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Mr Speaker
As the House will be aware, we have started our proceedings an hour late today because of the leak of some water into the Chamber from an air conditioning unit to an office nearby—not the one to the Chamber. I have been assured that it is safe for us to sit in the Chamber. All of today’s business has protected time, so no debates have been curtailed as a result of the delayed sitting. I am grateful to Members for their patience, and to the House staff who have ensured that we are able to sit today; thank you everybody.
Oral Answers to Questions
(1 year, 9 months ago)
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Tom Randall (Gedling) (Con)
The Parliamentary Under-Secretary of State for Work and Pensions (David Rutley)
Despite what has happened today, our spirits will not be dampened, and I am sure that the Chamber will be in full flow before we know it.
Universal credit claimants who received at least 1p during assessment periods that ended between 26 April and 25 May 2022 will be eligible for the first instalment of a cost of living payment worth £326. Latest statistics show that 4,800 households in Gedling were in receipt of universal credit in February 2022.
Tom Randall
Will my hon. Friend confirm when the more than 10,000 households in my Gedling constituency that are eligible for a cost of living payment should expect to receive that help from the Government?
David Rutley
The first instalment of the means-tested cost of living payment of £326 will be paid to eligible households from 14 July. I am pleased to remind colleagues that the payment is the first in a £15 billion package of measures to help households this year.
Marion Fellows (Motherwell and Wishaw) (SNP)
The Minister of State, Department for Work and Pensions (Chloe Smith)
We are absolutely delighted to see 1.3 million more disabled people in work than in 2017, smashing our commitment of 1 million lives changed by 2027 five years early. We remain committed to reducing the disability employment gap and, over the next three years, we will invest £1.3 billion in employment support for disabled people and people with health conditions.
Marion Fellows
The UK has the highest levels of in-work poverty this century, which, as the Minister will know, disproportionately impacts groups facing higher living costs, such as disabled people. In the middle of this Tory man-made cost of living crisis, will she ensure that the UK Government’s health and disability White Paper addresses the suitability of the current statutory sick pay system, increase the Access to Work fund and end the payment cap, as well as create statutory timescales for the implementation of reasonable adjustments?
Chloe Smith
As is the hon. Member’s wont, she introduces a series of serious points, which I look forward to continuing to discuss with her here and in other places. I can confirm that we shall be bringing forward our health and disability benefits assessment White Paper, and I very much look forward to discussing the full breadth of the contents with her. I can also confirm that our goal is to help as many disabled people as possible and as appropriate to start, to stay and to succeed in work, because that is one way of being more resilient to economic crises. That is in addition to our extensive cost of living support.
Vicky Foxcroft (Lewisham, Deptford) (Lab)
The Government-commissioned National Centre for Social Research report confirms that many disabled people live in poverty. Ministers claim that work is a route out of poverty, yet the disability employment gap remains stubbornly at 28%. We have a bureaucratic Access to Work scheme, with an ineffective spending cap, which, ironically, is not available in all accessible formats. A mere £128 million is spent on it, compared with £64 billion on disability benefits. What does the Minister say to those disabled people who want to work, but who are faced with a system that, frankly, is not fit for purpose?
Chloe Smith
I think the hon. Member is wrong to say that the disability employment gap is static at 28%. It is moving in the right direction, which is important to acknowledge. While we have made progress, we need to be able to make more. It is important to recognise what has gone on, in that we have more disabled people in work and the disability employment gap is reducing. We need Access to Work to be a strong part of the solution. There is a great deal of work going on to transform Access to Work to make it even more effective in helping disabled people to start, stay and succeed in work. Those will all be continued priorities of this Government and this Department.
Martyn Day (Linlithgow and East Falkirk) (SNP)
The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
Mr Speaker, I hope to be a better Pensions Minister than the one from whom I have just inherited the job.
The United Kingdom Government have provided £37 billion-worth of support for those most in need, including pensioners. Some pensioners will receive in excess of £1,500 over and above the state pension, which is up this year.
Martyn Day
I thank the Minister for that answer, but pension credit figures show that an estimated £1.7 billion goes unclaimed. Not only are 850,000 families missing out on this essential support, but they are also ineligible for the £650 cost of living payment. Will the Minister consider extending the cut-off date for entitlement to that payment to next March? Will the Department finally look at a proper benefits take-up strategy such as the one we have in Scotland?
Guy Opperman
The hon. Member will be aware that, by reason of the pension credit awareness campaign from April and in particular the pension credit day of action on 15 June, the numbers for pension credit have massively increased—by well over 275% for that period. He will also be aware that there is a huge effort being made to ensure that pension credit take-up increases. I ask all hon. Members please to encourage their communities to apply. Finally, he will also be aware that pension credit is retrospective, so people have until 24 August to apply and still be entitled to the £650 cost of living payment that this Government will be making from Thursday.
Matt Rodda (Reading East) (Lab)
Following the resignation of the Prime Minister, there is a real risk that the House turns in on itself. I want to draw the Minister’s attention to the serious cost of living crisis facing families and pensioners in this country. Sadly, the Government broke their promise to keep the triple lock on the state pension at the very time that inflation was starting to rise. As a result, pensioners struggling to get by have each lost more than £500 this year. How can the Minister possibly justify letting down pensioners in this way?
Guy Opperman
I was the Minister who saw that the Labour party at the time did not object to our taking the actions we did in respect of the triple lock. The hon. Gentleman talks about a loss but, as he knows, the state pension was less than £100 in 2009, before the Government changed in 2010. He also knows that we have now virtually doubled the state pension and that there is in excess of £1,500 extra money going to pensioners this year, by reason of the winter fuel payment, the cost of living support for those who are most vulnerable, the council tax rebate worth £150 and the energy support fund, which arrives on or around 1 October.
Alan Brown (Kilmarnock and Loudoun) (SNP)
The reality is that even before the Pensions Minister scrapped the triple lock, taking £500 out of the pockets of pensioners, the UK had pensioner poverty rates higher than small independent European countries. We now know that the Chancellor is reviewing the corporation tax rates, which were intended to raise £50 billion over the lifetime of this Parliament. How can he guarantee that the triple lock will not be sacrificed once more, trapping pensioners in poverty just to pay for Tory tax giveaways?
Guy Opperman
As the hon. Gentleman will be aware, the United Kingdom Government have provided £37 billion-worth of support—[Interruption.] Oh, we most definitely have. That takes the form of four different payments over the next six months and is a real support to the most vulnerable in our community. Without a shadow of a doubt, we will continue to support those most vulnerable.
Mr Philip Hollobone (Kettering) (Con)
The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
It was an honour and a privilege to visit my hon. Friend’s Kettering constituency. Although the figures on new pension credit claims cannot be broken down by constituency or region, the pension credit campaign has been highly successful, with more than 10,000 claims received across Great Britain during the week of the pension credit day of action on 15 June. That was an increase of 275% for the relevant period compared with 2021, which also saw an increase.
Mr Hollobone
I congratulate my hon. Friend on being the longest-serving Pensions Minister ever and thank him for visiting Kettering on Friday 1 July and supporting the Kettering Older People’s Fair. I urge him to use the fact that pension credit is a gateway benefit in encouraging people to take it up. Not only could it be worth £3,300 in itself, but it gives access to extra help with council tax, heating bills, NHS dental treatment and free TV licences.
Guy Opperman
As my hon. Friend knows, I am in day three of being the Pensions Minister—but the previous one was very good, I did hear. The practical reality is that pension credit is a difficult benefit to try to get out, because everybody has to apply. It is very much our role as Members of Parliament across all parties to ensure that we send out the message that, if anybody is in doubt, they should apply. That can apply to any particular member of our community because the circumstances differ in any particular way, but my hon. Friend is right that this benefit is a springboard to so much else, with £3,300 on average that people can apply for.
Mr Speaker
I am not quite sure of your connection with this question, as a Scottish MP, because obviously it is about Northamptonshire and England. There must be one, but I cannot see it. Are you sure there is a connection to the question? [Interruption.] It is limited to three areas—the responsibility is for those areas. I call James Sunderland.
James Sunderland (Bracknell) (Con)
The Parliamentary Under-Secretary of State for Work and Pensions (David Rutley)
In May this year, we published “Fighting Fraud in the Welfare System”, which details our proposals for reducing fraud and error, including legislative change and closer working across Government.
James Sunderland
The claimant rate in Bracknell is way below the national average. My constituency enjoys high employment, but we still have lots of job vacancies. What steps is the Department therefore taking to ensure that the remaining claimants are helped into work?
David Rutley
With a record 1.3 million vacancies, our focus is not only on tackling fraud but on continuing to help people to get back into work and to progress in their careers. A multi-billion-pound plan for jobs will continue to help our constituents and people across the UK to find work and progress in employment.
Christian Matheson (City of Chester) (Lab)
With regard to DWP issues, one of the largest problems I see in my mailbag is people who go for assessed benefits, such as the personal independence payment, being turned down at the first stage, having to go to appeal and, in huge numbers, winning on appeal. Why are there so many errors in the assessment process?
David Rutley
I thank the hon. Member—another good Cheshire MP—for his question. We are working hard to make the right decisions first time, every time. All health professionals undertaking assessments on behalf of the Department must be registered practitioners who have also met requirements around training and competence. We are working hard to make sure that we can further improve the quality of those assessments with clinical coaching and monthly performance meetings.
Simon Fell (Barrow and Furness) (Con)
The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
The Department’s priority will be to retain, retrain and redeploy colleagues either within the Department for Work and Pensions or within other Government Departments in the area, and with no reduction in the overall services people receive.
Simon Fell
The plan to close Phoenix House in Barrow will result in more than 40 specialist jobs leaving the area. This matters because the people there are the only team in the country able to deal with the really complicated industrial disablement benefits that they process. Only recently, largely due to our industrial heritage in Barrow, we were confirmed as having the highest rate of mesothelioma in the UK. The team at Phoenix House help not just Barrow residents but people across the UK with such complex diseases. I have written at length to the Secretary of State about this, with detailed testimonies from charities, service users, staff members and third-party organisations that want to keep the centre open. Will my hon. Friend meet me to discuss how we can find a way to make this work?
Guy Opperman
My hon. Friend is a doughty campaigner for his constituency and for the wider area, and the jobs that he is concerned with, and I give him great credit for that. I am not the responsible Minister, and I know that that letter has only recently arrived into the Department, but I will ensure very definitely that the Minister in respect of this particular decision will meet him in the near weeks so that there can be a proper discussion in respect of the situation for impacted staff.
Andrew Jones (Harrogate and Knaresborough) (Con)
The Minister of State, Department for Work and Pensions (Chloe Smith)
As I said to the hon. Member for Motherwell and Wishaw (Marion Fellows) , we are absolutely committed to being able to continue to increase the number of disabled people in work. There is a range of Government initiatives to achieve this, including the Work and Health programme, the Intensive Personalised Employment Support programme, Access to Work, Disability Confident, and supporting partnerships with the health system.
Andrew Jones
My office is part of the Disability Confident scheme started by the Department. I strongly support the scheme because it encourages employers to think differently about disability, and to take action to improve how they recruit, retain and develop disabled people in their workplace. How will my hon. Friend work to promote that scheme, which is a valuable tool to close the employment gap that we have already talked about today?
Chloe Smith
First, I thank my hon. Friend and any other hon. and right hon. Members who are members of that scheme, because it is incredibly important that we do that from this place as we encourage employers of all shapes and sizes to be involved in the scheme. Secondly, we will continue to promote the scheme from the Department as widely as possible through a variety of communications. Thirdly, because our goal to continue to reduce the disability employment gap remains at the forefront, we want to grow commitment and action across and outside of Government. It has to be a shared ambition across society and that is well encapsulated in the Disability Confident scheme.
Mr Speaker
I call the Chair of the Select Committee, Sir Stephen Timms.
Sir Stephen Timms (East Ham) (Lab)
The Government’s response last November to the Select Committee’s report on the disability employment gap promised key improvements to Access to Work to make it easier for people to use. Can the Minister give us an update on progress with that? Specifically, the trial of Access to Work passports started last November, so that people can take their support from one job to another. Can the Minister tell us whether that will be extended to everybody on the scheme and when we can expect that to happen?
Chloe Smith
These are incredibly important details and aspects of the Access to Work scheme, and the right hon. Gentleman is correct that those improvements are in the pipeline. We have been able to pilot a number of different passports. I will write to him with details and I am also with his Committee next week, where I can provide the precise details of that. By way of example, a passport now in operation assists freelancers and people who work in contract form to be able to carry their requirements with them from job to job, so that it is easier for them to stay and succeed in work, which is the goal we are talking about. I also look forward to talking further with him about the digital improvements we want to make to the process, again to help people get that support earlier and faster, so that they can get the benefits of being in work.
Rob Butler (Aylesbury) (Con)
The Parliamentary Under-Secretary of State for Work and Pensions (Julie Marson)
It is a privilege to be here, and I take this opportunity to pay tribute to the former Minister, my hon. Friend the Member for Mid Sussex (Mims Davies), for all her incredible work in this role. We want everyone to be able to find a job, to progress in work and to thrive in the labour market, whoever they are and wherever they live. On 26 January 2022, we launched the Way to Work campaign, moving more than 520,000 job-ready claimants into work by the end of June.
Rob Butler
I warmly congratulate the Minister on her appointment. Unemployment is at extremely low levels across the country, which is very welcome, but in my constituency of Aylesbury, we still have some small areas where some people struggle to find a job, despite there being vacancies nearby, often because they do not have the skills required to take those jobs. How can my hon. Friend’s Department help those who need new skills to get back into work?
Julie Marson
Thank you very much, Mr Speaker. My hon. Friend raises the important issue of skills. We empower work coaches to build individual, tailored support packages to help claimants into work and to progress into better work. The DWP has a range of programmes that work coaches can use to help claimants to gain new skills in areas of local labour market need. That includes sector-based work academy programmes and DWP Train and Progress.
Mr Barry Sheerman (Huddersfield) (Lab/Co-op)
I also welcome the Minister to her new job. Can I ask her to give someone a good kick on the kickstart scheme? It was the skill delivery mechanism for this Government, and it has quietly been put down in some back room. The fact of the matter is that this country needs more skills and this Government are not interested in skills and are not doing their job. Can she not get on with it, and get on with it now?
Julie Marson
I thank the hon. Gentleman for his question. Kickstart has delivered more than 163,000 starts, and I think that is hugely to be welcomed. One of the things that is so amazing to me in this role is to recognise the absolute impact on the individual people concerned of those 160,000 job starts. That is something we should welcome.
Mims Davies (Mid Sussex) (Con)
I congratulate the Secretary of State and her updated DWP team on their successes up and down the country. It is okay that it is my hon. Friend the Member for Hertford and Stortford who is at the Dispatch Box, rather than anyone else. Delivering help and opportunities up and down the country—true levelling up in action in jobcentres—has been the difference for the Way to Work campaign. Can I ask my hon. Friend, the new Minister, how she is looking to continue to progress for everybody, building on the success of getting half a million people into work through the Way to Work scheme?
Julie Marson
Again, I pay tribute to all the amazing work that my hon. Friend did in her role. She is right to talk about the way to work scheme. We are pleased that we have the DWP youth offer, which will continue to offer huge opportunities to people in that age group, and which extends to 16 and 17-year-olds. There are also a multitude of other valuable schemes, such as the 50-plus champions, the job entry targeted support scheme and in-work progression—a whole host of schemes—that we are working hard to deliver.
Dan Jarvis (Barnsley Central) (Lab)
I welcome the Minister to her new role. Does she share my concern at recent data showing up to 70,000 armed forces veterans in receipt of universal credit? Does she think that the 50 armed forces champions around the country, who are no doubt doing their absolute best, have the capacity to provide the support to those who have served our country so that they can weather the cost of living crisis?
Julie Marson
That is a vital area. Our veterans deserve our respect and every bit of help and assistance that they can receive. We are extending the veterans champions scheme; I will be looking at that in much more detail. This is day one, but I look forward to focusing on that and ensuring that I engage with the hon. Gentleman and others who are concerned about it.
Alison McGovern (Wirral South) (Lab)
I welcome the new Minister to her role. She joins the Government at a unique and special time. I also take the opportunity to pay tribute to the work done by the hon. Member for Mid Sussex (Mims Davies). I do not agree with her very much on employment, but I know how hard she worked and that many people in the Department will miss her greatly.
As the Minister is new, I will ask her an easy question—all I am looking for is a single number. By the time she leaves office, how many of the 1 million people who are estimated to have left the labour market will be back to work?
Julie Marson
It seems churlish, on day one, to mention the Labour party’s record on jobs. Every time it has left power, it has left more people unemployed than when it started.
Chris Stephens (Glasgow South West) (SNP)
The Parliamentary Under-Secretary of State for Work and Pensions (David Rutley)
Our £15 billion cost of living package includes a one-off £650 cost of living payment to low-income households in receipt of a means-tested benefit, a one-off £150 disability cost of living payment, and a £300 top-up to the winter fuel payment for pensioners. That is on top of a wider package of measures that takes the total Government help for households to £37 billion this year.
Chris Stephens
The Minister will be aware that during a recent Work and Pensions Committee meeting, the Secretary of State told me that she was not satisfied with the progress of bereavement benefits for cohabiting partners, and that she was meeting her officials the next day. When will the second remedial order be laid so that people who would qualify for that benefit can meet their living costs?
David Rutley
The hon. Member is a determined terrier on this issue, and understandably so. Important issues have been raised and it is vital that we get it right. We are carefully considering the issues and we will lay the order before the House as soon as we are able. In parallel, DWP officials are working at pace on implementation plans for the order, as I have discussed with him separately.
Dr Rupa Huq (Ealing Central and Acton) (Lab)
Tony Lloyd (Rochdale) (Lab)
The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
The Government have announced a £37 billion package of support to help people with the cost of living. The full basic state pension is now £2,300 a year higher than in 2010 and is supported by many other measures.
Dr Huq
It is good to see the Minister back; there is nothing like organised labour to effect progress.
In reality the state pension has not managed to keep up with the multiple crises we face: we have the Ukraine crisis pushing up food and fuel prices on top of the existing cost of living crisis. Yet the Ministerial and other Pensions and Salaries Act 1991 dictates that last week’s non-returning Ministers, including an alleged groper, are set to net £423,000 in severance payments. Given the widespread public revulsion among our constituents feeling the pinch, including state pensioners, does the Minister not see that there is an argument for the non-exercise of that provision in this instance, because—
Mr Speaker
Order. I am not quite sure about the significance of this; the question is not that wide.
Guy Opperman
This matter will be dealt with by an urgent question that follows. I can confirm it definitely does not apply to me, and frankly I do not think it is an appropriate question for today.
Tony Lloyd
The Minister is not new to his job. In the order of 1 million pensioners who should be in receipt of pension credit are still not receiving it, and he will know that they lose out not simply on the credit but on all manner of other benefits. Will he show some urgency and compassion for those struggling with the cost of living increases?
Guy Opperman
I sincerely hope that the hon. Gentleman joined in on Pension Credit Day of Action on 15 June, because it is incumbent on all Members of Parliament to get behind the efforts of the Government, and successive Governments, to improve pension credit take-up. The fact of the matter is that this Government have done more to increase take-up and the number of claims than any previous Government. There is no doubt whatsoever that we should all get people to apply, with £,3,300-worth of benefits applying for those receiving pension credit.
Dame Nia Griffith (Llanelli) (Lab)
The Minister of State, Department for Work and Pensions (Chloe Smith)
We estimate that 600,000 people on employment and support allowance will be better off on UC, which is of course a modern, flexible benefit that includes targeted support for disability and which helps to simplify the benefits system, providing support in times of need and making work pay. I can add that the Department holds regular engagement sessions with external stakeholders, including of course disabled people and others in the health and disability sector, seeking their input into the process.
Dame Nia Griffith
In 2019 the then Secretary of State promised that the Department would pause the migration to UC after a pilot of 10,000 cases, would report back and would provide parliamentary scrutiny of legislation for the wider roll-out. Instead of breaking this promise, does the Minister accept that migration to UC will make thousands of people worse off in real terms just when inflation is going through the roof, and will she now pause the process?
Chloe Smith
The answer is no, and that is because, first, my right hon. Friend the Secretary of State updated the House through a written ministerial statement only recently in which she explained precisely the point about the prior piloting and exploratory work. Secondly, Parliament voted in 2012 to end legacy benefits and replace them with a single, modern benefit system, and on top of that, committed to providing transitional financial protection. That is the key point in this case: where a claimant may not already be better off—as we have said, in the majority of cases, they are—they are supported.
Ms Karen Buck (Westminster North) (Lab)
The truth is that many people migrating will be worse off because of the timing—in a period of high inflation. We know that the legacy benefit group to be transferred on to UC is on average much more vulnerable than those in the existing UC caseload; the great majority of legacy ESA clients are in the support group. Can the Minister tell us exactly how the migration process is going? Has it been tested at scale to ensure that it is safe for vulnerable clients?
Chloe Smith
As my right hon. and hon. Friends have laid out extensively to the House, the process being followed is one of initial discovery. After that, it will be possible to provide fuller answers to the House of Commons about how the broader process will work. The vast majority of claimants will either be better off or no worse off, and I want to lay on record one more time that 55% of people will see an increase in their award, 10% will see no change, and 35% will be protected transitionally.
Alex Cunningham (Stockton North) (Lab)
Stephanie Peacock (Barnsley East) (Lab)
The Secretary of State for Work and Pensions (Dr Thérèse Coffey)
It is not usual to project poverty levels in terms of statistics—[Interruption.] Does someone want to join in? [Interruption.] I just cannot hear. Somebody is talking. Projecting poverty levels is not something we normally do. However, the latest official statistics show that in 2021, some 8 million people were in poverty in absolute low-income before housing costs, which was a fall on the previous year. I am very conscious of the challenge of the cost of living right now, which is why we are providing a £15 billion support package targeted at the most in need, but I am proud of the fact that we are getting more and more people into work—over half a million in just the past five months. We know that for most people, the best way to get out of poverty is to get into work.
Alex Cunningham
Even using the Government’s preferred measure of absolute child poverty, the proportion of children living in absolute poverty rose in every north-east local authority area between 2014-15 and 2019-20, and continued to rise in the first year of the pandemic. In Stockton, that figure is up by 7.1 percentage points; in Hartlepool, it is up by 7.2; in Darlington, it is up by 7.9; in Redcar, it is up by 9.4; and in Middlesbrough, it is up by a colossal 13.9 percentage points. Those are not just numbers: they represent thousands of children. Can the Minister tell the House which of the Tory leadership candidates will be content to see children in places such as Stockton go hungry, and which of them will take action to ensure they do not?
Dr Coffey
I would be grateful if the hon. Gentleman would give me the specific source of his statistics, because I believe that statistically, child poverty has actually fallen, something of which Government Members are proud. Nevertheless, he will be pleased by the fact that people have opportunities and are getting into work. That is what we will continue to do, because we know that children in workless households are undoubtedly more likely to be in poverty. That is why we continue to focus on getting their parents into work.
Stephanie Peacock
One in three children in Barnsley are living in poverty. My constituent cares for his disabled eight-year-old son. He recently started a part-time job to supplement his income, but after working just two hours’ overtime, he had a whole month of carer’s allowance deducted. The Secretary of State has just said that the best route out of poverty is to get into work, so can she explain why those who receive carer’s allowance are penalised for doing just that?
Dr Coffey
I expect that the hon. Lady’s constituent is receiving the caring element of universal credit, rather than carer’s allowance specifically, which is a slightly separate approach. Universal credit is a dynamic benefit. It reflects the fact that when a person is working more, they receive less support from other taxpayers, and—just as happened at the beginning of the covid pandemic—when taxpayers are working less, they immediately started receiving more. That is the success of universal credit, and we will continue to encourage people to get into work.
Henry Smith (Crawley) (Con)
The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
Some 35,000 people have been automatically enrolled into a workplace pension in the Crawley constituency since 2012. We thank the 1,690 employers who have declared compliance with their enrolment duties. Some 10.7 million people across the country are now saving into a workplace pension.
Henry Smith
I am grateful to receive those figures from the Minister, and I congratulate the Government on the record numbers of people auto-enrolled into workplace pensions, both in my Crawley constituency and across the country. Will he also pay tribute to some of the pension providers, such as B&CE, the People’s Pension, which is headquartered in Crawley?
Guy Opperman
I know the People’s Pension very well, and have met its staff many times. I have had the great privilege of coming to Crawley and meeting the team behind such a great organisation. It is a much-valued employer that is doing great work in making pensions accessible to the working population, both in Crawley and all across the country. That matters, because we used to have 26% of young people and 40% of women saving for a pension, and those figures are now well above 80% across the country.
Nick Fletcher (Don Valley) (Con)
The Secretary of State for Work and Pensions (Dr Thérèse Coffey)
Following the success of kickstart, which has seen over 163,000 jobs started by young people, with approximately 30,000 still on that scheme, the DWP youth offer remains in place to support those who still need help. That includes youth hubs, which bring together partner organisations and the DWP in local communities to provide employment and skills support.
Nick Fletcher
I have spoken with many young people since becoming an MP. They believe that waiting and fighting for their dream job is the right thing to do. Does the Secretary of State agree with me that our young people should take opportunities that arise which will get them earning while still applying for their dream job, as that will not jeopardise their chances but will, most probably, do exactly the opposite?
Dr Coffey
As ever, my hon. Friend talks common sense. It is really important that people realise that the heart of our Way to Work campaign is ABC—any job, better job, career. We know that having a job already allows people to build a lot of skills so they can progress, perhaps in the job of their dreams. Through support such as the DWP youth offer, work coaches will continue to help unemployed young people move into a range of roles. The skills and work experience that people can gain from a job will help them to progress.
Sir Robert Neill (Bromley and Chislehurst) (Con)
The Parliamentary Under-Secretary of State for Work and Pensions (David Rutley)
We recognise that earnings can fluctuate for all self-employed people, including performers and creative workers, and that it takes time to establish a business. That is why we offer a 12-month start-up period, giving claimants time and support to grow their earnings and reach their agreed minimum income floor before it is applied.
Sir Robert Neill
I understand the objective of the minimum income floor, to get into sustainable employment, but perhaps the Minister does not appreciate that for people in the performing arts and creative sectors it is not just a short-term period for which they have unpredictable and fluctuating incomes. By the nature of theatre, music, performance and so on, shows are cancelled at short notice. In fact, established performers with viable careers still get hit disproportionately by the minimum income floor. Would it not be sensible to collect the data on a sector-by-sector basis, so that we do not have a one-size-fits-all approach but can tailor it to achieve the objective he wants, which is to reach the need of each specific sector?
David Rutley
Universal credit supports self-employed people and the Department ensures fairness by treating all sectors equally. I have already talked about the 12-month start-up period, which is designed to strike the right balance between supporting claimants to make a success of their business and protecting public funds.
Kerry McCarthy (Bristol East) (Lab)
The Minister of State, Department for Work and Pensions (Chloe Smith)
Six million people in receipt of an eligible disability benefit will receive a £150 disability cost of living payment, as well as the £400 energy bill discount. Many will also be eligible for the £650 cost of living payment for lower-income households, the first instalments of which are being paid this week.
Kerry McCarthy
I thank the Minister for that response, but at the time when the then Chancellor came up with that support package in May, Ofgem’s cap prediction was that a typical bill would rise to £2,800 in October. It now looks as though it could be something like £450 more than that, with yet another rise in January. What additional support will whoever the Chancellor is, or will be in a couple of weeks’ time, come up with to ensure people with disabilities can manage to pay their fuel bills?
Chloe Smith
The helpful thing I can add here is that disabled people can, of course, also benefit from the package previously announced in the spring statement, which continues in the format of the household support fund. Many millions of pounds have already been allocated to local authorities, which are best placed to direct help to those who need it most.
Rachel Hopkins (Luton South) (Lab)
The Secretary of State for Work and Pensions (Dr Thérèse Coffey)
At this moment, I am delighted to have a team who are making sure that the wheels of government keep turning. That is particularly true given that we are the biggest delivery Department in Whitehall, on which so many vulnerable people rely.
It is certainly my focus to deliver help for households. As the Minister of State, Department for Work and Pensions, my hon. Friend the Member for Norwich North (Chloe Smith) pointed out, we will be sending out the first instalment of the £650 cost of living payments, starting from this Thursday.
We are also building on our successful Way to Work scheme, having smashed our ambition to get half a million people into a job in just five months, thanks to help from my hon. Friend the Member for Mid Sussex (Mims Davies). Dare I say, Mr Speaker, that that is way to go for Way to Work!
We are now putting more focus on those further from the labour market who are economically inactive or most at risk of inactivity, whether through the lifetime MOT offer or the £1.3 billion-worth of employment support for disabled people. That will help to grow the economy and ensure that more people are on the path to prosperity and prospects through work.
Rachel Hopkins
Many of my Luton South constituents are struggling to make ends meet. In fact, across the east of England, 50% of Citizens Advice debt clients are in a negative budget, with their monthly expenditure on essentials exceeding their income; that is up 12% from the same period in 2019. Does the Secretary of State still think that it is a good idea for the Government to raise taxes this year, when the UK is the only G7 country to do so?
Dr Coffey
The hon. Lady will be aware of the £37 billion package that is going to households, £15 billion of which is being deployed this year. People will already have received some elements of that through council tax support, and I have outlined the cost of living payment support. I could add to that the lifting of the national living wage to £9.50 an hour and the reduction in the taper rate to 55% for people who are working and on universal credit. We are targeting support at the most challenged low-income households, and we will continue to do that. Meanwhile, we will continue to try to do what we can to grow the economy to help households, so that we can tackle inflation overall.
Elliot Colburn (Carshalton and Wallington) (Con)
Dr Coffey
My hon. Friend continues to be a champion for his constituents. He will be aware of aspects of the Way to Work campaign that are different from how they were in the past. Far more job fairs are happening, bringing employers into jobcentres for interviews. That enables us to make quicker decisions, find out what is going wrong in the process and support people so that they can more quickly get the pay packet that they cherish.
Jonathan Ashworth (Leicester South) (Lab/Co-op)
As we have heard, it is expected that the energy price cap will rise by £450 more than was anticipated when the Government announced their cost of living package. A typical household will face energy bills of £3,250; that is more than a third of the value of the state pension. How on earth does the Secretary of State expect pensioners and families to cope this winter?
Dr Coffey
I think the right hon. Gentleman is referring to an external analyst’s prediction of what might happen with energy prices. Nevertheless, the Government have responded. We deliberately made sure that our cost of living payment package came out when Ofgem made its announcement, and that is why we tailored the cost of living payment support to help households. We will make sure that support for household energy costs goes to every single household in the country, in addition to our comprehensive package. My right hon. Friend the Secretary of State for Business, Energy and Industrial Strategy leads on fuel poverty. I am conscious that in making decisions, he will consider the vulnerable the most, as all of us in the Government do.
Jonathan Ashworth
I appreciate that the Secretary of State may not be in her place come this October—who knows?—but she is currently in a Cabinet with a Chancellor and a Foreign Secretary, and she shares the Government Benches with a whole host of colleagues, who have made £30 billion to £40 billion-worth of unfunded tax cut commitments. Is not the truth that those tax cuts can be paid for only by further cuts to the state pension, further cuts to universal credit and further cuts to disability benefit, and that the reality is that the next Tory Prime Minister will make the cost of living crisis even worse?
Dr Coffey
Far from it; as has been shown yet again, this Conservative Government have stepped up to deal with the cost of living challenge, just as we did through covid, and we will continue to do so. That is why we will be spending £37 billion on this. As for support going forward, I am conscious that people who are running to be leader of the Conservative party and the future Prime Minister want, quite rightly, to make sure that we have an active, growing economy. I will leave them to be judged on their policies. I am the Secretary of State for Work and Pensions, and we are going ahead with the additional payments, starting this week. Many households will be looking forward to them, and I am pleased that we are able to deliver them.
Mrs Sheryll Murray (South East Cornwall) (Con)
The Parliamentary Under-Secretary of State for Work and Pensions (Julie Marson)
As always, my hon. Friend is a fantastic advocate for her constituents in South East Cornwall. Jobcentres work with employers in all sectors to help them to connect with jobseekers who are looking for work, and to fill their vacancies. I encourage any employer to reach out to their local jobcentre. DWP staff recently held events alongside the National Farmers Union to promote jobs in agriculture and connect people to our sector-based work academy programmes.
Kirsty Blackman (Aberdeen North) (SNP)
The UK Government recently rejected the Work and Pensions Committee report’s recommendation to
“extend Child Benefit to all British children irrespective of their parents’ immigration status.”
People with no recourse to public funds do not qualify for the additional cost of living payments. Children are literally starving and suffering malnutrition because of this cruel policy. Does the Secretary of State believe that this is acceptable in the 21st century?
Dr Coffey
The hon. Lady refers to the fact that people without recourse to public funds are not eligible for benefits. When people arrive, I accept that they are not going to be eligible for child benefit. Any family in a state of difficulty can apply to the Home Office for a review of that status; it is for them to do so. At the same time, as I think we confirmed to the Select Committee when we discussed the matter at the hearing last week, it is for local councils to design the way they do the household support fund. It may be possible for people without recourse to public funds to apply to their local authority.
Sir Edward Leigh (Gainsborough) (Con)
Will the Secretary of State confirm that support for the welfare state depends on a kind of social contract where people realise that those who are pensioners or out of work should be helped because they have paid their taxes? How is support for the welfare state improved when 60,000 people a year are pouring across the channel, paying illegal smugglers—these are not the poorest of the poor—and being kept on social security, maybe for 10 years, without ever being deported? By the way, what does it cost?
Dr Coffey
I am conscious that through the help—the visa schemes—being put forward for Ukrainian citizens and for Afghan resettlement, there is access to public funds. My right hon. Friend will be aware that people who arrive in the country illegally are given a payment via the Home Office, I think, of a very small amount of money to pay for the day-to-day, but they are not eligible directly for benefits.
Ian Byrne (Liverpool, West Derby) (Lab)
The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)
The hon. Gentleman will be aware that the state pension has almost doubled under the coalition and this Conservative Government. He will be aware that pensioner poverty is going down. He will be aware that the state pension is up on last year and the year before. He will also be aware that we are paying £1,500-worth of support. He should very much be aware of pension credit and should be making the case for it to all his constituents who can access the £3,300, on average, plus the household support fund. I am sure he is making the case to each and every one of his constituents.
Tony Lloyd (Rochdale) (Lab)
The Minister of State, Department for Work and Pensions (Chloe Smith)
The hon. Gentleman raises an important point that we take very seriously in the Department. We want to get the correct support to people as early as possible and in a way that engenders trust and the proper levels of support from our Department. He will, I am sure, be an avid reader in due course of the health and disability assessments White Paper, which will go into some of these points in greater detail, following on from the Green Paper, to which we had 4,500 consultation responses. However, I can assure him, and all other right hon. and hon. Members, that we want to be able to ensure that the right decisions are made in the first place, and considerable resources are being put into the Department for that purpose.
Wendy Chamberlain (North East Fife) (LD)
Last year there were 337,000 overpayments as a result of errors by the DWP, with the debt waived in only 10 cases. Claimants spend these funds in good faith, but are then required to make repayments that they simply cannot afford. Will the Minister agree to bring universal credit in line with legacy benefits by making no-fault debts non-repayable?
The Parliamentary Under-Secretary of State for Work and Pensions (David Rutley)
It is obviously important to ensure that we get our payments right, and we are working hard to do that, but it is also important to balance the needs of the taxpayer with those of benefit recipients. We do need to get that balance right.
Steve McCabe (Birmingham, Selly Oak) (Lab)
The Department’s annual report, released last week, has revealed that the estimate of the number of women who have been short-changed over their retirement pensions has risen by a further 103,000. That is not quite the rosy impression that the Select Committee was given when the Secretary of State and the permanent secretary appeared before it recently. Just how long will these women have to wait before they receive their legal entitlement, and can the Minister confirm that there will not have to be a further upward revision of these estimates?
Guy Opperman
It is unquestionably the case that this Government are trying to resolve matters that date back some 20 years. I might have wished that some of my predecessors who occupied the illustrious position of Pensions Minister, some of whom now sit on the Opposition Benches, had made a better job of monitoring these matters. We are fixing the problem. We have—definitely—more than 500 people working on it now, and, as I explained to the Select Committee, we will have upwards of 1,000, rising to 1,300, working on it on an ongoing basis; so it will be fixed in the very near future.
Anne McLaughlin (Glasgow North East) (SNP)
I know what the Government have said they are doing to increase the uptake of pension credit, and that is good; I do not want to hear it again, though. I also know that people can backdate their claims for pension credit, so anyone who makes a successful application by 24 August this year will receive the £650. However, I have been campaigning for the deadline to be extended to the end of the fiscal year, because I think that as we go into the winter, that is what will concentrate people’s minds when they have to make the very real choice between heating and eating. I am not asking the Minister to commit himself to doing this today, but will he commit himself to at least considering extending the deadline to 31 March next year?
Guy Opperman
The uptake of pension credit is clearly to be applauded, and I sincerely hope that the hon. Lady was behind the pension credit day of action and is behind the messages that we are all trying to put out. That is not all, however. On Thursday we will make the £326 cost of living payment, which will drop £1 million in payments every single working day, and there will be a further £324 payment in the autumn. We are also providing the energy support grant of £400, which will go to every individual in the country, as well as the £300 winter fuel payment, the council tax rebate, and various other household support grants. All those are available to individuals up and down the country, and will also support pensioners.
Mr Speaker
Order. If there are no further questions, I will suspend the sitting for two minutes.
Sitting suspended.
Ministers’ Severance Pay
(1 year, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Fleur Anderson (Putney) (Lab)
(Urgent Question): To ask the Chancellor of the Duchy of Lancaster if he will give a statement on severance pay for Ministers.
The Parliamentary Secretary, Cabinet Office (Mrs Heather Wheeler)
The severance pay for Ministers is established in legislation that was passed by Parliament in 1991 and that has been used by successive Administrations over several decades. The Ministerial and other Pensions and Salaries Act 1991 states that where a Minister of eligible age ceases to hold office and is not reappointed to a ministerial office within three weeks, they will be entitled to a severance payment of a quarter of their ministerial annual salary. The context of this legislative provision is the reality that ministerial office can end at very short notice indeed, that reshuffles are a fundamental part of the operation of Government and, by their nature, routinely remove Ministers from office, and that, unlike in other employment contexts, there are no periods of notice, no consultations and no redundancy arrangements. Section 4 of the Act therefore makes provision for severance payments.
This is a statutory entitlement, and it has existed and been implemented for several decades, by Governments of all stripes. Severance payments were made and accepted by outgoing Labour Ministers between the Blair and Brown years, as well as during the Administration in 2007, and by Liberal Democrat Ministers during the coalition. To ensure transparency, severance payments are published in the annual reports and accounts of Government Departments. As an example of the previous operation of this provision, the data published in 2010 indicated that severance payments made to Labour Ministers in that year amounted to £1 million. Finally, let me be clear that although this is a statutory entitlement, Ministers are able to waive such payments. This is not a matter for the Government; it is an entirely discretionary matter for the individuals concerned, and this is an approach that has been taken before.
Fleur Anderson
Thank you very much for granting this urgent question, Mr Speaker. I welcome the fact that there is a Minister to respond. In the middle of a cost of living crisis, and with families struggling to make ends meet and get to the end of each month, the British public will be rightly watching this distracted Government with disgust. They are too busy infighting to provide real solutions, and to add insult to injury, thousands of pounds of people’s hard-earned taxes will be handed out to former Ministers. By my reckoning, £250,000 of severance pay will be given to Ministers who have not been reinstated. Five former Secretaries of State will receive more that £16,000 each, including the former Secretary of State for Education, who was in post for 36 hours and is due to receive close to the annual starting salary for a teaching assistant.
This unprecedented wave of resignations and the avalanche of abdications make this a unique case. The vast majority were not sackings or forced resignations. The departures were caused entirely by a discredited Prime Minister clinging to office and a Conservative party unwilling to deal with it. Now our constituents are forced to foot the bill, paying for this Government’s chaos yet again. So I ask the Minister: what is the exact cost of these resignations to the taxpayer? Have any payments already been made to former Ministers? If so, how much and to whom? Will Ministers receive the severance in a one-off payment to their bank account? How do these payments represent good value for money to the public, and what arrangements are there to ensure that they can be waived, as she identified, and returned to the Treasury? Former Ministers need to look themselves in the mirror and decide if their constituents would wish them to accept this payment, and this whole Government must tell us if they can really defend this use of our money.
Mrs Wheeler
As I said earlier, and to answer the hon. Lady’s question, at this point no Ministers who resigned are entitled to receive a severance payment. We have a three-week window.
Michelle Donelan (Chippenham) (Con)
Does my hon. Friend agree that it is disingenuous of the Opposition to reference my alleged severance pay, as I made it clear almost immediately after resigning that I would not be taking such money?
Mrs Wheeler
Indeed, and I thank my right hon. Friend for confirming that she has already talked to the permanent secretary of the Cabinet Office and that she will not be receiving the payment.
Mr Speaker
We now come to the SNP spokesperson, Brendan O’Hara.
Brendan O’Hara (Argyll and Bute) (SNP)
Could there be a more fitting end to the tenure of one of the most discredited Prime Ministers in living memory than to have a slew of his former Ministers, motivated in the main by naked self-interest, finally abandoning the ship that everyone else could see was sinking months ago and, in the process, costing the public purse hundreds of thousands of pounds? It is quite astonishing, particularly when, for so many people across the United Kingdom, keeping body and soul together at this time of crisis is a daily challenge that will only get tougher.
I appreciate that the Minister has said that this payment is discretionary and that no one is forced to accept it, so will she join me in asking everyone in receipt of such a payment to refuse it, to return it or to donate it to charity? Will that be made public when it is done? Does she agree that this system, whereby a disgraced Prime Minister—one who is heading out the door, we think—can appoint Ministers knowing they will be entitled to severance pay in a few months’ time, is fundamentally broken and requires an immediate overhaul?
Mrs Wheeler
I am afraid I do not agree with the hon. Gentleman. It is quite clear that, within the three-week period, Ministers who have left can decide for themselves whether they should accept the money and make that decision clear to the permanent secretary so that no money leaves the Treasury before having to come back. I hope that is totally clear.
Selaine Saxby (North Devon) (Con)
Does my hon. Friend agree that it is outrageous that the Liberal Democrats put out an article last week stating that I, as a Parliamentary Private Secretary, was paid £22,375 for a job we all know is unpaid, and that I received £5,594 in severance pay? Does she also agree that this type of libellous statement, which the Liberal Democrats choose to put out about us, has earned them the nickname of “the Fib Dems”?
Mrs Wheeler
That is an astonishing thing for the Liberal Democrats to put out. It is a straight, flat lie that they should know very well should not be put out by any political party. When the hon. Member for North East Fife (Wendy Chamberlain) stands to ask a question, which is a perfectly reasonable thing for her to do, I sincerely hope she apologises and confirms that the Lib Dems will put out a clarification as large as the original piece.
Barry Gardiner (Brent North) (Lab)
I make it clear that I do not want to cast aspersions on any individual Minister.
This morning I visited the care workers of the St Monica Trust in Bristol. One worker told me that the average wage is between £16,000 and £17,000, and that the trust is asking them to take, in one case, a reduction of £6,000. The House will consider legislation later today that enables agency workers to undercut striking workers, in an atmosphere in which we are talking about levelling up. Does the Minister understand that these payments should not be made where a Minister resigns voluntarily? I understand it if a Prime Minister says, “Your services are dispensed with,” but to make any such severance payment following a voluntary resignation is really wrong.
Mrs Wheeler
I recall that, during the Blair and Brown years, the Labour party decided it did not need to change the legislation. The legislation is as it is, there is a three-week period, and I think that is completely fair.
Wendy Chamberlain (North East Fife) (LD)
First, I commit to responding directly to the hon. Member for North Devon (Selaine Saxby) and the Minister on what statements were put out.
This seems to be a situation entirely of the Conservatives’ making. We are potentially at risk of making a mockery of our system. Given that the Minister says it has been more than 30 years since this legislation was looked at, does she agree that now is the time to revisit it and that, at the very least, we should look at a minimum term of service before a Minister or Secretary of State is entitled either to waive or to receive a severance payment?
Mrs Wheeler
That is a fair question. The answer I would give the hon. Lady is that, obviously, the Liberal Democrat who resigned during the coalition did not think it was worth looking at either.
Steve McCabe (Birmingham, Selly Oak) (Lab)
Does the hon. Lady think the public will consider any resigning Minister who is a Tory leadership candidate to be setting the right example by trousering this cash?
Mrs Wheeler
Fortunately, I am going to make absolutely no comment about the fact that we have many, many wonderful candidates to be our next leader who, frankly, will knock the Labour party into a cocked hat when they are elected.
Matt Western (Warwick and Leamington) (Lab)
I understand that approximately £400,000 will be paid out in severance payments. Will the Minister agree to publish a full list of the amounts being paid out to those individuals? Will she confirm that these moneys will be coming from Departments, such as the Department for Education, and will therefore have an impact on the budgets of much-pressed Departments and, for example, on schools or other institutions?
Mrs Wheeler
The hon. Gentleman asks a perfectly reasonable question. It is laid out in statute how the amounts and payments are made, and it is in the annual accounts of the Departments.
David Linden (Glasgow East) (SNP)
A supermarket worker from Shettleston would not get thousands of pounds in a severance payment. Why should Rishi Sunak, the richest man in Parliament, get a severance payment?
Mr Deputy Speaker (Mr Nigel Evans)
Order. Do not name Members by their names, please. You could say former Chancellor of the Exchequer—
Mrs Wheeler
Thank you, Mr Deputy Speaker. Absolutely, we do not use names, do we? I thank the hon. Gentleman for the question. It is very simple: this is a matter of statute law, it has been around since 1991, and all the different political parties have taken use of it. That is where we are.
Mr Deputy Speaker
Mr Brown, let’s see if you can do better than your colleague.
Alan Brown (Kilmarnock and Loudoun) (SNP)
Thank you, Mr Deputy Speaker. When the new Education Minister gave a one-fingered salute to the crowd outside Downing Street, that was symptomatic of this Government, who have been putting two fingers up to the entire UK for the tenure of the former Prime Minister. Given that we have a zombie Government, with Ministers who are clearly in place on a temporary basis, does this Minister agree that they should not take severance payments when they rightfully get sacked when a new Tory leader comes in?
Mrs Wheeler
The hon. Gentleman is slightly off point regarding the Education Minister; I would like him to remember that the lady in question has had seven death threats against her, and the way the baying mob were reacting at the time was astonishing. As regards anything else, people will use the three-week window to decide whether they take the severance payment or not, and the law is the law.
Ms Marie Rimmer (St Helens South and Whiston) (Lab)
It is a sensitive time. People are going hungry, they are going to be cold, although they are not at the moment, and they have to deal with energy prices. Yes, we hear, “This is statute and that is it. It is up to the individual.” We were told this once before, and the individual can do something, but surely at this time, with all that is going on, when we are in a poor state as regards respect from our public, we should call on the relevant people to reflect the sensitive situation and to say en masse, “We do not want this. We will not accept it.” That would go a long way with the public.
Mrs Wheeler
I thank the hon. Lady, whom I know to be an unbelievably caring lady. It is important that comments and sentiments like that are expressed in this Chamber, as they make the House of Commons the sort of place that everybody in a living democracy wants to have. I will reflect on her views. I repeat, loudly, that there is a three-week window and individuals can reflect on the situation themselves, but I do thank her for the question.
Bill Presented
Parliamentary Elections (Optional Preferential Vote) Bill
Presentation and First Reading (Standing Order No. 57)
Paul Maynard, supported by John Stevenson, presented a Bill to introduce the optional preferential voting system for Parliamentary elections; and for connected purposes.
Bill read the first time; to be read a second time on Friday 9 September, and to be printed (Bill 138).
Energy (Oil and Gas) Profits Levy Bill: Business of the House
Ordered,
That the following provisions shall apply to the proceedings on the Energy (Oil and Gas) Profits Levy Bill:
Timetable
(1) (a) Proceedings on Second Reading and in Committee of the whole House, any proceedings on Consideration and proceedings on Third Reading shall be taken at today’s sitting in accordance with this Order.
(b) Proceedings on Second Reading 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.
(c) Proceedings in Committee of the whole House, any proceedings on Consideration and proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion four hours after the commencement of proceedings on the Motion for this Order.
(d) This paragraph shall have effect notwithstanding the practice of the House as to the intervals between stages of a Bill brought in upon Ways and Means Resolutions.
Timing of proceedings and Questions to be put
(2) When the Bill has been read a second time, it shall, despite Standing Order No. 63 (Committal of bills not subject to a programme order), stand committed to a Committee of the whole House without any Question being put.
(3) (a) On the conclusion of proceedings in Committee of the whole House, the Chair shall report the Bill to the House without putting any Question.
(b) If the Bill is reported with amendments, the House shall proceed to consider the Bill as amended without any Question being put.
(4) For the purpose of bringing any proceedings to a conclusion in accordance with paragraph (1), the Chair or Speaker shall forthwith put the following Questions in the same order as they would fall to be put if this Order did not apply:
(a) any Question already proposed from the chair;
(b) any Question necessary to bring to a decision a Question so proposed;
(c) the Question on any amendment, new Clause or new Schedule selected by the Chair or Speaker for separate decision;
(d) the Question on any amendment moved or Motion made by a Minister of the Crown;
(e) any other Question necessary for the disposal of the business to be concluded; and shall not put any other questions, other than the question on any motion described in paragraph (9)(a) of this Order.
(5) On a Motion made for a new Clause or a new Schedule, the Chair or Speaker shall put only the Question that the Clause or Schedule be added to the Bill.
(6) If two or more Questions would fall to be put under paragraph (4)(d) on successive amendments moved or Motions made by a Minister of the Crown, the Chair or Speaker shall instead put a single Question in relation to those amendments or Motions.
(7) If two or more Questions would fall to be put under paragraph (4)(e) in relation to successive provisions of the Bill, the Chair shall instead put a single Question in relation to those provisions, except that the Question shall be put separately on any Clause of or Schedule to the Bill which a Minister of the Crown has signified an intention to leave out.
Miscellaneous
(8) Standing Order No. 82 (Business Committee) shall not apply in relation to any proceedings to which this Order applies.
(9) (a) No Motion shall be made, except by a Minister of the Crown, to alter the order in which any proceedings on the Bill are taken, to recommit the Bill or to vary or supplement the provisions of this Order.
(b) No notice shall be required of such a Motion.
(c) Such a Motion may be considered forthwith without any Question being put; and any proceedings interrupted for that purpose shall be suspended accordingly.
(d) The Question on such a Motion shall be put forthwith; and any proceedings suspended under sub-paragraph (c) shall thereupon be resumed.
(e) Standing Order No. 15(1) (Exempted business) shall apply to proceedings on such a Motion.
(10) (a) No dilatory Motion shall be made in relation to proceedings to which this Order applies except by a Minister of the Crown.
(b) The Question on any such Motion shall be put forthwith.
(11) (a) The start of any debate under Standing Order No. 24 (Emergency debates) to be held at today’s sitting shall be postponed until the conclusion of any proceedings to which this Order applies.
(b) Standing Order No. 15(1) (Exempted business) shall apply in respect of any such debate.
(12) Proceedings to which this Order applies shall not be interrupted under any Standing Order relating to the sittings of the House.
(13) (a) Any private business which has been set down for consideration at a time falling after the commencement of proceedings on the Motion for this Order shall, instead of being considered as provided by Standing Orders or by any Order of the House, be considered at the conclusion of any proceedings to which this Order applies.
(b) Standing Order No. 15(1) (Exempted business) shall apply to the private business so far as necessary for the purpose of securing that the business may be considered for a period of three hours.—(Mr Simon Clarke.)
Energy (Oil and Gas) Profits Levy Bill
Monday 11th July 2022
(1 year, 9 months ago)
Commons ChamberRead Full debate Energy (Oil and Gas) Profits Levy Act 2022 View all Energy (Oil and Gas) Profits Levy Act 2022 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: Committee of the whole House Amendments as at 11 July 2022 - (11 Jul 2022)
The Chief Secretary to the Treasury (Mr Simon Clarke)
I beg to move, That the Bill be now read a Second time.
People across the country are facing rising energy costs and an increase in the overall cost of living. Of the basket of goods and services that we use to measure inflation, a record proportion are seeing above average price increases. Indeed, the country is now experiencing the highest rate of inflation for 40 years, which is causing acute distress to the people of this country. In May the Government announced a series of measures to help the British people during this difficult time, in which we have seen oil and gas prices reach new highs; oil prices have nearly doubled since early last year and gas prices have more than doubled. This is a global phenomenon that is driven by factors out of any single Government’s control, in large part resulting from Russia’s illegal war.
With increased prices at the global level, profits from oil and gas extraction in the United Kingdom have also shot up. These are unexpected, extraordinary profits—above and beyond what forecasters could have expected the sector to earn. Because of these extraordinary profits, and to help fund more cost of living support for UK families, the Government are introducing an energy profits levy. The temporary levy is a new 25% surcharge on the extraordinary profits. When oil and gas prices return to historically more normal levels, it will be phased out.
Stephen Flynn (Aberdeen South) (SNP)
I would welcome some clarity from the Minister as to what his Government regard normal prices to be, because those involved in the industry will be watching on at this moment.
Mr Clarke
The answer is: prices of an order that we saw prior to Russia’s invasion of Ukraine and prior to some of the inflationary pressures resulting from the covid disruption—prices more akin to those seen in 2021. Indeed, we could also refer to factors that predate that, back to 2019. The system has clearly been in flux, but I would certainly not want to encourage the artificially low prices of 2020 to be seen as a baseline for these purposes.
Stephen Flynn
I thank the Minister for giving way again. Getting investment into the industry is one of the Government’s big arguments for the tax break incentives they are providing to the industry. How can that possibly happen when they do not even say what a normal price is?
Mr Clarke
I will set out more about our investment incentives in a moment. We are not going to tie ourselves to a specific price level, but will obviously look towards a return to more normative market conditions—not, as I said, the artificial lows of 2020—such as the pre-crisis situation in 2019 and some of the much healthier pattern of last year, prior to what Russia has done in Ukraine, which has obviously driven prices to new highs. That gives the House a sense, but we will obviously set out our thinking well in advance of repealing the levy.
I am firmly committed to our net zero strategy.
Alan Brown (Kilmarnock and Loudoun) (SNP)
Will the Minister give way once more?
Mr Clarke
No, I will not; I am going to make some progress.
As set out in the energy security strategy, the North sea will still be a foundation of our energy security for years to come. Currently, about half our demand for gas is met through domestic supplies. In meeting net zero by 2050, we have to be realistic; we will still be using about a quarter of the gas that we use now. It is therefore necessary to incentivise investment in oil and gas, and to encourage companies to reinvest their profits to support the economy, jobs, and our energy and security, but it is possible to tax extraordinary profits fairly and to incentivise investment. That is why, within the energy profits levy, a new “super-deduction” style relief has been introduced to encourage firms to invest in oil and gas extraction in the UK. We expect that the energy profits levy, with its investment allowance, will lead to an overall increase in investment. Indeed, one oil and gas company has already said that the immediate investment allowance should spark further investment in the North sea. The new 80% investment allowance will mean that, overall, businesses will get a 91p tax saving for every £1 they invest, providing them with a clear incentive to do so. This nearly doubles the tax relief available and means that the more investment a firm makes, the less tax it will pay. Unlike Labour’s windfall tax in 1997, this levy both incentivises investment and raises more revenue.
The energy profits levy contains an investment allowance that doubles the overall investment relief for oil and gas companies, unlike Labour’s proposal of a few weeks ago. Our levy raises around £5 billion over the next 12 months against Labour’s estimate of around £2 billion for its proposals. Its windfall tax would raise less than £70 per household, not £600 as it claimed. In fact, the Opposition’s regressive VAT plans would give millionaires in mansions more off their bills than those in need. They are now caveating their windfall tax costings by stating that their £600 per household support will be supported by “other measures”. By that I presume they mean more public spending and a higher rate of taxation for hard-working people across this country. As usual with Labour, the sums sadly do not add up.
The new tax we are introducing today ensures that the extraordinary and unexpected profits from which oil and gas companies have benefited are taxed fairly and provide a significant investment incentive. This is a sensible considered move and one that will be warmly welcomed across the House.
Our plans mean that the oil and gas producers can claim the allowance when their spending on investment is actually incurred. This is unlike the allowance under the existing permanent tax regime for oil and gas companies, which can be claimed only once income is received from the field, subject to the investment, and, as some Members of the House will know, that can take several years.
I want to make it clear what the investment allowance will apply to. First, if capital or operating expenditure qualifies for supplementary charge allowance, it will qualify for the energy profits levy allowance. As the levy is targeted at the extraordinary profits from oil and gas upstream activities—that is the profits that came about owing to global price increases—it makes sense that any relief for investment must also be related to oil and gas upstream activities.
Secondly, such spending can be used to decarbonise the oil and gas production, for example through electrification. Therefore, any capital expenditure on electrification, as long as it relates to specific oil-related activities within the ringfence, will qualify for the allowance.
Stephen Flynn
I thank the Minister for giving way once again; he is being very generous. On that specific point, the Financial Secretary to the Treasury stated the same last week. It is good to have that clarification, but why is it not written into the text of the Bill?
Mr Clarke
I can provide that assurance from the Dispatch Box. Examples of electrical expenditure on plant and machinery will be things such as generators, which include wind turbines, transformers and wiring. I also remind the House that there are other tax and non-tax levers to support non-oil and gas investments, such as in renewables. Those levers include the super-deduction and our competitive research and development tax credit regime. Importantly, the returns on these investments are taxed at 19% rather than at 65% as for UK oil and gas profits.
We have been listening closely to feedback from industry. Late last month, my right hon. Friend the former Chancellor met industry stakeholders in Aberdeen to discuss the levy and to make sure that it works as the Government intend it to. As my right hon. Friend the Financial Secretary to the Treasury confirmed in a debate last week, the Government have changed the legislation, which is reflected in the Bill before us today.
Tax repayments that oil and gas companies receive for petroleum revenue tax related to losses generated by decommissioning expenditure will not be taxed under the levy. These are repayments that are typically taxed under the permanent tax regime. However, as wider decommissioning expenditure is also left out of the account for the levy, this change is both consistent and fair. I wish to reiterate my thanks to those in the industry with whom we have engaged on this matter, and to again reassure the House that, with this change, the Government still expect the levy to raise around £5 billion over the next year.
On how long the levy will be in place, it will take effect from 26 May this year and, when oil and gas prices return to historically more normal levels, it will be phased out. The sunset clause in the Bill ensures that the levy is not here to stay. There are very few taxes that have their expiry date set in law, so this provision demonstrates the Government’s commitment to keeping the levy temporary and gives oil and gas companies further reassurance as they seek to plan their investments.
Our permanent oil and gas tax regime is competitive globally against similar operating environments and is lower than that of Norway, the Netherlands or Denmark. However, it is both fiscally prudent and morally right that we have a temporary and targeted levy that applies to extraordinary profits in our oil and gas sector and reflects an extraordinary global context.
Through the Bill, the levy will raise some £5 billion of revenue over the next year so that we can help families with the cost of living through significant and targeted support to millions of the most vulnerable. These are extraordinary times and we are seeing extraordinary prices, and that requires extraordinary Government action.
I did not come in to politics to raise taxes, nor did this Government, but we are about delivering the action required to support families in their time of need. At the same time, the Government are clear that we want to see the oil and gas sector reinvest its profits to support our economy, jobs and energy security. For those reasons, I commend the Bill to the House.
James Murray (Ealing North) (Lab/Co-op)
I thank the Minister for setting out how North sea oil and gas producers will be affected by the measures the Bill seeks to introduce—even though he seemed unable to say the words “windfall tax” when referring to it at any point during his speech.
This Bill is long overdue. We are finally debating this legislation in Parliament, more than seven months after the shadow Chancellor first set out Labour’s plans for a windfall tax on oil and gas producers’ profits. In the seven months since Labour first called for a windfall tax, cost of living pressures for people have grown relentlessly, and in those seven months, oil producers’ profits have soared.
Since the start of this year, energy bills have spiralled by £700 for a typical household, inflation across the board has hit 9.1%, the highest in 40 years and, despite Tory smoke and mirrors with thresholds, average earners will still be paying £300 more in national insurance contributions by 2027.
Alan Brown
The hon. Gentleman is making the point that Labour has campaigned on this for seven months. At the same time, the SNP has been calling for a much wider profits levy to address excess profits of other companies. Why is Labour not looking at that? I will give an example: Tesco chair John Allan, as we know, called for the windfall tax on oil and gas, but Tesco trebled its profits from £636 million to more than £2 billion. Why not an excess profit levy on Tesco and others that have profited through the pandemic?
James Murray
I look forward to the hon. Gentleman supporting Labour’s amendments and new clauses to the Bill as we seek to cut some of the loopholes the Government have introduced, which I will turn to in a moment.
Let us not forget that, while cost of living pressures on people across the country have soared relentlessly, oil and gas producers’ profits have climbed too, with some tripling this year. A fair solution has been staring the Government in the face: levy a one-off windfall tax on North sea oil and gas producers’ profits and use that money to help to cut people’s energy bills at home.
Yet when, on 9 January this year, the shadow Chancellor first called on the Government to levy just such a tax, Conservative MPs opposed it outright. Leading that opposition the very next day was the then Education Secretary, the right hon. Member for Stratford-on-Avon (Nadhim Zahawi). He is now of course the Chancellor, so this is his Bill. At the time of our announcement, the now Chancellor, who was an oil industry executive before becoming an MP, came out firmly against the tax on the grounds that oil producers were “already struggling”. When she responds, I would be grateful if the Financial Secretary to the Treasury confirmed whether the Chancellor supports his own legislation today.
Back in January, of course, it was not only the now Chancellor who opposed the tax. The Business Secretary opposed it too, saying:
“I have never been a supporter of windfall taxes.”
The then Northern Ireland Secretary, the right hon. Member for Great Yarmouth (Brandon Lewis), said that he thought a windfall tax sounded attractive, but did not work. The Deputy Prime Minister claimed it would be disastrous. Ministers and their Back-Bench Conservative colleagues then went on to vote against our plan for a windfall tax on three separate occasions.
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
This demonstrates the difference between Opposition Members and Conservative Members, in that we do not come lightly to the decision to increase taxes on successful British industries. Labour and the SNP would tax anything that moved; we take a long time to think through our plans carefully. That is why we are presenting this plan today, which is far removed from Labour’s plan. That would decapitate the oil and gas industry—which, by the way, Labour does not support—and we would have the taps turned off tomorrow.
James Murray
The hon. Member is right that Conservative Members have taken a long time to come round to this. They have taken seven months to come round to it—seven months in which the cost of living pressure on people across the country has risen relentlessly and in which oil producers have seen extraordinary profits. That delay has not been without cost.
Despite our common-sense plan for a windfall tax having wide support across the country for many months, with even oil bosses backing its logic, Conservative Ministers and their colleagues on the Back Benches simply refused to get on board—until 26 May, the day after the Sue Gray report was published. That was the day the Prime Minister and the former Chancellor suddenly changed their minds. It seemed clear that what had finally caused the Conservative leadership to change course and back a windfall tax was not the deafening calls from people across the country for help with their energy bills, nor the blatant unfairness of oil and gas producers’ profits soaring in the middle of a cost of living crisis; rather, it was the need for a different set of headlines in that week’s news. That is a grubby way to govern, and it is proof, if further proof were needed, that the Conservatives are not fit to lead our country.
Now, after months of refusing to act, Ministers are rushing this Bill through Parliament with just one day of debate and with a consultation period on the draft legislation of just seven days. As Tax Justice UK, working with the campaign group Uplift, has said, such a short period of just one week for consultation on the draft Bill is
“a breach of well-established legal principles of procedural fairness.”
As it points out, having a longer consultation period would not delay the levy taking effect, as the Bill names its start date as 26 May. It fears that the shorter consultation period the Government have chosen offers
“those with most resources—such as oil and gas producers—more opportunity to influence the shape of the legislation.”
Alan Brown
It is good that the hon. Gentleman mentioned Tax Justice UK. It is probably worth speaking to it about pandemic profits and a wider profits levy, because that it is what it advocated. Hopefully when he is discussing the oil and gas stuff with it, he will discuss a wider profit levy as well.
James Murray
I thank the hon. Gentleman for his intervention. We discuss many matters with Tax Justice UK, not least its response to the ridiculously short consultation period on the draft of the Bill that the Government are now seeking to rush through Parliament in a day.
Despite the fact that Ministers may be in a rush today, we know that their story until recently has been one of delay. Those months of delay in backing a windfall tax mean that the public finances have missed out on billions of pounds of tax revenue that could have gone towards further help for people struggling with the cost of living. But whatever it took to get the Prime Minister and the former Chancellor over the line, we were relieved that they finally agreed to back a windfall tax. On behalf of the people we represent across the country, we were relieved that some help with soaring energy bills was finally on its way. That help is set to include a payment of £400 to all domestic energy bill payers. We welcomed that promise of support announced alongside the windfall tax, and we were relieved that the Government had finally listened to what we and so many others had been saying as they agreed to drop the “buy now, pay later” compulsory loan scheme that had been promised before. But we were dismayed to learn that some of the people who need the help least will be getting that £400 payment several times over. Because this package has been cobbled together at the last minute, people who live in more than one home will get £400 for each of them, so a total of £200 million of public money will go towards people with multiple properties. That is not fair, it is not a good use of public money, and, as we see far too often, it is public money being casually wasted by this Government.
While that particular loophole may have been the result of carelessness or haste, the Bill contains another loophole that has been created by design—a brand-new tax break for oil and gas producers that will give money back to the same firms that were supposed to be paying their fair share through the windfall tax. This tax break means that oil and gas producers will receive an unprecedented level of subsidy for their spending on oil and gas-related activities. For every £100 an oil and gas producer invests in the North sea, they will receive £91.25 from the taxpayer. That compares with £25 that companies receive for investing in renewable energy—a figure that will fall to just £4.50 from April 2023.
Andrew Bowie
Although the hon. Gentleman is talking about how the Labour party likes to support working people, he is quite obviously abandoning all those working people who rely on the oil and gas industry for their employment, including the many thousands who live in my constituency. Given that he has had so many months to think about this, how many times have he and his shadow Cabinet colleagues actually met those in the oil industry to discuss this and see how it impacts on them?
James Murray
I and my hon. Friends have had discussions with them many times, and it is absolutely clear that even oil company bosses agree with the logic of a windfall tax, saying that it would not affect their investment plans.
James Murray
No, I am not going to give way. I have been generous in giving way, and I am going to make some progress now.
This is a subsidy that not even oil executives think is necessary. BP’s chief executive, who in November last year said that soaring global commodity prices had made his company a “cash machine”, told shareholders in May that the company’s £18 billion of investment plans were
“not somehow contingent on whether or not there is a windfall tax.”
Yet despite even oil executives questioning its worth, the Government are pushing ahead with this tax break. Our analysis has shown that this means a third or more of any revenue from the new levy could be handed straight back to oil and gas producers.
The truth is that this tax break means that money that is supposed to be helping people struggling with their home energy costs will instead go back to the very oil and gas producers that have been making record profits during the energy crisis. Furthermore, that money will subsidise projects that almost certainly would have happened anyway. There is no requirement in the Bill for investments claiming this tax relief to be additional to what was already planned.
I wonder whether the Financial Secretary to the Treasury wants to correct what she said in this Chamber on 6 June. That day, she said:
“The investment relief should not be available for investments that are deadweight. It should be for new investments.”—[Official Report, 6 June 2022; Vol. 715, c. 546.]
Yet there is nothing in the Bill to make sure the tax relief it introduces goes towards investments that are new. Above all, let us remember that we are currently holding the COP26 presidency and being trusted with a position of leadership in the world’s efforts to tackle the climate crisis. It is astonishing and appalling that, at this of all times, we are giving 20 times more in taxpayer incentives to oil and gas producers than will be offered to firms investing in renewable energy.
While this Bill has plenty to say about tax breaks for oil and gas producers making extraordinary profits, it is silent on the idea of a windfall tax on the electricity generation sector. We know the Government were planning to tax the sector’s profits, as it was widely briefed in late May that the former Chancellor had ordered Treasury officials to draw up plans for a windfall tax on electricity generators. The uncertainty created by this will-they-won’t-they hokey-cokey on taxing profits from electricity generation risks discouraging vital investment in our future energy security.
As the Government are well aware, the price of electricity generated from renewable sources is currently linked to the price of gas. The spike in gas prices we are facing has therefore pushed up electricity prices, despite the costs of generating electricity from renewable sources not having changed, yet there is nothing about the electricity generation sector in today’s Bill and no detail on any wider plans from the Government to delink electricity prices from the price of gas. All we were promised in the explanatory notes published with the draft Bill was a vague intention that
“the government will urgently evaluate the scale of these extraordinary profits and the appropriate steps to take.”
I therefore urge the Financial Secretary in her response to take this opportunity to say, once and for all, whether the Government will or will not be introducing additional taxes on this sector, and when the Government will bring forward urgent legislation to delink the price of electricity from the price of gas. We are not claiming that a solution to this is simple, but it is the job of Ministers, and a sign of leadership in government, to plan ahead and solve the challenging issues our country is facing.
The windfall tax is a way to offer immediate help to people now, but we need to be investing in the long term to keep energy bills down and make our economy more secure and more sustainable. That is why the Government should be adopting not just our plan for a windfall tax, but also our wider plan to improve energy security and keep energy bills lower in the future. Labour’s plan would see us accelerate home-grown renewables and new nuclear, double onshore wind capacity, reform our broken energy system and retrofit 19 million homes to save households an average of £400 a year on their bills. From the Government, however, all we have in front of us today is a Bill that gives a tax break for oil producers’ continued spending in the North sea. Once again, this Government lurch from crisis to crisis with no plan to fix our broken system and provide the security we need.
We are relieved that the Government are finally proceeding with the windfall tax, and we will be supporting this Bill today, but we will come back to the detail of it in Committee of the whole House. At that stage, we will urge Ministers to make right their delay in introducing the windfall tax and to drop the unnecessary tax break for oil producers that undermines the impact of this windfall tax and our country’s wider efforts to tackle the climate crisis.
The Conservatives’ approach to the windfall tax shows that they are not fit to govern. When we called for a windfall tax, they wasted months opposing it before finally changing course. Now they are undermining their own windfall tax with a new tax break for oil companies. When it comes to the long-term challenges we face, they simply do not have the plans we need for the future. That goes for the former Chancellor, the current Chancellor and all the Conservative leadership candidates as much as it does for the outgoing Prime Minister. Changing the person at the top of the Conservative party will not change anything. We need a change of Government, and that means we need a Labour Government.
Peter Aldous (Waveney) (Con)
This Bill is of particular interest to me, as not only is the cost of living crisis hitting hard in the Waveney constituency, but we need jobs based on the North sea to revitalise the local economy. I should also point out that I chair the British offshore oil and gas industry all-party parliamentary group, as the industry is a significant employer in the Lowestoft and Great Yarmouth area.
It is necessary to balance the need for short-term measures to support people through an unprecedented challenge, caused by covid and exacerbated by Russia’s brutal invasion of Ukraine, against our long-term priority of promoting investment in the UK continental shelf, which will not only revitalise coastal communities but help us achieve our net zero obligations. It is important to point out that the activities taking place on the UK continental shelf are not just the extraction of oil and gas, but those in emerging new lower carbon industries such as offshore wind, hydrogen production and carbon capture, utilisation and storage, all of which are inextricably linked. Any levy on the oil and gas sector, if poorly thought through and poorly drafted, could have a negative impact on investment in those emerging industries, which are so vital to our future.
There is concern that there is a lack of a coherent long-term energy strategy. This Bill, printed on 5 July, in many respects conflicts with the Energy Bill published the very next day. The latter Bill aims to boost the UK’s energy independence and security, attract private investment, reindustrialise the economy and create jobs through clean technologies. What is required is a seamless thread that runs through all aspects of energy policy, from our long-term strategy for producing energy to the need for a major step change in how we insulate our homes and our businesses, right through to the support for those who need it most at the current time. Those latter initiatives should build on policies already in place, such as the energy price cap, the warm home discount and the energy company obligation. We should also look to add to them with support such as the social tariff.
Underpinning this integrated approach should be how we ensure that we fully realise the great opportunity to create exciting, new jobs and how we can best provide people with the necessary skills. In mapping out the strategy with particular regard to this levy, the Government should have in mind the following considerations. The first is the vital importance of not inhibiting investment in decarbonised projects that will create jobs and help us meet our net zero obligations.
Secondly, the Government must have it in mind that investment in energy projects is global and footloose and, if we have an unstable fiscal regime, business will go elsewhere. Thirdly, they must ensure, and not undermine, the security of our energy supply. Fourthly, they should have regard to the negative impact on not just those high-profile oil and gas majors, but the supply chain companies located in many constituencies that are invariably highly innovative small and medium-sized enterprises and are the lifeblood of our local economies. Fifthly, notwithstanding that the Bill contains a sunset clause, there remains some uncertainty on the levy’s timeframe, which I hope the Minister will clarify.
Taking those considerations into account, the amendments and clarification that the Government have made are welcome. They include the exclusion of petroleum revenue tax rebates from the levy, reassurance that capital expenditure on electrification linked to oil and gas is included in the investment allowance, and the inclusion of the aforementioned sunset clause.
That said, more changes would be welcome to reduce the fiscal uncertainty, so I would be grateful if the Government considered the following suggestions. To support SMEs, they should introduce a small profit allowance to allow companies with small profits to be exempt from the levy. That would assist small companies that have been investing for many years. They accumulated significant losses when oil and gas prices were low and are now making only marginal profits.
There should also be support for decarbonisation schemes to ensure that projects such as the electrification of oil and gas production facilities benefit from the capital allowance. A regular review mechanism should be included to ensure that the levy is delivering on its aims and is not having any unintended consequences. There is also a need for regular ongoing dialogue with the industry and the sector’s investors.
I understand why the Bill is being introduced—we are in unprecedented and deeply troubling times—but I am mindful that unintended consequences could undermine much-needed inward investment into the UK, particularly along the North sea coast, which is vital to the regeneration of towns such as Lowestoft. I therefore urge the Government to do all they can to address those concerns, and I hope that the Minister will do that in her summing up.
Stephen Flynn (Aberdeen South) (SNP)
It would be remiss of me as MP for Aberdeen South not to reflect on the fact that last week marked 34 years since the Piper Alpha disaster. It is all well and good for Members to talk about the Bill, but it is important to reflect on the sacrifices that many people have made in the North sea, particularly my constituents and those of the hon. Members for Banff and Buchan (David Duguid) and for West Aberdeenshire and Kincardine (Andrew Bowie), who continue to work in inhospitable terrain daily. I also reflect on the ultimate sacrifice that was paid by so many people long ago; I am sure the Minister will join me in that in her summing up.
On a less serious note, it is funny that we are in the midst of a leadership contest where all we hear about is tax cuts—some have promised £200 billion of tax cuts—yet the Chief Secretary to the Treasury is in the unenviable position of coming to the Chamber to tell us that he will hike taxes to 65% on the oil and gas sector. The irony of that will not be lost on anyone present. Importantly, that tax hike is four times greater than the £1.2 billion that the Opposition pushed for in January, so I congratulate him on being the only Conservative at this moment who appears to want to hike taxes.
Seriousness is important in this debate, however, because we are talking about why the legislation is needed. All hon. Members present are aware of the severe challenges that people up and down the country are facing. Energy prices are absolutely skyrocketing and we have all seen the troubling news in the last couple of days that they are expected to go higher than even Ofgem anticipated. There is also the knock-on impact of inflation, which is away to hit double figures. Fuel costs are skyrocketing. Clothing costs are skyrocketing. Food costs are skyrocketing. Interest rates are going up. Whichever way people turn, irrespective of where they live on these isles, they are getting squeezed and hammered. And the situation is not going to get better: we know the UK under the leadership of the current United Kingdom Government has the slowest growth in the entire G20 outside of Russia and the true effects of Brexit continue to be felt.
So implementing a policy that puts money into people’s pockets is necessary and we of course support the principles of what the Government are seeking to do in that regard. It is worth reflecting on the fact that we are now at a point where the UK Treasury has coined some £400 billion from Scotland’s North sea oil and gas sector. Is it not a pity that we are returning to the well once again? We look enviously across the North sea at Norway, which has a sovereign wealth fund from its own oil and gas sector. It is a bigger basin there, but that fund sits at around $1 trillion. What a comparison to this Government. Not only are they going back to the Scottish well to try to put in place financial support for people, but they are at this crux, where they do not necessarily know what it is and where they are seeking to go, because the Bill was undoubtedly hastily written on the back of Sue Gray’s report, as the Minister acknowledged earlier, when he could not even tell us at what price the levy would be removed. He talks about a normal price for oil and gas. I do not know what a normal price is for oil and gas; I am the MP for Aberdeen South and I have no idea what a normal price for an oil and gas barrel should be, and I do not think any Members on the Government Benches do. That offers absolutely no certainty to industry, irrespective of what the Government seek to suggest.
Perhaps the most glaring omission from the Bill is the fact that the Government are going to offer tax incentives in relation to further exploration, but we will not have anything in the Bill on renewable technologies directly linked to the offshore industry. Those tax incentives are not going to be applied to the renewables industry itself. We were told that is outwith the scope of the Bill, but it is a great disappointment that the Government had an opportunity to seriously incentivise investment in renewables and chose not to do so.
We are of course talking about the wider picture at the present time and I reflected earlier on the UK Government’s desire to cut taxes, but we have not heard about climate change from any single Tory leadership candidate; what are their views on climate change? It is disappointing that there is no talk in relation to this Bill about the journey to net zero or the climate compatibility checks that I think we all across this Chamber, and indeed in industry, agree with.
It is clear, from looking at the situation at the moment, why the Bill is needed. The Government chose to introduce it when they did for reasons of political expediency, but we cannot allow the Bill to simply go through without attempting to improve it and I look forward to doing that at Committee stage.
Several hon. Members rose—
Mr Deputy Speaker (Mr Nigel Evans)
Order. I ask Members to respect the maiden speech conventions as I call and welcome Simon Lightwood.
Simon Lightwood (Wakefield) (Lab/Co-op)
Thank you, Mr Deputy Speaker. It is with great pleasure that I rise to make my maiden speech today. The people of Wakefield have placed their trust in me to restore their rightful voice in this place, and I hope I will reflect their affinity for no-nonsense straight talking in my contributions in this House. I will speak briefly on the Energy (Oil and Gas) Profits Levy Bill before begging Mr Deputy Speaker’s indulgence to speak about the wonderful constituency that I now proudly represent.
What took you so long? It has been seven months since the shadow Chancellor, my hon. Friend the Member for Leeds West (Rachel Reeves), first set out Labour’s plans for a windfall tax on oil and gas giants—seven long months of dither and delay as Government Members attacked the common-sense, compassionate plan to help millions of people facing soaring energy bills and the choice between heating and eating. Why? Pride. The Government could not possibly embrace an idea proposed by the Labour party, so instead of focusing on the people crying out for help, they attacked and ridiculed the idea, while millions worried about how to make ends meet.
