Levelling-up and Regeneration Bill (Twenty Fourth sitting)
Tuesday 18th October 2022
(1 year, 6 months ago)
Public Bill CommitteesRead Full debate Levelling-up and Regeneration Act 2023 View all Levelling-up and Regeneration Act 2023 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 18 October 2022 - (18 Oct 2022)
The Committee divided: - Ayes: 5 / Noes: 8 - Question accordingly negatived.
The Chair
I have a few preliminary reminders that Mr Speaker has asked me to read out for the Committee. Please switch electronic devices to silent. No food or drinks are permitted during sittings of this Committee, except for the water provided. Hansard colleagues would be grateful if Members could email their speaking notes to hansardnotes@parliament.uk.
Clause 184
Pavement licences
Question proposed, That the clause stand part of the Bill.
The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Dehenna Davison)
It is a pleasure, as ever, to serve under your chairmanship, Mr Hollobone. The temporary streamlined route for pavement licences implemented in 2020 has been successful in supporting the expansion of outdoor dining during the covid-19 pandemic and the economic recovery. To continue supporting the hospitality sector, and to encourage better use of our high streets for our communities, we are making that measure permanent.
Clause 184 inserts a new schedule that amends the Business and Planning Act 2020, making the measure permanent subject to the amendments set out within the schedule. The clause is necessary to ensure that businesses, communities and local authorities have a sustainable process going forward, which balances the interests of all and enables better use of outdoor spaces. I commend the clause to the Committee.
Question put and agreed to.
Clause 184 accordingly ordered to stand part of the Bill.
Schedule 17
Pavement licences
Alex Norris (Nottingham North) (Lab/Co-op)
I beg to move amendment 199, in schedule 17, page 321, line 27, at end insert—
“(A1) In section 1 of the 2020 Act (Pavement licences), in subsection (5)(b) at end insert ‘but includes any part of a vehicular highway which is adjacent to a highway to which part 7A applies.’.”
This amendment would enable the pavement licence to include part of the carriageway, where the carriageway were adjacent to, for example, an eligible pavement. This would enable a licensing authority to grant licences which occupy part of the highway shared between space for pedestrians and vehicles.
It is a pleasure to resume debate with you in the Chair, Mr Hollobone. We support the principle of pavement licences, along the lines of the Minister’s introduction, but we have tabled a few amendments that would enhance them. We are interested in getting some views on the amendments, to ensure that the scheme works as well as it can, taking into consideration concerns about its implementation, whether of road users, walkers, businesses or disabled people. We need to ensure that all voices are heard, and the Bill provides a good moment to do so. As the Minister said, this was a very challenging time for business, but having gone through a dreadful couple of years of collective sacrifice we should seek to grab whatever good we can get from it.
One of the issues, with the benefit of hindsight, with the Business and Planning Act 2020, which legislated for pavement licences, is that a licensed area may take up part of the pavement but not part of the carriageway unless vehicles are already restricted or excluded from it. The existing provisions therefore protect vehicular space but reduce pedestrian space, which is contrary to the aims of “Gear Change”, the vision of the Department for Transport to make England a great walking and cycling nation. If it is right to license extra space for use for commerce, I do not think that we should put a blanket limitation on the nature of the space available, and not include highways when local space could sensibly accommodate it. Again, it would be a matter for local discretion whether it was reasonable to encroach on the space used primarily by motor vehicles, not just by pedestrians.
The amendment would allow a pavement licence to use part of the carriageway adjacent to a pavement. Local authorities would then be able to decide where it was appropriate to allow use of the carriageway. We would expect them to refuse the use of busy roads, but perhaps to license space in other roads and to use road furniture creatively, just as a build-out can accommodate a bus stop, to ensure that the space is still available in its usage. The amendment would empower local authorities, which know best in this regard, to make the decision, thereby giving a bit of flexibility. I am interested in the Minister’s thoughts.
Dehenna Davison
The Government are incredibly supportive of provisions making it as easy as possible for businesses and authorities to facilitate outdoor eating and drinking through the use of the streamlined pavement licence process. I am grateful for the shadow Minister’s broad support for this measure.
There are already a number of ways in which a local authority can consider the pedestrianisation of a street—for example, through traffic regulation orders under the Road Traffic Regulation Act 1984 and through a pedestrian planning order under section 249 of the Town and Country Planning Act 1990. That includes facilitating the placement of furniture on the highway for al fresco dining. The regimes already in place to consider pedestrianisation include important processes to allow the consideration of any issues, including whether vehicular access is required at any time of the day. Pavement licences can then be granted for highways that have been considered under those processes. We have seen the success of that in practice across the country, including in Soho in London and in the Northern Quarter in Manchester, so I kindly ask the shadow Minister to withdraw his amendment.
Alex Norris
I am grateful for the Minister’s answer. I felt that there was a contradiction, however, because she started by talking about a desire to streamline the process, but it was explained essentially as a double process. Not only will there be a pavement licence process, but the local authority will then have to do the other process that she detailed in order to change the use of the space. I am not sure that that is streamlined. Nevertheless, the facility is there to do it and I think that I have made my point, so I will not labour the argument any further. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Alex Norris
I beg to move amendment 204, in schedule 17, page 322, line 7, at end insert
“, together with any profit share, the maintenance fee and the cleansing fee”
This amendment and Amendment 205 would enable the local authority to share in the additional profit accruing from a licence enabling the licensed business to trade on the highway, and to recharge to the licensee the cost of maintaining and cleansing the licensed part of the highway.
The Chair
With this it will be convenient to discuss amendment 205, in schedule 17, page 322, line 10, at end insert—
“(1C) In subsection (1A)—
(a) ‘the profit share’ is such sum as the person who applies for a pavement licence, as part of an entity employing more than 250 people, and the local authority may agree represents one half of the additional profits arising from the grant of the licence during its term, or such sum as the local authority may reasonably determine to represent that amount in default of agreement;
(b) ‘the maintenance fee’ is such sum as the person who applies for a pavement licence and the local authority may agree represents the cost of maintaining that part of the highway comprised in the licence during its term, or such sum as the local authority may reasonably determine to represent that amount in default of agreement;
(c) ‘the cleansing fee’ is such sum as the person who applies for a pavement licence and the local authority may agree represents the cost of sweeping and cleansing that part of the highway comprised in the licence during its term, or such sum as the local authority may reasonably determine to represent that amount in default of agreement.”
See explanatory statement to Amendment 204.
Alex Norris
A highway is part of the public realm. Every publicly maintainable highway is, under section 263 of the Highways Act 1980, vested in the highway authority. Pavement licences and the granting of public space to be used by private business must therefore strike the balance between commerce and the community.
Let us consider a very foreseeable example. Let us suppose that a large, national chain of pubs with an extensive frontage on a street—perhaps a pedestrianised street—seeks a licence for the use of that street for seats and tables. That, in and of itself, is a good thing. I love a decent pub garden. My hon. Friend the Member for Greenwich and Woolwich always complains that I make him stand outside. I hate being inside in a pub; I like being outside, and I suspect that there are a significant number of like-minded people who may wish to vote with their feet, so it is good that we are offering this facility. However, we should understand that it may well be a highly lucrative endeavour for the business. The business increases its capacity to trade, particularly in summer. We know that some of the very big chains can increase turnover by significant sums in this way.
At the moment, the local authority can charge a fee for the pavement licence. This Bill amends the fee from £100 per application under the 2020 Act to £500 for a new application and £350 thereafter for repeat applications. We say that this is a step in the right direction, but it is not likely to do much more than meet some of the administrative, monitoring and enforcement costs. Of course the public, under this process, lose their right of access to the area and, unless they are customers of the licensee, they do not gain any benefit from it, but, as I said, the licensee can derive significant benefit, so we have to try to find a balance, which is what I am seeking to do in amendments 204 and 205.
We know that things are tough enough, particularly for small and medium-sized businesses—often the local independents that populate much of our high streets—so I have removed them from this proposal by using the 250-staff threshold that the Government used with regard to calories on menus. I think that that is where I divined that they draw the line for small and medium-sized businesses. I would be interested to hear from the Minister whether she felt that that was not the case, because I am seeking to target the proposal particularly on larger companies, which perhaps can afford to pay a bit more.
It is incumbent on us to drive a hard bargain for our constituents and for a fair deal for this use of space, because the local authority will retain its obligation to cleanse, drain and maintain the street. Indeed, with more outside activity, the need for that could grow. It is important that those costs are reflected. Even when the licence is granted, the authority does not just offload its duties and obligations in this respect. Therefore these amendments would secure for the local authority a share in profits arising.
It is probably important to say at this point that these are probing amendments. There might be a different mechanism by which we could secure this outcome. If the Minister is minded that way, I certainly would be too, so I am interested in her views. I think that, in this process, a balance has to be found between private enterprise and the public interest and I do not think that we have quite found it yet, although what is in the Bill is a welcome move in that direction. I just wonder whether we can go a little further.
Tim Farron (Westmorland and Lonsdale) (LD)
It is a continuing pleasure to serve under your guidance this morning, Mr Hollobone.
The amendment moved by the official Opposition gives us something to consider. For someone who represents an area such as Cumbria, where it is always sunny and al fresco dining can therefore happen at any time throughout the year, it is hugely significant. One of the learnings in the development of the pandemic that could have a positive ongoing legacy is the move towards dining and drinking outside, and making better use of the public realm. That is a positive thing.
Let us remember that pubs in particular have never been under more pressure than they are now. We lose many every week, with people losing their livelihood and communities the thing that holds them together. It is deeply troubling to see that happen. We should allow smaller pubs especially to gain the full benefit of anything that they can from the provisions allowing use of the pavement and parts of the highway to expand capacity and therefore increase profit.
I agree, however, that with larger employers and businesses we absolutely need to ensure shared benefit from the development for two reasons. First, we are giving local authorities more responsibilities. Planning departments—we have discussed this throughout the Bill—have an enormous role to play in ensuring that communities have genuine power. If we are devolving power to communities, we have to allow planning departments that work on behalf of those communities the resources—the scope—to be able to enforce their rules. This is an additional responsibility, so we should enable additional finance to go to the planning authorities to make sure that they can uphold the rules, protect the community and ensure that the costs to the local authority, the community and the council tax payer for highways, refuse collection and other things are borne jointly.
Secondly, many people will observe that throughout there has been a disconnect between the interests of the local authority and the business community. The proposed measure would integrate them—the fact that there is joint benefit shows that it is in the interests of the council tax payer and the business rate payer to do the same thing. Organised synergy is almost a consequence of the two amendments, which is why they are important. I hope that the Government will take them seriously.
Dehenna Davison
The thing that is most wonderful about today is that only seven minutes into the Committee’s sitting, we have found some cross-party agreement, which is on the quality and value of a good pub garden. I hope that at some point we can share a pint in one, when the Bill Committee is over.
Clearly, in my last few trips, I have been in Cumbria on those incredibly rare rainy days, but the hon. Member for Westmorland and Lonsdale made a good point that pub and hospitality businesses are under pressure. According to our most recent stats, 73% of hospitality firms have outstanding debt as a result of the pandemic, so at this point we really do not want to put additional undue pressure on businesses.
In developing the proposals to make the streamlined pavement licensing process permanent, we have worked closely with local authorities, business, leaders of the hospitality sector and the community. That is why we are increasing the fee cap from £100. We will take detailed analysis of the actual cost to create a sustainable process, which will cover the cost to local authorities of processing, monitoring and enforcing the powers, while remaining affordable and consistent for businesses around the country. Businesses have seen inflated fees reaching thousands of pounds per application under the previous process.
Local authorities maintain flexibility to set fees at any level under the fee cap, to respond to local circumstances. For example, we have seen some areas make licences completely free in order to support their local high street. At a time of rising costs, we are not seeking to impose additional charges on business, in particular given that the hospitality industry was one of the hardest hit by the pandemic. On that basis, I ask the hon. Member for Nottingham North to withdraw his amendment.
Alex Norris
I am grateful for the contribution of the hon. Member for Westmorland and Lonsdale. His point about joint benefit is a good way to characterise this—we do not envisage a situation in which business and local authorities scrap it out, but take a sharing approach, with the benefit going to local rate payers as well.
I am also grateful for the Minister’s response. She addressed well the point on cost, and we would not want local authorities and therefore rate payers to be out of pocket for the processes, so there should be cost recovery. However, I do not think she has addressed the point on the enhanced value through use of a public asset. As drafted, the amendment is not quite ready for inclusion in the Bill, but I hope that the Minister will reflect further on the point that it makes. We will certainly return to it in due course, but for the moment I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Alex Norris
I beg to move amendment 200, in schedule 17, page 322, line 19, at end insert
‘(2B) In subsection (7), for “it is sent to” substitute “a receipt for the application is sent to the person who applies for a pavement licence by”.’
This amendment would cause the public consultation period to begin from the date on which the local authority sends a receipt to the applicant.
The Chair
With this it will be convenient to discuss amendment 201, in schedule 17, page 322, line 30, leave out ‘14’ and insert ‘28’.
This amendment would amend section 2 of the 2020 Act so that the consultation period for licence applications would be 28 days, rather than 14.
Alex Norris
Under the current provisions of the 2020 Act, the application and consultation process for a pavement licence do not adequately protect the public interest, particularly with regard to having suitable time to engage in a consultation. As it stands, the process is such that the applicant for the licence must immediately display a notice on their premises. The date of the application is the date on which it is sent to the local authority and that display is made. The local authority must then publicise the application for public comment. The public consultation period lasts seven days, starting the day after the application has been made. The Bill amends that to 14 days—that is welcome—but that is the sole change to the process. We think the process could be further improved and my amendments seek to do that.
Amendment 200 delays the date on which the application is deemed to have been made until the local authority issues a receipt. That delays the start of the clock on the public consultation period until the local authority has been able to act and do something about it. Amendment 201 builds on the increase to 14 days and instead increases the period to 28 days, therefore protecting the public with such a period of engagement. As the 2020 Act currently applies, if the local authority fails to publicise the application until a week after receipt, the public have no time to respond. That is assuming that they have not seen the site notice, and we know there is a challenge there. That cannot be right or fair for the public, and is probably reflected in the decision to move to 14 days. However, we still think that is not enough time, especially if we consider that we are often talking about the summertime. We know local authorities already have limited resources. If the appropriate officer is away or unavailable, there might be a delay to that process, when the clock is running down and the public do not know that.
That is worthy of consideration in and of itself, to ensure that the right balance is struck regarding the public interest. I am also interested in the Minister’s views on the following matter. In the 2020 Act, section 3(6) says that there may be circumstances in which the granting of a licence would have unacceptable effects on the use of a highway. That makes sense because, otherwise, why have a process? There are circumstances where the answer might be no. However, at the moment, if the local authority does not act quickly enough, the licence is granted notwithstanding those effects. There is a contradiction there. Can the Minister say whether the Government wish to draw the line at 14 days? Is it clear that there could not be a situation where what ought to be a rejected grant could, through delay, be granted anyway?
Dehenna Davison
I thank the shadow Minister for his clarity on the purpose of his amendments. The pavement licence process that we are seeking to make permanent has been successful over the past few years because it provides a simpler and more streamlined process to gain the licence. We feel that the amendments would place unnecessary new administrative processes on local authorities by requiring a receipt to be sent to all applicants. They also have the potential to create a delay in the process, meaning that licences could take longer to be determined should receipts not be processed within reasonable timescales. We are, however, seeking to double the consultation and determination periods, compared with the temporary process, to ensure that communities have sufficient opportunities to comment on applications.
We have worked closely with stakeholders, including groups representing disabled people, local community groups, businesses and local authorities, in considering the consultation period when making the streamlined pavement licence process permanent. In working with those groups, we have sought to achieve a balance between a quick and streamlined process and ensuring that process is sustainable for the long term and gives communities an opportunity to comment on applications. That is why we are setting the consultation period at 14 days—double that of the temporary process. We feel that the amendments would create a slower process than that which it replaces, adding unnecessary administrative burdens for local authorities.
The shadow Minister is correct that if the local authority does not decide within the 28 days, the licence will be deemed granted, but local authorities still hold control, as they are able to publish conditions in advance that will automatically apply to any deemed licence. That provides an additional layer of protection, so I kindly ask him to withdraw the amendment.
Alex Norris
I am grateful for that last point on protection, which addresses the issue. Where there is a difference is that the Minister characterises this as a possible delay in the process. I would say that that is the whole purpose. Our interest is in ensuring that the public get the full time to have their say. It is welcome that there has been consultation with groups who take an interest in this matter. I would be slightly surprised if the consensus among them was that less time is better, or that the weird period where the application has started and they just do not know about it is a desirable use of the first two or three days of the 14, but I might have to test that with them outside the Committee. However, that is probably a point to return to in due course, so I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Alex Norris
I beg to move amendment 203, in schedule 17, page 322, line 31, leave out paragraph 7 and insert—
“7 (1) Section 3 of the 2020 Act (determination) is amended as follows.
(2) After subsection (8) insert—
‘(8A) A local authority, in deciding whether to grant a pavement licence under subsection (3), shall have regard to the desirability of maintaining the free flow of pedestrians and other road users along the highway, and the avoidance of inconvenience to such persons.’.”
This amendment would confer discretion on a local authority to have regard to the needs of road users in deciding whether to grant a pavement licence.
As I said in the previous debate, under the 2020 Act the local authority can refuse to grant licences that prevent traffic from passing along the highway or that inhibit the passage of, say, mobility scooters. However, the Act is not clear—I want to test the Minister’s views on this—about whether a local authority can refuse a licence that inhibits or unduly influences the free flow of people or their enjoyment of the public amenity. For example, what if an authority believed that the use of the licence would substantially interfere with the free flow of pedestrians or cycles at a peak time or deprive people of the use of street facilities such as benches? If residents living nearby, or in flats above shops, would be disturbed by the use of the licence above and beyond what we would normally expect under the alcohol licensing process, would an authority be able to refuse the licence on that ground alone? The Government’s guidance states that
“1500mm clear space should be regarded as the minimum acceptable distance between the obstacle and the edge of the footway”,
but 1.5 metres is not a particularly generous allowance in a shopping street. Would the Minister be comfortable with a local authority seeking more than that?
The amendment proposes a solution to the examples I have listed. It proposes that an authority should be able to refuse a licence if the use of it would interfere with pedestrian flow—for example, if it would leave the pavement so narrow that pedestrians might feel they had to step into the carriageway to pass each other, which obviously is not very desirable. I am keen to test the Minister’s views on that, and to get on record the level of flexibility that local authorities have to balance the enjoyment of the amenity across various, possibly competing, interests.
Dehenna Davison
I thank the shadow Minister for raising an important issue that local authorities must consider when determining applications, which is the continuing flow of pedestrians and other road users on the highway. The Business and Planning Act 2020 already requires that local authorities take that into consideration when determining applications through section 3(6), and it prevents licences from being granted where they would prevent pedestrians or other non-vehicular traffic from entering or passing along the highway or having normal access to premises adjoining the highway.
Ensuring that pavements remain accessible to everyone, including disabled people, is a condition of the temporary pavement licences issued by councils. Where that condition is not met, licences can be revoked. To provide some reassurance, we have worked with the Royal National Institute of Blind People and the Guide Dogs for the Blind Association to refine the guidance to ensure that local authorities consider the needs of people who are blind when setting conditions and making these decisions.
We have carefully considered the issue of minimum distances, which the shadow Minister raised, and we judge that we should leave some room for reasonable local discretion, given the different physical environments involved. However, we have made it clear that 1.5 metres will be the minimum acceptable width in most circumstances. We therefore resist the amendment on the basis that the existing legislative framework already requires local authorities to consider these issues, and they cannot grant a licence if pedestrians are prevented from using the highway as they usually would. I therefore kindly urge the shadow Minister to withdraw his amendment.
Alex Norris
I am grateful for that answer. On that basis, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Alex Norris
I beg to move amendment 202, in schedule 17, page 322, line 32, leave out “14” and insert “28”.
This amendment would allow a local authority 28 days to determine the application, instead of 14.
If this feels a bit like a replay of the debate on amendments 200 and 201, I assure colleagues that it is slightly different—they might just have to squint to see that.
At the moment, the Bill retains the stringent regime whereby a local authority must determine an application for a pavement licence within a fixed period. Formerly, that period was seven days; it will now be 14 days. If the local authority fails to do so, the application is deemed to have been granted. Labour wanted to extend the period for consultation purposes, but we have not succeeded. I want to test the point of potentially amending it to give the local authority
“28 days to determine…instead of 14”,
as it says in amendment 202.
We remember well the quick passage of legislation during the early knockings of the pandemic. As the Minister said, the industry was struggling and we needed to support it, and quick action was integral to that. The times for consultation and determination in the 2020 Act reflected that, but now that we do not have such time pressures, it is reasonable to expect a little more time for determination, not least because local authorities are hard-pressed. They will probably have only a single person, not teams of people, working on these applications.
The two-week period would not align with most applications people might make to their local authorities. For example, it would certainly not align with an alcohol licence—ordinarily, that would not be determined in 14 days, and it definitely would not be deemed to be granted if the clock had run out. Labour feels that having a little more time—28 days, rather than that two-week period—would give space for creative solutions in line with those the Minister set out in the previous debate and would ensure a fair balance between the business, the public and the local authority.
Dehenna Davison
We have worked closely with stakeholders, including groups representing disabled people, local community groups, businesses and local authorities, in considering the determination period when making the streamlined pavement licence process permanent. In working with those groups, we have sought to achieve a balance between a quick and streamlined process and ensuring that the process is sustainable for the long term and gives local authorities sufficient time to consider any issues and determine the application. That is why we are setting the determination period at 14 days—double that of the temporary process.
I refer the shadow Minister to comments I made on the previous amendment. Local authorities can publish conditions in advance, which will automatically apply to any deemed licence. However, even if a licence is granted, local communities will still be able to contact local authorities about any concerns they have, and authorities will have enforcement powers to tackle any issues raised. We deem that the period is lengthy enough, but local authorities will of course continue to have those enforcement powers should any issues arise. We fear that the amendment would create a slower process than that which it replaces. I therefore urge the shadow Minister to withdraw it.
Alex Norris
It absolutely would create a slower process, but that was the intention. I will not press it to a Division, but I hope the Minister will reflect on the fact that it seems considerably out of kilter with other decisions of this nature that are made for licences and permits. I cannot think of another that would be as quick as 14 days, with a deemed acceptance if the clock runs out. In those others cases—say, for a parking permit or an alcohol licence—there is good reason to have a little time for reflection, and I think those reasons probably apply here.
This is perhaps not a point to labour any further today, but I hope the Minister will keep thinking about it. We could be in danger of being just a little too streamlined. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Alex Norris
I beg to move amendment 206, in schedule 17, page 323, line 5, at end insert—
“(8A) (1) Section 5 of the 2020 Act (conditions), is amended as follows.
(2) After subsection (7) insert—
‘(7A) The conditions to which a licence granted by a local authority may be subject include—
(a) a condition that any furniture which may be placed on the highway under the licence must be removed from the highway at times when the premises are not open to the public;
(b) a condition that, where the furniture to be put on the relevant highway consists of seating for use by persons for the purpose of consuming food or drink, the licence-holder must ensure that smoking or vaping does not affect others.’.
(3) After subsection (8) insert—
‘(9) But regulations under subsection (8) must not prevent a local authority imposing a condition, nor affect a condition imposed by a local authority for the purposes of subsection (7A)(b).’”
This amendment would allow a local authority to require that furniture is removed from the highway when it is not in use, as well as imposing a condition to require the licensee to prevent smoke-drift affecting those in the vicinity.
Me again. Sections 5(4) to (6) of the 2020 Act cover the imposition in a licence of a “no-obstruction condition” and a “smoke-free seating condition”. These conditions require the licensee to avoid the effects specified in section 3(6), including
“preventing traffic, other than vehicular traffic, from…passing along the relevant highway”
and to make reasonable provision for seating where no smoking is permitted. The Bill does not affect these requirements, which the Opposition support. However, we might want to tighten up these provisions to ensure they have the desired effect.
Local authorities are already required to impose a smoke-free seating condition to ensure that reasonable provision is made to accommodate non-smokers. A smoke-free seating condition, however, does not give the public, people using the highway or neighbouring premises, or people living above the premises explicit protection to ensure that their enjoyment of the amenity is not affected by people smoking. Smokers are more likely to go to outdoor tables because they cannot smoke inside, and that can throw down a gauntlet, in that the public have to run through a cloud of smoke.
Amendment 206 would expressly enable local authorities not just to lay down conditions about smoke-free seating, but to require in those conditions that the licensed area should not affect passers-by, neighbouring shops or homes. If, for example, there are flats above a café, a condition could require steps to avoid the occupiers being affected by smoke drift. We are seeking a balance, so that people using a highway can do so peacefully and with the full enjoyment of the amenity. I hope the Minister will say that local authorities can already do that, but if that is not the case and if this amendment is not the right answer—though I think the principle is likely one that is shared—how do local authorities ensure that balance for people?
Dehenna Davison
I thank the shadow Minister for his dedication on this point. Pavement licences may be granted subject to any condition that the local authority considers reasonable, as set out in section 5(1) of the Business and Planning Act 2020. We are aware anecdotally of conditions that would, for instance, require licensed furniture to be removed when not in use and that go further than our national smoke-free condition.
We are all about empowering local areas and relying on local leadership. That is why we consider that local authorities have the local knowledge and appropriate powers to impose such conditions, should they consider that necessary. A number of local authorities have already implemented local smoking ban conditions for outdoor seating, including the City of Manchester, Newcastle and North Tyneside, so it is clear that local conditions can be implemented where it is appropriate and desired. On that basis, we do not think it is necessary or appropriate to create national conditions, and there are circumstances where it may not be necessary or appropriate on a local level. I would therefore ask the shadow Minister to withdraw his amendment.
Alex Norris
I am grateful for that very clear answer. There are areas where this is still a point of debate. I think the Minister’s answer alone will resolve that. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Alex Norris
I beg to move amendment 207, in schedule 17, page 324, line 19, at end insert—
“(4A) If the person leaves or puts removable furniture on the relevant highway in contravention of the notice, the local authority may issue a fixed penalty notice of £500 to the person in accordance with guidance issued by the Secretary of State.
(4B) Subsection (4A) applies whether or not the local authority has taken the action specified in subsection (4).”
This amendment would enable local authorities to issue £500 fixed penalty notices to persons who leave or put removable furniture on a street in contravention of a notice.
The Chair
With this it will be convenient to discuss amendment 208, in schedule 17, page 324, line 19, at end insert—
“(4A) It is an offence to leave or put removable furniture on the highway in contravention of a notice issued under subsection (3).
(4B) A person guilty of an offence under subsection (4A) is liable on summary conviction to a fine.
(4C) A person may be prosecuted for an offence under subsection (4A) notwithstanding whether or not the local authority has taken action against the person under subsection (4).”
This amendment would make it an offence to contravene a local authority notice requiring a person to remove furniture or to refrain from putting it on the highway.
Alex Norris
This is my final amendment to schedule 17. This is a really important point, and I hope to find the Minister in listening mode. The provisions in part 10 of the Bill have addressed many of the problems with the temporary regime for pavement licences and have given local authorities a bit more say and strength in this matter. That is very welcome.
However, under the temporary regime we are seeking to replace, many licensing authorities highlighted the challenge of not being able to adequately enforce the regime they are overseeing, with district councils issuing licences under the temporary regime, while enforcement powers remain with county councils under the Highways Act. A couple of the answers the Minister has given have relied on enforcement, so the enforcement point is important. For example, if a premises puts tables and chairs outside its business without a licence, the licensing authority is not the one that can take action; it needs the highways authority to do that, so it already gets a little complicated.
Dehenna Davison
The Government recognise the importance of having a system that can be properly enforced to deter and tackle the unauthorised placement of furniture. Powers introduced in the Bill enable local authorities to serve notice requiring that businesses remove furniture that has been placed on the pavement without a licence. If that notice is contravened, local authorities can remove furniture themselves or issue an instruction to have it removed, and can then recover the costs of that and go on to sell the furniture and retain the profits.
The Government’s position is that the introduction of the powers proposed will lead to appropriate protection of our communities by giving local authorities powers that work as a deterrent and to directly tackle issues where notices are ignored, ensuring that the licensing system operates appropriately. Ultimately, local authorities will still have the power to revoke a licence.
It is also important to note that highways authorities already have powers in the Highways Act 1980 to tackle obstructions on the highway. That includes section 148, which creates an offence of depositing, without lawful authority or excuse, things that cause interruption to users of the highway.
The shadow Minister mentioned some of the groups that he has worked with, and I would be delighted to sit down with him to discuss their response. However, at this stage, I ask him to withdraw the amendment.
Alex Norris
I am grateful for that. It is of note that those who know of what they speak in this area, particularly on a day-to-day basis, feel the way they do. However, the Minister’s offer is a good one and I will take her up on it. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 17 agreed to.
Clause 185
Historic environment records
Rachael Maskell (York Central) (Lab/Co-op)
I beg to move amendment 130, in clause 185, page 190, line 2, leave out “an historic environment record” and insert
“or have access to an historic environment record and adequate specialist advisory capacity”
This amendment is intended to ensure that all current models for service provision of HERs are covered by the provisions of Clause 185 and that HERs have access to specialist archaeologists and conservation officers.
It is a pleasure to serve with you in the Chair, Mr Hollobone. We are making good progress. Although the provision in the legislation on historic environment records is good in itself, it simply does not go far enough. My amendment calls for specialist archaeologists and conservation officers to be engaged in the planning process to a greater degree.
Historic environment records extensively map the physically accessible historic environment and archaeological areas. However, they do not come with a voice, a brain or context. The amendment, which is supported by those who work in the field, recognises the unique importance of specialist archaeologists and conservation officers in the process and the need to draw on their skills and expertise to advance the understanding of a site, which often is missed when just looking at historic records.
Although HERs are an important starting point, it is about the interpretation of the relevance of a site and using that specialist knowledge combined with the records that makes a significant impact on the site and makes it significant. Eighty areas in England are covered by HERs; two thirds of records are held online and are accessible via local authorities. An archaeologist can interpret the HER data, bringing it to life, placing it into context and giving the site relevance, weighing the possibilities and asking the challenging questions about that site: why is it there? What is it about? How does it impact on us, past and present?
I use York as an example of the discoveries made, because there have been so many incredibly significant finds in the city that have led to further exploration and understanding of the context of our history. Ensuring that we engage specialist archaeologists and conservation officers extends the understanding of our past and the influences on us. In York there have been so many finds on the Coppergate site. People think about the Jorvik centre, but behind that is the understanding of our city as an international place of trade, and what that meant then and today for diversity in our country and where we all come from. Those issues are so important in the archaeological context, but we would not get that from an HER. That is why it is so important to extend the legislation to ensure that we have those minds and that knowledge applied to the records, to ensure that there is significance.
I think about the Richard III finding in Leicester. Had the minds not been there, that site could have so quickly been missed. Yet the discovery of Richard III has given a huge economic opportunity for that city, not least from tourism. It is important that the skills that we have educated people in, which they have applied in their science and their art, can be brought into the process. That will ensure that we have the specialist archaeological and conservation officers’ engagement with the historic environment records, which will give real value to this process and ensure that we are not just looking at a paper exercise, but using the science and arts of archaeology and conservation to ensure the value of that site and build it into the identity of the community.
The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Lee Rowley)
It is a pleasure to serve under your chairmanship, Mr Hollobone. I am grateful to the hon. Member for York Central for introducing this amendment. We agree that historic environment records are an important source of information about the historic environment of any given area, especially its archaeology. I defer to the hon. Member for York Central in terms of her knowledge of the history, particularly in her area. HERs can help the public learn more about where they live and ensure that local plans and planning decisions are informed by an understanding of an area’s history. I am glad that the hon. Lady and others have broadly welcomed clause 185 and the fact that we are putting historic environment records on a statutory footing for the first time. I know that the heritage sector has warmly welcomed that as well.
I completely understand the sentiment behind the hon. Lady’s amendment. The first philosophical question we have to deal with is not whether this is a good thing in principle, but whether it is necessary to have it in primary legislation. My gentle challenge to the hon. Lady—and the reason that in a moment I will ask her to withdraw her amendment—is that I am not convinced this necessarily needs to be put forward in primary legislation in this instance, given what I am about to outline and the fact that there will be other opportunities for her to make her case and for the Government to consider what is possible.
Furthermore, though I understand the intent behind the amendment, we are concerned that the wording may potentially water down some of the statutory duties of local authorities, if it is looked at in certain ways. It may also be inconsistent with the current drafting of subsections (4) and (5), which provides for how the duty should be discharged by a local authority. I know that is not the intention of the hon. Lady, but it is something that has been raised by officials in discussion and appropriate assessment of this. Consequently, I will ask the hon. Lady if she would be minded to withdraw her amendment. She may be aware that we intend to publish accompanying guidance alongside the intention of putting HERs on a statutory footing. That will give some clearer views about how those records can be maintained. If she is willing, we will be happy to receive more detail about her concerns, and I will ask that officials give those concerns complete consideration when we are creating that guidance. I hope that some of the understandable concerns she has outlined today can be assuaged through that process. Therefore I will ask the hon. Member if she is content to withdraw her amendment.
Rachael Maskell
I welcome the Minister to his place. I take the challenge straight on. First, I reiterate the point that records themselves do not have application—they are presented in the way they are but they do not have a voice, they do not have context and understanding and they certainly do not have a brain, though they are written by those who do. Of course, archaeology is about a process and a journey; it is not static, but is moving the whole time. Therefore that context is really important to engage with.
I issue a challenge back to the Minster on the matter of watering down the role of local authorities. We all have a huge responsibility to preserve our heritage, understand our history and ensure that we are using the science of that. I know that archaeologists know more about science than we do, but we draw on the opportunities that that presents, which takes us into a stronger future as well as having commercial benefits. However, I am heartened to hear that there will be guidance that looks specifically at HERs and their application. I hope that when drafting the guidance the Minister ensures that specialist archaeologist resources are drawn on, as well as that of conservation officers, so that the maximum opportunity can be derived from looking at the historical context within the planning system. I will closely examine that guidance. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Lee Rowley
I will not detain the Committee for long. Historic environment records are, as we have just discussed, an information service that provides access to comprehensive and dynamic historic environment resources. They relate, as the hon. Member for York Central indicated, to a defined geographical area, for public benefit and use. They are important sources of information for plan makers and applicants, as well as for the public and other Government bodies. We seek to put them on a statutory basis in order to provide clarity for the sector and those who wish to use the records. The clause will make it a statutory requirement that all local authorities maintain a historic environment record, which must be kept up to date, be maintained to an agreed standard, contain specified information as a minimum, and be publicly accessible.
Question put and agreed to.
Clause 185 accordingly ordered to stand part of the Bill.
Clause 186
Review of governance etc of RICS
Question proposed, That the clause stand part of the Bill.
Lee Rowley
The clause enables the Secretary of State to commission, from time to time, reviews of the Royal Institution of Chartered Surveyors. RICS, as many hon. Members will know, is the leading professional body for surveyors. Its members work across the UK, and RICS plays a vital role in these sectors. The guidance RICS publishes is valued by surveyors, industry and members of the public. The clause will enable reviews into RICS’s governance and its effectiveness in meeting its objectives. The clause does not prescribe the frequency of reviews, but gives the Secretary of State the necessary power and flexibility to further specify the scope and timing of any review that is required.
The Government do not envisage enacting a review of RICS on a regular or specified basis, so long as RICS demonstrates its effectiveness and is reviewing its own performance to the satisfaction of Government and Parliament, but should a review be required the clause sets out that the person the Secretary of State appoints to carry out the review must be independent of both the Secretary of State and RICS. The reviewer must submit a written report setting out the results and any recommendations of the review to the Secretary of State, who will publish a copy of the report. The clause does not include powers for the Secretary of State to act on any such findings or recommendations; they would need the explicit approval of Parliament. That will ensure that the Government have the ability in law to review whether RICS is performing in the public interest, and I commend the clause to the Committee.
Matthew Pennycook (Greenwich and Woolwich) (Lab)
It is a pleasure to serve with you in the Chair, Mr Hollobone. I thank the Minister for that explanation of the purpose of the clause, but he will be aware that the Royal Institution of Chartered Surveyors has expressed deep concerns about its precise wording, not least in terms of the precedent that it would set in relation to Government interference in other royal chartered bodies.
The issue is not the need for RICS to undergo periodic reviews of its governance and performance. Following the September 2021 publication of the Levitt report into the events that took place within the institution in 2018 and 2019, and the subsequent independent review undertaken by Lord Bichard, which examined its purpose, governance and strategy, RICS’s governing council accepted that regular independent reviews should take place, with their findings laid before Parliament and the devolved nations. The case for periodic independent reviews is therefore uncontested.
From what the Minister said, I think what remains the point of contention is whether the Secretary of State should be given the power to commission reviews of RICS, the scope and frequency of which are not clearly defined in the Bill, or whether the clause should be revised to reflect the commitments made by the institution in the light of Lord Bichard’s independent review. Given the serious concerns expressed by RICS, I will probe the Minister further on the Government’s rationale for the clause’s wording. Can he set out more clearly why, given that RICS’s governing council has made it clear that it accepts recommendation 14 of Lord Bichard’s review in full and will implement it subject to Privy Council approval, the Government believe that they still need to legislate to ensure that the Secretary of State can initiate reviews of RICS whenever they choose, as well as determine their scope?
Can the Minister also outline how such periodic reviews initiated by the Secretary of State using the powers in the clause would differ, if at all, from the parameters of independent reviews as outlined in paragraph 3.22 of Lord Bichard’s review, and accepted in principle by RICS? Can he reassure the Committee that the Government have given serious consideration to the potential impact of approving this clause unamended on not only RICS’s independence and ability to act in the public interest but the status of royal chartered bodies more widely?
As I say, we have no issue with the clause in principle, and we do not suggest that it should be removed from the Bill entirely; there is clearly a need to act to ensure that RICS is subject to regular independent review. However, we want the Government to properly justify the inclusion of the clause as worded in the Bill, rather than amending it to reflect developments following the publication of Lord Bichard’s review. I look forward to hearing the Minister’s response.
Lee Rowley
I am grateful to the hon. Member for his questions, which are entirely reasonable and on which I hope to provide some assurance. First, he asked why the Government are asking for this power, given that the Bichard review has outlined a process to resolve the current situation. The view of the Government and of previous Ministers who instigated this was that a process was likely to be under way, but equally there is value in the Secretary of State having this power, should it ever be necessary in the future, which obviously we hope it would not, and we have indicated that it would be used extremely sparingly. The principle of having the ability to instigate a review is one that the Government believe is reasonable and proportionate.
Secondly, the hon. Gentleman asked how the terms of reference would differ from an independent review. That question would have to be asked in individual circumstances, so I hope he will accept that it is a difficult one to answer. However, I understand the sentiments behind the point he makes.
Finally, the hon. Gentleman asked whether the Government have given serious consideration to the impact of this approach on the ability of RICS and other bodies to operate. I am happy to confirm that the Government and I will engage in discussion with RICS about this in the coming weeks before further stages of the Bill, and I will be keen to discuss with RICS all elements of the Bill, to understand its concerns and to see what reassurances I can provide.
Question put and agreed to.
Clause 186 accordingly ordered to stand part of the Bill.
Clause 187
Vagrancy and begging
Question proposed, That the clause stand part of the Bill.
Dehenna Davison
We recognise that this is an issue on which there is a great deal of passion and heart. The Government agreed that the Vagrancy Act 1824 was antiquated and not fit for purpose. That is why we committed to repeal the Act once an appropriate and modern replacement was in place. I pay tribute to those who have campaigned so passionately on this issue, such as my hon. Friend the Member for Cities of London and Westminster (Nickie Aiken).
It is important that we balance our role in providing essential support for the most vulnerable with ensuring that the police and other agencies can protect communities, while embedding rehabilitation and support at the heart of our approach. We launched a public consultation to seek views and inform any replacement for the Vagrancy Act. This placeholder clause will allow Government to introduce appropriate legislation once the results of the public consultation have been analysed.
In the meantime, the Government have made the unprecedented commitment to end rough sleeping within this Parliament. We remain steadfastly committed to that goal. By autumn last year, rough sleeping levels were at an eight-year low, having reduced by 49% since 2017. In September we published a bold new rough sleeping strategy, backed by £2 billion of public money, which sets out how we will end rough sleeping for good. I commend the clause to the Committee.
Matthew Pennycook
We are extremely concerned about the implications of this clause, and the explanation just given by the Minister does not reassure me one bit. Clause 187 is a placeholder clause that allows for a substantive clause to be introduced via Government amendment at a later stage in the Bill’s passage. Its effect is to disregard the full repeal of the Vagrancy Act 1824 that the House approved via amendments to the Police, Crime, Sentencing and Courts Act 2022.
There are two fundamental problems with the clause. First, in approving section 81 of the 2022 Act, the House made it clear that it wished the Vagrancy Act to be repealed in full, so that homelessness would no longer be criminalised. It did not seek to qualify the effect of that measure by stipulating that the repeal of the 1824 Act should be delayed until replacement legislation was brought forward, which appears to be the Government’s intention in inserting this placeholder clause in the Bill. The House voted purely and simply for repeal in full.
Secondly, precisely because clause 187 is a placeholder clause, we have absolutely no idea as we debate it today what the “suitable replacement legislation” will look like. It could include positive measures that featured in the consultation that the Minister mentioned, which was launched in April, such as multi-agency outreach, but there is a clear risk that any replacement regime introduced via the powers provided for by this clause could once again criminalise people who are begging or sleeping rough. We take the view that replacement legislation is not required at all. Existing legislation—including the Anti-social Behaviour Act 2003, the Modern Slavery Act 2015 and the Fraud Act 2006—already provides the police with sufficient powers to tackle harmful types of begging, harassment, antisocial behaviour and exploitative activity. By expressly allowing for the reintroduction of criminal offences or civil penalties for conduct that is the same or similar to that under sections 3 and 4 of the Vagrancy Act, clause 187 enables the effective re-criminalisation of homelessness and rough sleeping, with all the damaging and counterproductive implications that that entails.
As the Minister has recognised, the Vagrancy Act is an embarrassing remnant of Georgian England’s approach to the poor and destitute. It deserves to be consigned to the dustbin of history in its entirety, rather than being surreptitiously restored in a modern form to enable the criminalisation of rough sleeping or passive begging. As I said, the House made its views on this matter clear during the passage of the Police, Crime, Sentencing and Courts Act, but if the Minister is in any doubt about the strength of feeling on this issue, she need only look at the long list of names of Members from her own Benches who have signed amendment 1, in the name of the hon. Member for Cities of London and Westminster (Nickie Aiken).
We do not intend to oppose clause 187 today, but if the Government do not voluntarily withdraw it from the Bill, we will work with Members from across the House to ensure that it is removed on Report. I hope that the Minister can give some indication today that that will not be necessary, and that the Government will reconsider their position.
Tim Farron
Likewise, I am appalled and deeply troubled by this provision. Clause 187 feels gratuitous—unnecessary. As we have heard, plenty of provisions already exist to allow the police to deal with antisocial behaviour that could be associated with rough sleeping and people who are begging. This clause feels unnecessary and counterproductive. Above all, it feels like an act of bad faith, given what the Government have committed to doing—both from the Treasury Bench in the Commons and from the Dispatch Box in the other place.
Tomorrow, we will either celebrate or mourn the 100th anniversary of the last Liberal leaving No. 10 —notwithstanding the current sleeper agent, obviously. The legislation that is brought back to life by this clause was nearly 100 years old, and out of date, back then, but even saying that is not going far enough, because if something is morally wrong, it is morally wrong no matter how old it is—whether it is 200, 100 or new, and whether it is from Georgian England, Lloyd George, or the current era. It is morally wrong to criminalise people for being homeless. It is pointless as well.
I have spent a number of nights over the years raising money for our local homelessness charity, Manna House in Kendal. We do a night sleeping rough in January up at Kendal castle. Some of the people who work with Manna House have slept rough in reality—in many cases for years. As we went through the difficulties of one night out in the open, the casual way they would speak about their experience on the street I found more chilling than the night air. It was not just the poverty, the hardship, the hunger and the cold; it was the sense of shame, the sense of not being fully human. A Crisis poll of people who are street homeless found that 56% felt that laws that criminalise them added to that sense of shame.
People who are in desperate housing need, and are on the street, need more than just a roof over their head—though they need that. They need sustained help in rebuildibng their life. Often there are addiction and other mental health issues that partner their homelessness, and may even have fuelled it. The last thing that they need is to be criminalised. There is no value to society in doing so. All that happens is that they are displaced to somewhere else. Instead, our society should be compelled to do something to meet their needs.
Rachael Maskell
I, too, rise in disgust at the piece of legislation before us today, and I urge the Government to think again. It is an insult not only to Parliament, which strongly voted to abolish the Vagrancy Act 1824 just this year, but to those incredibly vulnerable people who find themselves on our streets, for whatever reason. It is not for us to judge them; we should provide support and pathways for people out of that situation.
Yesterday at the Dispatch Box, the new Chancellor announced a new era of compassionate Conservatism. Today, we have this legislation before us, which is anything but. It is about othering people—the most vulnerable people in our society. It is about calling them out, and using despicable language to describe them: “vagabonds” and “rogues”. These people are incredibly troubled. Today, language has moved on. We recognise that people who have serious mental health problems or addictions need support. We recognise people who simply do not have the money to survive in our society. That population is growing. There are three people officially registered as on the streets in York, yet when I went out the other morning, there were 23 people sleeping rough.
This is not just about people who are sleeping rough. Many people who are living in hostel accommodation, sofa surfing, and so on find themselves begging on the street. Many people I talk to—and this is where the Government must engage with the community—simply find applying for social security too complicated. They are fed up of being rejected by the complex process of getting access to the public money to which they are entitled. They therefore turn to begging as a mechanism by which to survive, feed themselves and get through the day or night. Many people have multiple challenges pressing down on them, including financial debt and other things that they owe.
To put into legislation once again, having just repealed them, measures that criminalise people who are trying to find their pathway through life—trying to survive—is an abomination. It is completely unacceptable to criminalise those individuals. This measure is not just about civil penalties; it is about the criminalisation of the most vulnerable people. Any compassionate Government would reach out and recognise their duty, and would recognise their blame and responsibility for allowing people to fall into that state. The language used is horrific. It is a horrific piece of legislation. I urge the Government to U-turn on it, and will praise them for it if they do. It is prejudicial and insulting, and it is certainly not beign done in my name, or in the name of my hon. Friends who are signed up to the amendment, which is significant.
Although the Conservative party is desperately trying to rebrand itself, deep down the roots of prejudice seem to continue to exist. If this Government spent time with those vulnerable people across our society, and understood their pathways and stories, they would not write such appalling pieces of legislation. It is not for any of us to judge those individuals, or to place our prejudices on them. It is for us to provide support and pathways out, so that they have the future that we have been afforded, and the opportunities we have had the privilege of having. We need to enable people to have that fresh start, however many attempts it takes. We need restitution and opportunity, not blame and criminalisation of the most vulnerable people in our communities. It is therefore disgraceful to see this measure before us, and I trust that the Minister will withdraw the clause.
Dehenna Davison
The hon. Lady made a very good point when she said that it is for us not to judge, but to provide support and pathways, and the Government are absolutely committed to that. I have already outlined the rough sleeping strategy, which was announced just a few weeks ago.
I want to reassure the Committee that the Government are absolutely committed—we have repeatedly been clear about this—to not criminalising anybody simply for having nowhere to live. The intent of any replacement legislation will not be to criminalise people for being homeless. I want to put that point very firmly on the record.
On our support for rough sleepers, we want to ensure that rough sleeping is ended in a way that is sustainable in the long term. That means preventing people from needing to sleep rough where possible and, where rough sleeping does occur, ensuring that those spells are rare, brief and non-recurring. We recently published our strategy, which is backed by more than £2 billion of funding over the next three years. As part of that, we announced the new £200 million single homelessness accommodation programme, which aims to provide up to 2,400 supported homes for rough sleepers by March 2025, and £500 million to provide 14,000 beds for rough sleepers and 3,000 staff to provide tailored support across England. That support is absolutely crucial in ensuring that those who are homeless can get back on their feet. The support includes helping individuals to find work, manage their finances and access mental and physical health services. We will fully enforce the landmark Homelessness Reduction Act 2017, which we believe is the most ambitious reform to homelessness legislation in decades.
Mrs Emma Lewell-Buck (South Shields) (Lab)
The Minister is asking us to have faith that the Government do not want to criminalise rough sleeping, but is asking us to approve a clause that will allow them to do just that. We are not debating what the Government are doing on rough sleeping; we are debating this legislation.
Dehenna Davison
That is why I made the point about the consultation we are running. We want to make sure that we get this right, which is why we sought views on this issue in a public consultation that closed in May. Analysis of those responses is ongoing and will form the backbone of our response to any new legislation. The measure is a placeholder until we can bring something forward. I recognise that it is not an ideal situation, but that is where we are.
Matthew Pennycook
I want to challenge the Minister on that point. If I heard her correctly, I think she said that the intention behind the clause is not to recriminalise homelessness.
Matthew Pennycook
Can she explain why subsection (2) allows regulations to include provision to create criminal offences, in similar ways to sections 3 and 4 of the Vagrancy Act 1824, which the House voted to repeal? It effectively will allow for the recriminalisation of homelessness. I think she is wrong on that point, but if she could provide further clarification, I would appreciate it.
Dehenna Davison
As I outlined, this is a placeholder, and we are analysing the consultation responses. The commitment I have given is that no criminalisation will result from the fact that someone is homeless. I want to put that point on the record incredibly strongly.
I cannot pre-empt the outcome of the consultation, but I have spoken to the Minister with responsibility for rough sleeping, who has committed to writing to Committee members to outline the next steps. As I say, this issue does not usually sit within my brief, but we are limited by the number of Ministers we can have in Committee today. Hopefully, that Minister will be able to provide additional reassurance.
Rachael Maskell
This measure was not brought forward in the Police, Crime, Sentencing and Courts Bill, so we have had a period in which the Government have not had the opportunity to criminalise people for being homeless or begging on our streets. Nothing has changed since Parliament as a whole gave the Government a clear indication that it wanted to see off a 200-year-old piece of legislation, yet today, Government are trying to resurrect the opportunity to criminalise people.
The Minister says that there is no need for the measure, but it is hardwired into the legislation. It is the text of the statute, not what the Minister says, that decides what the Government have the capacity to do. The clause is completely unnecessary, yet the Government push it before us. Will the Minister explain the context of having such measures written into the Bill? We have not had them for the past six months; indeed, she says, while still analysing her consultation, that we will not need them moving forward. The measure is seen as a draconian move, and should be taken out of law.
Dehenna Davison
I genuinely thank the hon. Member for her passion on this issue, which is prevalent in the City of York, and she has campaigned on it well and strongly in recent years. The best thing that I can do is ask the Minister with responsibility for homelessness to write to her directly. Indeed, he has committed to writing to all Committee members to set out the next step. I hope that he can provide some reassurance. However, at this stage, I ask that the clause remain part of the Bill.
Question put and agreed to.
Clause 187 accordingly ordered to stand part of the Bill.
Clause 188
Data protection
Question proposed, That the clause stand part of the Bill.
Lee Rowley
The clause stipulates that any duty or power in the Bill, or provision made under the Bill, to disclose or use information must be in accordance with data protection legislation. This is subject to an exception, which I will come to, that provides for “data protection legislation” to be interpreted in line with the definition in section 3 of the Data Protection Act 2018. This is a standard provision to make it clear that relevant provisions in the Bill are subject to data protection legislation. As was discussed in the debate on the planning data clauses, the Government are clear that nothing in the Bill should jeopardise the proper protection of data.
Hon. Members will note the exception from the clause: they will immediately recall that clause 77, which is part of our digital powers, will enable the open publication of prescribed planning information to anyone for free. Clause 77(2) ensures that planning authorities cannot publish planning data that is otherwise restricted in law, including under the DPA. The exclusion in clause 188 preserves that position. There is therefore no intention to allow our digital powers to operate outside the framework of data protection legislation.
Clause 189 provides that the Bill will bind the Crown, except where it amends legislation that does not bind the Crown. There are two exceptions to that: part 8 does not apply to the Crown in relation to land that is Crown land for the purposes of part 13 of the Town and Country Planning Act 1990; and part 9 does not apply in relation to land belonging to His Majesty in right of his private estates.
Clause 190 is a technical provision that sets out the abbreviations used throughout the Bill in order to ensure that the abbreviations used are clear and consistent. Finally, clause 191 provides a power to make consequential provision, which includes the power to amend primary legislation to ensure that the statute book remains coherent and legally operative as a result of the provisions made in or under the Bill through regulations. It confers no power to make policy changes.
Question put and agreed to.
Clause 188 accordingly ordered to stand part of the Bill.
Clauses 189 to 191 ordered to stand part of the Bill.
Clause 192
Regulations
Lee Rowley
I beg to move amendment 77, in clause 192, page 195, line 7, at end insert “(fa) under Part 8;”.
This amendment corrects a drafting omission by applying the negative procedure to regulations under Part 8 (unless they amend primary legislation, in which case the affirmative procedure will apply under the existing drafting of the clause).
The amendment relates to the high streets rental auctions measures in part 8 of the Bill and seeks to correct a drafting omission. Clause 192 prescribes the parliamentary process applicable to the regulation-making powers of the Secretary of State. Under the existing drafting, the affirmative procedure applies to regulations made under clause 176, or where they amend primary legislation, which is the case for regulations made under clauses 152 and 160.
Lee Rowley
This series of clauses covers a number of technical matters in the Bill. Hon. Members will have noted the number of delegated powers taken by the Bill. Clause 192 deals in particular with the parliamentary procedure to be followed in making certain of those regulations. It also allows those regulations, for example, to deal with incidental or transitional matters arising from them. It is a standard provision found in legislation, and allows us to protect against unintended disruption of the legal position.
The Committee has already debated specific delegated powers in the substantive clauses. My predecessors and colleagues have already committed to consulting on various regulations to be made under powers in the Bill. That will ensure that the public and sector stakeholders are brought into the detailed design of the new policies that the Bill will introduce. The delegated powers memorandum published alongside the Bill sets out the Government’s view on the necessity of the powers, and the approach to scrutiny as a result.
Clause 193 authorises the spending of money for the purposes of this Bill. It is a standard provision included in Bills that incur costs on the public purse. Hon. Members will note that clause 194 sets out the territorial extent of the provisions in the Bill and whether each part of the Bill extends to England and Wales, Scotland and Northern Ireland. The devolution position has been debated in relation to each part during the discussion of that part. As a consequence, I commend the clauses to the Committee.
Question put and agreed to.
Clause 192, as amended, accordingly ordered to stand part of the Bill.
Clauses 193 and 194 ordered to stand part of the Bill.
Clause 195
Commencement and transitional provision
Lee Rowley
I beg to move amendment 197, in clause 195, page 197, line 1, after “sections 107” insert
“, (Power to shorten deadline for examination of development consent order applications)”.
This amendment provides that the clause inserted by NC60 will come into force two months after the Bill is given Royal Assent.
The Chair
With this it will be convenient to discuss Government new clause 60—Power to shorten deadline for examination of development consent order applications.
Lee Rowley
The Government and the country need to ensure that world-class sustainable infrastructure can be consented to, vitally, in a manner that can support our ambitions for economic growth. To achieve that, we must have a robust planning system that is able to accelerate infrastructure delivery and to meet the forecast demands and complexity of projects coming forward in order to attract strong investment in infrastructure. Through these changes, the planning system can continue to lead in its approach to supporting the delivery of nationally significant infrastructure, which incentivises investment and makes it quicker to deliver that infrastructure.
The Government have an ambition in the national infrastructure strategy for some development consent applications entering the system from September next year to go through the process up to 50% faster from the start of pre-application to decision, but to achieve that a national infrastructure planning reform programme was established to refresh how the nationally significant infrastructure project works and to make it more effective and deliver better and faster outcomes. New clause 60, as a consequence, will amend the part of the existing NSIP process that concerns the examination of a development consent order application. Under existing legislation, the relevant Secretary of State can set an extended deadline for the examination of an application for development consent, but there is no corresponding legislative power to enable the same Secretary of State to set a shorter deadline for such an examination.
Our measure will rectify that, providing the means for the Secretary of State to set a shorter examination period for projects that meet quality standards as part of wider NSIP reform and the fast-track consenting route that we plan to put in place, as set out in the energy security strategy. The mechanisms and criteria that could trigger the exercise of that power by the Secretary of State will be set out in supporting guidance and we will commit to consulting on that in due course. I commend these measures to the Committee.
Matthew Pennycook
We have serious concerns about the potential implications of Government new clause 60, which, as the Minister has made clear, will provide the Secretary of State with the power to impose a shorter statutory timeframe for the examination stage of some NSIP applications.
In the policy note entitled “Improving performance of the NSIP planning process and supporting local authorities”, which was published in August to accompany the tabling of the Government new clause, the rationale cited for its introduction is specifically the need significantly to reduce the time it takes to gain consent for offshore wind projects in order to realise the commitment set out in the British energy security strategy. That objective is entirely laudable, but while we support efforts to improve the overall performance of the DCO system—a reform, after all, introduced by the last Labour Government to expedite decisions on large-scale infrastructure projects—the Government have not provided any convincing evidence that the length of the DCO examination stage is the reason why project consents can take too long to secure.
As the Minister will know, the DCO system already specifies a fixed timeframe of nine months for the planning inspectorate to make a final decision, with only six of those months being allocated to the examination stage. The Minister might have some convincing evidence that he can share with the Committee to explain why the six-month examination process is the reason why the Government believe that offshore wind projects are taking up to four years to gain consent, but we are not aware of any such evidence that has been published.
Allowing an appropriate time for a DCO examination is important not only because that enables inspectors to gather and analyse all the available evidence and the social and environmental impacts of projects properly to be interrogated, but because it is the part of the statutory process in which communities have a say over developments that are often likely to have a significant impact on their lives. If the Government want to hand themselves the power to curtail the timeframe in which that important part of the DCO process takes place, we feel strongly that they need to bring forward the evidence to justify such a measure, and they have not done so yet.
However, beyond that in-principle concern over reducing the time available for the public to engage with a detailed process, there is a further reason why we are concerned about the possible implications of the Government new clause, which is that its scope is not limited simply to offshore wind projects. Instead, the powers provided to the Secretary of State by the measure will seemingly apply to all DCO applications and any large-scale infrastructure project that meets as-yet-to-be-specified qualifying criteria.
To take a topical example, the powers could be applied to schemes for hydraulically fractured shale gas production, which I know is of deep concern to the new housing Minister and other Government Members. With the Government having abandoned their manifesto commitment by signalling the end of the fracking moratorium and with UK onshore oil and gas already gearing up to convince Ministers to designate fracking projects as nationally significant, the obvious concern about Government new clause 60 is that the Government will use it to facilitate fracking applications with only the most limited opportunity for local communities to have their say on them. That concern is made more acute by the fact that Ministers have so far failed to provide any detail on precisely how it will be determined that local consent for fracking schemes exists.
Given the serious nature of those concerns, I would be grateful if the Minister answered the following questions. First, what evidence do the Government have that the examination phase of the DCO process is unduly holding up consent for offshore wind and other large-scale renewable energy projects? Secondly, given that the new clause allows the Secretary of State to set an unspecified date for a deadline below the current six-month timeframe for DCO examinations, can the Minister give us a sense of how much shorter the Government believe the examination stage should be under the proposed fast-tracked DCO application process? Thirdly, when will the Government tell us what the qualifying criteria will be for large-scale infrastructure projects subject to shorter examination stage timeframes via this route? Lastly, do the Government intend to designate schemes for hydraulically fractured shale gas production as “nationally significant” and bring them within the purview of this new fast-tracked DCO process—yes or no? I look forward to hearing from the Minister and to returning no doubt to this matter as we consider the Bill further.
Lee Rowley
I am grateful to the hon. Gentleman for his questions. Again, they are entirely reasonable and I will answer as many of them as I can. We recognise that this is a change to the approach, but it is a change that comes directly from a recognition, which I hope we all share, that where there is a desire to move quicker on important infrastructure for this country that we are able to do that. We have an in-principle ability to extend this process, which has been in place for a number of years, and—although I do not know the history—presumably ever since the Labour party started this process a number of years ago, as the hon. Gentleman indicated. Given that, it is not necessarily conceptually problematic that we have the ability to vary that in the other direction, while accepting the understandable challenge of ensuring that there are appropriate reassurances within the process that mean that it will be used in a reasonable and proportionate manner.
While I understand the hon. Gentleman’s point about the evidence base and working through all the detail and ensuring that it is reasonable and proportionate, we are trying to establish the principle that while there is already an ability to vary this timeline in one direction, we can also vary it in another direction. In that narrow sense of what we are trying to achieve, that is a reasonable thing to do. I will try to answer the hon. Gentleman’s questions as directly as I can. On evidence, I am happy to have a further discussion with him—either verbally or in writing, whatever his preference—going through why the Government think this is reasonable and proportionate. This is all part of a broader attempt to improve this in aggregate, and I hope that the Opposition will accept that pulling multiple levers to try to secure incremental improvements in all parts of the process is a laudable aim to pursue.
On the hon. Gentleman’s specific questions on the length of time the stage should take and the qualifying criteria, that can be dealt with in guidance. I will ensure that the officials have heard his concerns and I hope we can deal with them at the guidance stage. In addition, because we have given a commitment to consult, there will be an opportunity for that. We have an interest in providing that information in the detail that is sought, so that the Government can consider it in appropriate detail as well.
Finally, on fracking, I have strong views on hydraulic shale gas and hydraulic fracturing, which I have put on the record many times in this place, and I will continue to share those views. At the same time, and I hope the hon. Gentleman accepts that there are times and places to debate policies like this one, I am no longer a Minister in the Department for Business, Energy and Industrial Strategy. I am sure that there will be regular opportunities to develop this matter, but my own position is known and understood. On his specific question, hydraulic fracturing is not within the NSIP process. There was a consultation in 2018-19 in which the Government decided not to put it in the NSIP process at the time. Should that change, I would be happy to debate with him at the appropriate moment.
Amendment 197 agreed to.
Lee Rowley
I beg to move amendment 198, in clause 195, page 197, line 1, after “sections 107” insert—
“, (Additional powers in relation to non-material changes to development consent orders)”
This amendment provides that the clause in NC61 will come into force two months after the Bill is given Royal Assent.
The Chair
With this it will be convenient to discuss Government new clause 61—Additional powers in relation to non-material changes to development consent orders.
