly strong and the relationship between transparency and the proposed digital system needs to be spelled out. Accountability and probity in public office need to be emphasised and explicit. We have had a number of recent issues in which probity in public office and the appropriateness of the awarding of contracts have been seriously questioned and suggestions of cronyism made.
Public procurement accounts for roughly 15% of all carbon emissions, and the public benefit of taking into account carbon emissions in the procurement process needs to be reflected in the Bill. That means that tenders which might otherwise be attractive can be rejected if there is a negative impact on carbon emissions, and potential contractors can be excluded if their record on the carbon front is poor. To be safe, that needs to appear in statute. It appears in the national policy statement—well, the draft of it—but, of course, that is not statute.
Likewise, on local preference, it must be possible for local authorities and devolved Administrations to give a degree of preference to local companies—SMEs, start-ups and social enterprises in particular—and for the creation of local employment, and for national public bodies to give preference to UK-based companies in certain respects. In Committee on the then Subsidy Control Bill, I asked whether any such local preference would be classified as a subsidy under the post-Brexit state aid rules. I never received a clear answer and I shall ask again now in relation to this Bill. Will local or national preference be accepted as a public benefit under these new and complex post-Brexit rules?
On human rights and employment rights, I think I heard the Minister say that the Bill will allow the exclusion of potential bidders on the ground of their human rights record—but I should like him to repeat it. For example, on employment rights, would P&O, in view of its recent behaviour, now be excluded from contracts for the development of freeports?
The international dimension here is also important. As the noble Lord, Lord Alton, referred to, we exclude Chinese companies from certain security and communications-based contracts, but does that apply to individual public authorities and their contracts, and other Chinese companies, on similar grounds? Does that require a national policy or can local authorities take their own decisions?
In a more contentious area, I have noticed that the Government have told local authorities and other public bodies that they cannot, for example, ban Israeli companies from their contract lists. I make no comment on the rights and wrongs of that argument, but it indicates that there is a clear, public, national policy on the issue. How does this apply now to, for example, Qatari companies, in view of what we know about their treatment of employees and employment rights in preparation for the World Cup? Would a local authority now be penalised for deleting a Qatari company from that list on those grounds? There must be hundreds of similar examples.
I briefly mention one other point: accessibility. I hope the Minister has seen the submission from the RNIB on this issue, but it is important that the Bill reflects the need for public contracts to take account of their effect on those who are disabled. I hope that is one aspect that can be reflected. It was referred to in the consultation and now needs to be reflected in the Bill. These are a few of the issues that I hope we can explore further at later stages. I look forward to the Minister’s response.
Baroness Brinton (LD) [V]
My Lords, I declare my interest as a vice-president of the Local Government Association. It is a pleasure to follow the noble Lord, Lord Whitty, especially his comments about social values.
Included in Section 70 of the Health and Care Act was a description of changes to the public procurement rules for health services, but most of which will be in regulation and the details of which are woefully short on the sort of information that we have in this Bill. In its 15th report, the Delegated Powers and Regulatory Reform Committee said on the relevant clauses of the Health and Care Bill that “full analysis” of the proposals,
“has not been completed and there has not been time to produce a more developed proposal.”
We asked on Report why on earth the Government would wish to bring into force legislation that they themselves admit they have not had time to analyse, let alone to produce a more developed proposal, when everyone knew that a Cabinet Office cross-departmental Bill was not just planned but heavily trailed.
Paragraphs 17 and 18 of the DPRRC report said about the Health and Care Bill:
“We do not accept that the inclusion of regulation-making powers should be a cover for inadequately developed policy”
and:
“Ministers would not ordinarily propose clauses in one Bill possibly requiring imminent amendment in a subsequent Bill without expecting to face questions. The House may wish to seek further and better particulars from the Minister concerning the possible effect of any Cabinet Office procurement Bill on the Health and Care Bill, and … to press the Minister on why it was necessary to include provision, based on inadequately developed policy, in the Health and Care Bill when the Government intend to introduce a procurement Bill.”
I have to say that it was no clearer after the passage of the Health and Care Act, and I am even more bemused by the reference in a procurement Bill to only certain health services being excluded, a detail not outlined in the Health and Care Act at all.
May I ask the Minister to write to Peers to explain which elements of NHS contracts are excluded from the Bill and how we can be confident that the protections and transparency that he outlined in his opening speech will also be applied to NHS services excluded from this Bill but covered by the very brief detail in the Health and Care Act? I suspect he might have a problem in doing that, for exactly the reasons that the DPRRC made clear: there is no detail available at all on those health contracts.
Returning to this Bill, paragraphs 19 and 20 of Schedule 2 set out the preferential arrangements for procurement rules of an international organisation or set out in an international agreement. Paragraph 20 says that a contract may be awarded under international obligations even where the award rules would be different from those otherwise set out in the Act. I heard the Minister’s comments in his opening speech, but I would be grateful for confirmation that the arrangements in paragraphs 19 and 20 of Schedule 2 are as strong as those we had under the EU public procurement directive, which made it clear that, unlike non-public services, a public body based in an EU member state can accept a contract that is not the cheapest provided it fulfils the quality, continuity, accessibility and comprehensiveness of services and innovation. In the EU directive there was also no need to publish procurement advertisements cross-border. This goes to the heart of my noble friend Lord Fox’s question to the Minister about the provision of source of supply when an international treaty is in place.
Although I noticed that the Minister was somewhat scathing in his speech about the previous EU directive, it was this directive that provided a guarantee that US companies could not come in and cherry pick our NHS under the terms of the Transatlantic Trade and Investment Partnership. On 18 November 2014, the noble Lord, Lord Livingston of Parkhead, answered my question in your Lordship’s House by quoting an EU Commissioner. He said that
“Commissioner de Gucht has been very clear:
‘Public services are always exempted ... The argument is abused in your country for political reasons’.
That is pretty clear. The US has also made it entirely clear. Its chief negotiator”—
on TTIP—
“said that it was not seeking for public services to be incorporated. No one on either side is seeking to have the NHS treated in a different way ... trade agreements to date have always protected public services.”—[Official Report, 18/11/14; col. 374.]
I also raised these issues in a later debate with the then Minister, the noble Lord, Lord O’Shaughnessy, who responded:
“The noble Baroness, Lady Brinton, and the noble Lord, Lord Brooke, asked about procurement. I can tell them that we have implemented our obligations under the EU directive. The Government are absolutely committed that the NHS is, and always will be, a public service … whether overseas or here. That will be in our gift and we will not put that on the table for trade partners, whatever they say they want.”—[Official Report, 29/3/18; col. 947.]
Can the Minister confirm that it is still the intention, expressed by the noble Lords, Lord O’Shaughnessy and Lord Livingston, in their ministerial roles, that those same protections will exist in the Procurement Bill, not just for the NHS but for other public services, as under the EU directive?
The equality impact assessment for the Bill says at paragraph 6:
“This is a largely technical bill regulating how public procurements are undertaken. The nature of the bill means it has limited equality impacts, whether direct or indirect.”
I echo the points made by the noble Lord, Lord Whitty, that the Royal National Institute of Blind People is very concerned that, in replacing existing regulations, the Bill overwrites requirements of particular significance to the 14 million disabled people in the UK that ensure that publicly procured goods and services are accessible to everyone. It is unclear how the Bill in its present form will replace the regulatory framework for accessibility within public procurement legislation. I ask the Minister: how will the new regime ensure that specifications take into account accessibility criteria and design for all users, including those with disabilities?
I echo the points made by the noble Lord, Lord Alton, on procurement of goods in countries where modern slavery or genocide is believed to happen. I look forward to returning to this during later stages of the Bill. I agree that more needs to be done. I also agree with his key points about surveillance equipment sourced from China.
A number of noble Lords referred to emergency contracts issued during the pandemic. Like the noble Lord, Lord Stevens, I am struggling to see how the arrangements in this Bill would work in practice. The noble Lord made critical but gentle points about the need for an emergency power, but I can be blunter than he was prepared to be. Will the arrangements for special exemptions in emergencies be strong enough to prevent the scandal of the “VIP lane” and some of the other contracts made in relation to the pandemic? Will all emergency contracts be transparent, even if publication has to be delayed for a few contracts because of the nature of whatever the emergency is, whether pandemic or war? It appears that Ministers seemed to believe that many of the pandemic contracts across a number of departments, not just health, would never see the light of day. Emergency should not mean secret, not rule-bound and not checked.
The UK Anti-Corruption Coalition says that, despite the warm words in the Green Paper, the Bill does not create a clear, unambiguous imperative in primary legislation for a single rulebook with full transparency. It also makes the point, which I and others have made, that too much is left for secondary legislation—again. The Minister is now hearing that argument across your Lordships’ House: there is real concern about far too much not being in primary legislation.
Lord Aberdare (CB)
My Lords, my interest in this large and complex Bill relates to how it will affect the ability of small businesses, particularly in sectors such as construction and engineering services, to access public procurement opportunities. Of course, this is one of the Bill’s stated policy objectives.
The six principles on which the Bill is based are welcomed by small businesses in these sectors. However, as ever, the proof of the pudding will be in the eating—will the Bill deliver what it sets out to do, and will it foster the sorts of good practices and professionalism that the noble Lord, Lord Maude, tellingly emphasised from his deep experience? I was also struck by a phrase used by the noble Baroness, Lady Brinton, asking how the arrangements in the Bill will actually work “in practice”; that will be the nub of the Bill’s success. Many of the measures required to create the new public procurement culture envisaged in the Transforming Public Procurement Green Paper do not feature in the Bill itself; presumably, they will be introduced in subsequent secondary legislation.
The importance of procurement in bringing about needed culture change in the construction sector is recognised in the levelling-up department’s recent Guidance on Collaborative Procurement for Design and Construction to Support Building Safety and in the Cabinet Office’s Construction Playbook. One of my concerns during the passage of the Building Safety Bill was about how such guidance would be put into practice, so I hope to hear from the Minister what regulation, oversight and monitoring mechanisms are planned to ensure that this Procurement Bill achieves its policy goals. The Green Paper speaks of a “Procurement Review Unit”; I wonder what role that will play and why it does not appear in the Bill.
The new system proposed in the Green Paper and embodied in the Bill introduces many new approaches and terminologies that small businesses already finding it difficult to access public procurement may find it hard to get to grips with. The Green Paper also speaks of a
“programme of learning and development to meet the varying needs of stakeholders”
during the six-month lead-in period. Can the Minister confirm that this will include access to relevant training and support for small businesses seeking to learn the rules of the game in order to access public contracts? What plans are there to promote the early engagement of contractors and their supply chains in the tendering process? What plans are there for the pre-market engagement of civil servants so that they can gain an understanding of emerging trends and technologies before going to tender? Clause 17’s requirement for contracting authorities to consider dividing procurements into “lots” is welcome for small businesses, but what are the levers to ensure that this actually happens, and what are the remedies if it does not?
Small businesses often need to use commercial framework providers to access public procurement. This can add significant costs, often 10% or more, to their market prices, and these costs are not entirely visible to them. So how do the Government plan to ensure transparency in the fees charged by such providers? Will the
“central register of commercial tools”
mentioned in the Green Paper require publication of these fees and charges so that SMEs that use such tools can understand the true costs of doing so? How will the Bill help to deliver the gold standard recommendations of Professor David Mosey’s review of public sector construction frameworks?
As the noble Lord, Lord Mendelsohn, mentioned earlier, onerous and unfair contract terms and payment practices are another significant barrier to small businesses accessing public sector contracts. The Green Paper included proposals to give small businesses at all levels in the supply chain
“better access to contracting authorities to expose payment delays.”
It also proposed that public bodies look at the payment performance of any supplier in a public sector contract supply chain.
The Government’s response confirmed their intention to introduce these proposals into legislation, as does the Bill’s impact assessment. Can the Minister confirm that this is still the plan and how it will be implemented? Like the noble Lord, Lord Mendelsohn, I welcome the clauses in the Bill which apparently extend 30-day payment terms right down the supply chain. However, prompt payment initiatives have a history of ineffectiveness, so I would like to know how the Minister plans to ensure that this does not happen this time and what sanctions may be imposed on late payers.
SMEs are often pioneers in their sector: innovating, training and providing real social value impact. As we have heard, social value is another important aspect of the Green Paper which has not surfaced in the Bill. I am glad to say that Wales is leading the way with its Draft Social Partnership and Public Procurement (Wales) Bill. SMEs may be precluded from such innovation if they are not engaged until after tenders have been awarded at the upper tiers of the supply chain. The Bill’s emphasis on a value-led, rather than a price-led, approach to procurement—MAT rather than MEAT—is welcome, as long as it becomes more than a neat new acronym. Public sector contracting authorities need to move to awarding contracts at the price that maximises innovation, investment and training, thereby avoiding the scenarios of paying twice or squeezing the margins of suppliers, which ultimately result in behaviours highlighted by the building safety crisis, whereby lowest cost has been prioritised over quality and safety outcomes.
Much of what I have said relates to measures not specifically covered in the Bill as it stands, so I hope that the Minister will tell us what plans he has to publish draft regulations which address some of these areas in the course of the Bill’s passage. I welcome the Bill and I hope that the Minister will be able to give some reassurance that the proposed new system will include the necessary regulation, oversight and monitoring mechanisms, not just to enable small businesses to play a much larger and more valuable part in future contracts, including in construction, but to ensure that they do.
Baroness Noakes (Con)
My Lords, there is a lot to like in this Bill and, like my noble friend Lord Maude of Horsham, I do not think that it will be improved by adding a lot of extra things to it.
My favourite kind of Bills are the ones which repeal EU-derived legislation and replace it with legislation designed for the UK. As such, my favourite clause in this Bill is Clause 107, and my favourite schedule is Schedule 11. Unfortunately, some of the new rules still seem to be written in EU-speak. In particular, I have in mind the description of a “public contract” in Clause 2 which uses the term “for pecuniary interest”, which I have failed to find in any UK-based legal usage in this context. I am sure we can explore that in Committee.
I have one main problem with the Bill: the public procurement rules are still very complicated. Creating the new procurement system requires over 110 pages of primary legislation in this Bill, and who knows how much more in the secondary legislation. I acknowledge that we must remain compliant with the WTO’s Agreement on Government Procurement, and I also pay tribute to the extensive consultation the Government have carried out before bringing this Bill forward. Of course, the Government have made significant changes, reducing seven procurement categories to three, and having a single set of procedures for most public procurement. I will say in passing that I regret that there is a power in the Bill to allow the NHS to go its own way; it would have been very much more satisfactory if a single code had applied across all public procurement. The NHS, in particular, needs to be exposed to more competitive procurement, not protected from it. I would really like to see Clause 108 removed. However, I am a political realist when it comes to the quasi-religion of the NHS, and I accept that I may not achieve that ambition.
My challenge to my noble friend the Minister is whether more simplification could have been achieved. Could the procurement code be even more streamlined and even more principles-based?
My personal knowledge of public procurement is limited to being engaged in a number of public procurements as both a seller and a buyer over the years, and therefore I claim no specialist knowledge of public procurement and I cannot point to a better way to draft it. However, I am aware that there is a whole army of public procurement specialists out there. A number of noble Lords have already referred to the sorts of numbers of people in various parts of the public sector who are handling public procurement. I have a feeling that we should have a way to liberate more of them so that they can be more productively employed in the economy.
My noble friend the Minister will also be aware that the UK’s reputation for gold-plating regulations is well known and that we often went voluntarily much further even than we were required to by the EU. Can my noble friend tell the House how the Government satisfied themselves that gold-plating does not live on in this Bill? It would be terrible if we allowed the UK to be dragged down by the kind of bureaucratic groupthink that we really ought to have left behind.
I said earlier that there is a lot to like about the Bill, and, like other noble Lords, I particularly like the way in which the Government have shaped the basis of contract award, shifting from the “most economically advantageous tender” to the “most advantageous tender”. The previous formulation had a tendency to drive contracts towards lowest-cost tender and left little scope for longer-term strategic considerations or for innovation, which other noble Lords have spoken about. Although it was entirely possible under the EU system not to award contracts to the lowest bidder, the new formulation makes it clear that a narrow economic evaluation is a part of, but not the heart of, public procurement—and that is good.
Turning to SMEs, which other noble Lords have already covered, we know that they have traditionally found the public procurement processes intimidating and inaccessible. With its emphasis on proportionality, the Bill may well help to open up public procurement to more SMEs. The 30-day payment term throughout the supply chain will certainly be welcomed by SMEs if it is actually delivered. The noble Lord, Lord Mendelsohn, who is no longer in his place, made some important points about that.