I have spent the past few months telling people that this was their chance to tell the Prime Minister he should go. I am delighted that the voters of Wakefield took my advice, but am slightly surprised that 53 Conservative Ministers did, too. We need a change in Government and a fresh start for Britain. Everywhere we look, we see things that are broken, but under this Government, nothing gets fixed. They are incapable of governing in the national interest, and should move aside and call a general election. Those, perhaps, are not the words expected of a Member still exhausted by the rigours of a by-election, but it is an important message to deliver when the Government show such a clear detachment from reality.
I was not born in Wakefield, but I was made in Wakefield. It opened my eyes to a world of opportunity, and I fell in love with the people and the place when I moved to West Bretton to study for my theatre acting degree at Bretton Hall College, which is nestled in the glorious grounds of the world-renowned Yorkshire Sculpture Park. The city also boasts the Hepworth gallery, which was designed by the British architect David Chipperfield and takes its name from the artist and sculptor Barbara Hepworth, who was born and educated in the city. Wakefield constituency includes Wakefield—the merrie city, as it is known—and a large rural area to the south-west. It also includes the towns of Horbury and Ossett, each with their proud history and unique identities.
Wakefield has a proud mining heritage, and I pay tribute to those who powered our nation and kept our lights on. At the National Coal Mining Museum, situated in Wakefield, people come from all over the country to learn about that important industry and its important place in our history. While we cherish our proud heritage, we also have our eyes set towards the future, as shown by the recent opening of CAPA College, which is inspiring, training and educating the next generation of performers, creatives, designers and technicians. I was also pleased to visit the construction site of Tileyard North a couple of weeks ago. That exciting 135,000 square feet creative industries hub, based at Rutland Mills, is transforming the site into the UK’s largest creative community outside London.
As is tradition, I would like to pay tribute to some of my predecessors, including Mary Creagh, who I watched from the Gallery delivering her maiden speech some 17 years ago. A tenacious campaigner and advocate for the people of Wakefield, she successfully introduced the Children’s Food Bill in 2005, which sought to introduce minimum nutritional standards for all school meals. She went on to hold various positions, including shadow Secretary of State for Environment, Food and Rural Affairs, and was pivotal in delivering the new Pinderfields Hospital.
I also pay tribute to David Hinchliffe, who represented Wakefield from 1987 to 2005. He was Chair of the Health Select Committee and, in 1988, became the founder and first secretary of the all-party parliamentary rugby league group—coincidentally, the first all-party parliamentary group I joined upon my election. Finally, I pay tribute to the right hon. Walter Harrison MP, who represented Wakefield from 1964 to 1983. He proudly served as a Government Whip from 1966 to 1970, and as Deputy Chief Whip from 1974 to 1979. I believe Walter remains the only half vote recorded in Hansard, having jammed his foot in the Lobby door just as it was about to close, after being delayed in a lift.
It will not have escaped the notice of Members that I have omitted my most recent predecessor, who left the people of Wakefield without a voice in Parliament, but what I would like to do is pay heartfelt tribute to all victims of sexual abuse for their bravery in pursuing justice. Their actions leave the world a safer place and send a message to those who perpetrate such heinous crimes that we, as a society, will not tolerate sexual violence and abuse. No matter what your status, you are not above the law.
The reality of sexual violence and abuse in England is truly shocking: one in four women have been raped or sexually assaulted as an adult; one in 20 men have been raped or sexually assaulted as an adult; and one in six children have been sexually abused. Those are staggering statistics and represent an uncomfortable truth that must be heard—and, more importantly, urgent action must be taken. Our justice system is failing when only one in 100 rapes are reported to police and charged that same year. Sadly, most victims and survivors of rape do not report it to the police: five in six women and four in five men do not report it.
The biggest tribute we can pay to victims is our action, our perseverance and our commitment to demanding better, to doing more and to being honest with ourselves and admitting that when victims and survivors are forced to wait three years for their case to get to court something is badly wrong. We can and must do better. So, I pay tribute to all victims and survivors of sexual violence and abuse, and promise to always be straight-talking on this issue, and to ensure that the voices of victims and survivors are always heard.
Before taking my seat, I proudly worked for the national health service and witnessed the sheer exhaustion and the struggle that those on the frontline continue to face, and the frustration of those seeking to access NHS services stretched far beyond their limits. I worked with some real-life superheroes. As we move into a world where we live side by side with covid, I urge all colleagues to remember that for the NHS, the impact will be with us for many years to come. They deserve our respect, our patience and our gratitude for all they continue to do.
The people of Wakefield are weary of our politics and their trust has been eroded, but I promise to rebuild that trust every day and be their strong voice in Parliament, fighting every day for the betterment of my constituency.
Mr Deputy Speaker (Mr Nigel Evans)
Congratulations on your maiden speech. You will remember this day forever.
Wera Hobhouse (Bath) (LD)
I congratulate the hon. Member for Wakefield (Simon Lightwood) on an excellent speech. He told us about the wonderful heritage, arts and culture in his constituency. I went to Yorkshire Sculpture Park, a long time ago now, and it was absolutely beautiful. I encourage everybody to go. I hope he will not suffer the fate of one his predecessors and get his foot jammed in one of the Lobby doors. Maybe if he comes early for voting, he can avoid that fate.
We Liberal Democrats have been calling for a windfall tax since last year. It was my right hon. Friend the Member for Kingston and Surbiton (Ed Davey) who first suggested, last October, a windfall tax on the super profits of the oil and gas giants that were taking millions of pounds in profit while households were starting to struggle badly. For months the Government tried to resist a windfall tax, defending the indefensible. The Government have finally caved in, but too late for many. For example, my constituent wrote to me in January saying that he had to stay in bed because he could not heat his home. Our Liberal Democrat analysis shows that more than double the amount could have been raised if the Government’s levy was tougher now and had been implemented earlier. The equivalent of £200 is lost to each household because the Government are doing too little too late.
Imran Hussain (Bradford East) (Lab)
The hon. Lady is making an absolutely excellent and pertinent point. Does she agree that the Government have had ample opportunities, but voted no fewer than three times in this House against bringing a levy in earlier?
Wera Hobhouse
I could not agree more. The Government have dithered and delayed. They could do something about it and back our amendment, which would ensure that the new levy on oil and gas companies is backdated to last October. That would at least reflect the dither and delay and do something about it.
What should we make of the proposals to exempt those companies investing in new oil and gas exploration? There is nothing in the Bill to incentivise investment in renewables. That flies in the face of the Government’s commitment to get to net zero. In fact, it demonstrates once more how quickly they are prepared to U-turn on their promises, making it harder for struggling households to get on top of soaring energy bills now and in future and failing to take serious action on climate change. What is more, where is the programme to transform the pace of home insulation, which is lagging shockingly behind? Where are the planning laws to ensure that we build zero-carbon homes now rather than allowing developers to build homes that will require very costly retrofitting in a few years’ time?
We need bold and swift action to help families with the soaring cost of living and energy prices. The cheapest form of energy is onshore wind. When will the Government drop their effective ban on onshore wind and turbo-charge its revival? That would be the surest way to help struggling households to bring their energy bills down in the near future. The Government, however, can only fire-fight, and they have no vision and no real ambition.
Under Liberal Democrat plans, we would cut most emissions by 2030. That would be good not only for the climate, but for people’s pockets as we wean ourselves off global oil and gas markets as soon as possible. The Government have to come clean on the fact that even if gas and oil are produced in the UK, that will do nothing for household energy costs, because the price of oil and gas is fixed globally, not nationally.
On new green jobs, cleaner air, warmer homes and lowering living costs, the levy could have done so much more. We Liberal Democrats support the Bill but deplore the lack of a much greater ambition from the Government to rein in soaring energy costs and tackle the climate emergency.
Mr Deputy Speaker (Mr Nigel Evans)
I call the shadow Minister, Abena Oppong-Asare.
Abena Oppong-Asare (Erith and Thamesmead) (Lab)
It is a pleasure to respond on Second Reading on behalf of the official Opposition. I thank all hon. Members; this has been a good debate with many interesting contributions from across the Chamber. I particularly congratulate my hon. Friend the Member for Wakefield (Simon Lightwood) on his excellent maiden speech—isn’t it great to see Wakefield turn red again? I know that he will be a great champion for Wakefield and his constituents, and I look forward to hearing many more of his speeches. I also thank the hon. Members for Waveney (Peter Aldous), for Bath (Wera Hobhouse) and for Aberdeen South (Stephen Flynn), who made interesting speeches; it is good to hear them supporting Labour’s policy.
The message that we have heard loud and clear from hon. Members today is that the Tory cost of living crisis is far from over. In fact, the financial pressures that many people are facing grow larger and larger. Food, fuel and energy bills continue to rise and families across the country are already worrying about the winter that lies ahead, as we all see reflected in the emails that we get from our constituents across the country. As my hon. Friend the Member for Wakefield mentioned, in that context, we are finally considering this long-overdue Bill, seven months after my hon. Friend the Member for Leeds West (Rachel Reeves), the shadow Chancellor, set out Labour’s plan for a windfall tax on oil and gas producers—I repeat: seven months.
As my hon. Friend the Member for Ealing North (James Murray) said, since Labour first called for the windfall tax on oil and gas producers, energy bills for typical households have risen by a shocking £700, inflation has rocketed to its highest level in 40 years, and, of course, people’s taxes have gone up as the Government have pressed ahead with the national insurance increase. In that period, oil and gas producers’ profits have soared. Indeed, we estimate that between Labour first calling for the windfall tax in January and the former Chancellor and soon-to-be former Prime Minister finally accepting our arguments at the end of May, nearly £2 billion of tax revenue could have been raised to help people with the cost of living crisis. In that time, Conservative MPs voted against our plans for a windfall tax not once, not twice, but three times. Ministers repeatedly claimed that such a plan would not work. Famously, the current Chancellor said that oil and gas producers were “already struggling”; I would be very interested to hear from the Chancellor whether he has changed his mind about that.
It is shameful that it took the Government so long to come to their senses and finally do the right thing. That is yet more evidence, if we needed it after last week, that this Government are on their last legs, out of touch, out of ideas and now truly out of time. With the windfall tax and with so many other issues, it is Labour that leads and the Conservative party that follows. We are relieved that the Government are finally legislating for a windfall tax, and we will not oppose the Bill today, but there are several areas of concern for us.
Several hon. Members have mentioned the Bill’s tax break for oil and gas producers. We simply do not think it right that the Bill will hand back money to the same companies that are supposed to be contributing their fair share to tackling the cost of living crisis. As my hon. Friend the Member for Ealing North said, for every £100 that an oil and gas company invests in the North sea, it will receive £91.25 from the taxpayer. How is that right? I compare that with the £25 that companies receive for investing for renewable energy, which is set to fall even further. A third or more of the revenue from the windfall tax will be handed straight back to oil and gas producers. How can it be right that we are subsidising oil and gas projects, which companies have said would happen anyway, to this level? It is an insult to families who are struggling and it makes a mockery of our climate commitments.
I turn to electricity generation and the excess profits in the electricity sector.
Stephen Flynn
The hon. Member is making a very passionate case. A similar question was asked earlier of her Front-Bench colleague, the hon. Member for Ealing North (James Murray), but I would be keen to know when shadow Ministers last met industry representatives in Aberdeen to discuss their views on the matter. I ask out of interest.
Abena Oppong-Asare
As the hon. Member knows, Labour has been consulting regularly with organisations and stakeholders about the matter. We are willing to meet anybody who would like to meet us. Our door is open.
We called for the windfall tax months ago and are glad to see that the Government are taking it forward, but I have to say that they have been all over the place on the issue. In May, it was suggested that the Chancellor had asked the Treasury to draw up plans for a windfall tax on excess profits by electricity generators. I really wish that the Government had been vocal on the issue when Labour raised it months ago. As hon. Members will know, the price of electricity is closely linked to the price of gas; electricity prices have therefore been pushed up, although the costs of generating electricity from renewable sources have not changed. That is leading to significant profits for the sector. It was reported that such a windfall tax could raise up to £10 billion, but the Bill says nothing about the electricity generation sector.
As the Government have gone quiet on wider plans to decouple electricity prices from the price of gas, I would be grateful if the Financial Secretary would shed some light today on the Government’s plans for the electricity generation sector. It is clear that the market needs urgent reform so that it delivers for consumers and businesses. I hope that she can tell us why the Government are delaying bringing forward an energy market reform Bill that will finally break the link between gas and electricity prices.
Hon. Members have mentioned the support announced alongside the windfall tax. Of course it is a relief to our constituents that the Government have finally brought forward payments to help with energy bills and have scrapped their proposed “buy now, pay later” scheme, but we think it simply wrong that owners of multiple properties will receive the £400 payment for each and every property that they own and live in. There are surely far better uses for the money than that, so I urge the Government to think again.
Although we will support it today because we have long argued for a windfall tax on oil and gas producers to help people with soaring energy bills, we know that the Bill will not be enough. It is simply not ambitious enough. We need a long-term plan to guarantee the UK’s energy security and bring down bills for families. We have called for an acceleration of home-grown renewables and new nuclear, a plan to double onshore wind capacity and reform our broken energy system, and a national mission to retrofit 19 million homes to save households an average of £400 a year on their bills.
Abena Oppong-Asare
I think that I have already been very generous.
Given the crisis facing the Conservative party, I do not have much confidence in them to deliver these essential priorities for Britain. While they spend the summer arguing among themselves, we on this side of the House will continue to provide the leadership that our country needs, just as we have with the windfall tax. We will stand up for families through the cost of living crisis, we will back British businesses and we will provide economic security for our country.
The Financial Secretary to the Treasury (Lucy Frazer)
It is a pleasure to close this important debate on behalf of the Government. We have talked today about the context of the Bill: the high oil and gas prices, and the extraordinary profits that are being received by the industry while working people struggle with the cost of living. We are introducing a temporary, targeted levy to fund cost of living support, at the same time as encouraging companies to invest.
Let me start by responding to some of the points made by the hon. Member for Ealing North (James Murray). He criticised our levy for not raising enough, but, as was pointed out by the hon. Member for Aberdeen South (Stephen Flynn), Labour’s proposal would have raised only £1.2 billion at the time when it was made, whereas our levy will raise £5 billion—more than the £4 billion called for by Greenpeace, more than the £3.7 billion called for by the Green party, and, as I have said, significantly more than the amount proposed by the Labour party.
The hon. Member for Ealing North criticised our scheme because it will encourage investment, while the hon. Member for Erith and Thamesmead (Abena Oppong-Asare) said that we needed domestic energy security. We are ensuring that the important oil and gas sector will continue to invest so that we have that domestic energy security. The hon. Gentleman criticised us for not listening to industry, but I noted that neither of the Labour Front Benchers was able to say how or when they had engaged with industry. As Conservative Members know, last month the Chancellor held an industry roundtable which was attended by me and by the former Exchequer Secretary, my hon. Friend the Member for Faversham and Mid Kent (Helen Whately).
Let me quote some of what has been said by representatives of the industry about our investment proposal. Orcadian Energy has said:
“We believe the immediate investment allowance, included in the Energy Profits Levy, has transformed the attractiveness of domestic oil and gas projects for companies extracting oil and gas in the UK and it should spark further investment in the North Sea.”
Cornerstone Resources has said that there has been
“more interest in partnering with us”
in the last few weeks. I could go on, but what we are trying to do is raise money to help with the cost of living, at the same time as encouraging industry to invest in a vital sector.
Let me now answer some of the questions put to us by the hon. Member for Ealing North. First, I can confirm that the Chancellor supports the Bill. I also want to respond to the point about consultation. The hon. Gentleman was, of course, encouraging us to do this a long time ago, but now he says that we should have consulted for longer and, therefore, introduced the measure later. We have sought to engage, and put the industry on notice, as much as possible regarding the announcement of the levy. Ministers in my Department have been in regular contact with the industry and we also undertook a short period of technical consultation on the legislation for the levy. Hon. Members will know that draft legislation was published on 21 June, with stakeholders able to provide technical feedback on it until 28 June.
The hon. Member for Ealing North asked what we were doing about the electricity generation sector. As the former Chancellor said at the time, that is something we are urgently looking at. The hon. Gentleman said that we should follow Labour’s plan. Well, let us remember what Labour’s plan is. Labour has put forward £100 billion-worth of spending proposals, of which only £10 billion-worth are fully funded.
I would like to mention the passionate and important speech from my hon. Friend the Member for Waveney (Peter Aldous). He rightly identified the need to balance short-term measures with long-term investment, and I hope that that is what we are doing. He raised the importance of renewables. As I have had the opportunity to discuss with him before, there are other tax levers and non-tax levers to support non-oil and gas investment, including the super deduction and the UK’s research and development tax credit scheme. There is also the contracts for difference scheme, which provides developers of low carbon electricity generation with direct protection from volatile wholesale prices, and the £1 billion carbon capture infrastructure fund.
My hon. Friend also asked about the timeframe. That is an important point, because this is a temporary measure. There is a sunset clause in the legislation. It is rare to include a sunset clause, but we have done so to underline that this is a temporary measure with a timeframe of 2025. He raised the importance of dialogue with the industry, and I reassure him that we have engaged fully with the industry and will continue to do so.
Alan Brown
On carbon capture infrastructure, the Minister is well aware that the Scottish cluster has been made a reserve and been let down yet again. Can she define what “reserve” means, because nobody seems to know? Does she expect one of the two selected projects to fail, at which point the reserve would step up, or is it a question of dangling a carrot in front of it? What does “reserve” really mean, and why do the Government not just make the Scottish cluster a track 1 cluster?
Lucy Frazer
The hon. Member makes an important point, because we value the investment and work that is going on in Scotland in the oil and gas sector and in renewables. He knows that, because I and Ministers from the Department for Business, Energy and Industrial Strategy have stood at this Dispatch Box and engaged with him regularly on this. He is right to identify that that cluster is in reserve, and I am sure these matters are being discussed with the relevant Ministers in BEIS.
I recognise the points that the hon. Member for Aberdeen South made about the sacrifices made by those who work in this sector. I am grateful to him for making those points, which I am happy to associate myself with. He asked what the normal price was, and I would like to refer him to the comments that the former Chancellor made when he was questioned on this by the Treasury Committee. He said:
“The last time this was done, a price target was published, which was $74 or $75 for Brent…If you look at average Brent price over the last five or 10 years, that will give you something like $60 or $70 for oil…so that gives you a sense.”
This is something we will be considering in due course.
Stephen Flynn
I was of course aware of the former Chancellor’s fluff in relation to this topic. Is the Minister confirming to the House and to the industry, which will be watching, that if the price of oil falls to around $60 or $70 a barrel, the levy will be no more?
Lucy Frazer
As I have just said in responding to the hon. Gentleman’s earlier point, the former Chancellor said that that “gives you a sense”, and I too am happy to relay that sense of where the prices would be, but we also have the long-stop date, which should give the industry some certainty as to when this will finally come to an end.
I welcome the hon. Member for Wakefield (Simon Lightwood) to this place. I was born and made in Leeds so I am very pleased to welcome a neighbour, in one sense of the word, and to hear him extol the virtues of Wakefield. He made a passionate speech about standing up for victims of sexual abuse and I welcome him to his place in the House of Commons.
The hon. Member for Bath (Wera Hobhouse) asked for bold and swift action, and that is what this Bill is about. Tonight this House has the opportunity to support the introduction of an energy profits levy on the extraordinary profits of UK oil and gas producers. It has the opportunity to support investment in the North sea through the levy’s investment allowance, and to support the automatic expiry of the levy in law, giving companies additional reassurance that the levy is temporary. This is a balanced approach that allows the Government to deliver support to families while encouraging investment and growth. For those reasons, I urge Members of this House to support the Bill.
Question put and agreed to.
Bill accordingly read a Second time.
Energy (Oil and Gas) Profits Levy Bill
Monday 11th July 2022
(1 year, 9 months ago)
Commons ChamberRead Full debate Energy (Oil and Gas) Profits Levy Act 2022 View all Energy (Oil and Gas) Profits Levy Act 2022 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Committee of the whole House Amendments as at 11 July 2022 - (11 Jul 2022)
19:06 - The Committee divided: - Ayes: 41 / Noes: 298 - Question accordingly negatived.
19:19 - The Committee divided: - Ayes: 284 / Noes: 202 - Question accordingly agreed to.
19:31 - The Committee divided: - Ayes: 203 / Noes: 289 - Question accordingly negatived.
The Second Deputy Chairman of Ways and Means (Mr Nigel Evans)
With this it will be convenient to consider the following:
Amendment 9, in clause 2, page 2, line 42, at end insert
“, which may include electrification investment that decarbonises upstream oil and gas activities”.
This amendment would put on the face of the bill that electrification investment which decarbonises upstream oil and gas activities is eligible for relief.
Clause 2 stand part.
Clauses 3 to 11 stand part.
Amendment 1, in clause 12, page 9, line 32, after “levy” insert
“and the amount of tax relief on additional expenditure treated as incurred that the responsible company is claiming under section 2 of this Bill.
(2A) The data submitted by responsible companies under subsection (2) of this section must be published in aggregate on a quarterly basis.”
This amendment requires companies making a payment of the levy to also provide information to HMRC about the amount of extra tax relief they are claiming under section 2 of the Bill, and requires the total amounts of levy received and tax reliefs claimed every quarter to be published.
Clause 12 stand part.
Clauses 13 to 19 stand part.
That schedule 1 be the First schedule to the Bill.
That schedule 2 be the Second schedule to the Bill.
New clause 1—Assessment of revenue effects of a higher Energy Profits Levy—
‘The Chancellor of the Exchequer must, no later than 30 September 2022, lay before the House of Commons an assessment of the effects on—
(a) tax revenues, and
(b) oil and gas company profits
of the Energy Profits Levy being charged at 45%.’
This new clause would require the Government to publish an assessment of the effect on tax revenues and on oil and gas company profits of charging the Energy Profits Levy at 45% rather than 25%.
New clause 2—Review of the impact of tax relief on additional expenditure treated as incurred—
‘The Chancellor of the Exchequer must, by 26 August 2023, publish an assessment of the impact of the tax relief provided by this Act on the UK’s energy market, including the impact on—
(a) net zero obligations;
(b) energy security;
(c) renewable energy supplies; and
(d) fracking.’
This new clause requires an assessment, within three months of the end of the first year of the levy being in place, of what impact the Bill’s extra tax relief for investment expenditure by oil and gas companies would have on the UK’s net zero obligations and other aspects of the energy market.
New clause 3—Review of impact of earlier start date of the levy—
‘The Chancellor of the Exchequer must, within three months of this Act receiving Royal Assent, publish an assessment of how much the levy would have raised between 9 January 2022 and 25 May 2022 if it had been in place from 9 January 2022.’
This new clause requires an assessment, within three months of the Bill becoming law, of how much extra revenue would have been raised if the levy had been introduced on 9 January 2022 rather than 26 May 2022.
New clause 4—Review of the amount of tax relief on additional expenditure treated as incurred—
‘The Chancellor of the Exchequer must, within three months of this Act receiving Royal Assent, publish an assessment of—
(a) how much tax relief on additional expenditure treated as incurred under sections 2 to 7 of this Act will be claimed; and
(b) how much of the tax relief expected to be claimed is estimated to be in respect of investment that would have taken place if the tax relief had not been in place.’
This new clause would require the Government to assess the amount of tax relief for investment expenditure introduced by this Bill expected to be claimed by oil and gas companies, and to estimate how much of this is a deadweight cost.
New clause 5—Review of the impact of limiting the scope of the tax relief on additional expenditure treated as incurred—
‘The Chancellor of the Exchequer must, within three months of this Act receiving Royal Assent, publish an assessment of the impact of making ineligible for the tax relief on additional expenditure treated as incurred any investments that—
(a) do not align with the IEA’s net zero emission scenario for a 1.5 degree temperature increase;
(b) have been announced before 26 May 2022; or
(c) are incurred by companies that have engaged in share buy-backs in the three previous financial years.’
This new clause would assess the impact of limiting the scope of the tax relief introduced by this Bill to exclude investments on the basis of their impact on climate change, whether they had already been announced, and whether the company making the investment had engaged in share buy-backs in the last three years.
New clause 6—Environmental impact of exploration activity on which levy relief is claimed—
‘The Government must undertake an environmental impact assessment in relation to any claim for relief in respect of exploration activity, which must include an assessment of whether the exploration activity is consistent with the Government’s net zero commitments.’
This new clause would require the Government to assess against its net zero commitments any investment in oil and gas exploration activity against which levy relief is claimed.
New clause 7—Regular reviews in relation to oil and gas market—
‘The Government must publish a review of the oil and gas market by 26 November 2022 and every six months thereafter during the period of the levy, which must include an assessment of—
(a) whether there is a continued need for the levy, and
(b) whether the levy should be continued in order to promote further decarbonisation of upstream oil and gas activities.’
This new clause would require a six-monthly review by the Government of the oil and gas market to assess whether the levy is still needed and whether it should continue in order to promote decarbonisation of upstream oil and gas activities.
New clause 8—Assessment of revenue from a permanent levy rate of 30%—
‘The Government must within six months of Royal Assent lay before the House of Commons an assessment of the expected change in levy revenue if the levy is set at a permanent rate of 30% so that taxation on oil and gas company profits was permanently set at 70%.’
This new clause would require the Government to produce an assessment of the amount of revenue which would be generated if the level of taxation on oil and gas company profits was permanently raised to the global average of 70%.
New clause 9—Assessment of levy revenue if investment relief not permitted—
‘The Government must within six months of Royal Assent lay before the House of Commons an assessment of the revenue that the levy would yield if no relief was permitted in respect of investment expenditure.’
This new clause would require the Government to produce an assessment of how much revenue would be generated by the Energy Profits Levy if the investment allowance were removed.
New clause 10—Assessment of investment allowance on compliance with climate change targets—
‘The Government must within six months of Royal Assent lay before the House of Commons an assessment of the impact of the levy investment allowance on compliance with the requirements of the Climate Change Act and the global agreement to limit global heating to 1.5 degrees.’
This new clause would require the Government to produce an assessment of the impact of the investment allowance on achieving Net Zero by 2050 and limiting global temperature increase to 1.5 degrees.
Just to remind everyone: as I am sitting down here, I am the Chair of the Committee and not Mr Deputy Speaker, so it is “Mr Evans”, “Chair” or “Chairman”. Anything like that will do.
Lucy Frazer
Thank you very much, Mr Chair. I open this debate by reminding the Committee of the purpose of the energy profits levy. The levy is a temporary 25% surcharge on extraordinary profits being made by the oil and gas sector as a result of the substantial rise in energy prices precipitated by the Russian invasion of Ukraine. It will help to fund the cost of living package for UK families that we announced in May. It will raise around £5 billion over the next year and will apply to companies within the ringfenced corporation tax regime. Specifically, these are companies involved in the exploration for and extraction of oil and gas in the UK and on the UK continental shelf.
The Government have been clear that they want the oil and gas sector to reinvest its profits to support the economy, jobs and UK energy security. That is why the Bill includes the 80% investment allowance. This new super deduction-style relief is being introduced to encourage firms to invest in oil and gas extraction in the UK. In future years, if oil and gas prices return to historically more normal levels, the Government will phase out the levy. However, the first clause in the Bill specifies that the levy will automatically cease to apply after 31 December 2025. I want to highlight this to the House, as it demonstrates the Government’s commitment to keep the levy temporary. Very few taxes have their expiry date set in law. Before I address the clauses and schedules in the Bill in turn, I would like to say that I have noted the amendments and new clauses tabled by Opposition Members and I will respond to them later in the debate.
Clause 1 gives the Government the ability to collect the energy profits levy. It sets the 25% rate and the levy’s main scope. The clause sets out that the levy applies to accounting periods for when the measure is in effect. It also sets the adjustments to ringfence profits for the purposes of calculating taxable profits for the levy. The levy is a tax on profits that companies are realising from oil and gas activities during what is an exceptional period. It is only fair that the measure of profit on which the EPL is charged should not be reduced by the amount of decommissioning expenditure or losses incurred from previous years. Therefore, those adjustments, which include finance costs, decommissioning costs and historic losses, are left out of account. However, the repayment of petroleum levy revenue tax arising from decommissioning is also left out of accounts. As I mentioned on Second Reading, the Government have responded to feedback from the industry in making this change. Although such repayments remain taxed under the ringfenced corporation tax and supplementary charge, they are not taxed under the levy. Another adjustment to profits is the new 80% investment allowance, which is deductible against profits.
Alan Brown
The right hon. and learned Lady sent a letter to MPs saying that electrification will be covered in the offsetting, but does she agree that it should really be in the Bill? Ministers and Prime Ministers come and go, as we have seen, so the only way the industry can have full certainty and clarity is to have something in the Bill about electrification, which is the purpose of SNP amendment 9.
Lucy Frazer
I have read amendment 9 and will address it in due course. In response to the hon. Gentleman’s point, that will be included in guidance. I said it at the Dispatch Box last week, and my right hon. Friend the Chief Secretary to the Treasury has also said it at the Dispatch Box, so I think that point is quite clear.
Clause 5, on the meaning of “disqualifying purposes,” is an anti-avoidance provision to ensure that expenditure is not eligible for the investment allowance if it arises because of any tax avoidance arrangements. Clause 6 ensures that additional expenditure for the investment allowance is available only for new assets, including the acquisition of an interest in an oilfield. It prevents the allowance from being generated on assets that have already been taken into account for the purposes of the levy or that would have been had the levy been in force.
Clause 7 determines when investment expenditure is incurred. For capital expenditure, it is as per the rules set out in the existing capital allowances legislation; for operating and leasing expenditure, it is the date on which it is paid. The clause also makes it clear that expenditure incurred before 26 May 2022 or after 31 December 2025 is not to be treated as expenditure incurred in an accounting period to which the levy applies.
Clauses 8 and 9 define financing and decommissioning costs and are modelled on existing legislation. Clause 10 and schedule 1 set out the loss regime within the levy. This includes group relief and the losses that companies carry back or forward under the levy, such as carrying forward losses to a future qualifying period. Clause 11 applies general corporation tax principles to the levy, which is treated for administrative purposes as an amount of corporation tax. It also prescribes the framework within which the levy will operate.
Clause 12 introduces a requirement for companies making a levy repayment to provide information about that payment to HMRC, so that receipts from the levy can be monitored. Clause 13 provides for necessary adjustments to be made if alterations are made to a company’s ringfenced profits or losses. Clause 14 introduces schedule 2, which makes consequential amendments to enactments in the light of this Bill.
Clauses 15 to 17 set out the rules for apportioning profits for accounting periods that straddle the levy’s start or sunset dates. These rules identify which profits are chargeable to the levy by treating the periods before and after the start or end date as separate accounting periods. In particular, this requires companies to apportion their receipts, expenses, assets and liabilities on a just and reasonable basis. Clauses 18 and 19 simply set out the Bill’s legal interpretation and short title in the usual manner.
This Bill delivers the energy profits levy, a 25% surcharge on the oil and gas sector’s extraordinary profits. The levy will raise around £5 billion over the next year, and it will go towards supporting people via the cost of living measures we announced in May. The Bill also provides for the new 80% investment allowance, which means that businesses will overall get a 91p tax saving for every £1 they invest. Finally, the Bill provides certainty through a sunset provision. It will therefore give businesses further reassurance that the levy is indeed temporary.
James Murray
I will now address the detail of the Bill’s key clauses, as well as the amendments and new clauses tabled in my name and those of my hon. and right hon. Friends.
As I set out on Second Reading, this Bill is long overdue. The Government have finally agreed to introduce a windfall tax many months after they should have done. As I noted earlier, Ministers still cannot bring themselves to say “windfall tax” in relation to these measures, so we offer them amendment 8, which would rename the Bill, as one last chance to call this new tax what it is.
It has been six months since, on 9 January, the shadow Chancellor first set out Labour’s plans for a windfall tax on oil and gas producers’ profits to help to fund a cut to people’s home energy bills. Until their U-turn in late May, Ministers were falling over each other to attack our plans. In all the time they opposed our plans, people’s energy bills and oil producers’ profits both soared. Those months of opposing our plans left the public finances missing out on billions of pounds of tax revenue. Those extra funds could have given people further help with their energy bills. Today we are giving the Government the chance to right that wrong.
Clause 1 makes it clear that the windfall tax will apply from 26 May 2022. Our new clause 3 would require the Government to recognise how much extra tax revenue would be raised if the levy instead applied from 9 January. We urge all Conservative MPs to support our amendment and apply the windfall tax from 9 January, the day the shadow Chancellor first laid out Labour’s plans for a windfall tax, rather than leaving it to start only from 26 May, the day the former Chancellor finally changed his mind.
Those extra months would raise an extra £1.9 billion for the public finances, which we would then urge the Government to put toward removing VAT on domestic energy bills for the rest of this year. We have been urging the Government to scrap VAT on this year’s domestic energy bills since last autumn. We know that a VAT cut would provide immediate help to families now. Furthermore, taking VAT off energy bills would help to push inflation downwards from its current 40-year high. Funding for this should come from applying the windfall tax from January this year, when Labour first called for it, rather than only from May, when the Government finally came round.
Conservative leadership hopefuls have been talking a lot over the weekend about how keen they are on tax cuts, although they and their supporters have all failed to explain how any of those would be paid for. Today, we offer them a fully funded tax cut that will help people immediately with the cost of living. Today, we are asking them to follow our plan to cut VAT on home energy bills by applying the windfall tax on oil producers from the start of the year, as should always have been the case. The principle of backdating a windfall tax is not only well established—given that the very principle of windfall taxes is to tax unexpected profits that have occurred—but is included in this Bill, which backdates the levy in its first clause.
We know that oil producers such as BP and Shell reported bumper profits in the first quarter of 2022. As drafted, however, the Government’s Bill ignores those profits entirely, as their levy will not apply until well into the second quarter of this calendar year. I realise that the Financial Secretary has said that she will not support our new clause and that the current Chancellor, a former oil industry executive, is unlikely to change his mind after coming out so firmly against a windfall tax on oil and gas producers back in January, on the grounds that those producers were “already struggling.” But given the situation in the Conservative party, I wonder whether colleagues of the Minister may feel able to think more openly about how to vote. I wonder whether any of the other Conservative leadership candidates may like to support our plan for an immediate, fully funded tax cut to help people with the cost of living and tackle inflation. Later this evening, when we vote on new clause 3, we will find out what judgment they have made.
We would also like to know what judgment those people have made about the Government’s decision to undermine the levy by shamefully giving a third or more of any money raised straight back to the oil producers through the new tax break introduced by clauses 2 to 7. This new tax break offers oil and gas producers an unprecedented subsidy for their spending on oil-related activities. As we made clear on Second Reading, for every £100 an oil and gas producer invests in the North sea, they will receive £91.25 from the taxpayer. That is an astonishing 20 times the £4.50 that companies investing in renewable energy will receive from April next year.
Any argument by Ministers that this tax break is necessary to support investment in oil-related activities has been challenged by the bosses of the oil producers themselves. BP’s chief executive told shareholders just two months ago that the company’s £18 billion investment plans were
“not somehow contingent on whether or not there is a windfall tax”.
Yet despite even oil executives questioning its worth, the Government are pushing ahead with this tax break. Our analysis has shown that that means a third or more of any revenue from the new levy could be handed straight back to oil and gas producers. That money will subsidise projects that almost certainly would have happened anyway, as there is no requirement in the Bill for investment to be additional to what was already planned, and this move stands totally at odds with the paramount need to invest in renewable energy sources.
It is critically important and urgent for us to invest in renewable energy to strengthen our energy security while bringing down people’s bills and tackling the climate crisis. We have set out Labour’s plan to do just that. Alongside insulating 19 million homes over 10 years to cut people’s bills, we would strengthen our energy security and reduce our carbon emissions by doubling our onshore wind capacity, tripling solar power, backing tidal power and nuclear power, and further investing in hydrogen. Yet the Government are today introducing a tax break that seems to fly in the face of tackling the climate crisis.
That is why we have tabled new clause 2, which would force the Government to come clean about the impact of their unnecessary tax giveaway to oil producers on our country’s net zero obligations, energy security and renewable energy supplies. This new clause also asks the Government to spell out what impact their tax break will have on fracking, given the deeply concerning reports in the media that legal advice provided to the campaigning group Uplift suggests that fracking companies would also be eligible for this tax break, based on the way the Bill has been written. I urge the Government to accept new clause 2, to make it clear what impact the tax break in the Bill will have on fracking. If the Minister refuses to do that, will she at least come clean today and confirm or deny whether this tax break could lead to public money being channelled toward dangerous, unpopular and expensive fracking projects?
Craig Mackinlay (South Thanet) (Con)
I was asked on 26 May by one of the main newspapers what I thought about this proposal of a windfall tax, on the back of what Labour had proposed some time before. I gave this fairly high-octane statement:
“Whichever way you look at it, a 65% tax rate applied to an industry that we need to encourage to help us through our energy policy mess seems topsy-turvy.
Higher taxes can never mean lower prices.”
And this was the statement that caused some alarm and was widely reported:
“All in all, I’m disappointed, embarrassed and appalled that a Conservative Chancellor could come up with this tripe.”
With the change of Chancellor, I had hoped that we would have quietly disposed of the Bill and not progressed to Second Reading. It should sensibly have been scrapped, but although the former Chancellor has gone, the Chief Secretary to the Treasury, my right hon. Friend the Member for Middlesbrough South and East Cleveland (Mr Clarke), is still here and presented the Bill this afternoon. I fully understand public disquiet about the supranormal profits that have been earned by the oil and gas industry over the period. The hon. Member for Ealing North (James Murray), who speaks from the Labour Front Bench, has made those points, which form the backbone of some of Labour’s new clauses.
The comments of various chief executives of the oil and gas industry—calling their profits “cash machines” and all that—were particularly unhelpful; they did not do themselves too many favours. Such companies lost similar amounts of money during covid, when, as we all recall, the gas and oil price completely collapsed. Owing to storage issues, there were a few days when oil was trading at a negative rate, which was rather bizarre; I wish I had had a few barrels to fill at the time.
We already did some rather strange things in years past. Under the Finance (No. 2) Act 2017, we restricted the carry-forward of losses. There is an allowance of £5 million, but the amount of profit that can be relieved with carried-forward losses is restricted to 50% on the rest. We have created a tax regime whereby we are happy to take the profits and tax them, but we are not willing appropriately to relieve the losses, and I am not sure that any of Labour’s new clauses would address that.
I have had discussions with various Front Benchers prior to today. Labour has objected to many parts of the Bill, because in its analysis of life—shadow Ministers have given quite a lot away— anything less than taking 100% of everything is a loss of tax. I am not sure that it was quite what the hon. Member for Ealing North intended to say, but he clearly suggested that that is Labour’s view of tax: it is necessary to take the lot, as anything less is a sort of tax give-back.
Geraint Davies (Swansea West) (Lab/Co-op)
The hon. Member may know that over the last few decades, the five biggest oil companies have made $2 trillion of profit, and the profit that they have been making is over the normal operational costs. What we have now, thanks to Putin’s war, is a massive price hike. That windfall profit is literally that—the companies have done nothing to earn it; they have simply stolen money from the pockets of people using transport and filling their cars. Is the hon. Member saying that that theft should simply be kept by the oil companies, which have done nothing other than exploit an illegal war? What sort of statement is that?
Craig Mackinlay
The hon. Gentleman has merely clarified what I have been trying to say; yes, of course there were supranormal profits on the back of Ukraine war and coming out of covid, when the entire planet was getting its factories back up and running and life was returning to normal. I had hoped I was making the clear point that there were substantial losses by similar companies in years past. Given the hon. Gentleman’s analysis, I assume that grain wholesalers would face a similar tax from Labour. Semiconductor manufacturers supplying their goods from South Korea would similarly, through artificial means, have earnt good profits at this time. It seems that the Labour party would definitely want to tax everybody on anything that it considered to be an inappropriate amount of profit, whatever that might be.
I have a number of objections to the levy. Labour’s new clauses 7 and 8 go some way to clarifying a little of what I am saying, although I will not support them tonight. Let me turn to the relevant North sea businesses that will be caught by the levy. Since 1 January 2002, we have had the ringfenced corporation tax at 30%—more than our current headline rate of corporation tax. The supplementary charge, which goes on top of that, has been up and down over the years. It commenced on 17 April 2002 and peaked during the coalition period—very relevantly, between 24 March 2011 and 31 December 2014 —at 32%. Of course, the then Department for Business, Innovation and Skills was held by the Liberal Democrats in the coalition, so that gives us a little insight as to what they think of tax: it is generally a high one.
We had a 62% tax during that period, but immediately prior to this legislation the supplementary charge had been down to 10%. We were bobbling along with massive profits and were taking 40% of the total to the Treasury. Whichever way I look at it, I see that as a goodly rate of tax. However, under clause 1, which has just been outlined by the Financial Secretary to the Treasury, my right hon. and learned Friend the Member for South East Cambridgeshire (Lucy Frazer), this new energy profits levy is 25%.
Let me be very clear about my objections: a 65% tax rate is excessive in any tax regime. We are asking the self-same companies to go all out—“Please go all out!”—for more oil and gas in the North sea at this time of energy crisis, energy insecurity and very high prices. Why have they not, thus far, explored those parts of the North sea that we are now asking them to explore? It is because they are more complicated, deeper and more hostile environments. The profits derived from those tougher locations—the higher hanging fruit, rather than the lower hanging fruits—will be less, as the costs are higher.
I am aware of what I perceive as the tax nudge, but I am afraid that it is a little bit like Baldrick’s cunning plan. We are trying to nudge companies—this is about the only good thing about the Bill—by saying, “You make the right investments to get more oil and gas out of the North sea that we desperately need, and we will give you a very substantial tax relief.” And that tax relief is substantial, at 91.25%. I am afraid that the Chief Secretary to the Treasury has let the cat out of the bag; if that is the Baldrick cunning plan, which I can see the benefit of, how can we have estimated £5 billion as the amount of tax to be raised? That cunning plan is not going to work fully; many companies will not take the option of relieving the variety of taxes that are now before them, they will not invest, and we will be taking £5 billion out of the industry.
We are not only asking the companies to undertake new investment in the North sea. We are asking them to undertake some rather fresh thinking and research, with unknown outcomes, on the net zero pathway. I know for a fact that BP is doing a lot of work in this field—its people have been in one of the dining rooms of this House—and good luck to it, but as has been highlighted by the Labour Front Benchers, there is nothing in the Bill that nudges such investment in the net zero field.
“Profit” is not a dirty word. Profits pay our salaries, every salary of every civil servant, and every single pension in this country; they are all on the back of profits. “Profit” is a good word—a word that makes the world turn. Another objection I have to the levy is that the self-same companies, which are earning good profits, are the backbone of many blue chip investments that can be found in practically every pension fund in the land, because they are good dividend payers. Millions of pensioners rely on those dividends—a long and usual flow that can be relied on year in, year out. By the Government taking the extra 25%, those dividend flows will have to be lessened. We cannot take another 25% out of a profit and expect the dividends to flow at the same rate.
Alan Brown
Is the hon. Member seriously saying that the companies that currently work in the North sea—companies that are environmentally responsible, take workers’ rights very seriously and look after their workers—might just move somewhere else in the world and give up on workers’ rights and the environment? That does not sound like responsible companies, yet that is what he seems to be saying they would do.
Craig Mackinlay
I am saying very clearly that big companies can make investments anywhere they please in the world, perhaps with tax regimes that are more suitable to them and where they are not being taxed at 65%. I would rather that they were investing here and staying here than going abroad to invest, with all the potential consequential impacts on the environment and employment. It seems that the hon. Gentleman agrees with me.
David Duguid (Banff and Buchan) (Con)
I rise in response to the hon. Member for Kilmarnock and Loudoun (Alan Brown). I declare an interest: I used to work for BP. I worked in the oil and gas industry for 25 years. I worked for BP in the North sea in this country, and in Angola, Venezuela and a range of different places. I worked for other companies in other countries as well. It is true that these companies have made their bread and butter in this country, and cut their teeth in the North sea, particularly from a safety point of view. The hon. Member for Aberdeen South (Stephen Flynn) mentioned Piper Alpha, which led to our having one of the highest regulatory regimes on the planet. It is not true to say that companies abandon that when they work elsewhere; it does make it a lot more difficult for them to work in those environments, but it does not stop them.
May I take the opportunity to totally agree with what my hon. Friend was saying before? This legislation, for all its flaws, compared with what Labour is proposing—
The First Deputy Chairman of Ways and Means (Dame Rosie Winterton)
Order. The hon. Member for Banff and Buchan (David Duguid) will resume his seat. We are getting interventions on interventions, because the interventions are perhaps a little long, and people are mistaking them for speeches. Please remember that interventions are supposed to be quite short.
Craig Mackinlay
Thank you, Dame Rosie, for clarifying that. I think that we will find that the hon. Member for Aberdeen South (Stephen Flynn) was being a touch facetious.
Caroline Lucas (Brighton, Pavilion) (Green)
Will the hon. Member give way?
Craig Mackinlay
I had not developed a point, but, please, make an intervention.
Caroline Lucas
I am grateful to the hon. Member for giving way—I am intervening on a previous point on which he was intervened on. Is he aware that the 65% tax that the Government are proposing is still below the global average? The figure in Angola is actually higher at 70%, so there is not any real logic to what he is saying. These oil companies are already operating in places where the tax is higher.
Craig Mackinlay
Let me take a couple of those points. The hon. Lady makes the point that tax rates on the oil and gas industry are higher elsewhere in the world. Well, that may be the case. I know that some will be fundamentally opposed to the whole concept of being energy secure in the UK. Gas, in my view, is part of an interim solution as we get on the path to net zero, but it is a fact of life. I do not have an awful lot of time for the output of the Climate Change Committee, but even it is saying very clearly that we will be using gas and oil up to 2050 and probably beyond. My view is that that gas and oil should be sourced in the UK. Hence my support for the nudge part of this legislation, which may encourage businesses to stay here and invest here.
I did not address properly the point from my hon. Friend the Member for Banff and Buchan (David Duguid). He makes the point that we have the most fantastic environmental standards not just in oil and gas technology, but in practically everything that we do in the manufacturing space in the UK. There will be very few regimes around this world that have such high standards. On the issue of methane venting, which we have not really addressed, I can be absolutely sure that, with a very robust and advanced regulatory regime, the advanced oil and gas companies of this country will be telling the truth and doing the right thing rather more than may be the case elsewhere, and I think we have to accept that as a fact of life.
Caroline Lucas
First, the hon. Member seems to think that just because gas is exploited in the UK, it will get used in the UK, yet he must know that it gets sold on global markets and therefore might get used anywhere. Secondly, he talks about our environmental standards being higher than others. He will know that we get most of our gas from Norway, where, actually, its carbon footprint is significantly less than it is here in the UK. His argument just does not stand up.
Craig Mackinlay
I am so delighted that the hon. Lady has expanded this debate. This is not somewhere that I wanted to go, Dame Rosie, but I think it is my duty to respond to the intervention. Surely it is obvious, no matter where on the spectrum on net zero we are—I am obviously on the rather more critical part of that spectrum—that we will be having gas in this country. We have a choice: do we import it halfway across the world on a liquefied natural gas ship, with the CO2 cost of chilling it, transporting it and regasifying it, or do we try to do that domestically?
Craig Mackinlay
If I may, Dame Rosie, I will address the hon. Lady’s questions. On international markets, I do not know any more about economics than this: if we add more capacity to any system, the price should drop. Even if her view of economics holds water and the price does not drop, which I think is the basis of what she is saying, would I prefer the pounds of gas revenue to be at least retained and spent in the UK, or do I want to export those pounds to Qatar? I do not think there is much choice, and the answer is obvious.
I will finish now, Dame Rosie—I am sorry for the time I have taken, but I am grateful for your indulgence. If we take up this type of proposal of penal taxes that can be changed within a month, we will lose in future deferred taxes the opportunity cost of investment. Big companies will say, “Do you know what? The UK is not a place for good investment. I think I will take my money elsewhere.” We may get £5 billion out of this tax as a windfall, but over time, in my view, we will lose more than £5 billion in the lost opportunity of businesses being attracted to the UK.
I have never believed, as has said in the House this afternoon, that the investment plans of the big oil and gas companies will be unaffected by this. I have been having discussions with them. There are already signs that they are scaling back their investment activities to the detriment of UK energy security, and I am afraid this Bill does not help with that all. If there is a Division on Third Reading, I will be voting against the Bill this evening.
Stephen Flynn
Repetition is of course a convention of this House, but I am not much for many of the conventions of this House, so I do not intend to say much more than I did earlier about the Bill in general. I will just reflect very briefly on the amendments in my name and the names of my hon. Friends.
Amendment 9 relates directly to the electrification of North sea assets. We have heard comforting words about that from two Ministers now. I am sure the Minister for Energy, Clean Growth and Climate Change, now sitting beside the Financial Secretary to the Treasury, would agree that it will be in guidance that the electrification of assets will be able to get the taxation incentives. We cannot escape the fact that Ministers come and go, as we have seen so clearly in this place over the course of recent times, but what industry needs in relation to this issue is certainty. The best way—the only way—to provide certainty on the electrification of grids is to put that on the face of the Bill.
I agree with the hon. Member for South Thanet (Craig Mackinlay) on one point he made: it is deeply disappointing that there is not additional scope for the wider renewable sector to get these incentives. If the Government were serious about combating climate change and reaching their net zero ambitions, they would have extended those incentives to that industry.
That takes me on to new clause 6, again in my name and those of my hon. Friends, which aptly relates to net zero. The Government have rightly promoted, and will continue to promote, climate compatibility checks. I think we all in this place agree about those. What we need to be clear about, however, is the implications of this Bill for reaching net zero. The easiest, indeed the obvious, way to do that is to ensure that those climate compatibility environmental checks take place in relation to any investments. I thought that would be a very straightforward thing for the Government to agree with, and I hope they will do so.
Finally, in relation to new clause 7, I have teased this argument out on a couple of occasions in exchanges with Ministers: we know there is going to be a sunset clause on this levy, to end it in a couple of years’ time. However, the phrase “normal oil and gas prices” keeps being used again and again. We heard inferences from the former Chancellor that somewhere around $60 to $70 a barrel was normal. I just did a very quick calculation of prices. Between 2015 and 2021 the price was $56 a barrel, but between 2010 and 2015 it was double that, at $101.4 a barrel. I again ask the Minister—[Interruption.] Indeed, oil and gas is a good argument for independence.
Stephen Flynn
I will not give way to the hon. Gentleman. That has nothing to do with this Committee stage, and I would hate to get diverted, as some others did earlier.
What we and the industry need to be clear about is what price the Government regard as normal. If we are to have serious legislation, we need serious answers to the most basic of questions.
Richard Burgon (Leeds East) (Lab)
I wish to speak in favour of my new clause 1, new clauses 8 to 10, which I have signed, and of course the amendments from the Labour Front Benchers.
Away from the drama among Government Members over who will be their next leader, the cost of living emergency out there is biting ever harder. Experts now warn that the energy price cap will surge by another 64% in October to more than £3,200 a year—up £2,000 in just a few months. Millions of people will be thrown even further into crisis. We urgently need further Government interventions to help them, and my new clause offers a way to do that.
In May, after political pressure from the Labour Benches, the Government were forced into imposing a windfall tax on the North sea oil and gas producers’ excess profits. Such a tax is certainly needed. The Government’s own figures suggest that North sea oil and gas companies will make pre-tax profits of £21.4 billion this year—a staggering increase from the £2.5 billion average over the past five years. We have gone from a £2.5 billion average to £21.4 billion this year.
Let us be clear: these excess profits are not the result of extra investment. They are not the result of innovation. They are an undeserved and unexpected windfall, mainly resulting from Russia’s horrific war on Ukraine. They are vast super-profits made on the backs of higher bills for ordinary people. We have a clear choice. Either we allow the oil and gas giants to hoard those excess profits, or we use the funds to help to bail out the vast majority of people hit hard by soaring energy bills.
My new clause 1 calls on the Government to look at setting the windfall tax at 45% on top of normal tax rates, not the current proposed 25%. The aim is to ensure that nearly all of the windfall—the undeserved, unmerited excess profit—goes to supporting families instead of boosting the profits of oil and gas giants.
The windfall tax as it stands will raise £5 billion. The higher windfall tax that my new clause addresses would raise another £4 billion in tax revenues this year alone, which could provide an extra £1,000 payment to the most vulnerable 4 million households. Surely that is more important than boosting oil and gas company profits. North sea oil and gas companies’ revenues have risen so much that even with this higher tax they would still make £3 billion in profits this year, which is above their recent average.
Christian Matheson (City of Chester) (Lab)
My hon. Friend has obviously given real thought to his proposals. Does he agree that the vast profits that the oil and gas companies make do not stay with those companies but go to their ultimate owners, the big City institutions which, in my view, the Conservative party represents these days?
Richard Burgon
That is an important point well made by my hon. Friend. That is what this is really about. It is a political choice that we are discussing.
On the Government’s major loophole that I referred to, which gives a 91p tax saving for every £1 invested by the oil and gas companies, we need to be clear that it is a subsidy to oil and gas giants. It takes money away from supporting families and encourages further fossil fuel production when we need to be ending all new oil and gas production to avoid climate catastrophe.
With another huge spike in energy prices now expected, much more needs to be done to help families. The Government should start by accepting my amendment and others that would see less going into profits for oil and gas firms, and more into bailing out people facing the biggest crisis in living memory.
Caroline Lucas
It is a pleasure to follow the hon. Member for Leeds East (Richard Burgon), whose new clause 1 I am happy to support. I rise to speak in favour of new clauses 8 to 10 tabled in my name.
First, new clause 8 would require the Government to produce an assessment of the revenue that would be generated if the level of taxation on oil and gas companies were permanently raised to the global average of 70%. That is 5% higher than the total level of taxation with the addition of the Government’s levy, but it would be permanent.
I know the new Chancellor may be disinclined to increase taxation on the oil and gas industry, given that he has benefited so handsomely from it in the past, previously earning £1.3 million from his executive position at Gulf Keystone Petroleum, including a whopping £285,000 settlement payment when he stepped down from that role in 2018 after becoming a Minister. However, it is important to understand that the level of taxation that this new clause proposes on oil and gas would simply bring the UK into line with countries such as Angola and Trinidad and is backed by 63% of the public. By way of comparison, it may be interesting to note that the UK’s North sea neighbour, Norway, has a taxation rate of 78%, and that does not seem to have done it any harm. I therefore hope that the Government will recognise that this is a very reasonable amendment that it should be easy for them to support.
The reason I am proposing a permanent taxation level is that the UK currently has the lowest tax take in the world from an offshore oil and gas regime. That is not a badge of honour; it should be a badge of shame. Indeed, Norway’s tax take from a barrel of oil in 2019 was over 10 times the equivalent here in the UK. The amendment would simply require the Government to assess the impact of ending that shameful state of affairs. Greenpeace estimates that a tax at that level would generate an additional £13.4 billion for the Exchequer in comparison with the status quo—money that, in addition to providing immediate support to households to cope with the cost of living scandal, could be used to invest in much-needed energy efficiency, quite literally insulating households from escalating costs.
To date, the Government have spent £37 billion on short-term financial support. Although that support is of course very welcome, gas prices are likely to remain high for several years, and a more long-term approach is necessary, especially when the CEO of Ofgem is warning that the number of households in fuel poverty could reach 12 million in October when the energy price cap rises again. The think-tank E3G estimates that the average household with an energy performance certificate of D or lower will be paying what it calls an inefficiency penalty of £916 per year for adequate heating compared with households with an EPC of C or higher. Investment to kick-start a local-authority-led, street-by-street home insulation programme would save cash-strapped families money not just this year but every year. It would also rectify a glaring omission in the Government’s approach so far, with the Climate Change Committee saying clearly in its 2022 progress report to Parliament:
“Given soaring energy bills, there is a shocking gap in policy for better insulated homes.”
New clause 9 would require the Government to produce an assessment of how much revenue would be generated by the energy profits levy if the investment allowance were removed. I also support the Labour Front-Bench amendment that would simply delete the clause on the investment allowance, which is nothing less than a scandal. As the Chancellor and his team very well know, it will come at huge cost to the taxpayer. Analysis by the New Economics Foundation suggests that the investment allowance will cost £1.9 billion a year because any subsidised oil and gas projects will not start to return a profit until after 2025—the date of the sunset clause in the Bill.
Geraint Davies
I very much support what the hon. Lady is saying. Is she aware that in Germany for three months in succession people are being offered a €9 a month pass that can be used on all public transport, thereby shifting people on to public transport, reducing energy costs, encouraging environmental green investment, and stopping our addiction to fossil fuels? Does she think that a higher tax could help us to do that and put us on a more sustainable route to a green future?
Caroline Lucas
I am grateful to the hon. Gentleman for his intervention, particularly since it helpfully highlights a party policy of the Greens, who were, as he knows, in coalition Government in Germany. It has absolutely been their policy to introduce those kinds of incentives, and they are being massively taken up because they are incredibly popular.
I was talking about the investment allowance and just how egregious it is. The Institute for Fiscal Studies says that investing £100 in the North sea now will cost companies just £8.75, with the public picking up the remaining investment costs in the form of the forgone windfall tax. What is more, there is a chance that this new subsidy could lead to the development of otherwise economically unviable projects, becoming stranded assets of little or no economic value. Oil and gas companies are benefiting from that right now. For example, according to analysis by Rystad Energy, Shell, which recorded quarterly profits of over £7 billion earlier this year, will pay £210 million less in windfall tax for investment in the newly approved Jackdaw gas field.
The investment allowance also significantly reduces the amount of revenue generated, which is why I can only assume that the Treasury believes that its levy will raise only £5 billion in its first 12 months, especially since oil and gas company profits are expected to reach £11.6 billion this year, with BP’s chief executive describing the company as a “cash machine”. Let us remember that, as other hon. Members have outlined, these profits are not earned; they are a consequence of high global gas prices fuelled by Russia’s illegal invasion and war in Ukraine, and must be urgently redistributed to provide vital support to struggling families. Will the Government now publish their full impact assessment? Will they accept this crucial amendment so that we can have clarity over the cost of their perverse proposal?
The subsidy in the Bill is unfortunately entirely consistent with the Government’s approach to subsidising the fossil fuel sector overall. While they refuse to acknowledge that tax reliefs are indeed subsidies and prefer to use the very narrow International Energy Agency definition of a subsidy, Ministers and colleagues will know well that there are much wider definitions in use, including that developed by the World Trade Organisation, which would very definitely include the investment allowance. If the Government go ahead with this subsidy, it will come on top of countless other tax reliefs from which the sector benefits, including those for exploration for new fields, for R&D, and for decommissioning. The latter, for decommissioning, has an especially egregious element in the form of decommissioning relief deeds that guarantee future tax reliefs for oil and gas companies at a given rate. Imagine any other sector being guaranteed tax reliefs in perpetuity with future Governments unable to make changes to that! Companies should pay decommissioning costs, with decommissioning plans required to ensure a just transition for workers. That is the only fair approach. The measures in the Bill will add to the decommissioning tax relief burden faced by the public purse going forward, to say nothing of the impact on fossil fuel extraction.
Geraint Davies
The hon. Lady will be interested to know that people in Swansea University are looking at using the energy from wind farms that is not used by the grid off-peak to create hydrogen that can be put in the gas pipes to dilute the gas to reduce the carbon footprint of everyday gas. Would it not be better to put the money into those sorts of green investments rather than digging more and more holes to destroy the planet?
Caroline Lucas
Again, I am grateful to the hon. Gentleman. Those are precisely the kinds of forward-looking policies that we need rather than the backward-looking, dinosaur policies that seem to think that digging out more and more fossil fuels is the way forward.
Christian Matheson
To make the same point that I made to my hon. Friend the Member for Leeds East (Richard Burgon), can I urge the hon. Lady to follow the money? For as long as these tax credits are given to the oil and gas companies, they are passed on to the people who control the Conservative party in the City—the big hedge fund investment billionaires who have massive incomes because of their ownership stakes in those companies.
Caroline Lucas
The hon. Gentleman puts it perfectly succinctly and I very much agree.
It has been estimated that existing decommissioning relief deeds could enable the extraction of the equivalent of 1.7 billion barrels of oil that otherwise would have remained unextracted, and that will only increase if we continue with the vicious cycle of handsomely subsidising fossil fuel companies to exploit oil and gas reserves. In response to the Glasgow Climate Pact’s call for parties to
“phase out inefficient fossil fuel subsidies”,
the Climate Change Committee said that the Treasury should initiate a review of the role of tax policy in delivering net zero, and was very clear that no fossil fuel subsidy should be considered efficient in the UK. Will the new Chancellor now commit to that review, listen to his own Climate Change Committee, and take its advice?
New clause 10 would require the Government to produce an assessment of the impact of the investment allowance on achieving net zero and on limiting the global temperature increase to 1.5°. It is frankly astounding that the Government need to be reminded yet again that the IEA has been clear that limiting global temperatures to 1.5° necessitates
“no new oil and gas fields approved for development”
as from last year. Yet according to the United Nations Environment Programme, the level of fossil fuel production planned and projected worldwide by Governments in 2030 is more than twice the levels consistent with that goal. The UK has given North sea oil and gas companies almost £14 billion in subsidies since signing the Paris agreement in 2015 alone. This Bill was an opportunity for the Government to change course, but instead they have chosen to double down and to play with fire by bringing forward a Bill that is plainly incompatible with a safe future.
It is patently obvious that the Government should amend the Bill to ensure that oil and gas profits are taxed properly, but I believe fundamentally that that should pave the way for a much wider overhaul of our tax system. We need a carbon tax, which, if implemented properly with a dividend to shield low-income households, could be pivotal in driving the change we need in order to decarbonise our economy fairly. That tax—it has long been Green party policy—would target the big polluters such as oil and gas companies. It is estimated that, starting at a rate of about £100 per tonne of CO2, it could generate up to £80 billion to fund the transformation necessary to achieve our climate goals. That is the kind of innovative policy we need right now to save ourselves from the climate emergency that is only growing deeper.
Lucy Frazer
Many of the points that have been raised in Committee were considered on Second Reading, but I would like to touch on a few of them and then deal with amendments.
The hon. Member for Ealing North (James Murray) asked how the new investment allowance works. On 6 June, I said I was very happy to look further at this point, and I can reassure him that the investment allowance within the levy will be generated on investment expenditure —that is, capital expenditure and some operating and leasing expenditure—incurred on or after 26 May. The legislation includes an anti-avoidance provision to prevent any recycling of existing assets from getting the allowance, and that is all very clearly set out in clause 6.
I want to deal with some of the points made by my hon. Friend the Member for South Thanet (Craig Mackinlay), because I understand his objections, and no Conservative wants to bring in a tax rise where it is not necessary. I have had the opportunity to talk to him on a number of occasions about these measures, and he will know that they are targeted and temporary. He says he fears for investment coming through, but of course that will be assessed by the OBR in due course. I am not sure whether he was in the Chamber earlier when I quoted some companies that have said that they will be investing and that this encourages investment, but I will mention a further one. Kistos has said that it is
“assessing opportunities in the UK that would enable us to take full advantage of the investment allowances implicit in the recently introduced UK Energy Profits Levy”.
I turn to the amendments. Amendment 1 would require companies to report on how much additional tax relief they are claiming as a result of the levy’s investment allowance, in addition to the existing requirement to report how much levy is payable. The amendment would also require that data to be published on a quarterly basis. Companies will already be reporting the information to HMRC that allows it to ensure appropriate compliance with the law, and figures on the amount of tax raised through the levy will also be published on a periodic basis in line with other taxes. As a result, this amendment should not be made to the Bill.
Amendment 9 would add clarification to the allowable purposes of expenditure under the levy’s investment allowance. I have already dealt with that point on Second Reading, and I confirm to the Committee that HMRC will clarify this in written guidance.
New clause 1 calls for an assessment of the impact on revenue and on oil and gas companies’ profits of a 45% levy rate. Similarly, new clause 8 calls for assessments of the revenue impact of a permanent 30% levy rate, which would bring the permanent headline rate of tax for oil and gas companies in ringfence corporation tax to 70%. However, it is not standard—I will be saying this in relation to a number of new clauses—for the Government to publish assessments of the fiscal and economic impacts of measures that they are not introducing, and it is not clear that doing so would be a beneficial use of public resources. Therefore, I recommend that the Committee rejects these new clauses.
Again, new clauses 3, 5 and 9 would require reviews or assessments of policies that the Government are not introducing. New clause 3 would require a review of the revenue that would have been raised had the levy taken place from early January. I set out on Second Reading why we did not bring forward this measure earlier, and I did so last week as well. We are not supporting these measures because, as I have said, it is not usual to bring forward public assessments of measures that we are not introducing.
New clauses 2, 6 and 10 would require reviews or assessments of the impact of the investment allowance on the energy market, climate change commitments and exploration activity. The Government oppose these amendments on the basis that the Treasury already carefully considers the impact of all measures on the energy market and our climate change commitments as a matter of course.
New clause 4 would require a review of the amount of investment allowance that will be claimed and how it relates to expenditure that would have happened were the investment allowance not in place. The first point to reiterate here is that the Government expect the combination of the 25% levy and the 80% investment allowance to lead to an overall increase in investment, and the OBR will take account of this policy in the next forecast. HMRC already publishes data on the costs of non-structural reliefs, which will include the investment allowance in due course, once data is available.
Finally, new clause 7 would require the Government to publish regular reviews of the oil and gas market, including assessments of the need for the levy and whether it should be continued to promote further decarbonisation of upstream oil and gas activities. That is also unnecessary, since the Government already monitor the UK oil and gas sector, and data is published on gov.uk on a monthly and quarterly basis.
For all the reasons I have set out, I urge Members to reject all the amendments and new clauses. I commend the clauses and schedules to the Committee.
Question put and agreed to.
Clause 1 accordingly ordered to stand part of the Bill.
Clause 2
Additional expenditure treated as incurred for purposes of section 1
Amendment proposed: 9, page 2, line 42, at end insert
“, which may include electrification investment that decarbonises upstream oil and gas activities”.—(Stephen Flynn.)
This amendment would put on the face of the bill that electrification investment which decarbonises upstream oil and gas activities is eligible for relief.
Question put, That the amendment be made.
Employment Agencies and Trade Unions
(1 year, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
21:13 - The House divided: - Ayes: 289 / Noes: 202 - Question accordingly agreed to.
21:27 - The House divided: - Ayes: 201 / Noes: 290 - Question accordingly negatived.
Madam Deputy Speaker (Dame Rosie Winterton)
The Business of the House (Today) motion just agreed to by the House provides for the two motions under item 4 on the Order Paper to be debated together. At the end of the debate, I will put the Question on the first motion. When that is decided, I will ask the Opposition to move the second motion formally, and I will then put the Question on it.
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Jane Hunt)
I beg to move,
That the draft Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2022, which were laid before this House on 27 June, be approved.
Madam Deputy Speaker
With this we shall take the following motion:
That an humble Address be presented to Her Majesty, praying that the Liability of Trade Unions in Proceedings in Tort (Increase of Limits on Damages) Order 2022 (S.I., 2022, No. 699), dated 22 June 2022, a copy of which was laid before this House on 24 June 2022, be annulled.
Jane Hunt
The purpose of the first instrument is to lift the current ban on employers bringing in agency staff to help them cope with industrial action. The second instrument makes a long-overdue change to the maximum levels of damages the courts can award against trade unions that take unlawful industrial action.
I will start by examining why the Government are making these changes. Our trade union laws are designed to support an effective and collaborative approach to resolving industrial disputes. They rightly seek to balance the interests of trade unions and their members with those of employers and the wider public. While the Government continue to support the right to strike, it should always be the last resort. The rights of some workers to strike must be balanced against the rights of the wider public to get on with their daily lives. Strikes can, and do, cause significant disruption. That is particularly the case when they take place in important public services such as transport or education. It cannot be right that trade unions can, as we saw in the case of the recent rail strikes, seek to hold the country to ransom if their demands are not met.
Alec Shelbrooke (Elmet and Rothwell) (Con)
What assessment has my hon. Friend made of the availability of spare teachers, nurses and train drivers to fill the gaps during a strike?
Hywel Williams (Arfon) (PC)
I am grateful to the Minister for giving way so early on. How does she justify overturning the Trade Union (Wales) Act 2017, which bans the use of agency workers in devolved services, and therefore the intention to overturn the consequences of Welsh democracy?
Jane Hunt
I thank the hon. Member for his question. I will talk about that a little later; it is a reserved right.
Some trade unions appear to be looking to create maximum disruption in a bid to stay relevant, rather than constructively seeking agreement with employers and avoiding conflict. In the light of this, the Government have reviewed the current industrial relations framework and have come to the conclusion that change is needed.
The first change we are making is to remove the outdated blanket ban on employment businesses supplying agency workers to clients when they would be used to cover official industrial action. Employers can, of course, already hire short-term staff directly to cover industrial action, but this change would give them the ability to work with specialist employment businesses to identify and bring in staff. The change in no way restricts the ability of workers to go on strike. It will, however, give employers another tool they can use when trying to maintain the level of service they offer to the public.
Rachael Maskell (York Central) (Lab/Co-op)
I am grateful to the Minister for giving way. Has she considered the 100,000 vacancies we currently have in the NHS that we cannot fill? The staff who work for agencies are also unionised and will not cross a picket line, so how will she fulfil this legislation?
Jonathan Gullis (Stoke-on-Trent North) (Con)
To help the hon. Member for York Central (Rachael Maskell) with her intervention, as a former teacher and a former trade union representative, I am more than happy to go back into any classroom to help out when the disastrous “not education union” is threatening to bring down schools.
Jane Hunt
I thank my hon. Friend for his intervention, and for his expertise and knowledge in the field.
This is a permissive change that will not force employment businesses to supply agency staff to employers to cover strikes. Agency workers will still be able to decline any assignments they are offered and the right to strike is unaffected. This change is simply about giving both employers and employees more freedom and flexibility to decide what works best for them—a freedom that the current outdated regulations deny them.
Jane Hunt
I understand that the hon. Gentleman will be speaking later.
Employment businesses will still need to be satisfied that the workers they supply are suitably qualified and trained.
Alongside that change, we will increase the levels of damages that a court can award in the case of unlawful strike action. It has long been the case that employers can bring a claim for damages against a trade union that has organised unlawful strike action. The upper limits to the damages that can be awarded are set out in the Trade Union and Labour Relations (Consolidation) Act 1992, and are based on the size of the union that organises the unlawful strike action, but the damages regime has not been reviewed since 1982, so the limits are significantly out of date. As a result, the deterrent effect that Parliament intended has been significantly reduced. The Secretary of State is using powers granted to him under section 22 of the 1992 Act to increase the existing caps in line with inflation. In practical terms, that means that the maximum award of damages that could be made against a union will increase from £10,000 to £40,000 for the smallest unions and from £250,000 to £1 million for the largest.
Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)
Does the Minister think it is right that the cap on any fines issued by the Electoral Commission for fraud if it was found in the Conservative party is lower than what she is proposing for trade unions? Does she think it is right that fines are higher for trade unions than for preserving the democratic functioning of our country?
Jane Hunt
I thank the hon. Member for his question. I will, in fact, move on.
This is a proportionate change, because we are simply increasing the amounts to the level they would be at had they been regularly updated since 1982. We are increasing the limits in line with the retail prices index, which is a well understood measure of inflation and is the same measure for other employment legislation. By increasing the limits on damages in line with inflation, we are sending a clear message to trade unions that they must comply with the law when taking industrial action.
Strikes should only be as a last resort and should only ever be called as the result of a clear, positive and democratic decision of union members. The key point is that unions that continue to comply with our trade union law will be completely unaffected by this change. The changes we are making will ensure that our trade union and agency laws remain fit for purpose. We are giving businesses the freedom to manage their workforce and empowering workers by giving them more choices about the kind of assignments they can accept. We will continue to protect an individual’s right to strike where proper procedures are followed, while ensuring that trade unions are deterred from taking unlawful industrial action.
I beg to move that both instruments are considered by this House.
Several hon. Members rose—
Madam Deputy Speaker (Dame Rosie Winterton)
Just to give prior notice, there are many more speakers than have put down to speak, so I suspect a time limit will be imposed. Members should bear that in mind. I call Angela Rayner, shadow Secretary of State.
Angela Rayner (Ashton-under-Lyne) (Lab)
Thank you, Madam Deputy Speaker. I want to say from the outset that I was an agency worker and I continue to be a very proud trade unionist.
I also want to start by welcoming the Minister to her new position. And what a fitting debate for her to start with. Over the last week, dozens of Government Members found themselves forced to work in intolerable conditions, answering to a boss who only cared for himself and not their interests, so they withdrew their labour—and they achieved some change as a result. So, they do understand the right to strike; they just seek to deny that right to others. The Minister now finds herself, much like agency workers under the regulations she proposes, filling in at short notice as a desperate last resort, with no time to prepare, in an organisation reduced to chaos.
It just does not work. The shambles of this Government disproves their own theory. The regulations are not just utterly wrong in principle, but totally impractical. They promised no new policy while the Prime Minister clings to his desk by his fingernails, but it appears that they have made an exception in this case, ripping up decades of national consensus. The proposals are anti-business and anti-worker. They will risk public safety, rip up workers’ rights, and encourage the very worst practices. Above all, they will not prevent strikes; they will provoke them. It is hard not to believe that this is what the Government were after and their whole intention all along.
The proposals are simply “unworkable”—not my conclusion, but the conclusion of the body that represents agency worker businesses, the Recruitment and Employment Confederation. It is not hard to see why. We already face severe labour shortages, in part caused by the decisions of this Conservative Government. There simply are not the agency staff to cover industrial action. The right hon. Member for Elmet and Rothwell (Alec Shelbrooke) asked the Minister about the impact. The Government have their own impact assessment, which they rushed out this afternoon. It estimates that only 2% of working hours lost to strikes would be covered. I met the REC last week, and it was very concerned that the Minister’s predecessor was simply not listening. I believe that to be the case. This proposal is anti-business. It threatens good agency worker businesses’ reputations, their relations with their staff, and, as the Government’s own impact assessment found, will cost employers thousands of pounds in familiarisation costs.
But there is also a far more insidious side to the proposals. There is a risk to safety, both to workers themselves and the public. The proposals could see agency workers recruited on the hoof and squeezed in to cover highly skilled roles. Take the recent rail strikes, which the Minister mentioned in her opening speech. They saw skilled workers such as signallers, guards and maintenance staff walk out. In case the Minister did not know, it takes a year to train a signaller. Where are the temps who can operate 25,000 volts at control centres or signal 140 mph high-speed trains? How could the travelling public have any confidence in their safety? The public should absolutely not be put in a position where that could happen.
No one in this House can pretend that they are ignorant on this issue. We saw the consequences when P&O Ferries replaced its experienced workforce with agency crew earlier this year. That decision led to 31 separate safety failings. Vessels were suspended and a ship literally lost power in the middle of the Irish sea due to an inexperienced crew. At the time, the Secretary of State for Transport told the House:
“No British worker should be treated in this way… we will not allow this to happen again”.—[Official Report, 30 March 2022; Vol. 711, c. 840.]
The Prime Minister told us that
“we are taking legal action…against the company concerned”.—[Official Report, 23 March 2022; Vol. 711, c. 326.]
Lloyd Russell-Moyle
Is this not an exploiters’ charter that is deeply anti-British? This is from an anti-British party that has abandoned British workers, reducing their rights in work and allowing either agency workers from abroad to be brought in to undercut staff, as happened with P&O, or agency workers to be exploited when they are forced to cross picket lines. This is anti-British worker, is it not?
Angela Rayner
On the P&O workers, it seems to me like the company broke the law and the Government implied that they were going to do something about it. Perhaps the Minister can tell us how that legal action is getting on. Will the Prime Minister keep the promise that he made before he loses office? Can we assume not, judged by today, because the very practice they condemned, they now want to legalise and encourage? This is an absolute disgrace.
Grahame Morris
My right hon. Friend is making a terrific speech and I agree with what she is saying. She mentions P&O, and I certainly recall the Secretary of State making a statement to the House and being enraged by the actions of P&O. Why are the Government putting through the House a statutory instrument to change the terms and conditions and bring in agency workers? Why are we not having the employment Bill that was promised by the Secretary of State? Why is this being done in an underhanded fashion if it commands the support of the House and the country?
Angela Rayner
My hon. Friend makes an absolutely crucial point. The Government have been promising jam tomorrow for far too long, saying “employment Bill”, “employment Bill,” but guess what? No employment Bill. That is what it is like with this Government: it is all jam tomorrow and broken promises all the way.
There is another point to make. Under section 12 of the Employment Agencies Act 1973, the Government must consult before they change any regulation. However, with all the chaos of the past couple of weeks and days, they are trying to pass a consultation from 2015 that they never even completed. They also thought that it would be acceptable to sneak out an updated impact assessment on the day of the debate. This is government on the back of a fag packet, with no time and no opportunity for scrutiny. It is typical of what we have come to expect from this Government.
Hywel Williams
I pointed out to the Minister that the Government are determined to repeal the Trade Union (Wales) Act. She said she would refer to her position on that later in her speech but, unsurprisingly, she failed to do so. Will the shadow Minister commit a future Labour Westminster Government to reinstate our Senedd’s ability to implement a ban on agency staff in devolved services?
Angela Rayner
I thank the hon. Member for his point. I promise him that the Labour party will always support Welsh devolution and support the Wales Government in what they have been trying to achieve. Actually, as we have seen with the industrial action on the railway, we have avoided that in Wales, where we have a Welsh Labour Government, because Labour Members respect devolution. This Government want to break up the Union with their petty squabbles, sleaze and scandal.
Let me move on to the second motion. I congratulate the Minister’s new team on finding one of the lesser-known industrial regulations. It is funny that the Government are proposing to increase fourfold the damages that could be claimed under a measure that has not even been used. The Conservative party is wasting precious parliamentary time in a week when piles of legislation have had to be postponed due to there being no Minister to deal with them. This is an empty gesture or a threat. Whether the Minister and her party like it or not, everybody has the right to join a trade union in this country and to take strike action. This measure is either pointless or yet another attempt to undermine that right by the back door.
Jerome Mayhew (Broadland) (Con)
Does the right hon. Lady agree that it is not open for trade unionists to entertain illegal strike action in this country?
Angela Rayner
We have some of the strictest trade union legislation in Europe. Members have to go through strict balloting. This is the myth that Government Members do not get about trade unionists and industrial action: it is a last resort and it is often when all else has failed. It would be good if the Government got round the table and tried to deal with the disputes rather than stoke them up.
Let us take a step back to examine what this is really about: the Government are set on breaking the strikes that they are causing themselves. We saw it with the RMT strikes last month, when the Government did everything they could to avoid the negotiating table and find the resolution to bring the strikes to an end. Instead, this is a flagrant attempt to do something by a zombie Government that are out of answers, out of options and out of time. They are about a race to the bottom on standards. They are about further eroding British workers’ rights. They are about dividing the country they claim to lead. Undermining strike action will make it harder to find a resolution, resulting in more and longer strikes to the detriment of the public, businesses and workers. This will also empower bad bosses and we will see more cases like P&O Ferries.