Lee Rowley
A key benefit of the NSIP regime in the Planning Act 2008 is that it puts forward statutory timeframes for consideration and determination of applications concerning NSIPs, thereby providing a degree of certainty to developers and others in order to ensure a timely outcome, as we discussed in the previous debate. The outcome of a successful application is the granting of a DCO. Subsequent changes to a scheme after a DCO is granted—regardless of whether they are material or non-material changes—require consent from the relevant Secretary of State. Although there are statutory timeframes in place for the consideration and determination of DCO applications for material change, there are none currently for non-material change.
Lee Rowley
This group contains the two final clauses in the Bill. Clause 195 governs the commencement or coming into force of the various provisions. It enables certain provisions to commence immediately on the Bill gaining Royal Assent—for example, some devolution measures, notably clause 42, which allows proposals to establish combined county authorities to be made. That will facilitate proposals coming into effect as rapidly as possible. Other provisions commence two months after Royal Assent—for example, the levelling-up missions in part 1. The remaining provisions will come into effect on a day appointed by regulations. In all cases, clause 195 provides additional powers to make such transitional, transitory or saving provision as appropriate in connection with the coming into force of any provision in the Bill. The final clause, clause 196, contains the short title for the Bill. I commend both clauses to the Committee.
Question put and agreed to.
Clause 195, as amended, accordingly ordered to stand part of the Bill.
Clause 196 ordered to stand part of the Bill.
New Clause 60
Power to shorten deadline for examination of development consent order applications
“(1) Section 98 of the Planning Act 2008 (timetable for examining, and reporting on, application for development consent order) is amended as follows.
(2) After subsection (4) insert—
‘(4A) The Secretary of State may set a date for a deadline under subsection (1) that is earlier than the date for the time being set.’
(3) In subsection (6), after ‘subsection (4)’ insert ‘or (4A)’.”—(Lee Rowley.)
This new clause allows the Secretary of State to set a shorter deadline for the examination of applications for development consent orders and makes related provision. The new clause will be inserted after clause 110.
Brought up, read the First and Second time, and added to the Bill.
New Clause 61
Additional powers in relation to non-material changes to development consent orders
“In paragraph 2 of Schedule 6 to the Planning Act 2008 (non-material changes), after sub-paragraph (1) insert—
‘(1A) The Secretary of State may by regulations make provision about—
(a) the decision-making process in relation to the exercise of the power conferred by sub-paragraph (1);
(b) the making of the decision as to whether to exercise that power;
(c) the effect of a decision to exercise that power.
This is subject to sub-paragraph (2).
(1B) The power to make regulations under sub-paragraph (1A) includes power to allow a person to exercise a discretion.’”—(Lee Rowley.)
This new clause gives the Secretary of State the power to make provision about the decision-making process for non-material changes to development consent orders (for example, by setting time limits for making decisions). The new clause will be inserted after clause 110.
Brought up, read the First and Second time, and added to the Bill.
New Clause 62
Prospects of planning permission for alternative development
“(1) The Land Compensation Act 1961 is amended as follows.
(2) In section 14 (taking account of actual or prospective planning permission in valuing land)—
(a) in subsection (2), for paragraph (b) substitute—
‘(b) of the prospect of planning permission being granted on or after that date for development, whether on the relevant land or other land, other than development for which planning permission is in force at the relevant valuation date.’;
(b) for subsections (3) and (4) substitute—
‘(2A) If a description of development is certified under section 17 as appropriate alternative development in relation to the relevant land (or any part of it), it is to be taken as certain for the purposes of subsection (2)(b) that—
(a) planning permission for development of that description would be (or would have been) granted on the relevant valuation date, and
(b) the permission would be (or would have been) granted in accordance with any indication given under section 17(5B).
(2B) In relation to any other development, the prospects of planning permission are to be assessed for the purposes of subsection (2)(b)—
(a) on the assumptions set out in subsection (5), and
(b) otherwise, in the circumstances known to the market at the relevant valuation date.’;
(c) in subsection (5), in the words before paragraph (a), for ‘subsections (2)(b) and (4)(b)’ substitute ‘subsection (2B)(a) (and in section 17(1B)(a))’;
(d) in subsection (9), in the words before paragraph (a), for the words from ‘to’ to ‘15(1)(b)’ substitute ‘in subsection (2) to planning permission that is in force’.
(3) In section 17 (certification of appropriate alternative development)—
(a) in subsection (1), for the words from ‘containing’ to the end substitute ‘stating that a certain description of development is appropriate alternative development in relation to the acquisition’;
(b) after subsection (1) insert—
‘(1A) Development is “appropriate alternative development” for this purpose if it is development—
(a) on the land in which the interest referred to in subsection (1) subsists (whether alone or together with other land),
(b) for which planning permission is not in force at the relevant planning date, and
(c) in respect of which the following test is met.
(1B) The test is whether, had an application for planning permission for the development been determined on the relevant planning date, the local planning authority would have been more likely than not to grant the permission—
(a) on the assumptions set out in section 14(5),
(b) on the assumption that it would act lawfully, and
(c) otherwise, in the circumstances known to the market at the relevant planning date.
(1C) For the purposes of subsections (1A) and (1B), the “relevant planning date” is—
(a) the relevant valuation date, or
(b) if earlier, the date on which the application under this section is determined.’;
(c) in subsection (3), for paragraphs (a) and (b) substitute—
‘(ba) must set out the applicant’s reasons for considering that the description of development given in the application is appropriate alternative development, and’;
(d) for subsections (5) to (8) substitute—
‘(5A) The local planning authority may issue a certificate under this section in respect of—
(a) the description of development given in the application for the certificate, or
(b) a description of development less extensive than, but otherwise falling within, the description given in the application.
(5B) A certificate under this section must give a general indication of—
(a) any conditions to which planning permission for the development would have been subject, and
(b) any pre-condition for granting the permission (for example, entry into an obligation) that would have had to be met.
(5C) The test to be applied for the purposes of subsection (5B) is whether the local planning authority would have been more likely than not to impose such conditions, or insist on such a pre-condition, on the assumptions, and otherwise in the circumstances, referred to in subsection (1B).’
(e) in subsection (10)—
(i) for ‘there must be taken into account any expenses reasonably’ substitute ‘no account is to be taken of any expenses’;
(ii) omit the words from ‘where’ to ‘favour’.
(4) In section 18 (appeals to Upper Tribunal)—
(a) in subsection (2)—
(i) after paragraph (a) (but before the ‘and’ at the end) insert—
‘(aa) must consider those matters as if, in subsections (1B) and (5C), the references to the local planning authority were references to a reasonable planning authority,’
(ii) in paragraph (b), after sub-paragraph (ii) insert—
‘(iia) cancel it, or’;
(b) after subsection (2) insert—
‘(2A) Where the local planning authority have rejected an application for a certificate under section 17, the person who applied for the certificate may appeal to the Upper Tribunal against the rejection.
(2B) On an appeal under subsection (2A)—
(a) paragraphs (a) and (aa) of subsection (2) apply as on an appeal under subsection (1), and,
(b) the Upper Tribunal must—
(i) confirm the rejection, or
(ii) issue a certificate,
as the Upper Tribunal may consider appropriate.’;
(c) in subsection (3), for the words from ‘the preceding’ to the end substitute ‘subsection (2A) applies as if the local planning authority have rejected the application’;
(d) after subsection (3) insert—
‘(4) The references in sections 14(2A) and 17(5A) and (5B) to a certificate under section 17 include a certificate issued, or as varied, by the Upper Tribunal under this section.’
(5) In section 19 (applications by surveyors)—
(a) in subsection (3), for ‘paragraphs (a) and (b)’ substitute ‘paragraph (ba)’;
(b) after that subsection insert—
‘(4) In the application of section 18 by virtue of subsection (1)—
(a) subsection (1)(a) of that section is to be read as if it included the surveyor, and
(b) subsection (2A) of that section is to be read as if the reference to the person who applied for the certificate included the person entitled to the interest.’
(6) In section 20(a) (power to prescribe time limit for issuing certificate under section 17), for the words from ‘time’ to the end substitute ‘period within which an application under that section is to be determined’.
(7) In section 22 (interpretation of Part 3), after subsection (2) insert—
‘(2A) The completion of the acquisition or purchase referred to in the applicable paragraph of subsection (2) does not affect the continued application of that subsection.’”—(Lee Rowley.)
This new clause (to be inserted after clause 149) changes how prospects of planning permission are taken into account when assessing land value for purposes of compulsory purchase compensation. Planning permission will be taken for granted only if the planning authority certifies that it would have granted it, and such certificates will be reduced in scope.
Brought up, read the First and Second time, and added to the Bill.
New Clause 1
Independent body to monitor levelling up missions
“(1) The Secretary of State must assign an independent body to assess the Government’s progress on levelling-up missions and make recommendations for improvements to delivery of them.
(2) The body must prepare parallel independent reports for each period to which a report under section 2 applies.
(3) Each parallel independent report must—
(a) assess the progress that has been made in the relevant period in delivering each of the levelling-up missions in the current statement levelling-up missions, as it has effect at the end of the period, and
(b) make recommendations for what the Government should do to deliver each levelling-up mission in the following period.
(4) The Secretary of State must lay each report under this section before Parliament on the same day as the report under section 2 which applies to the relevant period.”—(Alex Norris.)
This new clause would require the Secretary of State to establish an independent body that can provide reports on the Government’s progress on levelling-up missions and outline recommendations for their future delivery.
Brought up, and read the First time.
Question put, That the clause be read a Second time.
National Security Bill (Thirteenth sitting)
Tuesday 18th October 2022
(1 year, 6 months ago)
Public Bill CommitteesRead Full debate National Security Act 2023 View all National Security Act 2023 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 18 October 2022 - (18 Oct 2022)
The Chair
Welcome back to the consideration of the National Security Bill.
Ordered,
That the order of the Committee of 7 July be varied as follows—
1. In paragraph (1)(g), leave out “13 September” and insert “18 October”.
2. In paragraph (4), leave out “13 September” and insert “18 October”.—(Tom Tugendhat.)
Mr Kevan Jones (North Durham) (Lab)
On a point of order, Mr Gray. I welcome everyone back; it is very nice to see them. My point of order concerns the explanatory notes on foreign agent registration. It is customary that we have such notes at least before the Committee meets, but there do not appear to be any explanatory notes or a detailed impact assessment. I know some people think that Committees are just tick-box exercises, but they are not; we are allowed to scrutinise the Bill. Given that the foreign agent registration scheme has had a gestation period longer than that of an African elephant, there should have been time at least to make some explanatory notes.
The Chair
I am most grateful to the right hon. Gentleman for giving notice of his points of order—neither of those matters is a point of order. They are points of information, which the Minister will no doubt have heard, and will doubtless wish to act on during the course of the day. They are not matters for the Chair.
Mr Jones
Yes, it is definitely different. Mr Gray, you will remember that, when we were discussing clause 23, a commitment was given by this Minister or the last Minister—whoever it was. The Minister could not give the Committee details about why the agencies needed clause 23 because of the secret nature of that, and a commitment was given that the Intelligence and Security Committee would be given examples of why the clause was needed.
I am told that the examples were received late last week, yet a date has not been set for me to be briefed formally by the agencies. The reason being put around for that, I am told, is that the Chair of the ISC has made it difficult. I put on the record that that is not the case. We received them only last week, and I, and other members of this Committee who are not members of the ISC, have not yet been in a position to read those examples. If someone gives commitments, it is not good enough to have such delays.
The Chair
Although that is an important matter for the ISC and for this Committee, it is not a point of order. The Minister and others, however, will have heard the right hon. Gentleman’s point, and will no doubt take it into consideration in the future.
New Clause 8
Disclosure orders
“Schedule (Disclosure orders) makes provision for disclosure orders.”—(Tom Tugendhat.)
This new clause introduces the new Schedule inserted by NS1.
Brought up, and read the First time.
The Minister for Security (Tom Tugendhat)
I beg to move, That the clause be read a Second time.
The Chair
With this it will be convenient to discuss Government new schedule 1—Disclosure orders.
Tom Tugendhat
Thank you very much for chairing this sitting, Mr Gray. It is a pleasure to be here under your chairmanship, and a great pleasure to introduce new clause 8 and new schedule 1, which introduce a suite of measures to allow law enforcement officers to apply to the courts for orders to gather information that will assist investigations into foreign power threat activity. As with the other police powers in the Bill, the Government have carefully considered relevant existing legislation, and looked to emulate it where it has proven effective in investigating other serious crimes. I will first speak more broadly about the need for the measures as a whole, before turning specifically to disclosure orders.
Most modern investigations include lines of inquiry into finances and other property, sometimes as a starting point and sometimes to enhance other leads. Financial investigations are often critical in developing evidence that is used in criminal proceedings where there is a financial element, by identifying and tracing criminal assets and uncovering the extent of criminal networks. Financial investigation has become increasingly important in criminal investigations in recent years.
In his recent letter to the Committee, the national lead for counter-terrorism policing, Matt Jukes, stated that it can be difficult for his officers to conduct effective investigations into state threats with the current powers and tools available, and that police would greatly benefit from the inclusion of financial investigative measures. The police have stated that these lines of inquiry are particularly important in state threats cases, where actors may be motivated by financial gain but also where they deploy sophisticated forms of tradecraft, meaning that their criminal conduct is even more difficult to uncover, disrupt and evidence than for other crimes. In many cases, financial and property investigations form an important part of establishing the link between the activity and the foreign power, particularly regarding investigations into obtaining material benefits from a foreign intelligence service.
Investigations into property and finances can take place in relation to any form of criminality, but Parliament has already recognised, in both terrorism legislation and the Proceeds of Crime Act 2002, that there are certain circumstances where it is appropriate for investigators to have access to broader investigatory powers. The Committee has also recognised, in particular during our debates on schedules 2 and 3, that state threats investigations are an area where it is appropriate for investigators to have access to enhanced powers. The addition of these new financial and property investigation powers in relation to foreign power threat activity will ensure that law enforcement has the tools it needs to effectively conduct state threats investigations, prevent and mitigate harmful activity and bring those responsible to justice.
The Committee will note that these new powers are available to National Crime Agency officers, reflecting the Government’s intention, as set out in the integrated review of defence and security, to ensure that the NCA has the capabilities that it needs and to pursue greater integration where there is an overlap between serious organised crime, terrorism and state threats.
I want to take this opportunity to inform the Committee that as we have finalised these provisions, we have identified other areas in the Bill where the drafting needs to be tailored to ensure that it is consistent regarding the availability of the powers to the NCA. These small amendments will be addressed on Report.
Turning to disclosure orders, as we have discussed in Committee, schedule 2 provides for a number of powers that law enforcement can use to obtain information in state threats investigations. Law enforcement investigators require disclosure orders for state threats investigations in order to access non-excluded material by compelling individuals or organisations to provide information to investigators. It is important to note that disclosure orders cannot compel someone to answer any question or provide information that is legally privileged, or to produce excluded material. Excluded material is defined under the Police and Criminal Evidence Act 1984 and includes personal records relating to physical or mental health obtained in the course of a trade or profession, human tissue held in confidence and taken for the purposes of diagnosis or medical treatment, and journalistic material held in confidence. If excluded material were required by investigators, a production order under schedule 2 would be required.
Much of the information that investigators seek under a disclosure order may be considered confidential in nature, such as payment details, but is not classed as excluded material. That may be required because the police have previously approached an organisation to ask for the non-excluded material to be provided, but the organisation has refused because it does not consider that it should disclose the information in the absence of a clear power of compulsion. It may be because the police are conducting a complex investigation involving several organisations that could require multiple requests for information over time. In such a scenario, which is likely to occur in state threats investigations, the police require a streamlined process whereby one order is available to cover separate requests for information from multiple organisations without creating an undue administrative burden on law enforcement, the courts or those who might receive such requests.
In the absence of a disclosure order, a schedule 2 production order, if applicable, would need to be made for every request for information, requiring a large amount of police resource as well as court time. Disclosure orders streamline this process and reduce the numbers of orders needed for requests for non-excluded material during an investigation. For example, if the police were conducting a state threats investigation into an individual and needed to access information from several airline companies regarding the suspect, the company may be willing to provide only basic customer information, such as the full name, without a formal court requirement. If the police required access to the suspect’s payment information used for a plane journey that is suspected of being related to state threat activity, the company may refuse to provide that information, even if investigators provided the company with reassurance that providing this information was in the interests of the prevention of crime. Executing a warrant on the company may be possible, but may not be an appropriate course of action by the police. In some cases, a production order under schedule 2 might be available, but that will not always be the case. Disclosure orders will provide a more proportionate and appropriate way of providing investigators with the information required.
In another example, the police may suspect that a person is purchasing a specialist piece of computer equipment to use in the commission of a state threats offence. The police suspect that the equipment has been purchased from one of a small number of possible companies. In that case, a single disclosure order could be sought, enabling the police to seek information from the companies in question, instead of the police needing to seek multiple production orders.
We recognise that these orders could enable the police to give a notice to a wide range of organisations. As such, senior authorisation is required within law enforcement before an application can be made to the courts. In addition to the requirement for senior authorisation, a disclosure can be made only in relation to an investigation into the identification of state threats property, which is defined as money or other property that could be used for the commission of foreign power threat activity, or the proceeds from such activity. This restriction to investigations into relevant property reflects the scope of the equivalent powers in terrorism and proceeds of crime legislation.
Furthermore, the judge must be satisfied that there are reasonable grounds for believing the information being sought would be of substantial value to the investigation, and for believing that it is in the public interest for the information to be provided, having regard to the benefit of the investigation. Disclosure orders provide for an effective and flexible means of obtaining information in a state threats investigation. Sitting alongside the powers of schedule 2, they would ensure that investigators have efficient and effective access to the information that they need to conduct their inquiries.
Holly Lynch (Halifax) (Lab)
It is always a pleasure to serve under your chairmanship, Mr Gray. I also welcome hon. Members back to the final day of the Committee. We welcome new schedules 1, 2 and 3, and hope that they will reflect the complex and evolving nature of state threats, and the significant technical and financial resources that provide the capability for sustained hostile activity.
For too long, our police and security services have had to use blunted tools in this regard, not designed to address adequately the challenges posed by modern day espionage. We are grateful to Counter Terrorism Policing for submitting written evidence to the Committee, and making its support for the new schedules 1, 2 and 3 very clear. Frankly, the Met provided far more in its written evidence on the rationale of these provisions than the explanatory notes accompanying the new schedules from the Government—a point made by my right hon. Friend the Member for North Durham.
The fairly non-existent explanatory notes are a constant challenge from this part of the Bill onwards, affecting later amendments, which is disappointing for all hon. Members trying to follow the detail closely. As the Minister said, Assistant Commissioner Matt Jukes said in his written evidence to the Committee:
“We have requested financial investigation powers to support our investigations in this space. To this end we have articulated a clear requirement to emulate various investigatory powers within the Terrorism Act which centre on financial investigations as well as examination of material which can be used for investigatory purposes. We are assured that these will be introduced by way of a forthcoming amendment. If so, this will further ensure that we have the tools required to successfully investigate and disrupt state threat activity.”
We welcome the new schedules, and now that the long overdue Economic Crime and Corporate Transparency Bill has been published, no doubt the new schedules are intended to work alongside some of the part 5 provisions in that legislation. Currently, terrorism disclosure orders can be made under schedule 5A of the Terrorism Act 2000. Counter Terrorism Policing has called for an explicit disclosure order for state threats, stating that it will help investigators benefit from a streamlined process, whereby one order is available to cover separate requests for information from multiple organisations, without the need to return to court. I want to push the Minister on oversight. I have made the case for an independent reviewer of all the new measures in the Bill. As those will be investigatory powers, will the Minister confirm that the investigatory powers commissioner will have responsibility for overseeing their use?
Turning to paragraphs 7 and 17 of new schedule 1, paragraph 7 outlines offences in relation to disclosure orders. Sub-paragraph (3) states that a person commits an offence if
“in purported compliance with a requirement imposed under a disclosure order, the person—
(a) makes a statement which the person knows to be false or misleading in a material particular, or
(b) recklessly makes a statement which is false or misleading in a material particular.”
By comparison, paragraph 17(1) states that a
“statement made by a person in response to a requirement imposed under a disclosure order may not be used in evidence against that person in criminal proceedings.”
I cannot quite square that off. I am keen to better understand why the information provided by a person under a disclosure order could not be used as evidence in criminal proceedings.
Before concluding, as I have said before, I accept that it is standard to refer to a police officer as “constable” in legislation, despite the fact that in doing so we are referring to police officers of any rank, not the rank of constable, which seems problematic. New schedule 1 is a prime example of where it gets messy. Paragraph 1(5) says that an appropriate officer for the purposes of these powers is either a constable or a National Crime Agency officer. It is not until paragraph 2(10) that the provision states that an appropriate officer must be a senior officer or authorised by a senior officer. Not until paragraph 9(4) does it confirm that “senior officer” must be a superintendent or above. Would it not be clearer to be explicit about the stipulated rank required to exercise certain powers at the earliest opportunity, instead of allowing for the ambiguity of the word “constable”? The last thing any of us want is for any ambiguity to be exploited by defence lawyers in the courts.
Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)
It is a pleasure to serve under your chairmanship, Mr Gray. My apologies for missing the previous Committee sitting. I can now welcome the Minister to his place at this very interesting and challenging time. I do not doubt that we wish him well. We have a tricky job in Committee today. We are looking at fairly substantial new schedules and new clauses for the first time. It would be helpful to hear what the Minister has to say about them. On the whole, we are supportive of most of what we will be discussing today, but we will have to take away what the Minister says and consider it further. Ultimately, we reserve our position until the Bill reaches its final stages in the House of Commons.
The Minister has outlined a number of case studies and scenarios to illustrate how this new clause and new schedule would work. More of that information would be really helpful to understand what the Government are getting at. With that proviso in mind, we would say that new schedule 1 seems to provide the necessary powers to investigate foreign threat activity. The Minister referenced the fact that this was based on other provisions, which is interesting to know, but I two have two or three questions about precisely what statute and provisions these measures are modelled on. Some of them seem fairly unusual, so it would be useful to know where else they can be found in order to analyse how they work there.
The Minister provided some examples of how the new clause and schedule would work. The first question is how is it to be decided that property is
“likely to be used for the purposes of foreign power threat activity”
or proceeds of that? Is that essential analysis to be based on the nature of the property, or is more required, such as intelligence about who may have had ownership or possession or some other link to it? Again, the illustrations which the Minister gave during his introductory speech may answer that question. I will have to go away and have a think about that, but the more illustrations we can have, the better. Otherwise, his scheme seems pretty reasonable.
I have a couple of questions about some of the supplementary provisions. Is there not an issue with being able to ask questions that could lead to self-incriminating answers? I think the shadow Minister almost had the opposite concern from me. She asked why that would be protected from use in a criminal trial. My question is about whether the safeguard goes far enough. The Government are basically saying that someone can be asked a question that may lead to a self-incriminating answer. There are protections elsewhere in paragraphs 8 and 17 of the new schedule about the non-use of those statements, but is this formulation used in other legislation? It would be useful to have a specific reference to a provision in another Act of Parliament.
In a similar vein, what is the thinking around ensuring that disclosure orders have effect, despite restrictions in another enactment? That seems a very broad provision. Again, is that found elsewhere in another piece of legislation? What other Acts of Parliament are going to be impacted or undermined by this? Finally, part 2 includes the provisions in relation to Scotland and how these would be put into practice. I wanted to check that there has been consultation with the Scottish Government. The broad thrust of new schedule 1 seems fine, but there are one or two questions for the Minister.
Maria Eagle (Garston and Halewood) (Lab)
I have a minor point to raise with the Minister in respect of part of the supplementary provision in new schedule 2, which the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East has referred to, about disclosure orders—
The Chair
Order. I am sorry to interrupt you, but we are discussing new schedule 1 rather than new schedule 2.
Maria Eagle
Sorry; it is in new schedule 1. That was my mistake, Mr Gray, and I apologise. I am not seeking to confuse proceedings any more; it is confusing enough to have to scrutinise the provision without an explanatory memorandum. That makes this kind of provision very difficult to scrutinise with any real sense. The point I wanted to make is about paragraph 3(4) of schedule 1, which says,
“A disclosure order has effect despite any restriction on the disclosure of information imposed by an enactment or otherwise.”
The words “by an enactment” seem to make it pretty clear that unless it excludes material, the provision is designed to enable the investigating authority to look at anything. Can the Minister give an example of what that aims to remedy? What lacuna is it aimed at preventing? We are talking about waving through a provision that allows a disclosure order to ignore another enactment, and that seems to me to be a large power.
The provision goes on to say, “or otherwise”, which is an absolute catch-all phrase. Can the Minister can explain why the provision is drafted so widely, as well as what kind of “otherwise” arrangement it seeks to get around and why? It seems to me to be extraordinarily wide. We might have seen the rationale for that in an explanatory memorandum, had there been one, but we do not have one to hand. Perhaps the Minister can tell us whether we will have an explanatory memorandum before the completion of the Commons stages of the Bill. I think that waving through extraordinarily wide arrangements is cause for concern if we are trying to scrutinise what the Government seek to do and why.
Tom Tugendhat
I thank hon. Members for their comments so far. I will first touch on the point that has been raised about the explanatory notes. I am told that it is normal procedure for that to be published before the Bill is introduced to the Lords—
Tom Tugendhat
I will be taking that up with officials later, and I will find out why that has been said.
Tom Tugendhat
The right hon. Gentleman knows that I would never do such a thing. In response to the provision on oversight, we discussed in the last sitting that we are looking at different forms of oversight. While that has not yet been clarified, I will engage with the hon. Member for Halifax to ensure that we have a form of oversight that works, be that from one of the existing oversight bodies or from another body. There are various different arguments, so I will come back to the hon. Member on that.
The hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East asked what the measures were based on. The Bill is based on the Terrorism Act 2000, but we also looked at the Proceeds of Crime Act 2002. We sought consistency in the schedules by using the so-called TACT and the Proceeds of Crime Act as their basis. It is important to note that Police Scotland has been involved in this endeavour and is content. It has been a very important part of the conversation.
The hon. Member for Halifax asked where these orders could come from. Police need to compel individuals or organisations to answer questions. Because of the different natures of potential production orders, they may involve not just a single individual, but multiple sources; that is why I mentioned multiple companies. In this case, one may be following a particular individual but not be certain which airline they travelled on. Therefore, this could include either multiple companies that may have produced a good or a service, or multiple agencies that have supplied it. That is where it comes from.
Question put and agreed to.
New clause 8 accordingly read a Second time, and added to the Bill.
New Clause 9
Customer information orders
“Schedule (Customer information orders) makes provision for customer information orders.”—(Tom Tugendhat.)
This new clause introduces the new Schedule inserted by NS2.
Brought up, and read the First time.
The Chair
With this it will be convenient to consider Government new schedule 2—Customer information orders.
Tom Tugendhat
I beg to move, That the clause be read a Second time.
New clause 9 and schedule 2 seek to insert customer information orders into the Bill as part of the suite of investigatory measures. Those who engage in state threats activity are highly trained individuals who have knowledge of tradecraft that can obfuscate their identity and real intentions.
For example, the tradecraft could be used to conceal transactions by creating secret bank accounts under false identities, or accounts registered to different addresses, in order to send or receive money for conducting activity. The operational objective of a customer information order is to enable an investigator to identify accounts and other account information in relation to state threats investigations. For example, this could be where a foreign agent is paying others to conduct state threats activity in the United Kingdom and police need to identify where the agent’s account is held, or it could be where a suspect is using a covert account under a false identity to receive funds to use for the purposes of state threats activity.
The customer information order is therefore intended for use as a tool of discovery during an investigation, often in the early stages. Once accounts have been identified through a customer information order, they could, where appropriate, be subject to further monitoring or investigation through a schedule 2 production order or an account monitoring order. Without customer information orders, accounts used by those conducting state threats activity may go unidentified, reducing investigative opportunities and, in turn, the ability for law enforcement to disrupt harmful activity and bring offenders to justice. We recognise that such orders could potentially require any financial institution to provide information about relevant customers. As such, senior authorisation is required within law enforcement before an application can be made to the courts.
We expect that, in practice, the powers will be used by police and NCA officers who have received relevant financial investigator training, and we are continuing to work with the police and NCA on creating the relevant guidance. Again, we have modelled the provisions on the terrorism equivalent and the measures used in the Proceeds of Crime Act 2002, and the consistency of these processes will ensure that law enforcement officers can make the most effective use of the powers. As I have set out, the customer information orders are another important investigative tool, opening new lines of inquiry and ensuring that law enforcement can run effective state threats investigations.
Holly Lynch
New clause 9 and new schedule 2 establish customer information orders, which authorise the police and NCA officers to obtain customer information from financial institutions. In its written submission to the Committee, for which we are all grateful, Counter Terrorism Policing has welcomed the provision, stating that it will
“enable investigators to identify accounts in relation to state threat investigations, or where an individual is using a covert account under a false identity to receive funds to use for the purposes of state threats.”
As the Minister outlined, the tool has been available to law enforcement for terrorism investigations thanks to schedule 6 to the Terrorism Act 2000, and it has been available for criminal investigations through the Proceeds of Crime Act. However, according to Counter Terrorism Policing, it has not been possible to use either Act in relation to state threats investigations, so we welcome the provision. It prompts the question of why we have not addressed this issue sooner.
Subsection (2) states that the judge may grant the order if they are satisfied that
“the order is sought for the purposes of an investigation into foreign power activity”,
and that
“the order will enhance the effectiveness of the investigation.”
We have spoken a lot about the value of an independent reviewer, and I welcome the substance of the Minister’s comments. It is worth keeping under review the threshold of a judge being satisfied that the order is sought for the purposes of investigation into foreign power activity. We cannot use these orders without good cause, but if we need them to be able to find evidence of foreign power activity, will investigators be able to satisfy a judge prior to that? It will be interesting to see how many applications are granted and rejected once we start to work with the orders. Aside from those points, I am happy with new schedule 2.
Stuart C. McDonald
I will make a couple of brief points. The broad thrust of the new schedule and the intention behind it seem absolutely fine, but I am interested in the tests that must be satisfied before an order is made. Under the previous schedule on disclosure orders, the judge has to be satisfied that there are reasonable grounds for suspicion, that there is substantial value in the information gained under the order and that the order would be in the public interest.
In contrast, here in new schedule 2, the judge has to be satisfied only that the order is sought for the purposes of an investigation and that it will enhance the effectiveness of that investigation. That seems a pretty low bar to allowing this pretty invasive procedure to be gone through. Why that choice of language? I guess it is modelled on the provisions that have been mentioned. I have probably not been as diligent as the shadow Minister has in doing my homework and tracking through the previous bits of legislation, and I will now do that. The information gained under these orders could be pretty intrusive, so we need to ensure we are not giving carte blanche to all sorts of intrusive investigations. I am a little bit concerned about the low level of test, compared with the test for disclosure orders.
My second, brief point is that paragraph 4 of the new schedule suggests that the person whose records are about to be trawled through can seek to vary or discharge the order. It is not clear to me how they would go about doing that, given that I suspect most orders will be made without any notice, and they can even be made by a judge in chambers. What assurance can we have that people will be able to challenge this potentially intrusive investigation?
Tom Tugendhat
The question as to why we have not addressed this sooner is a fair one. The UK’s investigation legislation is complex, as the hon. Member for Halifax knows only too well from the homework she has obviously done for our sittings. For example, in the Proceeds of Crime Act there are more than seven investigatory orders used in criminal and civil investigations. The consideration that has gone into this has naturally been complex, and it has required a lot of time and input. This Bill, as she knows very well, has been some years—and, indeed, some Ministers—in the making.
Tom Tugendhat
Let us see. The fact that there are no recorded uses of the information orders in TACT demonstrates how sparing the use of these provisions will be.
Question put and agreed to.
New clause 9 accordingly read a Second time, and added to the Bill.
New Clause 10
Account monitoring orders
‘Schedule (Account monitoring orders) makes provision for account monitoring orders’.—(Tom Tugendhat.)
Brought up, and read the First time.
The Chair
With this it will be convenient to consider Government new schedule 3—Account monitoring orders.
Tom Tugendhat
I beg to move, That the clause be read a Second time.
I turn to new clause 10 and schedule 3—
Tom Tugendhat
My apologies; I meant new schedule 3. New clause 10 and new schedule 3 provide for account monitoring orders for certain investigations into state threats. Police need to be able to obtain information relating to accounts held by a suspect in real time in order to identify and act on disruptive opportunities related to state threats activity. An account monitoring order will require a financial institution to provide specified information in relation to an account—for example, details of all transactions passing through the account—for a specified period not exceeding 90 days.
Holly Lynch
In our debates on new schedules 1 and 2, we have been through arguments similar to those that apply to new schedule 3. Once again, CT Policing states that these account monitoring orders will provide:
“investigators with real-time information that can be used to react quickly and intervene if necessary, potentially stopping the state threat activity from taking place.”
Of course, that is enormously welcome. I draw the Minister’s attention to one small matter, concerning the use of the word “constable”. For account monitoring orders, new schedule 3 stipulates that an appropriate officer is a constable or an officer of the NCA under paragraph 1(3). When we get to interpretation, paragraph 7(2) states:
“‘Appropriate officer’ has the meaning given by paragraph 1(3)”,
which refers us back to the word “constable” with no stipulation about rank whatsoever. That is very different from the requirements in new schedules 1 and 2, which stipulate that the officer needs to be a senior officer, meaning a superintendent or above. Is this an oversight? Should the officer be a senior officer, in line with new schedules 1 and 2, or can a police officer of any rank apply for an account monitoring order?
Mr Jones
These are sensible proposals to give our law enforcement agencies the powers they require, but I would like clarification about definitions. The Minister referred to a bank, and it is clear that this is about monitoring bank accounts. The explanatory statement, expansive as it is—I think it is one line—says:
“These orders may require financial institutions to provide specified information relating to accounts.”
I want to clarify the definition of financial institution. If we go back 20 or 30 years, it was quite clear: we had bank accounts and financial products. Today, though, there is a complex environment of organisations that work and deal with financial accounts. For example, Bitcoin is now traded between organisations, some of which are covered by the Financial Conduct Authority and others not. I am trying to get some understanding of how widely this will go.
The other issue is about bank accounts that are not in the UK. I am particularly thinking about bank accounts in the overseas territories, and what happens there. We need clarification about the remit. The measure might work very simply with banks and other financial institutions, but in an ever-changing world we have a lot of organisations that deal with people’s “accounts” where they are not regulated.
Tom Tugendhat
The hon. Member for Halifax asks again about the term “constable”. She is right to ask, but that is not an oversight; it is accurate. There are different levels at which different officers are allowed to warrant things. As she rightly identifies, “constable” is the generic term, and then at various points different ranks of officer are required for different levels of authority. That is in line with the TACT powers. This area of authorisation is considered less intrusive, and that is why a lower-ranking officer is allowed to ask for it.
On financial institutions, the right hon. Member for North Durham identified that banking has changed somewhat since he and I had post office accounts in the early—I will leave that there. Schedule 3 uses the same definition as that used in paragraph 6 of schedule 6 of the Terrorism Act 2000; it is designed to align. The definition of financial institution in the Proceeds of Crime Act 2002 can be found in paragraph 1 of schedule 9. Account monitoring orders can be used as part of a broader set of purposes, such as civil recovery, and they are applicable to a broader range of financial institutions. Such breadth is unnecessary in respect of state threats, which is why that is slightly narrower, but the definition is there.
Obviously, these powers cannot be used to compel institutions overseas, so we are asking for co-operation from police forces.
Mr Jones
I appreciate that in terms of overseas bank accounts, but there has been a lot of controversy about individual using overseas territories. If the Minister does not know the answer, he can write to the Committee to clarify the point. I just want to see how far these orders could go in terms of their effect.
Tom Tugendhat
The right hon. Gentleman knows very well that overseas territories come under slightly different jurisdictions, whether they are Crown dependencies or overseas territories. It depends on the jurisdiction, but I will be happy to write to him.
Question put and agreed to.
New clause 10 accordingly read a Second time, and added to the Bill.
New Clause 11
Requirement to register foreign activity arrangements
‘(1) A person (“P”) who makes a foreign activity arrangement must register the arrangement with the Secretary of State before the end of the period of 10 days beginning with the day on which P makes the arrangement’
(2) A “foreign activity arrangement” is an arrangement with a specified person pursuant to which the specified person directs P—
(a) to carry out activities in the United Kingdom, or
(b) to arrange for activities to be carried out in the United Kingdom.
(3) “Specified person” means—
(a) a foreign power specified by the Secretary of State in regulations;
(b) a person, other than a foreign power, specified by the Secretary of State in regulations.
(4) The regulations may specify a person other than a foreign power only if—
(a) the person is not an individual, and
(b) the Secretary of State reasonably believes the person is controlled by a foreign power.
(5) A person is controlled by a foreign power if—
(a) the foreign power holds, directly or indirectly, more than 25% of the shares in the person,
(b) the foreign power holds, directly or indirectly, more than 25% of the voting rights in the person,
(c) the foreign power holds, directly or indirectly, the right to appoint or remove an officer of the person, or
(d) the foreign power has the right to direct or control the person’s activities (in whole or in part).
(6) In subsection (5) “officer”—
(a) in relation to a body corporate, means a director, member of the committee of management, chief executive, manager, secretary or other similar officer of the body, or a person purporting to act in any such capacity;
(b) in relation to a partnership, means a partner or person purporting to act as a partner;
(c) in relation to an unincorporated association other than a partnership, means a person who is concerned in the management or control of the association or purports to act in the capacity of a person so concerned.
(7) The Secretary of State may make regulations specifying a foreign power or a person other than a foreign power only if the Secretary of State considers it reasonably necessary to do so to protect the safety or interests of the United Kingdom.
(8) The requirement in subsection (1) does not apply to a foreign power.
(9) Regulations specifying a foreign power or a person other than a foreign power may provide for subsection (1) to apply, with modifications specified in the regulations, in relation to a foreign activity arrangement made with the specified person before the regulations come into force.
(10) A person who fails to comply with subsection (1) commits an offence if the person—
(a) knows, or
(b) ought reasonably to know,
that the arrangement in question is a foreign activity arrangement.’—(Tom Tugendhat.)
NC11 to NC28 require certain arrangements with, and activities of, foreign powers and foreign persons to be registered. They are intended to form a new Part 2A, referred to in explanatory statements as the registration scheme. This new clause requires registration of arrangements with specified persons to carry out activities in the UK.
Brought up, and read the First time.
The Chair
With this it will be convenient to discuss the following:
Government new clause 12—Offence of carrying out activities under an unregistered foreign activity arrangement.
Government new clause 13—Requirement to register activities of specified persons.
Tom Tugendhat
New clauses 11, 12 and 13 are the first of a series of amendments relating to the foreign influence registration scheme announced by the Home Secretary on Second Reading. I will come to the new clauses shortly, but first I want to make some introductory remarks about the scheme itself.
In the 2020 Russia report of the Intelligence and Security Committee, it was recommended that future counter-state threats legislation should address the issue of those acting on behalf of a foreign power and seeking to obfuscate their links or relationship. The director general of MI5 strongly emphasised the importance of legislating to ensure that those acting covertly could be pursued through criminal means to make the operating environment harder for those who intend to disguise or obfuscate who they are acting for. The ISC’s report identified the need for stronger transparency legislation, akin to that in place in the United States—namely, the Foreign Agents Registration Act 1938, known as FARA.
FARA requires any person, regardless of nationality, to disclose to the Department of Justice where they represent the interests of foreign powers in a political or quasi-political capacity, as described by the report. It is a disclosure requirement that applies far beyond a situation in which a person acts for a foreign intelligence service, extending to activities undertaken for foreign powers as well as other entities and individuals.
Only four years ago, the Australian Parliament passed its contemporary equivalent to FARA, the Foreign Influence Transparency Scheme Act 2018. The Australian scheme requires the registration of political influence activities undertaken for, or on behalf of, a foreign power or other individuals or entities subject to foreign power control. Both schemes contain a range of exemptions, offences and enforcement powers to further shape and support enforcement of the scheme. Although not like-for-like schemes, they share the principle of tackling covert influence through greater transparency.
There is evidence of the value of these schemes. A submission from the Australian Attorney-General’s Department to an ongoing review of FITS, which commenced in August last year, describes the behavioural changes that it has seen as a result of the scheme’s implementation: some organisations and individuals have adopted better transparency practices, while others have seemingly ceased activities that would be registrable. Enforcement of the US’s FARA has increased in recent years. That has also resulted in behavioural change, as well as prosecutions for non-compliance, including of one very high-ranking former military officer.
I am delighted to be before the Committee today to talk through the proposed UK scheme. This is an important piece in our package of measures and is the area of legislation that calls on sectors to play their part in making it difficult for foreign powers to operate covertly in the United Kingdom. Similar to the position with the precedents that I have just described, its overarching aim is to deter foreign power use of covert arrangements, activities and proxies by requiring greater transparency around certain activities that they direct, as well as where those activities are directed or carried out by entities established overseas or subject to foreign power control.
Put simply, where a foreign state deploys its influence in the UK, either directly or through third parties, that will now be subject to registration and more transparent. I must stress that the scheme’s requirements are not identical to those of the United States and Australian schemes. Although we have worked with our US and Australian colleagues to understand the lessons learned from implementation of their schemes, our scheme’s requirements reflect our own experience and the threats that we face.
The overarching aim of the scheme is to be delivered through two separate objectives and requirements. The first is to strengthen the resilience of the United Kingdom’s political system against covert foreign influence. Openness and transparency are vital to the functioning of our democracy. Where covert influence is deployed by foreign powers, directly or through third parties, it undermines the integrity of our politics and institutions. The scheme will therefore require the registration of political influence activities where they are to be undertaken within the United Kingdom at the direction of any foreign power or foreign entity, or by a foreign entity itself. I will refer to these obligations as the “primary registration requirements”.
Certain registered information will be made available to the public via a scheme website, similar to the position with the schemes of our Australian and US partners. This requirement is deliberately state and sector agnostic, as the source of foreign influence should be transparent no matter where it originates or manifests. The only exceptions, which I will come to, are where exemptions are necessary to protect existing obligations.
The second objective is to provide greater assurance around the activities of specified foreign powers or entities. The scheme contains a power to specify a foreign power, part of a foreign power, or an entity—such as a company or organisation—subject to foreign power control, where the Secretary of State considers it necessary to protect the safety or interests of the United Kingdom. It would require a person acting within the United Kingdom at the direction of a specified power or entity to register with the scheme. It would also require a specified entity to register activities to be undertaken within the UK with the scheme. I will refer to this as the “enhanced registration requirement”. Its use will be limited and subject to parliamentary approval.
These requirements will apply to certain arrangements and activities, regardless of the nationality of those carrying out the activity, and will be enforced through a range of offences and penalties, as well as powers to request information.
I also want to tell the Committee about the scheme’s exemptions, which are as follows.
Stewart Hosie (Dundee East) (SNP)
Before the Minister tells us about the exemptions, it would be helpful to know how the enhanced registration—let us call it tier 2 —will actually work. So far, we are in the dark. The basic registration seems eminently sensible, but what will the procedure be to specify a country, entity or person to whom enhanced registration will apply? How will it work? We need to know that before we find out who might not be expected to register in that way.
Tom Tugendhat
The right hon. Gentleman will see that I have a number of pages of text that I will be coming to. If he will forgive me, I will explain all these elements as we get to them.
The scheme’s exemptions are as follows: individuals to whom privileges and immunities apply in international law, as provided by, for example, the Vienna convention on diplomatic and consular relations; legal services, as well as information subject to legal professional privilege; domestic and international news publishers, including confidential journalistic material and sources; and arrangements to which the UK Government are party.
The scheme has also been designed to uphold the letter and spirit of the Belfast/Good Friday agreement. To that end, any arrangement with Ireland, or with a body incorporated or associated under the laws of Ireland, will be exempt from registration, as are activities to be carried out by such entities. That will avoid interference with the rights of citizens of Northern Ireland who identify as Irish, as well as the activities of cross-border entities and institutions.
I want to close my opening remarks—that is right; we are just starting—by mentioning George Brandis, the former Attorney General for Australia who was responsible for passing the Australian scheme. He was recently reported as commenting on the announcement of the UK scheme:
“This ought not to be in the cockpit of political controversy in the U.K. It ought to be something, because it is necessary for the protection of the national interest, that commands bipartisan support.”
That is certainly the sentiment that I have taken from Second Reading and our deliberations in Committee so far, and I look forward to working with all sides to ensure the requirements are effective and proportionate.
With that, I turn to the group of new clauses relating to the enhanced registration requirement. Each of the new clauses is substantive and so, after setting out the benefits of the enhanced requirement, I will take each in turn. The enhanced registration requirement will provide greater scrutiny of the activities of specified foreign powers or entities while deterring the use of covert arrangements. I describe it as “enhanced” because it creates wider requirements to register than the primary registration requirement, which we will come to later. That is proportionate to the aim of this part of the scheme: to provide greater assurance around the activities of specified foreign powers or entities.
The enhanced registration requirement will provide three principal benefits. First, it will provide the Government and the public with a greater understanding of the scale and extent of activity being undertaken for specified foreign powers and entities within the United Kingdom. Secondly, the offences and penalties for non-compliance will increase the risks to those who seek to engage in covert activities for foreign powers, either directly or through specified entities. Finally, the requirement offers potential for earlier disruption of state threats activity, where there is evidence of a covert arrangement between a person and a specified foreign power or entity but it is not yet feasible to bring charges for a more serious state threats offence.
Tom Tugendhat
I will, very briefly, but the right hon. Gentleman may find that the point is covered—
Mr Jones
If the Minister wants to come here and just read his speech to us, that is fine, but that is not what scrutiny is. I am fully supportive of the proposals under tier 1, but I find it difficult to understand how tier 2 will work in practice. Putting countries or companies on the list will cause huge diplomatic incidents. Let us say we put Huawei on the list, for example; I am sure there would be fallout from that. As well-meaning as tier 2 is, practically, I do not think it will ever be used.
Tom Tugendhat
The right hon. Gentleman and I have had many debates on the nature of different foreign influence in the seven years that I have been here. We have discussed many different companies and countries in various ways. I know he shares my absolute passion for protecting the United Kingdom from foreign influence and knows the difficulty that that causes in diplomatic areas. He appreciates better than almost anyone how difficult it is sometimes to match the economic needs and requirements of the United Kingdom with the need to protect ourselves from foreign influence. He is right that this will cause difficulty. There is no getting around the fact that making a decision on the enhanced tier will have diplomatic repercussions. But the reality is that if we do not make those decisions, the implications for our economy and domestic security will be very high.
The right hon. Gentleman is absolutely right that there are companies that some of us have stood up to and made a point of identifying as actors for a foreign state—he mentions Huawei; there are others—and which are in many ways difficult examples. I am not going to say whether Huawei would or would not be subject to the enhanced tier, as we have not looked at any determinations on that, but it is quite clear that there are some countries—Russia is a good example today—that would absolutely require the enhanced tier. Different elements of Russian business would no doubt fall within it.
Mr Jones
Yes, but the Minister knows that there are many countries in the world that, although they are not comparable with Russia, would also cause economic harm but are not in the higher tier. Would it not be better to have a broader scheme that mirrored tier 1, with tight definitions of what needs to be registered, and apply it to all countries? We would then give ourselves protection and avoid the diplomatic pitfalls every time we wanted to follow this process.
Tom Tugendhat
People have to register under tier 1 anyway. That will be a public scheme that already identifies many areas. Tier 2 will make sure that there is an enhanced aspect that allows us to be clear what exactly is going on, rather than relying on a general identification. That is an important distinction.
Maria Eagle
Is my understanding correct that tier 1 is about capturing arrangements and activity undertaken for the purpose of influencing a political event or decision, but that the second tier will capture all other behaviour beyond political influencing, such as acting as a foreign intelligence officer? Is it correct that the scheme as set out at present is aimed at making everyone apply at the lowest level—the political influencing level—but that only more serious incidents will be dealt with by designating individual countries or companies? We are going to immediately run into the difficulty of upsetting diplomatically any person, company or country that is designated for more serious activity.
Tom Tugendhat
The hon. Lady is not noted for her shyness. I am surprised that she feels that the diplomatic repercussions of designating a company or country should dissuade the UK Government from defending themselves. I know she does not think that, and I know the right hon. Member for North Durham does not think that.
The different schedules identify the different natures of influence being used. As the hon. Lady rightly identifies, schedule 1 is about political influence. As I think we all appreciate in this House, that should be public. Those who seek to influence anyone in this House or anyone else by political means, whether through lobbying or in different ways, should identify on whose behalf they are doing so. I do not think that is a very contentious provision.
Tom Tugendhat
I am glad to see the hon. Lady nodding. The second point is the enhanced scheme. That is where influence may come in different ways, where co-operation and interaction with different businesses that pose a particular and distinct threat may be required. That is why—we will come to this later—the political register will be public and the second register will be private, but the identification of those who are required to be registered will of course have to be public and there will be a political and a diplomatic decision that will go with that.
Mr Jones
I sympathise with what the Government are trying to do, and I think my hon. Friend the Member for Garston and Halewood does too, but I am never in favour of putting things on the statute book that look tough but that, frankly, will never be used. There must be a more direct way of doing this—a broader measure that applies to all countries, which is then used against relevant countries. My fear is that the measure as it is written at the moment looks tough but will not be usable.
Tom Tugendhat
The right hon. Gentleman raises a fair point, but I simply do not believe that if he were in my position, he would not use the powers. I would use them, and I am sure he would use them in a situation where they were required. I know that he has never shrunk from a fight or diplomatic argument, but I think that this is important. The problem is that if the enhanced power were to be used for every nation, the volume of data produced would be enormous and the imposition on companies would be huge.
Mr Jones
I agree with the Minister, but he has a problem. He and I have dealt with the Foreign Office and other diplomatic entities over many years: he knows that the pressure that the power will come under, and the competing arguments against security, will make it unusable.
Tom Tugendhat
I do not accept that, so I think we will have to end this discussion with an agreement to disagree.
Tom Tugendhat
Indeed. But I entirely respect the right hon. Gentleman’s position, and I do understand the point he is making.
New clause 11 will require Ministers—specifically, the Secretary of State—to be willing to engage in a strong discussion with other Departments that rely on investment or, indeed, diplomatic leverage. Yes, I am afraid that is a balance that the Government have to make; the right hon. Gentleman is absolutely right to identify it, but I simply do not accept that that means the power will not be used. It is true that the power will be constrained, but that does not mean that it will be unused—Ministers who see the threats before them will be willing to use the powers that they have. We will no doubt continue this discussion later.
New clause 11 will provide three principal benefits. The first is that it will provide the Government and public with a greater understanding of the scale and extent of activity being undertaken for specified foreign powers and entities within the United Kingdom.
Stewart Hosie
The Minister explained just a few moments ago that the tier 1 registrations would be public but the tier 2 enhanced registrations would be private. I am not sure how he can argue that the tier 2 enhanced registration would give the public much more confidence if it is a secret.
Tom Tugendhat
The nature of the registration will not be a secret, but who has had to register will be kept private at the moment. I am already keeping this matter under discussion, so I am glad that the hon. Gentleman sympathises with my concerns. He and I are fully aware that journalism is a very powerful force in many of these areas.
Mr Jones
This baffles me, as it does the hon. Member for Dundee East. Tier 2 registration will not be private, will it? The order will have to be moved to put them on the list in the first place. Everyone will know, so what is the problem with providing transparency? I do not think you can have two tiers with different levels of transparency.
Tom Tugendhat
Let me clarify. Whoever is identified as being on the enhanced tier will be identified publicly. It is those companies that may be co-operating; at the moment, there is a discussion as to whether that should be public or private. The reason for that discussion is that some companies will be co-operating and we may feel that we wish to see that co-operation continue, even though we wish to have the compliance and registration so that we know who is doing what. The argument is that the Government should have the ability to have that information.
Tom Tugendhat
Forgive me, but I think the right hon. Gentleman has got this slightly the wrong way round. By definition, the company that would be identified would be a foreign company, not a UK company.
Mr Jones
Yes, but if I headed a French company—I am not suggesting that we use this power against the French for one minute—and had shareholders, surely I would have to tell them, and report at board meetings, that I had been on the list. It will get out anyway, so what is the point of keeping it quiet?
Tom Tugendhat
We are clearly speaking at cross purposes. The state that is on the enhanced register would be public. The company would be public. Those UK companies that are registering may not be. The right hon. Gentleman has it the wrong way round.
Tom Tugendhat
Okay. I am going to carry on, but I am very happy to continue this discussion on a later occasion.
New clause 11 will provide three principal benefits. First, it will give the Government and the public greater understanding of the scale and extent of the activity. Secondly, the offences and penalties for non-compliance will increase the risk to those who seek to engage in covert activities for foreign powers, either directly or through specified entities. Finally, it offers potential for earlier disruption of state threat activity where there is evidence of a covert arrangement between a person and specified foreign power or entity but it is not yet feasible to bring charges for a more serious state threat offence.
I want to be clear that we expect use of the enhanced registration requirement to be limited. It is an additional tool of assurance to bolster the package of measures within the wider Bill. The power to specify a foreign power or entity will be available to the Secretary of State when the Secretary of State considers it reasonably necessary to do so to protect the safety or interests of the United Kingdom. It will be subject to the affirmative procedure.
It is also vital to stress that the use of this requirement should not be taken to imply that every national of a specified foreign power or person associated with a specified foreign entity is to be mistrusted. The message here is quite the opposite: any person who complies with the obligation to declare an arrangement with a specified foreign power or entity is contributing to the safety and security of the United Kingdom by being open and transparent about that arrangement.
Although I am sure that members of the Committee will be keen to understand which foreign powers will be in scope of the enhanced registration requirement, I am sure they appreciate that it would be premature—if not damaging—to make undertakings on that at this stage. The Government will decide when the scheme is ready to be brought into force. For now, I will cover each amendment.
New clause 11 is the requirement to register foreign activity arrangements. A foreign activity arrangement is where activity is to be carried out, or arranged to be carried out, within the United Kingdom at the direction of a specified foreign power, part of a foreign power or an entity subject to foreign power control. The requirements could apply to any activities, but subsection (9) provides for this to be modified through regulations where necessary.
I wish to bring four key points to Members’ attention. First, I want to reflect on what we mean by a person required to register in this context under subsection (1). A person can be an individual, regardless of their nationality, or an entity. However, if a company or organisation is being directed by a foreign power or entity, the company or organisation would be responsible for registering the arrangement, not its individual employees.
We will shortly discuss new clause 13, which includes a requirement for specified entities to register their own activities. That is important because it makes clear our intention that an employee of a specified entity cannot be considered as being in a registrable arrangement with that entity. The approach was taken in response to sector feedback during our public consultation as a means of reducing the potential registration burden on companies and other organisations that may have many employees all engaged in the same activities.
Importantly, subsection (8) clarifies that there is no requirement for a foreign power itself to register. The scheme intends to increase assurance and transparency of activities being carried out for a foreign power where the involvement of that power might otherwise not be apparent.
Stewart Hosie
In new clause 11(1), “A person (‘P’)” might, as the Minister said, be an individual, an entity or a business. This is not at all clear. Is this the UK individual, entity or business or is it the overseas individual, entity or business that is directing a UK citizen? Is it a combination of the two?
Tom Tugendhat
Let me be completely clear, because subsection (8) makes it completely clear: there is no requirement for a foreign power itself to register. We cannot compel foreign powers or entities to register; this is a compulsion on UK entities or individuals.
The scheme intends to increase assurance and transparency to activities being carried out for a foreign power, where the involvement of that foreign power might otherwise not be apparent. As such, we would not expect other Governments to register with the scheme in respect of activity that they themselves are undertaking. As the later “interpretation” clause will make clear, that includes any person acting in the capacity of an office holder, employee or other member of staff of the foreign power, or a person whom the Secretary of State reasonably considers to be exercising such functions.
This scheme has been designed to avoid interference with our obligations under international law regarding the diplomatic and consular relations between countries, as well as the need to protect routine Government-to-Government engagement—the official visits of officials, military and other agencies of a state, for example.
Secondly, subsection (2) sets out the definition of “arrangement”, which requires there to be direction from a specified foreign power or entity to a person. That element of direction is important because it envisages a power relationship between the specified foreign power or entity and the person. The specified foreign power or entity has told the person to carry out the activity, or arranged for it to be carried out. While in practice it is entirely likely for a direction to be delivered in the language of a request, the context of the relationship between the specified foreign power or entity and the person being directed will ultimately determine whether it falls within scope.
Stuart C. McDonald
What happens if an intermediary is involved? What if a designated state power says to someone locally, “You arrange for these activities”, rather than saying to someone in the United Kingdom, “I want you to undertake these activities”? That falls within the terms of the new clause. That intermediary then instructs people in the United Kingdom to undertake activities. Does that not mean there is a gap in the clause and that people in the UK undertaking those activities would not have to register anything? It would be almost impossible to enforce against that intermediary requirement to register. Is there not a potential problem there?
Tom Tugendhat
My understanding is that—in fact, I will come back to that when I sum up, because the hon. Gentleman has raised an interesting point.
We consider a power relationship to include, for example, where the specified foreign power or entity has formally contracted a person’s support for an activity, or where it is paying a person to deliver a service. It could also include a situation where a specified entity is making a request of its subsidiary—again, the direction might be in the language of a request, but the power relationship would make it a direction. Where such formal structures are not established, a direction should include where a person is requested to act, but through the promise of compensation or coercion—for example, future payment, benefit or favourable treatment.
To be clear, though, it would not be enough for a specified foreign power or entity to simply provide funding in support of an activity—through subsidy or donation, for example. Nor could a generic request from a specified foreign power or entity be considered a “direction”—a request made through a public communication to a large distribution or mailing list, for example.
A power relationship, whether formal or informal, is necessary to ensure that unilateral activity on the part of the person is not within scope and nor is activity that is part of a collaboration and absent a power relationship. We shall set out in guidance what we intend by a direction so that it is clear to the public and to the courts what arrangements are registrable.
An arrangement also captures where a person is to arrange for activity to be carried out at the direction of a specified foreign power or entity, as well as where the person is to carry out the activity themselves. That is to ensure that a person in a direct arrangement with a specified foreign power or entity cannot avoid registration by simply contracting out the activity to a third party, creating a degree of separation between the specified foreign power or entity and the ultimate person who will carry out the activity.
Thirdly, I turn to the definition of “control”, where a specified entity is said to be subject to foreign power control. It is important that we capture the commonly used practice of foreign powers channelling state threat activity through private entities. To capture this effectively we have defined “control” under subsection (5) as being where a foreign power holds, be it directly or indirectly, more than 25% of the shares or voting rights of the entity, or the foreign power can appoint or remove officers of the entity.
Control can also be demonstrated where the foreign power has the right to direct or control the entity’s activities, allowing the Secretary of State flexibility if foreign powers exercise other significant forms of control that fall below those thresholds. The more than 25% threshold is in line with existing legislation on substantial control over an entity.
Mr Jones
I appreciate that it is difficult to identify control, but how would we get around the situation of a Russian oligarch who is clearly under the influence of the Kremlin, but whose company is owned through myriad different offshore companies? Would it have to be proven that the ultimate beneficiary was that individual to fall under this legislation? Those people, and even states, are very clever and hide who ultimately controls that company.
Tom Tugendhat
The right hon. Gentleman is identifying a problem that we have had with foreign ownership of companies for a very long time. That is why the Economic Crime and Corporate Transparency Bill is very important, because the ownership of companies is something that has been a challenge and he is correct to identify it. This Bill addresses certain elements of that control, but he is right that it does not address the totality, although it provides an important brick in the wall that we are building. That is why the Economic Crime and Corporate Transparency Bill and the companies registration are important.
Mr Jones
So, really, what we are enacting in this legislation will have to be dovetailed with the Economic Crime and Corporate Transparency Bill. The issue around Scottish limited partnerships has been quite controversial. Is the Minister saying that when the two come together, they will form the toolkit to tackle these individuals?
Tom Tugendhat
The right hon. Gentleman knows that there is not a single tool to deal with every task. The Bill will certainly help with a lot of things that already exist; the Economic Crime and Corporate Transparency Bill will add to it, and no doubt, in future years, different Governments will add further tools.
May I finally come to my fourth point? [Interruption.] I hear the hon. Member for Birmingham, Yardley chuntering. I will briefly summarise the procedural element of the new clause. The requirement is to register a foreign activity arrangement within 10 days of its being made, or otherwise before the activity is carried out. That is important because it may not be obvious to the Government under whose direction the person is acting. The prior registration of arrangements offers some opportunity for the Government to be informed before an activity pursuant to a foreign activity arrangement takes place. It also offers an opportunity to enforce the requirements of the scheme prior to an attempt to carry out covert influence activity.
Subsection (10) makes clear that an offence is committed if a person fails to comply with the requirement to register, and knows—or ought reasonably to know—that the arrangement is a foreign activity arrangement We will discuss the proposed range of offences shortly.
The offences relating to the other part of the scheme—where the registration of political influence activities are concerned—come with a higher bar for the prosecution to meet. Given the likely attention that the measure will receive if a foreign power, part of a foreign power or an entity subject to foreign power control is specified through regulations under subsections (3) and (4), a person should not be capable of avoiding prosecution by claiming they were unaware of the requirement to register. That said, we are mindful that a person who is unwittingly acting for a specified foreign power or entity should not be criminalised. That is why the test is such: a person can be prosecuted only if they ought reasonably to know that they were acting for a specified foreign power or entity.
New clause 12 makes it an offence to carry out activities, or arrange for an activity to be carried out, in the UK pursuant to a foreign activity arrangement that has not been registered. The requirement to register a foreign activity arrangement, which is an arrangement with a specified foreign power, part of a foreign power or entity subject to foreign power, applies to the person who is party to that arrangement—in such a case, that is the person directed by the specified person.
In practice, many other people could be involved in the activity or activities pursuant to that arrangement. For example, if the person party to an arrangement with a specified foreign power is a company, multiple employees could be all engaged in registerable activities within the UK under the arrangement. While I have already explained that the responsibility for registration would rest with the company in this example, and that that is necessary to avoid the burden of each individual employee being required to register separately, the effect of the new clause is to make it an offence to carry out an activity, or arrange for the activity to be carried out, pursuant to a registerable arrangement that has not been registered.
There are two main justifications for the offence. First, it will reduce the likelihood that activities pursuant to an unregistered arrangement with a specified person will be carried out, supporting the overall aims of the scheme. It makes it clear that all individuals have a role to play in ensuring that the requirements of the scheme have been complied with. Where there is doubt that an organisation or company has registered its arrangement with a specified person, it is a good outcome if its employees take necessary steps to clarify that their registerable activities are covered by registration.
