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Speaker’s Statement
(2 years ago)
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Mr Speaker
Order. I wish to inform the House that I have received a letter from the right hon. Member for Harlow (Robert Halfon) informing me of his resignation as the Chair of the Education Committee, following his appointment to the Government. I shall announce the arrangements for the election of a new Chair in due course.
Oral Answers to Questions
(2 years ago)
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Steve Double (St Austell and Newquay) (Con)
Virginia Crosbie (Ynys Môn) (Con)
The Parliamentary Secretary, Cabinet Office (Brendan Clarke-Smith)
Island communities are important to the United Kingdom, which is why the previous Chancellor of the Duchy of Lancaster, my right hon. Friend the Member for Stratford-on-Avon (Nadhim Zahawi), chaired the inaugural Islands Forum meeting in Orkney last month. This forum brought together council leaders, chief executives and other island representatives from across the UK to share challenges and best practice on net zero. The forum will continue to meet to work together on shared opportunities and challenges in other areas, and I look forward to seeing the real difference it will make.
Steve Double
Cornwall is not quite an island, but if the River Tamar was a couple of miles longer it would be, and many a proud Cornishman has considered taking their shovel and finishing the job. But being a remote peninsula, we bear many of the hallmarks of island communities. That has shaped our proud, independent identity and culture but also created challenges in our economy and in delivery of public services. What consideration is given to Cornwall’s unique geography when considering funding public services and in levelling up the Duchy?
Brendan Clarke-Smith
I thank the hon. Gentleman for his question and declare a bit of an interest in having a grandmother from Devon. Cornwall’s geographical position at the far end of the south-west peninsula is well known, and the challenges are well understood by the Government. The Government have committed £99 million across four Cornish towns through the future high streets fund and stronger towns funding, which will be invested in a range of projects to create community hubs, green transport, affordable housing and commercial flexible workspaces. We have also allocated to Cornwall and the Isles of Scilly £132 million from the UK shared prosperity fund so that Cornwall can decide what to invest in locally in order to best target the funding. We are also negotiating a historic devolution deal with Cornwall Council, recognising the distinctive characteristics of Cornwall, and empowering strong local leadership by taking a county deal approach to devolution.
Virginia Crosbie
Does my hon. Friend agree that island communities have unique characteristics that are best represented by having a dedicated Member of Parliament, which is why Ynys Môn has been granted special protected status in this Government’s recent boundary changes? Ynys Môn has been deprioritised under the Welsh Labour Government’s plans to increase the size of the Senedd from 60 to 96 Members and Ynys Môn will no longer have an MS with specific responsibility for it.
Brendan Clarke-Smith
I agree with and understand what my hon. Friend is saying. She has worked hard to ensure that Ynys Môn is given protected status by the UK Government, and I understand her concerns about the island and that it must not be deprioritised. I understand her point about MSs as well. My Conservative colleagues have done a brilliant job, despite the Welsh Labour Government, which is propped up by Plaid, and I thank her for her hard work.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
Last Thursday the main telecommunications cable between Shetland and the mainland was damaged, leaving most of my constituents in Shetland with no access even to landline or broadband services. It was really fortunate that we were able to get services restored much better and more quickly than we expected, but it is surely apparent that the system does not have the necessary resilience. Will the Minister bring together the different stakeholders—the companies involved, the local authorities, the Scottish Government and UK Government Departments —and see what can be done as soon as possible to ensure that any repetition of what happened does not leave us stranded in the way that we were?
Brendan Clarke-Smith
I thank the right hon. Gentleman for his question, and I am glad that the situation has been resolved. As I said in relation to the Islands Forum, the Government are committed to ensuring that island communities are fully represented. I am sure that we will be more than happy to continue with the meetings, and I am certainly happy to meet any stakeholders to discuss how we can improve the situation and continue to work together.
Patricia Gibson (North Ayrshire and Arran) (SNP)
Kirsten Oswald (East Renfrewshire) (SNP)
The Parliamentary Secretary, Cabinet Office (Brendan Clarke-Smith)
The Union is at the heart of the Government’s work, from securing UK-wide growth to establishing freeports and supporting the Homes for Ukraine scheme. Central to that is working closely with colleagues in the devolved Governments. My right hon. Friend the Secretary of State for Levelling Up, Housing and Communities will be continuing that work in his new role.
Patricia Gibson
The previous Prime Minister, in her short tenure, managed to keep only one pledge: to ignore the Leaders of the devolved nations. The new Prime Minister has said that he wants to lead the most active UK-wide Government for decades, and also to respect devolved Governments. Will the Minister explain how this Government can claim to be respectful when the Prime Minister has pledged to circumvent Holyrood and undermine the devolution settlement even more than his predecessors?
Brendan Clarke-Smith
I remind the hon. Lady that the previous Prime Minister did meet with First Ministers at events commemorating the Queen. We have also heard that the new Prime Minister has already spoken to the devolved leaders of Wales and Scotland and has made a firm commitment to work with our devolved Governments and to strengthen our precious Union. I am sure that he will continue to do that and, in doing so, will certainly have the support of Conservative Members.
Kirsten Oswald
The Prime Minister believes that he is delivering on the mandate that his party won, with a minority of votes and a lower percentage than that won by the SNP in both recent elections as the source of his legitimacy. Does the Minister agree that, as the Prime Minister was not elected, not even by his own party members, the cornerstone of renewed intergovernmental relations must be respect for the mandates won by the actually elected First Ministers of devolved Governments?
Brendan Clarke-Smith
I thank the hon. Lady for her question. As the Prime Minister made clear, we will continue to work with devolved Governments. This Government have a mandate from 2019. We also respect the mandates of the devolved Governments, which we will continue to do, including the mandate in Scotland from the independence referendum to remain part of this precious Union.
Fleur Anderson (Putney) (Lab)
Thank you, Mr Speaker. I welcome the new team of Ministers to their positions today. I am not alone in being worried about the effect of this Government chaos on the Union, specifically on what they will do in terms of Union activity. The Union has been treated as a departmental tennis ball. It has gone to the Department for Levelling Up, Housing and Communities, then to the Cabinet Office, and then back to the Department for Levelling Up, and now, we hear, it is potentially staying there. Does that really suggest priority for the Union? The former Prime Minister did not call the First Ministers of Scotland and Wales during the entire time that she was in office. That says a lot. Will the Minister please explain to the people of Wales, Scotland and Northern Ireland why this Tory Government treat our Union as a departmental tennis ball, instead of, as Labour would do, defending and building on our strong Union, which is a priority for everyone across our country?
Brendan Clarke-Smith
I take the hon. Lady’s point but, of course, as we have said, the Prime Minister telephoned the leaders of the Scottish and Welsh devolved Governments on his very first night in office. If that does not show how much the Union is treated as a priority, I am not really sure what else can be done. On departmental work, it is very important that the Cabinet Office deals with the constitutional elements of that and to use its expertise to make sure that intergovernmental work is as effective as possible.
Brendan O’Hara (Argyll and Bute) (SNP)
I, too, welcome the new Secretary of State and his team to their place.
It has been well documented that not once in her 45 days in office did the former Prime Minister pick up the phone to our First Minister. Indeed, such was her antipathy towards the nations of the UK that one of her first actions was to farm out responsibility for the Union and intergovernmental affairs from No. 10 to the Cabinet Office. I am pleased that the new Prime Minister has talked about a good working relationship and that he has called Nicola Sturgeon. Does this mean that responsibility for the Union and intergovernmental affairs will now return to Downing Street, or will it stay with the Cabinet Office? If it does stay with the Cabinet Office, what does it intend to do with it?
Brendan Clarke-Smith
I remind the hon. Gentleman that the Prime Minister remains in charge of elements relating to the Union. More than 200 intergovernmental ministerial meetings took place between just January and September of this year, and the focus of those engagements was on issues including the Ukrainian conflict, delivering net zero, cost of living pressures, covid-19 recovery, freeports and myriad other matters. Transparency is key, and we will continue to publish quarterly and annual intergovernmental relations reports on gov.uk to give a snapshot of the activity and to allow the scrutiny that Members wish.
Brendan O’Hara
It seems that responsibility for the Union and the intergovernmental relationship has become a hot potato that is passed from Department to Department, because no one knows what it is or quite what to do with it. My suggestion to the new Secretary of State is that he uses his new responsibility to encourage the Prime Minister to respect the mandate the Scottish people gave last year, when they elected a pro-independence majority Government with a commitment to holding a referendum. Does he agree with what my hon. Friend the Member for East Renfrewshire (Kirsten Oswald) said: that a Prime Minister who was rejected by his own party members but subsequently put into office, unelected, by the MPs on the Government Benches, denying the wishes of the Scottish people in a free and fair election, is an absolute disgrace?
Brendan Clarke-Smith
Talking of free and fair elections is to undermine the tremendous democracy we live in and to show a lack of appreciation of what we have. The Prime Minister has continually referred to the result of the 2019 general election and mentioned his commitment to the 2019 manifesto we were elected on. We respect the devolved Governments; as I have said the Prime Minister spoke to those devolved leaders on his very first day in office and he will continue to do so. However, if we are talking about mandates, there is still the mandate in Scotland from the independence referendum. We are very firm on that, and we will continue to support it and prioritise the Scottish people rather than playing politics and navel gazing at this point in time.
Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)
The Parliamentary Secretary, Cabinet Office (Brendan Clarke-Smith)
The Government are committed to relocating roles out of London and to increasing and spreading opportunity, providing an economic boost to cities and towns across the UK. We have already relocated more than 8,000 roles and will relocate 15,000 by 2025. Around 1,200 of those roles will be relocated to the south- west by 2025.
Luke Pollard
The south-west is a great place to invest, and the Land Registry and the Valuation Office Agency are already prospering in our city. Will the Minister look ahead not only at allocating existing civil service roles, but at those we will develop in the future? Plymouth is building out a world-leading capability in autonomy, which has the potential to create huge numbers of jobs if we can create a cluster of Government and private sector expertise in one place.
Brendan Clarke-Smith
We currently have around 43,570 civil servants working in the south-west and, when I checked this morning, around 755 jobs are being advertised there. I can certainly reassure the hon. Gentleman that Plymouth is well represented in the Cabinet Office now.
Kevin Foster (Torbay) (Con)
It is always good to hear that the town of my birth is well represented in any Department. The Minister will be aware that moving civil service jobs into coastal communities, particularly into our town centres, can help to kick-start regeneration. What plans does he have to look at doing that in Torbay?
Brendan Clarke-Smith
Of course, my hon. Friend is right: this Government are committed to levelling up not just in the north of England, but across the whole country, ensuring that everybody has opportunity wherever they are. That is why we are ensuring that we create jobs and opportunity everywhere in the country, including in constituencies such as his.
Duncan Baker (North Norfolk) (Con)
The Chancellor of the Duchy of Lancaster (Oliver Dowden)
By the end of this week, all those infected and/or bereaved partners currently registered on UK infected blood support schemes will each receive an interim payment of £100,000. The Government remain committed to meeting in full the interim recommendations made by Sir Brian Langstaff. The payments build on the support already provided by the four United Kingdom schemes.
Duncan Baker
I welcome my right hon. Friend to his new position, and thank him for reaffirming that support. I am sure that all Members have constituents who have been deeply affected by the infected blood scandal. It is absolutely right for the Government to bring forward compensation payments. The concern is that the deadline is looming in just a few days. Can my right hon. Friend be absolutely sure that every single person affected across the country will receive the interim compensation payment by the end of October?
Oliver Dowden
I thank my hon. Friend for his question. Like him, in a previous incarnation as a Minister in the Cabinet Office, I met with survivors. All of us, I think, who have met those survivors have been humbled by their courage and dignity. I can of course give my hon. Friend the assurance that he seeks. All four national Health Departments have confirmed that the payments will be made by the end of this week.
Jim Shannon (Strangford) (DUP)
I thank the Minister for that very positive response. Some of my constituents, and indeed people across Northern Ireland, will welcome the £100,000, but other families have lost loved ones who were potential recipients of that money. Can the Minister assure us that those families will receive the money, and will do so at a suitable time? In some cases, they have been waiting for 12 to 15 years.
Oliver Dowden
I understand and share the angst felt by those families at the time that this has taken. As the hon. Member will be aware, these are interim payments, and it is the start of a process. It would be wrong for me to prejudge the entire process, but I very much share and sympathise with his concerns, and I will ensure, as the responsible Minister, that those sentiments are represented.
Mrs Sheryll Murray (South East Cornwall) (Con)
The Chancellor of the Duchy of Lancaster (Oliver Dowden)
Vladimir Putin’s invasion of Ukraine is illegal, barbaric and will not stand. My hon. Friend is right that we face a heightened security threat, and the Cabinet Office and the National Cyber Security Centre play a key role in meeting that. Building on the commitments in the national cyber strategy, we are running a campaign of public warnings and guidance, and we have undertaken significant outreach across critical national infrastructure to keep businesses and individuals safe.
Mrs Murray
At the beginning of this terrible and illegal attack on Ukraine by Russia, a cyber-attack saw many Ukrainian Government websites go down. Has a full analysis been completed of the tactics used, and are we confident that we could now defend against those tactics if they were used against us?
Oliver Dowden
My hon. Friend is entirely right to raise that. As she will appreciate, work is ongoing literally 24 hours a day by the Cabinet Office and relevant agencies. Before and since Russia’s illegal invasion of Ukraine, the UK Government and our allies have attributed a number of cyber-attacks on Ukraine to the Russian Government. All that is of course based on expert technical analysis, and that work is tireless and ongoing.
Chris Bryant (Rhondda) (Lab)
I warmly welcome the Minister and the rest of the team to their posts. I disagree with him, however, about one thing: the invasion did not start this year; it started in 2014. Every time we say that it started recently, we forget that we were not robust enough in 2014, which was one of the things that emboldened Putin. One tactic of Putin and his team is the targeting individual politicians in this country. How safe is it, therefore, for the Home Secretary to have been using a separate and unsecure email address? Does that not need to be addressed?
Oliver Dowden
I will start on a point of agreement with the hon. Gentleman. First, I welcome his kind words. He is entirely right to point out that this whole episode began at least with the invasion of Crimea in 2014. Arguably, it began even before that, in terms of Russian aggression. I am sure that he was in the House yesterday and will have heard the Prime Minister, and indeed my hon. Friend the Paymaster General, addressing exactly this point, but I am happy to reiterate that the Home Secretary accepted that she made errors of judgment in her conduct. She recognised that, accepted her mistake, apologised and resigned. I think that that was an appropriate course of action.
Giles Watling (Clacton) (Con)
John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)
The Parliamentary Secretary, Cabinet Office (Brendan Clarke-Smith)
This Government are committed to delivering for citizens across the UK, whether it is protecting households against rising energy prices or stimulating growth through the creation of freeports. When we act as one United Kingdom, we are safer, stronger and more prosperous, and we remain committed to working collaboratively with the devolved Governments on the collective challenges ahead.
Giles Watling
I thank my hon. Friend for his answer, and it is good to see my right hon. Friend the Chancellor of the Duchy of Lancaster and the team on the Front Bench. I have been fortunate enough to work in all four corners of this great Union—and Cornwall; my hon. Friend the Member for St Austell and Newquay (Steve Double) is no longer in his place. We have fought shoulder to shoulder for freedom and democracy all over the world, not least at Waterloo and the landing beaches of Normandy. Does my hon. Friend agree that it would be foolish to let this great and successful Union fall apart on a whim, with the aid of the likes of Mel Gibson? Should there not be a legislated timeframe—say, 25 years—before another referendum can be held?
Brendan Clarke-Smith
I thank my hon. Friend for his excellent and, as always, good-humoured point. People across Scotland want both their Governments to be working together and focusing their attention and resources on the issues that matter to them, not talking about yet another independence referendum.
John Lamont
I am delighted to see the Ministers in their places. Cross-border transport links are essential for strengthening the Union and connecting people across the United Kingdom. Yesterday I had a positive and productive meeting with the Ministers at the Scotland Office to see how we can push forward the extension of the Borders railway. Campaigners hope that the UK Government will soon give the green light to the next steps of the plan and consider extending the railway to Hawick, Newcastleton and on to Carlisle. Can the Minister confirm that the Government are committed to moving that project forward as soon as possible?
Brendan Clarke-Smith
I know that my hon. Friend has been a great champion on this issue. I can confirm that the Department for Transport has been working closely with Transport Scotland and the Borderlands Partnership on development of the evidence behind a possible extension of the Borderlands railway, following commitments made in the Borderlands inclusive growth deal. The DFT will continue to work closely with all parties and is considering the next steps.
Patrick Grady (Glasgow North) (Ind)
I wonder how the Minister thinks the Government’s repeated and increasingly blatant disregard for the Sewel convention helps to strengthen the Union.
Brendan Clarke-Smith
Again, I refer the hon. Member to my earlier answers. If he would like to meet me, I am more than happy to discuss the issue with him at greater length.
Andrew Jones (Harrogate and Knaresborough) (Con)
The Minister for the Cabinet Office and Paymaster General (Jeremy Quin)
As announced in the civil service apprenticeships strategy, we are committed to 5% of total civil service headcount being apprentices by 2025. Some 47,490 apprentices have been recruited since April 2016, with 78% of those being outside London. We will provide entry and progression routes within a range of careers and professions for new and existing staff.
Andrew Jones
I thank my hon. Friend for that answer. I welcome the fact that hundreds of civil service jobs have moved to the north from London as part of our levelling-up drive. It is important to the north that the maximum potential is released by that move. To achieve that, can the Minister assure me that apprenticeship opportunities will be available alongside the move?
Jeremy Quin
I agree with my hon. Friend, and I can give him that assurance. We want civil service apprenticeship levels to grow in line with the local civil service workforce in every region of the UK. As I say, some 78% of our apprentices are outside London. In Yorkshire alone, we have already created 3,800 apprenticeship opportunities since 2016. That is good news for the apprentices, good news for Yorkshire and good news for our public service.
Margaret Ferrier (Rutherglen and Hamilton West) (Ind)
The Government have moved 933 jobs from London to Scotland since March 2020. The Cabinet Office’s Glasgow HQ is set to more than double its presence by 2025. What steps are Ministers taking to ensure that, within this relocation, a proportionate number of high-quality apprenticeships are made available in Glasgow?
Jeremy Quin
I thank the hon. Lady for her question. I agree that it is great news that the Cabinet Office, among other Government Departments, is relocating jobs to Scotland. We have a hub in Glasgow; the Foreign, Commonwealth and Development Office and many other Departments also have a Scottish hub. That is good news. I have been assured that our UK apprenticeship programmes are available across the UK, and I believe that we are in dialogue with the Scottish Government. Where we can work together to provide good apprenticeship opportunities across the public sector, that must be a good thing.
Damian Hinds (East Hampshire) (Con)
The Minister for the Cabinet Office and Paymaster General (Jeremy Quin)
I was so entranced by the brilliant advocate of civil service jobs in Scotland, the hon. Member for Rutherglen and Hamilton West (Margaret Ferrier), that I had forgotten my old friend, my right hon. Friend the Member for East Hampshire (Damian Hinds). I apologise to him and the Chancellor of the Duchy of Lancaster.
The Cabinet Office co-hosts the new Public Sector Fraud Authority with His Majesty’s Treasury. It will work with public bodies to better understand and reduce the impact of fraud against the public sector. In its first year, it will deliver £180 million in outcomes and agree targets with other public bodies. I hope that was worth waiting for.
Damian Hinds
It was well worth waiting for; I warmly welcome the Paymaster General to his place.
There is a lot of commonality between different types of public sector fraud and between public sector fraud and regular consumer fraud. Often, there are the same professional enablers, there can be the same criminal gangs, and of course, there are the same routes out for money laundering. Can he reassure me that he and his Department will continue to seek every possible synergy between what different Departments are doing, and between the Government and law enforcement?
Jeremy Quin
My right hon. Friend is absolutely correct; I know he speaks from significant experience from his time in the Home Office. Tackling fraud is clearly critical. The Government work closely with the private sector to share threats, tools and practices. As an example, the Public Sector Fraud Authority’s national fraud initiative has developed pilots to use its data to help to find fraud in other sectors. The NFI assists utility companies and car hire and insurance sectors. Between April 2020 and March 2022, its work resulted in savings of £33 million.
Mr Tanmanjeet Singh Dhesi (Slough) (Lab)
The Minister for the Cabinet Office and Paymaster General (Jeremy Quin)
I assure the hon. Gentleman that our Treasury colleagues hold us all to account in ensuring that value for money is secured. The Infrastructure and Projects Authority provides advice and assurance specifically on the Government major projects portfolio. It supports robust project cost estimates and builds delivery capacity and capability. Its 2022 annual report sets out the progress made across the GMPP.
Mr Dhesi
Under the Conservatives’ crony approach to public spending, taxpayers’ money has been unforgivably and irresponsibly wasted. During the pandemic, a staggering £9 billion was spent on personal protective equipment that was written off, £2.6 billion was spent on items that were not even suitable for the NHS, and a whole series of contracts just happened to be awarded to friends of Tory donors. Can the Minister explain why the principles of
“public good, value for money, transparency, integrity, fair treatment of suppliers and non-discrimination”
are not in the Procurement Bill as promised in the Government’s Green Paper?
Jeremy Quin
The hon. Gentleman talks about what happened during the pandemic. I remind him what it was like. Opposition Members were constantly saying that we needed PPE in hospitals and we needed it yesterday. They were right to demand it and the Government were right to deliver it. They stretched every sinew and our brilliant civil service did an enormous amount of work and good to get the PPE where it was required during the pandemic.
The hon. Gentleman raises a point about the Procurement Bill, which we will soon be able to scrutinise in this place. He will welcome, as I do, the fact that it will bring greater uniformity in regulations across Government and greater transparency across Government in terms of pipelines, and it will give more opportunities to small and medium-sized enterprises to exploit the many benefits of Government procurement.
Sir Robert Goodwill (Scarborough and Whitby) (Con)
What work has been done across Government to look at the temperatures at which public buildings are heated this winter, and in the longer term can more be done to improve the energy performance of these buildings?
Jeremy Quin
I will have to get back to my right hon. Friend on the details of that. I am afraid I do not know whether that specific work has been undertaken, but he raises a good point that, given the costs of energy, we should all be cognisant of that cost and particularly—giving value for taxpayers—ensure that we in government are doing our utmost to be as efficient and effective as we can be in the delivery of high-quality services.
Florence Eshalomi (Vauxhall) (Lab/Co-op)
Thank you, Mr Speaker. My hon. Friend the Member for Slough (Mr Dhesi) highlighted the fact that, during the pandemic, we saw the Government ignore qualified companies and use its VIP lane to give their friends enormous contracts. This does all have consequences. Meanwhile, Social Enterprise UK found that, between 2010 and 2020, the UK may have missed out on £700 billion-worth of economic, social and environmental opportunities. This is not value for money. Far too often, small businesses end up at the back of the queue for public contracts behind big corporations that have an army of PR staff and flashy websites. So will the Minister cut the red tape, and create a fairer, more transparent and streamlined procurement process that gives all our small businesses a fighting chance?
Jeremy Quin
Yes, I will. May I welcome the hon. Lady to, I believe, her first Dispatch Box performance? It is good to see her on the Front Bench. If I may say so, where we can we try to work together across the Floor, and I think there is commonality of view that we need to cut red tape, to reduce regulation and to give the maximum opportunity to small businesses across the country to access procurement. I hope that she and her team will be welcoming the Procurement Bill when it arrives in this place. [Interruption.] She is going to wait to see it. That is perfectly reasonable, and she will be very impressed when she does. It will increase transparency, reduce regulation and, I am certain, increase opportunities for smaller companies.
Kerry McCarthy (Bristol East) (Lab)
The Chancellor of the Duchy of Lancaster (Oliver Dowden)
The hon. Lady is right that the disruption to supply chains caused by covid and Putin’s illegal invasion of Ukraine poses challenges to food security the world over. The UK does have a high degree of food security, and my Department works closely with the Department for Environment, Food and Rural Affairs and industry figures to monitor food supply. I can reassure her that we remain well equipped to deal with situations that may cause disruption. Indeed, our food security strategy sets out a plan to transform our food system to ensure it is resilient and fit for the future.
Kerry McCarthy
I thank the Minister for that response, although I notice he did not mention the cost of living crisis, which was mentioned in my question. In the past week, both the former Children’s Commissioner Anne Longfield, and Henry Dimbleby, the author of the national food strategy, have called for Cobra to be involved and to look at the extent of food poverty in this country, particularly given rising food prices. Will the Minister support that suggestion and, if not, what will his team do to ensure there is cross-governmental co-operation on tackling this issue?
Oliver Dowden
I hope the hon. Lady heard from the Prime Minister’s comments yesterday his commitment to showing compassion in this area, and it is certainly something that is very important to me as well. Of course, I will take my duties as Cabinet Office co-ordinator and as Chancellor of the Duchy of Lancaster to include ensuring that we take a co-ordinated approach to that. The Government have spent many billions of pounds supporting the most vulnerable, such as the over £200 billion through the welfare systems in 2022-23, including £108 billion to people of working age, but I will continue to take action to make sure we help the most vulnerable.
Fleur Anderson (Putney) (Lab)
The latest Office for National Statistics figures show that half of adults are buying less food as a result of the cost of living crisis. Earlier this year, farmers slammed the Government for being “blasé” about food security following Russia’s invasion of Ukraine. One farmer branded governance from Westminster as shambolic, slow to see problems, slower to react and inadequate when it does. It is the Government’s responsibility to plan and be prepared for sudden shocks, and it is essential for us to have a national resilience strategy, but we have been waiting 14 months for that crucial strategy. I am starting to think its existence is an urban myth. At this time of national crisis, can this month’s Minister explain to the public why the national resilience strategy is permanently at the bottom of the Department’s in-tray? Will that change?
Oliver Dowden
First, I would hope that the hon. Lady heard from my previous answer my personal commitment as Chancellor of the Duchy to ensure this is at the top of the Government’s in-tray. Of course one of the consequences of the invasion of Ukraine is greater food insecurity. That is why the Cabinet Office is taking action to co-ordinate to ensure we address that. However, underlying all this is an inflationary problem. At the absolute heart of the Prime Minister’s commitment as an incoming Prime Minister is making sure that we get a grip of inflation and start to see it fall. If we can start to see it fall, all those pressures will be relieved.
Fleur Anderson
My concern, and that of others, is that this summer of chaos has left a black hole in emergency preparedness, beyond just food strategy—in other emergency resilience planning. This morning the Joint Committee on the National Security Strategy concluded in its report that
“no Minister is taking responsibility for”
ensuring the resilience of vital power, transport and communications networks. We have long called for a dedicated Minister of resilience as part of Labour’s three-point plan for a more resilient Britain, learning the lessons from covid. So will the Government now follow our lead and adopt the recommendations of the Joint Committee report, but start with a dedicated Minister responsible for resilience?
Oliver Dowden
In essence, the Cabinet Office is the Department of resilience; it is the cornerstone of my duty as Chancellor of the Duchy of Lancaster and indeed the duty of the Minister for the Cabinet Office and Paymaster General. It is absolutely top of our agenda and of course, at a time like this, as we deal with the consequences of the invasion of Ukraine, it is one of the many things we are grappling with and dealing with. So I can give the hon. Lady my complete assurance that that remains at the heart of the Government’s activity. I do not believe we need a specific Minister for resilience, as we are both Ministers for resilience.
Richard Burgon (Leeds East) (Lab)
The Minister for the Cabinet Office and Paymaster General (Jeremy Quin)
In recent years the civil service has delivered in the face of unprecedented challenges. This Government are focused on improving efficiency and reducing the cost of public service delivery. The Government are totally committed to delivering high-quality public services and want to do so as effectively and efficiently as possible.
Richard Burgon
I thank the Minister for his answer. However, such job losses risk even longer backlogs for services such as issuing passports and driving licences—systems that are already in chaos—and they will not even deliver savings to the taxpayer. A new study by economists employed in the Government Department shows that, in addition to the short-term bill for redundancy payments, these plans could drain £3 billion annually from the UK economy and result in the knock-on effect of the loss of 118,000 private sector jobs. With civil servants feeling increasingly overworked and underpaid, should not the Minister drop these reckless proposals?
Jeremy Quin
I am sure the hon. Gentleman recognises that, given what is going on in the world at the moment and the pressures on household incomes, what every person in this country wants is high-quality public services but delivered as effectively and efficiently as possible. He is wrong to assume that just because we have x number of people we need to always keep x number of people. There are innovations we can do, which are common in the private sector, such as the use of digital networks and of AI to support strong delivery of public services. None of these should be ignored or forgotten about as a way of delivering high-quality public services on an efficient and effective basis.
Sir Robert Syms (Poole) (Con)
In the summer, there was a number of stories about downgrading the fast-track process for recruiting civil servants. I have always believed we need the best and brightest in the civil service to deliver first-class services. Is that Government policy, or have they had any thoughts about this, because the system has served us very well over many years?
Jeremy Quin
The Government are absolutely committed to ensuring that there is always a path into the civil service for people who are high quality; we need really good, high-quality civil servants. That is absolutely our priority. I spoke earlier about apprentices, and my hon. Friend raises an important point regarding fast track. I can assure him we will make certain there are routes into the civil service for the high-quality public servants we all need to deliver high-quality public services.
Mr Philip Hollobone (Kettering) (Con)
The Minister for the Cabinet Office and Paymaster General (Jeremy Quin)
The Procurement Bill will enable simpler, more flexible procurement processes and increased transparency of planned procurements. These changes will make it easier for small and medium-sized enterprises to compete for and indeed win public contracts.
Mr Hollobone
When it comes to public procurement, I know that it is administratively easier for the Government to award contracts to bigger companies, as that involves a smaller number of contracts with a smaller number of companies. What happens is that SMEs then become subcontractors of those big national organisations but with reduced margins. It would really help local economies if SMEs could bid directly for Government procurement contracts, because that would raise margins at the local level and be a real boost to the local economy.
Jeremy Quin
Not only that: it would increase competition for the contracts, enabling us to have even better delivery of our services on a cost-effective basis. I have good news for my hon. Friend: the most recent stats, for 2020-21, showed that the Government were spending £9 billion indirectly with SMEs and £10 billion directly with SMEs. We are making a lot of progress in opening up procurement, but I assure him that the Procurement Bill will make the pipeline easier and more transparent—there will be one core set of data already in the system—which will enable SMEs to focus on the bid itself. It will also ensure more uniformity across Government regulations and process. That will help SMEs and help level them up.
Tommy Sheppard (Edinburgh East) (SNP)
The Parliamentary Secretary, Cabinet Office (Brendan Clarke-Smith)
Statistics for the requests made under each subsection of section 35 are not held by the Cabinet Office. However, to assist the House, I will share the number of FOI requests refused under the entirety of section 35 in each of the last five years. In 2021, 150 FOI requests were refused. In 2020, there were 142; in 2019, 67; in 2018, 81; and in 2017, 63. Each of those figures represents between just 4% and 6% of total FOI requests made in that year. FOI requests are considered on a case-by-case basis, with information released where it is not exempt.
Tommy Sheppard
It is obviously disappointing that the Department does not collect those statistics given that the paragraph in question specifically relates to Government policy. I do not expect an answer today, but perhaps the Minister can write to me on the number of instances when decisions were subject to challenge at either the first-tier tribunal or upper tribunal and how much the Department spent in legal costs defending each challenge.
Brendan Clarke-Smith
I thank the hon. Member for his question. I remind him that responses are handled in line with the legislation, which includes applying the relevant exemptions where applicable. Parliament has agreed that certain sensitive information should be protected from disclosure, including information relating to the formulation and development of Government policy. I am however happy to write to him and will try to provide him with as much information as possible.
Jessica Morden (Newport East) (Lab)
The Chancellor of the Duchy of Lancaster (Oliver Dowden)
The Cabinet Office sits at the very heart of the British Government, supporting our new Prime Minister to co-ordinate and deliver for the British people. Like the rest of the country, I was deeply moved by public commemorations for Her Majesty Queen Elizabeth, and I am proud of the work undertaken by officials in my Department to co-ordinate those efforts and make them such a success. Of course, planning has already begun for a safe and successful coronation of His Majesty the King in May. I welcome the opportunity to debate with Opposition Members, and indeed Government Members, the issues in my Department.
Jessica Morden
Constituents involved in the contaminated blood inquiry want to know when the arm’s length body to administer payments will be ready, whether independent legal support will be available for those making claims and, crucially—this is on behalf of the Smiths, whose harrowing evidence was a key part of the inquiry; I ask Ministers to watch it—whether parents who lost children will be included in future compensation schemes. When will we know? These people have waited far too long already.
Oliver Dowden
I totally agree with the hon. Lady on what happened to those people, the suffering they endured and the length of time that they have had to wait. I hope that they can draw some comfort from the fact that interim payments will be made by the end of the week. Of course, that is the beginning of an ongoing process and I do not want to prejudge its outcome, but she raises important points that will be considered as part of the process. I hope to respond positively to all of them.
Mr Speaker
I call Dr Jamie Wallis. Not here, so let us come to the shadow Minister, Angela Rayner.
Angela Rayner (Ashton-under-Lyne) (Lab)
Thank you, Mr Speaker. Let me welcome the newest Ministers who have made it through the revolving door to the Government Front Bench—and may I say that it feels like the Spice Girls versus the Backstreet Boys? When their latest Prime Minister was campaigning in the leadership election—the one before last, that is—he said that reappointing an independent ethics adviser would be one of the first things he would do, but the first things he did were to bring back a Home Secretary a week after she resigned for breaking the ministerial code and an Immigration Minister who admitted that they had acted unlawfully in office. When will there be someone in place to investigate the new Cabinet?
Oliver Dowden
First of all, I welcome the right hon. Lady’s question and her kind words. In fact, as we were discussing previously, we have more in common than people might think: not only are we both gingers, but we both come from good working-class stock and we both rather enjoy a trip to Glyndebourne to see the opera —just to prove that nothing is too good for the working people.
The right hon. Lady is absolutely right to raise the question of the independent adviser. I have discussed it with the Prime Minister. He will make an announcement shortly and a person will be in place.
Angela Rayner
I absolutely welcome the Chancellor of the Duchy of Lancaster’s comments. I listened to him earlier with regard to the Home Secretary. I am sure he heard last night that the former Minister without Portfolio, the right hon. Member for Rossendale and Darwen (Sir Jake Berry), revealed that the Home Secretary was involved in multiple breaches of the ministerial code, that these were really serious and that the Cabinet Secretary had expressed concern. Perhaps the new Minister can tell us what they were, how will they now be investigated and what action will be taken over them. If the Government had an ethics adviser, does he really think they would have sanctioned the return of this Home Secretary?
Oliver Dowden
Once again, to restate it to the right hon. Lady, the Home Secretary did accept that she made errors of judgment in her conduct. That is why she resigned. Of course, the Prime Minister, on appointing her, sought assurances to ensure that that would not happen again. In respect of private advice given by the Cabinet Secretary to the Prime Minister on making appointments, it has never been the case, under any Administration, that that advice is made public. I would, however, gently say to the right hon. Lady, and to Opposition Members, that this is the third occasion the House has had the opportunity to discuss an issue of process, and I wonder whether it is because they do not want to discuss the strong record of the Home Secretary, whether in tackling migration—
Mr Speaker
Order. This is topical questions. We had a good love-in at the beginning, but answers are meant to be short and punchy, not a full debate. Laurence Robertson, show us the example.
Mr Laurence Robertson (Tewkesbury) (Con)
The Minister for the Cabinet Office and Paymaster General (Jeremy Quin)
This is a matter for the FCDO, as my hon. Friend will understand, but I am informed that its view is that the correct procedures have been followed and that it determined that both suppliers failed to satisfactorily provide answers and documentation following classification questions. The existing procurement remains in compliance with all procurement regulations and will, I am informed, be concluded within the original timeframe outlined.
Stephanie Peacock (Barnsley East) (Lab)
Jeremy Quin
I thank the hon. Lady for her question. We are always keen to see thriving regional enterprises. This matter has been discussed frequently in the House, and I refer her back to the debate earlier this week and what the Minister said.
Sara Britcliffe (Hyndburn) (Con)
Oliver Dowden
I know what a strong champion my hon. Friend is for the National Cyber Force in Samlesbury. Thanks to the efforts of her and others, 6,000 jobs were created just last year and more than 52,000 people are now employed in cyber-security. Crucially, more than half of them are outside London and the south-east.
Christine Jardine (Edinburgh West) (LD)
Oliver Dowden
The hon. Lady, as a former colleague of mine in Downing Street during the coalition days, will remember that we do not ever comment on issues in relation to the security services. However, in all leak inquiries, as she may recall, everyone is interviewed, so I would not read too much into some of those reports.
Tracey Crouch (Chatham and Aylesford) (Con)
Poor mental health costs the economy £118 billion per annum, obesity-related diseases cost the NHS £6.5 billion every year and ill health in England’s most deprived communities costs £30 billion, yet schemes that would improve the nation’s wellbeing and reduce those sums are scattered across Whitehall Departments and buried low down in their priorities. Will the Minister meet me to discuss how his Department can lead a wellbeing strategy to improve the physical, mental and economic health of the nation?
Oliver Dowden
I know my hon. Friend’s passionate commitment to that cause, and I would be delighted to meet her to discuss it.
Rachel Hopkins (Luton South) (Lab)
Oliver Dowden
The Home Secretary has accepted that her conduct was not acceptable. That is precisely why she resigned and accepted that responsibility. However, I have to say that Labour Members’ obsession with a mistake for which she has apologised stands in stark contrast to their failure to answer questions on crime or immigration. That says it all about their priorities for the British people.
Justin Tomlinson (North Swindon) (Con)
If an election result is declared and challenged, it can ultimately be settled in the High Court. If an election result is declared and a genuine mistake is spotted, even with the agreement of the returning officer and all the candidates, the only option to correct it is through the High Court, causing delay, great expense and distress. Will that anomaly be looked at by Ministers and corrected?
Oliver Dowden
Once again, my hon. Friend demonstrates his in-depth knowledge of electoral issues. He raises a very important point; I will take advice on that and look into whether there is something that we can do.
Chris Bryant (Rhondda) (Lab)
Will the Minister do a root-and-branch review of the transparency of publications by the Government on ministerial hospitality received? Quite often, those lists are not even an accurate list of Ministers, let alone an accurate list of the hospitality that they have received. Why is it that ordinary Members of Parliament have to register and publish any hospitality that they receive within 28 days, whereas if someone is a Minister, they never have to provide all the details and it does not get published for at least nine or sometimes 12 months?
Oliver Dowden
I am happy to look into the points that the hon. Gentleman raises. The standards of transparency in this country—and indeed, that have been introduced under this Government—are some of the highest in the world, but I will look into that.
Dr Luke Evans (Bosworth) (Con)
I welcome the Government’s commitment to having move civil servants outside London. Leicestershire is a perfect place for the Department for Environment, Food and Rural Affairs; we have a rural community, with big farming and concern for the environment. I would be surprised—amazed, actually—if Ministers had not heard about the campaign by my hon. Friend the Member for Rutland and Melton (Alicia Kearns) to bring DEFRA right to the heart of England. Is that something the Cabinet Office would support?
Jeremy Quin
I hear a proper call from a Leicestershire MP for Leicestershire’s values to be recognised. It would not be for me to make determinations for DEFRA, but I wish my hon. Friend well in his campaign.
Patrick Grady (Glasgow North) (Ind)
I wonder whether we might give Ministers a second chance and see whether one of them can explain what they understand the principles of the Sewel convention to be, and whether nowadays they are more easily observed in their breach than in their application.
The Parliamentary Secretary, Cabinet Office (Brendan Clarke-Smith)
I remind the hon. Gentleman that, as I am sure he realises, we will not normally legislate on a matter that involves the Scottish Parliament or another devolved Administration without consulting the devolved institution and letting it pass a legislative consent motion. I am sure that will continue. If he has any issues with any particular case, he is welcome to come and speak to us about it.
Sir Robert Goodwill (Scarborough and Whitby) (Con)
The inquiry into food security by the Select Committee on Environment, Food and Rural Affairs has identified a major problem, which is that British farmers who want to produce more food do not have good access to the right amounts of nitrogen fertiliser. As part of the Government’s resilience work, can Ministers look across Government at what more we can do to ensure access to the fertiliser that British farmers need to produce British food for British consumers?
Oliver Dowden
My right hon. Friend makes an important point that I will take away. He is probably more of a farming expert than I am, but I believe we have already loosened some of the requirements in relation to fertilisers. However, it may well be that there is more to do.
Margaret Ferrier (Rutherglen and Hamilton West) (Ind)
The Retained EU Law (Revocation and Reform) Bill will have impacts that require a dedicated and well resourced workforce like the civil service to deliver its goals and prevent complications. What assessment have Ministers made of headcounts to ensure project deliverability?
Jeremy Quin
We will always make certain that we have the right resources and the right civil service support to ensure that we continue to govern appropriately and that laws passed by this place and the other place are put into effect.
Jim Shannon (Strangford) (DUP)
The Financial Conduct Authority has found that 13% of all people in Northern Ireland are finding it difficult to keep up with bills or loan repayments. Can the Minister reaffirm the commitment to maintaining support for the Northern Irish economy during this very difficult period?
Jeremy Quin
Absolutely. There are problems across the UK, and indeed globally, and we are very mindful of supporting our citizens right across our United Kingdom.
Cross-Channel Migrants: Manston Facility
(2 years ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
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Mr Speaker
May I remind Members requesting an urgent question that if another Member is involved, they should please notify them with plenty of time so that they can come to the Chamber? This is a very important UQ, but we must always think about the constituencies affected. I call Dame Diana Johnson.
Dame Diana Johnson (Kingston upon Hull North) (Lab)
Thank you, Mr Speaker. I did notify the Member for the constituency where Manston is based.
Mr Speaker
He has requested that I pull the UQ. I am not willing to do that, but he claims that he did not get the message in good time.
Dame Diana Johnson
(Urgent Question): To ask the Secretary of State for the Home Department if she will make a statement on the situation at the Manston facility for cross-channel migrants.
The Minister for Immigration (Robert Jenrick)
The continued rise in dangerous small boat crossings is placing an unprecedented strain on our asylum system. The Manston processing centre is a single, secure environment that is used to deliver the crucial first stage of the asylum assessment process in a more integrated manner than was possible in the past. It is resourced and equipped to process migrants securely while efforts are made to provide alternative accommodation as soon as possible. The basic needs of arrivals are provided for at the site, including hot food, fresh clothing, toilet facilities, sanitary packs and medical care. There is 24/7 medical provision, and a GP began work on the site on Monday. Families and vulnerable adults are prioritised for separate hotel accommodation. Full border security checks are carried out before anyone leaves the Manston site, and whenever possible those seeking asylum in the UK are also interviewed and their asylum claims registered before they leave.
As of 8 am today, there were 2,636 arrivals at Manston. We have more than 900 people working there, including trained Home Office staff, contractors and military personnel, with support from security staff. More than 170 people left the site for onward accommodation yesterday alone, and that continues today, with 15 having moved on already. This requires us to source appropriate onward accommodation to house asylum seekers for a longer period. We do not want to place them in accommodation that may leave them more vulnerable and without access to appropriate services.
Lieutenant General Stuart Skeates was seconded to the Home Office on 12 October. He will bring a wealth of experience and is now putting in place the necessary command and control structure as we move forward and ensure that the site operates in the manner that we would all expect.
As always, we urge all who are thinking about leaving a safe country and putting their lives and those of their children and loved ones in the hands of vile people smugglers to seriously reconsider. This Government will deliver a fair and effective immigration system that works in the interests of the British people.
Dame Diana Johnson
Thank you for granting the urgent question, Mr Speaker. Let me also welcome the Minister to his place, although I am very disappointed that the Home Secretary is not here to answer this important question.
I do not recognise the description that the Minister has given to the House. The situation at the Manston facility for cross-channel migrants constitutes a major incident that is escalating in severity. Only yesterday, the independent chief inspector of borders and immigration described it to the Home Affairs Committee as “a really dangerous situation” that had left him “speechless”. The number of individuals currently being detained—about 3,000—is larger than any prison population in the country, and vastly exceeds Manston’s capacity of 1,600. Detainees are being guarded by people described by the chief inspector as not appropriately trained, and he further warned of a risk of fire, infection and disorder spreading within the facility.
The Committee heard that people are being held for well over 24 hours, and some for as long as a month. As of Monday, one Syrian family had been detained for two weeks, while an Afghan family had been held there for 32 days. There is a serious question about the legality of detaining people at the facility for more than 24 hours. Will the Minister tell us how long the Government can legally detain people at a short-term holding facility? This facility was not designed for people to stay there for more than 24 hours.