We have not just determined that this is bad policy. It is also clear that it is deliberately harmful to workers and their employers, and it is an absolute fault of this Government. I should not be surprised by it. The Conservative party may be trying to get rid of their leader and may want to try and press the refresh button and get a better image, but this Government and that party have shown us time and time again who they are. This is a Government that have no answers to the cost of living crisis. This is a Government that have no answers to backlog Britain and the chaos that it is causing for ordinary working families. This is a Government that have no answers to the spiralling inflation that is on our backs. And this is a Government that have not only failed to prevent the chaos, but have indeed caused the chaos. The party opposite is in disarray and this is no longer good enough. It is the Labour party that is pro-worker and pro-business, and I urge the whole House to be the same.
Several hon. Members rose—
Madam Deputy Speaker (Dame Eleanor Laing)
Order. A great many Members wish to speak and, as the House will be aware, we have limited time—we have just over an hour left. I hope that they will be courteous to their colleagues by taking five minutes or less each.
Jerome Mayhew (Broadland) (Con)
I rise to support both statutory instruments, but I will speak in support of only one: the liability of trade unions in proceedings in tort and the increase in the limit on damages. To set the context, we need to look at the rights and obligations under the law of tort—the common-law duty under tort—so that we can understand the rationale behind the measures. As many Members will know, for a liability under tort to become established, we first have to have a duty of care for one organisation or individual to another. There needs to be a breach of that duty and then evidence to demonstrate that the breach was causative of identified damages. That is a standard part of the law of tort and of our common law. It is worth making the point that it applies to all of us in all our relations with one another; it is not unique to the unions. The starting point is that every organisation is responsible in damages for a tortious breach of its duty of care.
I turn to the specific problem with trade unions and trade union-inspired strikes. Although the withdrawal of labour is a fundamental right, as the right hon. Member for Ashton-under-Lyne (Angela Rayner) made clear, it can lead to a huge number of breaches of tortious duty if a strike is illegal, because public sector work has an impact on so many other organisations. In previous legislation, the Government created an exemption for unions on legal strikes—the official protected industrial action clauses—but illegal strike action is not protected under the law, so the risk remains that trade unions are open to crippling damages being awarded against them. Why should they not be? If through their illegal actions they have caused identified losses to other individuals, why should they not be responsible for them?
Paula Barker (Liverpool, Wavertree) (Lab)
Could the hon. Member identify the last time that there was an illegal strike, please?
Jerome Mayhew
Since 1982, there has been effective legislation to dissuade that kind of act, but the effectiveness of that legislation has diminished over time to such a level that it is no longer worth applying. The damages cap is so low in real terms that it has become ineffective as a disincentive.
Barry Gardiner
Does the hon. Member understand that as the normal remedy is an injunction, what he proposes might, ironically, make injunctions against strikes more difficult for employers to obtain? One of the conditions for the grant of an interlocutory emergency injunction is that it must be shown that damages, if awarded at full trial, would not be an adequate remedy, so raising the level of that remedy makes it less likely that an employer could get an injunction. The hon. Member’s argument has therefore undermined itself.
Jerome Mayhew
I am grateful for that intervention, but I fundamentally disagree. As the hon. Member will know, when someone makes an interlocutory application for an injunction, they often have to give an undertaking in damages. The cap, which I have not yet come on to, will not be raised to a new level; the order merely restores what was put in place, which was the will of Parliament when the legislation was enacted back in 1982.
There is a very strong argument that an organisation that causes loss to another through its breach of a duty of care should be responsible for 100% of damages, but the Government have not taken that view. They have capped the liability in damages for trade unions, even when strikes are illegal. They have tried to balance the disincentive from strike action, for which I make no apology, with protection for trade unions from the full consequences of their actions, even though they might be illegal. The reason is that the Government are in favour of trade unions and do not want crippling damages being awarded against them. There is a balance of rights and obligations, which in my view is absolutely reasonable.
The cap was set by Parliament under the Employment Act 1982 at between £10,000 and £250,000, based on the size of the union and its ability to pay. It seems quite wrong, in 38 intervening years, for the caps not to have been increased by the rate of inflation or by any other amount. The rights of unions and the rights of damaged businesses and individuals have now, in my submission, become unbalanced. The legislation is no longer acting as proposed, and I think the Government are quite right to take action to rebalance it, as it originally required. I have looked up, on the Office for National Statistics website, the retail prices index figures for inflation between January 1982 and May 2022. The multiplier, to be entirely accurate, is 4.31963. The Government’s proposals, which use a multiplier of four, are actually less than the inflationary increase.
It is entirely right that the order restores the original intention of Parliament. The legal right to strike is wholly protected, and it is disingenuous for Opposition Members to suggest that the right to strike is being in any way affected. The order merely restores the balance of rights between the damages available to the victims—and they are victims—of tortious losses caused by illegal strike action and the protection of trade unions from crippling losses. That is right: it is an incentive to avoid illegal strikes, which I think is a good thing.
This is good government. I support the order; I only suggest that from now on, the limits should rise automatically with inflation to avoid having a repeat of this debate in 2060.
Chris Stephens (Glasgow South West) (SNP)
I refer to my entry in the Register of Members’ Financial Interests and to my membership of Unison Glasgow City; I am a proud trade union member. Like the right hon. Member for Ashton-under-Lyne (Angela Rayner), I must say that the irony has not escaped me that right hon. and hon. Members who secured workplace change last week by withdrawing their labour—bringing the country to a standstill, as the Minister put it—now wish to stop others from doing so. When I saw the regulations on the Order Paper, I asked myself whether they were for the trade unions or for the Tories. In Operation Save Big Dog last week, was consideration given to hiring agency Ministers? That was the level that we were at.
What is wrong with the employment agency regulations, of course, is that the Government have tried them before, during the passage of Trade Union Bill. Indeed, there were Government Members who suggested to the Government that they should not go down that road. Then and now, the reason not to is the evidence of the agencies themselves, which do not support this legislation. There has been no consultation.
The regulations interfere with devolution by trying to end the Trade Union (Wales) Act, as we have heard from a number of hon. Members. They interfere with Scotland’s legislative approach, which uses the fair work model; once again, we are seeing this Government running roughshod over devolution. They are also based on fanciful notions. The Minister did not use the phrase “trade union bosses”, but I have heard it used over the past couple of weeks. Trade unions are not the bosses; they are the representatives. It has been suggested by some hon. Members that the fact of disputes taking place is all the fault of the trade unions, not of the poor, downtrodden, six-figure-salary executives who are not engaging.
Chris Stephens
There is no such thing as a union baron. The hon. Gentleman is one of the hon. Members who withdrew their labour to sit on the cobblestones, but given his rhetoric tonight, it seems that he wishes to stop others doing so.
Another problem is the likely breach of international law. The use of agency workers to replace striking workers would violate trade unions members’ right to strike, which is safeguarded by International Labour Organisation convention No. 87, article 3; by the European social charter of 1961, article 6, paragraph 4; and by article 11 of the European convention on human rights. Indeed, the ILO committee on freedom of association has said:
“The hiring of workers to break a strike in a sector which cannot be regarded as an essential sector in the strict sense of the term…constitutes a serious violation of freedom of association.”
On 16 June, the Institute of Employment Rights published an article by the great Professor Keith Ewing, professor of public law at King’s College London. He discusses the convention and refers to the Government’s own agreement—the EU-UK trade and co-operation agreement, which is given effect in UK law via the European Union (Future Relationship) Act 2020. He suggests that the regulations’ revocation of regulation 7 of the Conduct of Employment Agencies and Employment Businesses Regulations 2003 may be unlawful:
“It is at least arguable that these pre-existing powers are constrained by the 2020 Act, s 29 so that they cannot be used in a way that will violate the TCA and the obligations thereunder. If this argument is correct, the government is constrained by its own hand from legislating to revoke regulation 7 by secondary legislation.”
There will be a negative impact on agency workers. Allowing their deployment would put them in a horrible position. They would have to choose between crossing a picket line and turning down an assignment, with the prospect of being denied future work by the agency. Many agency workers, such as supply teachers and bank nurses, will be trade union members themselves. Under the UK’s weak employment laws, agency workers are not protected from suffering a detriment if they refuse an assignment because they do not wish to replace striking workers.
There will also be a negative impact on the agencies themselves. The removal of the ban on the supply of agency workers would mean that employment businesses were forced to become involved in industrial disputes not of their making. That is why agencies themselves oppose the proposals, as others have said. In a joint statement with the TUC, the Recruitment and Employment Confederation urged the Government to leave the current ban in place as a key element of a sustainable national employment relations framework. Part of the reason for that is the realisation by employers and trade unions that disputes come to an end, and there must then be a discussion about how to move forward from that dispute and how to rebuild industrial relations. Neil Carberry, the chief executive of the REC, said:
“The government’s proposal will not work. Agency staff have a choice of roles and are highly unlikely to choose to cross picket lines.”
There is a safety issue. The health and safety of agency workers and the potential impact on public safety is of serious concern to trade unions. Studies suggest that temporary agency workers are exposed to more hazards than others, and have higher rates of workplace injuries and ill health. A simple search of the Health and Safety Executive’s prosecutions over the last five years shows a litany of employer failures: a lack of training of agency workers, a lack of access to protective equipment, and a lack of supervision and monitoring of agency workers to ensure that they understand and are following risk assessments and safe systems of work. Sadly, those failures have resulted in fatal or life-changing injuries among agency workers. We also know from agency workers that their health and safety is often overlooked. When the work involves delivering a public service, that can present risks to the service user or endanger wider public safety.
The Health and Safety Executive and other safety bodies broadly agree that the components of a positive safety culture and successful health and safety management, leading to fewer incidents, include good communication, competence, training and induction, good team working, ability to raise concerns with no detriment, and good worker involvement. The hiring of agency workers to try to disrupt industrial action would not achieve that.
There are also concerns about public safety. Under section 3 of the Health and Safety at Work etc. Act 1974, employers taking on agency workers are responsible for their safety and the safety of the public. The agency placing the worker also has responsibility, and we suggest that failures in safety occur owing to the lack of communication and consultation between the two duty holders, with the safety of the agency worker falling through the gaps. That is borne out by reports from the Health and Safety Executive, which found that about half the recruitment agencies surveyed did not have measures in place to ensure that they were fulfilling their legal obligations.
This proposal is not practical. As was pointed out by Members earlier, there are currently 1.3 million vacancies in the UK , which is a record high. Data shows that the number of candidates available to fill roles has been falling at a record pace for months. In this tight labour market, agency workers are in high demand and can pick and choose the jobs that they take. Are they seriously going to take a job in which they have to cross a picket line in order to get a shift, rather than picking a different one? [Interruption.] Perhaps the hon. Member for Stoke-on-Trent North (Jonathan Gullis) would, but I have to say that he is a unique case.
Grahame Morris
Does the hon. Gentleman agree that many Conservative Members would prefer to turn the clock back to the days of the bond and indentured labour? My grandfather’s father was paid a modest sum as a bond to be an indentured labourer in the mines. It was illegal to go on strike, and if workers did go on strike for better terms and conditions, they were evicted from their homes. It is a disgrace that Conservative Members are trying to turn the clock back to those days.
Chris Stephens
Of course, it was Conservative Members’ party that introduced the Master and Servant Act 1823. I could say more about that, Madam Deputy Speaker, but I will not.
Chris Stephens
Well, it was about what implements could be used to discipline a worker. The hon. Gentleman may want to reflect on that, because the Whips might have done something to him last week when he was taking his industrial action.
What the hon. Member for Easington (Grahame Morris) said was correct. I do not think the Conservatives understand what happens in the workplace. That is the issue here. They think that agencies will replace the striking workers, but that is just not going to happen. An agency worker who can choose between crossing a picket line to get a shift and not crossing the picket line and getting a shift somewhere else will choose the latter option.
Rachael Maskell
The hon. Gentleman is making an excellent speech. It is also the case that employers in safety-critical industries will not want to hire agency workers because they know that the liability will sit with them when the injuries and the accidents occur. Those roles often feature in safety-critical areas. These workers are simply irreplaceable.
Chris Stephens
That is absolutely true. There is a suggestion that the rail industry could bust the current rail dispute by hiring agency workers. Where are the unemployed signalmen who are sitting at home saying, “I cannot wait for the railway workers to go on strike so I can get a shift”? Those people do not exist. This is completely wrongheaded, and utterly impractical. In the gig economy, so-called key workers fighting for better employment terms and pay seem to be expendable under a Tory Government who do not care. Where is the employment Bill that the Government have been promising us since 2015?
There is another point that I forgot to make at the beginning of my speech. Last week, after his resignation, the Prime Minister made a commitment not to introduce legislation that was not in the Government’s manifesto, and not to introduce controversial legislation. Well, by any measure, this is controversial legislation, and, crucially, it was not in the Conservative party manifesto, and therefore it should not be introduced.
I have a couple of questions for the Minister. What assessment has the Secretary of State made of the compatibility of the Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2022—which we are discussing today—with the Human Rights Act, the trade and co-operation agreement with the European Union, and the UK’s commitment to the International Labour Organisation’s fundamental conventions, including convention 87, article 3?
We have heard about the impact assessment, but what consultation have the Government had with the rail industry employers, rail industry unions and rail industry regulators, including the Rail Safety and Standards Board, about the risk assessment of the use of agency workers in safety-critical parts of the rail industry? What consultations have the Government had with devolved Administrations, local authorities, health boards and other public services? I am guessing that they have not had such consultations, because if they had, they would have been told that these proposals were not workable. And what consultation have the Government had with the employment agencies themselves? We have already heard that the agencies do not support this legislation.
We in the SNP will certainly be opposing this statutory instrument and supporting the Labour prayer. My friend on the Labour Front Bench, the right hon. Member for Ashton-under-Lyne, is a good Unison comrade and I have known her for 15 years. I know that the trade union is proud of her working here, as well as of other hon. Members.
It is madness to say that no impact assessment has been produced for this SI because no significant impact on the private, voluntary or public sectors is foreseen. Fining trade unions for pursuing strike action that is deemed unlawful is a deliberate Tory attack to undermine the ability of trade union members and working people to pursue their aims. Instead, the Transport Minister should be negotiating with the trade unions—sitting down with them and seeing if he can help to resolve this dispute. It is quite incredible how this Government do not understand working people or how modern trade-unionised workplaces operate. This statutory instrument that they are proposing should therefore be placed in the bin.
Madam Deputy Speaker (Dame Eleanor Laing)
I am going to impose a time limit of four minutes.
Mrs Natalie Elphicke (Dover) (Con)
It is well known to hon. and right hon. Members across the House that I am an enthusiastic supporter of the role of trade unions, and of marches and protests, particularly in my own constituency of Dover and Deal. I have been a member of a trade union over the last 20 years, and I have been involved in assessing collective bargaining arrangements with unions. I have marched with unions and I have stood alongside them, most recently in relation to the disgraceful, unacceptable behaviour of my Dover constituents P&O, against whom I have taken firm action. As a Member of Parliament, I have also helped with the negotiations between the unions and the P&O management through two previous restructures during the covid pandemic.
So I fully support the role of trade unions, where workers wish to be involved in them, and I think that sentiment is widely shared among Conservative Members. However, trade unions have a particular and special responsibility, and the rights that they and their members are afforded by law are not unfettered. It is the role of this place to assess where the balance of rights and responsibility lies, and today’s measures are about the responsibilities as well as the rights. Regrettably, the most recent train strike action seems to have been taken precipitately, not as the last resort. In my constituency, no trains at all ran on the strike days. That caused upset and also financial loss to others. It did not strike the right balance of fairness to people who were going to school to sit their exams, going to work or going to see loved ones.
Let me say clearly that I fully understand why those working on the railways are seeking pay rises, and I am pleased that the Government have announced the ending of the pay freeze, but in my area train prices are already too high. I have spoken about that in this place before. The railways are in need of urgent modernisation, and, as the Transport Secretary has set out many times, it is important that these conversations take place so that that can happen. The trains provide an essential service, and we must look at how to provide the basic, critical, essential services that people need to get around in their ordinary lives and work when industrial action is carried out, while also respecting the right of workers to take industrial action. We must not undermine workers’ rights, but we must take into account the needs of the public. That is at the heart of the measures being introduced today.
I conclude by underlining that the increased damages under the order are set to apply only where the unions act unlawfully. As we have heard today, it is good that those instances are few and far between. The order does not fetter the activities that I have described and supported, but it must be right to look at the fairness of the rights and responsibilities, particularly in the current situation where industrial action seems to be encouraged and strikes are not always the last resort. I do not want this country to be brought to its knees by unnecessary strike action. These measures will help to strengthen the responsibilities of everyone involved in resolving employment disputes, to enable them to do so in a responsible way.
Paula Barker (Liverpool, Wavertree) (Lab)
I draw the House’s attention to my entry in the Register of Members’ Financial Interests. I am a proud member of the Unison and Unite trade unions.
Many Opposition Members will make well-reasoned and well-articulated arguments as to why the Government’s intention to break strikes with agency workers and to bankrupt trade unions violates international law and threatens safety-critical infrastructure in key sectors during periods of industrial unrest—not to mention its economic illiteracy. Those arguments will undoubtedly fall on the deaf ears of a governing party looking into its own spiral of moral depravity. For all their so-called love of liberal democracy, the Conservatives are now effectively seeking to remove the fundamental right of workers to withdraw their labour. As we enter this leadership election and the insufferable spectacle of hopefuls distancing themselves from the low-wage, high-tax, low-growth economy they have created with unrealistic, unfunded promises, I have no doubt that looking tough on trade unions will feature as part of the show for the Tory party faithful. They say we live in the 1970s, but it is they who live in their own warped reality of more than 40 years ago.
I remind the Conservatives that they are the ones who changed the rules with the Trade Union Act 2016, which brought in ballot thresholds set at what they thought were unrealistically high levels. Guess what? Trade unions are meeting them, so can we drop the phoney rhetoric that the likes of Mick Lynch and other trade union bosses are taking members on strike? It is the members of the RMT and other trade unions who take these decisions. They do not stand behind their trade union leaders; their leaders stand shoulder to shoulder with them.
Other unions will undoubtedly follow as working people attempt to claw back a fairer slice of the pie, rather than the crumbs they are being offered—like the Communication Workers Union workers in Crown post offices who are taking their third day of industrial action today. I support every worker taking a stand for their livelihood, their family, their dignity in the workplace and the prosperity of their communities. This Government fear that the action taken by the RMT and the CWU will encourage other working people to do the same. All this comes at a time when the Government’s boss mates are dipping the till by suppressing wages, paying out millions in dividends and giving themselves bonuses while millions of people cannot afford to eat, to heat their home or to put petrol in their car.
After so many decades of believing their own dogma, the Conservatives are running out of things to privatise, with Channel 4 and the Passport Office in their sights. Similarly with the trade unions, they have pushed the needle so far that the obvious next step is to break strikes using agency labour and to break international law—on which they have form. What next? Ban trade unions altogether, or simply legislate them out of existence? How far the Conservative party has descended into the throes of authoritarianism. We must oppose this with everything we have.
Alec Shelbrooke (Elmet and Rothwell) (Con)
The behaviour and the pay demands of the public sector at this time are unjust. Plenty of my constituents who work in the private sector will receive nowhere near those pay demands, and to threaten strike action to achieve them is an insult to my constituents whose livelihoods will be disrupted and whose taxes will probably have to be increased to pay for them.
However, the saying goes, “Act in haste, repent at leisure.” This agency worker measure was not in our manifesto, and it seems to have been done very quickly in reaction to what is going on in the public sector. Do not get me wrong; I think that action is wrong, but public sector employees represent a small proportion of employees in this country and the private sector has quite a few unscrupulous employers. If people lose their ability to have an effect when they withdraw their labour, I am afraid they will effectively lose the ability to withdraw their labour.
We cannot change the rules to require the service levels that the public demand while ignoring the considerably larger impact on private sector workers. Private sector employers might turn around and say, “I am sorry, but costs have gone up so high that I am cutting your wages back to minimum wage.” Their workers might withdraw their labour, to which the employer might say, “Fine, I will bring in agency workers.” That takes away all the rights of working people to make such decisions. Over history, and certainly many decades back, there have been plenty of examples of people working in terrible conditions, and being able to be part of a collective and to withdraw labour got those conditions improved. We are all gobby in this place—that is how we got here. We all feel it within us, and we all stand up and say something. Most people are not like that at all; they want someone to stand up and do it for them, and we then have negotiations and go to those levels.
I take issue with the right hon. Member for Ashton-under-Lyne (Angela Rayner), but I fully expected her speech to go down as it did. In many ways, we have invited it, but I do not believe the cost of living crisis is created by this Government; many issues in the world are creating a cost of living crisis. It is inflationary to try to chase those pressures, and this will have to be fair for the private sector. However, for the first time in my parliamentary career, I shall be voting against the Government tonight on the measure to bring in agency workers.
Grahame Morris (Easington) (Lab)
I, too, would like to draw Members’ attention to my entry in the Register of Members’ Financial Interests. I want to acknowledge the excellent contribution of the right hon. Member for Elmet and Rothwell (Alec Shelbrooke) and congratulate him on the conclusion he has arrived at. I am a proud trade unionist. I have worked ever since I left school, for 43 years, and I have always been a member of the appropriate trade union. I am involved with numerous parliamentary groups and trade union groups related to the justice unions, the Public and Commercial Services Union, the National Union of Journalists and the RMT. [Hon. Members: “Hear, hear.”] Thank you. I am also a member of Unite and have the honour of chairing its parliamentary group.
I suspect we are here because the Government have engineered strikes in the rail industry that could have been avoided. Sadly, the country was brought to a standstill, which was completely avoidable. The right hon. Member for Welwyn Hatfield (Grant Shapps), who wants to be Prime Minister, is the culprit; he is the roadblock to successful negotiations between rail operators and the trade unions. My advice is: lift the restrictions on the rail operators, let them negotiate fairly and freely, and a settlement can be secured.
I suspect the Government wanted strikes, however. First it was to distract from some of the shenanigans in Downing Street, and now they want to pitch worker against worker to cover for some of the economic failures of another prospective Prime Minister, the right hon. Member for Richmond (Yorks) (Rishi Sunak). The Government want to break strikes and force working people who are organised in trade unions to accept job losses, worse pay, worse pensions, and worse terms and conditions.
Enough is enough. People who work for a living refuse to be poor. It is not too long ago that Conservative Members were applauding public sector workers for their selfless contribution. Many in the transport sector and the national health service gave their lives to provide services and protect us during the pandemic, but memories seem to be short. So we will be organising, and I am firmly of the belief that we should not accept real-terms cuts in wages, whether in the private sector or the public sector.
Make no mistake: these statutory instruments come off the back of the recent RMT rail strikes, and the Government aim to sow political division. My colleagues on the Front Bench mentioned that employers and industry figures, including the Recruitment and Employment Confederation, oppose these changes. Let me just say for the record that the trade union co-ordinating group, a coalition of 11 national unions, not all of which are affiliated to the Labour party, has published a statement calling these proposals
“a shameless ideological assault on the millions of trade union members…in this country who are already suffering from the cost-of-living crisis.”
The Government’s plan is unworkable, but these SIs have not been designed to be workable. They have been designed to undermine strikes, irrespective of the damage they will do to working people, to their living standards, and to the economy and businesses in the meantime. The Government want untrained agency staff to take over safety-critical infrastructure as a means of breaking strikes. The public must be warned that if the Government cut corners to break strikes, safety standards will be compromised. The Minister said in her opening remarks—although she would not take my intervention—that this would not affect the safety of the public, but not too many months ago we saw P&O Ferries replace over 900 seafarers with agency crew, leading to the most appalling safety failures. Inexperienced seafarers who replaced experienced crews were involved in 31 separate incidents, including safety-critical failures such as not being able to operate lifeboats safely. In fact, one ferry was left adrift in the Irish sea after engine failure—
Madam Deputy Speaker (Dame Eleanor Laing)
Order. The hon. Gentleman was speaking with such authority that I did not notice he had exceeded his four minutes. I am afraid I will have to stop him there. I call Craig Mackinlay.
Craig Mackinlay (South Thanet) (Con)
It is always a pleasure to follow many of the Members in this House, and the hon. Member for Easington (Grahame Morris) knows I have great regard for him. I am glad that he discussed issues of the here and now—the P&O issue united the House in opposition to the behaviour of that employer, and it certainly meant a lot for the community of my hon. Friend the Member for Dover (Mrs Elphicke) —but I was somewhat entertained when he started to go on about indentured labour. I thought we had gone back not to the 1970s, which is part of this debate, but to the 19th century. I found that quite entertaining.
There are two usual ways of getting new staff into businesses, and we are discussing whether they can cross a strike action. Currently, a normal employment business is the one that cannot provide. The other type of employment business—the employment agency model—can. I do not think that I would much know the difference, if I went inside an employment business or an employment agency. At the end of the day, it is the staff that the business wants.
Much has been said about whether this change is being made on the back of the recent strikes. Well, perhaps it is. I have had so many emails from people who could not get to work on that day. We in this House had great inconvenience, which I am afraid was not assisted by possibly the worst London Mayor we have ever seen. I have local residents who have suffered fines because they rarely drive in London; they had to face the ultra low emission zone charge, box junctions everywhere that they could not get out of because of the chaos on the roads, and the local traffic networks that had closed much of London in the first place. We are into fairness. Is that fair on people who are trying to get to work and who usually rely on trains—trains that have had £16 billion of taxpayers’ money over this period, and not one job lost? Is it fair on everybody who is just trying to do the right thing: to run their own business, get to a hospital appointment, get to the doctor, or get to their exams?
I have every regard for the trade unions, but they have intentionally used the cost of living crisis—I do not blame them; best of luck to them—to get more than most people would ever be able to get. Let us not go back to the 1970s wage-price spiral. The hon. Member for Easington said that people’s wages will go backwards. Well, they will go backwards every year if we end up with a wage-price spiral.
Alec Shelbrooke
As I said in my speech, some of the wage demands are inappropriate. To put them into context, given the way in which MPs’ salaries are set with the raise in the average public sector pay, if all these wage demands were to go through, we would get an £8,000 pay rise next year. How does my hon. Friend think the public would react to that?
Craig Mackinlay
I thought about such issues when I was drafting my speech. There would be absolute outrage from the public if we were to get such pay rises. I do not particularly want such a pay rise; I assure hon. Members of that. We must guard against a wage-price spiral. I support these regulations, because it is not unreasonable for people to be able to get to work.
The other industry that was going down this route was British Airways. BA workers have come to a settlement, which is very good. If BA had effectively closed down over this holiday period, what would that have meant for the employment of London? What would have happened to the tourists who spend a lot of money in London and other tourist areas around the country, including in my own coastal town? What would that strike at BA have done?
I am glad that the dispute has been settled, but it seems to me that unions are picking off certain industries in order to cause the maximum upset, with little regard for normal people trying to go about their normal business. I have every respect for what unions are trying to achieve. That is what they are for, and they have done marvellous work in the past. At this time, however, we need to pull together as a nation—I really wish that we could pull together as a nation.
I have heard from those on the Labour Front Bench. I have heard from my friend, the hon. Member for Glasgow South West (Chris Stephens), who raised the spectre of danger. He knows very well that these industries are so regulated and that the staff are so qualified that the reality of agency workers being able to carry out this work is pretty low, so he is raising a spectre of something that does not really exist.
I am supportive of these measures. I hope that they do not need to be used. I hope that we can get common sense, get people back to work and get some of these disputes settled.
John McDonnell (Hayes and Harlington) (Lab)
These two small pieces of legislation could have the most serious impact of any we will be considering in this Session. BA has been mentioned. That is in my constituency. Let me explain what happened. When we went into the covid crisis, the airport was shut down. Many workers were asked to remain in post to bring in essential supplies and, as we repatriated people back into this country, two of our immigration officers caught covid and died. Others continued to go into work. When hon. Members went out to applaud key workers on the doorsteps, we went out to applaud our workers at the airport who were putting their lives at risk.
We negotiated a deal. The union accepted that there would have to be some jobs reduced in the short term and wages reduced to ensure that the company survived. That was the negotiation. The assurance given was that, as we became fully operational again, wages would be reinstated. When we became nearly fully operational—at 80%—the company reneged on that commitment for a group of workers. Members can imagine how angry those workers were. They were not asking for a pay rise; they were asking for the 10% cut to be reinstated. That was all. We did the normal thing that we do at the airport: we went into negotiations and we settled the dispute, but there was a threat of industrial action. If that had happened, my whole community would have supported it.
If there had been any hint of bringing in agency workers, not only would that dispute not have been settled, it would have been bitter and long-winded. Members should not think that other workers in the airport, not implicated in that dispute, would have stood on their own. They would not have taken illegal action; it is easy for workers to find a grievance at the airport if they want to. They would have gone through the legal procedures and that airport would have been shut down. Do not tell me that agency staff can fill in for air traffic controllers, firefighters, baggage handlers who have security clearance—it takes months to get that security clearance—immigration officers and others.
This is a serious piece of legislation going through tonight, and it will exacerbate industrial relations across the whole of the country. I say to hon. Members from all parts of the House to be careful what they wish for, and to be careful what they legislate for. I am fearful about what this legislation could do. It is not just the public sector that is affected, but the private sector at Heathrow and elsewhere. Interestingly, with regard to the fines imposed, not a single example could be quoted of where the existing system was not working. In addition, unions are meticulous in the way they go forward on these matters, but where they are not, the injunction route for the employer has worked effectively. At the airport, we had one problem in the cabin crew dispute where the union was unsure who it was balloting, because halfway through some of the staff had been made redundant. An injunction came in, the union started again, the process was legitimised and the dispute took place, and we resolved the dispute through negotiation.
These measures will cause animosity and division, but if that is what this Government are all about, I say, “I think you’ve misjudged the public mood when it comes to support for trade unions in this country at the moment.”
Jonathan Gullis (Stoke-on-Trent North) (Con)
The hon. Member for Glasgow South West (Chris Stephens) talked about my alleged withdrawal of labour last week. The only withdrawal of labour that the people of Stoke-on-Trent North, Kidsgrove and Talke are seeing is 70 years of failed Labour Governments, failed Labour MPs and a failed Labour-run council. By not investing in high streets, investing in heritage, building the new homes we need or creating the new jobs, the Labour party once again shows it is out of touch and is forgetting the people of Stoke-on-Trent North, Kidsgrove and Talke.
I am fully supportive of the specific SI on trade unions. I welcome the Minister to her place and congratulate her on an excellent opening speech. I spent eight and a half years teaching in state secondary schools in inner London and inner Birmingham. I was also a trade union shop steward for the NASUWT in that time, and there was many a time when we came close to potentially having to ballot on strike action, but only as a last resort, after negotiations had failed, freedom of information requests had not been granted and there was a breakdown of morale in the school. It is the absolute last resort.
What we have seen from the RMT is a politicisation from the communists and Putin apologists who want to use this opportunity to bring this country to a halt and make sure, very clearly, that tourism to the great city of Stoke-on-Trent is destroyed, that people cannot get to work and earn a salary, and that those uni students who travel in by train to Staffordshire University cannot sit their summer exams.
Then we have the “not education union”. Hansard always corrects me when I say the “not education union”, but that is its name. I do not want to hear its official name, when it is obsessed with bringing these silly 120-point plans for when schools can reopen during covid—one of which was somehow about reforming the welfare state, which had nothing to do with education—and when it has the audacity to tell kids that it will potentially have teachers out on strike at the start of the new term, further damaging the education of children who have been affected by covid. The Labour party is silent about that. Labour does not have it in it to stand up to those trade union barons on their six-figure salaries, in most cases earning more than the Prime Minister of this country, because it simply wants to make sure those donations keep coming in to its party coffers and its constituencies as well.
This Government are trying to take action to ensure that if the service level is being lowered and agency workers want the opportunity, or wish to choose—it is a choice—to cross the picket line, they should have that right. It is deeply Conservative to allow people to choose. I know that the Labour party, or the socialists opposite, are obsessed with us having one set standard for all, but that is not what the people of Stoke-on-Trent North, Kidsgrove and Talke want.
The people of Stoke-on-Trent North, Kidsgrove and Talke want to see a party that is on their side, helping to get their schools open and ensuring that hospitals are running and public sector workers are working. They want to see the very best, world-class services. It is under this Government that they have already seen £56 million from the levelling-up fund, £31 billion from building back better, 500 brand new Home Office jobs, £29 million from the transforming cities fund and £17.6 million in the Kidsgrove town deal, which means that Kidsgrove sports centre, which Labour closed—they did not want to save it for £1 back in 2017—will be refurbished and reopened.
That is the record of this Government. That is why this Government want to make sure that areas such as Stoke-on-Trent North, Kidsgrove and Talke have people on their side. I welcome the Minister for all her fantastic work and I hope the socialists opposite will realise the error of their ways.
Beth Winter (Cynon Valley) (Lab)
I am not going to waste any of my time responding to the appalling and abhorrent comments by the hon. Member for Stoke-on-Trent North (Jonathan Gullis), which were also completely inaccurate and insulting.
I want to put on record my opposition to the regulations, and there are three main reasons. First, it is a flagrant attack on employment rights and a purposeful attempt to inflame industrial relations. The Government are only pursuing these measures to continue to impose their decade-long low pay agenda, holding down the pay of key workers below inflation. It is the Government’s low pay approach that is generating industrial action, and this is a draconian attempt to force people into poverty.
Mary Kelly Foy (City of Durham) (Lab)
Does my hon. Friend agree that the easiest and best way to stop strike action is to give workers decent pay and good, decent terms and conditions?
Beth Winter
I totally agree. That is what we do in Wales.
These measures are unsafe, putting workers and the public at risk. They have been rejected by the Trades Union Congress and the Recruitment and Employment Federation, which said:
“Bringing in less qualified agency staff to deliver important services will endanger public safety”.
I oppose the first of these instruments, in particular, because, as the hon. Member for Arfon (Hywel Williams) said, it conflicts with Welsh Government legislation—the Trade Union (Wales) Act 2017, passed in the Senedd. This Government have made it clear that they intend to legislate to remove that Act through primary legislation when parliamentary time allows. The First Minister of Wales has made it clear that the proposal by the UK Government to revoke the Act is unacceptable. He has said that it is “deeply disrespectful”—
“Not a word in advance, not a letter to say that this is what they intended to do”.
It is hard to believe that any UK Government with a grain of principle and care for the Union could behave in such a cavalier manner. If anyone is going to be responsible for the break-up of the Union, it is this Tory Government by riding roughshod over the devolution settlement. The general secretary of Wales TUC, Shav Taj, has said:
“We will fiercely oppose any attempt to attack workers’ rights and we look forward to a future where workers throughout the UK have the strongest employment rights in Europe, instead of the weakest”,
as it currently stands. This is the act of an out-of-touch Government unaware of their own unpopularity.
We also have to remember why this proposal has come about now. The Government are in a confrontation —they are actually stoking confrontation—with key workers who do not wish to have yet another of this Government’s annual real-terms pay cuts. In the RMT they have found a trade union that is willing to challenge them, and it has my full support, as do all the other unions that are being forced—forced—to consider industrial action, which is always a last resort.
In Wales, the Welsh Government are not in conflict with the RMT. In fact, no industrial action is being taken on Transport for Wales trains, which are publicly owned. The UK Government could have followed suit and taken Network Rail into public ownership, as happened in Wales during the pandemic. The UK Government have so much to learn from the Welsh Government, where a different approach is being taken. The Welsh Government’s approach includes passing legislation to work with trade unions in partnership—the Public Procurement and Social Partnership (Wales) Bill. That is the model that we need to see. The Government are giving a role in statute to businesses and trade unions, and employers and employees, in developing and supporting an atmosphere of co-operation and partnership instead of risk, division and confrontation.
What discussions has the Minister had with the First Minister and Counsel General in Wales on this matter? What discussions has he had with the TUC and trade unions in Wales? What do employer bodies in Wales, or in the rest of the UK, think about his proposals? What consultation has happened with them? What is the view of the new Welsh Secretary on these proposals? I am disappointed that he has not already committed to pausing any progress on overriding the Welsh Government and Welsh legislation while we have a caretaker Government. Is it the Government’s intention to bring forward primary legislation to revoke the Trade Union (Wales) Act 2017, and if so, when will it happen?
This is a Government doubling down on their cost of living crisis. People will not accept it and we will fight back.
Several hon. Members rose—
Madam Deputy Speaker (Dame Eleanor Laing)
I will have to reduce the time limit to three minutes.
Barry Gardiner (Brent North) (Lab)
The Government seem to think that most workers are unskilled or uncertified, but agency workers are simply not there with the relevant skills and certification to perform their work in a way that is safe. I began today at the St Monica Trust, at two sites just outside Bristol, to speak to workers there who have withdrawn their labour because of the appalling offer they have been given of being fired and rehired unless they accept lower wages and terms and conditions. They were earning, on average, between £16,000 and £17,000 a year—about what a Secretary of State’s severance pay is—and they made it clear to me that their main worry and their main reason for going on strike was not actually for their own sake. They were concerned for the welfare of the residents of the residential homes and the retirement village.
I want to ask the Minister tonight whether she will please report the St Monica Trust to the Health and Safety Executive and ensure that a positive inspection is carried out there, because the workers out on the picket line were very concerned about the safety of employing unskilled workers who do not understand the residents and are not able to care for them in the way that they have all the way through covid. They were there on Christmas day and all the time when relatives could not visit; they treated them as their family. The agency workers cannot do that.
I want to make a couple of other brief points. Agency workers are generally paid significantly more than permanent staff, and that reflects the intermittent nature of their work. However, the employer, by paying agency rates to strike breakers in a dispute, actually makes the union’s case for it, because it shows that the employer actually can pay higher rates for the job. How very foolish of them.
Finally, I want to ask whether the Minister might, in her summing up, explain whether the Secretary of State for Business, Energy and Industrial Strategy has replied to the letter written at the end of June by Hays, Adecco, Randstad and Manpower, in conjunction with the TUC, in which they said:
“We can only see these proposals inflaming strikes—not ending them”.
It seems to me that, when we have the employers of the agencies themselves saying that this is a bad thing to do, the Government should listen.
Ian Byrne (Liverpool, West Derby) (Lab)
I would like to put on record that I am proud member of Unite the union and the GMB. I start by paying tribute to all those in Liverpool, West Derby and indeed across the country who are facing real-terms cuts to their pay, attacks on their conditions and security of work, attacks on their pensions, redundancy and attacks on health and safety in the workplace, and are having to take industrial action as their absolute last resort. I stand in absolute solidarity with them.
While the workers worry about their families and their families worry about their futures, as they are forced to leave the industry they have dedicated their whole lives to and are forced into poverty and using food banks, we have the disgraceful spectacle of a morally bankrupt Government using this Parliament to attack fundamental workers’ rights—and this is in the middle of a cost of living crisis, when workers are fighting against real-terms cuts to a wage so that they can actually put a meal on the table.
Mick Whitley (Birkenhead) (Lab)
My hon. Friend is making a fantastic speech. Does he not think that to be a working person in Britain today, to have lived through a decade of stagnating wages, to have seen their pay collapse in real terms while prices soar and to know their own Government refuse to lift a finger forces people on low pay to take strike action to try to force—
Ian Byrne
Absolutely. I agree with everything my hon. Friend said.
This is a Government who furiously defend the class interests of those they represent in this place, and that is never the working class. The Trades Union Congress has pointed out that the action is a violation of trade union members’ right to strike, which is safeguarded by international law. Make no mistake, this is a risk to public safety, and standards will be lowered. Any consequences of these actions will lie at the foot of this Government.
The Government’s cynical regulations that we are debating tonight put agency workers, who they know have limited rights, in the position of having to turn down an assignment with the prospect that they will be denied future work by the agency if they do not want to cross a picket line. Many agency workers, such as supply teachers and bank nurses, will be trade union members themselves, and they have suffered terribly in this pandemic.
The regulations highlight the insecurity of the labour market, the erosion of workers’ rights and how flawed and immoral it all is. The pandemic shone a light on this immorality when workers with covid had to continue working because they had no sick pay. The employment model is broken for millions. We should be legislating and learning lessons from covid, and enhancing worker protections, including sick pay. Instead, tonight we are voting on a scab charter for bad employers from a Government who have picked their side.
Trade unions are the transformational vehicle for positive change—they have been for centuries and, despite the efforts of this wretched Government, will continue to be so for future generations. I will always be proud to stand shoulder to shoulder with them supporting workers in the struggle who refuse to be poor.
Tonight is yet another sad day for democracy in this place. I stand in absolute solidarity with all those trade unions and trade union members who are fighting so hard for our communities and the rights of workers everywhere. Their fight for economic and social justice has never been needed more.
Jane Hunt
I am grateful to the House for its consideration of the draft amendment regulations on agency workers, which will allow agency workers to cover strikes, and the order raising the upper limit for damages against trade unions that organise unlawful strike action. I will cover some of the things that were mentioned. The right hon. Member for Ashton-under-Lyne (Angela Rayner) and the hon. Member for Glasgow South West (Chris Stephens) talked about health and safety. The change does not affect broader health and safety issues, with which businesses will still have to comply. Similarly, the obligations on employment businesses to supply only suitably qualified workers remain in place.
Will the hon. Member for Brent North (Barry Gardiner) please write to me with some urgency with the details of the case to which he referred? The right hon. Member for Ashton-under-Lyne and others referred to P&O Ferries. The situation is different with P&O Ferries, where the company has admitted deliberately choosing to ignore statutory consultation requirements when firing staff with no notice. The hon. Member for Glasgow South West and others talked about the trade and co-operation agreement. We are confident that this change complies with relevant international legal obligations. In response to the hon. Members for Arfon (Hywel Williams) and for Cynon Valley (Beth Winter), let me say that the Government have been clear since 2017 that we intend to repeal the Trade Union (Wales) Act 2017, so the trade union legislation will equally apply across Great Britain.
In conclusion, the aim of our trade union laws is to support an effective and collaborative approach to resolving industrial disputes that balances the interests of trade unions and their members with the interests of employers and the wider public. The changes we are making will support that balance, and I therefore commend these instruments to the House.
Question put.
Business without Debate
Madam Deputy Speaker (Dame Eleanor Laing)
With the leave of the House, we shall take motions 5 to 7 together.
Motion made, and Question put forthwith (Standing Orders Nos. 118(6) and 18(1)(a),
Plant Health
That the draft Plant Health etc. (Miscellaneous Fees) (Amendment) (England) Regulations 2022, which were laid before this House on 6 June, be approved.
Regulatory Reform
That the draft Legislative Reform (Provision of Information etc. Relating to Disabilities) Order 2022, which was laid before this House on 12 May, be approved.
Police
That the draft Police Act 1996 (Amendment and Consequential Amendments) Regulations 2022, which were laid before this House on 9 June, be approved.—(Adam Holloway.)
Question agreed to.
Draft Mental Health Bill (Joint Committee)
(1 year, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Deputy Leader of the House of Commons (Mr Peter Bone)
I beg to move,
That this House concurs with the Lords Message of 5 July that it is expedient that a Joint Committee of Lords and Commons be appointed to consider and report on the draft Mental Health Bill (CP 699) presented to both Houses on 27 June.
That a Select Committee of six Members be appointed to join with a Committee appointed by the Lords to consider the draft Mental Health Bill.
That the Committee should report by 16 December 2022.
That the Committee shall have power—
(i) to send for persons, papers and records;
(ii) to sit notwithstanding any adjournment of the House;
(iii) to report from time to time;
(iv) to appoint specialist advisers; and
(v) to adjourn from place to place within the United Kingdom.
That the quorum of the Committee shall be two; and
That Rosena Allin-Khan, Marsha De Cordova, Jonathan Gullis, Dan Poulter, Ben Spencer and Sir Charles Walker be members of the Committee.
It is an unexpected pleasure, in my first outing as Deputy Leader of the House, to speak to this motion, which relates to prelegislative scrutiny.
The draft Mental Health Bill seeks to ensure that patients suffering from mental health conditions have greater control over their treatment and receive the dignity and respect that they deserve, as well as making it easier for people with learning disabilities and autism to be discharged from hospital. It is clearly an important Bill, so it is important that a Joint Committee be established to conduct prelegislative scrutiny. I hope that the whole House will support the motion to allow the Joint Committee to begin its important work.
Question put and agreed to.
Environmental Audit
Ordered,
That Sir Robert Goodwill be discharged from the Environmental Audit Committee and Chris Skidmore be added.—(Sir Bill Wiggin, on behalf of the Committee of Selection.)
North Street, Keighley: Green Space
(1 year, 9 months ago)
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Robbie Moore (Keighley) (Con)
May I extend my thanks to you, Madam Deputy Speaker, and to Mr Speaker for granting this urgent debate? It is truly urgent, because in just 10 days’ time, people in Keighley will be heading to the polls to vote in a public referendum to determine the fate of a key strategic site in the heart of Keighley.
I am, of course, talking about the much-loved green space that adjoins North Street and the top of Cavendish Street, right in the centre of Keighley. It is a unique site, and people in Keighley quite rightly care about its future. They want to have a say in how it looks, how it feels, how it interacts with the remainder of Keighley’s streetscape and, of course, how is utilised long into the future.
The unique site was once the home of Keighley College, before the college was demolished and rebuilt on a bigger and better site, presenting a rare opportunity for a newly created open site right in the heart of Keighley, ready to be used by all. It was sown with grass and was quickly adopted, by all across Keighley, by the name “the green space”. Hope was raised and a new open green space was created. A new green lung right in the heart of Keighley was formed, with the potential to go on to be landscaped as a fantastic town centre space, perhaps planted with trees, wild flowers, and a permanent grassed area for all in Keighley to enjoy—because place, and a sense of place, are important.
If you were to join me in Keighley, Madam Deputy Speaker—and you are very welcome to do so, as is the Minister—you would see some of the fantastic architecture that we have there. North Street, for instance, has some beautiful buildings. Some, of course, are in need of refurbishment, but nevertheless, those buildings are stunning. Cavendish Street is the same. While our high streets face some challenges, as many high streets do, our town centre has soul, and I believe that the green space—uniquely positioned in the centre of town, at the junction of North Street and Cavendish Street, opposite the fantastically imposing beauty of the Carnegie library, adjacent to the town hall and the Town Hall Square with our awe-inspiring cenotaph—makes the soul of our town all the better.
All this is at risk, however. Labour-run Bradford Council is determined to build on this key site, stripping away that hope of Keighley’s town centre streetscape being improved by a permanent green space in the centre of our town. As I said earlier, place and the sense of place are important, and, in my view, Bradford Council’s determination to build on the site, no matter what, only illustrates its lack of willingness to consider the negative impact that that will have on Keighley’s soul. But there is a bigger, underlying, and much more detrimental issue. We are governed by a local authority that is unprepared to listen—to listen to what the people in Keighley want.
I am proud to say that this Conservative Government announced that Keighley would receive £33.6 million as part of its towns fund deal. That included some seriously exciting projects for our town, including a new skills hub, a new manufacturing, engineering and future tech hub, and more money for town centre improvements, regeneration, and cultural offerings such as Keighley Creative—but also funding for many, many other projects.
I am also proud to say that as part of the Keighley towns fund deal, this Conservative Government have allocated money to help deliver a new health and wellbeing hub, to improve local healthcare services and address some of the health and wellbeing inequalities in our town. I am delighted to have been directly involved in helping to secure these funds, along with the great team which forms our Keighley towns fund board, an advisory body in which many are volunteers and give up their own time to help Keighley in a positive way.
We do need a new health and wellbeing hub: one needs only to speak to representatives of the many great organisations in Keighley that provide health and wellbeing services to realise and acknowledge that. However, throughout the towns fund application process, even during the many years before my time representing Keighley, Bradford Council has been determined to ensure that the green space is built on, no matter what.
John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)
I congratulate my hon. Friend on securing this important debate. Yet again, he is demonstrating what a feisty campaigner he is for his constituents in Keighley and Ilkley. Although my constituency is, of course, some distance from Keighley, I do know the green space, and I understand the points that he is making. Does he agree that this is an example of the need for local authorities to listen and devolve decision making as close to the people as possible, so that they secure the best possible outcome that reflects the views of local residents?
Robbie Moore
I absolutely agree with my hon. Friend. If we want to place-make, and if local authorities are in the position to regenerate a town, it is absolutely crucial that they listen to what the local people and the town council want. In that way, we can make sure that when we are in a position to place-make and the local authority is being issued with Government funds, it will deliver on what local people want in the location where local people want to see it.
We are unfortunate because Bradford Council is fixated on ensuring that the green space is built on, no matter what. It has adopted the position that this is the only place in the whole of the centre of Keighley in which a new health and wellbeing hub can be located. That is despite the fact that Keighley has many other brownfield site options and many other empty buildings and vacant premises in the centre of our town, all of which, over many years—even prior to the existence of the towns fund—the Council has failed to properly explore. It has failed to carry out site analysis of other sites or openly consider other site options.
I very much want to see a new health and wellbeing hub built in Keighley. We need one, but we should not be railroaded into a corner and told by Bradford Council that building on the green space is the only option. This, in my mind, is a result of the council’s lack of preparation, lack of due diligence and lack of consideration of other sites for many years. This should not be an either/or choice. In Keighley, we should be able to have a new health and wellbeing hub and keep the green space on North Street green. In fact, it is surely far more beneficial for the health and wellbeing of Keighley to have both.
Local authorities have an important role in regeneration. If they function properly, with due thought and consideration for a town, they can have a real place in making sure that we develop and regenerate a town in the appropriate manner. They can help communities to grow and thrive, and they can deliver on the community’s priorities. But this involves listening to what the community wants, and I come back to the point that I made earlier. My issue is not with the identified need for a new health and wellbeing hub at all; it is simply about the location. Unfortunately, in this case, Bradford Council has failed properly to engage with Keighley. It has failed to consider just how much this green space—this unique space in the centre of Keighley—matters to the people of the town. The council’s lack of inquisitiveness, preparation and ability to engage with our community and listen to its voice is detrimental to the process of proper place-making.
This has not been without trying. Local campaigners such as Laura Kelly and our former Keighley town mayor, Councillor Julie Adams, have tried on many occasions to tell Bradford Council that residents in Keighley would like the green space to stay green. Likewise, the Keighley Central ward District Councillor Mohammad Nazam and Keighley West ward District Councillor Julie Glentworth, as well as Worth Valley Councillors Rebecca Poulsen, Chris Herd and Russell Brown, have tried to get Bradford Council to listen and to make their voices heard in Bradford’s City Hall, but no one in Bradford’s running administration would listen.
I have to say that Labour-run Bradford Council’s approach to debate on the green space has been shameful. All its Labour councillors in Keighley are failing to listen on this issue. Let us be clear: Labour is determined to build on this green space, no matter what. When the council’s political executive gathered to discuss building on the green space just over a month ago, Keighley town councillor and local campaigner Councillor Paul Cook turned up to a meeting at Bradford Council in good faith to put forward his views. He had a pre-registered slot to speak at the meeting, but he was silenced by the council and not given the time to speak properly on this matter. Place-making is about listening to what local communities want, not silencing them.
At the end of last month I, along with many other residents, attended a packed public meeting in Keighley’s civic centre. It was an opportunity kindly organised by Keighley Town Council to allow local people to raise their views. The mood of the room was strong and represented, I believe, the mood of the wider town, which is absolutely clear. We want to save our green space.
As a result, Keighley Town Council decided to hold a public vote on this very matter, triggered by Keighley resident Graham Mitchell. This public poll will take place in just 10 days’ time, and everyone in Keighley will have the chance to vote on Thursday 21 July between 4 pm and 9 pm. Everybody living in the town council parish area, which includes Riddlesden, East Morton, Beechcliffe, Utley, Ingrow, Long Lee and Thwaites Brow, Guard House, Braithwaite, Bracken Bank, Oakworth, Laycock and, of course, the wider Keighley area, will be able to vote in their regular polling station. Any constituent who is unsure of where this is can find out by searching wheredoivote.co.uk or by calling Bradford Council’s election office.
This really matters because people in Keighley will be asked three questions on the ballot paper, and the choice for all is very clear. The first question is, “Do you want a new health and wellbeing hub?” As I have said, we need a new health and wellbeing hub in the centre of Keighley, and I am therefore urging everyone to say yes.
Secondly, residents will be asked, “Do you want a new health and wellbeing hub on the vacant land at the corner of North Street and Cavendish Street?” This is, of course, the green space. There are other places in the centre of Keighley, which should be explored, where a new health and wellbeing hub could be located. Of course, I want to keep the green space green, and I am therefore urging all residents to answer no.
Finally, residents will be asked, “Should the vacant land at the corner of North Street and Cavendish Street be considered as a public open space?” This is our chance—the people of Keighley’s chance—to send Bradford Council a clear message to save this green space for many generations to enjoy into the future. To keep it green, I am urging all to vote yes.
This is an important moment for our town. Developments like the one proposed by Bradford Council are irreversible. If we lose our green space, this unique space in the centre of town, we will never get it back. I reiterate my call for as many people as possible to get involved and make their views known. I am urging people to vote yes, no, yes in the referendum. We must ensure this green space is protected for the future generations of Keighley, like the children at St Anne’s Primary School, which is located next to the green space, who kindly wrote to me saying that they want the green space to be kept green. If it is destroyed now, there will be no turning back.
This is not an either/or choice. I want to see a new health and wellbeing hub and I want to protect our green space, to protect and enhance the soul of our town. In just 10 days’ time, the people of Keighley will have a clear choice, and I urge them all to get out and vote on Thursday 21 July, to let their voice be heard. Let us keep it green.
The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Eddie Hughes)
I do not know where to begin. It seems unfortunate that the Opposition Benches and the Benches behind me are not full to hear that tour de force of a speech from my hon. Friend the Member for Keighley (Robbie Moore). I congratulate him on securing this debate but, my God, what a speech that was. Nobody could doubt that he is incredibly passionate about this cause and a strong campaigner on behalf of his constituents.
I also thank my hon. Friend the Member for Berwickshire, Roxburgh and Selkirk (John Lamont) for his somewhat surprising intervention, given the very specific nature of the debate. It shows just how far my hon. Friend the Member for Keighley is prepared to reach out in his campaign.
So I would like to start by saying that the Government share my hon. Friend’s concern about making sure that communities in all parts of the country have access to vibrant green spaces in which people can relax, exercise and engage with the natural environment. Everyone here will testify to how essential their local parks and open spaces—
Eddie Hughes
Everyone here will testify to how essential their local parks and open spaces were at the height of the covid pandemic—they certainly were for me. They remain essential to everyone’s physical and mental wellbeing, and our quality of life, too. I am sure that my hon. Friend will appreciate that I cannot comment on specific cases, owing to the Secretary of State’s quasi-judicial role in the planning system. However, I can spend this time reassuring my hon. Friend on what we, as the Government, are doing to both discourage development on green spaces and encourage development elsewhere.
On open space, the national planning policy framework makes it crystal clear that access to high-quality open spaces and opportunities for sport and physical activity are important for the health and wellbeing of communities. On top of these benefits, they obviously add ecological value, making an important contribution to the green infrastructure of the community. That is especially pertinent when we talk about the legacy of COP26 and the need for housing and planning to play their part in helping us to tackle carbon emissions, improve air quality and win the race to net zero.
Planning policies should therefore be based on robust and up-to-date assessments of the need for open space, sport and recreation facilities. Plans should also make sure that councils are ready to seize opportunities for new provision of these spaces where they can. Finally, the framework is clear that open space should not be built on unless there is clear evidence that it is no longer required, or that equivalent or better provision is secured in a suitable location. Development is also permitted if it is for alternative sports and recreational provision, the benefits of which clearly outweigh the loss of the current or former use.
Similar to open space, local green space can have a positive effect on local communities and can be designated through local and neighbourhood plans, ensuring that green areas of particular importance are identified and protected. Designating land as local green space should be consistent with the local planning of sustainable development and should complement investment in sufficient homes, jobs and other essential services. These spaces must also be in reasonably close proximity to the community, be demonstrably special to a local community, and hold a particular significance—for example, because of their beauty, historic significance, recreational value or richness of wildlife. Policies for managing development within a local green space should be consistent with those for green belts, but I should add that this space may also be nominated by parishes and community organisations for listing as an asset of community value. What does that mean in practice? If somewhere is listed, the community will have an opportunity to bid for it if the owner wants to dispose of the land on the open market.
My hon. Friend will know that the Government strongly support the re-use of suitable brownfield land, especially to meet housing needs and to regenerate our high streets and town centres. That is one reason why we committed to making the most of brownfield land, in line with our policies in the NPPF. The framework sets out that planning policies and decisions should give substantial weight to the value of using brownfield land. To further support this brownfield-first approach, we have introduced a number of measures, including increasing housing need by 35% in our 20 most populated urban areas. We have also widened permitted development rules, making it easier for boarded-up shops and offices to be converted into new homes.
We have also mandated every local authority to publish a register of local brownfield land suitable for housing in their area. Although it is rightly for councils and their residents to plan where new homes should go, our plan is clear that local authorities must give substantial weight to the re-use of brownfield, and give it priority where practical and viable. In many cases, we encourage councils to consider building upwards, with higher densities in towns and cities. However, it goes without saying that brownfield sites vary greatly, and our default position is that local authorities are generally best placed to assess the suitability of each development.
Let me turn to green space and planning applications. As my hon. Friend will know, councils are required to undertake a formal period of public consultation prior to deciding on a planning application. Where relevant, considerations are raised by local residents, and they must obviously be taken into account by the local authority. Planning applications are determined in accordance with the development plan for the area, unless material considerations indicate otherwise. Each application is judged on its own individual merit; and of course, if a proposed development infringes on local green space, residents will be able to object and make their views known, just as they would with any other planning application.
I am sure that my hon. Friend will agree that all this underlines the need for the planning process to be more democratic and engaging. I am pleased to say that the reforms proposed in our Levelling-up and Regeneration Bill will help us to do exactly that. Under the reforms that we have set out, communities will retain the right to make representations on planning applications and local authorities will have a duty to consult with their communities on plans. Crucially, the Bill includes measures to digitise the planning system and transform the way that people can see and engage with what is being built in their area, including provision for green and open spaces.
Through the Bill, existing powers that determine when pre-application engagement is required with communities will also be made permanent. That will ensure that the voice of the community continues to be heard loud and clear. Our changes will also increase opportunities for community involvement through street votes, neighbourhood plans and design codes, so that high-quality green design and development is brought forward in a way that works best for local people. But we are not just reforming the planning system to ensure adequate green spaces for local communities; we are also giving councils the real investment they need to increase local provision of parks, woodland and play areas. That is evidenced in our towns fund, which is providing more than £3.6 billion to support locally-led job-creating projects that support growth and build pride in place.
As my hon. Friend will be aware, £33.2 million of the towns fund has been committed via the Keighley town deal to invest in capital projects designed to improve connectivity both to Keighley and within the area, to improve land use in and around the town, and to make the best use of the area’s rich economic and cultural assets. I understand that the proposed £2.4 million of public realm improvements include improving public spaces, such as new squares and parks for residents to enjoy, along with upgrades to walking and cycling links, and the regeneration of Low Street with significant tree planting. I am confident that, complemented by the £4.9 million community grant scheme, Keighley will become an even more attractive place in which people can live, work and play. It is an exemplar of how the Government are supporting councils to level up and increase the provision of green spaces in their communities. We want to get more growth-spurring, life-improving projects such as this off the ground in the coming weeks and months.
I thank my hon. Friend once again for his amazing, passionate speech, and for securing this incredibly important debate. I hope that my remarks have gone at least some way towards reassuring him that the Government are committed to protecting our vital green spaces. We will continue to take a brownfield-first approach to development that protects our existing green spaces while ensuring that we build greener, more sustainable neighbourhoods for the benefit of all.
Question put and agreed to.
Draft Business and Planning Act 2020 (Pavement Licences) (Coronavirus) (Amendment) Regulations 2022
(1 year, 9 months ago)
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The Minister of State, Department for Levelling Up, Housing and Communities (Mr Marcus Jones)
I beg to move,
That the Committee has considered the draft Business and Planning Act 2020 (Pavement Licences) (Coronavirus) (Amendment) Regulations 2022.
It is a pleasure to serve under your chairship, Dame Maria.
It is a privilege to update the Committee on these important regulatory changes in my first speech as the new Housing and Planning Minister. I take the opportunity to pay tribute to my predecessor, my right hon. Friend the Member for Pudsey (Stuart Andrew), now Minister of State at the Ministry of Justice. I commend his commitment and enthusiasm, and the dedication that he showed to this position throughout his time in post. I wish him well in his new role.
The Minister on the Front Bench may be new today, but Members will know that the regulations that we are considering are not. They were laid before the House in draft form last month, under section 23(6) of the Business and Planning Act 2020. The draft regulations will extend the temporary pavement licence provisions for a further 12 months, to 30 September 2023. They will come into effect the day after the regulations are made.
Hon. Members will know that the pavement licence provisions create a faster, cheaper and more streamlined approval process for businesses to put tables and chairs on the pavement outside their premises. In my constituency, and no doubt in all our constituencies, that has proved to be a game changer for many cafes, bars, restaurants and pubs. The measures have proven to be almost universally popular, and successful in supporting high street businesses to stay afloat and to keep their doors open—in particular during the height of the pandemic, when people were in effect not able to trade indoors. By making it easier for those businesses to offer al fresco dining with outside seating, the draft regulations also contribute to a vibrant, mixed-use high street, which drives up footfall, and supports local businesses and the wider local economy.
For all such reasons, it is important to extend the provisions for a further 12 months. That will give businesses certainty about the current rules while we seek to make the measure permanent through the Levelling-up and Regeneration Bill.
I now offer some background to the draft regulations; I hope the Committee will bear with me while I delve into the finer points of the legislation. Part VIIA of the Highways Act 1980 sets out a permanent local authority licensing regime for the placement of furniture such as tables and chairs on the highway. However, the process set out under that legislation is for there to be a legal minimum of a 28-day consultation to determine applications. In practice, many local authorities take much longer to determine applications, and there is no statutory cap on the fee that an authority may charge.
We sought to cut through that red tape quickly, to help struggling businesses during the pandemic, and in July 2020 we introduced a temporary pavement licence provision in the Business and Planning Act, to support the hard-hit hospitality sector. The draft regulations use enabling powers under the Act that allow the Secretary of State to extend the temporary provisions, subject to parliamentary approval.
I turn to the detail of the draft regulations, whose sole purpose is to change the four references to the expiry date of the temporary pavement licensing provisions in legislation. To be specific, those dates are pushed back by 12 months, from 30 September 2022 to 30 September 2023. I want to be clear: the draft regulations will change no other part of the temporary pavement licensing provisions. The process for applying for a licence during the extended period will not change, either.
All the draft regulations mean is that businesses will continue be able to apply for a licence under the process set out in the 2020 provisions until at least 30 September 2023. However, the regulations do not automatically extend licences that have already been granted under the current provisions, so businesses will need to apply for a new licence if they wish to have one in place during the extended period. Councils are encouraged by guidance to take a pragmatic approach to applying the relevant provisions, to make it as easy as possible for businesses to apply for a licence during the extended period.
I appreciate that some hon. Members may be interested in what the process looks like. All licence applications are subject to a seven-day public consultation period. After that, there is usually a further seven-day determination period during which the local authority is expected to either grant a licence or reject the application. If the council does not determine the application before the end of that period, the licence will automatically be deemed to be granted and the business will be able to set out its tables and chairs in accordance with the purposes stated in its application.
Licence application fees will be set locally but are capped at £100. The fees are unchanged from the current temporary provisions. All licences will be subject to a national non-obstruction condition and smoke-free seating condition, as well as other local conditions set by councils. The granting of a pavement licence covers only the placing of removable furniture on the highway. A pavement licence does not negate the need to obtain approvals under other regulatory frameworks such as alcohol licensing.
The draft regulations will enable hospitality businesses to continue to obtain a licence to place their tables and chairs outside their premises quickly and cheaply. The changes could not come at a more important time for high street businesses. Evidence from organisations such as the British Beer and Pub Association shows that the hospitality sector has struggled to return to pre-pandemic levels of trading.
I firmly believe that the draft regulations will provide essential economic support for the sector by letting businesses continue to serve food and drink outside. To support councils and businesses with the implementation regulations, we will publish an updated version of the pavement licensing guidance. We are seeking to make the measure permanent through the Levelling-up and Regeneration Bill so there will be no unnecessary gap in service, which would prove costly for businesses and local authorities.
Members on all sides of the House will have seen the positive impact of al fresco dining during this period. I want to express my gratitude for the huge efforts made by local authorities to make the licences a success. Since introducing the simplified route for businesses to obtain a licence, we have seen a massive explosion of outdoor seating. That has led to more buzzing high streets, a great deal of social capital and support for our economy. It is right that we keep the regulations, and I commend them to the Committee.
Sarah Owen (Luton North) (Lab)
It is a pleasure to see you in the Chair, Dame Maria. I welcome the Minister to his role, although I will miss him as a fellow Whip.
No matter what is happening here, including the non-stop roundabout of the internal woes of this Government, sooner or later our constituents will raise the issues directly on their doorsteps, high streets and pavements. That is why this statutory instrument on extending temporary pavement licensing provisions in the Business and Planning Act 2020 is important. We will not oppose this extension, but I have some questions for the new Minister, which I will come to later.
I am sure we all agree how hard the last two or three years have been for businesses, our high streets and local authorities, but this trend started well before the pandemic. In recent years, we have seen an acceleration in the number of high street chains closing their doors forever. They include Debenhams, House of Fraser, Topshop and Dorothy Perkins, where I had one of my first jobs at the age of 16—a very long time ago.
I turn specifically to hospitality. Big names in the restaurant business have not been immune. Jamie Oliver’s restaurant chain closed its doors for good, and despite GBK finding a rescue deal, it had to cut 362 jobs and close 26 stores—a pattern of cuts similar to those in many big chain restaurants. This was not an easy time for the hospitality industry or our high streets. The Minister has talked about al fresco dining. Although we support the regulations, they are not the magic saviour of our high streets or our hospitality sector. What will make a difference is pounds in people’s pockets and tackling the cost-of-living crisis for all, including businesses affected by higher energy costs and gas and electricity bills.
As I said, the stripping back of our high streets started well before the pandemic. Local authorities had £18.6 billion cut from their budgets. Post levelling-up funding in 144 areas, people are £50 million worse off. When funding has come, it has often been far too little, far too late, with no long-term view or strategy from central Government, leaving towns and cities hitting against each other for ever-dwindling resources, and our high streets bare. Then, after a decade of Conservative cuts, we get covid. This was a perfect storm, which saw the end of many well-known names and longstanding local small businesses. We all know the ones that have disappeared from our local areas, and jobs and skills along with them. It is vital that every step is taken to offer the support needed to the hospitality sector.
As we come out of one period of uncertainty and into another, we now need to balance the objective of supporting the hospitality sector with other considerations, such as the impact of outdoor hospitality on local residents, highways and pedestrian access. On the issue of pedestrian access, one of the Royal National Institute of Blind People’s many important campaigns is on A-boards. I am aware that both the Guide Dogs UK and the RNIB raised concerns about the shortened timeframe for consultation when the temporary changes on pavement licensing were introduced. I seek assurances from the Minister that both those charities and other disability charities have been thoroughly consulted on this permanent change, and that their concerns have been fully addressed.
On the impact on local residents, I of course welcome recognition of the need for councils to be able to enforce rules and take action where necessary, such as when businesses are blocking pavements. However, the regulations do not outline a specific offence of erecting tables and chairs without authorisation and would instead require councils to confiscate a business’s furniture. This could be a logistical nightmare. Where should councils store such furniture? How would they be reimbursed for removal costs? Would the Minister consider allowing other means, such as councils using fixed-penalty notice charges instead? I would be grateful if he could offer some concrete solutions to these potential knock-on impacts.
Another potential issue for local authorities is any ongoing and associated costs. I know and welcome the fact that burdens funding was given to councils for year one of this temporary regime, and for year two. Will the Minister confirm that this funding will continue? Does he accept that, in order for enforcement to be effective, local authorities have to be adequately funded for that purpose?
As I said earlier, we need to give the hospitality sector as much support and opportunity to grow as possible. The Opposition will not oppose the regulations, but I would be grateful if the Minister please addressed the points of concern that I have raised.
Cat Smith (Lancaster and Fleetwood) (Lab)
It is a pleasure to serve with you in the Chair, Mrs Miller.
I welcome the Minister to his new position, and I warn him that he might be hearing an awful lot from me when it comes to bids for the high streets in Fleetwood and Lancaster. Our high streets have suffered immensely in the last couple of years, and hospitality in particular has suffered, with lockdowns restricting businesses’ ability to open. Many have been very innovative and looked at different ways of trading. One of the things that I have been pleased to see is the burst of al fresco dining, especially in the Lancaster part of my constituency, where Dalton Square, which was a big thoroughfare for traffic, suddenly became pedestrianised, with tables and chairs put out.
That was all very pleasant, but I do want to raise a few issues with the Minister on behalf of my constituents. I have two particular constituents in mind. The first uses a guide dog, because he is blind. He has raised with me the particular issues with street furniture on Lancaster high streets. He is working with the Royal National Institute of Blind People and Guide Dogs. I appreciate that this is literally day one in the job for the Minister, but what consultation has he managed to have and will he commit to working with these charities to ensure that, when legislation is proposed, it is inclusive of all members of our community?
The second constituent I have in mind is a woman who uses a mobility scooter and recently came to one of my Fleetwood surgeries. She raised the issue of street furniture in Lord Street in Fleetwood. Again, this is not just about our constituents who are blind or partially sighted; it is also about our constituents with mobility scooters, and, I suspect, an awful lot of people pushing wide pushchairs and wheelchairs. It can become something of an obstacle course to pass through our city and town centres. What engagement has the Minister had with the broader disability charities and what consultation might he be willing to engage in?
I broadly welcome the changes. It is welcome to see the hospitality sector in many of our constituencies begin to get back on its feet. The best thing we can do to support our hospitality sector is to put more money in people’s pockets. If the Minister could have conversations with his colleagues in other Departments about making the uplift in universal credit permanent rather than removing it, that would go a long way to supporting our hospitality sector.
Mr Jones
I start by thanking the hon. Member for Luton North for her good wishes. It was a pleasure to work with her in her role as an Opposition Whip when I was in the Government Whips Office.
The hon. Lady made a number of points about our high streets and the challenges there. I do not, as she mentioned, see the regulations as a panacea for dealing with all the problems on the high street, but they are part of the solution. She mentioned the cost of living—clearly, we all have concerns about global inflation and the cost of living. I remind her that the Government have put in £37 billion of support and that money is going into people’s pockets from this month to help with the additional cost of living.
The hon. Lady asked a number of questions and made a very good point about those who are partially sighted or without sight. We have been working with the RNIB and Guide Dogs and, with them, have worked to refine the guidance to help people as regards the hazard from furniture placed on the pavement in their way. We have refined that guidance to ensure that it works and I believe from my conversations—as the hon. Lady said, I was not party to those discussions—that we have been able to accommodate a number of suggestions that were made.
We are putting guidance in place to ensure that enforcement happens. We are clear that when people breach the conditions of a particular licence or do things that become a nuisance to the local community, the local authority has the opportunity to revoke that licence. I will take back the suggestions that the hon. Lady made.
On new burdens funding, a significant amount has been dedicated to the policy. In the first year, £4.83 million was given to local authorities and in the second year it will be £2.38 million. The funding is a little less in the second year because many people applying for licences are reapplying for the same licence; the amount of work the local authority will have to conduct will therefore be reduced significantly.
Sarah Owen
I hope I am not pre-empting the Minister, but I want to make sure that he will get to the point about year three and ongoing funding for burdens. We have agreed that enforcement is incredibly important; local authorities therefore need to be adequately funded to enforce the new rules.
Mr Jones
I am sure the hon. Member knows that the intention is to legislate for the regime through the Levelling-up and Regeneration Bill. There will be an opportunity for local authorities to put forward further charges in relation to the application fee. However, it will not be anywhere near the current situation. The average application fee before this regime was about £500, and in some cases fees were £1,000. We expect the fees to be far lower, but we also expect local authorities to be reimbursed for the work they do.
I thank the hon. Member for Lancaster and Fleetwood for her kind comments. It sounds like she will be knocking on my door to talk about her local area. I reiterate that we had extensive dialogue—although it is not required by the legislation—with organisations such as the Royal National Institute of Blind People and Guide Dogs before making the extension. We wanted to have that dialogue, because it is extremely important that we support people with disabilities. We have refined the guidance significantly, and that will be reflected in the guidance for local authorities.
On the hon. Lady’s final point about the cost of living, there is a significant package under which people on the lowest incomes and on benefits can receive in the region of £1,250.
Mr Jones
That is significantly more than the amount referred to by the hon. Lady.
To follow your guidance, Dame Maria, I will leave it there. I hope hon. Members will support the statutory instrument, which in turn supports businesses, livelihoods and jobs in our town centres and on our high streets.
Question put and agreed to.
Westminster Hall
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Bearskin Hats: Queen's Guards
(1 year, 9 months ago)
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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
Martyn Day (Linlithgow and East Falkirk) (SNP)
I beg to move,
That this House has considered e-petition 602285, relating to the use of real bearskin hats by the Queen’s Guards.
The petition calls for real bearskins used for the Queen’s Guard caps to be replaced with a faux fur alternative. The petition has gathered in excess of 106,000 signatures and it is not difficult to see why, given the strength of feeling that exists in the UK against wearing animal fur. Indeed, many of the constituencies with the highest number of signatures are Scottish, which is also not surprising as Ministry of Defence procurement policies and the regulation of international affairs are currently reserved matters and require action by the UK Government. As the petition states, 93% of people in the UK would refuse to wear animal fur, including Her Majesty the Queen, the regiment’s namesake, who has acknowledged the changing societal attitudes towards the issue and who no longer buys fur for her own wardrobe.
Furthermore, a Populus opinion poll held in March 2022 revealed that 75% of the UK population consider the use of real bearskins to be a bad use of taxpayers’ money and support the Government acting to replace bearskins with faux fur. Frankly, at this juncture, it is difficult to understand why the Government would wish to continue with the use of an animal product for ceremonial headgear resulting from slaughtered bears in the face of such strong public opinion.
In their response to the petition, the Government argue that the bear pelts used are the
“by-products of a licensed cull by the Canadian authorities”,
and say:
“Bears are never hunted to order for use by the MOD.”
In a 2001 freedom of information request made by People for the Ethical Treatment of Animals, the Army secretariat conceded that it does not know the details of the supply chain. The MOD receives the final product from its suppliers, and that, it seems, is that.
Furthermore, previous inquiries made by PETA to both the federal and provincial Canadian Governments revealed that no formal cull of bears exists in any territory of Canada. What is known, however, is that the Canadian Government issue hunting tags annually to licensed hunting enthusiasts, and that once in possession of those tags, hunters are free to bait and kill bears. To be clear, this hunting involves the violent killing of bears, with many bears being shot several times. In some provinces the use of the bow and arrow is permitted, leading to the slow and painful death of those poor animals. Some Canadian territories have spring hunts, meaning that even nursing mother bears are being killed, leaving cubs to starve. The incentive to hunt and kill bears is greater if there is a buyer for the fur.
It seems undeniable, therefore, that by continuing to purchase hats made from the fur of black bears the MOD is funding the suffering of bears in Canada by making the baiting and killing of those animals and the sale of their pelts a profitable pursuit for the hunters. To make the connection clear, at least one bear is killed to produce a single cap. In 2020, the Government purchased 100 caps in that year alone. At least 100 bears were killed and their pelts used to produce the Queen’s Guards caps. The Government argue that
“there is currently no non-animal alternative available that meet the essential criterion”
and that any alternative material must meet five criteria. I understand those five requirements concern water absorption, water penetration, appearance, drying rate and compression.
In their response to the petition, the Government go on to highlight the man-made fabric manufactured by ECOPEL, which was passed to an independent testing house by PETA and the results shared with the MOD. The Government state that their analysis of the results showed that the faux fur alternative
“met only one of the five requirements”
needed
“to be considered as a viable alternative for ceremonial caps.”
The Government response goes on to state that while it met the basic standard for water absorption, the faux fur alternative did not perform well in terms of water shedding or on the visual assessment. However, PETA has revealed that new tests conducted between December 2020 and April 2022 have shown that ECOPEL’s faux fur product performs in a very similar way to—and in some instances, better than—real bear fur in all the Government’s identified areas.
The Minister for Defence Procurement (Jeremy Quin)
Does the hon. Gentleman agree that it would be helpful if that analysis were shared with the Ministry of Defence, so that we could have a look ourselves? We have not yet had access to any of that data. We would like to find an alternative if it proves useful—we take that seriously—but that has not been shared with the MOD.
Martyn Day
I hope I will come to that later, but I believe that the Minister’s point will be heard by the campaign group. I echo his calls for sharing and transparency. One of my requests is that Ministers meet PETA to discuss things further. I hope he will take that on board and that things can get moving to everybody’s satisfaction.
Let us examine these areas and the results in more detail. First, on water absorption, PETA revealed that tests conducted at Intertek, an MOD-accredited laboratory, on 18 December 2020 showed that the faux bear fur performed similarly to real bear fur when wet. When water was poured on a real bearskin sample and a faux fur sample, the water ran off both samples in several places. When wet, both samples formed tendrils, and water droplets were shaken off both samples.
On water penetration, the same test assessed how much water, if any, penetrated the cap. The faux fur cap, like the bearskin cap, showed no wetting at the back of the sample, meaning it is completely waterproof. On appearance, the machinery used by ECOPEL ensures that strands of faux bear fur match the exact length of real bear fur of 9.5 cm. If images of the bearskin cap and a faux fur cap are considered side by side, they are virtually indistinguishable.
Jeremy Quin
I will not make a habit of intervening, I promise. I do not know whether the hon. Gentleman has seen the creation of the bearskin using faux fur. I am not aware that one has been created, and I do not know whether it is possible to stretch the faux fur over the wicker in order to create a bearskin. What happens with the drilling of the holes to keep it together? Does that still prevent water penetration? I do not expect the hon. Gentleman to have any answers, but we need to understand those kinds of things if the faux fur is to be a viable alternative. It may be, but we do not know yet.
Martyn Day
I appreciate the Minister’s constructive approach to the debate. We probably can keep that going given how few Back Benchers are here. I have not seen them being made physically, but I have seen photographs of the end product and I would be more than happy to join the Minister to see them being made.
Christian Wakeford (Bury South) (Lab)
We had a couple of examples of the faux fur bearskins at a reception I hosted a couple of months ago. It is all well and good the MOD asking for details of the data from PETA, but it would be helpful if the MOD provided the exact criteria they would need the material to meet. Rather than a constant to and fro, the criteria could be met, which could offer a genuinely cruelty-free solution.
Martyn Day
That is a helpful piece of information. There is a willingness for everybody to get together to move the debate forward outwith this Chamber.