Mr Jones
How does the Minister define “foreign power control”? What would be the evidential test? I have heard him argue, for example, that all Chinese companies are ultimately under the control of the Chinese Communist party. Is that the evidential test? Or to take the Russian example, would the evidential test be a company being owned by an oligarch who is close to Putin? Clearly, if the Chinese Communist party wants to control a Chinese company, it can. Would that be the threshold at which a company would be caught by the measures?
Tom Tugendhat
The right hon. Gentleman is right to ask. Control over an entity means 25% of a shareholding—that is one thing that we have already identified—or it could also be formal mechanisms within the company, including voting power or other forms of control. Some foreign powers enact legislation to oblige entities to comply with their security services or intelligence agencies—the right hon. Gentleman knows what I am referring to—giving them a right to exercise an element of control over those entities outside formal governance structures.
Stewart Hosie
Further to the point made by the right hon. Member for North Durham, the control criteria could be indirect control of more than quarter of the stock, indirect control of more than a quarter of the voting rights, or an indirect ability to appoint or remove an officer of the entity. That is dreadfully subjective. Unless the criteria are really nailed down, people could absolutely fall foul of the measures without knowing that they are being controlled in any way.
Tom Tugendhat
I do not think that is the case. The hon. Gentleman should realise that foreign control of any kind is under the general provision of the so-called ordinary provision, while the enhanced provision would be specifically identified, so individuals required to register under the enhanced provision would be aware that they are contracting within an organisation or entity that falls under it. All those contracting with a foreign entity will know that they have to register under the ordinary provision, so the legislation covers both cases.
Mr Jones
That does not clear things up for me. I have mentioned China. I am sure if I googled long enough I would find a speech that the Minister has given where he suggests that all Chinese companies are controlled by the Chinese Government, if they wish to have foreign influence. There is clear, direct evidence about doing business in Russia—it is not the law, but there is coercion regarding the individuals around Putin. If we are saying that the Chinese Communist party can control most companies, is the Minister saying that all those companies will have to register?
Tom Tugendhat
The right hon. Gentleman knows very well that what we express in private and what we say from the Dispatch Box cannot always be absolutely aligned. I am not going to identify every single Chinese company in one go. He knows that there are different elements of control. The Companies Act 2006 sets out the nature of those different elements.
Mr Jones
I am sure the Minister will get some China hawks on the Back Benches of the Conservative party arguing that all Chinese companies should have to be registered under the scheme. I think the measure needs some clarification before it goes any further. There are also certain individuals that the Minister’s party has taken money off who very clearly have connections with the Kremlin and who control companies in this country through front people; the ownership is actually individuals who we would not want to be associated with.
Tom Tugendhat
The right hon. Gentleman knows very well my own views on foreign influence on political parties. Sadly, we have seen such influence in all political parties, where parties or members of political parties have unwisely, sometimes rashly and often extremely foolishly, taken money off Chinese, Russian or other individuals. That is completely wrong and I know he and I share complete revulsion at it. I am very glad that we are sorting some of that situation out. It is a problem that the whole of the United Kingdom and many other political parties around the world have to face. We need to deal with it, and that is what the Bill is doing.
New clause 13 is the second aspect of the enhanced registration requirement. It will require the registration of activities to be carried out within the United Kingdom by a specified person. The first aspect of the enhanced measure, which we dealt with earlier, was the registration of arrangements with a specified person. Although arrangements are important, we recognise that activities within the United Kingdom will be carried out by the specified person themselves and not just those they direct. I should be clear: “specified person” in the context of the requirement can only be a specified entity subject to the foreign power control. I have already explained that foreign powers themselves are not required to register under the foreign influence registration scheme. We are therefore proposing that the specified entity subject to foreign power control, for example a company or organisation, be required to register its activities within the United Kingdom before they are carried out. An offence would be committed where the specified entity had failed to register its activity and it knew or ought reasonably to know that the activity in question was not registered.
To ensure that the requirement is practical and proportionate, the requirement to register is to be fulfilled by the entity and not its individual employees. Although we recognise that an employee is also capable of being directed by its employer to engage in the same registerable activities, we considered it disproportionate to require each individual to register in such a scenario. There would also be practical difficulties, not just in administration but also in consistency. If each individual employee were required to register the same activity, that increases the likelihood that the information provided is materially different and possibly even contradictory.
Finally, hon. Members may wonder why, compared with the requirement to register an arrangement, there is no 10-day period within which the registration must be made. The requirement to register an arrangement within such a period is necessary, as it may not be immediately clear that a person is acting at the direction of a specified person, as the person receiving the direction is separate to the specified person directing the activity. Where the specified person—the entity subject to foreign power control—is acting itself, it should already be clear and it is therefore enough that the registration takes place before the activities are carried out.
I want to finish my remarks by reiterating that if we did not include that requirement there would be a clear gap. A person who is separate from the specified entity, for example a different organisation, would be required to register an arrangement that involves being directed to act in the United Kingdom, but there would be no requirement for the specified entity itself to register its own activities. Leaving such a gap would not make sense in the context of countering state threats. I also want to stress again that we intend the use of the enhanced measure to be limited. It is there as an additional tool of assurance and its use will be subject to parliamentary approval through affirmative procedure. I ask the Committee to support the clauses.
The Chair
Before we move on to the debate, may I raise a matter to the Committee that has been brought to my attention? The 1922 Committee elections for Select Committees happen at 2 o’clock this afternoon, which is an obvious clash with the meeting of this Committee. I understand that it would be possible for the Minister to move an amendment to the sitting time this afternoon to 2.15, if he wished to do so. Any objection from any member of the Committee would of course make that fall. Before we enter a discussion—although I would rather not discuss it too long—would the Minister be prepared to move that the Committee should sit at 2.15?
Tom Tugendhat
I would be prepared to move that, if the Committee were supportive.
Maria Eagle
Would it be possible to extend the sitting by 15 minutes, so that no time is lost? If we were to do that, I would have no objection.
The Chair
If the Minister so moves, it would be a question of starting 15 minutes later and ending 15 minutes later this evening.
Ordered, That the Committee shall meet at 2.15 pm until no later than 5.15 pm.—(Tom Tugendhat.)
Holly Lynch
I have listened very carefully to everything the Minister has said. I will speak to all of the new clauses in the group, which is the first of several additions to the Bill concerning the foreign influence registration scheme, as well as raising some more general issues which will need ironing out about the scheme as we move into this section of the Bill. First, I assure our Australian friends that beyond making sure that we have provided our scrutiny and ensured that the registration scheme does everything that we need it to do, we are very much in support of the introduction of it.
I appreciate that the Minister is not responsible for the publishing of the provisions after Committee stage has already started, but I am going to have to come back to the issue of explanatory notes. To assist the Minister, I suspect that the feedback he has had from his officials is that it would appear we only get a technical explanatory statement when an amendment is published on the amendment paper. The more complex explanations are in the explanatory notes published alongside the Bill. I expect that that is the way it has happened in the past, in anticipation of Governments not tabling substantial additions to pieces of legislation so late in the Commons scrutiny process. That may be the feedback he has had from his officials. However, so important are the types of explanations and examples that we are asking for, I do not think that there would be anything out of order if those examples were provided to Members of the Committee directly, or that anything prevents that.
Holly Lynch
My right hon. Friend is quite right. Let me turn to the explanatory notes provided with the Bill as examples, for instance. If person A is contacted by person B to organise activity X, those examples are on page 14, 16, 17, 18 and so on, to try to add some colour and operational understanding of part 1. We have then got nothing to accompany an outline in real-world terms of how so many of these provisions about the foreign influence registration scheme, which is complicated, for the reasons that hon. Members have already outlined, would work in effect. I just put it on the record that that has been a real frustration for Committee members and is disappointing. We understand from officials that efforts will be made to correct it by the time the Bill gets to the Lords, but that is of no use to us, so let me gently suggest that some of those examples be provided before we get to Report, which I know would be enormously welcome.
Stuart C. McDonald
We are now turning to some of the most important provisions in the Bill. I do not think anybody here would argue that we do not need some sort of foreign influence registration scheme. The question for us today is, is this the right scheme? This debate gives us a lot of food for thought, and we will have to go away and think about it further. We have had the benefit of some very useful meetings with officials, for which I am extremely grateful.
I understand the thinking behind the two-tier system, with a broad primary political tier followed by a narrower but all-encompassing enhanced one. Obviously, the Minister is right about political transparency being essential and something we all support. It is the enhanced tier and how it would operate that challenges Members slightly more. Designating states or organisations for the enhanced tier will clearly be an incredibly serious issue, with profound implications for everyone impacted, as well as the diplomatic challenges highlighted by Members.
Many of the questions raised are ones that I would have asked, so for the moment I want to focus on the question I posed in my intervention, which is about precisely how this would work in circumstances where there are various intermediaries. Again, the hon. Member for Halifax made a very valid point: this could be helped by real-world case studies and examples, otherwise we are just using our imagination to try to come up with examples of how this will apply in practice, and my imagination is probably not up to the task. However, I will try to give a fairly mundane example of where this legislation might have implications.
A specified Government or institution in country X decides that they want a sympathetic professor or tech boss in the UK to try to corral some experts in a particular industry into an association or team, with the purpose of providing regular updates on developments in said industry in the United Kingdom. They might have longer-term goals for how they could use that information and these people. That seems exactly the type of situation that the clause is aimed at. At the stage that the professor or tech boss is tasked with putting together this team on behalf of Government X, he is under an obligation to register that arrangement, as I understand it. That then enables people to keep an eye on that activity, if it is thought necessary, in an attempt to stop anything untoward happening before it is too late. If he does not register, that obviously raises a big red flag, perhaps if the security services are aware of some of his other activities.
That all seems pretty straightforward. The problem is what happens if that professor or tech boss is not situated in the United Kingdom but is in country X? There seems little prospect of enforcing these rules against him in country X if he does not register the arrangement. If I have interpreted it correctly, the new clause does not put any obligation on the people in the UK who are undertaking the activity to register the arrangement. That seems to be a potential gap, because that seems a far more likely scenario than a simple instruction straight from a specified Government or company to people in the United Kingdom saying, “You do this”. There will always be intermediaries involved, and that potentially sets up a problem.
I appreciate that there will be issues with what the state of knowledge of the persons in the UK who are doing this via the intermediary might be. Other parts of the Bill, including new clause 11 itself, refer to a person who
“knows, or ought reasonably to know”.
That formulation might be used to fill the gap—if I have interpreted the measures correctly and there is a gap. Basically, my point is that if persons further down the line know full well that they will be asked to do activities for Government X—albeit via an intermediary—perhaps that obligation should be placed on them.
It is not clear how the criteria specified in new clause 12 would amount to an offence. Clearly, the intermediary would be committing an offence for arranging various activities without having registered them, but they are away in country X, so there is no chance of our enforcing the law against him or her. Are industry experts in the UK who have been corralled into the organisation by that intermediary committing an offence by undertaking activities that the intermediary has not registered? That comes down to the question of whether they are acting
“pursuant to a foreign activity arrangement”,
but it is not clear that they are. A little more clarity on that would be useful. Would it depend, for example, on their state of knowledge?
The Minister suggested that new clause 13 could close a gap, but it does not apply to Governments for a start, so it does not fill the hole that we are talking about. If it is not a Government who have been specified but another company, there are questions about whether that company would bother to comply with the measures and about how the measures would be enforced anyway.
More profound concerns about the enhanced tier, including the diplomatic issues and what impacts the measures might have on research and collaboration, have been raised by organisations such as Universities UK. The Government may well say, “That’s something we have to weigh in the balance, and if it is required for the security of the United Kingdom, tough—so be it.” However, there is provision for regulations to tailor precisely the list of activities that could be exempted on a country-by-country basis, and I would be interested to know the Government’s thinking on that.
What will be the process leading up to a decision to take this very serious step of designating either a foreign Government or another institution? I guess that there would have to be significant consultation about that—or would there? Would the list of activities that have to be registered be tailored depending on the country, or will the list be for everything?
Mr Jones
The Minister said that he was delighted to bring the new clauses to the Committee. I think it is disappointing that we did not have sight of them on Second Reading. It is not as if the Government have not had time to come up with the scheme. In 2020, we on the Intelligence and Security Committee reported that the United States have had a system since 1939 and that the Australians brought in their legislation in 2018. I am delighted that we have it, but it has taken too long, and I am surprised that, even at this stage, we are still scrabbling around on the detail.
One thing that concerns me a little is that Committee stage has become a tick-box exercise. We should be able to scrutinise the proposals in detail. Most of the provision will be introduced as secondary legislation, so even when the Bill receives Royal Assent, we will not have the detail of how it will operate in practice. I say gently to the Minister that we should have more detail before the Bill reaches Report and the other place, where it will quite clearly be torn to shreds because of the outstanding issues.
The Minister referred to the former high commissioner of Australia, who said that he hoped the provisions had cross-party support. That is the problem with the way the Government have approached this entire Bill. I am not suggesting for a minute that the Minister would, but other people try to score political points by saying that one party is more concerned about national security. Certainly, my hon. Friend the Member for Halifax, my party and I have known for many years that we would not do anything that would weaken our national security. We want to enhance it. There have been missed opportunities throughout the Bill. I know that is not the Minister’s fault, because the succession of Ministers has not helped. I hope that with current things happening, we do not get another Minister before the Bill reaches its final stages.
Mr Jones
I am sorry; it is an odd quote. That will be the test for tier 1: to make sure that it is publicly available and people know it and can see. That has worked in both those systems.
I have real problems with the secondary tier. I understand what the Government are trying to do, but they are making it very complicated. I worry that we are putting in provisions that will not be helpful in practice. It goes beyond political influence, for which I think there is a need. One example is acting as a foreign intelligence officer. Those arrangements need inquiry, but we are left not really knowing, because a lot of that will be looked at in secondary legislation, and it does not apply to all countries. That will create some problems. I have already mentioned the diplomatic problems when a country is added to that list.
When I met officials yesterday I used the analogy of being put on the naughty step: there is no real understanding of what criteria would be used to do that. I have no problem with the Minister’s robustness in using this measure, but because it is getting into economics and other areas, there will be huge problems with pressures from the Department for Business, Energy and Industrial Strategy, the Foreign and Commonwealth Office and others. I would like to understand what a country would have to do to get on the naughty step.
On named countries, I am sure the Minister will not mention the exact countries today, but once the Bill secures Royal Assent, are there any countries that will automatically be added? I am sure no one will be surprised to see North Korea on it. The more problematic country is China, on which I know the Minister has strong views. That will create some problems. I am struggling to understand which countries will end up on this tier.
How will the list work in practice? If the Minister were to put a country that is hostile to us on this list, that is one thing, but what happens if the relationship with that country changes? The example I gave to officials was Iraq. During the Iran-Iraq war, it was our ally. When it invaded Kuwait, it was certainly not our ally. What would be threshold to take someone off that tier? What is the practical way in which that will be done?
Holly Lynch
My right hon. Friend is making a powerful case for doing things slightly differently. In the conversations we have had with officials, one of the issues we have worked through is, if our relationship changes with a country at quite a pace, how quickly could we make additions to that enhanced tier to reflect that? Some of the feedback was that it could take a number of weeks, if not months, to address that through the enhanced tier. Is that another area of consideration that we would like to get a grip on?
Mr Jones
My hon. Friend makes an interesting point. That is why I do not think the provision will be used in practice. That is the problem and, as I have said, I am never in favour of putting such provisions on the statute book. A more narrowly defined set of criteria applied to all countries would be better than the complicated system that we have here.
The other point is about transparency. Clearly, the public record for tier 1 will be there—it is published. Why the second tier should be done differently, I do not know. The information is going to get out anyway. It is not going to be a great surprise if a company is on this list. If I was running a company and was suddenly put on the register, I would not tell people that—I would not tell the investors and shareholders. I do not understand why the Government are treating the second tier differently from the first tier.
Tom Tugendhat
May I interrupt with a point of fact? Any company that is designated under the highest tier will be public by definition. That element will be public. It is the UK element that is having to register. The right hon. Gentleman gave an example of a completely spurious French company, which would of course never be on the enhanced list, as we are such good allies with the French. That company would be publicly declared. That is not the bit that is being kept out of the publication. It is the UK element registering it.
Mr Jones
Why not include the UK company? I do not understand why there are different levels in the two schemes.
I support the measure—when we did the Russia report, the right hon. Member for Dundee East and I were very clear that there was a gap, where international partners had provisions and we did not, so this is welcome. I just think that the Government are making it unnecessarily complicated.
I press a final point about secondary legislation. More information about how the measures are going to work in practice before the Bill gains Royal Assent would help the process.
Maria Eagle
I endorse what my right hon. Friend has just said about the complexity of the proposed scheme, which concerns me as well. I very much favour our having a scheme, and I think we should have had one sooner. It is a shame that we were not able to see on Second Reading what was being proposed, because we could have had some of these debates at an earlier stage, when there was still a chance to make changes.
I have a concern about the two tiers being different. It is confusing and complex—much more confusing and complex than it needs be. It might have been more effective to have one tier applying to all countries, and a broader range of covert activity specified as having to be registrable. That might have then meant we would have needed more exclusions, but it would have had the benefit of being simple, straightforward, transparent, all on a level and more obvious, both to those to whom it applies and to those who wish to see the benefit of being able to consult the publicly available information, from a transparency point of view.
It is hard to understand the need for this level of complexity, particularly when it comes to the second tier. Why is the registration of harmful activity outside political influencing, some of which is worse than political influencing, only registrable when a foreign power is set out in the secondary legislation? What we are doing is putting an additional burden on the Government. The Security Minister might always be up for registering the right companies and organisations and countries, but he has got to persuade the whole Government. Other Departments have their own interests and their own work to pursue, which could be made much more difficult by designating in this manner. We seem to be setting ourselves a barrier that might be quite hard to overcome. The eventual outcome of the discussions within Government might not be in accordance with the best security interests. I am not talking about this particular Minister or this particular Government, but there are always competing issues and concerns.
Ordered, That the debate be now adjourned.—(Miss Sarah Dines.)
Trade (Australia and New Zealand) Bill (Third sitting)
Tuesday 18th October 2022
(1 year, 6 months ago)
Public Bill CommitteesRead Full debate Trade (Australia and New Zealand) Act 2023 View all Trade (Australia and New Zealand) Act 2023 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 18 October 2022 - (18 Oct 2022)
The Chair
Before we begin, may I make a few announcements? Hansard colleagues would be grateful if Members could email their speaking notes to hansardnotes@parliament.uk. Please make sure your phones and other electronic devices are switched to silent mode.
We will now begin line-by-line consideration of the Bill. The selection list for today’s sitting is available in the room. It shows how the selected amendments have been grouped together for debate. Amendments grouped together are generally on the same or similar issues. Please note that decisions on amendments do not take place in the order they are debated, but in the order they appear on the amendment paper. The selection and grouping list shows the order of debates.
Decisions on each amendment are taken when we come to the clause to which the amendment relates. A Member who has put their name to the leading amendment in a group is called first. Other Members are then free to catch my eye to speak on all or any of the amendments within that group. A Member may speak more than once in a single debate.
At the end of a debate on a group of amendments, I shall call the Member who moved the leading amendment again. Before they sit down, they will need to indicate whether they wish to withdraw the amendment or to seek a decision on it. If a Member wishes to press any other amendment in a group to a vote, they need to let me know.
Clause 1
Power to implement government procurement Chapters
Gareth Thomas (Harrow West) (Lab/Co-op)
I beg to move amendment 19, in clause 1, page 1, leave out subsections (2) and (3).
It is a pleasure to serve under your chairmanship, Mr Pritchard. I congratulate the Minister on being knighted. [Hon. Members: “Hear, hear!”] It is a pleasure to see him and, indeed, his fellow members of the anti-growth coalition in their places this morning.
Labour Members had hoped that the Bill would provide an opportunity for a much bigger debate on the entirety of the trade agreements with New Zealand and Australia. Sadly, however, the way in which the Bill has been drafted means that it is only the procurement chapters of those agreements that we will be able to debate. I shall illustrate why this is a restrictive approach. There are more than 2,500 pages in the Australia deal—a member of my staff has counted them—but only 30-odd of them are on Government procurement. The New Zealand trade deal has fewer pages, but there are more than 500 of them, with only 30-odd pages on Government procurement. Our opportunities to scrutinise are, therefore, far more restrictive than the House would have liked. None the less, we will raise one or two of the concerns that have been put to us about the Government procurement chapters of both deals.
I should stress at the outset that we welcome increased trade with Australia and New Zealand. They are key allies led by strong, progressive, effective leaders in Anthony Albanese and the incomparable Jacinda Ardern. Their legal systems and value systems are similar to ours, and it makes enormous sense to deepen the economic ties between us.
Our concerns about the procurement chapters arise from the fact that the now Prime Minister appeared to be in a bit of a rush when negotiating both deals. Perhaps one or two mistakes were made and a deal of insufficiently high quality was secured. Members will remember the context in which the Australia deal in particular was negotiated. The flaws in the deal that the now Prime Minster had negotiated with Europe were becoming very obvious, and Ministers were clearly desperate to divert attention from them by negotiating a deal with Australia.
Amendment 19 seeks to delete subsections (2) and (3) from clause 1. Those subsections allow Ministers to extend specific provisions that are included in the UK-Australia and UK-New Zealand agreements, and which go beyond provisions of the Government procurement agreement to all covered procurement. They also bring procurement within the scope of the GPA and other UK trade treaties. These GPA-plus provisions of the UK-Australia free trade agreement could be made part of domestic law and would apply to all suppliers, not just those from Australia. On the GPA-plus elements of FTA clauses relating to estimating values of contracts without a fixed term, the UK-Australia FTA requires that all contracts with unknown value are deemed as covered procurement. Other examples of the so-called GPA-plus provisions that this clause makes available to all suppliers include the advertisement of procurement opportunities and the termination of awarded contracts.
Our amendment seeks to prevent Ministers from quietly slipping into law measures that they have negotiated as part of the trade agreements with Australia and New Zealand, in particular the procurement chapters, that they suddenly think should apply generally. The specific concern that has been brought to our attention relates to contracts of unknown value and length.
Let me go into more detail, to help the Minister and the Committee to understand those concerns. Under current UK rules, contracts of an unknown duration or without a fixed term are advertised only if their estimated cost over 48 months exceeds the relevant value threshold. Under the free trade agreement with Australia, those contracts always have to be advertised. To give effect to the FTA, our domestic UK law will have to be reformed as a result of this Bill.
That surely raises two issues. First, more contracts will have to be advertised, and that will benefit not only Australian tenderers but all tenderers in countries that are members of the Government procurement agreement. That is because the contract opportunity will be advertised online and will be in English. I will explain shortly why that raises concerns. Secondly, domestic legislation is being reformed as a result of free trade agreement, which gives rise to the question whether a trade discussion is the most appropriate way in which to address reforming UK contract law. It certainly gives rise to the question of how much consultation Ministers have had, not only across Government but with business, industry and others who might be affected.
Why does the Minister think it is a good idea to extend to very other member of the GPA the so-called GPA-plus provisions negotiated as part of the Australia trade deal? That gives rise to an obvious question: does it mean that every other member of the GPA will offer us the same arrangement?
I have been describing the concerns in technical detail, so let me give some specific examples to bring the concern to life. On contracts of unknown value, a contract for office printing—a pay-as-you-go service—would come under the scope of the concerns put to us. Let us imagine that a local authority did not want to buy or lease printers, but rather preferred an all-inclusive service comprising availability of equipment, maintenance, help-desk services and supply of paper and other consumables. The contractor would be remunerated on a per-printed-page basis—a pay-as-you-go price. Let us say that the contract was for five years and that the contracting authority—a council on its uppers, perhaps, one like Northamptonshire that had either gone bust or very nearly gone bust—had provided an estimate of the average number of pages printed over the last few years, so as to allow tenderers to price their offers up. However, the contracting authority would not know the total value of the contract at the time of advertising because future consumption could vary.
We have been given similar scenarios that could emerge from cloud computing services. In the cases that I have described, regulation 6(19)(b) of the Public Contracts Regulations 2015, which apply at the moment, requires the contracting authority to calculate a likely monthly value of the contract and multiply it by 48 months. If that estimate exceeded the relevant threshold, which is currently just over £213,000, the contract would have to be advertised. If the estimate was below that threshold, it would be possible that no advertisement was required. If the contract was estimated at below £25,000 in value for the next 48 months, there would be no obligation to advertise the contract opportunity at all. The contract could be directly awarded by the local contracting authority, perhaps following a request for tenders to two or three local small and medium-sized enterprises.
Conversely, under the requirements of the UK-Australia free trade agreement’s procurement chapter—paragraph 9 of article 16.2—given that the total value of the contract over its entire duration is not known in the example I gave, there would be an obligation to advertise the contract. Surely that would reduce the chances of local small and medium-sized businesses getting the contract. There seems to be a clear negative potential effect for SMEs that seems at odds with the Government’s declared policy of boosting SME access to public contracts. Paragraph 13 of the national procurement policy statement refers to that, and paragraph 10 notes as a strategic priority the need to improve
“supplier diversity, innovation and resilience”.
It explicitly refers to the goal of creating a more diverse supply chain to deliver the contracts that will better support start-ups and small and medium-sized businesses in doing business on public sector contracts.
The Minister will remember the clear evidence we heard last Wednesday from Lucy Monks, the Federation of Small Businesses representative, who said:
“Small businesses have problems accessing public procurement in the UK as it stands, because they find it technically difficult. They obviously do not have the ability to take the same kind of risks as larger businesses. They might not have the technical departments, lawyers or whoever might support them through that process.”
She went on to spell out, in even starker terms, that
“small and medium-sized enterprises are basically underserved in the UK procurement processes”.––[Official Report, Trade (Australia and New Zealand) Public Bill Committee, 12 October 2022; c. 5.]
SME representatives are already expressing serious concerns that the people they represent are struggling to win sufficient UK Government contracts. It appears that under clause 1(2) and (3), Ministers are about to make the situation even more difficult for SMEs. That is particularly the case because it is not just Australian and New Zealand businesses that might want to try to win these contracts in future; every other member of the Government procurement agreement could also bid for these contracts.
Although it might seem unlikely that GPA members such as firms based in Hong Kong would want to bid for contracts of unknown value, a business based in the Republic of Ireland, which is part of the GPA, could conceivably think, “Well, now we’ve got an opportunity to bid for a contract in Northern Ireland, Scotland or Wales. It is within the realms of possibility that we could win that contract and offer it for our purposes.” I gently emphasise to the Minister that he needs to explain not only to the Committee but to SMEs across the UK, which are at the moment able to secure contracts of unknown value and length, why he thinks it is in the interests of our country to make it more difficult for them to do so.
If the printing example has not helped the Committee enough, let me give another example from a different economic sector. The Minister will understand just how important procurement is as a means of supporting the UK’s food and agricultural industries. To be fair to the Prime Minister, even she understood that role very clearly when she was in a previous role as the Secretary of State for Environment, Food and Rural Affairs. She published a plan for public procurement, which was designed to help SMEs to win contracts, especially SMEs from the food and agricultural sector.
Public procurement in this type of situation could sometimes involve the direct delivery of agricultural products, perhaps bought in bulk by local government, but that is less likely than the outsourced provision of meal services for schools or the NHS. With that in mind, tenders for meal services can and increasingly tend to include supply chain considerations that can support local agricultural industries through criteria in the contracts that schools and local NHS hospitals set. That involves shortening the supply chains, perhaps as a way of reducing carbon footprint. Again, that is something that one would have thought we all wanted to continue supporting.
Contracts for meal services can be very difficult to price at a tender stage, especially if there is an element of price competition, which is the norm. It might be surprising that school meals are very difficult to price. However, my own offspring often change their minds over whether they want a school meal or a packed lunch, and I imagine that that scenario is mirrored in families across the country. That makes it difficult for those who are setting the tender terms for meal services to be able to guarantee a set amount of products.
The Minister of State, Department for International Trade (Sir James Duddridge)
I followed the hon. Gentleman’s printing example, in the main, but on school meals, is he just being illustrative? I cannot quite see how the meals that my children have at their school might be contracted out and delivered from Australia or New Zealand.
Gareth Thomas
Let me come on to the example. I am not saying that at all; absolutely, it is highly unlikely that an Australian firm will decide that it wants to rush over and provide schools in Southend or Harrow with meals. That is difficult to see. But it is not difficult to see that a business based in Ireland might think it could provide services in Northern Ireland. It is also not beyond the realms of possibility that it might think it could offer the same terms in Scotland and Wales, such is those countries’ relative proximity.
The Minister is saying that, under the agreement that the Government have negotiated, the opportunity to advertise contracts of unknown value will be extended not only to Australia and New Zealand but, effectively, to every GPA country. Businesses based in the Republic of Ireland will be made aware of contracts across the UK, and more easily able to bid for them as a result, making it that little bit more difficult for small and medium-sized enterprises based in Northern Ireland, or in Scotland or Wales, to win those contracts.
The other concern that has been put to me in relation to these examples is that the activation of the FTA could generate significant legal uncertainty about the compatibility of supply chain considerations that prefer UK produce over Australian produce, especially where the Australian produce has been given extensive market access under other chapters of the FTA. The practical impact of the duty to advertise would be a risk of a reduction in the likelihood of UK-based SMEs, offering UK-grown produce, winning the contract. The Minister might think that is a good thing, but given the difficulties that SMEs have in winning contracts for Government procurement, why has he made the judgment that all contracts of unknown value should be advertised online and in English, and therefore available to all members of the Government procurement agreement to bid for? Why are we making it that little bit more difficult for British SMEs to win contracts?
I want to ask the Minister some other questions related to the clause, and in particular to the issue of contracts of unknown value and length having to be advertised online and in English. What consultation did his Department have with SMEs about the clause? Is it the case that we were rule takers, and the Australians insisted on its inclusion in the FTA? Given that the benefits will extend to every other GPA country, has he had any discussions with those countries about whether they might now offer the same terms to the UK? What assessment have the Government made of the impact of contracts of unknown value and length being advertised online and in English to all GPA members? What impact does he think that will have on the desire of all of us to see more buying of British produce, goods and services? We on the Labour Benches are strong enthusiasts for “buy British” campaigns, so it would be good to hear the Minister’s assessment of the damage to that aspiration.
I briefly flagged the issue of legal uncertainty. The Minister will know about, and may be directly involved in, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership accession talks. Does the CPTPP procurement chapter include similar provisions? If we accede to the CPTPP, that will trump the Australia and New Zealand FTAs; businesses that have got used to operating in this new context might suddenly find there is a whole series of new rules they have to adjust to very quickly, and may not realise that the Australia and New Zealand FTA provisions that were negotiated under the procurement chapter have been jumped as a result of our accession to the CPTPP.
I am interested to hear the Minister’s responses to the concerns that have been put to us about the extension beyond Australia and New Zealand of this series of provisions. No doubt they were negotiated with the best of intentions, to improve opportunities for Australian and New Zealand businesses here, and for UK businesses in Australia and New Zealand, but they might—inadvertently or otherwise—have a series of other consequences that could damage the ability of British SMEs to win procurement contracts here.
The Chair
If colleagues would like to remove their jackets, they can—it is rather warm in here. I remind colleagues to put their electronic devices on silent. I call Bill Esterson.
Bill Esterson (Sefton Central) (Lab)
It is always a pleasure to see you in the Chair, Mr Pritchard. I was struck by a number of points that my hon. Friend the Member for Harrow West made about the fact that the Bill is about procurement alone, and about the way that it has been drawn up. He said at the start of his speech, in talking about the then Trade Secretary, who is now the Prime Minister, that a few mistakes were made in negotiating the trade agreements—that things were done in a rush. In listening to my hon. Friend make the case for the amendment, I wondered whether that is becoming something of a habit of this Government. It was not just the way the agreements were negotiated but the way that the Bill was brought forward—and just last night, of course, the Prime Minister apologised to the nation for the mistakes that she made as head of the Government in the recent mini-Budget and the disastrous effect that it had on the economy.
The clause gives Ministers the powers to put into operation what my hon. Friend and others have referred to as GPA-plus, with contracts of unknown value, and more contracts being advertised, to benefit not just companies from Australia and New Zealand but companies across the world whose countries are GPA members. I found what my hon. Friend said about the—I assume—unintended consequences extraordinary. I hope we all agree that if they are intended consequences, that would be a very retrograde step, because it would be deliberately harmful to small and medium-sized businesses in the country. As we heard from the Federation of Small Businesses and the other business groups that gave evidence to the Committee last week, it is already very difficult for smaller firms to get contracts in this country. Like my hon. Friend, I hope that the Government genuinely mean it when they say that they are trying to improve the situation for smaller firms bidding for Government contracts.
Government procurement is one of the best ways to stimulate the economy and push funds through smaller firms, which are a source of growth, of much innovation and creativity, and of job creation across our country. That is an incredibly important part of what any Government should offer if they want success, and it is at the heart of the Labour party’s offer in our industrial strategy and in our plans to make, buy and sell more in Britain. I hope that the Government’s approach to the legislation has not undermined support for small firms.
As my hon. Friend set out, if that has not been considered because the Bill has been rushed, some countries—the example of the Republic of Ireland is a good one, but the same applies to other European Union countries—may see an opportunity to win contracts in the United Kingdom at the expense of UK firms, in particular smaller ones, purely by dint of the fact that they have gained a competitive advantage through very poorly drafted legislation. I fear that that risks making it harder, not easier, for domestic companies to benefit from Government spending.
My hon. Friend was also right to mention the carbon footprint aspect. It cannot make sense for us to move away from the idea that, where it is sensible, domestic firms should win contracts from public bodies and, in building a more resilient, local supply chain and delivering British jobs, should have the best possible advantage. I will add one thing to my hon. Friend’s excellent point about the carbon footprint: in the light of the international situation—we all know that we face serious times because of Putin’s invasion of Ukraine—building greater domestic resilience in our supply chains must be a fundamental part of public policy. Moving away from that, which would weaken supply chains and make it harder for small firms in this country to win contracts from our own Government, sounds to me like the opposite of improving resilience and supporting the economy around the country.
I share my hon. Friend’s concern that the consequence of subsections (2) and (3) would be to weaken potential support for UK businesses and the jobs of the people who work in them. For those reasons, I agree with him that we should support amendment 19 and remove those subsections from the Bill.
Sir James Duddridge
Thank you very much, Mr Pritchard. I thank the Members of His Majesty’s official Opposition for their kind words.
The debate on amendment 19 has been useful and wide ranging. I am working on the assumption that we will not have a clause stand part debate, so with your permission, Mr Pritchard, I will speak widely and address all the points made by the shadow Minister—the hon. Member for Harrow West—and the hon. Member for Sefton Central. I will address the shadow Minister’s points more generally before moving into the detail of amendment 19.
The Federation of Small Businesses said that it had been consulted widely and was happy with what the Government have done on this process. The FSB is also part of various strategic advisory groups and trade advisory groups, so, structurally, it is wedded in with the Department on all issues, including procurement.
Sir James Duddridge
I look forward to that.
There were some wide-ranging comments about the Bill. This is a very focused Bill, and I will focus on the procurement element. The Government did not produce a focused Bill by design; we focused the Bill on what there was a legislative need to change. Everything else is done through statutory instrument and there has been wide consultation on the deal overall.
There was talk of GPA-plus. It is in the British interest to have many people tendering, beyond Australia and New Zealand, and to have transparent information. There was also a question about CPTPP, on which I think there is a bit of misunderstanding.
Gareth Thomas
I intend to come to some of the tensions between competition and “buy British” in our next group of amendments, but let me give the Minister the example of Essex County Council. He seems to be saying that it is fine for SMEs in Essex to face greater competition if they want to win contracts of unknown value and length as a result of the council’s having to advertise such contracts online and in English, even though we have not secured similar pledges from other GPA countries. Those small and medium-sized businesses that might hope to bid for a contract in, say, France or Ireland do not have the same advantages, as Ministers have not achieved that. Why give that bit of negotiating leverage away at this stage?
Sir James Duddridge
I think Essex County Council, which is Conservative-run, would think competition is good. The more people applying, whether they are from Essex, Kent or New Zealand, the better. If that provides better services procured with our money—taxpayers’ money—that is fundamentally good. Clearly, local businesses and SMEs have a competitive advantage because there is less transport and a closer understanding of the marketplace; there is a plethora of reasons why that would work. Competition is also good for driving change. If an SME or an organisation in the UK is not competitive or does not have exactly the right product, by not getting that one contract it will try to develop and improve. That is how we grow as a society—but I am straying slightly from the provisions of the Bill.
Let me return to CPTPP. There are some fundamental points here. The Australia and New Zealand trade deals do not die once CPTPP starts, for two reasons. First, they will remain in place because they will be the way we judge what has happened before; deals done in the period before CPTPP will be judged on the Bill. Secondly, the deals will sit alongside CPTPP, in that some of the provisions in the Australia and New Zealand trade deals will be better than those in the deal with the 11 nations in CPTPP, and we would not want to remove those benefits that we have given to our Antipodean colleagues.
Gareth Thomas
The Minister is describing an interesting context—the idea of the CPTPP sitting alongside the Australia and New Zealand free trade deals. Specifically on the issue of contracts of unknown value and length, is that provision contained within the CPTPP as well? We will be a rules-taker. That is the evidence that has been put, certainly to me, in terms of the procurement chapter of the CPTPP. Is it the same provision? I gently suggest that if it is going to be in the CPTPP, with largely the same wording, procurement experts have put it to us that we risk having some legal confusion between the procurement chapter of the CPTPP and the procurement chapters of the Australia and New Zealand FTAs.
Sir James Duddridge
The wording is in line with the CPTPP. Australia, New Zealand and ourselves are conscious that while this deal is in all three nations’ interests, it is also a potential stepping stone to a bigger deal. Throughout the negotiations we, on all sides, thought very carefully about what will be replicated in the new trade deal—what goes through—and also what we wish to retain in our special relationship with those two nations. As the hon. Gentleman knows, trade is always evolving. These deals contain some new and exciting provisions. I will focus my comments on amendment 19 specifically and pick up on thematic issues later, if the hon. Gentleman probes me on them.
I reassure the Committee that the scope of these powers is only to make regulatory changes that are absolutely necessary to implement the procurement chapters. Subsections (2) and (3) of clause 1 are there to ensure that the regulatory changes can be made. Some suppliers do benefit from a separate set of regulations to suppliers from other nations, including the UK. These provisions simply ensure that any supplier participating in a tender that is covered by the agreements do so under the same rules and processes. The amendment would fundamentally undermine the bringing forward of the deal that has been done with Australia and New Zealand in relation to procurement. I hope I have provided some reassurance to the Committee.
Gareth Thomas
Will the Minister explain how the provisions in the procurement chapter of the Australia and New Zealand FTAs sit with the Procurement Bill, which is going through Parliament at the moment, and whether this requirement to advertise contracts of unknown value and length is also touched on in that Bill? If so, there is a risk of confusion, not just as we accede to the CPTPP, but also from our own domestically introduced procurement legislation.
Sir James Duddridge
The Opposition Front-Bench spokesman is tempting me to speak to two Bills under one. When the Procurement Bill goes through, this Bill will not be needed. The trajectory the Government are taking is consistent across the board, but it would be wrong for me to debate a future Bill. We should focus today on what is before us, rather than on what might happen. It is still an active debate. That Bill is not even starting in this House; it is starting in the other place. Therefore, I hope the reassurance I have provided are satisfactory. I ask the shadow Minister to withdraw the amendment.
Gareth Thomas
I am grateful to the Minister for his reply. Although I am not 100% convinced by the argument that he advanced, this is a probing amendment and we will reflect on what he said.
We cannot find any evidence that there was a consultation with the FSB or anyone else on the impact of extending contracts of unknown value and length and on the requirement to advertise them online and in English to every other country with which we have a trade agreement, notwithstanding the Minister’s argument and the evidence we heard in Committee that there have been consultations between the Department for International Trade and the representatives of small and medium-sized businesses. I wonder, therefore, whether this so-called GPA-plus provision has had quite the attention it merits.
Bill Esterson
Did my hon. Friend notice that the Minister did not actually address one of the central points that he and I raised, which is that the opportunity would be widened to all countries that are signed up to the GPA? That causes great concern about the loss of contracts to businesses in this country.
Gareth Thomas
To be fair to the Minister, he sort of touched on the issue in very loose terms. Perhaps my hon. Friend may be reassured that amendment 5, which we are inching towards, would require much more consultation down the line. Perhaps that is a way to try to improve things for SMEs across the UK.
Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)
Is not the big problem—my hon. Friend rightly pointed this out earlier, but the Minister did not really reflect on it—that we are giving away negotiating elements for future deals? Opening this up to all GPA countries means that no GPA country will need to put it on the table. We have opened up our markets for them, and they have not opened up their markets—fantastic. We have cut off the nose to spite the face of all our small and medium-sized businesses, but other countries have not acted similarly. If we do this repeatedly with all areas of trade, in the end we will have unilaterally opened up all our borders but received no benefits for our small businesses. That is the basis of the Conservative negotiating strategy, and it is a disaster, is it not?
Gareth Thomas
I appreciate that Conservative Members will be focusing on other mistakes that the Prime Minister has made, but my hon. Friend is absolutely right. One wonders whether, in the rush to get a deal with Australia, Ministers essentially decided just to give up their negotiating leverage on these issues and hoped to push it through quietly without too much attention. None the less, we have aired these issues. We will reflect on what the Minister says, and we may well come back to this matter on Report. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Ms Anum Qaisar (Airdrie and Shotts) (SNP)
I beg to move amendment 1, in clause 1, page 1, line 15, at end insert—
“(3A) Regulations under subsection (1) will not come into force before the date on which the procurement Chapters come into force.”
The amendment is pretty self-explanatory. It is about the timing of entry into force. As my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey and I have mentioned, the Scottish Government have consented to the intent of the Procurement Bill. The UK Government’s procurement provisions in the Procurement Bill will supersede this Bill’s procurement provisions when it receives Royal Assent.
The draft Bill was not cleared with the Scottish Government in advance of its introduction, while the drafting of key elements of clauses relating to cross-border procurement—which directly engage the legislative consent process—were not cleared with the Scottish Government until the day before the Bill’s introduction. There has therefore been no meaningful opportunity for the Scottish Government to engage on the specific drafting of provisions before their introduction. It is key that we pass legislation that is thorough. That is why such amendments as this are so important. I encourage colleagues to consider the amendment.
Sir James Duddridge
It is good to see the hon. Lady in her place. I think it is the first time we have served in Committee together—no doubt, not the last time—and I welcome her to her place.
I also welcome her probing amendment—I assume it is probing, forgive me—but it is unnecessary. Australian and New Zealand suppliers will not gain the benefit of the procurement chapters until the agreements have entered into force, in accordance with the existing framework for domestic legislation.
By way of example, the text of the Australian FTA states that the default date of entry into force of the FTA is 30 days after the date on which notifications confirm completion of domestic procedures on all sides, although both parties may agree otherwise. If for whatever reason we made it 31 days or 29 days, and that was acceptable to both parties, the change could be made to allow for all eventualities.
I argue that the amendment is not necessary and that, were we to pass it, it would remove the flexibility of that small change. I welcome the amendment, but ask the hon. Lady to withdraw it.
Gareth Thomas
The hon. Member for Airdrie and Shotts rightly raises an important issue about the linkages between the Procurement Bill and the measures in this Bill. One wonders why Ministers could not get their act together and get that Bill through both Houses of Parliament first. That would have been the sensible thing to do, rather than introducing specific and narrow legislation to implement the procurement chapters of these two free trade agreements, even though they will be completely usurped by the Procurement Bill coming down the line. Does the Minister have any insight into why there has been such a delay in getting the Procurement Bill through both Houses? Is it the chaos in the Conservative party? Is it that there was a need for more consultation with business about the Bill? Why has there been such a delay in the progress of the Procurement Bill?
Sir James Duddridge
The Procurement Bill is in the House of Lords. It has still not reached us. I do not wish to be disparaging about the House of Lords, but had the Bill started here and were the hon. Gentleman, the hon. Member for Airdrie and Shotts and I on the case, no doubt we would have sorted it earlier. I ask the hon. Lady to reflect and to withdraw her amendment.
Ms Qaisar
It will come as no surprise to the Minister that the SNP will disagree with what he is saying. However, we are content to reconsider the amendment and will perhaps bring it back at a later stage. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Ms Anum Qaisar
I beg to move amendment 3, in clause 1, page 1, line 15, at end insert—
“(3A) Where the appropriate authority is a Minister of the Crown, regulations under subsection (1) may not be made until the appropriate authority has consulted the relevant Scottish Ministers in relation to any matters affecting Scotland.”
The Chair
With this it will be convenient to discuss the following:
Amendment 4, in clause 1, page 1, line 15, at end insert—
“(3A) Where the appropriate authority is a Minister of the Crown, regulations under subsection (1) may not be made until the appropriate authority has consulted the relevant Scottish Ministers in relation to any matters affecting farming in Scotland.”
Amendment 5, in clause 1, page 1, line 15, at end insert—
“(3A) Regulations under subsection (1) may not be made before completion of such public consultation as the appropriate authority considers appropriate with the relevant—
(a) Scottish ministers,
(b) Welsh ministers,
(c) department of the Northern Ireland Executive, and
(d) representatives of the English Regions.”
Amendment 7, in clause 1, page 1, line 15, at end insert—
“(3A) Regulations under subsection (1) may not be made before completion of a review by the Trade and Agriculture Commission of the potential impact of the procurement Chapters on industry in the United Kingdom.”
Amendment 20, in clause 1, page 1, line 15, at end insert—
“(3A) Regulations under subsection (1) may not be made before publication of an impact assessment setting out the potential impact of the procurement Chapters on—
(a) employment rights and human rights in the United Kingdom, and
(b) climate change.”
Amendment 22, in clause 1, page 1, line 15, at end insert—
“(3A) Regulations under subsection (1) may not be made before publication of an impact assessment setting out the potential impact of the procurement Chapters on—
(a) Scotland,
(b) Wales,
(c) Northern Ireland and
(d) English Regions.”
Ms Qaisar
I should say, Mr Pritchard, that it is a pleasure to serve under your chairmanship.
Amendments 3 and 4, which I tabled with my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey, can be summed up as standing up for Scotland and Scottish farmers on procurement. The Bill fails to ensure that Scottish Ministers have the ability to scrutinise matters of procurement that impact on Scotland. The powers in the Bill are drafted too broadly. They confer too many powers on UK Government Ministers without securing consent from the Scottish Government. That does not appear to be democracy in action.
Scottish farmers are already struggling with energy costs, crops rotting in fields for a lack of pickers, rising fuel costs, the loss of EU farming subsidies, and fertiliser prices spiralling. Experts have spoken about the deal. We heard from the president of the National Farmers Union Scotland, who said that it appears to be very one-sided, with little to no advantage for Scottish farmers. That is heightened by so little having been done to ensure the continuity and expansion of Scottish and British agrifood exports to new and existing EU markets. Scottish interests and Scottish farmers are not expendable.
Gareth Thomas
I entirely understand and agree with the hon. Lady’s concerns about how Scottish farmers have been treated. They must rightly be very angry with the Government. Does she accept that the concerns of Scottish farmers are replicated among Welsh farmers and many farmers across England, for similar reasons? There is a sense that there has been a huge giveaway to Australia and New Zealand by the Government, perhaps because they were desperate to do a deal. The anger is only made worse by, as she rightly alludes to, the cost of living crisis facing many farming communities. Is she also sympathetic to amendment 5, which references not only the concerns that she articulates in respect of Scotland but those of the people of Wales, England and Northern Ireland?
Ms Qaisar
I thank my colleague for his intervention. He is correct that the challenges that Scottish farmers face are the same as those faced by Welsh farmers and farmers from across the four nations. A key point that he failed to mention, however, is that in Scotland over 60% of people voted to remain in the EU, and there is still a lot of anger from Scottish farmers in that regard.
Last week, we also heard from Jonnie Hall from NFU Scotland. He said something that struck me:
“There are clear potential impacts for particular sectors that are already really quite vulnerable in large parts of the United Kingdom, not least in Scotland. I am thinking particularly of the red meat sector and how important that is to the rural economy of Scotland and, indeed, the whole economy. Scotch beef and Scotch lamb are iconic products, but we are not in a situation whereby we can stack it high and sell it low, as it were. Anything that comes along and undermines our position in that respect is clearly going to be a considerable threat—I use that word advisedly—to the viability of agricultural businesses here in Scotland.”––[Official Report, Trade (Australia and New Zealand) Public Bill Committee, 12 October 2022; c. 32, Q40.]
Concerns have also been raised by the Scottish Cabinet Secretary for Finance and the Economy, Kate Forbes, and the Minister for Business, Trade, Tourism and Enterprise, Ivan McKee. They recommended that the Scottish Government do not give consent for the Bill in its current form. We need to be really careful. The UK Government must not continue on the path of creating delegated powers to implement the Bill.
Amendments 3 and 4 seek to ensure that there are high levels of dialogue and discussion between Scottish and UK Government Ministers. That dialogue would ensure that matters of procurement in Scotland are at the heart of this legislation, crucially protecting the interests of Scottish farmers. In order to support Scottish interests and farmers, I ask Members to please support the amendments.
Dame Nia Griffith (Llanelli) (Lab)
I rise to speak in particular to amendments 5, 20 and 22. I am sure that the Committee will be pleased to hear that in talking about amendment 5 and consultation, which is vital, I will also refer to amendment 22 and the issue of impact assessments, so as not to repeat myself. To avoid excessive repetition, I will give examples based on the Welsh Government, but that will certainly apply to Scottish Ministers, to the Northern Ireland Administration and to regions across England. The issue for us is that here we have a clause that will implement part of a trade agreement in which we would have liked to have seen better consultation and a more nation-specific impact assessment. What we can do here is try to put in appropriate consultation before the legislation that clause 1 will allow is finalised.
It is essential that there should be consultation specific to the nations and regions of the UK for a number of reasons. In the case of Scotland, Wales and Northern Ireland, devolution means that within areas of devolved competence, such as agriculture and economic development, there is increasing divergence in the way that things are done. Indeed, public procurement policies are different, and it is important to see the impact of the implementation of the Bill on each nation.
There may be very different economic profiles for the different nations and regions. In the case of the Bill, what is of particular significance is the relatively greater importance that the production of beef, sheep meat and dairy products has in certain nations compared with the UK as a whole. The same may be said for specific regions of England, for example, the relative importance in Cumbria of the beef and sheep meat sectors. Equally, there can be concerns for a particular region because of its reliance on fishing or a specific industry. To give an example, 70% of agricultural output in Wales is beef, sheep meat or dairy, and 70% of the farmland in Cumbria is for beef and sheep livestock farming, with a further 16% for dairy. The importance of livestock farming in Scotland has just been mentioned by the hon. Member for Airdrie and Shotts.
It is no secret that the farming and food processing sectors are most concerned about the treaties; those are the sectors for which ongoing consultation on the implementation of the treaties and their impact on public procurement is absolutely vital. The Government’s impact assessment singled out agriculture, food and fishing, and food processing, as the sectors that lose out in both the Australian deal and the New Zealand deal, with gross value added down in the Australia deal by £94 million, and in the New Zealand deal by £48 million. Food processing is down in the Australia deal by £225 million, and in the New Zealand deal by £97 million. Obviously, there is real worry about what will happen to our farming industry because that has a massive impact on the guardianship of the local rural community, the family farms, and affects our culture—the Welsh and Gaelic languages.
Regarding the markets, let us take the example that 85% of the beef produced in Wales is consumed in the UK, as is 60% to 65% of sheep meat. There is a question about the impact that the huge and rapidly increasing tariff-free quotas of meat from Australia and New Zealand will have on our own farmer’s ability to sell into the UK markets. While we have mentioned the issue of school meals, it is not necessarily in the public procurement of the finished product, but in the supply chains of ingredients, where we will potentially see Australian and New Zealand products—cheese or meat—displacing UK produce. That is in conflict with some of the devolved nations’ procurement policies, where there is a wish to support the local and circular economy.
Further concerns have been raised. In the New Zealand deal the weights allowed in under the tariff rate quotas refer to the carcase weight equivalent, whereas in the Australia deal the volumes are shipped product weight, which means that they could be used disproportionately for the Australians to send their most expensive cuts, thus challenging the most lucrative part of the market for our farmers. We saw something similar to this during covid: when restaurants were not allowed to open, there was a drop in demand for steaks and higher end meat products, while supermarkets continued to demand the lower value products, and that had repercussions for our farmers and food processing industry.
Bill Esterson
My hon. Friend is making the case very well about the need to involve the farming and agriculture industry in trade agreement scrutiny. Was she struck, like I was, by the comments from Jonnie Hall of NFU Scotland about “retrospective scrutiny” and the fact that this weakened the role of the Trade and Agriculture Commission? Does she share my view that the evidence we heard is exactly why we need the kind of analysis referred to in amendment 7 before the regulations are implemented?
Dame Nia Griffith
I absolutely agree with my hon. Friend. The whole point is that there should have been much better consultation, either directly with the farming unions or by their representatives in the Scottish and Welsh Governments who have raised these points and have very good, close relations with the stakeholder groups in their respective nations. As my hon. Friend rightly says, a number of concerns were raised by the NFU. The whole point of having consultation and impact assessments is that those concerns can be properly documented and we do not rush into the legislation produced by clause 1 and leave people in a more difficult predicament.
Gareth Thomas
Does my hon. Friend agree that one reason why the Minister ought to be tempted by amendment 5 and amendment 22 is that they would give Essex County Council—which is currently Conservative-run but probably not for much longer, given the mess the Conservative party is leaving our country in—the chance to consult directly with small and medium-sized businesses about the procurement chapter deals that have been done in the UK-Australia and UK-New Zealand free trade agreements? As a representative of the people of Essex, he would surely think that that sort of consultation is a good thing that might remedy some of the mistakes that his predecessors have made in this area.
Dame Nia Griffith
I absolutely agree with my hon. Friend. The point is that locally based devolved authorities have much closer contact with the people they represent, so the consultation on how this is working out, what we are going to do next and what the next part of the implementation is must be able to take account of the feelings of those stakeholders on the ground who perhaps feel that they have not had a voice until now.
I pay tribute to officials in the Department for International Trade and the Welsh Government for their very positive and professional engagement. Indeed, the Welsh Minister for the Economy, Vaughan Gething, notes that there has been some improvement between the Australia deal and the later New Zealand deal, and I hope that the experience has been similar for colleagues in Scotland and Northern Ireland, and indeed for representatives of local government across the regions of England.
On procurement, the Welsh Government go as far as to say that there may be scope for businesses in Wales to take advantage of the provisions included in the UK Government procurement agreement, and that some Welsh interests in procurement were protected during the engagement with the Department for International Trade. However, Vaughan Gething says:
“I hope we continue to see improvements in the engagement we have with the UK government, and that future deals provide opportunities and benefits for producers and consumers in Wales.”
It should not be a matter of hoping or relying on good will, which is why the concept of consultation should be enshrined in the wording of the Bill and a meaningful consultation should take place before the clause allows for the implementation of the procurement chapters of the FTAs. Of course, there are certain powers that the Welsh Government have already. Under section 62 of the Government of Wales Act 2006, they have the power to make representations about any matter affecting Wales, but we still feel that this needs to be stated explicitly in relation to the Bill.
One of the issues that relates to procurement is the gradual elimination of tariffs on beef and lamb. Under the New Zealand treaty, for example, the UK or New Zealand can unilaterally accelerate the elimination of tariffs. This is clearly of huge importance to Welsh farmers, so the Welsh Government want to know that they will be fully consulted by the UK Government on any possible acceleration of the elimination of tariffs on goods from New Zealand well before any decisions are made, because secondary legislation could emanate from the clause to put that into action. Clearly, we need that consultation beforehand. Why? Because if we had had better parliamentary scrutiny of the trade deal, we might not be in this position in the first place.
Gareth Thomas
Given the comments that my hon. Friend has just made, perhaps the Minister will take advantage of this debate and reflect on whether his ministerial colleague, the right hon. Member for Chelsea and Fulham, was wrong to reject amendments to the Trade Act 2021 that would have increased scrutiny. As many suggested at the time, perhaps we should have a debate on each free trade deal as the negotiations are just beginning to get under way, so that interested bodies can set out their concerns and Ministers can properly understand the depth of concerns that particular sectors might have—especially on procurement, given that that is what we are debating at the moment, but more generally as well. We are only having to oppose the amendment because Ministers will not do the sensible thing and have proper parliamentary scrutiny much earlier and at the end of things.
Dame Nia Griffith
Indeed. As I said, there are a number of unanswered questions. For example, it would have been nice to have had some analysis from the UK Government to understand why such huge increases were agreed in the quotas of tariff-free beef and sheep meat. Indeed, the Welsh Government requested that but have not had an answer. During the negotiations, the Welsh Government also made calls for market access offers that recognise the risks that large increases in imports could pose to Welsh producers, who have to meet high animal welfare standards. All of this points to why consultation is so important from the very outset and all the way through to the stage we are at now and beyond.
This is not just about the things that have been done by the Bill; it is also about areas where the free trade agreements could have been made better. Let me take the example of antimicrobial resistance. It is okay to stay where we are at the moment, but it would have been useful to work towards a better situation and to use procurement to do that. We do not want just to say, “Well, we don’t want any more use of antibiotics.” Actually, we want to look to reduce their use, although we seem to have missed that opportunity in the trade deals.
We welcome the commitment in the free trade deal to regulate our own standards, as well as the commitment to non-derogation with respect to welfare standards, but the point is that we need the consultation. We want the statutory basis for consultation to extend much further to the point of having some form of concordat with the Welsh Government, the Scottish Government and the Northern Ireland Administration that set out exactly what the consultation would be throughout the process. Indeed, we have a similar concordat on justice between the Welsh Government and the UK Government.
The point is to try to give some shape to the framework, and some certainty, and such a concordat would have so much to contribute. I made a point earlier about the fact that the devolved Administrations are in many ways much more able to engage with stakeholders to represent their views. Going forward, we need to think about issues that might cause problems, such as rules of origin and the fact that small and medium-sized enterprises might struggle and need support in that respect—consultation, impact assessment and feedback are so important to getting this right.
Gareth Thomas
Surely one of the other benefits of consultation is that it might start the Welsh Government and the Department for International Trade thinking about how, together, they might help businesses in Wales to capitalise on a free trade agreement. My hon. Friend will remember that a previous trade Minister criticised the Department for not doing enough to support businesses trying to export. Early consultation with the Welsh Government presumably might help to address some of those failings and enable businesses, together with the Welsh Government and the Department, to begin to think more quickly about how they might take advantage of the benefits of an FTA.
Dame Nia Griffith
Indeed. Not only might there be a benefit, but the high penalties that can be incurred by the respective parties if, for example, they do not understand rules such as the rules of origin might be avoided. Such fears could be fed back through proper consultation and support put in place to ensure that we were able to take advantage of the free trade deals.
Another pertinent issue is the fact that we are debating legislation that overlaps with areas of devolved competence —for example, procurement policy, agriculture and economic development. We do not want the situation that arose with respect to the United Kingdom Internal Market Act 2020 whereby instead of a proper negotiation on where we should end up and what we wanted and required, we were frightened by the thought of being driven to the lowest possible common denominator on standards by the over-powerful influence of a UK Government purporting to represent the whole UK, but in fact listening only to themselves and not taking into account the views of the devolved Governments.
It is important that we recognise the powers that we have, and that the way forward is through consultation and negotiation, rather than riding roughshod over the issues. For example, the Welsh Government have devolved responsibility for setting domestic sanitary and phytosanitary strategy and policy. Clearly, that is of direct relevance to procurement and the way the FTAs were drawn up.
Gareth Thomas
In referencing Manchester, my hon. Friend has stimulated a thought in my head that, if I am lucky enough to catch Mr Pritchard’s eye, I hope to return to: the issue of levelling up. If levelling up is going to take place—I appreciate that it appears Conservative Members have now given up on that ambition—something we will have to sort out is the Government procurement market. It is quite clearly skewed away from regions such as the north-east and north-west, and nothing seems to have been done about it for the past 12 years. Perhaps a little consultation on how the procurement chapters of these two trade agreements will be introduced might give Government Ministers and Members some ideas as to how we can use Government procurement to facilitate levelling up.
The Chair
I reassure the shadow Minister that he will always catch my eye as long as his comments are—as they are always are—in the scope of the Bill.
Dame Nia Griffith
My hon. Friend raises the importance of consultation, working together and wanting to make things better by negotiation, rather than by imposing a view by one central Government Department on areas that are actually within the devolved competence of other Governments.
I will move on to speak more specifically about the issue of impact assessment. There are various reasons for wanting a proper impact assessment of the effects on Scotland, Wales and Northern Ireland and on regions of England. Clearly, there is the levelling-up agenda. There is the fact that different sectors are of different importance to different areas. There is also the fact that the Government’s impact assessment in respect of the FTAs is literally just a table. This is the sop we have to anything to do with the individual nations or regions. We do not have a real study of the impacts of the FTAs on those areas.
As we go forward with the Bill and clause 1, with the powers it provides, it is absolutely essential that it should include a clause for proper impact assessment. The Welsh Affairs Committee was very critical of the lack of detail in that respect. The Committee referenced the Japan comprehensive economic partnership agreement, which includes a better attempt at regional impact assessment—of Wales, for example—but that again did not go far enough. There is a real need for proper impact assessment.
We have mentioned already the impact on agricultural producers and, as I have mentioned, the wellbeing of future generations. The importance of that is of course that FTAs have obligations that bind future generations. They are not things that we can go back on. That is why it would have been nicer to have had impact assessments earlier. If we had them now we could at least prevent mistakes going forward and not have negative impacts on our agricultural sector in the surrounding communities. Given that we already start with negative figures, there is clearly some work that needs to be done. The risk has been exposed. That has been detailed, yet the impact of what that means for farming families and our communities has not been thoroughly explored.
Gareth Thomas
The beauty of having a consultation before regulations are introduced as well as an impact assessment once regulations are about to be brought forward is that we can try to prevent mistakes and understand what might happen as a result of procurement regulations. An impact assessment can highlight to the Welsh Government and other Government agencies what ameliorative support might be needed to help businesses adjust to the impact of new procurement regulations as a result of the procurement chapters. That is an advantage of two of our four amendments as well.
Dame Nia Griffith
Indeed. In respect of support for businesses, there is a real concern about the cumulative impact. That, again, refers to the first amendment we debated today—the issue of what other FTAs with other countries might be included in the legislation. Also, we need to see what the situation would be if the agreement has a negative impact—for example, unfair subsidies made by New Zealand or Australia to help their businesses, or if there is a particularly high volume of imported goods. It is important that Welsh businesses can report and escalate any concerns to the relevant trade bodies and authorities. Again, the proper relationship with devolved Governments can facilitate that.