Families are being housed for weeks on camp beds, with no onsite catering facilities and limited personal and clothes-washing facilities. Several cases of diphtheria and scabies have been detected. Can the Minister tell us what the timeline is for upgrading facilities so that they are safe and fit for purpose? Can he also tell us what action will be taken specifically to safeguard children who are being detained there? What conversations has he had with the Union for Borders, Immigration and Customs about staff safety and wellbeing?
The evidence we heard indicates that the situation unfolding at Manston is not some unforeseeable mishap, but the product of a malfunctioning system. Why were the warning signs of this impending crisis not acted upon earlier, when numbers started to escalate in August with 8,000 people crossing the channel? That would have avoided the current situation. What exactly did the Home Secretary do about the situation at Manston during her previous tenure?
Finally, may I ask the Minister to confirm that the Home Affairs Committee can visit Manston next week?
Robert Jenrick
I am grateful to the right hon. Lady for her kind words about my appointment. I was honoured to be appointed by the Prime Minister 48 hours ago to help my right hon. Friend the Home Secretary to lead the Home Office forward, and to tackle issues, such as this, which are of the greatest concern to the British public.
We want to build a fair immigration system that enables people who come to the UK via safe and legal routes to do so, while also being robust in dealing with those who choose to come here illegally. It is not right that people smugglers are enabling people to risk their lives in dangerous channel crossings. Individuals often come from safe countries, and at the expense of people we would want to bring to this country, such as those from Hong Kong, Afghanistan and Ukraine.
With regard to the right hon. Lady’s specific questions, I was of course concerned to read the evidence that was presented to her Committee yesterday by David Neal, the independent chief inspector. I will meet Mr Neal next week, and will listen directly to his concerns. I intend to visit Manston as soon as possible—hopefully next week.
We want to ensure that the site is maintained legally, of course. It is absolutely essential that any site that the Home Office operates is managed within the law. Mr Neal raised a number of concerns, and I will refer briefly to as many of them as possible. With regard to the conditions for individuals staying at the site, the site was designed to be temporary. Individuals who enter it are supposed to stay for only a matter of hours—perhaps 24 hours at a maximum—and as a result the facilities are temporary. People are none the less given accommodation that is heated and has air conditioning, food and medical supplies. Families are prioritised for better accommodation and for swift opportunities to leave for hotel accommodation.
I was concerned at Mr Neal’s suggestion that there had been a degree of unrest and of health considerations. I am told that, although there have been some incidents, the site is mainly stable, but I will take that up further and see for myself when I visit. There have been a very small number of cases of diphtheria. Those individuals were isolated and public health guidelines were immediately followed, and a permanent ward, with a doctor, has been created to manage that situation.
Our longer-term plan is clearly to reduce the population at Manston as quickly as is practicable. The numbers that I read out in my opening remarks show that the population of the site is reducing, but that is dependent on the numbers coming across the channel, so our longer-term aim has to be to strongly deter people from making that extremely dangerous crossing of the channel, and to use all means available to us. I hope that that aim can unite us across the House. It cannot be right for individuals to leave a safe country—our closest, safest ally: France—to risk their lives coming to the United Kingdom. In doing so, and by coming to sites such as Manston, they are putting immense pressure on the system, meaning that we are unable to fulfil our obligations to individuals who come safely and legally from Ukraine, Afghanistan and other countries, who must be the first priority of the UK Government.
Tim Loughton (East Worthing and Shoreham) (Con)
The evidence that the Home Affairs Committee heard from David Neal yesterday was shocking, and it certainly presented a very different picture of Manston from what the Committee had seen when we visited this summer. I am glad to hear that the Minister is meeting David Neal next week. May I suggest that the Home Secretary sits in on that meeting? Mr Neal has not been able to meet a single Home Secretary since he was appointed, despite several requests.
The other shocking revelation yesterday, which is partly connected to the logjam at Manston, was the fact that of the 28,000 people who came across in small boats in 2021, only 4% have had their claims processed, which means there is an enormous backlog. What will the Minister do, as his highest priority, to get those applications processed much more swiftly, and to remove from this country people who do not have a claim to be here, freeing up space for those who genuinely have a claim?
Robert Jenrick
I am grateful to my hon. Friend for the question and for his long-standing interest in this issue. He is absolutely right that part of a fair and robust asylum system is that individuals who come to the UK have their claims processed as quickly as possible, and that if they are denied, they are removed from the UK at the earliest opportunity. That will be a priority for me and my right hon. Friend the Home Secretary. We will review the backlog of cases to see how we can improve the productivity of the Home Office. I am told that 1,000 individuals are now working through those cases; it must be possible for us to reduce that backlog quickly. Other countries, such as France and Greece, are more productive and faster at processing claims, so I intend to review their processes to see what we can learn and whether we can bring those processes to bear in the UK in order to have a better system.
Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)
I welcome the Immigration Minister and congratulate him on his appointment, and I thank the Cahir of the Home Affairs Committee, my right hon. Friend the Member for Kingston upon Hull North (Dame Diana Johnson), for securing this urgent question.
The Government’s handling of the dangerous channel crossings has been disastrous. There has been a huge proliferation of criminal gangs operating in the channel and a failure to put the requisite policing and cross-border co-operation in place. We have seen a big increase in dangerous boat crossings, putting thousands of lives at risk, which everyone should be working to stop. And there has been a collapse in asylum decision making, with 14,000 decisions a year compared with 28,000 initial decisions just six years ago.
Reports say it is now taking, on average, 480 days to make an initial decision, which plays into the hands of people traffickers and people smugglers. We have also had reports of hundreds of children going missing, soaring backlogs, huge hotel bills and security and fingerprinting failures, as well as the devastating reports of what is happening at Manston, including the chief inspector saying Manston is dangerous and describing an Afghan family who have been in a marquee for 32 days. This follows damning independent reports on the Government’s handling of this, including their rhetorical and expensive gimmicks that do not actually solve the problem.
The Minister’s response sounded complacent, so can he confirm that the Home Secretary was previously given options to ease the situation at Manston and refused to act? Will he now accept that these expensive gimmick policies, such as spending £140 million on a Rwanda policy that is unworkable and unethical, and that the Home Secretary herself has said is failing, is the wrong approach and that he should instead put that money into boosting the National Crime Agency and tackling the criminal gangs? And when will the backlog be cleared? This is too important for the kind of chaos we have had for the last few years.
Robert Jenrick
I am grateful to the right hon. Lady for welcoming me to my position and for her questions. I do not detect any plan from the Labour party for how it would tackle this issue. We intend to bear down on illegal immigration and ensure that those who come to the UK illegally on small boats are processed as swiftly as possible and, if their asylum claims are rejected, removed from the United Kingdom. That is what we need to do to have a robust but fair immigration system.
Of course any individual who comes to the UK must be treated compassionately and humanely while they are under our care, which is why I will be making inquiries and visiting Manston to ensure the site is operating appropriately. The backlog is a serious concern, which is why we now have 1,000 members of the Home Office team working on these cases, and I want to ensure it is done as swiftly as possible.
We will also ensure that Border Force continues to robustly police the channel, to ensure we deter people from making the dangerous crossing. My right hon. and learned Friend the Home Secretary, the new Prime Minister and I are particularly concerned to ensure that we take the opportunity of his premiership to build a productive and constructive relationship with our friends in France to see whether there are further measures we can take together to bear down on the issue.
In particular, we will see how we can tackle the growing issue of Albanians coming to the United Kingdom, which is a priority for the Home Secretary. Up to a quarter of people making the crossing to the UK this year, and at times 80% of them, come from Albania, which is a safe country. Those individuals have crossed through multiple safe countries to come to the UK, which is not acceptable. We need to ensure that we deter these individuals as swiftly as possible.
Lee Anderson (Ashfield) (Con)
The fact that we have the Manston processing centre shows the shocking failure of this country to protect our borders, especially the English channel. We are telling people that it is time to tighten our belts, yet we are spending £2 billion a year on housing these illegal immigrants, including 10,000 Albanian men. We talk about the Rwanda scheme, but I am struggling to look my constituents in the eye when they tell me that thousands of young men are coming across every single week. When are we going to sort it out?
Robert Jenrick
I share my hon. Friend’s concern. It is disgraceful that this country is spending hundreds of millions of pounds on accommodating people in hotels, and we need to resolve that. To do that, we have to tackle the issue on multiple fronts: diplomatically, with our friends and neighbours; with robust enforcement in the channel; and by ensuring that those individuals who do come here are processed as swiftly as possible and are returned where they do not meet the standard to be granted asylum. That is exactly the approach that my right hon. and learned Friend the Home Secretary and I will be setting out, building on the statement that the new Prime Minister made in the summer in his 10-point plan for immigration.
Anne McLaughlin (Glasgow North East) (SNP)
The Prison Officers Association’s Andy Baxter has described this as:
“A humanitarian crisis on British soil”.
As we have heard, the independent chief inspector of borders and immigration, David Neal, told MPs that he was left “speechless” by what he saw and advised that we are now past the point where we can describe Manston as being a safe facility. This Home Secretary had better start to listen and the Minister needs to listen, rather than reading out briefings that announce the provision of toilet facilities. He needs to understand what people actually need. How on earth have we ended up with people sleeping on cardboard, in tents, and with outbreaks of diphtheria and norovirus? We are constantly debating these conditions here. Why do we keep coming back to this? How many times are we going to be standing here repeating the question: where was the forward thinking? The Home Office is not coping, but instead of spending that £120 million on her “dream” flight to Rwanda had the Home Secretary spent it on caseworkers, perhaps we would not have these disgraceful logjams.
Finally, Manston is supposed to be a short-term holding facility; people are not supposed to be there for more than 48 hours. Surely that means that people are now being detained illegally in these conditions, so will he tell us: how many people have been detained for more than 48 hours? how many claims for unlawful detention is he expecting and at what cost?
Robert Jenrick
We do not want these individuals to make the channel crossing in the first place. They are coming from a safe country and most have travelled through multiple safe countries before making the crossing. They have chosen to make a highly dangerous crossing. When they arrive, we should, of course, treat them humanely. That is exactly what we intend to do, but the Manston site is only meant to be there as a temporary facility to handle people in the instant of their arrival, before they are transferred to other accommodation. We could and will put on more hotel accommodation, but that cannot be our long-term solution. Is the hon. Lady suggesting that we just spend millions of pounds more on hotels and that we build more five-star hotels in which to put people who have crossed the channel? No, that is not the answer. The answer is to try to deter people from crossing the channel, and then to process their claims as quickly as possible and send back those who should not be in the UK.
Tracey Crouch (Chatham and Aylesford) (Con)
My right hon. Friend the Member for North Thanet (Sir Roger Gale) has asked me to say that he would have been here but he is at a meeting in Manston as we speak. In order to improve his mood, I am sure he would welcome a telephone call later on from the Minister. My constituents may be extremely concerned about the sheer volume of small boat crossings, but they are also compassionate people and they will welcome the Minister’s comments this morning about improving wellbeing. However, all of this is putting extreme pressure on the resources in Kent, including on the lifeboat crews, the health services and of course Kent police. So will the Minister outline what is being done to support the police and other resources across the country, in dealing both with the landings and with the security at Manston?
Robert Jenrick
I am grateful to my hon. Friend for that and I will be speaking to her friend and neighbour, my right hon. Friend the Member for North Thanet (Sir Roger Gale). I know that the Home Secretary is meeting him later today to speak to him as well. I completely understand my hon. Friend’s concern and that of Members of Parliament throughout Kent; this intolerable situation is placing great strain on members of the public and on the emergency services and local authorities within the area. I know that only too well from my previous experience as Local Government Secretary. The Department is determined to support those local authorities as best as we can. Yesterday, I met the leadership of Border Force to discuss the resources we have in the area and I will be visiting Dover next week.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
Between 2015 and 2020, the proportion of asylum seekers whose applications were decided by the Home Office within the six-month target plummeted from 80% to 17%, and the consequence is misery and mental health issues for asylum seekers, and pressure on local accommodation and local communities. All I can say to them is, “The Home Office is broken”. When will it work?
Robert Jenrick
There is a range of reasons why the processing of asylum claims is taking longer than we would like, but it is a priority of mine, as the new Minister in the Department. I have already met the relevant officials, and we will be looking at ways in which we can improve their productivity as swiftly as possible. As I said in response to an earlier question, we do now have the right number of staff processing the claims. A thousand people are working on this. That is a good number of individuals tackling the issue so I hope that we can make swift progress.
Sir Christopher Chope (Christchurch) (Con)
What is the target date for ending this farce? Will my right hon. Friend explain to us that in Manston the conditions, although far from ideal, are a heck of a sight better than the conditions in squatter camps in Calais or on those overcrowded, dangerous boats crossing the channel? So some of the people at Manston should probably be counting their blessings.
Robert Jenrick
My hon. Friend is absolutely right that these individuals have chosen to make an extremely dangerous and perilous crossing. We have greeted them, and we are ensuring that they are treated humanely for a very short period of time while they make their initial asylum claim, if that is what they intend to do, and then they are taken to other and better accommodation. We have given them the food, the medical care and the clothing that they need, as befits a welcoming country, but this is not the long-term solution to the problem. We do not want to be receiving tens of thousands of individuals in small boats across the channel, and that is why we are taking all the steps we can to deter people from making this dangerous crossing in the first place.
Mr Ben Bradshaw (Exeter) (Lab)
On Monday the latest Prime Minister said that he would restore integrity, professionalism and accountability to government. How is the Home Secretary’s failure to come here and answer a very serious question in her area of responsibility for the second day running consistent with that pledge?
Steve Double (St Austell and Newquay) (Con)
Cornwall is a long way from Kent, but almost every day I receive emails from constituents who are concerned and often angry about the sheer number of illegal immigrants and asylum seekers arriving on our shores. As well as the very real concerns about the situation at Manston, is not the real question here that we urgently need to find a way of stopping people crossing the channel? Does my right hon. Friend agree that part of the solution is the measures contained in the Nationality and Borders Act 2022? Does he agree that we will take no lessons from the Opposition parties on this, who voted against that very Bill?
Robert Jenrick
Absolutely. Fundamentally, the Opposition parties want to see uncontrolled immigration. We disagree with that and it is entirely out of step with the British public. We want to see those people who wish to come here do so safely and legally, and we want to see the best and the brightest around the world find a home in the United Kingdom. But it must be controlled immigration, and we must have a robust response to those who come here illegally.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
The hon. Member for St Austell and Newquay (Steve Double) is right to remind us that during consideration of the Nationality and Borders Bill we were told repeatedly that the provisions of the Bill, which is now an Act, were necessary to stop the flow of small boats across the channel. The Act was brought into force in June. What has happened to the number of boats making the crossing since then?
Robert Jenrick
The number of people crossing the channel remains unacceptably high, and that is why it needs to be a priority for me and my right hon. and learned Friend the Home Secretary.
Sir Robert Syms (Poole) (Con)
I welcome my right hon. Friend the Minister to his post. I expect him to be both tough and compassionate in dealing with immigration. Many of my constituents go to France on holiday because it is safe, and a nice place to go, and they are perplexed at these people coming in, who are creating profits for criminal gangs. We need to crack down on this particular area. My right hon. Friend mentioned that he was going down to Kent, and I welcome that. Is he going to go and see his French counterpart soon for further discussions about how we can stop this terrible trade?
Robert Jenrick
My hon. Friend raises an extremely important point, which gets to the nub of the question. These individuals are leaving a safe country, and they are leaving France, of all safe countries. We must do more to deter them from making the dangerous crossing. I will be going to France to meet my opposite number and other elected officials, both in Pas de Calais and in the French Government. An opportunity is afforded to us by the arrival of the new Prime Minister to improve relationships and see what further action we might be able to take together.
Alison Thewliss (Glasgow Central) (SNP)
As chair of the all-party group on immigration detention, I have heard many stories over the years of inadequate facilities for people who have come from very desperate circumstances, but the circumstances at Manston really do cause great concern. Can the Minister tell me how many children are currently housed at the facility, and what he is doing to ensure that there are no children or families held there, because it seems entirely inappropriate for anybody, least of all children?
Robert Jenrick
A small number of children are held at the facility. As I said in answer to an earlier question, we do prioritise families, so that families are, as swiftly as possible, allowed to leave the facility and taken to more suitable hotel accommodation. The same approach applies to vulnerable adults.
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
I thank my right hon. Friend for coming to the Chamber this morning to answer the urgent question. The situation at Manston is obviously unsustainable and, according to reports, unacceptable. Can he go into more detail about what we are doing to speed up the application process, so that we can relieve the pressure on Manston?
Robert Jenrick
The Home Secretary and her predecessors have been putting in place a number of measures over the course of the summer, including hiring more individuals to process the claims at the Home Office. As I said earlier, we now have a team of 1,000, which seems to be the right number given the scale of the backlog. We are working through how they can process those claims as quickly as possible. We do process claims in slower order in the UK than some other comparable countries, and there is reason to believe that we can make the process more productive than it is today.
Dave Doogan (Angus) (SNP)
Manston is a disaster for migrants who find themselves there, and it is a black mark against the bureaucratic competence of the Home Office. The processing regime more generally is a disaster for standards of humanity. More broadly, the dynamic that saw the Royal Navy dragged into this space to compensate for failures of Border Force—principally, a lack of resource—is deeply unwelcome for defence. Against all that, can the Minister advise what this information rule-breaking, retread Home Secretary will do to fix the problem?
Robert Jenrick
I suspect that she would do a great deal more than the SNP if they were in government.
Richard Graham (Gloucester) (Con)
I welcome the appointment of the Minister to this important and difficult role and everything that he said about making sure that the facilities at Manston are appropriate and legal. Surely, at the heart of this problem, is the sharp increase in illegal immigrants from Albania. Will he say more about whether we have adequate resources in Tirana to look at the validity of asylum claims, which— given that there is not a civil war or general unrest in Albania—may not be very strong anyway, to ensure that we can return as many of them as fast as possible? Is the agreement that is already in place for Albanians to serve prison sentences in Albania working as effectively as he would hope?
Robert Jenrick
That is a very important question and one to which I will be giving a lot of thought in the coming days. As I said earlier, around a quarter of those individuals who have crossed the short strait this year alone have come from Albania. On some boats, 80% of the individuals are coming from Albania. As my hon. Friend said, Albania is quite clearly a safe country, and those individuals have crossed through multiple other safe countries before arriving in the United Kingdom. Some reports suggest that as much as 1% or even 2% of the adult male population of Albania either have attempted to leave the country in this manner, or are contemplating doing so.
This is a serious issue on which we need to get a grip, and there are a number of fronts on which we are doing that. We are considering whether there is a bespoke route for Albanians to have their cases heard quickly and to be removed from the country if they are not found to be successful—returned to Albania. We are also looking diplomatically at how we can work with the Government in Albania and in coalition with like-minded countries such as France to reach an agreement with Albania. I would be happy to update my hon. Friend as soon as we make further progress.
Jim Shannon (Strangford) (DUP)
I thank the Minister for his answers and wish him well in his new role; I am sure he will do well with it. With the turmoil of winter about to arrive, my real fear is the loss of life that will take place among those who cross illegally in unfit boats. The need to prevent the crossings before they begin is stronger than ever, and I know he also understands that. What more can we do with our French allies to take more proactive steps at those ports and launching locations? Will he task our allies with taking those enhanced steps that are very much needed?
Robert Jenrick
I intend to have the most constructive approach possible with our friends in France to try to address the issue together. Our progress will always be limited if we cannot have a good relationship across the channel. A number of steps have been taken in recent weeks and months; in fact, the French authorities deter up to half the crossings attempted from French beaches, but clearly that is not enough, because far too many people still make that perilous journey. It will be an early priority for me and the Home Secretary to speak to our counterparts in France and see what further steps we can take.
Anna Firth (Southend West) (Con)
I too congratulate the Minister on his new role. Does he agree that to stop totally inappropriate facilities such as the Skylark Hotel on the border of my constituency suddenly being considered for housing asylum seekers, we must not only crack down on those evil people-smuggling gangs and dangerous boat crossings, but speed up the application process at the Manston facility?
Robert Jenrick
I agree with everything my hon. Friend says. It is quite wrong that the British taxpayer is paying for hotels to such a degree. We need to reduce our reliance on those hotels as quickly as possible and my right hon. Friend the Home Secretary and I will do exactly that.
Dr Luke Evans (Bosworth) (Con)
In my short time as a parliamentary private secretary at the Home Office, working on illegal and legal immigration, I saw the dedicated work of the staff there. Will my right hon. Friend thank the staff, who are under huge pressure in trying to process visas, immigrants and asylum seekers? More importantly, is not the long-term process about stopping illegal immigration while providing more legal immigration, as we have done through Ukraine, Hong Kong, Syria and Afghanistan? Is that not the solution?
Robert Jenrick
It certainly is. We want the UK to be a home for those in genuine need of refuge. I am proud of the work we have done in recent years: the scheme for Hong Kong nationals to come to the UK, the work we have done with the Ukrainians—I have been honoured to have a Ukrainian family stay with my family this year—and the work we are doing to ensure that those who supported the British armed forces in Afghanistan can come and find safe refuge here in the UK. We are a welcoming country and that should continue, but we must crack down on those who are coming here illegally. It is wrong and it means that our system is overwhelmed and unable to provide the support that those who should be here deserve.
John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)
Many of my constituents are concerned about illegal immigration and the Government are right to tackle it. Will the Minister confirm again, however, that by tackling illegal immigration we ensure that the UK Government have the capacity and facilities available to ensure that vulnerable people coming here in need of help from other places in the world have that support?
Robert Jenrick
The real issue we have faced in the past two years is that because of the scale of illegal immigration, including through small boats, we have not been able to provide the kind of welcome that we would have wished for those coming from, for example, Afghanistan or Ukraine, because hotel capacity has been limited and social housing capacity has been extremely tight. We need to bear down on illegal immigration, not only because it is the right thing to do, but so that we can provide a humane and compassionate welcome for those who deserve to be here in the UK.
Dame Diana Johnson
On a point of order, Mr Speaker. I am grateful to you for allowing me to make this point of order. I want to apologise to the right hon. Member for North Thanet (Sir Roger Gale). My understanding was that the facility at Manston was in the constituency of the hon. Member for South Thanet (Craig Mackinlay). He was the person I emailed last night, and he thanked me for doing so. I am very sorry for that confusion, and I will of course contact the right hon. Member for North Thanet directly as well.
Mr Speaker
Thank you for that.
The next business is business questions. The Leader of the House has informed me that she is unable to be present until around 12 noon. Given that there is no Deputy Leader of the House, I have to suspend the House until her return. I will arrange for the Division bell to be rung shortly before the House resumes, and for a message to be placed on the Annunciator.
Business of the House
(2 years ago)
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Thangam Debbonaire (Bristol West) (Lab)
Will the Leader of the House give us the forthcoming business?
The Leader of the House of Commons (Penny Mordaunt)
The business for the week commencing 31 October will include:
Monday 31 October—Remaining stages of the Genetic Technology (Precision Breeding) Bill, followed by consideration of Lords amendments to the Product Security and Telecommunications Infrastructure Bill, followed by a motion to approve a money resolution relating to the Protection from Redundancy (Pregnancy and Family Leave) Bill.
Tuesday 1 November—Second Reading of the UK Infrastructure Bank Bill [Lords].
Wednesday 2 November—Opposition day (6th allotted day). Debate on a motion in the name of the Scottish National party. Subject to be announced.
Thursday 3 November—Debate on a motion on the independent review of Smokefree 2030 policies, followed by a general debate on the Government’s White Paper “A Fairer Private Rented Sector”. The subjects for these debates were determined by the Backbench Business Committee.
Friday 4 November—The House will not be sitting.
The provisional business for the week commencing 7 November includes:
Monday 7 November—Second Reading of the Social Housing (Regulation) Bill [Lords].
Thangam Debbonaire
I thank the Leader of the House for giving us the forthcoming business. May I congratulate her on being reappointed? There were suggestions that it may not have been the job she was hoping for but we both know that, as Parliament’s representative in Government and the Government’s representative in Parliament, she has an incredibly important role. I know that she takes her responsibilities seriously, and I look forward to continued work with her to ensure that Members can properly hold the Government to account. In that vein, I repeat my regular plea, on behalf of our constituents, for prompt responses from Ministers to MPs.
The Prime Minister’s promise to restore “integrity” and “accountability” lasted barely a few hours. The Home Secretary was reappointed to the job from which she was sacked just six days earlier for breaching the ministerial code and putting our national security at risk. We now hear that there were
“multiple breaches of the ministerial code”,
which even involved “documents relating to cybersecurity”. The first duty of any Government is to keep this country safe. This is exceptionally serious. Does the Leader of the House agree that there must be an urgent investigation?
The Home Secretary said she that “rapidly reported” her mistake
“on official channels, and informed the Cabinet Secretary”,
but we now hear that the evidence was put to her rather than the other way round. Despite that, the Prime Minister said yesterday at the Dispatch Box that the Home Secretary
“raised the matter and…accepted her mistake.”—[Official Report, 26 October 2022; Vol. 721, c. 289.]
This is really important. The shadow Home Secretary, my right hon. Friend the Member for Normanton, Pontefract and Castleford (Yvette Cooper) has raised two points of order, asked two urgent questions and sent a letter to the Cabinet Secretary, but we still have no clarity. It is imperative that the Prime Minister sets out a clear timeline of who reported what to whom and when. If he has misled the House on this serious national security matter, will he come to the Chamber, apologise and correct the record?
This is yet another example of why a Government ethics adviser is so badly needed. After months of calling for one, I welcomed yesterday’s announcement that an appointment would be “done shortly”, but it is obvious that one is needed urgently. Can the Leader of the House give us a timeframe?
The new Prime Minister claims a mandate from the 2019 general election, but that was three Prime Ministers and several national crises ago. Meanwhile, the Government are pulling legislation left, right and centre. Which sofa has all the Government’s missing legislation has fallen down the back of? Where is the Energy Bill? Where is the Animal Welfare (Kept Animals) Bill? Where is the Online Safety Bill, which was first mooted a decade ago? We have been waiting four years for it. Has the Prime Minister been forced to pull it to appease his new International Trade Secretary?
Since the Conservatives first announced their intention to regulate, seven other jurisdictions have introduced online safety laws. In that time, in the UK, online crime has exploded, child sexual abuse online has become rife and scams have proliferated. Every day that goes by without the Bill, this suffering continues. We hear it has been delayed and not pulled so, yet again, I offer Labour’s willingness to work with the Government to get this Bill over the line as soon as possible. Will the Government accept our offer, and can the Leader of the House tell us when the Bill is coming back?
The Government are dragging their feet on the climate and nature emergency. The Environment Act 2021 legally requires the Secretary of State for Environment, Food and Rural Affairs to set long-term targets for air quality, water, biodiversity, resource efficiency and waste reduction by 31 October, so she has three days left. Will the Leader of the House please wake up the new Environment Secretary from the nightmare of the past few weeks and ask her to get on with the job?
We have a Prime Minister nobody elected and with no mandate, and he is letting down the British people. It is time the Government accepted that the British people deserve a choice between the failed Tory trickle-down economics of the past and a green, clean, sustainable future with a Labour Government.
Penny Mordaunt
I thank the hon. Lady for her questions on the themes of democracy and integrity, which are both very important. I reassure her that it is not a disappointment to find myself here, in part because I very much enjoy my exchanges with her across the Dispatch Box. It was important that we tested the proposition of a contest, as we did to destruction, and I think that has been a good outcome.
The Conservative party has one member, one vote and, of course, the Leader of the Opposition tried to end that for Labour. He had to abandon his attempt to return to an electoral college amid accusations of gerrymandering and holding the membership in contempt. Of course, the Labour party has form on this, as it blocked an election when Parliament needed one and its leader campaigned to overturn the result of the European Union referendum, so I will take no lectures from Labour Members on honouring democracy.
On integrity, the ethics adviser is a matter for the Prime Minister, and he intends to bring that decision forward. It is a matter for him, but he has made that commitment. Opposition Members have made allegations about support for jobs. As far as the Prime Minister is concerned, there is support for jobs: he supported 163,000 kickstart jobs; he supported job-entry schemes, benefiting 177,000 unemployed people; and, of course, he paid the wages of 11 million people in this country to protect them and their jobs. I am proud of our record of getting nearly 4 million people back into work with the dignity of a pay packet.
The hon. Lady mentioned prompt responses, and I have met the Home Office permanent secretary. All Members can have a bespoke service in which they attend a surgery to go through their cases, or they can have the usual responses and written replies. Both those options are open. We hope all the backlogs will be cleared by the end of the year, and there are ongoing improvements. I hope hon. Members will have an improved service shortly.
The Online Safety Bill will be back in the House shortly. The Bill remains a priority for this Government. We need to ensure there is time for Members to consider amendments properly, which is why the Bill has not yet returned to the House. I will announce business in the usual way, and we are committed to that Bill.
One thing the hon. Lady did not mention is diversity. All Members of this House can be very proud that we have the first British Asian Prime Minister. He was sworn in this morning, which is why today’s business questions are at an unusual time. I am very proud that my party has had three women Prime Ministers and now the first British Asian Prime Minister. Obviously, many other great British institutions are also enabling talent to thrive. Labour has a little way to go. Even “Doctor Who” has a more successful track record on the diversity of its lead characters.
All other business will be announced in the usual way.
Madam Deputy Speaker (Dame Rosie Winterton)
I call the Father of the House, Sir Peter Bottomley.
Sir Peter Bottomley (Worthing West) (Con)
Thank you, Madam Deputy Speaker. The Opposition spokesperson, the hon. Member for Bristol West (Thangam Debbonaire) rightly described the importance and significance of the role of the Leader of the House. My right hon. Friend knows I am glad she is doing it, partly because it is good for the House and partly because it is bad for the Labour party.
After Prime Minister’s questions, this session is one of the more interesting parts of the parliamentary week. I pay tribute to the Labour spokesperson for giving a review of the week, but may we turn to what should be considered in this House?
I ask the Leader of the House whether we may have the Government’s statement, as soon as possible, on changing the fees for park home residents from using the retail price index to using the consumer prices index, which is long overdue. We need to deal with the issue of the 10% commission whenever anyone changes their home.
On residential leasehold, we need to have the Law Commission’s proposals brought to the House and enacted.
Lastly, on 6 July and 7 September, I put questions to the then Prime Ministers about environmental problems, where inspectors can come and overrule a borough, district or unitary authority’s plans for their area. We must no longer have expensive barristers arguing in a small room over something that local voters have voted on—this happens in areas represented by parties on both sides of the House—in order to avoid having green areas that were not intended to be built on being built over by developers who have more money, persistence and expertise than the planners, whose job is to do the planning not to be a judicial committee of lawyers. May we please get this changed? We should be building on brownfield sites, not greenfield, and we should let local authorities make their own decisions.
Penny Mordaunt
I thank my hon. Friend for his kind remarks regarding me and my post. He will know that the new Secretary of State is no stranger to the Department for Levelling Up, Housing and Communities and I am sure will grip these issues swiftly. On my hon. Friend’s sentiments on greenfield versus brownfield sites, local consent and putting people in the driving seat, I think all Conservative Members would agree with him.
Deidre Brock (Edinburgh North and Leith) (SNP)
Thank you, Madam Deputy Speaker. It is good to see the Leader of the House in her place. I am glad to hear that she is not too disappointed to find herself back here again, answering probing questions from the House, such as this one: if the new Prime Minister can claim yesterday a mandate to govern based on the Tory 2019 manifesto, why will he not recognise the even clearer mandate for an independence referendum, as laid out in multiple SNP manifestos and voted for by a clear majority of Scottish voters, as legitimate? I look forward to the Leader of the House’s answer.
Weren’t there waves of relief from those on the Tory Benches yesterday as they joyfully registered that their jobs were possibly safe for a little while longer? However, criticism has already begun about the new Prime Minister’s choices and judgment; it has been described by others far unkinder than me as a Cabinet of retreads. That does not point to a bright new future for this Government. Most questionably, perhaps, we now have a Home Secretary who admitted breaking the ministerial code, apparently multiple times, and resigned over it just days ago, but she has been given a free pass back. Yes, an investigation is needed, but should this place not produce a guide or pamphlet on “How to be a Secretary of State” —or even a “Secretary of State for Dummies”—for those chosen for these positions?
I do not wish to trivialise the Westminster psychodrama, but there is news that makes all that look like the proverbial storm in a teacup: the three main greenhouse gases were at their highest level ever in 2021, and the UK is not even halfway to meeting its climate targets in the 2030s and being net zero by 2050. Yet new licences for oil and gas exploration are being issued; we have a climate Minister who seems to think that that is good news for the environment; and the COP26 President has lost his position and influence at the Cabinet table, although he has since demanded that the Prime Minister explain how increased licensing dovetails with the UK’s legally binding green commitments. I hope that the Leader of the House will not be tempted to refer to the lazy haverings of Scottish branch colleagues and accuse the SNP of not supporting oil and gas workers in the industry. After all, the Scottish Government have committed £500 million to transitioning from a reliance on fossil fuels to renewable energy, a commitment the UK Government have still to match.
The Secretary-General of the United Nations warns that we are rapidly approaching the point of no return and that we must prioritise the climate or face catastrophe. Is it not time this Government took seriously the message that scientists, academics, students and ordinary citizens are trying to tell us through their protests and all work together urgently to reach net zero and quite literally save our planet?
Penny Mordaunt
The hon. Lady asks me why we do not acknowledge the mandate to have a referendum. As I say every week, it is because we have had one. I long for the day when SNP Members will follow the democratic mandate of the people of Scotland. It was a once-in-a-generation vote. Now is not the time to be trying to have another one. People should be focused on the needs of the Scottish people—on improving educational standards and getting people access to health. However, I know that is what I say to her every week, so let me give her another reason. We learn today that, for there to be an independent Scotland in Europe, Scotland would have to join the euro. If she can tell us how she intends to do that, I will be happy to take her question again.
Mr Robin Walker (Worcester) (Con)
I welcome my right hon. Friend back to her place. Some weeks ago, I asked her about the urgent matter of the Worcester Warriors, and since then both they and Wasps have gone into administration. With rumours that the rugby organisations want to see a 10-team top league, can we have an urgent debate about the future of rugby union in England and how we keep the benefits it brings to so many constituencies such as mine?
Penny Mordaunt
I thank my hon. Friend for raising this incredibly important matter again. The date for Department for Digital, Culture, Media and Sport questions has not yet been announced, but I encourage him to apply for a debate in the usual way and I shall write to that Department about the issue he raises.
Madam Deputy Speaker
I call the Chair of the Backbench Business Committee, Ian Mearns.
Ian Mearns (Gateshead) (Lab)
I welcome the Leader of the House back to her place and thank her for announcing the Backbench Business debates for Thursday 3 November, a week from today. I am sorry that she could not be with us at 11.10 am. Although she may have been unavoidably engaged in other duties, it means that the time for Backbench Business debates this afternoon has been reduced by almost an hour. I say that on behalf of the Members who have put in to speak in those debates.
As the House is not due to be sitting on Thursday 10 November and the autumn statement is now scheduled for Thursday 17 November, may I ask the Leader of the House whether other time will be made available in those weeks, notwithstanding the planned rail strikes on both 7 and 9 November?
Penny Mordaunt
I thank the hon. Gentleman. Unfortunately, we were given two choices today: to delay the start of business questions by suspending the House or to take business questions in between the two Backbench Business debates. After consulting colleagues, it was felt that the former was going to cause the least disruption to hon. Members. On his other issue, I shall come back to him.
Maggie Throup (Erewash) (Con)
I am delighted that my right hon. Friend the Prime Minister used his first outing at the Dispatch Box to reaffirm the Government’s commitment to the levelling-up agenda. It is already making a huge difference in towns such as Long Eaton in my constituency, where a £25 million towns fund deal is beginning to become a reality. The levelling-up fund could transform Ilkeston and other towns in my constituency if our £20 million bid is successful. Prior to the latest round of announcements of the successful bids, can we have a debate in Government time so that Members can again put forward the reasons why they should be successful in the levelling-up bids?
Penny Mordaunt
I thank my hon. Friend for raising this issue. She knows that we will be investing close to £5 billion over the next four years on infrastructure projects and culture, but we will be very much focused on towns and city centres as well. I know that she has been championing her local bid and I encourage her to apply for a Westminster Hall debate on the subject.
Sam Tarry (Ilford South) (Lab)
In the early hours of Monday morning, three people were shot in my constituency. Two have died and a third is still in intensive care. Since January, eight people have been murdered in my constituency, including Zara Aleena, whom I spoke to the then Prime Minister in Prime Minister’s questions about, and Hina Bashir. Both of them were murdered in psychotic acts of violence against women. Violent crime is now blighting Ilford in a serious way. I am horrified that the place I have lived in most of my life and grew up in is now so badly impacted. All I want to know is whether the Government will provide some decent considered time, in Government time, to talk about how we genuinely combat violence, not just against women, but against the young people who are losing their lives, sadly on an almost weekly basis, in Ilford.
Penny Mordaunt
I was very sorry to hear about the several incidents in the hon. Gentleman’s constituency. I am sure that all hon. Members will want to send their thoughts to the families of the victims. We hope that the person who survived that terrible attack will make a recovery. It is incredibly important that we tackle violent crime. The Government have lifted restrictions on stop and search and removed more than 72,000 knives and dangerous weapons in recent times, but more needs to be done. I am sure that, if the hon. Gentleman wanted to apply for a Backbench Business debate, he would have support across the House for it.
Bob Blackman (Harrow East) (Con)
In the past week many of my constituents have been afflicted by flooding from sewerage systems that are completely inadequate. Developments have taken place, but no further improvement of the sewerage system in Harrow has been made. May we have a debate in Government time on what measures we can put in place to ensure that, when developers put in applications for developments, proper consideration is given to sewerage systems so that people are not afflicted with unnecessary flooding?
Penny Mordaunt
This is incredibly important. Planning committees need to give due regard to infrastructure not just for developments but, for example, for the astroturfing of pitches and so forth. I will raise this matter with the new Secretary of State. I also encourage my hon. Friend to raise it in questions.
Carolyn Harris (Swansea East) (Lab)
Recognising that children and youngsters quickly outgrow football boots, in 2019 Karl Bradley and his fabulous volunteers Tracy, Nanette and Rhys set up The Boot Room, a swap and donate your boots scheme based at Pure Football in Swansea East. This month it is celebrating its third birthday. It has ensured that more than 1,500 pairs of pre-loved boots have found a new home. It also now offers a limited number of shorts, shirts, socks and shin pads, thus ensuring that there are no barriers to young people enjoying the beautiful game. Will the Leader of the House join me in wishing The Boot Room a happy birthday and congratulating Karl and his team on all their hard work in bringing joy to so many young people?
Penny Mordaunt
I am sure that the whole House will want to congratulate Karl, Tracy, Nanette and Rhys. What a fabulous project. I thank the hon. Lady for allowing us all to pay tribute to them.
Andrew Selous (South West Bedfordshire) (Con)
A previous chief constable of Bedfordshire described police IT as “yesterday’s IT tomorrow”. I am hearing alarming stories that it now takes officers up to a day and a half to input case files, when it used to take 40 minutes. May we have an urgent debate in Government time? The public want the police out on the streets catching criminals, not hunched over their computers.
Penny Mordaunt
I fully understand why my hon. Friend is so annoyed at this situation. I will certainly write to the Home Office to make it aware of this. One of the benefits of the representation we have in this House is that good practice can be shared. If he were to apply for a debate, we could see what other forces do and how they ensure that the 20,000 new officers that we are putting in to frontline policing are able to serve their communities and are not stuck behind a desk doing admin.
Wera Hobhouse (Bath) (LD)
May I also welcome the right hon. Lady back to her place? A bit of continuity is very welcome. Voices, a local charity in my constituency, has highlighted the devastating impact that the cost of living is having on women suffering from domestic abuse. A third of respondents to a Women’s Aid survey said that they found it impossible or very hard to leave their abuser. Could we have a debate in Government time on this unique problem that the cost of living crisis is posing for women suffering domestic abuse? I know the Leader of the House will say that I should apply for a Backbench Business debate, but showing Government support on this important issue would be very welcome.
Penny Mordaunt
I thank the hon. Lady for raising this important issue. This has been a priority for the Government. Most recently—last week, in fact—we announced that we were opening up further legal aid access to victims of domestic abuse so that they can get support and representation. I shall write to the Home Office and encourage my right hon. Friend the Home Secretary to write to the hon. Lady in detail.
Jo Gideon (Stoke-on-Trent Central) (Con)
Currently, a young entrepreneur must wait until they reach the age of 18 before they can open a business bank account. Does my right hon. Friend agree that entrepreneurship should be encouraged as a path post education, and that existing barriers should be reconsidered to increase accessibility for young people? Will she set aside parliamentary time for a debate on how we can encourage and support young entrepreneurs?
Penny Mordaunt
I thank my hon. Friend for raising this. We want to support all young people in their talents and ambitions. She has identified a barrier that stops people setting up their own businesses and starting to develop their ideas at a young age. I shall certainly write to the new Secretary of State and raise the matter with him.
Geraint Davies (Swansea West) (Lab/Co-op)
I know that the Leader of the House is a great supporter of green growth. She may know of the innovative work at Swansea University to create hydrogen from off-peak renewables and waste plastic. Is she aware that the university faces a cliff edge in EU funding that threatens 50 projects and 270 highly skilled jobs? Will she talk with her colleagues at Cabinet level and look to make time for a debate on this so that we have the investment in existing projects and jobs and the money to scale up market-ready innovation to generate jobs and exports?
Penny Mordaunt
We recently had Business, Energy and Industrial Strategy questions. I do not know whether the hon. Gentleman was able to raise the matter then. If not, I will be happy to do so on his behalf.
Dr Matthew Offord (Hendon) (Con)
Following the events at the Chinese consulate in Manchester, I was concerned to read a recent report from the Safeguard Defenders non-government organisation which claims that the Chinese police are operating from several locations in the UK, including an estate agents in the Hendon constituency in order to seek the repatriation of Chinese nationals. Could a Minister from the Home Office come to the Dispatch Box to address not only the report but the subsequent security concerns?
Penny Mordaunt
I thank my hon. Friend for raising this. These are disturbing reports. I shall bring them immediately to the attention of the Home Office. It is vital, if that is happening, that it desists. I shall also raise it with the Foreign Office. It is an absolute disgrace.
Kirsty Blackman (Aberdeen North) (SNP)
The SNP amendments to the Online Safety Bill were tabled by the original deadline of July, so I can only assume that the amendments that Members are being allowed extra time to consider are those that have been tabled by the Government. Can the Leader of the House please confirm that, when the Online Safety Bill comes back, hopefully, makes progress and goes through to the Lords, it will not do so with another swathe of Government amendments that will make the Bill unrecognisable?
Penny Mordaunt
Future business will be announced in the usual way, but I heard the hon. Lady. The reason why this has been delayed that I gave earlier is correct. It is simply to allow more time for hon. Members to look at the amendments.
Siobhan Baillie (Stroud) (Con)
I am growing increasingly concerned about maternity services and pressures on midwives. The superb Stroud maternity hospital has also had post-natal beds temporarily closed due to staffing shortages. Post-natal care is not a nice-to-have luxury; the first few days after birth are discombobulating at best and terrifying at worst. Recently, there have been many national reports, such as on Ockendon and East Kent, but some are still saying that this is only a Government issue, and they are not looking to the NHS to solve some of the complex problems. Will my right hon. Friend grant time on the Floor of the House to debate this serious issue so that we can remove it as a political football and see what can be done to bring about change?
Penny Mordaunt
First, let me welcome my hon. Friend back from her maternity leave and thank her for the work that she is doing to highlight this deficit in her constituency. Normally, I would suggest that she applies for an Adjournment debate, but I know that she has raised this issue repeatedly, so I will write on her behalf to all relevant Departments to ask them to come together to resolve this, and I encourage some of her local stakeholders to do so as well. This is a priority for our Government. We are making a £127 million investment in the maternity system over the next year alone.
Dame Diana Johnson (Kingston upon Hull North) (Lab)
I know the Leader of the House will be aware that today marks the start of the Royal British Legion’s annual poppy appeal. Last week, I spent time in Belgium and northern France with the right hon. Member for Ludlow (Philip Dunne)—we are both commissioners, representing Parliament, on the Commonwealth War Graves Commission. Seeing the scale of the loss and the ages on the gravestones of people from all around the Commonwealth, it really struck me that it would be very timely for this House to debate and to remember again the sacrifices that so many have made for all of us.
Penny Mordaunt
I thank the right hon. Member for raising that wonderful suggestion. As she spoke, I heard many Members of this House also voice their approval of that. She will know how to secure such a debate, but it would certainly have my support. The Royal British Legion and Poppy Scotland are just two of the organisations that help us commemorate and remember those who have made the ultimate sacrifice.