On the drying rate, the faux fur cap has been shown to perform better than real bearskin, with a faster drying rate. On 14 April 2022, four laboratory tests showed that the faux fur sample had an average drying rate of 83.3% over a 24-hour period. Real bearskin, by contrast, has a drying rate of 64.1% over 24 hours, meaning that the faux fur alternative is 19.2% better at drying.
Finally, on compression, the faux fur fabric performed well in tests also conducted in April, returning to within 5 mm of its original height within 45 minutes, and achieving full thickness shortly after. To compare, real bear fur has a compression recovery rate of 45 minutes, meaning that both perform similarly.
Based on the results released by PETA, it is hard to understand the Government’s assertion that the faux fur alternative does not meet their requirements. I challenge the Government to explain fully their issues with the faux fur alternative’s water shedding performance and concerns about the visual appearance of the cap.
To be clear, there is potential for an alternative that will end this Government’s involvement with the cruel killing of bears. If there are concerns about this alternative, I would urge the Government to work to resolve them. Indeed, I take some comfort from the Minister’s interventions that there may be a willingness to do that, and I ask the Government to meet representatives from PETA to progress this and to work to create a faux fur cap that is suitable.
In the past seven years, the Government have spent in excess of £1 million on caps that, in my opinion, serve no military purpose and have a clear connection to trophy hunting, at a time when there is a private Member’s Bill before this House to prohibit the import of wild animal specimens derived from trophy hunting. It has been said that these bearskin caps are part of the UK’s military tradition, not least by the current Secretary of State for Defence, the right hon. Member for Wyre and Preston North (Mr Wallace), in an amendment to an early day motion in 2006.
As the writer and philosopher G. K. Chesterton wrote:
“Tradition means giving votes to the most obscure of all classes, our ancestors. It is the democracy of the dead.”
Instead of giving deference to tradition, we ought to acknowledge that society, attitudes and technology have moved on. I ask the Government to embrace modernity, technology and progress, and to find a solution that ends their involvement with cruel and barbaric practices towards bears.
In conclusion, I believe that the MOD has questions to answer and I hope that the Minister will, as I have requested, agree to meet representatives of PETA. It is fair to say that the Department for International Trade also has a role in this matter. The UK Government are banning the export of fur, but with the failure to legislate an animals abroad Bill and paralysis around the Animal Welfare (Kept Animals) Bill, it is imperative that the UK Government get a grip and better protect animals. I urge the UK Government to make the right decision, listen to the people and to morality, and prohibit the import of new fur products.
Margaret Ferrier (Rutherglen and Hamilton West) (Ind)
It is a pleasure to serve under your chairship, Ms Fovargue. I thank the hon. Member for Linlithgow and East Falkirk (Martyn Day) for opening the debate and the more than 100,000 members of the public who signed e-petition 602285, including 116 from my constituency. I also thank Alesha Dixon, Virginia Lewis-Jones and Andy Knott, co-sponsors of the petition and vocal advocates for animal welfare. I thank them for their contributions to this campaign.
The use of real bearskin in ceremonial caps is antiquated, costly and unnecessary. It should not take 100,000 signatures and a debate for the Government to acknowledge that. In fact, the opening line of the Government response to the petition is:
“Currently we have no plans to end the use of bearskins.”
Granted, the full response goes into slightly more depth, but it remains inadequate. The Ministry of Defence might argue that there are valid reasons to continue the use of bear pelts in its ceremonial garments, but to present the line in the response that
“Guardsmen take great pride in wearing the bearskin cap which is an iconic image of Britain”
as an argument to continue the practice is embarrassing.
There are alternative materials on the market, as PETA has demonstrated with ECOPEL, and faux fur has been the norm for decades. Vanity and cosmetic appeal should not form part of the debate as they do not hold water, never mind that the newly developed faux bearskin actually matches the current appearance requirements.
Advances in the technology that has developed faux fur, such as ECOPEL, mean that it is practically indistinguish-able from the real thing. Looking at the written Government response to the petition, we see that they say they need the material to perform, as we have heard, across “five requirements”. In addition to the need to “look smart”, those requirements are water absorption and penetration, appearance, drying rate and compression. The Government response states that ECOPEL performed satisfactorily in only one category, so as a result they reaffirmed their position that they will not be taking faux bearskin alternatives forward.
The MOD’s defence that the bearskin is obtained through “licenced culls” in Canada, and therefore the reduction in Britain’s procurement would not lead to a reduction in bear deaths, is weak. A vegetarian does not say, “Well, I can eat this steak because the cow is already dead and it has reached the supermarket shelves.” Morally, it is unreasonably to hide behind that argument.
Bear Conservation—a UK charity—and PETA have highlighted several worrying elements of the Canadian bear culls, noting that many provinces allow bear hunts in the spring, when the bears are just coming out of hibernation and are in a weakened state. Some provinces do not have restrictions on the hunting of mother bears with nursing cubs, which leads to the killing of entire bear families, or orphaned cubs abandoned to die because they cannot fend for themselves.
Recreational hunters are also granted licences to participate in bear hunting or culls, which brings in a worrying sporting element. PETA reports that some hunters use bows and arrows, meaning that the bears do not die instantly—it can be slow and painful death. By financing such activities, and by continuing to participate in the supply chain, taxpayer money is being spent on an industry that—whether or not it is Canadian state-sanctioned—profits from the suffering of bears. The financial cost of those caps is huge: £1 million was spent on 819 caps in seven years. That might not seem a lot of money in the context of Government projects and funding streams, but it is, especially in today’s economic climate, with a fast-growing cost of living crisis and families struggling to put food on the table or keep the lights on.
PETA has offered ECOPEL fur to the MOD, free of charge until 2030, which provides much-needed relief on the public purse. If it truly does not meet requirements—the lack of detail to explain why makes me wonder—why does MOD not offer to join PETA and ECOPEL to strengthen the product, build on the progress that has already been made, and make a faux fur product that does the job in appearance and practicality? Production of fur is illegal in the UK and, for the most part, so are imports—although there are exceptions—so continued use of real bearskins is just outsourcing animal cruelty overseas, and that is a hypocrisy. The overwhelming majority of the UK public—who will inevitably include some of the very guardsman who have to wear the caps—are strongly opposed to fur.
I do not want to be too hard on the MOD, because I know that truly excellent work is going on there—particularly with the current international state of play in Ukraine—but I worry that there is double standard. Unnecessary and even cruel practices are indirectly supported by the Department. I have received many emails from constituents about the use of MOD land for trail hunting, for example, as a smokescreen for fox hunting.
I appreciate the Minister for joining the debate, and I look forward to his reply. I understand that policy changes take time, but I hope that his response will not be just a fleshed-out repeat of the written response to the petition, that all the points that we have raised on behalf of our constituents will be considered and addressed, and that this debate will cause some forward movement away from the use of bearskins. We need to do better, and that is no longer a fringe view; it is the shared view of most of the British public, who do not want to see their hard-earned tax spent in such a way.
Christian Wakeford (Bury South) (Lab)
It is a pleasure to serve under your chairmanship, Ms Fovargue. I am grateful to the hon. Member for Linlithgow and East Falkirk (Martyn Day) for leading the debate on behalf of the Petitions Committee. I am glad that we have this opportunity to discuss the subject of bearskins.
I cannot help but feel a sense of despair. I have spoken on several occasions—both in this Chamber and in the main Chamber—in debates about banning fur imports into this great country. I believe that, if introduced, a ban should also extend to bearskins. For each of the caps used by the Queen’s Guard, a bear is cruelly killed by being shot or ensnared. They can sometimes spend days in painful traps. Ninety-five per cent. of British people object to killing animals for fur, but they are unwittingly paying for it through their taxes. For nearly two centuries, the MOD has waged war on black bears while doing almost nothing to further the search for materials to replace the use of their skins. That is quite simply not good enough in 2022.
There is no reason why the MOD should continue to use real bear fur for purely ornamental caps that serve no military purpose, as had been said, when an almost indistinguishable faux fur has been developed. As I said in an earlier intervention, I have had a chance to see that fabric for myself.
Jeremy Quin
I am delighted that the hon. Gentleman has seen the material for himself. In the MOD, we have not. I have seen photographs, but I assume that they might have been digital mock-ups. I have no idea whether a bearskin cap made of faux fur exists or what it looks like when it is subjected to water. We must bear in mind that the guardsmen often have to wear them in cold weather and very wet weather for long periods of time. I know that he would want an alternative that actually works, as would I, but without seeing the sample—we would like to see it—it is quite hard to check whether it hits those tests.
Christian Wakeford
I thank the Minister for that intervention. I speak as a scientist and work from evidence. I sense almost a desire from the Minister and that he is open for dialogue—hopefully I am not putting words into his mouth. If the material is suitable and fits all the MOD’s criteria, hopefully we are finding a solution. I sense a bit of reticence, though.
Jeremy Quin
I would not want the hon. Gentleman to think that I am reticent. He should be aware that where sustainable, affordable and suitably appropriate faux material exists, we have used it—the busby caps of the Royal Horse Artillery are a prime example—but it is hard to agree to use a material without having seen it.
Christian Wakeford
I thank the Minister for his second intervention. I am sure that we can get a sample of the material for him and the MOD to peruse and run further tests on.
We should all support the fact that there is a virtually identical alternative, and hopefully we can get behind it. The material is waterproof and lighter than real fur, and it makes for a comfortable alternative for our soldiers to wear. Reports from an independent fabric expert conclude that the animal-friendly material meets and, in some areas, exceeds the criteria. I am aware that further testing will be needed against the MOD’s criteria. It would allow the Ministry to retain the aesthetics of the caps while aligning them with the more modern value of preventing cruelty.
I understand that the MOD has been offered the material free of charge up to 2030, whereas sticking with fur would cost well in excess of £1 million a year, so the change is not just the moral thing to do but the fiscally responsible thing to do. The question is why the MOD has not acted if it is not about mere tradition. The idea that guardsmen take great pride in wearing the current cap and would be somehow upset if a cruelty-free material was used appears to be a fallacy—even more so when, as has been stated, the Queen refuses to wear fur. The country has left many traditions by the wayside and consigned them to the history books because they were cruel, inhumane, outdated or—in some cases—just plain wrong. To stick with something through familiarity and to continue to waste taxpayers’ money does not strike a chord with Britain as a strong, advanced, forward-looking nation. It smacks of a country stuck in the past and refusing to move with the times.
I urge the Minister to look at the evidence in the debate. I am reassured by his comments that he is open to meaningful dialogue. Hopefully we can find a strong solution. The new caps are a very good replica and much more ethical. They are 100% recyclable and, most importantly, cruelty-free. I hope that we do not go into another year of hearing about one more black bear being mindlessly and pointlessly killed to keep tradition happy.
John Nicolson (Ochil and South Perthshire) (SNP)
It is a pleasure to serve under your chairmanship, Ms Fovargue. I thank my hon. Friend the Member for Linlithgow and East Falkirk (Martyn Day) for introducing this important debate. It is clear that none of us likes the idea of a bear being killed to make a hat. Some of us think it is unforgivably cruel and inexcusable. Others think that while it may be unpleasant, it is justified by tradition. It was previously impossible to reconcile those two positions, but no longer.
We are told by Ministers that the bear hunt is not the purpose of the activity. It is not like foxhunting, where red coats, an exhausted fox and blood are—apparently—part of the fun. The hunting of bears serves only one purpose: to procure fur for a hat that, it is argued, looks good and honours a tradition going back centuries. Therefore, if a product involving no death can be found that is in every way as handsome and durable as that obtained from a living creature killed for the purpose, surely we can all agree that that is the ideal outcome. Why do we seem to be making so little progress moving from bearskins to cruelty-free synthetic alternatives? In April this year, I hosted a reception in Westminster, in conjunction with the charity PETA, to raise awareness about the issue. I can confirm to the Minister that the hat he has asked several questions about was there. I got to hold it. I got to wear it. Others, I am sure, looked much better in it. However, it exists—so we can clear that up, immediately.
Importantly, on the day of the reception, the Secretary of State for Defence wrote to all MPs attempting to justify the continued wearing by soldiers of hats made out of real fur. His defence of the practice had two principal grounds. First, that synthetic alternatives still failed the Ministry of Defence’s quality control, which living bears sadly pass. Secondly, bears are not wantonly killed for the purpose of making caps; the bears would be killed anyway as part of a regulated licensed cull by the Canadian authorities to manage the wild bear population.
Those two claims should not be hard for the MOD to prove. Nonetheless, it took a freedom of information request to extract some answers. PETA, the animal rights charity, asked whether the hunts killed bears to order for the MOD. In other words, if a certain number of hats are required, would a certain number of bears be killed to make them? We can see why that matters; if it is about managing the bear population, the number killed would not be based on the number of hats needed. The MOD’s answer was,
“No information in scope of this element of your request is held by the department.”
That sounds like a computer writing.
There is no basis for the Secretary of State to assert that the bears would be killed anyway. He does not know.
Jeremy Quin
I want to try and help the hon. Gentleman on that point. The last research I have seen was from 2007, which was by H. Hristienko, and J. E. McDonald, who estimated the Canadian black bear population to be around 434,400. I understand that a report from 2017, not by the Ministry of Defence but by the Canadian Government, said that there was 5% to 6% human-induced mortality among black bears, including car and train crashes involving bears. The hon. Gentleman can do the maths; in the last financial year we bought 31 bearskins. I totally appreciate that there is a point of principle here, and I am sure that is the point that the hon. Gentleman is driving at. However, I do not think the numbers would suggest there is an appreciable impact on bear numbers—killed through licensed culls—because of orders from the Ministry of Defence. I fully appreciate that it is a matter of principle—which I respect.
John Nicolson
It is a matter of principle. It is not about the number of bears killed, but the principle. It would not be a difficult question for the MOD to answer, but the MOD chose not to answer. It said that it could not answer because it did not have the information. Perhaps the Minister could update the MOD on that.
It is clear that there is no basis for the Secretary of State to assert that the bears would be killed anyway. He does not know. It may well be that the bears are only killed because he orders a certain number of hats—whatever that number is. In fact, that seems highly likely. In truth there is not, and never has been, any evidence of a widespread licensed cull authorised by the Canadian authorities. It just sounds better, when MPs and campaigners ask awkward questions—as we are doing today.
To address the Minister’s point, the evidence is that most bears in Canada are killed by trophy hunters who know there is a market for the skins. Canadian Government culls are infrequent and only authorised to kill the small number of bears straying too close to human habitation. The MOD has no idea about the provenance of the dead bears it buys. The evidence, again, is that they are often nursing mothers. When they are killed to make a hat, their cubs starve to death.
That deals with one MOD claim—it does not stand up. Let us turn to the other claim made by the Defence Secretary in his letter to MPs. Hon. Members will remember that that was about the look, quality and durability of faux fur alternatives to a living bear’s skin. PETA has commissioned an alternative faux fur product called ECOPEL. It has been tested to rigorous standards, and it lasts longer than real animal fur, which has a short post-mortem lifespan. That is why we have to keep killing bears. One generation of soldiers cannot pass on caps made from real bearskin to the next generation. Real bearskins fall apart. By contrast, faux fur does not wilt or decay—it lasts longer. It looks indistinguishable from real fur: I can attest to that. My partner has been abused in public by animal rights activists—hooligans, no doubt—for wearing what they thought was real animal fur. It was not; it was faux fur.
Faux fur is more water resistant. It would also, as we have heard, be free to the public purse. ECOPEL say it will provide custom-made hats to the MOD for a decade without cost. Those hats now exist—I have seen them. I would advocate that the Minister has a look. I would have thought that this all sounds good, but apparently not for the Defence Secretary. He said the faux fur did not meet necessary standards. What are those standards? How do we test them? I do not think it is unreasonable to ask that the Minister shares the analysis: he did not do so. If the MOD shared the specific detailed requirements that ECOPEL needs to address, it and PETA would undertake to meet them. There is some agreement on that point—we could move forward.
This is the first of two animal welfare debates today. The second is a debate looking at the violent whaling and dolphin killing in the Faroe Islands. Both debates come at a point of friction between tradition and animal welfare, but for traditions to be transferred from generation to generation, they must evolve and adapt. We cannot defend cruelty on the basis of tradition, otherwise we would still be bear-baiting. Come to think of it, we may still be. My constituents in Ochil and South Perthshire and the country at large care passionately about animal rights, as I know from the correspondence I have received. People find it jarring to see soldiers wearing hats made out of dead bears when a viable, affordable and ethical alternative is available. They have pressed me to get answers today, and they are watching. Of course, it may well be that we are all shadow boxing. The Secretary of State and the MOD may well have no intention of ever replacing real fur with a cruelty-free alternative. They may not care how the bears are killed or whether faux fur is as good as, or better, than real fur as a product. However, that is not what they say, so will they please say what they mean and mean what they say?
Stephanie Peacock (Barnsley East) (Lab)
It is a pleasure to serve under your chairship, Ms Fovargue. The men and women who make up our armed forces keep our nation safe, and we are immensely proud of each and every one of them. We recognise and take pride in the many traditions of our armed forces, including the ceremonial caps worn by the Queen’s Guard. Indeed, before the use of khakis, these iconic caps were worn more widely among our forces, most notably during the Crimean war. They remain an important symbol of our country to this day. People travel from across the world to see them at the gates of Buckingham Palace, and they are a staple at ceremonies such as Trooping the Colour, the jubilee celebrations and other vital moments in our history.
While backing our armed forces and these traditions, Labour also backs high animal welfare standards. It is for that reason that we recognise the real concerns about the use of bearskin for ceremonial caps. It is understood that to make just one cap takes the skin of at least one bear. As such, we strongly believe that no bear should ever be hunted or killed to order for use by the Ministry of Defence.
The price of real fur caps has risen in recent years, increasing to over £1,700 per bearskin and totalling over £1 million in recent years, as outlined by the hon. Member for Rutherglen and Hamilton West (Margaret Ferrier). The Defence Secretary has said that no non-animal alternatives are available or suitable for use as ceremonial caps. In contrast, we know that the Queen announced that she would stop wearing fur in 2019, as the hon. Member for Linlithgow and East Falkirk (Martyn Day) highlighted. I ask the Minister: how many alternatives to real bearskin hats have been tested to date? What faux fur is used by the King’s Troop, and how does that fail to meet the criteria for the Queen’s Guard caps?
Despite outlining problems with fake fur options, including failing water shedding criteria and visual assessments, the Department has not published any of the analysis or data that substantiate those claims. That is not good enough. Alternatives to the use of the real fur must be fully assessed and the results made public, as argued by my hon. Friend the Member for Bury South (Christian Wakeford). More than 100,000 people signed the petition leading to this debate, clearly showing that this issue is something the public care about deeply. The Government owe the public complete transparency on this matter.
I would like to therefore ask the Minister if he will commit to an immediate review of the possible alternatives to bear fur, taking an in-depth look at contracts and costs and assessing the suitability of all fake fur options against clearly defined criteria. Any review should speak directly to troops, taking their views seriously and ensuring they form part of any decision for the future. If the Government will not commit to doing this, Labour would do so in government. It is incredibly important that traditions develop and adapt if they are to survive.
The Minister for Defence Procurement (Jeremy Quin)
It is a pleasure to serve under your chairmanship, Ms Fovargue. I am grateful for the opportunity to discuss the Army’s use of bearskins as headwear for the Household division. The country is proud of its military and the traditions of selfless service that it represents. The country is also proud of our record as a leading nation in supporting animal conservation and welfare. I am pleased to have this opportunity to explain the Government’s position in greater detail, and I hope to dispel a few of the myths surrounding this issue.
First, the cap itself: I do not need to tell the House that the bearskin worn by the Queen’s Household division is an iconic emblem of our country, whether seen outside Buckingham Palace or, on occasion, outside Holyrood or Edinburgh Castle. As pointed out by the hon. Member for Linlithgow and East Falkirk (Martyn Day), the caps have been worn for more than two centuries by members of the Household division. They are a lasting reminder of the famous victory at the battle of Waterloo in 1815, when the 1st Regiment of Foot Guards defeated Napoleon’s Grenadiers and, in doing so, helped to establish the circumstances in which the UK would remain at peace with the European powers for 40 years and with those of western Europe for a century. Their reward was not just the title of Grenadier regiment, but the right for every solider to wear a bearskin. Even today, the opportunity for soldiers to don the cap is regarded as a great honour, whether they are in the Grenadier Guards, the Scots Guards or any of the five regiments of Foot Guards.
We are not unique in making use of ceremonial bearskin caps. They are part of the uniform of some 13 other nations, from Canada and Kenya to Spain and Sweden. However, I would hazard a guess that it is the British bearskin that is most noted around the world.
I want to make it clear that the Army is not wedded to the material that makes up the cap. Where man-made alternatives to replace natural fur items provide a suitable, affordable and sustainable alternative to animal products, the MOD will use them. However, until that material is sourced and proven, the UK goes to great lengths to ensure that the pelts that make our caps are procured in the most responsible way possible.
Christian Wakeford
It is reassuring that the MOD is open to more sustainable and ethical products. However, can the Minister explain what steps the Ministry has taken to explore the alternatives to bearskin thus far?
Jeremy Quin
The hon. Gentleman is pre-empting me, but I will get there. There is a long record of examining the alternatives, stretching back to when other parties were in government.
In response to the hon. Member for Barnsley East (Stephanie Peacock), let me be clear: bears are never hunted to order for the MOD. Bear pelts used for the Queen’s Guards’ ceremonial caps are sourced exclusively from Canada precisely because it is a regulated market and a declared party to the convention on international trade in endangered species of wild fauna and flora. A CITES permit is required for the export of pelts from Canada to the United Kingdom. Provincial, territorial, federal and international laws also provide strict trade regulations to protect against unlawful trade in black bears, both within Canada and internationally. The pelts required are by-products of legal and licensed hunts, which are authorised in Canada by provincial and territorial governments.
The hon. Member for Linlithgow and East Falkirk mentioned that the total number of bearskins acquired in 2020 was 120—I have it down as 107 in 2020. The hon. Gentleman might be right; my numbers are by financial rather than calendar year. We acquired 31 bearskins in 2021. In response to the hon. Member for Ochil and South Perthshire (John Nicolson), I have put that into perspective. In other words, any reduction in the number of bearskins procured by the MOD would not have any meaningful impact on the Canadian conservation and population management policy. However, I appreciate that there is a point of principle that goes beyond that.
We are also very sparing in the acquisitions that we make. Individual soldiers do not possess their own hats; they are cared for and shared within the Household Division. Despite their constant use, every effort is made to carefully prolong the longevity of each ceremonial cap. The hon. Member for Ochil and South Perthshire is concerned that the caps do not last; actually, they usually last for more than a decade and some have been in use for as long as 60 years. They are carefully looked after as treasured items.
None of that is to say that we would not be perfectly willing to embrace a faux fur material that is up to the job. The Department has already made it clear that where suitable, affordable and sustainable alternatives to animal products exists, they will be used. The Opposition spokesperson, the hon. Member for Barnsley East, referred to the faux fur used in the smaller busby hats, worn by the King’s Troop of the Royal Horse Artillery; those hats do not need to be worn with such regularity or all year round, in all manner of demanding conditions. The bearskin caps are taller, broader, made of longer fur and inherently weightier. They must also retain their distinctive shape and appearance for far longer durations than required of many other items of ceremonial wear.
Sir George Howarth (Knowsley) (Lab)
I think the Minister confirmed, in response to my hon. Friend the Member for Bury South (Christian Wakeford), that the Government are open to the possibility of a sustainable and viable option other than real fur. If the hon. Member for Linlithgow and East Falkirk (Martyn Day) and others can demonstrate that such a product exists, would the Minister be willing, subject to costs and all the other considerations that have to be taken into account, to switch to that product?
Jeremy Quin
Absolutely. As I said at the outset, we are not wedded to the material used but we are wedded to this iconic symbol of the British Army. If there is an alternative that works, it will be taken seriously. Affordability, sustainability and other criteria are important, but whether the other material works is key.
John Nicolson
It sounds as if we are making progress, which is a rarity in such debates and quite exciting. Will the Minister give us a pathway and agree to a meeting, so that the manufacturers can turn up, provide the hats and agree to a timetable for them to be analysed? If they pass, that will be great and we will all be happy; if they fail, will the Minister provide the manufacturers with a breakdown of how they have failed so that they can address the problems and we can make progress?
Jeremy Quin
I can perhaps help the hon. Gentleman by explaining the pathway that we have already trodden, right up until today, and we can see where we can go from there.
Margaret Ferrier
While we have been in this debate, I have contacted PETA and can confirm that its representatives are ready and waiting to meet the Minister, and ECOPEL’s offer still stands. They can bring the prototype hat to the meeting and samples of other faux fur. Is the Minister willing to meet PETA and ECOPEL to go through the options?
Jeremy Quin
Let me go through what we are doing. Finding a faux fur alternative is not without its challenges. Until 2007, research into faux fur replacements was conducted by Defence Clothing. It looked at more than 50 different types that used many different fibres in many combinations, both synthetic and natural. None were found to be acceptable and many created static and the fur stood on end.
In 2007, PETA submitted two samples that MOD agreed should be looked at in detail. A number of test methods were developed to compare the faux fur with real fur and assess its performance. Both samples were rejected as they allowed water penetration, did not shed water but absorbed it and did not shake it off.
Some seven years later, in 2014, PETA approached the MOD about submitting more faux fur samples and understandably wanted to know the required parameters. The tests devised previously were formalised and agreed with PETA as the starting point that the faux fur had to meet before being considered as a replacement.It was agreed that the test house would be Intertek and that the MOD would be sent a copy of any report.
In 2018, PETA submitted a sample to Intertek that was not taken forward as it showed unacceptable water penetration. In 2019, PETA submitted a sample to Intertek that had improved water-penetration results. However, although the water penetration was greatly reduced, the wet appearance was unacceptable, with rat-tails and dripping. The sample was not passed to the MOD to verify. In February 2020, PETA submitted a sample to Intertek that had greatly reduced water penetration but, again, a poor wet look.
Another sample was tested in December 2020 and there was nil penetration, although there were still problems with appearance. In 2021, the testing house shared its report with the MOD. I am afraid we do not have any detail on the fabric or the supplier, or the technical details, such as how to seal stitch holes and any seams needed to retain the waterproof barrier. It is yet to be established whether the sample could be formed over the wicker framework to resemble a real fur, and a trial is needed to gauge performance in use. For example, does the material succumb to static problems? What does it look like if it is wet? I was pleased to hear from the hon. Member for Bury South (Christian Wakeford) that a faux fur bearskin over a wicker frame has now been created, which sounds like good news. I was not aware of that before this debate.
Earlier this year, PETA issued another report, in conjunction with its campaign, claiming that all five tests that the MOD require have now been proven in the use of faux fur. Thus far, however, we are unsighted on the latest test results.
I wish to calm down excited Members but give them encouragement. The hon. Member for Rutherglen and Hamilton West (Margaret Ferrier) said that it was taking a long time to change policy. There is no policy issue here to be concerned about. If there is a faux fur alternative that works and overcomes the hurdles I have described, we will look quickly at affordability, sustainability and the other boxes that we need to tick. There is no opposition at all to the idea of using faux fur if it can be proved to work. As I say, in other circumstances we have actively and willingly embraced faux fur alternatives. We would be keen to see whether faux fur works in this instance.
The hon. Member for Linlithgow and East Falkirk said that there are questions to answer; if PETA helps us to answer those questions by providing to the experts in the Ministry of Defence the material—the faux fur bearskin—that PETA has created, we will without doubt have a look and consider the results seriously.
The House can rest assured that we will continue to keep these matters under review and, as I say, if PETA or any other body wishes to share the details of any tests with us, those details will be analysed. The best way to help to make us use faux fur in future is to share with us the data. If the data proves to be right and we can genuinely believe that there will be a viable faux fur alternative, we will be happy to take it forward and then test it against sustainability, affordability and other criteria.
At the moment, however, the jury is out. We need to see the results of the tests, which have not yet been shared with us, and evidence that faux fur can be made to work and can hit our five criteria. If we have that evidence, we will happily take faux fur on, but that is the hurdle that we need to get over, and it is in the hands of others. We are willing to receive any information.
Martyn Day
On behalf of the Petitions Committee, I thank the Members who have come along to the debate. Perhaps we are lacking in numbers, but we have had good, informed content and I hope that some progress has been made. I take some heart from the fact that the Minister said that the MOD will use man-made alternatives if they can be proven to be satisfactory.
I repeat my call: I hope that, perhaps through my office, we can arrange a meeting with the Minister and PETA to take this matter forward, look at the evidence and then move on to the next stage. I hope the Minister will be appreciative when he gets a letter from my office to that effect.
Question put and agreed to.
Resolved,
That this House has considered e-petition 602285, relating to the use of real bearskin hats by the Queen’s Guards.
Dolphin and Whale Hunting: Faroe Islands
(1 year, 9 months ago)
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John Nicolson (Ochil and South Perthshire) (SNP)
I beg to move,
That this House has considered e-petition 597171, relating to the hunting of dolphins and whales in the Faroe Islands.
It is a pleasure to serve under your chairmanship, Sir Christopher. I thank the 104,664 petitioners who made this debate possible, and Dominic Dyer for his continued passion and drive to protect animals. On Sunday 12 September last year, a small armada of boats herded a large group of mammals towards a beach. Those in the boats were not tourists, not scientists, and not hungry and looking for food. They were islanders in a sophisticated country in the north of Europe, a country with one of the highest standards of living in the world: the Faroe Islands. The creatures were highly intelligent mammals—dolphins—and they were being driven towards the Skalabotnur beach.
Dolphins are playful creatures and not suspicious of mankind. They probably had no idea of their intended fate until it was too late. It was originally estimated that there were 200 dolphins in the pod, but we now know that the number was much higher. Over 1,400 white-sided dolphins were set upon with knives, ropes and blunted hooks. It took hours to kill them all. Once the hours of senseless killing had stopped, the sea had turned red. The scene resembled something from a biblical plague. Had that killing happened here, the thugs responsible for such a wantonly cruel act would face the full force of the law and would serve prison sentences. Remarkably, however, in our near neighbour, the Faroe Islands, what was done was absolutely legal. Although what happened was grotesque, the killing of mammals on such a scale is, sadly, a regular occurrence. Last year, excluding the event on 12 September, 667 long-finned pilot whales were killed in the Faroe Islands. This year alone, 182 have been killed—intelligent aquatic mammals needlessly, brutally killed.
The practice of driving whales into specific bays is called Grindadrap or, more commonly, the Grind. It has its origins in the middle ages, when sailors would drive the whales and dolphins to beaches and kill them with spears and rowing boats. The killing of whales at that time was justifiable. The whales, killed in far fewer numbers, were vital to the survival of the Faroese people, who lived at the edge of northern Europe in an unforgiving winter climate. I know a bit about those climates—my family on my father’s side are from the Outer Hebrides. My surname, Nicolson, is Nordic and from Orkney, the Faroe Islands’ southern neighbour. My family lived for countless generations there, too.
All three archipelagos have suffered famines throughout much of their history. Fresh meat and whale oil were once vital to the survival of folk so reliant on barley, seafood and, later, potatoes. But no longer. The Faroes are, thankfully, highly prosperous. The slaughtering of dolphins and whales is not required for meat. In fact, the slaughtered animals are hard to get into the human food chain, as so few people, especially young people, want to eat them.
As for the method of slaughter, who could justify it? And on what basis? Tradition? Sailors now use boats with electric motors to drive large numbers of whales and dolphins into killing bays. I apologise in advance, but it is important to know exactly how these mammals are killed. It is not a quick death. Sea Shepherd has reported that the killing of dolphins regularly takes over two minutes and can take up to eight—eight minutes dying at the hands of sailors using rudimentary tools such as knives and blunted hooks.
The fate of the whales is even more monstrous. They are killed by what is called a spinal lance. If used correctly —an unfortunate word under these circumstances—it will paralyse the whale, which will then slowly bleed to death. On average, the process takes 13 minutes—13 minutes of that wounded, paralysed, sentient being floating in its own blood while other creatures are killed round about it. The killing is indiscriminate, with pregnant mothers, juveniles and calves all being slaughtered. All of that takes place in the 21st century, just 250 miles from the coast of Scotland.
The UK Government have expressed their opposition to that barbarism and to the hunting of sea mammals more generally, and that is welcome. The International Whaling Commission has condemned the killing too. However, no amount of condemnation has worked, so we must get tougher. That is why this petition advocates a greater use of the Government’s levers of power. That is the only way that we can ensure that that brutality does not continue.
There are very few advantages to Brexit, but post Brexit, the UK was able to enter into a free trade agreement with the Faroe Islands. Although the isles have a minuscule impact on our trade, we have a disproportionate impact on theirs. Their exports to the UK have gone up 157% since we signed the free trade agreement. We import £864 million of goods and services from the Faroe Islands, yet we export only a minuscule £17 million to them. For us, obviously, that is an inconsequential deal, yet for the Faroe Islands it is vital.
We have the power to make the Faroe Islands focus and desist. Condemnation alone will not stop the medieval practice of the Grind. We must let them know that we will back our condemnation with trade action, and we will not be alone. On Capitol Hill, congressmen increasingly see this issue as part of their environmental agenda, and focus on the Faroe Islands is increasing. We must let them know that their ghoulish barbarism will not be excused by mutters about tradition. The days of the Grind are numbered.
Kerry McCarthy (Bristol East) (Lab)
It is a pleasure to see you in the Chair, Sir Christopher. I congratulate the hon. Member for Ochil and South Perthshire (John Nicolson) on speaking with such horrific eloquence about what is going on with the—I think it is pronounced “grinned” rather than “grind”, but I am not sure. I was just googling, but perhaps it is—
Kerry McCarthy
Okay. Well, the hon. Member is closer to the Faroe Islands than I am, but I think it is pronounced “grinned”. Regardless of that, I was researching for this debate and saw the footage of what is happening there.
I once went to an event—I think it was probably something like Vegfest in Bristol—where someone on a stall showed me a tourist brochure for the Faroe Islands. There was a double-page spread showing red water with the bodies of animals in it. This was, “Come and witness our cultural traditions.” It was actually seen as a wonderful, spectacular event, in the same way that people might have been invited to watch bullfighting in Spain. It really was quite horrific, and I think the hon. Member from the Petitions Committee more than did justice to how horrific it is.
Over the years—this dates back to discussing the derogation at EU level—I have seen so many excuses made by people who are really just washing their hands of the blood of these thousands and thousands of whales and dolphins. I gather that the Faroe Islands Prime Minister promised a review at some point, but we have seen very little in terms of outcomes.
The Parliamentary Under-Secretary of State for International Trade (Andrew Griffith)
My understanding is that we have now seen the early fruits of that review. It has resulted in a cap. The Government’s position is that any continuation of this practice—notwithstanding the reduction through that cap—is still unacceptable.
Kerry McCarthy
I thank the Minister for that response. That wipes out one of the questions I was going to ask him. He can keep intervening on me; then he will not need to do a winding-up speech.
Patricia Gibson (North Ayrshire and Arran) (SNP)
It is worth clarifying for the hon. Lady that the cap is set—on a provisional basis until 2022-23—at 500 dolphins. The problem is that that number is not only higher than the total number of Atlantic white-sided dolphins that are usually killed in a year, but could be increased in future.
Kerry McCarthy
I think we all agree that allowing the slaughter of even one dolphin or whale is unacceptable.
I pay tribute to conservation groups such as Born Free and Sea Shepherd, as well as to Dominic Dyer, for their campaigning on this matter. However, the burden of pressing for change should not fall on them; change requires international pressure and trade negotiations at Government level, where we have leverage. It is clear that the British public think that the Grind is horrific, but consumers who would be absolutely sickened by the bloody images from the Faroes are simultaneously—if completely unwittingly—buying products from the Faroe Islands in British supermarkets. There is a separate debate to be had about transparency around the issues in our food supply chains, be that deforestation in Brazil, the worst animal welfare practices in other countries or human rights abuses. Clearly, if people knew that they were propping up the Grind, they would not continue buying these products.
Where we are now is a post-Brexit development. We were told that we would be masters of our own destiny after Brexit, so I do not understand why our Government, who have placed on the record their strong opposition to the hunting of whales and dolphins, have failed to make banning it a prerequisite for any trade agreements. As we have heard, the Faroe Islands have very little leverage—we are way bigger than them in terms of what we bring—so this would have been an ideal opportunity to put pressure on them.
Margaret Ferrier (Rutherglen and Hamilton West) (Ind)
The Government’s response to the petition states that they are opposed to the hunts and are committed to
“upholding high animal welfare standards in…trade relationships”,
but is unclear what will happen if the hunts continue. Should the UK not model its opposition by playing a stronger hand to encourage bringing the hunts to an end?
Kerry McCarthy
I agree with the hon. Lady. I have seen this so often. I remember sitting in a meeting with a Trade Minister—this goes back some time, because I have been around for quite a bit. When I spoke about human rights in China—I was shadowing the human rights Minister in the Foreign Office team—I was told that trade is a separate matter. I was told, “Human rights is dealt with by the Foreign Office. We are here to talk about trade and to get deals done.” That is entirely wrong. I could mention all sorts of examples that we should not accept of a lowering standards or of human rights abuses in other countries. We should use trade negotiations to set a clear marker on our standards and the standards we are prepared to accept from other countries.
The Government said in February that the UK
“continues to call on all whaling nations, including the Faroe Islands, at every appropriate opportunity to cease their whaling activities”.
I do not understand why the trade negotiations that took place in early 2019 were not an “appropriate opportunity”. What counts as an appropriate opportunity? Perhaps the Minister can tell us what discussions were had back then.
Ben Lake (Ceredigion) (PC)
The hon. Lady is making a powerful speech. Does she share my concern that, in addition to the cruelty and barbarity of such spectacles, there is—according to our research briefings—no real idea of the number of whales left in the ocean surrounding the Faroe Islands? Indeed, the last assessment was conducted way back in 1997. Are arguments about the Grind being sustainable not completely undermined by that very omission?
Kerry McCarthy
Yes, they are. We should protect and preserve the ocean, not plunder it; what is in the ocean is certainly not there for the sake of such horrific pastimes. There is a conservation issue, and that is one reason why successive Governments have taken such a firm stance against whaling.
Some people would try to defend whaling as a traditional activity, but a snap poll of Faroe Islanders, conducted following the infamous 12 September Grind, found that over 50% of respondents were in favour of halting dolphin hunting. Save the Reef reported that fewer than 20% of Faroe Islanders consumed any pilot whale meat or blubber at all. Yet that meat was the reason for the derogation; it was said that it was needed for the local food supply. We know that that is nonsense if we look at the numbers of whales and dolphins that have been killed. As has been mentioned, a record 1,428 dolphins were slaughtered in the 12 September hunt last year—the single largest killing event in the islands’ history. It is clear that that was for no other reason than for pleasure and the spectacle—it was nothing to do with food.
It is important to recognise cultural traditions, and the role they play in binding communities together and sustaining age-old customs. However, we have a responsibility to evolve, as we have seen in this country with the discussions about fox hunting and in Spain with the discussions about bullfighting. There are many practices that would once have been deemed acceptable but that no longer are.
Ben Lake
On that point, does the hon. Lady agree that arguments in favour of the practice continuing on the basis of cultural heritage would be far more powerful if hunts were conducted, as they used to be back in the 15th century, using wooden rowing boats and rocks, rather than modern machinery? To my mind, the idea that this pines back to cultural heritage is somewhat hollow, given that they are not conducted in the way they were in the 15th century.
Kerry McCarthy
I am not sure I would advocate throwing rocks at whales and dolphins—although I suppose there is a good chance they would miss, so it has to be better than the way things are done now. I take the hon. Gentleman’s point: this has evolved into something way beyond the traditional practice.
Whale and Dolphin Conservation, which I have worked alongside in the past, described pilot whales as very sociable and incredibly loyal, with an inquisitive nature. They are highly intelligent social mammals. Humans have taken advantage of that social nature by subjecting pods to incredibly stressful hour-long hunts that culminate in whales watching their kin being killed in front of them and bleeding to death. There is no regulation or oversight; killings can be indiscriminate and methods are unchecked. It is not always apparent that a spinal lance has been used to administer a quick death, and there are frequent reports of knives being used to hack away at the meat. We have heard some of that before.
This practice falls well below anything that the UK would accept, but the fact is that we are tacitly accepting it, although I know the Minister will try to assure me that we are not. We are endorsing these methods by virtue of the fact that we are signing a trade deal with the country that carries them out. It will be the people and the Government of the Faroe Islands who ultimately determine if and when the slaughter ends. However, we have an opportunity to play our part and to end our complicity by suspending the free trade agreement. I hope that the Minister, who I need to welcome to his place—it is so confusing at the moment, because we have no idea who may turn up—will get off to a flying start by telling us all exactly what we want to hear.
Patricia Gibson (North Ayrshire and Arran) (SNP)
I, too, welcome the Minister to his place. I am delighted to participate in this debate calling for the suspension of trade agreements with the Faroe Islands until all whale and dolphin hunts end. The debate was well opened by my hon. Friend the Member for Ochil and South Perthshire (John Nicolson). The petition attracted 104,664 signatures from across the UK. People in my constituency of North Ayrshire and Arran care deeply about the welfare of animals, and I believe that is replicated in every constituency across the UK. The practice of hunting whales and dolphins dates back some 1,200 years, but not all traditions are worth preserving, with about 800 whales being hunted every year.
The practice of hunting whales and dolphins is cruel, inhumane and must be condemned. In any case, we now know that the meat on pilot whales—the type of whale that is primarily hunted—is toxic, as it contains high levels of mercury, and can cause health challenges when consumed by humans. It is no longer the case that the people of the Faroe Islands need to hunt whales to survive—those days are gone. It is the scale of the slaughter, as well as the cruelty, that has caused international concern. Last year, more than 1,400 dolphins were slaughtered, and the outcry against it prompted the Faroese Government to review the practice. That shows that when concerns are properly expressed and directed, the international community can effect change—if, that is, we drive that intention to its end, which we have not yet done.
The review is obviously welcome, but it is not enough—action is needed. The frustration and deep concern about the hunting of dolphins and whales has led to calls for the suspension of trade agreements until the practice has ended. The call for the suspension of trade agreements is borne of deep frustration with the Faroese Government’s lack of action. The reality, particularly in Europe, is that such unnecessary and cruel treatment of our fellow creatures makes most people recoil with horror. There is little tolerance of it, even if such cruelty is carried out in the name of sport, culture or some half-baked excuse about necessity. It simply will not do.
I continue to be deeply opposed to and concerned about Brexit, but I recall how many Tory MPs were willing to proclaim the huge benefits that Brexit would bring. Well, with Brexit came a UK free trade treaty with the Faroe Islands, which by the end of 2021 accounted for more than 25% of the islands’ global trade. The agreement’s value in Faroese exports to the UK reached a staggering £864 million; in comparison, total UK exports to the Faroe Islands were a mere £17 million in the same period. The UK Government are therefore perhaps uniquely placed with the leverage to effect real change and to encourage the Faroe Islands to prohibit the barbaric practice of dolphin and whale hunting, in line with the rest of Europe.
Andrew Griffith
The hon. Lady is making a passioned argument for some of the benefits of an independent trade policy, although I accept that, in this respect, that has yet to be fully realised. Will she clarify whether the European Union is taking any action, and whether it is now the policy of the Scottish National party not to abrogate responsibility for trade deals to the European Union?
Patricia Gibson
The point I am making is about the Brexit that was trumpeted and sold by the Tory Government. I remember Minister after Minister saying on television that Brexit would provide the opportunity to improve animal welfare standards. I have seen no evidence of that, but the Minister has an opportunity today to show me not only that he believes in it, but that he is willing to sell that message abroad. From what he has just said, I fear that he is not. He is using what-aboutery to excuse a lack of action; that is really not the big, shiny Brexit we were promised.
A massive 69% of people support the UK Government taking some degree of diplomatic or economic trade action against the Faroe Islands to encourage or pressure that country into ending the practice, and 65% of people in European countries would support boycotts over it. There is real concern about this matter. Of course, once the Minister has sold the unacceptability of this practice to the Faroe Islands on behalf of the UK, he could go and evangelise in Europe if he thinks it helpful and set an example to all of us.
The fact is that the health of our oceans and marine life has been undermined over a long period by mankind. We need more marine mammals in our oceans, not fewer. Marine mammal movements in the ocean account for a remarkable one third of all ocean mixing, transporting vital nutrients around the world and oxygenating the ocean. In addition, whale and dolphin faeces stimulate the growth of phytoplankton—the ocean plants that produce most of the world’s oxygen. Enhancing and encouraging cetacean species can therefore help tackle climate change.
Encouraging or pressuring the Faroe Islands to outlaw the horrific practice of hunting whales and dolphins could boost its economy. Nations that used to allow whale hunting now engage in whale watching, which generates far more economic benefit and employment through whale tourism than hunting ever did, as well as winning international approval.
It has to be remembered that in the so-called review that the Faroe Islands said it would establish and that we were told was being carried out, only the dolphin hunt is currently being reviewed and not the entire grind tradition, which Members have spoken about. In the Faroese grind tradition, grind hunters surround dolphins or pilot whales with a wide semicircle of fishing boats and drive them into a shallow bay, where they are beached. Then, as we have heard, fishermen on the shore slaughter them with knives.
In February, it was reported that the Faroe Islands had begun discussions about the future of its controversial dolphin hunt, with a decision expected in subsequent weeks. Meetings were held to discuss the conclusions of the so-called review, which started last September. We were told that several options were on the table. In February, we were told that a decision would be announced in a few weeks, but here we are in July and nothing seems to be happening.
We have waited and waited, and I got to the point where I honestly thought that the Faroese Government had no intention of outlawing the practice of hunting dolphins and whales in any meaningful way. Their review was so limited in scope that many feared it would not result in much at all. It has taken so long, and has led to very limited action on the issue. I thought it was all starting to look as though the review was announced not because the Faroese Government felt that change was needed, but simply to placate international outrage after the mass slaughter of more than 1,400 Atlantic white-sided dolphins was publicised and sparked an outcry last year. And no wonder—it was the biggest organised killing of dolphins on record.
It seems that I was right to be suspicious. The review has now concluded. The cruel hunts are not to be banned. Instead, the Faroe Islands has proposed an annual catch limit of 500 dolphins on a provisional basis for 2022-23. Not only is that number higher than the total number of Atlantic white-sided dolphins normally killed in a single year; the total could be increased in future years, potentially making the already appalling situation worse.
The Government of the Faroe Islands are simply not listening, even though most people in the Faroe Islands want these hunts to end. No quota can be substantiated scientifically. It is clear that the international community must look less to carrots to influence the Faroe Islands and use a bit more stick. The UK Government have a significant stick that they could use in the UK’s importance to the Faroe Islands as a trading partner.
I know that the UK Government refuse to consider suspending their free trade deal with the Faroes over this barbaric practice. Sadly, I am not surprised by that, since we know that the UK is willing to sell arms to the most barbaric of states; consequently, killing dolphins and whales is unlikely to cause much of a ripple around the Cabinet table.
As is often the case, the public are well ahead of the Government on this issue. They do not approve of the cruel and barbaric hunting of whales and dolphins, and they want the UK Government to use whatever clout they have to encourage and pressure the Faroe Islands to end this practice. The Government should listen and, alongside the rest of Europe, exert every lever of influence they have over the Faroe Islands to stop this unacceptable and shocking practice, which has no place in an enlightened society.
It is clear that the Government of the Faroe Islands are not serious about stopping this practice, so the UK and other European nations need to do more to persuade and encourage them, in the strongest terms, to get serious, and should lay out what consequences will be faced if the practice continues.
Ruth Cadbury (Brentford and Isleworth) (Lab)
It is a pleasure to serve under your chairship, Sir Christopher.
It is also a pleasure to welcome the Minister to his seat. I think he is three days in—well, one parliamentary day in. Wikipedia says that he was appointed on Friday, but this is his first full day as a Trade Minister and I welcome him. Doing so makes me feel like an old-timer.
I am pleased to speak for the Opposition in this important and timely debate on the cruel and abhorrent treatment of whales and dolphins in the Faroe Islands, and to follow the hon. Member for Ochil and South Perthshire (John Nicolson), my hon. Friend the Member for Bristol East (Kerry McCarthy) and the SNP spokesperson, the hon. Member for North Ayrshire and Arran (Patricia Gibson). There have been useful interventions as well.
As has been pointed out, over 100,000 people have signed the petition, which shows that people across our country are rightfully concerned about these awful practices. Equally, they want the Government to do much more. Over 150 of my constituents have signed the petition; they are concerned about the UK’s ongoing failure to do more on animal rights, whether that is on whaling, the imports from trophy hunting, or the sale of fur or foie gras. I note that 92 people in Uxbridge and South Ruislip have signed the petition as well, so I am sure they are looking forward to the Prime Minister leaving No.10 and becoming a doughty and dogged constituency MP on this issue.
We have heard from hon. Members about the horrific ongoing hunting of whales and dolphins around the Faroe Islands. The hon. Member for Ochil and South Perthshire described what has happened very graphically and, as my hon. Friend the Member for Bristol East said, the pictures we have seen of the sea turning red are truly horrific. The events of last September, when over 1,400 white-sided dolphins were killed and butchered, as well as a number of whales, represented the single largest slaughter of dolphins recorded in modern history. As the charity the Born Free Foundation said, the “ferocity and scale” rightly caused outrage around the world, including in the Faroe Islands.
The conservation charity Sea Shepherd reported that the dolphins were driven into shallow waters by speed boats and jet skis, and every single one of the 1,428 dolphins was killed. As we have heard, they died slowly because of the time it took to kill such a large number of dolphins. New technology, such as jet skis, can do things that more old-fashioned boats cannot. I have seen the pictures, and anyone who, like me, has had the honour to be on a boat with dolphins swimming alongside will be particularly moved by what they have seen and heard.
Turning to the role of this Parliament and this Government, we cannot merely be bystanders to this slaughter and throw up our arms in horror. We can do something; this Government can do something. We have the UK free trade agreement with the Faroe Islands. Faroese exports to the UK are valued at £864 million, while UK exports to the Faroe Islands are a mere £17 million. That sets the context for the influence that Ministers at the Department for International Trade have—the power of the pen and of diplomacy.
What have UK Government Ministers done to tackle this shocking practice? I fear that Ministers at the Department for International Trade have tended to follow the same old playbook—the same one we see when trade unionists are killed in Colombia and when women’s rights are trampled on in the Gulf states. The Government say, “By nature of our trading arrangement, we are able to have influence over the actions of other countries and to raise these issues directly with so-and-so Government.” Indeed, the Government will boast that the animal welfare Minister, Lord Goldsmith, wrote to the Faroe Islands Minister for Fishing and that the Faroe Islands Government have launched a review, but we are still waiting for the results and changes from the review, so what has happened since then?
In February this year, the Government signed the annual agreement on fish quotas with the Government of the Faroe Islands. The Labour party supports the UK’s fishing industry, yet we also believe that the Government must not sign these agreements in a vacuum—certainly not a vacuum of values. I looked at the Government press release of 8 February announcing the fish quota update; the Government did not mention animal or whale hunting, whether the UK had raised this issue before signing the new agreement, or what further steps the UK Government would be taking. Once again, it seems the Government are using the same old playbook of sweeping important issues under the carpet and pretending that they do not exist.
One issue that is raised is the cultural history of whale and dolphin hunting in the Faroe Islands and how, historically, people needed dolphin meat and, in particular, whale meat to stay alive. However, I have just looked it up, and the Faroe Islanders are not poor. In fact, they are better off than we are. The GDP per capita in 2017 was $54,800, whereas the figure for the UK was $40,200, so the Faroe Islanders are better off per capita than UK residents. As we have heard, there is strong evidence that Faroe Islanders themselves, especially young people, increasingly oppose this slaughter, particularly since the September 2021 slaughter.
This brings me to the wider problem and the failure of our approach to trade. The only significant discernible trade policy the UK Government have is to secure free trade agreements with countries covering 80% of UK trade by the end of this year. That policy leads the Government to rush to sign any deal they can, without thinking about the influence the UK could have in the trade negotiations. We are—when I last looked—the sixth largest economy in the world. Whether it is on animal welfare, climate change, women’s rights, workers’ rights or environmental considerations, the UK can and should be using trade as a way of ensuring that our basic and fundamental values are protected around the world and as a lever to improve them. Trade cannot and does not happen in a vacuum.
I would like to ask the Minister a couple of questions. Since the letter that Lord Goldsmith sent, what further steps have the UK Government taken to raise this issue directly with the Faroe Islands Government? What assessment did the UK Government make of the protections in place for dolphins and whales when they signed the recent fishing quota agreement? What plans do the UK Government have if the Faroe Islands Government do not implement any of the required changes?
I thank the tireless campaigners who have worked so hard to raise awareness of dolphin and whale slaughter, particularly Dominic Dyer of Sea Shepherd, and the need for the UK Government to act. Whether it is the charities that have lobbied, the individual campaigners or even those who took the step of signing the petition, they have made a difference, so I thank them. Now we will see whether the UK Government are prepared to play their part to make that difference.
Sir Christopher Chope (in the Chair)
I, too, congratulate the Minister on his appointment and invite him to respond to the debate.
The Parliamentary Under-Secretary of State for International Trade (Andrew Griffith)
It is a pleasure to serve under your chairmanship, Sir Christopher. I congratulate the mover of the motion, the hon. Member for Ochil and South Perthshire (John Nicolson). I know that he cares deeply about the health of our oceans and has done much over past decades to protect the animals and other marine life that live within them. I thank the Petitions Committee, Dominic Dyer and the more than 100,000 people who signed the petition for enabling us to hold this important debate and rightly use Parliament’s voice to send the clear signal that we call out this practice. Both side of the House are united in condemning it. This is clearly an emotive issue, which evokes a strong response from parliamentarians and people across the country. We have heard many deeply considered contributions during the debate, and I thank all hon. Members for those contributions. I will do my best to respond to as many points as possible.
First, let me be clear that promoting animal welfare is a key priority for this Government. This debate is about the best means to end whale and dolphin slaughter, and no one disagrees with that. As we chart a new course, which is something we heard about from the hon. Member for North Ayrshire and Arran (Patricia Gibson), a new UK independent trade policy promoting animal welfare in all its manifestations is central to our trade negotiations and dialogues with partners. We will continue to negotiate dedicated animal welfare articles into new free trade agreements, which hon. Members will know we have done recently in deals with Australia and New Zealand—something we could not have done before we left the European Union.
We continue to utilise our existing trade agreements—those that have been negotiated in the past, not more recently—to keep diplomatic channels with partners, such as the Faroe Islands, open. We will work with Members of Parliament and stakeholders to ensure that we deliver the policies in the Animal Welfare (Kept Animals) Bill, which will strengthen domestic animal welfare protection for kept animals, by delivering this Government’s manifesto commitment to end the export of live animals for fattening or slaughter.
As the hon. Member for North Ayrshire and Arran reminded us, not all traditions are worth preserving. I and this Government agree. The Government are deeply concerned by the hunt that took place on 12 September last year and the continued hunting of cetaceans in the Faroe Islands. As we heard in several contributions, almost 1,500 beautiful Atlantic white-sided dolphins were killed in one day. That is more than six times the number of white-sided Dolphins usually killed in an entire year. The hunts are cruel and unsustainable.
We heard from the hon. Member for Ochil and South Perthshire and others about the fate of those mammals and the inhumane methods used to kill them. In the years prior to the hunt, the UK Government consistently raised concerns with our Faroese counterparts. We have urged them to switch to alternatives to hunting cetaceans and have emphasised the economic and social benefits that responsible, fantastic whale watching can bring to the community. We heard from the hon. Members for Bristol East (Kerry McCarthy) and for North Ayrshire and Arran about the benefits to the local economy, which is many times any economic benefit that can be achieved through the slaughter.
I assure all Members that we will continue to make those points ever more strongly further to this petition. As the hon. Member for Brentford and Isleworth (Ruth Cadbury) reminded us, it was after that hunt that my colleague Lord Goldsmith, the Minister of State for the Pacific and Environment, wrote directly to the Faroese Government in the strongest terms to express our condemnation of the hunt—something agreed by all sides of the House—and to call for the end of hunting of cetaceans in the Faroe Islands. In his letter, he stated how unacceptably cruel the hunts were and talked about the immense stress and suffering that they caused those animals.
The Government continue to engage with their Faroese counterparts on this important issue. The Under-Secretary of State for Scotland, my hon. Friend the Member for Milton Keynes South (Iain Stewart), visited the Faroe Islands in the last few weeks and raised this issue. I hope that goes some way to answering the question of the hon. Member for Brentford and Isleworth about what the Government are doing to take forward this campaign following Lord Goldsmith’s letter.
The hon. Member for Bristol East reminded us that 50% of the Faroese are in favour of ending the practice. One can only imagine that, due to both the pressure of the world community and the fabulous education that younger generations now receive on issues such as the climate and the marine ecosystem, that number will increase over time. No suspension of a trade agreement would end the practice; it will be ended only by the action of the Faroese Government themselves.
Although there is further to go, I am pleased that the collected efforts seem to be starting to make a difference. In my earlier intervention I talked about the cap, and the Faroese Government have started to review the regulations around it. It is a step in the right direction, but we remain strongly opposed to the killing of any dolphins, and we will continue our calls to the Faroese Government to stop the practice.
Now I have set out some context, I will turn to the specific circumstances of the trade agreement. Since leaving the European Union, the UK has agreed trade agreements with 70 countries, including rolling over the agreement that we were previously party to in our membership of the European Union. The agreement, which dates back to 2019, exactly mirrors the text and the abilities that we had under the European Union, where member states had less power to act bilaterally as we do now. We have reformed these deals with these countries, which allows us to deepen our relationships because they become bilateral relationships. It gives us a greater ability to influence crucial issues such as animal welfare.
That is why the Government’s position is that removing the deal—aside from the legality—would be counterproductive. We all want to achieve the same aim, which is to end this barbaric practice; the question is how best to achieve that. As I have said, we are fully exploiting all the different channels that our free trade agreement opens to us. It strengthens diplomatic ties between our nations, which gives us the power to influence and change practice.
Patricia Gibson
The Minister talks about the bilateral relationships that free trade agreements give the UK, which allow it to influence animal welfare. That is a very good point. On that basis, can he tell us specifically what influence the UK Government have had on stopping the practice or getting the Faroe Islands Government to a point where they will stop the hunting of dolphins? The new cap that he talks about is just smoke and mirrors. What other influence have the Government brought forward?
Andrew Griffith
It is about the continued engagement that we are able to have on a bilateral basis—not just Lord Goldsmith’s engagement, but across a panoply of international forums and issues, including the upcoming UN convention on biological diversity. With us holding the seat ourselves, as an independent nation state, we now have influence in all of those.
There are growing ties between the part of the United Kingdom that the hon. Lady represents and the Faroe Islands, including significant economic ties. I am unsure of the pronunciation, but there is a term for the significant investment being made by Faroese companies in Scotland and the United Kingdom.
We have managed to obtain groundbreaking animal welfare provisions in the new agreements we are signing, including those we have recently agreed with Australia and New Zealand. For the first time in any such free trade agreements, we have dedicated chapters on animal welfare, including commitments on non-regression and working together to raise standards. Such provisions are not in the Faroese agreement, but they are in agreements using our new powers going forwards. That is equally true of the agreement with New Zealand, which includes a standalone chapter on animal welfare, on non-regression, non-derogation and, again, measures to champion animal welfare.
Outside of our trade agreements, as I hope hon. Members on both sides will recognise, the UK will continue to work internationally to protect whales and other cetacean species. As a country, we are proud to play a leading role in the International Whaling Commission, where we work with international partners to encourage countries around the world to protect species. In addition to our subscription fees to the IWC, we have made several additional contributions to its voluntary funds. One such fund that is relevant to the dolphin species that we have spoken about is the small cetacean fund, which funds important conservation work focused on small cetacean species—dolphins—around the world. We will continue to encourage the Faroe Islands to engage with the IWC.
We are also playing a leading role internationally in protecting the ocean in the lead-up to the conference of the parties on the United Nations convention on biological diversity, which will take place this December. The UK is leading a coalition of 110 countries committed to protecting at least 30% of the world’s oceans by 2030 and, of course, 30% of the species within those oceans.
In conclusion, the Government welcome the petition, the debate that it has sparked, and the opportunity to send a clear message today. We appreciate and share the signatories’ reaction to this abhorrent hunt, and the Government stand strongly against the hunting of cetaceans in the Faroe Islands. The review announced by the country’s Prime Minister was welcome, but it is just a start. By maintaining, using and exploiting our diplomatic channels with the Faroese Government, we will continue to prosecute the case to encourage them to reform their practices.
As an independent trading nation, the UK is leading the world in improving environmental, animal welfare and labour standards more than ever before. In the years and months ahead, we will continue to use our independence to defend the rights of animals through international forums. We will put animal welfare provisions at the heart of our trade negotiations, and we will continue to promote animal welfare through the diplomatic channels that our agreements create. Protecting animals is part of Britain’s DNA—we love doing it as a nation—and that is exactly what we are doing as an independent trading nation.
I reiterate my thanks to the members of the public up and down the country who signed the petition and secured this invaluable debate. I stress that the UK Government stands with them against this abhorrent whaling practice. Through our diplomatic channels and our free trade agreements, we will continue to encourage reform and seek to replace cetacean hunting with new, better and more humane economic opportunities for the Faroese people.
John Nicolson
Thank you, Sir Christopher, for chairing today’s debate. I thank the hon. Members who spoke and, belatedly, welcome the Minister to his place. I thank the constituents who have written to us for their engagement and, indeed, those who are sitting in the Gallery. There is a great deal of agreement across the House, and I was delighted to see the recognition of the Faroe Islands’ extraordinary financial turnaround, as mentioned by the hon. Member for Brentford and Isleworth (Ruth Cadbury). It is remarkable what a small independent country can do, is it not?
On the substance of the Minister’s point, I do not think that exploiting diplomatic channels is enough. It is too opaque. I do not think that angry letters from Members of the House of Lords in ministerial positions is enough. Exhortation is not enough. Action is now required. Financial pressure is essential.
Question put and agreed to.
Resolved,
That this House has considered e-petition 597171, relating to the hunting of dolphins and whales in the Faroe Islands.
Written Statement
Metropolitan Police Commissioner Appointment
(1 year, 9 months ago)
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The Secretary of State for the Home Department (Priti Patel)
I am pleased to announce that Her Majesty the Queen has approved the appointment of Sir Mark Rowley QPM as the new Commissioner of the Metropolitan Police Service, following my recommendation after a highly competitive recruitment process. I also had regard to the views of the Mayor of London, as occupant of the Mayor’s Office for Policing and Crime.
The Metropolitan Police Service faces major challenges, having been moved to the engage phase by Her Majesty’s Inspectorate of Constabulary and Fire and Rescue Services (HMICFRS), and needs to demonstrate sustained improvements in order to regain public trust in London and nationally. It is vital that the right person is in place to take on the biggest leadership role in policing in this country. I expect the new commissioner to work with HMICFRS’s policing performance oversight group to make the necessary improvements.
Sir Mark brings a wealth of experience with him and I am confident he will be able to exercise the strong and decisive leadership required, in order to deliver the sustained improvements that are so urgently needed. This will be a difficult time for the force as it seeks to regain the public’s trust, but I am confident that Sir Mark is the right person to meet this challenge.
At a time when the Government are investing record sums into policing—including the recruitment of 20,000 additional police officers across England and Wales—the new commissioner will need to focus on delivering the aims we set out in our Beating Crime Plan: cutting crime, reducing the number of victims and make our capital and country safer. But, reflecting the context in which this recruitment has been made, I also want the new commissioner to focus on getting the basics right, restoring confidence in policing, and ensuring that Londoners and those who visit our capital city get the service they deserve from the Metropolitan police.
Support for police is often based on personal experience, and the public have a set of basic expectations of the criminal justice system. They expect to be able to contact their local police, knowing their names and how to reach them. They want to see police in their neighbourhood confronting crime and making streets safer. They expect crimes to be investigated, offenders caught and punished, and when a case proceeds for justice to be swift and certain. The Beating Crime Plan outlines our approach to this, but to be successful the new commissioner must embed the aims and objectives in wider strategic plans.
While it is the responsibility of the Mayor to hold the commissioner to account for the Metropolitan police’s transformation, I will be closely monitoring progress. I look forward to working with them both to drive real change in the force. The public deserve nothing less.
[HCWS196]
Grand Committee
Arrangement of Business
The Deputy Chairman of Committees (Lord Haskel) (Lab)
My Lords, if there is a Division in the Chamber while we are sitting, the Committee will adjourn as soon as the Division Bells are rung and resume after 10 minutes.
Procurement Bill [HL]
Monday 11th July 2022
(1 year, 9 months ago)
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Baroness Noakes
Member’s explanatory statement
This amendment probes why light touch contracts are not more narrowly defined in Clause 8.
Baroness Noakes (Con)
My Lords, I shall also speak to Amendment 207 in my name. My noble friend Lord Lansley has Amendment 35 in this group but is unable to be with us in Committee this week. At his request, with the leave of the Committee, I shall be speaking to his amendments on both Committee days this week.
At Second Reading, I noted that the definition of light-touch contracts is extremely wide since it concerns the supply of services of any kind, provided that they have been specified by regulations under Clause 8(2). It is my understanding that light-touch contracts are currently for health and social care services—indeed, that is implied by the reference to those services in Clause 8(4)(b). The wide scope given by the lack of restriction in Clause 8(2) means that, notwithstanding the “have regards” in Clause 8(4), it would be possible, for example, for the Government to specify legal services, accountancy services or any other kind of services. The “have regards” are simply not an effective curtailment of the very wide power in Clause 8(2).
My Amendment 30 seeks to confine light-touch contracts to health or social care services provided to individuals, on the basis that, it is my understanding, that is how they are used at the moment. However, if the Government believe that there should be a wider concept than that, they should put that in the Bill. Open-ended regulation-making powers should not be necessary and are not desirable.
My noble friend Lord Lansley’s Amendment 35 would add another “have regard” to Clause 8(4): whether suppliers of light-touch services consist of small and medium-sized enterprises and few larger enterprises. The other three “have regards” seem to be designed to reflect the current scope of light-touch contracts: they do not generally involve overseas suppliers, they are generally for the benefit of individuals and they involve suppliers that are close to service recipients. Another feature of current service provision is the presence of small and medium-sized service providers in both the private sector and the voluntary sector.
If the supplier market features large suppliers, including overseas ones, there really is no good policy reason for the light-touch regime to be applied; the full-fat version of the procurement rules should be in place for them. A light-touch contract should not become a convenient escape from the procurement regime for contracting authorities. They should be focused on the supplier end of the market, where a lighter regime would be appropriate.
Amendment 207 is rather different. It tries to tease out the Government’s intentions for contracts under Clause 33, which covers the reservation of certain light-touch contracts to public sector mutuals. A qualifying public sector mutual is one that has not been awarded a contract in the previous three years, under Clause 33(5). So if I am a public sector mutual and I am awarded a contract on 1 January 2022, that means that I may be excluded from tenders under subsection (2) for the three years until 31 December 2024, and under subsection (3) a contracting authority must exclude me from tenders assessed under Clause 18 until the same date—that is, the end of 2024.
If my earlier contract is for five years, which is the maximum allowed under Clause 33(1), I think that I would not be excludable from retendering when the contract came up for renewal, because the retendering process would almost certainly have started after the end of December 2024. If, however, my initial contract was for three years, I would almost inevitably be excluded from bidding for its renewal because the retendering process would by definition have to start before the end of December 2024.
My amendment proposes changing the period in subsection (5) from three years to five, but that is for probing purposes. I do not understand whether the Government are trying to allow or prohibit public sector mutuals from carrying out consecutive contracts, if indeed they were awarded them under a competition. It seems bizarre that a shorter contract could prohibit the public sector mutual from retendering while a long one would not.
In addition, I am less than clear on how contract award and commencement dates are supposed to interact, given that a contract could be awarded some considerable time before it is intended to commence. I know that my noble friend the Minister has Amendment 206 to Clause 33, which is not in this group and would slightly alter its wording, but I do not think that that will answer the basic question that I have posed. I beg to move.
The Deputy Chairman of Committees (Lord Haskel) (Lab)
My Lords, the noble Baroness, Lady Brinton, is taking part remotely. I invite the noble Baroness to speak.
Baroness Brinton (LD) [V]
My Lords, I will speak to Amendment 30 but just want to say that I agree with Amendment 33, in which my noble friend Lord Wallace asks why suppliers from outside the UK are likely to want to compete for contracts for the supply of services. Amendments 34 and 35 remind us that there are a wide range of different bodies that need to be able to tender for services, probably mainly local, but they should not be either excluded formally or informally as a result of this Bill.
Returning to Amendment 30, I thank the noble Baroness, Lady Noakes, for her helpful introduction and I want to raise with the Minister matters that we will be returning to in Clauses 41 and 108. As the noble Baroness, Lady Noakes, has laid an amendment that includes health and social care services supplied for the benefit of individuals, there are questions that need to be raised. Had we been debating the second group of government amendments today, I would have covered this topic in the Minister’s Amendment 526 as well.
Clause 108 sets out the disapplication for this Bill in relation to procurement by NHS England, but Section 79 of the Health and Care Act talks about
“health care services for the purposes of the health service in England, and … other goods or services that are procured together with those health care services.”
It goes on to define a relevant authority in healthcare services in subsection (7) as
“(a) a combined authority;
(b) an integrated care board;
(c) a local authority in England;
(d) NHS England;
(e) an NHS foundation trust;
(f) an NHS trust established under section 25”.
The problem is that that definition excludes certain parts of health services. For example, an integrated care board will be commissioning, but not procuring directly, some services to primary and secondary care organisations. However, not all NHS organisations are covered by the relevant authority in the healthcare definition. For example, a GP surgery might be a private partnership or a company employing surgery staff including GPs. This might be UK based or even an overseas company, but not a trust or any of the other definitions. The same definition also exists for dentists’ surgeries. I was wondering if the noble Baroness, Lady Noakes, was thinking that this type of organisation would be covered by her amendment. Most of them are small organisations.
I ask the Minister this question of principle, really as advance warning that we will return to it later in the Bill. Why are health services, clinical and
“other goods or services that are procured together with those health care services”,
going to have a completely different procurement regime entirely delegated to the relevant Secretary of State, who can enact it by SI? That can ignore all the important clauses that we are debating in this Bill—value for money, value for society, transparency and the technical elements critical for anybody wishing to procure goods and services using money from the public purse, except for those parts of the health service that do not fall into that definition in the Health and Care Act, which will have to abide by the Procurement Bill.
Secondly, can the Minister advise on exactly where the dividing line is for those parts of the health service that are commissioned by other parts of it, but do not fall under the definition? It would be perfectly logical to have a contractor team preparing a bid for a contract with a regional consortium that includes a hospital trust and a non-NHS body, perhaps a charity—exactly the sort of small organisation that the noble Baroness, Lady Noakes, referred to—that worked with patients. It would have to remember, if syringes were included in that PFI contract for the new wing, for example, when the NHS procurement system would therefore be used, that there would be an entirely different set of rules, processes, et cetera, compared with a contract for a hospital trust that covered only non-clinical items, and therefore used the terms in this Bill.
This will be horribly messy. It will not just be confusing for contractors, which will need teams fully au fait with where the dividing line is between the completely different rules that will apply, but I suspect it will be total chaos inside the NHS. Can the Minister explain the thinking behind this and where the differences are? If possible, could we have a meeting with him and other noble Lords interested in the interface between this Bill and the Health and Care Act legislation, and in how it will work in practice?
Lord Wallace of Saltaire (LD)
My Lords, I will speak to Amendments 33 and 34, but I start by thanking my noble friend Lady Brinton for highlighting the need to make sure that this Bill and the Health and Care Act do not contradict each other. I was struck by a speech by the noble Lord, Lord Willetts, at the Second Reading of the Higher Education (Freedom of Speech) Bill the other week, in which he suggested that the Minister consider whether definitions of freedom of speech in the Online Safety Bill and the higher education Bill were compatible. The noble Lord very much doubted that they were. In spite of the current chaos within the Government, they need to ensure that different Bills going through in the same Session are compatible and do no cut across each other.
Amendments 33 and 34 are concerned with light-touch contracts. Amendment 33 is purely a probing amendment. We wish to understand the circumstances in which suppliers from outside the UK are likely to want to compete for contracts of the sort that the noble Baroness, Lady Noakes, suggested would be covered under the light-touch system—primarily, the provision of personal and social services to be delivered on the ground, in local communities, by people with sufficient local knowledge to be effective.
My concern here was heightened by the outsourcing of the initial test and trace contracts to two large companies, one of which has its headquarters in Miami, Florida, and neither of which has any appropriate expertise in local delivery or geography. Not surprisingly, therefore, testing stations were set up in inconvenient places and local volunteers, who offered to assist in large numbers, were often ignored. My colleague, my noble friend Lord Purvis, would have wished to ask whether the new trade agreements the DIT is negotiating would nevertheless open these contracts to overseas companies, including those from non-English speaking countries. Can the Minister therefore explain and justify the paragraph concerned?
Amendment 34 would put in the Bill the importance of local provision of services and the constructive role that non-profit entities can play in the provision of services in which sympathy, personal relationships and concern for welfare above immediate profit are important parts of the motivation for those who work in them and in which volunteers can also contribute to effective supply. My experience here is mainly from the care home sector, although I believe the argument stretches a good deal more widely than that. Private companies, including offshore-based private equity companies, have made excessive profits out of care home provision in a number of cases. Noble Lords will be familiar with Terra Firma, which the Minister will recall is based in the Channel Islands. That is why I have a later amendment that challenges the question of whether companies based in the Crown dependencies and overseas territories should be considered UK suppliers—but there are other examples.
Baroness Bennett of Manor Castle (GP)
My Lords, I rise to make my first contribution in this Committee, so I declare my position as vice-president of the Local Government Association. I must also, slightly belatedly, thank the Bill team for last Wednesday morning’s briefing, which was very helpful in trying to come to grips with the complexity of the Bill. There are many people with a great deal more experience than me who are also wrestling with the complexity.
I rise to speak chiefly to Amendment 34 in the name of the noble Lord, Lord Wallace of Saltaire, who has just very ably introduced it. I also support Amendment 33. As the noble Lord, Lord Wallace, was speaking, I was thinking of the case study of the Dutch firm Randstad and the disaster of the Covid tutoring. That was a very large and important contract that I think the Government would now acknowledge went horribly wrong and should clearly never have been let overseas in the first place. The noble Lord also referred to care homes. Financialisation and hedge fund or overseas ownership of care homes is something I have been very concerned about since a brilliant report, which is highly relevant, from the Centre for Research on Socio-Cultural Change in 2016. It put that issue on the agenda and it has been focused on since by, for example, the Financial Times.
On Amendment 34, I perhaps come at this from a slightly different philosophical position from the noble Lord, Lord Wallace, in that I would like to get rid of all financialised provision and see it all in non-profit hands. I believe that is what is appropriate for this. This amendment is probing to ensure that organisations such as local social enterprises, not-for-profit companies and charities are able to apply for contracts. I would like to go stronger on that. I would like to see a preference for those organisations having many of these contracts. I think I am going to anonymise this case study because I have not had the chance to check with the people concerned, but a number of years ago I knew an excellent local rape crisis service that had been providing provision in a city for a number of years. Eventually I found out a month or so after a new contract was supposed to have started that it had been handed to a large national organisation. It was a total mess.
We have seen far too many cases like that where excellent local provision, which may not be expert at putting in tender documents but is expert at providing services, is swept aside under our current arrangements. I mentioned the Financial Times. There is very general agreement across the political spectrum that we need to stop that happening and ensure that good local services and social enterprises are able to continue, have stability, surety and certainty and do not need to put so much of their resources into the endless cycle of bidding and bidding again. I am not sure whether this amendment exactly gets to where I want to go, but it is certainly heading in the right direction. That is why I wished to speak in favour of it.
Lord Coaker (Lab)
My Lords, good afternoon. When the noble Baroness, Lady Noakes, leads a group of amendments, I often end up agreeing with her; it is a bit of a surprise sometimes. Amendment 30, which the noble Baroness has moved, goes to the heart of it, as do all the amendments, because of the lack of clarity about what Clause 8 really means and what is meant by light-touch contracts. It is a really important job of this Committee to try to tease out a little bit more detail.
As the noble Baroness, Lady Noakes, probes in her amendment, why are they not more narrowly defined? There is also an argument for asking why they are not more widely defined. I think the noble Baroness—she will no doubt correct me if I am wrong—is seeking to understand the Government’s thinking and how they have arrived at their conclusions. I think that is what all the various amendments from the noble Lord, Lord Wallace, the noble Baroness, Lady Bennett, and so on, are about.
In speaking to these amendments, I too am seeking clarity from the Government on what this clause means. I will start with the most obvious point. I have read the Library briefing, which refers to the Government’s own memorandum to the Delegated Powers and Regulatory Reform Committee on light-touch contracts, and will quote a couple of things that I think are relevant to all the amendments in this group, including lead Amendment 30 from the noble Baroness, Lady Noakes:
“The light touch regime is a facet of the existing rules … and has fewer rules regulating how a procurement is conducted for these contracts. This is reflected in the bill by a series of exceptions of obligations under the procurement regime for the relevant contracts.”
I will be frank: what does that actually mean? Which rules are not applied? There was one set of rules before, under the light-touch regime, which at one point the Government were not going to include in the Bill. That then moved to light-touch contracts, but we are told by the Government that there are fewer rules.
It would be helpful to know what the difference is. What are the fewer rules which the Government have explained to the Delegated Powers and Regulatory Reform Committee? The noble Lord, Lord Wallace, made the point that what we are all struggling with is that Clause 8(1) says what “light touch contract” means and then that it will all be done by regulation. In fact, it is a bit like knitting fog to try to understand exactly where we are coming to and what we are doing.
The Government also said in their memorandum to the Delegated Powers and Regulatory Reform Committee, which, again, is relevant to all these amendments:
“Whilst the scope of what is to be included in the power is known, it is not practicable for the bill to include a long list of detailed CPV codes to indicate which categories of contracts may benefit from the light touch regime. In addition, both CPC and CPV codes may evolve over time, which would … require amendment to the bill. The power will be used to ensure that the scope of what is included with the light touch regime does not extend beyond what is permitted for the UK by reference to the GPA and/or other international trade agreements.”
Again, we are trying to understand what that really means for the light-touch regime which the Government are seeking to bring in as a result of Clause 8 and associated regulations. Some clarity on that would help to answer the questions from the noble Baroness, Lady Noakes, about why it is not more narrowly defined and why it is defined in the way it is. That would help us to understand the Government’s thinking behind much of the clause.
The amendment from the noble Baroness, Lady Noakes, gets to the heart of what we are discussing: how the Government have arrived at their position. However, in particular, Amendment 34 from the noble Lord, Lord Wallace, and the noble Baroness, Lady Bennett, raises a very important point about ensuring that light-touch contracts will involve various other services and bodies and that they are properly considered for such contracts.