To sum up on the issue of impact assessments, the impact on sectors is very important. That dovetails with the question of the different regions in England and the different nations of the UK because different sectors can be affected by trade agreements in very different ways, particularly regarding the output and the employment in the different areas. What is the GVA in those areas? Those are all reasons why we want an absolute commitment from the UK Government to a proper consultation procedure and a proper impact assessment before the implementation of clause 1.
I want to sum up with the question of rights and the rights that we are concerned about. The Joint Committee on Human Rights did not give exactly give the ETAs a clean bill of health as they went through. We have had concerns from the trade unions. The Joint Committee on Human Rights raised the fact that in the Australia deal there is no language about the protection of human rights. I note that in the response to the International Trade Committee, the Minister at the time, the right hon. Member for Berwick-upon-Tweed (Anne-Marie Trevelyan), rather brushed that off as “Oh, there are other ways we can deal with that.” However, as we know, it has become more common for trade deals to have a wider focus.
Whereas historically trade deals would just have focused on the economic benefits of trading relationships, they have now expanded to address a wider set of cross-cutting areas, such as small and medium-sized businesses and gender, labour and environmental policy, including climate change. Those wider considerations are particularly relevant to public procurement implementation because of the role of procurement policies in protecting the environment and fair work.
The Joint Committee on Human Rights was not exactly happy—[Interruption.] It was pleased to see provisions on forced labour, modern slavery and human trafficking, but noted the limitations on enforcement and supply chains, limitations that the trade unions also raised. The trade unions also pointed out that they were not part of the stakeholder consultation and did not have their rightful place at the table. Again, consultation through the devolved Governments could give them a better voice, because there tends to be a better relationship, but trade unions should be at the table, full stop.
I will not go into more detail on climate change, apart from to say that at the time of the negotiation of the Australia deal, Australia had a terrible reputation on climate change, ranking very low in the world, with a terrible record on emissions. This might have been an opportunity, perhaps, to do rather more.
Dame Nia Griffith
It was indeed. I hope that the new Government in Australia may do something of their own accord, but we should not be leaving it to them to act of their own accord, and hoping. That is the point of the amendment. It is not enough to leave things just to happen, because they do not. Unless we put positive steps in to make something happen, it does not happen.
Gareth Thomas
My hon. Friend is making a very good point about climate. Is that not one of the differences between the New Zealand FTA and the Australian FTA? Negotiating with a conservative Administration in Australia led to a deal that does not reference climate. Negotiating with a Labour Administration in New Zealand led to substantial provisions on climate—[Interruption.] Would it not be good to hear the Minister explain how he has been talking to the new Labor Administration in Australia about how they might perhaps insert some more climate provisions into the trade relationship between the UK and Australia as a result of some of the joint committees that have been set up under the FTA?
Dame Nia Griffith
Indeed, absolutely. One rather suspects that it was not thanks to the UK Government, but thanks to the New Zealand Government that the climate provisions found their way into the trade agreement; they somehow got completely lost in the Australian FTA.
All these points are reasons why we have tabled the amendments. These issues are too important to be left to chance. They should be fundamental to any form of procurement policy, which should be based on a full impact assessment, full consultation and full respect for human rights and employment rights, and our goal of getting to net zero. Those are all very important points.
The Chair
After that big bang, I am very tempted to call the ghost of Christmas past, but instead I call the very living and very present, Lloyd Russell Moyle.
Lloyd Russell-Moyle
I will take that in the good manner that it was meant. Thank you, Mr Pritchard.
I speak to amendments 5, 7, 20 and 22 for three main reasons: first, because we heard evidence of great concern from businesses and other organisations about the consultation that this Government will do when bringing forward regulations and the trade deals themselves. The Government have established the Trade and Agriculture Commission, but it is able to produce reports only after the trade deal is signed, defeating one of the main points of its existence—it produces a long report but we go and ratify the trade deal anyway, after the horse has bolted. That is same with the International Trade Committee.
Bill Esterson
My hon. Friend makes good points about the way that France and European Union scrutinise trade agreements. In the context of agriculture, the other really good example is the United States. Recently, the United States trade unions had access to negotiating texts during the negotiation period and were able to insist on improvements to employment rights in the recent United States-Mexico-Canada agreement, which, crucially, protects workers in Mexico who face draconian approaches and attacks on trade unionists. Does my hon. Friend agree that we should have a similar process in this country? In the absence of that process, the amendments are a desperately needed back-up.
Lloyd Russell-Moyle
I totally agree. The US is a much better example than us of scrutiny and engagement. It engages its elected representatives early on. We see a Democrat Government there—one of our sister parties—putting trade unions and small businesses front and centre in their ongoing prosperity, rather than trying to run roughshod and have corrupt practices, which the previous party of Government in the US was all in favour of.
There is a better way of doing this. The amendments are not the ideal. I am, desperately unfortunately, missing my Select Committee inquiry this morning on international trade agreements and how we how we process them. I am sure I will read the transcript of the evidence hearing with fascination this evening. The Public Administration and Constitutional Affairs Committee’s inquiry makes it clear that the current ways that we produce trade deals and scrutinise their implementation—what these amendments are about—are inadequate. They are inadequate because they were created in an age when most of it was farmed off to the European Union and we had strong scrutiny processes of secondary legislation that came via the European Union—Committees that looked at that and debates in Parliament.
All that was swept aside—I will not get into the rights and wrongs of leaving the European Union. We have then just relied on a CRaG process and no other proper form of ongoing scrutiny process, which we would have accepted under the European Union, or which every other country has now developed, because trade deals are dynamic.
Gone are the days when trade deals were fixed in one piece of writing; they are ongoing, living, breathing documents. That is quite right, because trade deals really are multilateral deals on numerous issues: on not just direct trade but intellectual property and procurement, as we are discussing today. They affect the domestic implementation of issues, affecting how councils and public bodies are able to go about their day-to-day business, and the ability to consult.
Gareth Thomas
I apologise to my hon. Friend for missing his opening remarks. However, as he was reflecting on the weaknesses of the CRaG process, does he not think that perhaps part of the reason why Government Members genuflected towards the CRaG process so much, despite all its weaknesses, is that it was initiated by a Labour Secretary of State, Arthur Ponsonby, albeit 100 years ago? Perhaps that is what gives them some comfort. However, I absolutely agree with my hon. Friend that it is time to uprate and modernise it.
Lloyd Russell-Moyle
I do not think that even the most foresighted Labour politician would expect the rules that they designed 100 years ago to still be in operation today. Even if I managed to get one amendment through in my career here, I would not expect it to last 100 years.
The CRaG process, I am afraid, is not fit for purpose in the modern world. Although I do not want to prejudge what my other Committee will say, I suspect that is the conclusion that all sides are coming to—that it needs to be updated. These amendments allow a sticking plaster so that secondary legislation and regulations that are made must go through that process. That is what we heard businesses wanted.
The amendments would also ensure that all regions and nations of our country are properly consulted. The other part of my constitutional affairs hat is that we visit the devolved Administrations every year and speak to them about how they feel their relationships with the Union are going. I can tell Conservative Members that they think it is going very badly. That is not just the SNP in Scotland but Labour in Wales and the Democratic Unionist party in Northern Ireland. They think that the way this Government consult and work with them is arrogant and dismissive. That is what every single one of them said, and what Conservative colleagues in the devolved Administrations said to us too.
Sir James Duddridge
I thank the hon. Gentleman for his constructive criticism. In the 25 meetings between the chief negotiator and the devolved Administrations, what, specifically, did the DAs raise on procurement issues that they were unhappy with?
Lloyd Russell-Moyle
Well, I can go and look at my notes and see if they said that procurement was a particular problem. Their concern was that they were presented with a faits accomplis time and time again. They were presented with, “This is the way that you can have it; accept it or leave it.” That was in a wide range of areas, but trade was one of their many concerns.
The amendments are not to say that the Government are not meeting with the devolved Administrations or are not in communication with them, but to say that the Government must consult and work with the devolved Administrations and the English regions before the regulations are laid, in a co-operative, rather than dictatorial, way. It is therefore important that they are agreed to, because they would provide the reassurance that is needed to rebuild the way that regulations are laid that affect the whole UK. We have seen how, when legislative consent motions have not been provided, they are still run roughshod over.
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
The Minister has just informed the Committee that the chief negotiator met the DAs 25 times in the run-up to this trade Bill being put down. Will the hon. Member for Brighton, Kemptown inform the House, if he knows the answer to this, how many times the chief negotiators from the EU consulted the devolved authorities in the UK and, indeed, the UK Government and Members of this House when trade deals were being negotiated, given that he seems such a fan of the way the EU conducts itself in trade negotiations?
The Chair
Order. I am sure the hon. Member for Brighton, Kemptown would give a very full and articulate answer to that, but we are slightly straying out of scope. The points about devolution have been well made and can continue, but only in relation to the United Kingdom. Thank you.
Lloyd Russell-Moyle
I am sure that my Committee’s report will include a fantastic comparison and I will ensure personally that the hon. Member for West Aberdeenshire and Kincardine gets a copy of it when it is out. I can tell him, though, that when we were in the European Union, the devolved Administrations met the different sections of the European Union weekly, because the devolved Administrations had representatives in Brussels who would meet weekly on trade issues, and they would meet daily with the European Union officials. Anyway, we will move that to one side.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
It may help to underline the hon. Gentleman’s point to quote Ivan McKee, the Scottish Government’s Trade Minister, who said:
“Once again we were not consulted by the UK Government before the introduction of proposed legislation that as currently drafted, bypasses the Scottish Parliament and undermines Scotland’s powers. That is…disappointing, but sadly no longer surprising.”
Lloyd Russell-Moyle
I think that is the case here.
These amendments, particularly amendments 2, 20 and 22, which relate to the devolved Administrations, provide a failsafe for the devolved Administrations and English regions to know that they will be consulted. They provide a failsafe for the businesses, including small businesses, that we heard in evidence to know that they will be consulted beforehand. Of course, with all consultation, the Government can still go away and say, “We have listened to you. We have heard you. We have put forward our suggestions. You don’t agree with them, but we are still going to push forward, because we think that is necessary.” That is democracy; of course that has to be allowed, but what we cannot have is people being bumped into things at the last moment or presented with things as faits accomplis, and that is the situation at the moment.
I rose to support the amendments. I think that they are vital; more importantly, they are vital in preserving our Union. I know that some colleagues have a different view, and it is people’s own right whether they want to leave or not—it is not my choice—but I would like to see the Union preserved. I think that those on the Government Benches would like to see the Union preserved as well. I am afraid that if we do not start treating the devolved regions and nations of this great country with more respect and more humility, people will be out the door and it probably will be understandable.
Gareth Thomas
I rise to support amendments 5, 7, 20 and 22, which were tabled in my name and which my hon. Friend the Member for Llanelli spoke to. In so doing, I want to indicate, as I hope my interventions on the hon. Member for Airdrie and Shotts indicated, my strong sympathy with her two amendments as well. I hope that amendments 5 and 22, in that they are more wide-reaching because they cover Northern Ireland, Wales and the English regions as well as Scotland, might be sufficient to encourage her support for them.
Amendment 5, as we have indicated, seeks to lock in the opportunity for more consultation with the whole UK about particular regulations that might emerge around the procurement chapters. As I said in my opening remarks, the Australia free trade agreement is more than 2,500 pages long, and it is quite easy for the bits on procurement to be largely missed. The opportunity to lock in a bit of consultation at this point—before implementing regs have to be made—would help to ensure that there is specific focus on the procurement chapters in both deals.
Bill Esterson
My hon. Friend is talking about consultation and amendment 5 refers to the representatives of the English regions. Earlier, the Minister was talking about Essex County Council. He did not mention Southend-on-Sea City Council, where he is a Member of Parliament. I could not help but notice that the procurement objectives of Southend are:
“Maximising the opportunities for Social Value, Economic Sustainability, and benefits for the local community”.
Does my hon. Friend agree that the Minister, in accepting the amendment, would do well to engage with the objectives of his own local authority to ensure that procurement policy is put into practice in a proper way?
Gareth Thomas
My hon. Friend makes a very good point in suggesting that the Minister look to his own backyard in the troubled times that he and his party are in at the moment. In the context of the free trade agreements’ procurement chapters, it would be particularly helpful for the Minister to seek the views of Labour-run Southend-on-Sea City Council and see whether it agrees with the stance that he is likely to be advancing, which I suspect will be against the idea of more consultation—
Levelling-up and Regeneration Bill (Twenty Fifth sitting)
Tuesday 18th October 2022
(1 year, 6 months ago)
Public Bill CommitteesRead Full debate Levelling-up and Regeneration Act 2023 View all Levelling-up and Regeneration Act 2023 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 18 October 2022 - (18 Oct 2022)
The Committee divided: - Ayes: 5 / Noes: 8 - Question accordingly negatived.
The Committee divided: - Ayes: 5 / Noes: 8 - Question accordingly negatived.
The Chair
Welcome to the afternoon sitting. We now come to new clauses 2 to 7, which have already been debated. Does Rachael Maskell wish to move any of the new clauses formally?
Rachael Maskell (York Central) (Lab/Co-op)
We wish to bring them back later in proceedings, at which point we will press them to a Division.
New Clause 8
Industrial support reporting
“(1) The Secretary of State must prepare annual reports on—
(a) the rates of the matters in subsection (2), and
(b) the extent to which the fiscal and regulatory framework supports growth in those matters in areas with rates of poverty, unemployment or economic inactivity above the national average.
(2) The matters are—
(a) new factory openings,
(b) investment in new factory equipment,
(c) the introduction of tailored skills-acquisition programmes, and
(d) the creation of manufacturing jobs.
(3) The first such report must be laid before Parliament before the end of 2023.
(4) A further such report must be laid before Parliament in each subsequent calendar year.”—(Mrs Lewell-Buck.)
This new clause would require the Secretary of State to report annually to Parliament on the rates of, and the extent to which the fiscal and regulatory framework supports, new factory openings, investment in new factory equipment, introduction of tailored skills-acquisition programmes and creation of manufacturing jobs in areas with rates of poverty, unemployment or economic inactivity above the national average.
Brought up, and read the First time.
Mrs Emma Lewell-Buck (South Shields) (Lab)
I beg to move, That the clause be read a Second time.
The new clause is tabled in my name and that of hon. Friends and hon. Members right across the House. Time and again, we have heard from the many Ministers who have sat opposite us during our short time considering the Bill that the Government are committed and serious about levelling up, yet time and again, when the Opposition have suggested amendments to support and strengthen those aims, the Government have voted against them. I hope that the Minister will give serious consideration to new clause 8, as it will actually help the Government.
The Government have struggled to define what levelling up means and, consequently, how its success can be measured. In fact, in their own technical annex to the White Paper, when addressing how they will measure boosts in productivity, pay, jobs and living standards—especially in areas where they are lagging—the Government state that further work needs to be undertaken to refine the metric. I humbly suggest that new clause 8 does just that.
Legislating for a reporting mechanism that is linked to a revival in manufacturing will focus the efforts of this and any future Government into job and skills creation, as well as the promotion of the UK as a manufacturing powerhouse once again. For too long our economy has been reliant on the service sector, where jobs can often be low paid and insecure, especially in coastal communities such as mine—coastal communities, towns and cities that were once the manufacturing hubs of the UK.
In the last 12 years we have seen a marked increase in low rates of economic growth, leading to stagnation in productivity and living standards. That is felt most starkly in the north-east, where Hartlepool, Redcar, Cleveland, Darlington, Newcastle, South Tyneside and Sunderland have all seen significantly decreased manufacturing outputs compared with 2010. The consequence has been an over 50% decrease in apprenticeships in engineering and manufacturing technologies in every single north-east local authority since 2010. Manufacturing makes up only approximately 9% of UK output, compared with 17% in the early ’90s. In other countries, such as Germany, Japan, Switzerland and South Korea, it is nearly as high as 25%.
The UK brand is still powerful; we have the skills and talents to be making and doing so much more. I do not have all the answers, and I know it can be difficult to create the right environment for manufacturing to thrive, but there are plenty of people smarter than me out there who have thought it through and do have the answers. What we need is a Government who are willing to listen to them, and to be held accountable for any action they take. New clause 8 would do that.
I suspect that the Minister will try to explain why the Government do not support the new clause. I suspect that she will explain that there is already provision for measuring and monitoring the missions in the Bill. However, new clause 8 goes further than that: it cuts across nearly every one of the levelling up missions but, more than that, it targets them directly at the very areas that the Bill claims it wants to level up. I look forward to hearing the Minister’s views on the new clause.
Tim Farron (Westmorland and Lonsdale) (LD)
It is an honour to serve under your guidance, Sir Mark. I am in full agreement with the hon. Member for South Shields, and I am pleased to be a signatory to the new clause, which gives the Government the opportunity to place real, measurable metrics at the heart of levelling up. It would ensure that we tackle some of the myths about growth, which is a word bandied around an awful lot in this place. Many of us think that so much of what the Government mean by “growth” is just consumer spending on the basis of credit and, therefore, does not really add anything long term to our economy.
The new clause gives the Government the opportunity to have measurables for this country to level up in a way that sees us restore manufacturing and skills to the heart of our economy, ensuring that we have growth that is not only real and sustainable, but distributed equally across the country. It would ensure that the Government can be held to account on whether they achieve that or not.
The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Dehenna Davison)
It is a pleasure to serve under your chairmanship, Sir Mark. I am grateful to the hon. Member for South Shields for raising this matter. As MPs for the north-east, we are acutely aware of the value of manufacturing. She referred to her manufacturing powerhouse, which the north-east certainly is. We want it to continue to thrive, but we also want the entire UK to thrive when it comes to manufacturing.
Manufacturing is vital to levelling up as it provides high-skilled and well-paid jobs. It is supported by the Government, including through a new £1.4 billion global Britain investment fund, with grants to encourage internationally mobile companies to invest in the UK’s critical and most innovative industries.
There are already publicly available official statistics covering matters in the new clause, such as the number of manufacturing jobs by region. We are a little concerned that the new clause would require an additional and disproportionate burden on businesses to collect data in a timely manner at a time when they are already facing unprecedented rising costs, which are particularly acute for manufacturing businesses. We therefore feel that the new clause is unnecessary at this stage.
The hon. Member for Westmorland and Lonsdale talked about having real metrics at the heart of levelling up, which the Government are certainly passionate about. We want to be able to measure levelling up to show that we are successfully delivering it. That is why we are already taking steps to improve the quality of the spatial data that we have available.
My Department has established a new spatial data unit to drive forward the data transformation required in central Government. The unit supports the delivery of levelling up by transforming the way the UK Government gather, store and manipulate sub-national data to underpin transparent and open policy making. On that basis, I think we are reaching for the same end here. I reassure the hon. Member for South Shields that the spatial data unit will be pivotal in this matter. The Department for Education is also working to deliver a better understanding of local area skills demand and supply through its unit for future skills.
Mrs Lewell-Buck
I referred to the fact that the Government’s technical annex to the White Paper identifies an issue with measuring and understanding pay, jobs, living standards and productivity. If the Government do not want to put an extra burden on businesses, who will they ask to get this data for them? How will they do that?
Dehenna Davison
This is a matter for our excellent new spatial data unit, which is doing valiant work. It will really help us to understand the scale of the challenges, as well as the progress that we are making against the levelling-up missions. As a Government, we are determined to level up and make progress against those missions.
We are doing a lot of great work in this area and the spatial data unit really will be revolutionary in how we gather this data. For the reasons I have outlined, I ask the hon. Lady to withdraw her new clause.
Mrs Lewell-Buck
I am not entirely convinced, so I will go away and think about it, but I will not divide the Committee on the new clause today. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 12
Duty to have regard to impacts on UK agriculture, agricultural land and domestic food production
“(1) A relevant authority must, when making policy, have regard to any potential impacts of that policy on the resilience of UK agriculture, agricultural land and domestic food production, and seeking to minimise any adverse such impacts so far as is reasonably practicable.
(2) In this section, a ‘relevant authority’ means—
(a) a Minister of the Crown;
(b) a relevant planning authority (under the meaning in section 81).
(3) In order to comply with the duty under this section, the relevant authority must have regard to—
(a) any impacts the proposal may have on agricultural production in the UK;
(b) any impacts the proposal may have on the area of land available for agricultural production in the UK, including in particular the area of grade 1 and 2 land available for production;
(c) any impacts on the genetic diversity of domestic livestock populations;
(d) the impact on farming in areas of natural constraints including land above the moorland line;
(e) the ability of agricultural producers in the UK to operate competitive businesses;
(f) any impacts on food security; and
(g) any other factor which appears relevant to the relevant authority.
(4) Nothing in subsection (1) requires a relevant authority to do anything (or refrain from doing anything) if doing it (or refraining from doing it) would be in any other way disproportionate to the impact on UK agriculture, agricultural land and domestic food production.
(5) This section does not apply to policy so far as relating to—
(a) the armed forces, defence or national security, or
(b) taxation, spending or the allocation of resources within government;
(c) Wales;
(d) Scotland; or
(e) Northern Ireland.”—(Greg Smith.)
This new clause requires Ministers of the Crown and planning authorities (with a broad definition) to take account of the impact their policies are likely to have on the resilience of the agricultural sector, agricultural land and domestic food production.
Brought up, and read the First time.
Greg Smith (Buckingham) (Con)
I beg to move, That the clause be read a Second time.
The Chair
With this it will be convenient to discuss new clause 13—Statements about Bills which may impact on UK agriculture, agricultural land or domestic food production—
“(1) This section applies where a Minister of the Crown in charge of a Bill in either House of Parliament is of the view that the Bill as introduced into that House contains provision which, if enacted, could have an impact on UK agriculture, agricultural land or domestic food production.
(2) The Minister must, before Second Reading of the Bill in the House in question, make a statement under subsection (3) or (4).
(3) A statement under this subsection is a statement to the effect that in the Minister’s view the Bill will not have an adverse impact on UK agriculture, agricultural land or domestic food production.
(4) A statement under this subsection is a statement to the effect that—
(a) the Minister is unable to make a statement under subsection (3), but
(b) His Majesty’s Government nevertheless wishes the House to proceed with the Bill.
(5) A statement under this section must be in writing and be published in such manner as the Minister considers appropriate.”
This new clause requires a Minister of the Crown to make a statement when a Bill is introduced which is likely to have an impact on UK agriculture, agricultural land or domestic food production.
Greg Smith
It is a pleasure to serve under your chairmanship, Sir Mark. While I have no actual technical or financial interests to declare, for the sake of transparency, as we are going to talk about agriculture, I declare that my wife’s family are farmers. Conveniently and coincidentally, they are located in the constituency of my hon. Friend the Member for South Suffolk, who is sat next to me.
Some 90% of my constituency’s 335 square miles is agricultural land. Day in, day out, we see massive competing demands on that land, from the Agriculture Act 2020, with the environmental land management scheme and demands on farmers for rewilding and various other uses that take land out of agricultural use, to the thousands of acres of solar farm developments being brought forward, the housing demands, and state-sponsored infrastructure projects such as, in my constituency’s case, 19 miles of High Speed 2. As a result, when it comes to food security, we have seen our self-sufficiency declining over recent decades. We currently sit somewhere around 60%.
Within the national planning policy framework, there is a presumption to protect the most versatile and productive agricultural land, but I am certain that we in Buckinghamshire are not alone in seeing planning applications approved on said land, be those for housing, solar farms or other projects that I have listed. In the spirit of new clauses 12 and 13, in my name and that of my right hon. Friend the Member for North Thanet (Sir Roger Gale), it is high time we locked into the planning system a legal requirement for planning authorities—indeed, any public authority that considers these matters—to take food security into account when determining those applications.
I think that would take us to a place that is far stronger than the current NPPF presumptions that we see being overlooked and not enforced up and down the country. It would get us to a position that is good for our farmers, where they are not losing hundreds, if not thousands, of acres of their land and can get about their business—the way they make their money—growing crops or raising cattle, sheep or other livestock. It would improve our food security at a time of global pressures, which I need not take up the Committee’s time describing, not least the appalling war in Ukraine. It would also give the countryside back its very definition—that it is there primarily for food production. It is there for farmers to work the land to produce the food that we need as a nation.
James Cartlidge (South Suffolk) (Con)
My hon. Friend is making an excellent speech; there will be much sympathy for his argument in South Suffolk, where his family reside on a beautiful farm. Was he reassured by suggestions in one newspaper that the Secretary of State for Environment, Food and Rural Affairs is looking at the classification of new solar? At the moment, we are using farmland that could still be productive; we should, potentially, be tightening those rules.
Greg Smith
My hon. Friend is absolutely right; I am reassured that the Government are moving to a place where productive farmland will not necessarily be used for solar in future. However, as it stands, we are trapped in a position where it has become very attractive for land to be taken over for solar use. We see the glossy planning consultants’ documents that show sheep grazing underneath the solar panel. That is all very well in year one, when there is still some grass underneath the glass, metal and plastic that form those solar panels, but when a field has been covered so comprehensively in those materials, the grass will not grow, and it becomes very difficult to graze a sheep underneath those panels in year two and beyond. We should call out and challenge the assumption that those planning consultants make when it comes to solar farms in particular.
New clauses 12 and 13 are not specifically about solar, housing, infrastructure or whatever; they are about taking the principles and precedent in the Environment Act 2021, which places a duty on planning authorities to take into account environmental concerns such as biodiversity gain, and extending them to include a requirement to take our nation’s food security as seriously as we take environmental concerns, energy security and national security.
Tim Farron
I congratulate the hon. Member for Buckingham on bringing forward these important new clauses. I agree with an awful lot of what he said. Undoubtably, food security is something that our country has overlooked hugely in recent decades, to our great cost. By some metrics, we produce only about 55% of the food we eat. That is not just a dangerous position to be in given the global situation, but it is morally questionable. As a first-world nation, we will go out and find the food we need, and we will inflate prices on the commodities markets, which will end up increasing prices for the poorest people in the world. On that level, we have a moral requirement to make good use of the land we have to produce food to feed ourselves so that we are not literally starving other people around the world.
It is worth pointing out that 70% of England’s land and about 72% of the United Kingdom’s land is agricultural. If we are serious about tackling global carbon emissions and improving biodiversity, we have to start with those working in farming. Anyone who thinks we can improve our environment without keeping people farming to deliver those environmental policies is not living in the real world.
The other thing that makes the new clauses attractive to me is that they refer to the responsibilities not just of planning authorities, but of Ministers. When it comes to planning authorities, a requirement to look at the impact of any proposal on food production and farming may sometimes mean that we protect land and do not allow development. It may also sometimes mean that we permit development, in order to allow, for example, diversification. Some level of renewable energy on farm sites is something that farmers actively want, to help shore up their businesses. I agree that we do not want to see whole farms handed over to solar, but many farmers would like the option to use renewables for environmental reasons and to cross-subsidise and diversify their business. Also, sometimes we simply need labour in those communities, and we may need to build some houses to ensure that we have sustainable farming.
I wish that the provisions of these important new clauses were already in law, because they would stop the Government botching the transition from the common agricultural policy, which was far from perfect, to the new ELM scheme. That will see farmers lose 20% of their income by the end of this year, with very little to replace it. Fewer than 2% of the 1,000 farmers in my patch—13 of them—have signed up for the new sustainable farming incentive. The botching of the transition means that farmers will lose their income, and so far they have very little to compensate for it.
However, to botch the unbotching is almost inexcusable. In the last few weeks, the Government have signalled that they might be ready to rip up ELMS altogether, after farmers have spent two years preparing for it. We see foolishness upon foolishness, all of which puts our farmers in a desperate position. They have never been more angry with the Government of the day—and we do not have time to go into the damage being done to our farming community by trade deals. We desperately need to remember, at the heart of policy making, nationally and locally, the importance of farmers and farming to food production and the environment. If the hon. Member for Buckingham were to press the new clauses to a vote, he could count me on his side—I would vote with him.
The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Lee Rowley)
It is a pleasure to serve under your chairmanship, Sir Mark. I thank my hon. Friend the Member for Buckingham for his introduction to the new clauses and for the work he is doing on this important policy area. We absolutely accept the challenge that he puts to us. He made strong points about the importance of balancing competing demands, all of which are important in isolation and need to be thought through and integrated as best as possible, while recognising that it is sometimes not possible to do everything. The point of Government, both local and national, is to try to ensure that that balance is struck in the best possible way.
I hesitate to go too much into an agricultural discussion, although the hon. Member for Westmorland and Lonsdale was keen to move into that space, but I acknowledge the points that have been made. It is critical that we continue to have food security in the United Kingdom, that consumers have access to good quality, healthy and sustainable food and that domestic producers have a viable business in the long run. Although I do not want to trade figures, the figures I have in front of me state that we produce about 60% of what we eat, and we produce roughly 70% to 75% of what we can produce in this country. Given the problem of dates, times and the like, I recognise that those things move around, although they seem to have been relatively static over the last 20 years. Therefore—to my hon. Friend’s point—the question is whether the planning system needs further content and signals so that it is clear that these things can be weighed up more clearly.
At the current time, things are going on elsewhere in Government, particularly around the Agriculture Act, which my hon. Friend referenced. The Act commits the Secretary of State to have regard to the need to encourage the production of food by producers in England and for that production to be done in an environmentally sustainable way. Also in the Agriculture Act is a legal obligation to produce an assessment of food security once every three years. I hope that goes some way towards reassuring my hon. Friend, although I acknowledge that he is also interested specifically in the planning element.
This might be one of the statements that I make regularly over the next few minutes or so, but I am happy to talk to my hon. Friend in more detail about the underlying intent and calls behind his new clause. However, at the current time, I ask him to withdraw it in lieu of further discussions and debate outside after our sitting.
Greg Smith
I welcome my hon. Friend’s commitment to keep the conversation going. This is a subject, as right hon. and hon. Members can perhaps understand, that I get very passionate about. I could have a debate on agriculture for as many hours as the hon. Member for Westmorland and Lonsdale could. Our farmers produce the best food in the world, and we have to find the right balance to ensure that they have the land on which to produce it. In the spirit of carrying on the conversation before the Bill reports, I will not push the new clause to a vote, but I urge the Government to keep listening and talking to protect our world-class, best-in-class British farmers. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 14
Prohibition of mandatory targets and abolition of five-year land supply rule
“(1) Any housebuilding target for local planning authorities in—
(a) the National Planning Policy Framework (NPPF),
(b) regulations made under any enactment, or
(c) any planning policy document
may only be advisory and not mandatory.
(2) Accordingly, such targets should not be taken into account in determining planning applications.
(3) The NPPF must not impose an obligation on local planning authorities to ensure that sufficient housing development sites are available over five years or any other given period.”—(Greg Smith.)
This new clause requires a revised NPPF within six months to provide that housing targets are advisory not mandatory and that the five-year housing land supply rule will no longer apply.
Brought up, and read the First time.
The Chair
With this it will be convenient to discuss new clause 15—Requirements of the National Planning Policy Framework—
“(1) The Secretary of State must ensure that the National Planning Policy Framework (NPPF) is in accordance with subsections (2) to (6).
(2) The NPPF must not contain a presumption in favour of sustainable development including where there are no relevant development plan policies, or such policies are out-of-date.
(3) The NPPF must provide for the right for persons to object to individual planning applications.
(4) The NPPF must provide that the Planning Inspectorate may only recommend that local plans not be adopted if—
(a) the consequences of that local plan would be detrimental to the objectives of such plans, and
(b) that local plan is markedly and verifiably atypical in comparison to other such plans.
(5) The NPPF must permit local planning authorities to impose bans on greenfield development in their areas, other than in exceptional circumstances, where—
(a) greenfield areas make a marked contribution to the local economy through leisure or tourism, and
(b) where sufficient brownfield land is likely to be available to meet housing needs identified in neighbourhood and local plans.
(6) The NPPF must include specific measures designed to support the creation of additional retirement homes, sheltered accommodation for the elderly and facilities for care homes.
(7) This section comes into force at the end of the period of six months beginning on the day on which this Act is passed.”
This new clause requires a revised NPPF within six months to provide that, among other things, there should be no presumption of sustainable development.
Greg Smith
This should be relatively straightforward, given the commitments that my right hon. Friend the Prime Minister made in the leadership election during the summer. I believe that she described her approach as ending the Soviet-style, top-down housing targets that exist in the United Kingdom at the moment.
New clause 14, in the name of my right hon. Friend the Member for Chipping Barnet (Theresa Villiers), gets to the nub of the matter by getting rid of mandatory targets and leaving local areas free to decide what housing development, commercial development, infrastructure and so on they need. It also gets rid of something that has been an aberration in the planning system for far too long. I have talked to local government colleagues up and down the land, and the five-year land supply rules have got in the way of many areas deciding exactly what is right for them and of their ability to be dynamic.
The new clause gets to the nub of these issues. I hope that the Government can listen and that we can move forward by adding to the Bill either this new clause or whatever the Government wish to bring forward to meet the Prime Minister’s commitments over the summer.
Lee Rowley
Again, I am grateful to my hon. Friend the Member for Buckingham for tabling the new clauses and for articulating the rationale and reasoning for them. I think he and everybody else present would accept the principle that these would be significant changes, whatever people’s views about some of the important points he highlighted, such as the five-year housing land supply rules, local plans and the NPPF. The appropriate balance needs to be struck in each case, and those debates could detain the Committee for many hours, with extremely strongly held views in many places. Each of us will have—as I do and as my hon. Friend the Member for Buckingham and my right hon. Friend the Member for Chipping Barnet, who is not on the Committee, do—individual recollections and experiences of the implications of the NPPF, the five-year housing land supply rules and other things for their constituencies and more broadly.
I recognise and acknowledge the significant underlying element of change that is proposed in the new clauses, the significant move away from the current approach, and the balance that needs to be struck. I also acknowledge that, as part of the leadership campaign, my right hon. Friend the Prime Minister made a series of statements over the summer about looking again at this area and bringing forward new proposals. However, I hope that my hon. Friend the Member for Buckingham will be content on this occasion to emphasise the point in his speech, which was that we should either look at the new clauses or bring forward additional proposals. I hope we can bring forward proposals in due course that he will have the opportunity to comment on, so I ask him to withdraw the new clause, pending further discussions in advance of the Bill coming back at a later stage.
Greg Smith
I am grateful to my hon. Friend the Minister for those commitments. The statements made over the summer were very clear, and I look forward to working with the Government on their proposals or to put new clause 14 into the Bill on Report.
New clause 15 goes to the heart of localism and the same issue that new clause 14 talks about: the ability of local communities, rather than Whitehall, to decide. Given the commitment that the Minister made, I am equally content that we continue the conversation, which we will come back to on Report. For the time being, I am content not to press new clause 15.
I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn
New Clause 16
Character test: determination of applications
The Chair
With this it will be convenient to discuss new clause 37—Prohibition on development for prescribed persons—
“(1) The Secretary of State may by regulations prohibit a person of a prescribed description from carrying out development of land in England (or a prescribed description of such development).
(2) The descriptions of persons which may be prescribed include in particular persons who—
(a) have been found to be in breach of planning control on a development undertaken by them, and
(b) that breach has not been rectified.
(3) A prohibition under the regulations applies despite planning permission (or any prescribed description of planning permission) having been granted.”
Greg Smith
New clause 16 is relatively straightforward. It addresses an issue that arose from talking to Conservative and other councillors up and down the country in areas where rogue development—build now and seek to apologise or get retrospective planning permission later—has caused significant issues. The new clause would give the planning authorities the ability to take into account an applicant’s character, such as whether they have previous form on rogue or illegal development, when considering any fresh applications. It is relatively straightforward and aims to give our planning authorities more ability to protect their communities from rogue development.
Matthew Pennycook (Greenwich and Woolwich) (Lab)
It is a pleasure to serve with you in the Chair, Sir Mark. New clause 37 in my name and that of my hon. Friends, is, like new clause 16, a simple amendment. I will not devote too much time to making the case for it.
We all agree that it is essential that the integrity of the planning system is upheld, not only to ensure that unauthorised development cannot blight local communities, but to maintain public trust and confidence in the planning decision-making process. When considering chapter 5 of the Bill, we had a number of debates about how planning enforcement might be improved as well as better resourced. A number of members of the Committee, including my hon. Friend the Member for South Shields, have spoken at length about the impact that rogue developers can have on communities across the country.
New clause 37 seeks to probe the Government on a specific issue of concern. As the hon. Member for Buckingham has just made clear, at present it appears that it is entirely permissible for an individual developer to consistently breach planning control, with the only risk being that they face enforcement action in respect of that specific breach. We believe that it is right that enforcement of planning law and regulation is based on the principle of proportionality and that when it comes to cases of alleged unauthorised development, local authorities have discretion to determine how the breach can be remedied. However, we also believe there is a strong case for changing the law so that certain categories of proscribed persons, in particular those who breach planning control and make no efforts to rectify those breaches, can be prohibited from carrying out development of any kind.
New clause 37 would allow that sanction to be applied to those who persistently offend when it comes to contraventions of planning law and regulation. Its objective is the same as new clause 16, on a character test and the prior record of an applicant. Adopting new clause 37, or a version of it, would reduce the burden on local authorities that are attempting to deal with the minority of rogue developers of this kind, and would also strengthen the integrity of the system overall. I hope the Government will give it serious consideration.
Lee Rowley
I thank my hon. Friend the Member for Buckingham and the hon. Member for Greenwich and Woolwich for their new clauses. I am extremely sympathetic to some of the concerns. I agree with the hon. Member that ensuring the integrity of the planning system is paramount. We will all have examples from across the country of where development does not occur in the way that is sanctioned, or before it is sanctioned, and then an attempt is made to gain planning permission retrospectively by those who are not necessarily following either the letter or the spirit of the rules as set down. It is extremely frustrating.
By the same token, we have to tread extraordinarily carefully here. There are a set of principles, which my hon. Friend and the hon. Member acknowledged in their speeches—that the planning system is based on a specific application, which should be judged accordingly on its merits. It is challenging to bring forward a form of character test within those principles, although I recognise that there is an issue here that many communities up and down the land are seeing.
As those who have debated it for longer than I have will know, the Bill already includes a significant package of measures that will help tackle persistent abuses of the system. Those will speed up the enforcement process, restrict the circumstances in which an appeal can be lodged, increase fines for non-compliance and discourage intentional unauthorised developments that rely on a slow enforcement timescale. The Government acknowledge some of the concerns and are trying to find appropriate levers with which to approach them.
While offering a commitment to continue to talk about this issue, although wanting to be being clear that it is extremely difficult in terms of legislation, as my hon. Friend and the hon. Member acknowledged, the Government are not minded to accept the new clauses. I therefore ask both Members not to press them.
Greg Smith
I welcome the commitment my hon. Friend has just made to carrying on the conversation. I accept the complexity, in a system that looks at individual cases, of bringing in a more universal test. However, there are other areas of life where people—for example, those with particular criminal records—are barred from doing certain activities—particularly where children are involved. If we could extend the principle and precedent whereby somebody who has form with rogue development—that is, turn up, build now and apologise later—which blights communities up and down the land, is barred through legislation that is practical and that does not undermine the planning system, I am up for carrying on that conversation. If not through the exact wording of this new clause, then perhaps by another means, we could find a happy solution that protects our communities from those who, I am sorry to say, continue to blight them by building out schemes that they do not have planning permission for.
Matthew Pennycook
I thank the Minister for that response. I agree that we have to tread very carefully in this area; the principles that we have all spoken about, in terms of planning system proportionality and judgment on individual applications, are important. The Minister was not on the Committee at the time, but the Opposition broadly supported the measures outlined in chapter 5 of part 3, which strengthened enforcement. I welcome his commitment to continue the discussion outside the Committee, but I hope he gives the issue some serious thought.
I accept what the Minister said about the difficulties, particularly in terms of a character test, but at the same time it does not seem beyond the talents in this Committee Room—I will put it that way—to come up with a system that proscribes certain categories of person. Even if it was a threshold of a certain number of planning breaches in the past, beyond which someone cannot bring forward applications, there must be some way of doing it. A minority of rogue developers are causing havoc for communities and lots of work for planning departments in local authorities. We think the Government should give further thought to making progress on the issue.
Greg Smith
I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 17
Community right of appeal
“(1) The Town and Country Planning Act 1990 is amended as follows.
(2) After section 78 (right to appeal against planning decisions and failure to take such decisions) insert—
‘78ZA Community right of appeal
(1) The Secretary of State must by regulations make provision—
(a) enabling communities to appeal against a decision to grant planning permission or permission in principle for a development, and
(b) about such appeals.
(2) The regulations may require a certain number or proportion of residents of a local area to record objection against a decision for such an appeal to proceed.
(3) The regulations may, in particular, make provision the upholding of such appeals and the revocation of permission if—
(a) the development is inconsistent with a relevant neighbourhood plan, or
(b) due process has not been followed in relation to the planning application.
(4) The first regulations under this section must be laid before Parliament before the end of the period of six months beginning on the day on which this section comes into force.’” —(Greg Smith.)
This new clause would introduce a community right of appeal against the granting of planning permission.
Brought up, and read the First time.
Greg Smith
I beg to move, That the clause be read a Second time.
This new clause gets to the heart of a frustration for many communities, be it Maids Moreton in my constituency, Ickford or many others. Planning permission is granted—or conceivably in some places not granted—but the community is opposed to the application. Conversely, the community wants it, but it is not given permission. We know that, as it stands at the moment, there is little power for communities to challenge that, short of the judicial review process. We all know how much judicial reviews can cost and how unlikely they are, in many cases, to succeed, because they are dependent on technical legal requirements, as opposed to the wider planning law environment.
The new clause would bring in a community right of appeal. It would mean that a community that felt particularly hard done by as a result of a decision of a planning authority, rather than being forced down the route of judicial review at great—often unaffordable—expense, could lodge an appeal, just as a developer can who is not content with the way that their application has been determined. This is about fairness—about giving those on both sides of the debate the same right of appeal. It is a point of principle that I hope the Government will listen to, and I hope that they find a way of getting this measure into the Bill.
Rachael Maskell
It is a pleasure to see you in the Chair, Sir Mark. I add my support for these measures, because it is incredibly important that power be given back to people in communities. On many occasions, I have seen developers across York move into a space and determine the future of a community without engaging it, even if only in a consultative way. Occasionally, the community may be lucky enough to meet the partners cursorily, yet those developers will derive serious profit from the land. Also, what they place on the land will have huge implications for local housing prices and economic opportunities for the community, but the community is completely disregarded.
That feeds into a wider agenda around people identifying with their place. Across society, we are wrestling with that issue, and with people having a franchise in place. People are feeling more and more disconnected from their locality. It is crucial that we find a way, across communities, to rebalance people’s right to steer through a mechanism. In debate on my earlier amendments, I talked about deliberative democracy. The community should absolutely be involved in processes before they get to a certain point. It is far better to prevent an incident than to try to recover once it has happened. It is important to find a way to give people franchise over their community, particularly when we contrast the harm that could be done with the profit that developing companies and landowners will reap. This huge extraction economy, as I have been calling it, is playing off the localism that people want in their vicinity, and causing a lot of stress and tension, because while it benefit others, it causes the community harm. A community right of appeal will start to tilt the balance back towards local people, which is absolutely essential.
Tim Farron
This important new clause gets to the heart of a historical imbalance, injustice and inequity in the planning system. Developers, who tend to have significantly more resources than those who question or oppose a development, have the right to appeal against the local authority or national park that turned down their planning permission, and they have the resources to see that through; but what happens if a community that has opposed a development loses? It may have opposed not development, but the nature of the development proposed. In my constituency, we are very often happy with the number of houses proposed, but outraged that none of the houses is affordable to local people.
The ability to challenge a developer and a decision seems to be at the heart of democracy. To really level up, we must not just level up geographically, but level out the imbalance of power between developers, many of which have substantial resources, and local communities, who, generally speaking, do not.
The new clause is a sensible move in the direction of winning people’s consent to the planning system, so that communities do not feel that things are being done to them. If levelling up is to mean anything, and if devolution is to mean anything, the Government should surely want to embrace proposals such as this.
Lee Rowley
I thank hon. Members for their contributions. At a high level, the new clause is attractive, and I am tempted by it, but for reasons that I will outline, I am afraid that we will be resisting it. I completely accept the way in which all three of my colleagues have articulated the issues. I am sure that everybody in this room has stories of cases in which, although planning applications have gone through the process, there is a general lack of consent from the community to the manner in which they went forward.
Notwithstanding that, and notwithstanding my acceptance of the points that the hon. Member for York Central rightly made about the importance of franchise of place and embedding local consent in decision making, two fundamental principles mean that I am unable to accept the new clause. First, it is absolutely vital that we retain the principle that those who own land have the right to make applications, and to understand the processes that they can go through. Once that due process has been concluded, those landowners have the right to do as they wish with their land, within the established framework that the Government deem it reasonable and proportionate to apply.
Secondly—I recognise that I am speaking to people with a great interest in this area, and I am probably telling them lots of things that they already know—we would all accept that planning is a long, difficult and convoluted process at the best of times. In another part of my portfolio, I am looking at the reasons why a large proportion of local authorities do not have a local plan; a local plan is one of the processes through which discussion takes place and consent, hopefully, is given to development. That is a multi-stage, multi-consultative process in which people can put forward ideas, and in which those ideas can be tested, and then accepted or not, first in the community, and then with an additional body looking at them. Once that process has concluded, on most occasions, there is the opportunity for planning applications to be debated in principle. The community has the opportunity to get involved at that stage, and then once again in the case of reserved matters.
That is a very imperfect process, and we will all have lots of experience of it not leading to communities liking, or particularly wanting, individual applications. However, it is important to note the multi-stage nature of the process and the multiple elements of consultation in. While I understand the sentiments behind the new clause and the frustrations that have been articulated, and while I recognise that the system is very imperfect, I ask my hon. Friend the Member for Buckingham to consider withdrawing the new clause. As many Members know, and occasionally remark on, I am only six weeks in post, but I have spoken to a number of people who have been involved with these matters for years. I understand that this proposal has been around for many decades, and one of the reasons why it has not been taken forward is the fundamental change it would make to the planning system. I accept and understand the importance of the new clause, but we are not able to accept it.
Rachael Maskell
I appreciate that the Minister was not here for earlier stages of debate on the Bill. Will he consider my suggestion about greater community engagement and involvement, and my point about ensuring deliberative democracy when sites are brought forward for use? It would be a way of trying to address the problem at source, rather than retrospectively, and it would give communities that engagement, franchise, and opportunity to determine how the community develops.
Lee Rowley
I am grateful to the hon. Lady for her comments. We may have another discussion about deliberative democracy when we debate another amendment in a few minutes’ time.
I am a great advocate of local communities having as much involvement in these discussions as possible. It is a shame when councils—I experienced this in North East Derbyshire a number of years ago—do not emphasise the discussion at the appropriate point, and people do not feel as involved as they need to if they are to understand what happens later in the process. I hope that local councils take opportunities to be as broad and open in their discussions as possible. I am also a big fan of neighbourhood plans, because they give communities the opportunity to be more involved in discussion. There are parts of the system that can be used at the moment, though I respect and acknowledge the challenge of involving local communities in it. I ask my hon. Friend to withdraw the new clause.
Greg Smith
I absolutely hear what my hon. Friend says about due process for landowners who wish to develop their land. I am not in any way, shape or form seeking to take any of that away through the new clause; it is quite right that landowners or developers should have the due process set out, and a clear path to appeal if they feel that they have not been treated fairly.
What is missing is the other side of the equation, when something materially affects a village, town or neighbourhood. Some months ago, when speaking to an amendment, I gave the example of the way flooding is dealt with in the planning process. In the village of Ickford in my constituency, every villager knew that a piece of land flooded not just a little, but a lot, but that was completely ignored throughout the planning process and when it got to the Planning Inspectorate. The community could see the problem—they knew and felt it; they had puddles lapping up to the top of their welly boots regularly—but was left with a choice of going to judicial review or nothing. That community right of appeal did not exist. They could see, feel and breathe the issues. This was the place they call home, but that knowledge could not be put into any meaningful challenge that would not cost the village £1 million.
I am happy to withdraw the new clause for the time being, but I really urge my hon. Friend to look at how we can restore fairness, so that when a place feels that the planning system has worked against it, it can lodge a good, well-thought-through challenge that that does not go into the unaffordable realms of judicial review. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 18
Start of development for planning purposes
“(1) The Town and Country Planning Act 1990 is amended as follows.
(2) In section 56(4) (time when development begun) leave out paragraphs (aa) to (c)
(3) In section 92(2)(b) (outline planning permission) for ‘two years’ substitute ‘one year.”—(Greg Smith.)
Brought up, and read the First time.
The Chair
With this it will be convenient to discuss the following:
New clause 20—Revocation and modification of planning permission for unbuilt development by Secretary of State—
“(1) Section 100 of the Town and Country Planning Act 1990 (revocation and modification of planning permission or permission in principle by the Secretary of State) is amended as follows.
(2) After subsection (1) insert—
‘(1A) In this section, “expedient” includes circumstances in which—
(a) a development for which planning permission has been granted is unbuilt and appears likely to remain unbuilt, and
(b) in the opinion of the Secretary of State it is in the public interest to revoke or modify that planning permission.’.”
New clause 21—Council tax to be payable on undeveloped sites for which planning permission granted—
“(1) The Local Government Finance Act 1992 is amended in accordance with subsections (2) and (3).
(2) In section 3 (meaning of ‘dwelling’ for Council Tax purposes), after subsection (3) insert—
‘(3A) A hereditament which—
(a) is all or part of a new or proposed new building the terms of planning permission for which required the building to already be completed, and
(b) which otherwise would be a dwelling for the purposes of this Part is a dwelling for the purposes of this Part.’
(3) In section (4) (dwellings chargeable to council tax), at the end insert—
‘(5) But a dwelling under section 3(3A) may not be an exempt dwelling.’
(4) Schedule 4A of the Local Government Finance Act 1988 (non-domestic rating: new building (completion days)) is amended in accordance with subsections (5) to (7).
(5) In paragraph 1(1), after ‘months’ insert—
‘or the terms of planning permission require the building to be completed within three months,’
(6) At the end of paragraph 2(2) insert—
‘or, if it is sooner, the day on which the terms of planning permission required the building to be completed.’
(7) After paragraph 4(1) insert—
‘(1A) But a person may not appeal under sub-paragraph (1) if the terms of planning permission required the building to be completed on or before the completion day.’.”
Greg Smith
There is clearly a game afoot, whereby many developers up and down the land acquire planning permission, but do not build out what they have received planning permission for. I stand to be corrected, but I believe that around a million homes that have planning permission are not being built out. New clause 18 would shut down some of the loopholes that are exploited; for example, if a trench is dug, or a single pipe is laid, or something very superficial to the development is started, that can satisfy the planning authorities that the development has started, even though not a single brick may follow, or certainly not in the timeframe the community expects.
Particularly pertinent is the ability under new clause 20 for a planning authority to revoke or modify planning permission where the development has not been built, or started. The community is expecting 10, 50, 1,000 houses or whatever, but the developer is simply playing a game, in order to increase the land value for resale later, or because they want to sit on the permission and distort property values in the a particular area, or for some other reason.
In our planning system, there should be an presumption that once a developer has been granted planning permission, they need to build the development. There will always be reasons why a development might not start immediately—force majeure or whatever—and we need to be conscious of that, but if a developer has been given planning permission, they should build or face a penalty. New clause 21 goes that little bit further: it would make council tax payable on sites that have been granted planning permission. That would give the developer a financial incentive, shall we say, to get on with the development, because if they are attracting council tax on each new home given planning permission, that will quickly rack up, certainly in many parts of the country, to many thousands of pounds per housing unit per year.
The new clauses are designed to get the planning system to work as it is meant to do. It is about ensuring that planning permission means something. When it is granted, communities that have consented to it should see the product—the homes and the commercial developments—that they want.
Tim Farron
These interesting new clauses highlight two issues about which I am particularly concerned—issues to which the hon. Gentleman alluded. They are very helpful new clauses, and I am grateful to him for tabling them. He is right that, over the past decade, roughly a million properties granted planning permission have not been built. That tells us something. When the Government consider growth and the need for new developments, they think they just need to loosen planning regulations. Well, the answer to that is that 1 million new homes have obtained planning permission but have not been built. Let us focus on making sure that those developments get delivered, rather than on reducing the regulations, because that tends to lead to the wrong sort of homes in the wrong sort of places.
Another issue affects tens of thousands—but not a million—houses. It is when developments begin but are not completed. That may be for a range of reasons, such as genuine business failure. It may also be due to a disreputable developer; we have seen plenty of those. I think of one in my constituency, a serial bankrupt, and it seems obvious to me that in their case, we are talking about a deliberate business tactic. Developments are either completely or partially abandoned. That is a waste of time and money, and it creates eyesores for communities, when the development could have provided nice, decent homes for people to live in.
Would the Government consider going further than the new clauses suggest and applying existing legislation, namely empty dwelling management orders? They allow local authorities to commandeer empty properties after a period. It should be noted, however, that the period is seven years, which is far too long, but we should be able to commandeer developments that were begun but not completed for public use and public good. I can think of one house in the Kendal Parks area of Kendal that has been uncompleted for 20 years. It is an eyesore, and damaging to the local community. It could be a decent home for someone. I can also think of a whole development in Burton-in-Kendal that has been poorly managed and has fallen out of the hands of one set of owners into those of another. The ability of local authorities to commandeer properties for the public good would be of huge benefit, not just to my community but to every Committee member’s community.
Lee Rowley
I am grateful to the hon. Member for Westmorland and Lonsdale for his comments, and to my hon. Friend the Member for Buckingham for tabling the new clauses.
I accept that this is another area of policy that is difficult and challenging and that a balance needs to be struck. I completely understand the concerns that have been raised. In order not to detain the Committee, and without offering any guarantees, I would be keen to continue the conversation outside the realms of the Committee to consider and reflect on the points made by those who have spoken. I am happy to discuss that in advance of further stages of the Bill, should my hon. Friend be content to do that.
Greg Smith
I welcome that commitment. I stand ready to carry on the conversation; therefore, I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
Greg Smith
I beg to move, That the clause be read a Second time.
This new clause is in a similar vein to many of the others that I have tabled, although it looks at the controls for planning enforcement and essentially abolishes the time limits so that where rogue development or development carried out without planning permission takes place, especially in protected landscapes, it can no longer be timed out by a lack of enforcement action. I accept that planning enforcement is not a statutory service on local authorities, which are often overstretched. Removing the time limit would ensure that those who have done wrong by a community and developed that which they should not have, or have developed in a manner that is not commensurate with their planning permission, can still face the appropriate planning enforcement beyond the current statutory time limits.
Lee Rowley
I share my hon. Friend’s desire to ensure that important landscapes are protected from breaches of planning control. We would need to consider the time limit by which that occurs, and whether an open-ended time limit is the most appropriate way. While I understand the underlying principle and point that my hon. Friend makes, there is a challenge in leaving something so completely open ended, as it could come back in many years’ or decades’ time, however unlikely that may be.
As my hon. Friend will know from sitting on this Committee longer than me, the Bill already increases the time limits for some breaches of planning control from four years to 10 years. We hope that is a positive direction of travel that demonstrates the Government’s willingness to look at this area and make changes where appropriate, but in this instance, I ask my hon. Friend to withdraw the clause. I am happy discuss it further—although it is very difficult to see how an open-ended timeframe can be obtained. I hope that he can see in other parts of the Bill the Government’s intent to look at that where we can and where it is proportionate to do so.
Greg Smith
I very much welcome the Minister’s words. I accept that, with a totally open-ended time limit, the new clause is imperfect. I am happy to negotiate and find a happy medium that sets a more realistic and reasonable timeframe, so that planning enforcement does not just fall off the metaphorical cliff edge and communities are not left wanting. Therefore, I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 23
Report on measures to incentivise brownfield development over greenfield development
“(1) The Secretary of State must, within 60 days of the day on which this Act is passed, establish a review of the merits of measures to financially incentivise brownfield development over greenfield development.
(2) The review must, in particular, consider the impact of—
(a) introducing a greenfield plot tax to provide dedicated funding streams for brownfield development,
(b) setting a uniform zero-rating of VAT for development on brownfield sites,
(c) applying standard VAT to development on greenfield sites,
(d) applying variable measures to ensure that increases in land values attributable to the granting of planning permission for development are used in support of communities local to those developments, and
(e) allowing a high degree of variation in the Infrastructure Levy to enable communities to value the loss of greenfield land depending on local circumstances.
(3) The Secretary of State must lay a report on the findings of this review before Parliament no later than one year after this Act comes into force.” —(Greg Smith.)
This new clause would require the Secretary of State to review the merits of measures that would financially incentivise brownfield development over greenfield development and to report the findings to Parliament.
Brought up, and read the First time.
Greg Smith
I beg to move, That the clause be read a Second time.
There have been so many Committee sittings in which I have said very few words, but it seems that this afternoon is my time in the limelight. [Interruption.] It is probably best that I did not hear the heckles from the Opposition Benches.
The new clause comes back to some of the earlier amendments that we have debated in this Committee that looked at the practical steps that could be taken to incentivise brownfield development over greenfield development. The Government are to be commended and congratulated on the move to a brownfield-first development approach. There is a reality that underpins that. It remains the case that for a developer, it is often grossly more expensive to develop a brownfield site than a greenfield one. That is most commonly because of the decontamination costs of former industrial land, which may have had petrol or oil tanks underneath it. We have to accept that the cost differential is, at times, extreme.
Just as the Committee has debated amendments proposing different rates of infrastructure levy for brownfield and greenfield sites, so this new clause would compel the Government to look seriously at financially incentivising the development of brownfield sites over greenfield ones. Subsection (2) contains some suggestions—I urge my hon. Friends on the Treasury Bench not to consider this an exhaustive list—around VAT and a greenfield plot tax. They are ways to say to developers that we want and need them to develop brownfield sites rather than taking yet more of the Great British countryside and greenfield sites; and that the Government will put the public’s money where their mouth is by providing these incentives. In many other walks of life, the Government offer incentives to do the right thing environmentally. We need to say to developers, “In the tax and planning systems, we will make it advantageous for you to go for brownfield sites first.” I believe that is what the public want, and I hope we can get it into the Bill.
Ben Bradley (Mansfield) (Con)
It is a pleasure to serve under your chairmanship, Sir Mark. I want to give the Committee a change of scenery for five minutes, before I let somebody else speak. I will not develop these points; I will just add a thought that the Minister might wish to take away and consider in further conversations.
The Bill will, I hope, create numerous mechanisms and levers to incentivise local areas to bring forward brownfield sites, not least development corporations, combined authorities and the investment zones that have been the subject of much conversation. I should declare an interest, because I am the leader of a local authority and I am involved in a devolution conversation in the east midlands. At a regional level, we have been given funding to bring forward brownfield sites for development, and we are considering how we might use that funding locally to achieve this goal. Perhaps the Minister might consider whether some of the levers, funds and opportunities that my hon. Friend the Member for Buckingham has proposed would sit better at a devolved, local level within one of the mechanisms created by the Bill, rather than in the Bill itself.
Dehenna Davison
It is a pleasure to speak to this amendment from my hon. Friend the Member for Buckingham. We have done some great work on it together, and I hope we can continue in that spirit. Members will know that the Government strongly encourage the use of brownfield land over greenfield, and in national policy there is an expectation that local planning policies and decisions will give substantial weight to the value of using suitable brownfield land to meet our communities’ housing needs and other identified needs.
My hon. Friend was right to highlight the cost differential that developers face. We are investing significant funding to support brownfield development, including in some of the schemes that he has mentioned. I will rattle through them one more time for the Committee’s benefit. There is the £550 million brownfield housing fund and the £180 million brownfield land release fund 2, which builds on the success of the £75 million first brownfield land release fund. In addition, later this year we aim to launch the £1.5 billion brownfield, infrastructure and land fund, which will unlock sites around the country.
We are particularly sympathetic to this cause, which is why we are setting out a range of new measures and powers in the Bill to support brownfield development. My hon. Friend the Member for Mansfield is right to talk about local empowerment—something that I know he is a real champion of in his other role, at local government level. We are keen that the Bill in its entirety will empower local leaders to regenerate towns and cities through a range of provisions, including new locally led and locally accountable development corporations, which my hon. Friend mentioned, and support for land assembly and regeneration through enhanced compulsory purchase powers.
My hon. Friend the Member for Buckingham mentioned the infrastructure levy introduced in the Bill. It provides a framework in which, where increases in land value are higher—as is often the case with greenfield development—higher rates can be set. This mechanism would allow differential charging rates to be set by local planning authorities for different types of development, so that more could be levied on greenfield land as compared with brownfield land to incentivise development on that brownfield land.
We will also continue to work on wider planning proposals that will give the public an opportunity to shape our future national planning policy, and in relation to which the Government have committed to consult the public.
On that basis—because we are already taking such strong steps to encourage brownfield development and have a commitment to review national policy—we do not feel that the new clause is necessary, so I kindly ask my hon. Friend to withdraw it today.
Greg Smith
I very much welcome the Minister’s commitments. She is absolutely right in outlining the various schemes to support brownfield development. I guess the thought I will leave her with is the reflection that, rightly, there is a lot of carrot in those schemes; where I do not think we have quite enough at the moment is the stick to dissuade people from greenfield development. We need to ensure a proper balance of incentivising, through grant funding or whatever it might be, development on the brownfield sites, and also something to actively dissuade developers from looking at the greenfield sites. If we can carry that conversation on through to Report, I am content to withdraw new clause 23 at this time. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 24
Report on measures to improve the efficiency of the housing market
“(1) The Secretary of State must, within 60 days of the day on which this Act is passed, establish a review of the merits of measures to improve the efficiency of the housing market.
(2) The review must, in particular, consider the impact of—
(a) a stamp duty exemption to encourage elderly homeowners to downsize,
(b) an additional stamp duty surcharge on purchases by person not resident in the UK,
(c) a stamp duty surcharge on second home purchases,
(d) a reduction in the highest rates of stamp duty, and
(e) measures to promote an active market in long-term fixed rate mortgages to encourage lending to first time buyers.
(3) The Secretary of State must lay a report on the findings of this review before Parliament no later than one year after this Act comes into force.”—(Greg Smith.)
This new clause would require the Secretary of State to review the merits of measures to improve the efficiency of the housing market and to report the findings to Parliament.
Brought up, and read the First time.
Greg Smith
I beg to move, That the clause be read a Second time.
This is one where we genuinely have to tread extraordinarily carefully. I fully understand the scope for new clause 24 to be misinterpreted, shall we say, as trying to demand that people move, leave larger homes, or whatever it might be. There is no intention whatever—let me place this on the record—to compel or demand that someone living in a large house move out of it, or do any such thing. But I think we have to acknowledge that there is some failure in the housing market that is leading to the demand for new homes to be built, whereas perhaps a pensioner couple whose children have flown the nest, who find themselves—just the two of them—living in a five-bedroom house somewhere and who actively want to move are finding themselves trapped.