The Government will be aware that SMEs may still perceive that significant barriers will be associated with engaging with public sector procurement, despite the improvements made in the Bill. What will the Government do to promote SME involvement in public sector procurement and to demystify the new regime and help them to access it?
My final point relates to light-touch contracts, which are allowed under Clause 8. I rather liked the Government’s initial proposal in their consultation to subsume light-touch contracts into the mainstream, especially given the reformulation of contract classifications and the articulation of procurement objectives. However, the Government have given in to pressure to keep the light-touch regime going. I do not challenge that, but I hope that the Government will keep it under review.
The extraordinarily wide power to designate light-touch contracts under Clause 8 has already been mentioned, in particular by the noble Lord, Lord Fox. Although there are matters to which the Government must have regard for specifying services as light-touch, there is no actual restriction on what the Government could put in this category. The regulation-making power is the affirmative procedure, which is of course better than the negative procedure, but not by much in practical terms. I hope that my noble friend can explain why the Government have chosen to make the light-touch regime so open-ended, otherwise we may need to look at that very carefully in Committee.
I look forward to scrutinising the Bill in Committee, but also hope that we can get it on to the statute book as quickly as possible so that its benefits can be realised. That hope may well be unrealistic given the evident enthusiasm from other noble Lords for an extensive Committee stage, but I can but hope.
Baroness Young of Old Scone (Lab)
My Lords, I declare my interests, as listed in the register, as a chair, vice-president or commissioner of a range of environmental and conservation NGOs.
I declare today Groundhog Day for two reasons. First, I am following the noble Baroness, Lady Noakes, for the second day in a row. I am pleased to do so; and it proves that the Whips’ Office has a sense of humour since I revealed yesterday that I have disagreed with the noble Baroness consistently for the past 44 years.
Baroness Young of Old Scone (Lab)
I take the noble Baroness’s challenge: I will do the maths shortly and pass her a note, although I did look up her CV yesterday to check the date. It was 1988; the rest of your Lordships can now do the maths.
The second Groundhog Day phenomenon is that, yesterday, I and many other noble Lords pressed the Government on the lack of climate change, environment and biodiversity objectives in the UK Infrastructure Bank Bill. We asked why the Government were missing an opportunity to ensure the delivery of their target to halt species decline by 2030 through the mechanisms of that investment vehicle.
Today, we have a similar—even bigger—real opportunity in the Procurement Bill. Many of the opportunities on the environment and climate change were outlined by my noble friend Lady Hayman of Ullock. The Minister told us that public procurement is big: it was worth £357 billion in the past year, makes up a third of all public expenditure, represents 13% of GDP and is estimated to account for 15% of climate-changing emissions. Public procurement on this scale has the capacity to be a huge influencer for good in terms of the climate change and environmental performance of the whole of the public supply chain. This influence could go even further because public procurement shapes the performance not only of the suppliers of goods and services that are publicly procured but of the wider markets to which the same suppliers also sell. Basically, my message is that it can influence a big slug of the economy.
The twin crises of climate change and biodiversity decline are allegedly two of the Government’s highest priorities. We boasted about this on the world stage at COP 26 in Glasgow only a few months ago. Yet when the Minister, the noble Lord, Lord True, signed off the Bill’s formal statement under the Environment Act 2021, he never spoke a truer word—if I can pun—when he said that this Bill cannot be construed as environmental legislation. He was absolutely right because it cannot, although it may talk about “maximising public benefit” as a key objective. The Green Paper on which the Government consulted referred to public benefit as including
“the delivery of strategic national priorities”,
including those relating to the environment, yet we have no formal definition of “public benefit” in the Bill. Your Lordships’ House is being asked to pass the Bill when some key elements of public benefit, climate change and performance in support of targets in the Government’s 25-year environment plan are relegated to the National Procurement Policy Statement and a set of policy notes.
The current version of the National Procurement Policy Statement is pretty flabby. It says:
“All contracting authorities should consider the following national priority outcomes”,
which include climate change, the environment and biodiversity. The phrase “should consider” is a bit weak, is it not? It is not “must deliver” or “must adhere to”; it is just “should consider”. That is not good enough. We are at a “Thelma & Louise” moment; for those noble Lords who are not cinema buffs, let me explain. We in the world are currently living it up beyond our means and driving madly towards a cliff edge. We need action to meet the Government’s urgent environment and climate change targets as an objective of public procurement in the Bill and we need it to be a requirement, not simply a consideration.
Can I also ask the Minister whether we can have sight of whatever upgrade to the national procurement policy statement the Government are planning to issue? It is so important to this Bill—otherwise, we are considering a bit of a pig in a poke. Will the Minister also consider whether the process of changing the NPPS could be improved? Currently, it is subject to a procedure equivalent to the negative procedure. Does the Minister think that this is sufficient parliamentary scrutiny of such an important document?
I turn to two further elements of the Bill. The Government are touting the exclusions section as progressive and praiseworthy. That has some merit. The Bill says that the conviction of an offence involving
“significant harm to the environment”
constitutes discretionary guidance for excluding suppliers from procurement—but only “discretionary”. The exclusion provisions must be much tougher than that, to give a clear signal that only operators who consistently meet high environmental standards will be considered.
Secondly, though the transparency requirements are very welcome, they depend on secondary legislation and do not currently impose requirements for suppliers to report publicly on environmental commitments, either in the NPPS or in individual contracts. The Government’s record on tracking performance is not great. The National Audit Office has repeatedly raised concerns about the lack of data and monitoring of compliance with the current government buying standards. It is interesting to see that the Ministry of Justice, the Department for Transport and the Ministry of Defence simply stopped collecting the data because it was so embarrassing to have to report. The Environmental Audit Committee at the other end concluded that it appears impossible to know whether departments have improved their sustainable procurement performance. So should the Minister not consider including reporting environmental commitments in the transparency framework that the Government are proposing to establish, and saying so in the Bill?
Somebody once told me that football would be a terrible game if you did not keep the score. I actually think that football is a terrible game—but let us at least keep a proper, transparent score on how public procurement is delivering these important public benefits.
Along with many other noble Lords, I look forward to returning to these issues at subsequent stages of the Bill, to make sure that this terrific opportunity to use procurement as a powerful lever for improving the performance of the Government’s climate change and environmental targets is not lost. We are drinking in the last chance saloon, and if we do not use all the levers at our disposal, we will not meet the climate change and biodiversity decline challenges—and I am amazed that the Government have not recognised how much of an own goal this would be.
Baroness Parminter (LD)
My Lords, I will speak briefly. I associate myself entirely with the remarks of my noble friend Lady Young. I welcome the fact that the Government have set very clear net-zero targets. I hope that they will do similarly for nature targets in the near future, as the Environment Act requires. As my noble friend said, it would be an own goal if the Government were not to take the opportunities in this Bill to create market incentives to ensure that businesses move their supply chains to a more sustainable model. The Government can spend all they want on putting money into green energy and stopping harmful subsidies going into agriculture, but they will be missing a major opportunity if they do not address the opportunities in procurement.
Colleagues around the House have talked about the huge sums of money and the opportunities to do this. The noble Lord, Lord Stevens, talked about the money spent in the NHS and the opportunities, highlighted in the Health and Care Act, to decarbonise procurement. My noble friend Lady Smith of Newnham talked about the massive sums of money in defence. In recent weeks, our own Environment and Climate Change Committee has been looking at the opportunities in the area of food procurement to deliver many benefits by reducing greenhouse gas emissions, at the same time as tackling the growing obesity crisis among our children.
So there are massive opportunities, and when I looked at this Bill I was concerned. The words “net zero”, “nature”, “biodiversity”, “weight loss” and “waste reduction” are not in the Bill, the Explanatory Notes or the impact assessment—and indeed, in his opening remarks, the noble Lord, Lord True, did not mention net zero or the environment at all.
I will be brief. I add my weight to the calls already made by the noble Baroness, Lady Hayman, the noble Lord, Lord Stevens, and others for there to be a mechanism to put our concern for net zero and environmental goals in the Bill. The obvious way is to put it into Clause 11 under the procurement objectives; that would be the clearest way. Otherwise, there is a danger, as the noble Lord, Lord Maude, memorably said, that it will always be just about the money.
Equally, it could be that the Government choose to define in the Bill what they mean by public benefit. The Green Paper is very clear what public benefit means. As the noble Lord, Lord Lansley, who is not in his place, said, the Green Paper explicitly includes the environmental and net-zero goals. If that were in the Bill, that would be another way to do it. Or, as the noble Lord, Lord Stevens, suggested, another way would be to transpose some of the mechanisms put into the Health and Care Act by the Government. So there are plenty of suggestions from around this House, but there is a growing consensus that the Government have to do it.
Secondly, we need to make sure that the national procurement policy statement is as robust as it can be. Clearly, it will help if we get the objectives for the procurements correct. From looking at what was printed in the Cabinet Office procurement notes produced last year, there has been concern that, yes, it talks about meeting net-zero goals, addressing circular waste, reducing the amount of waste and tackling nature, but the carbon reduction plans apply only to central government, as the noble Baroness, Lady Hayman, rightly said. Why? Why are we asking only people who are taking services from central government to produce carbon reduction plans to 2050? Why not all public authorities? We need to make sure that future public procurement statements are as strong as they need to be.
For me, that issue is strongly allied to scrutiny by this House of what that national procurement policy statement would be. The noble Baroness, Lady Young, raised a point about procedure in the House: it looks to be almost equivalent to a negative instrument. It may be that the Delegated Powers Committee has said that, because this policy statement does not have the ability to insist that someone does something and can only guide, it has to be a negative instrument. I find that quite amazing, given how powerful this statement could be, and I am sure that we as a House would want to be clear on the reasons for the proposed scrutiny.
Even if it is to be a negative instrument, we in this House have the power to change the period of time we have to scrutinise it. It says here that it is 40 days, but I worked out that, if you take out Fridays, Saturdays and Sundays, it is effectively about three weeks. The reason I feel really quite strongly on this—I think we all feel strongly about parliamentary scrutiny—is that this will be the first document that will control so much of public procurement post Brexit and post the rules we had before.
We have just had a parallel policy statement, the environmental principles policy statement, which was meant to drive environmental protection across the heart of all government, and we in this House were given 21 days to scrutinise it. That is what we allowed for in the Environment Act. I sat through the passage of the Environment Act and I missed it. It is an own goal, and I am refusing to allow us to make the same mistake. I say this as a committee chair—the noble Baroness, Lady Andrews, is also in the Chamber—because, given the difficulty of getting some Ministers to come before us so that we can scrutinise issues, and the need to then bring it back to the House and table a regret Motion or a take-note Motion, 21 days is not enough. This is a really important policy statement, so if the Government do come back and say, “Yes, it’s got to be a negative instrument”, we would of course accept it if that was legally what we had to accept—but I serve notice now that we will not accept 40-day scrutiny by this House of the national procurement policy statement.
Lord Thomas of Cwmgiedd (CB)
My Lords, I too welcome the Bill but I want to make five short points. First, as a victim of bad government procurement and as someone who has had to look at the law quite carefully, I cannot but emphasise the importance of the remarks of the noble Lord, Lord Maude, that in considering the Bill what matters, as in most legislation, is the delivery and the three stages he described. I shall not weary noble Lords with more stories about it but, believe me, my whole experience is that that is far more important than the law.
Secondly, however, we must get the law right. Therefore, I warmly welcome what was suggested by the noble Baroness, Lady Hayman of Ullock: the Bill should contain principles. It is plain that this was thought of. One can tell from the table of contents and the headings that someone forgot to take the word “principles” out because there are no principles. There is a principle, which I think is self-evident, that you have to procure in accordance with the Bill. There is no point in having a clause to say that, so the draftsman may have had second thoughts. A good lawyer ought to have second, third and fourth thoughts. It would be very helpful to know what the considerations are so that the House can reach a judgment.
The reason I think there should be principles takes me to my third point. It is plain that there is a relationship between procurement and subsidy. In the discussions on the Subsidy Control Bill, it was accepted that procurement could be used to subsidise and encourage local performance. I cannot find any reference to subsidies in this Bill and it therefore seems very important to put into a principle the relationship between control of subsidies and its use to develop the local economies and procurement. It has to be grappled with and this should not be left to the courts.
Fourthly, in looking at this piece of legislation, which I hope simplifies matters, it is a great misfortune that we will end up with a regime in the United Kingdom —forgetting the Northern Ireland protocol for the moment—that applies to three of the nations but not the fourth. I really hope that the way the Government have been able to bring in Wales and Northern Ireland will influence Scotland. It is surely to its advantage that there is a single procurement regime. It must be to its economic advantage, although I can see why there are arguments that some may think it not to its political advantage.
My fifth point is about the importance of remedies. The noble Lord, Lord Mendelsohn, was quite right in the point to which he drew attention. I am afraid I do not agree with the noble Lord, Lord Whitty, about the Subsidy Control Act. That has the CMA in it but the CMA does not have many teeth and depends on private enforcement. This Bill is wholly dependent on private enforcement. I do not want to develop this point now, but when one looks at Part 9 there are terrible problems, particularly for smaller companies. If you have a dispute about the contract for the west coast line, one can see that money may not be too great an objection, but when you have a much smaller one—and much of this is concerned with smaller sums of money and encouraging SMEs—you must have an enforcement process that is economic.
One resort might be that suggested by the noble Lord, Lord Mendelsohn, which is recourse to an outside body other than the courts. But I very much urge the Minister to engage with the Civil Justice Council to see if a process can be devised that deals with the real problems of procurement. You want to use the power to deal with a difficult contract where the process has been in breach of the regulations by stopping that going forward, but you do not want to end up in the situation where you allow that contract to go forward, without having looked at an alternative available remedy of damages, and the local authority or the Government end up paying all over again.
It may be in the public interest in this case for there to be something short and sharp that comes to a decisive conclusion, but remedies are a key issue which we should not ignore. It requires creatives thinking. We ought not to rely on the traditional way, as the courts have done. It is very good for lawyers—they make a lot of money and will have an even better year next year—but we must do something to deal with the unique problem of ensuring that the people who breach these regulations do not go forward with a contract and that the taxpayer does not end up paying two people. Those are my five short points.
Lord Hunt of Kings Heath (Lab)
My Lords, it is a great pleasure to follow the noble and learned Lord, who showed how much more interesting a debate on a procurement Bill can be than we thought when we started out on this journey. I declare an interest as president of GS1 and of the Health Care Supply Association, and I pay tribute to NHS procurement officials for the fantastic work that they did during Covid.
Like most other noble Lords,I support the intent of the Bill to make public procurement quicker, simpler and more transparent. However, there is a balance to be struck. I take on board the comments of the noble Lord, Lord Maude, that outcome is more important than process, particularly in relation to the public sector’s poor record in supporting innovation and the perennial UK problem that we are a country great at innovation but very slow to adopt it, particularly in the public sector.
We must, however, have some process and tracking of what happens. We saw with Covid what happens when you do not have it. The PAC’s report readily acknowledged the challenge faced by the Government, but the failure to be transparent about decisions, publish contracts in a timely manner and maintain proper records left them open to accusations of cronyism and waste. Somehow, the Minister, through the passage of this Bill, must convince us that in moving to a quicker and more efficient system, proper process will continue while also allowing SMEs and innovative companies to take part and win tenders. The state of our economy suggests that unless we invest in innovation, we will be in very challenging times in the years ahead.
On defence, the noble Baroness, Lady Smith, made very trenchant points. Reading the PAC’s report this month on the MoD’s worrying inability to control costs was sobering. The report said that the MoD’s reliance on billions of pounds of future cost reductions to keep within its budget looks like a lot of trouble to come. It currently has no plans to support how these might be delivered and rising inflation will make pressure on affordability worse. The Government, however, are saying that they have done sufficient to ensure that our Armed Forces are in a state of preparedness for many of the challenges to come. That does not add up. The MoD has rejected the PAC’s general point, but I know who I would trust more in relation to defence contracts.
I principally wanted to mention the NHS, which the Minister kindly mentioned in his opening speech. We have just had the passage of what is now the Health and Care Act. There was quite a debate about procurement because that Act takes out the enforced tendering of clinical services from the Health and Social Care Act 2012. There is concern that in the Act there is now an all-catching clause which effectively gives the Secretary of State power, through regulations, to change the whole NHS procurement process. This was in anticipation of this Bill.
The noble Lord was very clear in his opening speech that this Bill is not going to be used to turn the clock back and allow for the tendering out of clinical services where it is not required to do so. It would be good to get his confirmation, and also for him to spell out what Clause 108 of this Bill means, which gives the power to Ministers, through regulations, to disapply provisions of this Bill in relation to procurement by the NHS in England. I hope that the two things go together, but it would be good to get some clarification.