John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)
Earlier this week, the hon. Member for Airdrie and Shotts (Ms Qaisar) attacked the Prime Minister over his race. In a nasty social media post, the SNP Member suggested that the Prime Minister was the wrong type of Asian. Does the Leader of the House agree that the Member should apologise, and will she consider holding a debate—
Madam Deputy Speaker (Dame Rosie Winterton)
Order. I presume the hon. Gentleman has told the hon. Member that he would be mentioning her.
John Lamont
I have, yes.
Does the Leader of the House agree that the Member should apologise, and will she consider holding a debate on divisive rhetoric in politics in the light of recent hate-fuelled statements made by SNP politicians?
Penny Mordaunt
I thank my hon. Friend for raising that point. The overwhelming sentiment across the whole of the UK, whatever people’s political differences, is that we should be incredibly proud that this country has its first British Asian Prime Minister. The hon. Member for Airdrie and Shotts (Ms Qaisar) did, I think, delete her tweet, and she may wish to proactively apologise for it. The fact that she has deleted it shows that she recognises that it was the wrong thing to do. Again, I would just say to our Opposition colleagues that they might like to think about some of their tone and some of the things that their party leaderships say that gives permission for people to do such things.
Kirsten Oswald (East Renfrewshire) (SNP)
Last month, one of my constituents was detained at Charles de Gaulle Airport. On arrival, authorities said that a Schengen travel ban had been in place since 2019. That came as a great shock to my constituent who had travelled to many Schengen countries since 2019 without any issue. During his detention, he was subjected to racist language and stereotyping and was detained in appalling lodgings. The travel ban is now affecting his work, which necessitates travel within the Schengen area. I am doing all that I can to help, but may I ask for a statement in Government time on how the UK Government might expedite the removal of the Schengen travel ban against my constituent and move the matter forward swiftly?
Penny Mordaunt
I hope the hon. Lady has contacted the Foreign, Commonwealth and Development Office; I do not know the gentleman’s circumstances.
Penny Mordaunt
I am glad to hear that that is the case. I will write to the Department, then, and let it know that this is an ongoing issue for the hon. Lady.
Anna Firth (Southend West) (Con)
I welcome my right hon. Friend back to her place. I think that she does an outstanding job.
News reports this week suggest that children as young as 10 are abusing nitrous oxide, and indeed Southend police recently confiscated more than 100 industrial use canisters on just one day. Will my right hon. Friend find time for a debate on this important issue, described by doctors as an epidemic among our youth?
Penny Mordaunt
I thank my hon. Friend for raising that important issue. My hon. Friend the Member for North Devon (Selaine Saxby), is also campaigning on this issue. They should join forces and apply for a debate, and I am sure that other Members of the House would welcome that, too.
Rachael Maskell (York Central) (Lab/Co-op)
The housing crisis is being fuelled by the plethora of short-term holiday lets, which, I know, is a matter of concern for Members across the House, but the Government are simply not acting fast enough. The situation is growing in my constituency: I have three times more Airbnbs and short-term holiday lets than the right hon. Member has in her constituency. Can we have an urgent debate on the rise of short-term holiday lets and what the Government will do to stop this?
Penny Mordaunt
I thank the hon. Lady for raising that matter, which other Members have also raised recently. I think that I can best be of assistance to her by writing to the Department and asking that it takes this matter up. She will know how to apply for a debate in the usual way, and I know that other Members of the House would support that.
Richard Graham (Gloucester) (Con)
As the first six months of the Homes for Ukraine scheme draw to a close, housing authorities, host families and refugees will be taking stock. There is likely to be a need for more hosts. There may be a need for higher amounts of reimbursement to host families to take account of the rising cost of living. At the same time, there are still housing issues for Afghan refugees and Hong Kong British national (overseas) passport holders, and, as we heard earlier, pressure for asylum seekers as well. Does my right hon. Friend agree that all this perhaps provides an opportunity for a debate that takes stock of how this scheme has worked, what its successes have been, what lessons there are to be learned, and perhaps whether we can have a wider homes for refugees scheme?
Penny Mordaunt
I thank my hon. Friend for raising that matter. Clearly, for a fairly modest sum of £350 a month, a sizeable group of people are being taken care of. If those people had not stepped up and done that, pressures on housing stock and others would be severe and it would be much more expensive to the public purse. I thank him for enabling us to say thank you to all those individuals who have stepped up. He is right that it is the most cost-effective and nicest way of caring for those individuals and showing our support to the people of Ukraine if we keep that scheme going.
Patricia Gibson (North Ayrshire and Arran) (SNP)
As well as reaching the dizzying heights of the highest office, the current Prime Minister has in common with the right hon. Members for South West Norfolk (Elizabeth Truss), for Uxbridge and South Ruislip (Boris Johnson) and for Maidenhead (Mrs May) and the former Member for Witney having no mandate in Scotland. Will the Leader of the House make a statement, advising the new Prime Minister not to follow the example of his erstwhile predecessors in seeking to deny Scotland’s right to choose its own future, or did democracy die in Scotland in 2014?
Penny Mordaunt
Again, the way that democracy works has not really been fully understood by SNP Members. My hon. Friend the Member for Gloucester (Richard Graham), who asked a question just before the hon. Lady, is intimately familiar with the Westminster Foundation for Democracy, which promotes and explains the importance of democracy in all places around the world. Hon. Members should get in touch with him and learn what democracy actually means.
Antony Higginbotham (Burnley) (Con)
In my constituency, residents are contacting me about antisocial behaviour. It does not matter whether they live in Padiham, in Burnley town centre, or up on Corn Road. When I speak to local police officers, they tell me that the issue is not with the police, but with youth justice and successfully prosecuting a very small number of highly motivated young children. Can we have a debate in Government time on antisocial behaviour and youth justice so that we can find a solution to this problem?
Penny Mordaunt
My hon. Friend is right to point to the team effort that is needed to ensure that communities are protected from antisocial behaviour and their lives are not disrupted, but also to ensure that young people are taken care of and enabled to follow a more productive path. That is a very good suggestion for a debate and I encourage him to apply for one.
Mrs Emma Lewell-Buck (South Shields) (Lab)
For months now, various Ministers, Secretaries of State and one of our recent Prime Ministers have all promised action regarding my constituent, Mr Singh. Mr Singh is subject to identity theft. He and his family have been held by Border Force, his immigration status is in jeopardy, his family have been placed in danger and his health records are in utter chaos. Now, a long-awaited ministerial meeting for next week has just been cancelled. Will the Leader of the House please use her good offices to ask her colleagues in Government to start doing their jobs?
Penny Mordaunt
I assume the relevant Department that the hon. Lady was expecting to meet is the Home Office. If that is the case, if she gives me the details after this session, I will write to the Department immediately. I know this must be a traumatic time for her constituent, and we would want the case dealt with very quickly. As I said earlier, I met the permanent secretary to the Home Office yesterday to discuss timeliness of getting back to colleagues, and he is determined to improve the service that hon. Members are getting.
Virginia Crosbie (Ynys Môn) (Con)
Ynys Môn is currently represented by five Members of the Senedd, soon to increase to six under the Welsh Labour Government’s plans to increase the size of the Senedd from 60 to 96 MSs, at an estimated cost of £100 million. Yet the Welsh Labour Government continue to deprioritise north Wales: the sudden closure of the Menai bridge last Friday, with no warning, will bring months of chaos to my constituents. Does the Leader of the House agree that the Welsh Labour Government should be prioritising the maintenance of key transport links, not increasing the number of politicians?
Penny Mordaunt
My hon. Friend is right, and this is another example of the Welsh Labour Government’s deprioritising the people of north Wales. I heard about the bridge closure, which is outrageous, but she is doing everything she should in her work on getting a freeport and on championing nuclear power and infrastructure to support that industry. I also know she is very effective, because I think she has already secured an Adjournment debate on this matter, so I shall give some more power to her elbow by writing to the Minister before that debate.
Patrick Grady (Glasgow North) (Ind)
I am afraid that I too have to ask for a debate about the Home Office’s not taking its responsibilities seriously. I have two refugee constituents who, for different reasons, are stuck in two different countries and have had their travel documents lost or stolen. They both have significant childcare responsibilities, yet the Home Office seems content to leave them stranded for weeks on end waiting for replacement documents, while they run out of money and their children are placed at risk. Can the Leader of the House help me to get those cases urgently in front of someone who will pay attention and respond to them?
Penny Mordaunt
I am sorry to hear that that is the case. One of the new services that the Home Office has stood up is a surgery with hon. Members, which can be done either in person or on a Zoom or Teams call. That sounds like a way of resolving the matter in the swiftest possible time and I encourage the hon. Gentleman to use it, but I will also write and let the Home Office know that this is a pressing case.
Dr Luke Evans (Bosworth) (Con)
On a personal note, may I say that the Leader of the House is an asset to this party, this House and this country?
I am an avid Bath Rugby supporter, which is tough to say as a Leicestershire MP, but my father is a season ticket holder and my brother was the medical doctor there. The one thing that unites us is our passion for rugby; to see the likes of Wasps and Worcester Warriors collapsing is incredibly scary, especially for my constituents who are employed by the likes of Wasps. Will my right hon. Friend write to the Government to ask for a review like the one we had of football and, failing that, can we have time to debate such a review?
Penny Mordaunt
I know this will be a pressing issue of immense importance to my hon. Friend’s constituents, and I am happy to write to the relevant Department. I thank him also for his kind remarks to me; I may not be the centre forward, but I shall always be needed on the right wing.
Fleur Anderson (Putney) (Lab)
Given all the changes of Ministers recently, can the Leader of the House confirm that we can still expect timely answers to letters and to written and oral questions from recent weeks? Specifically, on 14 October I raised concerns about the very noisy early-morning night flights to Heathrow, which regularly wake up my constituents from 4.30 am. The former Transport Minister, the hon. Member for Torbay (Kevin Foster), answered reassuringly that he would investigate. Can the Leader of the House assure me that that pledge by a Transport Minister will be honoured?
Penny Mordaunt
Yes, it will. The faces change but the Government continue. If there is a delay in the hon. Lady getting a timely response, as she has indicated, I will always follow up on behalf of hon. Members. That is one of the main reasons for having business questions, so that we can ensure that urgent cases in particular are followed up. She has that assurance.
Andy Carter (Warrington South) (Con)
In June, Warrington Council introduced a low-traffic neighbourhood zone in the Latchford area of my constituency—an area that is totally unsuitable, because it is constrained to the south by the Manchester ship canal and to the north by the River Mersey. Roads have been closed to traffic, resulting in longer journey times and more congestion. In a survey I conducted, 87% of residents who were impacted by the changes say they want things to go back to how they were. May we have a debate in Government time on low-traffic neighbourhood zones, and does my right hon. Friend agree that local councillors need to listen to local residents and scrap those changes?
Penny Mordaunt
We do need to listen to local people, not only because that is what their representatives are supposed to do, but because quite often they will have the best ideas on how to manage particular situations. I would tell my hon. Friend how to secure a debate, but I know that, like my hon. Friend the Member for Ynys Môn (Virginia Crosbie), who is sitting next to him, he has already managed to secure an Adjournment debate. I congratulate him on that, but I shall also flag the fact that he has raised the matter with me to the relevant Ministry.
Chris Bryant (Rhondda) (Lab)
If we could reopen the Rhondda tunnel, which goes from Blaencwm to Blaengwynfi, it would be the second-longest cycle tunnel in Europe and a great local asset in some of the poorest areas in Wales. It belongs to the Department for Transport, so I have been trying to secure meetings with Ministers. I met with the then Secretary of State, the right hon. Member for Welwyn Hatfield (Grant Shapps), who was very enthusiastic. Unfortunately, he was sacked, and then he became the Home Secretary and then the Secretary of State for Business, Energy and Industrial Strategy. I met with a Minister, the right hon. Member for Daventry (Chris Heaton-Harris), but he was then made the Europe Minister, then Chief Whip and then Northern Ireland Secretary. I met with another Minister, the right hon. Member for Aldridge-Brownhills (Wendy Morton), who then became Chief Whip, resigned, un-resigned and was then sacked. I was going to meet with the new Secretary of State, the right hon. Member for Berwick-upon-Tweed (Anne-Marie Trevelyan), but she is now a Minister at the Foreign, Commonwealth and Development Office.
Therefore, can the Leader of the House do two things for me? First, can she ensure that I do meet a Minister, and that whichever Minister I meet stays in place long enough to make sure we get the money? Secondly, as she is the fixed point in this Government, as far as I can see, will she personally come to the Rhondda tunnel? We can dangle her down in a hole, right down to the bottom, so she can see it for herself. We will let her out again—probably—but it will be amazing; there will be lovely chaps who will look after her as she goes down, and she will not hit her head or anything like that. It is amazing. We need to make this project happen; will she help?
Penny Mordaunt
I shall do my utmost to help the hon. Gentleman. We often talk about a whole-of-Government approach, and it seems that he has done all the legwork to secure that. I will be happy to flag the matter to the new Secretary of State, who I saw this morning—
Penny Mordaunt
My right hon. Friend the Member for Forest of Dean (Mr Harper). I hear the hon. Gentleman’s frustration and I shall do my best to ensure that the matter is prioritised by the relevant Department.
Ben Everitt (Milton Keynes North) (Con)
I wish I had an offer to make as good as that of the hon. Member for Rhondda (Chris Bryant). Many people in rural towns and villages in my constituency rely on public transport. They need those links and that connectivity to get them to where they need to be, so it is very concerning to hear that route 41, which runs between Bedford and Northampton, stopping at many towns and villages in the rural parts of my constituency, will soon be running at a much-reduced rate. That will leave constituents isolated, without the means to travel to work, school or the doctor’s. Will the Leader of the House ensure a debate in Government time to underline our commitment to keeping rural communities connected and the fact that everybody has a role to play in that—bus operators and local government included?
Penny Mordaunt
I shall be very happy to flag that issue with the Department for Transport and the new Secretary of State. My hon. Friend will know that the six-month extension to the bus recovery grant scheme provided up to £130 million to continue supporting bus services, and England’s long-term national bus strategy, which I am sorry to hear is called “Bus Back Better”, is explicit about ensuring the needs of rural transport.
Anna McMorrin (Cardiff North) (Lab)
Just a few days from COP27, the new Prime Minister has decided to sack the COP26 President not only from Cabinet but as a Minister. What message does that send when the Government are looking at a hundred new oil and gas licences, and the UN Secretary General is saying, “Prioritise climate change or face catastrophe.”?
Penny Mordaunt
I am incredibly proud of what the Government did at COP26, and I pay tribute to my right hon. Friend the Member for Reading West (Alok Sharma) for all the work he has done as COP26 President. It is not correct to say that he has been sacked; he will be there to ensure that that work has a real legacy, and he will hand it over to the new president. I am grateful to the hon. Lady for allowing me to put on record my gratitude to our colleague.
Mr Tobias Ellwood (Bournemouth East) (Con)
I wish the Prime Minister and his Front-Bench team every success as we return to greater fiscal responsibility and focus on meeting our 2019 Conservative party manifesto commitments, which include action on climate change. In the spirit of focusing on COP26 and COP27, I invite the Government to welcome King Charles to attend COP27, he having done such a fantastic job with the COP26 President in Glasgow.
Penny Mordaunt
I thank my right hon. Friend for placing his views on the record. He will understand that they are not a matter for me, but they will have been heard. Hopefully we will be keeping His Majesty rather less busy on other matters.
Margaret Ferrier (Rutherglen and Hamilton West) (Ind)
Will the Leader of the House join me in congratulating Bonnie Blantyre and pals on their community horticulture gold award from Keep Scotland Beautiful for their tireless campaign to brighten up the local area with flowers and plants? May we have a debate in Government time on the importance of biodiversity at a local level?
Penny Mordaunt
I am sure that all Members would congratulate the Bonnie Blantyre team for this huge achievement. The hon. Lady is right that this is vital for wellbeing, and for the look and feel of our communities. I thank her for getting that on the record.
Martin Vickers (Cleethorpes) (Con)
The principal rail service into my Cleethorpes constituency is provided —or at the moment not provided—by TransPennine Express. It is supposed to run an hourly service between Cleethorpes and Manchester. When I checked its website this morning, there were five consecutive cancellations, which means at least six hours between trains. I have had frequent meetings with members of the management over the last 11 months of various disputes, but to no avail. They tell me that they need approval from the Department for Transport to conclude negotiations. Could the Leader of the House arrange for a statement from the new Transport Secretary so that we can try to resolve the issue?
Penny Mordaunt
I thank my hon. Friend for raising that. I will raise it straightaway with the Department for Transport. It is absolutely vital. We know that there are occasional disruptions to services, but to have so many will have caused my hon. Friend’s constituents a huge amount of difficulty. I thank him for raising the issue, and shall help him to get it resolved with the Department for Transport.
Jim Shannon (Strangford) (DUP)
I am very pleased to see the Leader of the House back in her role, and I look forward to business questions every Thursday. The Chinese embassy in London is currently looking to move to the former Royal Mint building. Yesterday the BBC reported that the Chinese Communist party had established unofficial police stations operating out of embassies and consulates in Europe. Does she agree that steps should be taken to ensure that the Chinese Communist party does not use that building to establish a clandestine police force to intimidate or threaten Hongkongers and Chinese nationals living in the United Kingdom of Great Britain and Northern Ireland?
Penny Mordaunt
I agree with the hon. Gentleman—or any building, for that matter. Another colleague raised the same issue earlier. These reports are appalling. People need to be protected, and this needs to be stopped.
Exempt Accommodation
(2 years ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate
Madam Deputy Speaker (Dame Rosie Winterton)
We now come to the Select Committee statement. Clive Betts will speak for up to 10 minutes, during which time no interventions may be taken. At the conclusion of his statement, I will call Members to put questions on the subject of the statement and call Mr Betts to respond to them in turn. I emphasise that questions should be directed to the Select Committee Chair, not the relevant Government Minister. Interventions, including from Front Benchers, should be questions and should be brief. I call the Chair of the Levelling Up, Housing and Communities Committee, Clive Betts.
Mr Clive Betts (Sheffield South East) (Lab)
The Levelling Up, Housing and Communities Committee today published its report on exempt accommodation. I thank the Backbench Business Committee for providing time for this statement, and our excellent Committee staff and specialist advisers for helping to compile the report.
Members of the Committee are experienced public representatives, but individually and collectively we were appalled by what we heard in this inquiry, which revealed a complete and utter mess of shocking accommodation and inadequate support all funded at enormous expense by the taxpayer. Here is how the system is supposed to work: exempt accommodation, which is supported housing, should offer suitable accommodation and care to its residents. The people who live in exempt accommodation are often the most vulnerable in society, such as survivors of domestic abuse, care leavers and people who struggle with their mental health or with addiction. Because this type of accommodation can be more costly to run than general needs tenancies, it is exempt from locally set caps on housing benefit, hence the name “exempt accommodation”. To qualify for those uncapped rates, the provider must be not for profit, and provide care, support or supervision to residents.
Where the system works well, responsible providers offer a safe and supportive setting for people who may have fallen on hard times, and equip residents to move on and lead independent, fulfilling lives, but our inquiry found that where it works badly, vulnerable people are being exploited when they should be given support. Those with an eye for quick and large returns, sometimes with malicious and criminal intent, see the system as an opportunity to make large and potentially illegal profits, all at the expense of the taxpayer. I thank everybody who provided evidence to the Committee’s inquiry. In particular, I thank Birmingham City Council for helping to arrange the Committee’s visit in June this year, and all those who took part in it and gave evidence. Their stories brought to light just how appalling the situation can be, both for residents and for neighbours who have to live with the impacts on their communities.
We heard from people living in squalid conditions—tiny rooms with walls smeared with faeces—with no gas, electricity or internet. For some people, the support on offer was just a support worker shouting from the bottom of the stairs, “Are you all right, then?” or a loaf of bread and jam left on the table. Others are given no support whatsoever, or worse still are exploited by staff. We heard stories of individual residents being forced to undertake work on the property, or asked for sex in return for better accommodation. We heard of vermin, organised crime, prostitution and harassment. Unbelievably, residents are often asked to pay additional charges for the support that they may or may not receive. There is no requirement to assess people’s support needs before offering them accommodation. Survivors of domestic abuse are being housed alongside people with a history of sexual abuse. Recovering addicts are being housed with drug dealers. Residents we spoke to found their accommodation on sites such as Gumtree and Facebook, and for many there is no way out. Without their housing benefit, they cannot pay their rent, so they are afraid to enter employment and risk losing the roof over their head. Women’s Aid told us about survivors of domestic abuse actually going back to their perpetrators because they felt safer returning to an abusive relationship than remaining in these settings. This simply must change.
To add insult to injury, this mess is all being paid for by the taxpayer through housing benefit, which local authorities have inadequate powers to control. Not only that, but we heard numerous stories of providers exploiting loopholes to pocket that housing benefit as profit. West Devon Borough Council told us about a portfolio of properties that were bought for £6 million and sold on the same day for £18 million to an offshore investment company, in anticipation of the returns to be made from converting those properties into exempt accommodation. Local councils also end up footing much of the bill for accommodation that is not registered.
While taxpayers are footing the bill of this goldrush, the Government have no idea how much they are spending on exempt accommodation, how many people are living in exempt accommodation or how many providers there are. The Government tried to convince us that the bad experiences we heard about were the minority, but no matter how many times we asked for data to back that up, they could not provide any. The Government cannot know whether the system is providing value for money, but given how much money is being siphoned off as profit at the expense of vulnerable residents, we think it is quite possible that the Government may not need to spend more to improve exempt accommodation. They simply need to put in place systems so that the money spent is spent on good accommodation and appropriate levels of support.
We are therefore calling for national standards for exempt accommodation, covering the referral process, the care and support provided, the quality of the housing and the information given to the residents. It is, quite frankly, shocking that national standards do not exist. These standards should be in place within 12 months, and local authorities should be given the powers and the resources to enforce those standards, to improve the overall quality of exempt accommodation and establish greater consistency. Councils can then collect data, which the Government can collate, to give an accurate national picture of the exact scale and cost of exempt accommodation.
The oversight of exempt accommodation is a complete mess. There are lots of different regulators overseeing different bits of the system. There is the regulator of social housing, the Care Quality Commission and the Charity Commission, but no single regulator has overall responsibility for overseeing all the different components, and no single regulator has complete coverage of the sector. That is why we are calling for a national oversight committee to pull together all the different strands and fill the holes in the current patchwork of regulation.
We are also calling for compulsory registration with the regulator of social housing. If providers and properties are registered, local authorities will have the basic information to enable them to enforce standards. We look forward to the Second Reading of the Supported Housing (Regulatory Oversight) Bill, sponsored by the hon. Member for Harrow East (Bob Blackman), who is a long-term and valued member of the Select Committee. The Select Committee will be doing pre-legislative scrutiny of that private Member’s Bill.
Finally, there need to be greater controls on the development of exempt accommodation. Provision should be driven by local need, not by the greed of unscrupulous, profit-driven crooks. Instead, the planning system currently offers a free-for-all. It gives councils very little power to halt developments that strip out much needed family housing and create concentrated pockets of exempt accommodation that, when run badly, attract crime, antisocial behaviour and vermin to local communities. The Government should immediately end all exemptions to the licensing of houses in multiple occupation and article 4 directives, as well as ending other planning loopholes.
The Government need to sort out the many issues with exempt accommodation that our inquiry identified, but in reality, they cannot sort out exempt accommodation without solving the wider housing crisis. The Government’s five pilot schemes to look at these issues found that, often, residents of exempt accommodation do not even require care or support; they simply have nowhere else to go because there is a lack of affordable housing in this country, so we have reiterated our call on the Government, made in a previous report, to build 90,000 social rented homes a year.
The British public are living through many difficult challenges. They do not want to see money from their taxes being handed over during a cost of living crisis to corrupt people who make the lives of vulnerable people worse and create a living hell for neighbours and communities. The Government should implement our recommendations immediately and in full. I commend this report to the House.
Eddie Hughes (Walsall North) (Con)
It was a pleasure to contribute to the evidence session for this report, as the relevant Minister at the time. While I do not agree with all the recommendations in the report, which is perhaps no surprise, I commend the Committee for its excellent work and for shining a light on this important topic. Does the Select Committee Chairman agree that it is important that any changes in legislation do not negatively impact the many excellent providers of exempt supported accommodation out there, including YMCA Birmingham, of which I was previously the deputy chief executive?
Mr Betts
I thank the hon. Member genuinely for the way he engaged with the Committee as a Minister. Some Ministers engage better than others with Select Committees, and although he did not always agree with us, he engaged with us entirely properly, so I thank him for that.
In terms of the hon. Member’s question, he is absolutely right, and we reflected that, but what we are asking of even the best providers is simply that they register, so that we can be aware of who they are and what they are doing. They have nothing to fear from a basic registration fee—that is all. I completely agree with him: it is not just about closing down the bad; it is about how we can expand the good, particularly on domestic abuse. There is a shortage of such accommodation for people fleeing domestic abuse in this country, so there need to be more funds. Perhaps some of the funds that are being siphoned off inappropriately could be channelled into providing good accommodation, provided by organisations such as Women’s Aid, which came to give evidence to us.
Matthew Pennycook (Greenwich and Woolwich) (Lab)
I commend the Select Committee on the publication of an excellent report, which makes a series of extremely sensible recommendations. What is particularly concerning, albeit sadly predictable, is the Committee’s finding that, despite some limited improvements in quality and standards, vulnerable people were still living in “utterly appalling circumstances”, even in areas subject to supported housing oversight pilots. It is obvious that much more needs to be done in terms of national standards and local authority powers and funding. May I press my hon. Friend to expand on why he thinks Ministers remain unwilling to introduce the substantive emergency measures that are clearly required if we are to finally bring this scandal to an end?
Mr Betts
I thank my hon. Friend for that question, though perhaps it would be better addressed to Ministers, rather than the Committee. I do not know why the Government do not want to act more quickly. I take the point about not putting off good providers, but we have talked about a light-touch registration scheme for the good providers. We are not calling for more money; we said that. There is enough money in this system. We hear of organisations buying properties for a few thousand pounds—probably £100,000—then converting them into exempt accommodation and charging £1,000 per room in housing benefit per month. These are eye-watering sums of money. If that money was diverted into better accommodation and if local authorities had the powers to enforce it, using existing funds, it could all work well. We heard from the pilots that there were problems in lots of places, not just Birmingham, and every council that fed back said it could do more once it had some additional funds through the pilot schemes. That additional funding needs to be rolled out to all local authorities.
Bob Blackman (Harrow East) (Con)
I congratulate the Chairman of the Select Committee on presenting our report, which I agree with every single word of, and thank him for promoting my private Member’s Bill, which will have its Second Reading in this place on Friday 18 November. I trust that, with Government support, that Bill will include all the report’s recommendations or as many of them as we can shoehorn into it. We will have a Members’ briefing on Wednesday 2 November at 2.15 pm in Room W1, and I trust that we can get all-party support for the Bill and correct the wrongs.
Does the hon. Gentleman agree that one of the key issues is ensuring that local authorities can determine which homes are set up in their local area, which they know best, rather than having to deal with the consequences of one of these homes being set up and then try to close it down?
Mr Betts
I absolutely agree with the hon. Gentleman, my friend on the Select Committee, with whom I have worked on many issues; this is a unanimous report. That is why we have called for local authorities to be given those powers. The Government have laid down some guidelines on standards, but they are not enforceable. In such a situation, it is no use saying to providers who are making millions of pounds, “Oh please don’t do it.” The standards must be enforced. Local authorities need those powers and they need to control access to the accommodation so that people with particular needs are put into accommodation that can deal with those needs and has the right sort of support. That is why we are calling for local authorities to have powers over the support as well. It is a comprehensive approach, and local authorities are best placed to enact it.
Kerry McCarthy (Bristol East) (Lab)
The Chair of the Select Committee will be aware of my interest in the issue, which arose from a particular property in my constituency where several residents died. It was clear that that was being run not for the benefit of the residents but for financial reasons. I welcome the report and I think it is spot on in its condemnation of the situation. The problem that we came up against in Bristol was that, although the council would no longer refer people to that property, we found it difficult to stop other councils outside referring people in. Did the Committee look at making sure that each local authority has a responsibility to provide this sort of accommodation in its area, rather than trying to pass the problem off to other places that do provide it?
Mr Betts
We did not specifically look at that issue, but we looked at giving councils the powers to ensure that standards are met. My hon. Friend is absolutely right that one of the problems is that there is no control over the referral process—anyone can refer themselves, which is why people use Facebook and Gumtree to self-refer. If we can give powers to the councils to control referrals, it would be appropriate for them to consider commissioning services themselves in some circumstances. Some services are already commissioned; many are not. We did not call for all services to be commissioned, because some very good voluntary local providers are doing work in this area and we do not want them to close down. It is about controlling the referral process and ensuring that housing benefit is paid out only for properties that meet these standards. Once the money loophole has been closed, the rest of the abuse will stop —in our view.
Steve McCabe (Birmingham, Selly Oak) (Lab)
I acknowledge the way that the hon. Member for Walsall North (Eddie Hughes) engaged with the issue when he was a Minister. I congratulate the Chair of the Select Committee on the report. I was privileged to sit in on a couple of the evidence sessions in Birmingham, which were certainly illuminating. In view of the serious issues raised in the report, I have two questions.
First, there is a reference to the West Midlands police saying that such properties are sometimes used as a front for money laundering and drug gangs. Does the Chair agree that any standards must include a fit and proper test of any person who owns or purports to manage such a property, so that we know they are not a front for that kind of activity? Secondly, as well as trying to restrict the concentration of such properties through a planning measure, does he agree that any standards must include a proper inspection regime of the quality of the property and of the so-called support that is being offered? Otherwise, this activity will continue to be lucrative for anyone who wants to pursue it.
Mr Betts
I thank my hon. Friend for drawing the Committee’s attention to the issue, because he had had experience in his constituency, as he pointed out to us. He was the first Member who said, “You need to have a look at this. It is absolutely awful.” Unfortunately, he was absolutely correct about that. The idea of a fit and proper person test is interesting. We did not specifically address that as a Committee, but if we are going to have proper standards of accommodation and proper support on an ongoing basis, we need to ensure that the people doing that are legitimate people with legitimate objectives. He is absolutely right that if we are going to have standards, we need to enforce them. That is why local authorities need the powers and the resources, and why we need to bring all such properties within the HMO regulations, so that local authorities can send their health inspectors in to make sure that standards are kept and maintained.
Chris Bryant (Rhondda) (Lab)
The Select Committee Chair is being his normal, moderate self, but what he is exposing is phenomenally scandalous and despicable activity by some people who are not just making a profit but profiteering from the misfortunes of other people and the taxpayer. Many of the most vulnerable people who are housed in exempt accommodation are people with acquired brain injuries, whether because they have been in a car crash and had a blow to the head, because of concussion in sport, or because of hypoxia. Can he ensure that the Select Committee feeds into the programme board that is looking at a national strategy for acquired brain injury? If we leave this part of the equation out, many vulnerable people will not get the support that they need to lead genuinely independent lives.
Mr Betts
My hon. Friend is absolutely right to identify a particular group of people who need support and proper accommodation, and who can easily be exploited. There are many groups in that situation, which is why we should not simply shut down accommodation; we need to make sure that sufficient supported accommodation of an appropriate standard to meet particular needs is provided for a whole range of different groups, including people with acquired brain injury. We will certainly feed that back, as he has suggested.
Ian Mearns (Gateshead) (Lab)
I thank the Select Committee Chair for using this device to throw an important spotlight on the issue. Unfortunately, it is not new—we have been aware of it for some time—but it is important to have a spotlight shone on it. My hon. Friend the Member for Birmingham, Selly Oak (Steve McCabe) referred to properties being bought, established and put to this use to launder often significant amounts of money. People then get a quasi-legitimate revenue stream to pay them back, but that is paid for directly out of the public purse through housing benefit from the Department for Work and Pensions. Surely it is not beyond the wit of Ministers in that Department to make sure that when significant amounts of money are paid out for housing benefit in particular properties, those properties are fit for purpose and managed appropriately. It should not be difficult for the Government to organise something as simple as that.
Mr Betts
It should not be. Currently, all that providers have to do to get the higher level of housing benefit, which is almost uncontrolled, is to provide support “beyond the minimal level”—nobody knows what that means; it does not mean very much. Some authorities have tried to challenge the housing benefit requests that have been made, but the problem is that all providers have to do is to show that the rent is reasonable—they are issuing freedom of information requests to find out the amounts of rent being charged for other properties in the area—and that there is no alternative accommodation, which there often is not, for reasons that I have explained. People are allowed to write a virtually blank cheque. That needs to be closed down, because the money can be put to better use than being siphoned off for profiteering, as it is currently.
Jim Shannon (Strangford) (DUP)
I thank the Chair of the Select Committee for the report that he has put forward. Does he acknowledge that the high concentration of antisocial behaviour in areas of exempt accommodation is indicative of the system and of the fact that some of the accommodation is unacceptable? I think he agrees that an urgent review of the system must be a priority for the Government to prevent the continued placement of individuals and families into homes that are simply not fit for purpose.
Mr Betts
The hon. Gentleman is spot on with that. When we went to Birmingham, we heard not from individuals living in exempt accommodation, but from those living in communities where dozens of properties in the same small area were being converted. They explained to us the amount of criminality and drug dealing going on, that the police were turning up every night and that there were people lying in the road and people begging. They often tried to help where people were vulnerable and in need, but they said that there was no control over how many properties could be turned into exempt accommodation in the same area. They were people with family homes and kids, who had often lived in that stable community all their lives, but who were seeing that community being destroyed around them. That is not acceptable or appropriate. We owe it to both the individuals needing supported accommodation and the individuals in communities where lots of accommodation is being created to change the system and help everyone.
Madam Deputy Speaker (Dame Rosie Winterton)
I thank the Select Committee Chair for his statement and for answering that thorough questioning.
Backbench Business
National Food Strategy and Food Security
(2 years ago)
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Esther McVey (Tatton) (Con)
I beg to move,
That this House recognises that food security is a major concern to the British public and that the impact of the covid-19 pandemic, the cost of living crisis and the conflict in Ukraine has made UK food security more important than ever before; further recognises the strain on the farming sector due to rising farming and energy costs; supports the Government’s ambition to produce a National Food Strategy white paper and recognises the urgent need for its publication; notes that the UK food system needs to become more sustainable; and calls on the Government to recognise and promote alternative proteins in the National Food Strategy, invest in homegrown opportunities for food innovation, back British businesses and help future-proof British farming.
The motion is in my name and that of the hon. Member for Bristol East (Kerry McCarthy). I pay tribute to her for all her help in co-ordinating this debate, and I particularly thank the Backbench Business Committee for finding time for it.
Food security is a perennial concern. Even the meaning of “food security” causes concern and disagreement, but I will use this definition as a starting point—being able to feed the population at a reasonable cost, even in the face of future shocks such as a global pandemic, massive harvest failure or a general crisis of agricultural productivity caused by climate change. However, colleagues may well wish to expand on that definition and talk about a whole array of issues, for this is such a vast topic with so many important implications for farmers and for families and household food bills, particularly now that we see them rising with the cost of living crisis.
The UK is addressing the issues of food security by using new approaches to agriculture such as vertical farming, precision agriculture and genome editing. It is cutting food waste with Government policies and new technology, producing alternative proteins from cultured insects and algae—not for the faint-hearted—as well as producing plant-based meat, on which the UK leads the way, and packaging food in innovative ways to reduce damage, prolong freshness and fight off bacteria.
However, with the shocks we have suffered to our food security over the last two years—the consequences of covid and lockdowns, and now of the war in Ukraine —there is much more the Government need to do, particularly to help our local farmers. In the north-west, our 12,815 farming and growing community quietly go about their business, collectively producing a wealth of food commodities and contributing more than £726 million to the economy. Our UK farmers and growers are world leaders in food safety, animal welfare, traceability and environmental enhancements, and these values are reflected through our UK annual food and drink export value of £2 billion.
I want to focus on my little corner of the world. Over 70% of Cheshire county is still agriculture-producing, with large swathes given to dairy, sheep and cattle farming. More than 7,000 people are employed on 2,804 farm holdings covering nearly 160,000 hectares of land. We are home to some of the country’s leading dairy farms and dairies—for example, Grosvenor’s Eaton Estate in Cheshire produces more than 35 million litres of fresh milk a year, which is enough for half a million people every day. In Tatton, we have County Milk, which is a family-run business and the largest privately owned dairy ingredient company in the UK. We have the award-winning Delamere Dairy, located in Knutsford, and Bexton Cheese in Knutsford. We have the award-winning Lambing Shed, run by the Mitchell family, and Cheshire Smokehouse in Morley Green, Wilmslow. We have Mobberley Ice Cream, Great Budworth Ice Cream and Seven Sisters Farm Ice Cream—there are lots of ice creams—and Roberts Bakery. I meet my local farmers regularly, assisted and facilitated by the local National Farmers Union team.
There have always been concerns in farming, for livestock and the Great British weather are temperamental fellows to work with, but of late these issues have got bigger and they need to be addressed if we want our food strategy to work. In Tatton, our farmers, like those across the country, are facing labour shortages, energy price increases of up to 400%, fertiliser cost increases of over 150% and red diesel increases, as well as increases in rural crime. Only the other week, I met a group of local farmers at Shepherd’s farm in Aston by Budworth, which has just invested £300,000 in a new milking shed of the new cubicle type, and they all concurred that we are now seeing particularly tough times.
My farmers are renowned for good husbandry, good farming and good farming techniques, and they go to great lengths to look after their animals and land, for high-quality care leads to high-quality meat, milk and produce, but they need help to find staff and to offer competitive training and apprenticeships. New farmers entering the profession need to have a chance to get a farm, and those leaving it need a chance to relinquish a farm at a price that will provide for their retirement. Can the Minister please look into these matters as a matter of urgency? I know significant work has been done, but certainly more work needs to be done. If the Minister cannot provide a full answer today, I am more than happy for him to write to me.
Another of my constituents is Philip Pearson, who, along with other members of his family, runs a family business called the APS Group. Set up by his grandfather after the second world war in Alderley Edge, it is now the biggest tomato producer in the UK, producing approximately 650 million tomatoes a year. He has explained quite clearly that the horticulture sector in the UK is desperately short of staff to look after crops and to cope during the harvest. He would have expected 1,500 workers, out of a peak total of 2,500, from central and eastern Europe each year—from March to Christmas—but this has not been possible this year.
A question for the Minister is: can these farmers have more visas for seasonal agricultural workers—the number must rise from the current 30,000 to at least 50,000 as soon as possible—and can farmers employ Ukrainian nationals and other migrants now housed in the UK to help deliver an increase in the number of seasonal agricultural workers?
Mr Alistair Carmichael (Orkney and Shetland) (LD)
The right hon. Lady is making a very powerful case, very little of which I would disagree with, but the food strategy is not all about agriculture. The fishing industry also needs visas for crews in particular, which has been a problem for years. Through her, can I add to the Minister’s list to take to the Home Office the plight of the fishing industry as well as that of farmers?
Esther McVey
The right hon. Member absolutely can, and indeed he has. I expect other Members to talk about the farming in and the produce coming from their parts of the country. As I said, I am focusing on Cheshire, but I believe we all share the same concerns.
In my patch, farmers are leading the way in technology, too. In the case of APS, it is developing robotics for tomato production, starting with harvesting and going right the way through to packaging. It is putting significant money and research into this development to cope with the lack of people now coming forward to work in the farming sector. However, these robots will not be ready for four to five years, so it needs short-term help now to be able to deliver on its commitment to supply tomatoes for the country.
Farmers also care deeply about the environment. This particular farm is working hard to deliver compostable packaging. It uses its tomato plant waste to develop packaging, and it is using it for other sectors, including fake leather for car seats, coffee cups and even bactericidal treatment for the NHS. It is charged a packaging tax, yet it is developing green, biodegradable alternatives, so can the Minister let me know what incentives there are for such great British technology to help the companies providing these terrific developments, which will be used not just here, but right around the world?
Jim Shannon (Strangford) (DUP)
Robotics is very important in my constituency of Strangford in two ways. First, for the dairy sector, it is a seven-figure sum to set up a new robotic milking dairy—my neighbours are doing that—and, secondly, it is a significant six-figure sum for those wanting to have tomato houses, as the right hon. Lady has mentioned. To make such vast investments happen, the Government must be involved, so the Department for Environment, Food and Rural Affairs here and the Department of Agriculture, Environment and Rural Affairs back home will have to be very much part of that process.
Esther McVey
I thank the hon. Member for joining in and adding that pertinent point.
We could not have this debate without talking about the high energy prices at the moment, with an increase of 400%, and what is happening to farms having to cope with those increased costs. For APS, this has resulted in reduced production of UK tomatoes and other foods, because the costs of production are not recovered through higher prices. Farmers must be mindful of passing on higher prices to customers—if they can, as the supermarkets and shops the food goes to will not accept them—so we must be mindful of how we support farmers.
That company has even developed a combined heat and power plant, which supplies 3 MW of power to Alderley Edge, and it uses the waste heat and the carbon dioxide from that to grow their crop. I wonder whether it can get some recognition that it uses carbon dioxide from power generation to produce food, because that would help it to offset the huge increases in energy cost. I know the Department for Business, Energy and Industrial Strategy is reviewing the move from the European Union energy trading scheme to the ETS UK equivalent post Brexit, but can the Minister liaise with his ministerial colleague at BEIS and give me the latest news on that?
Food production is essential for the delivery of the environmental benefits on which the Government plan to centre in their agricultural support policy, but unless we recognise the dual role of farmers as food producers and conservationists, we risk turning farmers into environmental contractors with little incentive to continue farming. That would do enormous damage to the jobs and communities that depend on farming, as well as weaken our food security. The strategy needs to be clearer in linking food production to action against climate change and enhancing the natural environment.
My final plea is for greater clarity on food labelling, so that the high standards of British food are known and recognised—so a shopper knows the quality of the produce and where it is from. Buying British and locally, for me that means buying from Cheshire, is important not just because of the high husbandry standards of UK food but the low transport mileage to get from field to fork. That low transport mileage is particularly important if we are concerned about the environment. As my beef and sheep farmers say, it is better to have high-quality beef and lamb from Cheshire than chickpeas from halfway around the world. [Interruption.] I thank Members for the cheers for that.
On food standards, it is important when the Government are negotiating and implementing free trade agreements to avoid undermining the domestic sector for farmers and growers and reducing standards. In its report on the UK-Australia free trade agreement issued on Friday 17 June 2022, the Environment, Food and Rural Affairs Committee concluded:
“In practice it appears unlikely that food produced to lower animal welfare standards will enter the UK as a result of this deal.”
That is positive news, but my farmers are calling for greater transparency on food labelling. Like me, they believe in choice, but we only have choice when we have knowledge of what we are choosing and what we are choosing from.
Geraint Davies (Swansea West) (Lab/Co-op)
I sit on that Committee and we observed that the average size of a sheep farm in Australia is 100 times the size of one in Wales, and they practise mulesing—shearing the back- sides of sheep in a painful way without anaesthetics—and transport cattle for 24 hours. So there is a clear problem of British producers being undercut by inhumane welfare practices and massive intensity of production.
Esther McVey
That relates to the transparency that some people are calling for to know what they are eating and enjoying, to appreciate the difference in cost and the treatment the animals have gone through. Fair competition can only really come from accurate labelling and transparency on produce. The UK produces some of the best food in the world, with the highest standards of safety and animal welfare, and it is only right that people in this country know what they are getting.
Tatton farmers and producers are hard-working, dedicated to the sector, industrious and experts in their field, with many generations of experience. They want to help solve the food security issues that this country is facing, but along with this strategy, which goes some of the way, and along with awareness of what is happening around the world, more assistance is needed to help our farmers here and now with the problems the world is facing.
Kerry McCarthy (Bristol East) (Lab)
I thank the right hon. Member for Tatton (Esther McVey) for that comprehensive introduction. It means, I hope, that I can keep my remarks quite short. I agree on a lot of what she said, although she may not be surprised to hear that I do not agree with her about chickpeas. Hodmedod, a really good British pulse grower, has been growing them in Norfolk for the past few years and I urge her to support it in its efforts. There is so much potential and growing pulses here is really good for the soil. I can wax lyrical about things like chickpeas.
Esther McVey
I want to explain that I make a fabulous chickpea soup and stew. If anyone would like to know the recipes, I will be more than happy to share them.
Kerry McCarthy
I make a very good chana dal.
The debate is about food security, which the right hon. Lady covered in detail, but also about the national food strategy. I pay tribute to Henry Dimbleby, who put a huge amount of work into the strategy. I have a well-thumbed copy of the strategy document; it is almost like a Bible to me, giving an overview of all the different aspects of food policy and what we need to do.