Time and again, at the heart of previous groups, this group, and no doubt groups of amendments to come is a general debate on what a Procurement Bill should or should not include and how far the Government should or should not interfere with the operation of the market. What the noble Baroness, Lady Noakes, is trying to get at, and what I believe is really important, is some of the ways in which this clause has been put together, so that we understand what exactly a light-touch contract is and the difference between the light-touch regime and the light-touch contracts in this Bill, and the Government’s thinking on what regulations may come forward in due course so that, as a Committee, we can consider whether they have got the balance right and whether this makes sense. The noble Lord, Lord Wallace, made the point that this clause is wishy-washy—one bit says this and another says that—and the Government’s get-out clause all the time is that it will be sorted out by regulation. This really is not the way forward for primary legislation.
Baroness Scott of Bybrook (Con)
My Lords, I will start with a question from the noble Lord, Lord Coaker. I will probably not answer it in a way he understands, but I will give it a go and we will probably have more discussions on this as we go forwards.
The services currently identified via these CPV codes, as the noble Lord talked about, are outside the scope of the GPA, albeit within scope of some national treatment provisions in certain international agreements. As such, these could arguably be subject to even less regulation, but we think we have the balance right to ensure competition where possible, value for money, and appropriate transparency and fairness. That is the background to this. The Green Paper proposed removing the separate light-touch provision entirely, but it was clear that this was a popular concept, recognising that these types of services warrant special treatment with a light touch. If they were subject to the full regime, we would be adopting a more stringent approach than that taken by any other European country. That is why we have put them in, and we think that is correct. I am sure we will have more discussions on that.
Before we turn to the amendments, because they were slightly separate, I will answer the questions of the noble Baroness, Lady Brinton, and the noble Lord, Lord Wallace, on how this Bill interacts with the Health and Care Act. At Second Reading, concern was raised regarding the interaction between the Health and Care Act 2022 and the Procurement Bill. I hope that my noble friend’s letter of 8 June allays these concerns. To confirm, the intention is that the provisions in the Procurement Bill will be disapplied for a tightly defined subset of healthcare services that will instead fall within the provider selection regime. The provider selection regime has bespoke rules which commissioners of healthcare services in the NHS and local government will follow when procuring healthcare services in their area, and only where delivered directly to patients and service users.
The scope of the provider selection regime will be supported by reference to the common procurement vocabulary—CPV—codes, which will help procurement personnel to determine which regime applies. As the provider selection regime will sit alongside the reforms introduced by the Procurement Bill, DHSC and the Cabinet Office are working together to ensure that the two regimes remain clear and coherent. The Procurement Bill, and therefore the light-touch contract provisions, will continue to apply to healthcare or health-adjacent services that are not delivered to patients but support the infrastructure of the NHS. Light-touch contracts will also continue to include all services procured by authorities other than NHS bodies and local authorities. I hope that helps.
There was another question from the noble Baroness, Lady Brinton, about how the PSR interacts with the new reforms in the Procurement Bill. The PSR will cover the procurement of healthcare services that are delivered to patients and service users, as I have said, and only when they are arranged by relevant healthcare authorities, including NHS bodies and local authorities. The Procurement Bill will not apply to these but will cover all other goods and services.
Lord Wallace of Saltaire (LD)
My Lords, could we ask for some clarification on this, perhaps in a letter? Probation services are obviously a personal service that falls outside healthcare. Personal tutoring was raised by my colleague the noble Baroness, Lady Bennett. If this is to be a wider sector than purely health and social care, we would like a little more guidance as to how wide it might go.
Baroness Scott of Bybrook (Con)
I understand. We will make sure to get that guidance well before Report.
Amendments 33, 34 and 35, tabled by the noble Lords, Lord Wallace and Lord Lansley, and the noble Baroness, Lady Bennett, relate to Clause 8(4). This subsection identifies features that may constitute light-touch contracts and complements the regulation-making power to determine light-touch contracts in Clause 8(2). The noble Lord, Lord Wallace, included a probing amendment to delete Clause 8(4)(a). However, recognising that Clause 8(4) is an indicative list, the relevance of the provision is to identify that light-touch services are often unlikely to be of cross-border interest. I hope that that makes sense; if not, we can discuss it further.
This is still a useful identifying feature of light-touch contracts and helps readers of the legislation to understand why some contracts have light-touch rules. Set against subsections (4)(b) and (4)(c) of Clause 8, subsection (4)(a) identifies that the services are not exclusively domestic. We are content that Clause 8(4) is appropriate as drafted.
Amendment 34, proposed by the noble Lord, Lord Wallace, and the noble Baroness, Lady Bennett, requests an addition to Clause 8(4), which aims to ensure that local authorities, social enterprises, not-for-profit organisations, mutuals and charities are properly considered for such contracts. Similarly, Amendment 35, proposed by the noble Lord, Lord Lansley, has been put forward to include a consideration that
“the suppliers of such services consist of small and medium-sized enterprises and few larger enterprises.”
Clause 8(4) does not dictate how contracting authorities award light-touch contracts. We already have adequate provision in the Bill to support these groups to obtain public contracts—for example, reserved contracts, the introduction of a new user choice direct award ground, and maintaining significant flexibility to tailor award criteria for light-touch contracts. We think that we strike the right balance in the Bill by creating opportunities for these sectors while maintaining fair treatment of all suppliers in the awarding of public contracts.
Amendment 207, proposed by my noble friend Lady Noakes, would make the time limit at Clause 33(5) equal to the maximum duration for such a contract. The intention behind the change is to prevent a public sector mutual from being repeatedly awarded a contract for the same services by the same contracting authority.
It is not considered appropriate to align the time limit with the maximum duration permitted under the clause. It should be noted that there is no obligation on the contracting authority to award contracts that were run for the full five years’ duration allowed, or indeed that use the reserved contracts provision at all. In fact, stakeholder feedback indicated that the existing provision under the Public Contracts Regulations 2015 is underutilised due to its tight restrictions.
Public sector mutuals are usually organisations that have spun out from the public sector and most often deliver services to their local communities rather than nationally. It is therefore feasible that a reserved competition may result in a sole compliance tender, especially if the purpose of the contract is to provide services for the single local authority, which is likely often to be the case. If the restriction time limit were to match the maximum duration time limit, this could prevent the reserved competition from resulting in compliant tenders and require a new and unreserved competition to be run, which may not be in the best interests of the public.
The clause currently empowers the contracting authority to manage this risk when considering the procurement strategy, using its knowledge of the market and supported by guidance. If the time limits were to align, it would require more complex drafting of Clause 33 explicitly to enable this risk to be overcome within the time of restrictions. As I have said, if the restriction is too long, it may result in the reserved competition receiving no compliant tenders, given, I repeat, that public sector mutuals are usually organisations that have spun out from the public sector. Therefore, I respectfully request that these amendments are not pressed.
Lord Aberdare (CB)
I am somewhat baffled by subsection (4) of the light-touch contracts clause. The noble Baroness has rejected several suggestions that criteria might be added to it regarding what light-touch contracts might be used for, on the grounds that it already provides sufficient scope. There are three criteria in the clause and all that the clause says is that the authority must consider the extent to which they are met. Does that mean that they are good criteria or bad criteria? If a supplier is from outside the United Kingdom, does that mean that one should favour them or not? I find it completely baffling.
Baroness Scott of Bybrook (Con)
My Lords, it is up to the organisation that is procuring. That is exactly what we are saying; we are freeing up that procurement process.
Baroness Noakes (Con)
My Lords, I am not sure that we have advanced very much on either of the clauses. I thank all noble Lords who have taken part in the debate, particularly the noble Baroness, Lady Brinton, who raised a number of good points about the interaction with NHS contracts, which I had simply not appreciated, not having followed the most recent NHS legislation. I agree with her that the interaction of the two codes is likely to be confusing to all those who come across it and, with respect, I do not think that my noble friend made that any clearer in her answer. Nevertheless, we will come to that later on in the Bill and I am sure that it will be teased out again.
On Clause 8, the main thrust of my amendments was to try to find out what was likely to be covered under light-touch contracts. I am still no clearer at all. I have heard that the “have regards” in subsection (4) are appropriate as drafted but have not heard any argumentation as to why. I have heard quite a lot about how it is really up to the contracting authority to decide what it wants to take account of, and that whether it is good or bad to have overseas suppliers is up to the contracting authority.
I am quite unclear what the Government are intending by this light-touch contract regime. I have no idea at all what they are going to allow to be specified under the regulations, which is what I was trying to tease out by saying that it should be confined to health and social care. That was a placeholder to say, “Tell me what you’re going to put in them”—but I am afraid my noble friend did not tell me what she is going to put in them.
So I am left probably slightly less satisfied with Clause 8 than I was when I tabled my amendments to probe what was in it. I will of course consider very carefully what the Minister has said between now and Report, and we may have further conversations about it, but I politely suggest to her that the Government appear to be in a bit of muddle about what they are expecting from light-touch contracts. Are they simply saying, “We’ll create this power and let contracting authorities tell us what they want to do, and then we’ll have some regulations and do what we like with it”—because that is what the clause allows—or are they intending to restrict the scope in some way and, if so, in what way? That is all still waiting to be teased out, in addition to the issues raised about interaction with the NHS.
I turn to my Amendment 207, which is in connection with Clause 33. I think I heard the Minister say that the Government’s intention was to prevent repeated contracts. That is not necessarily what this measure achieves, except that it tends to prevent a repeated contract if it is of shorter duration. If the initial contract is for three years, they almost certainly do not have a time window to be involved in tendering for a repeat of three years, because of the three-year prohibition—whereas, if they take a contract for five years, that three-year prohibition on retendering will have expired before the retendering comes up again. My noble friend simply did not answer that question, so again I am no clearer about what the Government are really trying to do. Are they trying to stop repeated contracts or allow them? They are allowing them for longer contracts but not for others, which does not seem to make sense.
We have all summer and quite possibly a lot of the autumn between Committee and Report to consider what we need to probe further on Report, but I hope the Minister will be taking back the Hansard of this discussion to her officials and looking at the points that have been raised but not dealt with in her response. However, this is Committee, so I beg leave to withdraw the amendment.
Baroness Scott of Bybrook
Lord Moylan
Member’s explanatory statement
The effect of this amendment would be to limit obligations on contracting authorities to compliance with the procurement objectives in section 11.
Lord Moylan (Con)
My Lords, in moving Amendment 37 I will speak also to Amendment 460 in my name, which is closely linked to it. They work to a similar effect.
The purpose of these amendments is to go back to the question of what we are trying to achieve in this Bill—what its purpose is. I think we all agree that we want honesty, transparency and value for money in public procurement, in broad terms. However, as I said at Second Reading, it seems that what we are achieving is the bureaucratisation of honesty, whereas we should be focusing on the principles. We are creating a great beneficial bonus for lawyers, as was identified by the noble Lord, Lord Fox, earlier in Committee.
The key to real-world management of procurement is flexibility: to be able to respond to circumstances as they change during a tender. The current system, as I said at Second Reading, operates by setting up some conditions at the beginning over which the contracting authority has very great control. However, the system operates with great rigidity after that, so that it is very difficult to respond to changing circumstances in the course of the tender, or to surprising tenders that might be received.
I gave some examples at Second Reading, particularly the great non-existent iconic London bus shelter. I will detain noble Lords with a couple of further examples because I have been contacted since then by a former local government officer, for whom I have great respect, with two examples from the water sector. One related to a contract in which—I cannot supply the names—the officers had set up in advance the very precise and clear criteria by which to analyse the tenders they received for a waste collection contract. When one of the tenderers said “For certain types of waste, we will pay you in order to collect it”—which can make sense for certain recyclers—the whole assessment system effectively collapsed because it had not contemplated that sort of bid. As far as I am aware, everything had to be scrapped and started again, whereas a sensible approach would have allowed it to be flexibly adapted.
The second was a case where the local authority decided to take a relaxed “Let’s see what the market comes up with” approach to the tender—which can be appropriate as well—which was also for a waste collection contract. Unfortunately for the local authority, the cheapest bidder proposed collecting waste from households only once every four weeks—which was why it was the cheapest bidder. Of course, that was neither environmentally nor politically acceptable, but what could the authority do about it at that stage? All it could do was put pressure on the second-lowest bidder, which had sensibly proposed a two-week collection cycle, to cut its price to make it competitive with the four-week people. That duly went through. The two-week collection was awarded the tender, and within a matter of months the contract had effectively collapsed because, of course, the company could not make it work at the price it had been obliged to agree.
So why is there no flexibility in the system once the initial conditions have been set up? The practical reason is that the moment you say, “This is daft. We should be able to do something about it”, the people whom I described in my Second Reading speech as the high priests of procurement will turn up and say, “Ah, but if you do that, a disappointed bidder may sue you for failures in the process.” That is why you are tied at the outset with iron hoops to the process that you have set in motion.
What we need is a Bill that focuses on principles rather than on process. These two amendments do that by preventing disappointed bidders from suing a contracting authority for process faults; they could sue only for breach of the objectives set out in Clause 11. I remind noble Lords that those are to do with: delivering value for money; maximising public benefit; sharing information; acting with integrity and being seen to act with integrity; and equal treatment of tenderers.
It is important to explain that the approach I am proposing is not necessarily tied to Clause 11, because certain noble Lords are proposing that the Bill be augmented with a further set of principles—the amendment in the name of the noble Baroness, Lady Hayman of Ullock, adds a set of principles to the objectives in Clause 11. My amendment is perfectly compatible with her approach. If the House decides that the objectives for the Bill and the principles underlying it are not sufficiently and adequately expressed in Clause 11 and that further objectives and principles are required, on Report my amendment could be adapted to fit in with those principles. In this particular debate, I am staying neutral on the various proposals for how to develop the principles; I am totally neutral on the noble Baroness’s amendment, because mine would fit with it if that is the direction that the House and the Government wish to take. It is important to bear in mind that I am not tying this explicitly to Clause 11.
It is also important to bear in mind something else that I said. This is not a Bill for combating fraud, corruption or malfeasance in public office. All those things are criminal offences. If a contracting authority commits those offences, it will be prosecuted not under the terms of this Bill but under the relevant provisions of the criminal law—and quite properly. What this Bill does is create a huge bureaucratic minefield for contracting authorities in which disappointed tenderers can sue for some sort of compensation or damages—not that they do so very often, but it is a chilling factor when it comes to the flexibility that contracting authorities should rightly have.
Now, some people would say that this would radically alter the whole approach of the Bill. I think it is a fairly radical alteration of the Bill’s approach, but I speak with some experience when I say that it would also make it a workable Bill. I hope that my noble friend, if he or she is not immediately inclined to agree, will at least explain why this approach does not commend itself to Her Majesty’s Government.
Baroness Hayman of Ullock (Lab)
My Lords, I shall speak to my Amendments 43 and 51 in this group and comment on the other amendments. I thank the noble Baroness, Lady Bennett, for supporting Amendment 43. Amendment 43 would reintroduce the procurement principles that were laid out in the procurement Green Paper and put them in the Bill.
The procurement Green Paper stated that the principles of the new regulatory framework for public procurement should be consistent with the Treasury’s Managing Public Money and the seven principles of public life as set out by the Committee on Standards in Public Life. The Green Paper states:
“The Government proposes that the following interdependent principles should be included in the new legislation.”
I shall remind noble Lords of the interdependent principles: they are public good, value for money, transparency, integrity, fair treatment of suppliers and non-discrimination. We absolutely support these principles, as I am sure all noble Lords do, because they are crucial for good business practice. Will the Minister say why these principles are not in the Bill as expected, particularly when we consider that, in the consultation on the Green Paper, the majority of the more than 600 respondents supported the principles for procurement being in the Bill? If we look at the Government’s response to the consultation, they said:
“The Government intends to introduce the proposed principles of public procurement into legislation as described.”
What has changed since then? Why now are those principles not in the Bill?
We believe that these principles are an integral part of procurement and a vital tool for setting out what this legislation wants to achieve and how its success will be judged. In the Bill as currently drafted there is a notable absence of mentions of equality or protected characteristics. The public sector equality duty requires public bodies to have due regard to the need to eliminate discrimination, advance equality of opportunity and foster good relations between different people when carrying out their activities. This includes promoting equality and eliminating discrimination through public procurement as well as ensuring that the PSED is adhered to by those with whom public bodies contract.
Furthermore, this is important domestic legislation that asserts that international obligations on procurement in the UK entered into must be compatible with social objectives. We are concerned that the UK has signed a trade agreement with Australia that potentially threatens the inclusion of social criteria in procurement rules. The UK-Australia agreement states that social and labour considerations can be used in the government procurement process only when based on objectively justifiable criteria. This means that social criteria could be challenged by Australian companies via their Government as unjustified. Furthermore, the World Trade Organization’s government procurement agreement that the UK has acceded to does not contain social criteria for procurement. We believe that the current positron needs to be revised and that these principles should be clearly in the Bill.
Moving on to my Amendment 51, it would add proportionality to the procurement objectives. The Procurement Bill covers a wide range of goods, works and services and a range of scales from tens of thousands of pounds to hundreds of millions, but it can be implemented effectively only if proportionality is applied throughout the process. Ensuring the Procurement Bill is proportionate is also key to achieving two of the Government’s key aims in this legislation: to improve value for money and to open up the market to smaller providers, including charities. Proportionality is crucial to the effective procurement of person-centred public services through ensuring that resources are not wasted on overly complex processes when they are not necessary and that the most appropriate provider to run the service can be procured rather than being excluded because of their size or where this is disproportionate to the scale or nature of the contract. Proportionality is referenced in the legislation, but only in specific parts, yet we believe it is relevant right across the entire process.
NCVO, which represents over 17,000 voluntary organisations, charities, community groups and enterprises across England, and the Lloyds Bank Foundation have drawn attention to the fact that this Bill will impact on the services and support that people access. We therefore believe that it is important to ensure that it is appropriate for the commissioning of procurement of people-centred services that are delivered by a range of service providers that also include charities. Charities are often well placed to deliver these services because they are embedded in local communities. They are trusted by local people and often able to reach those whom other services fail to reach.
Lord Wallace of Saltaire (LD)
My Lords, I will speak to Amendments 44, 56 and 57. I too have gone back to the Green Paper and the Government’s response to that consultation and I remain extremely puzzled that this entire consultation process was undertaken, that the Government responded in their response document rather favourably to it, but that almost none of that is reflected in Part 2 of the Bill. Part 2 declares that it is about principles and objectives, but Clause 12 reserves the detailed definition of those objectives to the Minister—whoever he or she may be when it comes to it—to set out later in a policy statement. This is a skeleton Bill and, reading through several parts of it, and this section in particular, I am reminded that the DPRRC commented that leaving things to regulations often disguises the fact that Ministers have not yet quite made their minds up as to what their policy and intentions will be when it comes to it.
If Ministers continue to turn over as rapidly as they have under the current Government, we might anticipate that, every nine to 12 months, a new Secretary of State will wish to issue a new strategic statement. Clause 12 tells us that the statement will be presented to Parliament after carrying out
“such consultation as the Minister considers appropriate”
and making
“any changes to the statement that appear to the Minister to be necessary in view of responses to the consultation”.
So we are asked to leave all that—the underlying principles of this Bill—to the Minister, whoever she or he may be by the time this becomes law. Much better to start with a parliamentary debate on what the agreed principles for procurement should be, from one Government to another, than to present Parliament with changing Ministers’ changing ideas after lengthy discussions with others outside.
On that topic, can the Minister tell us which Cabinet-level Minister is now responsible for this Bill, or which Commons Minister he is co-operating with in managing it as it moves through the two Houses? That would help the Committee understand how and whether it is likely to progress and what difficulties or changed circumstances the Minister is operating under. I appreciate and almost sympathise with some of the difficulties he may be going through in those circumstances, but if we intend this Bill to last, to provide some stability for non-governmental suppliers and the clients of public services, we need to put agreed principles and objectives in it.
There was much more about principles in the Government’s response to the Green Paper. Can the Minister explain why it is not here? Why did it not appear necessary, in view of the responses to the consultation? Amendments 43, 44 and others insert statements of principles largely drawn from government publications. They are central to the Bill. I hope the Minister will accept that it was a mistake not to include them and that it is not acceptable to Parliament to leave this to a future Minister—or perhaps Government—and that he will return on Report, after consultation, with a form of words on this that can command a cross-party consensus and which reflects the consultation already undertaken. Amendments 43 and 44 offer different, though overlapping, drafts of what it might be appropriate to include in the Bill.
I will speak also to Amendments 56 and 57. Amendment 56 is purely exploratory; we deserve an explanation in clear and simple language of the grounds on which some suppliers are to be treated differently from others. Amendment 57 inserts clearer language on the criteria by which procurement decisions should be judged: value for money, cost, quality and sustainability—as the noble Lord, Lord Moylan, pointed out, it is the principles that matter most in setting the tone and culture under which the entire public procurement process will take place. These are important terms, not to be left to the policy statement when it comes but fundamental to the principles under which procurement decisions are taken. They must be in the Bill.
We are all aware of procurement contracts where the cheapest bid has produced unsatisfactory outcomes, where what has been promised has not been produced and where insufficient attention has been paid to quality or sustainability. The noble Lord, Lord Moylan, mentioned one, but there are many others. These need to be spelled out for future procurement, with the blessing and approval of Parliament. Parliament has been sidelined under the recent retiring Government; we hope that whoever succeeds our current Prime Minister will treat it with rather more respect and consideration.
Lord Clement-Jones (LD)
My Lords, I will speak to Amendment 46, which comes from a slightly different angle. In our report AI in the UK: Ready, Willing and Able?, our AI Lords Select Committee, which I chair, expressed its strong belief in the value of procurement by the public sector of AI applications. However, as a recent research post put it:
“Public sector bodies in several countries are using algorithms, AI, and similar methods in their administrative functions that have sometimes led to bad outcomes that could have been avoided.”
The solution is:
“In most parliamentary democracies, a variety of laws and standards for public administration combine to set enough rules to guide their proper use in the public sector.”
The challenge is to work out what is lawful, safe and effective to use.
The Government clearly understand this, yet one of the baffling and disappointing aspects of the Bill is the lack of connection to the many government guidelines applying to the procurement and use of tech, such as artificial intelligence and the use and sharing of data by those contracting with government. It is unbelievable, but it is almost as if the Government wanted to be able to issue guidance on the ethical aspects of AI and data without at the same time being accountable if those guidelines are breached and without any duty to ensure compliance.
There is no shortage of guidance available. In June 2020, the UK Government published guidelines for artificial intelligence procurement, which were developed by the UK Government’s Office for Artificial Intelligence in collaboration with the World Economic Forum, the Government Digital Service, the Government Commercial Function and the Crown Commercial Service. The UK was trumpeted as the first Government to pilot these procurement guidelines. Their purpose is to provide central government departments and other public sector bodies with a set of guiding principles for purchasing AI technology. They also cover guidance on tackling challenges that may occur during the procurement process. In connection with this project, the Office for AI also co-created the AI procurement toolkit, which provides a guide for the public sector globally to rethink the procurement of AI.
As the Government said on launch,
“Public procurement can be an enabler for the adoption of AI and could be used to improve public service delivery. Government’s purchasing power can drive this innovation and spur growth in AI technologies development in the UK.
As AI is an emerging technology, it can be more difficult to establish the best route to market for your requirements, to engage effectively with innovative suppliers or to develop the right AI-specific criteria and terms and conditions that allow effective and ethical deployment of AI technologies.”
The guidelines set out a number of AI-specific considerations within the procurement process:
“Include your procurement within a strategy for AI adoption … Conduct a data assessment before starting your procurement process … Develop a plan for governance and information assurance … Avoid Black Box algorithms and vendor lock in”,
to name just a few. The considerations in the guidelines and the toolkit are extremely useful and reassuring, although not as comprehensive or risk-based as some of us would like, but where does any duty to adhere to the principles reflecting them appear in the Bill?
There are many other sets of guidance applicable to the deployment of data and AI in the public sector, including the Technology Code of Practice, the Data Ethics Framework, the guide to using artificial intelligence in the public sector, the data open standards and the algorithmic transparency standard. There is the Ethics, Transparency and Accountability Framework, and this year we have the Digital, Data and Technology Playbook, which is the government guidance on sourcing and contracting for digital, data and technology projects and programmes. There are others in the health and defence sectors. It seems that all these are meant to be informed by the OECD’s and the G20’s ethical principles, but where is the duty to adhere to them?
It is instructive to read the recent government response to Technology Rules?, the excellent report from the Justice and Home Affairs Committee, chaired by my noble friend Lady Hamwee. That response, despite some fine-sounding phrases about responsible, ethical, legitimate, necessary, proportionate and safe Al, displays a marked reluctance to be subject to specific regulation in this area. Procurement and contract guidelines are practical instruments to ensure that public sector authorities deploy AI-enabled systems that comply with fundamental rights and democratic values, but without any legal duty backing up the various guidelines, how will they add up to a row of beans beyond fine aspirations? It is quite clear that the missing link in the chain is the lack of a legal duty to adhere to these guidelines.
My amendment is formulated in general terms to allow for guidance to change from time to time, but the intention is clear: to make sure that the Government turn aspiration into action and to prompt them to adopt a legal duty and a compliance mechanism, whether centrally via the CDDO, or otherwise.
Lord Davies of Brixton (Lab)
My Lords, I am speaking to my Amendments 128 and 130, although the issues raised there have already been addressed by earlier speakers. I fully support the amendments spoken to by the Front Bench and Amendment 57 tabled by the Liberal Democrats.
Baroness Bennett of Manor Castle (GP)
My Lords, it is a pleasure to follow the noble Lord, Lord Davies of Brixton, who I think is seeking to achieve the same goals as two amendments in this group to which I have attached my name: Amendment 43, in the name of the noble Baroness, Lady Hayman of Ullock, and Amendment 57, in the names of the noble Lords, Lord Wallace of Saltaire and Lord Fox. I will focus on those amendments because I have done my best to get round their technical detail.
Having listened to the powerful introductory speeches that were made, I noted that the noble Baroness, Lady Hayman, highlighted the issues with the Australian trade deal. It is a pity, therefore, that this Committee is taking place at the same time as the Australian trade deal is being debated in the Chamber; some joined-up thinking might have ensured that people were able to participate in both debates. However, that is perhaps a very large aspiration that we can all work towards.
I want to focus on perhaps the most crucial provision, which is subsection (1)(a) in the new clause proposed in Amendment 43, which refers to,
“promoting the public good, by having regard to the delivery of strategic national priorities including economic, social, environmental and public safety priorities”—
although I think I might prefer the wording “public health”, which is perhaps broader than “public safety”, for reasons that I will come to in a second. That is something that we might consider in future. However, the Government are already signed up to those principles, at least theoretically, in everything that they do because, like the rest of the world, they are signed up to the sustainable development goals. I cite the paper from the Cabinet Office and the FCDO Implementing the Sustainable Development Goals, dated 15 July 2021, which says:
“The UK is committed to the delivery of the sustainable development goals. The most effective way we have to do this is by ensuring that the Goals are fully embedded in planned activity of each Government department”.
Now one might think that making legislation is a planned activity of a government department. However, that is a very centralised view because it refers only to central government spending and is not focused on other spending. Surely, if we are going to deliver the sustainable development goals, they have to be embedded right across the broad breadth of spending. Essentially, Amendment 43 broadens out and attempts to deliver something that the Government are fundamentally, nationally and internationally, signed up to do.
I note further that the Cabinet Office report states that “all signatories” are
“expected to … deliver them domestically.”
However, NGO studies demonstrate that the UK is not on track to deliver a single sustainable development goal. Surely this Procurement Bill is a crucial mechanism for delivering those sustainable development goals of economic, social and environmental advance, meeting people’s basic needs while looking after our natural world and ensuring that we have a natural world for the future. I suggest that Amendment 43, in the name of the noble Baroness, Lady Hayman—and Amendment 57, in the name of the noble Lord, Lord Wallace of Saltaire, comes at this in a different way—is absolutely crucial, as it would put the principles of the sustainable development goals, to which the Government are signed up, on the face of the Bill.
Let me also address subsection (2) of the new clause proposed by Amendment 43, which states:
“If a contracting authority considers that it is unable to act in accordance with any of these principles in a particular case, it must—”
essentially, publish a report and take reasonable steps to ensure that it is not discriminating. When I considered signing the amendment, I worried about this because I thought that, surely, these are principles we should be delivering on. However, of course, we all know the practical reality is that many organisations procuring essential services simply do not have enough money to do what they need to do.
This is where we come to the value for money point of Amendment 57. I was thinking of putting this in practical terms, because much of what we are talking about here is technical and abstract. Think of the very common fable in which a poor person, who has only £10 in their pocket, is forced to buy a cheap pair of shoes. Then every three months, he is forced to buy a new cheap pair of shoes. A wealthy person, who has £100 in their pocket, can buy a pair of shoes that lasts for 10 years. So of course, in the end, the poor person ends up spending vastly more on shoes than the wealthy person, because they had no choice. So, given our current situation, maybe we need Part 2, but we have to look at whether this is a bigger, broader problem, beyond even the realms of this Bill. None the less, this group of amendments demonstrates that the Bill is fairly deficient in its current form. This cannot be an area for a framework Bill.
I will briefly mention another issue that is important and I commend the noble Lord, Lord Clement-Jones, for his amendment. We are seeing increasing levels of automation in many aspects of judgments—the human judgment being taken out and AI and algorithms being put in its place. There is a great deal of evidence demonstrating that the way they are being developed and the data on which they are based often fit the old adage of “garbage in, garbage out”. We need to make sure that any automation of these processes is not discriminatory. The noble Baroness, Lady Hayman of Ullock, pointed out that anti-discrimination elements are entirely lacking from any provisions in the Bill at the moment; proposed new subsection (1)(f) provides these as well.
Lord Hope of Craighead (CB)
My Lords, I return to Amendment 37 in the name of the noble Lord, Lord Moylan. He made the point that the words at the end of Clause 10(1),
“except in accordance with this Act”,
are a hostage to fortune. The words range right across the whole of this complicated Bill and of course a disaffected client will invite his lawyer to search through all the provisions to find some flaw in the way in which the procurement exercise was carried out, which he can then attack.
I wonder whether the words
“in accordance with this Act”
are wider than they need to be. First, Clause 10 contains a prohibition, but Clause 10(2) contains a definition of procurement and Clause 10(3) tells you that
“a contracting authority may only award a public contract in accordance with”
the four matters set out there.
In my mind, that raises the question of whether the words at the end of Clause 10(1) should really be
“except in accordance with this”
section, the purpose of which is to describe the framework or scope of the power, before Clause 11 tells you that that power must be exercised in accordance with the procurement objectives set out there. It would make sense if Clause 10 simply said what may be done in accordance with that section. If I am wrong about that, the Minister might like to reflect on whether the words
“in accordance with this Act”
go further than they need to.
Choice of words, as I say from time to time, is always very important and the noble Lord, Lord Moylan, raises an important point. What he wishes to put in place at the end of Clause 10(1) is already in Clause 11 and will have to be complied with. I understand that the Minister may be reluctant to go as far as the noble Lord, Lord Moylan, has invited him to go, but he has raised an important point. That is why I suggest that the word “section” might be a more sensible and less dangerous word to use than “Act”, at the end of Clause 10(1).
Baroness Neville-Rolfe (Con)
My Lords, it is always a great pleasure to follow the noble and learned Lord, Lord Hope of Craighead, who is always so brief and makes such constructive suggestions. The more I listen, the more I feel that this Bill in many respects strikes the wrong note. It is overregulatory and calls for a rethink, which I hope the Government will be thinking about.
Lord Scriven (LD)
My Lords, I have listened with great interest to this debate and seen the tension between those who want what they call a flexible and open framework and those who want a more principles-based framework with an understanding of what public procurement is about. We have to be clear that the public procurement is not just about the monetary bottom line; it is about ensuring that social good comes from every pound that the public sector spends. It is not just about ensuring that value for money is the bottom line—the pounds and pence; it is about the environment, the local economy and trying to ensure that people have opportunity, and ladders of opportunity are sown in communities so that people can grow.
I have worked as a public sector employee, I have worked in the private sector on procurement, I procured in the public sector as a health service manager and, like others here, I have been a politician who set the framework for public procurement, particularly when I was the leader of Sheffield City Council. I think that, sometimes when we speak, we are divorced from reality. Most suppliers use a legal challenge not on the process but on the criteria and how those criteria have been judged for the award of a particular contract. I cannot think of any time in my life when I have been involved in procurement that a legal challenge has been brought against an organisation that I either worked for or have been a senior politician in where the criteria have not been the particular legal point on which a supplier challenges; it is not normally the process.
Interestingly, the noble Lord, Lord Moylan, gave many examples of why suppliers might not be able to do anything. Nothing in the Bill would stop that; in fact, the noble Lord, Lord Lansley, has an amendment in a future group that talks about having a more of an outcome approach to procurement, which would allow innovation. It would allow that innovation to be seen as something that it brought into the tendering process right at the beginning by going out to talk to suppliers about what outcomes were required, as the noble Lord suggests. So we have to be careful about how we frame this discussion and about saying that being less clear about principles and what is required will somehow stop legal challenge.
I would argue the other way: if there is no definition in the Bill of such things as value for money, that is a charter for lawyers to start saying, when a contract has been awarded, “What did you mean by value for money?” If over 400 different procurement authorities have a different view of value for money, and I am a supplier looking for a contract in 100 of them and everybody is giving a different definition, then legally there may be more challenges to come. There have to be clear definitions in the Bill of certain aspects, such as what we mean by value for money—or, interestingly, social value. Again, if there is no national definition of that, it is a lawyers’ charter.
The tension between what is in the Bill and having more flexibility has to be thought through. It comes down to what a number of noble Lords have said, namely that this Bill is very confused. It is complex and contradictory. It has not been thought through, particularly the elements which need to be clearly defined so that it does not become a lawyers’ charter. I ask the Minister, in replying, to say what we actually mean by social value. Once this Bill has passed, if I was a supplier, how would I know what value for money was? Will value for money be defined for every contracting authority and understood by every supplier? Or will it be open to local interpretation to determine what social value is? The Bill is contradictory and has some holes, but we should be very careful of saying that being more flexible stops lawyers challenging. Sometimes not having things in the Bill means that lawyers will challenge more.
The Minister of State, Cabinet Office (Lord True) (Con)
My Lords, I thank all those who have spoken. Lest anybody be alarmed by the coughing I have inflicted on the Committee and my not very brilliant voice, I should say that I tested several times over the weekend and this morning for Covid and the results have been negative.
It has been a very interesting debate. I have listened to it very carefully, including the many contradictions within it, which were summed up ably by the noble Lord, Lord Scriven. There are differences of opinion. Indeed, one challenge was laid down at the beginning by my noble friend Lord Moylan and spoken to eloquently at the end by my noble friend Lady Neville-Rolfe. Of course, we know the other extreme is the intervention from the noble Lord, Lord Coaker, who wished to use the Bill for very extensive potential government intervention.
All of us in this House and in public service care passionately about the principles in which we believe. Those principles differ and that is the nature of the change that can be made when Governments change. The question this Committee is wrestling with, and will I am sure continue to wrestle with through to Report, is the extent to which one encrusts the Bill with the total sum of all the hopes of those contributing to Committee, with some of the attendant risks that have been referred to in relation to litigation; or, at the other extreme, the extent to which one strips it down and concentrates on simplicity. There is an inherent tension, which is expressing itself in a very interesting and informative debate. I can assure noble Lords that, as we go forward, the Government will be listening carefully to both sides of it.
It started with Amendment 37 to Clause 10 and Amendment 460 to Clause 89, tabled by my noble friends Lady Neville-Rolfe and Lord Moylan. These seek to limit the scope of remedies for breach of statutory duty under Part 9 to compliance with only the procurement objectives in Clause 11.
A supplier’s ability to properly hold a contracting authority to account is essential for a well-functioning and fair procurement system and helps to ensure that contracting authorities comply with specific requirements under the Bill. Our submission, in presenting this legislation, is that, without such obligations to comply with the detailed provisions of the Bill, many of the important things that it seeks to deliver would fall away. For example, some of the transparency obligations in the Bill are intended to ensure early publication of information in order to support small businesses. If these cannot be enforced, we risk losing that important support mechanism.
Lord Scriven (LD)
Would the Minister give way? That is one definition of local growth: that it has to be a local company that gets the business. Local growth is completely different: it could be subcontracting or the value sustainability that it puts into the economy, which gets to the nub of the problem. Without having clear definitions, we get these kinds of differences. Would the noble Lord agree that his definition of local growth is predicated on who gets the supplier contract but, actually, local growth could be much broader?
Lord True (Con)
My Lords, I will look carefully at what I have said and what the noble Lord has said. I think I said—and will repeat if I have not said it already—that it is important to have some flexibility, particularly at the lower end of contract letting, precisely to give local authorities and others the freedom of judgment for which the noble Lord asks. The more one codifies these aspects in statute, and tightens the definition, the greater the risk—this is something we have wrestled with in Committee—that one limits the flexibility that the noble Lord seeks for local action.
A formal regulatory evaluation of whether each public contract delivered “social value” and “local economic growth” could also be an unnecessary burden on contracting authorities. I repeat my view that local contract management should be able to judge the effectiveness of all aspects of the contract. The Bill makes provision for the publication of information on the performance of large contracts—currently, those valued at over £2 million—which we consider a reasonable and balanced approach.
The Government do not support the use of a debarment list for any purpose other than to designate suppliers that meet a ground for exclusion and have failed to address their risk. Debarment is a last resort to be used when a supplier poses a significant risk to contracting authorities or the public, following criminal or other serious misconduct. We do not consider it appropriate that failure to meet characteristics such as social value should form the basis of such a punitive sanction.
Amendment 46, tabled by the noble Lord, Lord Clement-Jones, who spoke with, as always, great passion and authority on these subjects, seeks to insert an additional principle on automated decision-making and responsible and ethical use of data when carrying out a procurement. The new data platform will deliver enhanced centralised data on UK public contracts and spending. All data that is published will be freely accessible through the central digital platform. This is in support of the objective set out in Clause 11(1)(c), which expects contracting authorities to have regard to the importance of
“sharing information for the purpose of allowing suppliers and others to understand the authority’s procurement policies and decisions”.
The data displayed in the platform pertains to the public sector’s commercial activity, including tender opportunities, contract awards, spending and so on. The UK’s historic commitments to data protection standards and public trust in personal data use will continue to be at the heart of the regime. The proposals build on the fundamental principles of the UK GDPR, and these will continue to underpin the trustworthy use of data to support our central digital platform.
The noble Lord asked why one would be reluctant to legislate for the ethical use of data and automated decision-making. We are not legislating for specific rules for certain sectors but instead setting the legislative framework for public sector procurement. In the same way that we are not legislating for the standards for construction projects, we are also not legislating for the standards for data projects. The Government already issue extensive guidance––the noble Lord referred to some of it—on best practice where appropriate, and contracting authorities should have that in mind when purchasing AI or data products and services.
The Government are resisting this amendment, as policies are still evolving at government level on ethical use of automated decision-making and data. This is a fast-changing world—as the noble Lord knows better than most—so legislating in the Bill could be a premature fix, as it were. I have already referred to the existing guidelines on responsible use of AI procurement for public sector organisations on how to use data appropriately. These evolving policies should be applied by contracting authorities as appropriate. That said, we are open to more engagement on this topic, and I have listened again very carefully to the points that the noble Lord makes. I can give an undertaking to him, as I did earlier to others, that we will engage with him between now and Report, because he is right that this is an important area. We are just cautious about seeking to fix specific things in legislation at the moment.
My noble friend Lady McIntosh of Pickering is, regrettably, unable to be here, for reasons referred to earlier in this Committee debate—and I confess I had nothing to do with that. Her amendments are around the subject of acting with integrity and being seen to act with integrity, which my noble friend Lady Neville-Rolfe also referred to. The integrity objective will oblige contracting authorities to consider how best to prevent fraud and corruption through good management, prevention of misconduct, and control. As well as oversight and control, open competition and the strengthened transparency requirements in the Bill will enhance integrity in public procurement.
It is essential that the procurement regime in the UK commands the trust of suppliers, the public and our international trading partners. While it is important that contracting authorities actually act with integrity—and that is a fundamental point—the objective is drafted as it is due to the importance that those observing procurements can see that contracting authorities are acting with integrity. We will, however, reflect on my absent noble friend’s amendment and the points made in debate, including the direct question that my noble friend Lady Neville-Rolfe asked me, to which I do not have an answer as I stand here, about precedents in legislation—clearly, her question will be in Hansard and requires an answer.
Lord Wallace of Saltaire (LD)
My Lords, although I am not a great expert on this subject, it seems that this is a case in which judicial review would be extremely easy because the question of how one justifies it is not spelled out here. Could the Minister perhaps write to us between now and Report about what criteria would then be used to justify the decisions taken? I entirely agree with the noble Baroness, Lady Neville-Rolfe, that one wants to ensure as far as possible that we do not leave large holes for judicial review to come in.
Lord True (Con)
My Lords, obviously I accept that, but we will certainly undertake to provide further information.
The noble Lord, Lord Scriven, was adumbrating cases where it should be possible to take different issues into account in terms of local activity. I understand the point that noble Lords are making about clarity. Clarity can either be sought through superdefinition, chasing the Snark through the end of the rainbow—sorry, I am mixing my metaphors—or it can be something for which the Government set out a clear framework that ultimately it is open to anyone in a free society to test under the common law. There is a balance to be found here and we will write further.
On Amendment 57, the noble Lords, Lord Wallace and Lord Fox, and the noble Baroness, Lady Bennett, complain that Clause 11 does not define value for money in order to leave a degree of flexibility for different types of organisation with different drivers to place a different emphasis on the concept. That is not unusual in legislation. Value for money as a concept is not uncommon on the statute book without further definition. It has been used in relation to setting high-level objectives for organisations, including the general duties of Ofcom in Section 3 of the Communications Act 2003 and indeed those of the Nuclear Decommissioning Authority in Section 4 of the Energy Act.
There are many precedents, I am told, but I have only given two of them where the term is left undefined, and this allows a degree of flexibility. We are happy with the broad interpretation of value for money, but Amendment 58 would have the effect of limiting the scope for future reviews of what value for money means. That is something that future Governments might wish to do. We do not support that position at the moment but, again, I am ready to listen to further discussion in Committee.
Amendments 128 and 130, tabled by the noble Lord, Lord Davies of Brixton, amend the provisions on award criteria. I am grateful to the noble Lord, first for the explanatory statement which sets out that his amendment intends to ensure that value for money does not override other procurement objectives, and secondly for his exposition of it. While it is important to be clear that Clause 22 does not affect the relative weighting of the objectives in Clause 11, I am grateful to the noble Lord for his consideration of this point and respond on that basis.
Public procurement needs to be focused on achieving value for money, and we submit that this is rightly at the top of the list of objectives set out in Clause 11. The noble Lord laid an amendment, the second part of which would in effect—taken literally—relegate or at least abnegate the possibility of placing value for money exclusively at the top. Our submission is that, while value for money will be the highest priority in procurement for the Government and that is reflected in the drafting of the Bill, it does not disapply or override the obligation on contracting authorities to have due regard to the other matters in Clause 11. I have no doubt that this will be probed further, but I hope that this will reassure the noble Lord that the amendment is not only unnecessary but, in its detail, we could not accept it. There is a balance to be sought here, and that balance will be seen differently by successive Administrations in successive places.
There was a very interesting range of amendments put forward in this group. I have listened carefully, and we will engage further on the points raised. I hope on that basis that noble Lords will feel ready to withdraw or not move their amendments.
Lord Moylan (Con)
My Lords, my noble friend the Minister has a difficulty with his throat, and I commiserate with him on that. He also has a difficulty with the Bill. He wants to have a Bill which is highly prescriptive, but his answer to those who wish to amend it is that that would make it too prescriptive. The question is: what are the bounds of prescription, and has he given an adequate defence of them? It may be the heat, but I suspect we are condemned this afternoon to receiving a series of responses from Ministers which are not as adequate and embracing of our original ideas as one might hope.
It has been a very important debate because it is about the principles underlying the Bill. My noble friend said that there was a degree of confusion and contradiction in the debate. There is often confusion in debate when you have a broad range and number of topics to discuss, but I do not think there was any contradiction if one understands that the debate on principles has been taking place on two levels. The first is about what the principles should be—whether they should involve what the noble Baroness, Lady Hayman of Ullock, has suggested should be incorporated and whether they should involve a certain interpretation of value for money. We all agree that has to be an element of it, but what does that actually mean? That has been the tenor of part of the debate. I have said that I intend to remain neutral in a sense on that question.
The second level on which we have been debating the principles is: on the assumption that we can agree what the principles are, what role do they then play? What purchase or leverage do they give in the procurement process? In particular, should they be a basis on which disappointed contractors should be able to nitpick through this procedural Bill in order to bring complaints when, in my view, it would be better if they were limited to doing that only if the broad principles of the Bill—which we might have agreed on—had been breached? The noble and learned Lord, Lord Hope of Craighead, clearly grasped that point, and the noble Baroness, Lady Hayman of Ullock, heartily agreed that we should ensure that there is a degree of flexibility in the tendering process so that unforeseen circumstances that lead to idiotic outcomes can be handled in a sensible way.
My noble friend Lady Neville-Rolfe made a similar point, but I am going to quibble with her very slightly, because she used the word “frequent” in reference to frequent legal challenges to procurement processes. In my experience, they are not very frequent, because what happens is that precise attention to the detail of the process is often prioritised over sensible outcomes in order to avoid those legal challenges in the first place. The structure of the approach that we are taking often leads to poor outcomes in procurement terms precisely to avoid legal challenges, but we congratulate ourselves on having gone through a successful procurement even though we have a suit with a pair of trousers with one leg shorter than the other, or something like that.
Baroness Neville-Rolfe (Con)
On the business of frequent challenge, I think it would be quite useful to have some information before we discuss this again. My experience—I have worked in the industry, although admittedly not as an executive—is that there are quite a lot of challenges, and they absorb a lot of resources. However, if they are rare, that is important as well.
Lord Moylan (Con)
I heartily second that call for information.
To conclude, my noble friend the Minister said that he thought that flexibility in response to the sort of circumstance that I am describing is desirable. To that extent, he agreed in principle with me and with my noble friend Lady Neville-Rolfe, and it is for him, as we go forward, to show how he intends to instantiate that in his own amendments, so as to give us that sensible, practical outcome. In the meantime, I beg leave to withdraw the amendment.
Baroness Neville-Rolfe
Member’s explanatory statement
This amendment seeks to reduce the burden on business of the Bill’s provisions.
Baroness Neville-Rolfe (Con)
My Lords, Amendment 38, on helping small business, would free up procurement for those businesses with a turnover of under £5 million. I am particularly grateful for the support of my noble friend Lady Noakes, and I am glad of the opportunity to endorse her review amendment, Amendment 534, which she will introduce later.
I shall also speak to my Amendment 50, which aims to keep the bureaucratic burdens on small businesses as low as possible, and to Amendments 97 and 100, which seek to exclude small businesses from complex competitive procedures. Finally, I will also speak to Amendments 290 and 295, which seek to exclude SMEs from the bureaucratic burden of cross-compliance in Schedules 6 and 7, which give long lists of reasons for excluding suppliers from bidding.
The Deputy Chairman of Committees (Baroness Watkins of Tavistock) (CB)
My Lords, the noble Baroness, Lady Brinton, is taking part remotely. I invite the noble Baroness to speak.
Baroness Brinton (LD) [V]
My Lords, it is a pleasure to follow the noble Baroness, Lady Neville-Rolfe, in championing small and medium-sized enterprises to get access to many contracts, which needs to happen. There are many amendments to the Bill to this effect, and I hope the Minister will take serious account of making sure that they are not excluded by virtue of the complexity of procurement rules.
I wish to speak briefly to Amendment 534 in this group, which sets out the important principle of ensuring that a Minister carries out reviews of the operation of this Act. Proposed new subsection (2) states:
“‘Procurement rules’ means the requirements related to procurement set out in this Act or issued under the authority of this Act, and the health procurement rules referred to in section 108.”
While I was very grateful to the Minister for her explanations to my question at the end of the first group of amendments, I am afraid that I do not think she answered—
The Deputy Chairman of Committees (Baroness Watkins of Tavistock) (CB)
Lady Brinton, we believe that you are speaking to the wrong group at the moment. Is that correct? I am not sure. We are just clarifying.
Baroness Noakes (Con)
It is the right group, but I have not introduced the amendment. The noble Baroness, Lady Brinton, is speaking before all the amendments have been spoken to.
The Deputy Chairman of Committees (Baroness Watkins of Tavistock) (CB)
The rules are—I can see the problem—that remote speakers speak before the other amendments. Lady Brinton, it is quite difficult in that the amendment has not yet been spoken to; would you rather proceed, as per the current regulation, or wait and speak at the end of the group?
Baroness Brinton (LD) [V]
I am used to speaking in this way, if the Committee will bear with me. These are the rules, and I do not believe that I have the luxury of choosing to change them. What I usually do, but did not do earlier when I first spoke this afternoon, is to apologise to anyone where I might have to speak ahead of them speaking to their own amendment. I assure the Grand Committee that this is not of my making. The rules about remote contributions are extremely clear, mainly, I believe, to help those chairing the proceedings. I am happy to continue.
The Deputy Chairman of Committees (Baroness Watkins of Tavistock) (CB)
I think the rules are to help those chairing proceedings—that is, Deputy Speakers—but also to help the people who are coping with having to come in remotely. Having said that, we will proceed within the rules, but I promise that I will take this back to the Lord Speaker’s office again at our meeting on Thursday. Lady Brinton, please continue.
Baroness Brinton (LD) [V]
I apologise again to the Committee. I was just quoting the element of Amendment 534 that talks about “procurement rules” as meaning
“the requirements related to procurement set out in this Act or issued under the authority of this Act, and the health procurement rules referred to in section 108.”
While I was very grateful to the Minister for her explanations to my question on the first group of amendments, I am afraid that I do not think she answered the core question about the interface between this Bill and the provisions in Section 79 of the Health and Care Act.
I refer the Minister to his Amendment 528 to Clause 108 of this Bill which, because it was among the government amendments in the second group of amendments, was not moved or debated. It is important, however, because that amendment states
“If the procurement of goods or services by a relevant authority is regulated by health procurement rules, a Minister of the Crown may by regulations make provision for the purpose of disapplying any provision of this Act in relation to such procurement.”
I appreciate that that amendment makes an important link to the Health and Care Act, which both Ministers have pointed out to us that they are trying to do. However, it does not pick up the issues raised by a number of noble Lords, including me, about the problem that provisions in the Health and Care Act do not cover the entire NHS.
I am very grateful to the noble Baroness, Lady Noakes—and I look forward to hearing her introduction to her amendment—for picking up my concerns at the end of the first group. Her Amendment 534 would ensure a review by a Minister, including looking at the procurement provisions in the Health and Care Act. That would at least ensure that any emerging tensions and practical problems could be identified and published.
Having raised this, there are two fundamental questions that were not answered by the Minister’s letter, nor by the Minister earlier. First, why are the rules for NHS public spend—which, in 2018-19, was in excess of £70 billion—to be created by a statutory instrument without the same level of public scrutiny that this Bill is receiving and no guarantee of the same protections that this Bill is affording to public money being spent on public contracts? Secondly, I ask again exactly where is the interface between the Bill and the Act, given the gap in the Health and Care Act legislation that is covered by the Procurement Bill? I ask again whether it might be sensible to have a meeting for noble Lords interested in this particular and perhaps esoteric problem. It is vital that public procurement works across the board.
Baroness Thornton (Lab)
My Lords, I find myself being drawn into this Bill in all kinds of ways. I apologise for not speaking at Second Reading, but I was not able to do so. I declare interests as the founding chair and current patron of Social Enterprise UK and as a senior associate of Social Business International, which is an organisation concerned with social enterprises that contract with the public sector. Both of those positions are unpaid.
Over the 20-odd years I have been in your Lordships’ House, I have been involved in putting community interest companies on the statute book and, as a Minister, in the right to request for social enterprises and the Public Services (Social Value) Act. I will speak to Amendment 75B in my name but, because this is the first time I have spoken, I will say that there is a suite of amendments to this Bill that are all about social enterprise. They follow the introduction by the noble Baroness, Lady Neville-Rolfe, very well, because many of the problems are the same, although there are some huge social enterprises providing public services.
This amendment proposes a new clause for the Bill, which addresses market stewardship. The reason is that we are interested in how you give voice to the social value Act in this space; that is at the heart of this amendment. There is a policy background to this that the Government will recognise. The 2015 review of the social value Act carried out by Lord Young of Graffham found that
“where the Act is being used, it has a positive impact and that the variety … of organisations that support the Act is quite striking.”
In 2018, Her Majesty’s Government announced that all central government contracts would be evaluated on the basis of social value. In December 2020, a new social value model was published by the Cabinet Office, which was to cover all procurement by central government departments and bodies under its responsibility. In June 2021, the new national procurement policy statement required contracting authorities to consider how they could maximise social value in creating new businesses jobs and skills, improving supplier diversity and tackling climate change.
Less than seven months ago, in December 2021, in its response to the consultation in the Green Paper Transforming Public Procurement, the Cabinet Office promised that
“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.”
Her Majesty’s Government’s flagship levelling-up White Paper calls for greater use of social value yet, despite all this, social value is nowhere to be seen in this Bill. When it was in the Commons, the Minister for Brexit Opportunities and Government Efficiency was directly asked why social value was missing. He refused to even use the phrase “social value”.
That is a considerable disappointment because, over the last decade, a strong cross-party consensus has developed on the need for all public bodies to consider social value when making procurement decisions. Indeed, the social value Act was introduced by a Conservative Member of Parliament, championed in this place by a Liberal Democrat Peer and supported by Labour and the Green Party during its passage.
Baroness Noakes (Con)
I am sorry to interrupt, but I am struggling a little as to which amendment the noble Baroness is speaking to. Amendment 75B, which deals with market stewardship, is in this group, but Amendment 75A, which is about social value, is not.
Baroness Thornton (Lab)
I beg your pardon. I was trying to give the basis as to why this amendment is down and then the other amendments that will be in the groups following this one, but I take the noble Baroness’s point and will just address this amendment.
Social enterprises report higher levels of staff engagement. The Bill does not place any duty on contracting authorities to consider the impact of their decisions on the range of providers, such as social enterprises or SMEs, but there is a risk in ignoring these organisations. There may not be the providers that the public sector needs for the future and this may reduce innovation in our supply chains. That is what this amendment addresses.
Baroness Noakes (Con)
My Lords, I have added my name to Amendments 38, 50, 97 and 100 in the name of my noble friend Lady Neville-Rolfe and, as she has already said, she has added her name to Amendment 534.
I will come to that in a moment, but I start with Amendment 86 in the name of my noble friend Lord Lansley. This returns to the question of preliminary market engagement and fostering the involvement of SMEs about which my noble friend spoke on our last Committee day in relation to his Amendment 88. Clause 15(1)(f) makes building capacity among suppliers a permitted purpose for preliminary market engagement. My noble friend’s amendment adds some words of emphasis so that capacity building should be particularly for small and medium-sized enterprises.
I know that noble Lords need no reminding of the importance of SMEs to the UK economy. They account for around 60% of employment and over half of turnover in the UK. Not all small businesses achieve scale and not all want to, but most large and successful businesses were small businesses once. We have a responsibility to ensure that SMEs are given every opportunity to thrive and grow. That is why we should be looking at this Bill on the important area of public procurement and its role in the economy and considering the way that can be used to foster SMEs.
SMEs find engaging with public procurement daunting. They simply do not have the time and resources to get involved in complex tenders, let alone things like dynamic markets. It has to be in the interests of both the individual contracting authorities and the economy as a whole to foster as much competition as possible and to assist SMEs in growing their businesses. Building capacity among SMEs is a good thing to do and this Bill should recognise that. It may occasionally be important to build capacity among larger businesses and my noble friend’s amendment does not preclude this. But large businesses have the kind of resources that make participating in public procurements pretty straightforward. SMEs, not large businesses, should be the focus of policy in this area.
My noble friend Lady Neville-Rolfe’s Amendments 97 and 100 also recognise that getting involved in public sector procurement is hard for SMEs. The complexity of procurement processes makes it quite likely that an SME might not satisfy all the participation criteria and even more likely that they will mess up on an aspect of the procedural requirements. They need to be cut some slack, which is what my noble friend’s amendments would do.
I am, as my noble friend knows, less convinced by her Amendments 290 and 295 because there are some serious issues in Schedules 6 and 7 which rightly debar businesses from public tenders. On the other hand, Schedules 6 and 7 are very heavy-handed and there may well be a case for further discretion to allow some of the matters in those schedules to be disregarded in the case of SMEs.
I now come to Amendment 534 to which the noble Baroness, Lady Brinton, spoke so eloquently earlier. It is rather different from the other amendments in this group because it requires a report every year. It is relevant to SMEs because the first area of the report is about how procurement rules have impacted the award of contracts to SMEs. I think we are agreed that we want to see awards of contracts to SMEs growing, and that means making it easier to include SMEs in the process and helping them to win.
There have been some changes to the previous EU rules on which this Bill is largely based which could make it easier for SMEs, but I suspect that the overwhelming effect of the procurement rules as we have them in this complex Bill and the secondary legislation that will follow will continue to deter SMEs from participating fully in public procurement. We really ought to be keeping this matter under review. The noble Baroness, Lady Brinton, raised the issue of whether the health procurement rules are covered. I drafted the amendment with the intention that it should cover health, but I recognise that this is a very complex area and will need to be teased out later in Committee.
A second area covered by my suggested report is whether there is scope to simplify the rules while remaining consistent with the procurement objectives set out in Clause 11. This will also be relevant to SMEs because I believe the complexity of the public procurement code is a major barrier to entry for small and medium-sized businesses. I am sure that large businesses, large tenderers, are quite comfortable with having barriers to entry for small and medium-sized entities, but government and Parliament should not be comfortable with that, and we should at least be striving for greater simplicity and keeping it under regular review.
Lord Wigley (PC)
My Lords, I am delighted to follow the noble Baroness. I support Amendment 38 moved by the noble Baroness, Lady Neville-Rolfe, and support very strongly the points that she and, more recently, the noble Baroness, Lady Noakes, have made. They relate to the pressing need to ensure that the burden on small businesses tendering for public contracts is addressed. This issue has arisen under other amendments, and I have no doubt that we need to get this nailed one way or another on Report. It is an important question.
We all draw on our experience. My experience, immediately before coming to the House of Lords after I had left elected politics, was when I chaired the board of Bangor University’s Bangor Business School. It related to the small business sector. These issues arose time after time. Some colleagues may be aware that way back, before entering full-time politics, I was involved in the manufacturing industry. I had two incarnations, the first of which was with large supernational companies, Ford, Mars and Hoover, when I was financial controller. Although those three corporations were not generally involved in public sector contracting, their approach to any question of contractual relationships was highly professional with relevant legal advice in-house and with the resources to buy in specialist advice when needed.
My second incarnation, which I undertook as a serving MP in the 1980s, was to chair a small company from its creation to when, after 11 years, it merged with a larger American-owned company to form a significant new entity employing 200 people at Llanberis in my constituency. We built—the hard way—the acorn from which that grew, raising our own capital locally and starting up by employing just one person full-time, an engineer to build automated diagnostic equipment for the medical sector.
In competing for contracts, we had to beat competitors that were much larger and with far greater resources and in-house expertise. A small company such as ours had a serious uphill struggle to compete on anything like a level playing field. We did so by being fleet of foot, resilient and flexible and by engaging proactively with potential customers. But it is unrealistic to expect SMEs to be in a position to compete on a level playing field with suppliers which have professional resources in depth. The danger is that such SMEs will be scared away from tendering for public sector contracts where the bureaucratic imposition is totally unreasonable for such small-scale operators.
In this context, the amendment is particularly relevant. If our company had not succeeded with the early contracts, we would not have grown to employ some 50 people, as we did at the point when the merger took place. Had we fallen by the wayside in that highly competitive situation, we would not now have the Siemens company that took over our successful company now employing more than 400 people at Llanberis, and with a further expansion a real possibility soon.
I support these amendments because I feel that there needs to be some mechanism written into the Bill to counterbalance the inevitable bureaucratic safety net which public sector bodies build with their procurement procedures. Providing some lower level of bureaucratic imposition on SMEs could make the difference between those companies, on the one hand, being suffocated out of the competitive arena by impositions that they cannot handle and, on the other hand, securing contracts which enable them, in the fullness of time, to grow, given the impact that that might have on our economy.
Lord Aberdare (CB)
My Lords, many of my amendments and those to which I have added my name relate to the issue of promoting greater access to public procurement for small businesses, but for whatever reason none of them has come up in this group, so I will just make two brief points.
First, I very much support all the amendments in this group. I wonder whether they will successfully address the large-supplier focus of procurement hitherto and whether they will be enough to bring in those much smaller suppliers, many of which could make a real impact on the provision of, for example, personal services at a local level but which are often excluded on the ground of having too small an income or no track record of delivering high-value contracts, even when the contracts that they want to deliver are far lower than that and they have delivered them at that level. So I suppose my question to the Minister is: how will the contracting authorities––local authorities or whatever—be dissuaded from imposing, or persuaded not to impose, thresholds and contract terms that actually deter or prevent some of those smaller enterprises from bidding? We have heard a lot about opening things up to small businesses, but unless you put restraints on the contracting authorities, those opportunities may not work.
Secondly, I very much welcome the amendment in the name of the noble Baroness, Lady Noakes, although it was spoken to first by the noble Baroness, Lady Brinton. It seems to me that one of the elements that is lacking from the Bill is any indication of how its provisions will be monitored and enforced. How will we know that it is working? I strongly support the review proposed in Amendment 534. Six years seems to be rather a long time to wait, but on the other hand this process will take time to work through.
Beyond that, I hope the Minister says something about how the Government intend to monitor the effect and impact of the Bill, specifically including whether it is actually succeeding in unleashing the energy, dynamism, innovation and entrepreneurship that come from smaller suppliers, and what mechanisms there might be to resolve the issue if it turns out that is not happening. I do not think we can rely on the courts, and certainly these small businesses do not have the will, resources or even time and energy to pursue issues such as this in court. So what mechanisms might the Government be able to use when the system does not seem to be working?
Baroness Bennett of Manor Castle (GP)
My Lords, I rise not solely to demonstrate that there is broad ideological support for small and medium-sized enterprises being given a larger share of the kind of procurement that we are talking about; I do so also because I have attached my name to Amendment 75B in the name of the noble Baronesses, Lady Thornton and Lady Hayman.
I am going to attempt not to repeat everything that has been said but I want to pick up something said by the noble Lord, Lord Wigley. No one else has drawn attention to the fact that the previous group and this one are related. They have aspects acknowledging that SMEs bring different qualities—particularly quality. The noble Lord suggested that, if we do not put in specific provisions about SMEs, it is inevitable that the big companies will dominate. I say that if we do not put in provisions about social value and quality of services—as the noble Baroness, Lady Thornton, said, that is delivered under the Public Services (Social Value) Act—and do not account for those things, it will possibly be even more telling against SMEs than the rules and the points addressed by the amendments.
I am not particularly picking on the noble Lord, Lord Aberdare, here as I was going to say this before he spoke, but I have seen from all sides of the Committee a huge focus on productivity improvement and innovation, but we need to be careful about that terminology. Again, this point comes back to the previous group: a lot of what we are talking about here is the provision of care and the caring services, the type of provision that really does not lend itself to the same kind of measurement as how productively you are producing widgets. If a nurse is caring for a dying person, maybe it would be more “productive” if they were caring for two dying people at the same time instead. We really have to ask ourselves about that. I can see some head-shaking happening but a lot of our measures of productivity have been that gross and raw, and have failed to acknowledge issues of quality and service.
We need to acknowledge that there are many elements of our service economy where those measurements would be inappropriate. If you are providing a rape crisis service to people in rape crisis, how do you make that more efficient? What does that actually mean? What does innovation mean in that context? I think we sometimes fall into a narrow, widget-based, economistic way of looking at these issues, and we need to look at them much more broadly.
I am going to finish with something on which I think the noble Baronesses opposite will agree, picking up on the point by the noble Baroness, Lady Neville-Rolfe, about 30-day payment terms. Speaking as someone who many years ago used to work for a small independent business that supplied supermarkets on 120 days, which usually meant 150-day payment terms, I think that is crucial. I say to the Minister, if he is responding to this group, that perhaps this is an issue that we could look at in future in the form of a letter. It is crucial for SMEs that it is acknowledged when 30 days or less being part of the procurement process needs to be written into the contract to enable them to bid. That could be an important factor.
Lord Scriven (LD)
My Lords, this has been a fascinating as well as nearly unanimous debate about the importance of small to medium-sized enterprises and the role they can play in innovating, stimulating, changing and helping local economies grow. Part of that will be—I have to say to the noble Baroness, Lady Bennett—through productivity. Productivity and quality in themselves are not too separate things; they can go hand in hand in caring services. I speak as a former health service manager. Productivity is not just about how you apply people; it is how you apply all the resources to get better outcomes for those you serve. Therefore, sometimes there are contradictions and it is hard, but they are not always separate.
I would like to speak to a number of amendments in this suite. I thank the noble Baroness, Lady Neville-Rolfe, for doing this in a previous life because—I am sure she will understand what I am about to say—every little does help, particularly with small to medium-sized enterprises. A number of the noble Baroness’s amendments are probing for one reason, I think. I am sure that the Minister will come up with specifics in the Bill which will help small to medium-sized enterprises, but I think the general view is that it does not do it. It does not go in depth and give the clarity which I and other noble Lords have said will help to give a level playing field for small to medium-sized enterprises, which is what is required.
In particular, an important amendment spoken to by the noble Baroness, Lady Noakes, on behalf of the noble Lord, Lord Lansley, was on capacity building. In my life of working in local economies, I have seen that the big thing that helps is capacity building for small to medium-sized enterprises. If anything should be on the face of the Bill, capacity building for small to medium-sized enterprises and not-for-profits should be, because they can—with help from the public sector in terms of capacity building—achieve quite a lot.
I have seen that in a number of areas including my own area of Sheffield when I was leader. We had something called “Buy for Sheffield”. It was not an issue of giving special treatment to small to medium-sized enterprises; it actually got ahead and gave a lot of capacity building. Through that capacity building and then through their own innovation, they could go to larger organisations and get part of the supply chain on their own volition rather than what normally happens, which is that the large organisations look for small to medium-sized enterprises down the supply chain because it gets them ticks. It actually meant that innovation came. There is something particularly in Amendment 86.
I am not quite sure why the noble Baroness, Lady Neville-Rolfe, chose £5 million because the average turnover of a small to medium-sized enterprise at present is about £756,000. I think because it is a probing amendment there has to be a cut-off point which says that for companies below a certain turnover there should be a special emphasis within this Bill. I hope that the Minister goes away and reflects on what has been said because it does not seem deep enough, and I am sure we will be coming back to this on Report as an important part of the Bill.
I agree with the noble Baroness, Lady Noakes. We have been diametrically opposed on many Bills, but on Amendments 290 and 295 there are elements I would want to see apply to small and medium-sized enterprises. I understand why the noble Baroness, Lady Neville-Rolfe, has done that, but there are some really important issues about the probity and capacity of small to medium-sized enterprises as to whether they get the procurement.
Finally, I want to re-emphasise what my noble friend Lady Brinton said. There is a huge contradiction between having a Bill for public procurement and then saying that, by statutory instrument, the Minister can take away that right for the health and social care provision. I was explaining this over dinner on Saturday to a number of friends who were asking me what I was working on in Parliament at the moment. When you explain the Procurement Bill, people glaze over, but when you explain that there is a provision for £70 billion-worth of their taxes to be excluded at the signing of the Minister’s pen, suddenly they become very excited—the glaze stops.
The Minister tried to explain this to my noble friend Lady Brinton; I was more confused after the explanation than before it. She needs to try harder to explain where the contradictions are and how they will be dealt with as a unified Procurement Bill. On the whole, like most noble Lords, I agree with the thrust of these amendments, but Ministers need to go away between now and Report and think carefully. It is clearly not strong enough to give a level playing field to small to medium-sized enterprises.
Lord Coaker (Lab)
My Lords, this has been another interesting debate, with that clash of views the noble Lord, Lord True, reminded me about over how far the state should interfere with the market. Some think it should interfere more; some think it should interfere less. No doubt, the noble Lord will pursue the Government’s objective of ensuring that we have a social market which operates for the benefit of the many. We look forward to continuing that debate, and I am sure he will respond in due course.
On a serious point, I will start this slightly back to front in terms of the amendments. The really important amendment—apart from my noble friend’s Amendment 75B, which I will speak to in a moment—is Amendment 534, which looks at reviewing the procurement rules to see whether they have made any difference or not. You can argue what those rules should be and how far something should go, and the Government will say, “Of course we will have a review; it is a matter of course. We keep under review all the legislation that is passed and look to see how effective it has been”, but this is really important.
The amendment refers to the awarding of contracts to small and medium-sized businesses. I appreciate that it does not deal with all the various points that have been raised, but the general point of reviewing what takes place and whether what is passed by the Bill has the impact we think it should have—or any impact at all—is an important principle that we should not lose sight of. However, Amendment 534 is much more narrowly drawn than that, and I suggest that six years is too long.
I will try to be reasonably brief in closing the debate, but I thought there were some really interesting suggestions in Amendment 38 from the noble Baroness, Lady Neville-Rolfe. They went to the heart of what the Government need to do; there has clearly been a procedural problem, but the Committee is trying to address and support the Government to achieve their own objectives. The noble Baroness, Lady Bennett, supported the point about 30 days in Clause 63(2). Is it immediate payment or late payment? Is it sufficient? Is it too long or not long enough? It raises the point that there are a whole series of measures about supporting small and medium-sized businesses with public procurement that need to be looked at and addressed. That is one example.
The point that there are thresholds in Schedule 1 and that below-threshold contracts can be reserved for small contracts was really interesting—if I have understood what the noble Baroness said. She raised the possibility of whether there was the opportunity to have a below-threshold business amount. That is quite an interesting concept for the Government to address and look at.
As the noble Lord, Lord Wigley, pointed out, we are trying to look at how we can expand this and ensure that small and medium-sized enterprises—as the noble Baroness, Lady Noakes, argued—will benefit from the public procurement provisions in the Bill. Everybody wants that, but is it going to happen? Will the measures on public procurement make any difference or not? It is in everybody’s interests that they should.
Baroness Scott of Bybrook (Con)
My Lords, I thank your Lordships for a really interesting debate. A lot of what has been said about support for small and medium-sized enterprises, social enterprises and voluntary organisations is something that the Government also support and, through the Bill, have been trying to support even more. After we finish Committee, we need to meet interested noble Lords and talk more about these issues because they are important to the Committee, as I can tell, but also to the Government. I make no promises, but we should be using all the knowledge in the Committee as we discuss it further.
In that context, I will answer a few questions. I say to the noble Baroness, Lady Brinton, that I am sorry if I did not quite get to the interface with the Health and Care Bill. I will try to get a bit further but I am afraid I do not think I can go as far as she wants. All public authorities will be covered by the Procurement Bill in relation to health except those that will come under the regulations made under Clause 108. There should therefore be no gap in procurement regulations between the two. On health issues, regarding entities under health procurement, further work is going on at the moment in both departments, and we will come back to the noble Baroness as things move forward.
I turn to the amendments in this group. I note that other non-government amendments have been tabled, some of which address prompt payment and relate to SMEs but are also about social values, which have been quite a big part of this debate. Those will be covered at a later stage so I will not cover them; my noble friend the Minister will do so, some of them probably in the next group.
Amendment 38 would impact Clause 10, Amendments 97 and 100 would impact Clause 18 and Amendments 290 and 295 would impact Clause 54. Each of these amendments has been proposed by my noble friend Lady Neville-Rolfe, and I thank her for them. They would enable contracting authorities to exempt businesses, based on their size and turnover, from certain obligations set out in the Bill. Public sector procurers are required to determine the most advantageous offer through fair and open competition, and the Bill sets out that the buyer should contract with the bidder offering the most advantageous tender. We want to focus on getting the best value for the taxpayer by opening competition to all businesses of all sizes.
That is not to say that we are not keen to open public procurement, as I have said, to more SMEs; in fact, quite the opposite. First, we are committed to ensuring that the new procurement regime is simpler, quicker and cheaper for suppliers, which particularly benefits SMEs and social enterprises, ensuring lower barriers for entry to the market. Secondly, bidders will have to submit their core credentials only once to a single platform, making it easier, especially for SMEs, to bid for any public contract. The single transparency platform means that suppliers will be able to seek all opportunities, including a pipeline of future opportunities, in one place.
Thirdly, the Bill will ensure that prompt payment flows down the supply chain, making it more attractive for SMEs to get involved. Fourthly, contracts below the threshold listed in Schedule 1 can be reserved for suppliers based in the UK and/or small suppliers where it is good value for money to do so. Thus, the Bill represents good news for SMEs.
While we share the noble Baroness’s keenness to support SMEs in getting access to public procurements, we cannot do that by simply exempting them from procurement rules altogether, as her amendment to Clause 10 would do.
Amendment 50, also proposed by my noble friend Lady Neville-Rolfe, would require the procurement objectives in Clause 11 to make explicit the obligation on contracting authorities to have regard to the importance of keeping the burden on SMEs associated with tendering as low as possible. While we support this goal, there are risks in legislating in such stark terms. Contracting authorities must keep an open and fair playing field for all bidders. While we take steps which facilitate access, in particular for SMEs, it would not be wise to encourage the procurement community to believe that some form of active discrimination in favour of SMEs was appropriate.
That said, we have taken significant actions to level the playing field for SMEs without actively discriminating. Some of these I have mentioned, but I add that we have reformed commercial tools, such as frameworks. This will allow longer-term open frameworks, which will be reopened for new suppliers to join at set points, so SMEs are not locked out, and the new concept of dynamic markets—
Lord Scriven (LD)
Does the Minister accept the feeling around the Committee that, while we accept that things are moving forward, they are not strong enough? On the framework issue, one of the provisions in the Bill is that a fee has to be paid every time is contract is let. That does not help. Once you get into the detail, there are barriers to the progression of SMEs. What we are not asking for is a system which supports only SMEs; we are asking for a more risk-based assessment, based on what the risk is of the procurement amount, to release some of the normal procedures and bureaucracy that is required to give them a view. One of the issues that the Minister can perhaps look at between now and Report is a more risk-based approach to public sector procurement rather than a one-size-fits-all which, on the whole, the Bill still is.
Baroness Scott of Bybrook (Con)
I agree with a lot of that and I think it is something that we will discuss further. I thank the noble Lord for his ideas.
This will allow a longer-term open framework which will be reopened for new suppliers to join at set points, so SMEs are not locked out, and the new concept of dynamic markets which, like the current dynamic purchasing system, will remain always open to new suppliers. All these will provide greater opportunity for SMEs to join and win work.
Amendment 75B, tabled by the noble Baroness, Lady Thornton, would insert a clause into the Bill on market stewardship, meaning contracting authorities must consider the impact of procurement on small and medium-sized businesses, social enterprises and voluntary organisations. They would also need to consider how to improve the diversity of their supply chains including, but not limited to, these organisations.
I have previously touched on how the Bill benefits SMEs and would also like to highlight Clauses 32 and 33 to your Lordships, which enable contracting authorities to reserve certain contracts to supported employment providers and public service mutuals. We indeed recognise the importance of diverse supply chains and the benefits to the delivery of public services, and that is why in Clause 63 we require that 30-day payment terms will apply throughout the public sector supply chain, regardless of whether they are written into the contract, ensuring SMEs and other organisations receive prompt payments and the increased liquidity they bring.
Amendment 86, tabled by my noble friend Lord Lansley, would make explicit obligations on contracting authorities to consider small and medium-sized enterprises in preliminary market engagement. Contracting authorities are able, under the new legislation, to design their preliminary market engagement in a way which gives consideration to SMEs, but too many obligations on contracting authorities will discourage them conducting this engagement. I therefore suggest this amendment is not needed.
My noble friend Lady Neville-Rolfe’s Amendment 534 proposes a new clause that seeks to make legislation obliging a Minister of the Crown to carry out regular reviews to consider the Act’s performance in relation to the award of contracts to SMEs. I draw to noble Lords’ attention that the Government do capture SME spend data for those SMEs contracting either directly or in government supply chains.
Baroness Neville-Rolfe (Con)
My Lords, I start by thanking everyone in this Room for taking part and for the widespread support for my amendment and for doing something in the Bill for small business.
I was sorry to get such a disappointing reply from the Minister. She repeated the positives that I had already identified and given the Government due credit for, but she did not offer a lot else. She said all bidders must be treated in the same way; I think that is at the heart of the problem. We have to find some way to help SMEs. The Minister mentioned the billions going to SMEs, but that is compared to the £300 billion opportunity. There is a huge opportunity to grow the SME and social enterprise sector in the procurement area and to do it in a way that represents value for money—I am coming from that angle as well.
I also thank my noble friend Lady Noakes, who made a very strong case for a regular, five-yearly review of procurement to be written into the Bill. I remember that we did this in the intellectual property area and it has worked well. She rightly fears that SMEs will be discouraged by the new laws and SIs—there are so many SIs coming through—and that that might heighten the barriers to entry that deter small business from bidding. This was reinforced very strongly by the noble Lords, Lord Wigley, Lord Aberdare and Lord Coaker. The killer line from my noble friend Lady Noakes—I am going to embarrass her—was like something from Oscar Wilde: “SMEs find engaging with public procurement daunting.” It is wonderfully understated, but it summarises the issue beautifully.
My noble friend also persuasively presented the capacity building amendment from the noble Lord, Lord Lansley, and attracted support for that from across the Committee, both in relation to SMEs and social enterprise. I strongly agree that capacity building is the way to improve productivity in the economy, so it would be great if we could encourage it in some way or another.
We also heard about social value from the noble Baronesses, Lady Thornton and Lady Bennett. The noble Baroness, Lady Bennett, reminded us that care is covered by this Bill, but I do not agree that you cannot have improved productivity in care. I have noticed how, as in Bupa homes, the distribution of medicines to old people is much improved as a result of private sector innovation in trying to make sure that they are not taking the wrong pills and that the nurses are giving them the right ones. There have been other improvements in the care area, with wheelchairs and so on, as well as the use of internet-enabled things, which can be really helpful. It was great that the noble Baroness reminded us of care even though, as usual, we come at this from slightly different angles. As the noble Lord, Lord Scriven, said, productivity and quality actually go hand in hand with good procurement in care.
It is clear that we need to do more for SMEs and social enterprise, and—not or—we need to put a review clause into the Bill or be assured that there will be a review of it, given its novelty. I very much appreciate the offer of a meeting with those of us who are interested in moving this forward with the Government during the Recess, before we come back to look at this gargantuan Bill again, presumably in October. With the leave of the Committee, I would like to withdraw my amendment.