I support what the noble Lord, Lord Alton, said very strongly. The noble Lord, Lord Stevens of Birmingham, has also mentioned this. In the Health and Care Act, there was an insertion of Section 81, which provides that:
“The Secretary of State must … make such provision … with a view to eradicating the use in the health service in England of goods or services that are tainted by slavery and human trafficking.”
Will this be replicated in this Bill? Does the Minister further accept—this was raised in the Answer on Xinjiang today—that this Bill should be amended to include at least a discretionary exclusion ground for companies closely associated with serious human rights abuses? I am sure there will be a number of amendments in this field, and past history would suggest that the Government would be advised to accept them, or at least accept the principle.
My final point, which a number of noble Lords have also made, is on the post-award contract management that the noble Lord, Lord Maude, talked about. The monitoring of public procurement contracts has been very poor. Many PFI deals were poorly procured. Many recent deals involving the use of private providers through centrally awarded contracts or frameworks have not proven to be good value for money. We seem to have in the public sector a bureaucratic edifice where huge energy goes into the agreement of a contract, but once that is done, people move on to looking at a new contract. Monitoring and managing the contract is simply not done effectively. In our meeting with the noble Lord, Lord True, a week ago, which was very helpful, he talked about his department, or the Government, engaging in development and training support programmes for procurement professionals, with a particular focus on contract management. That is very welcome. I ask the noble Lord, Lord True, whether that will be extended throughout the public sector. Although we are much concerned here with central government contracts, the principles must be enunciated throughout the public sector. In terms of value for money and for our future confidence in public procurement, it is essential that we up our game in relation to contract management.
Lord Berkeley (Lab)
My Lords, it gives me great pleasure to follow my noble friend. I agree with his views on the public procurement of particularly large projects in this country. As the noble Lord, Lord Maude, also mentioned, the costs of preparing bids are much higher here than in many other European countries, and I believe that the costs relating to HS2 involved spending £15 billion on consultants. Why do we need so much money spent on consultants? Is it because the commissioning authority is frightened of making decisions itself, or is it for some other reason? It is pretty frightening. The costs of HS2 are very high—probably double what the Government are saying at the moment—and ditto with the Ajax tanks, which the noble Baroness, Lady Smith, mentioned, and, of course, Hinkley Point, which is not strictly a government procurement project but which we will all end up paying for in the end. And dear old Crossrail was opened yesterday—a wonderful project, but it is £5 billion over budget and three years late.
One thing that links many of these projects is that they usually fall down on the IT towards the end of the project. In other words, I wonder whether the people who commission these projects—whether in the private or public sector—have realised that we need to keep up with the latest IT developments rather than keeping on making sure that the civil engineering is on programme. I am a civil engineer, and it is lovely to talk about these things, but actually it is the IT which causes many problems and I think we have to learn some lessons from that.
One further point before I get on to what I really want to talk about, which is local authority procurement, is the issue of Scotland not being part of this Bill at the moment. I would like to ask the Minister: if the new HS2 trains that are going to run to Glasgow and Edinburgh are procured in England, will they be allowed to travel into Scotland, or will there be some need for financial or technical approval? It would be very stupid if there was any cost or anything else—and the vice versa would equally apply—but I think it is something we need to think about when we start to scrutinise the Bill. I hope that the Bill will improve things. I support this Bill, but, as other noble Lords have said, there is a lot of work to be done to make it fit for purpose.
I have one other question for the Minister. It may take a year or two before the Bill comes into effect, so what is the current process and rules for local authority procurement? Are we still carrying on with the European Union procurement rules, or is it a sort of free-for-all? It would be interesting to know what the present situation is.
I want to speak briefly about local authority procurement, on which the noble Lord, Lord Stevens, also made some interesting comments. I worry that the system, even as it is set out in the Bill, leaves too much control with Ministers, with very little oversight or enforcement. I think that is quite worrying. As many noble Lords have said, including my noble friend Lady Hayman and the noble Lord, Lord Fox, key principles are wonderful, but we need to get into more detail. We need clear objectives, and I am pleased that the noble Lord, Lord True, mentioned value for money, value for the customer and value for the taxpayer, and competition. But many noble Lords have mentioned— and I think these are missing in its strongest part—transparency of process, transparency of results, which includes the Freedom of Information Act, and some kind of independent scrutiny or overview, and possibly an appeals body. I would be interested also to see what exemptions are being proposed, because it is very easy for exemptions to be used as a quick shortcut to a process which may be quite difficult at the end of the day.
On local authority procurement, I have an example from the Isles of Scilly, which noble Lords may have heard me speak about before, and this week my Select Committee went to Birmingham and Coventry to look at transport—but there are many other similar examples. These things start off with the government bidding process. Local authorities are, as we all know, very short of money, and tendering costs money and time, which they do not have much of. The Government, in their localism programme for town centre improvements or whatever, offer a competition, which I am sure is welcomed by everybody, but do not actually allow the councils or the other responding authorities time to prepare a proper bid. Nor do they allow them to have the funding to do that, when you look at the rules and the amount of information that is required to produce these bids.
What it therefore needs is for the first bid to be for funding to get enough money to prepare a proper bid for the next phase. And so it goes on. We found this on several transport projects we talked about in Birmingham and the West Midlands generally. I have also found it in watching from afar—or not so far—the attempt by the local authority in the Isles of Scilly to get a new ferry through the localism bid, which would involve working with the monopoly supplier of services, for £48 million, to be given a new ferry with no competition. I can understand why it is doing it, because it does not have the money to prepare the bid.
We therefore have to be very careful that this legislation does not allow local authorities to cut corners for political or cost reasons because they cannot afford to do anything else. I could go into great detail on this but I am not going to. It is not just the Isles of Scilly, Birmingham or Coventry transport. If one reads some of the stories that come out quite regularly in Private Eye, one sees an awful lot of examples of local authorities that cut corners—and have probably been caught doing it, otherwise it would not be published—because of political expediency, because they could not afford to do anything else or because it was said to be urgent. We have to be very careful when we scrutinise the Bill that we recognise that local authorities do not have much money and that it is very tempting to cut corners politically, because it might be useful for the next election or whatever.
I hope we can allow a bit more devolution of the funding for, say, transport in the West Midlands so that local authorities have an incentive to do it properly, with oversight scrutiny but not total nitpicking of the kind that goes on at the moment. I repeat what I said before: at the moment, the Treasury requires Network Rail to apply to it for approval to paint the railings at a station. That is micromanagement just gone darn stupid.
My last comment is on the role of government in the Bill. It is as the “contracting authority”, what is called the “appropriate authority”, the compiler of debarment lists—I am sure all noble Lords know what that means—and a sort of appeal body to the Minister of the Crown in Clause 61. As the noble and learned Lord, Lord Thomas, said, there need to be some remedies that do not involve central government. I am not sure what that is—I am no lawyer—but it really is important. All these things coming together under government, with the local authorities also being subject to their political pressure, means that we could end up with a disaster. We do not want that. There is enormous potential in the Bill, but there will be quite a lot of discussion in Committee, and probably further on, about some changes that will need to be made to make sure it really works properly.
Lord Strasburger (LD) [V]
My Lords, I will focus my remarks on what went so badly wrong with the procurement of PPE and how it should inform our approach to this Bill. I will also take this opportunity to share with the House one particular PPE contract that ended in suspicious circumstances that should concern us all.
The first problem with PPE procurement was that the UK started the pandemic from a bad place. Much of our stockpile of PPE items had been neglected and allowed to fall out of date, making it unusable due to the risk that it would fail to protect its users. The stockpile was created in 2009 at a cost of £500 million, following an outbreak of swine flu. Sadly, during the eight months prior to Covid being declared a health emergency of international concern, 200 million items in our stockpile went out of date, including 80% of the respirators, and the stockpile included no gowns, visors or testing swabs. So the flying start we should have had in tackling the pandemic was lost.
The next problem was that the Government were slow to respond to this crisis. They were advised several times to build up PPE stocks, but by the time they eventually started looking for PPE, it was well and truly a seller’s market and prices had gone through the roof.
These procurement failures intensified the scale of the challenge our country faced to protect healthcare staff and other key workers. The Government scrambled to make up for lost time, and this involved abandoning all the measures designed to prevent corruption in procurement and ensure that taxpayers get value for money. Not only was competitive tendering dropped; until May 2020, the eight-point due diligence process was also suspended.
Worse still, with its secretive decision to set up the VIP lane for companies recommended by politicians and officials, the Government exposed the process to potential cronyism and corruption on a massive scale. Firms in the VIP lane had a 10 times better chance of winning a contract, but they had no special qualities that justified that priority—other than their political connections. In fact, the actual performance of the VIP lane contractors appears to be worse than that of those who had no priority. The Department of Health and Social Care estimates that overall, 53% of VIP lane suppliers delivered PPE not fit for front-line services, compared with 11% of all suppliers.
Billions of pounds-worth of orders were funnelled into the VIP lane companies run by friends and associates of Conservative politicians. For example, the noble Lord, Lord Feldman of Elstree, recommended four successful companies; the then Health Secretary, Matt Hancock, recommended four as well, including his local pub landlord; while Michael Gove referred Meller Designs, a firm run by David Meller, who has donated £60,000 to the Conservative Party, including funding for Mr Gove’s leadership bid.
I will not bore the House with the full list of generous politicians, but many successful bidders for PPE contracts were set up on the spur of the moment and had flimsy balance sheets. Many had no prior experience of supplying PPE, or had a controversial history, including tax evasion, fraud and human rights abuses. Trade Markets Direct, a dormant company run by a former bookmaker, was awarded a £3.8 million contract. Michael Saiger, a Miami-based jewellery designer, was awarded £250 million of PPE business and £108 million went to a pest control company, again with no experience of PPE.
Other unlikely companies to benefit from government largesse were a hotel carpeting business, a naval design firm, a luxury packaging company and a month-old firm owned by offshore finance specialists. Transparency International estimates that 20% of the contracts awarded between February and November 2020 contained one or more flags for possible corruption. Some £255 million- worth of contracts went to companies that did not even exist 60 days before they won the business. Meanwhile, many well-established companies with a long history of supplying PPE, but without the seemingly essential ingredient of political clout, could not get a look in. Some offered products several times but never heard back from the Government, presumably because resources had been diverted to the VIP lane.
How has all this frenetic activity turned out for taxpayers? The answer, I am afraid, is not very well. The Department of Health’s annual report for 2020-21 reveals that it spent £12.1 billion on emergency PPE and, of that, £8.7 billion—70%—has been written off because the price has fallen, the PPE is unsuitable or it is past its expiry date. This is waste on a monumental scale, brought about by the Government’s failure to maintain adequate stocks before the pandemic and their tardiness in getting into the market, despite being advised to do so before prices took off.
These serious blunders were compounded by the chaotic way procurement was managed. As Gareth Davies, head of the National Audit Office, puts it, the department’s procurement was vulnerable to fraud due to large numbers of contracts being awarded to new suppliers, many of which came through the controversial VIP lane. He also points to a lack of checks on the quality of goods received and poor inventory management. If you add the wasted £8.7 billion to the £4.3 billion lost in fraudulent Covid grants, it comes to £1 billion more than the Government expect to raise from the increase in national insurance. To put it another way, if PPE procurement and Covid grants had been properly managed, we could have avoided wasting £13 billion of taxpayers’ money—and avoided the increase in national insurance at a time when people are struggling with the cost of living crisis.
This huge scandal has passed most of our press by. With a couple of honourable exceptions, the mainstream media has been shamefully silent. The only thorough report I have seen appeared in the New York Times in December 2020, and none of our papers picked it up, with the exception of the Guardian and Byline Times. Most papers have maintained a strict omerta.
Who has carried the can for this massive scandal? Which Ministers or officials have fallen on their swords or been fired? As we all know, nobody has taken responsibility; nobody has even apologised. As is always the way with this Government, seemingly no-one is to blame—which leaves us exposed to similarly poor performance when the next crisis arrives. It also means that the relatives and friends of the NHS workers and the staff and residents of care homes who perished through lack of PPE will get no explanation or apology.
As I promised at the start, I shall now tell the fascinating and deeply worrying story of Adrian Buckley, a gentleman from Yorkshire who has been trading with China for 32 years and has a full-time sourcing manager based in China on his payroll, not merely an agent. I am recounting his experiences in the summer of 2020 as an illustration of what can go wrong when competitive tendering is abandoned and individual Ministers and officials are given too much untrammelled discretion to select contractors.
In May 2020, Mr Buckley’s company, Buckley Healthcare Ltd, fulfilled an order for 1 million surgical gowns for a hospital trust in Yorkshire. The procurement director was so satisfied that he recommended Mr Buckley’s company to the NHS procurement officer, who informed Mr Buckley that he was putting his company forward to the Cabinet Office to supply 24 million gowns nationally. Mr Buckley and his sourcing manager scoured China for a factory with the capacity and skills to handle such a large order. They also thoroughly checked that the factory had access to the necessary raw materials and that the factory and its staff could meet the required specification for the products. After some time, they found a factory that met all the requirements, which was no mean feat in the frenzied market that existed at that time.
On 4 June 2020, Mr Buckley sent full details and prices to the NHS procurement officer, who forwarded them to the Cabinet Office. After a two-week silence, the details were re-sent to the office of the noble Lord, Lord Deighton, who was managing PPE procurement for the Government from the Cabinet Office. The email included the full specification and photos and videos from inside the factory.
On 25 June, three days after the company had been told that its proposal had been sent for approval, it was informed that the contract had been placed elsewhere. The company was surprised and disappointed, but assumed that it had been outbid and accepted the outcome.
A few days later, however, the company received an agitated phone call from the owner of the Chinese factory saying that he had been contacted by an agent for a company of which he had never heard concerning an order identical to the one he had planned with Mr Buckley. From the naive questions being asked, it was clear that this new company had no experience of buying PPE. Now suspicious that his company’s extensive investigation work and detailed proposal had been passed by the Government to another company—a debutant in the market—Mr Buckley emailed the noble Lord, Lord Deighton, asking what was going on. He received a reply from a civil servant offering first one and then another phoney reason for rejecting the Buckley bid, both of which were quickly dispensed with.
On 12 September, the contract with the other company was published, 30 days later than it should have been. It revealed that the contract had been awarded to a company called Inivos, which appears to have no previous experience of PPE. But the most startling revelation in the contract details was that the price paid to Inivos was £12 million higher than Mr Buckley’s proposal. So, there is every reason to suspect that the details of Mr Buckley’s supply arrangements were passed to Inivos, and that taxpayers have been robbed of £12 million in the process.
There is a full audit trail of all communications between the Cabinet Office and Mr Buckley’s company to support his version of events. I should say, by the way, that Mr Buckley and I have totally different political outlooks. He was a strong advocate of Brexit—although his serious problems with the new Brexit bureaucracy are causing him to think again—but he and I share a strong distaste for corruption and dishonesty. Many years ago, he donated £50,000 to the Conservative Party, and we both wonder whether he would have suffered the same fate from the Cabinet Office if he had kept up his payments to the Tories.
Will the Minister initiate an independent and forensic inquiry into whether a Minister or official in the Cabinet Office behaved unethically and passed to Inivos Mr Buckley’s gold-dust information on where and how to acquire the goods? Where is the extra £12 million? Did it remain with Inivos as super-profit, or was it shared with whoever disclosed the details of Mr Buckley’s supply arrangement with the Chinese factory—if that in fact happened? We also need to audit the other PPE contracts to find any other instances of similar behaviour.
Returning to the Bill, it lacks the necessary provisions to guarantee the integrity of the Government’s procurement process, as identified by the good people at the UK Anti-Corruption Coalition. Clauses 40 and 42 appear to give the Government the opportunity to discard the checks and rules, as they did for PPE procurement with such disastrous consequences. Transparency seems to have mysteriously slipped backwards since the Green Paper. These shortfalls, and others, must be rectified as the Bill passes through this House so that we never see a repeat of the cronyism and possible corruption that happened with the PPE contracts.
Lord Wigley (PC)
My Lords, it is a pleasure to follow the noble Lord, Lord Strasburger, and to identify totally with the important points he raised. I hope very much that his questions—on supplies at the time of the Covid outbreak and on whether this Bill will in fact be able to tighten up on the sort of happenings during that period that we just heard most alarmingly about—have been heard by the Government. I hope his speech does not get lost in the sands of time and that there will be answers to those questions.
Touching on the comments the noble Lord, Lord Strasburger, made a moment ago, there is the question of the capacity we have within these islands to manufacture these things ourselves. That feeds through to the important speech made by my noble friend Lord Alton with regard to the policies of the Chinese regime towards its own citizens and the fact that we depend so much on Chinese manufacturing capacity to meet our needs. We have an overdependence on it, which surely leaves us immensely vulnerable to China in the general context as well as in the context we heard about from the noble Lord, Lord Strasburger, a moment ago.