I think Henry should feel let down by the inadequacy of the Government’s response to that document. I want to highlight some of the things the Government should be doing more on. The work was commissioned by the Department for Environment, Food and Rural Affairs, and he was an executive director there. It is disappointing that the Government are not treating that as the Bible for how to take things forward.
Food poverty is now far worse than when Henry Dimbleby started that work. We have seen frightening figures from the Office for National Statistics this week showing how prices of basic foodstuffs have shot up: vegetable oil by 65%; pasta by 60%; bread by 38%. The Food Foundation recently reported that 18% of households, and 26% of households with children, have experienced food insecurity in the past month. That is nearly 10 million adults, and around 4 million children. Many of those surveyed said they have cooked less, eaten food cold, turned off fridges and washed dishes in cold water because of concern about energy bills and rising inflation. Many were buying less fruit and vegetables.
On “Newsnight” last week, the former Children’s Commissioner, Anne Longfield, said she had never seen child food poverty on this scale before. She called, as did Henry Dimbleby, for Cobra to be convened. I raised that at Cabinet Office questions this morning and got a response about how the Prime Minister wanted compassion to be at the heart of what he did, but I did not get a response on how a cross-departmental approach to tackling food poverty could be steered by the Cabinet Office. A cross-departmental approach is needed. As Henry Dimbleby said when giving evidence to the Environment, Food and Rural Affairs Committee last week, we need a structural mechanism to drive progress. If it is not Cobra, I would like to know from the Minister what mechanism he envisages would work.
Cobra is also very good at looking at granular detail, which is important because this calls for a localised response. We can express some generalities about food poverty, but Bristol, for example, which is known to be quite a foodie place, also has two of the top five food deserts in the entire country. There are estates in south Bristol where it is very difficult to access affordable and healthy food. So this needs to be done at a local level. My first question to the Minister is about how he sees that overarching response. Would DEFRA be leading? Does he see a role for Cobra?
In terms of swift action, the national food strategy is clear that extending eligibility for free school meals is one of the best levers we have. Extending it just to families on universal credit would feed an extra 1.4 million children. Healthy Start and holiday hunger schemes are also important.
Kate Green (Stretford and Urmston) (Lab)
I am grateful to my hon. Friend for drawing attention to the importance of families being able to afford healthy food—all the more important given the rising cost of living. In relation to Healthy Start, she will know that take-up of these essential vouchers that provide fresh fruit and veg, and milk and vitamins to pregnant and new mums and their children is at only about 60% across the country. Will she support me in calling on the Government to work across Departments so that those applying for universal credit who are also eligible for Healthy Start are automatically registered for that Healthy Start support?
Kerry McCarthy
I thank my hon. Friend for that intervention. As I understand it, next week she will introduce a Bill, which I very much support and I hope that the Government will, too.
I do not have much time to talk about the importance of healthy diets, but does the Minister know what has happened to the health inequalities White Paper? Will we see that soon?
The national food strategy approach on junk food is quite straightforward: it is about restricting advertising and promotions, and targeting ingredients. Some people I know are concerned that that will mean increased costs for consumers, who can ill-afford to feed their families as it is. However, the suggestion is not to tax food in the shops but, for example, to tax sugar in the huge quantities bought by the food manufacturers, so it would be in their interests to reformulate their products to avoid that tax. We saw that happen with the soft drinks levy. I would be interested to know what the Minister thinks about that.
There is all this concern about the nanny state and not wanting to dictate to people what they do and do not eat. However, we accept that action on smoking is important for public health reasons and that action on alcohol abuse is important. When we look at the cost to the NHS of diet-related diseases and ill health, it seems a no-brainer to me to take an interventionist approach on this, too. It is not about telling people what they can and cannot eat; it is about helping them to make the right choices for themselves and their families, making sure that the education is out there and giving financial incentives such as the Healthy Start scheme.
In terms of other levers that could be used, public procurement could make a huge difference. The DEFRA consultation on public sector food and catering closed on 4 September. Could the Minister tell us when we will hear the results from that?
This may be going back to chickpeas, but the Mayor of New York, Eric Adams, who describes himself as an imperfect vegan—I suppose that is better than nothing—has introduced a scheme whereby the default option for catering in New York hospitals is plant-based. That does not mean that people cannot choose meat-based options or things that are not plant-based, but apparently it is proving to be really popular and there is good take-up. Again, that is a way of encouraging people down the path of taking a healthier option. I hope the Minister agrees that much of the food served in our hospitals—regardless of whether it is of animal origin—is not the sort of food we should be serving people we are trying to make healthier and better.
Kate Green
In that regard, my hon. Friend will be pleased to know that Healthy Start does support the provision of plant-based meals.
Kerry McCarthy
I am glad to hear that; it is a good step. I will not go into the environmental arguments. I hope that people accept that I am not trying to force people down a particular path, but the Climate Change Committee, the UN and several Cabinet Ministers have accepted that, for environmental and health reasons, we could do with reducing meat consumption.
I turn to the need for a land-use framework. I understand that the Government intend to publish one next year. Land is a finite, scarce resource, but we do not always treat it as such. We need to be strategic about how we use it for food, carbon sequestration, biodiversity and fuel. Where possible, “best and most versatile” land should be used for food growing,
It is nonsense for the Government to seek to reclassify poorer-quality soil as BMV as part of their war on solar farms. Is that ill-thought-out proposal still Government policy? It was a few weeks ago; I hope the Minister understands that I am finding it quite difficult to keep up. Could he tell me whether the proposal to reclassify poorer-quality land as BMV is still going to be brought through?
After yesterday’s Prime Minister’s questions, I am also not sure where the Government stand on onshore wind. Will the Minister clarify that? I am glad, however, to see that the fracking ban is back, but that one U-turn—or two U-turns—has left many casualties on the road in its wake. Again, that goes to the whole issue of what land is best used for. As Henry Dimbleby told the EFRA Committee last week, over the seven or eight decades since the war, we have been steadily producing more and more food on the same amount of land. He said:
“That is making the land sick, destroying the environment and driving out nature.”
What he said about the need for the land to be carbon-negative—not net zero—was spot on. The potential for carbon sequestration is huge, and by taking some of the least productive agricultural land out of production, we could enhance biodiversity at the same time as creating natural carbon sinks.
Some 20% of our farmland—mostly peatland and upland—produces only 3% of our calories. Henry Dimbleby argued that about 5% of that should come out of farming. The rest of the farmland would be higher yielding, with lower inputs and lower environmental costs.
Mr Carmichael
May I warn the hon. Lady about the law of unintended consequences? By way of illustration, I offer the example of my own family farm on Islay, not in my constituency but on the west coast. Our farm sits in a site of special scientific interest designed to protect choughs, which are a highly endangered species. However, chough numbers continue to decline because the way in which land is farmed discourages the presence of cattle and, to encourage chough, both sheep and cattle need to be on that land. If she is not careful, the sort of blunt tool that she is talking about could work to the detriment of the chough population.
Kerry McCarthy
I do not know why the right hon. Member says that I am suggesting a blunt tool.
Kerry McCarthy
Yes; Henry Dimbleby suggests that that 5% should come out of production. However he does not dictate that that should be anywhere that, perhaps, does not have certain productivity levels or does not do this or that. That brings me neatly to my concluding point.
Sir Geoffrey Clifton-Brown (The Cotswolds) (Con)
Will the hon. Member give way?
Kerry McCarthy
I think that the hon. Gentleman will make a speech, so I will let him make his comments then.
This is where the environmental land management scheme comes in, which is a sophisticated approach and not a blunt tool. It is about looking at everything taking place on the land, including what is being done to support nature and biodiversity. I would think that the farmland mentioned by the right hon. Member for Orkney and Shetland (Mr Carmichael) would very much come under those criteria; I hope so. My final question to the Minister is: where are we now with ELMS? Farmers are desperately seeking certainty on it. Will he confirm that the public money for public goods approach will still underpin support for our food and farming system?
Jo Gideon (Stoke-on-Trent Central) (Con)
It is a particular pleasure to follow the hon. Member for Bristol East (Kerry McCarthy), with whom I sat on the all-party parliamentary group on the national food strategy, which has been disbanded. She covered a comprehensive range of issues that needed to be spoken about, so I will try not to cover some of them.
I have consistently highlighted the need for a robust food system to ensure that every one of our constituents has access to nutritious, affordable food. In achieving that, we must safeguard our countryside and restore the balance of nature. We need to reduce the health problems that result from poor diets, and we can accomplish that only by working together—both across all Government Departments and more widely in society—from field to fork.
The food system underpins our economy and security, and the health of our planet. Without restoring equilibrium to our food system, we will continue to have food production that depletes nature and makes us unwell. As the world faces ever more environmental and social challenges, ensuring a well-functioning and equitable food system becomes a matter of strategic importance. Food security depends on global peace, stability, and a healthy planet and population. We have been facing a threat to all three of those.
The war in Ukraine has seen millions across the world put at risk of starvation. Ukraine is commonly referred to as the breadbasket of the world. It boasts some of the most fertile land on Earth, with rich black soil—chernozem—perfectly suited to growing grains and producing and exporting vast amounts of barley, corn, rye and wheat. Ukraine ranks first in the world in global sunflower production and export. Even after the war is over, it is likely that up to 50% of the land will have been rendered unproductive by landmines, which will take many years to clear.
As buyers have looked to find alternative supplies, international commodity markets have faced turbulence and prices have risen. That affects the price of basic foods in shopping baskets in our local supermarkets.
Russia is one of the biggest exporters of fertilisers. Farmers in the UK have concerns about input costs—particularly about fertilisers and animal feed—as well as energy costs. Indeed, agricultural commodity prices have always been strongly correlated to the price of energy. We forget that energy prices were increasing before the war in Ukraine, and as a net importer, the UK is exposed to the increasing volatility in gas prices. Energy inputs for farms increased by 34% between January and April 2022, and farm motor fuel costs increased by 30% over the same period. That comes at a period of significant economic turmoil following the effects of a global pandemic, when the food supply chain has had to respond to a surge in demand due to panic buying. A cluster of hot, dry summers has led to crop failure and nature loss, making our land less productive. We will all notice the impact on familiar products. I read recently that there is a challenge with tomato ketchup, which is a key ingredient of Staffordshire oatcakes. It may become a rarer commodity as climate change threatens to halve the harvest in the coming years.
Fear of food shortages from multiple fronts has changed our attitude towards food. Increasingly, purchasing decisions are based on affordability and choosing the healthy option is more difficult than before. Lack of money means cold food and cold water. Some 71% of households who experienced food insecurity in the past month said they have cooked less, eaten food cold, turned off fridges and washed dishes in cold water.
When families are being faced with the question of whether to eat or heat, it is more important than ever that we should have a national food strategy in place, aligning the nation’s hunger and health with UK climate goals and UK farm sustainability. Access to good food is essential to improving life chances and health must be a focus of our food production. Whatever the cause, we must recognise that the challenges around access to a healthy diet are major indicators of inequality. As I think the hon. Member for Bristol East mentioned, 18% of all households experienced food insecurity last month, compared with 54% for households on universal credit, so any Government policy developed needs to address that disproportionate impact.
Foods that are bad for our health should not be the cheapest foods on the market, yet people are having to compromise the quality of their diets to cut food costs. The Food Foundation suggests that of those experiencing food insecurity, 58% said they were buying less fruit and 48% said they were buying fewer vegetables. One young person from Bite Back 2030 said:
“There’s two chicken shops about a one-minute walk from my school that sells two wings and chips for £1. A school dinner is £2.40.”
This is a serious issue. People are being forced to choose the cheapest calories, which are typically the least healthy. Families with lower incomes are not going to be driven by whether labels say food is high in calories, fat, sugar and salt. We should probably check those things, but we do not because the driver is money and that is what is affordable and within budget. Good food policy needs to reduce and rebalance the bombardment of unhealthy food and use the revenue raised to make more affordable, accessible, easy and appealing food for those on low incomes.
We see the need to work closely with the food and drink industry to ensure that our whole population can afford good food, but tackling obesity is also central to our commitment to levelling up. We need to support healthier options and behaviours by addressing social factors that lead to obesity and making them more conducive to healthy living. Underpinning any economic levelling up must be a levelling up of diet-related life choices.
Because I care passionately about the importance of fixing our food system from the triple challenges of climate change, biodiversity loss and diet-related ill health, I am hosting a food summit at Staffordshire University in Stoke-on-Trent on 4 November. I am delighted that the author of the national food strategy report, Henry Dimbleby, will be opening the summit. We will have a big conversation about food, and about inspiring new thinking and embracing new expectations of our food system, celebrating innovators and shining a light on the great work already under way. I think my right hon. Friend the Member for Tatton (Esther McVey) mentioned some of that work on innovation already.
Under the current food system, the amount of food being produced from a given area of land has increased and the amount of other life occupying that same area of land has decreased. Data from the Department for Environment, Food and Rural Affairs shows that wheat yields in the UK have doubled from 1970 to today. Yet through that time, we have also seen the number of farmland birds decrease by 54%. We have touched on land use, so I will skip over it, but it is very important that we have a clear understanding of how we should use land.
We need to recognise the dual role of farmers as food producers and conservationists, but we have to be careful not to turn farmers into environmental contractors with little incentive to continue food farming. Therefore, the food strategy could be clearer in linking food production to action against climate change and action to enhance the natural environment. Without such action, climate change further threatens to cause crop failures and nature loss, which makes our land less productive. Our priority must be looking at how we can reduce the environmental impact of the foods we consume, while making it easier and cheaper for people to consume healthier and more nutritious food. To build national resilience to food insecurity, we need to grow—quite literally—our local food production and enable smaller food businesses to thrive.
The strategy is right to recognise that promoting local food and drink can also increase cultural identity and community pride. That, in turn, makes an area a more attractive tourist offer, while also ensuring the resilience of the local food supply and supporting farmers and small producers. Growing community involvement in the redistribution of food will help us to minimise food waste and ensure that food surplus from the supply chain is not wasted.
I welcomed the emphasis that the Prime Minister placed on delivering the 2019 manifesto commitments. The manifesto has high aspirations for agriculture, food standards, children’s dietary health and levelling up opportunities, which are impacted directly by access to good food. Research has already been conducted on health disparities, and this could be considered within the compassionate framework that the Prime Minister has committed to, so the motion has my full support.
Several hon. Members rose—
Madam Deputy Speaker (Dame Eleanor Laing)
Order. I hope we can manage without a time limit this afternoon. It is a good-natured debate and everybody appears to be behaving quite well. If speeches are around eight minutes, then everyone will get a fair chance.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
Thank you very much, Madam Deputy Speaker—I will see what I can do about that!
First of all, I remind the House of my entry in the Register of Members’ Financial Interests. I congratulate the right hon. Member for Tatton (Esther McVey) on securing the debate and I thank the Backbench Business Committee for granting it. This is an enormously important and timely subject for the House to be debating.
The cost of food and where people put their money at the moment is probably the uppermost consideration in the minds of all our constituents. I hope the Government will bear that in mind when they think about the wider policy and strategy, because the implications for some of what we are seeing at the moment could be profound for both producers and consumers. When people are primarily driven by price—I think that is their primary consideration at the moment—and they go to a supermarket and are looking for the cheapest food on the shelf, they are not necessarily going to find it with a Union Jack, red label or saltire on it. At a time when the Government are seeking to increase, through the variety of trade deals we have, the range of foods coming into this country, which may not have been produced to the same environmental and welfare standards that we are accustomed to, the damage that could be done to our own producers could be long-term and profound.
I do not want to detain the House for too long today, not least because the right hon. Member for Tatton was comprehensive in her introduction to the debate. I can say that there was really nothing with which I disagreed in her speech—I am agnostic on the question of chickpeas, but apart from that. It is right that we should consider for a moment the role of our food producers in food strategy and food security, and particularly our fishermen, farmers and fish farmers. Aquaculture is one area of food production that offers a real opportunity for producing high-quality protein at affordable prices, but which also brings with it a number of challenges and opportunities.
This issue also strikes at the heart of the role of Government. There are things that the Government can do, such as on food labelling and encouraging people to eat more or different fish or to use food in a different way—that is perfectly legitimate. There is an obvious role for the Government, for example in the production of support payments for farmers. At other times, however, the role of Government is to get out of the way and allow food producers to get on and do what they do best. The Minister, with his background, will be alive to that tension in Government.
For farmers, fishermen and fish farmers, the many challenges result in a perfect storm. The rising cost of energy has had a wide range of impacts; the cost of fertiliser is the one that is spoken of most frequently, but the costs of running machinery, such as tractors, are also affected. With the agricultural industry facing an uncertain future, in particular, regarding the future of support payments, there is real anxiety in the industry about what the future holds.
Let me say parenthetically that the suggestion of support payments being subsidies for farmers has to stop. Support payments for farmers are actually support payments for, probably, consumers and supermarkets. It is their route to ensuring that cheap food keeps being produced in this country—it is not just farmers who benefit from support payments. One thing that the Government could do as part of the food strategy is to look at how the big supermarkets have a real, adverse impact on how farmers can get their food on to the shelves. There is a massive imbalance of power. A few years ago, we started the Groceries Code Adjudicator. It has not had the effectiveness that I hoped it would, but that issue has to be revisited through whatever means we can.
One of my frustrations relating to the future of support payments is that we see that as being about either agriculture and food production or environmental goods. From my experience as somebody who lives in and is part of an agricultural community and who was brought up on a farm, that is not an either/or—it is both. Farmers are working the land in a way that would maintain the richness of our countryside’s ecology, especially in many areas that are less productive, where the land is not of such good quality. I offered an example from my experience to the hon. Member for Bristol East (Kerry McCarthy), but there are others from my constituency. I see the damage that is done to crops grown in Orkney by barnacle geese, and Orkney is not a great cropping county. The balance between what farmers can do and the challenges of nature has really fallen out of kilter there.
Our food strategy needs to be holistic; we cannot allow it to be silent on things. It is very well to say that we will have visas to bring in workers to pick fruit or to work on fishing boats, or whatever else it may be, but that is of absolutely no use if we have no housing in which to accommodate them. Housing in our rural communities is a massive issue. My hon. Friend the Member for Westmorland and Lonsdale (Tim Farron) speaks about that issue frequently.
On transport, it frustrates me beyond measure that it seems to be a massive surprise to our shipping companies every year that suddenly in October, crofters start wanting to sell their lambs and to export them to the Scottish mainland. We need extra capacity in our ferries at that time. A bit more joined-up thinking in Government, wherever that is, would allow us to put food policy at the heart of Government and Government strategy. In that way, there would be a win for us all.
Dr Matthew Offord (Hendon) (Con)
It is a pleasure to speak in this debate, and I congratulate my right hon. Friend the Member for Tatton (Esther McVey) and the hon. Member for Bristol East (Kerry McCarthy) on securing it. I have been calling for a national food strategy for many years. Like the hon. Member, I agree that the food strategy is not about the nanny state; it is a road map, putting a spotlight on the path that we should tread as a nation.
The national food strategy mentions food security a lot. Many of us are concerned about that, but what is food security? Academic research on that issue found that there are more than 200 definitions of “food security”. The NFS, however, defines self-sufficiency as the ability of a nation to produce its own food, but under that definition the UK has not been self-sufficient in food security for the past 176 years. We are all aware of the problems with the blockades during the first and second world wars. The Agriculture Act 1947 was designed to improve food security, but I am not convinced that we have since achieved that.
Many people say that food security is all about shortage, but we have to ask ourselves, “Is there actually a shortage of food?” No, there is not. Global food production is forecast to be higher this year than last. If England’s 2019 wheat crop had been used for human consumption alone, it would have provided 2,500 calories per person per day for 63 million people while using less than 20% of our agricultural land.
Globally, a large share of crops are used to fuel cars and feed livestock. In the US, a third of the maize crop is turned into biofuels in a process that is worse for the climate than burning fossil fuels. Grain is expensive not because it is scarce, but because we feed most of it to livestock. Animals consume a disproportionate amount of feed to supply a small amount of meat. That ensures that 70% of farmland produces just 10% of the calories manufactured in the UK each year.
Some hon. Members will be able to see where the debate is going. The issue of meat consumption is important to many people in the United Kingdom, and the popularity of vegetarianism and veganism is more important than ever. I will declare an interest: I have been a vegetarian for 39 years—not for moral or ethical reasons, but simply because I do not like eating meat. The hon. Member for Bristol East is a vegan, probably for the same reason, so I share her love of chickpeas rather than of Cheshire lambs. There are alternatives. I would never stop anyone eating meat, and I feel that everyone has the right to do so. It is important to many people and they enjoy it, so we should let them continue to eat meat.
However, the food strategy has one area in which the Government have missed a trick: sustainable protein. The Government have the opportunity to become a global leader in the sustainable protein space. When I say protein, I mean plant-based or fermentation-made and cultivated meat, eggs, dairy and seafood. If we establish the UK at the forefront of the protein transition, we will help to make the UK’s food system more resilient, healthier and more sustainable. At the same time, the industry would align with many of the UK’s existing policy commitments, including reaching net zero carbon emissions by 2050, addressing the looming threat of antimicrobial resistance and championing animal welfare. It would also further cement the UK’s reputation as a climate leader and a global scientific superpower.
Making meat from plants and cultivating it from cells presents enormous opportunities to provide the British public with the familiar foods that they want, but at a fraction of the external cost to the environment and planetary health. Plant-based meat production results in up to 90% fewer greenhouse gas emissions and uses up to 99% less land than conventional meat. When produced with renewable energy, cultivated meat could cut the climate impact of meat by 92% and use up to 95% less land. In addition, those sustainable proteins are free from antibiotics and involve no risk of the emergence of zoonotic diseases, which is associated with raising and killing animals for food.
Back in June, I asked the Government whether they would consider sustainable protein as part of the national food strategy. They said that it was a very important issue, on which they were very keen, but they decided not to include it as part of the national food strategy. I therefore ask the Minister to do so today. This is an opportunity not to prevent people from eating meat, but to give them a choice. As a vegetarian, I would have the choice to eat such a product, whereas other people would have the choice of eating what is considered freshly reared meat or something that has been created. That could also help to address some of the issues surrounding food labelling. I know that many colleagues share concerns about production methods in certain religious communities, so the alternative protein market would allay some of those concerns.
I ask the Minister to do four things: establish a strategy to make the UK a global leader in the sustainable protein space; invest in open access research and development for sustainable proteins; ensure a fair and robust regulatory plan for the market; and invest to ensure a dynamic industry ecosystem. That could help many parts of the world, and the UK could really take its place as a global leader in the market. Rather than cutting down on choice, it would extend choice to our constituents.
Geraint Davies (Swansea West) (Lab/Co-op)
In 2010, when the Labour Government left office, there were 26,000 people getting food from food banks. By 2021, that had increased a hundredfold to 2.6 million, and that was before the Ukraine war. Now, one in four children and one in five adults—4 million children and 10 million adults—are in food poverty, in the sixth richest country in the world. That is a catastrophe. The number of people who are in food poverty, who cannot afford to eat nutritious food and who are freezing in their house, is much, much higher than it was during the pandemic.
I am a member of the Co-operative party and the Labour party. We agree with the right to food. The right to life is in the UN charter and the UN convention on human rights, and obviously an intrinsic part of the right to life is the right to food. I support Co-op party initiatives such as Healthy Start vouchers, and it is important that they be rolled out and index-linked to keep up with inflation, but we need much more.
The co-operative movement was started by the Rochdale pioneers to stop adulterated food. It is about food, and everybody should have the right to daily nutritional food. Winston Churchill famously said that the most important asset of a country is its health; a country’s health is predicated on having enough healthy food, and the reality is that people do not have enough money to buy healthy food after taking account of the housing costs and the heating costs that they face. Amartya Sen, a famous Nobel prize winner, wrote about famines: he was focused on the developing world, but he argued that famines are not about a shortage of food, but about the conjunction of high prices with low wages in particular communities, leading to starvation.
That is what we are now on the brink of seeing in Britain. High prices are coming in—yes, because of Ukraine, but also from Brexit. The price of imports is going down as the value of sterling has gone down. We have shortages in our own production: a quarter of our fruit is not picked, we have had a mass culling of 40,000 pigs and we do not have enough people to work in abattoirs. We have problems with food production locally and with sterling being further pushed down, which is driving prices up. Some of those problems were avoidable political problems.
Alongside high prices, we have low wages. Since 2010, we have had very low growth and pay freezes. In the previous 10 years under the Labour party, or certainly in the 10 years to 2008, the economy grew by 40%. The Institute for Fiscal Studies has shown that if that trend in growth had continued, average wages would now be £10,000 higher. The country would be much more resilient to the external shocks that are now causing this catastrophe of localised famine.
The Government need to act, and act quickly. They need to think carefully about how to manage the upcoming new Budget. I know everybody thinks the national insurance abolition idea is great on the face of it, but the reality is that it will give £7.60 back to the lowest 10% and more than £1,000 back to the richest 10%. At a time when half of people on universal credit are in food poverty, we need to think very carefully about how we sustain our people and about what is right and what is effective for our nation.
We have talked about the quality of our food, but the truth is that people in poverty are often obese because they have to resort to low-nutrition, high-fat, high-salt, high-sugar products that keep them going for a long time but are not particularly good for them. That is storing up a time bomb for the NHS of obesity, diabetes, heart attacks and strokes. Health inequality is a real problem for us. Famously, in a 2014 study of many countries over many years, the OECD found a relationship between inequality and growth, namely that less inequality means higher growth and a bigger cake.
Health inequality is also linked to income inequality. I look forward to the White Paper, but we need to be serious. We need to feed our people to get a productive economy and a fair economy that we can all be proud of. I am from Wales, and I am very pleased about the initiatives in Wales that are providing universal free breakfasts and are now rolling out universal free lunches. For all children—for all the adults who sign their children up—that will be free in Wales. Henry Dimbleby, whose strategy I very much welcome, has welcomed that. When questioned by the Environment, Food and Rural Affairs Committee, on which I serve, about universal credit and levels of payment to make food affordable, he said:
“That is beyond my pay grade.”
But it is not beyond the Government’s pay grade to realise what the issues are. If children have affordable, nutritious food, their performance is better, their life chances are better, future tax revenues are better and NHS costs are lower. From UK plc’s point of view it makes a lot of sense, quite apart from being morally right.
I spoke only this week to an online audience of student unions across Wales. That was one group, of course, and I am not saying that they are the only group, but as hon. Members might expect, they face high rents, they live in houses in multiple occupation and their food costs and energy costs have gone up. A large proportion of them have something like £10 a week or less to live on after paying for utilities. They cannot afford their student learning materials. More than 90% of them face mental health problems. There is a cost of living crisis, and they also face an uncertain future in the jobs market and the mortgage market. We need to think very carefully about that.
Finally, I turn to food security. Having invaded the Crimea, Russia is now producing 15% more food. We should think about our food security. The cost of fertiliser has gone up, and we are reliant on too much. Our home production should be organic. We need spatial planning. We need a proper plan so that we do not end up with another wave of austerity that costs 300,000 lives. Instead, we should focus on the opportunity to provide all our people with decent food. We need a healthy and productive economy that is more equal and fairer, and a stronger, greener future for all, but I fear that that will only come with a Labour Government.
Sir Geoffrey Clifton-Brown (The Cotswolds) (Con)
I am grateful to have caught your eye in this important debate, Madam Deputy Speaker. May I say how delighted I am to see the Minister of State, Department for Environment, Food and Rural Affairs, my right hon. Friend the Member for Sherwood (Mark Spencer) back on the Front Bench? That is great news, because he really does know a great deal about the subject.
I congratulate my right hon. Friend the Member for Tatton (Esther McVey) on opening the debate. I look forward to being invited to have some of her excellent chickpea soup, preferably garnished with some excellent Tatton beef. I also congratulate the hon. Member for Bristol East (Kerry McCarthy). Having spent years disagreeing with her in rural debates, I agreed with nearly everything she said. On chickpeas, I hope that she agrees that one of the great challenges for British agriculture is to produce more pulses and a greater variety of them. That is absolutely possible with new varieties.
The national food strategy is an important milestone, and Henry Dimbleby was an important contributor. This week, as hon. Members have said, the price of staple foods including bread, tea, potatoes and vegetable oil has absolutely soared. Data from the Office for National Statistics collected thousands of prices from items available on supermarket websites, and food price inflation is staggering. When we look at the percentage changes in the prices of the lowest-cost products between September 2021 and 2022 we see that vegetable oil is up by 65%, pasta by 59.9%, tea by 46%, bread by 37%, and milk by 29.4%. These price increases are huge, making the weekly shop for many people simply unaffordable. The differences in price seem to be starkest in the case of food staples as opposed to luxury items: for example, the price of orange juice is actually down by 8.9%, while the price of wine has increased by only 2%. The impact on food staples will be catastrophic for those living on the breadline, who are already having to budget tightly to feed their families each week.
Food and energy prices are highly regressive, causing more of those on low incomes to pay much more as a percentage of their budgets than those higher up the income scale. Increasing food prices will soon become as big a problem as the increase in energy prices, to which much more attention has been paid in the House and elsewhere. As has already been said, 18% of all households have experienced food insecurity in the last month.
Supermarkets should be doing more to compete with each other and try to hold prices down, even if it has an impact on their profits. After all, that is what they are dictating to their suppliers—often small suppliers, some of whom will not survive this latest bout of cost and food inflation. The country’s largest supermarket, Tesco, has taken steps to ease the costs for its customers. Despite falls in profits, it is freezing prices on more than 1,000 products, while at the same time increasing the hourly rate of pay in its stores to £10.98 to help its workers.
While costs in supermarkets are soaring, the increased costs of fertiliser and feed, exacerbated by Russia’s war in Ukraine, will cause a crisis for some farmers who will undoubtedly cease to trade. The cost of potatoes in the supermarkets has recently been hiked by 13.2%, whereas farmers have seen only a 5% rise this year. I know that the hon. Member for Bristol East will disapprove, but British Sugar is to increase its wholesale sugar price by 40% by the end of the month, while sugar beet farmers have seen a substantive increase of only 30% this year, which is the first increase in three years. All this is happening in an environment where the price of fertiliser—the main cost to farmers—has increased by 300% in the last 18 months.
DEFRA urgently needs to discuss this matter with the supermarkets. They should not be raising their prices for customers by more than the increase for their suppliers, and they certainly ought not to be increasing shareholders’ profits on the back of the poorest in the country. In short, they should be exercising restraint for a short period to get us over this financial crisis. They should also continue the policy that some began during covid, and buy British wherever possible.
It is important for the Government to continue with their environmental land management scheme re-evaluation to see whether taking land out of food production for environmental schemes such as tree-planting and rewilding balances with the need to maintain the land to grow food sustainably, and to protect our own food security. In the current circumstances, in which the cost of food is so high and the poorest in our society —as has already been said—are having to rely on food banks to feed themselves, it is our duty to ensure that we can produce as much of our own food as possible to meet demand.
David Rutley (Macclesfield) (Con)
My hon. Friend is making a powerful case, because he knows a great deal about this subject—as does my right hon. Friend the Minister. Does he agree that, given the challenges we are facing, it is right to start focusing on tackling food waste? I recently met representatives of a potato business in my constituency, E. Park & Sons, and Sodexo, one of one its major clients. That focus will not just help them and their bottom line, but ensure that food is more available in these difficult times.
Sir Geoffrey Clifton-Brown
My hon. Friend has raised a point that is important in two respects: it applies not only to the food retailers and processors but to individuals in their homes, where far too much food waste goes on.
As an island nation, we should not be over-reliant on imports or the global market with the shocks that can come with that, the most recent case being the war in Ukraine. In the 1980s, our self-sufficiency in food was 75%; it has now fallen to only 60%. We need to encourage as much food production in this country as possible, so that more of the food we eat is grown in this country to keep prices at a sustainable level. Since August 2021, imports of food and live animals have increased rapidly, while exports have barely moved.
I fully recognise that environmental schemes such as tree-planting and soil improvement schemes to prevent our rivers from being polluted will help to slow climate change and improve our natural environment. However, it is also the case that as global temperatures warm, vast swathes of countries near the equator will inevitably produce less food, which means that temperate countries such as ours will have to produce more to feed the world.
Environmental and animal welfare issues are often forgotten. Either animals are having to be transported for long distances to be slaughtered, or environmental damage is caused by shipping or, worse still, flying food for vast distances across the world. The way to improve the situation is to ensure that animals are slaughtered as humanely as possible close to the farm where they are kept, and to ensure that all food around the world is consumed as close as possible to the point of production whenever that is practicable.
Let me say this sincerely to my right hon. Friend the Minister: we need to be very careful about taking land out of production. It makes no sense for a 2,000-acre good-quality arable farm in Essex which was formerly growing wheat, barley, rape and field beans to be encouraged to put all its land down to grass under the countryside stewardship scheme. Let me also say to the hon. Member for Bristol East that while I fully accept that we should be taking some of our poorest land out of production for environmental schemes, we should be very careful about taking our best land—particularly grade 1 and 2 land, in the old parlance that was used when I was training —out of production for non-food-producing schemes.
No one is keener on improving and protecting the natural environment than I am. Those of us who are lucky enough to live in the Cotswolds are eager to protect its natural beauty, and I pay tribute to my Cotswolds farmers for not only producing some of the best lamb in the country but participating fully in environmental schemes to improve biodiversity. On the other hand, everyone in the world is reliant, wherever possible, on a good supply of food at a reasonable price. If we are to reduce the amount of food that we import and have a long-term sustainable food policy, we must do more to grow and process our own food. That will help to bring down the cost of our basic food staples, helping individuals and families to shop for food without fear of what it will cost. I imagine that so many are unable to do that at present. Equally, we in the UK have the most beautiful countryside and rivers in the world, in which we need to be careful to preserve our biodiversity.
Ben Lake (Ceredigion) (PC)
It is a pleasure to follow the hon. Member for The Cotswolds (Sir Geoffrey Clifton-Brown). I agreed with a great deal of what he said, and I should like to elaborate on some of the themes of his speech, particularly his exhortation for us to grow more of our own food in the United Kingdom. That is not only good for UK farmers and growers, but good for the health of people across these islands. It will also help us to reduce our climate footprint when we lessen our dependence on imports and global supply chains.
I do not want to labour the point, but this will be the focus of my speech. I believe that self-sufficiency plays an important part in food security, and we need to concentrate on that. A DEFRA report on food security published in 2021 stated that the UK was about 75% self- sufficient in foodstuffs that could be produced domestically. The actual consumption of UK-produced food was about 54%, which means that we were importing some 46% of the food that we consumed. When I first came across that statistic, I was interested and, indeed, shocked by the discrepancy between the two figures, but it makes much more sense when we recognise that there is a considerable variance in the level of self-sufficiency in different types of food. For example, we are 100% self-sufficient in oats and barley and lamb. That is an important statistic for me, as a proud Member for a Welsh constituency. It then goes up to 90% self-sufficiency in wheat—we heard from the hon. Member for Hendon (Dr Offord) about the real contribution that wheat growers on these islands have made in the past year—and 80% in oilseed. However, the figure stands at only 54% for fresh vegetables and 16% for fresh fruit. In discussing food security, we need to consider the foodstuffs—fruit and vegetables in this particular example—of which we clearly need to grow more.
The dependence on global supply chains for so many of our imports means that, as the hon. Member for The Cotswolds (Sir Geoffrey Clifton-Brown) explained, we are vulnerable and exposed to shocks—be they geopolitical, climate, production or logistical—that are completely beyond our control. This Parliament has perhaps experienced a few unprecedented global shocks, the first being the covid pandemic, which wrought havoc on a lot of our food production and imports, and then, more recently, the Russian invasion of Ukraine, which has had a significant impact not only on grains, wheat and sunflower oil, but on many of the import costs for domestic production—I will talk more about that.
When we look to the future of our food security, increasing climate change poses a significant risk. I mentioned that we are self-sufficient to the tune of only 16% of the fruit that we consume. DEFRA’s food security report notes that:
“There are concerns about water availability for fruit and vegetable production in many of the countries on which the UK currently depends”,
particularly on the equator, but also in the Mediterranean region.
When we discuss food security, we need to think about growing more of our own. Other Members have mentioned the shocking impact that food inflation is having on families across the country. I do not wish to labour that point further, but for a number of foodstuffs, the problem could be alleviated to some extent if we had greater self-sufficiency in the categories that they relate to.
The hon. Member for The Cotswolds, who I hope will forgive me for referring to him so often—I thought he made an excellent speech—mentioned the Groceries Code Adjudicator and the power of the supermarkets. It is not right for them to balance their books, or indeed to profit, on the backs of the nation’s poorest families. We know that some of their increasing costs are not being fed back to the primary producers. As we have discussed this afternoon, rising import costs—particularly for fertiliser and feedstock—and high fuel and energy costs are having an impact on primary producers, who are not getting higher prices for their goods from the supermarkets and their suppliers. The Government need to look again at how they can make the system fairer.
Personally, I think there is much to be said for moving away from the more globalised food system to a more local one. In that regard, I recognise that a great deal of work needs to be done to reinvest in the processing facilities that were once very local but have now been lost, such as mills, abattoirs and the like. They were once a feature of every village in rural areas; now, they are seldom found.
The rising costs on farmers are being fed through the system and, in turn, into shopping bills, but are not being recompensed by the major supplier and supermarkets. That is a serious issue that could be addressed by greater self-sufficiency. The food strategy is an opportunity to consider a holistic way of ensuring that more of the food that we consume is produced on these islands.
Ben Lake
I entirely agree. We should set an ambition not only to be self-sufficient in the food that we produce, but to move down to a more local and seasonal food system. One of my peeves is that it is still possible to buy fresh strawberries on Christmas Eve—consider the environmental cost, if nothing else. We as a society are sadly ignorant to that, and we need to learn it again.
I am conscious that I am running out of time, so I will finish with a warning to the Government: in our move—I hope—to becoming more self-sufficient in our food production, we must remember that we need producers to do the work on the land and, as the right hon. Member for Orkney and Shetland (Mr Carmichael) said, in our seas. I am afraid that in a recent survey, NFU Cymru found that of the 700 farmers it spoke to, 71% intended to reduce production in the next year, and a significant number of them were also questioning whether to continue farming in the years to come, as a result partly of higher costs, yes, but also of the cumulative impact of many years of not getting a fair deal from some of the larger supermarkets for the price of the goods that they grow and rear.
Finally, I am very concerned—I think the Government can return to this—about the need for proper land-use planning and consideration. I know that the administrative burden would cross the four nations of the United Kingdom, but we know exactly the types of land that we have, down to the field level. At the moment, I fear that when it comes to certain carbon-offsetting schemes, prime agricultural land is being sold, often to corporations that intend to greenwash their own emissions rather than contributing to the nationwide effort to reduce our carbon footprint.
Even the Green Finance Observatory has expressed concerns about the current UK emissions trading scheme system. It states:
“The elephant in the room is that offsets are fundamentally not about mitigating climate change, or even about removing past emissions, but about enabling future emissions, about protecting economic growth and corporate profits.”
Too often—and, I am afraid to say, in Ceredigion—too many farms that were prime agricultural productive land have been bought by such corporations not to reduce their emissions, but to greenwash them so that they can continue business as usual. In so doing, they reduce our own productive capacity.
Munira Wilson (Twickenham) (LD)
Given all the chat about chickpeas, I feel compelled to join in and recommend my mother’s chickpea curry or my very own Moroccan-spiced lamb shank with chickpeas. Hon. Members who want the recipes may get in touch later.
I congratulate the right hon. Member for Tatton (Esther McVey) and the hon. Member for Bristol East (Kerry McCarthy) on securing this important debate. The motion before the House notes the impact of the cost of living crisis and calls for the urgent publication of the national food strategy White Paper. I presume the White Paper will build on the Government’s food strategy, which was published back in June but was, as the hon. Member for Bristol East noted, fairly disappointing and vague in its commitments, rather than a detailed response to the Dimbleby review, which spanned two volumes and more than 400 pages.
The most glaring omission from the Government’s food strategy is how they plan to feed hungry children. That is even more glaring given that the very first recommendation in part 1 of the Dimbleby national food strategy was to extend free school meals to all households on universal credit. As that report states:
“A hot, freshly-cooked school lunch is, for some children, the only proper meal in the day, providing a nutritional safety net for those at greatest risk of hunger or poor diet.”
In the majority of schools, however, only children from very low-income households—meaning an annual income of £7,400 before benefits—are eligible for free school meals after the age of seven. That threshold is much too low—I completely agree with Henry Dimbleby. That recommendation was so central to his thinking that when it became clear that the Government were not willing to make that financial commitment, he offered them the less generous alternative—in part 2 of the report—of increasing the household income threshold to £20,000, but the Government still have not moved. All we got in the Government food strategy was a vague commitment to
“continue to keep free school meal eligibility under review”.—[Official Report, 8 September 2022; Vol. 719, c. 486.]
The Government’s position cannot hold much longer, because they know it is economically, morally and politically unsustainable amid this cost of living crisis. We know from the DWP’s own data, published in part 2 of the Dimbleby report, that nearly half the families living in food insecurity—those who are skipping meals or not eating when they are hungry because they cannot afford it—do not qualify for free school meals because the earnings threshold is too low.
A few weeks ago, at one of my constituency surgeries, I met a mother who had fled an abusive partner and was skipping her mental health medication because she was trying to save the money she would have spent on her prescription to enable her daughter to have lunch at college. That is the reality of this policy.
Pete Wishart (Perth and North Perthshire) (SNP)
Like the hon. Lady, I hope free school meals are realised across the rest of the United Kingdom. Will she congratulate the Scottish Government on introducing free school meals for all primary school pupils between primary 1 and 5, with a view to expanding it to primary 6 and 7? Every child in Scotland living in a household in receipt of universal credit gets a free school meal. Does she acknowledge that it can be done if there is the political will?
Munira Wilson
I am happy to congratulate the Scottish Government, as it has long been Liberal Democrat policy to extend free school meals to all primary-age children. I am happy to welcome that development in Scotland.
The new Secretary of State for Levelling Up, Housing and Communities—or the old one, because they keep changing—the right hon. Member for Surrey Heath (Michael Gove), told a Conservative party conference fringe event that he is in favour of expanding free school meals to all children on universal credit. The case for expanding free school meals is compelling because it is not just a welfare intervention but a health and education intervention.
The Dimbleby review reminds us:
“Children who are hungry at school struggle to concentrate, perform poorly, and have worse attendance records. More generally, children who experience food insecurity suffer worse physical and mental health outcomes.”
I appreciate that I am making the case for greater public spending when the Government are desperately searching for efficiency savings, otherwise known as cuts, to pay for their botched Budget but, as with much of education and children’s policy and spending, I ask Ministers to view this as an investment in our children’s future and our country’s future. A PwC analysis found that, over 20 years, every £1 spent on free school meals for all children on universal credit would generate £1.38 in return, including £2.9 billion in increased lifetime earnings.
The Government are keen to move people off social security and into work, yet their current policy creates a huge poverty trap that actively deters families with children from increasing their hours. A single mum with three children would have to earn £3,100 a year more after tax to make up for the shortfall of crossing the eligibility threshold for free school meals. That is nonsense.
I am proud that Liberal Democrat Ministers fought tooth and nail with Conservative Ministers in the coalition Government to introduce free school meals for every infant pupil. I am proud that Liberal Democrat Richmond Council has, this half-term, prioritised free school meal vouchers, even though the Department for Education does not fund free school meals during half-term. I am proud that it was a former Liberal Democrat Education Minister in Wales who, during the pandemic, led the way in ensuring that children got free school meals in every school holiday when the Westminster Government had to be shamed by Marcus Rashford into doing the same for English children.
Liberal Democrat Members will continue to campaign for every child living in a household receiving universal credit to get a free healthy school meal. During the cost of living crisis, we think there is a strong case for extending free school meals to all primary schoolchildren. If that is too much for the Minister to stomach, I beg him, as an absolute bare minimum, to agree to speak to his colleagues in the Department for Education about increasing the £7,400 threshold. The threshold has not increased since it was introduced in 2018, yet prices have risen by almost 16%.
The Government’s food strategy reminds us that school food is an invaluable lifeline for many children and families, especially those on low incomes, but with 800,000 children living in poverty not eligible for free school meals and with one in four households with children now living in food insecurity, too few children who need a free lunch are getting one.
One school leader in the north of England told me last week that, for the first time ever, parents were coming into some of his schools asking for a loaf of bread or a pint of milk. He is now contemplating the introduction of a free evening meal for many children in his academy trust. He is not sure how he will pay for it, because we know that nine in 10 schools will be in deficit by next September.