Lord Wallace of Saltaire
“Procurement requirements
In carrying out a procurement, a contracting authority must have regard to—(a) the target to reduce the net UK carbon account;(b) the ethical and human rights record of the supplier;(c) the need to maintain data security within the digital platform; and(d) the necessity for transparency and openness.”Member’s explanatory statement
This amendment specifies a number of overarching requirements that a contracting authority must have regard to when carrying out a procurement.
Lord Wallace of Saltaire (LD)
My Lords, all the amendments in this group—which, the Minister will note, come from all the various groups and tendencies in the Lords, including the Conservatives—are concerned to spell out in the Bill in rather more detail the social and economic objectives that public procurement should promote. My name is on Amendments 45 and 59, but there is language in other amendments that I support and which I hope the Minister will accept. The concepts of “public benefit” and “social value” are broad and non-specific. We are asking for rather more spelling out of the kinds of benefit and value that are intended, in order to guide contractors and suppliers as well as Ministers and officials.
All of us on the Committee are conscious of the significant impact that the principles of public procurement can have on the broader UK economy and society. I am struck by the degree of consensus in the Committee around a number of issues. If I may say so, I have never before been so painfully aware of how much I am agreeing with the noble Baroness, Lady Noakes, and perhaps I shall ask to sign one of her amendments on Report. That shows a sense of what we are trying to do constructively with the Bill, and let us hope that we continue. I hope the Minister is indeed in a receptive and co-operative mood and will be willing to consult members of this Committee before Report and to return with agreed language that responds to these concerns.
I appreciate that there are some on the hard right of the Conservative Party who do not believe in moving towards net zero or in the concept of social value. Conservative Ministers and Liberal Democrat Ministers co-operated in producing the social value Act of 2012, which remains in force and is highly relevant to the Bill. With respect, there are a minority within the Minister’s own party and a smaller minority within the wider public who resist this. The Minister himself is a self-declared one-nation Tory committed to conserving the nation’s shared values and long-term interests, so let us put some of these shared principles and objectives in the Bill.
Amendment 45 would insert the target of reducing the UK’s net carbon amount. The Minister will note the modesty of that objective since it does not even mention net zero, and indeed the noble Baroness, Lady Bennett, will probably disapprove of my modesty. The ethical and human rights record of suppliers is a live public issue across the parties that will not go away, as the Minister must be aware.
Amendment 59 spells out what is a definition of public benefit that, again, I hope the Minister will agree with and shares. Will he now accept that such a definition ought to be in the Bill?
Baroness Thornton (Lab)
My Lords, I shall speak to Amendment 47A in my name and Amendment 52. Basically, we believe that Clause 11 should include specific references to maximising social value as something that a contracting authority must have regard to in line with the social value Act and the national procurement policy strategy. The question to which I would appreciate an answer from the Minister is: why is that not included? In my previous contribution, I went through all the different policy streams—including levelling up—that lead us to the conclusion that social value and support for social enterprises and social businesses are a good, and they are good in procurement. It is therefore a mystery why this has been left out of the Bill. I hope the Minister will agree with that and, if not, explain to me why it is not the case. I hope he will support these amendments and add them in. They are modest amendments, really.
Lord Hunt of Kings Heath (Lab)
My Lords, I have Amendment 48, but I very much endorse my noble friend Lady Thornton’s remarks on this subject. In the group before last, it was interesting to hear the Minister talk about what I thought was a hierarchy in terms of the balance to be drawn in making judgments about procurement. He put value for money at the highest level. My major problem with that is that my experience in the public sector, mainly in the health service but in other worlds too, is that that is translated into the lowest price.
Lord Hunt of Kings Heath (Lab)
No, the noble Lord, Lord True, was interpreting what my noble friend said.
Lord Hunt of Kings Heath (Lab)
I could get into trouble quoting the noble and learned Lord, Lord Judge, to himself on constitutional issues in the Schools Bill, but surely I can quote the noble Lord, Lord True, to himself. He interpreted my noble friend’s words of wisdom as a dangerous attempt by my party—the Labour Party—to constrain individual private companies that sought to provide public services to conform to the will of whatever its wishes in power might be. If only.
I think my noble friend was really saying—no doubt he will come back if he thinks I have got it wrong—that this Bill presents us with a unique opportunity to influence a huge public spend in the direction of policies that we wish to see implemented. In today’s environment, climate change and sustainability are essential. One way or another, this Bill will leave this House with some form of words on that in it, and I doubt very much whether the Government will be able to take them out, bearing in mind that this is a Lords starter.
Baroness Worthington (CB)
My Lords, I rise to speak to Amendments 49 and 58 in this group referring to Clause 11 on procurement objectives. I am very grateful for the support of the noble Baronesses, Lady Verma, Lady Young of Old Scone and Lady Parminter, on these amendments.
We have just had a very interesting debate about the need to support small and medium-sized businesses as a more explicit goal within the Bill. I am here on this group of amendments to make the case for more explicit support for future generations. We have a climate crisis on our hands. We are potentially facing temperatures of 43 degrees this weekend. This is not a pleasant situation to be in; it is going to cause people to die. This is not something we should turn away from, and we must future-proof every single piece of legislation that passes through the House during our watch. This Bill offers an opportunity for us to do just that. The Government have not introduced anything in the Bill that goes beyond guidance other than simply the words “public benefit”. This needs to be given much more clarity, and my amendments seek to do that.
It was stated at Second Reading, and I apologise for being unable to attend it, that we need to improve the existing drafting. Therefore, I am looking forward to hearing from the Minister and, I hope, to meeting the Minister as I have to echo the words of the noble Lord, Lord Hunt. It feels that there is a huge amount of cross-party support for being clearer in this Bill about our intentions and that somehow or other we need to see something more explicit in the Bill, so a meeting on this topic would be most welcome.
Amendment 49 seeks to add more specific targets and a list of matters that the contracting authority must have to regard to including the importance of contributing to targets on our carbon budgets, the natural environment, air quality and other matters. I do not think anybody here is wedded to precise wording, and a number of noble Lords have come forward with different wordings in this group. Obviously, this is not an amendment I would seek to make final, but there must be a form of wording we could all agree on.
We have talked at length about the opportunity the £300 billion per year spent on government procurement offers in terms of driving forward the agenda we wish to see and increasing Britain’s productivity, innovation and the diversity of the companies able to engage in the transition we need to see. Business as usual is no longer tenable. We need to drive change, and we know that procurement is a hugely important lever for doing that.
I asked some questions about precisely how much procurement is responsible for driving global carbon emissions, but I am told that that information cannot be given, so we have no way of knowing how well aligned government policy is to the achievement of these broader goal, which is regrettable. We want to see more clarity in the Bill so that we can, over time, know whether procurement is delivering on these multiple goals.
I am sure there will be responses from the Minister that call into question the sense of these amendments and suggest that somehow it would distort the hierarchy. I reassure the Minister that that is not what we are seeking to do. We are not trying to tie the hands but are simply trying to provide the clarity and direction for such an important lever. I am sure we will be told that the next clause on the national procurement policy statement should be relied upon to deliver this clarity. Yet—and we will debate this—there is not a requirement on the Government to produce a statement; it is simply a “may”. Also, there is no fixed timetable I can see about when that will be produced so, really, we have nothing. There are no reassurances at all that this very poorly defined concept of public benefit will be given more flesh and more detail.
There is a precedent for putting something in the Bill. I highlight Section 9 of the Health and Care Act 2022, on which this amendment is modelled, which amended the National Health Service Act 2006 to give similar duties to the NHS to have regard to climate change including in relation to procurement, so it is not incoherent or without precedent to put this in the Bill. It would be more consistent to have it in legislation. If we do not do it, people will say that it was done in the NHS Act and ask why it was not done in the broader framework Bill that came subsequently. There is well-established similar terminology in the Financial Services Act 2001 and the Skills and Post-16 Education Act 2022, so we must be consistent about the future-proofing of Bills to ensure that we are sending the right signals and bringing about this transition.
I hope I have explained why I think this approach should be taken. I highlight that public benefit being undefined is a problem, which brings me to Amendment 58. Of course it is legitimate for a Government not to seek to define every word in legislation, and some legislation can be unambiguously understood when the words have the ordinary meaning that you would find in a dictionary. The trouble with not defining a term that needs to be understood by all and for that meaning to be as consistently understood as it can be is that it will introduce a level of subjectivity and a lack of clarity. In a search through existing legislation, I have found no use or definition of public benefit, except in relation to charities law, but that cannot easily be read across into procurement decisions. Amendment 58 seeks to remedy that and to define it more clearly. It would include local priority outcomes as well as national ones.
I am sure the Minister will say that the understanding of public benefit will evolve over time and therefore a degree of a flexibility is required, but that is why we have selected only the issues which are enduring and which will be playing out of the long term. We have chosen three national and local priorities. Of course, that does not limit other priorities, but these will be enduring outcomes that will be with us for the long haul and will not change. The need to address the issues that we have highlighted here will get only greater. I think this amendment should be supported; I am not particularly wedded to this way of doing it, but there needs to be something in the Bill to provide the clarity that enables us to future-proof it. We need to take the current crisis and the responsibility we carry for future generations seriously in all legislation we consider, and I therefore look forward to the Minister’s response.
Baroness Noakes (Con)
My Lords, this group includes my noble friend Lord Lansley’s Amendment 53. Like some of the other amendments in this group, it is defines “public benefit” in Clause 11, which the noble Baroness, Lady Worthington, has just covered in her speech. My noble friend Lord Lansley regards it as important that there is a definition in the Bill. Public benefit is a very elastic term, which is good in some ways because it allows us to future-proof the use of the language for changes in circumstances, but there should be more guidance in the Bill on the kinds of things that are intended to be encompassed by it.
Clause 11 should be the guiding star for procurement professionals and we owe it to them to make it as clear as possible what is expected from them in applying Clause 11 in their work. I think most people would understand that public benefit includes economic and environment benefits and social value, which is included in my noble friend’s definition, but my noble friend is concerned that innovation and levelling up, which he also includes in his definition, should be mentioned explicitly. They are important topics and central to government policy, and they might not be obvious to procurement officials as coming within the term public benefit. Omitting them from the Bill raises questions about how important the Government think they are. The Minister may well say it will all turn up in the national procurement policy statement, but that is not the same thing. If something is important, it can easily bear repetition.
Other amendments in this group—Amendments 58, to which the noble Baroness, Lady Worthington, has spoken, and 59—also seek to define public benefit. They reference innovation but both contain rather long lists. One problem with rather long lists is that they tend to raise questions about what is not included in them, which is why drafting a long list is often a dangerous approach to trying to explain what something means in statute.
Baroness Parminter (LD)
My Lords, I have added my name to the two amendments tabled by the noble Baroness, Lady Worthington, which she so ably introduced. I am also speaking to Amendment 59A by my noble friend Lord Purvis of Tweed, who, because of the scheduling announced today, cannot be here.
I support all the amendments in this group, which takes us on to the issue of whether the Bill should bring forward public benefit. If we are to be put into camps then I am certainly in the camp that wants public procurement to be developing social values. Clearly the Minister will argue with us on that, but what I do not think he can argue with is that on some of the issues that we have been talking about in relation to public benefit—I cite specifically net zero and biodiversity loss, which the amendments refer to—are not just issues of social value; they are the Government’s stated objectives. They have legislative targets to meet for both net zero and biodiversity. So the Minister can argue with us if he does not want to use public procurement to deliver social value, which I firmly believe it should, but he cannot argue with the fact that, if his Government have targets, they need to deliver, and they should use every means at their disposal to do so.
I shall give an example of why I say that. The Environment and Climate Change Committee has been holding evidence sessions over the last three months on mobilising behaviour change. We have received evidence from academics, companies, schoolchildren and indeed everyone about how to change behaviour. The Climate Change Committee has said that about 60% of his Government’s targets are going to need people to change their behaviour. We have learned that you can make people change by giving them a bit more money through fiscal incentives or disincentives, and you can change regulations so that companies can or cannot produce certain products, but a critical factor is that we are social animals that want to see what the social norms are. We do not just live our lives in our own little house; we live our lives in schools and hospitals, and if we see menus in those places that may not reflect net-zero values, or we go into council buildings and see that they are not dealing with energy efficiency, that encourages us to think: “Why should I bother changing my lifestyle?”
Unless the Government use every opportunity at their disposal, one of which is procurement, they are not going to meet their own targets. So I argue that even if the Minister differs—as I think he would—from those of us who believe that procurement should deliver social values, it is still the case that the Government cannot meet their own targets unless they use the Bill to maximum effect, and that means putting in it the commitments referred to in this group of amendments. As the noble Baroness, Lady Worthington, said, no one is precious about the wording; it is about the intent.
I was asked by the noble Baroness, Lady Verma, who had to leave early, to express her support for these amendments and to remind the Minister that he mentioned that there would be an opportunity for discussions with colleagues on these matters before Report.
As I said, I will introduce on his behalf—although nowhere near as ably as he would—my noble friend Lord Purvis’s probing amendment to pick up the issue of the use of Fairtrade products in procurement contracts. Here, to be fair, there has been progress in recent years: many central government departments use Fairtrade products, we see many local authorities using Fairtrade products, especially in catering, and indeed even here on the parliamentary estate we use Fairtrade products. So I am not saying there has not been progress in the absence of Bills such as this, but there is much more that can be done. My noble friend’s probing amendment aims to highlight the importance of fair trade in this arena and make sure that the Bill does all that it can to further that important agenda.
Baroness Bennett of Manor Castle (GP)
My Lords, I rise in a very pleasing position for a Green: in a group of amendments addressing climate, biodiversity, social justice and indeed fair trade, to say that almost everything has been said, just not by me.
I am acutely aware of the hour so I am going to be very brief; I seek to add only a couple of points. Amendment 49 in the name of the noble Baroness, Lady Worthington, and addressed by the noble Baroness, Lady Parminter, has full cross-party support; I would have attached my name to it had there been space. It is clearly a crucial amendment.
We have to contrast this Bill with the UK Infrastructure Bank Bill, which I was recently in, half of which is entirely directed at something that is missing in this Bill. I was thinking of the tireless work of the other noble Baroness, Lady Hayman, the one who is not in the Room today, who has worked so hard. I can go back to my first ever time in Committee in this Room almost three years ago now, when we were fighting to get a climate provision into the Pensions Bill. We thought, “One day we’ll get to the stage where we won’t have to fight to get these into every Bill when they should clearly be there.” Sadly, it is clear that, despite the UK Infrastructure Bank Bill, we are not there yet.
The points made by the noble Lord, Lord Hunt of Kings Heath, about the most recent report from the Climate Change Committee were hugely powerful. We have targets but not policies. How are we going to get those policies unless we have them written explicitly into Bills such as this? I commend the noble Lord’s Amendment 48, which I would have signed had I not missed it, which contains important wording about “cultural well-being”, something that is far too often missed out. The noble Baroness, Lady Parminter, made a point about culture in the broadest sense. We need to give people a rich life, one that may have less physical stuff in it but is of far better quality. The cultural point really starts to address that, as well as addressing public health and consumption issues.
I am aware of the time so I am going to be really restrained, and I hope I get some brownie points for that. I shall sit down.
House of Lords
Retirement of a Member: Lord Harrison
The Lord Speaker (Lord McFall of Alcluith)
My Lords, I should like to notify the House of the retirement, with effect from today, of the noble Lord, Lord Harrison, pursuant to Section 1 of the House of Lords Reform Act 2014. On behalf of the House, I thank the noble Lord for his much-valued service to the House.
Information Commissioner’s Office Report
(1 year, 9 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Thornton
To ask Her Majesty’s Government what steps they will take to implement the recommendations of the Information Commissioner’s Office report Who’s Under Investigation: The processing of victims’ personal data in rape and serious sexual offence investigations, published on 31 May.
The Minister of State, Home Office (Baroness Williams of Trafford) (Con)
My Lords, the Government are committed to improving protections for victims of rape, so that they are not subjected to unnecessary and intrusive requests for information. We have changed the law to minimise requests for digital information, and we are consulting on new statutory duties to ensure that police requests for third-party material are both necessary and proportionate. We are working closely with the police and other criminal justice partners to consider the ICO recommendations.
Baroness Thornton (Lab)
I thank the Minister for that Answer. It is hardly surprising that rape prosecutions fell by nearly 60% in four years, even though the number of reports to the police increased, and that the proportion of rape complainants dropping out of cases has risen from 25% to 43% over the last five years. It must be partly due to the fact that, when someone summons up the courage to make a complaint about rape, they are asked to sign a form agreeing access to any information that the police or CPS might care to go fishing for—counselling, school reports and, of course, social media. Does the Minister care to confirm whether, if a rape victim seeks support and rape counselling during the period between reporting the rape and the case coming to court, the police may also access that information if they choose? As the ICO put it, “If you don’t comply, we will come back with an enforcement hat on”. What is the timescale for the change?
Baroness Williams of Trafford (Con)
That point about “If you don’t comply” is absolutely the opposite of what the Home Office, the police and the CPS’s approach will be. The aim is to encourage victims through a very clear process on whether to hand over digital information. Our aim is to have that processed within 24 hours, because it is not right that someone feels compelled to hand over their phone or feels that the prosecution will not go accordingly if they fail to do so.
Lord Paddick (LD)
My Lords, yet again it appears that the law, and the rules set by the police and the CPS restricting access to rape victims’ sensitive personal information, are not making a practical difference. Is this not a reflection of a culture in the police, the CPS and the courts that does not treat women fairly? What will the Government do to address this?
Baroness Williams of Trafford (Con)
I cannot disagree with the noble Lord that the rape review and the things we are doing for victims now are long overdue, and that there has been a culture along the chain of letting women down. Indeed, we should be making sure, and we are, that both referrals and prosecutions go forward.
Lord Morris of Aberavon (Lab)
My Lords, concern about non-disclosure of evidence was an issue a long time ago, when I was Attorney-General. The balance has swung the other way, to excessive intrusion. As defence counsel in many rape cases, there is an even more fundamental problem in ensuring that justice is done, as juries are reluctant to convict where the defence is consent. Will the Attorney-General lean on the DPP to publish statistics distinguishing consent cases from stranger-rapes, so that effective prosecutions can succeed in the former?
Baroness Williams of Trafford (Con)
I think that is the whole point of the criminal justice system: that evidence that comes forward distinguishes between consent and non-consent.
Baroness Chakrabarti (Lab)
My Lords, can the Minister readdress my noble friend’s question about counselling? It is a real concern of women that after they have made a report, they should be able to get some help—some therapy or counselling—in the considerable period before trial. The fear that that might be exposed to a fishing expedition will affect attrition rates.
Baroness Williams of Trafford (Con)
I do apologise: I only answered one part of the noble Baroness’s question; I am glad that the noble Baroness, Lady Chakrabarti, has come forward. I do not know if she is aware of Operation Soteria, a process through which the victim would be supported through the system from end to end, notwithstanding the need to secure justice and the right outcome based on evidence. I believe that five forces were initially part of the pilot. There are now 14 more, so I hope this will be a way of following due process and being consistent nationally, and a model for the future.
Baroness Uddin (Non-Afl)
My Lords, the Minister will be well aware, as is widely reported in the media, of children not being believed by police officers when they report rape, including in places such as Rotherham. Does she believe there are some significant changes in that pattern of behaviour by police officers in particular forces? On the question from the noble Baroness, Lady Chakrabarti, about support for women and children, organisations that offer such support, particularly those through which women support women, have been decimated. Does she believe that adequate resources are available through the Government and local authorities?
Baroness Williams of Trafford (Con)
On funding, our VAWG strategy comes with a significant amount of funding. On children and Rotherham, I could not agree more with the noble Baroness. In fact, I can think of other parts of the country where the culture makes some of its leaders completely blind to what is going on under their noses.
Baroness Burt of Solihull (LD)
My Lords, the Minister has already confirmed that she does not believe that the price for justice for rape victims in this country should be that their whole personal life is laid bare. It is causing victims to walk away before their case even reaches court, making them feel doubly victimised. The recommendations in this report are very modest to say the least. Why can the chief constables and the CPOs not just get on with implementing them now? Do they seriously need to be officially told to work together to implement consistent and proportionate treatment of victims—or will we just stand by as our already dismal prosecution rates get even worse?
Baroness Williams of Trafford (Con)
One thing I feel a bit disappointed about is that the report does not reflect some of the powers that I know the noble Baroness was instrumental in bringing forward within the PCSC Act. They will both help to protect privacy and, I hope, improve consistency across the piece.
Baroness Fookes (Con)
My Lords, no one is more concerned than I am that people who have been the victims of rape should be dealt with sensitively and properly, but could I put a point which may not prove popular here? Surely, there is always the possibility in the system that someone might make a malicious charge. It is therefore important to have sufficient evidence and if all, or a lot, of that evidence is closed off it could again cause problems and injustice for somebody else.
Baroness Williams of Trafford (Con)
I totally agree with my noble friend and refer her to the comments I made earlier. Nevertheless, it is also important in that whole balancing act that people do not feel they have to hand over their mobile phones or that their prosecution will not go forward if they do not.
Baroness Bryan of Partick (Lab)
My Lords, other victims of crime are not expected to hand over such sensitive information as in the case of rape; that is what is unfair. Actually, the victim in such cases can be asked to divulge far more information than the person accused. I hope the Minister can confirm that women should not expect to have personal information about the impact that attack has had on them shared with the defendant—the person who has raped them.
Baroness Williams of Trafford (Con)
I hope the noble Baroness will agree that I have made that point throughout my answers. It is all about the balance between justice being served and evidence being brought forward but victims, in particular, not feeling coerced into having to do it.
Baroness Berridge (Con)
My Lords, it is clear that things are complex in relation to charges of rape and the information you may or may not have to hand over. Obviously, at that moment somebody has had an enormous trauma, whether it turns out to be a criminal offence or not. Can my noble friend please outline what awareness and publicity the department is providing to make sure that women generally are aware of what you can and cannot be asked at that moment, before they are in that unfortunate situation?
Baroness Williams of Trafford (Con)
What we are working towards and hoping to implement by the beginning of the next Parliament is that the process and the regulations around it are absolutely clear about what is expected of the police, and that there is training to back this up on what people will be asked to hand over. There is an aim towards it being for not more than 24 hours because for many people, it is not only their phone but their entire life.
Financial Inclusion
Lord Holmes of Richmond
To ask Her Majesty’s Government what steps they are taking to improve financial inclusion in the United Kingdom.
Baroness Penn (Con)
The Government want to ensure that people, regardless of their background or income, have access to useful, affordable financial products and services. To tackle financial exclusion, the Government convene the Financial Inclusion Policy Forum, which brings together Ministers, regulators, industry and the third sector to provide leadership and promote collaboration. Since 2019, the Government have allocated £100 million of dormant assets funding to support Fair4All Finance’s work to improve access to affordable credit.
Lord Holmes of Richmond (Con)
My Lords, does my noble friend agree that financial inclusion brings not just economic benefits to the individual but economic, social and psychological benefits to all of us? To that end, does she agree that it is high time that we revisit the question of a “have regard to” financial inclusion duty for the FCA?
Baroness Penn (Con)
My Lords, I absolutely agree with the sentiments expressed by my noble friend about the importance of financial inclusion. The Government recognise that there has been strong interest in the proposal for the FCA to be given a separate “have regard to” financial inclusion duty. However, at present the Government’s position remains that the FCA’s existing objectives and regulatory principles are already well aligned with the objectives of financial inclusion. We do not believe that a separate “have regard to” financial inclusion duty would necessarily lead to a different approach or tangible improvements over the current arrangements with regard to the aim that we all want to see: greater financial inclusion and less exclusion.
Lord Watts (Lab)
My Lords, the Government say that they are in favour of this, but they are watching as banks close in many communities. Many poor areas have no bank, at a time when those banks have seen soaring profits. When are the Government going to act to do something about this, to make sure that people have access to banking services?
Baroness Penn (Con)
My Lords, there are existing obligations, which are enforced by the Payment Systems Regulator, but noble Lords will also know that the Government are committed to legislating to protect access to cash. Those measures will be included in the forthcoming financial services Bill.
Lord Howell of Guildford (Con)
My Lords, does tangible improvement include wider social ownership of assets—wider ownership of popular capitalism? At the moment, capitalism is not very popular at all. So maybe there should be some reinforcements to spread the benefits of capital, beyond those who benefit anyway because they have capital in the first place?
Baroness Penn (Con)
I agree with the sentiments expressed by my noble friend. Access to capital is something that should be offered to the widest range of people so that they can benefit from it.
Lord Sikka (Lab)
My Lords, the biggest barriers to financial inclusion are poverty and regressive taxation which robs people of disposable income. Some 14.5 million people already live in poverty. The poorest 10% of households pay 47.6% of their income in direct and indirect taxes, compared with 33.5% by the richest 10%. Can the Minister explain how and why the Government have created this shameful position of exclusion?
Baroness Penn (Con)
I say to the noble Lord that the £37 billion of financial support offered to people this year to support them with the high costs of living has been targeted at those on the lowest incomes and those least able to pay. So the Government have taken progressive measures to help protect people against rising costs of living.
Lord Bird (CB)
Does the Minister agree that if you fail 35% of our children at school, then you are going to have a lot of financial exclusion?
Baroness Penn (Con)
My Lords, I agree that school is a very important place to start for people’s life chances, and also their financial understanding. I am pleased to say that under this Government, the achievement gap for children at school between those in the poorest households and those in the wealthiest households has narrowed. That is something that we need to continue to make progress on.
Baroness Tyler of Enfield (LD)
My Lords, pursuing the point on poverty that we have just heard about, is the Minister aware that the poverty premium—the extra costs that people in poverty or on low incomes pay for essential products or services—costs the average low-income household some £430 a year? That is the equivalent to some 10 weeks’ grocery bills. Could the Minister explain why she does not think that giving the Financial Conduct Authority specific powers to tackle financial inclusion, including the poverty premium, is a good idea? I just do not understand it.
Baroness Penn (Con)
My Lords, I am aware of the poverty premium: it can exist in different ways in different sectors. There is already work under way to tackle that poverty premium; for example, the other week in Questions I spoke about work in the insurance sector to ensure that those with pre-existing conditions or those who are older can access products. We are continuing to work through the Financial Inclusion Policy Forum to make sure that things such as the poverty premium are tackled.
Lord Knight of Weymouth (Lab)
My Lords, according to evidence from the National Centre for Financial Education, financial habits are formed at around the age of seven. It also says that only 20% of primary schoolchildren are receiving financial education, despite personal, social, health and economic education being a compulsory subject—it is probably too wide for many teachers to cover everything that is required. What is the Treasury doing to work with the Department for Education to ensure that every child gets decent financial education from primary school upwards?
Baroness Penn (Con)
Financial education is taught in schools through a number of different avenues, including the maths curriculum, citizenship education and PSHE. The Government are well aware of the importance of this topic and continue to work with the Department for Education to make sure that schools and teachers have the resources to ensure that children can learn about it.
Baroness Bull (CB)
My Lords, following on from the question asked by the noble Baroness, Lady Tyler, about the poverty premium, which sees those who can least afford it being forced to pay more for essential goods and services, what are the Government doing to work with energy providers to prevent them charging more for electricity that is accessed via a pre-payment meter?
Baroness Penn (Con)
My Lords, pre-payment meter customers are covered by the price cap, so they receive protection from that, but they pay a higher rate, which Ofgem believes is necessary to reflect higher operational costs and risks. However, a robust set of rules is in place to protect pre-payment meter customers, ensuring that, if suppliers identify that they are in a vulnerable situation, including where they are self-connecting or self-rationing their supply, they must be offered additional support credit. In doing so, suppliers must also consider people’s ability to pay back that credit. So a robust set of support is available to people in that situation.
Lord Forsyth of Drumlean (Con)
My Lords, although the Government have done well in reducing the taper rate, is it not still the case that people in work on universal credit are paying an effective marginal tax rate of 55%, which is 10% more than the highest-paid people in the country? So, while we are talking about tax cuts, as we appear to be doing in the Conservative Party at the moment, would it not be a good idea to reduce the effective marginal tax rate of those who are poorest in order to encourage people back into work and to encourage those who are in work to value their contribution to society?
Baroness Penn (Con)
I agree with my noble friend’s sentiments. As he pointed out, a cut to the taper rate of universal credit is essentially a tax cut for those on the lowest wages, and it makes sure that the incentives are aligned for them to take on more work and bring home more money. So I totally agree with him, but I cannot speculate on any future policies in that direction.
Lord Tunnicliffe (Lab)
My Lords, I congratulate the noble Lord, Lord Holmes of Richmond, on his tenacity on this subject, which has made this fact stand out to me: 22% of adults have less than £100 in savings. They are not just unlucky; they are victims of the policies of firms, ranging from car parks to banks, to reduce costs and hence make more profit. We need a comprehensive and holistic approach, and the Government are going some way down that road, but the Financial Inclusion Commission wrote to Mr John Glen, setting out a comprehensive way forward, including the concept of a “have regard” duty on the FCA. Is that letter being responded to, and how does it fit in with the Government’s general approach?
Baroness Penn (Con)
My Lords, I am sure that that letter will be responded to, although I take this opportunity to pay tribute to the work of my honourable friend John Glen, to whom the letter was addressed, as Economic Secretary to the Treasury. He has done a huge amount in post to promote financial inclusion, and I reassure noble Lords that that work will continue. For example, the FCA has consulted on its new consumer duty. The noble Lord referenced those who do not have access to savings. Of course, the Government have the Help to Save programme to ensure that those who are on lower incomes get more support to save so that they have a financial buffer for when times are tough.
Broadcasting Sector White Paper
(1 year, 9 months ago)
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Baroness Bonham-Carter of Yarnbury
To ask Her Majesty’s Government how their white paper Up Next—the government’s vision for the broadcasting sector, published on 29 April, will support (1) original British content, and (2) the creative industries in the United Kingdom.
The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Lord Parkinson of Whitley Bay) (Con)
My Lords, as set out in the White Paper, the Government are taking action to support British broadcasters and our creative industries more widely. Among other things, we are supporting original British content by including it in a new and more focused public service remit for television. We will continue to support our highly skilled and innovative creative industries through world-leading creative sector tax reliefs and by protecting the UK’s hugely successful terms of trade regime.
Baroness Bonham-Carter of Yarnbury (LD)
I thank the Minister for his reply. Our PSBs are the backbone of our creative industries; they support original British content, talent, skills and exceptional journalism. Does the Minister agree that this will become increasingly difficult as BBC funding continues to be depleted, coupled with the commitment to sell Channel 4 off? This is something that the independent film, TV production and advertising sectors are against. Will the Minister accept that pursuing this is completely inappropriate, considering that it is deeply unpopular among the industry and the public—92% of those responding to the Government’s own consultation were against it—it is not a manifesto commitment, and the noble Lord is now a Minister in a caretaker Government? I see no mandate there.
Lord Parkinson of Whitley Bay (Con)
My Lords, it remains the policy of Her Majesty’s Government to ensure that our public service broadcasters are equipped for the decades ahead. As we have discussed, although we may disagree on this issue, I hope all noble Lords agree that Channel 4 needs the investment to be able to compete with the American streaming giants. I look forward to debating this more with noble Lords.
The BBC will continue to receive around £3.7 billion in annual public funding, which allows it to deliver its mission and public purposes.
Lord Fowler (CB)
My Lords, does the present political interregnum not give the Government the opportunity to think again about their whole broadcasting policy—and not just for television? If they are pushing ahead, will the Minister say what the Government’s future policy is on supporting BBC Radio, which still has a massive audience in this country—and abroad, for that matter—and today serves us well in its reports on the Ukraine conflict?
Lord Parkinson of Whitley Bay (Con)
The noble Lord is absolutely right about the vital role played by BBC Radio, including both national and local radio stations. I greatly enjoyed the programme last night celebrating the centenary of The Waste Land, which, like the BBC, turned 100 last year. That is the sort of distinctly British content that only the BBC can provide. I am sure that any incoming Prime Minister and Administration will see the same challenges that beset the BBC and Channel 4 in continuing to do their excellent work in an increasingly competitive field. They would want to address things such as the declining number of people paying the licence fee for the BBC and Channel 4’s reliance on live advertising to ensure that they continue to be sustainable in future.
Lord Vaizey of Didcot (Con)
I congratulate my noble friend the Minister on staying in his post; he is a sea of calm amid a frenzy of turbulence. I also congratulate the Government on the broadcasting White Paper; I know my noble friend the Minister had nothing to do with it, but it is a truly excellent piece of work. I thought I would be dramatically changing the subject, but the noble Lord, Lord Fowler, already raised the importance of radio. I point out that radio is one of our most successful creative industries, so can my noble friend the Minister update us on the progress of digital radio, where Britain leads the world?
Lord Parkinson of Whitley Bay (Con)
I am conscious that I still have many years to go to equal my noble friend’s length of tenure in office. The Government remain committed to legislating to give effect to the conclusions of the 2017 consultation on radio deregulation as soon as parliamentary time allows. We are also very keen to continue the co-operation between the BBC and both commercial and community radio, as the digital radio and audio review encouraged.
Lord Wigley (PC)
My Lords, the Minister will be aware that Wales has a vibrant television and film industry and that back-to-back films have been exported to over 100 countries. Given that ministerial responsibility for the creative arts in Wales is devolved but that for television is not, will he ensure that S4C is adequately funded to maximise the benefit that comes from this sector?
Lord Parkinson of Whitley Bay (Con)
The forthcoming media Bill will remove the current geographic broadcasting restrictions so that S4C can broaden its reach and offer its content on a range of new platforms throughout the UK and internationally. The recent funding settlement ensured that S4C was able to continue the work that is much valued in Wales and more widely.
The Lord Bishop of Chichester
My Lords, the Government’s Up Next policy paper claims that
“public service broadcasters … develop skills and talent, drive growth right across the creative industries”.
Will the Minister undertake to widen the Government’s vision for broadcasting to ensure that we also hear how skills and talents will be developed among pupils, students and young performers and designers when at present curriculum incentive and public investment are so often lacking in this area in our schools, colleges and universities?
Lord Parkinson of Whitley Bay (Con)
The right reverend Prelate points to an important issue in talking of skills. The British Film Institute has looked at this very carefully and published its film and high-end TV skills review at the end of last month, which we strongly welcome and look forward to discussing with the industry to see how it engages with the findings. The Government are doing their bit by, for instance, the new pilots of flexible apprenticeships and through our regular support of more than £2 million a year to the National Film and Television School.
Lord Bassam of Brighton (Lab)
My Lords, given that the current cost of living crisis is problematic across all sectors and can have a particularly adverse impact on the creative industries, which are sensitive to changes in economic conditions even without the continued fallout from the pandemic, what assessment has the department made of the impact of inflation and energy price increases across the whole sector, whether on huge production companies, small venues or the dedicated workforce that keeps the show on the road?
Lord Parkinson of Whitley Bay (Con)
We talk about inflation and energy bills with all the sectors and industries that the DCMS has the privilege of representing. I spoke about them this morning at the Imperial War Museum when I visited it. Our settlement for the BBC will, as I say, ensure that it continues to receive around £3.7 billion in annual public funding, which will allow it to deliver its mission and public purposes.
Viscount Colville of Culross (CB)
My Lords, I declare an interest as a television producer. The White Paper gives the public service broadcasters the right to move their content to less-watched digital channels. Can the Minister confirm that if Channel 4 is privatised, the new owners—and any other public service broadcaster—will have the right to move, say, “Channel 4 News” to a digital channel such as E4, or even a specially set up obscure digital channel?
Lord Parkinson of Whitley Bay (Con)
These details and more will be set out in the media Bill, which I look forward to debating with noble Lords. Giving Channel 4 the freedom to diversify its revenue streams as well as to address issues such as the intellectual property of the content it provides are important in making sure that it can continue to compete in the years to come.
Lord McNally (LD)
My Lords, very few people agree with the Minister’s analysis or the solutions he has put forward for either Channel 4 or the BBC. I put it to him again that it would be far better to withdraw this rather ill thought-out White Paper and allow the new Secretary of State coming into office in September to look at these matters afresh. If he does not think that there will be a new Secretary of State, would he like to take a bet on it?
Lord Parkinson of Whitley Bay (Con)
My Lords, it remains the policy of Her Majesty’s Government to take forward the work that went into the White Paper.
Baroness Fraser of Craigmaddie (Con)
My Lords, the independent television sector in Scotland is worth more than £300 million to our economy. I declare an interest as a board member of Creative Scotland. Why do a Conservative Government propose to undermine the successful and growing business model of entrepreneurial producers to create a bureaucratic, grant-giving, centrally directed levelling-up fund, and how would that fund support the regional production centres in any way more efficiently or successfully than the current ownership model of Channel 4?
Lord Parkinson of Whitley Bay (Con)
My noble friend points to the success of independent production companies that are privately owned. We want to ensure that Channel 4, whose remit was to promote that important sector 40 years ago, is able to continue to commission from those companies at a time when costs are going up because of the greater budgets and commissioning spending of the American streaming giants.
TRIPS Agreement: Vaccines
(1 year, 9 months ago)
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Lord Browne of Ladyton
To ask Her Majesty’s Government how, and to what extent, the temporary waiver of provisions of the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS), agreed at the World Trade Organization’s Ministerial Conference on 17 June, will expand access to current and new vaccines, given that it does not include a waiver of trade secrets.
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
My Lords, the consensus-based agreement reached at the WTO’s 12th ministerial conference streamlines compulsory licensing processes for developing countries to manufacture and export Covid-19 vaccines while preserving the incentives to innovation that the international IP system provides. We welcome that the agreement does not undermine the existing IP framework, which has been key to the effective response to the pandemic.
Lord Browne of Ladyton (Lab)
My Lords, regrettably, the Minister’s Answer—I do not blame him for this as he was probably following his brief—did not address the issue that, without the inclusion of a waiver of trade secrets, essential access to critical manufacturing know-how and clinical data, and therefore to the ability to manufacture new vaccines, is denied. Why is this our Government’s policy, and why did our negotiators, who spent 18 months resisting this waiver completely, try to weaken the text further by requesting the deletion of the reference to the possibility of expanding the agreement in TRIPS on Covid-19 to include therapeutics and diagnostics in six months’ time? Who on earth instructed them to do that?
Lord Callanan (Con)
I disagree. This is a very good agreement, and the Government have seen no evidence that IP rights, including the protection of undisclosed information or trade secrets, are any barrier to accessing treatments for Covid-19. The problem now is that we are seeing supply effectively outstrip demand, with the current level of vaccine production. There is evidence—reports of a South African Covid-19 vaccine plant being at risk of closure because it has no orders, and the Serum Institute of India halving production of AstraZeneca’s vaccine due to no new orders.
Baroness Sugg (Con)
My Lords, I hear what my noble friend the Minister says around supply now but, if all the vaccines that the G7 committed to had been donated in 2021, around 600,000 lives would have been saved. I would like to ask about the finances. The UK has delivered some of the vaccines that it committed to, but I understand from the British Medical Journal that the Government have charged donated vaccines to the aid budget at much more than they paid for them, which has meant that there have been further cuts to life-saving UK aid programmes. Why have the Government counted each vaccine as £3.26 of aid spending, despite paying just £2.30 for doses in the first place?
Lord Callanan (Con)
I thank my noble friend for the question. All vaccine dose donations will be reported as official development assistance and be included in the 0.5% total. Expenditure for 2021 has been published in the UK Statistics on International Development, and by the OECD Development Assistance Committee. In 2021, we donated 30.8 million doses of AstraZeneca, which we reported at cost in line with the DAC guidance.
Lord Hannay of Chiswick (CB)
My Lords, what are the Government doing to prepare for when the next global pandemic comes along, to make sure that there is better and more equitable distribution of vaccines to developing countries? If this is such a wonderful agreement, why were we the last people to accept it?
Lord Callanan (Con)
The noble Lord makes a very good point, of course. The best answer to future vaccine development is achieved by preserving the intellectual property system. It is a good, consensus-based agreement that all member states can go along with, and a good agreement for vaccine manufacturers and developing countries.
Lord Boateng (Lab)
My Lords, under the existing intellectual property system, as of June this year 72.9% of people in high-income countries have been vaccinated with at least one dose of Covid-19 vaccine whereas only 17.94% in low-income countries have been vaccinated. The UN special rapporteur on discrimination and the Office of the UN High Commissioner on Human Rights have attributed this directly to the existing TRIPS intellectual property system. What is the moral justification for that?
Lord Callanan (Con)
My Lords, I think the noble Lord is wrong: the problem is not with vaccine production, as there is now an excess number of vaccines being produced; the problem is with the healthcare systems of individual countries that are unable to store, distribute and inject those vaccines, which is why we are working with developing countries to help them with that. We know that this is the case because of the problems we had rolling out the vaccine in this country, which of course has a very advanced healthcare system. I repeat the point: the problem is not with vaccine production, as there are already excess vaccines being produced; the problem is with the healthcare systems in those countries which enable them to be distributed and put into peoples’ arms.
Lord Purvis of Tweed (LD)
So why was it that the Government cut by nearly 60% their support for countries to have the health systems to distribute the vaccines when they became available? Why was it that when countries needed the vaccines, at the early stage of this, the Government vehemently opposed this move at the WTO? Returning to the question of the noble Baroness, Lady Sugg, can the Minister be very clear as to whether vaccine support is within or over and above the 0.5% cap? In March, in relation to a donation to Bangladesh, the Government said:
“The cost of this donation has been funded through UK Overseas Development Assistance and will come over and above the ODA spending target of 0.5% of GNI if needed.”
That is not what the Minister just told the House, so which is it?
Lord Callanan (Con)
The position is as I repeated to my noble friend Lady Sugg: all vaccine dose donations will be reported as overseas development assistance and be included within the 0.5%. I think the noble Lord is being very unfair about the UK’s support. We are in fact a leader of international support in response to the pandemic; we have spent more than £2.1 billion since 2020 to address its impacts and that includes up to £829 million to support the global development, manufacture and delivery of vaccines, treatments and tests in lower-income countries.
Lord McNicol of West Kilbride (Lab)
My Lord, the deal agreed at the WTO conference obviously fell short of what was initially proposed. Even after 18 months, discussions on extending the waiver to treatments and tests have been postponed again by another six months. Surely sharing clinical data and research on vaccine production is in our own self-interest, but a poor substitute would be having a relationship with or speaking to the pharmaceutical industry. Have Her Majesty’s Government had any representations with British pharmaceutical corporations to try to bypass the obstacles that exist?
Lord Callanan (Con)
The UK Government have regular meetings with pharmaceutical companies. Of course we want to see the maximum amount of support offered to lower-income countries. I just outlined the support we are providing, but we agreed at the meeting to a consensus-based decision that does not waive IP rights but streamlines the processes for developing countries using compulsory licensing to produce and export Covid-19 vaccines.
Baroness McIntosh of Hudnall (Lab)
My Lords, I have been listening very carefully to what the noble Lord has said so far; I did not hear him answer the question that the noble Baroness, Lady Sugg, asked him, which was about the difference between the price that was paid and the price that was charged for the vaccines. Will he have another go at explaining that difference?
Lord Callanan (Con)
I did answer the question but let me repeat the answer. In 2021, we donated 30.8 million doses of AstraZeneca—
Lord Callanan (Con)
If noble Lords would listen—which we reported at cost, in line with the DAC guidance.
Baroness Chakrabarti (Lab)
My Lords, this question of intellectual property is going to be really important in future pandemics. It is not absolute. We gave up liberties. People stayed at home and did not go to work. All sorts of sacrifices were made. Why cannot big pharma make its little bit of sacrifice as well?
Lord Callanan (Con)
It is making sacrifices. I agree with the noble Baroness about the sacrifices that have been made, but if we want big pharma and the private sector to invest, then we need to preserve the intellectual property regime, because next time it will require billions of pounds of investment, production and research. That is best achieved by preserving the intellectual property regime, but we need to make sure that developing countries have access to these vaccines, which we have done. Many of these countries do not have the facilities, the knowledge, the expertise or the know-how to produce these vaccines.
Baroness Bryan of Partick (Lab)
My Lords, developed countries have been accused of aligning themselves with the narrative of the pharmaceutical industry. Does the Minister accept that the development of these vaccines was not dependent on the innovation of the private sector, but rather came out of public investment and research? Can he explain why these companies were allowed to influence these vital discussions?
Lord Callanan (Con)
The noble Baroness is partly right; of course, there was substantial public research, but we needed the facilities in the private sector to help with the development, production and distribution of those vaccines. It was a partnership. The House is eager to criticise big pharma, but AstraZeneca produced all these vaccines at cost and donated many of them to the third world; it has done a fantastic job, for which we should be grateful.
Coronavirus: New Cases
(1 year, 9 months ago)
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Baroness Merron
To ask Her Majesty’s Government what assessment they have made of the recent rise in Covid cases across the UK to 2.7 million infections over the last week.
The Parliamentary Under-Secretary of State, Department of Health and Social Care (Lord Kamall) (Con)
We continue to see Covid-19 case rates and hospitalisations rise in all age groups, with the largest increases in hospitalisations and ICU admissions in those aged 75 and older. A large proportion of those hospitalised are admitted for reasons other than Covid. However, Covid is identified due to the increase in case rates in the community and the high rates of testing in hospital, including among those with no respiratory symptoms. Current data does not point to cases becoming more severe.
Baroness Merron (Lab)
My Lords, with a stark rise in infections, many people—particularly the clinically vulnerable, carers and older people—are feeling anxious, yet the Government have been noticeably silent, perhaps being somewhat distracted. We might be through the worst of Covid but evidently it has not gone away; individuals, organisation and businesses still want guidance. I have two questions for the Minister. Are the Government planning any campaigns, perhaps involving scientists and others, to highlight current risks and to encourage the take up of booster jabs? Are there plans to reintroduce mandatory mask wearing in hospitals, which the chair of the JCVI considers sensible?
Lord Kamall (Con)
I have to strongly disagree with the noble Baroness when she says that the Government are doing nothing. We are reliant on the UKHSA, which monitors rates and gives us advice, along with the JCVI. In my briefing from the UKHSA, it said it is continuing to monitor cases. As many noble Lords will remember, when we announced the living with Covid strategy we said that we are always ready to stand up measures should case rates rise so much that our health system was under pressure. We managed to break the link between infections and hospitalisations and hospitalisations and death; if that gets out of control then of course we will stand up the measures that we had previously.
Lord Paddick (LD)
My Lords, why do the Government not reintroduce free Covid tests for everyone in England and financial support for those who do the right thing and self-isolate, especially in the face of the cost of living crisis?
Lord Kamall (Con)
The noble Lord will be aware of the different balances and trade-offs that the Government have to consider. At one stage, I think we spent £2 billion in a short period on testing, and a number of people in the health system said that surely that money would be better spent elsewhere, given the backlog due to lockdown. It is always a difficult trade-off on where you spend the money. At the moment, there are people who are still eligible for free tests: certain social and healthcare workers, and also people visiting and some carers. All this will continue to be monitored. Should the number of cases spiral out of control, clearly we would look to reintroduce free testing at some stage, should that be needed.
Lord Cormack (Con)
My Lords, Covid is clearly here to stay. As we will be into autumn within two months or thereabouts, what plans do Her Majesty’s Government have to give a dose of the vaccine to everyone in autumn along with the flu vaccine?
Lord Kamall (Con)
My noble friend raises a very important question. We are waiting for advice from the JCVI, coming later this week, on the autumn programme. There have been various reports, but we are waiting for confirmation of whether it will be the existing cohort of 75 and over, 70 and over, or whether it will be given to wider groups. That is being considered and will be announced later this week.
Lord Bilimoria (CB)
My Lords, the Minister mentioned £2 billion being spent in a month on Covid tests, which includes PCR tests as well. What proportion of that £2 billion was spent on lateral flow tests? If necessary, looking down the road to this winter, are the Government prepared with vaccines, free lateral flow tests for businesses and citizens, and the antiviral programme? Are we ready just in case?
Lord Kamall (Con)
We continue to monitor the situation. The Secretary of State and I have regular meetings with the UKHSA, which tells us about the various issues of concern. Noble Lords will know about the outbreak of monkeypox in certain communities and the discovery of the polio vaccine in sewage, though not leading to cases. Clearly, we constantly talk about Covid cases. We are monitoring numbers, and the UKHSA looks at the ONS numbers as well. We are planning for the autumn, but we also have plans should the number of infections start leading to hospitalisations and possibly deaths.
Lord Foulkes of Cumnock (Lab Co-op)
My Lords, my noble friend Lady Merron is absolutely right: this appears to be creeping up on the Government unawares. The level is going up and is particularly high in Scotland. The last time around, there was a lot of confusion, because different reactions were evident in Scotland, Wales, Northern Ireland and England. In order to deal with this quickly and in a co-ordinated way, can I ask the Minister to get together the Chief Medical Officers of all four countries as quickly as possible to come up with a plan?
Lord Kamall (Con)
The noble Lord will be aware that health policy is devolved. There are times when the devolved Administrations want to go their own way and not follow England—
Lord Kamall (Con)
I am sure the noble Lord will have been in meetings with the devolved Administrations; sometimes they want to go their own way. For example, when we reduced some of the measures in England, the devolved Administrations were sceptical of what we had done. When the data showed that the measures left in place in Scotland were no more effective than us removing some of those restrictions, it demonstrated exactly why, although we talk to the devolved Administrations all the time, we also respect the devolved settlements. We have to agree to disagree at times.
Baroness Altmann (Con)
My Lords, does my noble friend agree that we have lived with flu all our lives? I completely agree with his assertion that if this illness is not proving more deadly than illnesses we have lived with for a long time, what would be the purpose of upsetting the economic recovery and causing so much extra cost to the public purse—unless, as he rightly says, serious hospitalisation cases and deaths were to increase suddenly?
Lord Kamall (Con)
My noble friend makes a very important point. You always have to look at these things in the round and you have to look at the trade-offs. Many noble Lords will recognise that, when we went into lockdown, there were build-ups in many parts of the NHS backlog and an increase in people suffering from mental health issues—the numbers were even larger than they were before—so clearly, we have to look at this as a trade-off. We have a living with Covid strategy. We constantly get updated by the UKHSA, which is looking at all this data. We are ready to stand up should we need to.
Lord Stirrup (CB)
My Lords, the recent welcome inroads into NHS waiting lists are now being reversed. What plans do the Government have to ensure that, as Covid pressures mount, over the winter in particular, crucial NHS services and diagnoses are sustained—particularly, for example, early diagnoses of cancers?
Lord Kamall (Con)
The noble and gallant Lord makes a very important point: we have to continue with the living with Covid strategy, and keep an eye on the Covid cases, but also be aware that we need to clear the backlog, and that people have missed appointments. One of the things we are doing is looking more at diagnostics. Many noble Lords will be aware that about 80% of the waiting list is people waiting for diagnosis. Of those waiting for surgery, about 80% of them do not need to stay overnight in hospital. We want to make sure that we get the right balance between monitoring what is going on with Covid and at the same time clearing the backlog.
Lord Hunt of Kings Heath (Lab)
My Lords, the noble Lord just talked about clearing the backlog. He said earlier that the incidence rise is now leading to increased hospitalisations. What impact is that having on the backlog?
Lord Kamall (Con)
I asked that very same question when I had the briefing with UKHSA officials earlier, and they said they are still focusing on the backlog. If it gets to a point where it is affecting the backlog, clearly measures may well have to be introduced.
Lord Scriven (LD)
My Lords, I declare my interest as in the register as a non-executive director of Chesterfield Royal Hospital NHS Foundation Trust. Following on from the last two questions, last year, the Government awarded £6 billion extra to the NHS to deal with Covid cost pressures. There was an assumption that there would be no Covid in the NHS by June, and all funding stopped. In the light of rising cases and the issues caused by the pressures, will the Government reinstate NHS Covid money? If not, this will eat into the day-to-day budgets of our NHS.
Lord Kamall (Con)
As I said, we are keeping everything under review. We called our strategy Living with Covid-19 as opposed to “We’ve Got Over Covid-19” because we knew it could come back at any time. We have seen that, with the omicron variant, some medication is less effective. We continue to monitor that, and we are ready to stand up the measures that may be needed if the number of cases dictates that, on the advice of the JCVI and the UKHSA.
Lord Patel (CB)
My Lords, we all agree that the numbers are increasing by the day. Can the Minister say what is driving this rise in numbers? Are particular groups driving the rise, and if so, is the policy based on that information?
Lord Kamall (Con)
We are finding that vaccination is clearly the best way to break the link between catching Covid and hospitalisation. Sadly, a large part of our population still has not been vaccinated. Even with the third booster, 80% of that age group have come forward but 20% of the older age group still have not done so. We are trying to target groups that have not yet been vaccinated to make sure that we offer them the best protection possible.
Lord Hamilton of Epsom (Con)
My Lords, does my noble friend think that an inquiry will be carried out into the Covid pandemic, and if there is one, does he think that it will prove that every mutation has made this virus more transmissible but less lethal?
Lord Kamall (Con)
Undoubtedly there will be an inquiry; in fact, the Government announced that there would be one. There will also be lots of independent inquiries and academics writing about what different countries got right and got wrong. When speaking to my friends who are Health Ministers in other countries, we all say that, looking back, there are things that we could have done differently, in various ways, if we had had that knowledge. But we also have to be very careful about the fallacy of hindsight, and of saying that we would have acted differently had we been in that situation. We can learn from hindsight, and we need to make sure that we do so for future pandemics.
Baroness Ritchie of Downpatrick (Lab)
My Lords, will the Minister take up the offer made by the noble Lord, Lord Foulkes, of a meeting of the four chief medical officers of the regions and nations of the UK to explore further possibilities and solutions in relation to Covid? Only last week in Northern Ireland I heard two separate virologists indicating that to reduce the advisory limit for self-isolation to five days was a dangerous precedent because many people in that group would remain positive, thereby spreading Covid in their local area. In view of that and the rising levels of Covid and other respiratory viruses, will the Minister immediately talk to his ministerial colleagues and set up such a meeting?
Lord Kamall (Con)
One of the things we do in the Department of Health and Social Care is to have regular meetings with our counterparts in the devolved Administrations—all the Ministers do. The noble Lord, Lord Foulkes, shakes his head, but I can tell him that we regularly have meetings with the devolved Administrations. I commit to go back to the department and see who is next due to have a meeting with their devolved counterparts, and ask whether we can put Covid on the agenda.
Lord Winston (Lab)
Does the Minister agree that his dismissal of hindsight is one of the most useless ways of looking at this? Surely with continuing infection like this, hindsight is really important, and we should be looking all the time to see how we can change our practice.
Lord Kamall (Con)
I was making the point that there is the benefit of hindsight but also the fallacy of hindsight. The benefit is that we learn from mistakes we made in the past. We learn from previous actions what worked and did not work, particularly in a local context. Some of my friends in other countries tell me that what we did in England may not necessarily have worked in their country, and vice versa. There is also the fallacy of hindsight, when people say that in the same situation, 18 months or two years ago, they would have done something completely different with the information we had then. That is what is known in social sciences as the fallacy of hindsight.
Lord Morse (CB)
My Lords, I just want to be clear about something. One mistake we made before was not paying attention earlier to predictive modelling from the NHS. Are we sitting on any information that we are getting from the NHS now about what exponential rate may occur in this virus? Please can the Minister reassure me on that.
Lord Kamall (Con)
We rely on data from the UK Health Security Agency. It monitors this, and looks at ONS data, data on hospitalisations and the capacity of the NHS to absorb the increase in patient numbers if there is one. That is where we take our advice from and that is what would trigger future action, should it be needed.
Baroness Fox of Buckley (Non-Afl)
My Lords, I confirm that there is anxiety about the rise in Covid cases, but less about the virus itself than a worry that politicians might reintroduce some of the over-the-top restrictions that led to such collateral damage during the past two years. Hindsight or not, I make the point that people are nervous. Very specifically, will the Minister comment on the fact that, for example, some care homes are using the rise in Covid cases to lock down homes and carry on restricting visits with relatives—which we now know is damaging the mental and physical health of so many elderly care home residents, who suffered so inhumanely, not from Covid but from our response to it? Will he encourage those care homes to open up and be a bit more confident?
Lord Kamall (Con)
I start by paying tribute to the noble Baroness for her championing of civil liberties issues and making sure there was a debate on them. I will, with pleasure, take back her point on care homes to my ministerial colleagues who are in charge of social care.
Supply and Appropriation (Main Estimates) Bill
Monday 11th July 2022
(1 year, 9 months ago)
Lords ChamberRead Full debate Supply and Appropriation (Main Estimates) Act 2022 View all Supply and Appropriation (Main Estimates) Act 2022 Debates Read Hansard Text
Business of the House
Lord Ashton of Hyde
That, in the event of the Energy (Oil and Gas) Profits Levy Bill having been brought from the House of Commons, Standing Order 44 (No two stages of a Bill to be taken on one day) be dispensed with on Wednesday 13 July to allow the Bill to be taken through its remaining stages that day.
Business of the House
Lord Ashton of Hyde
That, in the event of the Supply and Appropriation (Main Estimates) Bill having been brought from the House of Commons, Standing Order 44 (No two stages of a Bill to be taken on one day) be dispensed with on Wednesday 13 July to allow the Bill to be taken through its remaining stages that day.
UK Infrastructure Bank Bill [HL]
Monday 11th July 2022
(1 year, 9 months ago)
Lords ChamberRead Full debate UK Infrastructure Bank Act 2023 View all UK Infrastructure Bank Act 2023 Debates Read Hansard Text Amendment Paper: HL Bill 3-R-I(Rev) Revised marshalled list for Report - (1 Jul 2022)
Baroness Penn
That the Bill be now read a third time.
Relevant document: 2nd Report from the Delegated Powers Committee
Baroness Penn (Con)
My Lords, before we progress with Third Reading, I shall make a very brief statement on legislative consent in relation to the Bill. My officials have worked closely with their counterparts in the devolved Administrations throughout the set-up of the bank and the passage of this Bill. All three Administrations have welcomed the establishment of a national infrastructure bank. The bank has also been developing its own relationship with the devolved Administrations and their institutions—for example, the Scottish National Investment Bank. I am pleased that the bank has now completed a deal in all four nations of the UK. We continue to discuss the requirements for legislative consent with the devolved Administrations, and I am grateful for their continued engagement on this. I beg to move that the Bill be read a third time.
Lord Tunnicliffe (Lab)
My Lords, much has happened since last week’s Report stage, when your Lordships passed two sensible amendments. These changes would considerably strengthen the Bill’s climate and levelling-up credentials, ensuring greater external support for the bank and its work.
The Prime Minister has rightly said that the business of government must go on over the coming weeks and months. In that spirit, I hope that the Treasury will reconsider its opposition to these amendments. This will ensure that the next Prime Minister gets a stronger Bill on the statute books. If Ministers, whether the current crop or their successors, do not like the current wording, they are welcome to change it. However, simply overturning the amendments would show poor judgment. The economic picture has become gloomier, while dealing with the climate and biodiversity crisis is ever more pressing. Through this revised Bill, the bank can play an important role in both battles, supporting the creation of good jobs and doing more to protect nature. When one of the many leadership hopefuls assumes the office of Prime Minister, these issues must be at the front of their mind.
Until then, I thank the noble Baroness, Lady Penn, and the noble Viscount, Lord Younger of Leckie, for taking this Bill through its Lords stages. They have been ably supported by a range of Treasury officials, to whom I am also grateful. I am even more grateful to my Labour Party policy adviser, Dan Stevens, for his invaluable advice and help.
In the meantime, I wish the bank well as it continues to find its feet and comes to its initial investment.
Baroness Kramer (LD)
My Lords, obviously my colleagues and I support the creation of the UK Infrastructure Bank. We regret that it does not have the genuine operational independence that was a clear statutory characteristic of the Green Investment Bank, which was sold off by this Government as soon as the coalition ended, but we are where we are.
The work of this House has improved the Bill significantly. The Government amended it to provide absolute clarity on the UKIB’s role in supporting investment in energy efficiency; we thank the Minister for that. Noble Lords from all sides of the House also supported further changes to establish that the bank’s objectives extend to nature-based solutions in a circular economy. I hope that the Government will not attempt to reverse these meaningful improvements.
However, the Bill has followed what has become a consistent government thrust: diminishing Parliament and enhancing the power of the Executive; I will not repeat all our previous arguments about Henry VIII powers and the power of direction. The Government have promised to amend the framework document by the end of the year to assure us that not only the directions, including their content, but any objections made by the bank to such directions, including letters of reservation, will be made public. This transparency is vital; I thank the Minister personally for making sure that we got a meaningful response to this issue with a commitment not just to removing the gagging clauses originally in the framework document but to ensuring full transparency through the publication of the relevant documents.
I thank the Minister and her team for their openness and willingness to meet. I thank Peers around this House who worked together to get improvement—they are too many to name—but I believe that the Government’s nightmare is an amendment in the name of the noble Baroness, Lady Noakes, supported by the noble Lords, Lord Tunnicliffe and Lord Vaux, the noble Baroness, Lady Bennett, and me.
Last of all, I thank my own ranks. I thank Sarah Pughe and Mo Souidi in the Whips’ Office, who provided us with organisation and backing. I thank my noble friends Lord Sharkey and Lord Teverson, who brought their particular and extensive expertise to bear on this Bill; they have earned and enjoy the respect of this House.
Baroness Penn (Con)
My Lords, I thank all noble Lords for their constructive approach to each stage of this Bill. In particular, I thank the noble Lord, Lord Tunnicliffe, and the noble Baroness, Lady Kramer.
The level of scrutiny and debate on the Bill demonstrates the importance of the bank’s mission and has served to demonstrate once again the expertise of this House on topics from corporate governance through to the definition of infrastructure and our target for tackling climate change. Although this is a short Bill—something that may be welcomed—it is an important one given the bank’s potential to deliver a step change in tackling climate change and supporting levelling up through supporting the development of high-quality infrastructure across the whole of the UK.
I am therefore pleased to see the Bill progress towards becoming law, supporting the bank to become a fully-fledged, operationally independent institution able to deliver on its mandate as agreed by this House. I thank noble Lords on all Benches for working constructively on this both during debates and in the many separate discussions that I have had on this Bill.
Finally, I recognise the work of the parliamentary counsel in drafting this Bill and in supporting its passage so far. I also thank the House staff, the excellent Bill team, and my noble friend Lord Younger for his support. I am not alone in this House in looking forward to seeing the impact of the bank’s investments in improving the vital infrastructure of this country. I beg to move.
Australia Free Trade Agreement
Baroness Hayter of Kentish Town
That this House takes note of the Free Trade Agreement between the United Kingdom of Great Britain and Northern Ireland and Australia, laid before the House on 15 June.
Relevant document: 4th Report from the International Agreements Committee (special attention drawn to the agreement)
Baroness Hayter of Kentish Town (Lab)
My Lords, I thank and pay tribute to the very recent Trade Minister, the noble Lord, Lord Grimstone, who worked very closely and openly with the committee, not just to facilitate our access to documents and briefings and to answer our many questions, but to negotiate within Whitehall that very welcome exchange of letters on how future trade deals will be handled. Of course, his resignation, rather different from the other 60, except for that of the noble Lord, Lord Greenhalgh, took place on Friday, and was not to get rid of Prime Minister Johnson but was a result of Mr Johnson’s leaving. In the Lords, we always do something a little different.
Having gone through four Ministers when I was dealing with Brexit on the Front Bench, and having now lost a Trade Minister in my new role, I am beginning to take this slightly personally. However, I welcome the noble Viscount, Lord Younger, to the wicket. I hope that he found time during the Wimbledon finals—sorry, Australia—to peruse the 2,000-page document on the Australia deal, and that “team Grimstone” will be there to help him answer our many questions.
This debate is important for three reasons. First, and most obviously, it is the first time that this House has debated a new, post-Brexit trade deal which is not just a rollover from our EU days but is a from-scratch, non-European trade agreement. Secondly, it gives the House a chance to consider the deal within the Government’s wider diplomatic, defence, foreign affairs, environmental and domestic objectives—at least, it would be good to debate it within that context if only the Government had set out a trade policy which went wider and beyond the nebulous “global Britain”, which is simply about more trade. Thirdly, again from it being a novel agreement, and the first since 1973 for which our Government have had responsibility and come to our committee, it gives the House the opportunity to consider whether our ability and our powers to scrutinise negotiating objectives and the resultant deal are sufficient for the task given to us.
Beginning with the first of those points, the actual deal: how do we assess it? The International Agreements Committee welcomes the agreement, especially the provisions facilitating trade in services, including financial and legal services; mobility; digital; consumer protection; and its support for SMEs. In particular, improved mobility for UK professionals seeking to work in Australia, a new framework on mutual recognition of professional qualifications, and the ban on data localisation, are all likely to be beneficial. We note, as the Government acknowledge, that the expectations of increased trade are not enormous—0.08% of GDP by 2035—and only very slight in goods, given that existing Australian tariffs are already very low.
However, the deal has other advantages, not least in helping pave the way for the UK’s potential entrance into the CPTPP. It was right for the Government to prioritise Australia as a segue into that. However, we queried whether the desire for speed reduced the chance of obtaining more from the negotiations, and we highlighted the fears of many in our farming communities, particularly in Wales, Scotland and Northern Ireland, that they may have been sold short, with safeguards for their produce insufficient for the new competition they could face, particularly given the differences in Australian farming practices.
It is true that Australia’s focus on Asia might mean that our farmers will be insulated from competition from this deal, but there is a fear that the unconditional approach to removing agricultural tariffs could set a precedent. If a similar approach with the US, Brazil or Argentina had a cumulative effect, it could be damaging to our farmers and our wider agri-food sector. Although the TAC and the FSA/FSS—food standards and all of that—did not raise any significant worries about food standards and safety, the impact of increased competition on vulnerable farming communities remains of concern.
More time in negotiating might also have enabled our negotiators to obtain more on climate than is in the deal with what is now, of course, the former Australian Government. Given that the new premier and his Government are far more sympathetic to tackling climate change, we have urged Ministers to seek more ambitious moves in this direction through the joint committee set up under the deal. More generally, the desire for a quick result, and with a trusted ally, might have led to Australia’s very clear trade objectives and focus giving them a better deal than perhaps we could have obtained.
I turn to my second point. Given that this is the first deal negotiated from scratch, it provides an insight into the Government’s vision for post-Brexit trade. However, the committee finds it regrettable that the agreement cannot be placed in the context of a published trade policy and thus be understood in relation to other policy priorities, such as on climate, or in line with our diplomatic or defence alignments, or indeed with the Government’s own desire to safeguard their right to regulate for public policy reasons, including the promotion of public health and morals.
Since all trade deals involve trade-offs and compromises, Parliament needs to be able to judge the outcome of any FTA against the Government’s overall objectives, but these need to be set out in an agreed policy with Parliament and made publicly available. We asked Ministers a year ago to set out their ambitions for trade in this new era. Without such a framework, Parliament cannot judge the success or otherwise of a trade agreement. The Government demurred, leaving us scratching our heads as to the extent to which any outcome meets the Government’s wider objectives for their trading partnerships.
This may not matter so much with Australia—it is a friendly nation and a close ally, with which we already have extensive and pretty much free trade—but not all future deals will look like this. Following the invasion of Ukraine, with its impact on global security, food security, supply chains and vulnerabilities, just-in-time processes, our environmental commitments, and the need for strong, resilient relations with friendly states, such an overarching framework is even more urgent. Furthermore, as Russia, perhaps alongside China, has devalued any commitment to a rules-based global order, on trade or anything else, the UK needs to ground its trading and international relations firmly in a trusted, ordered and rules-based environment. That is what we need the Government to spell out.
Our committee is not alone in seeking a proper trade framework. The International Chamber of Commerce says that the UK has an opportunity to design a trade policy that creates an economy that is prosperous, fair and green. It should not be difficult for Ministers to lay out their trade ambitions, acknowledging their wider global objectives. Much is scattered around among various official documents listing the Government’s commitment to universal human rights, the rule of law, fairness and equality as guiding
“all aspects of our international policy, including our approach to trade”
—so they say it sometimes, but not in that framework. Indeed, the DIT’s strategic approach for a deal with Mexico highlights its commitment
“to uphold … high environmental, labour, public health, food safety and animal welfare standards”
and the interests of “consumers, producers, and businesses”.
Given the annunciations emanating from Anne-Marie Trevelyan, why the resistance to publishing the objectives and red lines as a trade policy? Such a benchmark would help us understand how the emerging agreements with individual American states, such as the one with Indiana, and those with India and the Gulf fit into the picture and embed respect for human rights and the environment within them. Without a trade policy against which we can rank any deal, what exactly are we are meant to conclude?
Thirdly and lastly, in this new trading environment is our committee, on behalf of the House, able to scrutinise trade deals effectively? The answer is yes and no. In the case of Australia, the Government gave us three months with those 2,000-odd pages—delivered to me on Boxing Day—to study, take evidence and report, but the Act requires only 21 sitting days. That is impossible for any trade deal. We would like the Minister to give us an assurance that months, rather than days, will be available to us to do the job we have been given.
In addition, we are uncomfortable as to whether the devolved Governments have sufficient input into trade agreements that impinge on their competences. We also lack environmental impact assessments. Indeed, we do not have sufficiently granular impact assessments even to judge the Government’s projected outcomes, let alone to test these against other data or to hear from independent analysts of the likely impacts.
Above all, of course, the Lords can only opine on a deal. Even the Commons can only delay ratification. This is far less traction than the European Parliament, the US Congress or other legislatures have. Yet if parliamentarians are excluded from greater oversight of agreements with major impact on people’s lives, we risk worsening public concerns about trade impacting negatively on some sections of society. If we believe in free and increased trade, as we do, any lack of trust in it cannot be a good thing.
While we welcome the Grimstone rules and the Grimstone commitment to a debate on negotiating objectives, which we saw in action on CPTPP and expect to have with our report on India, that offer came too late for this set of negotiations. We hope to have greater input in future. We are delighted that this first opportunity to report to the House is on a deal with a friendly, reliable ally and that the agreement, with some hiccups, is one we can endorse. I thank our committee and secretariat for the amazing work they have done on this, and the witnesses for their input and insight. I beg to move.
The Duke of Montrose (Con)
My Lords, I offer congratulations to the noble Baroness, Lady Hayter, on securing this debate. I am sure that anybody who has read the report will have something to say about it. I declare my interest as a member of the NFU in Scotland, a former president of the National Sheep Association and a long-term sheep farmer.
The UK-Australia Free Trade Agreement has, inevitably, been a baptism by fire for the Trade and Agriculture Commission. The fact that the International Agreements Committee’s report, including at paragraph 70, states that its findings in a limited number of areas were mainly positive makes one wonder whether it has an adequate remit to do the job that we expect of it. The briefings I have had from several agricultural bodies said quite the opposite. In its call for evidence from the agricultural community, the TAC’s main question was whether the agreement would affect the maintenance of the UK’s regulatory standards in animal or plant health, welfare or environmental protection. From that, it appears that we have is a regulation and agriculture commission and not a Trade and Agriculture Commission. Would my noble friend the Minister not agree that the remit should ensure that greater emphasis is placed on trade for any future reports?
The only reference to agricultural trade that found its way into the report we are debating today is the government estimate that the agreement would lead to a 0.07% drop in gross value added for agriculture, forestry and fishing. Then it mentions that the fall expected in the price of beef and sheep products is up to six times that value. As far as I can see, most sections of the agricultural industry have made their excoriating views known whenever they had a chance. The NFU’s brief sums it up by saying that it is a one-sided deal, with Australians achieving all that they ask for and British farmers sacrificed for political gain.
There are great misgivings at the promise of achieving a zero-tariff regime for this and subsequent trade deals, though presently it will be cushioned by a 16-year lead-in period. Even in our agreement with the EU, where we have a much more level playing field, if we exceed our tariff rate quota for beef, I believe we would be subject to a 20% tariff. Can my noble friend the Minister say whether the most favoured nation rules of the WTO will mean that any agreement hereafter with other countries will be required to follow this pattern, or will zero tariffs be the rule?
The report states that the Trade and Agriculture Commission’s findings were mainly positive. This might be true for the criteria at the level of carcass meat imports we can expect from Australia, but it may not take long before we see producers beginning to press for more of the animal welfare and climate change standards that apply in that part of the world to apply to our production here. I will give two examples. First, our animal health standards are enforced by law. In Australia, at the federal level, they have only non-binding guidelines. In the deal, we have undertaken not to go back on ours, so their animals in fields do not have to be checked every day, whereas we have the cost of doing so. Secondly, in the agricultural community we have been subject to constant reductions in animal transport times and distances, as many noble Lords will know, so that some areas cannot sell their stock unless they break the journey for livestock with an enforced rest period. The RSPCA found that in Australia sheep and cattle are transported for up to 48 hours in hot weather, sometimes without food or water, to mention only two of the anomalies. What hope can my noble friend the Minister offer that the Australians will be anxious to move towards our restrictive practices when they are quite happy with what they have now and the agreement states clearly that they should be under no obligation to do so?
The same thing applies to our regulations and undertakings on environmental issues. When I attended the COP 26 in Glasgow this summer, we were treated to a stream of UK Ministers and under-Ministers telling us that the country was going to be in the forefront in achieving the Paris Agreement, and telling everyone else that they should do so. Yet when we come to conditions for an agreement on investment and services, all that flies out the window and we have an agreement at the level we see in this treaty.
Lord Oates (LD)
My Lords, I declare my interest as a member of the UK hydrogen commission. It is a pleasure to speak in this debate and, as a member of the International Agreements Committee, I pay particular tribute to our chair, the noble Baroness, Lady Hayter, and to our committee clerk Jennifer Martin-Kohlmorgen and her team for producing such an informative report.
I regret that the noble Lord, Lord Grimstone, has stood down from his ministerial post, although, like the noble Baroness, Lady Hayter, I am surprised that it was because Boris Johnson was leaving rather than because he was staying—a decision entirely beyond my comprehension, I have to admit. Nevertheless, the noble Lord was a capable Minister who engaged constructively with our committee, and we will miss him in our deliberations.
I intend to focus most of my remarks on the environment chapter of the Australia FTA but, before I do so, I want to touch briefly on the wider context of the deal and the circumstances in which it was concluded. We are debating this free trade agreement against the backdrop of a catastrophic decline in the UK’s trade performance. Just last month, we learned that the current account deficit stood at a staggering 8.3% of GDP in the first quarter of 2022—the worst figures ever recorded. This has further weakened sterling and added to upward pressures on inflation.
As Howard Dean, the former candidate for the Democratic presidential nomination, once remarked:
“Unfortunately, ‘I told you so,’ is an incredibly unsuccessful campaign slogan”.
Of course, he is correct, yet the Brexiteers in this House and the other place cannot be allowed simply to slip away from the devastating consequences they have inflicted on our country and its economy; nor is it any good for them to try to blame Covid for our woes, because our trade performance is shocking not only in absolute terms, it is even more so in comparative terms. The Government’s own assessment predicts that the UK-Australia FTA will have a positive impact on GDP, as we heard from the noble Baroness, Lady Hayter, of 0.08%. This is a welcome, albeit modest, contribution to our national wealth but it hardly lives up to the deluded imperial nostalgia of the Brexiteers, who seem to think that the old empire was just waiting to fill the trade gap left by Brexit.
The biggest impact of the FTA, as we heard from the noble Duke, the Duke of Montrose, will be found in agriculture, where tariffs will, in effect, be removed altogether, albeit with some emergency brake safeguards. The clear beneficiary of this part of the deal is Australia because it is a major agricultural producer gaining access to a much bigger market, and because UK farmers already had tariff-free access to the Australian market. Of course, all trade deals are trade-offs and, I hope, mutually beneficial ones. But with such a major concession on offer to Australia, it is regrettable that the UK conceded a potentially strong negotiating position by making its desperation for a deal so glaringly evident.
One area where we could and should have insisted on more progress is in relation to the environment chapter. There were certainly positive aspects to this chapter—for example, as the report notes, the RSPCA’s evidence to our committee stated that the language on the conservation of marine ecosystems was particularly good—but, none the less, stakeholders viewed the chapter overall as, at best, a missed opportunity.
Certainly, the contrast between the respective chapters in the New Zealand and Australia FTAs, which is highlighted in our report, is stark, particularly in respect of fossil fuel subsidies, carbon pricing and trade in environmental goods. Notably, the Australia chapter does not include specific reference to the temperature goals of the Paris Agreement, which, it is reported, were taken out on the insistence of the then Australian Government.
Although the UK’s impact assessment finds that UK-based production emissions should remain largely unchanged, our Government do not seem to have taken enough account of the dangers of carbon leakage and the reliance of the Australian power sector on dirty coal. As the noble Baroness, Lady Hayter, has said, we urged the Government in our report to take advantage of the election of the new Australian Government to look at this chapter again.
The evidence we received from a range of stakeholders indicated concerns about the precedents that this FTA could set in future trade agreements with trade partners with low environmental standards, such as the United States and Brazil. The lack of an overall trade policy means that the Government do not seem to be gaming the impacts that concessions to achieve quick-fix FTAs such as this one will have on our future negotiating position. It is hard to imagine the US, for example, agreeing to a future trade deal that had more onerous environmental demands that those agreed with Australia.
In addition, the Government did not take advantage of the opportunity to conclude agreements on green technology and on green energy co-operation. One area we might have looked at is green hydrogen. This is an area where mutually beneficial agreements might have been arrived at, given that the UK is the home to cutting-edge technology—we have in Sheffield ITM Power, which is one of the world’s leading manufacturers of electrolysers used in hydrogen production—and Australia has huge interests in hydrogen production through solar and wind. But these sorts of opportunities seem to have fallen victim to the desire for a quick deal, rather than a comprehensive deal.
Given that the UK’s net zero commitment is a legally binding obligation on our Government, it follows that it must be their central policy objective over the years to 2050. But somebody needs to inform the trade department of this fact, so that environmental objectives are not seen as a “nice to have” but are regarded as central to our trade policy.
As a liberal free trader, I conclude by welcoming this trade agreement, despite its flaws. However, I hope that as this is our first full trade deal post Brexit, the Government will take the time to absorb the negotiating lessons they have learned, and in particular that they will recognise the need in future not to appear such an eager, if not desperate, suitor. I hope that in his reply, the Minister will reflect on which lessons the trade department intends to take on board as a result of these negotiations—the first, as the noble Baroness, Lady Hayter, said, conducted by a British Government since 1973.
I hope the Government will also recognise that improving our trade position will require much more than a flurry of quick-fix trade deals. It requires an overarching policy—as the noble Baroness, Lady Hayter, stressed—that has a strong focus not just on concluding trade agreements but on trade promotion and building the enduring relationships with business and with countries around the world that help sustain and nurture trade and investment. At the moment, too many nations regard us as an unreliable partner, unwilling to enter into real partnerships or engage on equal terms.
Our country and economy are in deep, long-term trouble: productivity is stagnant, GDP growth is anaemic and in the G20, only Russia’s economy is predicted to fare worse than ours. Our trade position has deeply deteriorated. None of this will be fixed by the fantasy economics that most of the Tory leadership candidates seem determined to peddle. Unless we are able to restore our trade position and provide a concerted solution to the structural problem of low productivity, we will find ourselves an ever-poorer and more unhappy country.