I also identify with the points made by the noble Baroness, Lady Brinton, on the disability issues, and the important points made by my friend, the noble Lord, Lord Aberdare, on the needs of small businesses, particularly those in the construction sector.
During the last Session, I was very much involved in debating the subsidy Bill, which the noble and learned Lord, Lord Thomas, implied is a first cousin of the Bill that we have today. At that time, I described the way in which successive Welsh Governments had succeeded in using public sector procurement as a tool to stimulate the Welsh economy, within the framework of the European single market. So successful was that policy that, over two decades, the proportion of goods and services secured by the Welsh Government in Wales increased from 35% to 55%. This meant that we were securing work for employees, more trade for businesses in Wales and, often, far lower product miles, which helps our carbon footprint.
This is surely all to the good, provided that it is done in a manner that does not deliver inferior goods or services, does not significantly increase the price of procurement, does not lead to appreciable market distortion and does not prevent companies from outside Wales setting up in Wales to tender for such work. It is worth noting that, after this policy had reached a stable level, it contributed to a significant fall in unemployment levels in Wales, which, before the impact of Covid, had dropped to a level below the UK average for the first time in three generations. What this Welsh policy did not achieve was to raise significantly the average GDP per head in Wales; that is another issue that might be worthy of debate on another day. These factors are relevant background to our consideration of the Bill.
I welcome the fact that the Government have acknowledged, in Clause 13, that Welsh Ministers may publish their own strategic priorities in relation to procurement. In relation to the fact that Scotland is not in this agreement, I say to the noble and learned Lord, Lord Thomas of Cwmgiedd, that uniformity of regulation across the nations is valid only if circumstances and aspiration are similar in each. We will need a mechanism that allows for flexibility between the nations of these islands as well as the advantages that come from having markets that are as open as they can be.
I understand that the wording of Clause 13 has been agreed with the Welsh Government, as the Minister suggested. Assuming that to be the case, it is a much-needed positive step forward in the relationship between Westminster and Cardiff Bay—I welcome this. However, it is far from clear how the application of a different approach to procurement in Wales will be rolled out in practice within this new regime. The Bill is silent on that key question, perhaps understandably, because I believe that discussions are ongoing on that matter.
If procurement policy in Wales, as underpinned in law, is identical to the provisions of the Bill—in which case the provisions of Clause 13 are purely declaratory—in practice, the provisions of the Bill will apply in their entirety to Wales, whether or not they chime in with the procurement policy of the Welsh Government. If that is the case, Clause 13 will be little more than window dressing. Alternatively—and I believe that this is more likely—Clause 13 is a vehicle whereby different procurement laws may be implemented in Wales, and the Welsh Government have been planning to bring forward their own Bill within their devolved legislative competence. I certainly hope that that is the case. I assume that the Senedd has devolved competence in all the relevant areas within the Bill. But, if it is not so, some legislative mechanism should be built into the Bill to give the Senedd the power to fine-tune legislation in these matters. Equally, there must be a lever whereby the provisions of parts of the Bill are disapplied in Wales, if circumstances dictate that. This can be agreed by the UK and Welsh Governments.
The Minister touched on these matters when opening the debate, and I hope that he can further clarify in the wind-up. It is, after all, totally inappropriate that statements are written into the UK statute book which could transpire to be meaningless. The Welsh Government have essentially used their procurement policy, working within the European framework which applied to these matters, to support disadvantaged communities by helping to maximise job opportunities in Wales. The EU allowed us to do this. It appears, however, depending on the interpretation of Clause 13, that in some circumstances the UK Government could in practice debar the Welsh Government from doing so. This goes to the heart of the approach that we take to disadvantaged people and the duty of government to safeguard them.
Against that background, it is revealing to consider the wording used in Clause 32 of this Bill, which, rightly, makes provision for contracts to support disadvantaged individuals. However, it does nothing to provide for disadvantaged communities, which is essentially the policy followed by the Welsh Government and which was endorsed by the EU. It is here that we see the reality of Brexit staring us in the face. If that is acknowledged by the UK Government, and if they wish to address the adverse implications for Wales, they should either give real teeth to Clause 13 and allow Wales to develop its own policy, underpinned in law, or, if they maintain that this distorts the UK single market, they should amend the Bill to ensure that public procurement policy throughout the UK can help address disadvantaged communities wherever they may be.
I know that the Welsh Government have greater ambitions in this field which they wish to progress. We shall look forward, in due course, to a Welsh legislative measure being introduced in the Senedd to facilitate this. One such ambition may be to help start-ups in Wales and help micro-companies to grow. Enabling them to bid for public sector contracts is one way of facilitating that growth. For a small business, the bureaucracy of bidding for such contracts can be daunting, and I know that a report on this will be published next week by the Coalition for a Digital Economy, or Coadec. I hope that the UK and Welsh Governments will pay attention to its analysis and representations. In the meantime, if the Welsh Government wanted to change their procurement rules in order to assist such small companies, can the Government give an assurance that they will be free to do so, either through Clause 13, suitably stiffened up to be fit for purpose, or by other legislative means?
Clause 11 of the Bill spells out what the Government see as their four procurement objectives: value for money, public benefit, transparent procurement policies, and acting with integrity. No one would argue with these four, though one might quibble about the order in which they are placed. To my mind, public benefit and value for money should be regarded as equally significant and worthy of equal weight when assessed for any contract. In other words, if government pays a penny more for a widget but by doing so helps secure a dozen jobs in an area of high unemployment, then it is a compromise which earns its place.
Perhaps I may raise a question in relation to the definition of “a devolved Welsh authority”, which arises in several places in the Bill. It is a term which constrains the powers exercised by the Welsh Ministers, as specified in Clause 99. That defines devolved Welsh authorities as ones falling into the definition of Section 157A of the Government of Wales Act 2006. That section relates to powers exercisable only in relation to Wales. Where does that leave Welsh Water, a not-for-profit utility some of whose responsibilities straddle the Wales- England border?
There are other aspects of this Bill which we undoubtedly will need to examine in Committee. Those include the need for transparency and for the public sector to appreciate the challenges facing small businesses when they try to secure public sector tenders. There is, in particular, a need for the public, and especially businesses which find the challenges of tendering successfully to be daunting, to be assured that the allocation of public sector contracts is totally fair and above board and that there is no room for the “old pals act” to secure business for companies that happen to be well connected.
I think that I have flagged up enough issues to which we should apply ourselves in Committee. I look forward to following these up at that time, and to hearing tonight the Minister’s response to the points which I have raised.
Lord Moylan (Con)
My Lords, it is a privilege to follow the noble Lord. With 28 years of experience in local government, and eight years on the board of Transport for London, I have long had a very strong interest in procurement. I am delighted that so many noble Lords have an equally strong interest in procurement. However, it is somewhat dispiriting that so many Members have strayed off into using this Bill as yet another opportunity to roll out a number of anti-capitalist themes and proposals which will no doubt reappear in Committee and then be duly taken out by a sensible Government when it returns to another place.
My question is rather more radical than those raised by most noble Lords so far: whether we actually need this Bill at all. Of course, we need to scrap the EU regulations, but do we need to replace them at all? In large parts of Europe—I say this without specifying any particular parts—there was a history of municipal corruption in the award of contracts in a non-transparent and corrupt way, and it was right that we should tackle that as a single European Community while we were a member of it. It was also the case that the European Union saw these regulations as a means of forcing the development of a single market. As we are no longer a member of the single market, that consideration is not relevant to us.
When it comes to municipal corruption, I will be so bold as to say that, in this country, we have been remarkably free of it. In my lifetime, there have been a few very significant cases—but only very, very few. We are very fortunate; we have an enviable record of a lack of corruption in public bodies. I was expecting at this point to be jeered at in the wake of the remarks by the noble Lord, Lord Strasburger. Yet, even if the allegations made and hinted at by the noble Lord were all vindicated, the remedy for them would lie in the criminal law and not in this Bill. This is because we have a full panoply of criminal law dealing with municipal and public body corruption, against the taking of bribes and against misconduct in public office. This is where we should look for remedies to the sort of corruption with which these regulations were originally intended to deal, rather than this Bill, which in my view is almost irrelevant. Indeed, the weakness of the Bill in relation to remedies has already been pointed out by other noble Lords, particularly the noble and learned Lord, Lord Thomas of Cwmgiedd.
I ask myself—and my noble friend the Minister can explain this later—why we do not simply scrap the existing regulations, rely on the criminal law as we used to before we joined the European Union, and then perhaps an esteemed body, such as the Chartered Institute of Public Finance and Accountancy, could issue a good practice note on how local authorities should comply with our international obligations. Is anything more than that actually needed?
The bureaucratisation of honesty—which is what we are actually discussing here—has led, over recent years, to the creation of what I call a high priesthood of procurement. By that, I mean people who are dedicated to the process—because this is a process Bill—of honesty rather than to its substance. Having got the grip of the process of procurement, they often refuse to let it go, even though everyone can see—even themselves quite often—that the procurement process is leading to a disaster. I hope that this Bill would at least be drafted in such a way as to avoid the pitfalls of the current system. I know that there have been some war stories, but I will take the opportunity to illustrate what I am saying with some of my own.
Very fortunately for me, back in the 1990s a very wise council officer said to me, “Do you know, I can get any result I want out of a procurement process? The secret, Councillor Moylan, is in how you set up the conditions by which the final decision will be made.” The whole system rests on what conditions you set up. I will give just a few examples. I know of one public procurement project, for services, which allocated 40% of the points to what was called “project compatibility”. When I said, “What does that mean?”, they said, “It means that we can choose whoever it is we want to work with, because they will be compatible with us.”
On another occasion, I was brought in to sit on an architectural panel; I was not involved early on, so I did not have a chance to shape the conditions. It was an architectural procurement—not a construction procurement—for a major public building. Having interviewed the various architects and seen their proposals, when we decided which one we wanted we were told by local government officers, who had brought their own lawyers to control us, that we could not have it because it did not meet the criteria. We asked what criteria it was not meeting, and the answer was financial stability—35% of the points had been given, without anyone being consulted, to the financial stability. Financial stability is important in some contracts, but if you choose a one-man architecture practice to build something for you and he goes bankrupt, you just rehire him; there is no consideration of financial stability when it comes to procuring services such as that. But we ended up with the architect we did not want because we had left it all too late.
I will now come to the question of the new, iconic bus shelter for London. Noble Lords will notice that there is no such thing as a new, iconic bus shelter for London. I engaged with TfL on this before I joined the board, and I said, “We should have a new, iconic bus shelter for London, because they are dreadful—absolutely appalling.” Peter Hendy, who was then commissioner of Transport for London, was good enough to agree that something should be done. I was representing London Councils at the time, so we set up jointly a process in which we invited architects to submit proposals for this wonderful thing. TfL officers ran it as a procurement process.
A large number of wonderful designs were put to us—20 appeared—some of which were so extravagant that they could never have been used. A design panel was put in place to make the architectural judgments, only for us to discover at the end of the presentations that we were not allowed to take design into account because the TfL officers had used the branch of the procurement process that you would use if you were buying a piece of air-conditioning plant. So it was to be judged entirely on the specification of whether it kept the rain out and things such as that. The entire purpose of the exercise was defeated through a misapplication of the procurement process, and we all agreed, exhausted by that point, that basically we would abandon it and come back to it. But we never did, so London still has a wide variability and a high level of ugliness in its bus shelters.
These revelations may shock noble Lords—I do not know—but they would not have shocked anybody engaged in public procurement in most other European Union countries, because they are perfectly aware that most European Union legislation is written with a high degree of rigidity as far as the words are concerned, and a high degree of flexibility as far as the application is concerned. Reference was made earlier to our gold-plating things. It is not that we gold-plate them; it is that we take them seriously in a way that other countries do not.
I say to my noble friend that my worry is simply this. We are quite rightly getting rid of a set of regulations that do not work for us and were designed for certain stances that do not apply to us, but instead of taking the radical approach of asking what the point of them was in the first place and whether we need them, we are in great danger of replicating them but with an English touch—sorry, I should not say English, because I am speaking just after the noble Lord, Lord Wigley, and I should have said earlier how delighted we all are that Wales has joined in this great corporate endeavour. My worry is that we simply put a local—a national—touch on them, but we end up with the same problems. We will still be doing obeisance to the high priesthood of procurement, and we will find that we are no further forward and will certainly not be dealing with allegations of corruption because, as I said, those will effectively still be dealt with under the criminal law.
Lord Davies of Brixton (Lab)
My Lords, it has been an interesting, wide-ranging debate. I will base the bulk of my speech on the Government’s Green Paper, Transforming Public Procurement, published in December 2020. My interest is in what has been described as contract compliance by public authorities. It must be understood that public authorities, those covered by this legislation, have a range of objectives that come into play when they procure goods and services. Obtaining the goods or services at the lowest possible price is only one of a range of objectives they could follow.
Another objective—an overriding objective, I argue—is to encourage and secure a range of government policies through the contracts into which they enter. The Government’s support for this understanding of the role of procurement was clear in the Green Paper, which said:
“By improving public procurement, the Government can not only save the taxpayer money but drive social, environmental and economic benefits across every region of the country.”
I repeat: government policy is about not just price but achieving
“social, environmental and economic benefits across … the country.”
There is no indication of an order of priority of these different objectives.
The Green Paper states that
“we want to send a clear message that public sector commercial teams do not have to select the lowest price bid, and that in setting the procurement strategy, drafting the contract terms and evaluating tenders they can and should take a broad view of value for money that includes social value … We propose allowing buyers to include criteria that go beyond the subject matter of the contract and encourage suppliers to operate in a way that contributes to economic, social and environmental outcomes on the basis of the ‘most advantageous tender’.”
I anticipate that my noble friend Lord Hendy will not talk about bus shelters but emphasise how this approach can support improvements in employment standards.
Simply as another example, I emphasise how contract compliance, operated as part of procurement policies, can lead to improvements in environmental standards both in the UK and abroad. It is no exaggeration to say that this is a crucial element in what the Government need to do to achieve their goals for arresting climate change. It would be absurd if public authorities did not assess the impact on the climate of their procurement policies.
My concern is therefore that the Government’s position as set out in the Bill is now less clear-cut than it was in the Green Paper. For example, in paragraph 3 of the Explanatory Notes there is the statement of different goals, but paragraph 4 then goes on to talk only about
“value for money for taxpayers.”
We already have a national procurement policy statement, which was issued last year and is a sort of progenitor of the statutory statement we can anticipate later this year, I assume. Again, it sets out the range of objectives but then, in a separate paragraph, identifies and gives precedence to value for money. I am concerned that value for money is in some way seen as the key objective and the others as subsidiary. Do the Government still adhere to the approach set out in the Green Paper? This is obviously a key issue to consider in Committee, so will the Minister make the position clear: does the policy in the Green Paper still apply? In the explanatory statement and the statement of principles—the policy statement—it appears that at one stage there was a paragraph setting out the range of objectives, but then, unfortunately, someone read it and said, “This won’t do; we need an additional statement to emphasise money.” I really want clarity on that.
What role will there be within the national procurement policy statement for local policy objectives, even local objectives not fully in line with national objectives? The useful report, as ever, from the Library tells us that the Cabinet Office set out that the intention of the NPPS was not to impose the Government’s political priorities on bodies normally outside of their control, but rather to influence them. As you read through the paragraph however, it is clear that it is expecting its own democratically elected separate bodies to adopt the Government’s core principles. Will the Government make it clear that local authorities, which have their own democratic mandate, will not be dragooned by central government?
Finally, people may be surprised to know, a point about pensions. There is nothing in the Bill directly relating to pension schemes, but some schemes will end up being classed as contracting authorities and will be required to undertake procurement in the same way as government departments and local authorities. The Government say that attempts to introduce flexibility to simplify public procurement processes could impact on this sort of organisation. Great stress has been placed on the importance of simplicity in the process. I am not sure that simplicity is a good objective on its own. Clarity is an important objective, but simplicity can lead to confusion and difficulties for those organisations not regularly working through this process.
I am not expecting the Minister to respond on the impact on pension schemes at this stage, but it is an issue to which I think we need to return—smaller organisations caught within the remit. The Bill already includes provision for some exemptions, and we will need to look at whether waivers are required for some specific organisations.
Lord Best (CB)
My Lords, my contribution relates to the Bill’s impact on registered providers of social housing—bodies involved in contract procurement worth billions of pounds each year. The sector is a key contributor to easing the housing crisis by building tens of thousands of new homes, helping to fix the building safety disaster and undertaking day-to-day works to ensure residents in social housing have decent homes, while addressing the climate crisis and seeking to implement an ambitious decarbonisation strategy.