I read this morning that our new Prime Minister thinks education is a silver bullet, and I agree. It is the reason why I am in politics. I believe education can open doors and opportunities for every child, no matter what their background, but a hungry child cannot learn. The moral and economic case for taking action on this issue is clear. Ministers must urgently intervene so that no child goes hungry at school.
Jim Shannon (Strangford) (DUP)
It is a pleasure to speak on this issue. We had a similar debate in Westminster Hall yesterday morning, and I am pleased to see the Minister in his place. He has a deep practical interest in this subject, so I believe he will give us the answers to our questions.
I thank the right hon. Member for Tatton (Esther McVey) and the hon. Member for Bristol East (Kerry McCarthy) for setting the scene, and I thank every Member who has contributed to this debate. Madam Deputy Speaker, you are right to say this has been a good-humoured debate, and there is agreement on both sides of the House about supporting the thrust of the national food strategy.
I declare an interest as a member of the Ulster Farmers Union, which is similar to the National Farmers Union over here, and as a landowner and farmer. The world has been devastated by the adverse effects of the pandemic and the ongoing war in Ukraine, and we in Northern Ireland also have the Northern Ireland protocol. The Minister will not be surprised that I bring it up, because it clearly has an impact by continuing to subjugate Northern Ireland and damaging small food producers.
The United Kingdom still imports 46% to 47% of its food. Many people seem to be pushing reforestation, but we need to retain productive agricultural land, so I seek confirmation from the Minister that good land will continue to be used for food production. I understand that we cannot produce all the food we consume, but we need to address that issue, too. The inescapable detriment to us of the Northern Ireland protocol has been left to fester. Food and drink entering Northern Ireland from Great Britain could be hit with hundreds of pages of paperwork, hours of border checks and millions of pounds of extra cost.
In my constituency, Lakeland Dairies, Willowbrook Foods, Mash Direct and Rich Sauces all produce goods that they export. Lakeland Dairies exports almost 70% of its products, across the whole world. It has four factories in Northern Ireland and five in the Republic of Ireland, so it faces a delicate and complex issue when it comes to continuing to produce; it services a large number of dairy farmers across the whole of Northern Ireland. In my constituency, there are almost 3,000 jobs in those sectors and across the whole of Northern Ireland 100,000 jobs depend on agriculture for their future. So the situation with the protocol is the very antithesis of food security and it has the potential to severely damage supply chain resilience in Northern Ireland. That highlights the need for the smooth passage of the Northern Ireland Protocol Bill to ensure that we in Northern Ireland to continue to produce.
The House cannot ignore and disregard the invaluable contributions of the Northern Ireland farming industry. About 75% of Northern Ireland’s countryside is farmed in some way and 80% of Northern Ireland’s produce is exported. The industry is vital for the Northern Ireland economy, employing more than 3.5% of the total workforce, which surpasses the UK average of 1.2%. Again, that underlines the true importance for us in Northern Ireland of the agriculture sector. The right hon. Member for Orkney and Shetland (Mr Carmichael) is not in his place, but he referred to fishing, which is so important for us. I know that the Minister knows that, but if he gets the opportunity to come to Northern Ireland, we will show him some of the factories I mentioned and perhaps arrange a visit to Portavogie as well.
There are measures in the Northern Ireland Protocol Bill that are needed to address concerns in agri-industry, such as on veterinary certificates and on country of origin. As many Members are aware, my constituency has prolific farming, and I have already mentioned the fishing communities in Portavogie; we are seeking to increase those numbers. We face some workforce issues, which the Minister is aware of. We wish to contribute to and increase the UK’s national food security.
The right hon. Member for Tatton referred to robotics, and in farming of all types, be it cattle or tomato production, we see vast steps forward that will reduce the number of people we need to be involved. Robotics will be brought more into play. Again, I ask the Minister for more clarity on that and more help for farmers, who may have a lot of money to find. We must also combine productive farming, in order to sustain livelihoods and meet the growing demand for food, with sustainable methods.
I should also make a point to the Minister about partnerships involving universities. For example, Queen’s University Belfast has a partnership with business to produce new varieties of cereals and so on, which can give a 20% bigger yield. That is another thing that we need to look at—how what we put in the land can produce more. That will help us across the world. The title of this debate is “National Food Strategy and Food Security”, which makes it clear that this is about the national position, but we also have an obligation to look after other parts of the world.
However, we cannot reap the true benefits of the Northern Irish farming and fishing industries if the protocol continues to erect a border down the Irish sea, preventing trade between Northern Ireland and Great Britain. We need the fit-for-purpose Northern Ireland Protocol Bill, as it is, in order to secure food for the entire UK and not simply to fix the protocol for the people of the Province, although that really should be enough of a reason to implement it. I look to the Minister to be committed to it, as it will put us on an equal status with everywhere else. That is as it should be.
Claudia Webbe (Leicester East) (Ind)
I thank the right hon. Member for Tatton (Esther McVey) and the hon. Member for Bristol East (Kerry McCarthy) for proposing this important debate, and the Backbench Business Committee for granting it.
The first job of Government is to keep people safe and well. No debate on food strategy and food security is worth its name if the issue of hunger within this country caused by the UK’s gross structural inequality is not addressed. In the UK, in September, 4 million children did not have enough to eat—that is one out of every four households with children. About 3 million of those children have working parents and still face hunger, according to the Joseph Rowntree Foundation. An even higher number, one in three of our children, live in poverty and could tip into hunger at any moment. At the same time in our country, one in seven adults—about 8 million people—were forced to miss meals because they could not afford food as well as other essentials.
In my constituency, 42% of children have been living in poverty, a percentage that will only have risen as household bills rocket. The UN special rapporteur for extreme poverty visited the UK only four years ago and was shocked at what he saw then. He said that the issues of poverty, hunger and inequality were not expensive to fix, and that the Government could easily put them right if they chose to. Instead, the situation has been allowed to become much worse. Some would say that it has been knowingly accelerated. No food strategy adopted by the Government that does not address these issues is fit for purpose.
Equally, if the national food strategy does not protect the most vulnerable in society from food price increases, it may do more harm than good. There is no guarantee that the corporate giants in the food industry will not pass on tax costs to consumers. The Government must take steps to ensure that these businesses are not simply passing the cost of any future tax on sugar or salt on to consumers in order to maintain profits to pay excessive shareholder dividends and senior staff bonuses. There is no honour in making the poor pay for the rich.
The Government’s obligations under the international covenant on economic, social and cultural rights states that citizens must have access to affordable food without compromising other basic needs. But we already know that people are forced to compromise—forced to choose between eating or heating their homes. What work has been done to assess the imposition of a regulatory obligation on supermarkets, which wield incredible power, so as to protect the price of food staples to provide quality, nutritious foods to consumers on a cost recovery-only basis? I hope that the Minister can advise on the work that has been done in that regard. The Government have the power to stop allowing the UK to be a food bank nation and to stop forcing citizens to make such choices. The nation’s poverty and hunger is a political choice made here.
The hon. Member for Liverpool, West Derby (Ian Byrne) is running a campaign for adequate nutrition to be recognised as a human right in the UK, which would force the Government to take responsibility for ensuring that everyone in this country is well fed, regardless of their financial circumstances. This is a duty that this Government have shamefully neglected—just ask any teacher how many of their pupils come to school hungry each morning and struggle to study as a result, which damages their prospects of any kind of improvement in their situation.
My constituents will want to know why the Government are allowing this situation not only to continue but to explode, and why having enough to eat and decent wages to allow people to feed their children is not a human right in this country. Tragically for such people, under this Government the disaster is only set to get worse. Ultimately, I believe that the primary recommendation of the national food strategy must be to make healthy food available to the nation on supermarket shelves, priced without profit and on a cost-recovery basis only, in order to honour the Government’s obligation to ensure that everyone has the right to food.
Pete Wishart (Perth and North Perthshire) (SNP)
I congratulate the right hon. Member for Tatton (Esther McVey) and the hon. Member for Bristol East (Kerry McCarthy) on raising this important issue. This has been a largely consensual debate. I will try not to spoil that tone, perhaps unsurprisingly, Madam Deputy Speaker —not by much, anyway.
It is almost unbelievable that here we are in 2022 discussing food security, but such is the range of issues we face that we now have to confront the fact this is becoming an increasingly pressing problem. There is no doubt that the war in Ukraine has had its effect, just as recovery from covid has forced us all to look at this agenda. Governments throughout the world are now looking at their strategies to deal with what is clearly an emerging crisis.
However, it is not just here in the developed world; we also have to look at what is happening in the developing world. The International Development Committee reminded us of that, because we have not just the war in Ukraine and the recovery from the covid pandemic, but the climate crisis. Some of the biblical scenes that we have seen, particularly from the Horn of Africa, would chill any Member of this House to the bone.
In the UK, though, we have a particular and distinct problem, and it has not been mentioned at all today, which is really surprising. It is the thing that has caused most of the issues that we have in this country—Brexit. Brexit has made sure that we in the UK have a range of issues and problems that are not shared by any other comparable country in the world. It has led to a set of circumstances, which are not seen elsewhere, that have negatively and adversely impacted this country. It is just so surprising that, in all the contributions that we have had today, Brexit is the one word that has not been mentioned.
As well as Brexit, there are the economic policies that have been implemented by this Government, which have made things so much worse. Inflation in this country is running at 10.1%, which is way above anything that we see in Europe and the rest of the developed world. We have negative GDP, when GDP everywhere else is growing. Food prices are way above the 10.1% headline inflation rate. They have jumped by 14.6%, led by the soaring cost of staples such as meat, bread, milk and eggs.
We now have a term for what is going on in households across the United Kingdom. It is called “low food security”, which is where households reduce the quality and desirability of their diets just to make ends meet. Worse than that, we also have the term “very low food security”, which is where household members are reducing their food intake because they lack money or other resources for food. I know that it gets said an awful lot in this House, but it is probably an understatement to say that this winter many households will face the uncomfortable choice of whether to eat or to heat. This, in one of the most prosperous countries in the world, should shame us all.
However, it is Brexit that remains the biggest homegrown issue that has singled out the UK for particular misery, and has hampered the UK’s food production, acquisition and security. Brexit has meant that we have had to deprioritise our domestic food production, because we now have to secure these free trade deals, supporting cheaper, imported food. We have now got to the stage where the UK’s food self-sufficiency is below 60%, compared with 80% two decades ago.
In 2020 the UK imported 46% of the food that it consumed, 28% of which came from Europe. This means that the UK imports more than it exports, particularly when it comes to fruit and vegetables. That is something that will only increase unless it is addressed. In days such as these, particularly given the experience of the Ukraine war, we should be building resilience in domestic food production, but instead we are threatening it with these unbalanced trade deals.
We need only look at the deals that were struck with Australia and New Zealand to see how the market has become vulnerable to lower standards and open to cheap imports. The NFS addresses some of these issues. What it says, which I hope the Government will take on board, is that Governments should agree only to cut tariffs on products that meet our standards here in the UK.
Cheap imports are such an issue now that a farmer in my constituency has said to the BBC today that he is giving away a crop of blueberries, which would normally be worth £3 million, to the charity sector and to food banks. He reckons that that crop, which would usually get £3 million, has lost £1 million in value. It is not economically worth it for him now to take that crop to market. Donating that crop shows incredible generosity, but how have we got to this situation? This is a farm that has been in business in a very productive area of Strathmore in my constituency for more than 100 years. It is having to give away a crop because there is no value in harvesting it.
All over the UK, farmers and food producers are concerned about the pressures of rising input costs on their businesses. The National Farmers Union says that while growers are
“doing everything they can to reduce their overheads…double or even triple digit inflation”
continues to cripple the sector.
This is agflation, and it is so bad that fruit and vegetable growers face inflation rates of up to 24%. Those rapidly rising costs could lead to a drop of 10% in production and more produce being left unharvested. I know the NFU has written to the Government to call for urgent action to help UK farmers to produce enough food to keep supermarkets stocked and prices affordable.
I like the strategy; I think it is a very good thing, and I hope the Government implement it and take its recommendations seriously. Recommendation 8 calls for a guarantee that agricultural payments will stay in place until 2029. That must now happen to create a semblance of certainty. Recommendation 11 also says that £1 billion should be invested
“in innovation to create a better food system.”
So far, the Government have not committed to that, and all we hear about is closing budgets.
Thankfully, agricultural support in Scotland is entirely devolved, and we are crafting a new agriculture Bill as we speak, consulting with the sector on the way forward. Unlike the UK’s approach to farm subsidies, the Scottish Government are maintaining a singular fund that will maintain pre-Brexit levels of support for farmers. The Scottish Government are doing everything they can within their limited powers and their budget envelope to ensure food security, and are consulting on the Bill to ensure that happens. At the heart of the Bill will be support for active farming, delivering high-quality, sustainable, affordable food while meeting climate change and biodiversity goals.
But the Scottish Government are doing so much more; I want to touch on free school meals, which the hon. Member for Twickenham (Munira Wilson) raised, because we have the most generous universal free school meal entitlement of any UK nation. In Scotland, all children from primary 1 to primary 5 are entitled to free school meals during term time, as well as all children from households in receipt of universal credit, saving them an average £400 per year. That combines with the Scottish child payment, which has just been doubled to £20 a week and will be increased to £25 in November, which will also help Scottish families.
We are doing what we can to ensure that we help our constituents and the people of Scotland through this time, but we need the recommendations in this strategy—this very good piece of work—implemented as quickly as possible, and we must do more to ensure that we are food secure and doing what we can to help and serve our constituents.
Daniel Zeichner (Cambridge) (Lab)
I, too, congratulate the right hon. Member for Tatton (Esther McVey), my hon. Friend the Member for Bristol East (Kerry McCarthy) and the Backbench Business Committee on enabling this debate. I thank all hon. Members across the House for their excellent contributions and congratulate the Minister on his reappointment. I also pay tribute to all those who produce our food—the farmers, the fishers, the people in the processing sector, the retail workers and the delivery workers who keep Britain fed.
This debate is timely, but frankly it is very late—astonishingly, the UK has not had a proper food strategy since the last days of the Labour Government. As my hon. Friend the Member for Bristol East and others pointed out, we do at least have the widely welcomed Dimbleby report, called “The Plan”, which is significant in the absence of any plan from this Government—and not just the absence of a plan, but an abrogation of responsibility. It is the same old approach from this Government, leaving the food system to the supermarkets and saying, “Let them sort it out.” That is not good enough —not good enough at all.
The reason that is not good enough is because of what we have been hearing from hon. Members across the House. I will not repeat all the statistics, but the hon. Member for The Cotswolds (Sir Geoffrey Clifton-Brown) outlined some of the figures from the Office for National Statistics, as did my hon. Friend the Member for Bristol East. The appalling rise in staple prices is hitting people hard and the knock-on effect, as outlined by the Food Foundation, is that one in four households with children experienced food insecurity in September. That is a very bad place for this country to be in.
I will turn briefly to the furore around environmental land management plans for the future, which came about after the previous Secretary of State, the right hon. Member for North East Hampshire (Mr Jayawardena), instigated a review. That review gave rise to a whole train of concerns, with people speculating about just how committed the Government were to the “public money for public goods” approach. On the Labour side, we have consistently warned that complexity in those schemes would lead to low take-up. That is why we joined calls to move at pace to make them work, but it would be helpful if the Minister could give us some clarity about what the position now is. Perhaps he could today give precise details on the number of farmers who are taking up the schemes. He was reluctant to answer that question on Tuesday, although he admitted that sustainable farming incentive take-up was low, which confirmed what we had learned from the answer to a recent written question. If the money is not allocated, where will it go? I asked that question during the passage of the Agriculture Act 2020.
Moving back to the food strategy, we are two iterations of Government further on since it was produced, so perhaps the Minister can confirm where we stand on that. I am grateful to my hon. Friend the Member for Swansea West (Geraint Davies) for raising school food and obesity. The new Secretary of State has just come from the Department of Health and Social Care, but we need a strong anti-obesity strategy. Some of the mood music coming from the new Secretary of State in her previous job did not exactly convince me that she is an interventionist on such issues, so will the Minister at least tell us where the current measures in the anti-obesity strategy stand?
Will the Minister also tell us where the Government are on supply chain fairness, on Dimbleby’s very important suggestions on data, and on the future of the Groceries Code Adjudicator? At a time of such pressure on producers, the notion that in the name of deregulation the role of the GCA will be subsumed into the Competition and Markets Authority rightly caused huge alarm. Given the CMA response a couple of days ago, which was subtle but, I thought, damning of the Government’s responses, perhaps the Minister could tell us where that has got to. Where is the review of the dairy sector? Where has the review of the pork sector got to?
Let me move briefly on to food security and land use. There is an e-petition attached to the debate, and these issues have clearly been much discussed. We have been arguing for a long time now that we need a national land use framework. We note the work of the Lords Committee, and that the previous Secretary of State admitted that he did not much like plans in general, so what is the Minister’s view? Will he explain the Government’s position?
Briefly, I will raise the issue of bird flu. We raised it in the debate on Tuesday, and we know that it is very serious. I genuinely hope that the Minister will come back to the House with a statement soon. There are a range of important issues around housing orders, the supply of catchers, culling capacity, Animal and Plant Health Agency resource, and compensation. Without compensation, producers will not have the confidence to restock. Relying on imports would be pretty risky when other neighbouring countries are suffering similarly. This is really important in terms of food security. Chicken and eggs are pretty basic components of what we eat. It is a horrible disease, and it is dreadful to see what has happened to the wild bird population. It is awful for those working in the industry, and it is worthy of the Government giving it some attention on the Floor of the House.
When we look at the whole area of food policy, the conclusion that we come to is that there is a series of unconnected initiatives, whether in farming, fishing or food, and a lack of an overall plan. In particular, as Lord Deben has commented in the other place, there is no overall plan to meet the vital climate targets, which are so important given the issues we face.
The Government may not have a plan, but the Opposition do. We have a plan for the future of the country’s food strategy and security. We want to make, buy and sell more in the UK. We stand by the principles of public funds for public goods, but we see delivering food security harmoniously with the environment as a public good in itself. We will use public procurement contracts to drive the purchase of locally sourced food. We will introduce breakfast clubs to help to tackle some of the school food poverty and obesity challenges that people have referred to. With Labour, every public body will be tasked with securing more contracts with local producers, and we will legislate to require reporting on how much they are buying from domestic sources with taxpayers’ money, which we believe will help British farmers and local food producers.
Labour is committed to fixing the food system in order to meet the health and environmental challenges identified by Henry Dimbleby in his national food plan, to end the growing food bank scandal, to ensure that all families can access healthy, affordable food, and to improve our food security as a country. With Labour, Britain will buy, make and sell more here, and ensure that our schools and hospitals are stocked with more healthy food produced locally. We will change the food system to meet the health and climate challenges of our age, and we will do it by having the plan that the current Government so sorely lack.
The Minister of State, Department for Environment, Food and Rural Affairs (Mark Spencer)
I congratulate my right hon. Friend the Member for Tatton (Esther McVey) and the hon. Member for Bristol East (Kerry McCarthy) on securing this important debate, and I thank the Backbench Business Committee for allowing the time for it.
We are fortunate in the United Kingdom to have a highly resilient food supply chain that is built on strong domestic production and imports via sustainable trade routes, but it is worth acknowledging that food security has become a very hot topic politically. When I was elected in 2010, I highlighted food security as a very important topic in my maiden speech. It is not new to me; it is something I have been worrying about and concentrating on for most of my political career.
But we can meet these challenges. Domestic production figures have been very stable for most of this century. We produce 61% of all the food we need and 74% of that which we can grow in the UK. Those figures have changed little over the past 20 years. When food products cannot be produced here, or at least not on a year-round basis, British consumers have access to them through international trade. That supplements domestic production and ensures that any disruption from risks such as adverse weather or disease does not affect the overall security of the UK’s supply chain. I acknowledge that, as many Members have said, educating our consumers on what is seasonal and what is grown in the UK is a very healthy thing to do.
Across the UK, 465,000 people are employed in food and non-alcoholic drink manufacturing. We are proud to have a collaborative relationship with the industry, which allows us to respond to disruption effectively, as demonstrated in the response to the unprecedented disruption to supply chains during the covid-19 pandemic. DEFRA monitors food supply and will continue to do so over the autumn and winter period. We work closely with the industry to keep abreast of supply and price trends, which will be particularly important in the run-up to Christmas.
We recognise that rising food prices are a big challenge for household budgets. The latest figures for year-on-year food and drink prices show an annual rate of inflation of 14.6% in the year to September 2022, up from 13.1% in August 2022. While we remain confident in sectors being able to continue to deliver products to consumers, my Department continues to work to identify further options that will help businesses to reduce costs and pass on those savings to consumers.
The Government have committed £37 billion of support to households with the cost of living. That includes an additional £500 million to help with the cost of household essentials, bringing total funding for that support to £1.5 billion. In England, this is in the form of an extension to the household support fund, running from 1 October 2022 to 31 March 2023.
We must be prepared for the future. That is why we published the Government’s food strategy in June, setting out our plan to transform our food system, and I have a copy of it here. The hon. Member for Cambridge (Daniel Zeichner) said we had not given any thought to that; I hope he has had an opportunity to read the Government’s food strategy, to which the hon. Member for Bristol East referred. The strategy puts food security right at the heart of the Government’s vision for the food sector. It sets out our ambition to boost food production in key sectors and to create jobs, with a focus on skills and innovations, ensuring that those are spread across the whole country. Our aim is to broadly maintain the current level of food we produce domestically and boost production in sectors where there are the biggest opportunities. Setting this commitment demonstrates that we recognise the critical importance of domestic food production and the role it plays in our food security.
As the Prime Minister said only this week, at the heart of this Government’s mandate is our manifesto, which includes our commitment to protect the environment. The Government are introducing three environmental land management schemes that reward environmental benefits: the sustainable farming incentive, local nature recovery and landscape recovery.
Our farming reforms are designed to support farmers to produce food sustainably and productively, and to deliver the environmental improvements from which we will all benefit. I assure the House that boosting food production and strengthening resilience go hand in hand with sustainability—we can do all those things. We can make sure that we increase biodiversity, we can improve the environment and we can continue to keep ourselves well fed in the UK.
Although our food supply chains remain strong, some specific commodities have been affected by the invasion of Ukraine, especially sunflower oil. The Government are supporting industry to manage those challenges. For example, DEFRA worked closely with the Food Standards Agency to adopt a pragmatic approach to the enforcement of labelling rules, so that certain alternative oils could be used in place of sunflower oil without requiring changes to the labels. DEFRA will continue to engage with the seafood sector, including the fish and chip shop industry, to monitor the impacts and to encourage the adoption of alternative sources of supply, which will be of great importance to the right hon. Member for Orkney and Shetland (Mr Carmichael).
The food strategy announced our intention to publish the land use framework, to which several hon. Members referred. We will set out our land use change principles to ensure that food security is balanced alongside climate, environment and infrastructure outcomes. We are seeking to deliver as much as we can with our limited supply of land to meet the full range of Government commitments through multifunctional landscapes.
We also need to recognise that the production of food and the support of our farmers have an impact on those landscapes. It is no coincidence that the beautiful stone walls in North Yorkshire, which tourists enjoy going to see, are there to keep sheep in. If we remove the sheep—
Mark Spencer
And the Cotswolds, I hear an interested hon. Member say from a sedentary position. Similarly, it is worth recognising that the beautiful rolling moors of Exmoor and Dartmoor look as they do only because of the food that is produced and the sheep that graze on them.
The food strategy also sets out the significant investments that are already being made across the food system, including more than £120 million of joint funding with UK Research and Innovation in food systems research and innovation; £100 million in the seafood fund; £270 million across the farming innovation programme; and £11 million to support new research to drive improvements in understanding the relationship between food and health. That is vital; agritech and investment in new technologies will help us on the way.
We are taking steps to accelerate innovation by creating a new, simpler regulatory regime to allow researchers and breeders to unlock the benefits of technologies. My right hon. Friend the Member for Tatton talked about her constituent who is producing an awfully large number of tomatoes—I forget how many.
Mark Spencer
That could produce quite a lot of ketchup. New technologies in harvesting and production will assist those industries as we move forward. I hope that hon. Members on both sides of the House will be here to support the Genetic Technology (Precision Breeding) Bill as it passes through the House on Monday.
In the eight minutes that I have been allowed, it has not been possible to answer all the questions of Back Benchers. I think there were 11 speakers, which would have given me 40 seconds to respond to each contribution. If there are comments or questions that I have missed, however, I would be more than happy to write to hon. Members; I understand that this is a topic of great interest to hon. Members on both sides of the House.
Food has rarely been as high on the Government’s agenda. It is a critical issue and the Government are prioritising it accordingly. We have already seen the high resilience of our food supply chains, but my Department will continue to work closely with the industry to address any evolving issues. We will prepare for the future by investing in research and innovation. Our farming reforms will help to support farmers to maintain higher levels of food production, and we will protect the environment at the same time.
Mr Deputy Speaker (Mr Nigel Evans)
The Minister’s speech prompts me to heap praise on the great farmers of the Ribble Valley. We have a lot of stone walls there too.
Esther McVey
I want to thank all Members in the House for coming here today and taking part in this debate on food security and the national food strategy. It has been wide-ranging and timely, there has been much consensus across the House and it has been highly constructive. It has only been possible because of the hard work of the hon. Member for Bristol East (Kerry McCarthy) in making sure so many people were here.
A lot of Members, including the hon. Member for Swansea East and the hon. Member for Leicester East (Claudia Webbe), focused on food poverty, and securing food for children at school and families right across the country. The hon. Member for Stretford and Urmston (Kate Green) wanted support for her Healthy Start scheme (take-up) Bill, which is coming forward. The hon. Member for Twickenham (Munira Wilson) focused on free school meals and how we can help those most in need.
Looking for solutions and moving forward, my hon. Friend the Member for Cirencester and Tewkesbury (Sir Geoffrey Clifton-Brown) also focused on the cost of living and food price increases, but also on how we are going to grow more in this country and utilise our land more to bring prices down. The hon. Member for Strangford (Jim Shannon) talked about partnerships, with universities, businesses and farmers coming together to get healthier crops, again so that we can bring food prices down.
My hon. Friend the Member for Macclesfield (David Rutley) had a close eye on food waste and what we can do there. I want to take a moment to talk about my hon. Friend the Member for Stoke-on-Trent Central (Jo Gideon), who talked about affordability, healthy options and the sacrifices people are making to feed the family. Most importantly, she has a food summit coming up on 4 November, and Henry Dimbleby will be there to open it. My hon. Friend the Member for Hendon (Dr Offord) focused on the future technology of food—a passion I share—as well as sustainable proteins and plant-based protein alternatives to meat. That is something this country does very well, and it is an expertise we should really push and drive forward to help our country, but also other parts of the world.
I cannot forget the right hon. Member for Orkney and Shetland (Mr Carmichael), who spoke so passionately about his fish farmers, and the hon. Member for Ceredigion (Ben Lake), who talked about exposing the geopolitical shocks that we have suffered.
I want to thank the Minister, who is knowledgeable in this matter—he has spent his life in this area—but I want him to know that there will be constant pressure coming from all Members of this House on food security and on looking at what we need to do to make sure we have it. I again thank all Members for taking part in this debate.
Mr Deputy Speaker
Just for accuracy, the right hon. Lady referenced the hon. Member for Swansea East, but did she mean the hon. Member for Swansea West (Geraint Davies)?
Sir Geoffrey Clifton-Brown
On a point of order, Mr Deputy Speaker. I hesitate to correct my right hon. Friend the Member for Tatton (Esther McVey), but she referred to my old constituency of Cirencester and Tewkesbury. It is of course now The Cotswolds.
Mr Deputy Speaker
Wonderful—two corrections for Hansard.
Question put and agreed to.
Resolved,
That this House recognises that food security is a major concern to the British public and that the impact of the covid-19 pandemic, the cost of living crisis and the conflict in Ukraine has made UK food security more important than ever before; further recognises the strain on the farming sector due to rising farming and energy costs; supports the Government’s ambition to produce a National Food Strategy white paper and recognises the urgent need for its publication; notes that the UK food system needs to become more sustainable; and calls on the Government to recognise and promote alternative proteins in the National Food Strategy, invest in homegrown opportunities for food innovation, back British businesses and help future-proof British farming.
Contact in Care Settings
(2 years ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Dan Carden (Liverpool, Walton) (Lab)
I beg to move,
That this House has considered the matter of guaranteeing the right to maintain contact in care settings.
After much delay due to circumstances out of our hands, I am grateful that we now have the opportunity in this Chamber to debate this incredibly important issue. I thank the Backbench Business Committee for its efforts in finding us time to speak about this in the Chamber today. I also want to extend my gratitude to the hon. Members for Chatham and Aylesford (Tracey Crouch) and for St Albans (Daisy Cooper) and the right hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts) for their steadfast and resolute support and advocacy on this matter throughout.
People across the United Kingdom are still having to face their time in hospitals, care homes and other care settings completely alone and detached from the people they hold dearest. They are some of the most vulnerable and frail people in our society; some of them will be nearing the end of their lives. The devastating impact of this isolation and of denying contact with loved ones affects those in receipt of care and also their loved ones. It is difficult to imagine, unless we have personal experience, the anguish, pain and stress of not knowing when we will next see our loved one—our husband, wife, mother or father—and repeatedly asking ourselves, “Are they okay? Are they comfortable? Do they even know that I care?”
That same anguish and pain is experienced by the individual receiving care, not understanding why family or loved ones are not able to visit. Shirley from my constituency said:
“My father forgot I was his daughter during the period I was unable to visit. When I was finally able to visit, my dad was unrecognisable. It broke my heart. He has never recovered.”
The support and care given by partners and by parents and children is not an optional extra: contact with loved ones is absolutely vital to dignified care. This point was also made by the 363 members of the public who in the last few days alone provided written evidence for this debate, and I want to thank them for their brave contributions and the Chamber engagement team for collecting them.
Throughout today’s debate we will hear further personal experiences from across the Chamber, but I hope the House will not mind if I take a moment to talk about my own family’s experience last year. My mother and brother contributed a few words, too, and I am grateful to have the opportunity in the Chamber to express them.
My father, Mike, died last year: he was diagnosed with lung cancer in February and died in December. Like many people undergoing cancer treatment, one evening he suddenly became unresponsive and we had to rush him to A&E. At the hospital, it was confirmed that he had sepsis, and he was therefore isolated in a side room on the A&E ward, which was overrun with patients on beds or trollies in the corridor. My dad was in an A&E side room for three days, during which time he did not receive any hot food, he was not showered or washed, nor assisted to change his clothes, and he was unable to get help to go to the toilet. Instead, he was given cardboard containers which were often left full on his bed table for days despite regular requests that they be taken away and replaced. Throughout this time, he had no means of contacting us, because there was no phone signal where he was and he could not access the wi-fi despite repeated attempts.
There were other occasions: once he had to be moved to a ward, when he was left with his emergency buzzer out of his reach; and one time he could not breathe and began to panic, and he phoned my mum, who was unable to get through to the ward by phone and therefore rushed to the hospital. After these experiences he told us that he had felt so lonely and neglected, and unable to alert anyone to his basic needs, and my dad was a man who never liked to make a fuss.
The hospital policy at the time was that visitors were only allowed for patients in end of life care. The NHS website defines that as follows:
“End of life care is support for people who are in the last months or years of their life.
End of life care should help you to live as well as possible until you die and to die with dignity. The people providing your care should ask you about your wishes and preferences and take these into account as they work with you to plan your care.
They should also support your family, carers or other people who are important to you.”
However, at the time, the hospital defined end of life care differently and restricted visiting rights to those patients who were “actively dying”. In other words, they were displaying the physical symptoms of dying.
My mum said:
“This meant that instead of being able to focus on caring and supporting my husband through his final weeks, we had to battle with the hospital to see him. The trauma of my husband’s death—and in particular the neglect he experienced in his final weeks of life—remain with me. It is almost exactly one year since Mike was admitted to hospital, where he spent the last month of his life, and I am still overwhelmed each time I attempt to talk about what he went through.”
I turn to the words of one dementia sufferer, who said:
“I’d forget that I had an allergy, but my daughter was there to correct me. If alone, I would simply have said I didn’t have an allergy—that could be so dangerous.”
The lack of input from the family and friends of those receiving care—the people who know them best—leads to much worse outcomes.
In March, we invited affected constituents to an event where they could share their experiences with parliamentarians on the estate. The testimonies that we heard were harrowing, and the collective trauma was palpable. To give just one of the contributions from that day:
“Sitting with my mother’s body was the longest time I had been allowed to spend with her since she had entered the care home 16 months before.”
That powerful event left those hon. Members present united in the view that a legal right was needed to secure the right of care users to nominate an individual to provide support or care in all circumstances. Many of us at the event were disappointed by the response of the Government and the Minister for Care.
Since the event, 60 Members sent a letter to the right hon. Member for Bromsgrove (Sajid Javid), who at that point was Secretary of State for Health and Social Care, pushing for codification—a legal right to be put into law. We were again left disheartened by the Minister’s response. While we were told that the Government were committed to ensuring that care home residents had access to the support and companionship that loved ones bring, there was no answer to our request for a meeting or consideration of our proposals. Understandably, the campaign groups felt ignored once more. I hope that the Minister will not leave those affected feeling the same way.
The problem is not exclusive to the coronavirus pandemic. There are still rigid restrictions on visiting as well as shocking instances of denying contact. Another of my constituents reported:
“My family and I have never been allowed into the care home that he now resides in. Restrictions have caused unnecessary stress and anxiety to my family and I.”
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
The hon. Member is making an excellent speech. Does he agree that now is exactly the time that we should be considering this matter, because, as we go into the winter, many care settings will be considering the option of imposing restrictions, and guidance alone has proven insufficient? That is among the lessons that we should have learned over the last two years. The Government should now be acting.
Dan Carden
I am grateful to the right hon. Member for that intervention. The Government have previously pointed to guidance as a defence against bad practice, and we have enough evidence to show that that is not good enough. Indeed, while there are excellent examples of good practice across the sector, significant levels of uncertainty and variability throughout the system seriously undermine the rights of individuals. The guidance leads to a postcode lottery as separate settings interpret guidance differently.
That difference is compounded by the response of the Care Quality Commission, which is an organisation that many have had difficult and negative interactions with. The Government encourage those affected to report care providers who do not meet the guidance to the CQC, but by then it may be too late. The poor response is not because the CQC ignores complainants, although there was evidence of that as well, but that it simply does not have the proper powers or data to support people who have their access rights compromised. In the CQC’s own words:
“We do not have the power to require care homes to report live data on levels of visiting, neither do we have the power to take action against those care homes that are not reporting changes to their visiting status to us.”
The CQC, which regulates all health and care services in England, bases its enforcement action on the capacity tracker. However, providers are not obligated to use the tool—they are merely encouraged. That has led to very little, if any, clarity on the true extent of the problem.
By comparison, in Scotland, the National Care Service (Scotland) Bill, places a duty on Ministers to require providers to comply with any direction made regarding visiting. What assessment has the Department made of the Bill and would it be minded to introduce similar provision in England? The evidence suggests that the only way to guarantee contact in care settings is a legal right to an essential care supporter. An essential care supporter would be able to visit or accompany a person in any health and care setting to help communicate their wishes and needs, and to ensure they receive the correct care. If the Government are serious about their support for these calls, if they are serious about acting in the interests of families and loved ones, if they are serious about balancing clinical restrictions with the impact of restrictions on residents’ health and human rights, then I ask the Minister to immediately consider how to put that into law.
I cannot think of any other issue that commands such unanimous cross-party support. Indeed, as my right hon. Friend the Member for Leeds Central (Hilary Benn), who I know supports these calls wholeheartedly, said at our meeting in Parliament:
“How can anyone be opposed to this?”
There are also 35 organisations in this area who support these calls, including Mind, Mencap, Disability Rights UK and Dementia UK. The new Secretary of State for Health and Social Care, the right hon. Member for North East Cambridgeshire (Steve Barclay), has previously signalled support for this right. We are ready and willing to work with the Government to make this legal right a reality as swiftly as possible. The Joint Committee on Human Rights has also been unequivocal in its call for legislation in this area. In its report from July this year, “Protecting human rights in care settings” it stated:
“The Government must introduce legislation to secure to care users the right to nominate one or more individuals to visit and to provide support or care in all circumstances, subject to the same infection prevention and control rules as care staff.”
We have not yet had a response from the Government to that report, so may I ask the Government Minister to take that up? We have opportunities in the draft Mental Health Reform Bill and the Bill of Rights to codify this right. The Government could also introduce secondary legislation, which I know campaigners are in favour of. Will the Minister meet me, others and the affected families as soon as possible to discuss making this right as strong and effective as possible? The Government have previously said that legislative options are under active consideration, so please can the Government give much more specific detail on what that actually means?
I want to finish by paying tribute to the tireless campaigning of organisations in this area, in particular the Rights for Residents campaign group, the Relatives and Residents Association and John’s Campaign. The work of Jenny Morrison, Diane Mayhew, Helen Wildbore, Julia Jones, Nicci Gerrard and Kate Meacock has been absolutely inspirational, and they are all in the Public Gallery today watching this debate. Their dedication to this campaign has been phenomenal. I pay tribute to them. In the face of immense loss and personal grief, they have shown incredible selflessness and service to guarantee that no other family member will have to endure the pain of being denied contact again.
Families do not deserve any further delay; they have suffered enough. We must learn from this trauma and bring in legislation. I hope that when the Minister rises to give the Government’s response, she will agree and set out the steps that we can take to get this right.
Mr Deputy Speaker (Mr Nigel Evans)
Deepest condolences on your loss, Dan.
I call the debate’s co-sponsor, Tracey Crouch.
Tracey Crouch (Chatham and Aylesford) (Con)
Ordinarily when we stand up in the Chamber, we say that it is, for example, “a pleasure to follow my hon. Friend,” but given the very powerful speech from the hon. Member for Liverpool, Walton (Dan Carden), may I say that it is an absolute privilege and that I am very humbled to follow him in this debate, which I am very proud to co-sponsor? I echo his thanks to the people who have engaged with us and taken time to give us their testimony, especially the groups and the people he referred to, as well as those who have sent briefings for the debate.
In 2015, my father had a stroke, which left him physically and neurologically impaired, requiring him to spend the rest of his days in residential nursing care. My sister and I visited him on a regular basis, observing his decline from manly patriarch to someone with childlike vulnerabilities in just over the course of a year. I will not romanticise the relationship that I had with my father, which had been fractured since my teenage years, but I can honestly say that those months of us visiting him in care were the closest that we had felt to him in years. It is true to say that, during covid, I often remarked that I was glad that he had died long before the pandemic, because while no one wants to see their parent or loved one lying on a bed—a thin, pallid skeleton—saying their final goodbyes, blessings or apologies hours before their death, nor should they be denied that right.
Tragically, during the pandemic, and in some cases still today, many of my constituents and others around the country were denied visiting rights, whether that was to care, to celebrate or, sadly, to say goodbye. We should pause for a moment to cast our minds back to the start of the pandemic in early 2020, when the virus was ripping around communities, transport systems, offices, retail places and, of course, health and social care spaces. It was killing people in large numbers, especially the most vulnerable in society. People were frightened and our understanding of the virus was limited. We went into lockdown and isolated our loved ones because we thought that it was the kindest and safest thing to do. We all understood why.
When I looked back through my casework files in preparation for the debate, I found hardly any complaints about limited access to relatives in the first lockdown, because in a Blightyesque spirit, we got on with it and found alternative ways to communicate with those we could not ordinarily see. Many of us here stamped our feet about care workers not getting enough personal protective equipment and rightly included them in our doorstep clapping, because they were heroically looking after their residents when family and friends could not visit any more. We understood the fear that if one resident caught the virus, it could be devastating for the entire setting, and the duty of care that they held. But then lockdown ended, the summer arrived, the virus declined, our understanding of it improved and our hopes of going back to see residents in health and social care settings were raised—yet when I looked at my casework, I saw that that was when the problems began, and, unfortunately, they still continue.
I stress that I am in no way criticising any individual care home manager or any staff for the examples that I am about to cite. My criticism lies squarely with the Department of Health and Social Care. Its guidance that was published for managers to interpret was wishy-washy at best and is why I now firmly believe that, although we can still respect the individual business that a care home is, a right of access should be enshrined in law to give the manager, the resident and the relative clarity about visiting.
In November 2020, I was contacted by Francesca, whose nan was admitted to a care home following a short stay in a local hospital. Francesca’s family were not able to visit, despite having been told that Francesca’s nan was dying and that they would potentially be allowed only a one-hour goodbye. That was hugely distressing, not only for Francesca and her family but for her grandmother, who was coming to the end of her life without her loved ones around her.
The guidance was often cited, but its lack of clarity left care settings making decisions that were understandably in their own interest, but not in the interest of the resident or the family. After my intervention, visits to Francesca’s nan were allowed and goodbyes were said, but the uncertainty and distress caused could perhaps have been averted with a simple right of access that was clear in its intention.
Likewise, Mura’s mother was in a specialist nursing home that houses some very vulnerable and elderly people. Everyone, including Mura, understands the need for caution. When the virus surged in December 2020, care settings like the one that Mura’s mother was in effectively went back into lockdown. Named visitors were allowed if they underwent testing, a process that no relative has ever complained about. However, because the guidance enabled homes to design and implement their own covid outbreak procedures, many were able to prevent access even to the defined essential care giver, denying love and support from loved ones during another period of isolation.
One important point was reiterated when I listened with colleagues to powerful and—as the hon. Member for Liverpool, Walton said—harrowing testimony on access and support rights from campaigners, many of whom are in the Gallery today. This is not just about older people in care homes, or those at the end of life. We heard from Wendy Mitchell, who is living well with dementia, as those who follow her joyous Twitter feed know. She highlighted her experiences of going to appointments alone during the pandemic. I do not need to explain in detail the utter idiocy of allowing people with dementia to attend a healthcare setting where there are discussions about condition, medication and so on. In the head of a 1970s scriptwriter, it would have formed an idea for some sort of sketch show, but it is serious and potentially extremely dangerous.
Youngsters fared particularly badly during the pandemic, and those within care settings were affected quite acutely. I was reading back through my correspondence relating to a young man called Thomas, who has learning disabilities and is in a residential care home. He had a birthday coming up, but the care home was denying his parents the ability to take him home to celebrate, despite the fact that it was—wonderfully, I hasten to add—taking Thomas out for community visits. My correspondence to the care home explains perfectly well what the problem was:
“I have managed to speak to colleagues in both the Health Department and the Education Department about Thomas’ particular set of circumstances and both encouraged me to look at the ethical framework that care settings are required to operate under. I was also reminded that those with learning disabilities, such as Thomas, are not considered clinically vulnerable and therefore do not require shielding in the same way as others with significant health conditions.
I know that Government guidance in residential settings has not exactly been perfect and that care home managers and teams are doing their absolute best to navigate their way through, doing what they think is best for both the client and their staff. However there is a difference between the home Thomas is in and that of an older much more vulnerable person and therefore flexibility is perfectly possible.
It is with that in mind, and with the guidance for the whole nation being slowly eased to allow greater human interaction, alongside an appeal to your sense of compassion given Thomas’ mother’s deteriorating health condition, that I write to urge you to reconsider your decision to not allow Thomas to visit his family home tomorrow for his birthday. There are no ‘rules’ that stop you from doing this and I know that the family will forever be grateful.”
I am pleased to say that the home did allow Thomas to go home for his birthday, but the fact that Thomas’s case related to two different Departments, and the unclear guidance, caused great anxiousness.
In September 2020, a similar case arrived from Dawn about her son with complex medical needs living in 24-hour nursing care. She rightly noted the impact that the first lockdown had had on her son. She wanted me to write to the then Minister, who I am pleased to see back at the Dispatch Box today, to make it clear that a family member could be recognised as an essential part of the care home staff and be allowed to come as much as any member of staff. She felt that homes like the one that her son was in were never mentioned because people automatically thought of care homes in respect of our elderly population. I think that Dawn’s message and that of many others was heard, but its application remains sketchy, even today. [Interruption.] Oh—here is a lesson for Members: make sure you take the last page of your speech off the printer. [Laughter.]
Having reread the accounts of those cases and having listened, back in March, to the testimony of others who had suffered as a result of being unable to visit loved ones, I believe it is a no-brainer to have an absolute position on this matter. The guidance was not clear enough, and it caused distress to residents and relatives as a consequence. I know that the Minister will cite CQC guidance, but it is not strong enough, which is why so many now feel that it needs to be enshrined in one form or another. The Minister will note that there is cross-party support for such a move. We could do it quickly, in time for the winter, so I hope she will consider our pleas seriously. This would protect care home managers, as well as giving residents the right to have their loved ones with them providing whatever support and care are necessary.