That is because of higher rates of stamp duty, certainly in parts of the south-east, where five-bedroom houses can very easily be north of £1 million, and in London, where they can be north of £3 million, £4 million or £5 million. People find themselves trapped in a situation in which the tax system just works against their being able to downsize as they wish to. That then of course has a concertina effect through the entire housing market. The family who are able to buy the larger house cannot, because there is not the supply. And that goes all the way down to the first homes: the discount market homes, the part-buy, part-rent homes or, indeed, the social rent homes. They are just not available.
The new clause does not call for anything in particular. It essentially creates a duty on the Government to review those mechanisms that are causing market failure in the housing market and that are trapping people, particularly through the stamp duty system—I am explicitly referring to the higher end of the stamp duty rates—and preventing them from doing what they wish to do with their homes. I repeat from the start that this is not about saying to people who want to stay in larger houses that they must move out—it is absolutely their right and choice to stay if they wish—but about fixing the system so that those who do wish to go up or down the housing ladder can do so without penalty. That might reduce the need to build quite as much as we are in the United Kingdom.
Lee Rowley
I am grateful to my hon. Friend for tabling the new clause. I absolutely accept his points about discussing this matter sensitively and accepting the real challenges in parts of the housing market. I understand and acknowledge that challenge, which the Department grapples with daily and as much as the state can. It is vital to have an effective housing market and for people to have good-quality properties and roofs over their heads, irrespective of tenure. Most fundamentally, we Conservatives know that expanding home ownership is vital. Although it is starting to increase again as a proportion, a gap remains between the number of people who want to buy a house and the number of people who can.
We all have our own individual stories. In North East Derbyshire, the way that properties are distributed—that sounds like a very technical word for real people’s lives—does not necessarily align in all instances with people’s needs. In one town in my constituency, a significant amount of which was built in the ’60s, ’70s and ’80s, lots of people who purchased properties to bring up their families are struggling to find houses—bungalows in particular—to downsize to, now that their families have flown the nest. Many Members will have similar stories.
At the same time, my hon. Friend has considered the matter closely and will acknowledge that there is a question about whether we need to legislate in this area. I humbly suggest that we do not, but I recognise the intent behind the amendment. Over the course of my time in post, I will continue to do what I can to answer some of those questions, as will the Department, so I ask him to consider withdrawing the amendment.
Greg Smith
I appreciate my hon. Friend’s comments. To clarify, yes, we would be putting a clause into legislation, but we would not be legislating for the outcome. We would be legislating for a duty on his Department to publish a report—to properly kick the tyres, if I may put it like that—on the housing market failures that are leading to the demand for so many new housing units to be built.
Of course, I fully accept that tackling stamp duty is not within the competence of the Department for Levelling Up, Housing and Communities. Altering the rates to get the market moving more quickly would have to be pitched to His Majesty’s Treasury. With that in mind, I am content to withdraw the new clause, but I urge my hon. Friends the Ministers to consider this point as the Bill and the Department’s work on housing and planning move forward. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 25
Report on promoting development in already developed areas
“(1) The Secretary of State must prepare a report on possible measures to promote development in areas that are already developed.
(2) The report must consider measures to promote—
(a) the purchasing by housing associations of properties that—
(i) have been unoccupied for an extended period (with reference to the vacancy condition in section 152), or
(ii) are currently unfit for human habitation (with reference to requirements of the Homes (Fitness for Human Habitation) Act 2018;
(b) novel means of providing increased affordable housing that is sustainable and accords with surrounding areas.
(3) The report must be laid before Parliament before the end of the period of six months beginning on the day on which this Act is passed.”—(Greg Smith.)
Brought up, and read the First time.
The Chair
With this it will be convenient to discuss new clause 26—Review of compulsory purchase powers—
“(1) The Secretary of State must undertake a review of whether the powers of compulsory purchase available to—
(a) local authorities, and
(b) the Secretary of State
are adequate to meet the objectives of this Act.
(2) In undertaking the review the Secretary of State must, in particular, consider—
(a) whether existing statutory time limits for compulsory purchase action are appropriate,
(b) other means of accelerating compulsory purchase action with particular reference to properties to which subsection (3) applies, and
(c) the adequacy of compulsory purchase powers in relation to properties to which subsection (3) applies.
(3) This subsection applies to—
(a) properties that have been unoccupied for a prolonged period (with reference to the vacancy condition in section 152), and
(b) buildings of local public importance such as hotels and high street properties.”
This new clause would require the Government to review powers of compulsory purchase and whether they are adequate to meet its levelling-up and regeneration objectives.
Greg Smith
New clauses 25 and 26 are quite important to free up for good use properties that may have fallen into disrepair or been unoccupied for a long time. I am sure that we could all name properties in our constituencies that we have canvassed for five elections running but nobody is ever behind the door. We put leaflets through the door, but the post reaches almost as high as the letterbox itself. Those are homes that I hope all Members, of whatever political persuasion, would acknowledge really should not be sat empty, but should have a family or whoever living in them. Of course, the wider public good is also served by not allowing properties to fall into disrepair and become eyesores or perhaps hotspots for disorderly behaviour, as people seek to take them over illegally.
New clause 25 does not contain specific legislative measures to deliver the outcomes we are seeking, but it creates a duty on DLUHC to report on how better to ensure that empty properties that have fallen into disrepair and are perhaps causing other public health hazards can be more easily brought back into the housing supply chain for social rent, for part rent, part buy, for discount market housing, or for whatever it might be.
New clause 26 is about ensuring that the compulsory purchase powers available to local authorities are suitable, if I may put it in those terms, to enable them not just to get those properties back into productive use and put a roof over human beings’ heads, but to ensure that local authorities that often bang their heads against a brick wall when it comes to certain compulsory purchase powers are freed up to make the right decisions for the communities they represent.
Dehenna Davison
I completely agree with the sentiment behind these new clauses. We can probably all think of examples in our constituencies of the sorts of vacant properties that my hon. Friend mentioned. Indeed, I was out in Eldon Lane with neighbourhood wardens, local police and local councillors—I think last week or the week before—looking at streets where most of the houses sit empty and can become hotbeds for antisocial behaviour and petty crime, so this is certainly something we want to tackle.
I agree with the benefits of promoting development in areas that are already developed, but I do not think that new clause 25 is necessary. We have already debated the Government’s national planning policy framework, which promotes the development of previously developed land and makes it clear that local plans should also include sufficient provision for affordable housing. I share the interest in novel ways of increasing the supply of affordable housing. The Government’s affordable housing guarantee scheme is a good example of this kind of innovation. The same is true of the proposal in the Bill to secure affordable housing contributions in future through a new streamlined mandatory and locally determined infrastructure levy.
My hon. Friend also made the case for housing associations to purchase homes that are empty or not currently fit for human habitation. I agree that this can play a valuable role in expanding the availability of affordable housing and improving the overall quality of our housing stock. Local authorities and other social housing providers can access funding to acquire empty homes on the market and bring them back into use through programmes such as the affordable homes programme and the rough sleeping accommodation programme.
Briefly, on new clause 26, I strongly share my hon. Friend’s desire to ensure that the compulsory purchase system is fit for purpose and can play its part in delivering our levelling-up agenda. My officials have worked incredibly closely with key stakeholders to review the current system and develop the package of measures in the Bill. We believe that these measures, supplemented by improved and updated guidance, will together ensure that local authorities have the powers they need to bring forward the regeneration of their high streets and town centres, and to deliver much needed housing and infrastructure. We also believe they will deliver a faster and more efficient compulsory purchase system and make compensation simpler and clearer. I have also asked the Law Commission to undertake a review and consolidation of the existing legislation on compulsory purchase and land compensation, which will begin shortly.
On that basis, I hope that my hon. Friend will agree that a statutory review is not necessary and ask him to withdraw the new clause.
Greg Smith
On the back of those commitments, I am happy to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 27
Deliberate damage to trees linked to development
“(1) Section 210 of the Town and Country Planning Act 1990 (penalties for non-compliance with tree preservation order) is amended as follows.
(2) After subsection (4) insert—
‘(4AA) Subsection (4AB) applies if—
(a) the court is considering for the purposes of sentencing the seriousness of an offence under this section, and
(b) the offence was committed for purposes connected to planning or development.
(4AB) The court—
(a) must treat the fact mentioned in subsection (1)(b) as an aggravating factor (that is to say, a factor that increases the seriousness of the offence), and
(b) must state in open court that the offence is so aggravated.’”—(Greg Smith.)
This new clause would make damage to trees or woodland in contravention of a tree preservation order an aggravated offence if it was committed for purposes connected to development or planning.
Brought up, and read the First time.
Greg Smith
I beg to move, That the clause be read a Second time.
This new clause goes to the heart of an issue very close to my constituents, who have seen a great number of trees damaged—largely by the Government’s HS2 project, I have to say. It happens far too frequently in rural environments, but it is equally applicable to urban ones, where trees that are unacceptably damaged, often with preservation orders on them, are often the only green for some distance around. Very straightforwardly, this new clause in my name and the name of my right hon. Friend the Member for Chipping Barnet seeks to put in place measures that will clamp down harder on those who deliberately damage trees during development.
Lee Rowley
I am grateful to my hon. Friend for moving this new clause, and I am sympathetic to the issue that he and other Members have raised. The protection of trees and the environment is hugely important, and it is frustrating when others do not support that cause. The information I have is that the law already provides a substantial amount of leeway to seek appropriate financial redress from people who have been accused of damaging trees, should the contravention have been through the local council via a tree preservation order.
With that in mind—I may be misinterpreting my hon. Friend—I am keen to understand from my hon. Friend or his colleagues why they believe there is still a need to change the law. There is obviously a bit of a difference in views at the moment, so we should try to bottom that out. If we can find an issue to debate, I would be very happy to do so, but for the purpose of today, I ask my hon. Friend to withdraw the amendment.
Greg Smith
I appreciate what the Minister says, but I think there is still a gap in the law. It is not as strong as it possibly could be to clamp down on deliberate—we must underline the word deliberate—damage to trees as part of development. I am mindful of the Committee’s time, so I do not think going through the detail now would please many hon. Members. I am happy to meet the Minister to go through the detail, along with other colleagues whose names are on this new clause, in the hope of finding a satisfactory result for later stages of the Bill. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 28
Local planning authorities to be allowed to meet virtually
“(1) This section applies to any meeting of a planning committee of a local authority in England.
(2) A reference in any enactment to a meeting local authority is not limited to a meeting of persons all of whom, or any of whom, are present in the same place and any reference to a ‘place’ where a meeting is held, or to be held, includes reference to more than one place including electronic, digital or virtual locations such as internet locations, web addresses or conference call telephone numbers.
(3) For the purposes of any such enactment, a member of a local authority (a ‘member in remote attendance’) attends the meeting at any time if all of the conditions in subsection (4) are satisfied.
(4) Those conditions are that the member in remote attendance is able at that time—
(a) to hear, and where practicable see, and be so heard and, where practicable, be seen by, the other members in attendance,
(b) to hear, and where practicable see, and be so heard and, where practicable, be seen by, any members of the public entitled to attend the meeting in order to exercise a right to speak at the meeting, and
(c) to be so heard and, where practicable, be seen by any other members of the public attending the meeting.
(5) In this section any reference to a member, or a member of the public, attending a meeting includes that person attending by remote access.
(6) The provision made in this section applies notwithstanding any prohibition or other restriction contained in the standing orders or any other rules of the authority governing the meeting and any such prohibition or restriction has no effect.
(7) A local authority may make other standing orders and any other rules of the authority governing the meeting about remote attendance at meetings of that authority, which may include provision for—
(a) voting;
(b) member and public access to documents; and
(c) remote access of public and press to a local authority meeting to enable them to attend or participate in that meeting by electronic means, including by telephone conference, video conference, live webcasts, and live interactive streaming.
(8) In this section, ‘planning committee’ means any committee or sub-committee to which a local authority has arranged for the discharge of planning functions under section 101 of the Local Government Act 1972.”—(Greg Smith.)
This new clause would enable planning committees to meet virtually. It is based on the Local Authorities and Police and Crime Panels (Coronavirus) (Flexibility of Local Authority and Police and Crime Panel Meetings) (England and Wales) Regulations 2020, made under s78 of the Coronavirus Act 2020.
Brought up, and read the First time.
The Chair
With this it will be convenient to discuss new clause 69—Local authority planning committee meeting—
“(1) The Secretary of State must by regulations make provision relating to—
(a) requirements to hold local authority planning committee meetings;
(b) the times at or by which, periods within which, or frequency with which, local authority planning committee meetings are to be held;
(c) the places at which local authority planning committee meetings are to be held;
(d) the manner in which persons may attend, speak at, vote in, or otherwise participate in, local authority planning committee meetings;
(e) public admission and access to local authority planning committee meetings;
(f) the places at which, and manner in which, documents relating to local authority planning committee meetings are to be open to inspection by, or otherwise available to, members of the public.
(2) The provision which must be made by virtue of subsection (1)(d) includes in particular provision for persons to attend, speak at, vote in, or otherwise participate in, local authority planning committee meetings without all of the persons, or without any of the persons, being together in the same place.”
This new clause would allow local authorities to hold planning committee meetings and reach planning decisions virtually or in a hybrid form.
Greg Smith
With this clause I have a very simple proposition, although I state from the outset that I absolutely hate virtual meetings. We all tolerated them throughout the pandemic, but I believe that as humans we are inherently social and meeting together is a far better way of doing things. However, I have spoken to many members of local authorities in my own constituency and in other parts of the country—as well as many town and parish councils, although they are not planning authorities—that find it extraordinarily difficult to get a quorum, or to get together in a single place all voices who want to be heard. That is especially the case in rural communities. Somebody living in the village of Dadford in my constituency would be looking at a 50-minute drive to a planning meeting in Aylesbury, and I am sure that driving times in the constituency of the hon. Member for Westmorland and Lonsdale are considerably longer than that.
Matthew Pennycook
It is a pleasure to follow the hon. Member for Buckingham. I think that hate might be too strong a word, but I certainly share his preference for in-person over virtual meetings, where possible. However, there are circumstances where virtual meetings have become necessary or useful, and that is what these new clauses both seek to address for the planning system.
While there are significant points of disagreement between the Opposition and Government Benches on the question of whether the Bill, in the round, will enhance or discourage community engagement in the planning process, there none the less exists a broad consensus that that objective is a worthy one. Whatever one believes the causes to be, there is general agreement that it is a problem that, as things stand, less than 1% of people engage with the local plan-making process, only around 3% engage with individual planning applications, and—of particular concern to the Opposition—particular segments of society typically have no voice whatsoever on planning decisions that will have a huge impact on their communities and their lives.
We therefore think that reducing barriers to engagement with the planning process would be beneficial for a variety of reasons. Chief among them—this is a point that I return to again and again—is that, in some ways, we think it would address the extremely low levels of trust and confidence that the public has in the planning system as a whole.
New clause 69, which, in many ways, is similar to new clause 28 in the name of the right hon. Member for Chipping Barnet, seeks to increase public engagement in the planning process by allowing local authorities to hold planning committee meetings virtually or in a hybrid form. That proposal is obviously not novel. We know from the experience of local authorities during the pandemic that allowing for remote participation both worked effectively and had a number of benefits, including—as the hon. Member for Buckingham said—reduced travel times for councillors and the public, and greater transparency and openness.
What attracts us to this proposal is the fact that virtual meetings facilitated an increase—in many cases a dramatic one—of resident engagement in decisions, in part because remote participation made it far easier for a broader range of people, including those with disabilities, caring responsibilities and work commitments, to take part in meetings for the first time. New clause 69 simply seeks to ensure that those benefits, particularly increased public participation in planning decisions, can be enjoyed on a permanent basis.
However, it is important to say that it does not seek to do so prescriptively. While the language used is drawn from section 78 of the Coronavirus Act 2020, we would expect any regulations to follow to provide for local authorities to determine for themselves whether any given meeting is virtual or hybrid. That is on the basis that councils and councillors are best placed to decide how and when to use different meeting formats in particular circumstances. We feel strongly that it is important that they are given the freedom to do so.
There is widespread support for putting remote meeting arrangements on a permanent footing, including from the Local Government Association, Lawyers in Local Government, and the Association of Democratic Services Officers. As the Minister may know, the planning inspectorate already enjoys the freedom to offer virtual or hybrid meetings, at the discretion of a lead inspector, relating to hearings and inquiries.
To conclude, as every hon. Member knows, online meetings are now commonplace not just for work but for many other forms of social interaction. The public rightly expect that kind of accessibility for council meetings as well, and we are convinced that the freedom for local authorities to hold virtual or hybrid meetings will be welcomed by all our constituents.
We hope that allowing planning committees the option of meeting virtually, or permitting virtual participation in physical meetings, is an uncontroversial and common-sense measure. I hope that the Government are minded either to accept the new clause or, if they feel that it is defective in some way, to table one of their own that achieves the same aim.
Ben Bradley
I support the principles of the new clauses, although I will suggest a way in which they might need to be amended so as to apply not just to planning meetings, but to all council meetings. Throughout the pandemic, councils were allowed—and therefore invested in the technology—to permit members of the public to engage in council meetings through those mechanisms, and the public did. As the hon. Member for Greenwich and Woolwich said, engagement in many of those conversations was much higher during the pandemic. People were able to engage with them more easily from their own homes, and they probably had “Coronation Street” on in the background. The more something allows people to take part in a much easier way, the better.
As officers and councillors increasingly work in a more hybrid way, we are encouraging our staff in Nottinghamshire to work from home more, not least because of the practicalities—staff expect that these days. Financially, we do not want, and cannot afford, to run as many buildings as we currently have. Fewer people are in the office. Every time we have a face-to-face meeting that does not need to be face to face, that requires people to trek across the county. It requires councillors to do a three-hour round trip, sometimes for a 20-minute meeting. It is a waste of resources.
Through the pandemic, we also found that we saved thousands of tonnes of carbon—never mind the travel expenses—by not trekking around the county for meetings. I struggle to get opposition councillors, never mind members of the public, to attend some of our governance and ethics meetings. Accessibility is not an issue in that sense.
If there is to be a change to the new clauses, I ask Ministers to make them broader, to include all council meetings. Our full council meeting will always be an in-person public meeting; it is the exciting, set-piece event at the heart of our council calendar. However, many other meetings need not be. Giving local government that flexibility would be very welcome.
There has been a process to review this issue. There was a consultation a year or so ago, I think, and local government was asked to submit views. I can confidently imagine that the broad consensus was, “Give us flexibility, please, to make those decisions locally.” We have done it before, and we can very easily do it again. When Ministers consider the new clauses behind the scenes, I ask that they make them broader still and give us the scope to make those decisions locally.
Tim Farron
The two new clauses are about trusting local communities. We are not saying that every meeting must be held virtually, but that local authorities—in this case, planning authorities—should have the power to do so, and for good reason. My preference is for in-person meetings, but for the reasons that have been set out, especially by the hon. Member for Buckingham, local authorities should have that power.
Every part of my patch is parish. There are 67 parishes, and some of them are bigger than most Members’ constituencies and have not very many people living in them. To get from one end of the Lakes parish to the other, people have to pass three or four lakes. We should consider the age profile of some of the members of the parish councils and the distances involved. I said earlier that it rarely rains in the lakes, but occasionally it might. It certainly gets dark at certain times of the year. On a wet November night, holding a meeting on screen rather than physically is probably safer and better for everybody. Let us trust communities to make those choices on the go, and not impose.
The pandemic has been a traumatic and formative experience for us as a culture, as a society and as representatives of the people. We have learned many lessons, and some of them we should carry on with. I was disheartened and disappointed that some members of the Government seemed to be almost determined, as a point of principle, to close down any virtual operation of democracy during the pandemic—never mind at the end of it. It is encouraging to hear a cross-party outbreak of common sense today. It would be great if the Government listened.
Dehenna Davison
As a millennial Minister who is used to swiping and not to turning pages, Members might expect me to say that I prefer virtual meetings, but actually I do not. In-person meetings and the social element are important, yet we saw the value of virtual meetings during the pandemic, at the time when we needed them most. Hon. Members will remember the powers granted through the Coronavirus Act 2020, which allowed local authorities flexibility on remote and hybrid meetings, in certain circumstances. They will also know that those regulations expired back in May 2021. Since that date, all council meetings have had to be in person. The new clauses lean into the terms of those previous provisions and seek to replicate them on a permanent basis, but only for planning committees. I heard the points made by my hon. Friend the Member for Mansfield.
Looking beyond the circumstances of the pandemic, the Government considered that there may be benefits to permanent provisions for remote meetings, and that local councils may be keen to have the flexibility to use that provision as they see fit. I have been lobbied by a lot of my local parish councillors on the benefits that remote meetings can bring.
As my hon. Friend the Member for Mansfield highlighted, the Government conducted call for evidence last year to test the views of those who had participated in and experienced councils’ remote meetings to inform our decision on this matter. I thank the shadow Minister, the hon. Member for Greenwich and Woolwich, and the hon. Member for Westmorland and Lonsdale for their points on trust in local governance and local planning, which we all agree is paramount. Increasing participation is only ever a good thing.
The Department has considered the responses to the call for evidence and we have been weighing the benefits, which hon. Members have highlighted, against views that physical attendance remains important to deliver good governance and democratic accountability. I take on board the point made by my hon. Friend the Member for Mansfield about the investment in the technology that a lot of local authorities had made, which must also be taken into account.
I genuinely thank my hon. Friends for tabling the new clause, but we need to first consider the call for evidence. We will issue our response, which will set out the Government’s intentions. I ask for a tiny bit more patience and for the new clause to be withdrawn.
Greg Smith
The self-styled millennial Minister makes the commitment. Asking for slightly more time seems reasonable to me. However, if we are to be true to localism, I would double-underline and highlight the need to ensure that local people are able to participate in proceedings. Just as we can still have a witness virtually at a Select Committee in this place, councils should have the discretion to use virtual proceedings, to maximise participation locally. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 29
Local authorities to be able to raise planning fees to cover costs including planners
“(1) Section 303 of the Town and Country Planning Act 1990 (fees for planning applications etc.) is amended as follows.
(2) After subsection (5) insert—
‘(5A) Regulations made by the Secretary of State under this section may provide for local planning authorities to vary fees or charges under this section payable to the local planning authority to cover the reasonable costs of their exercise of planning functions.
(5B) In subsection (5A), “reasonable costs” includes the employment of qualified planners.’”—(Greg Smith.)
This new clause would enable the Government to allow local planning authorities to vary planning fees and charges to cover their costs relating to planning, which could include the employment of qualified planners.
Brought up, and read the First time.
Greg Smith
I beg to move, That the clause be read a Second time.
This new clause is pertinent to my local authority in Buckinghamshire, and I am sure that many local authorities up and down the land struggle with it. It is about the ability to vary fees and charges for planning so that local authorities can provide a good service to their residents.
My local authority, Buckinghamshire, borders London and, therefore, there is always a difficulty in recruiting, not just planning officers, but social workers or teachers or nurses, or whatever the public service role might be. When planning officers who are looking for work see jobs going in the London boroughs of Hillingdon or Harrow or, indeed, any of the London boroughs, they prefer to take the job with London weighting in those boroughs than apply to Buckinghamshire Council. That leaves Buckinghamshire in a position where it finds recruitment of planning officers very hard.
If local authorities had the ability to vary fees and charges so that they could pay a better rate for qualified planners and planning officers to provide all residents with an excellent service, we could get over some of the practical difficulties that stifle recruitment and that would ensure councils would be in a position where they could, if they wanted to, respond to all planning inquiries within however many days or hear all applications in good time. To do that, they need the ability to have a geographic variance to meet the costs of attracting the very best staff to and wanting to work in that place, rather than in a neighbouring area where there is a job that can pay more.
Lee Rowley
I thank my hon. Friend the Member for Buckingham for tabling the new clause.
I absolutely accept the validity of this discussion; it is an important one, and I am relatively sympathetic to the point that is being made. It is appropriate that we think through the balance between localism and centralism in this area, and my own personal instincts are that localism should take priority and precedence. So, if he is willing to withdraw this new clause, I am very happy to talk about this matter in more detail.
As I know my hon. Friend will know, we have already committed to increasing planning fees, as part of an earlier discussion. However, I am happy to talk about what he perceives as the need in this area over and above that, particularly given his own local circumstances.
Greg Smith
I very much welcome the Minister’s comments; I fully accept that planning fees are allowed to go up and I look forward to having a discussion with him about how some geographical areas, particularly those areas that border London and that compete with London weighting, need to have greater flexibility.
In the meantime, I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 30
Housing powers of the Mayor of London
“(1) Article 7 of the Town and Country Planning (Mayor of London) Order 2008 (direction that the Mayor is to be the local planning authority) is hereby revoked.
(2) Section 333D of the Great London Authority Act 1999 (duties of the Authority and local authorities) is amended as follows.
(3) At the end of subsection (2) (general conformity with the London housing strategy), insert—
‘, but any housebuilding target in the London housing strategy is advisory not mandatory and should not be taken into account in determining planning applications.’”— (Greg Smith.)
This new clause would remove the Mayor of London’s power to direct a London borough that the Mayor will be the local planning authority for a development, and clarify that any housebuilding target in the Mayor’s housing strategy is advisory only.
Brought up, and read the First time.
Greg Smith
I beg to move, That the clause be read a Second time.
We come to the end of this marathon run of new clauses. New clause 30 is one that could be a little bit prickly to navigate.
Without wanting to get into a debate about personalities who occupy the office of Mayor of London, the new clause seeks to test where the principle of localism actually sits, because across the London boroughs there are locally and democratically elected councils or directly elected mayors, and across the whole of the capital there is the Mayor of London. The councils and directly elected mayors, and the Mayor of London, have planning powers, which is an anomaly that has been thrown up and that causes political tension, when there is a Labour Mayor and a Conservative borough, or indeed when there is a Conservative Mayor and a Labour or Lib Dem borough. That tension is real; it exists.
My instinct is always that the most local area should be the one that makes the decision rather than the regional area or a pan-regional area. I accept that that is an ideological position of mine; it is how I believe decisions are best made. However, there is clearly a tension. I have talked to colleagues, such as my right hon. Friend the Member for Chipping Barnet—this new clause has also been tabled in her name—and my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith), who has been very engaged in this debate as well, so I know that that tension exists.
It might not be my preference, but it might be the case that the most appropriate decision-making level in London is the regional level, which is the Mayor of London. I do not believe that it is, but that would be a legitimate answer. Alternatively, is it the London boroughs that have primacy when it comes to planning? If we are true to the principle of subsidiarity, it would be the London boroughs, but at the moment that tension exists. However, if we were to make the Mayor’s powers in relation to the boroughs advisory as opposed to compulsory, we would take that tension away.
I offer the new clause to the Committee as one that identifies a very tightly defined geographical problem that affects many Members’ constituencies and causes a lot of community upset, where a London borough’s planning authority is essentially over-ruled by a regional structure.
Lee Rowley
I thank my hon. Friend the Member for Buckingham for tabling the new clause. I will resist the opportunity to defend the current incumbent Mayor of London, as I am sure he would expect, although I know other members of Committee would disagree with me.
A number of us in this room share experience of local government in London; at least three of us here—I apologise if I have missed anyone—served simultaneously on different councils in London. I served on Westminster council for eight years, until 2014. Even when there was alignment between regional and local tiers in terms of party, I recall a number of disagreements about individual applications and the general principle of where the relevant powers should sit. We will probably not resolve that philosophical debate today, other than to say that I acknowledge the concerns of my right hon. and hon. Friends who have put their name to the new clause.
It is particularly important to acknowledge the difference between inner and outer London, and the difficulties of making sure that policies can apply to both areas equally. I think we should tread extremely carefully when considering whether to amend the strategic powers of the Mayor, even if I happen to disagree with much of what the current incumbent does. Although my hon. Friend for Buckingham has made known his strength of feeling about the matter, and that of other colleagues, I ask him to withdraw the new clause.
Greg Smith
I welcome the Minister’s comments, and as I acknowledged, it is a difficult issue to navigate. It almost reopens some of the devolution questions. It is an anomaly that many London colleagues, certainly on the Conservative Benches, feel and I welcome the Minister’s commitment to work with them and me. Like him, I was a London borough councillor just a little way up the river from him for 12 years, some moons ago, and felt the same pressures. If he is willing to work with London colleagues to find a satisfactory way through this, I am content to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 34
Local government capital investments: economic appraisal
“(1) This section applies to local government capital investments of a value of £2 million or more.
(2) Before making an investment to which this section applies, a local authority must—
(a) commission an economic appraisal of the investment, and
(b) publish the findings of that appraisal.”—(Rachael Maskell.)
This new clause would require local authorities to commission, and publish the findings of any capital investment of the value of £2 million or more.
Brought up, and read the First time.
Rachael Maskell
I beg to move, That the clause be read a Second time.
It is a pleasure to move the new clause and to give the hon. Member for Buckingham some respite. The new clause relates to fiscal responsibility in local government. Without proper viability being sought, local authorities can pay millions of pounds on projects and never reap the return. That is why the new clause relates to capital investments and economic appraisals, which should be undertaken and understood, but without a Green Book-style appraisal, local authorities can end up paying and developers and landowners gaining, with ultimately no reward and benefit to the local community. The new clause is designed to ensure that the finances on any project are transparent and for the benefit of local people. It would ensure that there is gain for all and not ultimate loss, not least given that we are talking about the use of public resources. That is why the new clause is important.
The case study to which I want to refer particularly is that of the York Central site. The cost of bringing that site forward is now believed to be £200 million of public funding. As that project moves forward, more and more is being demanded from public sources to fund it, and yet the local authority may never see a return on that investment. City of York’s infrastructure investment was planned to be around £35 million, but it has now been given an estimated debt cost of £57 million based on April interest rates, which will clearly be significantly higher now.
The Department for Levelling Up, Housing and Communities has also put in £77 million and it is believed that more than £50 million will have to come through the Mayor’s budget once it is approved and in place—we are expecting that to be in 2024. In a briefing, councillors were told that the council would need to put in £85 million and debt costs to fill the gap, but we could now be talking about nearer £100 million rather than the £35 million once rejected. As a result, it is necessary to weigh up the viability of the site not for the developers, as set out, but for the local authority. It is that check that is not required for such a project today, but it is really important, not least because local authorities simply do not have the necessary margins and, as a result, have to cut back on vital services to fund such capital projects.
My amendment therefore calls for prudence. On sites where any capital investment over the value of £2 million is made, there must be an economic appraisal commissioned and then published assessing the financial viability of the site to the authority. York Central has been developed for housing, so it will not reap the opportunities that a larger business owner could bring in nor those to do with council tax, as most of the properties being developed will be for investment, not for local residents to live in. They will either be empty units, leading to a cost to our city, or will be turned into Airbnbs, a matter that I will turn to later. Of course, Airbnb falls under the thresholds of flipping the property, not paying council tax and not paying business rates either, so the local authority loses millions of pounds as Airbnbs dodge the system.
At a time of significant austerity in local government, it is crucial that more scrutiny is given to the costs it has to expend on sites. My amendment simply calls for proper governance over finances and, at a time when the whole nation is looking at how Governments at all levels are more prudent with the spending of their money, it is right to bring forward such a measure to ensure that public money is spent in a way that will see its return and will be for the benefit of the people, not the developers and landowners who ultimately gain from such development.
Dehenna Davison
I am grateful to the hon. Member for York Central, who always talks incredibly passionately about her constituency. I thank her for bringing her experience of the capital project she mentioned to the Committee. As a Conservative, my ideology tells me that ultimately we always need to get best value for taxpayers’ money.
The Government recognise the importance of local capital investment for economic growth, improved public services and meeting our priorities, such as on housing delivery. That is why we need a robust system that supports the benefits of local decision making and allows sensible investment while safeguarding taxpayer’s money and protecting the local government finance system. Unfortunately, in recent years a small minority of local authorities have taken excessive risks with taxpayers’ money; they have become too indebted or have made investments that have ultimately proved too risky. That is why we need to ensure that the system is fit for purpose.
The changes made through clause 71 provide a flexible range of interventions for the Government to investigate where capital practices may have placed financial sustainability at risk and to take steps to remediate issues if necessary. We think that that is sufficient to address risk.
We have recently taken a number of steps to improve the transparency of local authority capital investment and borrowing. Last year we completed our data survey, which is designed to extract new data from local government and fill our identified information gaps. As of February 2022, we amended our regular statistical returns to obtain more detailed data on local authority investment activity. That will provide the Government with the clarity they need on the performance of investment assets as well as the location and risk management of investment properties.
Rachael Maskell
I am grateful for the Minister’s contribution. However, will she acknowledge that even if the viability of a site stands up, some of the investors in it may not? What ultimately happens is that local authorities become the backstop for financing and have to fill the gaps in order for those sites to be brought forward. As a result, the benefit goes to the developer and the risk sits with local authorities.
Dehenna Davison
I have certainly heard what the hon. Member has said, and we all have examples from our own constituencies and authorities. The current legislation and statutory codes allow local government to appraise risks as they stand. Alongside that, the monitoring and provisions that we are seeking through clause 71 will provide central Government with assurance. We think that the new clause is unnecessary, and I ask the hon. Member to withdraw it.
Rachael Maskell
I am grateful to the Minister for giving way again. Reflecting on the example that I gave, will she say how her Department would scrutinise the funding of sites such as the one in York Central to assess the viability of the local authority’s having to make increased contributions? Has the Department done that?
Dehenna Davison
I will be happy to follow up with the hon. Member on that point in writing.
Rachael Maskell
I thank the Minister for her response, but I am not satisfied that what she says will be sufficient to ensure that there are safeguards on local public resourcing that is brought forward on a site, particularly one as important as the York Central site, where eye-watering sums of money are being spent. I will therefore read with care what she writes to me to see whether there are sufficient safeguards. If I am not satisfied, I will want to return to this issue at a further stage of the Bill, but for now I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 38
New use classes for second homes and holiday lets
“(1) Part 1 of Schedule 1 of the Town and Country Planning (Use Classes) Order 1987 (S.I. 1987/764) is amended as follows.
(2) In paragraph 3 (dwellinghouses)—
(a) for ‘whether or not as a sole or’ substitute ‘as a’, and
(b) after ‘residence’ insert ‘other than a use within Class 3B)’.
(3) After paragraph 3 insert—
‘3A Class C3A Second homes
Use, following a change of ownership, as a dwellinghouse as a secondary or supplementary residence by—
(a) a single person or by people to be regarded as forming a single household;
(b) not more than six residents living together as a single household where care is provided for residents; or
(c) not more than six residents living together as a single household where no care is provided to residents (other than a use within class C4).
Interpretation of Class C3A
For the purposes of Class C3A “single household” is to be construed in accordance with section 258 of the Housing Act 2004.
Class C3B Holiday rentals
Use, following a change of ownership, as a dwellinghouse as a holiday rental property.’”—(Tim Farron.)
This new clause would create new class uses for second homes and short-term holiday lets.
Brought up, and read the First time.
Question put, That the clause be read a Second time.
The Chair
With this it will be convenient to discuss new clause 68—Review of Permitted Development Rights—
“(1) The Secretary of State must establish a review of permitted development rights under Schedule 2 of the Town and Country Planning (General Permitted Development) (England) Order 2015 (as amended).
(2) The review should include an assessment of:
(a) the past effectiveness of permitted development rights in achieving housing targets;
(b) the quality of housing delivered under permitted development rights;
(c) the impacts of permitted development on heritage, conservation areas and setting;
(d) the estimated carbon impact of the use of permitted development rights since the expansion of permitted development to demolition;
(e) the relative cost to local planning authorities of processing permitted development compared to full planning consents;
(f) potential conflict between existing permitted development rights and the application of national development management policies;
(g) the impact of permitted development rights, or other policies in this Bill designed to deliver streamlined consent, on the efficacy of levelling-up missions.
(3) The Secretary of State must publish a report of the recommendations made by this review no later than twelve months after this Act comes into force.”
This new clause would commit the government to carrying out a comprehensive review of permitted development rights within 12 months of the Bill securing Royal Assent.
Rachael Maskell
I rise to move new clause 43 and to support new clause 68. They mirror one another and therefore emphasise the need for a review of permitted development rights, which are a major issue in planning.
New clause 43 calls for a change in the Town and Country Planning (General Permitted Development) (England) Order 2015. It would require a review to be published, within a year of the Bill becoming law, on the effectiveness of permitted development rights in achieving housing targets. Much planning permission is granted on the basis of balancing the economic viability of a site in favour of developers. Planning authorities may stipulate the framework around that, but it is not uncommon for developers to come back to authorities pleading that the site does not hold viability and seeking to change the tenure of units planned for it.
Furthermore, we have a housing crisis. The Government are right to want to fix it by setting targets for the number of units to be built, but if those units are unaffordable to a local population, or if they are sold as investment properties—as assets—and remain empty or are converted into short-term holiday lets, the housing demand is not addressed. Worse, property prices can heat up the market, resulting in a greater pool of people who are unable to access housing, which is making things far worse.
By allowing such a liberalisation of planning, not least for developers, the Government are creating a worsening situation. Rather than resolving the housing situation, they are pushing people out of their localities, as people cannot afford to either buy or rent. Now, with the economic crisis, they cannot get a mortgage either, but cash buyers can scoop up properties and then drive revenue through holiday lets. In York, we are seeing that in spades. York Central promises to be such a site of investment properties rather than homes, with the wrong housing in the wrong place heating up the market and exposing our city to even greater numbers of short-term holiday lets. This has to stop.
My new clause would enable a review, which would include an examination of the quality of housing delivered. I cannot tell hon. Members the scale of shoddy workmanship that we are witnessing. Developers hand their properties over to property management companies and then deny responsibility. Water ingress is common. Sinks are fitted just with silicone, and not properly plumbed in. Wiring is half done. Bin stores are turned into inaccessible bike shelters. The list of unresolved complaints is endless.
York is naturally concerned about its heritage and conservation sites, and we want to ensure that its archaeology is preserved, too. On the environment, we know that new developments help to solve the carbon crisis rather than add to it. If measures are not reviewed and taken seriously, we know that transport planning can be poor, as we are seeing on the York Central site. That will have an impact on the rest of the city. I have already mentioned the thorny issue of the cost to local authorities of the mess that is being created.
Reviewing permitted development rights, as the new clause seeks to do, is about addressing all the consequences, foreseen and unforeseen, of rushing planning through, not least at a time when planning departments across our communities are significantly under-resourced and under-powered. The new clause seeks a review, which is needed, and we want to see action following on from that. If the Government committed the resources and time needed to carry out a review of a such a significant issue, they could make such a difference to communities up and down the country. The review would ultimately be of real value to the Government, by ensuring that the planning system is working effectively for the purpose for which it is designed.
Matthew Pennycook
I rise to speak to new clause 68, in my name and those of my colleagues, and to speak in support of new clause 43. I congratulate my hon. Friend the Member for York Central on tabling new clause 43 and on her powerful remarks, not least about the contribution of the extension of permitted development rights to the affordability pressures in urban parts of the country such as hers.
It is a matter of public record that the Opposition have long-standing concerns about the detrimental impact of the liberalisation of permitted development rights on local communities. The Government have always justified the progressive liberalisation of those rights on the grounds that it removes unnecessary administrative impediments to development in the planning system. There is no doubt that the extension of PD rights since 2013 has boosted housing supply; estimates suggest that it has led to a net increase of around 100,000 dwellings. However, the increased supply secured as a result of deregulatory measures over recent years, and the significantly reduced control of rural and urban land that they entail, has come at the cost of a loss of affordable housing and infrastructure contributions, and an increase in poor-quality housing, with obvious implications for public health and wellbeing.
Evidence of the negative impact of the extension of permitted development for the conversion of office, commercial and industrial units to housing is now ubiquitous. A report published by the Ministry of Housing, Communities and Local Government in July 2020—at the same time, incidentally, that Ministers were setting out plans for a further extension of PD rights—found that, in comparison with schemes created through planning permission, permitted development schemes were far less likely to meet national space standards and far more likely to have reduced access to natural daylight and sunlight.
Members may well have come across some of the more well-publicised examples of poor-quality PD schemes. Those include the Wellstones site in Watford, which involved the conversion of a light industrial building into 15 flats, seven of which had no windows at all; 106 Shirley Road in Southampton, a former electric and gas fire shop, which was converted into six studio flats, each roughly the size of a single car parking space; and Terminus House in Harlow, a former office block converted into hundreds of homes, many with just one openable window, which has rightly been described as a “human warehouse”.
Lee Rowley
I thank Opposition Members for tabling the new clauses, and I understand why they have done so. In all processes, there will be challenges; there will be difficulties at the margins in how things work and where people try to push boundaries beyond where they are intended to be. I do not disagree that there will be examples around the country where PDRs have not been used in the right way, in the same way that there are problems with the existing planning system when people go through planning applications, or with enforcement when people have not done that.
There are problems in all systems, and I accept that the Government’s job is to try to minimise those problems while recognising that it is always a work in progress. I particularly accept the challenge that the hon. Member for York Central made about holiday lets and the like. I am happy to discuss that with her separately, if that would be helpful.
There is obviously a question about where we strike the balance between enabling processes to continue to happen in a way that is sped up, gives certainty and clarity, and brings out the “right answer” most of the time, and where additional consideration or time, or additional processes, are required. The latter all comes with cost, in terms of time and clarity, for those making applications. That balance is very difficult to strike, but we are trying to strike it by ensuring that the PDRs in the system, but also a significant proportion of applications that potentially require further consideration, go through the normal process.
The challenge that I have with the new clauses—I absolutely do not mean to caricature them—is that, in the way that they are written, they seek a review of every single element of PDRs. I know that the Opposition Front Benchers know that a significant amount of permitted development rights are relatively uncontroversial. The Opposition are effectively saying that, in order to look at problems that are understood and that need consideration and review—I am happy to talk to them about what we should do with those, if we are able to—we must also look at every single other PDR, including things such as how porches, chimneys, flues and microwave antennae are changed.
I am not sure that is the Opposition’s intention, so I gently ask them to consider withdrawing the new clauses on the basis that, while I am happy to continue the conversation, I think that their approach may be disproportionate to their intention.
Mrs Lewell-Buck
The Minister admitted that PDRs are not being used in the correct way. He feels that our new clauses seek a review of every element of PDR, but if he and the Government do not want to review every element, what elements would they review? He has already admitted that the system is not working properly, so will he offer an alternative?
Lee Rowley
For clarity, I said that no system is perfect. That is not necessarily a recognition that anything is systemically wrong, although I am happy to debate individual instances if Opposition Members believe that to be the case. We will never create a perfect system. I am sure that we all intend to make the processes better. There will be differences of view, both in the Committee and outside it, about where it is appropriate to draw lines in terms of the use and non-use of PDRs. That will be a discussion long after we have left this place. I am keen to hear from colleagues on both sides of the House about where they think PDRs are not working in the ways that we hope, recognising that no system is perfect but hoping that they are used correctly in most instances. I do not think, however, that it is proportionate to do a wholesale review of PDRs at this stage.
Mrs Lewell-Buck
I thank the Minister for being generous in giving way again. I do not think that he quite understood the point that I was making. He said that PDRs are not being used in the right way, so where do he and the Government feel that they need to be looked at? I am not getting any clarity.
Lee Rowley
I am happy to clarify. I did not say that PDRs were not being used in the right way; I said that no system—
Lee Rowley
I know that Hansard will demonstrate the context. I was saying that no system is perfect. I was not making any comment on individual PDRs, but I have said to colleagues on both sides of the Committee that I am happy to discuss individual areas where they have concerns, outside of a proposal for every single one of the 155-odd PDRs to be reviewed in detail within a timeframe that is not particularly proportionate. If there is a problem, let us talk about it in individual areas, but this approach is disproportionate. I hope that the Opposition will consider withdrawing the motion and having a separate discussion about specific instances that have been raised, and others that they are concerned about.
Rachael Maskell
I listened carefully to the debate, and I am grateful for all the contributions to it. The Minister will know that we are not putting forward a plan to tear up the whole PDR framework; we are simply calling for a review, as we believe is appropriate. After a scoping review, we would determine which points to drill down on, to ensure that we are looking at the parts of the system that are simply not working. That is the intention behind the new clause. Although it has a broader scope, it homes in on some of the challenges in the system. I therefore do not think that the proposal to put a scoping exercise in the legislation is unreasonable. I welcome the Minister’s offer of dialogue on these matters, which clearly are significantly impacting our communities. Dialogue will be really important. I will not press my new clause to a vote, but I will certainly take up that offer.
Matthew Pennycook
As I think the Minister will expect, I am naturally disappointed by his response. There are times when hiding behind the fact that there are trade-offs in balancing problems is appropriate; there are times when it is just a fig leaf, and not doing anything about a glaring problem. His own Department has produced evidence that it is not just a problem at the margins. I encourage him to go and see some of the sites being allowed on appeal because of national planning policy. It is not a problem at the margins; it is endemic, and intrinsic to the liberalisation of PD rights that has been allowed over the past nine years.
It is a straw man for the Minister to say, “We can’t do this, because it’s reviewing all PD rights.” Uncontroversial elements of PD can be dealt with very quickly; we are talking about the problematic aspects and the expansion of PD rights over the past nine years. It is causing a huge amount of human suffering, if nothing else. For that reason, not least to signal the Opposition’s intent to deal with this matter if and when we form the next Government, I will press new clause 68 to a Division when the time comes.
Rachael Maskell
I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
Ordered, That further consideration be now adjourned. —(Nigel Huddleston.)
National Security Bill (Fourteenth sitting)
Tuesday 18th October 2022
(1 year, 6 months ago)
Public Bill CommitteesRead Full debate National Security Act 2023 View all National Security Act 2023 Debates Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 18 October 2022 - (18 Oct 2022)
The Chair
I remind the Committee that with this we are discussing the following:
Government new clause 12—Offence of carrying out activities under an unregistered foreign activity arrangement.
Government new clause 13—Requirement to register activities of specified persons.
Maria Eagle (Garston and Halewood) (Lab)
As we adjourned this morning, I was expressing concern about the complexity of the two-tier scheme embodied in the new clauses. I was suggesting that it might be more effective to have one tier that applied to all countries and a broad range of covert activity, rather than this two-tier arrangement, which is more difficult to understand and which presents more barriers to the Government of the day, and to the Minister in particular, in designating those who ought to be covered by the secondary tier, which the Minister referred to as the enhanced tier. It might be more sensible to have a simpler but more extensive scheme that does not require lots of extra Government activity and inter-departmental negotiations between the Security Minister and other Ministers who are looking at relations with foreign countries and companies through a different lens. That was my basic point.
It is difficult to understand why, unlike comparable schemes in Australia and the US scheme, there are two tiers, and why the registration of harmful activity outside of political influencing—some of which is more serious—applies only where the foreign power has been designated by the Government. If it is not designated, or while the Minister is desperately trying to persuade other bits of Whitehall that it ought to be, such activity could go on unimpeded by these arrangements and the necessity for registration. That will have a consequent, knock-on effect on the transparency that should be gained, which is supposed to be one of the purposes of the scheme. If we cannot get something registered because there is no agreement in Government, we will not get the additional transparency that is supposed to be one of the major benefits of the foreign influence registration scheme.
I am questioning the entire underpinning of the way in which the scheme has been designed. I am certainly not convinced that it is better than a simpler but broader arrangement. That was the essential point that I wanted to make. I do not wish to repeat every point that my right hon. Friend the Member for North Durham or the shadow Minister, my hon. Friend the Member for Halifax, have made. However, I believe that the scheme, as set out in the new clauses, is too complicated and could be simpler, and that, were it simpler, it would be more effective.
The Minister for Security (Tom Tugendhat)
I pay tribute to the hon. Member for Garston and Halewood and the right hon. Member for North Durham for the tone with which they have approached the debate. I appreciate their comments and those of the shadow Minister, who has made similar points. They have made them in the spirit of openness, proper debate and trying to improve what they see, correctly, as a Bill that will keep our country safe. I am grateful to them for that.
I will go through some of the points that have been made. First, the right hon. Member for North Durham asked about the purpose. Part of the objective of registering under the scheme is to highlight and to be clear. This is not a sanction. The very fact that a scheme exists for foreign companies that trade with British companies does not in any way mean that it is a sanction. The intention is to bring transparency to relationships that might otherwise lie hidden. It is intended not as a punishment, but merely to promote openness.
The requirement to register an arrangement within 10 days is made so that the person acting on behalf of the Government, or the individual, makes that clear at that point or within a reasonable period of time. I am happy to hear arguments for a slightly longer or less long period, but I think 10 days is a reasonable period for a registration to be made. Again, that is not supposed to be a sanction or an obstacle, but it is merely supposed to be a way of achieving transparency. It is not really supposed to be stopping the entire process, but merely supposed to be enabling people to know what is going on. If there was a requirement, and if it was a sanction, that would be different and the process would have to stop immediately. That is not what this is about.
Holly Lynch
Of course, and I am grateful. May I bring the Minister’s attention to an example that I have had a chance to look at, and which has broken today? Up to 30 former UK military pilots are thought to have gone to train members of China’s People’s Liberation Army. They have been offered lucrative packages of up to £237,000 for their expertise in training Chinese pilots. Actually, a Ministry of Defence spokesperson has said that they are attempting to disrupt that activity
“while the new National Security Bill will create additional tools to tackle contemporary security challenges—including this one.”
Just looking at that example of where presumably some of those involved in headhunting might need to register that activity—
Holly Lynch
There is a need to try to put a stop to some of this activity, and I just wonder what the relationship is between the visibility and the need to stop it.
Tom Tugendhat
As the hon. Lady will know very well, I share her deep concern at this information, which was reported just this morning. First, may I say that there are already many different clauses in the Bill that are designed to make sure that individuals should not be co-operating with those who may be trying to steal secrets or to gain from secret information. It is possible, although I have not got the details of the case, that similar sorts of cases may be covered under other clauses in order to prevent the acquisition of information. The foreign agents element—the foreign influence element—would also come to play, but it is not the only element in the Bill that would come into play. It is absolutely correct that we do need the Bill in order to prevent such actions, which at the moment are more loosely defined, and therefore possible. The foreign influence element is not the only element, but I appreciate the spirit in which the hon. Lady has entered the discussion.
If I may, I will speed up a little.
Tom Tugendhat
You are very welcome, Mr Gray.
Subsections (3) and (4) of new clause 11 make it clear that a specified person can be a foreign power or an entity that is not an individual. Parliamentary drafters use that terminology for the legislation, but detailed guidance will be prepared so that it is clear to the public and businesses who is included.
I will follow up on other questions in writing, if I may, because a whole load of questions were put before lunch and I think many of us have forgotten which elements they related to. I will therefore conclude my remarks.
Question put and agreed to.
New clause 11 accordingly read a Second time, and added to the Bill.
New Clause 12
Offence of carrying out activities under an unregistered foreign activity arrangement
“(1) A person commits an offence if—
(a) the person carries out an activity, or arranges for an activity to be carried out, in the United Kingdom pursuant to a foreign activity arrangement required to be registered under section (Requirement to register foreign activity arrangements)(1),
(b) the arrangement is not registered, and
(c) the person knows, or ought reasonably to know, that they are acting under the direction of a specified person.
(2) Subsection (1) does not apply to a foreign power.”—(Tom Tugendhat.)
This new clause makes it an offence to carry out activities under a foreign activity arrangement that should be, but is not, registered.
Brought up, read the First and Second time, and added to the Bill.
New Clause 13
Requirement to register activities of specified persons
“(1) A specified person must not carry out activities in the United Kingdom unless the activities are registered with the Secretary of State.
(2) The prohibition in subsection (1) does not apply to a foreign power.
(3) A person who breaches the prohibition in subsection (1) commits an offence if the person—
(a) knows, or
(b) ought reasonably to know,
that the activity in question is not registered.”—(Tom Tugendhat.)
This new clause requires registration of activities carried out in the UK by a specified person.
Brought up, read the First and Second time, and added to the Bill.
New Clause 14
Requirement to register foreign influence arrangements
“(1) A person who makes a foreign influence arrangement must register the arrangement with the Secretary of State before the end of the period of 10 days beginning with the day on which the person makes the arrangement.
(2) A ‘foreign influence arrangement’ is an arrangement with a foreign principal pursuant to which the foreign principal directs the person—
(a) to carry out political influence activities in the United Kingdom, or
(b) to arrange for such activities to be carried out in the United Kingdom.
(3) ‘Foreign principal’ means—
(a) a foreign power,
(b) a body incorporated under the law of a country or territory outside the United Kingdom, or
(c) an unincorporated association formed under the law of a country or territory outside the United Kingdom, other than an association of persons where each person is a United Kingdom national,
but does not include a person within subsection (4).
(4) Those persons are—
(a) a specified person;
(b) a body incorporated under the law of the Republic of Ireland, or an unincorporated association formed under the law of the Republic of Ireland;
(c) an international organisation.
(5) The requirement in subsection (1) does not apply to a foreign power.
(6) The requirement in subsection (1) does not apply to—
(a) a recognised news publisher, or
(b) a person who makes a foreign influence arrangement with a recognised news publisher where the purpose, or one of the purposes, of the arrangement is the publication of news-related material.
(7) Subsection (1) applies in relation to a foreign influence arrangement made before the day on which this section comes into force as if, for the words from ‘10’ to the end, there were substituted ‘3 months beginning with the day on which this section comes into force.’
(8) A person who fails to comply with subsection (1) commits an offence if the person knows that the arrangement in question is a foreign influence arrangement.
(9) In this section—
‘international organisation’ means a person (other than an individual) which—
(a) is governed by international law,
(b) is set up by, or on the basis of, an agreement between two or more countries, or
(c) is recognised under an agreement between two or more countries and is specified by the Secretary of State in regulations;
‘news-related material’ and ‘publish’ have the meaning given by section 50(5) of the Online Safety Act 2022;
‘recognised news publisher’ has the meaning given by section 50 of the Online Safety Act 2022 but as if, in subsection (2)(e) of that section, ‘in the United Kingdom’ were omitted;
(10) Regulations under subsection (9) may specify a person or a description of persons.”—(Tom Tugendhat.
This new clause requires registration of arrangements with foreign principals to carry out political influence activities in the UK. Political influence activities are defined in NC15.
Brought up, and read the First time.
The Chair
With this it will be convenient to discuss the following:
Government new clause 15—Meaning of “political influence activity”.
Government new clause 16—Offence of carrying out political influence activities pursuant to unregistered foreign influence arrangement.
Government new clause 17—Requirement to register political influence activities of foreign principals.
Tom Tugendhat
New clauses 14 to 17 relate to the primary registration requirement, which is the requirement for political influence activities to be registered where they are either to be carried out, or arranged to be carried out, in the United Kingdom at the direction of a foreign principal, or to be carried out by a foreign principal.
Before I get into the effect of these new clauses, I want to be clear and up front that the UK is welcoming of open and transparent engagement from foreign Governments and entities. Governments around the world, including the UK, should seek to advance their interests through the lobbying and influencing of other states—after all, that is what diplomacy is. Where this is conducted openly and transparently, it is welcome and plays a vital part in our democracy and public debate, as well as being essential to international relations and civil society.
The primary registration requirements under this scheme will play a critical role in encouraging that openness and transparency, while simultaneously deterring foreign powers that wish to pursue their aims covertly through the use of agents and proxies. It can only be right that the UK public and our democratic institutions are protected from covert influence and are better informed as to the scale and extent of foreign influence in our political affairs. Again, each of the new clauses is substantive so, as with the previous group, I will take each in turn.
New clause 14(1) requires a person to register with the scheme where they are in an arrangement with a foreign principal to carry out political influence activities within the UK, or where the person is to arrange for such activities to be carried out. The person must register within 10 days of the arrangement being made. I covered several relevant points of detail in my speech on the equivalent provision under the enhanced registration scheme relating to foreign activity arrangements, which we have already discussed today. I will not repeat those explanations, but will instead focus on key points of difference.
First, subsections (5) and (6) clarify who is not “a person” for the purpose of defining a foreign influence arrangement and who the requirement does not apply to. I have already explained, in our discussion on the previous group of new clauses, why a foreign power is not required to register, and the same principle applies here. In addition, the requirement to register does not apply to a recognised news publisher or a person who makes a foreign influence arrangement with a recognised news publisher where the purpose, or one of the purposes, of the arrangement is the publication of news-related material. The practical effect of this aspect of the new clause is to ensure that domestic and foreign news publishers cannot be in a registerable arrangement with a foreign principal, and nor can a person—for example, a freelancer—where the foreign principal is a recognised news publisher and the arrangement concerns the publication of news-related material.
I mentioned in my opening remarks on FIRS that these requirements are deliberately state and sector agnostic, and that it is the responsibility of all sectors to demonstrate transparency and accountability, but with exceptions for where existing obligations apply. This is one such example. We have a proud tradition in this country of upholding the freedom of the press. Indeed, it is our obligation to ensure that journalists are empowered to carry out their legitimate activity independent of state involvement. We do not consider it appropriate to replicate this safeguard for the enhanced measure. Unlike the primary registration requirement, specifying an entity for the enhanced assurance measure will be reserved for where the Government have determined that a greater level of scrutiny is needed to protect the safety or interests of the UK. As such, we do not consider it appropriate to replicate this safeguard for the enhanced measure.
Secondly, the clauses use different terminology from the enhanced registration requirement. The definition of arrangement requires there to be direction from a “foreign principal”, rather than a specified foreign power or entity subject to foreign power control, as is the case under the enhanced registration requirement. The definition of “foreign principal” in subsection (3) includes
“a foreign power…a body incorporated under the law of a country or territory outside the United Kingdom, or…an unincorporated association formed under the law of a country or territory outside the United Kingdom.”
I will not dwell on why the requirement applies to a foreign power, as that should be obvious. Instead, I want to address the importance of this definition capturing any foreign entity rather than those subject to foreign power control, as it is perhaps one of the most complex areas of this scheme.
We know that foreign powers deploy their influence through seemingly private or independent entities. This can be achieved through formal links with such entities, which may include shares, subsidies or financing, voting rights, or through other obligations to collaborate with the state. It can also be achieved through informal links, such as understandings or verbal agreements. There are also entities that are ostensibly private, yet nonetheless act to further a foreign power’s interests.
It is our intention to apply the registration requirements to all of those types of entity by requiring foreign influence arrangements to be registrable where made with any foreign entity. This is the approach taken by the Foreign Agents Registration Act in the United States, and it was the ambition of Australia’s foreign influence transparency scheme before its parliamentary passage. The Australian scheme’s definition of “foreign principal” was amended by its Parliament to require a formal connection between an entity and a foreign Government for activity to be carried out on its behalf to be registrable. Such a connection would need to meet technical criteria of ownership or control, or a formal obligation to act in accordance with the directions or wishes of the foreign Government.
Maria Eagle
New clause 14(9) includes definitions that refer to “the Online Safety Act 2022”, but that is a Bill, not an Act, and it is not on the statute book, is it?
Maria Eagle
Is it correct for this Bill to make reference to another Bill as being an Act of Parliament when it is not?
Tom Tugendhat
It is not entirely unheard of to make reference to other legislation that is going through at the moment. Should there be issues, then there may be obstacles, but—
Mr Kevan Jones (North Durham) (Lab)
The Minister needs to clarify—he can do so in writing, if he wants—whether that Bill is going through. It has been stayed, has it not? It has been pulled, so it will not even go forward. Therefore, I think we need some clarification.
Tom Tugendhat
That is simply not correct. It is going forward. [Interruption.] I commit to writing to hon. Members should there be any changes, but the Bill is still going forward.
New clause 15 defines “political influence activity” for the purposes of the scheme’s primary registration requirements. This relates to new clause 14, which we have just considered, as well as the other new clauses in this group. The overarching aim of the definitions in this new clause is to ensure that activities are registrable if they intend to affect political decision making, proceedings and those with the right to engage in UK electoral processes. I will break that down into four points: three points governing the relevant activities, which include lobbying, public communications and disbursements; and one covering the intended purpose.
Lobbying, for the purpose of this scheme, is defined under proposed new subsection (2)(a) as “making any communication to” a listed person. Capturing “any communication” is important in this context, as we do not want to provide an easy way for those engaged in state act threat activity to avoid the requirement to register by adopting a different means of communication. The listed persons include His Majesty’s Government and devolved Ministers; Members of the legislature; officers, trustees or agents of a registered political party; candidates at national, devolved or local elections; and senior officials or special advisers. We recognise that there are existing rules and regulations to ensure transparency and accountability around such activity. They include the provisions of the Lobbying Act 2014, as well as codes of conduct for those listed, including Ministers, officials, special advisers and Members of the legislature.
The foreign influence registration scheme will offer an extra layer of protection against those seeking to engage in covert lobbying for foreign powers directly, or indirectly through other foreign entities. These offences and penalties reflect that. They will require people to be transparent about who they are acting for, and will inform the public of the nature and scale of foreign influence in UK’s political affairs.
The persons listed in this new clause have been identified as those most likely to be of use to foreign powers in effecting change in our political system or proceedings. The primary registration requirement under FIRS will not only hold those persons to high standards while they are in public office or service, or engaging in our proceedings and elections, but will seek to protect them from those who would seek to influence them covertly. Of course, it may be necessary to amend the list and adapt it in the light of the trends and behaviours we see; that is why we propose including an ability to amend the list by regulations, so that the scheme is future-proofed against emerging threats.I remind hon. Members that for lobbying to be in scope of the scheme, it must be at the direction of a foreign principal, and must be for a political purpose. It is hoped that that constraint will ensure that the scheme delivers its objectives without unnecessarily bringing a wider range of activities within scope.
Public communications activity is registerable under proposed new subsection (2)(b) where it is not already reasonably clear that it is made at the direction of a foreign principal. This applies to the dissemination, or production for publication, of information, a document or other article. The ability to mobilise public opinion can be a powerful means of engaging with our political system and effecting change. The intention behind this limb of activity is to ensure that the public are aware of who is behind a communication that may influence the way they exercise their rights in this country, or the way they engage with our political system. It is to guard against those who seek to manipulate public opinion for the benefit of foreign powers and to the detriment of UK interests and security.
I emphasise, however, that a public communication is registerable only where it is not already reasonably clear that it is made at the direction of a foreign principal. Where a foreign principal is itself undertaking the activity—we will come to that shortly—that would already be clear to the public. A foreign charity making a public communication in its own name would not need to be registered. However, where a foreign charity directs a public relations firm to make the public communication, that firm would have a choice: either it makes it reasonably clear through the communication that it has been directed to make that communication by the foreign charity, or it registers that arrangement with the scheme.