I want to raise one factual question, one issue of principle and one point of practical detail. First, am I right in assuming that the definition of public authorities, which clearly covers the non-profit registered providers of housing—housing associations, in common parlance—also covers the new breed of for-profit registered providers? The latter can obtain government grants and are subject to regulation by the Regulator of Social Housing. Indeed, their profit-making ethos may demand increased regulatory attention, compared with the non-profit providers, but are they classified for the purposes of this Bill as public authorities?
Secondly, my overarching point of principle concerns one way in which the procurement process can determine the success or failure of a contract. I have received excellent briefings from the specialist law firm Trowers & Hamlins. The view of experts in this field is that the use of current relative price models drives a race to the bottom. As many noble Lords have pointed out, a key objective of the Bill is to maximise the public benefit of contracts. But the current process actually leads to a narrow interpretation of best value which translates into awarding the highest marks to the tender with the lowest price and downplays the real benefits of other, more expensive but more advantageous bids. Even if the weighting split between quality and price favours quality, the evaluation model gives preference to the lowest price. In effect, the public sector asks bidders to guess the lowest price to win—not the actual price they think is necessary to perform the contract properly. Such an approach can undermine the relationship between client and contractor. From day one, the contractor must look to cut costs and retrieve its profit margin. This leads to conflict and loss of quality, innovation, investment, apprenticeships and safety.
The UK Construction Playbook already acknowledges the harm caused by such pricing models. This acknowledgement needs to flow into the Procurement Bill and its associated guidance. The Bill already requires scoring methodologies to be described in the tender documents. I suggest that this obligation incorporates provision to prevent these unhelpful “relative price models” from being used by public authorities when procuring contracts that should prioritise safety, quality and value.
My third and final point is about a grey area in the world of public procurement to which my noble friend Lord Aberdare has drawn attention. This relates to the fees charged by procurement consortia that offer a service to bodies such as housing associations that are not confident of their compliance with all the statutory regulations governing procurement. These organisations make sure that all the necessary requirements are met—for which they charge a fee that can add anything from 3% to 10% to the cost of the contract. While larger housing providers such as Places for People—which has explained the position to me—have in-house expertise to perform this role, smaller operators are spending millions of pounds hiring these intermediary bodies.
The practical point I want to leave with the Minister is that these procurement consortia should not be operating—as some are—under a cloak of commercial secrecy. Since taxpayers’ money is involved, surely the Bill should require these transactions to be fully disclosed, proportionate and used solely in the public interest.
In conclusion, are for-profit registered providers covered by the Bill? Can unintended preference for price over social value—currently built into most evaluation models—be prevented through this legislation for those contracts which have quality, safety and value at their core? Will the Minister look at mandatory transparency for the fees charged by procurement consortia to ensure that they are used solely in the public interest?
Baroness Bennett of Manor Castle (GP)
My Lords, it is a great pleasure to follow the noble Lord, Lord Best. As always, he was extremely incisive and clear about our all too often tragically awful housing and general building sector. I very much wish to associate myself with his remarks about transparency. We need to ensure and extend that, and not allow commercial confidentiality to overcome it. This extends far beyond the housing sector.
I declare my position as a vice-president of the Local Government Association. As second-last of the Back-Bench speakers, it is a great challenge not to repeat anything. I will seek not to do that, so I begin by associating myself entirely with the comments of the noble Baronesses, Lady Young of Old Scone and Lady Parminter, who covered many of the issues that your Lordships’ House might expect me, as a Green, to cover. Perhaps it is fortunate that I land at this particular spot on the list, because mine might be described, in chunks at least, as a balancing speech to that of the noble Lord, Lord Moylan.
As we look at the Bill we have to start by looking at the disastrous history of the outsourcing of government services over the past decades. I am not being specifically party-political or looking at only one side of your Lordships’ House here. There was some acknowledgement of this in a government press release on 6 December 2021, which said that the Government would seek to exclude
“companies with a track record of poor delivery, fraud or corruption”
from winning public contracts.
To pick a few of the worst offenders more or less at random—if you want a wider selection, pick up any Private Eye and you will find many more—let us start with Serco, which was fined £22.9 million in a settlement with the Serious Fraud Office over its electronic tagging contract. That was a deal through which it dodged criminal charges. Capita, with a £1.3 billion contract for Army recruitment, missed every target for recruiting both regulars and reserves, in some years by 45% and never in a decade by less than 21%.
Arguably the worst offender of all is G4S, which advertises itself as
“the leading global, integrated security company”,
with more than half a million mostly low-paid employees around the world and a human rights record to rival a failed state. It was profiting from running Birmingham jail until it spectacularly lost control—due, the independent monitoring board suggested, to insufficient staffing levels and quality. One job ad put out by G4S said that
“no specific previous qualifications or experience”
were required to be a prison custody officer. The state’s highly trained officers had to come to the rescue when G4S lost control. It also had the contract for Medway Secure Training Centre, which houses some of the most vulnerable children in the country, as well as for Rainsbrook Secure Training Centre. Both contracts had to be taken off it in consequence of its absolute failure.
So it is very clear that this Bill is to be welcomed. Indeed, we have heard welcomes for the Bill from all around the House—except perhaps from the noble Lord, Lord Moylan. However, it is worth going back to something that lots of people said. In his introduction, the Minister claimed that this was part of the famed and much-celebrated Brexit dividend, although of course, as I will come back to, many other members of the European Union seem to have managed without the continual stream of outsourcing disasters involving multinational companies that we have had under exactly the same set of EU rules.
However, let us start from where we are now and make the Bill as good as possible. For that, we really need some clarity. It is really important to stress that Clause 18, which talks about the “most advantageous tender” in a competitive tendering process, is not actually new. It is already possible under current regulations and guidance. Bringing in something that already exists will not change culture and practice. Many noble Lords have expressed the concern that value for money equals lowest unit cost. There has to be focus on social, environmental and economic value, particularly in our disadvantaged communities.
There has to be an opening up to small and medium-sized enterprises—which the Government say they wish to achieve—and away from these disastrous failed multinationals, which are great at being cash cows and terrible at delivering services. On that point, I associate myself in particular with the comments of the noble Lord, Lord Mendelsohn, and the noble and learned Lord, Lord Thomas of Cwmgiedd, that the idea that a small or medium-sized enterprise, in dealing with a big organisation on a contract that has gone wrong, can use civil remedies and take it to court is clearly utterly impractical. We need something else. We also need to look very closely at the way the 30-day payment regime is expressed in the Bill and whether it is strong enough.
I note the useful briefing from the Local Government Association, which notes, as the Green Party often does, that so many apparently cheap things have been costing us dear in this low-wage economy, such as the lack of investment in training and skills and the environmental damage. However, I think I would acknowledge as a Green that there is something of a philosophical problem here in that this is trying to set some rules from Westminster that apply around England and Wales, at least. Green philosophy shows a way forward here. In this Bill we need to have a foundation of basic standards while allowing freedom for councils and other commissioning bodies to choose higher employment, environmental and service standards. I note the call from the Local Government Association for national funding for the upskilling of council procurement officers. We all know how stretched local government is, so I have a specific question for the Minister. Do the Government intend to provide resources to local councils to ensure that they are able to work with the significant change that the Government outline in the Bill?
I note also in passing a number of useful briefings that have stressed very much the importance of getting away from the multinationals. They are from Social Enterprise UK, Coadec—the Coalition for a Digital Economy—the National Council for Voluntary Organisations and the National Association for Voluntary and Community Action. I note also a very useful briefing from UNISON, which says that what we need are inclusive, high-quality sustainable public services. Those are not just about procurement; they are also, of course, about decent funding.
I should like to make a couple of specific points about the detail. I suggest that Schedules 6 and 7 need to be combined. Schedule 6 has the mandatory exclusion grounds, which include conviction for corporate manslaughter or corporate homicide, fraud, bribery, slavery and human trafficking, organised crime and tax offences. I am glad they are regarded as exclusions. That is a good place to start, but I think we have to look at some of the contracts set over recent years to see that that does not seem to have been applied.
Schedule 7 lists the discretionary exclusion grounds. These include labour market misconduct, environmental misconduct, competition infringements and professional misconduct. Surely these grounds should also exclude bidders. If that means that all the bidders are excluded—perhaps not unlikely, given the tale of woe with which I started—maybe we need to get to a contract specification that caters for a different sort of bidder, such as a social enterprise or indeed a public body constituted for the purpose of delivering that service or goods.
Here, I cycle back to where I started and warn noble Lords that this is where I get to my most controversial bit. I note that all my case studies—perhaps they were not entirely randomly selected—are about the exercise of the coercive power of the state. I would say that whether in prisons, courts, policing or the military, the exercise of those grave responsibilities—the literal power, in the worst cases, over life and death, and certainly the power over individual liberty—should not come from contracts for which the Government hand over responsibility. It should remain in government hands. I will be talking to the Public Bill Office to see whether there is a way to bring that into the Bill.
I have been mostly negative but I always like to be hopeful so I shall circle back to the points raised by the noble Baronesses, Lady Young and Lady Parminter, and indeed the noble Lord, Lord Maude, who said: can we get the heart racing about public procurement? Absolutely I can and I can point to the fact that, back in October 2019, the first Written Questions I put down in your Lordships’ House as a new baby Peer—of a few days, I think—were about public procurement. I asked the Government how much organic and local food was being bought for schools, hospitals and prisons. I think noble Lords who have been round a lot longer than I will probably know the answer I got to each of those Questions. Exactly right—the Government do not know.
I come to a point on which, for the second day in a row, the noble Baroness, Lady Noakes, and I can perhaps agree: impact assessment. Reading all the pages of this long and complex Bill, I cannot see—I am not a legal expert—where we have an impact assessment of what the Bill does in, say, two years’ time. How will it have changed public procurement to improve public health, the economic situation of disadvantaged areas and the state of our environment and natural world by cutting carbon emissions? I leave your Lordships’ House with this question: how will we see the Bill’s impacts?
Lord Hendy (Lab)
My Lords, it is a great pleasure to follow the noble Baroness, Lady Bennett. I will not speak about the bus shelters of the noble Lord, Lord Moylan, or my brother, but I support what was said by my noble friends Lady Hayman and Lady Young, the noble Baronesses, Lady Parminter and Lady Bennett, and others about the use of public procurement as an instrument to advance environmental objectives.
Public procurement is also a very efficient way by which government and public authorities can require high standards from, and provide a good example to, employers. This is an important aspect of fulfilling the second objective in Clause 11(1)—“maximising public benefit”—because, of course, every public contract to which the Bill will apply requires workers to execute it. The United Kingdom has long recognised public procurement as a particularly apt tool to protect and enhance wages and working conditions. The fair wages resolutions of the House of Commons date back to 1891. Their final form was the fair wages resolution of 1946, introduced by Labour and supported by the Conservatives. In his speech in support, Harold Macmillan said of the Government:
“in placing their buying power—and this is the story behind this Resolution—they should see that they do so only with the best employers and that they do not use their contracting power to do down the better employer and to get better prices from the bad employer.”—[Official Report, Commons, 14/10/1946; col. 632.]
At that stage, the fair wages resolution had been elaborated from 1891 so that, in 1946, it had two main components. First, government contractors and subcontractors were required, as a condition of their contracts, to observe those terms and conditions of employment that had been established for the trade or industry in the relevant district by joint negotiating machinery or by arbitration. Secondly, in the absence of such established terms, contractors had to observe terms no less favourable than the general level observed by other employers whose general circumstances in the relevant trade or industry were similar. Questions arising under the resolution were first referred to the Advisory, Conciliation and Arbitration Service for conciliation and, if unsuccessful, to the Central Arbitration Committee for decision. These provisions were generally duplicated by public authorities, public bodies and the nationalised industries. In this way, wages, terms and conditions were driven up and good employers were not undercut by bad employers.
The resolution was rescinded by the Thatcher Government in 1983. To do so, it was first necessary for the United Kingdom to denounce, in 1982, International Labour Organization Convention 94, the Labour Clauses (Public Contracts) Convention 1949, which had adopted much of its text from the fair wages resolution.
Industrial relations have of course changed a great deal since 1983. Then, over 80% of British workers still had terms and conditions of employment set by collective agreements negotiated between employers and trade unions. Most of that coverage was by national agreements in various sectors. So the abolition of the fair wages resolution did not immediately have a great impact, but the policy and legislation of successive Governments have now reduced collective bargaining coverage to something below 25% of the workforce. Indeed, less than 13% of workers in the private sector, where public contracts will be placed, have the benefit of collectively agreed terms and conditions.
Consequently, today, the vast majority of the workforce are at the mercy of the labour market and employer diktat to set the terms and conditions on which they have to work. The national minimum wage is intended to protect the lowest hourly rate, but it cannot, of course, create the “high-wage, high-productivity economy” to which this Government aspire. So, reversion to negotiated terms and conditions, as elsewhere in western Europe, and as advocated by both the ILO and the OECD—see successive employment outlooks from 2017 onwards—and, as proposed by the fair wages Bill now before the New Zealand Parliament, might well redress the falling value of real wages in this country, wages which are already lower in value now than they were 12 years ago, particularly in the lowest three quarters of the wage distribution, with the exception of the very lowest paid.
This Bill presents the opportunity to revert to the 1891 and 1946 precedents as a simple and powerful mechanism to drive up wages, terms and conditions and to prevent bad employers from undercutting good ones. I will propose an amendment to that effect, if the Government are unwilling to move their own, and would be happy to consider with colleagues how these principles might apply to overseas suppliers, which we have heard about this evening. The Bill also provides the opportunity to deal with any number of other workplace abuses. Here is the chance to make public contracts dependent on not behaving as P&O Ferries did, as my noble friend Lord Whitty pointed out. Here is a chance to put an end to the noxious practice of “fire and rehire”, at least by public bodies. If it be thought that public bodies do not resort to such tactics, Richmond upon Thames College is an example of such a body, which has threatened 127 lecturers with that very ploy. Again, if the Government do not move such amendments, and in the absence of an employment Bill, I would wish to do so.
There are a number of other good practices to encourage and bad practices to discourage which this Bill could achieve by way of conditionality for the grant of public contracts, but I will not take time now to go through them. I have just one further point. The public procurement regulations which are to be displaced by the current Bill do not do any of the things that I have mentioned. But one thing that those regulations did do—in Regulation 56(2) of the Public Contracts Regulations 2015, for example—was allow public authority contractors to refuse tenderers which failed to comply with the various environmental, social and labour law provisions listed in Annex X to the EU public contracts directive of 2014. Amongst other things, that annexe lists ILO Convention 87 on the right to organise and ILO Convention 98 on the right to bargain collectively. These provisions have been excised from the current Bill. Schedule 7 does not include such international standards as grounds for discretionary exclusion of tenderers, and the list of international agreements in Schedule 9 does not include any ILO conventions or, indeed, any human rights instruments at all.
The UK was the first country to ratify Conventions 87 and 98, in 1948 and 1949 respectively. They became the most fundamental and are now the most ratified of all the conventions of the ILO. The present Government might harbour the desire to denounce those conventions, as they did 40 years ago with Convention 94, given that the UK has been found to be continuously in breach of them since at least 1989. However, they cannot denounce them because they have recently committed to
“respecting, promoting and effectively implementing the internationally recognised core labour standards, as defined in the fundamental ILO Conventions, which are: … (a) freedom of association and the effective recognition of the right to collective bargaining”—
I will not read the rest, but I am quoting from Article 399 of the EU-UK trade and co-operation agreement of last year. That article also reiterates that the Government
“commits to implementing all the ILO Conventions that the United Kingdom and the Member States have respectively ratified”.
In light of that, I ask the Minister: how can the exclusion in this Bill of references to ILO Conventions 87 and 98 as a potential basis of refusing tenderers be justified?
In conclusion, I wonder if the Minister would be prepared to meet to discuss whether and to what extent labour standards might be made conditions for public contracts.
Lord Wallace of Saltaire (LD)
My Lords, the noble Lord, Lord Maude, remarked that this is a dull subject and implied that we are all rather nerdish to be here. It has been, I think, a constructively nerdish debate. I admit that I have learned quite a lot about the problems of public procurement from working with the noble Lord, Lord Maude. I disagreed strongly with some of his ideas, but I agreed very strongly with some of them as well. I also shared his frustration that some of his best ideas were blocked by the departmentalism of Whitehall and the argument that each department made, as others do, of “We’re different from the others —besides, I’m the Accountable Officer to Parliament”, and that a number of opportunities for reasonable reform were therefore missed. Procurement is a very dull subject most of the time, but one punctuated by scandals when they hit the Daily Mail.