We can learn a lot from the pandemic, and I am sure that we will. One of the lessons must be about the devastating impact of isolation on the physical and mental health of those in social care settings. Let me finally repeat my initial point, drawing on my experience with my own father, six years after his death. No one wants to see their loved one vulnerable, incapable of basic functions or in their final hours, but nor should anyone be denied that important time with them. Sadly, many were and some still are, and it is with that in mind that I urge the Minister to think carefully about her response this afternoon, but ultimately to introduce legislation as soon as possible.
Mr Deputy Speaker (Mr Nigel Evans)
I call the other co-sponsor of the debate, Daisy Cooper.
Daisy Cooper (St Albans) (LD)
Let me extend my sincere thanks to the hon. Member for Liverpool, Walton (Dan Carden) for leading the debate, and to the hon. Member for Chatham and Aylesford (Tracey Crouch) for co-sponsoring the application. I pay tribute to both Members for sharing their own experiences and those of their constituents in such a powerful way. I am also extremely grateful to the Relatives & Residents Association, to Rights For Residents and to John’s Campaign. Their endless determination to highlight this glaring gap in the law in order to protect some of our most vulnerable, at their most vulnerable, has been critical to the securing of this important debate.
I have to say that, unlike the two hon. Members who have spoken already and unlike many from the campaign groups—some of whom are here today—I have not been personally impacted by this matter, but many of my constituents have. There have been too many examples of families being separated from their loved ones, often, as I have said, when they were at their most vulnerable. Each and every story has been absolutely heartbreaking, and I wish to share just two of them today.
Nearly two years ago, in November 2020, during a debate in Westminster Hall secured by the hon. Member for Beaconsfield (Joy Morrissey), I was able to tell colleagues about my constituent Steph. Steph’s mum had dementia, and had been living in a care home since December 2018, after it had become impossible for Steph’s dad and sister to look after her at home. Steph’s mum was visited every single day, by Steph, Steph’s dad or one of her four siblings, until the pandemic hit early in 2020. Before then, they had been able to lovingly hold her hand, comb her hair, remember stories together, and reminisce about the past. However, this was not just about visiting; Steph and her family were providing essential care.
Contact with and reassurance from loved ones is incredibly important to all of us, but it is especially critical for people with dementia. Family members know their loved ones best. They can identify the very subtle changes in their physical and mental health more quickly. Residents often feel more comfortable about opening up and sharing their concerns with close family members than they might with a care worker, and that is even more true when they do not always understand what is happening to them as well as you or I might.
Suddenly, however, Steph and her family were separated from their mum. For more than a year, contact was limited. Initially it was limited to phone calls or sometimes video calls, and although that was relaxed a little in the latter half of the year, the family were still only allowed to visit Steph outdoors, in a garden building. Unsurprisingly, like so many others in this awful situation, Steph’s mum simply could not understand what was happening. When presented with an iPad for video calling, she thought she was watching a television programme. She could not understand that she could interact with it, and found the ordeal incredibly confusing. Fences, window visits, plastic screens as barriers—none of those worked for people living with dementia either. They became incredibly frustrated because they just could not hear what was being said. Sometimes, they simply could not recognise their loved ones at all at such a distance. Others simply could not comprehend what was going on. Some felt as if they had been put in prison.
In early spring 2021, Steph’s mum’s condition deteriorated. She was moved to a hospice, where family members could finally spend time with and be close to her, and comfort and care for her. Sadly, she passed away in April last year. After such a long time of being physically separated from her mum, Steph says that she was, in a sense, almost lucky that in a different setting she and her family could actually spend time close to their beloved mum at the end of her life. Too many others have been denied those precious final moments together.
Restrictions were not limited to care homes: dementia patients and the vulnerable were prevented from seeing their children, spouses and carers in other health settings, too. I would also like to talk about Lynn, a constituent and friend. She discovered this whole experience at Christmas time last year. Lynn’s husband, Andy, also has dementia. Until December 2021, Lynn had been looking after Andy at home, with the help of regular professional carers. In a devastating blow, Andy’s condition suddenly deteriorated on Christmas day. He had to be admitted to our local A&E department, and was transferred to an acute admissions ward while a bed in a suitable ward was found.
Although other wards were now accepting visitors, the unit Andy was in was supposed to be temporary, so Lynn could not see him at all. The rules were the rules, and there were no exceptions for people such as Andy, who needed familiar reassurance and help to communicate their needs. As it turned out, because of a lack of suitable beds, Andy spent almost two weeks in that ward. It was not until Lynn contacted me, and I intervened by contacting the hospital management, that she was allowed access to her husband Andy.
We all know that the NHS was and continues to be under considerable pressure, but the lack of suitable one-to-one care with somebody who Andy trusted had devastating effects. Lynn was utterly distraught by his very dramatic and sudden weight loss in the days that she was separated from him. Eventually, after further direct contact from my office, the ward sister finally agreed that Andy’s professional carers could also visit.
We all know that dementia is, sadly, a progressive condition, but neither Lynn nor I were in any doubt that the pace of Andy’s deterioration in those days over Christmas last year was hastened by the lack of contact with those whom he loved and trusted. He had been denied access to his essential caregivers. Andy is now in a care home. When I spoke to Lynn last night, she simply said:
“It is so important that people in care homes have access to their loved ones. Andy isn’t ready to be stuck there until he dies, without love and physical contact. The humanity needs to come back into care.”
We have come a long way since last Christmas, and even further since the beginning of the pandemic, but as winter approaches the NHS and care settings are once again expected to struggle with a surge in covid cases. It is not inconceivable that what happened to Lynn and Andy could happen again to them and to many others.
We now understand much more about effective infection control with covid. Regrettably, we now also understand—from harsh lived experience—the impact of separating those with dementia from their loved ones and essential carers. Guidance exists so that safe visiting can be facilitated by care home operators but, as we have already heard, the overwhelming response from relatives across the country shows that it is just not being implemented in a consistent or fair way.
As it stands, care homes continue to apply rules far in excess of the measures recommended by Department for Health and Social Care guidance. It has been reported that more than 10% of care homes permitted no visitors at all during covid outbreaks between April and September this year; that 20% of care homes confined residents to their rooms for up to 28 days during an outbreak; and that almost half of homes have some form of visiting restrictions in place, even when there is no outbreak at all. As it stands, relatives do not feel empowered to do anything at all about the wildly varying rules put in place by the homes they have entrusted their loved ones to.
In advance of this debate, the CQC got in touch with Members to set out what it thinks it can do about this scandal. The CQC agrees it is vital that people are able to spend time with the people they love. It tells us that, when it becomes aware of guidance, it will take action but—this is the critical point—the CQC does not have the power to require care homes to report any visiting restrictions they put in place.
I am grateful to the Chamber engagement team for conducting research in advance of today’s debate. As we have heard, 363 people have responded to the survey in the last few days, and more than 70% of relatives with concerns about their loved ones in care homes had not contacted the CQC to make a report. Those who did contact the CQC reported mixed success. Some told us that things improved, but the vast majority said either there was no improvement, the CQC was not interested or the CQC simply did not respond.
This is the crux of it: one person who responded to the survey, a woman called Joanne, said
“because I spoke to the CQC we were threatened with eviction from the home.”
This is what so many of my constituents tell me. They fear making a report to the CQC because there are no legal protections for visiting their family members. They are terrified of being labelled a troublemaker, of being stopped from visiting their loved ones altogether or of their loved ones being evicted. There is a huge power imbalance, which cannot be right.
Members met the relatives’ campaign group in Parliament in March, and we heard heartbreaking testimony from families and service users about the effect of these instructions. Every single person agreed that the guidance simply was not working, everybody agreed that enough was enough, and everybody agreed that we needed protections in law. Everyone except the then Minister, who unfortunately was not able to make it until the very end of the session with a pre-prepared speech, and who had not heard the powerful and harrowing testimonies of those who attended, many of whom are in the Public Gallery today.
The new Minister is here to hear some of those powerful testimonies, and I hope she will conclude, as we have, that the evidence is overwhelming. We must put an end to this scandal. We have to be able to say, “Never again.” As other Members have said, there is cross-party support and we will work with the Government to put this into law. Surely the time has come to create a new legal right to maintaining contact.
Several hon. Members rose—
Mr Deputy Speaker (Mr Nigel Evans)
Four Back Benchers wish to contribute, and we have three Front-Bench contributions and Mr Carden at the end, so I ask people to consider the length of their contributions. We will be going to the wind-ups just after half-past 4.
Esther McVey (Tatton) (Con)
I congratulate the hon. Member for Liverpool, Walton (Dan Carden) on securing this debate, and I thank my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch) for co-sponsoring it.
It has been deeply distressing to hear the stories that have been told in this debate. Human beings have rights, including the right to education, the right to healthcare, the right to bodily autonomy, the right to equality and the right to private family life, free from Government interference, to be able to spend time with their loved ones. It is a sad fact that all those rights came under attack during the covid lockdowns, but we have moved on from those lockdowns, and the covid restrictions have ended, so it is deeply harrowing to discover that it is not the case for some.
In the stories we have heard today, in the stories I have heard from my constituents and in the stories highlighted in The Sunday Times, I am horrified that, seven months after the removal of official restrictions, care home residents are still being denied visits from their families and friends. It needs to be mentioned that some care homes are open and allowing visits, but others are not and continue to prevent family members from seeing one another. That is simply inhumane. It is beyond cruel. Isolation and the loss of social contact has a devastating impact on physical and psychological health. Without the support of family and friends, health outcomes are poorer, as residents lose hope and sometimes even the will to live, and they often refuse treatment. For residents with dementia this is especially devastating, as they do not understand why their relatives have not been to see them. Many also have serious sensory impairments, and for them physical touch and communication with family members might be all they have left.
I am more concerned that this situation is concealing neglect and abuse. As chair of the all-party parliamentary group on pandemic response and recovery, I heard from campaigners back in April, and more recently, who warned of widespread and shocking safeguarding issues involving medication, hydration, hygiene and a lack of basic care. Families must be allowed full access, to support, protect and advocate for their loved ones when they need it most.
What can be done to end this unnecessary suffering once and for all? It is now beyond urgent that care homes, local authorities, the UK Health Security Agency and the CQC stop blaming each other for these appalling failures of policy and take action. Rather than requiring new legislation, we need to uphold existing laws. Article 8 of the Human Rights Act and the Mental Capacity Act 2005 should have protected against this situation ever arising. Instead, that legislation is being wilfully misinterpreted as an excuse to keep people isolated in care homes; sometimes they feel as though they are prisoners. So I call upon the Minister to get tough on any care homes that block residents from seeing visitors. There should be severe consequences for those who continue to blight the lives of those in care, and they should face fines or legal action.
We are failing vulnerable members of our society and it simply cannot be allowed to continue. We must end all unlawful visiting restrictions and stop this unnecessary suffering and neglect. It is deeply shameful and a stain on our history that our country has allowed this to happen, and that it is still happening so long after covid restrictions have been lifted. Some care homes say that these restrictions are due to staff leaving the sector when mandatory vaccinations were called into use. May I ask therefore what the Minister and the Government are doing to get those staff back into the care homes and into those jobs? It could be that up to 7% of care home staff were lost, which represents 40,000 employees. What are the Government doing to reinstate them and compensate them for losing their jobs? As Professor Robert Dingwall told our all-party parliamentary group at the inaugural meeting last year:
“A good society is defined by life, health, liberty and the pursuit of happiness, not by the prevention of one disease alone.”
Maria Eagle (Garston and Halewood) (Lab)
I, too, congratulate my hon. Friend the Member for Liverpool, Walton (Dan Carden) and the hon. Member for Chatham and Aylesford (Tracey Crouch) on obtaining the debate, and I thank the Backbench Business Committee for granting it.
Many Members here know Jenny Morrison and Diane Mayhew, constituents of mine who were co-founders of Rights for Residents. Because of the shortage of time, I will not explain in detail what happened to Jenny’s mother, but it is similar to the experience that the hon. Member for St Albans (Daisy Cooper) set out in respect of some of her constituents. However, I wish to say a bit about the ongoing trauma that the experience causes for those left behind, because this is about not only the distress of seeing one’s relative go through the final illness —and the consequences of dementia can be distressing at the best of times— but the ongoing consequences of the restrictions for those left behind.
Jenny tells me that she has hardly had a restful night’s sleep since the doors closed on her mother’s care home, and that she feels as though her mother was locked away. Even though her mother has now unfortunately died, Jenny says that she is plagued by distressing images and painful emotions that will not go away. They have an ongoing impact on her life because the end of life can often overwhelm the earlier positive memories if it is distressing and difficult. Many thousands of people have had the experience of watching from a distance as their relatives in care homes deteriorate. They are unable to visit them, comfort them and watch them die. They have ongoing trauma, and may have for many years. The bad memories come back instead of the good ones. Many people affected in this way go on to feel like they are being selfish for thinking about their own feelings instead of what happened to the loved-one they lost, but they are not. They are suffering from deep trauma caused in part by what has happened.
Jenny Morrison and Diane Mayhew were co-founders of Rights for Residents. They have sought to turn their terrible experience into something much more positive—into campaigning for these changes, and I commend them enormously for that. The fact that covid is no longer seen as the threat that it was does not mean that the restrictions have gone away. As many hon. Members have said, they are still being used in care settings. In that context, it is tremendously important that a legal right is established.
The Relatives and Residents Association and Rights for Residents surveyed some of their families and discovered that the harm was continuing. One in five outbreaks saw residents confined to their rooms. One in nine outbreaks saw residents not allowed any visitors at all. Care homes were still implementing blanket visiting restrictions, when there was no necessity for any such thing. Quite often they say that it is because of Government guidance or that local authorities have suggested that they should have these restrictions. None of this is accurate or true, but it is still stopping families visiting their relatives in care homes. How much longer is this going to go on? How much longer are the Government going to allow this to go on?
I do not think—something highlighted by the Joint Committee on Human Rights—that changing the guidance 30 times in a short period helps any understanding of what the guidance actually says. That is not helpful. Let us have a law swiftly that says that residents in care homes and those having care and health support have a legal right to be accompanied by a relative—at least one, perhaps sometimes more would be appropriate. That is unequivocal; it is clear. It can be clearly understood by whoever needs to understand it. That is the answer to this. I hope that the Minister will agree and swiftly enact such a change.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
Diolch yn fawr iawn, Lefarydd.
My mother Nancy had a stroke sometime between Christmas eve and Christmas day at the close of 2020. There was no warning, no time to prepare for this catastrophic event. Overnight she lost her autonomy, her independence and her agency in her own life. She went into the local district hospital and was transferred from there at the beginning of January 2021 to a community hospital specialising in stroke rehabilitation. She remained there until the end of that February. She came back to live with us for a couple of months, with twice daily home carers, while I, her only child, was still able to vote here and speak in debates without having to be physically present in the House of Commons. She had to move into residential care because the period when I could balance caring and parliamentary duties came to an end.
Last November she had a fall and knocked her head. The anti-stroke medication resulted in bleeding on her brain. She was discharged from hospital back to the residential home at very short notice. Just before Christmas she fell again and broke her hip. She died in hospital four weeks later. These are the bald facts of the event. It was my mother’s misfortune to be old and in need of clinical services during the first covid winter. It was the misfortune of all of us as a family that my mother fell ill at a time when covid infection control demanded the absolute isolation of stroke patients. Many of the key workers with whom we interacted over those 13 months were extraordinary.
During the last month of my mother’s life, dementia specialist nurse Delyth Fon Thomas put me in contact with John’s Campaign. She explained to me that, in the last month of my mother’s life, family contact was a right rather than an optional favour. She was the first person in authority to mention that, and she put me in contact with Julia of John’s Campaign, who is, I am glad to say, with other campaigners here in the Public Gallery.
Look up the long list of hospitals and other organisations that have signed up to John’s Campaign. They recognise that a key family member is more than a visitor—they are a carer as much as anyone on the payroll. But, I say to Members, try to get that information volunteered to you, try to find out what your rights are, because they are not given to you on a plate. People such as Delyth confounded the cliché of monolithic public sector organisations, which may well prioritise institutional interests and risk aversion to the detriment of those services that we trust them with providing. I think that, as private individuals, many people will have had that experience.
None the less, despite Delyth’s help, I only touched my mother’s hand once during the critical six weeks after her first stroke. Yes, we could arrange to speak to her through a glass window as she sat in a hospital stairwell and we stood outside in the car park, peering in. She could not hear us—incidentally, her hearing aid had been kept in a cabinet all the while and the batteries had run out. Yes, we could phone and arrange to speak over an iPad, but she could not hear us; she could not understand us. There were no hugs.
Health authority infection policy vetoed family bonds of love as a health hazard to be minimised. Of course, at the onset of covid, we had to adapt and learn quickly about how to cope with an unfamiliar, life-threatening and highly infectious virus. We put in place measures such as lockdowns and visiting restrictions at hospitals and care homes, because that was the best that we could do; that is all we knew back in 2020. We had to learn as we went along, but have we truly learned the most important lesson of all? Treating the elderly and people with dementia as units of flesh and bone by meeting the barest minimum of their physical needs is wrong. We are social animals: take away our social support and we fail to thrive. Denying family contact causes immediate welfare harm to patients and longer-term harm to family members.
That is the context in which we must apply the abstract terminology of legislation: the Equality Act 2010 recognises the basic principle that the needs of disabled people should be assessed and reasonable adjustments made to meet those needs. People with dementia and cognitive impairments are disabled. Then there is the matter of human rights, which have been touched on. Article 2 of the European convention on human rights places an obligation on the state to secure the right to life. Article 8 protects the right to private and family life, but how these are balanced in care settings is critical, and how we shift that balance as we move along is also critical. It is also surprising that the Human Rights Act 1998 applies only to publicly funded residents in care homes.
This evidently unjust inconsistency is why the Government must step in. Why should the owners of private care homes, especially in England where local authority care is far less available than in Wales, be able to make such immense decisions, and possibly prioritise convenience over residents’ and families’ rights? Indeed, if we start from the point of view of people in need of care, the care setting itself should not depend on whether it is in the public or the private sector. If the individual has a right, that right goes with them throughout their lives—whether they be in hospital, at home or in residential or nursing care. A right is not a right if its only guard dog is guidance.
Sir Geoffrey Clifton-Brown (The Cotswolds) (Con)
On a point of order, Mr Deputy Speaker. I made a speech in the previous debate on the national food strategy and food security and I inadvertently forgot to declare my interest in the Register of Members’ Financial Interests as a farmer and a Fellow of the Royal Institution of Chartered Surveyors, for which I wish to apologise to this House and to put the record straight.
Mr Deputy Speaker (Mr Nigel Evans)
I thank the hon. Member for his point of order and for making it at the earliest possible opportunity. That is now on the record.
Fleur Anderson (Putney) (Lab)
I am very keen to speak in this debate and to raise the experiences of many of my constituents. I am grateful to my hon. Friend the Member for Liverpool, Walton (Dan Carden) for introducing this debate, and to the hon. Members for St Albans (Daisy Cooper) and for Chatham and Aylesford (Tracey Crouch) for sponsoring it.
Many constituents I know experienced dreadful times with those restrictions during covid. In saying that, I pay tribute to all the care workers and care staff who worked tirelessly through covid and are still working to take care of care home residents. My daughter is a care worker, so I have seen the impact that this has had on her throughout the pandemic. I also express my condolences to all those affected and pay tribute to the campaigners for Rights for Residents, who have brought this campaign to the fore and continue to ask for action.
My hope is that we will hear from the Minister about some action to make the legislative changes we need to make a difference now and to ensure that we learn the lessons of covid and of all the painful stories and experiences we have heard, so that if we are ever in a pandemic again, the same actions are not taken. It is understandable that visiting restrictions were put in place to save the lives of vulnerable care home residents during covid, but they could have been done differently, with much more consideration for the fact that a visitor is not just a “nice to have”, but an essential part of care, and that leaving care home residents without visitors led to a huge deterioration in their mental and physical health.
Many constituents have written to me about the effects of that isolation and lack of contact with relatives during covid. As one relative of a care home resident said:
“As you are aware my mother-in-law died and that’s attributed to the effects of isolation and forced separation and it’s paramount that we learn lessons from what has happened going forward.”
I visited many local care homes myself—respecting all restrictions in place, obviously—and heard about the lasting effects that isolation is having on elderly residents and the disabled even now; for example, residents who have become very reclusive.
The Government must listen to those care home providers who are also demanding an end to visiting restrictions and are not happy with the status quo. Jeremy Richardson, then chief executive officer of Four Seasons Health Care, the UK’s third-largest care home provider, said:
“We are depriving people of their right to visitors, which is an absolute outrage. The government restrictions at the moment are making it very difficult to give people a quality of life… We run care homes. We do not run prisons.”
The restrictions must be evidence-based. In December 2021, an Oxford University study, conducted by a team of eminent scientists led by epidemiologist Dr Tom Jefferson, found evidence that many vulnerable residents died of thirst, starvation and “broken hearts” during the pandemic. They identified that almost 40% of excess fatalities were not caused by the virus, with many people dying of loneliness and neglect. Without the support of visitors, vulnerable residents were left to deteriorate and die.
“Neglect, thirst, and hunger were—and possibly still are—the biggest killers”.
It is clear that care home staff had a huge amount of additional work during covid, but visitors would have alleviated some of that.
The Joint Committee on Human Rights published a report on the human rights implications of the Government’s response to covid in September 2020 and a report on care home visiting during the pandemic in May 2021. Following on from those, it published a report on protecting human rights in care settings, which recognised the balance between the state’s requirement to protect the lives of care users and other rights, including the right to a private and family life, stating that,
“too often the correct balance has not been struck and too much has been left to individual care settings to determine”,
and that
“insufficient respect was given to ensuring meaningful contact between care users and their family members and loved ones”.
We need legislation to ensure that that does not happen again.
The Committee’s report recommended that care users be given,
“the right to nominate one or more individuals to visit and to provide support or care in all circumstances,”
subject to full infection prevention measures, and that the Government should,
“give the CQC the power to require care settings to inform them of any changes to their visiting status, and to report live data”,
so that there is transparency about changes in visiting rights. The Government have not yet responded to this report, as other hon. Members have mentioned, but I hope to hear a response today.
As we have heard many times in this debate, the CQC guidance is just not enough. Rights for Residents is calling on the Government to take urgent action to pass legislation that would give every care home resident the legal right to nominate at least one essential care supporter, who can maintain contact in all circumstances, regardless of outbreaks, lockdowns, variants and future pandemics, and to ensure that care homes are supported in returning to pre-covid, unrestricted visiting arrangements, without the need for appointments or limits on time, frequency or the number of visitors.
In this place, we have a duty to give a voice to those who do not have one, and to fight against injustice. I feel that this debate has done that. I hope it will be heard and that it will result in long-lasting legislative changes that will save lives.
Steven Bonnar (Coatbridge, Chryston and Bellshill) (SNP)
I, too, thank the Backbench Business Committee for allowing this debate on such an important matter. I warmly commend the hon. Member for Liverpool, Walton (Dan Carden) for leading it, as well as the hon. Members for Chatham and Aylesford (Tracey Crouch) and for St Albans (Daisy Cooper). We have had a thorough and compassionate debate on what is such an emotional subject for so many of us, and many more of our constituents. I thank all Members for their contributions.
I was touched by what the hon. Member for Liverpool, Walton said about his beloved father, and the anguish felt by his family due to that separation. My condolences, and those of my party, are with him. I was touched because it brought back my own experience of watching those close to me fret about the loss of contact with a loved one during the pandemic and, more importantly, how that isolation would impact their beloved parent. Over the last two and a half years, we have all witnessed the devastating impact of people being completely isolated in health and care home environments, with families flatly denied vital contact with their cared-for relatives. The damage of that to people’s lives and their health and wellbeing has, I feel, been immeasurable.
As we have heard from across the House, the reality is that residents still face the prospect of spending the final days of their lives in care home settings, separated from their loved ones. Families are still experiencing major and traumatic difficulties when trying to support their relatives in ill health and in residential care settings. We know that social connections and meaningful activity are so important for the health and wellbeing, and particularly the quality of life, of people living in adult care homes. We, as a society, perhaps did not recognise how much devastation that prolonged separation would cause, or perhaps how long the pandemic would require such restrictions to be in place, but as a Parliament we must recognise that and do all that we can to ensure that it does not happen again.
We must understand how difficult and painful working throughout the pandemic has been for our care home staff. I am sure that the House will join me in expressing appreciation and gratitude to all care home staff who have worked heroically and tirelessly throughout the covid-19 pandemic. Wherever possible, they worked swiftly to maximise the opportunities for residents of care homes to spend some time with their loved ones, whether that be through glass or whatever. We know that they tried hard to do so as safely and as carefully as possible, but for long periods there was no opportunity for that family contact, that loving connection, and sadly that final goodbye, causing such deep anguish for so many.
The Scottish Government have recognised that, and we are now taking the steps required on the path to introducing Anne’s law in Scotland. Anne’s law aims to give nominated relatives or friends access rights to care homes, while of course following the same stringent infection control procedures as care home staff. That follows on from the Scottish Government’s introduction of the National Care Service (Scotland) Bill in June of this year, representing the final steps in the process of implementing Anne’s law.
Once the Bill is passed, we will be in a position in Scotland to ensure that people living in adult care homes have a legal right to see and spend time with those people most important to them, even in outbreak situations. Those are positive and progressive steps being taken by the Scottish Government, and I hope that the Minister will join me in welcoming Anne’s law on to the statute book, and use it as an example to ensure that all care home residents have the familiar support and family contact they truly want and rightly deserve. I am aware that the Rights for Residents group is campaigning for similar measures to those contained in Anne’s law to be introduced across the other nations of the United Kingdom. I fully support that campaign and hope the Minister will commit to look closer at it.
I urge the Government to go further still and take the necessary steps to fully integrate health and social care, as has been successfully done in Scotland. The Scottish Government have invested over £1.6 billion in integrated joint boards and are committed to increasing that spend by a further 25%, equating to £840 million, by the end of the next Parliament. We have invested an additional £124 million in care at home service provision and provided £200 million to uplift pay for adult social care employees in commissioned services to a minimum of £10.50 per hour. We in the SNP know the value of our care home workers across Scotland. They deserve a fitting wage for their outstanding work and service.
To support all that, an additional allocation of funding will be made available to the Scottish Care Inspectorate, to enable it to support and maintain the visitation rights implemented under Anne’s law. The Scottish Government are forward-leaning and are taking the steps necessary to fund social care to support the people who live and work in social care settings. I urge the UK Government to do likewise.
Finally, for the sake of all vulnerable care residents, wherever they may be across these four nations, I urge the UK Government and the Minister to take the steps required to guarantee their legal right to maintain contact in care settings.
Liz Kendall (Leicester West) (Lab)
I thank my hon. Friend the Member for Liverpool, Walton (Dan Carden) and the hon. Members for Chatham and Aylesford (Tracey Crouch) and for St Albans (Daisy Cooper) for securing this hugely important debate. I hope my hon. Friend the Member for Liverpool, Walton will forgive me for saying that I thought he spoke incredibly bravely and powerfully about his father, who I am sure would be very proud of him today.
The terrible consequences of banning families from seeing their loved ones in care homes is an issue very close to my heart. It is something that Labour has been campaigning on since the very first covid lockdown in June 2020. Indeed, we first called on the Government to bring forward a legal right for care home residents to see a family member or friend in February 2021. We continue to do so today because, as we have heard in the debate, this issue has not gone away, and because with winter almost here and, God forbid, in the event of any future pandemics, we need to ensure that the rights of residents and relatives are clearly guaranteed by law. We make this case because it is good for residents, good for family members and good for care staff.
I will say more about that later, but I want to start by thanking the organisations that have campaigned so hard on this issue, including Healthwatch, Mind, Mencap, the Alzheimer’s Society, Parkinson’s UK, Dementia UK and Disability Rights UK. I especially want to thank the Relatives and Residents Association, John’s Campaign and Rights for Residents, which have been at the forefront of the campaign. In particular, I pay tribute to Jenny Morrison and Diane Mayhew from Rights for Residents—two phenomenal women who have blazed a trail on this issue. After their terrible personal experiences, they set up Rights for Residents, to give a voice to all the other care home residents and families who had been banned from seeing their loved ones. The reaction to their campaign has been astonishing, which I saw for myself on joining them in Downing Street—or, rather, locked outside it—in September 2021, when they presented a petition calling for a change in the law, signed by more than 250,000 people.
Almost all the campaigners I met had never been involved in protests or petitions before. They were not there because of any political agenda, but because of their personal experience and the fact that they wanted to see a change. The reason why so many people joined Jenny and Diane is that this issue really matters. It matters to the thousands of families who have faced unbelievable anguish, guilt and distress because they were banned from seeing the people they love most—their mothers, fathers, husbands, wives, brothers, sisters, sons and daughters—at a terribly frightening time. It matters because of the physical and mental impact that isolation has on older people and, as the hon. Member for Chatham and Aylesford said, crucially, on people with physical and learning disabilities. We have heard much evidence about increased depression and anxiety, and people losing weight because they are not eating. The truth is that, as the hon. Member for St Albans said, families are not just visitors; they are an essential part of the care given to residents, and should be treated as such.
Banning families from seeing their loved ones also matters to care home staff. There is lots of international evidence that staff in many countries have faced increased workloads because some of the emotional and other support that was normally provided by families, such as helping people with eating and taking them on walks, completely disappeared when they were banned.
There is much I could say about all the powerful things that hon. Members said about their constituents; I was contacted by many deeply distressed constituents too. Because time is short, however, I will emphasise something that has not really been mentioned today, which is that families have always understood the need to protect their loved ones from covid and never wanted to expose them to unnecessary risks. All they wanted was to be treated the same as care home staff. They could not understand, once the PPE, testing and vaccines were finally available, why they were banned and treated differently from everybody else.
Throughout the pandemic, the Government have resisted calls for residents to have a legal right to see their family member. They have consistently said that the guidance they issued was enough, but the guidance, which changed more than 30 times during the pandemic, is not enough, as we have seen time and again. I will make two points. First, anything that is issued 30 times will be totally unclear. People will lose track and it will not be properly followed. Secondly, the clue to the problem with guidance is in the name—it is guidance, which can be ignored.
Neither is oversight from the CQC enough. The Joint Committee on Human Rights said in May 2021 that there was an
“astonishing lack of awareness by the CQC as to whether care homes are…allowing visits”.
The Chair of the Committee, my right hon. and learned Friend the Member for Camberwell and Peckham (Ms Harman), said at the time that the CQC’s assurance
“that visits are being allowed…is wholly unconvincing”.
We have heard evidence today that that remains the case and we know that the guidance and regulations are not working or being enforced.
The Relatives & Residents Association and Rights for Residents recently surveyed more than 650 families. They found that visiting restrictions during the majority of covid outbreaks between April and September this year were more restrictive than advised by current Government guidance. One in five outbreaks saw residents confined to their rooms. One in nine outbreaks saw residents not allowed any visitors at all. Shockingly, 45% of families who responded said that there were visiting restrictions in place despite there being no covid outbreaks. That is why those organisations have repeated their call for a new legal right to guarantee people’s access to in-person support from at least one care supporter—a person important to them, such as a relative or friend.
Opposition Members agree, as does the cross-party Joint Committee on Human Rights, which says that the default position must be that those in care homes can receive visits from a “significant person” and that blanket bans are in breach of the legal right to family life. We can learn quite a bit from other countries on this issue. I understand that the Dutch Parliament recently accepted a corona Act that guarantees that each resident has the right to welcome at least one visitor in the case of covid-19 outbreaks.
I ask the Minister to look at this subject again. She should heed what families want, what organisations representing residents and families demand, and what is done in other countries, and put this legal right in place.
Mr Deputy Speaker (Mr Nigel Evans)
I remind the Minister to leave a couple of minutes at the end for the hon. Member for Liverpool, Walton (Dan Carden) to wind up.
Helen Whately (Faversham and Mid Kent) (Con)
I would say that it is a rare Minister who welcomes a debate on day one following their appointment, but truly I do welcome this particular debate because it is so important. Visiting in care settings is something I have spoken to many people about, and I had hoped that by now it would no longer be a problem now we have put lockdowns behind us, but it is still a problem.
I thank and commend the hon. Members for Liverpool, Walton (Dan Carden) and for St Albans (Daisy Cooper) and my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch) for leading this debate and for their powerful speeches, and I thank all the other Members who also contributed very powerfully. I would also like to thank those who have been campaigning so hard for visiting rights, such as the Rights for Residents campaign, John’s Campaign and the Relatives & Residents Association. I know that some of them are here with us in Parliament today, and I am sure that many others are watching from home.
I do recognise the efforts that so many care homes have made to get back to normal, or as close to normal as they can, on visiting after the enormous challenges of the pandemic, because visiting matters. Visiting matters for the resident in a care home—we must never forget that it is indeed their home—and for family and friends who want to spend time with their loved ones. It can be the moment a resident looks forward to all week, a time that keeps their connection to life beyond the doors of a care home and—not to be underestimated—the chance to hold the hand of or have a hug with someone who loves them. I say this knowing that, sadly, many residents in care homes are living with dementia and may be confused or unable to remember things for long. Visits matter for them and their families, not least because dementia can progress so cruelly, as was mentioned in particular by the hon. Member for St Albans.
Dame Andrea Leadsom (South Northamptonshire) (Con)
My hon. Friend is absolutely right to talk about the impact of dementia in particular. During lockdown, a large number of people wrote to me, including a close family member of mine, whose dementia significantly worsened because they were not able to see family members just to keep those memories going. It was absolutely terrible, and I think we should do everything we can to make sure that cannot happen ever again.
Helen Whately
I thank my right hon. Friend for making that point, which we have heard from others in the Chamber.
Visiting is not just a “nice to have”, as we have just heard—all the stories we have heard today can leave us in no doubt about that. The hon. Member for Liverpool, Walton spoke very movingly about the experiences of others, but also about his own personal experience with his father, which he very courageously shared with us. The right hon. Member for Dwyfor Meirionnydd (Liz Saville Roberts)—I cannot pronounce her constituency, but Hansard will resolve it—also spoke very powerfully about her mother. I say to both of them that I am sorry for their loss.
Very importantly, my hon. Friend the Member for Chatham and Aylesford reminded us that this is not just about older people. Visiting, both into a residential setting and out of it, is also so important for younger people—for instance, those with learning disabilities. However, I am short of time, so I will press on.
On top of the stories, there are the facts. We know there is a body of evidence that supports the argument that not having visitors can be detrimental to the health of people living in residential care, as my right hon. Friend the Member for Tatton (Esther McVey) mentioned. For instance, there is a connection between social isolation, loneliness and mental health. In fact, back in October 2020, when I was previously the Care Minister, I commissioned research on the benefits of visiting as well as an assessment of the risks at the time and the options for opening up visiting.
I can also say that I do know personally what it feels like not to be allowed to visit a relative. In the summer, my mother was admitted unexpectedly to hospital and I was not allowed to visit her, even though I did not know whether I would ever see her alive again. The same was the case for my father, her husband for 50 years, who was also barred from entry to her ward, and that was even though we were clearly not in the heart of the pandemic by any stretch of the imagination.
I will look at this issue in three parts, at pace: what has happened to get us to this situation; what is really going on; and what can be done.
Sadly, during the pandemic we saw how hugely vulnerable to covid people who lived in care homes were, and the Government priority was to keep people safe, which meant doing everything possible to prevent covid from getting into care homes. It meant reducing the number of people going in and out who might take in covid. It meant requiring the use of personal protective equipment. It meant regular testing for care home residents and staff, and when we got the covid vaccine it meant prioritising vaccinations for care home residents and staff.
However, even back in 2020 we knew that residents in care homes and their families were suffering from the visiting restrictions, although I should mention that not all residents and their families had the same views. While some wanted more visiting, others did not because they were more worried about the risks. Balancing those two things, the Government sought to enable visiting in ways that would be safe, and we also made it clear that end-of-life visiting should always be possible.
In March 2021 we introduced the concept of the essential care visitor who would be able to visit a resident who needed personal care in any circumstances, including during an outbreak, following the same covid testing regime as staff. In June 2021 we expanded that to apply to all residents. At all times we worked with social care providers—with care homes—because they were the ones that had to put the guidance into practice; they were the ones at the frontline, balancing the prevention of covid with the practicalities of supporting visiting. I do not underestimate the demands that put on care homes, which were also carrying out testing, providing PPE and everything else.
Moving on to the situation today, since April 2022 the Government guidance has been that there should not be any restrictions on visiting in residential settings unless there is a covid outbreak, and even if there is an outbreak every resident should be able to have a visitor. Local public health teams may advise other restrictions on visiting if there is a particular local risk, but that should be proportionate and should stop visiting only in extreme circumstances.
Some Members have said today that the guidance is not clear, while others have said that it is not being followed; it has also been said that the problem is that it is guidance. On the content of the guidance, we have heard from many accounts that it is not being followed, and I will do further work on that.
Knowing the concerns during the height of the pandemic about visiting, the Department of Health and Social Care started tracking visiting restrictions; indeed, I started that as Care Minister, to try to get data about what was going on, because one of the challenges is knowing what is going on at the frontline, as the social care system is so diverse and fragmented. Our data told us in September that 98.4% of care homes were allowing visiting, but I recognise that that data is not the whole answer.
The CQC has been referred to in the debate. I spoke with Kate Terroni, chief inspector of adult social care at the CQC, many times during the pandemic about visiting and she, too, saw the importance of it. The CQC looks at visiting when inspecting care homes, and a lack of visiting or access is a red flag for it. Families should be reporting visiting concerns to the CQC, which then investigates them. I heard, however, the points made by the hon. Member for St Albans about some families feeling they got a mixed response or who were fearful of reporting to the CQC because of the possible consequences. Again, I will take that away from today’s debate.
Under the existing regulations, the CQC can take action if it believes that safe and proportionate visiting is not being facilitated, but I also took note of the point made by the hon. Member for Liverpool, Walton about the CQC powers to get live data being limited and its not having powers to require care homes to report changes to visiting restrictions. I will look into that, too.
Although we have the guidance and the CQC is able to take action on care homes, there is clearly still a problem. I have also seen the data from the Rights For Residents survey showing that 45% of responses said that restrictions on visiting had still been in place since April, and in 11% of outbreaks no visitors were allowed at all. Again, I am concerned to see that.
Maria Eagle
Will the Minister therefore undertake to implement a legal right for visitors to visit, as Rights For Residents has called for? We are all on tenterhooks.
Helen Whately
If the hon. Member will bear with me, I am getting to the third of the three considerations, which is what can be done. On that point, back in April 2021, I was questioned by Parliament’s Joint Committee on Human Rights about this very topic. On visiting, I said:
“I want to get to a position where it is as normal as possible. This is something to come back to in the future, particularly if family members and residents feel that the situation is not working as they would want it to.”
Clearly, family and residents do indeed feel that the situation is not working.
I understand that things are not easy for care homes. I understand the staffing pressures caused by the recent increase in covid—and flu, which many residents are vulnerable to. The majority of care homes are allowing normal visiting and, as hon. Members said, many care homes totally recognise the importance of visitors.
Helen Whately
I am short of time—I have two minutes —so if my right hon. Friend will allow me, I will continue.
However, we cannot continue to have a situation in which families and friends are struggling to see loved ones in care homes. That is why I have already commissioned work today—it was my first commission since my appointment—on the steps that I can take to sort this out. On the question from the hon. Member for Garston and Halewood (Maria Eagle), I cannot announce legislation here and now at the Dispatch Box, but I have commissioned work on what I can do to sort this out. I assure all hon. Members on the Chamber and all those listening to the debate that I do not consider the status quo acceptable, and I am on the case.
Dan Carden
I am grateful to you, Mr Deputy Speaker, for chairing the debate. I was watching the faces of the campaigners in the Gallery, who I am sure wish they had a voice in the Chamber. Having said that, I will take the Minister at her word. It may have been a bit much to ask that, on her first day, she would commit to legislation, but she knows that the campaigners will not be going away and that I and other hon. Members will continue to make their case.
We must put right what has gone wrong during covid. Loved ones are an essential part of care and, as many colleagues have said, there is an easy solution: essential care givers and loved ones should be treated in the same way as staff. The only way to resolve the situation is for this place to put a right in law through legislation. I think that we can all agree on the principle that, whether it is the state, a privately run care home or a hospital, it does not have the right to separate family and loved ones. The right to visit a loved one in a care setting is one that we should all enjoy across the country.
Mr Deputy Speaker (Mr Nigel Evans)
It has been a privilege to chair this emotional and effective debate.
Question put and agreed to.
Resolved,
That this House has considered the matter of guaranteeing the right to maintain contact in care settings.
Sarah Jones (Croydon Central) (Lab)
On a point of order, Mr Deputy Speaker. The shadow Home Office team has been seeking clarity on security breaches involving the Home Secretary and serious discrepancies in the information provided to Parliament. Yesterday, the Prime Minister stated in this House that the Home Secretary
“made an error of judgment, but she recognised that, she raised the matter and she accepted her mistake.”—[Official Report, 26 October 2022; Vol. 721, c. 289.]
That was contradicted last night by the former Conservative party chairman, the right hon. Member for Rossendale and Darwen (Sir Jake Berry), who stated that the Home Secretary was presented with evidence of her breach, rather than proactively reporting it. Similarly, the Home Secretary has claimed the breach related to a written ministerial statement on immigration, but the former Conservative party chairman claimed it related to cyber-security and other media reports state it was a set of Cabinet papers.
The Cabinet Office has now reportedly confirmed that it will investigate neither the circumstances of the Home Secretary’s original departure nor her reappointment. These are questions of national security and are incredibly serious. The public and Parliament deserve answers. Mr Deputy Speaker, this is the latest in a series of attempts to get answers. I ask your advice on how we can compel the Home Secretary to come to this House and answer questions about the accuracy of her resignation letter and the media briefings that have followed.
Mr Deputy Speaker (Mr Nigel Evans)
I thank the hon. Lady for her point of order and for advance notice of it. The Chair does not have the power to compel Ministers to come to the Dispatch Box in the way that she is asking, but there have been previous points of order on this matter and urgent questions—indeed, it was raised at Prime Minister’s questions. I know that the next question time for the Home Secretary is some way off, but none the less I have no doubt that there will be other opportunities for this matter to be raised. Those on the Treasury Bench will have heard the point of order and will ensure that it is brought to the attention of the Home Secretary.
Dog Daycare: Urban Areas
(2 years ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
It gives me great pleasure to rise to raise the important issue of daycare for dogs, particularly in the inner city. I appreciate the Minister having a quick word with me ahead of the debate. I hope that in the spirit of collaboration, despite differences in recent weeks that have arisen across Parliament, we can work together to resolve this issue. Before I get into my main comments, I want to shout out my thanks to Edita Sykora of Hairy Hounds in Hackney, which is a dog daycare and training centre in Homerton in my constituency, and to Daniel Conn of Great and Small Dog Care, which has premises in my neighbouring constituencies of Islington North, and Islington South and Finsbury. I met Edita and Daniel when I visited Hairy Hounds last month.
Dog ownership has been growing considerably. The pet charity PDSA—People’s Dispensary for Sick Animals —estimates that there are 10.2 million dogs in the UK in 2022, with approximately 27% of households owning a dog. There has been a steady rise in dog ownership, as I am sure the Minister is aware. In 2013, 23% of households owned a dog. It is difficult to pin down figures, but anecdotally—certainly in London and I think across the country—we saw a rise in dog ownership during the pandemic. Dogs, which are often called man’s best friend—let us say man and woman’s best friend—have been a very welcome addition to many households and a great support for both physical and mental health. From that we can infer—and what, locally, we know—there has been an increasing demand for dog daycare, particularly as people get back into offices and the number of people working from home decreases. The big challenge is then what to do about the dog they love very much but are no longer able to support during the day.
The regulations on dog daycare are under the Animal Welfare (Licensing of Activities Involving Animals) (England) Regulations 2018 and guidance. Section 4 of the specific statutory guidance on dog daycare licensing states:
“each dog must have 6 square metres of space available to them within the premises - this can include inside and outside space.”
That is great—we are all very concerned about animal welfare and I would not want dogs to be crammed into unnecessarily small spaces—but in the inner city, in Hackney South and Shoreditch, that is just too large for many urban daycares, where space is often at a premium. It is often impossible for those businesses to be viable, given high rents and overheads, yet dog owners need somewhere for their dogs to go. Yes, they can have dogwalkers, but many of my constituents live in small flats where their dog, left home alone for much of the day, would not be in a great setting anyway. So actually dog daycare, sometimes with smaller space standards, could be a better option than the alternatives.