Baroness Liddell of Coatdyke (Lab)
My Lords, I draw attention to my entry in the register. I am involved with a number of Australia-facing organisations, not least as a non-executive director of the Australian Chamber Orchestra. Having said that, I do not look at the situation of our trade deal with Australia through rose-tinted spectacles—I will come to that later. I pay tribute to our chair and our previous chair, the noble Lord, Lord Goldsmith, and to the team of civil servants and advisers who have helped with the complexity of this—we are doing these trade deals for the first time in a very long time.
A week is a long time in politics. The shenanigans of the past week affect all of us, and it is not for me on this side of the House to cast aspersions elsewhere, because everyone who is involved in the political process has suffered as a consequence of what has happened over the past few weeks. This spotlight on British politics affects all of us: there are questions about professionalism, integrity and competence. Every one of us now has to show that we live by the Nolan principles and that our partners can deal with us, knowing that we are not just competent but ethical, which is why we have to adopt a serious and informed view of trade deals such as this.
I want to get rid of the hyperbole that has surrounded the publication of this deal. It is historic—okay, it is the first one, so that is fair enough. But, frankly, if a Conservative Government in the United Kingdom cannot not do a deal with a Conservative Government in Australia, no doubt with some Australians who have a right to British citizenship—more of that later—they should give up the ghost.
Hyperbole comes up when we discover how much has been left out of the agreement. Previous speakers’ points on the climate emergency—notably those of the noble Lord, Lord Oates—and the problems with animal welfare brought up by the noble Duke, the Duke of Montrose, are really serious. I agree with much of what the noble Duke said; standards are lower.
I will tell a funny story that my colleagues will know. I made the point that we have limits on how long a beast can travel for. As the noble Duke, the Duke of Montrose, pointed out, a beast can travel for 48 hours in Australia in heat above 40 degrees, which makes today’s weather here seem cool. The response was: Australian cows are tougher than British cows. I thought that that was a joke, and it was perhaps a mistake to laugh at it. It is also extremely interesting that one of the big holes in this deal is climate change. The deal was done with a climate-sceptic Government, but that Government no longer exist: they were voted out to a very large extent because of the position they took on climate change.
Returning to hyperbole, it is important to note that Australia is 10,000 miles away and has a population of about 25 million, so the impact it can have on our economy is limited. My noble friend—and he is a friend—Lord Goodlad has a postcard that shows the United Kingdom as part of one county in New South Wales. It is a huge country with economies of scale, particularly in relation to agriculture, that we cannot even conceive of. I agree with the point made by both the noble Lord, Lord Oates, and our chair that GDP is estimated to go up by 0.08% by 2035. That is £2.3 billion, which the MoD and the Scottish Government could probably spend in a morning. These are not the kinds of sums that we are looking to see coming back to our economy.
Throughout all our hearings, the NFU has been particularly critical of this deal, bearing in mind the economies of scale that Australia can have. The Government claim that UK consumers prefer British products. Well, if you go into a shop and only have a pound to spend because of the cost of living crisis, you are not going to spend it on British products sold at £2; you are going to have to buy what you can afford. This is one of the consequences of the cost of living crisis: people are not able to choose what they want; they must buy what they can afford. The growing cost of living crisis will affect that. The real fear among farming communities is that the Australian deal could undercut the UK industry, especially if Australia is frozen out of Asian markets. That could happen; there is an intense dispute between Australia and China, and a real risk that Asian markets could be opened up. Why did the Government not insist that increased access to the UK market should mean adherence to the core standards that the noble Duke, Lord Montrose, talked about on the environment and animal welfare?
Back to hyperbole again: I am sceptical about the CPTPP—the trans-Pacific partnership. This deal has been done with countries that have agreed to a set of principles not all of which are aligned to what we in Britain would seek to have. Also, it is at the other end of the world, and we are joining it because we left our neighbours. Our neighbours were in a deal to which we contributed, and now we are saying, “We want to sign up to the CPTPP”. I will have to get a whole lot of new evidence that the CPTPP will work for us, and that we will be accepted into it. The deal on acceptance may be completely different from anything we can sign up to.
During the negotiating period, the UK signed up to AUKUS, the nuclear submarine deal. Where will that fit into this deal? The rumours are that the US will get the lion’s share of contracts.
One of the most exciting things that has happened in the past six weeks is that the new Government in Australia are not climate-sceptic. Has contact been made with the new Australian Government to reopen the discussions on climate change, maybe even getting them to commit to limiting the global average temperature increase to 1.5 degrees centigrade? Here, as in Australia, no Government can bind their successor. That is something we should be moving on now, and not at some point far into the future. The Rudd Government signed the Kyoto Protocol within days of being elected in the mid-2000s; why could the Albanese Government not have been asked to reopen the climate change sections that are so absent from the existing deal?
Coal is a driving force in Australia. In the UK, we are establishing a real lead in carbon capture, storage and use. Years ago, development programmes took place in the Latrobe Valley in Victoria. Why is that not included in the deal? Some years ago, a carbon capture and storage international programme was started in Australia, long before the climate-sceptic Morrison Government came on the scene. There are opportunities there for British business, and I should say that I am president of the Carbon Capture and Storage Association here in the UK. We are in a position where we can move into the leadership on carbon capture and storage, and there are many jobs tied up with it.
Noble Lords will be delighted to know that there are some parts of the agreement that I am actually very happy with. I am very happy with the professional services deal, and hope that many new opportunities will open up to British business. We benefit particularly here in London from many Australian professionals, many not needing visas as they have dual nationality, which is very popular in Australia—except in Parliament where only Australian citizens may sit. Frankly, the Home Office has a very busy time before elections while everybody who is a candidate revokes their British citizenship, and a very busy time after elections when those who have not won go and take up their British citizenship again.
That is how close the relationship is and I hope it is something we can build on; it is one area where hyperbole is uncalled for. With Australia we are among friends, as the noble Baroness, Lady Hayter, pointed out. But the flowery language used to justify a trade deal that could have been so much better is uncalled for. Now with a new Government in Australia, it is time to get that deal augmented without resort to hyperbole. It is a deal that we can work on, but the Government need a commitment to look hard at what Britain really needs, not headlines about doing the first trade deal.
Lord Kerr of Kinlochard (CB)
It is a pleasure to follow the noble Baroness, Lady Liddell. She is always trenchant and always expert and was extremely popular in Australia when she was high commissioner there; she is popular at this end too. I follow her part of the way. I certainly follow her in her tribute to the noble Baroness, Lady Hayter, for conducting our debates with such skill and style and, as usual, pinching all the points I was going to make today—although I am sorry to tell the House that I will make them all the same.
I pay tribute to the noble Lord, Lord Grimstone of Boscobel, whose dialogue with us, although it was not always very deep, was carried out with impeccable courtesy at all stages. I also had the feeling that he might know what he was talking about and that he might have liked to tell us a bit more than he was allowed. I hope that he will be back in order that I can test my theory.
If this report is a good one, and I think it is, that owes a great deal to the help that we in the committee had from our clerk, Jennifer Martin-Kohlmorgen, and our policy analyst, Andrea Ninomiya. My thanks to them.
I am less critical of this agreement than most of those who have spoken so far. The key point to make for perspective is that it is no big deal. The Government themselves maintain that its economic effects, although probably positive—trade liberalisation usually is—will be extremely marginal. In my view, it is not a bad deal; liberalising is generally a good thing to do, and there are genuine gains in this agreement for UK exporters of services.
On goods, of course, there is absolutely no doubt that the deal massively favours the Australians, principally because their own tariffs were already very low. It was hailed in Australia as splendidly asymmetrical, and their negotiators were congratulated on achieving the impossible. They believe that the greater market access that they have secured here for their agriculture producers will result in economic gains to them—so they share some of the views that the noble Duke, the Duke of Montrose, put forward. They would argue that the hill farmers in Scotland, Wales and Northern Ireland are right to be concerned about this deal. I think that the hill farmers are right to be surprised about it, because there was no attempt to prepare the ground—it came as a shock to them—but I do not believe that they will be hard hit in the end because, for Australia, the Asian market will always be the principal one for farm products. It is a pretty inexorable rule in trade in goods that trade halves as distance doubles. Overall, this deal is no big deal but no bad deal.
I would hope that the Minister in replying to this debate would be briefed to reply to some of the questions that we raised in our report. The two that I would particularly like to hear an answer to are the questions that we asked in paragraph 34 on data adequacy and in paragraph 42 on investor-state dispute settlement, where the policy of the Government simply is not clear to me. But my concern about the agreement was more about what it did not say than what it did say, and more about the unsatisfactory features of the process that produced it.
I shall make three points, one specific, one general and one purely about process. First, on the environment chapter, of course the noble Baronesses, Lady Hayter and Lady Liddell, and the noble Lord, Lord Oates, are right that the environment chapter is extremely disappointing. I agree with him that the contrast with the New Zealand deal is quite striking. The New Zealanders signed up to work with us on carbon pricing and reduction of fossil fuel emissions, but there is nothing comparable in the deal with Australia. Yet, as has been discussed, in other parts of the agreement we conceded quite a lot to the Australians; they are not necessarily very damaging, but those concessions were seen as considerable in Australia. I do not know what price we got for them, but it certainly does not look as though we got a price in the environment chapter.
I do not understand why we pressed ahead to do the deal with the Morrison Government, who had demonstrated at COP 26 that they did not attach a very high priority at all to reducing carbon emissions; they attached a higher priority to maintaining a massive coal export industry. As the noble Baroness, Lady Liddell, said, the polls showed that the Morrison Government were in trouble and an election was coming up, and the wildfires had caused the Australian public to be more concerned about global warming and emissions reduction. Maybe we did try to extract a price—but why did we give up? Why did we not wait to see whether the polls were correct and the Labor Party were going to come in with a very different approach to environmental policy? I do not know the answer to that; it looks like a mistake, but I hope that the Minister can elucidate.
Of course, it is not possible now to make our concessions in this agreement contingent on Australian action on the environment—the deal is the deal, it is written down and there is nothing we can do about it. One of the oddities of our scrutiny system is that we are allowed to debate it only when we can do nothing about it; still, that is where we are. I echo the noble Baronesses, Lady Hayter and Lady Liddell, and the noble Lord, Lord Oates, in saying that I hope we are, nevertheless, in discussions with the Albanese Government about whether, in addition to this agreement, there can be some new UK-Australian agreement to work together on climate change.
My general point springs directly from that specific one. I do not know—I do not think any of us knows—what view the Government take on linking trade deals to wider non-trade policy objectives. We do not know because the Government have not published a trade strategy or any hierarchy of priorities. We can deduce one or two things. We can deduce from what has been said in other contexts that the Government’s number one priority in trade deals is securing greater access for service exports. I do not disagree with that. We can also deduce from what has been said in other contexts that the Government would not do a trade deal with a country demonstrating egregious contempt for human rights—okay. That is about as far as we can go, I think.
I was puzzled to hear the outgoing Prime Minister saying in April that he wanted a full free trade agreement with India done and dusted by October—with remarkable speed. In other words, there was no question of any linkage with Prime Minister Modi’s policy on Ukraine. The Indian Government refused to criticise the invasion which happened in February or to join in any sanctions, yet our Prime Minister in Delhi in April was saying, “Let’s go steaming ahead and do as wide a free trade deal as we can by October.” I genuinely think that the Government need to tell us to what extent trade policy is to be joined up with foreign policy, environment policy, energy policy, human rights policy or development policy. I think, and I think the general view in this House is, that they need to be mutually supportive. I am a free trader, but I do not think that trade liberalisation can be ring-fenced overriding all else. Napoleon was wrong: we are not just a nation of shopkeepers, but we need to demonstrate that with a strategy that links our trade objectives to wider objectives and sets out a hierarchy of priorities.
My last point is that chapter 8 of this report points out that something is still not quite right in our trade negotiators’ relationship with the devolved Administrations. It is well illustrated by the alarm in Edinburgh, Cardiff and Belfast about the tariff reductions on farm products, which so alarmed the noble Duke, the Duke of Montrose. The Welsh Government told us that
“as the setting of tariffs is a reserved matter, limited information is shared with Devolved Governments and we were unable to have meaningful discussions with UK Government on this issue … This lack of discussion makes it difficult for us to ascertain whether our interests in this area are being protected as negotiations progress.”
That is a very fair point and I think the UK Government owe the Welsh—the Scots say much the same—an answer. The friction with the devolved Governments was clearly not a priority for the outgoing Prime Minister, but I hope it will get more attention from his successor and that the Government will drop the absurd objection, encapsulated in paragraph 147 of our report, where they say that
“sharing information on tariff liberalisation … could jeopardise overall negotiations.”
That is the reverse of the truth; it is not just wrong, it is absurd. It is extremely useful for a negotiator to be able to point out that a proposed concession could cause serious problems back home; it is extremely useful if one wants to reject it and even more useful if one aims to extract a higher price for it. Having an informed instructing constituency back home strengthens one’s negotiating position; it does not weaken it. It also avoids surprises of the kind that clearly struck the hill farming community when the deal with Australia took place.
I believe that the devolved Administrations should have been represented in the negotiating teams that negotiated with Australia, at least on farm products. They should be represented in the teams that negotiate—if such negotiations happen—on agriculture with Canada, Mexico, Uruguay, Brazil and, of course, the United States. These countries—which are much closer—will offer much greater competition to our farmers if tariffs come down. It would also make sense for wider reasons: to heal this running sore in Whitehall’s relationship with Belfast, Cardiff and, particularly, Edinburgh. I am sure that the noble Viscount, Lord Younger, will take this point on board more than most, and I very much hope that he will take it back to Whitehall.
Lord Robathan (Con)
My Lords, it is a great pleasure to follow the noble Lord, Lord Kerr, with whom I used to sit on this committee. We sparred a little; he particularly did not like my suggestion that smoking in the committee should be banned, even when it was on Zoom. But never mind—I think other members of the committee will understand that.
I, like him, am broadly philosophically a free trader—not totally, but broadly philosophically one. I thought I would be the first person speaking in this debate to welcome the free trade agreement but the noble Lord, Lord Oates, welcomed it, albeit with quite a few reservations. I do welcome it, wholeheartedly. The report, which I have read is mostly—this is not meant to be condescending—extremely sensible and raised some very reasonable points.
I was on the committee at the beginning of the investigation. It was extremely well chaired by the noble and learned Lord, Lord Goldsmith, and I regret that he has felt the need to stand down from the House of Lords because of rather controversial issues about declarations. I thought he was a really good chairman and extraordinarily balanced. I am sure the noble Baroness, Lady Hayter of Kentish Town, is similarly balanced and a good chairman, but I have no experience of that.
I shall just explain why I left the committee, which is slightly illustrated by this debate. I left because I was too often the sole voice on the committee who wanted the trade agreements to work. I am afraid that too many on the committee wanted to see post-Brexit trade deals fail because they wanted Brexit to fail. I found this extremely sad because I am interested in the good of this country, not in party-political—or whatever—machinations.
This UK-Australia trade deal is far from perfect—we have heard about a lot of the defects in it—but please show me a free trade agreement that is perfect. When we were in the European Union, the EU agreements were extraordinarily torturous and slow, often reaching no conclusion at all, not least because they were trying to satisfy 26 or 27 members of the EU. They were looking after French farmers, for instance, which is more important in the EU than the benefits of a free trade agreement to consumers and society as a whole.
I am a farmer, as declared in the register of interests, and I know things can be very hard. However, interestingly—I would like my noble friend to confirm this when he sums up—I understand that the current quotas of beef and lamb imported into the UK from the antipodes are not nearly filled, so this free trade agreement will not make things worse. I have to say that some of the arguments being advanced have echoes of the corn law debates.
The common agricultural policy—of which we all have experience in one way or another—is very expensive, extremely disruptive to agricultural communities and, frankly, madness. Surely it is better to be out of that. I would love to hear somebody among those who will speak later defend the common agricultural policy. It has hugely harmed the agricultural sector in so many ways—I agree that perhaps it needed sprucing up, but, nevertheless, it really has.
Climate change has been much mentioned. I have been banging on about climate change and environmental issues since I got into the House of Commons, 30 years ago. When I first mentioned climate change, it was thought to be a rather eccentric obsession; it is not anymore. However, I have to say that the report is somewhat nitpicking on the issue of Australian coal. I agree with the sentiment, but those with nostalgia for our imperial past may not have realised that Australia is a sovereign country now, not one of our colonies, so it is up to Australia to decide what to do. Yes, we can lobby for it, but hold on, how many of us are not wearing something—in my case, it is my socks and shirt—that were not made in China?
Lord Robathan (Con)
Are the noble Lords sure? They should check where their shirts were made—or perhaps they are Jermyn Street only.
China is belching forth fumes from coal-fired power stations, yet we have the belt and road initiative pouring goods into our country from China. We do not very often hear people saying, “Well, we can’t possibly let those in because the Chinese are using so much coal”.
I am going to tell one illustrative story about the committee, which perhaps explains why I left. Tony Abbott seems to have fallen by the wayside, but he was touted as an adviser. At one meeting, this was mentioned, and he was roundly slagged off for not knowing anything and, even worse, for being conservative. I think it was the next week that George Brandis, the high commissioner, came to speak to us. I had done a bit of research and knew that George Brandis had been in his Cabinet, so I asked—innocently, as always— whether he thought that Tony Abbott’s advice could add anything to our free trade agreement. He said, “Tony Abbott? Fantastic guy; absolutely brilliant. He knows so much about trade”. If it is possible on Zoom to see crests falling, I can promise your Lordships that there were a lot of crestfallen faces around.
In summary, I found being on the committee a less than edifying experience. I am sorry about that, because I thought it would be really interesting. However, I think the report is fairly balanced and makes some very good points. It is a pity that there was not greater enthusiasm in the report, or on the committee, for a free trade agreement, however imperfect, because, like the noble Lord, Lord Kerr, I think that free trade benefits everybody. The agreement was reached quickly—perhaps too quickly, indeed—but it was for the benefit of this country and its people, and for the benefit of Australia as well.
Lord Morris of Aberavon (Lab)
My Lords, I will restrain myself from commenting on the published taxation proposals of candidates for the Conservative leadership, save to say that Charles Dickens might have wickedly asserted that there was the smell of an Eatanswill election. I am pleased to tell the House that I am not aware of any personal taxation temptations in this agreement. However, this is an important agreement with Australia—the first trade deal, from scratch, post Brexit.
First, have we prioritised speed of the negotiation at the expense of the UK’s leverage to negotiate a better outcome for the environment? Could we have had some influence on Australia’s use of coal? Have the agreement and the report by the committee on which I served been overtaken by a change of Government in Australia? Will the Government use the joint committee to explore possible changes in the environmental and climate change provisions in the agreement? It is an important issue and the machinery is there, so do they intend to use it?
Secondly, although hitherto the amount of beef inputs to the UK have been small, there is no guarantee that there will not be an upsurge in the future. Are the provisions, criticised by the farming organisations and referred to in a trenchant speech by the noble Duke, the Duke of Montrose, sufficiently robust to deal with what may happen over the next 10 to 15 years? As in the report, I declare my non-financial interests in the occupation and livelihood of many members of my family.
Some Australian commentators have called the agreement a win-win result for Australian agriculture, with some envisaging the prospect of a tenfold increase in beef exports. Proximity and practice have meant that, hitherto, Far Eastern markets have been more attractive to Australia. However, I note a recent 38% decline in beef exports to China for political reasons. Have the Government taken this possibility properly on board? I would not wish, as a former MP and a representative of consumers for 41 years, to be unduly protective, but it is obvious to some that if this agreement is used as a template for an agreement with New Zealand, British agriculture could be adversely affected. It is beyond argument that there is nothing in this agreement for British agriculture, and I am sure that the noble Duke will agree with me on that.
My third point is more specific, on whether the agreement will be used generally for our entry into the CPTPP—the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. Will it be the template for general negotiations? Frankly, I am much more concerned about the dangers of a substantial increase in New Zealand lamb inputs, however desirable this might be, to cushion gaps when our lamb is not available. As always, the danger lies in untimely, unregulated excessive imports. In the post-Brexit era, there is a case for a proper agricultural policy on imports which would both ensure the prosperity of British agriculture and take advantage of cheaper imports for the British housewife. I assert that livestock rearing is more important in the devolved nations than in many other parts. I compare the size of the average farming unit in the antipodes with those in this country; the advantage of size and climate should make us wary of uninhibited imports.
I again mention my dissatisfaction expressed in earlier debates with the degree and manner of the Government’s involvement with the devolved Governments—the noble Lord, Lord Kerr, has referred to this already—and repeat my rejection of the Government’s defence for not forwarding the views of those Governments because of the danger of jeopardising the Government’s negotiation with other parties. The committee has therefore been driven to seek the views of the devolved nations directly.
It is not on to operate in this way, when agriculture has been devolved and when any negotiations in this field can have a tremendous effect on the culture of the nations that I am interested in. The Government must start afresh by taking the views of the devolved nations into account. If they maintain the defence that that would jeopardise their negotiating position, could we not be told in confidence, and then the committee could make its proposals known so that the House could take a view? There is no basis whatever for this defensive attitude.
My last point is to welcome the Government’s commitment to produce monitoring reports of the agreement every two years, as well as an evaluation report after five years. I hope the House will consider my reservations about some aspects of this agreement.
Lord Bilimoria (CB)
My Lords, I paid full credit to the Department for International Trade for having rolled over more than 66 EU bilateral free trade agreements in time for the transitional period. As president of the CBI at the time, I was proud to play a role in making that, including the Canada deal, happen. The UK-Australia free trade agreement is the first the UK has negotiated from scratch since leaving the EU and was signed on 16 December here in the UK and, because of the time difference, on 17 December in Australia.
It will always remain to be seen how trade flows will be affected once implementation of an agreement takes place. I am sure the Government will agree that is it is one thing signing a free trade agreement, it is another ensuring that businesses in both countries make full use of them and are aware of all the provisions and improvements in the FTA. What plans do the Government have to communicate those benefits to businesses here in the UK, in particular? Organisations such as the CBI will have a major role to play in that.
I congratulate the noble Baroness, Lady Hayter, and the International Agreements Committee on its report, Scrutiny of International Agreements: UK-Australia Free Trade Agreement. It clearly states:
“Imports from Australia will lead to greater consumer choice, which is welcome. Consumers could also benefit from lower prices for imported goods.”
The Secretary of State, Anne-Marie Trevelyan, has described the agreement as
“historic … setting new global standards in digital and services and creating new work and travel opportunities for Brits and Aussies”.
Of course, it will help create new opportunities for businesses in both the UK and Australia.
For example, it gives guaranteed access to bid for an additional £10 billion-worth of Australian public sector contracts and allows young people—and “young” has been extended from 18 to 35—to work for three years unrestricted in each other’s countries. The New Zealand free trade agreement now also has this provision, which I am delighted to hear. For the first time, UK service suppliers, including architects, researchers, accountants, lawyers and scientists, will have access to visas to work in Australia without being subject to Australia’s changing skilled occupation list. This is more than Australia has ever offered to any other country in a free trade agreement. The big thing about this is that it removes all tariffs, making it cheaper to sell our products, including Scotch whisky, to Australia, and for Australian wines to come over here. So that is a big aspect, and I do not think people appreciate that the UK has traditionally been the second-largest services exporter in the world, so it is very important for us.
This is, in my view, the most comprehensive free trade agreement in the world. It covers many different areas, which I shall go into, including 32 chapters, from trade in goods to trade remedies, rules of origin, trade facilitation, customs procedures, financial services, investment, the environment, trade and gender equality, dispute settlements and an impact assessment—and it has the first-ever dedicated innovation chapter in any free trade agreement in the world, which is fantastic news.
The Government’s impact assessment estimates that this agreement could increase trade between the UK and Australia by more than 50%, representing
“around £10.4 billion in the long run”.
That is fantastic. Of course, this increase
“is driven by reductions in regulatory restrictions to goods and services trade, tariff reductions, income and supply chain effects as the UK economy grows.”
Other speakers have mentioned that the impact on our GDP is relatively modest, at 0.08%.
On the restrictions and concerns around agriculture, there is a 15-year phasing-in period for beef and sheep. Of course, as Anne-Marie Trevelyan said, this is
“only a small fraction of our overall beef imports. Just 0.1% of all Australian beef exports went to the UK last year. Also, it is relatively unlikely that large volumes of beef and sheep will be diverted to the UK from lucrative markets in Asia, which are much closer to Australia”.—[Official Report, Commons, 5/1/22; col. 66.]
It is important that we debate this agreement because it is a forerunner to future agreements. A New Zealand one has just been agreed, an India free trade agreement is being negotiated and other agreements are now being uprated. We are also starting to upgrade some of the 66 bilateral agreements that were rolled over from the EU, such as the one with Mexico, to make them bespoke to us. The CPTPP was also mentioned; I will come to it later.
When it comes to digital and data provisions, as the Lords International Agreements Committee asked, how will the Government
“ensure that UK citizens’ personal data exchanged under the agreement will be protected and offer commitments that digital trade provisions in future trade agreements will not put at risk the UK’s data adequacy decision with the EU”?
Can the Minister address that? The committee’s report also referred to the Trade and Agriculture Commission’s
“finding that the FTA is unlikely to lead to substantive increases of imports into the UK of goods produced to lower standards, including animal welfare standards.”
This will be a concern for many people. The committee recommended:
“The Government should continue to monitor the levels of”
items; for example,
“pesticide residue on imported goods from Australia”.
Do the Government agree?
There is a chapter on small and medium-sized enterprises. The agreement will be advantageous here, but how can we encourage SMEs to export more? At the moment, only 10% of our companies export; of those, only 14% are super-exporters that export more than 10 different products to 10 different countries. Compare that with a country such as Germany, where it is 40%. The export strategy is absolutely vital, and we need to do much more to promote exports.
Going back to my role with the CBI, I personally played a major role in helping this particular free trade agreement at various stages, including helping it get over the line. We worked with not only the DIT on our side but Dan Tehan, the Australian Trade Minister who was the vice-president of the CPTPP accession committee at that time, and, of course, His Excellency George Brandis, the then Australian high commissioner. We have similarly been working with the New Zealand Trade Minister and the New Zealand high commissioner, Bede Corry. This way of working—getting business organisations such as the CBI to help the Government get these deals over the line and bringing stakeholders face to face with both sides—has worked extremely well; I would recommend it for all future negotiations, including the continuing India negotiation.
The noble Baroness, Lady Liddell, expressed some scepticism about the CPTPP. I think that it will be a fantastic thing for Britain. It covers 13% of the world economy; if you include the UK, it is 16%. It gives the UK access to the fast-growing Indo-Pacific region. We will be with allies of ours. We will have huge benefits, including modern digital rules and the elimination of tariffs. Of course, as the impact assessment says, the Australian FTA is a big
“stepping stone to our accession to CPTPP”;
I imagine that the Government would agree with that.
It will allow us to eliminate tariffs on UK exports more quickly—for example, whisky can come down from 165% duty to 0% in Malaysia, and car duty can be reduced to 0% in Canada by 2022—if we complete these negotiations. These are huge benefits to us. We also have the rules of origin, allowing content from all CPTPP countries to be cumulated, so that if goods have at least 70% CPTPP content, they qualify for preferential tariffs. It is great that 70% can come from any combination of CPTPP countries.
What stage are we at now with the CPTPP agreement? Will we gain accession by the end of the year, which was the target? We already have, if we include New Zealand, bilateral agreements with nine of the 11 countries—leaving only Malaysia and Brunei—equating to £110 billion worth of trade with the UK. That is higher than China, which has just under £100 billion. This is one of the largest free trade agreements in the world and key to the success of global Britain. Its members are the fastest-growing economies in the world, with expanding middle classes, an appetite for British goods, products and services, and a respect for brand Britain. For the UK to remain competitive, it must position itself as a trading partner of choice in that region.
On the environmental provisions, the FTA refers to the Paris Agreement but has been criticised for the lack of explicit reference to limiting the global average temperature increase to 1.5 degrees.
Can the Minister provide some clarity on the interaction between the Northern Ireland protocol and the FTA? It appears that exports from Northern Ireland to Australia will benefit from the FTA but that there are complications with goods entering Northern Ireland, including from the UK. This is further complicated by the protocol. Please, will the Government sort out the Northern Ireland protocol? Let us deal with the practicalities. I have visited CBI members on the ground in Northern Ireland. They just want to get on with it and get this protocol resolved using a practical mindset, because once we resolve the protocol, we can work on the biggest trade agreement that we have, which is with our neighbour on our doorstep. Some 45% of our trade is with the European Union, and the trade and co-operation agreement needs to be upgraded in a huge way, which we cannot do unless we sort out the protocol. Similarly, the Horizon project, which was so valuable for research between European universities and British universities, is under threat of being lost unless we sort out the protocol. There is an urgency over there.
The United Kingdom published our first integrated review on 16 March 2021. It talked about a tilt to the Indo-Pacific. Policy Exchange, of which I am proud to be a trustee, was ahead of the game. It produced a report, A Very British Tilt: Towards a New UK Strategy in the Indo-Pacific Region, in November 2020. It is so sad that the foreword of that report was written by the late Shinzo Abe.
Professional services and the recognition of qualifications in the FTA are hugely important, providing a pathway towards a mutual recognition of professional qualifications, which, again, would be very useful for our services exports. On legal services, it provides an agreement allowing UK and Australian lawyers to advise clients. If only we could have this in the India free trade agreement as well. Temporary entry for UK businesspersons is very useful for us, as is youth mobility, which I referred to. The agreement also includes provision on market excess for investors. Digital trade is covered, which is fantastic, as well as digital facilitation, data governance and data protection, technologies in data innovation, and consumer protection. It also has a very strong intellectual property chapter—again, I advise that we have the same in the India deal—and covers procurement, and the areas of beef and sheepmeat that I touched on earlier.
That said, the Government’s impact assessment shows a negative effect of the FTA on agriculture, forestry and fishing, and the semi-processed food sector. Do the Government agree? This is why the FTA is generally regarded with concern by the farming sector. The NFU warned that the agreement could have a significant impact on UK farming, with livestock and sugar particularly affected because of the lower cost of production in Australia compared with the United Kingdom.
Security and trade go hand in hand. Australia is a member of the Quad, along with Japan, the United States and India. I have suggested that the UK should join the Quad, making it Quad Plus, thereby encircling the world. We have AUKUS as well.
The speed of this deal was fantastic—one year, or one and a half years by the time it was signed. India signed deals with the UAE and Australia in under 90 days, but they were much lighter in content. It is very important that we do this thoroughly, and we have done that here.
Finally, trade deals such as this are all very well, but we must continue to be a magnet for inward investment as a country. We cannot do that if we have the highest tax burden in 70 years. That also comes into play. All in all, I am all for the deal and I congratulate the Government on securing it.
Baroness McIntosh of Pickering (Con)
My Lords, I am delighted to follow the noble Lord, Lord Bilimoria. I wonder whether his asking for lower taxes was his pitch to be the next leader of the Conservative Party.
I will start with the noble Lord’s comments about the Northern Ireland protocol. Clearly, it needs to be revised, but I add some words of caution: it is a fundamental part of the UK-EU withdrawal agreement. We need to treat that very sensitively indeed.
I congratulate the noble Baroness, Lady Hayter, and her committee on not just preparing the report but bringing the debate to the House this afternoon. I add my thanks to and pay tribute to my noble friend Lord Grimstone, who was extremely assiduous, charming and generous with his time at every stage of every debate he participated in. I pay a personal tribute to him and wish him well. I am sure we have not seen the last of his interventions as a Minister.
My approach to this free trade agreement is cautious. I highlight the fact that criticisms have been made, notably in the report before us but also by the EFRA Committee next door and others, and the fact that the Trade and Agriculture Commission can examine agreements only once they have been signed, which has been criticised in previous debates. I think we in Parliament would all sign up to the fact that the commission should be able to intensively scrutinise and make recommendations on each agreement before it is signed. I hope that is something the Government might keep under review.
In that regard, these agreements are seen to fall short in content and scrutiny. I add to that my criticism that there appears to be a lack of strategy in negotiating trade agreements, which is illustrated by this agreement in particular. I am grateful that the committee has annexed to the report in its appendix 3 an extract from the UK Government’s strategy for the UK-Australia free trade agreement. The Government published their public negotiating objectives for a free trade agreement with Australia but there does not seem to be an overarching strategy.
I single out the two paragraphs that relate to sanitary and phytosanitary standards. Here, the Government commit to:
“Uphold the UK’s high levels of public, animal, and plant health, including food safety”
and:
“Enhance access for UK agri-food … to the Australian market by seeking commitments to improve the timeliness and transparency of approval processes for UK goods.”
My first question to the Minister is: how can we hold the Government’s feet to the fire on sanitary and phytosanitary standards? It strikes me, and I am not the first to mention this in the debate, that this agreement is yet another asymmetrical deal that benefits the other side, the Australians, much more preferentially than the UK. I am sure the noble Lord, Lord Purvis, will agree because he made the same point when debating other agreements. I also point out that it adds value of only 0.02% to the UK economy, so I really have to hesitate before we congratulate ourselves too warmly in this regard.
The Government were elected, what seems like a long time ago in 2019, on a manifesto that committed to maintaining high standards of production and, in particular, of animal welfare, environmental protection and food hygiene and safety. Not long after that election, the NFU ran a very successful campaign and persuaded 1 million people in this country to sign a petition calling for these standards to be maintained. Yet, as the Great Yorkshire Show starts tomorrow and runs for the rest of this week, the farmers will explain to all, including one of the leading negotiators in Defra, Janet Hughes, who is looking at future farming policy in this country, how vulnerable farmers feel at this time. I entirely endorse the comments of my noble friend the Duke of Montrose in this regard.
It is the hill farmers and the uplands of the north of England that are suffering, as well as other parts of the UK. We have seen rising energy costs, higher fuel prices and an acute shortage of labour, which means that many fruits and vegetables, including salads, will simply not be picked this year. We are about 40% down on the labour we would usually have through seasonal workers. That is partly because the Ukrainians cannot come and help, but we simply have not attracted enough seasonal farm workers this year. I hope that will be put right in the SAWS agreement on seasonal agricultural workers in 2023.
If we do not resolve these issues, particularly as regards suckler cows and spring lambs in the hill farms and uplands of the north of England, and other parts of England and the United Kingdom, we will have the most severe social crisis for generations in our countryside. That is the backdrop against which the Great Yorkshire Show will meet this year. I hope these pleas will not fall on deaf ears in the Government.
I conclude by asking my noble friend the Minister what he feels that the agreement that is the subject of the report this afternoon will offer us, over and above what we would have had in the rollover agreements. What will particularly benefit UK farmers and other industries in this country?
Lord Liddle (Lab)
My Lords, first, I pay tribute to the noble Lord, Lord Grimstone, who was a very good Minister. He always attempted to answer our questions and treat Members of Parliament with seriousness. He approached his job as a Minister with a level of seriousness that some members of the Cabinet would have done well to follow. Secondly, I pay tribute to my noble friend Lady Hayter for producing this very good, balanced report. It is a bit kinder to the agreement than instinctively I am, but it is an important job of scrutiny well done. The only tragedy about parliamentary scrutiny is that we do not have in the British Parliament what exists in the European Parliament: a trade committee that follows and comments on the negotiations by the Commission at every stage. It is not much use having scrutiny only when the whole thing is over, so I hope we will press that point about future scrutiny and continue to press it.
My general view of this is that, as we are outside the EU, we have the ability to conclude our own trade agreements. This is what we should do, as it is in the national interest, but in this agreement—this is the central point I want to make—we are heading for a post-Brexit political economy that I am not particularly enthused about. That is a political economy based not on a European model of high standards underpinning our society, but a model based on Britain becoming Singapore-on-Thames and being part of a deregulated Pacific community, which could have consequences for the British people.
That is my worry about this agreement, but let us first examine its practical content. I am an instinctive free trader, like most of us in the Chamber, I suspect. I have always thought that consumers do well out of cheap goods, and therefore free trade and competition is a good thing. However, when I worked in the Cabinet of my noble friend Lord Mandelson when he was Trade Commissioner, I learned a few things about how others approached trade negotiations. Certainly, in Brussels, I remember asking senior officials questions about this, and they said, “Roger, what you’ve got to do is work out your offensive interests in any trade negotiation. Then you have to work out what you will defend to the last that the other side will want”. I think Britain has interpreted its offensive interests, in a simple way, as being strongly in services liberalisation. I think that is correct; that is where our great competitive strengths are. The question is whether, in order to pursue modest gains in services liberalisation, we are prepared to make large sacrifices—the common external tariff that we used to have with the EU, which to a large extent we have taken on ourselves—and whether we are prepared cut our tariffs. Of course, that policy pursued to its logical conclusion will be pretty ruinous for British agriculture and for large sections of our manufacturing that will have very little protection. Thinking about Britain, as opposed to London and Singapore-on-Thames, we have to ask whether this pursuit of services liberalisation, above everything else, will fit with the levelling-up objectives of our much-lamented Prime Minister.
I tried to find out what academics think about this agreement. There is a UK Trade Policy Observatory at the University of Sussex, and its conclusion based on its modelling is that the deal will boost Australian exports to us six times more than any benefit the other way, to the UK. That is a considered, academic view, and I will give you the numbers. It estimates that
“the UK may see an increase in exports of 0.35%, while Australia’s exports are simulated to increase by 2.2% once the free trade agreement is in force.”
That is why the forecast gain to our GDP of 0.07% is so small. The practical benefits are not that huge, and we ought to bear that in mind.
We have given a lot away, it seems, for not that much in return on services. But it is a modest step and therefore one should not be too critical, I suppose. There are some aspects of it that I really like: it is great that the working visas are to be expanded for people aged under 35, whereas previously they were only for those under 30, and from two to three years. That gives young people a tremendous opportunity to work in another country. I only wish that the TCA with the European Union had a similar agreement. If it had, a lot of the problems that we presently witness in the creative sector, with young people who are touring around Europe and all that, would just disappear. This model of the liberalisation of visas for young people, enabling them to work to pay for their stay in another country, is one that we should try to extend more generally.
Coming on to my reservations, I think the Government see—I should like to know whether the noble Viscount, Lord Younger, agrees with this—the main benefit of this agreement as unlocking the door to our membership of the CPTPP, the Pacific Rim trade agreement. This is the wrong post-Brexit political economy for Britain. It is true that it plays to our economic strengths, which are in services, and that Asia is an area with tremendous potential for growth. But within this economic area, there is very little concern for standards and the predominant view favours deregulation. This is particularly true of environmental standards and, on that point, the deal with Australia is absolutely shocking.
At present we are looking, along with the European Union—this is one area where there is alignment—at whether we should impose a carbon border adjustment mechanism on countries that do not stick to their climate change commitments. This deal with Australia has absolutely nothing to say about that question, yet this is a pretty fundamental point for the future. Our ability to use our economic strength, in Europe and Britain, to force other countries to take their obligations seriously will be important in tackling the climate crisis in future, and I worry that this trans-Pacific thing is an obstacle to that.
I also worry, as a Labour man, about labour standards, about whether trade unions are recognised and about whether there are minimum wages. What standards are there, and are people working in safe and reasonable conditions? If we keep alignment on these questions with Europe, as we were promised by this Government in all the Brexit negotiations, there will be at least some minimum standards. But are those minimum standards to be included in this Pacific agreement? I do not know, and I have doubts.
This seems to fit in with the tilt to the Pacific included in the recent defence review. With the war in Ukraine, however, do we really think that our central security interests are in the Pacific? Is that what people such as my friend the noble Lord, Lord Robathan, over there really think? Surely, our central security interests remain in Europe.
Lord Robathan (Con)
Actually, I agree with the noble Lord, and thank him for asking, but I do not think it is an either/or; I do not think it is binary. The issue with the Pacific is huge, as is the issue with Europe.
Lord Liddle (Lab)
I agree with that as well, but there is also a contradiction about this focus on the Pacific: the reason it is an economically dynamic area is because of the dynamism of China—it is China that drives the Pacific area. If with one hand we are saying we want economically to be a beneficiary of this but with the other hand saying we think there is a major security threat here, I do not know quite where we are going to end up. I just raise that as a question, but it seems to me to be an important one.
I have doubts—I am not saying I rule it out—about whether this Pacific tilt is wise. I worry that any trade agreement we make that does not meet European standards raises issues about trade with the single market in Europe, which is still by far the most central part of our economic interests.
Lord Udny-Lister (Con)
My Lords, I stand, I think, as one of the few to welcome what is a landmark deal. It is an ambitious one and quite an exciting one, because it is the first of the new form of deals that are being struck. It is also a rekindling of our historic and important relationship with Australia through free trade. It is part of our post-Brexit journey. It is also a moment when we can go back to what we used to have with that country and to those relationships which were so brutally terminated when we joined the EU. We have a real chance to develop this further, and I will talk about the CPTPP in a minute. It is all about global Britain and the opportunities that exist.
In speaking, I draw attention to my interests, which are declared in the register, including my work for HSBC bank. I also thank the noble Baroness, Lady Hayter, for getting this debate. There is another thank you I want to make, and that is to the noble Lord, Lord Grimstone. It is very sad that he has given up as the Trade Minister. I am one of the few, probably, in this Chamber who have seen him at work, actually negotiating. He was an impressive operator. It will be very difficult to follow him, and he is going to leave a real gap.
The report before us rightly points to the identification of several risks. However, I want to observe that, in our long and very proud history as an island trading nation, I cannot point to a single moment in time where we entered in good faith into trading arrangements without there being some element of risk. Our task is to scrutinise FTAs that come before Parliament. It should not focus solely, as some Brexit-loathing commentators would have it, on risk alone, for our task is to weigh up risks against the opportunities that will come, and to seek to hold the Government to account on how they unlock these opportunities to the benefit of every part of the United Kingdom.
A lot has been said on the topic of agriculture. Indeed, the National Farmers’ Union, among others, has tried to peddle a myth that this agreement fails to deliver for British farmers and that our standards will somehow be eroded. I put it to your Lordships’ House that such assertions are wrong, as the Government have been successful in achieving significant safeguards for British farmers, namely through the tariff rate quota, the product-specific safeguard and the bilateral safeguard measures.
When it comes to food standards, it is worth noting that the FTA does not create any new permissions for imports from Australia, and that our stringent world-class import requirements and independent food regulations all remain. Perhaps it is for some an inconvenient truth, or it simply goes against the Brexit-bashing narrative to which some have become accustomed, to accept—as we should all proudly accept—that the UK is already globally renowned for our agricultural excellence, animal welfare and food safety standards.
There is nothing in this agreement that farmers should fear. Like those in most other sectors, they would do well to ignore the Brexit doomsayers who will always try to spread fear in the hope of overriding the largest democratic mandate in British history and the sound decision of the British people to seek a new global outlook, free from EU protectionism. I fully concur with the views of the honourable George Brandis, who in an interview with the Financial Times called for farmers to be
“more open to the benefits of trade and international competition”,
and for the
“culture of fear of global trade”
to come to a swift end.
Baroness McIntosh of Pickering (Con)
I am sorry to interrupt, but does my noble friend share my concern that there should be a level playing field, so that any imports into this country from Australia should not be produced with pesticides which are banned in this country or the rest of the EU, and should not be raised to standards which we and British consumers would not accept? If that is the case, I think that he will share my concerns about the agreement as negotiated.
Lord Udny-Lister (Con)
I am afraid that I do not agree with this, because I think that the standards that exist in Australia are not that different from the standards here. I would also suggest that, certainly on animal husbandry, there are many other countries in the world with which people would have a lot more difficulty than they do with Australia—I can think of parts of eastern Europe where probably the standards are well below those which we are currently getting from Australia.
The deal is our gateway for joining the CPTPP. With demand for beef and lamb increasing in the Asian markets, there is an unprecedented opportunity for our farmers to capitalise on what is going to become exports of very high-quality British meats—but of course they are going to have to be of a standard and are going to have to be marketed in the right way.
The deal supports British farmers, protects our standards, advances animal welfare through non-regression clauses, and creates new and incomparable opportunities for our food and drink exporters. Our free trade agreement with Australia will not only unlock over £10 billion-worth of additional bilateral trade but, as the global economy increasingly centres on the high-growth, high-tech Indo-Pacific region, as I mentioned just now, we must remember that our accession to this agreement is an integral component of the United Kingdom’s journey to joining the CPTPP. The importance of this cannot and must not be downplayed, for our accession to the CPTPP will give the UK access to a free trade area encompassing 11 strategically important states, with a combined GDP of some £8.4 trillion.
It is estimated that there are currently 15,000 UK businesses that are already exporting goods and services to Australia. Through breaking down regulation, protecting innovation, enhancing consumer protection and creating new visa pathways, this agreement has the potential to deliver for each and every one of them.
The Government will be tested on how effective they are in supporting UK businesses to make the most of this landmark agreement. I would welcome comment from my noble friend the Minister on what work is being done by the Department for International Trade to ensure that UK businesses are engaged and ready and waiting to unlock the ultimate potential of an FTA.
I further welcome how this agreement will create new opportunities for the UK’s world-class legal profession. It is universally acknowledged that our legal, financial and other professional services are among our greatest exports, and I commend the way in which Her Majesty’s Government have sought to protect and enhance the UK’s interests here, from providing UK law firms with legally guaranteed access to Australian government contracts for legal services to improving the mobility of lawyers in order to enhance their experience by working abroad. I stand encouraged by the way in which the Government have listened to the sector and hope that the support shown for our professional services sector in this agreement will set a precedent for future FTAs.
I am further pleased to note Her Majesty’s Government’s success in achieving their negotiation objective on digital trade across all sectors of the economy. I concur that there is still a lot of work to do in fine-tuning the regulatory framework and putting this into practice on the ground, and thus I would welcome some reassurances from my noble friend that the department are undertaking further work in this area.
The opportunities for this free trade agreement should motivate and excite us, whether you want to see the UK’s high-tech industries of AI and space exploration thrive, are a young person seeking exciting opportunities down under or are simply a consumer—like many of your Lordships, dare I predict?—looking forward to tariff-free wine or Vegemite. To conclude, there is something in this agreement for everyone, and I wish the Government godspeed in making sure that it delivers for everyone and as part of the United Kingdom’s journey towards the CPTPP.
Viscount Waverley (CB)
My Lords, the noble Lord’s observation leads me to two regrettable observations. Trade is one of those nebulous facts of life that requires a greater degree of attention. However, just today, a senior trade writer at the Financial Times asked whether any of the candidates for Conservative Party leader will improve British trade policy—we certainly hope so. Additionally, I was dismayed to receive a message from an exasperated exporter today:
“I have a problem getting any information about the procedure and protocol from DIT on matters relating to my business”.
These issues require urgent attention.
The current limbo presents an opportunity to underpin Parliament’s contribution to governance and generally across the board, not just in relation to FTAs. The committee’s comprehensive report has met with varying degrees of support. Wherever one stands on the content of this FTA—our first negotiated from scratch post Brexit—it has significant implications in key policy areas, including food standards, animal welfare standards, environmental standards and procurement.
The FTA also sets an important precedent for how similar such agreements will be negotiated and ratified under the Government’s future programme. This is important because, as has been pointed out, it also represents the first-out-of-the-blocks forward thinking for the CPTPP discussions. Although we tend to go around this in circles, as delay in ratification is the norm of the day, many conclude that this ratification process is not adequate. Completing agreements with New Zealand, India and the Gulf Cooperation Council in the coming months is the goal, but there has been little opportunity to debate the Government’s original objectives, and we have not received comprehensive negotiation updates.
Parliamentary colleagues in Australia say that their Government will not establish their standing committee on treaties until the end of July, at which point they will embark on a scrutiny process lasting around three months. What is the rationale, therefore, for pushing this through in the UK—in the face of calls to delay across both Houses in Westminster—thus putting pressure on the 21-day CRaG period being used effectively for comprehensive scrutiny in both Houses?
There is still no clarity about whether the Government will grant time for a vote or even a debate on the UK-Australia FTA during CRaG in the other place. What is to be the process by which Parliament can secure a vote on a trade agreement? CRaG suggests that Members in the other place should resolve against ratification to allow further time for scrutiny, but there is no clear precedent for what form this might take. Possibly, we ought to consider delaying ratification and thus be in line with Australia’s timetable, giving a period to consider from Australia’s perspective some of the differing policy issues that have been touched on this afternoon, and to consider those forthcoming in the UK.
Lord Purvis of Tweed (LD)
My Lords, it is a pleasure to follow the noble Viscount, as I frequently do in these debates. I enjoy his contributions, and the debates, and I will touch on his substantive point on the scrutiny period in a moment. Given his comment, combined with that of the noble Lord, Lord Kerr, on these issues, discussing the quality of the horse’s breeding after it has bolted, I am willing—unless the Minister is able to be reassuring—to table a Motion to extend the scrutiny period beyond 20 July. I have done this before and will do so again, because we need to properly discuss these issues in both Houses.
I pay tribute to the committee for its work; I have done so before and I will continue to do so. Its reports are for debate in this House but they also inform it and the public, and they do a great constitutional service. My noble friend Lord Oates and I are literally Liberal free traders, and we therefore welcome the agreement, especially the parts on services, recognition of professional qualifications and the movement of people, which the noble Lord, Lord Liddle, mentioned. In supporting free, fair and open trade, many of our debates are more about non-tariff barriers than tariff barriers. This was particularly the case with Australia, as was mentioned, because its tariffs on UK exports were already low, and the regulatory elements of alignment are therefore very important.
There are questions about services support and facilitation, such as data transfer, where the committee highlighted that there is no data equivalence with Australia. This may cause difficulties for our combined services trade with those with whom we are seeking equivalence agreements. So I hope that the Minister will be able to say whether we expect to take forward in a meaningful way the discussions on data equivalence agreements with Australia to support the reassurance of consumers as well as trade facilitation.
I also enjoyed the debate because there were a couple of areas where there was not total unanimity. The noble Lord, Lord Robathan, was a case in point: I enjoyed his personal resignation statement—obviously, he felt left out—and I agree with him on China. I flippantly said that I do know where the cloth that I wear is from; I was an ambassador for the Scottish College of Textiles in my former constituency, and these are important issues.
The noble Lord raised a point with the noble Lord, Lord Liddle, on where we are geopolitically with our agreement with Australia, and with New Zealand, which we discussed. One of New Zealand’s oldest trade agreements is with China and, at the same time, the UK now has the biggest trade deficit of any country in our nation’s history: we have a trade deficit with China of over £40 billion in goods. This means that we need to debate this open-eyed. I smiled when the noble Lord seemed so envious of the French power to do harm to our farmers that he wanted to bring that back so that we could do harm to our own farmers—
Lord Robathan (Con)
As a farmer, I definitely do not want to do harm to farmers. But I have seen the harm done by the common agricultural policy, which I am sure the noble Lord thinks is marvellous.
Lord Purvis of Tweed (LD)
No, but we did not see output of beef and hill sheepmeat going down 5% and then 3% with any individual agreement, which is what we have seen with the Australia agreement. Perhaps those Brexit-supporting farmers now see the reality that the Government’s own impact assessment says that output will go down 5% and then 3% over 15 years in these sectors. Because I formerly represented a hill-farming constituency, I do not think that this is simply a case of doomsayers; these are genuine issues about the sustainability of our farming industry.
I pay tribute not only to the committee but to the noble Lord, Lord Grimstone, who has resigned from the Government; I enjoyed being his Liberal shadow. I look forward to the seventh Trade Minister whom I will shadow in this place when she or he takes office. I reassure the noble Baroness, Lady Hayter, that it is not her—it is me.
I agree with the overarching twin themes of the committee’s report: first, that this agreement was negotiated in the absence of a wider trade policy—in certain areas, it sits slightly alongside the Government’s export strategy, which I welcomed, but I have not yet seen too much read-across between the two—and, secondly, that the desire to move fast was to secure some boosterism and headlines between our Prime Minster and Australia’s, or, as the press reported at the time, between “BoJo and ScoMo”. We can reflect that neither is in office just months later, so we can question why there was such a rush.
When the noble Lord, Lord Grimstone, introduced the Queen’s Speech debate on trade, he wanted to reassure us that all parts of the UK would benefit from the 0.08% bounty over 15 years of this agreement—or, as the noble Lord, Lord Udny-Lister, said, that there is something in it for everyone. However, when I raised the fact that this had been oversold, I was wafted aside. It appears that it was quite hard for the Government to dismiss the Regulatory Policy Committee, which is tasked with reviewing what the Government say in their impact assessments. It was interesting to note that the Government had to bring forward a second impact assessment after the Regulatory Policy Committee published its initial review. On page 5 of this review, the committee said:
“As originally submitted, the IA was not fit for purpose as the results in the IA were presented in a way that disproportionately emphasised the beneficial impacts with very limited discussion of the risks, disadvantageous impacts, and potential mitigations. In addition, the IA did not adequately describe a range of significant risks and uncertainties associated with the impacts and did not contextualise the estimates sufficiently. The IA suggested a greater degree of certainty and accuracy to the projections than was supported by the underlying evidence and modelling.”
In a way, that neatly sums up how this Government sell their trade policy. Presenting the higher case not “supported by … evidence” means that, when we scrutinise the agreements, they turn out not to be as promised—this seems to be the approach across the Government. I say “the Government”, but it seems as if we have more than one at the moment: there is Liz Truss, the free trade fighter, alongside Anne-Marie Trevelyan, who is breaking WTO rules to have protectionist steel tariffs. Some Ministers on the one hand claim that we are seeing developing standards in nature, biodiversity and animal welfare; I am sure that the noble Viscount, Lord Younger, will say in his speech that this is the case. Other Ministers, apparently in the same Government, are saying the opposite: for example, the Foreign Office Minister the noble Lord, Lord Goldsmith, said yesterday:
“Rishi Sunak has evidently agreed to make Mark Spencer the … DEFRA Sec of State. Mark was the biggest blocker of measures to protect nature, biodiversity, animal welfare. He will be our very own little Bolsonaro. Grim … for nature. But great news for political opponents”.
It would be helpful if the noble Viscount could outline which measures have been blocked by the Treasury because, if a serving Minister says it, we should know about it.
As the noble Lord, Lord Liddle, and others have indicated, this is in the context of now seeing that the evidence has been very clear that our trade with the European Union has declined. This means that the concern raised by some of the witnesses to the committee—that some of the benefits of the Australia agreement might simply be those of displacement, rather than new and additional trade—is very relevant. That even means that the issue that consumers might seek cheaper prices will not necessarily be realised. It also means that the issues raised by some, including the noble Baroness, Lady McIntosh of Pickering, will be relevant for our consideration: that we will not have a level playing field and we would prevent some of our agricultural industry from using certain materials and practices that would be permitted from shipped-in products from Australia—a point raised by the noble Duke, the Duke of Montrose. This is not protectionism; it is realism.
One area which is striking—and especially astonishing given what Liz Truss and every Minister in the department had previously said—is that the UK failed to secure any protection for those goods that have geographical indicators, as the committee indicated. Why? We have heard time after time, during debates on the then Trade Bill and elsewhere, that GIs would be protected, but they are not. This is from Liz Truss, who made her name championing cheese in that famous speech, but has now raised the white cheesecloth on supporting products with geographical indications. We have now fully entered the Wonderland of Alice, because we will be able to protect those products which have geographical indications only should Australia sign an agreement with the European Union, because the European Union would provide the protection—I think the term is “give back control”.
This is a “landmark”, according to the Government’s statement and the noble Lord, Lord Udny-Lister, but my understanding is that landmarks are so called because they are followed. However, from reading the committee’s report, I think it struggled to get clarity from the Government as to whether this will set some form of precedent for other areas. The Government will no doubt say—I have heard them say it previously—that each agreement is negotiated on its merits, et cetera. However, at the same time, we hear the Government saying that this is a gold-standard, “landmark” agreement. This, therefore, raises questions about the impact on diagonal cumulation for developing countries and uncertainty as to that policy; uncertainty to the policy on ISDS, because it was to be reviewed in Canada; and about the situation with Japan. The noble Lord, Lord Grimstone, was a supporter of ISDS; will any new Minister have the same approach?
On the question of standards, which I have raised previously, for genetically modified products or the use of pesticides, is it okay to bring in produce that has been reared using banned products? Will they be approved for our consumers simply because those banned products are at a low level? The Government should be clear about their intentions.
The final point which has been raised—a very relevant one—regards the remaining lack of clarity as to when there will be sufficiently strong guidance for those operating within Northern Ireland.
We support this agreement, but we are not blind to the realities that it will have a negative impact for certain sectors. We certainly think that involving Parliament with less of the boosterism and headline grabbing, and more of the serious work of proper consideration of what trade policy would look like in future, would result in stronger agreements which are less rushed and more sustainable. Ultimately, they will help the British economy, so that it would not be 0.08% but considerably more.
Lord McNicol of West Kilbride (Lab)
My Lords, like nearly all other speakers, I congratulate my noble friend Lady Hayter of Kentish Town and pay tribute to her and her committee on the detailed and balanced report that has been debated this afternoon. I share the overall analysis from the noble Baroness, Lady McIntosh of Pickering, that it is cautious in nature. I think that is fair.
After leaving the European Union it is of course vital that Britain seeks free trade agreements across the world, but there are standards that these agreements must be held to. The deals that we negotiate must benefit UK interests, UK workers and UK businesses. As we have heard, the UK had not negotiated a full free trade agreement from scratch since 1973. I think the noble Lord, Lord Purvis, was very young then.
Lord McNicol of West Kilbride (Lab)
I was four. Negotiating from scratch in itself should not have been an issue, but analysing in detail the Australian agreement raises very real concerns about what has been negotiated and what has not. Parliament has been virtually neutered in the whole process. The Australian agreement was signed in December 2021 and the New Zealand agreement in March 2022. We are now in July with just over one week before Parliament rises. Yes, it has been examined by the International Agreements Committee and the International Trade Committee in the other place but it will then be laid before Parliament similar to any other statutory instrument.
I wonder, as many other noble Lords have this afternoon, whether better parliamentary scrutiny would have led to a better, fairer, greener and more equitable agreement. There is a paradox at the heart of the Australian deal—the Government’s own impact assessment estimates that our farming, forestry and fishing sectors will take a £94 million hit and our semi-processed food industry a £225 million hit. Yet, again by the Government’s own predictions, overall trade will increase by less than 0.1% of GDP by 2035, while there is fear of real damage to some of the UK’s most important sectors.
As many other noble Lords have this afternoon, I worry that the prize of the deal, the prize of the headline, the prize of being first was more important to the Government than the detail of the agreement itself. As my colleague Nick Thomas-Symonds MP said in the Commons:
“Other countries, in future negotiations, will look at what was conceded to the Australian negotiators and take it as a starting point.”—[Official Report, Commons, 5/1/22; col. 67.]
UK exports to Australia as a result of this deal are supposed to rise by 53%, but I see no great basis for that optimism. Few trade deals have ever had that kind of impact, and certainly not those between two countries where there is already a good trading relationship with historically low tariffs. The 53% is also somewhat higher than the original estimate. Can the Minister explain this leap in optimism between the original estimate and the secondary estimates?
As we have heard from the noble Duke, the Duke of Montrose, the noble Baroness, Lady McIntosh of Pickering, and the noble Lord, Lord Liddle, the labour, environment and animal welfare chapters are pretty weak and do not necessarily focus on UK interests. Would the Minister care to elaborate on any specific improvements negotiated which will bring a positive benefit to our labour, environmental or animal welfare standards?
Minette Batters, the NFU president, said:
“The government needs to level with farmers about the commercial reality of this and ditch the soundbites that lost any meaning a long time ago.”
She continued:
“It needs to set out a detailed agri-food export strategy, with complementary policies that will enable UK farmers to compete and adjust.”
Those were some of her more measured words, but she is right.
As always, agreements include carve-outs. How confident is the Minister about the predicted rise in exports given the protections to Australia’s services market? This is in stark contrast to the lack of protection given to the UK food sector in the tariff schedules. Were any of our devolved nations involved in adding to our 12 pages of carve-outs? As I understand it, the Australian states were consulted and state protections included. Were any of the concerns of the UK’s devolved authorities recognised and incorporated into our carve-outs?
I fear that the Australian agricultural corporations will not be held to the same high standards as our farmers. Animal welfare standards have been mentioned a number of times, but what the Government have agreed is a non-regression clause. To be clear, that does not mean that the standards will be the same in both countries. What will actually happen is that meat produced to lower animal welfare standards will get tariff-free access to the UK market. So much for the promise that the Government had no intentions of striking a deal that did not benefit British farmers. Australia’s former negotiator said:
“I don’t think we have ever done as well as this.”
How much engagement did the National Farmers’ Union have after the agreement in principle was published? Was the NFU given the opportunity to raise concerns or make counterproposals? More importantly, was it able to assess the true impact of the FTA before it was finally signed?
The UK granted Australia generous agricultural market access. Why was this not leveraged to press Australia for more ambitious commitments on climate change? As we have heard, there is no reference to the temperature goals which were fundamental to the Paris Agreement, nor to reducing Australia’s reliance on coal, which was addressed in the free trade agreement with New Zealand. As my noble friends Lady Liddell and Lady Hayter have said, we now have a Labor Government in Australia so there is an opportunity to revisit it.
With the energy security Bill making its way through Parliament, this feels like a missed opportunity for the Government to show leadership on the world stage on an issue which is increasingly global, instead of taking an insular approach. Tariff-free access to our UK markets is a prize that Ministers should not give away easily. However, looking at the concessions made by this Government, are we not right to worry? This was a deal the UK Government “were advised” they had to do for the bigger prize of CPTPP accession. I would like to hear the Minister’s views on that.
I return to my opening point, and I cannot put it any better than the noble Lord, Lord Kerr of Kinlochard, with regard to this Australian deal. We are allowed only to debate it; we can do nothing about it.
Viscount Younger of Leckie (Con)
My Lords, I start by acknowledging the opening remarks from the noble Baroness, Lady Hayter, who paid tribute to my noble friend Lord Grimstone of Boscobel, as did other noble Lords, including the noble Lord, Lord Liddle, who made some generous comments about him. I, too, regret that he has decided to step down. He worked very closely with many noble Lords in this House to advance and explain the Government’s free trade agenda, and this was acknowledged in the IAC report that we are debating today. He gathered a number of considerable achievements under his belt while working as the Minister for Investment. Notably, he shepherded the Trade Act on to the statute book, and noble Lords, me included, who took part in the debates on that legislation know that was no mean feat. Beyond his work in Parliament, my noble friend will leave a lasting legacy through his efforts to transform the Government’s approach to investment. The success of the inaugural Global Investment Summit, not to mention the significant sum of overseas investment secured under his tenure, offer no better evidence of his effectiveness in the role.
I suppose that today I come in from extra long leg to bat. I shall be batting but I shall, I hope, be doing some bowling—and, yes, I spent some of the weekend reading through this excellent report. I join other noble Lords in thanking the noble Baroness, Lady Hayter, chair of the IAC, for securing this debate and providing the opportunity to discuss this important subject. I also wish to thank her for the report.
Let me start by saying that I am pleased that the committee has welcomed this FTA today. It is good to have some reasonably positive feedback, including from the noble Lords, Lord Kerr and Lord Oates, and perhaps more effusively from my noble friend Lord Robathan, the noble Lord, Lord Bilimoria, and my noble friend Lord Udny-Lister. I am particularly pleased that the committee has formed the view that the Department for International Trade has conducted scrutiny beyond the statutory commitments set out in the Constitutional Reform and Governance Act. I place on record the positive and constructive engagement that the IAC has had with DIT, culminating in the exchange of letters in May, which pulls all the Government’s transparency and scrutiny commitments into one document.
I shall just address some points made about the devolved Administrations, as raised by the noble Lords, Lord Kerr and Lord McNicol, and the noble and learned Lord, Lord Morris. DIT officials continue to work closely with their colleagues in the devolved Administrations to ensure that their views are considered in the formulation of the UK’s trade policy—I make that opening statement. Our chief negotiators provide regular updates on the progress of negotiations. For example, during the Australian negotiations, our chief negotiator, or their deputy, briefed devolved Administration officials multiple times on all aspects of the programme. That is in addition to sharing draft texts for consultation with the devolved Administrations, regular policy forums at official level and discussions at ministerial level. I am sure I could give some more reassurance on that point.
Lord Morris of Aberavon (Lab)
Does the Minister agree with the statement made a few weeks ago by the noble Lord, Lord Grimstone, that the devolved Administrations are dissatisfied with the manner in which negotiations have been conducted and their involvement?
Viscount Younger of Leckie (Con)
I shall look into it but I do not think that I agree with that point. As I said, I think the devolved Administrations have been kept on board with the negotiations that have been going on—I really do. I certainly would like to reassure noble Lords further on that point.
Lord Kerr of Kinlochard (CB)
I am sure that the devolved Administrations were informed in the sense that they were told that there had been a round and various things had been discussed, but it is clear that the result came as a surprise—that there should be such an asymmetrical deal on farm products. I do not myself believe that it is a disaster, but it certainly came as a surprise. Would the Minister agree that it would be better if the documents that the Government published at the start of a negotiation—the negotiating objectives documents—were a little more specific? They are cast in such broad-brush terms that it is very difficult to deduce from them what a likely outcome might be, so the risk of a surprise is quite high.
Viscount Younger of Leckie (Con)
I would like to park that—I am not going to be drawn into it—but I would like to move on to discuss scrutiny, which is probably along the lines of the noble Lord’s question. This is an important matter, raised by the noble Viscount, Lord Waverley, and the noble Lords, Lord Purvis and Lord McNicol. Again, I hope I can give some reassurance on this.
The Government have made extensive commitments to support robust scrutiny of the new free trade agreements. As the International Agreements Committee acknowledged in its report, we have upheld those commitments. In particular, the Government committed that we would ensure that there would be at least three months for Parliament to scrutinise the agreement and for Select Committees to produce reports before the formal scrutiny period under CRaG. In fact, there was six months of scrutiny time prior to commencing CRaG, and I was very pleased to receive the IAC’s report on 23 June. In addition, we published the advice of the Trade and Agriculture Commission on 13 April, two months before commencing CRaG, and our own Section 42 report on the impact of the agreement on relevant domestic regulatory standards on 6 June. Of course, I am delighted that we are here today taking the opportunity to debate the agreement as part of that scrutiny process. In total, by the end of the CRaG period, the agreement will have been under the scrutiny of Parliament for over seven months and benefited from the formal views of three Select Committees.
Viscount Waverley (CB)
Might the Minister consider the possibility that there could be two new policy decision-making approaches in play here, coincidentally at broadly the same time, with a new Conservative policy circumstance and a new Government in Australia? Is there any possibility that the period being discussed might take into account any policy changes, which should be included in the final draft?
Viscount Younger of Leckie (Con)
The noble Viscount makes a good point, and I shall certainly take that back. I shall make one or two points about the new Australian Government in my remarks.
I should also like to address the point raised by the noble Lord, Lord Purvis, about extending CRaG in this respect—again, I would like to row back on what he was saying. He asked whether we would extend; this of course is a decision not for me but for the Secretary of State for International Trade. However, we are confident that the arrangements that we have put in place for scrutiny are robust. The agreement has been under scrutiny for over six months now and benefited from three very valuable reports from parliamentary Select Committees, including the International Agreements Committee in this House.
Lord Purvis of Tweed (LD)
The Minister will know that the Liaison Committee in the House of Commons has written formally to request an extension of the scrutiny period. Have the Government responded to that, and what is their position with regard to the concern in the Commons that the Secretary of State has not met the committee to respond to the very questions that we have raised in this debate today?
Viscount Younger of Leckie (Con)
I am not able to say whether we have responded, but I shall certainly get back to the noble Lord to find out exactly where we are on that process.
The IAC’s report acknowledged that the Government have upheld their commitments with regards to scrutiny of this agreement. However, I acknowledge the points that the committee made on scrutiny—first, that there is dialogue with committees prior to mandates being set for future agreements and, secondly, that we notify the IAC of all significant amendments to FTAs made after ratification. We are carefully considering the IAC’s report and will, of course, respond in due course. That, I hope, leads me to answer a question raised by the noble Lord, Lord Oates, on lessons learned. He made a very valuable point there.
I move on to the agreement itself. In response to the remarks made by my noble friend Lord Udny-Lister, he is right that this is not only the first FTA negotiated from scratch by the UK Government since leaving the European Union but the first trade deal to be signed by the UK as an independent free-trading nation in nearly half a century. Since the Secretary of State for the Department for International Trade put her signature to the deal in December, she has gone on to sign an FTA with New Zealand and a digital economy agreement with Singapore. This means that we have now secured trade deals with 71 countries, on top of the trade deal with the EU. Together, these countries accounted for £808 billion of UK bilateral trade in 2021. This is an immense success story.
This FTA was negotiated quickly and efficiently, despite the turmoil brought about by Covid. It shows the world what global Britain can do as a truly independent nation. I say to the noble Lord, Lord Oates, that we would not have been able to negotiate this agreement as a member of the European Union. Having left the EU, we are pursuing arguably the most ambitious programme of free trade agreements that this country has ever seen. As we speak, the Department for International Trade is conducting FTA negotiations with India and Canada. Negotiations have also been launched with Mexico and with the Gulf Cooperation Council, a customs bloc of six countries made up of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates. Negotiations will soon be under way with Israel too and the department has a packed programme of FTA negotiations coming down the track.
What we have achieved through this agreement, the UK-Australia FTA, is just the beginning. The noble Lord, Lord Bilimoria, described the deal more eloquently than I am able to just now, but this is a world-class deal between two like-minded nations, friends and allies, that will bind us together for years to come. Australia is already an important trading partner for the UK—last year, our trading relationship was worth £14.4 billion—but the ties between our two countries go far deeper than that. It is a relationship forged through a shared history and a common language, a relationship that has an unyielding belief in democracy, liberty and the rule of law.
I shall attempt to answer a point raised by my noble friend Lady McIntosh and the noble Lord, Lord Kerr. I will not be able to answer it in full and I may need to write a letter, but whether we have a trade strategy is a very fair question. We do indeed have a trade strategy and we have communicated it publicly through several publications, such as the integrated review, the plan for growth and strategic cases for each trade partner we are about to enter negotiations with. I probably need to write a letter, but the headlines concern what type of trading nation we want to be, what our aims for UK trade policy are, how we will try to achieve these aims, the connections to the export strategy and the strategic case for FTAs. We believe it is all there but I think I need to put that in writing for the House.
I shall move on to the benefits—which were questioned, by the way, by my noble friend Lady McIntosh. We believe that the FTA we have agreed will ensure that future generations continue to benefit from this relationship in more ways than one. We will be able to work together like never before to tackle existential challenges, such as climate change, health pandemics and threats to global security. This deal will deliver benefits to people, businesses and communities in every corner of the UK, playing a key part in levelling up our country.
Lord Robathan (Con)
I sense a peroration coming, but does my noble friend have the figures for the amount of beef and lamb given as a quota through the European Union, and how much has actually been imported into the UK from the Antipodes?
Viscount Younger of Leckie (Con)
I do indeed and if my noble friend will allow me, I shall come to that. To continue my so-called peroration, the deal will increase trade with Australia by 53% and boost the economy by £2.3 billion. I take note of the rather negative view of the noble Baroness, Lady Liddell, and I will explain what the extra benefits of this deal are. It will enable the 15,900 businesses that already export goods to Australia to sell their products in ever greater quantities, while opening the door for thousands of other businesses to start their exporting journey. This means exciting new opportunities for Scotland’s world-renowned whisky distillers, Wales’s fintech companies and Northern Ireland’s leading medical and pharmaceutical firms, as well as the north-east’s car manufacturers and aerospace companies in the West Midlands.
My noble friend Lord Udny-Lister asked about the reach of this agreement—another good question. I shall just mention SMEs, because this deal will benefit businesses of all shapes and sizes, not least the UK’s SMEs—the backbone of Britain—which comprise more than 99% of all private sector businesses, employing 16.3 million people and generating £2.3 trillion of income.
I come to investment. The deal will unlock further investment potential between our two countries too, with UK investors able to benefit from broader and deeper market access than Australia has ever guaranteed in a previous trade agreement. This will allow us to build on the £37 billion already invested in Australia’s economy in 2020. Of course, there will also be benefits for UK consumers, who will be able to enjoy more of their favourite Australian products, such as Jacob’s Creek and Hardy’s wines or Tim Tam biscuits.
The subject of services was raised, not least by the noble Lord, Lord Liddle. I was pleased to read the comments of the IAC in its report, welcoming the provisions that have been secured. The services sector, as we know, is of huge importance to the UK, and we believe we have negotiated a deal that plays to these strengths. I say to the noble Lord, Lord Liddle, that Australia has gone further than ever before in granting access to its market in several areas, with unprecedented levels of regulatory transparency. UK services from architecture and law to financial services and shipping will be able to compete in Australia on a guaranteed equal footing. This could increase exports of UK services to Australia, which were worth £5.3 billion in 2021.
The “Professional Services and Recognition of Professional Qualifications” chapter will support work towards mutual recognition of professional qualifications. This could lead to professionals such as lawyers, engineers and accountants no longer having to requalify to practice in one another’s countries. On mobility, the noble Lord, Lord Liddle, is right; this is a good part of the agreement, whereby there is a way in which our people can have good movement between one another’s countries. For the first time, UK service suppliers, including architects, scientists, researchers, lawyers and accountants, will have access to visas to work in Australia without being subject to its changing skilled occupation list.
I also acknowledge the point made by the noble Lord, Lord Bilimoria, about innovation. This agreement contains the world’s first dedicated innovation chapter, underlining the important role that innovation will play in the future. We want to take full advantage of this, particularly in terms of technological developments.
On agriculture, which I definitely want to come on to, the committee noted the concerns of the farming community, specifically that the agreement may lead to potential surges in agricultural imports to the UK. I want to provide some reassurance. We have secured a range of measures to safeguard our farmers, including tariff rate quotas for a number of sensitive agricultural products; product-specific safeguards for beef and sheepmeat, which were raised today in the debate; and a general bilateral safeguard mechanism providing a temporary safety net for all products. As the noble Baroness, Lady Hayter, said, we should remember that Australia’s focus is on exporting to lucrative markets in the Asia-Pacific region, and it is relatively unlikely that beef and sheep would be diverted to the UK from Asian markets in very large volumes, although I note the slightly pessimistic view of the noble Baroness, Lady Liddell.
Finally, answering the points made by my noble friend Lord Robathan, our estimates suggest a reduction in gross output of around 3% for beef and 5% for sheepmeat as a result of liberalisation, relative to the baseline. These estimated impacts would be felt gradually over the staging period. It is likely that the increase in imports will primarily displace beef imports from the EU and sheepmeat imports from New Zealand. Further testing suggests that, given the strong consumer preference for UK meat, gross output could fall by as little as 1% in beef and 2% in sheep.
The environment was raised by the noble Lords, Lord Oates and Lord Kerr, and the noble Baroness, Lady Liddell. I note the disappointment expressed but, to come back to noble Lords on this, we have secured the most substantive climate provisions that Australia has ever committed to in an FTA. The deal also recognises our right to regulate to reach net zero and affirms our mutual international environment and climate commitments, including the Paris agreement. There is a lot more I could say about that, but I want to move on and finish—
Lord Purvis of Tweed (LD)
Before the Minister sits down, he has not responded to my question about geographical indicators. There is no protection for Scotch beef or lamb, Welsh lamb, Stilton cheese, Cornish pasties, clotted cream—there is a very long list. There is a side letter to the agreement from Dan Tehan, the Minister, which states categorically that there is no legal protection for any of these protected products. Why?
Viscount Younger of Leckie (Con)
Okay, so that is a series of questions. I am going to agree to write to the noble Lord on that point because time is running out and I want to cover a number of other issues.
When it comes to animal welfare standards, I particularly want to address remarks made by the noble Duke, the Duke of Montrose, and the noble Baroness, Lady Liddell, because I want to quote from the agreement:
“Each Party shall endeavour to ensure that its laws, regulations and policies provide for and encourage high levels of animal welfare protection and shall endeavour to continue to improve their respective levels of animal welfare protection, including through their laws”.
Therefore, I hope that we have given reassurances on animal protection, in not just this debate but others.
On ISDS, in response to the point made by the noble Lord, Lord Kerr, I note the committee’s recommendation that we clarify our position on ISDS and I am happy to confirm that in light of our investment relationship, the UK and Australia decided it was not necessary to include ISDS in this new agreement. What we did do is negotiate a dedicated state-to-state dispute settlement chapter; this is the central pillar of our agreement that will provide an effective method for enforcing commitments made in the deal.
Very quickly on CPTPP, there is a lot I could say about that, but I do believe that this is a historic deal, a very important deal, and will lead into this, as the noble Lord, Lord Bilimoria, has also said. I think I should conclude on that; I feel that there is a letter that the House is due from quite a few questions that have not been answered. I think I should finish, if I may do this, so—
Lord Oates (LD)
On the specific point of the letters, could the Minister give an assurance to the House that all these letters will be received by Members of this House before the end of the scrutiny period?
Viscount Younger of Leckie (Con)
I will guarantee to write a letter—I will write one letter—on the basis of this debate but I cannot guarantee when it will come, if that is the question that the noble Lord is asking; as soon as possible, I will write a letter.
Just to conclude, this is a bold and ambitious FTA that will carry both the UK and Australia forward into a bright new future, and we all look forward to it being brought into force.
Baroness Hayter of Kentish Town (Lab)
I thank the Minister for batting at such late notice, and I thank all speakers—especially the noble Baroness, Lady Liddell, and the noble Lords, Lord Oates, Lord Kerr, Lord Morris and Lord Udny-Lister, who serve on the committee, and indeed the former member, the noble Lord, Lord Robathan. The noble Lord, Lord Purvis, and I are in competition for how many ministerial scalps we have taken but he has not had a member of the committee resigning before the chair took her place for the first time. The noble Lord’s place was, of course, taken by the noble Lord, Lord Astor of Hever, but very sadly he is going to be leaving this House. I take this opportunity to thank both noble Lords for the time they spent on the committee.
I will not try to cover the whole debate; the Minister has tried his best. I think it is true to say that there was broad support for this deal, although the noble Lord, Lord Kerr, said, it is “no big deal”. “It could have been so much better”, said my noble friend Lady Liddell and “cautious” said the noble Baroness, Lady McIntosh, of her approach. The noble Lord, Lord Liddle, was perhaps less kind as he said it is “not that huge” and it gave away a lot for services, I think he said, with not a lot in return. The noble Lord, Lord Purvis, said he supported it but was not blind to its inadequacies, and that sums up what our committee was saying: there are some inadequacies. My noble friend Lord McNicol said the fear was that the price of speed meant that it was at the cost of quality—they may not have been quite his words, but I think that was the spirit of it.
Clearly, agriculture is the big divide. The consumers, as some have said, will benefit—I thought the Minister was scraping the barrel to talk about biscuits as the great “up” that was going to come. But there are undoubtedly worries on the agriculture side about standards and about the impact, as I think the noble Baroness, Lady McIntosh, said, on our communities. Agriculture is not just like any other good; it is about communities, it is about support for a way of life, and it seems to me, and maybe the noble Lord, Lord Kerr, said this, that had the DAs been involved all the way through, greater sensitivity to that might have achieved something that would have led to fewer worries. I think the noble Duke, the Duke of Montrose, basically was asking a very broad question about whether the remit of the TAC was too narrow, and the noble Baroness, Lady McIntosh, asked whether earlier scrutiny would have helped.