As a revising Chamber, if we are able to work together, our aim in this Bill should be to provide a framework which can outlast the present Government and to provide a stable, long-term environment for contracting between different parts of government and outside suppliers. The Minister will recognise that I say that with particular passion, having survived the Elections Act, as it now is, which was a deeply partisan and deeply unsatisfactory Bill which will have to be rewritten by whichever party comes into office after the next election. Let us do this one differently, please.
There is an awful lot of windy Brexiteer rhetoric about “taking back control” and replacing
“the current bureaucratic and process-driven EU regime for public procurement”—
but here we have an unavoidably bureaucratic and process-driven Bill to replace the EU regime. The Bill does not entirely “take back control” because, as we will have to discuss, the UK will still be governed by various international standards and limited by the commitments given in the various trade agreements we are signing with other countries.
What we must focus on is getting the framework and the requisite elements of parliamentary oversight right. I think we all recognise that we cannot do much more than that. The problems of implementation cannot be dealt with very easily in law. The training of national and local civil servants to manage procurement is clearly very important; outside the Bill, I would like to ask the Minister whether we can have some more information about what sort of training is being laid on to improve the quality of procurement at all levels.
There is clearly an excessively complicated contracts process which enables outsourcing companies like Serco and Capita, and the sad Carillion, to write contracts which they therefore win but which they do not actually execute quite as well as others might have done. We are dependent on the success of the digital platform, which we will have to discuss, but its actual execution is clearly out of the hands of anyone in this Chamber, although the noble Lord, Lord Clement-Jones, on our Benches, will want to discuss that a little more.
On parliamentary oversight, there is some very imprecise language, as always, in this Bill: “an appropriate authority” may do this, that and the other. Every time I read that, I thought of the noble Lord, Lord Hodgson, and his committee, and how much he will pounce on the idea that tertiary legislation will be provided by some sort of authority somewhere around or near Whitehall. Clause 12, on the national procurement policy statement, which we have discussed in some detail, states that
“a Minister … must … carry out such consultation as the Minister considers appropriate”
and the statement can be amended or replaced whenever a Minister considers it necessary. Since 2015, Ministers have changed, on average, every 15 months. We have had five or six Cabinet Ministers in various offices since 2015. That is an appalling rate of turnover. It also means that continuity is very hard to get and that parliamentary oversight questioning a Minister, asking why he or she wants to change the policy statement or whatever it may be, is an important part of trying to maintain continuity. We all know that in many areas of procurement, continuity and a long-term perspective are extremely important.
Many of the most attractive reforming ideas in the Green Paper, Transforming Public Procurement, appear only weakly in the Bill. The Green Paper proposes, for example,
“a new flexible procedure that gives buyers freedom to negotiate and innovate to get the best from the private, charity and social enterprise sectors”,
but the charity and social enterprise sectors have almost entirely disappeared from the Bill. The Minister’s letter at the time of First Reading stated that the reforms to the procurement regime would be based on value for money, competition and objective criteria in decision-making, whatever those objective criteria may be. The briefing on Bills in the Queen’s Speech goes further, claiming that the Bill enshrines the principles of public procurement, with value for money first and foremost. We have heard from others in this debate that even the concept of value for money depends on whether you are saying value of money over one year, over five years or, as the manager of Crossrail said on television yesterday, over 60 years. It changes your calculations considerably. However, Clause 11 balances all this by adding as an objective “maximising public benefit”, and Clause 18 refers to the “most advantageous tender”, deliberately changed from previously, when it was the “most economically advantageous tender”—again without spelling out what criteria should come into play.
We will wish to put back in the Bill the language of the Green Paper, which states, for example, in paragraph 89:
“A more sophisticated understanding of different types of value—including social value … wider public policy delivery and whole-life value”
and refers in paragraph 100 to delivering
“greater value through a contract in broader qualitative (including social and environmental) terms”.
In paragraph 39, the Green Paper calls for
“a proportionate delivery model assessment before deciding whether to outsource, insource or re-procure a service thorough evidenced based analysis”.
That is wonderful but, again, why is not the option of insourcing confirmed in the Bill? We are all aware of the failure of water privatisation, for example, to deliver the promise that it would bring a surge of additional investment into the sector to clean up England’s rivers and coastlines. It did not lead to that; it generated high profits for its investors instead.
The Bill is very soft on private utilities, in view of their very mixed record in several sectors. It aims, as Minister told us, to reduce the regulatory burden on private utilities and to reduce transparency requirements to “the minimum required” by international trade agreements. The Bill contains a mechanism to exempt utilities in some sectors, such as ports, from procurement regulation. Even Dominic Raab has now discovered that ports are an important part of our national resilience and security structure. I am therefore not sure that exempting them from that level of supervision is desirable.
The Minister is a good populist. I draw his attention to the Survation poll of voters in the red wall seats captured by the Conservatives in 2019, which showed an overwhelming preference for some form of public ownership and management of water, energy supply, public transport, health and social care services. The Government are not giving their voters what they want.
The case for not automatically assuming that private service companies will provide the best outcome is strongest in the provision of personal services and social care, as the MacAlister report has just shown. The report states bluntly:
“Providing care for children should not be based on profit.”
The horrifying stories in today’s Times about the excessive profits made by convicted criminals through managing social care for children reinforce all of that case. Local authorities may often be the most appropriate provider. One of the most absurd and damaging central government decisions on outsourcing was, at the beginning of the pandemic, to put out the test and trace scheme to two large service companies, one of them based in Florida, which had no idea of local geography or conditions, when local public health officers already had the knowledge and contacts to provide a faster and more effective response. The Minister has a distinguished record in local government. I am sure that he does not share the view of some of his ministerial colleagues that central government should always have the main control of everything that goes on.
Briefings on the Bill all refer to ensuring “greater transparency of data”. We have all learned to be sceptical of government promises of transparency, freedom of information, and so on. Here, too, we shall want to ensure that there is active parliamentary oversight.
The briefings we have received from the Local Government Association and the National Council for Voluntary Organisations contain a number of reasoned criticisms and proposals for amendments which I hope the Government will accept to improve the Bill. I particularly noted the NCVO’s reference to the role that some strategic suppliers play in adding SMEs and charities to their promised supply chains but then not following through by giving them contracts—using charities and SMEs as “bid candy”, as I gather is the phrase. A more critical approach to companies that are skilled in drafting sophisticated contracts but not good at delivery is clearly needed but, again, that is more a matter of changing the negotiation of contracts and improving monitoring than of drafting in the Bill.
There are issues of corruption and of preventing undue political influence, which are touched on in Part 5—Clauses 74 to 76—which we will also need to discuss, despite the remarks of the noble Lord, Lord Moylan. I am not entirely sure that I yet understand the concept of dynamic markets, and I should welcome a further briefing on that.
I end where I began: I hope that, as a group of nerds, we can agree to a considerable degree on what needs to be done, that we can manage to put into the Bill a coherent framework for the future of public procurement, and that the Minister will co-operate with us—I thank him very much for the briefings we have already had and look forward to more—in achieving that objective.
Lord Coaker (Lab)
My Lords, I start by thanking the noble Lord, Lord Wallace. It is a privilege to follow him and say that I agree with much of what he had to say and the way he said it. I also thank the Minister for the customary way in which he introduced the Bill and tried to explain the various parts of it—I think the whole House was grateful to him for doing that. The thrust of the debate has shown that most noble Lords are basically in favour of much of the Bill and the direction in which it is going. However, we seek to improve and develop it, and to test what the Government really mean in certain aspects of it. I hope that the Minister will take my remarks in that context.
To the noble Lord, Lord Moylan, I say that I support the Government’s endeavour. I guess that makes the Minister a semi-capitalist, whereas I am a full-blown anti-capitalist in what I am going to say, so I apologise to the noble Lord in advance for that. I hope he will manage to stay in his seat and not get too upset by some of the things I am going to say. It appears to me that, so far as he is concerned, his own Government are treading down a dangerous path—whereas, for me, they are very much treading down a welcome path.
My noble friend Lord Whitty hit the nail on the head when he said that the importance of all this is that law sets the context, the priorities for a Government and the way in which you would wish a Government to act. This is the importance of the Bill before us. As my noble friend Lady Hayman pointed out in her excellent opening speech, this is the opportunity for us as a country—but also for this Government, pushed and supported in many ways by many of us in this House—to actually change direction. I think that is what the country wants. Coming out of the pandemic, the country does not want a return to things as they were and to business as usual. I believe that that is why the Government have done this. Of course, they have been consulting on it, but they mentioned it in the last Queen’s Speech in 2021 and did not do anything. Now they have mentioned it in 2022 and come forward with it—so I think they themselves recognise that there is a need to act. The public want something better, we want something better, and now is the time for us all to move forward.
On the £300 billion-worth of public spending, I would be interested to learn what the actual figure is with the exemptions. If the Minister cannot give it to us now, can he write to us with the actual figure: is it £300 billion or will it be less than that with the exemptions and so on that are included in the Bill? If we accept that figure, £300 billion-worth of public spending can be used to drive forward the sort of country and businesses we want. As many noble Lords in this debate have said, this is the way we can move forward and the direction we can take. Whether it be on labour, climate, levelling up, anti-poverty or anything else, this is a real opportunity for us to change direction. That is what is at the heart of this Second Reading debate: have the Government gone far enough, could they go further and what other steps could they take in order to move forward?
The Government set out six principles in their Green Paper—
“the public good, value for money, transparency, integrity, fair treatment of suppliers and non-discrimination”—
so it is somewhat disappointing to find that, when we come to the actual Bill, we have four factors and no principles. I think it was the noble and learned Lord, Lord Thomas, who mentioned the importance of Clauses 11 and 12 taken together, where there are objectives but no principles. What we mean by that will be a subject for debate by all of us in Committee. Clause 11 is fundamental to the whole operation of the Bill. What are we going to require businesses to do? What are we going to expect of them? What will the public procurement push them to do?
At some point the Minister will also need to clarify Clause 12 and what the national procurement policy statement will be. My understanding is that the existing one will go and a new one will be produced following the passage of the Bill. I think we need to know what is said on that.
Many noble Lords mentioned the need for us to consider things such as social, environmental and labour clauses. That is why Clause 18 is really important. As the noble Baronesses, Lady Bennett and Lady Parminter, and very powerfully my noble friend Lady Young pointed out, the move from having the most economically advantageous tender to taking out the reference to “economic” and having in its place the “most advantageous tender” gives us the opportunity to include social and environmental issues. As my noble friends Lord Davies and Lord Hendy pointed out, we can look at labour proposals with respect to that and demand certain things of businesses, because that is the sort of model and the sort of change we want.
My noble friend Lord Mendelsohn, from his experience as a businessman, and others pointed out the importance of this for small businesses. What will it mean for them? How will it help them? As the noble Lord, Lord Fox, asked, how will the new digital portal work in a way that gives business access to the sorts of things the Government want? What about the late-payment provisions in the Bill? How will they help? How will it work? There are all sorts of questions to be answered, and obviously we can discuss the details in Committee.
Transparency is everything. You cannot do anything without transparency—without knowing what is happening and what is going on. As my noble friend Lady Young pointed out, we need the data to be able to do that. Otherwise, it will be like the analogy with football—not liking football and not even knowing the result because nobody has given it to you, so you cannot tell who has won or lost.
One of the really important things is how all this will be enforced. In the Green Paper there was a procurement review unit, which has now been downgraded to an “appropriate authority”, with no clarity on what that means. As far as I can understand from reading Part 10, the appropriate authority will be able to make recommendations and conduct an investigation, but there is no way that those recommendations, as a result of any investigation, will be binding. The Minister will correct me if I have this wrong, but if they are not binding, what difference does it make? How will the new appropriate authority that will enforce all these regulations work in practice and ensure that what we intend and want from the Bill actually happens?
How will we ensure that the benefits outlined in the Procurement Bill spill over into defence? Clause 105 deals with single-source contracts, which are worth approaching £10 billion. How will that work? As I understand it, there will be new secondary legislation to deal with that. All the Bill does is to introduce primary legislation to allow changes to be made to secondary legislation, which will deal with the single-source contracts that the Ministry of Defence operates in certain circumstances. I do not understand what difference that will make, and at some point we will need to understand that.
There is a huge problem with defence spending, which has bedevilled the department for a number of years. The noble Baroness, Lady Smith, and my noble friend Lord Hunt spoke about that. To take one example, 29 Ajax vehicles have been delivered to the Government at a cost of £3.5 billion so far. There are more on the way. We are supposed to have 569, which were supposed to have been delivered four or five years ago, so there is a huge problem around this. We need to know how the Procurement Bill will improve defence procurement and all that.
Secondary legislation is a huge problem. Large numbers of regulations are set out in Clause 110, so while we have the principle that we will debate and discuss, much of this will be done by secondary legislation. That will be a real problem because the devil will be in the detail. Indeed, the noble Lord, Lord Stevens, mentioned some of the problems with secondary legislation in respect of this Bill, including how it will interrelate and cross over with the Health and Care Act. He was right to point that out for the benefit of noble Lords.
I want to talk a little about Part 7. The noble Lords, Lord Alton and Lord Wigley, and the noble Baroness, Lady Brinton, all mentioned the importance of procurement in the context of our international obligations. I do not believe that the British public, or the vast majority of decent people, would want anybody to be procuring from companies or countries where there are huge human rights violations. We are all realistic about this. We all know that it is very difficult, but it cannot be right that, where we are absolutely certain that there are human rights violations, it is business as usual. I hope that when we discuss Part 7 with the Minister in Committee, it will become clearer that the requirement for our international obligations to have a greater human rights dimension—in who we procure from and what we procure—is a really important part of the Bill.
In conclusion, we have approximately £300 billion of public expenditure. The days of the lowest-cost rules must be over. That is the demand from the citizens of this country. Other factors can be, and should be, taken into account. The Bill is a huge opportunity and the Government have grasped it, but many of us are going to push them further for a change to how procurement works—to rework it and remake it in a way that reflects modern business practice, the modern economy and the modern society that people want. It is an opportunity that we have to take.
Lord True (Con)
My Lords, I thank very much all those who have taken part in the debate. Myriad points have been raised from all sides of the House. I never know what the usual channels are deciding, but it is probably a good thing that, as I understand it, we are not going into Committee for some time because I can feel a compendious letter to your Lordships coming on, which might be as long as the Explanatory Notes.
Your Lordships will forgive me if I do not deal with every detailed point; I will try to address some of the main themes of the debate, which were expressed very well by the noble Baroness, Lady Hayman, when she opened and the noble Lords, Lord Coaker and Lord Wallace, in summing up. We will not agree on all these things. Certainly, in some of the speeches from the other side, there was a yearning to impose policies on the private sector—on people outside government. The high-water mark was the speech of the noble Lord, Lord Hendy, which I guess was the counterpoint to the low-water mark—I am not sure there was any water in it at all—of the speech of my noble friend Lord Moylan. To impose your political objectives on a nation, you have to win an election and form a Government. What we need to do—there was great support and great consensus across the House on this—is put together a framework that we could all work with to provide clarity, simplicity and, yes, transparency, which I will come on to, for those seeking to provide to public procurers.
An important speech on defence was made by the noble Baroness, Lady Smith, and the subject was also alluded to by the noble Lord, Lord Coaker. My noble friend Lady Goldie will respond in writing on the points made but, obviously, when we get into Committee, we will be able to address the points.
Points were raised about control, management and remedies. The noble and learned Lord, Lord Thomas, put forward some ideas. We will reflect on those but, basically, the law of the land is the framework; my noble friend was right.
Many noble Lords alluded to Covid-19 procurement. I understand that but we need to look forward. While the debate was going on, I looked this up on my machine and saw that in April 2020 the leader of the Liberal Democrats was calling for all red tape to be swept aside to get PPE. People in other parties were saying the same. Yes, mistakes were made, but when you make mistakes you must learn from them. We are putting together a regime that will deliver more comprehensive transparency requirements, clear requirements on identification, management of conflicts of interest and so on. It is right that we should address those things, but the priority of the Government—indeed, of all of us in all parties—as the pandemic we knew so little about arose, was to save lives. I acknowledge that there are lessons, but I hope that when we look at how the Bill is structured, we will see that we have an improved framework for addressing all aspects of procurement.
The noble Lord, Lord Alton of Liverpool, and others rightly addressed the issue of human rights. We will discuss this in Committee. I had the pleasure of discussing it with the noble Lord before, as he was kind enough to say. Certainly, modern slavery has no place in government supply chains; I affirm that strongly. I accept that the current rules on excluding suppliers linked to modern slavery are too weak. For example, they require the supplier to have been convicted, or for there to have been a breach of international treaties. These rules are not capable of dealing with some of the issues that we see.