The required space—six square metres per dog—can often be difficult to find in the first place. In the past couple of weeks, I have done three surgeries—two were in people’s homes, visiting them where they are—and I saw, as I have over the years, children in Hackney who do not have six square metres in their home. It is important to look at animal welfare, but if we compare and contrast, the balance does not seem right. It is a fact of inner-city living that dogs need support, but it can be very difficult to find the space.
Animal welfare is at the heart of this issue. It may sound counterintuitive to be arguing for flexibility on space standards to ensure that we can have a thriving dog daycare and training sector in the inner city, but it is important that people have options. The key point is that if dogs do not go to daycare, the other options are a dog walker and being left at home for a lot of the day. I am not at all trying to diminish the important work of many dog walkers, but there are not the places to go locally. Some people want their dogs to go into dog daycare, which, let me be clear, is not always about daycare; it is often about the training and socialisation of dogs to help them with their behaviour. Given the explosion of dog ownership during the pandemic, it is particularly important that new dog owners know that their dogs, and they as owners, can get support to ensure that their dogs are well behaved in public settings.
Some of my constituents are forced, because of the lack of dog daycare, to send their dogs to rural daycare. That sounds lovely and idyllic, but if we look at Hackney South and Shoreditch, which is in zones 1 and 2 in central London, we see that that means, in practical terms, that a van with cages in it arrives from outside London to pick up someone’s dog. If that person is unlucky and their dog is picked up early, and the van still has to pick up other dogs from the area, that can take an hour and there is often at least an hour’s drive, depending on the traffic, to the beautiful rural setting to which some dogs may go. I would not call it good animal welfare to have vans come in to pick up and drop off dogs. At its worst, that means that there are hot dogs in cramped conditions, shut in cages. That is not good for them and it does not help their socialisation and behaviour.
There are real animal welfare benefits to having urban dog daycare. Dogs are not travelling for hours in vans. It can be more natural for many dogs to be in smaller, well-socialised groups. When I went to Hairy Hounds, unbelievably, given the number of dogs that were there, there was not a single bark or any snappiness. The dogs were incredibly well behaved. Edita has done an amazing job. She has converted shipping containers, so when someone looks in, it looks like a lovely front room, with dogs sleeping on cushions, sitting on sofas and behaving as a dog would in a home environment. If I had a dog, that is what I would want them to do. There is an outside space with a course so that they can be trained and exercised, as well as having walks in local parks.
Walks in local parks are important. With the increase in dog numbers, there are issues because some dog owners do not manage their dogs well. With good training and support, however, those dogs behave well and when they meet in the park at weekends, when they are not in dog daycare, they know one another. There is no snappiness and the behaviour is much better, which is also better for the environment generally. Urban daycares, including Hairy Hounds, use outdoor space, and when they do not have the outdoor space, there are frequent, controlled exercise walks in local parks. Again, that allows for opportunities for training and development.
There are other benefits, such as the creation of local jobs—it is important that we maintain jobs across all sectors—and there is no requirement for vans to travel in and out of London, adding to pollution. With the ultra-low emission zone and congestion charging, it can be very expensive for daycare owners as well as for those who are paying for their dogs to go to daycare. There are unnecessary add-on costs that do not contribute anything beneficial for the dog concerned. Hairy Hounds is a good example of how a neglected public space has become useful. This might sound odd to the Minister, but Hairy Hounds is on a former scrapyard right by the railway line. That land is hard to let to other people, but it has been turned into a wonderful haven for dogs.
I have some asks of the Minister. A review of the 2018 regulations is due to be published in 2023, five years after they came into force. It offers the Minister an opportunity to re-examine the standards and the associated guidance and consider whether any changes are necessary. My first ask is for a recognition of the difference between dog daycare in the inner city and in a rural area where land is more available.
It also needs to be recognised that many people want their dog to be looked after close to home. That is not an unreasonable request. We are not asking for cramped space. In some ways, the situation is equivalent to that of nurseries in London, many of which do not even have outdoor space, whereas outside London that is much easier to achieve. As I have mentioned, many owners took on dogs during lockdown for company and for support with mental and physical health. It would be a tragedy if those dogs were then stuck in cramped flats. Unfortunately, many people are having to let their dogs go or give them away because they cannot look after them any more.
Some people have suggested 4 square metres of space for urban daycare. I think a less prescriptive approach might be better. I know that it will be quite challenging for officials to write the rules. I am not suggesting a free-for-all with no regulation; I think it is vital to have the right regulation. At the moment, some areas can license premises and others go through planning permission. There are some areas that could be worked on.
If the Minister or his officials—I know Ministers are always very busy—have time, I know that Edita, Daniel and others would be willing to meet. We could make it a very quick meeting; I entice officials on that basis. We could thoughtfully discuss the options and how they could be codified in regulations so that they are manageable, understandable for businesses, understandable for the consumer—the dog owner putting their dog into the right environment—and, crucially, understandable for local authorities and other inspection regimes that may take an interest in ensuring that provision is safe, properly managed and good for the dogs concerned.
If we have a good discussion, I think we can come up with a good regime in which urban daycares can operate in a viable way and dogs in the city can enjoy the benefits of local daycare. Many dogs already do, but not enough, because not enough daycare is available. I hope that the Minister will consider that genuine and open offer to meet him or his officials. If we could meet before the outcome of the review so that we can feed into it, that would be very helpful.
I am grateful that the Speaker’s Office granted me this debate, because it is very timely. It is really important that we get this right so that we support dogs and dog owners as much as we can.
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Scott Mann)
I thank the hon. Member for Hackney South and Shoreditch (Dame Meg Hillier) for securing this debate. One of my first actions in this House was supporting her as a candidate to chair the Public Accounts Committee, which she has done so eloquently for the past seven years, so it is somewhat fitting that my Dispatch Box debut is replying to her.
We are a proud nation of animal lovers. We have a strong record of being at the forefront of standards of care and protection for our animals. Two hundred years ago, the United Kingdom was the first country in the world to pass legislation to protect animals: the Cruel Treatment of Cattle Act 1822, which was instrumental in paving the way for future animal welfare legislation.
The Government recognise the importance of high animal welfare standards. On 12 May last year, we published the action plan for animal welfare, laying out the breadth of animal welfare and conservation reforms that we are looking to take forward. We are already delivering several of those objectives. We passed the Animal Welfare (Sentencing) Act 2021, realising our manifesto commitment to
“introduce tougher sentences for animal cruelty.”
The Act’s new maximum sentence of five years’ imprisonment and an unlimited fine for the worst cases of animal cruelty is a significant step forward in protecting animal welfare. In addition, the Animal Welfare (Sentience) Act 2022 recognises the sentience of vertebrates, decapods, crustaceans such as lobsters, and cephalopod molluscs such as octopus. Our approach takes into account central Government policy decisions.
That is not all we are doing. We have passed the Glue Traps (Offences) Act 2022, which prohibits the use of inhumane glue traps, and the Police, Crime, Sentencing and Courts Act 2022, which introduces tougher sentencing and improved powers to tackle the cruel practice of chasing hares with dogs. Under the new measures, anyone caught hare coursing will now face an unlimited fine and up to six months in prison.
The welfare of dogs is important and close to the hearts of many people in this country. The hon. Member has spoken about the important issue of urban dog daycare centres undertaking to improve accessibility and local options for dog owners who want their pets to be cared for. I am myself a dog owner, and I know that owning and caring for a dog is wonderfully rewarding. I should like to think of my two doggos going to Hairy Hounds and having a fabulous afternoon there. I am well aware of the vital role that dog daycare centres provide in ensuring that our pets are looked after. It is hugely important for dogs— regardless of their size or location—to have their welfare needs met. From the most impressive of Great Danes to the diminutive chihuahua, every dog needs appropriate space.
Before I deal with the key issues of the debate, let me say something about the Animal Welfare (Licensing of Activities Involving Animals) (England) Regulations 2018, which introduced the licensing scheme for commercial dog daycare centre providers. In 2018 we brought together and modernised the licensing of a range of activities by making those regulations under the Animal Welfare Act 2006. The regulated activities include dog and cat boarding, dog breeding, pet sales, the hiring out of horses, and the keeping or training of animals for exhibition. The 2018 regulations apply modern animal welfare standards to those activities, and make it easier for local authorities to carry out their enforcement duties. They also enable businesses to gain earned recognition by allowing local authorities to grant longer licences to premises which meet higher welfare standards.
The regulations were designed to specify and update the licensing of five key activities involving animals. They include a licensing scheme which ensures, at a minimum, that improved standards of welfare included in the 2006 Act are applied across the five licensable activities. They build on existing requirements, some of which had existed for more than 50 years, including dog boarding legislation from 1963. Thankfully welfare standards have developed considerably since then, and the dog boarding sector has changed significantly. The regulations enable welfare protection to be extended to novel types of dog care which were not mentioned in the Animal Boarding Establishments Act 1963; dog daycare was one of those activities.
As the hon. Lady will know, local authorities are responsible for implementing the licensing regime. They ensure that businesses that should be licensed are licensed, and meet the licence conditions of the 2018 regulations. They also check the welfare of the animals involved in licensed activities. Local authorities carry out enforcement activity where necessary if they find that businesses are not meeting their obligations.
The regulations are supported by statutory guidance from the Secretary of State for local authority inspectors implementing the licensing regime. The guidance is intended to clarify details of the requirements, and to assist inspectors in their interpretation and application of the licensing regime across England. That ensures consistency between local authorities and gives confidence to trained local authority licensing inspectors, many of whom will have responsibility for licensing a wide range of other business types.
Dame Meg Hillier
One of the anomalies in the system is the fact that some local authorities use a licensing scheme while others use planning permission. There are other parts of the regulations, which I did not go into in detail this evening, which is a further reason why it would be helpful if we could have a meeting.
Scott Mann
I should be more than happy to meet the hon. Lady and representatives of her businesses at the Department—if I am still in place for the next few hours, which I very much hope I shall be. I am keen to open up this discussion, because I think there might be something we can do here.
The guidance for the licensing regime is published on gov.uk, allowing prospective and existing licence holders full access to the information.
Let me now turn to the issue at the centre of the debate: the space required for dogs in daycare settings. The 2018 regulations state that dogs should be provided with a suitable environment. As I mentioned earlier, the regulations are supported by guidance from the Secretary of State, to which local authorities are required to have regard. The guidance states that when welfare standards are not being met, inspectors should take several factors into account. For instance—as the hon. Lady mentioned—each dog must have 6 square metres of space, which can include inside and outside space.
It may not surprise Members to learn that there are numerous business models in dog daycare centres. The welfare needs of an individual dog do not change on the basis of location, but the way in which they are met may vary.
In all settings, the primary licensing objective is to ensure that the dog’s welfare needs are met. Given the diversity of the sector, making a quick change to that guidance without consulting more widely may well resolve one problem but create others. Prior to making any change to the guidance, we need to consider carefully that risk and any impact on the animal welfare standards that I mentioned earlier. We would also need to consider any proposed change to the guidance for dog daycare centres, alongside similar guidance for other licensable activities involving dogs, to ensure parity of provision and consistency of standards.
I also understand that there are some concerns about dog daycare centre providers operating outside urban areas, where there is more space. I have received correspondence suggesting that dogs are travelling for significant periods to be taken to those places, as the hon. Lady rightly said. Animals’ transportation needs must be met—people must avoid causing them pain, suffering or distress—and transportation must fully comply with legal requirements to protect their welfare, including the provision of sufficient space, while journey time should be minimised. We take potential breaches of animal welfare legislation seriously, and advise that any concerns should be reported to the relevant local authority.
In February this year, we published an update to the guidance, largely to bring it in line with modern publication standards. After publication, a concern was raised regarding dog daycare. Working with the sector, we took steps to address the issue earlier in 2022. We were also clear with all involved that we would also consider the issue of space in the 2018 regulations.
The core purpose of the review is to assess the current operation of the 2018 regulations against their original impact assessment and policy intent, and to make recommendations on whether to retain, repeal or replace them. We are always seeking to learn from the implementation of legislation, and we feel that the review is also an appropriate time to re-examine the standards and the associated guidance, and to consider any changes.
I can confirm that DEFRA has begun the review process and that, as part of the review, my officials are proactively working with partners, including local authorities, businesses, and animal welfare organisations, to collate data that can provide a picture of licensed and unlicensed activities involving animals in the UK. I can confirm that Islington dog services and other urban dog daycare centres that have co-signed letters will be included in those submissions. As I have said, I am more than happy to meet the hon. Lady and her constituents.
Given the aforementioned need to consider the space needed by dog daycare centres, and by all licensed dog activities, the best route is to allow for the review to be completed before taking any further steps to address the guidance. However, we recognise that some businesses may not be able to wait that long because of their impending licence renewals. In light of all those factors, I will commit my officials to finding an interim solution for the space issue that protects the welfare of dogs in daycare settings, but which tries to reduce the impact on the urban businesses. We recognise the high demand for dog daycare in urban areas such as London, and we recognise and consider the issue of space across licensable dog activities.
The Government recognise the important role that responsible dog daycare centres play in caring for our pets. Their services not only ensure the welfare of dogs and afford them the opportunity to socialise, but allow the owners to go to work—we are very supportive of that. I hope that all present are reassured that the Government have heard of the difficulties in urban dog daycare centres and are committed to taking steps to address some of the challenges they face.
In the meantime, local authorities should be the point of inquiry about the application of the regime. If a licence holder is unhappy about the way a local authority handles an inquiry, they can report the matter to the chief executive officer of the local authority or, further still, to the local government and social care ombudsman.
I thank the hon. Lady for bringing the debate about.
Mr Deputy Speaker (Mr Nigel Evans)
If there is not a pub called “The Hairy Hound”, there should be.
Question put and agreed to.
Economic Crime and Corporate Transparency Bill (Third sitting)
Thursday 27th October 2022
(2 years ago)
Public Bill CommitteesRead Full debate Economic Crime and Corporate Transparency Act 2023 View all Economic Crime and Corporate Transparency Act 2023 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 27 October 2022 - (27 Oct 2022)
The Chair
Good morning, everybody. We will go into private session to discuss lines of questioning. With the agreement of the Committee, we will delay the end of each panel of witnesses by five minutes, because we have been held up.
The Chair
I thank Members and those giving evidence for their flexibility in moving rooms, and I inform Members and those giving evidence that we will be in this room all day today. Could the witnesses please introduce themselves for the record?
Helena Wood: Hello, my name is Helena Wood. I am a senior research fellow at the Royal United Services Institute, where I lead the economic crime programme.
Duncan Hames: Hello, I am Duncan Hames. I am the director of policy at Transparency International UK.
The Minister for Security (Tom Tugendhat)
Forgive me, Ms Wood; my hearing is not very good. Can you speak straight into a microphone?
Helena Wood: Yes.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
Q
Helena Wood: To place it in context, one of Britain’s great financial crime exports of recent years has been our joint money laundering information taskforce, which is one of the first public-private partnerships. That model has been replicated across the globe, with public-private partnerships now seen as a norm by the FATF, the international standard setter on tackling money laundering and terrorist financing. In one respect, we really have been a global leader in that regard. However, as with many British exports, we are now exporting that abroad and it is being copied and replicated at a speed and scale beyond what the UK is doing. Increasingly, we are seeing people moving from peer-to-peer information sharing towards a more collaborative data analytics model. I point to the models being set up in Holland and in Singapore as particularly groundbreaking in that regard.
Coming back to the provisions in the Bill, do they get us from where we are now on peer-to-peer information sharing, which is one thing, towards this world of collaborative data analytics, which we need to get to to really home in on financial crime? No, they do not. Although the provisions in the Bill will go some way towards increasing private-to-private information sharing and, in particular, the risk appetite in the banking sector, they really do not keep pace with the global standard.
What we would like in the next economic crime plan, which we hope to see this side of Christmas, is something that is much more ambitious. In many ways, I would say that while it is welcome, the Bill is a slight missed opportunity with regard to information sharing, given that it really does not push forward to this big data analytics model that others are moving towards.
Seema Malhotra
Q
Helena Wood: Absolutely. We have sat around for three years discussing information sharing in various working groups under the first economic crime plan, and it is a disappointment that all we have come up with is these one or two clauses of a Bill that merely take us towards quite analogue sharing between individual institutions. They do not take us as far as we should go.
I am not saying that at this stage, where that opportunity has been missed, we should push for something within the context of this Bill. These are really complex issues that require and deserve much further public consultation, particularly given the link with data privacy and individual rights of confidentiality, but we must see it in the next economic crime plan if we are not to get left behind. We invented public-private partnership, but we are really not driving that forward in the global context any more: we are being left behind. While this is a welcome step, and it is welcomed by the banking sector, it does not get us to where we need to be in 2025 and beyond.
Seema Malhotra
Q
Helena Wood: Absolutely. On the information-sharing gateways that we have in place currently, I particularly point to section 7 of the Crime and Courts Act, which, although being used for JMLIT purposes—this public-private partnership—they were not designed for that purpose. There was an opportunity within the context of the Bill to push for something that really is fit for purpose and gives the regulated sector the confidence to share under a collaborative data analytics model.
We have seen others—I particularly point to the Dutch, who at the moment have some legislation going through, which really gives a lot more confidence to the regulated sector to share. The Transaction Monitoring Netherlands platform allows some of their biggest banks to share transaction monitoring data at scale to point to where the biggest risks are emerging. Would this legislation allow us to set up a similar shared utility? No. It would not give them the confidence. Although it takes us a step forward and should be welcomed, it is not taking us where we need to be. We need something much more ambitious that keeps pace with global best practices when we look at the next economic crime plan, which I believe the Home Office will be launching imminently.
Seema Malhotra
Q
Helena Wood: I will start and then pass to Duncan. I would always say there is only so much that legislation can do. In many ways, as the Financial Action Task Force pointed to in the 2018 evaluation of the UK, we do have some of the best laws in place in the country. Although this law is absolutely essential in catching up with the threat, particularly around Companies House reform, we really do not have a problem with law; we have a problem of implementation in this country. We had an economic crime plan tracker, which is online and which you can scrutinise. It looked at all the 52 actions under the economic crime plan, and the most progress was made in areas of regulation and law—the bits that are quite easy and cheap to implement.
There was less progress in the areas of implementation, particularly around the enforcement of the existing laws in place. The big things that I would like to see prioritised outside the context of this particular Bill are things like policing reform, investment in the National Economic Crime Centre—I know you took evidence from them on Tuesday—and a real implementation of what we have got. That is not to say that this Bill is not necessary. It absolutely is, particularly around the huge gaps in Companies House capability and fundamental changes to its role, but none of this will come to anything if we do not invest in the enforcement response. I will pass over to Duncan, if I may.
Duncan Hames: We certainly welcome the Bill, and we welcomed the Government’s announcement that they intended to legislate for these reforms three and a half years ago. It is great that these are now before you, as Members of the House. The opportunity to address these issues dos not come along as often as it might feel that it has this year since Putin’s further invasion of Ukraine, so it is really important that we get reform of companies right this time rather than wait for things to be done later.
On what we would like addressed in the Bill, first, it is incredibly important that we do not allow a situation to develop where UK companies become the respectable front of otherwise secretive networks of corporates that provide the layering required to launder illicit funds. The use of corporate partners in offshore jurisdictions to control UK limited liability partnerships, for example, is a particular weakness that I can elaborate on.
Secondly, with these very welcome reforms, shareholder information will become the poor relation on the company register. That is a particular concern in instances where companies claim not to have a person of significant control, and shareholder information becomes our next best attempt to understand who is really behind those businesses.
The Chair
May I say to the hon. Member that she has had quite a few questions and we are limited on time, so this will be her final question?
Seema Malhotra
Q
Duncan Hames: A lot of information was collected on shareholders when this register was developed six years ago, and in many cases companies have been able to say, “There have been no changes.” That means there is a risk that information on shareholders has become quite dated, and finding what information there is involves tracking down PDF format documents that were uploaded a long time ago. There is an opportunity, whether in legislation or in practice at Companies House, to make sure that shareholder information does not become much less usable for investigation and due diligence.
On the third thing you asked me about, we think it is very important that Companies House has the powers and uses them to check the information, where it thinks necessary, that has been used to verify information by trust and company service providers, and not simply take that on trust where it has concerns or suspicions.
Alison Thewliss (Glasgow Central) (SNP)
Q
Duncan Hames: Limited liability partnerships have been a company entity available for the last 20 years or so, and 200,000 have been formed. We noticed that they kept appearing in revelations about major money laundering scandals. In the Danske Bank scandal, for example, the investigations found that UK limited liability partnerships were the vehicle of choice for the non-resident clients of its Estonian branch basically to hide their identity from those conducting compliance checks.
There are 1,600 LLPs that have appeared in these various scandals, but there are thousands upon thousands of UK limited liability partnerships that share the same offshore corporate partners. A pair of corporate partners registered in Belize are the controlling corporate partners of over 2,000 UK limited liability partnerships.
What is bizarre is that MPs have thankfully legislated to end secretive ownership of UK property, but we do not have the same requirements for overseas entities that control UK limited partnerships. As a result, we still have a veneer of UK respectability presented over what is essentially a secretive corporate network.
Alison Thewliss
Q
Helena Wood: There are some fundamental flaws. Although this is a significant step forward from where we are, as we all recognise, there are some flaws in the model that has been designed. When the consultation was put out three and a half years ago, we advised against outsourcing ID verification checks to the trust and company service provider sector.
Our evidence for saying that was that there was an assumption in the model being developed that these sectors were largely compliant with money laundering regulations, but we know from the various scandals that Duncan has pointed to and the great investigative work by Duncan and others that that is not the case. I have referred publicly to some of that sector as a bunch of cowboys, and I would gladly go on the record to say that today. That comes from poor levels of compliance, which is the result of poor Anti-Money Laundering Council provision in the sector.
If we are to go ahead with this model where we outsource those checks to a sector that hitherto has not been known for its compliance with the standards, we need to do something outside the context of this Bill to really hammer that home. I particularly point to HMRC as the supervisor of the standalone TCSP sector. We really need to hammer down on compliance in that sector to raise standards overall so that HMRC can properly take on the role, although I restate that we initially advised against it taking on that role, given the current state of compliance in the sector.
Eddie Hughes (Walsall North) (Con)
Q
When Seema was asking about data sharing, Helena, you were saying that the Government are not going far enough. It is odd for me to ask you to second-guess the Government, but why do you think we are not going far enough? Sometimes it feels to me that people are in a hurry for legislation to do everything that needs to be done to improve a situation, whereas that, sometimes, is almost counterintuitive because it is better to do it incrementally. Let us do some stuff, get it right, come back, revise, learn and move forward again. What are your thoughts with regard to their pace of movement?
Helena Wood: The pace of movement on information sharing? I think there is an inherent tension at the heart of all global anti-financial-crime standards, which is often with how we square the circle of data privacy. They are two often quite diametrically opposing concepts. We need to find a way to not rush into this. Your point is well made. If we are going to push people into sharing more individual personal data, we need to do so in a way that utilises the best technology to preserve the privacy of innocent individuals. We need to bring in the data privacy community to make sure that whatever we craft meets the needs of that community also.
We should not—I agree—push forward so quickly with something that is inherently complex. I absolutely do not think that we should be pushing for amendments within the context of this particular Bill; we need to be looking at the issue more broadly. We need to look at how the Data Protection and Digital Information Bill, which is currently stalled—I do not know what its future is—will also facilitate greater sharing for financial crime purposes while protecting individual privacy.
The simple fact is that this is a very complex and emotive issue that deserves due consideration and full public consultation. However, we have had three years. This was a key tenet of the economic crime plan that came to an end in July. There were multiple meetings to look at how we could do this and what we came up with were these two clauses, which, for me, are a missed opportunity, given that others have managed in the same timeframe to move forward with much further-reaching legislation, such as that currently being debated in Singapore and the Netherlands. I think we could go further than we need to, otherwise we get left behind.
The Chair
I am very sorry, but we are going to have to move on to other Members. I will come back if there is time at the end for further questions.
Dame Margaret Hodge (Barking) (Lab)
Q
I am going to ask about another issue, just to get it on the table. People engaged in the debate over dirty money are very anxious that we should move from just freezing the assets, particularly of the Russian Government and Russian oligarchs, to seizing the money so that we can use it—particularly for the reconstruction of Ukraine, when that war comes to an end. Can I have your views on that, starting with you, Duncan?
One final thing: a big thank you to both of you for the work your organisations do in exposing a lot of the problems and for the very positive attitude you have taken to establish solutions. Thank you to both of you, individually and to your organisations.
Tom Tugendhat
Hear, hear!
Duncan Hames: Thank you. I think it is important that we should continue to respect the rule of law and have a judicial basis for asset recovery. Too often, it is tempting to have a more administrative approach, and with that comes risks. It is very important that, as well as having the clarity of purpose to designate a whole substantial raft of individuals and entities for Russia sanctions, we have the determination to make those sanctions work.
We published some research just last month that found hundreds of millions of pounds’ worth of UK real estate that we were fairly sure was owned and controlled by individual entities that have been named under Russia sanctions. However, if you check on the Land Registry, there are not any of the typical markers to say that you cannot sell or transfer or trade this property. That is partly because of some of the very clever and complicated arrangements for their ownership, including using trusts.
In the work you are doing on the Bill, there is an opportunity to ensure that really important measures for global security, such as our Russian sanctions, actually work, bite and make it impossible for those who have moved large amounts of wealth out of Russia to continue to control it in the interests of their political sponsors.
Helena Wood: I could not agree more that we need to start moving from freeze to seize, but I echo Duncan’s sentiments that we must do so in a way that protects the very things we are trying to protect and do: the rule of law, due process and democracy. We should not push towards measures that effectively put in place a ministerial decree for confiscating individual assets and run roughshod over A1P1 principles.
That said, there is further we could go in UK legislation. Even with the advent of the much vaunted unexplained wealth order, our law enforcement agencies remain on the back foot. There is more we can do within the confines of European rights compliance-tested laws of reverse burden mechanisms to put law enforcement on the front foot.
Fundamentally, though, it is not going to be an easy fight to link those assets back to the criminality from which they once derived, given the difficulties of gaining evidence across borders. However, there are models we could replicate that have been tested for ECHR compliance, such as in Italy and Switzerland—I could name others. If the Committee will forgive me for trailing some forthcoming RUSI work, a paper is coming in November or December this year that sets out some recommendations of where part 5 of the Proceeds of Crime Act 2002 could replicate some of the principles of other regimes and push forward to at least put law enforcement on the front foot.
The other issue I would point to, which has already been partly legislated for, is cost protection for our law enforcement agencies. We have legislated for cost capping in cases involving UWOs, but they are not the right tool to use in all cases; I particularly point to the oligarchs, who do not fit under the definition of PEPs in UWO legislation. There is an argument for the Bill to potentially push for full cost capping of part 5 cases to increase the risk appetite of our law enforcement agencies to take those cases on in the first place.
James Daly (Bury North) (Con)
Q
“direct sharing between two businesses in the AML regulated sector”
and
“indirect sharing through a third-party intermediary for businesses in the financial sector”.
That is what the Bill does. Putting it bluntly, what is wrong with that? What is the criticism of those aims and the things it allows businesses to do?
Helena Wood: Civil liability for confidentiality is one barrier. It is an important one, and removing it will hugely increase appetite, but it is not the only barrier. The boundaries within our data protection legislation are not explicitly clear; they are open to interpretation. We need more guidance, potentially from the Information Commissioner, to make clear what those boundaries are. We potentially need further clarification in the data protection legislation that is currently going through—
James Daly
Q
Helena Wood: They absolutely are, and I would not—
James Daly
Can we very quickly come to you, Mr Hames?
Duncan Hames: Helena is the expert on this particular subject.
Helena Wood: This is a welcome step forward. Others are going much further. The legislation that has been put forward in Singapore and Holland basically removes any barrier to information sharing by making it mandatory to share private-to-private in the context of the shared utilities that are being set up in those jurisdictions. Whether we should go down mandatory sharing is, as I have said, something that requires much further and longer public consultation. But we do need to look at that.
Liam Byrne (Birmingham, Hodge Hill) (Lab)
Q
Duncan Hames: It is a serious matter, and this Bill doesn’t. Although, as you say, we published that report very recently.
Liam Byrne
Q
Duncan Hames: Doesn’t. What I said earlier was that if you use an offshore entity to hold UK property, as a result of legislation MPs passed this year you now have to register on the register of overseas entities who the beneficial owner of that entity really is. We find out who really owns bits of Britain. But you can control a UK limited liability partnership through offshore entities, and we do not find that out. There is no way of checking the information.
We are presenting a respectable veneer behind an otherwise opaque offshore corporate network. If we could require the same level of declaration around the corporate partners of those limited liability partnerships, then we would lift some of that veil of secrecy. Then maybe we would not have a situation where rogue bankers in Baltic states were getting their clients to use UK limited liability partnerships to get around the compliance checks in their own organisations.
Liam Byrne
Q
Duncan Hames: Not yet. I hope you will be able to address that.
Tom Tugendhat
Q
Duncan Hames: Yes, happily. We are quite a small organisation, but this is about the power of putting information in the public domain. The report that we were describing earlier is a form of network analysis; that is the sort of thing you can do if open data is published, rather than information in PDFs, which are essentially photographs of old documents.
Whether it is organisations like ours, or investigative reporters such as the Organized Crime and Corruption Reporting Project, civil society has shown its potential to help uncover those crimes if there is information in the public domain. If we want a spirit of partnership, and if Government want the private sector to be its first line of defence, then it is really important that everyone is equipped with the tools that they need and that the company register is providing accurate information, which has been checked, that they can rely on.
Tom Tugendhat
Q
Do you agree that those reforms begin that process and that fightback? Do they make a difference by scrubbing, as it were, the inside of the whitened sepulchre to ensure that we are exposing it to sunlight, so that organisations such as yours, the media, and many others around the world, will be able to identify where that money is going and from where it has come? This is also about jurisdictions overseas who are losing money through our system, not just about us who have to control it.
Duncan Hames: Yes, I agree. The Bill is beginning that. The challenge that we have is that it is six years ago that we last made reforms to Companies House, and I do not know when you are next going to get a chance to make further progress.
Tom Tugendhat
I have only just come into post.
Duncan Hames: It is hard, as we are often told, for legislative time to be found. So please make the most of the opportunity and take it as far as you can. It was only this summer that the US Treasury issued a money laundering alert about evasion of Russia sanctions. In that, they identified UK limited liability partnerships as part of the typology of the financial logistics for evading sanctions.
Tom Tugendhat
Q
Duncan Hames: But this is the jurisdiction that Members of our Parliament are responsible for.
Tom Tugendhat
Q
Helena Wood: May I come in on that particular point around Companies House reform? The point has been made by others giving evidence here this week and I will make it again until it sticks. Companies House reforms mean nothing if we do not resource Companies House properly. Using that secondary legislation to raise formation fees to £50, at least, is absolutely essential—
Tom Tugendhat
That is absolutely true, which is why the partnership that we have to put in place alongside agencies, NGOs and journalism, to make sure the application programming interfaces are open is so important.
The Chair
Order. I am afraid that brings us to the end of the time allotted for the Committee to ask questions.
I very much thank our witnesses, Helena Wood and Duncan Hames, for their time, and I thank Members for their questions. We now move on to the next session.
Examination of Witnesses
Chris Taggart and Elspeth Berry gave evidence.
The Chair
We now hear from Chris Taggart from OpenCorporates and Elspeth Berry from Nottingham Law School. You are both very welcome; thank you very much for joining us this morning. Could you please introduce themselves for the record? We have until 12.35 pm.
Chris Taggart: My name is Chris Taggart and I co-founded OpenCorporates, the largest open database of companies in the world. Essentially, we take official company information, from Companies House and the equivalent of Companies House in about 140 jurisdictions, and we put it all in one place and make it freely available for everyone to use. About five million users a month use the data—everyone from journalists to law enforcement, regulators, banks, ordinary companies and so on. We are also a social enterprise: it is a company, but with public benefit at its heart.
Elspeth Berry: My name is Elspeth Berry. I am an Associate Professor of Law at Nottingham Law School. My teaching and research includes limited partnerships—well, all partnerships, including limited partnerships and limited liability partnerships, or LLPs—and my research in recent years has focused on limited partnerships and LLPs.
Seema Malhotra
Q
I want to ask you a bit more about the lack of transparency when it comes to shareholders. How much do you see that as an issue? Can you suggest any specific measures to increase shareholder transparency?
Chris Taggart: I will maybe talk about the information sharing after. First, shareholding data is not even data. It is just a name; it is just some letters put together. We have opened the gates by allowing it to be just a transient historical record—you know, somebody owns shares in a company. They make a report. They put down a name; we assume that they put down their own name, but of course they can put down any name. But the shares are transferred the next day—maybe into a trust, maybe to somebody else—and there is no record.
At the moment, I think we have that with shareholding, particularly given the international context of cross-jurisdictional context networks and so on. Shareholding actually matters. If someone who runs a chip shop in south Wales or is a mechanic in Estonia, or wherever, owns the shares, they own the shares. That matters. We are not recognising this.
I absolutely welcome the Bill and think it is a huge improvement on where we are, but I think the shareholding is a particularly strong example of how there is essentially still the same problem, which is that Companies House is a historical record of information submitted by people, and the bad actors will always lie. We need to change things, so that it is much more difficult and risky for the bad actors to lie. I think that is the fundamental criticism of the Bill, which, by the way, I think is entirely welcome. It is an incredibly thoughtful and well-drafted Bill, but it is fundamentally coming from a different era. The Bill is a better horse and cart, and the criminals are driving around in fast cars.
Elspeth Berry: On the shareholder transparency point, I noticed that the identity verification is not being applied to shareholders and I think it could be, possibly subject to some de minimis requirements. If they come in as PSCs, which is possible, that also brings us to the problems with the PSC legislation, because the thresholds are, depending on which view you take, either woeful in terms of not catching enough people or should just not be there at all.
The third thing is that, for reasons I do not fully understand, I see that the central register of members is going. Some things now have to be central and some things cannot be central, and shareholders will not be central. I would also point out that the unique identifiers are not being applied to shareholders, although, in any event, they are apparently they not going to be made public. I am not a journalist, but I rely on the work of some fantastic investigative journalists and organisations to dig through that stuff and find out, “Well, that shareholder is appearing here as a partner, there as a director and there as another shareholder,” but that cannot be done.
Alison Thewliss
Q
Elspeth Berry: The idea is that the John Smiths, the J. Smiths and the Mr Smiths can be linked. Where it is a common name—or an overseas name, where a person like me who was looking at this would not know it was a common name and might assume, “Well, that must be the same person,” when actually it is not, because it is such a common name—it is important to find links. I can see that it is important for Companies House as one of their red flags, and they are going to be able to operate this system, but only partly, because it will not apply to shareholders or partners. But outsiders—people who do fantastic work that Companies House can’t, doesn’t or won’t—are going to find it difficult, or at least as difficult as it is now, to do the work of trawling though everything.
Alison Thewliss
Q
Chris Taggart: Perhaps not as much as you would think. Companies House currently has a thing called the personal ID, which is sort of inferred. It is not that somebody has confirmed they are this person, that they are the same as that person and that it has been identity-verified. By looking at the home address and other information that has been supplied and that they have, Companies House create a personal ID. We actually pull in information from the API and from various dumps. In some of those dumps, that information exists, but not in the normal stuff. So that information is there.
I would just back up what Elspeth said: not only is it essential, but I see no benefit otherwise. If you are a business trying to understand whether you want to do business with another company—this is not just about crime; this is about creating a great business environment—you can go to a director page on OpenCorporates and see other people with the same name. Okay, that is useful, but do you really want to be trawling through that and making a judgment call? It is almost like sending investigators off to try to understand whether they are the same. If this person has three other companies that all went bust owing money, you do not want to do business with them. I see no public benefit at all to keeping this identifier private and a secret.
Elspeth Berry: In terms of historic information, I think that has changed over time and gone in a bad direction. As I understand it, Companies House is now restoring some of the historic information, and it is important that that is available.
I would also raise the issue that there are provisions here for limited partnerships to be deregistered or dissolved. I think the provisions themselves do not do what it was hoped they would do. We also need to know how those are going to appear on the register, because that has been a problem with—shall I say—shady limited partnerships appearing and disappearing.
Alison Thewliss
Q
Elspeth Berry: In terms of the historic record? I would think 20 years; I understand that has been done for a lot of company information. If we are now going to have a registry power to dissolve and/or deregister, it is a little problematic. All of that needs to be clear. We know that there has been a pattern of limited partnerships appearing and disappearing, perhaps ceasing to trade and perhaps coming back. We know that that is a pattern, which we want to see, and if 20 years has been the standard at various times for companies, why not for everybody?
James Daly
Q
Chris Taggart: That is a good question. Certainly, we have been dealing with Companies House on quite a close level since we were founded 10 years ago. I have huge respect for them; they do really good work incredibly efficiently and so on. The challenge is that they are good people, but the people we are trying to stop are not good people, and they think in a different way.
What Companies House think they are doing is creating companies—when people think of companies, they think of a factory, a shop, a company providing services or manufacturing things, and so on—but what they actually do is create legal entities; they create things that have a distinct legal personality and limited liability. The criminals know that, they are using it and they are using networks of these things. More than that, we are talking about a situation where you start to think about things from a traditional company point of view—what we all used to think of as companies—but, actually, the legal reality is one of legal entities, so you need to start thinking about this in an entirely digital way, an entirely data way and an entirely legal way.
I will give you an example. Where a company has got assets—it has got things—there is a downside to it being struck off. If you are overseas and you create a UK company, and the company is struck off, as long as the money has come in and out before that, that is fine—you have done the job for the company. We need to have a change of mindset, and that change of culture will be as important as the powers that Companies House actually have.
James Daly
Q
Elspeth Berry: There will always be a problem, but that does not mean we should not tackle it and it does not mean that we cannot tackle it, and I appreciate that the Bill is attempting to tackle it. All of the things it is trying to do are good, but almost all of them could be significantly improved. We have to deter the wrongdoers. We have to stop looking as though this is a good jurisdiction to do this in. For example, there have been arguments about the fees. It is generally accepted that they should go up, and if your business plan cannot cope with £100 or £500, what kind of businesses are being set up here?
If we are not checking the identity of shareholders and applying PSC legislation to partners, there are still so many loopholes. It is not that there is something there that would be a sanction if they ever caught you—we know this from police and crime; if people think there is only a vanishingly small chance of anyone ever noticing, it is worth taking the risk. I suppose that brings us back to the point about the registrar’s powers, which are great, but they are not duties in most cases. How will we know if she has done it, or what she can reasonably do to minimise the risks of various things—to check information?
One of the things we need is a clear database of things that are red flags—things that Transparency International and lots of journalists have identified that the registrar should be looking for, some of which the legislation still allows, such as things like overseas registries and multiple formations, and the use of company service providers. The problems with those were talked about during the earlier session, and the Bill is not going to entirely resolve those, if at all. If we can tighten down on a lot of those, we will reduce—never eliminate, but reduce—the amount of wrongdoing that is here because of problems we have either created or left in our laws.
Dame Margaret Hodge
Q
I wanted to ask about shareholders and then about the disappearance of limited companies if they dissolve. I agree that shareholder information is really important—Usmanov brought that home to me. When we sanctioned Usmanov, he just gave everything to one of his daughters or something—anyway, it disappeared into other people’s hands. Can you explain a little what we need to do on shareholder information? At the moment, there is a 25% shareholding barrier. Should that be reduced to 5% or 10%? That is my question.
Then, on limited partnerships disappearing, that was brought home to me very much as a result of the terrible incident in Lebanon—the explosion in Lebanon. It was found that a British-owned company was behind that, with a beneficial owner in Cyprus who happened to be a corporate service provider. It then turned out that it was a nasty situation where the actual owners were some Syrians, and the fertiliser was not going anywhere near Mozambique—which was where it was meant for—but was being used for barrel bombs to kill Syrian citizens. The moment that happened, they tried to dissolve the company and get it to disappear, and obviously in that area of wrongdoing, we need to hang on to any knowledge that we have.
This is for both of you: what amendments do you think are necessary to enable us to stop people dissolving companies and to force information out, so that where there has been that terrible terrorist wrongdoing, we can pursue the wrongdoers? That said, I take the view that a lot of what we are trying to do is prevent these things from happening in future.
Elspeth Berry: On the PSC point, a reduced percentage would be a vast improvement, but I think a zero percentage could be considered. You can have a lot of influence in all sorts of ways while not necessarily hitting those targets, because you are connected with somebody else in a way that we do not catch through the legislation. But I certainly think that a reduction would be a big improvement to try and catch more people who are de facto PSCs, but not in law.
On the limited partnerships point, there are a lot of things we could do. The Bill makes a start in doing those, but given that a lot of this started with the limited partnerships consultations, I am slightly concerned that they got put aside because it was a case of, “Here comes all the corporate stuff,” and that is where all the money and excitement is. There is this small area of limited partnerships where there is a strong lobby for those people dealing with limited partnerships for particular purposes—quite legitimately—who do not necessarily want this to be made too difficult, but we get things like the restrictions on corporate partners not being applied to LPs. I had to read the provisions several times. I dread explaining them to my students, because of the difficulty in trying to get at who owns limited partnerships and who is in control of what is going on in them.
That level of “corporate partner on corporate partner on corporate partner” exists, and we know it is a problem. It is going to continue, depending on what we do with LLPs, and it is a big problem that they are just not in the Bill at all. It is like, “Oh, well, we’ll just apply the legislation to them later,” but which bit of the legislation? The corporate bit? The partnership bit? LLPs have a history of having the bits they want—the nice bits of corporate law and the nice bits of partnership law. Things can get missed because we think, “We have done the big task with the Bill.” PSCs can be applied to partnerships; they haven’t been here, and there is an assertion that it is not possible legally, but as a lawyer I would say that that is not correct.
You even have a provision here saying that people who have been disqualified under the company directors disqualification legislation can still act as limited partners. Limited partners have a limited role by definition if they are behaving properly—of course, they may not be—but even if they are behaving properly, a limited role is not no role for someone who has actually been disqualified from acting as a company director.
Chris Taggart: To pick up on an earlier question, the best information sharing is going to be information sharing in public. A lot of the great work that was done on people after the invasion of Ukraine was done using public domain information. There is a risk to lying in public. The fact that criminals will lie is also an opportunity to catch them out, because it is quite hard to lie consistently.
We get people all the time saying, “We don’t want our information to be on OpenCorporates”—even though it has come directly from Companies House and other places—“I don’t want people to know that my last two companies went bust,” “I used to have a company running a brothel in Germany, and I don’t want my new employees to know that” or, “I don’t want people to know that I am running a company on the side or working for someone else.” There is a cross-over here with data usage. When something is in the public domain, it needs to be functionally public. “Functionally public” means that you can use it and reuse it, and have it as data so that you can combine it with other datasets.
The shareholding data is so important, not just in and of itself, but because it allows you to ask, “Wait a minute. How is that happening with that?” Having it as data allows you to do that programmatically so that you can see trends.
Dame Margaret Hodge
Q
Chris Taggart: Yes. With shareholders, we ultimately need to get to a statement of fact—an authoritative record—so that what Companies House says is actually what the courts agree are the shareholders, and people cannot say, “We will move the shares, and then we will tell Companies House,” or, “We forgot to tell Companies House.” That will take work and time. We can extend the verification provisions for directors and PSCs to shareholders, at least over a de minimis amount, but ultimately we need to make Companies House the authoritative record of shareholding, so you are only a shareholder if you are on Companies House.
Elspeth Berry: On your question about dissolution, for limited partnerships it is a different issue because they are not an entity and you can still go after the partners, but of course that is why corporate partners are such a problem. Entities were a problem in Scotland some years ago. I am sure your Scottish colleagues can tell you more than I can about how that was dealt with after a fairly horrific criminal incident involving a lot of deaths. It was not possible to prosecute the partnership after it had dissolved. That is a problem with legal entity status, which is a whole big issue.
Seema Malhotra
Q
Chris Taggart: On the latter question first, I have been a director for some 20 years. The first time, someone sat me down and said, “This is what’s involved in being a director.” You think, “Wow, that’s kind of scary.” You have a fiduciary duty and you have to understand the company. If you are a director of 200 companies, I fail to see how you can perform that fiduciary duty, or those companies are, in some ways, just legal entities for some conduits for something. They are not actually in business; they are just conduits. I struggle when someone is a director of 200 companies: either those are just legal entities for some purpose other than as a normal company or they are not doing their job. It seems to me obvious that there is a challenge there. Whether that is a limit or whether that is actually holding directors much more personally liable for the wrongdoing of the companies, I do not know, but I think that there is something. There seems to be a contradiction there, fundamentally.
Elspeth Berry: I agree. I would have supported a cap on the number of directorships for exactly those reasons, in that I do not think a director can fulfil their duties if they have a lot of companies. However, if you are not going to have that, that certainly has to be a red flag for Companies House. It has to be a thing they will investigate and that they have the resources to investigate, which comes back to the problems that we identified earlier.