Providing this choice offers a practical option to prevent all public communications for foreign principals from needing to be registered. By its very nature, a communication to the public is visible to the public; it therefore achieves the transparency aims of the scheme, so long as it is clear who it is for. We do not think that same rationale applies to the lobbying and disbursement limbs of political influence activities, which are naturally less visible to the public.
Thirdly, I will address disbursement activity. Under proposed new subsection (2)(c), this includes
“distributing money, goods or services to UK persons”,
and “UK persons” is defined in the Bill as including
“(a) a United Kingdom national;
(b) a body incorporated under the law of a part of the United Kingdom;
(c) an unincorporated association formed under the law of a part of the United Kingdom.”
As with public communications, targeted incentives can be a key method of deploying influence—for example, through the provision of money or hospitality.
The intention behind this limb of activity is to ensure that the public have greater visibility of how that influence is deployed by foreign principals. Under electoral law, political donations from or on behalf of individuals not on the electoral register, such as foreign donors, are prohibited, but the disbursement of money, goods and services to mobilise sections of the public for a particular cause is not. The definition of “political influence activity” in this scheme is cast more widely than the scope of electoral law.
For example, if a foreign principal was to distribute funds to organisations in the UK with the intention of influencing a Government decision, that would be covered by the foreign influence registration scheme. If foreign principals make or direct such disbursements that are not regulated by electoral law, with the intention of affecting the way in which a UK person exercises their democratic rights or how they engage with the UK political system, the Government are of the view that such activity should be transparent. That is to strengthen our resilience against those who seek to manipulate or mobilise the public for the benefit of foreign powers and to the detriment of the United Kingdom’s interest and security.
Finally, there is the purpose of the activity that makes it registerable. Whether the activity is lobbying, a public communication or disbursement, the purpose, or one of the purposes, of it must be to influence a matter or person listed in proposed new subsection (3). Those matters and persons include: the conduct of a UK election or referendum; a decision of the UK Government or Ministers in the devolved Administrations; the proceedings of Parliament or the devolved Administrations; the proceedings of a registered UK political party; or a Member of Parliament or the devolved Administrations.
The list is intended to limit the circumstances in which registration is required to circumstances in which there is an intention to influence UK political decision making, proceedings and those with the right to engage in UK electoral processes. The list is sufficiently broad to capture all the areas that we think require greater scrutiny, while maintaining proportionality. The measures should give the Government and the public greater clarity on the scale and extent of foreign influence in our political and governmental processes, while strengthening their resilience against covert foreign influence.
New clause 16 is the corresponding offence for the primary registration requirement to that which we discussed in the previous group of new clauses relating to the enhanced registration requirement in new clause 12. I will not repeat all the points I made earlier. New clause 16 makes it an offence to carry out a political influence activity, or to arrange for it to be carried out, pursuant to a registerable foreign influence arrangement that has not been registered. The main difference between this offence and that under the enhanced registration requirement is that this would require a person to know that they are acting pursuant to an arrangement that is not registered. As I explained earlier, we have deliberately created a higher bar for prosecution compared with the enhanced measure. It would need to be evidenced that a person knew an arrangement was unregistered and yet continued to carry out the activity.
New clause 17 is the corresponding registration requirement to that which we discussed in the previous group of new clauses relating to the enhanced registration requirement in new clause 13. Again, I will not repeat all the points I made earlier. New clause 17 requires foreign principals to register their political influence activities that are to be carried out in the UK. This prevents there being an obvious gap in the requirement to register, and will support the scheme’s objective of strengthening the resilience of the UK political system against covert influence. As with the enhanced registration requirement, foreign powers would not be expected to register under FIRS, so this requirement will apply only to a foreign entity that is to undertake political influence activities within the UK. The requirement will also not apply to a recognised news publisher for the same reasons that they are not required to register a foreign influence arrangement.
An offence would be committed if the foreign entity fails to register their political influence activities, and they know that the activity in question is not registered. Again, as I explained earlier, we have deliberately created a higher bar for prosecution, compared to the enhanced measure. I ask the Committee to support these new clauses.
Holly Lynch
I thank the Minister for giving us a comprehensive understanding of this group of new clauses. Before I talk about them, it is crucial that we have clarity on the outstanding issue of when an arrangement has been registered, because new clause 12 creates an offence of undertaking such activity before it has been registered. I put on record that the Minister was not able to respond to that point and said that he would follow up in writing.
It feels as though there has been a surge in hostile states seeking to infiltrate our political discourse. They are prepared to allow years for their efforts to bear fruit, in an attempt either to align our values with theirs or to sow division and polarisation across our country. That has become more salient following Russia’s abhorrent invasion of Ukraine.
Only days ago, a report from a German newspaper stated that the Federal Office for the Protection of the Constitution is looking into the case of two civil servants who
“are involved with energy supply in key positions”
and are suspected of having Kremlin links, and I think a further and even more serious report from Germany has just broken. The allegation is that these individuals were advocates of Russian gas and highly supportive of Nord Stream 2. If confirmed, this case would represent exactly the type of security breach we have to protect ourselves against. Without wanting to repeating myself, there is just a single line in new clause 15 on the meaning of “political influence activity” by way of explanatory note. It is a crucial but operationally complex area.
I want to pull out subsection (6) of new clause 14, which explicitly states that the requirement to register a foreign influence arrangement does not apply to “a recognised news publisher” or
“a person who makes a foreign influence arrangement with a recognised news publisher where the purpose, or one of the purposes, of the arrangement is the publication of news-related material.”
Many civil liberties organisations and the National Union of Journalists have expressed concern over the need to ensure press freedom in relation to this Bill. That is absolutely right, and the Minister quite rightly put his strength of feeling about that on the record. But how do we protect ourselves and ensure transparency when blatant mouthpieces for hostile states present as news outlets, or when someone on the payroll of a hostile state seeks to place their pro-regime opinion pieces or articles in mainstream media? We have had assurances from officials that there are circumstances in which people in such situations may still have to register, and I would be grateful for clarity from the Minister on that.
Further to a point that my hon. and right hon. Friends have made, we gave one of the Minister’s predecessors some grief in discussion on Government amendment 9, which meant that this Bill would amend the “Online Safety Act 2022” by making online interference a priority offence. That was certainly a very welcome measure, but we said at the time that it was presumptuous to amend an Act when it was still a Bill in the Commons. Members might remember that the Online Safety Bill was on the Floor of the House while we debated it in this Bill Committee, so not to have made the change directly in the Online Safety Bill was somewhat cack-handed.
In subsection (9)(c) of new clause 14, we are referred once again to the “Online Safety Act 2022” for definitions. As things stand—I heard the Minister’s comments—what has happened to the Online Safety Bill is a bit of a mystery, and it seems to have been paused indefinitely. The last time it saw the light of day was that day in the Chamber, when we were in this Bill Committee. Can the Minister confirm that we will see that Bill again, and that the definitions in these new clauses will remain unchanged? Can he confirm that he is committed to ensuring that there is a future for making disinformation a priority offence, whether in that Bill or this? He will be aware that there are national security considerations in the Online Safety Bill that are of interest to him and to me, so we have an interest in ensuring that that Bill emerges once again.
Maria Eagle
Does my hon. Friend agree that for this clause to be accurate in referring to the “Online Safety Act 2022”, that Bill, which seems to have disappeared for now, has to have Royal Assent by the end of the year?
Holly Lynch
My hon. Friend is absolutely right. We thought that that was quite an aspiration at the time, but now it is looking even more unlikely. I just make the point to the Minister that that needs consideration to make sure we do not lose the definitions, or something more substantial under Government amendment 9.
Government new clause 15 defines “political influence activity” for the purposes of the new registration scheme. Members will be aware of the Security Service interference alert sent from MI5 to MPs and peers back in January regarding Christine Lee. The alert stated that Lee knowingly engaged in political interference activities on behalf of the United Front Work Department of the Chinese Communist party. The warning read that the UFWD was seeking to covertly interfere in UK politics by establishing links with established and aspiring parliamentarians across the political spectrum and cultivating relationships with influential figures. Can the Minister confirm that such conduct would need to be registered under these new clauses?
Proposed new subsection 3(a) states that
“the conduct of an election or referendum in the United Kingdom”
falls under the criteria of political influence activity. This is a welcome inclusion and reflects the evidence provided to the Committee by several of the expert witnesses we heard from at the start, which feels like a lifetime ago—it was certainly four Chancellors ago! One of the expert witnesses was former deputy national security adviser Paddy McGuinness. He stated,
“Vladimir Putin’s intent, which is to have us off balance—is that if the Russians do hack into a political party’s servers and mess about within them, and maybe mess with the data or interfere, or if they play games with a technology platform that people rely on for information and put out information, and we decide as a result that we cannot trust a referendum or an election, they succeed. That is success for them, so I think what really matters in this space is the ability to measure the impact that state activity has on the democratic process we are looking at, and…that there is bright transparency so we know who is doing what.”––[Official Report, National Security Public Bill Committee, 7 July 2022; c. 24, Q48.]
We welcome the fact that the registration scheme will go some way toward addressing these concerns, but I want to again make the case for new clause 3, because the Minister was not here for that debate. His predecessor gave us a commitment to look further at it. Alongside this new clause, new clause 3 would provide for an annual review on disinformation, with particular consideration of interference in elections. That would help with the transparency and awareness piece that needs to sit alongside the provisions. In a similar spirit, we want to tighten Government new clause 15 with our new clause 29 on the registration of former members of intelligence services, and with new clause 5 on ministerial conduct when meeting with representatives of foreign intelligence services. We will come to those.
I would be grateful for clarity on when we can expect the new clauses to come into effect, as we are hearing that it might be some time. Will we seek to backdate them to capture political influence activity already in motion? I think I heard the Minister say that he could not yet say when the measures would come into effect, and essentially the Government would not be rushed on that matter. I asked the relevant agencies the same question, and the working assumption seems to be that we will not backdate the requirements. I ask the Minister to consider looking at that again. Surely we stand to miss much political influence activity that is already under way—not even necessarily activity that has started and come to an end, but conduct that may have started some time ago. We would create a loophole whereby people could claim, as a cover for failing to register, that the activity predated the introduction of the scheme, whether or not it actually did, and could thus commit an offence under new clause 16.
Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)
I do not want to repeat anything the shadow Minister said, but I have a couple of short points. I am supportive of the goal of the political tier, though I am somewhat struggling with the design of the scheme. In debate on new clause 11, I asked questions about how the provisions would apply when intermediaries were used. It would be useful if the Minister could write on that, as I do not think we got an answer to that in his summing-up speech. The same concerns arise here. We have a lot of information to go away and take on board, but I am struggling to understand how these measures will apply in all sorts of situations. Lots of case examples will be essential if we are to get to the bottom of how this is going to work.
A simple example would be a case where an international NGO incorporated in another European country had a sister NGO in the United Kingdom. Both have employees of their own, some here and some in Europe. Both have Members, some here and some in Europe. How do all these provisions and this scheme apply to them if they have a month of action? An international NGO may take part in some direct engagement, so it would have to register that. What if it encourages its sister NGO to do that? What if either of them contact their members? The Minister has reassured us that employees would not have to register anything individually. It is not absolutely clear which part of the Bill makes that clear; it would be useful to know that.
I presume, as well, that members who are urged by an international NGO to email their MPs will not have to register any sort of activity like that. Again, it would be useful to know precisely where that is made clear in the Bill. Although I dare say we would all be quite happy not to have quite so many emails prompted by NGOs, equally, I do not think any of us would want them to have to register their schemes under the Bill. It would really be useful if we could get a handle on how the legislation will apply to these typical sorts of situations.
Tom Tugendhat
I want to start by addressing the point about disinformation, which is also about fake journalism. Hon. Members are absolutely right that that is a point that needs to be addressed by the Online Safety Bill, which I am sure is coming back—although I am but a Minister, so what would I know? I hope very much that it will. I accept that there may be a need for a drafting adjustment from “2022” to “2023”. I certainly anticipate that acts that are fundamentally propaganda activities rather than acts by journalists need to be covered by the Online Safety Bill.
It is also worth saying that any journalist who is not acting as a journalist but is instead acting as a lobbyist—some people do have dual roles—could perfectly legitimately not be covered as a journalist, but be covered as a lobbyist for certain elements of their activity. That is also important.
The applicable registration requirements will apply to arrangements that have already been entered into, but where the activity has not yet been commenced or completed. It will not be post-dated, as it were, but it will go from today forward, and therefore activities ongoing from the moment the Bill comes into force will be covered.
It is worth saying that the scheme will be introduced through regulations once the Bill has received Royal Assent. That will be done with the appropriate administrative and investigative resources that have been established. Existing arrangements will need to be registered within three months from the initial off.
It is also worth pointing out that although the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East and I may sometimes share frustration about the volume of emails, neither of us would seek to silence legitimate campaigning by organisations. That is covered by the “public” element. If it is a public campaign—a campaign general to everyone and therefore not targeted at any one particular individual or asking one particular individual to act—it is not covered. It is already public, by definition, because we know who is doing it and who is paying for it.
Question put and agreed to.
New clause 14 accordingly read a Second time, and added to the Bill.
New Clause 15
Meaning of “political influence activity”
‘(1) An activity is a “political influence activity” if—
(a) it is within subsection (2), and
(b) the purpose, or one of the purposes, for which it is carried out is the purpose of influencing a matter or person within subsection (3).
(2) The activities within this subsection are—
(a) making any communication to—
(i) a Minister of the Crown, a Northern Ireland Minister, a Scottish Minister or a Welsh Minister,
(ii) a Member of either House of Parliament, the Northern Ireland Assembly, the Scottish Parliament or Senedd Cymru, or an employee or other member of staff of such a Member,
(iii) an officer, trustee or agent of a UK registered political party or a member of such a party who exercises executive functions on behalf of the party,
(iv) a candidate at an election for a relevant elective office or a relevant Scottish elective office,
(v) a senior official or a special adviser, or
(vi) a person within a description of persons exercising functions on behalf of the Crown which is specified in regulations made by the Secretary of State;
(b) making a public communication, except where it is reasonably clear from the communication that it is made at the direction of the foreign principal;
(c) distributing money, goods or services to UK persons.
(3) The matters and persons within this subsection are—
(a) the conduct of an election or referendum in the United Kingdom,
(b) a decision of the government of the United Kingdom, a Northern Ireland Minister or Northern Ireland Department, the Scottish Ministers or the Welsh Ministers,
(c) the proceedings of either House of Parliament, the Northern Ireland Assembly, the Scottish Parliament or Senedd Cymru,
(d) the proceedings of a UK registered political party, or
(e) a Member of either House of Parliament, the Northern Ireland Assembly, the Scottish Parliament or Senedd Cymru.
(4) For the purposes of subsection (2)(b) a person makes a public communication if the person—
(a) publishes or disseminates information, a document or other article, or
(b) produces information, a document or other article for publication or dissemination.
(5) In this section—
“Northern Ireland Minister” includes the First Minister and the deputy First Minister;
“relevant elective office” and “relevant Scottish elective office” have the same meanings as in section 37 of the Elections Act 2022;
“senior official” means a member of the Senior Civil Service or a member of the Senior Management Structure of His Majesty’s Diplomatic Service;
“special adviser” means a person who serves the government in a position in the civil service of the State and whose appointment to that position meets the requirements applicable to that position set out in section 15(1) of the Constitutional Reform and Governance Act 2010;
“UK person” has the same meaning as in section 2;
“UK registered political party” means a political party registered under Part 2 of the Political Parties, Elections and Referendums Act 2000;
“Welsh minister” includes the First Minister, the Counsel General to the Welsh Government and a Deputy Welsh Minister.’—(Tom Tugendhat.)
This new clause defines “political influence activity” for the purposes of the new registration scheme.
Brought up, read the First and Second time, and added to the Bill.
New Clause 16
Offence of carrying out political influence activities pursuant to unregistered foreign influence arrangement
“(1) A person commits an offence if—
(a) the person carries out a political influence activity in the United Kingdom pursuant to a foreign influence arrangement required to be registered under section (Requirement to register foreign influence arrangements) (1),
(b) the arrangement is not registered, and
(c) the person knows that the arrangement is not registered.
(2) Subsection (1) does not apply to—
(a) a foreign power;
(b) a recognised news publisher;
(c) a person within section (Requirement to register foreign influence arrangements)(6)(b).”—(Tom Tugendhat.)
This new clause makes it an offence to carry out political influence activities under a foreign activity arrangement that should be, but is not, registered.
Brought up, read the First and Second time, and added to the Bill.
New Clause 17
Requirement to register political influence activities of foreign principals
“(1) A foreign principal must not carry out political influence activities in the United Kingdom unless the activities are registered with the Secretary of State.
(2) The prohibition in subsection (1) does not apply to—
(a) a foreign power;
(b) a recognised news publisher;
(c) a person within section (Requirement to register foreign influence arrangements)(6)(b).
(3) A person who breaches the prohibition in subsection (1) commits an offence if the person knows that the activity in question is not registered.”—(Tom Tugendhat.)
This new clause requires registration of political influence activities carried out by a foreign principal.
Brought up, read the First and Second time, and added to the Bill.
New Clause 18
General exemptions
‘(1) The registration requirements do not apply—
(a) in relation to an arrangement that is a UK arrangement;
(b) to the extent that an arrangement relates to the provision of legal services.
(2) The prohibitions do not apply—
(a) to activities carried out in accordance with a UK arrangement or a UK agreement;
(b) to the provision of legal services.
(3) A “UK arrangement” or “UK agreement” is an arrangement or agreement to which—
(a) the United Kingdom is a party, or
(b) any person acting for or on behalf of, or holding office under, the Crown is (in that capacity) a party.
(4) The registration requirement in section (Requirement to register foreign activity arrangements)(1) does not apply to the extent that the arrangement relates to the provision of goods or services which are reasonably necessary to support the efficient functioning of—
(a) a diplomatic mission,
(b) a consular post, or
(c) the permanent mission to a UK-based international organisation of a country which is a member of the organisation,
(for example, the provision of catering or maintenance services).
(5) The registration requirements do not apply to persons who—
(a) are members of the family of a principal person forming part of the principal person’s household, and
(b) make a foreign activity arrangement or a foreign influence arrangement pursuant to an activity carried out by the principal person in that capacity.
(6) The prohibition in section (Requirement to register political influence activities of foreign principals) does not apply to persons who—
(a) are members of the family of a principal person forming part of the principal person’s household, and
(b) carry out an activity pursuant to an activity carried out by the principal person in that capacity.
(7) For the purposes of subsections (5) and (6)—
(a) “principal person” means a person who is a member of staff of—
(i) a diplomatic mission,
(ii) a consular post, or
(iii) the permanent mission to a UK-based international organisation of a country which is a member of the organisation;
(b) the members of the family of a principal person forming part of the principal person’s household include a person who is living with the principal person as their partner in an enduring family relationship.
(8) “Member of staff”—
(a) in the case of a diplomatic mission, means a member of the mission within the meaning given by Article 1 of the Vienna Convention on Diplomatic Relations (set out in Schedule 1 to the Diplomatic Privileges Act 1964);
(b) in the case of a consular post, means a member of the consular post within the meaning given by Article 1 of the Vienna Convention on Consular Relations (set out in Schedule 1 to the Consular Relations Act 1968).
(9) The Secretary of State may by regulations make provision for further cases to which the registration requirements or the prohibitions do not apply.
(10) In this section—
“consular post” has the meaning given by Article 1 of the Vienna Convention on Consular Relations (set out in Schedule 1 to the Consular Relations Act 1968);
“diplomatic mission” is to be read in accordance with the Vienna Convention on Diplomatic Relations done at Vienna on 18 April 1961;
“legal services” has the meaning given by section 8(1) of the Legal Aid, Sentencing and Punishment of Offenders Act 2012;
“the prohibitions” means the prohibitions in sections (Requirement to register activities of specified persons) and (Requirement to register political influence activities of foreign principals);
“the registration requirements” means the requirements in sections (Requirement to register foreign activity arrangements)(1) and (Requirement to register foreign influence arrangements)(1);
“UK-based international organisation” means an international organisation which has its headquarters in the United Kingdom and on which privileges and immunities have been conferred under section 1 of the International Organisations Act 1968.’—(Tom Tugendhat.)
This new clause creates exemptions to the registration requirements in NC11 and NC14 and the prohibitions in NC13 and NC16.
Brought up, and read the First time.
The Chair
With this it will be convenient to discuss the following:
Government new clause 19—Registration information.
Government new clause 20—Information notices.
Government new clause 21—Confidential material.
Government new clause 25—Publication and copying of information.
Government new clause 28—Interpretation.
Tom Tugendhat
This group relates to scheme exemptions; the power for the Secretary of State to set what information needs to be registered with the scheme; the power for the Secretary of State to issue notices requesting information from registrants and those believed to be in scope of the requirements; provisions protecting confidential material from disclosure; the power for the Secretary of State to make regulations about the publication or copying of information provided through registration; and definitions for terms used in relation to FIRS. The majority of the new clauses in this group are substantive, so, as with the previous two groups, I will take each new clause in turn.
Stewart Hosie
The Minister has just described subsection (6) of new clause 19, which states:
“A person who fails to comply with subsection (3) commits an offence if, as a result of the failure, the information provided…is misleading, false or deceptive in a material way.”
That is absolutely correct. New clause 22, however, contains a range of offences that are committed if someone provides information that is “false, inaccurate or misleading”. Is there a reason why we have “deception” in new clause 19 but “inaccurate” elsewhere? Is there a different burden of proof for deception and inaccuracy?
Tom Tugendhat
If the right hon. Gentleman will forgive me, I will come to that in a moment.
New clause 20 provides the Secretary of State with the ability to give a notice to a person who has registered with FIRS, or who should have registered with FIRS but has not. On receipt of an information notice, the person will be required to provide the information requested within the specified timeframe. Failure do so without a reasonable excuse will be an offence. Receiving an information notice does not mean that an individual is guilty of a FIRS offence or that they are engaged in wrongdoing. It is, fundamentally, a tool to provide reassurance that individuals are meeting their registration requirements.
Stuart C. McDonald
I have a question about the new clause, and it may save the Minister from having to make a speech. With power, unlike with other notice powers, there seems to be virtually no limit on the nature of information that can be requested. There is no judicial oversight or right to challenge. It seems to be an incredibly broadly drafted power, and I do not understand why.
Tom Tugendhat
The hon. Member for Halifax has raised the question of oversight on various occasions and I have already committed to discussing it with her, so I will come back to that point. As for the nature of the information required, that will depend on the nature of the business. It is broad, as the hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East correctly identified.
Where a person is suspected of committing a FIRS offence, the information gathered as a result of these notices can be used to support the investigation and prosecution of a FIRS offence. New clause 21 makes provisions clarifying that a person does not have to disclose any information that is protected by legal professional privilege or confidential journalistic material, or that would require them to identify or confirm a source of journalistic information.
Legal professional privilege, commonly referred to as LPP, or as confidentiality of communications in Scotland, is a fundamental tenet of UK law and protects those seeking legal advice and representation in the UK. It ensures that material such as communications between clients and their lawyers—and, in some circumstances, third parties—is protected from disclosure. LPP does not arise where a lawyer’s assistance has been sought to further a crime or fraud. Any disclosure requirement in FIRS that could have the effect of breaching LPP would fundamentally infringe the rights of individuals to receive confidential legal advice, where that advice is not for the purposes of enabling a crime, and their rights to a fair hearing.
There is also legal precedent for protecting against the disclosure of confidential journalistic material or sources of journalistic information, unless the power to require disclosure has been subject to prior or immediate after-the-event judicial or other independent or impartial scrutiny. The Government consider that protections for such material should also be included in FIRS to ensure adequate protections for journalists and their sources. The protections will apply even if a journalist or a recognised news publisher has to register under the enhanced tier of the scheme. The Government propose this new clause to ensure that FIRS upholds the rule of law and fair access to justice. It will ensure that there is adequate protection for confidential journalistic material and information related to journalistic sources.
New clause 25 allows the Secretary of State to make regulations about the publication or copying of information provided through registration. The ability to publicise certain information registered with the scheme is vital to delivering the aims of FIRS, by ensuring that the influence of foreign powers and entities is open and transparent. We intend to publish information registered under the primary or enhanced requirements that relates to the carrying out of political influence activities. The regulation-making powers also provide the flexibility to publish information registered about a wider range of activity under the enhanced requirements.
As I said earlier, however, that is to be determined alongside the decision to specify a foreign power or entity subject to a foreign power or control. Ensuring information can be publicised where it relates to the carrying out of political influence activities will help to strengthen the resilience of the UK political system against covert foreign influence. After all, sunlight is the best disinfectant. Not only will this ensure that the UK public are better informed of the scale and extent of foreign influence in our political affairs, but it will put a person actively seeking to avoid being transparent in a difficult position. Either they comply with the scheme’s requirements and expose their arrangements or activities, or they face potential enforcement action.
The information published will be limited to what is necessary to achieve the transparency aims of the scheme: for example, the name of the registrant, which could be an individual or an entity; the foreign power or principal for which political influence activities are to be carried out; or the nature and duration of such activity. Subsection (2) would allow the Secretary of State to specify or describe information or material that is not to be published. That is likely to include a situation where publishing the information would threaten the interests of national security, put an individual’s safety at risk or risk disclosure of commercially sensitive information.
Subsection (1)(b) would allow the Secretary of State to make provision for the copying of information provided through registration. It an important provision that will ensure data can be managed by the scheme management unit and shared with other enforcement agencies when necessary. As already mentioned, data will be managed in accordance with the Data Protection Act 2018 and GDPR. As with other parts of the registration scheme, we consider it appropriate for this level of detail to be outlined through regulations, which will also provide the Government with the flexibility to adapt should there be a need to make changes to what information is to be provided in order to meet the objectives of the scheme.
New clause 28 provides the definitions relevant to the registration scheme requirements. As we have discussed these terms in detail in relation to the requirements to which they apply, I do not consider that further examination is needed.
In my opening remarks, I explained that any arrangement with the Republic of Ireland or with a body incorporated or association under the laws of Ireland will be exempt from registration, as are activities to be carried out by such entities. This, again, ensures that the letter and spirit of the Belfast/Good Friday accord are protected, by avoiding interference with the right of citizens in Northern Ireland to identify as Irish. To achieve that in the drafting, subsection (2) clarifies that the Republic of Ireland is not to be considered a foreign power for the purposes of FIRS.
Holly Lynch
There is an awful lot in this group that is still to be determined in regulations, which is always a shame because it does not allow for the same scrutiny as when we consider everything as a package.
Government new clause 18 creates exemptions to the registration requirements laid out in the previous clauses. There is merit to each of those exemptions, but my concern is that we are creating a grey area, particularly when a person engages in both exempt activity and registrable activity. For example, I note that in subsection (4), we do not require those who support the functioning of a diplomatic mission or consular post to register. However, we know that we have potential weaknesses here following the case of one of our own British embassy security staff, who was arrested and charged in Germany with spying for Russia under the Official Secrets Act 1911; it is good to know that that legislation is not totally out of date. That raises the question: do we go as far as we need to on the networks surrounding the vital work of embassies, and can we ensure that an exemption by role does not automatically exempt activity that we would certainly want to know about?
I have had the opportunity to discuss with officials my mixed views about the complete exemption of family members of a principal person under subsections (5) and (6) of new clause 18. While it is right to create a distinction between those we are interested in and their family members, I worry that if we are explicit about this in legislation, we are presenting them as perfect potential spies to the regimes that their principal family member is associated with, bearing in mind that we are dealing with some fairly unscrupulous hostile states.
In new clause 19, again, we are waiting for a great deal more information to be set out in regulation. Under subsection (3), where there is a material change to any information already registered, the Secretary of State has to be notified within 14 days of the material change’s coming into effect. Why 14 days after? Why not in advance of the material change, as is the case in other clauses—for example, within 10 days of the agreement being made when first registering?
Subsection (6) states that a person commits an offence if
“the information provided to the Secretary of State in relation to the registered arrangement or registered activity is misleading, false or deceptive in a material way.”
To come back to my earlier point, who will be undertaking those investigations? We are presumably creating a whole range of new responsibilities here, so who will lead that work, and will they have the corresponding resources?
Government new clause 20 permits the Secretary of State to give a notice to a person to provide information in connection with arrangements or activities registrable under the registration scheme. Subsection (3) states that the Secretary of State may permit an information notice
“requiring the person to whom it is given to supply the information specified in the notice.”
I have no doubt that information notices will be a powerful tool, but there is still a lot to be specified in the new clause.
The hon. Member for Cumbernauld, Kilsyth and Kirkintilloch East made a good point about oversight. I want to push the Minister on what means the public will have to query or raise concerns about an arrangement. If someone is aware of an arrangement that has either not been registered or not registered in full, what mechanism is there for them to raise that with the Home Office?
One of the examples that we discussed yesterday with officials was if a journalist writes an article that appears to be a blatant sales pitch for a hostile state. It would probably take an information notice to get to the bottom of whether it was commissioned by a hostile state, but how would a member of the public raise such a query? How would an employee of a company who is growing increasingly concerned about the nature of a joint project that they are working on raise those concerns with the Home Office? Currently, the mechanism is lacking from the provisions. I would be grateful to hear how the Minister intends to address that concern.
Government new clause 25 allows the Secretary of State to make regulations in relation to the publication and copying of information provided to the Secretary of State under the registration provisions. What really worries me about the registration scheme is that submissions will be made to the Home Office and they will go into some sort of electronic black hole and never see the light of day. We will not properly assess the arrangements or activities to see whether we are worried about them, and we will not publish them for months because we do not have the right back office resources to do so.
Any MP who has casework with the Home Office on almost any front—from visas to asylum and the national referral mechanism—will have experienced a similar service, despite, I have no doubt, the best efforts of civil servants. Can the Minister confirm that the register will be kept up to date in relative real time, and that it will be published online, which I think is what he said in his opening remarks? Can he also suggest a target turnaround time between registration and publication, which I am sure would be welcome and would set an early standard for what people can expect from the scheme?
Stuart C. McDonald
I will briefly emphasise how incredibly broadly and dangerously drafted new clause 20 is. All sorts of organisations will fall within the scope of the provisions; it could be a local business or a UK non-governmental organisation. Unless I am missing something, under the clause they can be asked by the Secretary of State in an information notice for virtually any information that she fancies helping herself to, with virtually no restriction whatsoever.
The new clause does not even require a link to some sort of ongoing investigation. There is no court oversight of the nature of the request, and there is absolutely no mechanism to challenge or appeal against any sort of information notice. If someone has been handed an absurd information notice and they refuse to comply with it, they can end up being prosecuted. As it stands, new clause 20 seems to be incredibly difficult and should be revisited.
Tom Tugendhat
I will come to the point made by the right hon. Member for Dundee East. He is absolutely right. Forgive me—that is a drafting error, which we will look at and tidy up.
On diplomatic staff, the hon. Member for Halifax makes a fair point. This is, however, diplomatic staff and their spouses acting in an official capacity—when they are conducting duties on behalf of their nation, and on behalf of the mission that they are sent to support. It is not supposed to be a blanket exemption; it is merely when they are acting in their role.
Who will manage the unit? A scheme management unit is expected to sit within the Home Office—that is, at least, the current plan—which will administer the scheme. It is unlikely that every registration will need to be scrutinised. More likely, the register will be a resource for public scrutiny. That is where the right hon. Member for North Durham, who is not currently present, was absolutely right: sunlight is the best disinfectant, and indeed disinfectant is the best sunlight.
Jess Phillips (Birmingham, Yardley) (Lab)
I am sure that the Minister has heard, just as I have, about cuts to Government Department budgets. This being a new additional spend, I wonder whether there has been any assessment of the cost of it, and whether he thinks the cost of it will survive.
Tom Tugendhat
As with the whole Bill, the way to think about it is as a public register, and because it is a public register the scrutiny will be provided, no doubt, by our friends in His Majesty’s press corps, who will look through every detail, as they look through every detail of the Register of Members’ Financial Interests and ensure that they keep us on our toes. They will no doubt do the same for businesses.
I will have a look at the question of the 14 days as opposed to 10. I am not quite sure why there is that difference, so I will come back to the hon. Member for Halifax on that, and with further details on the management of the scheme.
Question put and agreed to.
New clause 18 accordingly read a Second time, and added to the Bill.
New Clause 19
Registration information
“(1) The Secretary of State may by regulations make provision about the information a person is required to provide to the Secretary of State when registering—
(a) a foreign activity arrangement under section (Requirement to register foreign activity arrangements),
(b) an activity under section (Requirement to register activities of specified persons),
(c) a foreign influence arrangement under section (Requirement to register foreign influence arrangements), or
(d) a political influence activity under section (Requirement to register political influence activities of foreign principals).
(2) Regulations under subsection (1) may, in particular, require the person to provide information about any arrangements made by the person pursuant to the arrangement or activity which is required to be registered.
(3) Where there is a material change to any information provided to the Secretary of State under this section or section (Information notices) in relation to a registered arrangement or a registered activity, the person who registered the arrangement or activity must inform the Secretary of State of the change before the end of the period of 14 days beginning with the day on which the change takes effect.
(4) The Secretary of State—
(a) may by regulations make provision about the information to be provided to the Secretary of State under subsection (3),
(b) may issue guidance about what may or may not constitute a material change.
(5) The provision which may be made by regulations under this section includes provision about the form in which information is to be provided.
(6) A person who fails to comply with subsection (3) commits an offence if, as a result of the failure, the information provided to the Secretary of State in relation to the registered arrangement or registered activity is misleading, false or deceptive in a material way.”—(Tom Tugendhat.)
This new clause provides for the information to be provided when registering arrangements and activities under the registration scheme.
Brought up, read the First and Second time, and added to the Bill.
New Clause 20
Information notices
“(1) The Secretary of State may give an information notice to—
(a) a person who is a party to a foreign activity arrangement registered under section (Requirement to register foreign activity arrangements);
(b) a person who is a party to a foreign activity arrangement which is required to be, but is not, registered under that section;
(c) a person who has registered activities under section (Requirement to register activities of specified persons);
(d) a person the Secretary of State reasonably believes to be carrying out an activity in breach of the prohibition in that section.
(2) The Secretary of State may give an information notice to—
(a) a person who is a party to a foreign influence arrangement registered under section (Requirement to register foreign influence arrangements);
(b) a person who is a party to a foreign influence arrangement which is required to be, but is not, registered under that section;
(c) a person who has registered activities under section (Requirement to register political influence activities of foreign principals);
(d) a person the Secretary of State reasonably believes to be carrying out a political influence activity in breach of the prohibition in that section.
(3) An information notice is a notice requiring the person to whom it is given to supply the information specified in the notice.
(4) An information notice must—
(a) specify the form in which the information must be supplied, and
(b) specify the date by which the information must be supplied.
(5) Where an information notice has been given to a person, the Secretary of State may cancel it by giving written notice to that effect to the person.
(6) The Secretary of State may by regulations make provision about—
(a) the minimum period between the date on which an information notice is given and the date specified under subsection (4)(b);
(b) other matters which may be specified in an information notice;
(c) the cancellation of information notices.
(7) A person commits an offence if, without reasonable excuse, the person fails to comply with an information notice.
(8) The Secretary of State may not give an information notice to a foreign power.”—(Tom Tugendhat.)
This new clause permits the Secretary of State to give a notice to a person to provide information in connection with arrangements or activities registrable under the registration scheme.
Brought up, read the First and Second time, and added to the Bill.
New Clause 21
Confidential material
“(1) Nothing in this Part is to be taken to require any person to disclose any information that the person is entitled to refuse to disclose in legal proceedings on grounds of legal professional privilege (in Scotland, confidentiality of communications).
(2) Nothing in this Part is to be taken to require any person to disclose confidential journalistic material or to identify or confirm a source of journalistic information.
(3) In this section—
“confidential journalistic material” has the same meaning as in section 264 of the Investigatory Powers Act 2016;
“source of journalistic information” has the same meaning as in section 263 of that Act.”—(Tom Tugendhat.)
This new clause ensures that the obligations in connection with the registration scheme do not affect legal professional privilege or require the disclosure of confidential journalistic material.
Brought up, read the First and Second time, and added to the Bill.
New Clause 22
Offence of providing false information
“(1) A person commits an offence if—
(a) the person provides information to the Secretary of State under section (Registration information) or (Information notices) in connection with a foreign activity arrangement, and
(b) the information is false, inaccurate or misleading in a material way.
(2) A person commits an offence if—
(a) the person provides information to the Secretary of State under section (Registration information) or (Information notices) in connection with an activity which is required to be registered under section (Requirement to register activities of specified persons), and
(b) the information is false, inaccurate or misleading in a material way.
(3) A person commits an offence if—
(a) the person provides information to the Secretary of State under section (Registration information) or (Information notices) in connection with a foreign influence arrangement,
(b) the information is false, inaccurate or misleading in a material way, and
(c) the person knows, or ought reasonably to know, that the information is false, inaccurate or misleading in a material way.
(4) A person commits an offence if—
(a) the person provides information to the Secretary of State under section (Registration information) or (Information notices) in connection with a political influence activity which is required to be registered under section (Requirement to register political influence activities of foreign principals),
(b) the information is false, inaccurate or misleading in a material way, and
(c) the person knows, or ought reasonably to know, that the information is false, inaccurate or misleading in a material way.”—(Tom Tugendhat.)
This new clause creates offences of providing false or misleading information in connection with the registration scheme.
Brought up, and read the First time.
The Chair
With this it will be convenient to discuss Government new clause 23—Offence of carrying out activities under arrangements tainted by false information.
Tom Tugendhat
I turn to new clauses 22 and 23, which relate to the offence of providing false information and of carrying out activities under arrangements tainted by false information.
New clause 22 would create offences for where a registrant provides false or misleading information under the primary registration requirement or the enhanced registration requirement, or in response to an information notice. These offences are important to reduce the risk that the person is able to appear as if they have complied with the obligations under the scheme through the provision of false or misleading information. The delivery of the scheme’s objectives is undermined if a registrant is able to provide false or misleading information through registration or in response to an information notice without consequence. We should expect that those who seek to obfuscate their arrangements and activities will attempt to that, and we must be able to respond.
Such offences are not new or novel—indeed, they are common to requirements that place a positive obligation on members of the public to provide information. As with other offences we have considered, those that relate to the primary registration requirement have a higher bar for the prosecution to meet: that the registrant knows or ought reasonably to know that the information is false, inaccurate or misleading in a material way. By comparison, offences of the provision of false information in relation to the enhanced measure are to be strict liability. It should not be acceptable that such information is provided in relation to activity carried out for a specified foreign power or entity.
New clause 23 creates offences for carrying out activities under a registrable arrangement where false or misleading information has been provided in connection with the arrangement. I have already explained that the requirement to register an arrangement under the primary or enhanced registration requirements falls on the person who has made an arrangement with the specified foreign power or entity, or foreign principal.
We have also discussed the possibility that the registration of an arrangement could be made with false or misleading information: for example, where a person wants to appear as if they have complied with their registration obligations but is actively trying to conceal the true nature of their arrangements or activities.
These additional offences are important because they will allow for enforcement action to be taken against those who are acting pursuant to a falsely registered arrangement and are either complicit or in a position where they ought reasonably to know that the arrangement has been registered. As I explained in relation to the offences for carrying out activity pursuant to an unregistered arrangement, this will reduce the likelihood that unregistered activity is carried out, as well as providing a means of disrupting all levels of an organisation that has been identified as engaged in a covert arrangement or activity.
I want to reassure hon. Members that where an individual could not reasonably know that the information registered relating to the arrangement is false or misleading, they will not be prosecuted. It will be up to the courts to decide on a case-by-case basis whether someone charged with an offence ought reasonably to have known about the false information. I commend the new clause to the Committee.
Holly Lynch
It is right that new clauses 22 and 23 set out new offences that are created as a means of promoting compliance with the registration scheme. On that basis, we are satisfied that new offences are in order.
Question put and agreed to.
New clause 22 accordingly read a Second time, and added to the Bill.
New Clause 23
Offence of carrying out activities under arrangements tainted by false information
“(1) A person commits an offence if—
(a) the person carries out an activity in the United Kingdom pursuant to a foreign activity arrangement required to be registered under section (Requirement to register foreign activity arrangements)(1),
(b) information provided to the Secretary of State under section (Registration information) or (Information notices) in connection with the arrangement, whether by the person or by another person, is false, inaccurate or misleading in a material way, and
(c) the person knows, or ought reasonably to know, that the facts are as mentioned in paragraph (b).
(2) A person commits an offence if—
(a) the person carries out a political influence activity in the United Kingdom pursuant to a political influence arrangement required to be registered under section (Requirement to register foreign influence arrangements) (1),
(b) information provided to the Secretary of State under section (Registration information) or (Information notices) in connection with the arrangement, whether by the person or by another person, is false, inaccurate or misleading in a material way, and
(c) the person knows, or ought reasonably to know, that the facts are as mentioned in paragraph (b).
(3) Subsections (1) and (2) do not apply to a foreign power.
(4) Subsection (2) does not apply to—
(a) a recognised news publisher;
(b) a person within section (Requirement to register foreign influence arrangements)(6)(b).”.—(Tom Tugendhat.)
This new clause creates offences of carrying on activities under a registrable arrangement where false of misleading information has been provided in connection with the arrangement.
Brought up, read the First and Second time, and added to the Bill.
New Clause 24
Offences: penalties
“(1) A person who commits a foreign activity offence is liable—
(a) on conviction on indictment, to imprisonment for a term not exceeding 5 years or to a fine (or both);
(b) on summary conviction in England and Wales, to imprisonment for a term not exceeding the general limit in a magistrates’ court or to a fine (or both);
(c) on summary conviction in Northern Ireland, to imprisonment for a term not exceeding 6 months or to a fine not exceeding the statutory maximum (or both);
(d) on summary conviction in Scotland, to imprisonment for a term not exceeding 12 months or to a fine not exceeding the statutory maximum (or both).
(2) “Foreign activity offence” means—
(a) an offence under section (Requirement to register foreign activity arrangements)(10);
(b) an offence under section (Offence of carrying out activities under an unregistered foreign activity arrangement);
(c) an offence under section (Requirement to register activities of specified persons)(3);
(d) an offence under section (Registration information)(6) committed in relation to a foreign activity arrangement registered under section (Requirement to register foreign activity arrangements) or an activity registered under section (Requirement to register activities of specified persons);
(e) an offence under section (Information notices)(7) committed in relation to an information notice given under section (Information notices)(1);
(f) an offence under section (Offence of providing false information)(1) or (2);
(g) an offence under section (Offence of carrying out activities under arrangements tainted by false information)(1).
(3) A person who commits a foreign influence offence is liable—
(a) on conviction on indictment, to imprisonment for a term not exceeding 2 years or to a fine (or both);
(b) on summary conviction in England and Wales, to imprisonment for a term not exceeding the general limit in a magistrates’ court or to a fine (or both);
(c) on summary conviction in Northern Ireland, to imprisonment for a term not exceeding 6 months or to a fine not exceeding the statutory maximum (or both);
(d) on summary conviction in Scotland, to imprisonment for a term not exceeding 12 months or to a fine not exceeding the statutory maximum (or both).
(4) “Foreign influence offence” means—
(a) an offence under section (Requirement to register foreign influence arrangements)(8);
(b) an offence under section (Offence of carrying out political influence activities pursuant to unregistered foreign influence arrangement);
(c) an offence under section (Requirement to register political influence activities of foreign principals)(3);
(d) an offence under section (Registration information)(6) committed in relation to a foreign influence arrangement registered under section (Requirement to register foreign influence arrangements) or a political influence activity registered under section (Requirement to register political influence activities of foreign principals);
(e) an offence under section (Information notices)(7) committed in relation to an information notice given under section (Information notices)(2);
(f) an offence under section (Offence of providing false information)(3) or (4);
(g) an offence under section (Offence of carrying out activities under arrangements tainted by false information)(2).”.—(Tom Tugendhat.)
This new clause sets out the penalties for the offences created under the registration scheme.
Brought up, and read the First time.
The Chair
With this it will be convenient to discuss:
Government new clause 26—Offences: supplementary provision.
Tom Tugendhat
New clauses 24 and 26 deal with the penalties and supplementary provisions for the offences under the scheme. I start by reminding the Committee of one of the scheme’s aims: to deter foreign power use of covert arrangements, activities and proxies.
FIRS will play an important role in countering state threats. It is therefore important that the scheme should have penalties that reflect the seriousness of non-compliance within that context. The new clause makes provision for two separate maximum penalties for the two parts of the scheme. It is proposed that any offence committed under the primary registration requirement should be capable of attracting a custodial penalty of up to two years on indictment, or a fine; that is compared with an offence committed under the enhanced registration requirement, which we propose should be capable of attracting a custodial penalty of up to five years on indictment, or a fine.
The availability of a custodial penalty is a necessary reflection of the seriousness of seeking to hide or obfuscate influence or activity in the United Kingdom directed by foreign powers or entities. The penalty must be taken seriously by those engaged in the state threats activity that we are trying to counter; that would be unlikely if, for example, we were to impose only financial penalties. The offences under the enhanced measure would be capable of a higher maximum custodial penalty. This distinction is to reflect the seriousness of hiding or obfuscating arrangements and activities, carried out on behalf of foreign powers or entities, that the Secretary of State has identified as being necessary to specify in order to protect the safety or interests of the United Kingdom. I have covered the issue to some extent through my earlier explanations about the differing thresholds for offences.
I will not spend long speaking to new clause 26, given that it extends the application of clauses 28 and 29 to the offences under this part and mirrors the approach taken to exclude the public from legal proceedings in clause 31—clauses that have all been debated by the Committee already.
The new clause has several functions. First, it extends the application of clause 28 to this part so that the officers of bodies corporate and other bodies may be held liable for offences committed by those bodies. Given that a body corporate or other bodies can make either a foreign activity arrangement or foreign influence arrangement, it is crucial for the enforceability of the scheme that these bodies and their officers can be held liable should they breach the conditions set out under these provisions.
Secondly, the new clause extends the application of clause 29 to an offence under this part that is capable of being committed outside the UK. In the context of FIRS, that relates to where a foreign activity or foreign influence arrangement has been made outside the UK but has not been registered within the 10-day period. Although the activity pursuant to the arrangement must take place in the UK, the offence for failing to register can therefore be committed overseas. We have already debated the necessity of this in respect of the new clauses relating to the registration of arrangements.
Finally, this provision grants the court the power to exclude the public from proceedings for offences under this part, where necessary in the interests of national security; it is important to be clear, however, that this does not apply to the passing of a sentence. Excluding the public from proceedings might be necessary in circumstances where the Crown needs to adduce sensitive evidence as part of the prosecution—evidence that may be harmful to national security if shared more widely with the public.
For example, if a person provided false information in connection with an activity that is required to be registered in relation to a foreign influence arrangement, it might be necessary to rely on sensitive evidence to demonstrate why that information was considered to be false and what the person’s actual activities included. The provision would ensure that such sensitive evidence could be examined without the public being present. The decision to exclude the public would be made by the court, not the prosecution, and it is important to note that the power does not grant the use of closed material proceedings.
Holly Lynch
Government new clause 24 lays out the penalties for offences committed under the registration scheme. Subsection (1) states that a person who commits a foreign activity offence is liable on conviction or indictment to a maximum five years of imprisonment. Subsection (3) states that a person who is found to have committed a foreign influence offence is liable to a maximum two years of imprisonment. My hon. Friend the Member for Garston and Halewood raised this point yesterday with officials: why the marked difference in sentencing between the different strands of activity?
Subsection (1) of Government new clause 26 states that officers of bodies corporate may be held liable for offences committed by those bodies in relation to the registration scheme. That is a welcome measure that will ensure that corporate officers and organisations will remain accountable to the registration scheme. Like the inclusion of body corporate offences in part 1 of the Bill, it reflects the seriousness with which UK businesses must treat the provisions.
Subsection (3) provides that the public may be excluded from proceedings for an offence under part 1. As the Minister said, we discussed at previous stages of the Bill that it is right to have that option where matters prejudicial to the UK’s national security may need to be cited for prosecution. However, we stress that it is a power that should be exercised only when necessary.
Tom Tugendhat
The difference between the tariffs is purely down to the different importance of a general registration and an enhanced registration.
Question put and agreed to.
New clause 24 accordingly read a Second time, and added to the Bill.
New Clause 25
Publication and copying of information
“(1) The Secretary of State may by regulations make provision about—
(a) publication of information provided to the Secretary of State under this Part;
(b) copying of information provided to the Secretary of State under this Part.
(2) The power under subsection (1) includes in particular power to make provision about a description of information or material which is not to be published.”—(Tom Tugendhat.)
This new clause allows the Secretary of State to make regulations in relation to the publication and copying of information provided to the Secretary of State under the registration provisions.
Brought up, read the First and Second time, and added to the Bill.
New Clause 26
Offences: supplementary provision
“(1) Section 28 (offences by body corporate etc) applies in relation to offences under this Part as it applies in relation to offences under Part 1.
(2) Section 29(1) and (3) to (5) (offences committed outside the United Kingdom) applies in relation to offences under this Part as it applies in relation to offences under Part 1.
(3) If it is necessary in the interests of national security, a court may exclude the public from any part of proceedings for an offence under this Part, except for the passing of sentence.”—(Tom Tugendhat.)
This new clause provides that officers of bodies corporate and other bodies may be held liable for offences committed by those bodies, that offences may be committed outside the United Kingdom, and that a court may exclude the public from proceedings for offences.
Brought up, read the First and Second time, and added to the Bill.
New Clause 27
Annual report
“(1) The Secretary of State must, as soon as is practicable after the end of each relevant period—
(a) prepare a report in relation to that period, and
(b) lay a copy of the report before Parliament.
(2) The report must provide details of—
(a) the total number of arrangements registered with the Secretary of State under section (Requirement to register foreign activity arrangements) or (Requirement to register foreign influence arrangements),
(b) the number of arrangements registered with the Secretary of State under section (Requirement to register foreign activity arrangements) or (Requirement to register foreign influence arrangements) during the relevant period,
(c) the total number of specified persons and foreign principals who have registered activities with the Secretary of State under section (Requirement to register activities of specified persons) or (Requirement to register foreign influence activities of foreign principals),
(d) the number of specified persons and foreign principals who have registered activities with the Secretary of State under section (Requirement to register activities of specified persons) or (Requirement to register foreign influence activities of foreign principals) during the relevant period,
(e) the number of information notices issued under section (Information notices) during the relevant period,
(f) the number of persons charged with an offence under this Part during the relevant period, and
(g) the number of persons convicted of an offence under this Part during the relevant period.
(3) ‘Relevant period’ means—
(a) the period of 12 months beginning with the day on which this section comes into force, and
(b) each subsequent period of 12 months.”—(Tom Tugendhat.)
This new Clause requires the Secretary of State to provide an annual report to Parliament on matters relating to the registration scheme.
Brought up, and read the First time.
Tom Tugendhat
I beg to move, That the clause be read a Second time.
New clause 27 requires the Secretary of State to prepare and publish an annual report to Parliament on the operation of FIRS. I have already spoken about the importance of transparency. Indeed, transparency is essential to the functioning not only of our democracy but of our entire state. The hon. Member for Halifax raised that issue on numerous occasions, and I have committed to working with her. The commitment to publish information about the scheme’s operation will help to ensure that the UK public is more informed about the scale and extent of foreign influence in our political affairs, as well as activity being undertaken for specified foreign powers or entities.
The information that the Secretary of State would be required to provide is as follows: the total number of foreign activity and foreign influence arrangements registered with the Secretary of State; the number of foreign activity and foreign influence arrangements registered with the Secretary of State over the previous year; the total number of specified persons and foreign principals who have registered activities with the Secretary of State; the number of specified persons and foreign principals who have registered activities with the Secretary of State over the previous year; the number of information notices issued over the previous year; the number of persons charged with a FIRS-related offence over the previous year; and the number of persons convicted of a FIRS-related offence over the previous year. The new clause acts as a safeguard by inviting parliamentary and public scrutiny of the operation of FIRS.
Holly Lynch
I thank the Minister for that explanation. We very much welcome new clause 27. My understanding is that the different elements of the scheme could come into effect at different times. Will the Minister confirm that if, for example, the requirement to register foreign influence arrangements becomes operational before the requirement to register foreign activity arrangements, or vice versa, the annual report will be due a year from the start date of the specific scheme, not a year after both parts of the scheme come into effect?
Tom Tugendhat
Yes, there is no question but that it should be according to when the first part of the scheme comes into effect, not when the whole scheme is done.
Maria Eagle
Briefly, I welcome the provisions for an annual report to give information to Parliament. I wonder whether the Minister might consider extending the requirements, when it comes to those who are charged and convicted, to include a need to make it clear which countries they come from, to give an overall view on the extent to which there are difficulties with particular places?
Tom Tugendhat
I take that point in the spirit in which it was made. I think that makes sense, but it should be possible to refer back through the registrations. If registrations have not been made, I take her point entirely.
Question put and agreed to.
New clause 27 accordingly read a Second time, and added to the Bill.
New Clause 28
Interpretation
‘(1) In this Part—
“foreign activity arrangement” has the meaning given by section (Requirement to register foreign activity arrangements);
“foreign influence arrangement” has the meaning given by section (Requirement to register foreign influence arrangements);
“foreign power” has the same meaning as in Part 1 (see section 25), subject to subsection (2);
“foreign principal” has the meaning given by section (Requirement to register foreign influence arrangements);
“political influence activity” has the meaning given by section (Meaning of “political influence activity”);
“recognised news publisher” has the meaning given by section (Requirement to register foreign influence arrangements);
“registered activity” means an activity registered with the Secretary of State under section (Requirement to register activities of specified persons) or (Requirement to register political influence activities of foreign principals);
“registered arrangement” means an arrangement registered with the Secretary of State under section (Requirement to register foreign activity arrangements) or (Requirement to register foreign influence arrangements);
“specified person” has the meaning given by section (Requirement to register foreign activity arrangements).
(2) For the purposes of this Part references in section 25 to a foreign State, or a foreign country or territory, do not include the Republic of Ireland.
(3) Any provision of this Part which does not apply in relation to a person (“P”) does not apply in relation to—
(a) a person who holds office in or under, or is an employee or other member of staff of, P (acting in that capacity);
(b) a person whom the Secretary of State reasonably considers to be exercising functions on behalf of P as if they are a person who holds office in or under, or as if they are an employee or other member of staff of, P (acting in that capacity).’ —(Tom Tugendhat.)
This new clause contains definitions relevant to the registration scheme.
Brought up, read the First and Second time, and added to the Bill.
New Clause 4
Proceedings relating to safety or interests of the United Kingdom
“(1) This section applies where a court is considering proceedings under Part 1 of this Act, where the proceedings involve the safety or interests of the United Kingdom.
(2) In proceedings to which this section applies, the court must take account of how the interests of the Secretary of State or of the Government of the United Kingdom may differ from the interests of the United Kingdom, in order to satisfy itself that the interests of the United Kingdom have been appropriately identified and considered.”—(Holly Lynch.)
Brought up, and read the First time.
Holly Lynch
I beg to move, That the clause be read a Second time.
New clause 4 is an attempt to make a clear distinction between what is in the Government’s interest and what is in the national interest, so that the two cannot be conflated. There are a number of new offences created under part 1 of the Bill, and a key condition running throughout those offences is that a person knows, or ought reasonably to know, that their conduct is prejudicial to the safety or interests of the United Kingdom. There are other conditions that must be met, with the foreign power condition perhaps being the most substantial.
The aim of new clause 4 is to ensure that a court considering proceedings in relation to part 1 offences must take account of how the interests of the Secretary of State, or the Government of the United Kingdom, may be slightly separate from the interests of the United Kingdom, in order to satisfy itself that the interests of the United Kingdom have been appropriately identified and considered. Members will recognise that there is already a difference between the safety of the United Kingdom and the interests of the United Kingdom, with the new offences encompassing both. I suspect there will be a great deal of consensus on safety, but to explicitly define and agree on interests I imagine would be much harder.
We worked through various examples as part of the deliberations on part 1 offences. One such example was whether, if the Government faced deliberate disruption enacting policy they deemed to be in the national interest, that would be enough to meet the threshold? If, for example, a deportation flight—the stuff of the Home Secretary’s dreams—was prevented from taking off because of protesters, would that be enough to meet the prejudicial to the national interest threshold? The Government might wish to argue that case, although it would be far from compromising national security.
We got some assurances from the Minister’s predecessor that national security laws would not transgress into conduct that may be irritating for the Government but lawful, or into prosecuting other criminal offences by treating them as unduly having national security implications. Beyond the specifics of the new offences created by the Bill, we also believe that new clause 4 would establish in principle the distinction between the Government’s political interests and the country’s national security.
I am explicit that the new clause, alongside new clause 5 and new clause 29, have at least in part been shaped by the meeting that we now have confirmation took place between the former Prime Minister, the right hon. Member for Uxbridge and South Ruislip (Boris Johnson), when he was Foreign Secretary, and former KGB officer Alexander Lebedev, at the height of the Salisbury poisoning. It is worth remembering that we did not have confirmation of that meeting when the Bill Committee first started, and the right hon. Member was still the Prime Minister. I do not know if that is an indication of how quickly things move in politics or of how long this Bill Committee has been going on for. However, it is the sort of example that warrants the separating out of Government and individual Minister’s political interests and national security interests. It has become too easy to suggest that answers could not be provided on that matter and others for security reasons, when actually getting to the bottom of what had gone on was very much in the national interest. It may not have been in the Government’s political interest, but that is the distinction that is important to put on a proper statutory footing.
Stuart C. McDonald
I support the objective of the new clause. When we were debating some of the offences in part 1, the SNP tabled various amendments to try to make it clear that the national interest and the interests of the Government are not necessarily the same thing—often, they are not the same thing at all. It appears that judicial authority says that, in essence, it is for the Government to decide what the national interest is; that does not really assist the position. Whether or not this new clause is the answer is something we will have to revisit again, but I express sympathy with the intention behind it.
Tom Tugendhat
I welcome the spirit with which the hon. Member for Halifax has entered into this discussion, and I appreciate her points. Making illegal those matters that irritate Ministers of the Crown would certainly make my life at home significantly quieter, as it would silence my children. Sadly, I think that trying to make case law for my family would be problematic.
It is certainly true that there is a difference between the interests of Ministers and the interests of an individual Minister, whether that be an ordinary Minister or a Prime Minister, and national security. Case law in the United Kingdom already recognises that in considering any prosecution in relation to offences to which the provisions regarding prejudice to the safety of the interests of the UK apply. The UK courts already consider the nature and risk to the safety and interests of the UK. Case law already makes clear that
“the safety or interests of the United Kingdom”
should be interpreted as the objects of state policy determined by the Crown on the advice of Ministers. That is notably different from protecting the particular interests of those in office.
Again, I appreciate the spirit with which the hon. Lady has entered into the conversation, but the provisions in part 1 to which the safety or interests test applies are measures that disrupt and respond to serious national security threats, such as those from espionage, sabotage and threats to the UK’s most sensitive sites. As I am sure hon. Members will agree, it is right that appropriate conditions—such as the test of whether conduct is carried out for, on behalf of, or with the intention to benefit a foreign power—are in place to limit the scope of the offences to the types of harmful activity we are targeting.
The combination of the conditions we apply to measures in the Bill mean that not only are the offences themselves proportionate, but an appropriately high bar has to be met to bring a prosecution. These conditions take us firmly outside the realm of merely leaking embarrassing or unauthorised disclosures, or indeed whistleblowing or domestic political opposition. The Law Commission shared that sentiment in the evidence it gave to the Committee—of course I was not present, but given her reference to the length of time in politics I am sure she will understand that.
Individuals and groups might not agree with Government policy, but it still represents the policy that the Government have been elected to carry out, so disclosing protected information from a foreign power can never be the right response to that. It would not be appropriate for the courts to second guess the merits of Government policy in this way. On the basis that the courts are well able to judge the difference between national interest and personal interest, I hope that the hon. Member will withdraw the amendment.
Holly Lynch
I suspect the Minister understands the points I am making and is sympathetic to what I am trying to get at. I put him on notice that, where I think there is information that could and should be in the public domain and I meet barriers relating to national security reasons preventing it from being in the public domain, I will be a thorn in his side every step of the way. With that veiled threat—
Holly Lynch
I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 5
Ministerial conduct
“(1) This section applies in relation to any Minister of the Crown who engages with, or intends to engage with, or ought reasonably to know that they are about to engage with, a person who is a part of a foreign intelligence service.
(2) A Minister of the Crown may only engage with such a person if either of the following conditions are met—
(a) a senior civil servant is formally present at or party to the engagement, and a formal record of the engagement has been made by the senior civil servant; or
(b) a senior civil servant is not formally present at or party to the engagement, and a formal record of the engagement has not been made by a senior civil servant, but the written consent of the Prime Minister has been sought by the Minister of the Crown, and has been granted and formally recorded in writing.
(3) In this section ‘engagement’ includes meeting in person or via electronic means, and corresponding in writing or via electronic means.”—(Holly Lynch.)
Brought up, and read the First time.
Holly Lynch
I beg to move, That the clause be read a Second time.
New clause 5 is similar to the previous new clause and would mean that a Minister of the Crown may only engage with a person who is a part of a foreign intelligence service if either a senior civil servant is formally present at or party to the engagement, and a formal record of the engagement has been made by the senior civil servant; or a senior civil servant is not formally present at or party to the engagement, and a formal record of the engagement has not been made by a senior civil servant, but the written consent of the Prime Minister has been sought by the Minister of the Crown, and has been granted and formally recorded in writing. That would apply both to meetings in person and via electronic means. It would apply to any Minister of the Crown who engages with, or intends to engage with, or ought reasonably to know that they are about to engage with, a person who is a part of a foreign intelligence service. Failure to follow these rules should be a resignation matter.
The measures proposed throughout the Bill promise an extensive overhaul in establishing what constitutes meeting with and assisting a foreign power threat, including new offences and regimes covering almost all aspects of society. It is entirely right that we also consider the role of Ministers. I am afraid that, once again, the need for such a provision was born out of the conduct of the right hon. Member for Uxbridge and South Ruislip when he was the Foreign Secretary. However, there are other examples.
The right hon. Gentleman confirmed to the Liaison Committee that he met with former KGB officer Alexander Lebedev without officials and without permission at the height of the Salisbury poisoning back in 2018. To set the scene, that was immediately after the then Foreign Secretary had attended a meeting of NATO Foreign Ministers at NATO headquarters in Brussels to discuss the collective response to Russia’s use of Novichok on UK soil. In advance of that meeting, NATO Secretary-General Jens Stoltenberg outlined that Russia would be the first item on the agenda, after what he said were several years of Moscow’s “pattern of dangerous behaviour”, confirming, as the Prime Minister had already done, that:
“It is also highly likely that Russia was behind the nerve agent attack in Salisbury.”