We are making explicit provision in the Bill to disregard bids from suppliers known to use forced labour or to perpetuate modern slavery in their supply chain. Authorities will be able to exclude them where there is sufficient evidence; they do not need to have a conviction. We are seeking to respond in this area and no doubt we will be probed further.
One issue raised right from the start by the noble Baroness, Lady Hayman, was that of principles. A lot of people have said that this was in the Green Paper but is not in this Bill. A Green Paper is a basis for consultation and reflection. A Bill is the proposition that the Government put before Parliament and this is the proposition that we are putting before Parliament. The Bill splits the procurement principles into a group of objectives and rules to help contracting parties understand what they are obliged to do. The rules on equal treatment, now termed “same treatment”, in Clause 11(2) and (3) are obligations that set minimum standards in plain English that contracting authorities must follow on treating suppliers in the same way to create a level playing field. Non-discrimination, in the context of the Bill, means discrimination against treaty state suppliers on the grounds of nationality, which is a concept different from non-discrimination in the UK market. The national rules on non-discrimination in the Bill can be found in Clauses 81 to 83.
There were a number of changes to the principles. For example, the procedural transparency obligations in the Bill are complemented by a new information-sharing objective in Clause 11(1)(c), which will provide clarity to contracting authorities on exactly what they need to publish. There is also no need for an objective to maximise competition in procurement processes under the Bill, as procedural obligations start with the use of open and fair competition, unless there are legitimate grounds to dispense with or narrow competition. The most obvious of those would be special cases for direct award.
I acknowledge that transparency has been a key ask for the House. The House expects that transparency will be improved. We believe that the Bill does this. We are extending the scope of publication requirements to include planning and contract performance, in addition to current requirements to publish contract opportunities and contract awards. By implementing the open contracting data standard we will publish data across the public sector so that it can be analysed at contract and category level, and compared internationally. The new regime will also establish obligations on contracting authorities to capture potential conflicts of interest for individuals working on procurement additionally, or mandate the publication of a transparency notice whenever a decision is made to award a contract using a procedure as a direct award. This will all be supplemented by a comprehensive training programme that will be available to contracting authorities, which I will come back to later.
We remain committed to our aim to embed transparency by default through the commercial life cycle. We recognise and make no apology that this new regime seeks to do that. The new central digital platform will be designed to make complying with the new transparency requirements automated and low cost. We intend to make data analysis tools available to contracting authorities, which will ensure that they can use the data available to drive value for money.
Taxpayers have a right to see how public money is spent. There is abundant evidence of public engagement with contracting information, and it increases as the data improves. Because the data will be more comprehensive it will be more valuable and, we believe, better used. I have no doubt that we will be tested on that, but I assure the noble Baroness opposite that it is something we are extremely determined to achieve.
On social objectives, I was asked by a number of noble Lords how the Bill will help with achieving net zero. I accept that the Bill does not include any specific provisions on the Government’s target to achieve net-zero carbon emissions by 2050, but it will require contracting authorities to have regard to national and local priorities as set out in a national procurement policy statement to be published by the Government, and the Wales procurement policy statement to be published by Welsh Ministers. Many noble Lords have given notice that they will want to return to examination of the national procurement policy statement, how it will operate and how it will go forward, but there are statements in there.
Public sector buyers are able to structure their procurements so as to give more weight to bids that create jobs and opportunities for our communities, where this is relevant to the contract being procured. This is absolutely in line with the concept of value for money. Social value in procurement is not about a large corporate’s environmental, social and governance policies but about how the contract can be delivered in such a way that it delivers additional outcomes, such as upskilling prison leavers, which I think someone referred to.
Delivering value for taxpayers should certainly be the key driver behind any decision to award contracts to companies using public money, but again, public sector buyers will have to have regard to the national policy statement. The Bill will take forward a change from “most economically advantageous” to “most advantageous” to reinforce the message that they should take a comprehensive assessment of value for money, including the wider value of benefits, in the evaluation of tenders.
I know that many of your Lordships want to see and have asked for buying British. Public sector procurers are required to determine the most advantageous offer through fair and open competition. We confirmed in December 2020 that below-threshold contracts can now be reserved for UK suppliers and for small suppliers where it is good value for money. This applies to contracts—in those strange figures in the Bill that arise from international treaty—with a value below £138,760 for goods and services, and £5.336 million for construction in central government.
Above those thresholds, we need to act in line with our international obligations. A blanket “Buy British” policy would conflict with the UK’s international obligations to treat suppliers from other countries on an equal footing. The requirement for fair and open competition is a two-way street because it gives UK firms access to other markets. Within the UK, on average, just over 2% of UK contracts by value were awarded directly to foreign suppliers between—
Lord Fox (LD)
I thank the Minister for giving way. I am confused and I am sure he can help me. Clause 82(1) specifically says:
“A contracting authority may not, in carrying out a procurement, below-threshold procurement or international organisation procurement, discriminate against a treaty state supplier.”
The Minister just said the opposite of that in the case of below-threshold procurement. The Bill is very clear that a below-threshold procurement does not let off the contracting authority from having to give the contract to a treaty state supplier.
Lord True (Con)
My Lords, I was hoping to make progress and I know that your Lordships would like to conclude these matters. As the noble Lord says, those clauses refer to international treaty obligations. What I was saying was in reference to a contract to let; I was asked very pertinently by the noble Lord, Lord Whitty, for example, about local authorities buying locally, and I repeat what I said: below-threshold contracts can be reserved for suppliers located in a particular geographical area. If international issues arise, that is a different matter. This policy was set out in the Government’s Procurement Policy Note 11/20.
My noble friend Lord Lansley and many others, including the noble Baroness at the start, asked me about innovation. The legislation will put more emphasis on publishing pipelines of upcoming demand, procurement planning and pre-market engagement so that businesses can properly gear up to deliver and offer the best innovative solutions. It will have a new competitive tendering procedure which will enable contracting authorities to design and run procedures that suit these markets. For example, it will allow them to contract with partners to research, develop and eventually buy a new product and service in a single process. The new rules will make it clear that buying innovation does not apply only to buying something brand new but can be about developing an existing product to meet different requirements.
The noble Lord, Lord Stevens, the noble Baroness, Lady Brinton, and others asked about the health service and the relationship with the DHSC. These reforms sit alongside proposals to reform healthcare commissioning which have been enacted through the Health and Care Act. We recognise the need for integration between local authorities and the NHS, both for joint commissioning and integrated provision, and we will work closely with the Department of Health and Social Care.
I repeat: the public procurement provisions will not result in the NHS being privatised. The procurement of clinical healthcare services by NHS bodies will be governed by DHSC legislation and is separate to the proposals in the Bill. However, the non-clinical services, such as professional services or clinical consumables, will remain part of the Bill. Clause 108, which I agree is widely framed as it sits in the Bill, is needed to ensure that it neatly dovetails with any regime created under the Health and Care Act, providing clarity. Obviously, we will have that probed.
Accessibility was another theme that was raised by the noble Lords, Lord Whitty and Lord Fox. The Government remain committed to ensuring that public procurement drives value for money, and that includes better outcomes for disabled people, as it must. The Bill does not dictate how technical specifications may be drawn up, only what is actually prohibited, as set out in Clause 24. However, there is a clear expectation that when contracting authorities set technical specifications for procurement, they do so in a way that takes into account accessibility criteria for disabled persons. Clearly, this is an important matter that requires further consideration, and we commit to doing that.
Training is important, and the training package will be made available in good time for users to prepare for the new regime being implemented. That is why we have committed to six months’ notice before going live, and the training will be rolled out. The Cabinet Office will provide both funded training and written guidance and learning aids, covering the range and depth of knowledge requirements for those operating within the new system. The online learning will be free at the point of access for contracting authorities. The knowledge drops will be freely accessible for all via YouTube, and the written guidance and learnings will also be free and accessible for all via GOV.UK.
The noble Lords, Lord Mendelsohn and Lord Aberdare, asked some pertinent and specific questions about small businesses, and I will certainly make sure that they are answered. This legislation will help SMEs to win contracts for many reasons: bidders will only have to submit their core credentials to the single platform once, for example, making it easier and more efficient to bid. The single transparency platform, or single sign-on, means that suppliers will be able to see all opportunities.
The new concept of dynamic markets, which we will explore, is intended to provide greater opportunity for SMEs to join and win work in the course of a contracting period. The Bill will ensure that subcontractors in chains will also benefit from prompt payment obligations.
There are many other ways in which we intend to help SMEs. The noble Lord, Lord Wigley, asked about the great Principality of Wales. Wales will, as he knows, have the power to publish its own procurement policy statement, in which it can set out its own local priorities for communities. We have worked closely with the Welsh Government to ensure that there is continuity for Welsh contracting authorities. For the first time, Welsh Ministers will be able to regulate the procurement of some goods and services in Wales by some cross-border contracting authorities. But in our judgment, it is right that, where the scope of a procurement extends outside Wales into the rest of the UK, the UK rules should apply.
Publicly funded housing associations would be in scope of the contracting authority definition. However, I am advised that privately funded providers of social housing would not be in scope because they do not meet either the funding or the control requirements. I will write to the noble Lord further about this.
I was going to address points about data collection, but—
Lord True (Con)
I will indeed write a letter. It is very helpful to have my noble friend write my speeches for me.
I will answer other points but, to conclude, I thank noble Lords for their extremely intelligent, thoughtful and well-considered remarks, which the Government will consider in Committee. Our proposals have been consulted on extensively and we believe that they are common sense, but we can always gain from listening to your Lordships. In that spirit, I hope that your Lordships will support these proposals as they progress through the House.
Lord Wallace of Saltaire (LD)
I do not want to detain the House, but, since my noble friend Lord Strasburger made some serious points about a major contract, could the Minister possibly say that he will undertake to meet him and others to respond to some of the points he made?
Lord True (Con)
The noble Lord made a speech that went wide of the Bill. I will look at what he said in Hansard and respond thereafter. I make no commitment at this point.
Procurement Bill [HL]
(2 years, 5 months ago)
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Lord True
That it be an instruction to the Grand Committee to which the Procurement Bill [HL] has been committed that they consider the Bill in the following order:
Clauses 1 and 2, Schedules 1 and 2, Clause 3, Schedule 3, Clauses 4 and 5, Schedule 4, Clauses 6 to 40, Schedule 5, Clauses 41 to 54, Schedules 6 and 7, Clauses 55 to 69, Schedule 8, Clauses 70 to 81, Schedule 9, Clauses 82 to 105, Schedule 10, Clauses 106 and 107, Schedule 11, Clauses 108 to 116, Title.
Sue Gray Report
(2 years, 5 months ago)
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The Lord Privy Seal (Baroness Evans of Bowes Park) (Con)
My Lords, with the leave of the House, I will now repeat a Statement made by my right honourable friend the Prime Minister in another place. The Statement is as follows:
“With permission, I will make a Statement, Mr Speaker. I am grateful to Sue Gray for her report today, and I want to thank her for the work that she has done. I also thank the Metropolitan Police for completing its investigation.
I want to begin today by renewing my apology to the House and to the whole country for the short lunchtime gathering on 19 June 2020 in the Cabinet Room, during which I stood at my place at the Cabinet table and for which I received a fixed penalty notice. I also want to say, above all, that I take full responsibility for everything that took place on my watch. Sue Gray’s report has emphasised that it is up to the political leadership in No. 10 to take ultimate responsibility, and, of course, I do. But since these investigations have now come to an end, this is my first opportunity to set out some of the context, and to explain both my understanding of what happened and what I have previously said to the House.
It is important to set out that over a period of about 600 days, gatherings on a total of eight dates have been found to be in breach of the regulations in a building that is 5,300 metres square across five floors, excluding the flats. Hundreds of staff are entitled to work there, and the Cabinet Office, which has thousands of officials, is now the biggest that it has been at any point in its 100-year history. That is, in itself, one of the reasons why the Government are now looking for change and reform.
Those staff working in Downing Street were permitted to continue attending their office for the purpose of work, and the exemption under the regulations applied to their work because of the nature of their jobs, reporting directly to the Prime Minister. These people were working extremely long hours, doing their best to give this country the ability to fight the pandemic. The exemption under which those staff were present in Downing Street includes circumstances where officials and advisers were leaving the Government, and it was appropriate to recognise them and to thank them for the work that they have done. I briefly attended such gatherings to thank them for their service—which I believe is one of the essential duties of leadership, and is particularly important when people need to feel that their contributions have been appreciated—and to keep morale as high as possible.
It is clear from what Sue Gray has had to say that some of these gatherings then went on far longer than was necessary. They were clearly in breach of the rules, and they fell foul of the rules. I have to tell the House, because the House will need to know this—again, this is not to mitigate or to extenuate—that I had no knowledge of subsequent proceedings, because I simply was not there, and I have been as surprised and disappointed as anyone else in this House as the revelations have unfolded. Frankly, I have been appalled by some of the behaviour, particularly in the treatment of the security and the cleaning staff, and I would like to apologise to those members of staff, and I expect anyone who behaved in that way to apologise to them as well.
I am happy to set on the record now that when I came to this House and said in all sincerity that the rules and guidance had been followed at all times, it was what I believed to be true. It was certainly the case when I was present at gatherings to wish staff farewell—the House will note that my attendance at these moments, brief as it was, has not been found to be outside the rules—but clearly this was not the case for some of those gatherings after I had left, and at other gatherings when I was not even in the building. So I would like to correct the record—to take this opportunity, not in any sense to absolve myself of responsibility, which I take and have always taken, but simply to explain why I spoke as I did in this House.
In response to her interim report, Sue Gray acknowledges that very significant changes have already been enacted. She writes—and I quote:
‘I am pleased progress is being made in addressing the issues I raised.’
She adds:
‘Since my update there have been changes to the organisation and management of Downing Street and the Cabinet Office with the aim of creating clearer lines of leadership and accountability and now these need the chance and time to bed in.’
No. 10 now has its own Permanent Secretary, charged with applying the highest standards of governance. There are now easier ways for staff to voice any worries, and Sue Gray welcomes the fact that
‘steps have since been taken to introduce more easily accessible means by which to raise concerns electronically, in person or online, including directly with the Permanent Secretary’.
The entire senior management has changed. There is a new chief of staff—an elected Member of this House who commands the status of a Cabinet Minister. There is a new director of communications, a new Principal Private Secretary and a number of other key appointments in my office. I am confident that, with the changes and new structures that are now in place, we are humbled by the experience and we have learned our lesson.
I want to conclude by saying that I am humbled and I have learned lessons. Whatever the failings of No. 10 and the Cabinet Office throughout this very difficult period, for which I take full responsibility, I continue to believe that the civil servants and advisers in question—hundreds of them, thousands of them, some of whom are the very people who have received fines—are good, hard-working people, motivated by the highest calling to do the very best for our country. I will always be proud of what they achieved, including procuring essential life-saving personal protective equipment, creating the biggest testing programme in Europe and helping to enable the development and distribution of the vaccine that got this country through the worst pandemic of a century.
Now we must get our country through the aftershocks of Covid with every ounce of ingenuity, compassion and hard work. I hope that today, as well as learning the lessons from Sue Gray’s report, which I am glad I commissioned—I am grateful to her—we will be able to move on and focus on the priorities of the British people: standing firm against Russian aggression; easing the hardship caused by the rising costs that people are facing; and fulfilling our pledges to generate a high-wage, high-skill, high-employment economy that will unite and level up across the whole of our United Kingdom. That is my mission, that is our mission, that is the mission of the whole Government, and we will work night and day to deliver it. I commend this Statement to the House.”
Lord Collins of Highbury (Lab)
I thank the Leader for repeating the Statement. I am rather disappointed that we are taking it so late in the day with so few Members present.
As the noble Lord, Lord Kerslake—a former head of the Civil Service—wrote in the Guardian this afternoon:
“Sue Gray’s report is written in the measured and balanced way that you would expect from a longstanding civil servant … Event after event is juxtaposed against the prevailing rules at the time to devastating effect.”
What also jumps out from this report is: why did it take Boris Johnson six months to acknowledge what was going on? Instead of owning up and taking responsibility, we had to see a costly police investigation, which concluded that he was the first Prime Minister in our country’s history to have broken the law in office. Then we had to wait for the Sue Gray report.
During this time, we have seen Civil Service morale severely damaged and reputations trashed, including outrageous attacks on Sue Gray herself. I cannot improve on the Daily Mirror’s Kevin Maguire’s description of the report in brief:
“Vomiting. Excessive boozing. Fisticuffs. Partying until 4.35 am (before Prince Philip’s funeral). Broken swing. Secret Santa. Cleaners & security staff bullied. Red wine on walls. Karaoke. Sitting on laps.”