The environment was mentioned by a number of speakers: the noble Lords, Lord Oates, Lord Liddle and Lord McNicol, and the noble Baroness, Lady Liddell, along with a number of others, on a range of issues on which more should have been got. My noble friend Lord Morris says that he hopes the new Government will use the context of the joint committee to move further on some of those shortfalls on the environment. As the noble Viscount, Lord Waverley, reminded us, there is not just a new Government over there but we are about to have one over here—let us hope that the combination of those two move forward.
Finally, on the broader issue of scrutiny—to which we are going to have to return as a House, I think—the noble Lord, Lord Kerr, said that we can debate only when we can do nothing about it, and the noble Viscount, Lord Waverley, asked whether even the way we are doing it is sufficient. I think there is something really important about this; it is how trade fits into our security, our defence, our foreign affairs and our development, as well as our domestic agenda. But just looking at trade itself, what is it that this Government want? We just saw a wonderful example of it. We were asked about standards by my noble friend Lord McNicol, and others, but I thought one of the most interesting exchanges was between my noble friend Lord Liddle and, I think, the noble Lord, Lord Udny-Lister, about CPTTP. If this is the push for this particular agreement. and we hear there may be real questions about that Pacific tilt—some very supportive and some asking whether we have really thought about this—surely that is a debate that should take place in this Chamber, but it is also a debate that should take place and be on the record from the point of view of government. It is so important, not just how for trade fits into other things but on whether we have the right focus for trade.
Therefore, although this debate was about the particular deal with Australia and, as I said at the beginning, perhaps it is good that it was with a friendly ally with whom we do much work already, it has raised some very broad issues, both for the Government and for this House. For the moment, I thank everyone who has contributed, and I beg to move.
M56 Motorway (Junctions 6 to 7) (Variable Speed Limits) Regulations 2022
(1 year, 9 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Randerson
That this House regrets that the M56 Motorway (Junctions 6 to 7) (Variable Speed Limits) Regulations 2022 do not sufficiently take into account recent evidence about the risks of smart motorways and the use of the hard shoulder as a running lane, nor the concerns raised by the House of Commons Transport Committee, which recommended the pause of the rollout of future All Lane Running smart motorway schemes until a full five years’ worth of safety data is available. (SI 2022/607).
Relevant document: 5th Report from the Secondary Legislation Scrutiny Committee (special attention drawn to the instrument)
Baroness Randerson (LD)
My Lords, I am pleased to see that the Minister is still with us to answer this debate. There were times last week when I began to wonder whether she would be. In these surreal days, it is reassuring that she will be able to bring her experience of this issue to bear on the debate, because we have discussed the safety of smart motorways before. An essential part of my weekly reading is the email report from the Secondary Legislation Scrutiny Committee, whose work I cannot praise too highly. Its weekly reports are focused, specific and pull no punches. The Minister will know that Department for Transport legislation features rather too often in those reports.
First, on the detail of these regulations, they permit variable speed limits between junctions 6 and 8 of the M56 as part of an “all lane running scheme”, known as a smart motorway, near Manchester Airport. It will be operational from 12 September, with the hard shoulder converted to a running lane with emergency refuge areas. The decision to press ahead with this came as a surprise because the Secretary of State back in January had made a very firm statement that he would pause the rollout of future smart motorway schemes until a full five years of safety data was available. That very welcome commitment was made following the Transport Select Committee’s report on smart motorways last November, in which it concluded that
“the scale of safety measures needed to effectively and reliably mitigate the risks associated with the permanent removal of the hard shoulder on all-lane running motorways has been underestimated by successive Administrations, the Department for Transport and National Highways”.
The committee goes on to recommend that the department and National Highways should
“retrofit emergency refuge areas to existing all-lane running motorways to make them a maximum of 1,500 metres apart, decreasing to every 1,000 metres where physically possible”.
The strange thing about this SI is that the Explanatory Memorandum makes no mention of the Transport Select Committee’s critical report or of the Government’s commitments to deal with safety issues. This is legislation in a vacuum, and the Secondary Legislation Scrutiny Committee refers to it as “inexplicable”. It is at best shoddy and at worst an attempt to lull us into thinking that this is an insignificant routine measure that we do not need to worry about looking at in detail.
The Government’s commitment to pause the development of new smart motorways came with the caveat that those over 50% complete would proceed. But that caveat came with a promise that there would be retrofitting of existing schemes to reduce the distance between emergency areas. Apparently, this scheme is one of six where development work will proceed, as the Minister’s reply to the committee chair eventually spelled out, including schemes on the M1, M4, M6 and M27. So, the letter of the Secretary of State’s promise is being adhered to, even if the spirit is broken.
What of the promise that the frequency of emergency areas will be increased? That is at the core of safety concerns. The original concept of smart motorways envisaged emergency areas at around every kilometre, and the Transport Select Committee recommendation accepted by the Secretary of State was for between 1 kilometre and 1.5 kilometres. But the Minister has confirmed that this new stretch of motorway on the M56 will go ahead with four emergency areas, every 2.5 kilometres on average. At least this is the figure in the original Department for Transport response, but the Minister later wrote to the chair saying that they are on average 1.07 miles apart, or 1,721 metres. The Department for Transport seems to be taking on board the advice of Jacob Rees-Mogg and has moved back to imperial measurements, which might confuse us, but looking at it in metres, there is still a very significant difference between the original DfT response and the second one. So, my first question to the Minister is to ask her to clarify exactly what the distance is between the two emergency areas on either side of the M56 between junctions 6 and 8 because of that vast difference between her two answers.
Lord Berkeley (Lab)
My Lords, I support most of what the noble Baroness said in introducing this short debate. We are starting to hear that the Government are changing metres into feet or miles, but that is completely irrelevant. I suspect that, as the noble Baroness said, this regulation and the policy behind it—if you can call it that—will cover the whole of the country before long. I believe that there are already 236 miles of smart motorway, and that 200 more miles are planned.
I will say a few words about safety, because that is what it is all about. The distance between the places where you can get off the motorway must relate to what happens to your vehicle and the fact that you need to stop. The noble Baroness mentioned a variety of distances between 2,500 metres and 1,000 metres, but there will be situations where even 1,000 metres is not long enough; it depends on the gradient, the speeds and everything else. It is relevant that the AA has banned its recovery crews from dealing with cars that have broken down on smart motorways because it is too dangerous. There has to be a solution. I do not know what the right distance is; it is sad that the Government have not got some proper data on all this—probably over five years, as the noble Baroness and the Transport Committee suggested—so that we have some information to talk about and to see how safety is affected.
Two things are pretty obvious. The first is around the enforcement of speed on these motorways. There may or may not be variable speeds, but it needs to be much more effective and consistent. The electronic vehicle detection machine is supposed to be the Government’s flagship—in other words, if a vehicle breaks down not in a layby but in the left-hand lane, variable message signs immediately come up, saying “Slow down: lane is blocked.” But the figure I have seen shows that this works in only 62% of the examples where a vehicle has stopped, presumably in the nearside lane. That is much too low, because it means that, for the other 38%, there is a good chance that the vehicle behind will run into the one that has stopped. I cannot see why that cannot work properly. The Government should avoid bringing any more of these into effect until they can get this vehicle detection system working.
I look forward to the Minister’s response. As the noble Baroness said, I am pleased she is here, because she has a lot of experience on roads and transport. This is a terrible mess. Frankly, when the Government ignore the House of Commons Transport Committee’s sensible report, and receive the comments that the noble Baroness mentioned in the Secondary Legislation Scrutiny Committee’s report, it is as if they just want to ignore the whole lot and battle on regardless. I hope I am wrong.
Baroness Foster of Oxton (Con)
My Lords, the noble Baroness raises some serious and good points. However, I gently remind noble Lords of how these smart motorways came to pass. I recall that, in my time in the European Parliament as the transport spokesman—obviously covering road, rail, aviation and maritime—the huge push for smart motorways came from the regulations and directives in the European Parliament some years ago. This was not just about the UK. We found that many member states were having problems with capacity due to the growth in traffic, and it was about trying to look at a way that we did not have to build motorways in different parts of the country but just expand the ones that we had.
I fully acknowledge that there have clearly been some awful accidents due to the fact that there was no hard shoulder. When motorways were built in the first place, it was known that there could be a risk of accident—obviously, there is always the risk of accident—and it was paramount that there needed to be a safe space to go. I also understand that in some cases where there have been accidents, it has been very much a technological failure because the notification above the lane that it was closed, or the X, was not showing. People have then got confused, and of course some of the results of that have been appalling. There are also appalling accidents even for the miles of motorways where we have hard shoulders, which is why we have tried to make sure that people are alert if they pull in and why we now tell people to get out of their cars, notwithstanding the size of the lorries that sometimes have to pull in.
Can my noble friend say whether the Government are looking at how, for example, the technology can work, notwithstanding that we have spent millions expanding these motorways? I use the M6 with great frequency when I drive down here, and the M56 too, which the noble Baroness mentioned, and we have miles of full lanes where we are doing 60 miles an hour. We have had years of this expansion—obviously not of infrastructure—for all the right reasons on the motorways, to get the capacity, and we have been under terrible restrictions with roadworks; it is now even more infuriating that we have four lanes but are still all crawling along half of the time.
Notwithstanding the issue of technology, which clearly needs to be seen to be working and to work properly so that people and organisations have confidence, I look forward to the response from my noble friend. We need to move this on. As the noble Baroness opposite said, there is clearly a need for more laybys to access. This will take some time, because more roadworks will have to be started, but it is imperative that those can be put in place as quickly as possible.
Lord Tunnicliffe (Lab)
My Lords, the Government’s failed rollout of smart motorways costs lives, which is exactly why Members of this House have long warned of serious flaws. It is a tragedy that lives were lost before action was taken, and it is thanks only to the dedication of bereaved families that the rollout was paused at all. It is therefore beyond belief that the Government are still pressing ahead with new introductions.
Even in their current form, smart motorways, coupled with inadequate safety systems, are not fit for purpose, and clearly no adequate explanation has yet been offered for their further introduction. Unfortunately, the reality of this new scheme is even worse. The emergency areas in this new scheme have average spacings of 2.5 kilometres, which is much greater than the recommended separation of 1.5 kilometres. Before pressing ahead, the Minister needs to offer proper reassurances on the monitoring of CCTV, further reviews of the evidence and improved distances between refuge areas, at the very least.
Besides the well-noted safety concerns, there are also serious issues with the scrutiny afforded to these changes, not least the fact that the Explanatory Memorandum does not address any of these obvious issues. I hope that the Minister can provide such assurances today and address the points made in the noble Baroness’s Motion.
The Parliamentary Under-Secretary of State, Department for Transport (Baroness Vere of Norbiton) (Con)
My Lords, I am grateful to all noble Lords who have spoken in today’s debate. I am also fairly grateful to still be here; I have enjoyed being the Roads Minister for the past three years, and I know a fair amount about smart motorways, so I shall try to answer as many questions as have been raised, but of course I will happily write with more detail because I suspect that I will not be able to get through everything.
This is an opportunity to remind noble Lords of the commitments we have made in our response to the Transport Select Committee report. Noble Lords will recall that the second anniversary progress report was published earlier this year, in March 2022, and set out the progress we are making on the action plan we set out in 2020 on smart motorways. That was when issues about their safety first came to the fore and were picked up by the media. The Secretary of State and I did an awful lot of work on that to ensure that smart motorways are not only as safe as they possibly can be but feel as safe as they possibly can.
They are the type of road that gets the greatest amount of scrutiny in our country. I also note that this country has very safe roads relative to pretty much any other country in the world. Interestingly enough, smart motorways are the safest roads we have in the country with regard to the killed and seriously injured figures.
We are talking about roads that are already very safe—compare them to the average rural road and you will see that they are far safer, as we must always recognise. However, the Government remain determined to continue to make people safe, and feel safe, on these roads. That is why we agreed to the Transport Committee’s report and all the recommendations therein. This included an agreement to pause the rollout of all future all-lane running motorway schemes until five years’ worth of safety and economic data are available for those schemes that opened before 2020. In our response, we also clarified that we would continue with those roads that were more than 50% complete.
Why, many years ago now, did we start the smart motorways scheme programme? We need greater capacity on our roads, as was noted by my noble friend Lady Foster, and smart motorways offer a way to get that. We get improved reliability, reduced journey times and smoother traffic flows, which is key for safety. Much of this does not appear in the safety stats for these roads, but we also shift traffic from less-safe roads, because capacity on the road increases, so some people using less-safe roads will necessarily move to these roads. They require much less land take, so they have a lower environmental impact, including on biodiversity. They cost 50% to 60% of the amount that would be spent on a traditional widening scheme—significantly less of a call on the taxpayer—and they can be done more quickly.
The M56 is no different. It was included in the June 2013 spending review, which seems like a very long time ago, and it was confirmed in the first road investment strategy in 2015. The main construction works on the scheme began in November 2020 and, as noble Lords have pointed out, it is due to open later this year. It is well over 80% complete.
The M56 scheme is four miles long and has four emergency areas. Here we get to the problem that we had in the Explanatory Memorandum, and I can only apologise that the wording in the Explanatory Memorandum is incorrect. The spacing of 2.5 km, or 1.6 miles, refers to the maximum spacing between places to stop in an emergency. That was the design standard when this scheme was designed. In reality, there is an emergency area every 1.7 km, or 1.07 miles, on average, on this stretch. It was built and designed to the design standard in place at the time, which I think all noble Lords would expect, and actually has emergency area spacing of far less. We may well go on to include further emergency areas on the M56, but this will be considered as part of the emergency area retrofit programme, which will be available later this year.
As with all smart motorway schemes opening now, this scheme will open with stopped vehicle detection. This is radar-based technology, further elements of which I shall come to later. Essentially, it looks at the road and sees where vehicles have stopped and then provides an alert to the regional operating centre, and various things then happen as a result of that.
Let us think about the smart motorway safety data. It is important to bear in mind that the latest data we have available is for 2020, so the data available is from before any of the interventions that the Government set out in the smart motorway action plan, back in 2020, were put in place or had any impact. This data is from before the Government intervened, as we have now committed.
A conventional motorway has 1.45 killed and seriously injured per 100 million vehicle miles. I encourage noble Lords to keep that in their heads. An all-lane running motorway has 1.38, so 0.07 fewer. It is safer when it comes to killed and seriously injured. That is before the widescale rollout of stopped vehicle technology, before the commitment to retrofit emergency areas, before the signage improvements we have committed to and put in place, before the recent communications campaign which told everybody to go left, before the upgrade to the HADECS cameras for Red X enforcement, and before all of the 18 measures which the Government said they would do in 2020. I am fairly convinced that those 18 measures will improve safety further.
On the basis of the 2020 data, an all-lane running motorway is already safer than a conventional motorway when it comes to killed and seriously injured. For all these people who say, “Put back the hard shoulder; let’s go back to conventional”, I do not know on what evidence that would be remotely the right thing to do. If the evidence changes, of course we should look at it again, but I cannot see at this moment—and after how much scrutiny?—that the evidence exists to even contemplate ripping out these motorways, removing capacity, putting some of those people on less-safe roads and, for the people who stay on the motorway, making them slightly less safe. I cannot see it myself.
Lord Tunnicliffe (Lab)
Can the Minister explain why all this evidence was not contained in the Explanatory Memorandum, which she personally approved?
Baroness Vere of Norbiton
I will happily explain that. All the evidence I just outlined was in the progress report—as I said, there was an enormous amount of scrutiny. If I had my time again, would I have put all that evidence in the Explanatory Memorandum? No, because Explanatory Memorandums cannot possibly include every bit of evidence on which the Government have made a policy decision. This M56 variable speed limit SI is very standard—I cannot even begin to tell your Lordships how many we have done. However, I wish I had included a paragraph with links to all the different reports we have already done into smart motorways. There is a balance between providing sufficient information and links and ending up with an Explanatory Memorandum that becomes unwieldy. We could provide those links though.
Lord Tunnicliffe (Lab)
My recollection, though I may have got it wrong, is that the standard for Explanatory Memorandums requires them to be easily understood by a person with no previous knowledge. The arguments that she has revealed to us, which may or may not be persuasive, are not available to people with no previous knowledge.
Baroness Vere of Norbiton
That is exactly why, as I set out, we will update the Explanatory Memorandum. Am I going to regurgitate everything in the progress report, the response to the Transport Select Committee, the progress report from last year, and the original 2020 action plan and stocktake? No, because it would become a document of several hundred pages. We must be selective, but I think we can include links to other reports to explain it to people.
However, let us be absolutely clear that all this SI does is allow a variable mandatory speed limit to be put in place. Will that have any impact on road safety for that stretch? No, it will not. In allowing a mandatory speed limit to come in, it will probably make it safer. If the Government are then required to do an entire Explanatory Memorandum about the much broader policy, we will end up with some very lengthy Explanatory Memorandums.
Lord Tunnicliffe (Lab)
The Minister has illustrated that it can be done in a reasonably concise way. She just went through all the arguments—I cannot say that I am convinced because I cannot see them all together on a piece of paper—but the length of her speech is not that long compared with the paucity of information in the Explanatory Memorandum.
Baroness Vere of Norbiton (Con)
I could speak about smart motorways for ever—and I have not finished yet. I will happily set out in a letter to the House exactly where all these links are—I am sure the noble Lord knows where they all are—and summarise all the data that is out there at the moment, and make sure that a copy is placed in the Library. I am sure that it will be incredibly helpful.
I want to move on from the focus on safety data. The Transport Select Committee agreed with the Government that reinstating the hard shoulder and going back to a conventional motorway was not in the best interests of either our economy or the safety of the people using our motorways, and we were pleased that it reached that conclusion.
On the schemes that we are not pausing, the noble Baroness, Lady Randerson, noted that six schemes will continue because they are more than 50% complete. We feel that the disruption and challenges to road safety that leaving traffic management in place for any significant period of time would cause—because roadworks can be quite unsafe—make it not a viable option. Of course, with roadworks in place, many drivers would also use less-safe roads than the motorway. We therefore took the decision to continue with those schemes that are more than 50% complete. However, we did say that stopped vehicle detection will be in place for all the smart motorways that we are opening, and that is indeed the case. I did not mention cost in that, but the cost of reverting a motorway back to where it was before is fairly significant.
I want to cover a couple of points on which noble Lords have asked for clarity. I think that I have set out the Explanatory Memorandum issue. Again, I apologise that the original memorandum was incorrect. We put in various safeguards to ensure that people not connected to the Explanatory Memorandum read it. Clearly, even in those circumstances, it did not pass the sniff test, so we are going to get better—we really are.
The topic of more frequent emergency areas is an interesting one. As noble Lords will know, the spacing between emergency areas has come down. In 2011, it was 1.5 miles; in 2017, it was a mile; in 2020, with the new one, it was 0.75 miles, and obviously there are maximums in there as well. Does that necessarily mean that roads built to a more recent design specification are more dangerous than those built to the previous specification? The jury is still out; it is really interesting. One thing we said in the stocktake that we would do is put 10 more emergency areas on the M25. That was done, and they have been in place for well over a year now. The data from them on how many live lane stops there were and the impact on safety is being collated at the moment, but I expect it to be inconclusive. Go figure—but one has to look at the evidence.
The noble Baroness is signalling that I should get on with it. I agree—let us get on with it.
The noble Lord, Lord Tunnicliffe, made a couple of points. The AA responds on smart motorways—of course it does. No recovery operator is allowed on a smart motorway while it is live but they can go to the emergency areas. Traffic officers are responsible for lanes when they are still live; ditto on a conventional motorway. The AA will come to your rescue if you end up in an emergency area or indeed on a hard shoulder.
Baroness Randerson (LD)
I thank those noble Lords who took part this evening; in particular, I thank the Minister for her response.
Of course I recognise that safety on smart motorways is a complex issue. It relates to emergency areas, response times and response detection. But I must comment that, at times, the Minister’s response was at odds with the Government’s own stocktake and the evidence on safety that the Transport Select Committee received. Whether she agrees with that or not, she must recognise that there is widespread public concern about safety. It may be perceived rather than real, but that is probably because most of us find driving on smart motorways an extremely stressful experience. This is an indication of the perception of the safety of those roads. When the Minister comes to review the tone of her response on certain issues this evening, she may recognise that she is not doing her argument any favours with the general public. There needs to be a realistic assessment of this situation by the Government, but I recognise that this is a very specific issue. I therefore beg leave to withdraw the Motion.
Child Vulnerability (Public Services Committee Report)
(1 year, 9 months ago)
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Baroness Armstrong of Hill Top
That this House takes note of the Report from the Public Services Committee Children in crisis: the role of public services in overcoming child vulnerability (1st Report, Session 2021-22, HL Paper 95).
Baroness Armstrong of Hill Top (Lab)
My Lords, it is a great pleasure to introduce this report to the House before the Recess. The report makes it clear that the UK faces a crisis in child vulnerability. In England alone, over a million children are growing up with reduced life chances, and children paid a very heavy price during the pandemic. The national lockdowns, while necessary, had a severe impact on their education and their mental health. However, things were bad long before the outbreak of Covid-19. The last decade has seen our most disadvantaged children and young people being let down. We have seen cuts to early years and early intervention support, despite the raft of research which shows how important it is to a child’s long-term educational success and life chances, with rising child poverty, criminal exploitation and gang violence, while the gap in attainment at school between the richest and poorest children has continued to grow. Our children deserve better.
Spending on early help for families, such as Sure Start and children’s centres, family support and youth services, was cut by 48% between 2010-11 and 2019-20. Our report found that this had a devastating impact on communities across the country. In 2019, before the pandemic, the Office of the Children’s Commissioner for England estimated that 1.6 million children were living in homes with serious parental mental illness, addiction, domestic violence or other concerns, but found that support for these children was either patchy or non-existent. It also found that 829,000 of these children were completely invisible to services. This got worse over lockdown. This decimation of family support services has not only damaged the life chances of disadvantaged children but makes very little economic sense. If children and families are unable to access the support that they need when they need it, small problems can escalate into full-blown crises such as joining a gang, being expelled from school or ending up in care. As a result, councils have been forced to spend almost £2 billion a year more since 2010 on crisis management services such as youth justice services, safeguarding and looking after children in the social care system. Ironically, the decision by successive Governments to slash family support services has therefore resulted in an unprecedented increase in the role of the state in family life. In 2015, 69,000 children in England were in care, but by March 2020 the figure was 80,080.
Josh MacAlister, who gave evidence to our inquiry, warned in his recent Independent Review of Children’s Social Care that a failure to radically reset services for vulnerable children and families would lead to record numbers of children going into care. Research commissioned by the County Councils Network found that the number of looked-after children in England is likely to reach almost 100,000 before 2025 unless action is taken.
This growing crisis demands bold action. Therefore, I confess to being rather disappointed to receive such an uninspiring government response to our report. In fairness, the response did point to the Department for Education’s family hub programme, and additional funding for the early years and Supporting Families programme. We agree that these are steps in the right direction. Our report found that family hubs are an effective model for providing early help and supporting parents to meet their children’s needs. In the small number of areas where they have already been established, we saw how family hubs played an important role in improving early intervention support, in facilitating integration and data sharing among public services, and enabling voluntary sector partnerships.
Also, while most Sure Start centres offered services for children up to the age of only five, family hubs help parents with children up to the age of 19. That is undoubtedly the right approach. However, the money announced for the early years and family hubs to date nowhere near compensates for the £1.7 billion cut from Sure Start and other support since 2010. There are currently only 150 family hubs in England, and this falls far short of the vision put forward by Andrea Leadsom, the author of the Government’s early years review, that all families should be able to access a local hub in their community from pregnancy.
Our children and our country simply cannot afford for the Government to continue to underinvest in family support. This failed approach has undermined families’ resilience and made them more reliant on late, very costly intervention by the state, which is bad for children and, ultimately, bad for the taxpayer. That is why we need a radical new approach to early intervention. We need it for vulnerable families, not only to boost outcomes for children but to support families to be independent and to reduce costs in the criminal justice and social care system. We also need support for the estimated one in six children with unaddressed mental health needs, to ease pressure on the NHS.
During our inquiry, we were presented with a wealth of evidence from the Early Intervention Foundation and other organisations, as well as academics and researchers, about the impressive real-world impact that existing early intervention programmes already have on the lives of children. The Incredible Years programme has an impressive track record in improving cognitive outcomes for children. The Preparing for Life programme was found to narrow the disadvantage gap in school readiness. The recent evaluation of the Family Nurse Partnership programme demonstrates a significant impact on children’s health and education outcomes.
If the Government are serious about levelling up, this is where they should start. A national rollout of some of these programmes, delivered through a comprehensive family hub network, would unlock the full economic potential of our country. For too long, vulnerable children in our most disadvantaged areas have not been given that fair start, and research carried out by Pro Bono Economics on behalf of the committee found that cuts to early intervention have fallen most heavily on our poorest areas. Spending on early intervention in areas of England with the highest levels of child poverty was cut by £766 million between 2010 and 2019. It does not need to be like that. The London School of Economics estimated that the economic cost in a single year of failing to invest in the early years is over £16 billion. We must get our priorities right.
However, funding alone will not solve the child vulnerability crisis. Every relevant part of local and national government, the public and the voluntary sector must be mobilised if we are to tackle this once-in-a-generation challenge. That is why our report called for a national strategy on vulnerable children, with family hubs at its heart. The Government did not agree. They said that things are best done locally and of course I agree. None the less, we heard from several young people where there had not been the collective co-ordinated action from across public services that tackled the family problems, and it left them very vulnerable.
We fear that, without a national vision to bring together the NHS, police, social care, schools and the voluntary sector, or milestones and targets to hold Ministers and local services to account, little progress will be made to improve things for some of the most vulnerable children. I hope that the incoming Prime Minister, whoever that might be, and their Cabinet will take a different approach and make a strategy on child vulnerability a priority.
Any national strategy must also address data sharing. I think other colleagues from the committee will address this a little more than I have time for, but the Government ignored the evidence in their response on the grounds that data sharing is “already supported”—referring to requirements for safeguarding. The problem is that too many children do not quite reach the threshold for safeguarding, but services need to work with them so that they are not all missing out and falling through the gaps. The Information Commissioner acknowledged that there is a problem with existing data-sharing guidance on children, with too much emphasis placed on the risks to a child of sharing information with third parties, which disincentivises well-meaning front-line workers from sharing data that could improve a child’s outcomes. A clear strategy from the centre to ensure that the NHS, social care, schools, the police and other local services do not view each other as third parties is critical.
It is time that I finished. I thank everyone on the committee, which I have been incredibly lucky to chair. It has some great people. We lost some members, and I am delighted that a couple will contribute to the debate none the less. I must say that at least two of our members are not here and had to remove their names because they have Covid. It is a real problem in this House because we cannot have hybrid sittings anymore. We have not had a meeting of the committee in the last two months where somebody has not been missing with Covid.
I also thank the staff. We had Tristan Stubbs and Mark Hudson working with us, and Claire, our admin assistant. Tristan and Mark moved on as we were finishing this inquiry. We have two new people working with us, Sam Kenny and Tom Burke. They have all been really supportive and helpful in getting us this far. We keep coming back to some of the issues that were raised.
I also pay particular tribute to all the parents, children and young people who bravely shared their experiences with us. Vulnerable families still recovering from the impact of Covid on their education, mental health and personal finances now find themselves in the midst of the worst cost of living crisis in decades. All the pressures children face at home, as described in our report, such as witnessing parental domestic violence, addiction or mental ill-health, are likely to intensify in the coming months. If we do not act, the consequences for these children’s education, future employment prospects and life chances will be catastrophic. We cannot allow difficult times to distract us from this task at hand. If now is not the time to address the crisis facing vulnerable children, then when is it? I beg to move.
Baroness Pitkeathley (Lab)
My Lords, it is a privilege to be a member of the Public Services Committee, so ably chaired by my noble friend Lady Armstrong, and to speak in this debate, along with other colleagues and, indeed, former colleagues from the committee. Our inquiry was both illuminating and distressing, all the more so because many of us have worked in child protection for many years and found the same old problems of lack of recognition, lack of co-ordination, lack of a comprehensive strategy and lack of collaboration between agencies with which we have unfortunately been familiar for too many years. It was, to say the least, dispiriting.
To all these old problems was added the pandemic, with 1 million children growing up with reduced life chances, as my noble friend said, public services offering too little, too late, and local services undermined not only through lack of funding but through a lack of the information that would enable them to protect children, such as how many young people took up caring roles as support services were withdrawn as the pandemic progressed. We have no accurate figures about that.
In my brief remarks, I will concentrate on two areas where we found failings but which could, if addressed, provide some early wins and huge steps forward to protecting vulnerable children. The first is a lack of proper engagement with users—children and families—when services are designed. The evidence we received from users of services was the most powerful of all. Six focus groups and seven evidence sessions with parents and children really brought home to the committee the problems faced by families and shaped our recommendations. In short, services must be responsive to individual needs and must be co-produced.
I quote Emma in our report:
“I feel [that public services] just ignore children’s voices. When my mum was going through issues with her mental health, they asked her if she needed any services and she said we were fine. I felt like I needed help, but nobody listened to me. No one wanted to hear my voice.”
Emma had been a young carer for her mother for a very long time.
In our first inquiry, we argued that involving disadvantaged groups in the design of services makes public services more responsive to marginalised communities’ needs. But, like Emma, many of the children and families reported to us that statutory agencies too often deliver support without ever listening to the people who use their services. We heard that services for vulnerable children and their families need to be responsive to individual needs to be successful. Therefore, they must be co-produced—that is the word we heard very often.
We saw some interesting co-production and the Cabinet Office certainly issues quite strong guidance about how good it is to engage in co-production, but I am afraid that the experience of one of our witnesses was that the use of co-production in children’s social care is limited. She said that children in the care system regularly requested “kinship care”—when a child lives with a relative or family friend rather than with a foster family or in a care home—but they were often ignored. She called for children suffering from the consequences of family breakdown to have a greater say in their future. She said:
“The best way of doing that … is through coproduction and having young people, kinship carers and families working with the local authority to coproduce a kinship, family and friends care policy. Unfortunately, this does not happen.”
We heard too many depressing examples of where co-production does not happen, but we heard about some local authorities, such as Cheshire East Council, that envisioned an organisation to codesign the service with young people, their families and the community. They designed the programme and, lo and behold, they had some very good outcomes. They halved the rereferral rate into social care services from 23% to 12%, reduced the average social worker’s caseload by 30%, reduced reliance on agency staff, who, as we know, cost too much, and achieved 95% engagement from families.
I have often said in your Lordships’ House that if people work with the users they get some very pleasant surprises. When you really engage with users, they often ask for far less than you think they will want if you really address their needs, rather than have their needs addressed by somebody who does not really understand their situation.
That brings me to the second issue on which I want to concentrate: the inadequate engagement and collaboration with local voluntary and charitable agencies. Engaging users is nearly always best done through a local voluntary organisation; this was pointed out to us in our evidence sessions. I will never forget Maria from Birmingham, who said to us:
“The police dismissed what happened to us … They said, ‘It is just [your husband’s] behaviour’, and I was told to manage my fear and my children through counselling … but I needed [more] support with my daughter … she was easily triggered by the violence she had witnessed and would hurt herself. I couldn’t cope.”
Maria was fortunate to be referred to a small charity in Birmingham, WE:ARE, which forms long-term and meaningful relationships. She received group therapy from it, enabling her better to support her children. Now she says that her strength has been passed on to her children and that they are doing much better in school as a result.
Our report says:
“A common theme that emerged from our focus groups and evidence sessions with parents and children was that voluntary sector organisations were often better placed than statutory services to identify and respond to needs, and to co-design services more effectively. We heard that the voluntary sector was able to engage vulnerable families whom statutory services could not reach.”
I always remember that when I was working with young carers, a lot of them and their families were terrified of being referred to social services for fear that they would take the child into care instead of trying to resolve the situation in which the family found itself. It is hardly surprising that marginalised families are reluctant to request state support, because they fear that that involvement in family life will mean that kind of intervention, which is not what they want.
For example:
“Leah told us that her mother ‘did not want any help’ from statutory agencies with her addiction: ‘it was mainly because she was scared of social services taking me and my sister away.’ Fortunately, the family was supported by … an addiction charity.”
Leah said that the charity deals
“with those things more often, they have a better understanding … They know how to help and they have been doing it for a long time. They have seen loads of families come in with all sorts of problems. I feel like they could help on so many levels”.
We had some good examples such as those I have quoted, but there were too many where the ability of the voluntary sector to create and deliver innovative services was ignored because of a lack of trust and it being called in too late, once decisions had been made, not being treated as a proper partner and, of course, being deprived of funding.
Funding underlies so many of the problems we have identified, so it is very important that public services do not ignore but make the very best possible use of two of the most important resources available to them: the users themselves and the voluntary sector. If these are both treated as equal partners—co-producers—public services would do a better job of supporting vulnerable children than was evidenced to the committee in this inquiry.
Lord Davies of Gower (Con)
My Lords, it is a great pleasure to follow the noble Baroness, Lady Pitkeathley. It was a genuine pleasure to serve on this committee during this inquiry, and I pay tribute to my very knowledgeable colleagues on the committee—in particular, our chair, the noble Baroness, Lady Armstrong of Hill Top, who carefully steered us through this—and to the clerks at that time, who, among other things, gave great guidance and worked extremely hard to ensure that we obtained the best evidence. An awful lot of it was available for this inquiry.
The report is wide-ranging and, as can be seen, covers some important aspects—far too many to mention. Two particular aspects of the inquiry triggered an interest with me: the use of data, and the enormous benefit of family hubs.
One of the more fundamental aspects of the inquiry, as detailed in the report’s introduction, demonstrated the lack of co-ordination by central government—no news there, you might say—and national regulators, which, we were told,
“undermined the ability of local services working with families to collaborate effectively, intervene early and share information to keep vulnerable children safe and improve their lives.”
Of course, this was not helped by the barriers to sharing data on vulnerable children. For example, we heard from various sources that
“if they wanted to access help they would have to go through avenues where their parents would be involved, which could discourage them to share information with services”.
We heard from the Cabinet Office, which said that public servants faced a complex dilemma about their duty of privacy and how they contrast that with doing the right thing. Witnesses also suggested that the necessity
“for parental consent before data could be shared, and uncertainty among frontline professionals about thresholds for sharing data on at-risk children, inhibited the sharing of vital information.”
The Family Hubs Network supported witnesses’ experiences. It
“described how children and families were often ‘bounced from one service to another and have to repeat their story again and again’.”
We heard evidence that
“poor data-sharing between Government departments and local agencies endangered vulnerable children and their families by undermining safeguarding arrangements and preventing referrals for early help.”
This is quite extraordinary and, frankly, such data barriers are unacceptable in a modern, compassionate society.
I move on to another highlight of the report, which really caught my attention and which I believe could almost become the panacea for ensuring both the safety of vulnerable children and a guiding hand for parents in need of help. I refer to family hubs, of course. Family hubs aim to strengthen families by providing help with the countless challenges that parents face, especially those that will hamper children’s social, emotional and physical development and their educational progress. They
“provide families with a central access point to integrated services.”
So what did we learn about family hubs in our inquiry? We heard from
“Jade from Doncaster, aged 23 and a mother of two, with a three-year-old son and a daughter of eight. Doncaster Borough Council told us that at first they were concerned about Jade’s ability to care for her children. Jade is now able to meet their needs: ‘[she] interacts more readily with professionals, other adults and families and, most importantly, her children, as a more confident parent.’ Doncaster is one of a small number of local authorities in England with an established Family Hub network.”
It is worth repeating what Jade told us:
“I have been attending the Family Hub for some time now. I was having problems when my son’s dad was being abusive to me and smoking skunk … in front of the kids. If it wasn’t for the Family Hub, I wouldn’t have been able to get out of this tough situation. The staff have always been friendly, helpful and reliable. I really enjoyed attending the sessions they directed me to at a local church”.
This is important, because Jade told us that she
“learnt stuff that made me a better mum—like how important it is for kids to eat breakfast, healthy snacks and meals. I also learnt how to read and play with my children.”
Family hubs can provide a base for communication and support for children in early years as they move through school. Beginning at primary schools, the centres can include early childhood development and parenting activities, home visitation, home-based satellites, and early problem identification and intervention. As family hubs say of themselves, they can also be a place to support parents to facilitate their child’s learning. This can be through the provision of learning and mentoring support to help families provide a positive learning environment, and role models and mentors to support young people’s progress in school.
However, we learned:
“The Government has spent a relatively small amount on Family Hubs, with a focus on trialling new Hubs.”
Yet the professionals in the field who gave evidence to us advocated a greater spend, comparing it with Sure Start, which
“accounted for £1.8 billion of public spending … in 2009/10”
by today’s calculations.
Dame Andrea Leadsom MP’s Early Years Healthy Development Review Report was clear when it said:
“It is our vision that all families can expect to be welcomed to their local Family Hub from the moment their pregnancy is confirmed up until their child turns 19 … Family Hubs will be open-access and any parent or carer can ‘drop in’ to their local Hub when they need to. For this reason, we envisage Family Hubs as being baby-friendly, welcoming for families and located in accessible places.”
I hope that the Government pay serious attention to our committee’s report and that they
“commit to introducing a digital Red Book for children and young people aged 0–19”,
as advocated by Dame Andrea Leadsom, and, referencing my earlier point regarding data:
“This health record should be made available to all statutory agencies and voluntary organisations working with vulnerable children and young people.”
If we fail to join up our thinking in relation to data sharing in this area, we will fail to help the most vulnerable in our society: our children.
The Lord Bishop of Chichester
My Lords, I am glad to follow the noble Lord, Lord Davies, in this debate. I am immensely grateful to the noble Baroness, Lady Armstrong, and all those who have produced this outstanding report. One of the most impressive things about it is that one hears the voices of those who are so often not heard.
I think that the move from Sure Start to family hubs is a model for how we respond. The challenge of looking at the poorest and most vulnerable in our society today is such an important focus for us. The model of the family hub is absolutely invaluable, because in lengthening the time over which a person might need encouragement and help beyond the formative years of nought to five, we remind ourselves that being human is not a problem that can be solved with a quick fix of investment. It is actually a long-term story of investment and hope, of failure and recovery. That perspective, looking at nought to 19, is a really important one. I was also very encouraged by seeing the recognition of the needs of 18 to 25 year-olds, as people move into young adulthood, which is still a very important area.
When I was first ordained as a bishop and working in the north-east, on Teesside, the Sure Start centre in Grangetown—one of the most deprived parts of Middlesbrough—was an incredible place to go to because it offered hope, in contrast to so much that was derelict in life and the environment around there. What I saw there was that this was about families; this was about giving hope not only to children who were vulnerable but to the parents of those children, who did not really know quite how to deal with this gift that they had. Seeing parents with very tiny children being given the skills to parent their child was incredibly moving, and fruitful, of course, in terms of hope for the future.
Another thing I came across in that instance was somebody who, as a child, had been a victim of all the vices that he might have encountered in that area of Middlesbrough. He had fallen foul of the law and had ended up literally in the gutter, where he was picked up by a Christian woman and put back on his feet over the course of time. He established a small charity called Father to the Fatherless—a quotation from Psalm 68. He talked to young male adults—late teenagers—about what he had been, how he had failed and how he had found life, hope and potential for the future.
One thing in the interstices of this report, which I would want to point to, is something that the noble Lord, Lord Davies, has already mentioned: the role model. Where are the role models for those who are so often lost and most vulnerable as they grow through childhood into their teenage years and early adulthood?
I remember being very struck when I went to one of our schools—it was not a church school, but one that had very close working relationships with one of our parishes on the edge of Middlesbrough—and saw, in this large primary school, that all the teaching staff were female. The vicar of the parish, who had a marvellous role there, was also female—a very impressive female priest. I thought, “Everybody who is in a position of achievement, power and authority here is female.” The one person who was male was the person who was in charge of sport. It is positive in its way, but it did not say anything to the boys in that school about what their aspirations might be. Where do we find the role models? In particular, the challenge to us as nation, as wider society, as a wider issue than something we can legislate for, is to find role models for boys, in particular, to help them grow and become mature and responsible citizens.
I want to touch briefly on something that has already been explored by the noble Baroness, Lady Pitkeathley: the voluntary sector and its relationships with the statutory sector. When I was a curate, first ordained in Plymouth back in the 1980s, the probation service was in the lead in terms of partnership with the voluntary sector. It invested, from its own funding, in the voluntary sector that it worked with and set up voluntary charities. For example, it set up a garage where boys, again, who had a criminal record or were at risk of offending through stealing cars and motorbikes, could be taught mechanics and develop skills that might help them find employment. This extraordinary partnership between the voluntary and statutory sectors was modelled in a variety of other ways as well. Reading the report, one of the questions I had was the extent to which the initiative for forging those links rests with the voluntary or the statutory sector. It is not entirely clear where the responsibility might be, or just how far that relationship might go.
Relationships are at the heart of tackling deprivation and vulnerability for children. Looking at the voluntary sector, one area that is not touched on here is, once again, the question of the extended family. Certainly, on Teesside it was probably the most important relationship, between child and grandparent, as children grew through their teenage years. What we offer encompasses a wider community, and builds on relationships, as I think has already been rehearsed in this debate. This is very important.
On the business of information sharing and schools, it is certainly very important that information is shared, and schools are of enormous importance. I valued the reference to education in the report, but I want to speak up for what I have seen in some of our church schools, when I was in Yorkshire and on Teesside, but even in Sussex. There is pressure on teachers to take on responsibilities for which they have not necessarily been prepared, where information can be a burden and possibly a trauma, in terms of how they are then expected to respond. How do we prepare those who are working in education for this? What investment is made to support them? How do we ensure that this aspect of their work, which is increasing, I think, does not demoralise the profession, as we see a rapid departure from our teaching profession? These are important issues to be addressed in the application and implementation of some of the hopes in this report.
Finally, I touch on something that I mentioned earlier, in terms of the perspective of family hubs and the age range, and that is loneliness. The age range 18 to 25 as an area for support strikes me as being very important. It touches on what it means to be lonely. As many youngsters find themselves in a world where our society is atomised, where do they find reliable safe spaces and relationships? Psalm 68, used by the young man who was working with youngsters on Teesside, also has an interesting statement:
“God setteth the solitary in families.”
I think the loneliness of many of our young people begs us to answer how they find the family in which they will be valued, encouraged and given purpose for their lives.
Baroness Wyld (Con)
My Lords, it has become customary to say it is a pleasure to follow the previous speaker, but it is a real pleasure and honour to follow the right reverend Prelate. There were so many interesting insights but also challenges to the committee, so I thank him for that. I need to draw attention to my interests as set out in the register, in particular my current interest as a non-exec at Ofsted; I recused myself where necessary during the inquiry.
I start by paying tribute to the chairmanship of the noble Baroness, Lady Armstrong. I miss serving on her committee, as it was a natural move for me to go over to the committee on the review of the Children and Families Act 2014, so ably chaired by the noble Baroness, Lady Tyler of Enfield. I want to take a moment to say that the noble Baroness, Lady Armstrong, chaired this inquiry with real verve and sensitivity. She and I disagreed from time to time, but she never got into political point-scoring, although some may say that she has now got plenty of opportunity. I have observed her throughout the pandemic and beyond; she is somebody who has continued to work tirelessly for vulnerable children and women in the most horrendous circumstances. I thank her wholeheartedly.
I hesitated but I feel that I need to say a few words about the wider context for tonight’s debate. I am very glad that my noble friend the Minister is the person to respond to it. I am not sure how she feels about it, but she too has dedicated a lot of her life to helping those in need. She certainly needs no lectures from me about how frustrating it is for many of us to debate this in the current circumstances, but we must plough on because we owe it to those people that we have heard about who gave evidence to the committee, sometimes in private and with exceptional bravery. We need to ensure that their voices are heard.
As we have heard, one of the most disturbing realisations highlighted by many of the witnesses was the fact that the pandemic silenced many of those most in need of attention. We have heard again about the number of vulnerable children who became invisible to services, which is why there was such a sense of urgency in the committee’s recommendations. I pay tribute to the millions of public servants and voluntary workers doing sterling work up and down the country. We were lucky to hear from many of them first hand, but we also heard of structural or systemic issues that mean services too often are piecemeal or almost impossible to navigate.
What really struck me and, I am sure, other members of the committee when we took evidence from people who had needed to access public services in times of crisis was the number of times that the system had broken down due to poor communication or data-sharing issues. I take all the challenges on funding and agreed with some of them but, interestingly for me, a lot of the witnesses did not come forward and say it was about funding. They said that something which seems very simple, such as changing GP practice, can then have a domino effect. We heard of one example that really stuck with me, in the treatment of postnatal depression, where something that should have been handled quite simply—and could have been avoided—then had ramifications not only for the mother but for the whole family, at the heart of which sits the child.
I lost count of the number of times on this inquiry, and during the one we did before on public services in Covid, when we heard from people who had faced awful situations. It was not people who had made mistakes or could have tried harder but because of situations that anyone in this Chamber would, I am sure, have found it incredibly difficult to deal with. They said, “I had to tell my story over and over again”, because the system was so disjointed. It was bad enough when you heard adults telling you this but when you hear young people and children say it, that is terrible. Despite the fact that we were hearing that, still the voices are not heard when the services are created, as the noble Baroness, Lady Pitkeathley, and others have said.
I note that the Government “partially accepted” recommendation 10 of the report on co-production and co-design. There were some promising examples on parent and carer panels. Can the Minister set out how we are going to know whether these are effective? What metrics are in place for them and the other examples that the Government gave?
Others have talked about family hubs. I was going to go through them but have listened to every word, so I do not want to replicate. I will just give my observation: the Government are doing a lot of good work here and I thought there was a genuine acceptance that this was a good solution. I liked the fact that Minister Quince came with a great passion and said that he saw them as “Sure Start-plus-plus-plus”. All that was there. I accept the need for evidence-based policy-making, obviously, but I had a nagging feeling the whole way through that there was not quite enough urgency around implementation and delivery. The Government recognised that there were problems in rollout but did not say what steps were being taken to cut through the complexity, which is the job of governing. Again, I have cut short the points I was going to make, but I would be grateful if my noble friend could provide an update to the House. The noble Baroness, Lady Armstrong, raised that point as well.
I want to talk briefly about mental health again, because I expressed my concerns during the committee—and years before that, actually, with many others, including the noble Baroness, Lady Tyler, who have been talking about the fact that this has been a neglected area for so many years. Again, the Government have done some good work here and taken a thoughtful approach over the years. I have seen, first hand, some brilliant examples of mental health services delivered in schools by charities and I am a huge champion of early intervention, which was one of the core themes of the committee, but some children need further specialist support. Not everything is solved at that earlier stage, and I do not think we heard from anybody, and I do not know anybody, working with children in a professional capacity who is not hugely worried about the pressure on CAMHS. I probed this at the committee and did not think we got a particularly strong answer from Ministers, but maybe I am being unfair.
I want to talk briefly about the fact that I know some commentators feel we are in danger of medicalising what are normal anxious or low feelings. I agree that there is a balancing act in early years when you talk about emotions, mental health and mental well-being, but I am talking about young people who are self-harming or those who have eating disorders or suicidal thoughts. There are awful situations with thresholds, where their parents are told that they do not meet them. The system seems very painful and difficult to navigate in the worst circumstances. Can my noble friend kindly update the House on what assessment the Government have made, or whether she thinks I am overstating it, of the immediate requirements for CAMHS? What steps are being taken to address this in terms of both the crisis and immediate response, some of which can be blamed on the pandemic, and longer-term workforce planning?
To sum up, as we have heard, all children faced a huge burden during the pandemic. but many or most of them will be able to move on. They will recover without needing the support of public services beyond what anyone might expect. However, as the noble Baroness, Lady Armstrong, said: for those who cannot, for whatever reason, we have one chance to help them urgently, so please do not let us miss it.
Lord Hogan-Howe (CB)
My Lords, it is a pleasure to follow the noble Baroness, Lady Wyld, and to speak this evening on the committee’s report. I mention my non-executive directorship of the Cabinet Office so as to declare that interest.
I join everyone else, first, in saying how much I enjoyed the company of the people who I shared time with on the committee, as I learnt a great deal, and, secondly, in paying tribute to our leader. The noble Baroness did a great job in showing how to lead a group of very opinionated and strong characters, while showing all the skills she had as the Chief Whip for the Tony Blair Government. Her deft skills kept us all in control and guided us in the right way, while listening to everything that we had said. I say thank you to the noble Baroness, Lady Armstrong, for that leadership.
I really want to talk about only two areas. The first is the Government’s rejection of the committee’s recommendation to have a national child vulnerability strategy. The second is the recommendation to have more data sharing for the benefit of the vulnerable child, which, as the noble Lord, Lord Davies, said, remains a concern that we have both probably experienced in another sphere in our professional life. It continues to remain a problem even today.
On the Government saying that they do not want to produce a national strategy, their argument was, first, that they were already taking a strategic approach and, secondly, that a single strategy covering too broad an area of policy risks becoming unmanageable. I thought both arguments were really weak: if the Government have a strategic approach, surely they have recorded it somewhere; if not, I would argue that it will be applied inconsistently. But if it has been written down, surely it could be published. I did not think that was a very strong argument.
Surely the point of strategies is that they are needed in broad areas of complex policy issues, such as vulnerable children. This is crying out for a national approach, with consistency, and to make sure that the right priorities are addressed in the future.
My first positive reason for needing a strategy is that it could provide a definition of vulnerability. None of the Government’s witnesses that we heard from could produce such a definition. This means that there are different departments having different definitions and priorities. I understand that a definition can be a hostage to fortune: the difficulty is that if you exclude somebody from a definition, and then someone later says they are vulnerable, there will be a list that constantly gets increased. But the danger of not having a definition is that nobody is clear exactly what they are talking about, and the aggravating factors that make someone vulnerable. Therefore, I think it important that a definition should be provided, even if it means that you have to add things on to that definition over time.
The No. 2 point for me is surely that such a strategy should set out the evidence of what works in reducing vulnerability and improving outcomes for children who are vulnerable. At the moment, this evidence seems to be scattered between at least three departments—health, education and the Home Office—and I am sure it is across many others too. But there is a danger that what is working might be applied inconsistently across different departments for the same child and the same family, and that does not seem a very sensible way forward either.
Thirdly, a strategy would prioritise prevention. Our witnesses did not really explain clearly that prevention was at the forefront of everything that was being done. There were some good examples of preventive work, particularly for the very young, but it did not sound consistent across all the departments, applied in a similar way.
Fourthly, everyone acknowledges that child vulnerability is a fiendishly complex problem. Each child can suffer unique consequences of such vulnerability. Central and local government’s ability to respond is complicated by a complex delivery structure. In central government, we have different ministries: I mentioned health, the Home Office and education. Local provision is provided by different services. The compound effect of both working together is that it becomes even more complex. Surely such a strategy could simplify and prioritise resource allocation and delivery for those things that worked.
Finally, one obvious practical benefit of such a strategy could be the speedy rollout of family hubs throughout the country, as we have heard already this evening. Not one of our witnesses was able to say that the Government had a policy to make family hubs available for everyone. What we were told was that more bid money was available for more rollouts, but the question for the Minister I offer is: do the Government want family hubs for everyone? If they do, when do they estimate that this will be achieved? It may well have been Andrea Leadsom’s vision, but is it government policy? We did not hear that clearly, and such an important issue should be addressed.
Nearly every witness complained that privacy legislation, data protection and the Information Commissioner inhibited the sharing of data for the benefits of vulnerable children. To be fair, the Information Commissioner did not accept this, although I am afraid that she was the only witness to do so. We are in danger of saying, “Well, she would say that, wouldn’t she?” because she had a very clear grasp of the law and understood the definitions. But what was clear is that if the practitioners continue to be concerned about the risk of sharing data, surely the system is not working very well.
The best piece of evidence I can offer is that the MASHs around the country are still in place. We have already talked about family hubs, but MASHs are multi-agency safeguarding hubs; just another acronym. The police use them—they are usually based in police stations—but other people play a part in them. They were created so that different agencies could share information gathered in each of them about the vulnerability of a child. It was the only way to overcome the problem about data sharing: someone from education said, “This child did not turn up at school yesterday”, someone from health said, “This child attended casualty last night”, and the police said, “That’s interesting, because we attended a domestic violence situation last night but we did not see a child or anybody who was injured.” But the only way to overcome the data-sharing problem was to sit everyone in the room with their computer and ask them to share it, once they had built up some trust. That cannot be the right way, surely, if we have to go to that extent. It is not only costly, but is not the most effective way of doing it. Those MASHs were created to overcome data-sharing problems, and they still exist. Why have people still got them if it is so easy to share the data, as the Information Commissioner says should be happening?
I really think that a time for action has come in this area. The whole point of data protection and privacy legislation is to stop the sharing of data. Is it not time to challenge that presumption, in this narrow area, at least?
Could the Minister please comment on my suggestion, which is that if a public servant is acting in good faith, intending to improve the health or safety of a child, they will have a defence in law to an act which otherwise would have been unlawful? I cannot see why that would challenge the proper sharing of data or make the child less safe, and I hope that it would reassure professionals that they were doing the right thing. They would have a defence—not an absolute defence, but something that they could properly claim if they found themselves challenged by a commissioner for the improper sharing of data. I am afraid that at the moment all the advice and the codes available do not seem to be getting through. Cultures can change not by a thousand pieces of legislation, but sometimes by significant acts. A legal defence may be one way of making a difference.
The noble Baroness, Lady Armstrong, clearly listed the volume or size of this task—it is massive, and at times it seems to be getting bigger. But surely we all agree that one group in particular is vulnerable—young people in care—and, if we can make real progress, it might be applied more widely. The outcomes for them at the moment are pretty awful: they go into the criminal sphere, lack employment and have poor health outcomes due to alcohol and drug problems, and, sadly, they create more broken families along the way. Surely we can get it right for them, but all the evidence at the moment shows that it is not going well. Finally, I reiterate my earlier point: if we had a national strategy, this would be a very clear priority within it.
Baroness Tyler of Enfield (LD)
My Lords, I am grateful for the opportunity to speak briefly in the gap. As others have said, it was a real privilege and pleasure to be a member of the Public Services Committee, under the admirable leadership of the noble Baroness, Lady Armstrong, when this very important inquiry was undertaken. As we have heard, the report contains a number of very important recommendations, and I have been pleased to be able to pursue some of these issues relating to kinship care, mental health and other things in my new role as chair of the Select Committee conducting post-legislative scrutiny of the Children and Families Act 2014.
As we have heard from the noble Lords, Lord Davies and Lord Hogan-Howe, the report contained some important recommendations on information and data sharing, and I wanted to add a small postscript. In the report, we highlighted the important issue of how legislative and practice barriers meant that vulnerable children were already falling through the gaps between local agencies, being invisible to social services, the NHS and the education system. We highlighted agencies feeling unable to share the data that they needed to determine which children needed their help.
I was pleased to be able to take forward some amendments to the recent Health and Care Act that were very much inspired by the work that we have done in this committee, particularly on highlighting the need for a consistent child identifier, or what is sometimes called a unique identifier. I am really pleased that, as a result of those discussions, the Act now commits the Government to laying a report before Parliament within a year, setting out their policy on information sharing, et cetera. I know that a review in a year might perhaps sound like a modest step forward, but it is important. Many parliamentarians and charities have been campaigning on this for many years, and I am very much looking forward to seeing that report next year. Can the Minister say anything about the progress and timing of it?
The report also set out a very powerful case for early intervention and preventive services for children and families in need, particularly to prevent poor education, health or social outcomes and, critically, as we have heard, to try to prevent more children from going into care. Of course, this whole thrust was strongly reinforced in the recent Independent Review of Children’s Social Care, led by Josh MacAlister. So I strongly support the notion of a national strategy on vulnerability to promote greater collaboration and co-ordination, and indeed multi-year funding allocations for early intervention; I was disappointed by the Government’s response in this area.
As others have said, the report contained some important recommendations on family hubs, which I support. I recognise that the Government committed investment to a further 75 in the Budget, and that is welcome, but we need a commitment to a national network of them as soon as possible to make sure that every community has somewhere that families can go to access universal family and parenting support as well as targeted support for families with the greatest need.
For me, a key test for the Government’s levelling-up agenda will be whether it improves outcomes for families and children, particularly vulnerable children. I hope that an incoming Prime Minister will give this issue the priority that it deserves.
Baroness Pinnock (LD)
My Lords, this has been an excellent debate, with many issues raised, questions asked and challenges given. I am sure that the Minister will be able to respond with her usual careful consideration.
This important report starts by reminding us that over 1 million children are growing up with reduced life chances. This stark reality has negative implications for us all, not just those children and their families. For the children concerned, it may lead to lower educational attainment, with a knock-on impact on their life chances in employment, for example. When policymakers focus on skill levels that are not meeting our current needs, as they often do, they should be required to consider the evidence in this ground-breaking report. It demonstrates that too many of our nation’s children are raised in family circumstances that restrict their development. The sad fact is that intervention by the state is too little and far too late for many of these children. Worse still, the evidence gathered by the report points to the colossal waste of public funding in the failure to intervene early in these children’s lives.
I record my thanks to the chair of the committee, on which I was lucky enough to serve, the noble Baroness, Lady Armstrong of Hill Top, for her leadership and her persistence in following the evidence and then finally gathering us all together to agree—which was not always easy—in the production of this report, which I sincerely believe is invaluable.
I will focus my contribution this evening on funding issues. This is where I will disagree with the noble Baroness, Lady Wyld, because I think funding, and the lack of it, is at the heart of this report. Lots of other issues are very important and have been raised, including data sharing.
Baroness Wyld (Con)
I do not think I said that funding was not important. I said that some witnesses had pointed to problems that I thought were not necessarily directly related to funding; they were about communication issues and join-up. Indeed, at times I have called for extra funding for early years myself.
Baroness Pinnock (LD)
I thank the noble Baroness for putting that on the record and I withdraw any criticism that I have wrongly made.
The numbers of children likely to benefit from external support from local services are staggeringly high. We heard that 1.6 million children—that is an awful lot of children—were helped by local authority children’s services in the six years between 2012 and 2018. In addition, the Office of the Children’s Commissioner estimated that as many as 750,000 were known to social services but “received no support”. Further, as we have heard in other contributions this evening, an additional 800,000 children were deemed “completely ‘invisible’ to services”, although likely to “need help” because of the circumstances in which they were living.
The committee was mindful of the wise words of Martin Lennon of the Office of the Children’s Commissioner, who said:
“Not all vulnerable children are poor, and not all poor children are vulnerable.”
However, he then went on to make clear that there was a definite “correlation between poverty” and children being, and becoming, “vulnerable”. Since the report was completed, families are now having to contend with the cost of living crisis. Those families who are just managing now will have very considerable additional costs for basic essentials. All commentators expect that there will be even more children living in poverty with the consequences enumerated by this report. The challenge for the Government is to determine the most effective and cost-efficient ways of supporting vulnerable children for their, and our, benefit.
The committee heard from many witnesses that the key to cost-effective support is to provide help “as early as possible” in a child’s life. Obviously, that means that funding for early intervention is critical. However, early intervention funding is not statutory. Admitting children into the care of the local authority is a statutory reaction in response to a family in crisis. This is done at very considerable cost to the public purse: for example, foster care rates are between £140 and £200 a week, depending on the age of the child. This is for local authority foster care; it is considerably higher for agency foster care.
As the report concludes: early intervention is a key to enabling better lives for vulnerable children. Unfortunately, local authorities saw a £1.7 billion yearly reduction in early intervention programmes since 2010. Those communities in highest need experienced the largest cuts to these services: councils with the highest levels of deprivation saw reductions of over 50% in real-terms spending—therefore, a per-child average of £141 where poverty is highest. From 2010 to 2019, those with the lowest levels of poverty had budget cuts of only £182 million per annum.
Early intervention is based on supporting a family in their own home; later interventions—such as foster or residential care, as I explained—are much more expensive. Yet the report found that, while there was a 48% reduction in early intervention services, there was a 34% increase to “higher-intensity” late interventions, which, as the evidence from Barnardo’s showed, despite being vastly more expensive, had worse outcomes for children.
One statistic clearly shows this failure of public policy. The number of children looked after in England has risen from 65,520 in 2011 to over 80,000 now. Andrea Leadsom’s review of child health inequalities quoted research by the LSE which showed that £16 billion of public money was spent in a single year on children and young people who have serious problems, all of which could be traced back to their early experiences. Her review said that
“you can certainly argue that you will save a good portion of that by investing earlier.”
The Government have made some welcome moves towards the provision of early intervention in the creation of family hubs, but much more needs to be done. As the report recommends at paragraph 60:
“To underpin a strategy on child vulnerability and its ambitions for ‘levelling up’, the Government should restore ringfenced funding for early intervention to its 2010 levels.”
I agree.
Other noble Lords have highlighted the other key recommendations in the report such as listening to the voice of the user—what a powerful experience that was. It was a privilege, actually, to hear the voices of the users. How great their contribution could have been to improving the quality of the services they need and to the Government having an effective strategy. It is appalling that there is no strategy. It is apparent that there is no strategy for helping 1 million of our children and, from all the evidence that we have heard, saving lots of money at the same time. Why do we not get it done? Finally, there is the importance of the professionals working with the users and the voluntary sector to the benefit of children. I just hope that this excellent report has the impact on decision-makers that its quality deserves.
Baroness Chapman of Darlington (Lab)
My Lords, I start, as others have, including the noble Baroness, Lady Pinnock, by paying tribute to the noble Baroness, Lady Armstrong, and her committee for the work that has been done on this report.
I do not think it is ground-breaking, actually. Depressingly, it repeats things that we already knew—things that we have heard before. From reading her previous report on public services during Covid and what can be learned, we are just not learning these lessons. There is nobody in this Chamber who has not heard the arguments before about data sharing, information sharing, early intervention and prevention and the need to work across government. We have all heard that a hundred times, yet it seems so fiendishly difficult for the Government to implement. I share the disappointment at the Government’s response so far but there is obviously always hope.
The LSE estimates that failing to invest in early years costs £16 billion, as the noble Baroness, Lady Armstrong, said. This is just a social and economic failure, as we all know. It is good that we have this opportunity to have this discussion. As I am getting to know the Minister a bit better over various things that we are having to do, I am pretty confident that she would share many of the things said by noble Lords this evening.
I would also like to welcome the Minister this evening, as she has been remarkably stoic in recent days. She has had the filleting of the Schools Bill to deal with, and the resignation of fellow Ministers. She is still here and still smiling, and we are very pleased to see her. Regardless of the drama happening at the other end of the building, it is good to have this opportunity to discuss this report from the Public Services Committee.
Could the Minister let us know whether she has had a chance to discuss any of these issues yet with the new Health and Education Secretaries? I know that, with three Education Secretaries in the last three days, it is not exactly a normal week, and we are realistic about what focus they would have been able to give, but we cannot carry on like that. These issues are urgent, and we need to attend to them as quickly as we possibly can.
This report reminds us that the number of vulnerable children was increasing even before the pandemic. It calls on the Government to publish a national strategy on child vulnerability, alongside long-term, protected funding for early intervention and prevention. The central point that the committee makes is not a new one: there is too little co-ordination, insufficient sharing of information across government, inadequate planning and a lack of focus. As I have said already, we have all heard this before; it is depressingly familiar. These are not things that the Government have to avoid—there are things that they could be doing now to approach this far more effectively.
In their response to the report, the Government say:
“Providing the right support at the right time for children and families is a priority across Government ... This focus must and will continue.”
While these words are welcome, it is striking that the Government are not as forthcoming with the means that the committee suggests would make a difference. As the noble Lord, Lord Hogan-Howe, and the noble Baroness, Lady Tyler, said, there really should be a strategy. It is all too easy for the Government to say that they agree that early intervention is the best way to support vulnerable children, but if that is true, why did successive Tory Governments dismantle the support that was available in the form of Sure Start, early help and youth services?
The starkest paragraph in the report says:
“Spending on early intervention services in the areas of England with the highest levels of child poverty fell by £766 million between 2010 and 2019 … In areas of England with the lowest levels of child poverty, spending on early intervention services reduced by £182 million … Walsall, for example, has some of the highest levels of deprivation anywhere in England. Spending on early intervention services there fell by 81% … Surrey has much lower levels of deprivation, but overall spend on early intervention children’s services fell by 10%.”
As the noble Baroness, Lady Wyld, says—although I know that she did caveat this—funding is not the only thing that matters. Absolutely, but it does matter; it really makes a difference.
It might interest the right reverend Prelate the Bishop of Chichester that early intervention spending in Middlesbrough, where he worked, reduced by 64% between 2010 and 2019. I know Middlesbrough very well, as my family is from South Bank. When you read statistics like that and you know that community, you have to wonder what on earth was going on that a decision such as that could have been made. We know why it happened—it is because there was no strategy. If there had been, decisions about local government spending would not have been divorced from decisions that were made about child poverty and the Department for Education. Those things just have not been joined up. When local government finances were squeezed from 2010, when local government was responsible for many of the early intervention services that we are discussing this evening, what did Ministers think would happen to support for the most vulnerable children, often provided by their local council?
In their response to the report, the LGA said that
“funding announced by the Government in the Spending Review to invest in children’s health and wellbeing and parenting support was helpful. However, with spiralling demand on children’s social services and future cost pressures in children’s social care set to increase by an estimated £600 million each year until 2024/25, councils still find themselves in the unsustainable position of having to overspend their budgets.”
This is not the best way to encourage child-centred, cross-government support.
This is important because support for vulnerable children is not just about the Department of Health and the Department for Education; it requires leadership from local government, the Home Office, the MoJ, DCMS, Defra, the DWP and probably others as well. As the noble Lord, Lord Davies, said, co-ordination among regulators would also help. I do not know how we will get this without a strategy. Working across government, as we are witnessing and as the Government have proven, does not happen organically, especially at a time of cuts in public spending. It takes leadership from the centre, a clear vision, priorities and a plan. What we have are multiple and, to an extent, complementary initiatives, plans and programmes, but we lack the energising leadership that government intervention always needs if it is to be sustained and effective.
Vital too is the role of the private, voluntary and charity sectors. We heard from my noble friend Lady Pitkeathley that local statutory services should work closely with the voluntary sector to identify and understand need. I agree with her that that is important and I would be interested to know what the Minister, with the invaluable experience she brings to this role, can say about how the Government can make this happen. In my experience, voluntary and community organisations are particularly good at building relationships of trust with parents that can help encourage positive engagement in health and other services.
Will the Minister also comment on why it appears that the Government are not adopting the recommendation for a local authority duty to evaluate local early intervention programmes? We agree that it is essential to assess the effectiveness of locally provided services and that this is not always straightforward, especially in the case of early intervention, given the length of time sometimes needed to demonstrate impact, but does this not make it all the more valuable for practitioners to agree sensible ways to regularly assess and evaluate programmes? Better still, how about an approach that allows co-production, so that interventions have the best chance of success?
On family hubs, the Government say that they
“welcome the committee’s feedback and thoughts on family hubs, which we will consider carefully.”
That is not really saying anything much, so have the Government really thought about what the committee has had to say on family hubs? I do not accept that family hubs are a progression from Sure Start. Hubs followed the decimation of Sure Start. Sure Start focused on the very youngest because that is where the biggest impact is made. If the choice were hubs or Sure Start—I wish it were a choice for us—I would have Sure Start every time. Hub coverage is just not comparable, but if the Government could extend the reach of hubs to cover the 20% most deprived communities, that would be a very good move.
The committee praised the fact that family hubs support children up to the age of 19, and I agree that that is a really good thing to do. The committee went further, though, in proposing that each hub should include domestic violence and addiction services, mental health support and parenting classes. Those are sensible suggestions and I would be very grateful if the Minister could let us know whether she will take them away and think about them. Will she also let us know what plans the Government have to speed the roll out of hubs and to make sure that the most vulnerable children are able to benefit?
It is really difficult not to compare family hubs with the Sure Start centres that came before them. It has been devastating to see the closure of so many Sure Start centres. Sadly, most of them were not around long enough for their full benefit to be known. The range of services, the inclusive ethos, the breaking down of barriers between communities, the understanding that everyone struggles from time to time when you have a young child, the infectious enthusiasm and sense of mission of the staff, from health visitors to managers and volunteer storytellers, were all irresistible. As the noble Baroness, Lady Wyld, said, family hubs are supposed to be Sure Start-plus-plus-plus, but she is worried about a lack of urgency and so am I.
Not only does this report explain the inadequacies of the Government’s current approach but it highlights a way of doing government that is not joined up, where words are not followed by deeds, and individual plans are not supported by strategy. The Minister should use the opportunity of a new Secretary of State and his desire to make an impact in his first Cabinet role to explain this report to him so that he can reconsider the Government’s approach and commit to a national strategy. Will she do so?
The Parliamentary Under-Secretary of State, Department for Education (Baroness Barran) (Con)
My Lords, I thank all noble Lords for their thoughtful contributions today, and I echo other speakers in thanking the noble Baroness, Lady Armstrong of Hill Top, for her leadership of the committee. As your Lordships have reflected, the real test of any society is how it treats those who are most vulnerable within it, and I welcome the committee’s report for shining a light on some of the challenges that we face. On a personal note, I am extremely grateful for the generosity of the noble Baroness opposite, and for her kind words.
Before I turn to many of the individual points made, I want to start by saying that, as our response showed, the Government do not agree with every recommendation on how we should take things forward, but our direction of travel on what we should be trying to achieve is, we believe, strongly aligned. One of the elements of “how” has come up a lot in the House tonight; namely, co-production with vulnerable children and their families. That is something which perhaps we need to talk a bit more about because it is present in a number of the policies that the Government are pursuing. I thank the Children’s Commissioner for the work that she is leading in this area, and the example that she is setting.
I turn to the committee’s recommendation on having a single, cross-government strategy for vulnerable children. As the noble Lord, Lord Hogan-Howe, described, we have concerns about whether this would be a manageable approach and whether it would have sufficient focus to deliver. We also prefer to delegate authority in these matters to local areas, as the noble Baroness, Lady Armstrong, pointed out. Since the inquiry reported, the special educational needs and disabilities and alternative provision Green Paper, the schools White Paper and the independent care review have all set out an enormous agenda that touches on these areas, one which seeks to deliver a coherent education, health and care system that works in the interests of all children, but in particular for those who are especially vulnerable. We are working at pace to take those reviews forward and we have committed to setting up an implementation panel in relation to the care review which will report at the end of this year.
Whatever language we want to use to describe it, we are thinking strategically about a range of policies in this area. We are introducing as much independent scrutiny and challenge as possible, with the care review but also with the consultation on the Green Paper. That will build on strong governance across all departments and plans for particular aspects of vulnerability that affect children. To share a few examples of this, we have announced a new child protection ministerial group to make sure that safeguarding is championed at the very highest levels; we have cross-government strategies or plans in relation to serious violence, mental health and domestic abuse; and programmes such as Supporting Families and the family hubs show how we join up services locally, which I hope responds a little to the challenge from the noble Baroness, Lady Chapman. We also have departmental outcome delivery plans. Our plan in the Department for Education includes a priority to:
“Support the most … vulnerable children … through high-quality local services so that no one is left behind”,
so we are working very closely to deliver on that.
I turn to the calls in the report for ring-fenced funding for early interventions to return to 2010 levels. We absolutely accept that local government funding has faced pressure in recent years, as the noble Baronesses, Lady Chapman and Lady Pinnock, pointed out. This year, local authorities have access to £54 billion of core spending to deliver their services, which is an increase of £3.7 billion from 2021-22. I can say in response to the noble Baroness’s points that the most deprived areas of England will receive 14% more per dwelling than the least deprived, so we remain cautious about the concept of ring-fencing and prefer to leave discretion to local areas.
We have been encouraging more focus on vulnerable children and early intervention via a step change in funding levels at the spending review, with over £1 billion for government programmes to improve support, advice and early help services from birth through to adulthood, including, as your Lordships have referred to, family hubs and Start for Life services, but also the Supporting Families programme and the holiday activities and food programme. This funding will help to improve access, and we aim to put relationships at the heart of family support for all the reasons that your Lordships described so eloquently. Those who gave evidence to the committee articulated the anxiety that I think any of us might feel when seeking help.
On the issues about working with the voluntary sector, I absolutely support the points made by the noble Baroness, Lady Pitkeathley, and the right reverend Prelate the Bishop of Chichester about the important role that the sector plays. The Government work very actively with the voluntary sector across many areas, including addressing some of the causes of vulnerabilities, such as alcohol misuse and domestic abuse, and working with the sector to prevent children being drawn into crime. We have also renewed a £560 million commitment for youth services, and many of our partners in the holiday activities and food programme are also from the voluntary sector.
I thank the right reverend Prelate for his reference to loneliness among young people. It was genuinely an incredible honour to be the Minister for Loneliness—a post that was set up in memory of the late Jo Cox—particularly during the pandemic, when loneliness was so prevalent and terrible. I talked to many young people about that in that role.
While talking about some of the underlying issues, my noble friend Lady Wyld asked for an update on our commitment to improving capacity in mental health services, particularly for young people. She will be aware that we have committed to increasing the investment in mental health services by £2.3 billion by 2023-24, and we believe that this will allow access to services for an additional 345,000 young people. We are also increasing the number of mental health support teams in schools and colleges to around 400, which will support approximately 3 million students in England by 2023.
Moving beyond the role of the voluntary sector to the points raised by the noble Baroness, Lady Chapman, on local and central government collaboration, I say that obviously the committee was keen to see a new duty on local authorities to collaborate to improve long-term outcomes. Local partners already have a duty to work together to safeguard and promote the welfare of children, and local authorities to promote co-operation to improve the well-being of children. Of course, as we have heard tonight, the challenge is to make these work in practice.
The reforms from the independent care review and the SEND Green Paper have an important role to play in driving collaboration. The care review has a real focus on improving multi-agency working, and the Green Paper proposes requiring local areas to develop a co-produced inclusion plan; I hope that is a helpful example of co-production in practice. This will build on existing mechanisms to evaluate the effectiveness of joint working; for example, the joint targeted area inspections of multi-agency safeguarding arrangements. We are strengthening these including via thematic deep dives, such as “The effectiveness of early intervention”.
On effective data-sharing, as your Lordships reflected, the sharing of information for safeguarding purposes is already supported by legislation, but the data reform Bill will change the law to make it even clearer that there is no barrier to sharing data where child safety is concerned. We will also report to Parliament on our plans for information sharing, including the feasibility of a common child identifier, which the noble Baroness, Lady Tyler, mentioned. I can reassure her that work has started on that; there was a launch event last week.
We also have an ambitious digital transformation agenda for health, with the rollout of electronic patient records and the development of digital red books, which my noble friend Lord Davies of Gower referred to. As regards the scale-up and development of this, we are keen to start with infants and early years—very young children—and will make sure that this works well before going any further.
The noble Lord, Lord Hogan-Howe, asked about why we still need MASHs. I lost many years of my life trying to set up multi-agency information-sharing arrangements around the country, so perhaps he and I need a cup of tea to discuss this in more detail. However, the serious point is that information sharing itself does not make children any safer; what makes them safer is people taking actions, having shared the information and understood the situation fully. Genuinely, that is why people still need to meet.
On family hubs, we absolutely share the committee’s interest in earlier intervention which is better joined up. As part of the £1 billion of government programmes which I have already referred to, we are investing £300 million to transform Start4Life and family support services in 75 local authorities across England. The noble Baroness, Lady Chapman, asked when we would get to the 20%; our commitment in the first stage is half of all local authorities in England. We are making good progress too on delivery; we have announced the areas that will benefit, and obviously the focus there has been on areas with the greatest deprivation levels. We are expecting the programme guide to be finalised soon, and local authorities will sign up for the programme later this year, paving the way for family hubs to be up and running from next year.
My noble friend Lady Wyld asked about the evaluation of the programme. We have committed £2.5 million to the family hubs evaluation innovation fund, which is a three-year commitment, and that will also cover funding for the National Centre for Family Hubs. Our aim is to capture and learn iteratively through this process. The evaluations will focus on three areas: first, process, service implementation and performance; secondly, outcomes and impact; and, finally, an economic evaluation, which will look at value for money.
In closing, as I set out at the start of my speech, there is a lot of common ground in our aspiration for vulnerable children. We are ambitious in the reforms we want to implement, and making sure that our delivery is effective is a vital prerequisite to any future scaling. We thank all those who served on the committee and those who gave evidence. I know that those of your Lordships who were on the committee felt strongly that you wanted to make sure that the voices of those who gave evidence were heard in the House, and we can all reassure you that that was the case. I am deeply grateful to the committee for its contribution.
Baroness Armstrong of Hill Top (Lab)
My Lords, I thank the Minister for her responses. I was very relieved when I saw that she was to respond because I know, and have discussed with her, the work she did before she came to the House. I had an email today from SafeLives to make sure that I was aware of its points; I know that she will be too.
I thank everyone involved. I forgot to mention in my speech one person who helped us enormously through the report and the evidence taking. That was our specialist adviser, Anne Longfield, a previous Children’s Commissioner, so we had a lot of knowledge and a lot of challenge on how we were doing things, which was extremely useful. The House will recognise that I also had amazing people on the committee, and I was very confident that they would cover areas that I did not have time for in my speech. I thank the noble Baroness, Lady Pitkeathley, for emphasising the voluntary sector and the voice of the child and the family. Throughout our inquiries, we have become convinced, if we were not before, that listening to and involving people with lived experience is critical to both design and delivery of services across the board, and children’s services are very much part of that. I am pleased that the Minister recognised that too.
The other issue is mental health, and I am very grateful to the noble Baroness, Lady Wyld, for spending some time on it. We will never be able to train the number of psychologists and psychiatrists in time to deliver what we all want to be delivered. That means that we must use the voluntary sector, which works at an earlier, less intensive level, so that, for those for whom problems can be contained before they reach the crisis level that the noble Baroness discussed, we can do so with many more people. I know from other work I am doing at the moment that many young people are involved in what can only be called psychotic behaviour and need very specialist attention.
I was also grateful to the right reverend Prelate for his contribution—not as a member of the committee, but if he is interested; we are always interested in the Bishops’ Bench. He was able to talk about somewhere that my noble friend Lady Chapman and I both know very well: Grangetown. I visited that Sure Start centre myself. It was always so great to visit, because there was so much energy, commitment and determination to make things better. I thank him for his contribution.
There are so many issues here but there is unanimity around the House that this is a crisis and an issue that we have not got right—although there are examples of where we can get it right. This is not about saying, “We don’t know what to do”. The reality is that we know what to do. There are examples out there showing us that, with the right sort of support at the right time, things can be different in every community. I am sorry that my noble friend the Whip—the noble Baroness, Lady Blake—has left because she was the leader of Leeds City Council when, despite all the cutbacks, it managed to maintain its investment in Sure Start and children’s centres across the city. While everyone else was seeing the number of children going into care rise, Leeds saw a fall. We know what to do. The challenge for the Government is making sure that they pull together that knowledge and implement it. I thank everyone for a really interesting debate.