That NATO meeting was on 27 April 2018.
The Foreign Secretary went straight from that NATO meeting to Palazzo Terranova in Italy for a weekend-long party hosted by Evgeny Lebedev, now Lord Lebedev. There he met with Evgeny Lebedev’s father, Alexander Lebedev, an ex-KGB officer. The Foreign Secretary attended the party with no security and no officials, despite his position being deemed to require round-the-clock protection from the Metropolitan police. There is a brief entry of ministerial interests on the Foreign Office website, where he declared an “overnight stay” at the party on 28 April, which is the only official record in existence.
While the Foreign Secretary was partying with Lord Lebedev and his father, the ex-KGB officer, the Novichok was still waiting to be found in a bin seven miles north of Salisbury. It was found by Charlie Rowley on 30 June, who survived his exposure to the Novichok. However, his partner, Dawn Sturgess, did not, having sprayed it directly on to her skin, believing it to be perfume.
In September 2018, the Prime Minister returned to update the House of Commons to confirm that, based on a body of intelligence, the Government had concluded that the two individuals named by the police and the Crown Prosecution Service were officers from the Russian military intelligence service, the GRU. The right hon. Member for Uxbridge and South Ruislip followed up in writing to the Liaison Committee in his letter dated 21 July 2022, saying:
“As far as I am aware, no Government business was discussed”
at that encounter with Alexander Lebedev. Needless to say, that one line presented far more questions than answers.
We have decided to keep the definition tight to someone who is a member of a foreign intelligence service. Committee members might point out that, in this particular scenario, given that Alexander Lebedev would describe himself as a former KGB officer, the right hon. Member for Uxbridge and South Ruislip would not necessarily be covered by the new clause. However, this new clause, new clause 4 and new clause 29 would work in combination to ensure that the gap in procedure exposed by the meeting I have just outlined would be closed down.
It is right to ensure that the Government and officials act with accountability and transparency. The new clause does not prevent such meetings taking place; it only formalises expectations around how any such encounter should be managed. The Government may argue that it is not necessary, as similar expectations are already provided for by the ministerial code, but the ministerial code was very much degraded in recent months, and was in effect when the meeting that I outlined took place, so there is very much a case for tighter measures.
The public have a right to expect the highest possible standards from their Government officials, in both their public and private lives. The new clause will ensure that Government officials adhere to strict clearance systems when dealing with the intelligence services of hostile foreign states. I hope the Government will welcome this opportunity to tighten standards and will support new clause 5.
Tom Tugendhat
I welcome the spirit in which the new clause was tabled. I understand the points made by the hon. Member for Halifax. As she knows very well, Ministers are already expected to uphold the ministerial code. I am not going to seek to defend the Administration of the right hon. Member for Uxbridge and South Ruislip; as the hon. Lady will know, we had our disagreements at that time, when I was chairing the Foreign Affairs Committee, and I put them on the record. Indeed, I attended the Liaison Committee hearing to which she referred.
It is important to look at where we are today and to recognise that the re-issuing of the ministerial code in May this year, which included proportionate sanctions, should be taken into account. It is also worth pointing out that the Bill already includes several measures to counter hostile activity, including updated espionage offences for disclosing or providing access to protected information and offences for engaging in preparatory conduct relating to espionage. That could just be a simple meeting and a cup of coffee.
In clause 3, the Bill also seeks to criminalise activity whereby a person either engages in conduct that they intend will materially assist a foreign intelligence service or knows or reasonably ought to know that conduct that they are engaged in is of a kind that it is reasonably possible may materially assist a foreign intelligence service. As the former head of GCHQ put it, this is all about making sure that others cannot construct a haystack in which to find a needle. It means that, for the first time, it will be a criminal offence to be a covert foreign agent and engage in activity that assists a foreign intelligence service.
To be clear to the Committee, the offences would capture Ministers of the Crown if they engaged in conduct that falls outside their official functions or capacity as a Minister. Moreover, ministerial conduct is principally a matter for the ministerial code and there are already transparency measures in place for Ministers of the Crown to formally record their engagements with external parties and declare any gifts and hospitality. If a Minister is with an external organisation or individual and finds themselves discussing official business without an official present—for example, at a social occasion—any significant content should be passed back to the Department as soon as possible after the event.
Although it would not be appropriate to comment on security or intelligence matters, what I can say is that Ministers are made fully aware of their responsibility to safeguard national security, including in respect of the standards of conduct expected of Ministers and how they discharge their duties in maintaining the security of Government business, as set out in the ministerial code. Although the new clause may seek to provide further accountability and propriety, it would not be appropriate to create new, separate provisions.
Overall, I consider that the existing mechanisms that are already in place to increase transparency around foreign influence in the UK political and governmental system, as well as the measures already in the Bill aimed at tackling and responding to the malign nature of seeking to assist a foreign intelligence service, are sufficient. I ask the hon. Member for Halifax to withdraw the new clause, although I recognise the pattern of actions that brought her to table it.
Holly Lynch
The Minister has gone through the pre-existing frameworks that should have prevented such a meeting from taking place, and suggests that those should be enough. Unfortunately, the example I gave shows that they were not enough. We still do not have all the answers we would like about what was discussed and what the nature of that engagement was, and the clarity that would satisfy us that there were no breaches of national security as part of that interaction. The Minister is right that all that should have been enough, but it was not in those circumstances, and as far as we can tell there were no real consequences in real time of that having taken place.
I have made my case strongly; however, as the Minister has put his personal views on the record and given his assurance that he understands the points I made and will continue to bear them in mind as we look at some of the protections in the round, I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 6
Defences
“(1) In any proceedings for an offence under section 2 of this Act or section 5 of the Official Secrets Act 1989, it shall be a defence—
(a) that the disclosure in question was in the public interest, and
(b) the manner of the disclosure was also in the public interest.
(2) Whether a disclosure was in the public interest shall be determined having regard to—
(a) the subject matter of the disclosure,
(b) the harm caused by the disclosure, and
(c) any other relevant feature of the disclosure.
(3) Whether the manner of disclosure was in the public interest shall be determined having regard to—
(a) whether the disclosure has been made in good faith,
(b) if the disclosure relates to alleged misconduct, whether the individual reasonably believes that the information disclosed, and any allegation contained in it, are substantially true,
(c) whether the disclosure is made for the purposes of personal gain,
(d) the availability of any other effective authorised procedures for making the disclosure and whether those procedures were exercised, and
(e) whether, in all the circumstances of the case, it is reasonable for the disclosure to have been made in the relevant manner.”—(Mr Jones.)
This new clause introduces a public interest defence to the new disclosure offence created by clause 2, and the section 5 disclosure offence in the Official Secrets Act 1989. The proposed defence is modelled on the public interest defence in the Public Interest Disclosure Act 1998.
Brought up, and read the First time.
Mr Jones
I beg to move, That the clause be read a Second time.
It will come as no surprise to the Committee that I am not moving the new clause as some bleeding-heart liberal, and I would certainly do nothing to undermine the security of our country. However, as can be seen from the names put to the new clause, it has cross-party support throughout the House, including on the Government Benches.
The new clause even has support in the Cabinet, from the Secretary of State for Wales, the right hon. and learned Member for South Swindon (Sir Robert Buckland), the former Justice Secretary. While he was off the Cabinet carousel—the system at the moment—he was clear in arguing for why we need a public interest defence. To quote from the opening paragraph of his article on “ConservativeHome” in December 2021:
“The principle of open government is too often seen as an issue for the left, but I firmly believe that it is profoundly Conservative to believe that transparent administration is what should lead to higher standards, greater efficiency and better value for taxpayers’ money. As Conservatives, we believe that the State should be our servant, not our master.”
I could not agree more.
Such a measure as this is long overdue. There are basically three arguments against it, which I have deduced over the past few months since I tabled the new clause: first, it will be too difficult, which is the obvious one that always comes out; secondly, if we are in favour of it, we will open the floodgates to leaks and will be a leakers’ charter; and finally, it will make it difficult for our security forces, because evidence would have to be put into court to defend such actions, even though that has to happen now anyway. In a minute, I will come on to reasons why that argument is nonsense.
In its 2015 report, the Law Commission argued for a public interest defence. Are there strong reasons why there should be criminalisation of the leaking information under the Official Secrets Act 1989? Yes, there are, but I would also strongly argue that there has to be a defence in the public interest where someone is disclosing serious wrongdoing in Government—that individual needs to be able to have recourse to that defence in the courts. The problem I have is that if we do nothing—which seems to be the Government’s approach—what we will have, which is what we have already, is leaving it up to juries. I would sooner have the defence outlined in law, so that people can use it and so that it is impossible for certain other people to use it.
The Law Commission said in its report,
“we cannot be certain that the current legislative scheme”
in the 1989 Act, which does not provide for a public interest defence,
“affords adequate protection to Article 10 rights under the ECHR.”
That is the right to freedom of speech. We have a recommendation from the Law Commission and we have the opportunity to act on it in this Bill. It seems that, like lots of things in the Bill, it has been put on a pile on somebody’s desk of things that are too hard to manage. It is a missed opportunity.
The other side to it is that the defence would act as a safety valve. I have said in earlier sittings that the Bill is a missed opportunity to reform the 1989 Act, and I am still bemused to know whether the Bill and that Act will work alongside one another. The 1989 Act is outdated: it does not recognise modern technology, as the Intelligence and Security Committee outlined in its Russia report in 2020. It also fails to protect the individual in cases in which they know of wrongdoing and release it into the public domain because they feel there is no other course of action.
We then come to how we define the defence. I am not suggesting that what I have put in the new clause is ideal, but the argument “It is far too difficult and we could never do this”—which is what certain individuals have said to me—is not right. If we look at what is already in law—employment law, I hasten to add—we see that there is a definition in the Public Interest Disclosure Act 1998. Can we cut and paste that definition? No, I do not think we can, but it certainly provides a template. It is a piece of employment law that prevents whistleblowers from being negatively treated or unfairly dismissed when reporting concerns. That is a starting point.
There are other aspects we could look at in terms of a definition. The subject matter of the disclosure will obviously have to be part of it, as will the seriousness of the misconduct exposed. We must consider the harm caused by the disclosure and the proportionality in that respect, as well as whether the disclosure was made in good faith. Certainly, if someone just dumped a load of data into the public domain, we could argue that that was not done in good faith and would not meet the test at all.
We must consider whether the disclosure is made for the purpose of personal gain. If someone is selling something, that certainly would not meet the criteria. There are factors such as whether the extent of the disclosure is no more than responsible and necessary for the purpose of exposing the relevant conduct, and whether the individual reasonably believes that the information disclosed and any allegations it contains are true. There is the availability of any other effective authorised proceedings; if there are no other ways to do it, that would be a defence. Lastly, we must consider whether in all circumstances and cases it is reasonable to disclose, as well as the manner in which the information was disclosed.
The Law Commission recommended another safety value, which is something I am open to, but it seems that the Government completely ignored that. The issue will not go away—that is the point. We want to protect our security services; I am sorry, but having done jury service myself I would not leave it to a jury to decide what the arguments are. At least if we had this defence, people could argue the legal points and use it as a defence. It is supported by many lawyers, by the right hon. and learned Member for South Swindon and by many newspaper editors. That is why I have moved the new clause.
My other two points are about the argument that if we cross this Rubicon, somehow the floodgates will open and there will be a green light for everyone to release information. There is no evidence of that at all. In Australia, New Zealand and Canada, where they have a similar public interest defence, there is no evidence that its use is increasing. The other argument that has been put to me is that introducing the defence would allow people like Julian Assange to use it as a defence, but that is absolute nonsense. The new clause would actually make the Bill Assange-proof, because anyone who data dumped could not use the public interest defence.
Finally, there is an argument that I find remarkable. I do not know where it has come from, but the argument is that if we put a public interest defence into law, we will somehow have a situation whereby the security services will have to disclose things in court. My response is that if there is a data dump or somebody is prosecuted under the Official Secrets Act, we still have to go to court, but we have closed hearings, which protect sensitive sources. I honestly do not understand why this has just been left off. I think it has been left in the “hard to do” pile and some people think, “Do we really want to upset the status quo?” We need to get the balance right between protecting our national secrets, which I would certainly argue we should, and allowing a legitimate balance between the powers of the state. That would perhaps not be a problem under the usual conventions, but in the previous debate my hon. Friend the Member for Halifax clearly demonstrated that we have a Government who seem to ignore every convention.
It is in that spirit that I move the new clause. I know that U-turns are in fashion at the moment among the current Government, and I wish and hope that if the Minister—with a new set of eyes on this matter—cannot agree to the new clause today, he will at least look at how we can incorporate a public interest defence into the Bill.
Holly Lynch
I thank my right hon. Friend for tabling new clause 6, and I thank you, Mr Gray, and Ms Ali for allowing a debate on its merits.
As my right hon. Friend has outlined, the new clause seeks to add a public interest defence to the new disclosure offence created by clause 2 and to the section 5 disclosure offence in the Official Secrets Act 1989. There is of course an undeniable requirement to protect from public disclosure information that, if revealed, could be harmful to our national security. However, for the security services to be able to function as they should within a democracy, they rely on the trust of the British people and their elected representatives, with enough transparency and oversight to make accountability a real part of their work.
As has been mentioned, three of our four Five Eyes partners already have a mechanism that provides a public interest defence with regard to disclosures of this nature. It is also well documented—this is a point made on Second Reading—that, as a country, we have increasingly asked juries to make their own determinations on public interest defences when considering judicial proceedings. We have seen that result in varied outcomes, with a great deal of discretion afforded to jury members in the absence of a clear legislative framework for them to start from.
We might also make the case that, in the event that someone feels they have an obligation to share information but there is no agreed and structured route through which to do that, the absence of an alternative whistleblowing procedure leaves them with limited options, often resulting in a decision to go public and take their chances in the courts.
The Law Commission examined all this in its incredibly detailed 2020 “Protection of Official Data” report—specifically, in chapter 8—and we are grateful to the authors of that report for their evidence at the start of the Committee stage. With the commission having engaged with a significant number of stakeholders, its report is clear in its recommendation to have a public interest defence.
The report’s authors deal with the complexities head on, saying:
“The public interest in national security and the public interest in transparent, accountable government are often in conflict. While, no doubt, public accountability can ensure that government is protecting national security, the relationship between security and accountability is nonetheless one of tension.”
They go on to say:
“Our concern in this part of the Report is to reconcile these competing interests (so far as possible). It is to propose a legal model that ensures that the price of protecting national security is not to undermine the rule of law (and vice versa). We are concerned to ensure that those with evidence of wrongdoing in Government do not feel that they must commit a serious criminal offence and take the law into their own hands, risking both the national security, and people's lives, in order to have that evidence properly investigated.”
Tom Tugendhat
I am conscious that another Minister is on their feet and a vote may be imminent so, if I may, I will whizz through my response.
Many people have looked at the public interest defence. Although there are differences of opinion, I would be happy to immediately assure the right hon. Member for North Durham that I will accompany him to a meeting with senior officials that he has requested in the past, but which has not yet happened. I will make sure that happens very soon; it is important that he hears the explanations of others and not just ministerial colleagues. I will make sure that happens imminently, because this is an important element. I appreciate the tone with which he has approached the issue; he is trying to be serious and sober in his reflection of the defence of those who are trying to do their best for our country but may indeed be doing harm as well.
I am not a believer argument in the floodgates argument—I do not believe that is a correct assessment of what could happen. It is, however, true that even a single release of some of this information could be extremely damaging to the national interest, as he is aware and would no doubt wish to avoid. I am very happy to have this conversation further and to cover various other issues.
It is also worth noting that other countries have a public interest defence, and we looked at them and the legislation. When considering reform, we looked particularly at the Five Eyes countries, but it is important to recognise the UK context in wider circumstances, so it would not be right to assume that a public interest defence that works for others is exactly the same as for this instance. I appreciate the right hon. Gentleman’s points, but I ask, on that basis, that he withdraw the clause and that we engage in further conversation.
Mr Jones
I thank the Minister. This issue is not going to go away, so we need to have further discussions. The Law Commission’s recommendations seem to have been ignored, and I think engagement with them would be useful before the passage of the Bill is complete. With the undertaking I have been given, I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
The Chair
Before we move on, I should say that if we have a Division, or several Divisions, the Committee will be suspended for 15 minutes for the first one and 10 minutes for subsequent ones. If the discussion goes beyond 5.15 pm, which is of course our cut-off time, there will be no further time for debate thereafter, but we must return here for the decisions to be made whenever the Divisions are over.
New Clause 29
Registration of former employees of foreign security services
“(1) A former employee of a security or intelligence service of a foreign power who is present in the United Kingdom for more than 2 months must register their presence with the Secretary of State.
(2) The Secretary of State may by regulations make provision about the information a person is required to provide to the Secretary of State when registering under this section.
(3) Failure to register as required by subsection (1) is an offence.
(4) A person commits an offence if, without reasonable excuse, the person fails to provide information required by virtue of subsection (2).
(5) A person commits an offence if—
(a) the person provides information to the Secretary of State by virtue of subsection (2),
(b) the information is false, inaccurate or misleading in a material way, and
(c) the person knows, or ought reasonably to know, that the information is false, inaccurate or misleading in a material way.
(6) An offence under this section is a foreign influence offence under section (Offences: penalties).”—(Holly Lynch.)
Brought up, and read the First time.
Holly Lynch
I beg to move, That the clause be read a Second time.
On considering the foreign influence registration scheme and its intended use, we felt that there was room to go further in relation to former employees of the intelligence services of other nations. New clause 29 will require all former employees of a security or intelligence service of a foreign power who are present in the United Kingdom for more than two months to register their presence with the Secretary of State. The Secretary of State has the discretion of making provisions by regulations about what information is required. We know that we are dealing with countries that are tasking their people to engage in a multitude of influence activities, from the loud and overt to the barely seen and covert, and everything in between.
Turning specifically to oligarchs and that culture, we have seen some individuals establish themselves almost as London celebrities. They are incredibly wealthy, and for some their status is built partly on the back of having been a former employee of an intelligence service. They make that clear as part of their persona, and it is the “former” bit that gives them a degree of cover. They have the connections and insight to be an interesting and potentially helpful ally to some of our politicians and decision makers, especially if they are incredibly wealthy, as so many oligarchs are, yet are deemed to be arm’s length enough for there to be the confidence for those relationships to grow largely unabated.
The notion of systemic opposition in Russia in particular provides for a degree of criticism of Putin and his regime as a means of occupying the space where actual opposition should be, and once again provides a degree of cover for those oligarchs overseas who engage in some criticism—enough to satisfy those they need to satisfy that they are indeed critics—before later mounting staunch defences of their former regimes when necessary. In addition to the FIRS framework set out in the Government’s new clauses, this is another intended layer of transparency, aimed precisely at those people, to put on a formal footing both those who are open about their previous work and those we may not otherwise know about.
We have discussed that those engaged in espionage are often not typical in any way. They will have received training, and will be incredibly capable and resourceful. Even those who have truly moved away from careers in the intelligence services will not lose overnight the ability to exercise those skills. I take on board that those working for security services have the right to a life after those careers; however, given that there are regimes known to pressurise, blackmail, or force co-operation from their people, even if they have truly walked away from that environment, there would be merit in the Secretary of State knowing where those vulnerabilities lie. I hope that the Minister will see the merit in this addition to the foreign influence registration scheme and adopt new clause 29.
Tom Tugendhat
I note the proposed new clause, and I hope that the hon. Member for Halifax will take my response in the way I intend it. Either foreign intelligence agents are already declared, in which case they are actively engaged in conversations with our intelligence services, or they are undeclared, in which case asking them to register may be something that we can hope for, but would be unlikely. I understand the intention behind the new clause, although I question whether it is proportionate, given that we are already trying to get anybody who is connected to a foreign agent to be registered. I feel that it may be more hopeful and aspirational than a realistic attempt to change other people’s actions.
Holly Lynch
The Minister absolutely understands the point that I was making. I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Schedule 1
Disclosure orders
Part 1
England and Wales and Northern Ireland
Introductory
1 (1) This Part of this Schedule applies in England and Wales and Northern Ireland.
(2) “Relevant investigation” means an investigation into the identification of relevant property or its movement or use.
(3) “Relevant property” means—
(a) money or other property which is likely to be used for the purposes of foreign power threat activity, or
(b) proceeds of involvement in foreign power threat activity.
(4) The reference to proceeds of involvement in foreign power threat activity includes a reference to any money, other property or benefit in money’s worth, which wholly or partly, and directly or indirectly, represents the proceeds of the involvement (including payments or rewards in connection with the involvement).
(5) “Appropriate officer” means—
(a) a constable, or
(b) a National Crime Agency officer.
Disclosure orders
2 (1) An appropriate officer may apply to a judge for a disclosure order.
(2) The application must state that a person or property specified in the application is subject to a relevant investigation and the order is sought for the purposes of the investigation.
(3) The judge may grant the application if satisfied that conditions 1 to 3 are met.
(4) Condition 1 is that there are reasonable grounds for suspecting that the property specified in the application is relevant property.
(5) Condition 2 is that there are reasonable grounds for believing that information which may be provided in compliance with a requirement imposed under the order is likely to be of substantial value, whether by itself or with other information, to the investigation.
(6) Condition 3 is that there are reasonable grounds for believing that it is in the public interest for the information to be provided, having regard to the benefit likely to accrue to the investigation if the information is obtained.
(7) A disclosure order is an order authorising an appropriate officer to give to any person the officer considers has relevant information notice in writing requiring the person to do any or all of the following with respect to any matter relevant to the investigation—
(a) answer questions, either at a time specified in the notice or at once, at a place so specified;
(b) provide information specified in the notice, by a time and in a manner so specified;
(c) produce documents, or documents of a description, specified in the notice, either at or by a time so specified or at once, and in a manner so specified.
(8) “Relevant information” means information (whether or not contained in a document) which the appropriate officer considers to be relevant to the investigation.
(9) A person is not bound to comply with a requirement imposed by a notice given under a disclosure order unless evidence of authority to give the notice is produced.
(10) An appropriate officer may not make an application under this paragraph unless the officer is a senior officer or is authorised to do so by a senior officer.
Supplementary provision
3 (1) A disclosure order does not confer the right to require a person—
(a) to answer any question,
(b) to provide any information, or
(c) to produce any document or other material,
which the person would be entitled to refuse to answer, provide or produce on grounds of legal professional privilege in proceedings in the High Court.
(2) But a lawyer may be required to provide the name and address of a client.
(3) A disclosure order does not confer the right to require a person to produce excluded material.
(4) A disclosure order has effect despite any restriction on the disclosure of information imposed by an enactment or otherwise.
(5) An appropriate officer may take copies of any documents produced in compliance with a requirement to produce them imposed under a disclosure order.
(6) The documents may be retained for so long as it is necessary to retain them (as opposed to a copy of them) in connection with the investigation for the purposes of which the order was made.
(7) But if an appropriate officer has reasonable grounds for believing that—
(a) the documents may need to be produced for the purposes of any legal proceedings, and
(b) they might otherwise be unavailable for those purposes,
they may be retained until the proceedings are concluded.
(8) An appropriate officer may retain documents under sub-paragraph (7) only if the officer is a senior officer or is authorised to do so by a senior officer.
Applications
4 An application for a disclosure order may be made without notice to a judge in chambers.
Discharge or variation
5 (1) An application to discharge or vary a disclosure order may be made to the Crown Court by—
(a) the person who applied for the order;
(b) any person affected by the order.
(2) If the application for the disclosure order was made by a constable, an application to discharge or vary the order may be made by a different constable.
(3) If the application for the disclosure order was made by a National Crime Agency officer, an application to discharge or vary the order may be made by a different National Crime Agency officer.
(4) An appropriate officer may not make an application to discharge or vary a disclosure order unless the officer is a senior officer or is authorised to do so by a senior officer.
(5) The Crown Court may—
(a) discharge the order;
(b) vary the order.
Rules of court
6 Rules of court may make provision as to the practice and procedure to be followed in connection with proceedings relating to disclosure orders.
Offences
7 (1) A person commits an offence if without reasonable excuse the person fails to comply with a requirement imposed under a disclosure order.
(2) A person guilty of an offence under sub-paragraph (1) is liable—
(a) on summary conviction in England and Wales, to imprisonment for a term not exceeding the maximum term for summary offences or a fine (or both);
(b) on summary conviction in Northern Ireland, to imprisonment for a term not exceeding 6 months or a fine not exceeding level 5 on the standard scale (or both).
(3) A person commits an offence if, in purported compliance with a requirement imposed under a disclosure order, the person—
(a) makes a statement which the person knows to be false or misleading in a material particular, or
(b) recklessly makes a statement which is false or misleading in a material particular.
(4) A person guilty of an offence under sub-paragraph (3) is liable—
(a) on conviction on indictment, to imprisonment for a term not exceeding 2 years or a fine (or both);
(b) on summary conviction in England and Wales, to imprisonment for a term not exceeding the general limit in a magistrates’ court or a fine (or both);
(c) on summary conviction in Northern Ireland, to imprisonment for a term not exceeding 6 months or a fine not exceeding the statutory maximum (or both).
Statements
8 (1) A statement made by a person in response to a requirement imposed under a disclosure order may not be used in evidence against that person in criminal proceedings.
(2) Sub-paragraph (1) does not apply on a prosecution for—
(a) an offence under paragraph 7(3),
(b) an offence under section 5 of the Perjury Act 1911 or Article 10 of the Perjury (Northern Ireland) Order 1979 (S.I. 1979/1714 (N.I. 19)) (false statements), or
(c) some other offence where, in giving evidence, the person makes a statement inconsistent with the statement mentioned in sub-paragraph (1).
(3) A statement may not be used against a person by virtue of sub-paragraph (2)(c) unless—
(a) evidence relating to it is adduced, or
(b) a question relating to it is asked,
by or on behalf of the person in the proceedings arising out of the prosecution.
Interpretation
9 (1) This paragraph applies for the interpretation of this Part of this Schedule.
(2) “Disclosure order” has the meaning given by paragraph 2.
(3) “Judge” means—
(a) in relation to England and Wales, a judge entitled to exercise the jurisdiction of the Crown Court;
(b) in relation to Northern Ireland, a judge of the Crown Court.
(4) “Senior officer” means—
(a) a constable of at least the rank of superintendent;
(b) the Director General of the National Crime Agency or any other National Crime Agency officer authorised by the Director General (whether generally or specifically) for this purpose.
(5) “Document” means anything in which information of any description is recorded.
(6) “Excluded material”—
(a) in relation to England and Wales, has the same meaning as in the Police and Criminal Evidence Act 1984;
(b) in relation to Northern Ireland, has the same meaning as in the Police and Criminal Evidence (Northern Ireland) Order 1989 (S.I. 1989/1341 (N.I. 12)).
(7) The terms defined in paragraph 1 have the meanings given in that paragraph.
Part 2
Scotland
Introductory
10 (1) This Part of this Schedule applies in Scotland.
(2) In this Part of this Schedule “relevant investigation” and “relevant property” have the same meaning as in Part 1 of this Schedule.
Disclosure orders
11 (1) The Lord Advocate may apply to the High Court of Justiciary for a disclosure order.
(2) The application must state that a person or property specified in the application is subject to a relevant investigation and the order is sought for the purposes of the investigation.
(3) The court may grant the application if satisfied that conditions 1 to 3 are met.
(4) Condition 1 is that there are reasonable grounds for suspecting that the property specified in the application is relevant property.
(5) Condition 2 is that there are reasonable grounds for believing that information which may be provided in compliance with a requirement imposed under the order is likely to be of substantial value, whether by itself or with other information, to the investigation.
(6) Condition 3 is that there are reasonable grounds for believing that it is in the public interest for the information to be provided, having regard to the benefit likely to accrue to the investigation if the information is obtained.
(7) A disclosure order is an order authorising the Lord Advocate to give to any person the Lord Advocate considers has relevant information notice in writing requiring the person to do any or all of the following with respect to any matter relevant to the investigation—
(a) answer questions, either at a time specified in the notice or at once, at a place so specified;
(b) provide information specified in the notice, by a time and in a manner so specified;
(c) produce documents, or documents of a description, specified in the notice, either at or by a time so specified or at once, and in a manner so specified.
(8) “Relevant information” means information (whether or not contained in a document) which the Lord Advocate considers to be relevant to the investigation.
(9) A person is not bound to comply with a requirement imposed by a notice given under a disclosure order unless evidence of authority to give the notice is produced.
Supplementary provision
12 (1) A disclosure order does not confer the right to require a person—
(a) to answer any question,
(b) to provide any information, or
(c) to produce any document,
which the person would be entitled to refuse to answer, provide or produce in legal proceedings on grounds of confidentiality of communications.
(2) A disclosure order has effect despite any obligation as to secrecy or other restriction on the disclosure of information imposed by an enactment or otherwise.
(3) The Lord Advocate may take copies of any documents produced in compliance with a requirement to produce them imposed under a disclosure order.
(4) The documents may be retained for so long as it is necessary to retain them (as opposed to a copy of them) in connection with the investigation for the purposes of which the order was made.
(5) But if the Lord Advocate has reasonable grounds for believing that—
(a) the documents may need to be produced for the purposes of any legal proceedings, and
(b) they might otherwise be unavailable for those purposes,
they may be retained until the proceedings are concluded.
Applications
13 An application for a disclosure order may be made without notice to a judge of the High Court of Justiciary.
Discharge or variation
14 (1) An application to discharge or vary a disclosure order may be made to the High Court of Justiciary by—
(a) the Lord Advocate;
(b) any person affected by the order.
(2) The High Court of Justiciary may—
(a) discharge the order;
(b) vary the order.
Rules of court
15 (1) Provision may be made in rules of court as to the discharge and variation of disclosure orders.
(2) Rules of court are, without prejudice to section 305 of the Criminal Procedure (Scotland) Act 1995, to be made by act of adjournal.
Offences
16 (1) A person commits an offence if without reasonable excuse the person fails to comply with a requirement imposed under a disclosure order.
(2) A person guilty of an offence under sub-paragraph (1) is liable on summary conviction to imprisonment for a term not exceeding 6 months or a fine not exceeding level 5 on the standard scale (or both).
(3) A person commits an offence if, in purported compliance with a requirement imposed under a disclosure order, the person—
(a) makes a statement which the person knows to be false or misleading in a material particular, or
(b) recklessly makes a statement which is false or misleading in a material particular.
(4) A person guilty of an offence under sub-paragraph (3) is liable—
(a) on conviction on indictment, to imprisonment for a term not exceeding two years or a fine (or both);
(b) on summary conviction, to imprisonment for a term not exceeding 12 months or a fine not exceeding the statutory maximum (or both).
Statements
17 (1) A statement made by a person in response to a requirement imposed under a disclosure order may not be used in evidence against that person in criminal proceedings.
(2) Sub-paragraph (1) does not apply on a prosecution for—
(a) an offence under paragraph 16(3),
(b) perjury, or
(c) some other offence where, in giving evidence, the person makes a statement inconsistent with the statement mentioned in sub-paragraph (1).
(3) A statement may not be used against a person by virtue of sub-paragraph (2)(c) unless—
(a) evidence relating to it is adduced, or
(b) a question relating to it is asked,
by or on behalf of the person in the proceedings arising out of the prosecution.
Interpretation
18 (1) This paragraph applies for the interpretation of this Part of this Schedule.
(2) “Disclosure order” has the meaning given by paragraph 11.
(3) “Document” means anything in which information of any description is recorded.”—(Tom Tugendhat.)
This new Schedule provides for disclosure orders to be made. These orders authorise constables and NCA officers (the Lord Advocate in Scotland) to require information for the purpose of relevant investigations as defined in paragraph 1 of the Schedule.
Brought up, read the First and Second time, and added to the Bill.
New Schedule 2
Customer information orders
1 (1) An appropriate officer may apply to a judge for a customer information order.
(2) The judge may grant the application if satisfied that—
(a) the order is sought for the purposes of an investigation into foreign power threat activity, and
(b) the order will enhance the effectiveness of the investigation.
(3) “Appropriate officer” means—
(a) in relation to England and Wales or Northern Ireland, a constable or a National Crime Agency officer;
(b) in relation to Scotland, the procurator fiscal.
(4) The application must state that—
(a) a person specified in the application is subject to an investigation within sub-paragraph (2)(a) and the order is sought for the purposes of the investigation;
(b) the order is sought against the financial institution or financial institutions specified in the application.
(5) The application may specify—
(a) all financial institutions,
(b) a particular description, or particular descriptions, of financial institutions, or
(c) a particular financial institution or particular financial institutions.
(6) A customer information order is an order authorising an appropriate officer to give to a financial institution covered by the application notice in writing requiring it to provide any customer information it has relating to the person specified in the application.
(7) The financial institution must provide the information at or by the time, and in a manner, specified in the notice.
(8) A financial institution is not bound to comply with a requirement imposed by a notice given under a customer information order unless evidence of authority to give the notice is produced.
(9) An appropriate officer may not make an application under this paragraph unless the officer is a senior officer or is authorised to do so by a senior officer.
(10) Sub-paragraph (9) does not apply in relation to Scotland.
Supplementary provision
2 A customer information order has effect despite any obligation as to secrecy or other restriction on the disclosure of information imposed by an enactment or otherwise.
Applications
3 An application for a customer information order may be made without notice to a judge in chambers.
Discharge or variation
4 (1) An application to discharge or vary a customer information order may be made to the court by—
(a) the person who applied for the order;
(b) any person affected by the order.
(2) If the application for the customer information order was made by a constable, an application to discharge or vary the order may be made by a different constable.
(3) If the application for the customer information order was made by a National Crime Agency officer, an application to discharge or vary the order may be made by a different National Crime Agency officer.
(4) An appropriate officer may not make an application under this paragraph unless the officer is a senior officer or is authorised to do so by a senior officer.
(5) Sub-paragraph (4) does not apply in relation to Scotland.
(6) The court may—
(a) discharge the order;
(b) vary the order.
Rules of court
5 (1) Rules of court may make provision as to the practice and procedure to be followed in connection with proceedings relating to customer information orders.
(2) In Scotland rules of court are, without prejudice to section 305 of the Criminal Procedure (Scotland) Act 1995, to be made by act of adjournal.
Offences
6 (1) A person commits an offence if without reasonable excuse the person fails to comply with a requirement imposed under a customer information order.
(2) A person guilty of an offence under sub-paragraph (1) is liable—
(a) on summary conviction in England and Wales, to imprisonment for a term not exceeding the maximum term for summary offences or a fine (or both);
(b) on summary conviction in Northern Ireland, to imprisonment for a term not exceeding 6 months or a fine not exceeding level 5 on the standard scale (or both);
(c) on summary conviction in Scotland, to imprisonment for a term not exceeding 6 months or a fine not exceeding level 5 on the standard scale (or both).
Statements
7 (1) A statement made by a person in response to a requirement imposed under a customer information order may not be used in evidence against them in criminal proceedings.
(2) Sub-paragraph (1) does not apply on a prosecution for an offence where, in giving evidence, the person makes a statement inconsistent with the statement mentioned in sub-paragraph (1).
(3) A statement may not be used against a person by virtue of sub-paragraph (2) unless—
(a) evidence relating to it is adduced, or
(b) a question relating to it is asked,
by or on behalf of the person in the proceedings arising out of the prosecution.
Interpretation
8 (1) This paragraph applies for the interpretation of this Schedule.
(2) “Appropriate officer” has the meaning given by paragraph 1(3).
(3) “The court” means—
(a) in relation to England and Wales or Northern Ireland, the Crown Court;
(b) in relation to Scotland, the sheriff.
(4) “Customer information”—
(a) in relation to England and Wales or Northern Ireland, has the meaning given by section 364 of the Proceeds of Crime Act 2002;
(b) in relation to Scotland, has the meaning given by section 398 of that Act.
(5) “Financial institution” has the same meaning as in Schedule 6 to the Terrorism Act 2000 (see paragraph 6 of that Schedule).
(6) “Judge” means—
(a) in relation to England and Wales, a judge entitled to exercise the jurisdiction of the Crown Court;
(b) in relation to Northern Ireland, a judge of the Crown Court;
(c) in relation to Scotland, the sheriff.
(7) “Senior officer” means—
(a) a constable of at least the rank of superintendent;
(b) the Director General of the National Crime Agency or any other National Crime Agency officer authorised by the Director General (whether generally or specifically) for this purpose.”—(Tom Tugendhat.)
This new Schedule provides for customer information orders to be made. These orders authorise constables and NCA officers (the procurator fiscal in Scotland) to obtain customer information from financial institutions.
Brought up, read the First and Second time, and added to the Bill.
New Schedule 3
Account monitoring orders
1 (1) An appropriate officer may apply to a judge for an account monitoring order.
(2) The judge may grant the application if satisfied that—
(a) the order is sought for the purposes of an investigation into foreign power threat activity, and
(b) the order will enhance the effectiveness of the investigation.
(3) “Appropriate officer” means—
(a) in relation to England and Wales or Northern Ireland, a constable or a National Crime Agency officer;
(b) in relation to Scotland, the procurator fiscal.
(4) The application must state that the order is sought against the financial institution specified in the application in relation to information which—
(a) relates to an account or accounts held at the institution by the person specified in the application (whether solely or jointly with another), and
(b) is of the description so specified.
(5) The application may specify information relating to—
(a) all accounts held by the person specified in the application at the financial institution so specified,
(b) a particular description, or particular descriptions, of accounts so held, or
(c) a particular account, or particular accounts, so held.
(6) An account monitoring order is an order that the financial institution specified in the application must—
(a) for the period specified in the order,
(b) in the manner so specified,
(c) at or by the time or times so specified, and
(d) at the place or places so specified,
provide information of the description specified in the application to an appropriate officer.
(7) The period stated in an account monitoring order must not exceed the period of 90 days beginning with the day on which the order is made.
Applications
2 An application for an account monitoring order may be made without notice to a judge in chambers.
Discharge or variation
3 (1) An application to discharge or vary an account monitoring order may be made to the court by—
(a) the person who applied for the order;
(b) any person affected by the order.
(2) If the application for the account monitoring order was made by a constable, an application to discharge or vary the order may be made by a different constable.
(3) If the application for the account monitoring order was made by a National Crime Agency officer, an application to discharge or vary the order may be made by a different National Crime Agency officer.
(4) The court may—
(a) discharge the order;
(b) vary the order.
Rules of court
4 (1) Rules of court may make provision as to the practice and procedure to be followed in connection with proceedings relating to account monitoring orders.
(2) In Scotland rules of court are, without prejudice to section 305 of the Criminal Procedure (Scotland) Act 1995, to be made by act of adjournal.
Effect of orders
5 (1) In England and Wales and Northern Ireland, an account monitoring order has effect as if it were an order of the court.
(2) An account monitoring order has effect in spite of any obligation as to secrecy or other restriction on the disclosure of information imposed by an enactment or otherwise.
Statements
6 (1) A statement made by a person in response to an account monitoring order may not be used in evidence against them in criminal proceedings.
(2) But sub-paragraph (1) does not apply—
(a) in the case of proceedings for contempt of court;
(b) on a prosecution for an offence where, in giving evidence, the person makes a statement inconsistent with the statement mentioned in sub-paragraph (1).
(3) A statement may not be used against a person by virtue of sub-paragraph (2)(b) unless—
(a) evidence relating to it is adduced, or
(b) a question relating to it is asked,
by or on behalf of the person in the proceedings arising out of the prosecution.
Interpretation
7 (1) This paragraph applies for the interpretation of this Schedule.
(2) “Appropriate officer” has the meaning given by paragraph 1(3).
(3) “The court” means—
(a) in relation to England and Wales or Northern Ireland, the Crown Court;
(b) in relation to Scotland, the sheriff.
(4) “Financial institution” has the same meaning as in Schedule 6 to the Terrorism Act 2000 (see paragraph 6 of that Schedule).
(5) “Judge” means—
(a) in relation to England and Wales, a judge entitled to exercise the jurisdiction of the Crown Court;
(b) in relation to Northern Ireland, a judge of the Crown Court;
(c) in relation to Scotland, the sheriff.”—(Tom Tugendhat.)
This new Schedule provides for account monitoring orders to be made. These orders may require financial institutions to provide specified information relating to accounts.
Brought up, read the First and Second time, and added to the Bill.
Tom Tugendhat
I beg to move amendment 66, Title, line 3, after “2007;” insert
“for the registration of certain arrangements with, and activities of, specified persons and foreign principals;”
This amendment amends the long title to add a reference to the registration scheme.
Tom Tugendhat
This is a simple change in the title of the Bill and I hope that everyone can support it.
Amendment 66 agreed to.
The Chair
Order. No, no—we have not finished yet. Hang on.
Question proposed, That the Chair do report the Bill, as amended, to the House.
Holly Lynch
I am so grateful for your guidance, Mr Gray. I want to put on the record my thanks to some of those who have supported the Committee’s deliberations and made our scrutiny possible. I thank the Clerks—Bradley Albrow in particular has been utterly unflappable, often in the face of absolute chaos. He has been a massive help to me and, I am sure, to many other Members, and I thank him for his services.
I also thank Home Office officials and the UK intelligence community, who, I think all Members will agree, have been transparent and engaged in this process, ensuring that we are—given the subject matter—as informed as we can be. I have met several members of the security services over the course of the Bill Committee; funnily enough, I do not have full names for any of them. I thank MI5 director general Ken McCallum and his team for all their support. I also thank Detective Superintendent Darren Hassard and Commander Richard Smith from counter-terrorism policing for their insight on provisions relating to their work, as well as Professor Thom Brookes and senior lecturer and retired police office Owen West for their invaluable assistance. May I also thank my incredibly dedicated parliamentary assistant, Jamie Welham?
I have been very ably assisted by my fellow shadow Front-Bench colleagues as well as by Labour Back Benchers, and I am eternally grateful to them. As we reach Report, I look forward to following up with the Minister on the detail of exactly what has been promised.
Tom Tugendhat
May I thank the shadow Minister, the Member for Halifax—she has been of tremendous assistance to me in the very unusual position that I have found myself in—as well as Opposition Members? I also thank enormously my hon. Friends, who have been extraordinarily generous supporters at times when I have been quite literally learning on the job.
I also thank the Clerks—particularly Chris, who was my first Clerk on the Foreign Affairs Committee, which brought me right back home—Home Office officials, the intelligence community, with whom it is such a pleasure to work again, and of course all those who have contributed to the Bill, including you, Mr Gray. Thank you very much indeed.
The Chair
I will ensure that those thanks are passed on.
Question put and agreed to.
Bill, as amended, to be reported.
Trade (Australia and New Zealand) Bill (Fourth sitting)
Tuesday 18th October 2022
(1 year, 6 months ago)
Public Bill CommitteesRead Full debate Trade (Australia and New Zealand) Act 2023 View all Trade (Australia and New Zealand) Act 2023 Debates Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 18 October 2022 - (18 Oct 2022)
The Committee divided: - Ayes: 2 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 2 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 10 - Question accordingly negatived.
The Committee divided: - Ayes: 2 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 2 / Noes: 8 - Question accordingly negatived.
The Committee divided: - Ayes: 2 / Noes: 8 - Question accordingly negatived.
The Committee divided: - Ayes: 2 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 9 - Question accordingly negatived.
The Chair
I remind the Committee that with this we are discussing the following:
Amendment 4, in clause 1, page 1, line 15, at end insert—
“(3A) Where the appropriate authority is a Minister of the Crown, regulations under subsection (1) may not be made until the appropriate authority has consulted the relevant Scottish Ministers in relation to any matters affecting farming in Scotland.”
Amendment 5, in clause 1, page 1, line 15, at end insert—
“(3A) Regulations under subsection (1) may not be made before completion of such public consultation as the appropriate authority considers appropriate with the relevant—
(a) Scottish ministers,
(b) Welsh ministers,
(c) department of the Northern Ireland Executive, and
(d) representatives of the English Regions.”
Amendment 7, in clause 1, page 1, line 15, at end insert—
“(3A) Regulations under subsection (1) may not be made before completion of a review by the Trade and Agriculture Commission of the potential impact of the procurement Chapters on industry in the United Kingdom.”
Amendment 20, in clause 1, page 1, line 15, at end insert—
“(3A) Regulations under subsection (1) may not be made before publication of an impact assessment setting out the potential impact of the procurement Chapters on—
(a) employment rights and human rights in the United Kingdom, and
(b) climate change.”
Amendment 22, in clause 1, page 1, line 15, at end insert—
“(3A) Regulations under subsection (1) may not be made before publication of an impact assessment setting out the potential impact of the procurement Chapters on—
(a) Scotland,
(b) Wales,
(c) Northern Ireland and
(d) English Regions.”
Gareth Thomas (Harrow West) (Lab/Co-op)
Thank you, Mr Twigg, for the opportunity to resume my speech in this debate that was opened by the hon. Member for Airdrie and Shotts. I will speak in particular to amendments 5, 7, 20 and 22.
It is a particular joy that you are chairing the afternoon sitting, Mr Twigg, because you will know, having been both a Minister and a shadow Minister, just how much the odds are stacked against a shadow Minister in a Bill Committee, with 1,000-plus civil servants backing up the Minister versus just one researcher and, fortunately, some very high-quality Labour colleagues. The odds are very uneven.
When this morning’s sitting ended, I had begun some preliminary remarks on the case for amendment 5. I was about to highlight some of the issues around the differences between the New Zealand free trade agreement procurement chapter and the Australia FTA procurement chapter. I suspect that businesses will need some help to navigate those differences, so consultation with interested businesses across the UK would seem sensible.
It is tempting to think that the differences are so marginal that they can be ignored and that any flaws in the procurement chapters can be swept away by the upcoming procurement Bill or our accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. As the Minister briefly alluded to, with the CPTPP not yet on the statute book and with plenty of issues to be addressed before it gets there—if it does—we have to get the trade deal procurement chapters and their implementation right, as they will, without question, affect the legal landscape in which businesses bid for contracts here in the UK and in which British businesses bid for contracts in Australia and New Zealand.
Not only are there subtle and important differences between the New Zealand and Australia deal procurement chapters, but they are not the only such chapters that we have signed up to since our departure from the European Union; of course, we have the procurement chapter in the deal that the previous Prime Minister negotiated with the European Union. Again, there are subtle but none the less significant differences between the EU procurement chapter and the Australia and New Zealand chapters. It would seem an obvious and sensible thing for Ministers to embrace some help to navigate those differences, and amendment 5 would help them to do that.
Where do the differences lie? It is important to remember that the Government procurement agreement is the foundation text for procurement negotiations. The procurement chapter in the EU deal—the first we signed—keeps the GPA text and builds upwards from it. I hope to come to the evidence of the procurement expert Professor Sanchez-Graells in a little bit. He argues that the text of the procurement chapter in the Australia deal not only replicates but, crucially, modifies the text of the GPA. That creates a GPA-minus agreement and risks all sorts of complications and legal problems when bidding for contracts, both here in the UK for Australian and New Zealand businesses, and in Australia and New Zealand for British businesses.
Another reason that we should perhaps consult firms is that, as I understand it from the evidence that Professor Sanchez-Graells gave us, a UK firm could be barred from all remedies—the interim relief remedy, judicial review, as well as full redress, compensation—if they felt they were being unfairly treated in an Australian Government tender process, on public interest grounds. In a similar process in Australia, a French firm could be barred from interim relief but not from a redress claim. So the French firm could potentially secure compensation if it was treated unfairly if the contract was moved forward on public interest grounds, but the British firm could not. Apparently, that is because the UK firm’s rights are considered under the UK-Australia FTA, while the French firm’s rights would be governed by France’s membership of the Government procurement agreement.
Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)
Is not this another worrying sign that the trade deals and the Bill often sell British businesses short? British businesses are being deprived of rights that they currently have. I am sure my hon. Friend will confirm that, if we pass the Bill without amendment, it will mean that British businesses have less access and security in the Australian and New Zealand markets than they currently do under the GPA rules that extend to everyone already.
Gareth Thomas
That is certainly my understanding of the evidence that Professor Sanchez-Graells gave this Committee, the Select Committee on International Trade in this place, and the International Agreements Committee in the other place.
Let me spell out for the Committee where the problem lies. As I understand it, the Government procurement agreement allows countries to bar access to some but not all remedies, on public interest grounds, for companies that are unhappy with Government procurement decisions, but, crucially, it does not allow a ban on remedies involving compensation. That is the difference with the Australia FTA procurement chapter, which does allow a ban on remedies involving compensation.
Potentially, the firms of other GPA countries will have more comfort and ability to risk tendering for big Australian Government contracts, because they will know that they have some access to remedies if things go wrong in the procurement process and they want to try to get compensation. As my hon. Friend the Member for Brighton, Kemptown rightly says, it takes some skill to negotiate a worse position for British businesses in terms of access to remedies than the situation we have now. That is probably not the biggest mistake that the now Prime Minister has made in her time in office, but it feels like a significant issue, and I look forward to the Minister addressing it.
Government procurement matters enormously. We have touched a little on some of the reasons for that. It helps if Government procurement is done well. One of the reasons why amendment 5 is necessary is to ensure that we do not make the current set-up for Government procurement in the UK worse but, instead, enhance it. Done well, Government procurement can help to build supply chain resilience. We saw the significance of that during the covid lockdowns, when our dependence on China became ever clearer and the need to re-onshore some of our supply chains became a topic for discussion by business and, I suspect, in Whitehall.
We are all too familiar with the horror stories about some of the dodgy personal protective equipment that was procured. We understand the context in which some of those decisions were made, but it is striking that Transparency International, with which I worked when I was a development Minister trying to tackle corruption in developing countries, felt the need to investigate the Government procurement market for PPE. It identified some 73 contracts, worth 20% of all the contracts, that it said raised one or more red flags for possible corruption. That suggests there is work to be done to improve the quality of Government procurement. The National Audit Office also highlighted concerns, where the Government admitted that they were not getting full value for money on PPE.
We also know that good conditions for Government procurement can create more choice and more scope for innovation, and can achieve better value for money. One thinks about the digital procurement expertise that we need, and the potential for artificial intelligence to help revolutionise public services. We need to make sure that the framework under which Government procurement contracts are being offered works well, and that this new injection of uncertainty—but also, potentially, enhanced opportunities for other firms to come into the Government procurement market—does not destabilise the UK procurement market but improves things. A bit of consultation might help in that regard.
I touched on some issues around levelling up, which, to my surprise, prompted murmurs of disagreement from Government Members. I understood from their chuntering that they think everything is rosy with Government procurement outside London and the south-east. However, some figures I have seen from the House of Commons Library suggest that at the moment, there is a clear bias in the Government procurement market towards businesses operating in London and the south-east. The last thing we would want is for the procurement chapters of the Australia and New Zealand trade agreements to exacerbate the difficulties for businesses, not only in London and the south-east but in the west midlands, the north-west, the north-east or the east of England, that are trying to get into the Government procurement market.
House of Commons Library data demonstrates that of the 445 most lucrative contracts awarded by central Government in 2019, 202 went to companies in London or the south-east. That does not suggest that Ministers are using Government procurement to level up. We know they are not doing much else on levelling up, so one would hope that they would take the opportunity to consult more, as our amendment 5 would require them to, in order to ensure that the Government procurement market is not being made worse for businesses outside London and the south-east that want to get involved. It might be an opportunity to look at reforms and think about how businesses outside London and the south-east can be encouraged to do so.
The Minister of State, Department for International Trade (Sir James Duddridge)
Would the hon. Gentleman concede that it is possible that the reason those figures are so weighted towards London is that that is where a lot of headquarters are, yet some of those services are delivered from around the United Kingdom and, indeed, from the devolved Administrations?
Gareth Thomas
I absolutely concede that point—that is possible, without a doubt—but I gently suggest to the Minister that there are real concerns that, unless there is proper consultation, the procurement chapters of the Australia and New Zealand FTAs could make the situation worse for businesses that are not headquartered in London and the south-east.
Gareth Thomas
Nevertheless, it seems a reasonable question to pose. A bit of better consultation might allow us to think about how we encourage more British businesses to secure Government contracts. The Minister rightly said that there is a good argument for extending the contracts covered by this legislation—he was thinking of contracts of unknown value and length—on the grounds that it would encourage more competition and better value for money, but we need to ensure that that does not put off good British businesses, particularly small and medium-sized ones in the local area, from getting contracts. I am yet to hear any convincing story from this Minister or, indeed, Business Ministers or Cabinet Office Ministers about what they are doing in that space to shift things forward.
Let me come to some of the specific concerns that Professor Sanchez-Graells raised, which are the most troubling of the many issues raised in the evidence sessions last Wednesday. It is worth highlighting Professor Sanchez-Graells’s experience. He is a professor of economic law at the University of Bristol Law School and co-director of the Centre for Global Law and Innovation. He has done a lot of research on economic law, particularly competition law and procurement, and his research concentrates on the way the public sector interacts with the market and how it organises the delivery of public services, especially healthcare. He is a significant witness. He was clearly taken seriously by the International Trade Committee and by the International Agreements Committee in the House of Lords.
Professor Sanchez-Graells argued that there are a series of problems with the way in which the procurement chapter has been written that, in effect, create the GPA-minus problem, which could have a chilling impact on the appetite of British businesses to bid in Australia and New Zealand, unless Ministers can rectify those problems and provide comprehensive reassurance that Professor Sanchez-Graells may not have considered the whole picture. He has been explicit in saying that he wants the procurement chapters of both the New Zealand and Australia deals renegotiated and only then put into law, so it is important that we hear the Minister’s reaction to those concerns.
I had thought that the biggest problems with the Bill were the huge giveaway to Australian farmers, the lack of protection for British agricultural goods, the lack of progress on geographical indications and the shocking levels of scrutiny, but Professor Sanchez-Graells appears to suggest that there are serious issues with procurement and whether the procurement chapters present the huge opportunity that Ministers have been keen to big up. He says that the legal uncertainties in the chapter that the Bill would write into law ensure that the rules clash with the World Trade Organisation’s rules on procurement, and we would then risk breaching international law, be it the GPA or the two trade deals.
We know that Ministers have a record of not being bothered about breaking international law—one thinks of the Northern Ireland protocol or other aspects of the trade agreement with Europe—but if Britain’s reputation for international lawbreaking gathers ground, that could have a chilling effect on our ability to negotiate other trade agreements and implications for the confidence of the markets, which is particularly worrying.
The GPA is the baseline for opening up access to procurement contracts. I commend Ministers for the objective of creating a GPA-plus regime, and the Australia deal secures some more substantive obligations that point in the direction of such a regime, such as the electronic publication of contracts by authorities, the inclusion of a clause on environmental, social and labour considerations and a clause on SME access to procurement opportunities, the expansion of economic coverage through the inclusion of concession and build-operate-transfer contracts, and so on. However, it also deviates in ways that alter or reduce substantive obligations, so we have the creation of a GPA-minus regime instead.
The scope for legal uncertainty risks having a chilling effect in terms of British businesses wanting to bid for Australian and New Zealand contracts, and vice versa. Amendment 5 makes it clear that consultation is key, and amendment 22 would give us the chance to understand fully the impact of these GPA-minus changes. Both would be helpful additions to the legislation and would allow us to address some of the concerns.
The concerns Professor Sanchez-Graells expressed in evidence to the Select Committee were very technical and challenged members of the Committee—they certainly challenged me when I read back over them to fully understand their scope. To bring them to life at our witness session last week, I asked him to give some examples of where his concerns might have played out. One example I asked him to think about was a British construction business bidding for a contract to help build the Melbourne airport link, which the Australian authorities are tendering. He said:
“Let us imagine that an innovative British company that wants to sell low emissions rolling stock for that metro link in Melbourne airport goes and tenders in Australia. It is excluded for any number of reasons and it wants to challenge the decision. It could also be barred from access to remedies in Australia, which means that the UK tenderer has lost its time and probably made a loss on the project.”––[Official Report, Trade (Australia and New Zealand) Public Bill Committee, 12 October 2022; c. 42, Q52.]
That business could lose its access to remedies if the Australian courts embraced the decision of the contracting authority on public interest grounds—that the contract could not be delayed and the compensation not offered, because it was so important that the Melbourne airport link got built on time.
If the UK tenderer had spent substantial amounts to get that contract and then could not get any compensation for all that money, that would create a big disincentive for anyone from the UK thinking of trying to tender for future projects in Australia. It is important that the Minister and the Department for International Trade explain what steps they will take to prevent that risk from coming to fruition.
Lloyd Russell-Moyle
Is there not also a danger that an international company could choose which of its subsidiaries a bid should come from? Rather than choosing the British company and channelling the money through it, it might consider that the protection offered would be marginally better should the bid come from the French or German company. The multinational company will choose to channel its bids through their other subsidiary companies outside the UK, which could deprive UK taxpayers of money and British workers of the contract, when the British company has done some of the necessary paperwork and processing. There does not need to be a material change; there only needs to be a theoretical risk that that could happen.
Gareth Thomas
Unfortunately, that is absolutely right, as Professor Sanchez-Graells argued. That is a real risk. There are potentially chilling impacts on British authorities that want to issue contracts, should New Zealand companies, and particularly Australian companies, bid.
On the possible GPA-minus provisions, a broader issue is relevant to the argument for amendments 5 and 22. Is the GPA being undermined? The GPA-minus provisions are not just an issue for the UK-Australia FTA, but are likely to be an issue under the CPTPP. Given how difficult it was to negotiate the GPA and how long it can take to secure improvements, enhancements and modernisation, one has to ask whether Ministers have given up a little on that multilateral process. Have they decided that it is so important to get individual procurement chapters agreed under trade deals with potential allies that we will give up on the process of modernising the GPA? Surely it needs to be a living document, because it dates quickly; the current version was negotiated more than 10 years ago and is already out of date on digital procurement and sustainability. The more GPA-minus provisions there are in trade agreements negotiated around the world, the more difficult it will be for the World Trade Organisation to negotiate an enhanced, modernised GPA. It would be good to hear what plans the Minister and the new Secretary of State have to prevent the UK-Australia chapter, with its GPA-minus provisions, from stopping any effort to modernise the GPA. One hopes that Britain would seek to lead that process at the WTO.
The second major concern of Professor Sanchez-Graells is why we are putting the two procurement chapters into law if we plan to accede to the CPTPP? It has its own procurement chapters, and both Australia and New Zealand are members of it. Those chapters are very similar to the Australia and New Zealand FTA chapters, so there is similar scope for uncertainty. We have been led to believe by the current Prime Minister and the previous Secretary of State for International Trade—presumably the present Secretary of State will tell us something similar—that CPTPP remains the top trade priority for Ministers. Professor Sanchez-Graells is concerned about the Government’s rush to get two procurement chapters on to the statute book when there is scope for future uncertainty. I am not sure what I think about that particular argument, but I would be interested to hear what the Minister has to say.
Lloyd Russell-Moyle
We heard from the Minister this morning that potential accession to the CPTPP will not replace this agreement but be additional to it. Therefore, British businesses will have to cope with three different systems. We have also heard from the Minister that the Procurement Bill will not entirely replace the chapters and agreement before us, so there will be four potential regimes that people have to navigate. Is that not creating more bureaucracy for businesses rather than less?
Gareth Thomas
We know that Conservative Ministers have become enthusiasts for red tape—that was the reality of the deal the previous Prime Minister negotiated with the European Union. I gently suggest that my hon. Friend should not be too surprised that Ministers do not seem bothered about more legal uncertainty for businesses interested in Government procurement contracts.
Either way, a bit more consultation, which amendment 5 would lock in, and a bit more thought as a result of an impact assessment under amendment 22, might help to encourage debate and consultation about how serious the problems are and how to resolve them. That might help to advertise the many apparent benefits of these agreements, which the Government’s impact assessment mentioned. However, I caution Committee members to hold on a second, because the third argument that Professor Sanchez-Graells advanced in public was that the procurement chapters will not lead to the huge benefits for British businesses that Ministers have claimed they will and that the impact assessment Ministers published over-eggs all of those benefits. For example, Ministers say there will be lots of new opportunities for transport firms to run transport contracts in Australia, despite there being many transport networks in the UK that are run by foreign companies. I hope to pick up that issue in the Committee’s discussions on new clause 4, but it would be interesting to hear which companies have indicated to the Minister that they are interested in the procurement opportunities in Australia and New Zealand that he and his colleagues have alluded to.
Professor Sanchez-Graells also noted the consequences of clauses 1(2) and (3), which we debated this morning. He noted that contracts of unknown length and tenure would be extended by regulations to cover more than just Australian and New Zealand firms, with no reciprocity in mind. If only the Secretary of State had given evidence in good time to the International Trade Committee, which my hon. Friend the Member for Brighton, Kemptown sits on, some of those concerns could have been addressed.
To help me understand Professor Sanchez-Graells’s arguments, I asked him to explain them in the context of the Elizabeth line—Crossrail, as it was known—and of the need to rebuild a hospital. Members will remember the significance of the Elizabeth line, stretching as it does from Paddington in west London through to Abbey Wood and Stratford in east London. Its cost to date is almost £19 billion, and it will be fully operational this year. It is a huge public procurement exercise—that £19 billion does not include new trains or a number of other things. It has been a huge success story for the UK and London. It has generated 14,000 jobs, it comprises 42 km of tunnels and it has used 13,500 cubic metres of concrete. In short—
The Chair
Order. I understand the argument the hon. Gentleman is making, but I think we get the point about Crossrail. He needs to move on to the relevant argument.
Gareth Thomas
The argument I am making is that Professor Sanchez-Graells highlighted the risk of a chilling effect on the progress of the Elizabeth line had the Australian and New Zealand procurement chapters been in force. Let me set out how it might have played out—fortunately, neither agreement was in place, so there was not the same legal uncertainty and we have not had such a delay.
Let us suppose for a second that both procurement chapters had been in force. To slightly simplify it, the Elizabeth line offered three contracts—one for the construction of Crossrail, one for the supply and maintenance of the rolling stock and one for the operation of the line, which was a services concession. That services concession would not have been covered by the UK-Australia free trade agreement, but the construction contract and the rolling stock contract would have been covered under both the WTO’s Government procurement agreement and, crucially, the UK-Australia FTA. There would effectively have been dual regulation contracts.
There could have been a real, substantive clash of provisions between the GPA and the FTA. The crucial issue of access to remedies could then have played out. If an Australian company had expressed an interest in the relevant tender—for construction or for supply of the rolling stock—and had ended up not getting the contract, it could have been barred from access to remedies under the UK-Australia FTA on grounds of public interest. Why would we have wanted to delay the completion of the Elizabeth line?
The Australian company would have missed out on compensation and scope for judicial—
Gareth Thomas
This is relevant to clause 5. If we had consulted better with firms across the UK that benefited from the supply chain of the Elizabeth line, they might have been able to highlight their concerns at an early stage, preventing any problems going forward.