There is also, of course:
“‘We seem to have got away with it’—Martin Reynolds”.
Lots of questions remain about the Prime Minister and others who believed that lockdown rules did not apply to them. That was driven in part by the idea that those working long hours, dealing with Covid-related issues had a pass-out to behave as they did and, in essence, to carry on regardless. That they would have condemned and clamped down on such behaviour if it had happened in the NHS, schools, local authorities and other public-serving workplaces is not in doubt.
When the dust settles and the anger—strongly felt by many of our communities—subsides, this report will stand as a monument to the arrogance of a Government who believed it was one rule for them and another for everyone else. It is pretty clear that the Prime Minister knew exactly what was happening in No. 10 throughout the lockdown period and that it was wrong, both legally and morally. Five months ago, he told the House of Commons that all guidance was followed completely in No. 10. I am sure many noble Lords opposite, if they were here, feel uncomfortable. I know that many of those who are not here feel uncomfortable, at the very least. I know that many feel far worse, especially those who served under previous, more honourable Prime Ministers.
In her response, I hope the Minister will comment further on how cleaners and security guards at No. 10 were able quickly to ascertain that those events were clear breaches of the lockdown rules and call them out. They were faced with what can be described only as entitled abuse, while the Prime Minister told Parliament that he was unsure what the rules were. In the light of Sue Gray’s conclusion, does the Minister agree that the promised apology to those hard-working custodians and cleaners in Downing Street should be formal and in writing? They have been subject to rudeness and disrespect from officials and advisers while they were simply trying to do their job.
Sue Gray’s report shows systematic law-breaking, with photographic evidence that the Prime Minister himself broke the rules on multiple occasions. Allegra Stratton is the only one to have resigned, despite this industrial-scale breaking of the rules. Does the Minister think this is right? When the Prime Minister said that he was taking personal responsibility, what did that mean, beyond those words? What action will he take? Allegra Stratton did take personal responsibility. As Keir Starmer said:
“No. 10 symbolises the principles of public life in this country—selflessness, integrity, objectivity, accountability, openness, honesty and leadership.”
Nobody, but nobody, reading this report can honestly believe that the Prime Minister has upheld them.
Our constitution relies on Members of Parliament and the custodians of No. 10 behaving responsibly, honestly and in the interests of the British people. When our leaders fall short of these standards, Parliament has a duty to act. Without these standards, not only is our democracy weakened but our global reputation is impacted. The trust and confidence that this nation has built is severely weakened if the man who represents us is not believed by other global leaders.
I address these remarks to the noble Lords opposite. They must now use their influence on colleagues in the other place to stop this out-of-touch, out-of-control Prime Minister from driving Britain towards disaster. The values symbolised by the door of No. 10 must be restored. Only then can we restore the dignity of that great office and the democracy it represents.
Lord Newby (LD)
My Lords, finally we have the Gray report. The country owes Sue Gray a tremendous debt of gratitude for undertaking her task fearlessly and thoroughly. It was typically dishonourable of the Prime Minister to try and persuade her at the 11th hour not to publish it at all, and typically courageous of her to do so. Will the Government at least release the minutes of her meeting with the Prime Minister, so that we can be clear exactly what took place?
On one level, today’s report does not tell us anything new. We already knew that there have been multiple parties in Downing Street, and that the culture was the opposite of that which the Government were enjoining on the rest of the population. We already knew that the Prime Minister and the Cabinet Secretary, far from instilling a culture in tune with both their messaging and the legislation, were encouraging what was going on. And we already knew that, by denying what had happened, the Prime Minister was misleading both Parliament and the country. What the report does is provide the gory details—and gory they are.
The Prime Minister’s defence today is that Downing Street is a large, busy building; that it was appropriate to have farewell parties, that he did not stay long at the parties, and that he had no idea what happened after he had left. If this were any other large organisation, in either the public or private sector, these risibly feeble excuses would have meant that heads at the top would roll. That they have not is a major indictment of the Prime Minister, his Government and the Conservative Party.
By refusing to resign, the Prime Minister has weakened his own standing, that of his party, that of the country, and that of politics and politicians more generally. It is clearly of huge importance that this loss of reputation and standing be reversed. In the first instance, this can only happen if the Prime Minister is replaced, and this can only happen if he is ejected by his Commons colleagues or the electorate. As far as his Commons colleagues are concerned, it seems that there is in reality virtually nothing which the Prime Minister could do which would impel them to act. This is most strange, as the only reason the Prime Minister became leader of his party was that many people who knew him to be a charlatan and a liar held their noses, because they thought he was an election winner.
If they have been out on the doorstep recently, they will have found that this situation no longer obtains. Yet, with one or two notable exceptions, they sit on their hands. They are therefore all complicit in the duplicities of this Government. If his MPs do not act, the Prime Minister will be removed only by the electorate. Recent elections have shown what voters already think of him, and with every electoral contest, whether by-election, local elections or the next election itself, there will now be a reckoning for the Conservative Party. The sadness is that, until the general election comes, we will be stuck with this morally bankrupt and rudderless Government.
But if the Prime Minister comes badly out of this saga, so too, I fear, do the Metropolitan Police. They turned a blind eye to the parties when they first happened. Under intense public pressure, they initiated an investigation, but the fines which they imposed, concentrated as they were on junior and female staff who co-operated fully with them, compared to other more senior people who clearly did not, look arbitrary and incomplete.
They failed to explain themselves, so they cannot rebut the inevitable suspicion, widely felt across the country, that the policy on fines was driven not by a strict interpretation of the law but by a political impulse to let the Prime Minister off lightly. They are now facing legal challenges into the way they behaved. They should pre-empt these now by coming clean on the rationale for their partygate policies.
The Prime Minister, understandably, wishes to draw a line under this sorry saga and in his mind he has probably already done so. But the public have not, and there will be a reckoning.
Baroness Evans of Bowes Park (Con)
I will attempt to address some of the points raised by the noble Lords. It is absolutely right, of course, that the Prime Minister has made a full and unreserved apology for what happened in No. 10. As noble Lords will have heard in his Statement, he repeatedly said that he takes full responsibility for everything that took place. He has acknowledged people’s hurt and anger, which I think we have heard from the comments, totally fairly, from the two noble Lords, and which I think a lot of us feel having also seen the report. He has offered a full and unreserved apology, and he has accepted that more time should have been taken to establish the full facts at the very beginning.
The noble Lord, Lord Newby, asked about the meeting with Sue Gray that has been reported. The Prime Minister had a procedural update on timings and publication arrangements, prompted by No. 10 following a discussion at an official-level meeting, but the findings and content of the report were not discussed and the report has been published in full in exactly the form it was received.
The noble Lord, Lord Collins, rightly mentioned the references to the security staff and the cleaning staff, and the Prime Minister has strongly condemned that behaviour. He said during Questions in the other place that he was going to apologise personally to those affected—I think at that point he had not had the names; I am sure he will. I believe that some of those conversations have already happened. Everyone is unhappy at and horrified by what they read. He said quite strongly that he was going to take action himself, but that he also expected those who were involved in these situations to do so as well.
The noble Lord, Lord Collins, asked what has happened since. The Prime Minister has taken steps since the publication of the report to address some of the specific shortcomings identified, and a number of them were mentioned in the report. For instance, there is a new Permanent Secretary charged with applying the high standards of government, and there are now easier ways for staff to raise concerns. Things are being done, and that was one of the things that Sue Gray has acknowledged and welcomed. She has said that change needs to be embedded now, so that these things can really take hold.
Lord Cormack (Con)
My Lords, I admire and sympathise with my noble friend the Leader of the House. I am very sorry this has been taken so late and that I am the sole voice from the Government Benches to be able to comment. To me, and I hope my noble friend would agree, this report teaches us all to admire and respect the quiet dignity and the impeccable integrity of Theresa May. We should look to her for a real example of how a Prime Minister should behave.
Baroness Evans of Bowes Park (Con)
My noble friend is absolutely right, and I had the privilege to serve under Theresa May when she was Prime Minister.
Viscount Stansgate (Lab)
My Lords, I thank the noble Baroness the Leader of the House for repeating the Statement, which cannot have been a very pleasant thing to do. The House knows that the Committee on Standards in another place will in due course reach a view on whether the Prime Minister misled the House. I would only ask the noble Baroness whether she thinks that noble Lords on the Government Benches can be proud of the Government in this matter and the behaviour of the Prime Minister.
Baroness Evans of Bowes Park (Con)
I think I have made it clear that none of us is proud of what happened and what has been outlined in the report, and that is why the Prime Minister has made a full and unreserved apology.
Baroness Andrews (Lab)
My Lords, one of the reasons I regret that the House is empty this evening is that noble Lords were not able to hear the speeches of my noble friend on the Front Bench and the Leader of the Liberal Democrats, because they were both forensic and demonstrated the values we would expect in public service. One of the questions my noble friend asked was about what the Prime Minister understands by “full responsibility”. Does he accept that it means taking responsibility for the culture and behaviour of the entire management of what he is responsible for in the Cabinet Office?
What I heard this afternoon was not a full apology or the taking of full responsibility but a series of excuses. One of the most egregious was that, at the time, it was legitimate for Downing Street as a whole to have those parties to say goodbye to civil servants—when nurses, doctors and people throughout the health and care service simply would never have contemplated doing that, no matter how many of their colleagues left, as people became ill or were threatened by Covid. Can the noble Baroness explain to this House what she understands the nature of “full responsibility” for a Prime Minister, as leader of the Government, to mean?
Baroness Evans of Bowes Park (Con)
As I have said, the Prime Minister has taken responsibility. He has apologised and committed to making changes to address many of the issues raised and, as I mentioned in response to the noble Lord, Lord Collins, a number of those have been set out in the Statement. I reiterate again that Sue Gray recognises that and has said she is pleased that progress is being made in addressing the issues. That is not to say that there is not further work to do, but action has been taken, and it has been taken speedily.
Baroness Bennett of Manor Castle (GP)
My Lords, the seven Nolan principles of public office have been raised already this evening, but it is worth going through them: selflessness, integrity, objectivity, accountability, openness, honesty, and leadership. Would the Leader of the House claim that the Prime Minister, today and in the behaviour outlined in Sue Gray’s report, has lived up to those seven principles?
Baroness Evans of Bowes Park (Con)
All Ministers of the Crown are expected to maintain high standards of behaviour and to behave in a way that upholds the highest standards of propriety. The Prime Minister has accepted that his behaviour, on occasion, did not meet those standards, and for that he has wholeheartedly apologised.
Baroness Hoey (Non-Afl)
My Lords, the public were clearly very angry when they first heard about what had been going on in Whitehall. But now we have had the Sue Gray report—I commend her diligence—a full apology from the Prime Minister and the Metropolitan Police report, and we have seen changes in Downing Street. Outside this place and perhaps some elements of the media, I think many elements of the public—probably the majority now—really do want to draw a line under all this so that we can get on with the issues that are really affecting the country. But does the noble Baroness agree with me that there will be some people who will never give up criticising the Prime Minister because they do not like the fact that he took us out of the European Union, and that this still underpins a huge amount, particularly in some elements of the media? We all think what happened in Downing Street was shocking, but the apology has happened—let us move on.
Baroness Evans of Bowes Park (Con)
As I say, the Prime Minister himself has acknowledged that there is a lot of anger and upset among the population about what happened in No. 10. He has accepted that, which is why he has apologised wholeheartedly. The noble Baroness may be right that there are still divisions over Brexit, but I think we are all trying to move on now and come together. She is absolutely right: we now need to address the real issues facing people every day, particularly the cost of living—of which noble Lords will hear more very shortly.
Baroness McIntosh of Hudnall (Lab)
My Lords, I am sorry to come back to this point about what taking responsibility means, but I do not think we have quite heard an adequate description of what the noble Baroness thinks the Prime Minister has actually done to take responsibility. It is one thing to say, “I take full responsibility”, but another thing to have taken full responsibility through what you do.
This may sound rather trivial, but when you are dealing with small children, as some of us in this House have at various times in our lives, they have to learn that saying sorry is not enough. If you know that what you did was wrong, saying sorry is not enough. Little children really struggle to understand that, but by the time we grow into adulthood we have to understand that saying sorry is not enough and that if we cannot put right the wrong that we have done, or that we have caused to other people, we have to take ourselves out of the picture. I am not saying that the answer is therefore that the Prime Minister has to resign—I might think that; I might not—but it is important that we understand what the Prime Minister has actually done and what he intends to do to put right the damage not only to the reputation of many people who have served him but to his Government and to the country.
Baroness Evans of Bowes Park (Con)
I repeat again that he has taken responsibility. The Statement says that he himself has learned lessons. I have pointed out some of the practical things that have already happened on the back of the interim Sue Gray report on some of the issues she identified around leadership and other elements and structures in No. 10. That is in place. As I mentioned, there are now more ways for staff to raise concerns. There are practical things that have been done in No. 10 and the Cabinet Office to help address what has been said. He has taken and is taking steps. There may well be more to come, but tangible action has already been taken as a result of the interim Sue Gray report.
Baroness Bennett of Manor Castle (GP)
The Prime Minister today told the other place that it was “appropriate” to hold gatherings to thank Downing Street staff for their service. I go to a tweet from Adil Ray OBE, the actor and writer, who, with understandable and rightful anger, noted that at exactly the same time you were told to
“go straight home on your own or watch on zoom when your loved ones were leaving this Earth.”
Does the Leader of the House really believe that at that point in time it was appropriate to hold those Downing Street gatherings?
Baroness Evans of Bowes Park (Con)
Like everyone, I feel incredibly sorry for everyone who was touched in such a horrific way by Covid. We all have immense sympathy but, as I have said and can only repeat, the Prime Minister has made a full and unreserved apology for what happened in No. 10 and taken steps to start to tackle some of the issues involved.
Baroness McIntosh of Hudnall (Lab)
My Lords, can the noble Baroness say whether the changes the Prime Minister has made in No. 10, and in other aspects of the way the Government work, include changes to himself?
Baroness Evans of Bowes Park (Con)
I am not the Prime Minister. He has said what he has said. I am sorry if the noble Baroness does not accept that, but he has offered an apology. He has said that he has learned lessons, and I believe that.
Baroness Young of Old Scone (Lab)
Can the noble Baroness advise me? Around the time of some of the earlier parties, I developed some condition and had to go and see a doctor. That doctor wept in front of me. I did not know him. He was wearing PPE and a mask, and he was exhausted and at the end of his tether. When he asks me whether the sort of exhaustion and isolation he was facing and the things he was experiencing, seeing people dying of Covid, are equivalent to the sort of hard work that the Prime Minister this afternoon seemed to imply slightly justified people having parties, can the Leader of the House advise me on how I should rationalise those two sorts of hard work for the benefit of the doctor, whom I will no doubt see again at some stage?
Baroness Evans of Bowes Park (Con)
I would certainly thank the doctor that you saw for the incredible work and service he provided and all the hard work that people across the NHS provided. The Prime Minister and civil servants within No. 10 and the Cabinet Office, and indeed across government, were also working very hard, obviously doing completely different things but helping to ensure that we had help for the homeless, to help provide shielding packages and to ensure that the doctor you saw had the PPE that he needed. But that is absolutely not to say that the doctor you met —and I am sure many other people around the country—faced similar circumstances, and the Prime Minister has acknowledged the anger that someone like that doctor might well feel.
Baroness Bennett of Manor Castle (GP)
To return to the previous question I put to the noble Baroness the Leader of the House, I will simplify this down. The Prime Minister said today that it was appropriate to hold these gatherings to thank Downing Street staff for their service. Does the noble Baroness the Leader agree that it was appropriate to hold those gatherings?
Baroness Andrews (Lab)
I am going to ask the noble Baroness something else my noble friend asked her, about the fact that the cleaners and security staff at No. 10 seemed to know the rules governing behaviour over Covid. As she said, one of the most impressive things about Sue Gray’s excellent, measured and professional report is that, before she describes each of the events, she sets out, quoting verbatim, what the rules actually were at the time of each of the different stages of Covid. The Prime Minister was on television practically every week reading out those regulations, telling people what they involved and what they could and could not do. Yet he has systematically said that he did not quite understand them himself in terms of what his own staff were doing and what he and they were allowed to do. But the cleaners and the security staff seemed to understand. What was it that the Prime Minister did not understand?
Baroness Evans of Bowes Park (Con)
I can only repeat what was said in the Statement. The Prime Minister said that he understood that the rules and guidance had been followed at all times. That is what he believed was true, but he accepts now, in the light of the report, that his understanding of the situations that were happening, some of which carried on and happened without his knowledge, was wrong. He has corrected the record in that regard and once again apologised.