If you, Mr Twigg, are not convinced of the relevance of an argument that looks back, let me put to you an argument that looks forward and give the example of a hospital that needs to be rebuilt. Let us say it is the Queen Elizabeth Hospital in King’s Lynn, which we know needs rebuilding. The Australian and New Zealand free trade agreements, and the procurement chapters of both, will be in play at this point, assuming the Bill becomes law. If they are, and an Australian company bids for the contract to rebuild the Queen Elizabeth Hospital, there could be a chilling effect.
Let us say the company is denied access to the contracts, for whatever reason, thinks it has been treated unfairly, tries to put in a bid for judicial review to stop the contract being won and started by the relevant British company, and cannot get judicial review to stop it, because of public interest grounds—because the hospital is falling down. The court might say, “We’ve got to crack on with this.” The Australian company would miss out on judicial review, also on public interest grounds, and the court would be open to rule against giving it compensation. Australian companies would now look askance at the NHS procurement market and think, “We won’t take the risk of bidding for contracts there. We may well miss out because of the terms that have been agreed under the procurement chapter of the UK-Australia agreement.”
It does not just go one way. That same risk is potentially in play in Australia for British firms bidding to rebuild Australian hospitals. If one were falling down and a British company bid and lost out and then thought it had been treated unfairly, it might initially turn to its lawyers and say, “Let’s put in a judicial review bid to stop the contract going ahead while we try to persuade the court to restart the tender process. Let’s at least try to secure compensation for all the money it’s cost us to put the bid together.” In my understanding of the arguments advanced by Professor Sanchez-Graells, under the terms of the UK-Australia free trade agreement, if the contract is not awarded to the UK firm but to an Australian one, and the court decides on public interest grounds that that is fine, the British business would lose an awful lot of money that it might have invested in bidding for the contract.
The irony is that if a French firm bid for the same contract, it might not be able to stop the contract or get judicial review, but under the terms of the GPA, it could argue for compensation. The British firm would not even be able to apply for compensation, but firms from other GPA jurisdictions could. In those circumstances, British firms that specialise in overseas procurement may be tempted to look not at the Australian or New Zealand markets, but at other markets in which they have better protection if future contracts go wrong.
That is a substantive and serious concern, and it would be good to hear the scale of the Minister’s concern about such risk. Ministers and Committee members may still think that companies take risks all the time, so if a contract does not go their way and they cannot secure compensation or judicial review, then tough luck. However, it is also worth considering the effect on the bit of Government that is trying to issue the contract.
I pray in aid the case of Draeger Safety UK v. the London Fire Commissioner, which has been substantially protracted. The London Fire Commissioner wants to upgrade the quality of equipment available for its firemen and women—quite understandably, it wants the best, most modern equipment. Draeger Safety UK lost the contract, thought the contract was unfair, and is trying to secure compensation. That is not an isolated case; similar cases are going through the UK courts.
Adding to the process the complex GPA-minus provisions of the UK-Australia and the UK-New Zealand FTAs could have a chilling—or certainly a delaying—effect on the issuing of tenders. For that reason, I hope that a little more consultation by Ministers with each part of Government around the UK that might want to issue a contract, and a little more thought—perhaps through an impact assessment—about the impact of the GPA-minus provisions that Professor Sanchez-Graells set out, might help to avoid those sorts of problems, and that the procurement chapters of both FTAs could actually be really useful.
I look forward to hearing what the Minister has to say about Professor Sanchez-Graells’s concerns, and I strongly encourage the Minister to support amendments 5 and 22.
Sir James Duddridge
I haven’t said anything yet. This morning was incredibly jolly. I am sure that Mr Pritchard will be devastated that he cannot be here, but I will send him a copy of Hansard so that he can catch up.
The debate was interesting. A Labour speech literally brought the house down—one could hear things crashing down from the ceiling. Thankfully, no members of the public were hurt. I was amazed by the wide-ranging discussion, and the ability of Members to pop in the word “procurement” here and there to make their remarks orderly. It was a masterclass in Opposition debate, verbosity and probing—in a good way. I was surprised that there was a proposal to provide free hot school meals daily from New Zealand to the good burghers of Southend, which I am sure was heard by Essex County Council and Southend-on-Sea City Council—I was going to say it was Labour-run, but it is a bit of a shambles of organisation and coalition in Southend.
Sir James Duddridge
If I am given some leniency near the end, there might be an opportunity to intervene then, if there is a particular element that I have not picked up on, because there are about 25 issues that I need to cover.
Broadly speaking—officials will not like me saying this—I agree with a lot of what has been said. I agree about the importance of consultation, and of reviewing and evaluating what we have done. There is a lot of that in the Bill, and a lot of it has been done by the Government already. I will go through what we have done, but just because we have consulted, that does not mean we do what someone wants. It is a balancing act. I suspect the hon. Member for Harrow West would do things differently from me if he was in the hot seat, but I am sure he would have consulted as widely as the Department and officials did on behalf of His Majesty’s Government. I am disappointed to hear that he will press two of these measure to a vote. He has thrown down the gauntlet, and I have picked it up, so hopefully I can persuade him not to vote on them, because we are covering a lot of the issues raised.
Communication with the devolved Administrations is integral to not only the way the Department conducts its negotiations but ensuring that legislation operates effectively in each and every nation of the United Kingdom. I am more than happy to reiterate the commitment of the then Secretary of State for International Development that the UK Government would not normally legislate without the consent of the devolved Administrations. The hon. Member for Airdrie and Shotts may well say, “Why not put that in the Bill?” That is a valid point, but it is not one about procurement; it is about the fundamental nature of devolution. Treaty making is done at the UK level on procurement, as it would be in an international treaty on, for example, nuclear non-proliferation.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
The point that the Minister is making underlines that it would do no harm to make this commtment in the Bill. What would be wrong with that?
Sir James Duddridge
If the hon. Gentleman wants to bring forward a devolution Bill and completely revolutionise how our nations are run—
Sir James Duddridge
He clearly does, but that is not for this Bill. On scrutiny, Members drew comparison with the EU and the US. I gently point out that those are very different democratic bodies. The EU is a body of 27 nation states, remotely located; and the US has a presidential system, and an Executive that is more detached from the legislature, whereas we are much more integrated here.
On consultation, there was a wider discussion that related to all types of scrutiny but included procurement, so with your permission, Mr Twigg, I will go through how we have looked at scrutiny through the lens of procurement.
Lloyd Russell-Moyle
The Minister is quite right to mention that those two systems are different. Norway operates a dualist system for international treaty agreements in the same way that we do. It operates a prime ministerial system with a constitutional monarchy in the same way that we do. Their Parliament has the ability to scrutinise the heads of terms of international agreements, and its committees can agree the additional measures that are coming through, and can be consulted on them. So, yes, he is right in relation to the two big examples that I gave, but there are many other international examples, and I do not want to bore the Committee by going through more of them. Will he not at least acknowledge that we are on the worse end of the scale when it comes to the consultation of Parliaments, devolved areas and civil society, not on the better end?
Sir James Duddridge
No, I do not. I do not want to go through a comparative analysis of every country around the world, but we are not. There is a lot in legislation that we have to do; there is a lot that is not in legislation that we do on a repeated basis. For example, on issues of the scrutiny of the New Zealand and Australia trade deals, particularly in relation to procurement, prior to our talks, we published all of our objectives. We published the economic scoping document and a Government response to the call for input. During the negotiations, we published six public reports of what happened, so Parliament and the public could input and lobby. We published extensive information at the agreement stage and at the in-principle stage. We also engaged in Parliamentary activity. All together, there were over 12 sessions with either the International Trade Committee or the Lords International Agreements Committee.
Sir James Duddridge
I will just finish the point and then I will certainly give way to the hon. Gentleman. I was rather hoping that he was going to be at a Select Committee, but it is a pleasure to see him here—[Interruption.] I will finish my point and then I will give way. I apologise, Mr Twigg, for being slightly disorderly. We made nine ministerial statements and there were eight formal MP briefings; Ministers also made themselves available more informally to Members on both sides of the House.
Lloyd Russell-Moyle
I could not resist this Public Bill Committee and so I am missing the opportunity to grill the Secretary of State for International Trade. Hopefully I would not just be grilling her, but having fruitful discussions, such as those that we will now have. I look forward to doing that on future occasions.
The Minister listed a number of documents that the Government have published, but he has confused publishing information with having detailed, constructive and structured dialogues—with sitting down and engaging with people.
I have already publicly put blame on the previous Secretary of State, the right hon. Member for Berwick-upon-Tweed (Anne-Marie Trevelyan), and I will not repeat myself. However, for one reason or another, more than five times, she was unable to meet the International Trade Committee, and she was unable to meet it before it published its report on the Australia and New Zealand free trade agreements. That led to an urgent question in the Chamber and a Westminster Hall debate. Will the Minister not at least accept that there is more that the Department could do to engage co-operatively with the International Trade Committee and others, to stop the contention that we have had?
Sir James Duddridge
During long interventions, sometimes Ministers jokingly ask to intervene, but I had been sitting down for so long that I genuinely thought I was listening to a speech.
Relations with the International Trade Committee have not been as good as the Government, the Committee or the House want. That is going to change. We will make ourselves fully available. I know the Secretary of State has already started having those meetings with the Committee. Her diary obviously shifts quite quickly, so I cannot say where she will be, when. I know there is a whole series of activities planned. I am looking at the Public Gallery; there are civil servants looking into how we can link better with members of the Committee. I will play my part as Minister of State at the Department, and will always make myself available to the Committee, if at all possible. It will be my top priority, over and above speaking to the House or taking part in other Committee processes.
The hon. Gentleman said, “You just publish reports. That’s not enough.” If that is all we did, it would not be enough, but it is not all we have done. There are inter-ministerial groups on these issues, which are attended by Ministers from the devolved Administrations, particularly those with responsibility for trade. The forum that we are discussing was established to consider all trade policy, and its effective implementation, and will be able to review and evaluate that policy’s impact.
The hon. Member for Harrow West seems incapable of using the word “effect” or “impact” without prefacing it with the word “chilling”, as if these were haunting issues. We want to evaluate policies, to look at the impact assessment, and to improve all the time. As has been said, the agreements are evolving. They get built on and improved. The forum has met eight times since its inception in 2020. It provides for open discussion about negotiation, and allows Ministers from devolved Administrations to contribute their views directly, both formally and, in the sidings, informally.
Gareth Thomas
How many of those meetings have focused purely on procurement?
Sir James Duddridge
I have absolutely no idea. As the hon. Gentleman said early on, procurement is a very small section of these matters. Most, if not all, of these meetings were probably open, so I could check the minutes, but I suspect that not every nuance is captured in them. Also, sometimes trade issues can be looked at through lots of lenses. For example, one issue might relate to the motor industry, procurement and Wales.
There are bilateral meetings with counterparts from the devolved Administrations, and there is weekly engagement by UK Government officials. That all helps to build a better relationship. The hon. Member for Llanelli asked whether the relationship could be better. I am unsure of how well sighted she and the Committee can be of the details of that—I think that is what the hon. Member for Harrow West is alluding to—but it would be interesting to look at the Welsh example, in particular; there have been a lot of compliments, with people saying that engagement has increased and is better. That is not to say that it cannot be even better, but let us give credit where credit is due—not to Ministers, but to the Department.
Dame Nia Griffith
Absolutely, and I made that point clearly. Large questions remain unanswered, including why the quotas were set so high. Those sorts of things could have been sorted out if consultation had gone back a bit further and had been more timely.
Sir James Duddridge
I will focus my comments on the devolved Administrations, and I will come back to meat later, in the meaty bit of my speech. We have been discussing the necessary changes to procurement regulations with devolved officials since they were first raised in negotiations. I hope that our level of engagement demonstrates that consultation is already integral to what we do. The remit of the Trade and Agriculture Commission, in which there has been some interest, focuses on a critical issue for Government, the public and farmers: agricultural standards. Its analysis is an absolutely critical part of the scrutiny framework for new free trade agreements, and it supports the Government’s clear commitment to upholding the United Kingdom’s high agricultural standards.
The commission’s remit is very specific, so that it can produce high-quality advice that speaks to its collective expertise. The Government would not want to dilute its important work by widening its remit; that would weaken its focus on its core mission. If amendment 3 is intended to allow the commission to consider the impact of the procurement chapter on agricultural standards, it is unnecessary; the commission can already consider any part of an agreement that it thinks is relevant to the issue of domestic standards—specifically to animal and plant health, animal welfare or the environment. The amendment would widen the commission’s focus beyond what we want it to focus on. I respectfully suggest that that would have unintended consequences.
The Department committed to including in the impact assessments, every two years, a monitoring report on the deal. Furthermore, within five years of the agreements entering into force, there will be a comprehensive evaluation report on both deals. These evaluations will do exactly what I think hon. Members want and seek Government assurances on, because they will aim to show how and why the agreements were made, whom they benefited, what the outcomes are, and how they could be better. I am happy to assure the Committee that those reports will look at all the regions—Northern Ireland, Wales, Scotland and England—and, if necessary, consider the regional picture if that is still a concern, notwithstanding my comments and the evidence over that period.
Bill Esterson (Sefton Central) (Lab)
Rosa Crawford pointed out that the trade unions had never been given a place on the trade advisory groups since they were set up, if the Minister remembers last week’s evidence session. Why is it that in the United States the trade unions have access to negotiating texts and are able to influence changes, as they did in protecting workers in Mexico? Does he think that that is right or wrong? If he thinks it is right, why does he not allow it to happen in this country?
Sir James Duddridge
The unions are involved in the trade advisory groups. There is, I think, one issue with an offer that has been made to one union to join, but it is holding out because it wants another union also to be involved and is therefore not participating.
On returning to the Department after the previous sitting, one of my officials expressed surprise at the evidence given because it contradicted something she had been at—she had been present at one of those meetings. While I am happy to look again and the current Secretary of State has made it clear that she wants all consultees to be included in the process, we are the decision makers in our process, and I would not want to contract out UK Government decision making to any organisation.
I am not going to answer the question on the United States. I am responsible for many things, but not the system in the US.
Lloyd Russell-Moyle
The Minister has said that the trade unions are members of trade advisory groups, but I have looked up the membership of those groups, searching for the word “union”, and there are only four union members, and they are all farmers union representatives. I understand that farmers unions are important, but they are different from trade unions and the TUC, so either the list on the website is not up to date or there is some confusion here. It would be useful if we got some clarity.
Sir James Duddridge
Absolutely. On unions—I mean unions in the broadest sense; I am not trying to pull a fast one by referring to four regional national farmers unions—my understanding is that six unions, as the hon. Gentleman would understand the term “union”, as opposed to the Conservative and Unionist party, for argument’s sake, are genuinely involved in the trade advisory groups. That is what we would want.
That is on the record. If I am wrong and if I have misread my brief, I will correct the record later and write to the hon. Gentleman with the details of the unions, and perhaps with more information around the issue of the union being invited to something and there being some type of deal, if it is in the public interest to put that out. I want to encourage the unions to come and be part of the process, and I want us to make decisions.
Gareth Thomas
To be clear, is the Minister saying that if the TUC, as the representative of the trade union movement, is not on any of the relevant trade advisory committees, he is committing himself to inviting the TUC?
Sir James Duddridge
The Minister did not commit to that. I think the question is, will I commit to that? The answer is no. I will commit myself to ensuring that unions are on those trade advisory groups. I think they are on the trade advisory groups—
Sir James Duddridge
Because there are many unions out there. That is not part of the Bill—
Sir James Duddridge
This is an interesting question, but the hon. Gentleman, who was an able Minister, would not have made such an on-the-hoof commitment when he was sitting on this side of the Committee without consulting and without thinking about the implications for other unions. However, I am more than happy to go away and look at the issue if that makes him happy. I am picking up the gauntlet to try to bring him onside and get the Bill through, so perhaps that is a nice suggestion.
Gareth Thomas
Almost nice. All I would say to the Minister is that I would have known the question was coming.
Sir James Duddridge
There were no telepathic Ministers available, so the hon. Gentleman is stuck—
Sir James Duddridge
I certainly want us to make progress.
Let me turn to the meat of my speech—the lamb and beef. We have secured a large range of measures to safeguard farmers generally within the tariff quota with respect to a number of products, but specifically, on the New Zealand side, I would point out that UK sheep imports from New Zealand have fallen over the past decade, so I do not think the idea that these measures will radically change the relationship is right. On Australia, increases in beef imports are likely to happen, but rather than displacing our domestic farmers, those imports are more likely to displace slightly more expensive beef from the EU. That means that beef will be coming from Australia, not France, for argument’s sake, and it will be cheaper for my constituents—my Sunday roast, their Sunday roast. That is part of levelling up and getting on with tackling the cost of living.
More broadly, there is a strong case for free trade. Earlier, the hon. Member for Brighton, Kemptown made the case for not unilaterally making moves and to hold back the negotiating power. That is a valid argument, because some of these things could be traded off for something else. However, there is actual underlying value in reducing tariffs and minimising systems; it makes products cheaper. That is what we are trying to do as a Government and I do not think that anyone would disagree with that. So, it is a third balancing act within that arena.
Dame Nia Griffith
Would the Minister accept that there really is a need for consultation and that there is also a need for an ongoing impact assessment, because the situation for Welsh farmers is so different from that of farmers in Australia and New Zealand, where the quantities involved and the farms themselves are absolutely huge? We are obviously very aware here that our hill farms are in some of the areas that are hardest to farm and that really there is no straightforward comparison with Australian and New Zealand farms. Then add to that the other costs of production, such as the costs arising from the higher standards that we have. Again, it seems that the cards are already stacked, and that consultation and a continued impact assessment are absolutely essential in trying to protect our farmers.
Sir James Duddridge
Fundamentally, I agree with the hon. Lady that that needs to be done. However, I think there is a question of frequency. We talked about the evaluation at the five-year point; we have talked about a two-year evaluation. Should there be consistent—I am trying to find the words that she used—or repeated evaluation? Well, there might be some value in that, but there is also a big cost in that, and if you produce annual report after annual report, sometimes they just go on the shelf. So, there is the right point to do the evaluation rather than doing it too frequently.
The other point that I would make is that we cannot flick a switch overnight and suddenly go from one trading situation to a new one, with a whole different array of goods and services being traded. It happens over time. So, over the first year, I will take on the responsibility for both implementing the deal and for what we call within the Department utilisation, which is basically taking advantage, because there is no point in this pile of new trade deals just sitting on my desk. They need to be explained to British businesses; we want to take them out to Australia. Only a few weeks ago, I went to Ipswich, where there is a company producing recyclable bottles. I hope that I have got this in the Register of Members’ Financial Interests—they gave me a bottle of gin and the bottle was a reusable paper container. That company will want to export to Australia, I think, one of their machines; the New Zealanders will no doubt want a similar thing; and we will then import lighter weight, lower cost wine, which I think benefits everyone.
I will return a bit more forensically to some of the points that have been raised, while being conscious of time. The issue was raised of farming and discussions with Ministers in devolved Governments about procurement. While there would have been the overall discussion, I am not aware of the specifics on procurement in farming, because that is more about the consultation for the deal and not about the consultation for the Bill, which is more narrowly focused.
I think that I have covered off the issue of impact assessments. What I would say is that they are not forecasts; they are indicative. But in many ways my criticism of some of the forecasts is that they are not dynamic enough—that is, we are underrating the potential value of some of these deals. However, the process allows for a level playing field and a comparison between different things.
The hon. Member for Inverness, Nairn, Badenoch and Strathspey talked about the Scottish Minister for Trade. In respect of the content of the Bill, the procurement policy teams met with officials from the devolved Administration for roundtables on the text of the procurement chapters in both negotiations: for this Bill; and for the procurement regulations that are consequently developed from the Bill. We have been discussing the necessary procurement regulations that will follow on. So I can reassure the hon. Gentleman that that is happening.
There was some discussion around trade remedies. The hon. Gentleman said that I am blessed with a box full of wonderful officials and no doubt behind the scenes they are texting backwards and forwards. The resources are slightly less. I think there has been some misunderstanding, effectively, on what happens.
The same exclusion of trade remedies in the Bill applies to GPA, but the exclusion on remedies only applies to temporary measures to suspend a supplier from the procurement process. Crucially, it does not prohibit them from bringing a claim, so they can still do that.
Gareth Thomas
If the Minister cannot elaborate on this now, will he commit to write to the Committee with a more detailed respond to Professor Sanchez-Graells’s analysis? He had substantial concerns, which the International Trade Committee and the International Agreements Committee accepted, and nobody challenged it in the evidence he gave last week. I understand that the Minister may not have access to all the information he needs, but I wonder whether he would be good enough to write to us. I hope he is right—I really do—that the provisions negotiated are GPA-plus, but there seems to be doubt that some of the tweaks that have been made might make them GPA-minus, and that needs to be ironed out as a matter of urgency for British business.
Sir James Duddridge
I am happy to iron it out. The departmental advisers respectfully disagree with the professor, and I am more than happy to write with their analysis of why they disagree. Clearly, we cannot take evidence from 30 academics and say, “This is an outlier out of 30,” but I will send the Committee that letter.
On the unions, it is slightly more complicated than what the hon. Gentleman asks and what I said. The TUC has already been offered roles on the advisory groups but unfortunately has not taken them up so far. The TUC has been represented on the Department’s Strategic Trade Advisory Group, and in 2021 we offered six unions—that is where the figure six came from—roles on the group. I assumed incorrectly that they had taken us up on that offer. I do not know why, but they have not. They are still welcome, and I am more than happy to write again making that offer, to try to understand why they have not taken it up. We are saying that we want to consult more widely. We have offered the unions a consultation role, and Members say that unions want to have an even bigger role, but they have not come to the table. I am sure that there are complicated, good reasons for that, and we will try to work through those.
Hopefully I have answered the questions sufficiently and have only failed in my lack of telepathic skills to know which questions would come up. I will try harder next time and get the best brains on providing said facility to the hon. Gentleman.
Gareth Thomas
I am grateful to you, Mr Twigg, for allowing me briefly to respond. I am grateful for the Minister’s willingness to write to the Committee with a more detailed response to the concerns that Professor Sanchez-Graells raised. I am happy not to press amendments 7 and 20. However, tempting as it is to think that the Minister has given comprehensive answers, he was almost comprehensive but did not give quite enough for us not to press amendments 5 and 22. We will press them to the vote.
Ms Anum Qaisar (Airdrie and Shotts) (SNP)
The legislation does not reflect the values that Scotland stands for, and it does not adequately safeguard food and farming standards in Scotland.
The powers in the Bill should not be exercisable by UK Ministers in relation to Scotland without a requirement for them to secure the consent of Scottish Ministers. That is what amendments 3 and 4 propose. While negotiation of international agreements is a reserved matter, the implementation of such agreements in devolved areas such as public procurement is devolved. There is no reason for UK Ministers to hold such powers in relation to Scotland.
The Scottish Government have consistently and successfully implemented international obligations on procurement since 2006, when they first transposed the EU directives, and they have been consistent in their commitment to upholding international law. The Scottish Government continue to engage with the UK Government on the issue, and I understand that officials are in continual contact with counterparts in the Cabinet Office and the Department for International Trade.
It might be better to make provision in the Bill for the implementation of those agreements, rather than using a delegated power. The Minister mentioned the issue, although I still do not understand why that is not possible and there appears to be no particular reason for powers needing to be provided. Such agreements are signed and there is common understanding of the amendments that need to be made to procurement legislation in order to implement them. That could be done in the Bill, which in turn could provide for commencement regulations to ensure that the amendments took effect at the desired moment.
I thank the shadow Minister, the hon. Member for Harrow West, for his sympathy, as he put it, towards amendments 3 and 4. Those amendments are specific to discussion and dialogue between the UK Government and the Scottish Government, and I would argue that amendment 5 is not as strong as our amendments. However, we do support Labour amendments 7 and 22.
Question put, That the amendment be made.
The Chair
Before we come to the question that clause 1 stand part of the Bill, I note that I was quite lenient in the previous sitting about interventions. I would like to remind Members that interventions should be short and to the point.
Clause 1 ordered to stand part of the Bill.
Clause 2 ordered to stand part of the Bill.
Schedule 1 agreed to.
Schedule 2
Regulations under section 1
Gareth Thomas
I beg to move amendment 9, in schedule 2, page 9, line 5, leave out from “section 1” to end of line 6 and insert—
“may not be made unless a draft of the instrument has been laid before and approved by resolution of each House of Parliament.”
The Chair
With this it will be convenient to discuss the following:
Amendment 10, in schedule 2, page 9, line 8, leave out “negative” and insert “affirmative”.
Amendment 11, in schedule 2, page 9, line 11, leave out from “section 1” to end of line 12 and insert—
“may not be made unless a draft of the instrument has been laid before and approved by a resolution of Senedd Cymru.”
Amendment 12, in schedule 2, page 9, line 13, leave out from “section 1” to end of line 16 and insert—
“may not be made under this Act unless a draft of the regulations has been laid before and approved by a resolution of the Northern Ireland Assembly.”
Amendment 13, in schedule 2, page 9, line 25, leave out from “applies” to end of line 26 and insert—
“may not be made unless a draft of the instrument has been laid before and approved by resolution of each House of Parliament.”
Amendment 14, in schedule 2, page 9, line 28, leave out “negative” and insert “affirmative”.
Amendment 15, in schedule 2, page 9, line 29, leave out sub-paragraphs (5) and (6).
Amendment 16, in schedule 2, page 10, line 2, leave out from “Ministers” to end of line 3 and insert—
“may not be made unless a draft of the instrument has been laid before and approved by a resolution of Senedd Cymru.”
Amendment 17, in schedule 2, page 10, line 5, leave out from “department” to end of line 7 and insert—
“may not be made under this Act unless a draft of the regulations has been laid before and approved by a resolution of the Northern Ireland Assembly.”
Amendment 18, in schedule 2, page 10, line 9, leave out sub-paragraphs (9) to (12).
Gareth Thomas
Thank you, Mr Twigg. You will understand the frustration of Labour Members present that Ministers are once again seeking to get through a whole bunch of regulations using the negative procedure, rather than the affirmative resolution procedure. Amendments 9 to 18 seek to make it a requirement that the affirmative resolution procedure be used for every set of regulations that Ministers want to propose under the procurement chapters of these two free trade agreements.
In making the case, I note that the affirmative resolution procedure is by no means a perfect process. However, it is better than the negative procedure. Without the affirmative process, Ministers would have carte blanche to introduce regulations based on these procurement chapters without the slightest hint of anything resembling parliamentary scrutiny. The negative resolution procedure that the Government propose is the least rigorous of all parliamentary procedures available to the House for scrutiny.
Having served in government, I can understand the Minister’s appetite to avoid scrutiny. There is very little to be gained for a Minister of State or an Under-Secretary of State in having to come and justify to a parliamentary Committee why particular regulations should be introduced. However, it is none the less important that Parliament has the opportunity to ask questions about regulations that are being introduced and to consider whether they fit with the objectives that were set out for the trade negotiations and actually seek to achieve those objectives.
It is worth remembering that the last negative instrument to be successfully annulled, as I understand it, was the Paraffin (Maximum Retail Prices) (Revocation) (No. 3) Order 1979. With such a small chance of a negative instrument being successfully annulled, I can well understand the appetite of Ministers to use this process.
Sir James Duddridge
Does not the evidence that the hon. Gentleman has brought forward actually negate his case? If there was a genuine problem and there had been some error, the Committee would have voted against it or, indeed, the Government would have withdrawn the measure.
Gareth Thomas
I gently suggest to the Minister that it is much better not to get ourselves into the position where we have to persuade Members from all parts of the House to vote down an order. One swallow does not make a summer. Just because there is an example in the far distant past that we should endorse negative instrument, a little bit of parliamentary scrutiny and pressure on the Minister, and a few nerves to make the Minister check their brief in more detail before signing off on a set of regulations, would seem sensible. The scrutiny arrangements for the Australia FTA to date have been poor, and we have had no debate on the Floor of the House on the New Zealand FTA, apart from the Second Reading of this Bill. Given that, we should switch from the negative to the affirmative process, and I gently encourage him to adopt an even more reasonable tone than he has adopted up until now.
Sir James Duddridge
I am sure the Whips will note with criticism the hon. Gentleman saying that I have been reasonable. In all seriousness, I thank hon. Members for the amendments and I hope to provide reassurance as to why the measures are necessary. The hon. Gentleman says he wants to hold my feet to the fire. He suggested that I may not read the brief quite as closely if I do not have to defend it in Parliament, but I will ensure that I do that anyway. I will regularly check my brief.
It is worth remembering that the amendments would not be a vote on the agreements. They would be a vote on the secondary legislation of a trade agreement. By the time these agreements enter into force, Parliament will already have had the opportunity to scrutinise the obligations of the procurement chapter in these agreements through the process set out in the Constitutional Reform and Governance Act 2010. The Government are certainly committed to transparency in our trading arrangements, and we have put in place a suite of enhanced transparency and scrutiny arrangements that go well beyond our statutory obligations, and we will continue to do so. That includes providing the International Trade Committee and the Lords International Agreements Committee with at least three months to report on the agreements before Parliament scrutinises them more formally through the process set out in the Constitutional Reform and Governance Act, which comes later.
For the Australia agreement, the period was triggered after Parliament had had the deal available to scrutinise for over six months, and it has already been subject to scrutiny through the Trade and Agriculture Commission, which published its report in April 2022. The Department has since responded with the publication of the Australia agreement report under section 42 of the Agriculture Act 2020. In addition, future changes in the procurement chapters will relate mostly to machinery of government changes and the subsequent updating of lists.
This is not a novel procedure. Section 1 of the Trade Act 2021 enabled the implementation of the UK’s membership of the World Trade Organisation agreement on government procurement to operate in a similar way. This approach was acceptable to Parliament, and we received no negative comments from the Delegated Powers and Regulatory Reform Committee. These sessions and holding Ministers to account are useful, but Ministers are a limited resource. We are not an infinite number, and we should perhaps focus on the more critical pieces of legislation rather than just statutory instruments. I therefore ask the hon. Member to withdraw his amendment.
Gareth Thomas
I am grateful to the Minister for his response, but I gently suggest that we have not been deluged with regulations from the Department for International Trade, so I do not buy his argument that Ministers or shadow Ministers are so busy that there is no time to discuss regulations. If our amendment is accepted, it may well be that our debates would be relatively short, and they would provide the opportunity to ask questions and raise issues that are slightly outwith this debate but important to a range of stakeholders outside the House. It would make sense to switch from the negative to the affirmative process, so I intend to press the amendment to a vote.
Question put, That the amendment be made.
Gareth Thomas
I beg to move amendment 6, in schedule 2, page 10, leave out lines 31 to 38.
Amendment 6 would delete part 3 of schedule 2. I want to focus on what that would mean. Part 3 says:
“The power to make regulations under section 1 in relation to”
both Government procurement chapters, or
“any modification of either Chapter which requires ratification, is capable of being exercised before the agreement or (as the case may be) modification concerned is ratified.”
The Minister seems to be asking for carte blanche to be able to make any change to the procurement chapters without proper parliamentary scrutiny, and certainly before the UK-New Zealand FTA has been ratified. I am open to persuasion as to why such a requirement is necessary, but I wonder whether Ministers are again seeking to avoid serious parliamentary scrutiny, specifically on the terms of the UK-New Zealand FTA. The Minister will know that there has not been any sustained debate in the Chamber on the whole of that free trade agreement. I look forward to hearing his justification for this particular part of schedule 2.
Sir James Duddridge
I hope to be able to provide that assurance. This part of the Bill is there not at the request of Ministers, but at the request of lawyers, to give legal certainty and predictability. It is a necessary part of the process of implementing trade agreements to make the legislation before ratifying.
The amendment would create legal uncertainty regarding the process of implementing the two agreements. Several steps need to be taken to get agreements into force and allow UK businesses and, indeed, consumers to benefit from the significant economic advantages that they provide. Entry into force is the final step. However, the UK can proceed to enter into force only after it has ratified the agreements. In turn, ratification may only be agreed to once all the necessary domestic legislation is in place. Without the provision that the amendment seeks to change, there would be legal uncertainty about whether domestic legislation could be made before ratification. That is the reason behind it. I hope that the hon. Gentleman, having heard my response, will withdraw what I hope will turn out to be a probing amendment.
Gareth Thomas
I am grateful to the Minister for his explanation. I now understand a little better the reason for the provision. I will reflect on his remarks, but for now I will not press this to a vote. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 2 agreed to.
Clause 3 ordered to stand part of the Bill.
Clause 4
Extent, commencement and short title
The Chair
With this it will be convenient to discuss the following:
Amendment 8, in clause 4, page 3, line 5, at end insert—
“(4) This Act expires at the end of the period of two years beginning with the day on which it is passed.”
Amendment 21, in clause 4, page 3, line 5, at end insert—
“(4) If the United Kingdom becomes a full member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, this Act expires on the day that the United Kingdom becomes a full member.”
Ms Qaisar
The UK Government are negotiating trade deals for the first time in more than 30 years, and that is not an easy task. Trade deals in matters of procurement are not just for Government photo ops; they impact on every fibre of our and our constituents’ being. Therefore, we must have high levels of security at the start, during and at the end of discussion about the legislation. I appreciate that we have the CRaG—Constitutional Reform and Governance Act 2010—process during the drafting of legislation, but as has been said this afternoon, it does not guarantee a debate or any votes in Parliament. It is a poor scrutiny tool from the outset.
In setting an expiration date, our amendment would allow for scrutiny at the end. That would enable Parliament to judge the legislation’s effectiveness on the proposed date of December 2027. That would also allow our constituents to examine the usefulness of the legislation in matters of procurement that have arisen over the years. We must also consider the potential of traders across the country getting locked into agreements that do not work for them. Consumer group Which? has already found that 72% of people in the UK do not want food that does not meet current standards coming in through trade deals. The majority of survey respondents—67%—also felt that the UK Government provide a poor level of information about new trade deals. The amendment would ensure that we bring public and parliamentary scrutiny to the forefront. I urge colleagues to support the amendment.
Gareth Thomas
Amendments 8 and 21 are probing amendments, to understand better how the Procurement Bill and potential accession to the CPTPP might affect the provisions in the procurement chapters of the Australia and New Zealand free trade agreements.
As I understand it, the Minister has touched on some of the reasons why the New Zealand and Australia free trade agreements need to stay on the statute book for considerable time to come, but I want to understand whether the Procurement Bill will provide the opportunity to sweep up the measures proposed by the two amendments, so that this Bill can be taken off the statute book to avoid any legal uncertainty. Clarity on that would be helpful. If there is a chance that the legislation will not be necessary, because the Procurement Bill would take the matter forward, that creates additional opportunities for Members to consider the impact of the trade legislation going forward.
I wonder whether Ministers might be tempted to think, “Let us stick with the Trade (Australia and New Zealand) Bill because we have no idea whether the Procurement Bill will survive in its current iteration.” I say gently that, given the chaos in the Minister’s party, one does not know which legislation will survive if there are further ministerial changes. He will understand that there has been considerable criticism of the Procurement Bill. Clearly, it would not be appropriate to dive into that now, but it would be helpful to understand the interplay between that crucial piece of UK domestic legislation and the two procurement chapters. If the experts in his Department are wrong about the concerns that Professor Sanchez-Graells outlined about possible GPA-minus provisions now being the problem for British exporters to Australia and Australian exporters coming here, the Procurement Bill might provide an opportunity to sort those problems out.
Amendment 21 refers to the CPTPP and the potential accession of the UK to it. It would be good to hear from the Minister how the negotiations are going and what might be a reasonable timeline for the House to have the chance to consider the accession documents to the CPTPP. I ask that because the provisions in the procurement chapter of the Australia free trade agreement appear to largely mirror the provisions in the procurement chapter of the CPTPP. Everything that has been written about the CPTPP suggests that we will be rule takers and will not be able to shape in any significant way the procurement chapter of the CPTPP that we might wish to join. Was that part of the motivation for Ministers deciding to just roll over and accept the request of the Australians for the GPA-minus provisions in the procurement chapter of the Australia FTA? We would simply have to accept them on joining the CPTPP.
The Minister will know that a series of trade experts have suggested that we will be rule takers if the CPTPP comes into force. We will not have much opportunity to influence the negotiations, and that is a considerable concern given that the idea of Britain being a rule taker was a motivation for many to vote for leaving the European Union. I look forward to the Minister explaining the interplay between provisions in the Trade (Australia and New Zealand) Bill and those in the Procurement Bill and the CPTPP.
Sir James Duddridge
I welcome the probing amendments tabled by the official Opposition and the amendment tabled by the Scottish National—or nationalist—party. Forgive me, but I forget which word it is. [Interruption.] I will do my homework better next time.
Amendments 2, 8 and 21 would ensure that the power in the Bill expired, even if provision under it was still required. The Bill is about implementing and maintaining our commitments in the procurement chapters of the agreements. That means that we need to ensure day one compliance as well as compliance beyond that. That is why the amendments that would remove the power are inappropriate. Although the amendments would permit the procurement chapters to be implemented, they would remove the power when it might be needed for modifications, and that would not be a satisfactory position to be in. Future modifications in the procurement chapters may relate to machinery of government changes and updating of lists. An example is when the Department for Culture, Media and Sport added digital. I do not think that we would want to come back to this Committee to make such a change.
Let me deal with amendments 8 and 21, tabled by the hon. Member for Harrow West. Bilateral trade agreements, like the ones dealt with in this Bill, sit alongside agreements like the comprehensive and progressive agreement for trans-Pacific partnership and the World Trade Organisation agreement on Government procurement. The procurement chapters of these deals will not be superseded by the accession to the trans-Pacific partnership. Accordingly, the powers in this Bill will still be needed after the accession in order to implement future modifications to both these agreements.
Sir James Duddridge
I will, but I suspect I am coming to the hon. Gentleman’s point.
Gareth Thomas
The Minister mentioned the GPA, which provides me with the opportunity to intervene and press him on it. Presumably the Government are still significant supporters of the GPA, but I hope that the Minister accepts my point about the need for the GPA to be a dynamic and more modernised agreement. If he does accept that, what are Ministers doing to try to convene signatories to the GPA in order to start the process of modernising that agreement?
Sir James Duddridge
I agree that the GPA should be dynamic. In terms of what Ministers are doing, I can speak for myself: at G20, I met Dr Bright Okogu, Professor Ngozi’s right-hand man in the WTO, and I agreed that I would go to Geneva for probably a week and meet all the officials there to get up to speed with the detail at a quiet time, rather than the busy time of a multilateral agreement, to raise exactly these types of issues, because we believe in a free trading system globally and the value of promoting that for all UK equity—it is not just exports, but the cost of living and also development, which both of us care massively about.
I think that I have covered the issue about the CPTPP. I cannot give a running commentary on negotiations there. It is a high priority for the Government. At my most recent meetings with internationals, I raised it, both bilaterally and multilaterally, and I will continue to do so, as will other Ministers. The Australia deal and this Bill are a stepping stone to get there. As a precondition, we want to get this done so that we are on a firmer footing for the next transition.
Gareth Thomas
The hon. Gentleman will be well aware, I suspect, that one of the big concerns about the CPTPP relates to investor-state dispute settlement. One of the mildly reassuring things about the procurement chapters of the Australia and New Zealand FTAs is that they do not allow for investor-state dispute settlement to kick in in a very obvious way. The CPTPP appears to be much more explicitly in favour of ISDS. It would be helpful to understand from the Minister, at a time of his convenience, whether the Government are accepting the principles of ISDS, locked as they are into the CPTPP, or whether he is actively pushing for them to be deleted from the requirements that Britain has to sign up to in order to accede to the CPTPP.
Sir James Duddridge
I really cannot, as part of this Bill, give any more to the hon. Gentleman than I have done on my discussions in international forums and my intention to go out to Geneva. I want to go out there open-minded. A number of issues will be discussed in Geneva above and beyond this one, and I want to have an open discussion. I do not want to prioritise the hon. Gentleman’s equities and desires, or anything else; I want to listen openly to what Dr Ngozi says, and talk about how her priorities fit with the Government’s and how we can move forward together. That is the nature of multilateralism: because every member has a vote, the process can easily be held up, so I am resistant to being too strong in accepting what the hon. Gentleman has said. However, I am very sympathetic to it.
Gareth Thomas
I am grateful to the Minister for his explanation about his upcoming meeting with the staff of Professor Ngozi, who is a great figure internationally. The Minister—I do not chastise him in any way for this—had to have a discussion with his Whip, the hon. Member for Workington, but the question I asked was whether ISDS was included in the CPTPP. I wonder whether the Minister might be willing to look at the record and perhaps drop me a note about the question I actually asked.
Sir James Duddridge
I will certainly do so.
Turning to the question of whether the powers fall away, as ever it is slightly more complicated than yes or no. The powers in clause 1(b) for dealing with matters arising out of, or related to, the FTA chapters will cease to exist for England, Wales and Northern Ireland when the new procurement system becomes law through the Procurement Bill, assuming that all happens; those functions will instead be carried out through the powers in clause 82 of that Bill. It is different for Scotland, because competency for treaty making is at the UK level, but the actual procurement legislation and processes are done by the devolved Assembly. Scotland has separate procurement regulations from the rest of the UK and will retain those regulations after the Procurement Bill comes into effect.
Ms Qaisar
The Minister struggled to say the name of the Scottish National party at the start of his speech. I was a modern studies teacher before my election, and I would be more than happy to share my old PowerPoints on Scottish politics with him if he is struggling to remember the name of the largest party in Scotland.
Over the course of today’s sitting, we have heard time and time again—mainly from Opposition Members—that there has been a lack of scrutiny of this legislation. The amendment proposes that we can come back to this House in five years’ time and discuss the reality of how this trade deal has impacted not just us but our constituents. Trade deals are no longer pieces of paper that are signed by Trade Secretaries—they impact the fibre of our constituencies across all four nations. We therefore intend to push the amendment to a Division.
Question put, That the amendment be made.
The Chair
With this it will be convenient to discuss the following:
New clause 2—Assessment of impact on hill farmers and crofters in Scotland—
“(1) The Secretary of State must publish an assessment of the impact of the implementation of the procurement Chapters on hill farmers and crofters in Scotland within six months of Regulations made under section 1 coming into force and every six months thereafter.
(2) The impact assessment under subsection (1) must be laid before both Houses of Parliament and before the Scottish Parliament.”
New clause 3—Impact assessment: Geographical Indications—
“The Secretary of State must publish an assessment of the impact of the implementation of the procurement Chapters on the operation of Geographical Indications in the United Kingdom within two years of Regulations made under section 1 of this Act coming into force.”
New clause 4—Impact assessment—
“The Secretary of State must publish an assessment of the impact of the implementation of the procurement Chapters within twelve months of the coming into force of Regulations made under section 1 of this Act and every three years thereafter.”
Ms Qaisar
The SNP has proposed new clauses 1, 2 and 3 because we need impact assessments to fully examine the practicalities of these trade deals in matters of procurement, which is so important. I will begin with new clause 1. By examining the social, economic and environmental impacts, we can ensure that we are presented with a fair assessment. That is especially important, as we believe that the UK Government have rushed these trade deals and matters of procurement through Parliament with little to no scrutiny.
While the Bill is narrow in its focus on the procurement chapters of these two agreements, it is important to note the huge potential for imports to increase. Australia currently exports 5,000 tonnes of beef to the UK each year, but the agreement will allow 35,000 tonnes in the first year, increasing each year after that. We know that Australian producers do not have to adhere to the same animal welfare and environmental standards as Scottish farmers. It is a similar story with the agreement with New Zealand, under which exports to the UK beef market will rise to 68,000 tonnes by year 15 of the agreement.
Crucially, there are almost no benefits in this deal for Scotland’s food and drink sector. All this legislation achieves is to expose the Scottish agricultural market to the most export-orientated food producers in the world. Our new clause seeks to ensure that we can examine the impact of the deal. The UK Government’s own analysis shows that the deal with New Zealand will deliver a mere 0.03% of UK GDP benefit over 15 years, and the Australia deal will contribute 0.08%. Scotland has been forced against its will to trade outside the EU, tied to this UK Government, so that they can pretend Brexit is working. That is an undesirable position to be in, but unfortunately it is the position we are in, so we must try to protect Scottish interests as best we can. The impact of this agreement will be felt all across Scotland, so I urge colleagues to back new clause 1, as an impact assessment will improve this piece of legislation and future trade deals.
New clause 2 would provide for us to assess the impact of the implementation of the procurement chapters on hill farmers and crofters in Scotland every six months. Scottish producers are likely to be undercut by lower-quality goods in procurement, and regular impact assessment would allow us to keep track of any potential undercutting. It would also highlight the potential harm that this deal would do to Scottish farmers.
We know that Australia and New Zealand producers are not held to the high standards that Scottish producers are. The UK has put no environmental conditions on the agricultural products it will accept from Australia and New Zealand. The UK Government’s own advisers have conceded that pesticide overuse in Australia is a valid concern for UK farming. There are 144 highly hazardous pesticides authorised for use in Australia—many of the bee-killing variety—which is almost double the figure in the UK. Australian poultry farmers use 16 times more antibiotics per animal than British poultry farmers, and the Australian pig industry uses three times more antibiotics per animal.
While matters relating to food standards fall within the competency of devolved Administrations, they have no power to exclude imported products on the basis of how they have been produced. The Scottish Government have no power to exclude produce awash with pesticides and antibiotics from Australia, and already since Brexit the UK Government have fallen behind the EU on farm antibiotic standards. This undercutting of standards means that meat costs less in the UK if it has been shipped in from Australia or New Zealand. Where does that leave Scottish farmers? Analysis by Quality Meat Scotland has found that
“New Zealand beef farmgate prices are 25-30% lower than Scottish farmgate prices”
and that New Zealand lamb farm-gate prices are
“10% lower than their Scottish counterparts”,
undercutting Scottish farmers on price.
We are in a food security crisis within a cost of living crisis. New clause 2 would ensure that future generations of hill farmers and crofters in Scotland are protected. Last week, during the Bill’s evidence session, we heard from Donald MacKinnon from the Scottish Crofting Federation, who said
“I reiterate that it is so important that these trade deals are given the scrutiny that they deserve. The really important thing is that we consider all the potential unintended consequences—for our sector, in particular—of what may be well meaning motivations.”––[Official Report, Trade (Australia and New Zealand) Public Bill Committee, 12 October 2022; c. 32, Q39.]
None of us has a crystal ball to show us what potential unintended consequences may result from the legislation we are debating. Therefore, it makes logical and economic sense for the UK Government to commit to impact assessments and to back new clause 2.
Going beyond the unfair economics, we do not believe that the community-level impacts that these deals will have on our rural languages, rural local cultures and landscape and on the mental health of farmers, food processors and all those who support them across Scotland have been adequately taken into account. Therefore, supporting new clause 2 would ensure that we put Scottish hill farmers and crofters at the heart of this legislation. Crucially, having impact assessments could help to mitigate the damaging impact that these deals could have on Scottish producers. They would also ensure accountability, as we have stated that they would
“be laid before both Houses of Parliament and before the Scottish Parliament.”
Moving on to new clause 3, we also propose an impact assessment on geographically indications. The food and drink industry is vital in Scotland. Scotland is, of course, world-renowned for its production of whisky, beef and lamb.
Drew Hendry
My hon. Friend mentioned Scotch whisky, and having the safeguard of geographical protections is absolutely vital to that industry, as it is for many others, and I am sure she will touch on that. Is it not a small ask for the Government to include this, in a week where they have just abandoned their pledge to freeze alcohol duty, costing millions, and where their mishandling of the trade negotiations with India threaten even higher tariffs for the Scotch whisky industry, which is a massive export for Scotland? Of course, it sits very proudly in the UK balance of trade as well.
Ms Qaisar
I thank my hon. Friend for his intervention. He is correct, because there is real concern that these industries will be threatened by imitation products, which risks undercutting Scottish companies.
Geographical indications are of considerable importance for Scotland because, as I say, they protect the origins of our world-renowned products. Examples include Scotch beef, Scottish-farmed salmon and, as my hon. Friend said, Scotch whisky. The UK Government did not secure recognition of agrifood geographical indications in their agreement with New Zealand, which has, with the EU, now succeeded in gaining recognition of its agrifood GIs in its free trade agreements.
The UK-Australia deal only commits to letting the UK put forward potential geographical indications if Australia introduces bespoke GI schemes for iconic Scottish spirits and agrifoods, rather than including a full list of recognised GIs from day one of the deal, as well as the ability to enhance the list.
Drew Hendry
Does my hon. Friend find it strange that this has been omitted from the Bill and has not been considered until now, given the impact on rural constituencies across Scotland and the fact that one of the people who presented the Bill is in fact the Secretary of State for Scotland?
Ms Qaisar
I thank my hon. Friend for his intervention; he is completely correct. What people may fail to consider—it is important to remember this—is that the food and drinks industry is twice as important to the Scottish economy as to the UK as a whole, and the food and drink export trade is four times as important to the Scottish economy. The legislation in front of us will impact industry, with the UK-Australia trade deal expected to cause a £94 million hit to UK farming, forestry and fishing per year and a £225 million hit to the semi-processed food sector per year. However, UK Ministers pressed ahead with these deals despite prior warnings, effectively treating Scottish interests as expendable.
Dame Nia Griffith
I rise to speak about new clause 4, but I will briefly mention new clauses 1, 2 and 3. I commend the SNP for laying them, but I gently suggest that the issues in them could be covered in new clause 4, which proposes having a proper impact assessment that takes account of the interests of the four nations.
I will not repeat everything I said this morning, which I am sure the Committee will be glad to hear, but the reasons for wanting country-specific impact assessments—and region-specific impact assessments in England—of the ongoing implementation of the Bill, its effect on procurement and the economic effects of the procurement clauses of the FTAs are very much to do the different characteristics and the different proportions of GVA that are countable by different sectors, as mentioned by the hon. Member for Airdrie and Shotts. Within the devolution settlement there are powers regarding agriculture, economic development and procurement policies that the different nations have, which all overlap with what is in the Bill.
There are particular areas that are of great concern. Earlier I mentioned—I do not think the Minister has quite answered this—the power to unilaterally accelerate the elimination of tariffs. Clearly, it would be of huge importance if the UK Government wished to do that and allow in more meat from Australia and New Zealand. We would clearly want consultation on that, but we would also need proper impact assessments to evaluate the situation, and those need to be country-specific impact assessments. As I mentioned earlier, we have is just a group of figures that are region and nation-based.
The other issue—the Minister looked rather quizzically at me before—is the massive use of antibiotics by certain farmers in Australia and New Zealand and the cumulative impact that that will have on the food chain. Again, that needs to be looked at in detail from the perspective of not only the potential commercial advantage it could give over Welsh, Scottish and Cumbrian farmers but what it is doing to our food chain. Linked to that, of course, are pesticides and the sad fact that the Government have accepted the use of pesticides that we would not use in this country. None of these things is going to go away—they will be there for some considerable time and could be in our systems permanently.
On geographical indications, it is an immense disappointment that neither the Australian nor the New Zealand trade agreements include geographical indications. It is a complete failure by the UK Government. The EU made an agreement with New Zealand that did include geographical indications. There will clearly be a competitive advantage for goods from the EU being able to fly their flag and show geographical indications that our goods and our exports will not have. That is a great pity.
I return to the impact on the different nations of the procurement parts of the Bill. The New Zealand agreement contains a general bilateral safeguard mechanism, which is available if the elimination of customs duty causes an increase in imports that threatens or results in serious injury to domestic industries for any given good or products. The Welsh Government does not have that power, because it is not regionally or nationally based—a challenge on those grounds has to be put forward by the UK. We need to have information from the nations about the impact on the particular sectors, which will inform whether there is a danger and whether to flag it up and invoke that bilateral safety mechanism.
It is extremely important that we should not let negative impacts accumulate. That is why we propose an impact assessment within 12 months, and repeated assessments every three years. We know there is a 15-year gap until the full free tariffs come in, on meat, for example, but it is no good waiting 15 years and then finding we have no industry. We should be flagging up and knowing exactly what is happening. As the Minister said, it will not happen on day one; it will be gradual. We need a very specific impact assessment so that we know what is happening.
It may surprise people to know that New Zealand has only ratified six of the eight core International Labour Organisation conventions, which we touched on briefly this morning. It does not have a minimum age for starting work, as long as the work does not interfere with school or is not a matter of concern for health and safety. The Welsh Government have asked for clarification from the UK Government on whether not adhering to the same labour standards as the UK will give New Zealand an advantage. In addition, New Zealand does not protect strikes on economic and social grounds, only on collective bargaining and health and safety. These are important issues and we must keep an eye on exactly what is going on with the procurement and what opportunities and challenges there are, and ensure that the Minister takes action sooner rather than later if we find there are difficulties.
Finally, I would reiterate that there are huge differences between different parts of England and different nations of the UK in terms of the sectors they are dependent on and the impact that anything injurious to any of those sectors might have for their populations.
Sir James Duddridge
May I clarify, Mr Twigg, that we are considering all the new clauses together?
The Chair
Yes. There will be separate votes, but we are considering the new clauses together.
Sir James Duddridge
Thank, you Mr Twigg.
The Government are committed to transparency. We have put forward a suite of enhanced transparency and scrutiny arrangements that go well beyond our statutory obligations.
Lloyd Russell-Moyle
I am pleased to hear about the Government’s commitment to transparency, but at 3 o’clock, the Secretary of State cancelled her meeting with the Chair of the International Trade Committee. He turned up to the Department, where an official said, “The Secretary of State is going to be in the House for votes so cannot meet you now. We will have to postpone to another week.” Is that the reset that we were promised and the kind of openness and transparency that we should expect?
Sir James Duddridge
I have made the point that we want to establish a good relationship with the International Trade Committee, and the Secretary of State giving evidence to it is clearly part of that. The hon. Gentleman will know that Ministers sometimes need to deal with matters urgently. I do not know what other matters are going on, but I am sure that the Secretary of State has apologised profusely and looks forward—as I do—to attending that Committee. I am more than happy to update the hon. Gentleman in a bit more detail, informally—perhaps even later today if I have time to go back to the Department.
Gareth Thomas
As part of this new spirit of transparency from the new ministerial team at the Department for International Trade, will the Minister commit to publishing the analysis used to produce the impact assessment that the Government published for the FTAs? As I understand it, Ministers are refusing to publish the modelling used to generate that assessment. That leaves a slightly cynical taste in the mouth. One suspects that the economic model is not being released because the impact assessment was perhaps slightly inflated.
Sir James Duddridge
I would like to make it clear that this is not a new plan for transparency. I am being credited, to a degree, with what is just the old order and transparency—[Interruption.]
Sir James Duddridge
I am sorry, Mr Twigg. I will stick entirely to new clauses 1, 2 and 3.
I am more than happy to take away the issue of impact assessments, and look at the formula and what was disclosed. I have read the document, but it is very big. I will probe and look at what has already been disclosed before asking the Department to disclose further information.
Sir James Duddridge
I am more than happy to give way but I think I am unlikely to be able to provide the hon. Gentleman with more information than I already have.
Gareth Thomas
I suggest to the Minister that he should approach that discussion with his officials in a slightly different way. Why does he not go to his officials and ask, “Is there any reason why we cannot publish all the economic modelling behind the impact assessment?”
Sir James Duddridge
I thank the hon. Gentleman for his suggestions but, with respect, I will do things my way if that is okay.
We published impact assessments within the agreements—we have spoken about that already. In the reports, the Department provides analytical evidence as a base, but we will do more. I have already spoken about the five-year and two-year assessments.
On UK suppliers competing for procurements, there is a designated team in the Department—complemented by staff from Australia and New Zealand—who will support UK businesses across the country. I have already seen a bit of that.
Sir James Duddridge
I believe that the Secretary of State was tasting Scotch whisky in Scotland last week—that was certainly the plan, but forgive me if things changed. I have plans to go to Scotland myself, but I do not want to say where I am going because I have not yet informed the Member of Parliament for that area. The Department will ensure that I do visits across every nation, every region and in every sector, so that I am not going back to Ipswich or the east of England to look at food and drink every single time. As a reward to this wonderful Committee, if anyone wants me to come and visit their constituency—particularly with the Bill’s export or procurement angles in mind, and perhaps some other bits and pieces as well—I would be more than happy to do so.
Sir James Duddridge
I may just be coming to the point that the hon. Lady wishes to make. The UK prohibits the use of artificial growth hormones in both domestic production and imported meats. Nothing in the deal changes that important issue. The Trade and Agriculture Commission found that there was
“no reason to believe the scheme is not reliable and robust.”
The Chair
Order. I will suspend the sitting for Divisions in the House. I remind Members to come back promptly so that we can get on, as we are nearing the end of proceedings.
Sir James Duddridge
Yes. I have just two or three points. On the argument of the hon. Member for Llanelli, who challenged me outside the Committee Room to go further and be bolder, absolutely the Government should go further and be bolder in this regard, but not in this procurement Bill.
On Jersey potatoes, I was tempted to offer a PowerPoint presentation on the United Kingdom, given that the hon. Member for Airdrie and Shotts is going to send me one on Scotland. I remind the Committee that Jersey is a Crown dependency, and Crown dependencies and overseas territories are not part of this Bill.
I turn to some of the issues raised by the Scottish National party. I think they are inadvertently—I am sure not vertently, if that is a word—part of the anti-growth coalition, because my briefing says that this Bill is rather good for Scotland. I find myself in the position of promoting Scotland—perhaps quite rightly, as the Minister—while the hon. Lady is talking it down a little. The Australia FTA alone is expected to boost the economy by approximately £120 million. Adopt this good news; put it in a press release. Tariffs on Scotch whisky have been cut to 0%.
Drew Hendry
It is on that subject. I am grateful to the Minister for giving way. To be clear, this is about the geographical indicators not the deal itself, in terms of the trade involved. It is about protecting Scottish whisky and the brand.
Sir James Duddridge
There are no changes to geographical indicators in the Bill, but that is not to say we could not do something differently in future. I know there are issues with different spellings of whisky in different places, including in Northern Ireland. I also understand that there is a Northern Ireland issue to this. It has many distilleries—I believe eight—and Members of the Committee are invited to taste the products of some on 27 October.
Gareth Thomas
May I point out gently to the Minister that the point on GIs is that Ministers secured nothing in terms of protection for British GIs in the Australia deal. That comes on top of a very lengthy delay to get any GIs agreed with Japan. There is a worrying pattern of British businesses and good British products not getting the protection they deserve.
Sir James Duddridge
This is not an adverse change. It is just the start of an agreement and not everything can be done on day one.
I have further good news for the Scottish National party. It is slightly outside the scope of procurement, but there will be big benefits from the financial services industry, particularly in Edinburgh. Exporters were very keen, when the Secretary of State went there, to explain that they were happy about tariffs being reduced. That will reduce prices and increase profit. There is good news for Scottish salmon—not for the salmon themselves, as they will be dead—because they are guaranteed to clear customs in six hours. Hon. Members will know that time is an issue with fresh products. Scotland’s services firms, of which there are many, will benefit from access to millions of pounds worth of extra Government contracts. That is good news for the United Kingdom and good news for Scotland.
Ms Qaisar
Thank you, Mr Twigg. I thank the Minister for his contribution. He is more than welcome to come to Scotland. I have a distillery in my constituency of Airdrie and Shotts and he is more than welcome to visit, though I warn him that he may not get as good a response as he hopes, as a Tory MP walking the streets of Scotland.
The Chair
Order. A Division has been called. The maximum is 15 minutes but please be back as quickly as you can after the vote. We shall continue then if the Whips are happy.
The Chair
Anum Qaisar, I am not sure you had quite finished speaking. Do you want to continue?
Sir James Duddridge
Any misunderstanding, I am sure, was accidental. The hon. Lady did actually invite me. I understand how comments can be misinterpreted, and we need to be very careful. Inadvertently, some people might have taken fright at the suggestion that I might not be welcome in Scotland. I have always found Scotland to be very hospitable and welcoming, and look forward to visiting. This perhaps ups the priority of visiting the hon. Lady’s constituency.
Ms Qaisar
That invite is on the table. The reality is, of course, that Ministers in the UK Government have not protected geographical indications. The Minister claimed that he could not do everything on day one. That is understandable, but this is before day one; he has a prime opportunity to do something. I urge him and his colleagues to back new clauses 1, 2, and specifically 3, which protects geographical indicators.
I should say to Labour colleagues that new clause 1 does not mention Scotland specifically. We would like impact assessments on all four nations. The hon. Member for Llanelli said that it was a complete failure of the UK Government not to include geographical indicators, so I hope that I can look forward to her and her colleagues’ support for new clause 3.
Question put, That the clause be read a Second time.
Sir James Duddridge
On a point of order, Mr Twigg. I thank the Clerks for their advice, the Doorkeepers for keeping good order, my super-excellent team of officials, and my private office, who are truly wonderful—so much so that I have asked my private secretary to take a note of all the Clerks and Doorkeepers who helped, and have asked them to drinks in the Churchill Room, in the hope that we will soon complete Report and Third Reading. I extend the invitation to you, Mr Twigg, and to Mr Pritchard. This legislation implements the Department’s first from-scratch agreement, and officials of the Department have done us proud.
As we await Report and Third Reading, however, issues are bound to crop up. I encourage hon. Members to discuss those with me. In fact, at 7 o’clock this evening, I will be available in the Smoking Room, if anyone wishes to continue discussion on the agreements. I am more than happy to buy Members whatever tickles their fancy—an Australian wine, a New Zealand wine, an English wine, or whiskies from all nations.
Gareth Thomas
Further to that point of order, Mr Twigg. On behalf of the official Opposition, I add my thanks to you and to Mr Pritchard for the generous way in which you have chaired proceedings. I must also thank the Clerks for their assistance with drafting, the Hansard staff for the challenging job that they will have to do to understand my notes in particular, and the Doorkeepers for keeping order. I can well understand why the Minister praises his officials; I hope others will understand if I take the opportunity to praise my one member of staff, who has assisted me in preparing for the Committee.
We have had a lively and provocative debate, in which a whole series of serious issues were raised by hon. Members from the Scottish National party and from the Labour party. I am grateful to my hon. Friends the Members for Llanelli, for Nottingham South, for Brighton, Kemptown, and for Sefton Central for their support.
I note that not one Conservative Back Bencher took the opportunity to praise the person who negotiated the Australia and New Zealand deals today—
Ms Qaisar
Further to that point of order, Mr Twigg. I will not keep the Committee much longer. I echo the thanks to the Clerks and the Doorkeepers, who are the backbone of this place. Somehow, I seem to have had more help than the official Opposition: Katie, Clo and Calum have been fantastic on the research and background. I am sure that my hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey and I, and others in the SNP, will be knocking on the Minister’s door in coming weeks, championing Scotland, Scottish farmers and Scottish products.
Bill to be reported, without amendment.