On the addresses, if you have a company service provider giving their address, it is quite possible you will have multiples and that might be okay if that is their business, they are doing it properly, they are AML regulated and all the rest of it. The problem is that we have seen in recent years that they are not. Again, that ought to be a red flag. In the limited partnership proposals, where you are trying to establish some real connection, economic or otherwise, with a particular jurisdiction within the UK or, at least, with the UK, that is one of the problems. One of the options on the list—they are all problematic—I personally thought that the principal place of business might be quite a good one, showing an actual connection, but I have been corrected in my beliefs by my journalist colleagues who say that almost all the wrongdoers were able to tick that box. I think it is a problem if you are saying that as long as somebody will pick up the mail here, that is okay. Again, that needs to be a red flag.
Tom Tugendhat
Q
Chris Taggart: There are two issues. I watched some of the previous witnesses and the things that came across were issues to do with identification and resourcing and I back up both of those things. On identification, allowing the corporate service providers to essentially say they have done something seems both a huge vector for misuse and also unnecessary. The technology allows us to look like we are using one company when we are signing up online and so on, but it is all authenticated with another company. They could be using Companies House back ends or banks’ back ends—we could have that authority and those standardised processes—and still you would appear to be transacting with a corporate service provider.
Having corporate service providers doing the identity verification seems like we have walked away from doing it properly. Once you allow corporate service providers to play a significant role, particularly on identity, I think we have a bit of a problem. Assuming that loophole is closed, this is really good, but it is still state of the art two, three or four years ago, and I think we need to start using digital identities. We need to make sure that, with somebody’s identity, they are not saying one thing on this hand and not saying another thing on that hand. Again, the unique identifiers—
Tom Tugendhat
Q
Chris Taggart: Absolutely, but I think there are technical ways of doing that. It does not have to be one ID that everyone can see—
The Chair
Order. I am very sorry. That brings us to the end of the time allotted for the Committee to ask questions. I am very grateful to our witnesses for giving evidence.
Examination of Witness
Graham Barrow gave evidence.
The Chair
We will now hear from Graham Barrow, a journalist and author appearing via Zoom. We have until five past 1 pm. Could you introduce yourself, Graham?
Graham Barrow: Thank you. I suspect I am probably unique among all the different people giving evidence because I am effectively a private citizen. I am not actually a journalist. I write, but not in a professional capacity. I am just somebody who became obsessed by what was happening at Companies House and have spent much of the last five years rooting away in the darker corners of it, to establish exactly how bad things are there.
Seema Malhotra
Q
Graham Barrow: Thank you. Let me pick up on both of those questions. I think the reason why I have been successful is because I have a mandate to go wherever I want to and do whatever I want to. I also ought to congratulate Companies House because a lot of what I now know is through the release of its advanced search function, which has transformed our ability to understand networks of suspicious companies.
I really want to emphasise this idea of the network. No criminal ever set up one company. It is just not how it works. They work in networks of companies. At £12 a go, it is probably the cheapest way of organising a criminal network. Of necessity, they leave company DNA behind them. I guess I have a capacity for identifying that DNA and extracting it from the background noise at Companies House.
Your question about offshore entities is really interesting. I came into this five years ago very much thinking about what you have just been talking about—limited partnerships and limited liability partnerships. They feature prominently in a lot of the reporting. I think part of the reason for that is that they are, by and large, a very small subsection of the entirety of what is incorporated in Companies House. Therefore, the focus has been on some of that DNA that is exhibited by LLPs and LPs.
Before now, we have had very few tools that could establish the role of limited companies. To give that some context, since 1 January 2000, about 10 million companies have been incorporated at Companies House, of which about 5 million are still active. The loss rate is very high; it is consistently 50%. Nine and a half million of those companies are limited companies. That is an exceptionally difficult body of data to trawl through to establish suspicious activity.
I think one of the reasons why perhaps some of the stories I now re-tell on social media are novel is simply because we have never been able to extract those signals from the Companies House data before. For whatever reason, I appear to have a brain wired in a particular way that allows me to do that, and I have a very good relationship with Companies House. We share information quite regularly.
Alison Thewliss
Q
Graham Barrow: Where do I start? The scale is enormous. Even today, I have been looking—I have a company that tracks new company registrations. I can tell you that 20 or 30 companies have been set up in Leeds and in Birmingham today that have used real peoples’ names and addresses, some of them for the fifth, sixth or seventh time. One gentleman is 92 years old and has just had his name used for a second time. It is an absolute scandal what is going on. I would say that at least 1,000 people every week have their names used as directors on companies without their knowledge or permission. You are talking about potentially 50,000 people a year. It is on an unimaginable and wholly unreported scale.
Alison Thewliss
Q
Graham Barrow: No, and there are a whole range of reasons why, one of which is that you would need to identify the problem in the first place in order to understand that it is an offence. How do you deal with thousands of weekly company registrations that are clearly breaching the false declaration rules? It would overwhelm you. I think one of the conversations we probably need to have is that you are not going to address the problem instantly.
One of the things that will happen when this legislation is enacted—and I am massively supportive of it—is that company registrations will fall off a cliff to begin with. At this point, I do not think people realise just how many registrations currently would just not go ahead because it is not worth meeting, or they will not meet, those requirements. Will it have an economic impact? Absolutely not, because none of them were ever set up to do anything commercially relevant in the first place. I would not worry about it, but I do worry that the reaction to potentially a 30% or 40% drop in company registrations may force people to start rethinking the tenets of this, but they should not. I do not think you will see any economic consequences.
Alison Thewliss
Q
Graham Barrow: I think there have been a couple of opportunities missed. You have been talking about PSCs, but what I have not heard yet is the fact that there is no minimum age to be a PSC. That is an issue, because you can be a shareholder and PSC at the age of zero. I do not know how you going enforce the identification verification for somebody who has absolutely no documentation. I do not see that addressed in the Bill. That is my first point. Secondly, I see nothing in the Bill to address statements of capital. I think that is problematic. At the moment the record is held by a gentleman from Equatorial Guinea who registered a company with £670 trillion of capital. That is a pretty neat trick, because that is 10 times the global GDP.
The other one that worries me, and this is something that I would like to talk about, is burner companies. That is a phrase that I have come up with; it means companies that start out with no long-term use whatsoever. There are elements within the Bill that allow grace days for conforming with requirements. If you are a burner company, it is fantastic because you have no intention of conforming. All you need, effectively, is to get that registration document to do whatever it is you want to do with it—and there are a range of things that you might what to do with it—and then you have no further use for it. Allowing grace days for conformance is potentially problematic. Those are my top three. I am not going go down the route of allowing CSPs—that has been done to death. It is obvious that it is a difficulty because you have no history of assertive regulation outside of the FCA and banks. We are aware that has not worked desperately well by the level of fines that are being administered. I think there is a bit of a hit-and-hope model, which in the end is unlikely to translate into any sort of useful outcome.
The Chair
I have asked for the volume to be increased, because I know that some Members are struggling to hear.
Graham Barrow: I will move my microphone closer.
The Chair
Yes, if you could speak directly into your microphone, we would be very grateful.
Dame Margaret Hodge
Q
Graham Barrow: Absolutely. What I am looking at is probably not even 5% of what I could look at in terms of suspicious activity and red flags. I have not the hours in the day; bear in mind that I do not get paid for any of this, so it is a labour of love, or whatever. There is a sensible answer, which is that we are now in a world where data is manipulated really easily and in bulk. Therefore, something that my company has done is to design algorithms that looks at clusters of red flags. If all we look at, Dame Margaret, is red flags, we are going to be overwhelmed. We have to accept that we cannot address every issue straightaway, which means that we need to look at clusters of red flags, which, taken together, can indicate significant organised crime or corruption that is being utilised through the formation of companies.
This year I have seen one organised crime group create about 1,500 companies, using data that they have stolen from two major global organisations. These are HR files, so the data is replete with all the personal information of those employees, who have then found themselves directors of companies that have been registered to empty shops, which have then been used to access banking, particularly overdrafts or other banking credit. There are about 1,500 companies, and the average overdraft might be £5,000 to £8,000; you do not need too many of them to be successful to understand that millions of pounds are being extorted or fraudulently obtained from banks through this ease of use.
Something else that is really important is the ID&V piece. If you have stolen ID&V data from, for example, a company’s HR files, the implementation of proof of life at the same time—that is, you do not just have the documents, but can prove it is you by having some form of selfie or other real-time interaction—is vital, because these people do not just set up companies; they open banking with them. Banks can be criticised, but they do an awful lot more due diligence than Companies House. If these people are opening bank accounts, the ID&V they currently have is clearly high quality. We must bear that in mind.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
Q
Graham Barrow: Probably not. We have done some analysis of phoenix companies. For example, I think that something like 30,000 companies on Companies House have changed their name for fewer than seven days and then changed it back to its original name. That is a variety of phoenixing by which you disappear from your company name for a few days and then come back again. As you will probably know, Gavin, every year on Companies House there are thousands of proper phoenix companies—those that have dissolved and reopened, either geographically close or at the same address with virtually the same name. It is a real issue, and it is part of the whole broader issue of company name observations. There was a piece on “You and Yours” on Radio 4 a few weeks ago about a lady who had Asda Ltd registered to her terraced house in Huddersfield. She received 7 kg of post and all sorts of other things, and bailiffs turned up at her door.
The Bill does include the ability for Companies House to reject similar names, but if you have 3,000 companies a day—and that extends to companies across the world that may have similarities—I do not see how you are going to enforce that reasonably. There is just too much volume and too many potential comparative data points to compare them to. That is a huge issue, and one that inserting a little bit of friction between application and registration would help to address. At the moment, the focus is entirely on speed of getting on to the register. Putting in a bit of friction to do some proper checking would be a good idea.
Gavin Newlands
Q
Graham Barrow: Being clear that a company will not be allowed on to the register until those full checks have been made would be one. I would also be a lot stricter about the ability for people to register a company that has significant similarities to a previously registered and dissolved company. That may need a bit of crafting, in terms of the words, but I do not think that is beyond the wit and wisdom of people.
Companies House refused to dissolve or eject Asda Ltd because it was not close enough to Asda Stores Ltd, which is the actual name of the well-known supermarket. That seemed to be a bit of a nonsense. I am not saying that Companies House did not apply the law correctly; it suggests the law is not very good in terms of the intellectual capital.
There is a guy in Cheam who has legitimately registered Renault Ltd, Volkswagen Ltd, Adidas Ltd and Asda Ltd—which he re-registered after Asda Ltd in Huddersfield got struck off. That is simply nonsense. Intellectual capital is clearly being compromised by those registrations, yet we do not currently have the powers to deal with it. I know there is wording in the Bill on this. Obviously, the proof of the pudding is in the application of that, but I would like to see it tightened.
James Daly
Q
Graham Barrow: I guess the Bill is trying to assist by not allowing that to happen in the first place. That is the premise, is it not—that you should not be able to get somebody without their clear permission?
James Daly
Q
Graham Barrow: That is a difficult one to answer, because very often the address that appears on the public register is not their own address. However, it is potentially likely that a residential address appears on the non-public aspect of the register, because that is often the conduit for getting access to banking, as they will do electronic identification checks against somebody’s residential address rather than other elements.
At the moment, there is one piece that is rightly hidden from public view, which is the director’s residential address. That is almost certainly used by criminals where they have access to it, because that opens up access to banking. If we are not successful in stopping fraudulent use of directors’ names and addresses, the Bill needs to be looked at carefully in its ability to give redress to that, without, of course, allowing people with rather ulterior motives trying to remove legitimate directors because they have some sort of vendetta.
We should always remind ourselves that, in our attempts to correct all of the bad stuff, we must not make it possible for people to use those corrections to then make life harder for the people who are doing the job legitimately. That is an ongoing discussion, I think.
Tom Tugendhat
Q
Graham Barrow: That is kind. You must understand that I am a private citizen, so I do not have access to huge swathes of information that I would love to be able to get hold of to give a much rounder view of that. Companies House, of course, does, so there are some interesting things that it will have, such as email addresses, IP addresses and credit card details.
There are some important provisos there. Do not allow people to pay for their enrolment through a pre-paid credit card. That would be a bad thing. Do not allow people to apply through a virtual private network—a VPN. That would be a bad thing. Do not allow people to apply through something like Proton Mail or an encrypted mail account. That would be a bad thing. What we need is transparency in all those things so that we can aggregate that data with, for example, data from His Majesty’s Revenue and Customs, voter roll data and other data, to get a much more rounded picture of people who are applying for company directorships.
Now, that only works here in the UK. It is worth bearing in mind that about 150,000 company incorporations every year emanate from outside the UK. That adds further difficulty. There were 50,000 applications from China last year, so that is clearly a problem. Incidentally, those numbers soared after China banned cryptocurrency at the end of September last year. There was an extremely easy to observe uptick in UK corporate registrations from Chinese individuals.
The Bill will start to address such a range of issues. I think it will be the first of many if we are really going to make our corporate environment safe and secure, and start tackling economic crime and the abuse.
Tom Tugendhat
Q
Graham Barrow: No. I am saying that for the purpose of registering a company in the UK, you should not be afforded that benefit.
Tom Tugendhat
I understand the distinction. I just wanted to make the point. As you can understand, it would raise other difficulties.
Graham Barrow: Absolutely.
Tom Tugendhat
Q
Graham Barrow: They are good friends.
Tom Tugendhat
They are brilliant. These people are quite literally on the frontline of our democracy, defending our freedom by defending our corporate integrities. Their work is extraordinary important. I would be grateful if you would say a little bit more about shell companies.
Graham Barrow: I count all those people as friends. Oliver and I exchange daily emails. We work very closely together. The last time we met was on a bus.
Tom Tugendhat
I should put on the record that he is a friend of mine as well.
Dame Margaret Hodge
Of lots of us around the table.
Graham Barrow: Shell companies are containers. Effectively, it is a container for assets. They are used in a whole variety of ways. They are used, clearly, as conduits for corrupt and criminal funds to be moved around the world. They are also used just as a container to access banking and do as I have just described—a one-off hit to get a bank account open and get an overdraft.
I have seen physical evidence of a company being incorporated to an address of somebody in Cardiff who knows nothing about it; on the same day, they open a bank account with one of our high street banks, and on the same day, they remove the automatic £8,000 overdraft that came with that bank account. Then they disappear, and of course it turns out that they were untraceable because none of the details they provided were real. That is a shell company, because that is not doing any normal commercial activity.
The Committee mentioned addresses earlier. I am sure some members of the Committee will know that there are addresses in central London that are home to 100,000 companies. That is clearly a matter of concern, particularly with the proportion of those companies that are registered from some of the more remote parts of the world—places you would struggle to find on a map—that concentrate at those addresses.
We need to be quite clear about the legitimate use of corporate service provider addresses. Some of our banks now provide that as a service. That is fine. There is one firm that offers this thing called a non-resident package, which should immediately make your ears prick up. Somebody from outside the country can register a business and be given the business bank account for a fixed fee. That bothers me hugely, because it makes me ask why.
The thing about shell companies is that they are not always easy to identify at the point of incorporation. We are getting very good at it, but it is still not an exact science. It is about lifetime analysis of a company’s behaviour, as well as some of the red flags that are raised at the point of incorporation.
Tom Tugendhat
Q
Graham Barrow: It probably does not assist me an awful lot, because I do not have access to a lot of the other data that particularly members of JMLIT, and other law enforcement and Government organisations, have access to. As a private citizen, I will not have access to that much more information. That is probably a good thing, because I am already drowning in information. For a man who is going to be 70 next birthday, it is not exactly the retirement that I had planned. In a way, I think the best thing I can do is help to inform and educate others so that as the Bill starts to generate that information, some of which I will not be privy to, I can at least help people to understand better how to analyse and aggregate that information to extract signals.
Ultimately, there will be too much information to do everything with, so it is about how we organise ourselves, particularly at the point of incorporation, so that instead of waiting for a problem and going back to see how it happened, we identify that problem in the process of being set up, and start proactively managing the people who are part of organised crime or corruption and are using or abusing Companies House to do that. We have never done that before, to the best of my knowledge, but we are now in a situation where we can start doing it.
Dame Margaret Hodge
Q
Graham Barrow: Dame Margaret, you ask me a tricky question because I worked at Deutsche Bank, and some of what I know is privileged and I cannot talk about it. In fact, my work in Deutsche Bank is what has led me to be sitting here, because it was while I was there working on the Russian mirror trades that I realised that two completely different firms had filed exactly the same set of accounts—identical accounts—signed by the same person. My rather naive reaction then was, “How on earth did this happen?” I know better now. That person’s name is in the public domain: it is Ali Moulaye. He is a dentist who currently lives in Belgium and has been written about frequently. I kind of discovered him, in a way. He has signed more than 10,000 sets of accounts on Companies House on behalf of at least 2,500 limited liability partnerships, a significant proportion of which have, sadly, been named as being involved in various laundromats.
One issue was that all those accounts were filed on paper and were then scanned in as an image, not as a machine-readable document. That is a really big disadvantage, because it prevents people such as me, or those with access to clever technology, from reading those documents into artificial intelligence engines and performing deeper analysis on them. It is a very difficult problem. It would be a wonderful thing—although I suspect quite labour intensive—to retrospectively digitise all those old PDFs, because there is a huge wealth of intelligence still residing in them that we truly do not understand. That is also very much true of limited partnerships, which still can only file on paper. The only way to incorporate a limited partnership is on a paper application. That makes reading the data on those registration forms extremely difficult, which is why lots of it has remained hidden for so long.
The Chair
If there are no further questions from Members, I thank the witness; Graham, thank you very much for your time.
Financial Services and Markets Bill (Fifth sitting)
Thursday 27th October 2022
(2 years ago)
Public Bill CommitteesRead Full debate Financial Services and Markets Act 2023 View all Financial Services and Markets Act 2023 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Public Bill Committee Amendments as at 27 October 2022 - (27 Oct 2022)
The Chair
With this it will be convenient to discuss the following:
That schedule 6 be the Sixth schedule to the Bill.
Clause 22 stand part.
The Financial Secretary to the Treasury (Andrew Griffith)
Good morning, Dame Maria. It is a pleasure to serve under your chairmanship once again. I thank all hon. Members who are with us again today.
The Government believe that certain cryptoassets and distributed ledger technology could drive transformational changes in financial markets, offering consumers new ways to transact and invest, and that such technology could pose risks to consumers and financial stability. The Bill therefore allows the Government to bring digital settlement assets inside the regulatory perimeter.
In the first instance, the Government are focusing on fiat currency-backed stablecoins used primarily for payment. These are a type of digital settlement asset that could develop into a widespread means of payment and potentially deliver efficiencies in payments. Clause 21 extends the scope of payment systems legislation so that digital settlement asset payment systems and service providers are subject to regulation by the Bank of England and the Payment Systems Regulator.
Today, the Bank of England regulates systemic payment systems and service providers to those systems, where the Treasury makes an order recognising a particular payment system. That is subject to a high bar. Among other criteria, the Treasury must be satisfied that a system’s potential failure may cause disruption to the stability of the financial system.
Clause 21 also extends the scope of the Financial Services (Banking Reform) Act 2013 to ensure that relevant digital settlement asset payment systems are subject to regulation by the Payment Systems Regulator. That will help to protect user interests, promote competition and encourage innovation.
The changes made by clause 21 and schedule 6 will ensure that digital settlement asset payment systems and service providers are regulated to the same high standards as traditional payment systems.
Clause 22 allows the Government to bring digital settlement assets into the UK regulatory perimeter where they are used for payments. Secondary legislation under this clause could give the regulators powers over payment systems and service providers in order to mitigate conduct, prudential and market integrity risks. It could also allow the regulators to place requirements on firms in relation to appropriate backing assets and capital requirements to manage potential stability risks.
Given the nascent and rapidly evolving nature of the cryptoasset market, these provisions give the Treasury powers to amend the definition of “digital settlement asset” through secondary legislation. That is necessary to ensure that regulation can keep pace with the fast-moving nature of the market. The affirmative procedure will apply to any statutory instrument that seeks to amend the definition.
Clause 22 will also allow the Government to apply existing administration or insolvency regimes to digital settlement asset systemic payment systems and service providers to manage potential failures. The clause therefore provides the Government with the necessary powers to ensure that our legislative approach to digital settlement assets is flexible and responsive, and fosters competition and innovation in this fast-evolving sector. I recommend that the clauses and schedule stand part of the Bill.
Tulip Siddiq (Hampstead and Kilburn) (Lab)
It is a pleasure to see the Minister still in his place. I speak to clauses 21 and 22 and schedule 6 together.
Properly regulated innovations that have emerged in the crypto space, such as distributed ledger technology, have the potential to transform our economy and the financial services sector. As the Minister will know, many innovative companies are embracing different forms of blockchain to improve transparency in finance and create high-skilled, high-productivity jobs across the UK. However, I draw his attention to the recent collapse in the value of cryptoassets, including several stablecoins, which has put millions of pounds of UK consumer savings at risk. I am sure he is aware that the crypto trading platform Gemini estimated that as many as one in five people in the UK could have lost money in the crash. Do the Government agree with Gemini’s estimate? If so, does the Minister agree that the recent crisis in crypto markets demonstrates that so-called stablecoins are not necessarily stable, and that their instability can pose a significant risk to the public? How did the recent collapse in the value of cryptocurrencies inform the Treasury’s approach to clauses 21 and 22?
The Opposition have yet to be convinced that Ministers have acknowledged the scale of the threat that cryptoassets can pose to consumers and our constituents. In our Public Bill Committee evidence session, Adam Jackson of Innovate Finance, which is the trade body for UK fintech businesses, pointed out that the Bill has failed to set out how regulated stablecoins will interact with a future central bank digital currency. Can the Minister shed some light on that interaction? I also hope he can explain why the Government have opted to bring only stablecoins within the regulation. I am sure he is aware that the EU has just agreed to a comprehensive regime for regulating crypto exchanges and cryptoassets more broadly, and Joe Biden has said that he is looking to do something similar, but the UK will not even be consulting on a comprehensive regime until later this year. Does the Minister agree that this risks leaving our country behind in the fintech and blockchain race?
Even more importantly, does the Minister agree that in the absence of a comprehensive regulatory regime, the UK risks becoming a centre for illicit finance and crypto activity? I looked at the analysis from Chainalysis—a global leader in blockchain research—which pointed out that cryptocurrency-based crime, such as terrorist financing, money laundering, fraud and scams, hit an all-time high in 2021, with illicit finance in the UK estimated to be worth more than £500 million. In the absence of a comprehensive regulatory regime, how do the Government think they are going to protect our consumers from such threats?
Will the Minister shed a bit more light on his strategy? Does he believe that the definition of “digital settlement assets” in clauses 21 and 22 is broad enough for regulations on a wide range of cryptocurrencies, other cryptoassets and crypto exchanges? Finally, on pacing this work, I want to know his intention. How long will the public and the fintech sector have to wait until the regulators are given the power that they need to regulate the types of cryptoassets that I have referred to?
Andrew Griffith
I thank the hon. Lady for her comments. In truth, I agree with the assessment that she has set out. The approach taken in the Bill is to start with stablecoins and those that are most likely to be used as a means of settlement. That is what the Government are taking powers for in the Bill. As she says, we have committed to come back and consult on the issue before the end of the year. The nights are getting darker, so she will not have long to wait.
I am mindful of the opportunities and threats that the hon. Lady set out well when citing the evidence that the Committee heard, and it is my intention that the Government now move at a greater pace than is currently provided for in the Bill, which has been in gestation for some time. We will come forward with the consultation, which will happen before Parliament rises for Christmas. It will be a really good opportunity for us to continue to discuss how we can address some of the issues.
The reason we have started with stablecoins is that there are challenges in bringing them into regulation for the first time. The hon. Lady would not want us to rush, because by bringing them into the regulatory perimeter, we confer a status on them that may lead to some of the consumer harms she mentioned. The Government’s position is to start with the most stable, least volatile coins, which are likely to be used by intermediaries as settlement currencies, and then to go forward and consult from there.
I think I have addressed most of the hon. Lady’s comments. I do not disagree with her about the scale of the threat. There are other measures, including those that regulate the online promotion of cryptoassets, that will help to protect consumers who suffer harm.
Dame Angela Eagle (Wallasey) (Lab)
Will the Minister give us a little more flavour on how he sees the evolution of this area? Does the clause give him enough powers to go with that evolution, or will we need to legislate again as the landscape changes? It is clear that we have to avoid the potential harm of allowing consumers to think that all digital coins are somehow the same. We know what Bitcoin is, and do not need to spend much time talking about it. We would not want to give people the impression that it is safe to indulge in investing in it.
At the same time, both sides of the Committee realise that digital payment systems and coins are a huge and rapidly developing area that national Governments must get a grip on. That is why we all welcome the fact that the Bank of England is looking at launching its own non-fungible token, or whatever we want to call it. We have to keep a very close eye and watch this space to see how it evolves. Will the Minister give us an impression of whether the clause is evolutionary enough for his purposes in that rapidly changing environment? Might he want to change it through some later piece of legislation?
Finally, we all know how much energy is used in the creation of Bitcoin. I confess myself ignorant about whether the creation of other non-fungible tokens is as energy intensive as the creation of Bitcoin. Perhaps the Minister can enlighten us. There is a green side to the issue as well.
Emma Hardy (Kingston upon Hull West and Hessle) (Lab)
My point is further to those made by my hon. Friends the Members for Hampstead and Kilburn, and for Wallasey. My hon. Friend the Member for Wallasey asked whether the definition was evolutionary enough, and I want to pin down the Minister’s response. Does he believe that the definition of “digital settlement assets” is broad enough to allow for regulation to cover the wide range of cryptocurrency, other cryptoassets and exchanges?
Andrew Griffith
I thank hon. Members for their contributions. As currently envisaged, the definition successfully encompasses what it intends to today. The definition starts with the most safe, least volatile domain, which is the use of digital settlement assets. The Bill confers secondary powers, which are subject to the affirmative procedure, that allow the definition to change elastically over time. It is right that Parliament should have the opportunity to look at such changes. That achieves the balance that Members on both sides of the Committee seek. It does not rush headlong to confer legitimacy.
The hon. Member for Wallasey rightly raised the point about the energy used. The truth is that we do not know, but we all suspect that the activity is highly energy intensive. Partly due to the lack of regulation, there is no real data other than anecdotes that one hears that suggest the process is very intensive—even getting into whole percentages of world energy consumption, according to some anecdotes. That is the process of mining that things like Bitcoin and Ethereum are associated with.
Tulip Siddiq
The Minister has talked about regulated stablecoins, but I did not get an answer to my question about how they will interact with the central bank digital currency that we know is very much on the horizon. Have the Government thought about that?
Andrew Griffith
Stablecoins and central bank currencies are both new forms of money. They differ in the issuer: a central bank versus a private issuer. It is likely that a central bank digital currency would simply exist and be regulated alongside that. This is an area where the Government’s thinking continues to evolve. It is something that we will do in conjunction with the Bank of England, and therefore the hon. Lady will appreciate that I would not make commitments unilaterally, but we have committed to publishing a consultation later this year. The Government’s stance can fairly be described as forward leaning in this space, but there is more work to do. It is not a trivial exercise to create a new central bank digital currency. My own hope is that it is a “when”, not an “if”, but the hon. Lady will indulge me if I say, “Let’s wait for the joint Government and Bank of England consultation,” which she will not have to wait that many weeks for.
Question put and agreed to.
Clause 21 accordingly ordered to stand part of the Bill.
Schedule 6 agreed to.
Clause 22 ordered to stand part of the Bill.
Clause 23
Implementation of mutual recognition agreements
Question proposed, That the clause stand part of the Bill.
Andrew Griffith
Having left the EU, we have a unique opportunity to take the approach to the UK regulatory framework that most suits our markets. The Financial Services and Markets Bill is delivering on that and will support efforts to build on our historic strengths as a global financial centre. That includes developing our relationships with jurisdictions around the world, attracting investment and increasing opportunities for cross-border trade.
Mutual recognition agreements are one of the tools that the Treasury has to support the openness of the UK’s international financial services, alongside free trade agreements, financial dialogues and equivalence regimes. MRAs are international agreements that provide for recognition that the UK and another country have equivalent laws and practices in relation to particular areas of financial services and markets regulation. They are designed to reduce barriers to trade and market access between the UK and other countries. The UK is currently negotiating its first financial services mutual recognition agreement, with Switzerland.
Giving effect to MRAs, including the agreement being negotiated with Switzerland, is likely to require amendments to domestic regulation. Clause 23 therefore enables changes to be made through secondary legislation to give effect to that agreement and future financial services MRAs. That secondary legislation will be subject to the affirmative procedure, to ensure parliamentary scrutiny of the proposed changes. That will be in addition to the parliamentary scrutiny of the mutual recognition agreement that Members will be familiar with under the Constitutional Reform and Governance Act 2010, known as CRaG. Parliament will, therefore—I am anticipating questions that hon. Members may raise—be able to scrutinise MRAs in the usual way before this power is used to implement the ratified agreements.
Clause 23 can be used only to implement MRAs relating to financial services, not to make broader changes to legislation or to implement any other form of international agreement. Each financial services MRA will be different, but it is anticipated that clause 23 will allow the Treasury to confer the necessary powers or impose duties on the financial services regulators to give effect to the MRA. That could include a duty to make rules on a particular matter—for example, rules governing cross-border provision of particular financial services by overseas firms.
The clause requires the Treasury to consult the relevant regulator before imposing any duties. In financial services regulation, market access between the UK and other jurisdictions is generally delivered through the UK’s equivalence framework for financial services, and the mechanisms under that framework are primarily found in retained EU law and based on the EU model of equivalence. The MRAs negotiated by the Government may in some cases go further than, or simply function differently from, those equivalent mechanisms. The clause therefore includes the power to modify the application of existing equivalence mechanisms, or to create new mechanisms to reflect what has been agreed in the relevant MRA.
Together, those provisions ensure that the UK can negotiate and deliver ambitious MRAs and implement the agreements in a timely manner that maintains the UK’s credibility in negotiating future MRAs. I therefore recommend that the clause stand part of the Bill.
Tulip Siddiq
We support clause 23, but how does the Minister think it will help the UK to secure international trade agreements that are favourable to the UK’s financial services sector? I ask because the Government have made very little progress on securing trade deals for the City, including with the EU, which remains, as I am sure he will agree, one of our most important export markets.
We completely recognise that regulatory divergence with the EU on areas such as fintech and Solvency II will help boost our competitiveness on the world stage. However, we cannot ignore the fact that Europe will always remain an important market for our financial services sector. Last year, exports of financial services to the EU were worth more than £20 billion—I am sure that the Minister knows that—which was 33% of all UK financial services exports. I have been speaking to the sector and it is disappointed that the Government have so far failed to finalise a memorandum of understanding on regulatory corporation, or to negotiate mutual recognition with the EU of professional qualifications for our service sectors. I want to hear more about that from the Minister.
Since 2018, the value of UK financial services exports to the EU has fallen by 19% in cash terms, and very little progress has been made in securing trade deals around the world for our financial services. Will the Minister tell us how the clause will help secure important agreements with the EU? I also want to hear more from him about how he hopes it will turn around the Government’s record on boosting financial services exports.
Dame Angela Eagle
I want to focus on parliamentary scrutiny of these changes. They are quite technical, but they could be very important, including for consumers. If we do not get them right, they could have unintended consequences for financial stability and so on, because of the range of agreements under discussion. One assumes that those negotiating the agreements have a reasonable model of what they want to achieve, but that will also be the case for those with whom we are negotiating. The context is about gaining an advantage in the international competition for financial services. Indeed, both Front Benchers have hinted at that. If we are looking for a competitive advantage and growth, that kind of struggle for an advantage has obvious implications.
Until we left the EU, much of the negotiation on the financial directives that were promulgated went on within the European Commission. The UK had a great deal of influence over how those directives were negotiated, but it did not always win out; for example, the markets in financial instruments directive was a cause of some consternation for our financial services, because it did not fit with our kind of plan. We were always the country with the largest financial services sector, and were mostly likely to be impacted by agreements and compromises that did not clearly represent our best interests. We can now hope to move back towards that position, if we can come to an agreement. However, as my hon. Friend the Member for Hampstead and Kilburn said, we are constrained by the fact that a great deal of our financial services activity happened within the EU. I suspect that the divergence is likely to become greater over time. What does the Minister think would constitute a timely attempt by Government to ensure proper parliamentary scrutiny of these things? Aside, that is, from Parliament potentially debating 50 pages of extremely technical statutory instruments.
We know that the Treasury Committee will have a say, but some of the changes negotiated in these agreements with other countries may have important impacts on consumer rights, and larger number of Members of Parliament might want a say on them. Perhaps the Minister could say how he envisages the process going forward. I presume we will have some agreements—there has been a slow start. How can Parliament keep an appropriate eye on the philosophy behind the agreements, and the way in which they are going, as we diverge more from our closest partner?
Emma Hardy
I want to probe the Minister a little further. Obviously, it is a huge disappointment that we do not yet have a memorandum of understanding with the EU. Will the Minister indicate when we will have one?
Andrew Griffith
The hon. Member for Hampstead and Kilburn is right about the significance of the European Union member states as trading partners for our financial services. It remains the Government’s intention to form the closest possible relationship with those partners, and to help our financial services businesses access those markets in the most frictionless way. Both sides will have to be involved in reaching any agreement. I do not want to stray too far off the point, Dame Maria, but yesterday I met my German counterpart; Germany is probably the state with the biggest market for financial services. I hope the Committee will take that as a statement of our intent to negotiate as many agreements as possible, whether at national or EU level.
As I said, it is not the Government’s position to diverge for divergence’s sake. The hon. Members for Hampstead and Kilburn, and for Wallasey, accurately identified some of the provisions on which there may be opportunities to diverge, based simply on a different fact pattern in our financial services industries.
Emma Hardy
It is positive news that the Minister has met his German counterparts. Could he give any indication of the progress made towards a memorandum of understanding, and of when we might see one with the EU?
Andrew Griffith
The hon. Lady will forgive me, but I cannot give an indication of timing. However, I will undertake to engage with the Treasury Committee, whose acting Chair is with us today, as we go through that process. To speak to the point made by the hon. Member for Wallasey, we have a diligent Treasury Committee that exercises oversight of this area. I consider it unlikely that we will suddenly procure an MRA that blindsides that Committee, and I certainly undertake to keep it informed, so that the detailed parliamentary scrutiny provided for in the Bill is adequately exercised.
Dame Angela Eagle
I thank the Minister for giving way. Flattery will, of course, get him everywhere. Given the nature of that complex negotiation, might it be possible for him to undertake to give the Treasury Committee a heads-up on progress before agreements are made, so that we can try to ensure that we can encompass appropriate consideration in our heavy workload?
Andrew Griffith
I will not fully bind the Government on that, but the hon. Lady makes a reasonable point. These are not matters of overly partisan division between us, and it would certainly be our intention to do that, so that the scrutiny under CraG, and the scrutiny required by the affirmative procedure, can be carried out, and so that the right resources can be dedicated to it.
The hon. Member for Wallasey talked about these MRAs being a struggle for advantage. There is that element to them, but another key element is that they are mutual. It is certainly not the Government’s position that they are a zero-sum game. The objective is to procure such agreements with as many different jurisdictions as possible, so that, as the hon. Member for Hampstead and Kilburn mentioned, we can grow our sector and boost exports of not just financial services but related professional services, which the UK is extremely fortunate to have.
Question put and agreed to.
Clause 23 accordingly ordered to stand part of the Bill.
The Chair
We now come to amendments 43 and 45, in the name of Peter Grant. Would any member of the Committee like to move them? If not, we will move on to amendment 46.
Clause 24
Competitiveness and growth objective
Stephen Hammond (Wimbledon) (Con)
I beg to move amendment 46, in clause 24, page 37, line 13, leave out “facilitating” and insert “promoting”.
The Chair
With this it will be convenient to discuss the following:
Amendment 47, in clause 24, page 37, line 31, leave out “facilitating” and insert “promoting”.
Clause stand part.
Stephen Hammond
It is a pleasure to see you in the Chair, Dame Maria, and to serve under your chairmanship. I would again guide the Committee to my entry in the Register of Members’ Financial Interests.
For many of us, chapter 3 of the Bill is hugely important because it looks at the accountability of regulators. As the Bill could hugely increase their powers, the themes that many of us explored during the evidence session—of transparency, accountability and proportionality—are fundamental. Clause 24 deals with the secondary objective. Regulation and regulatory culture are some of the biggest factors affecting the competitiveness and attractiveness of a jurisdiction.
This is not about a race to the bottom. Any jurisdiction that is not well respected and well regulated, with tough regulation and an independent regulator, will fail on the international stage. It is about ensuring the regulator’s accountability, particularly for the objective. We heard evidence from major City trade organisations last week, and Emma Reynolds from TheCityUK said to us:
“it is important that the regulators are not marking their own homework”––[Official Report, Financial Services and Markets Public Bill Committee, 19 October 2022; c. 18, Q28.]
Charlotte Clark from the Association of British Insurers made a similar point.
It is clear that there is a track record, but we must make sure that the regulators stay on track and are held to their duty regarding the new secondary objective. Amendments 46 and 47, which are fairly simple, would change “facilitating” to “promoting”. Facilitating almost implies letting something happen, perhaps through disregard. There should be active promotion of the secondary objective to remain internationally competitive. Internationally, we would not be alone in taking such action. The Swiss Financial Market Supervisory Authority is required to take particular account of the effect that regulation has on competition, innovation and the international competitiveness of Switzerland. There is a very similar objective for the Monetary Authority of Singapore, and no one anywhere will suggest that those are not well regulated, competitive international markets.
London trade bodies, such as the London Market Group, suggest that in the UK, some regulatory costs are up to 14 times what they are in other places around the world. When we look at the one-size-fits-all approach sometimes taken by the Financial Conduct Authority, it is clear that a distinction needs to be drawn. If we are not careful, the objective could be subsumed in others and forgotten. If we want London to be the global financial centre, we should have regard to the secondary objective. I want the Bill to set out more clearly regulators’ accountability for this objective, the intention, and regulators’ role regarding the objective.
Craig Tracey (North Warwickshire) (Con)
As ever, it is a pleasure to serve under your chairmanship, Dame Maria. I refer to my interest, which I declared at the start of Committee proceedings. I welcome the Bill, and particularly clause 24 because of its competitiveness duty, for which I have campaigned for quite some time. I would prefer it to be a primary objective, and perhaps the Minister will look into that, but if we keep it in its current form, then we have to go further for it to be meaningful. There must be proper metrics to ensure that the regulator follows up on it. For that reason, I support the amendments put forward by my hon. Friend the Member for Wimbledon.
In the evidence sessions, I was surprised to hear that the FCA was not aware of any other regulator that had a competitiveness duty. That is quite worrying. It seemed slightly detached from what our competitors are doing. We need to ensure that the FCA is pressed hard on this issue, and that there is a clear, stated objective for them to promote competitiveness in the industry. To be clear, this is not at all about lowering standards. The FCA said in its evidence that it considers jurisdictions such as Hong Kong, Japan, Singapore and Australia to be robust financial centres. They all have a competitiveness duty, so a duty of that kind can be beneficial.
Let me put this into context by giving the example of insurance-linked securities. The FCA created regulations regarding them, which Singapore then lifted—took and used. Because of Singapore’s competitiveness duty, we lost one firm midway through the process. In the same timeframe, 15 firms have been regulated there, against five in this country. The estimated loss is around $700 million. That is money out of our economy that could come our way with just this simple change.
There is a similar story on captives. We do not have any set up here. The reason cited is over-burdensome regulation. The industry agrees that there needs to be regulation, but it needs to be proportionate, and we need to ensure that it does not block investment in this country. I hope the Minister will consider the amendments and see what can be done to strengthen the measures.
Dame Angela Eagle
I approve completely of having a competitiveness and effective competition analysis duty being attached to the regulators, and for them to report on it annually, which would allow us to see how much they are taking account of it. I would also like them to be thinking about financial inclusion, but that comes later in our proceedings.
Will the Minister tease out a little for the Committee how he thinks the regulator can go about discharging that duty safely? We have seen some of the carnage caused by bad regulation in the energy sector, where a superficial view of competition has led to problems in that market, with companies collapsing. There is an obsession with the idea that competition is about the number of firms, whether or not they are sound. If something similar were to happen in this context, it could be even more serious and even more costly. I broadly support the aims of clause 24, but would welcome the Minister’s thoughts on how the problems and the bad effects in the energy market caused by the regulator’s misguided attempts to prove that there was competition—the trap of thinking that competition is just about the number of firms—can be avoided in this context.
Tulip Siddiq
I will speak to clause 24. I was going to speak to amendment 43, but it has not been moved.
We strongly welcome clause 24. We are completely committed to supporting the City to retain its competitiveness on the world stage and we support the new secondary objective for regulators to consider competitiveness and growth. However, I hope the Minister will agree that financial stability and consumer protection must always remain the priority for our regulators. Any compromise on those important objectives would be self-defeating. The competitiveness and global reputation of the City depends on the UK’s reputation for strong regulatory standards.
Although supporting the financial services sector to thrive and grow will be key to delivering the tax receipts that we need to fund public services, it will not be enough. To get the economy growing, the Minister knows that we need to harness the power of the City to drive growth in every part of the economy and the country. The financial services sector will have to play an important role in driving our transition to a low-carbon economy and creating the green jobs and businesses of the future. Perhaps the most interesting part of the new secondary objective is how our regulatory system can incentivise medium and long-term growth beyond the financial services sector in the wider economy.
Andrew Griffith
I thank my hon. Friends the Members for Wimbledon and for North Warwickshire for raising some important matters, and those on the Opposition Front Bench for their support for clause 24. They clearly speak with a great deal of authority from their own experience, and the Government will take away their points and consider them further. Let me describe the clause, and then I will try to come back to the points that have been made.
The Bill asserts our domestic model of financial services regulation, whereby the Government and Parliament set a policy framework within which the regulators are generally responsible for setting the detailed rules. It is therefore necessary to ensure that the regulators’ objectives, as set out in the Financial Services and Markets Act 2000, are appropriate, given their expanded responsibility and the UK’s position outside the EU. The Government believe that the regulators’ current objectives set broadly the right strategic considerations, but we also consider it right that the regulators’ objectives reflect the need to support the growth and international competitive-ness of the UK economy, particularly the financial services sector. I welcome Members’ support for that.
The clause introduces new secondary objectives for the FCA and PRA in relation to growth and competitiveness. The new objectives will require the FCA and PRA to act in a way that, subject to aligning with relevant international standards, facilitates the international competitiveness of the UK economy, including the financial services sector, and its growth in the medium to long term. For the FCA, that objective will be secondary to its strategic objective to ensure that markets function well—I believe the hon. Member for Wallasey mentioned the importance of that, which is clearly paramount—and to its three operational objectives, which sit below the strategic objective, to ensure that consumers receive appropriate protection, to protect and enhance the integrity of the financial system, and to promote effective competition. Again, the hon. Member for Wallasey mentioned financial inclusion, and we will talk about that when we debate later clauses. For the PRA, the growth and competitiveness objective will be secondary to the PRA’s general objective to ensure that UK firms remain safe and sound, and to its insurance-specific objective to contribute to the securing of an appropriate degree of protection for those who are or may become policyholders.
The new objectives do not require or authorise the FCA or PRA to take any action inconsistent with the existing objectives. I will come back to the hon. Member for Wallasey on that, but they are subordinate objectives and secondary to their financial stability and prudential objectives, which they talk about. The new objectives will give the regulators a legal basis for advancing growth and international competitiveness for the first time. It does not go quite as far as my hon. Friends the Members for Wimbledon and for North Warwickshire have suggested in the amendment. Nevertheless, it is a significant enhancement in that respect on the status quo. As they said, it moves us in line with other international jurisdictions. That is a balanced approach. By making those objectives secondary, we are nevertheless giving the regulators an unambiguous hierarchy of objectives that prioritises safety and soundness, and market integrity. I therefore commend clause 24 to the Committee.
Amendments 46 and 47 seek to amend the new secondary objectives and require the regulators to promote, rather than facilitate, the international competitiveness of the UK economy and its growth in the medium to long term. The wording of the objectives in clause 24 aligns with the PRA’s existing secondary objective, which is to facilitate effective competition. The vast majority of respondents to the November 2021 future regulatory framework review consultation supported the Government’s proposal to introduce new secondary objectives for the FCA and the PRA to facilitate growth and competitiveness.
I reassure my hon. Friends about the importance of the Government’s plans on growth and competitiveness. We expect that there will be a step change in the regulators’ approach to the issue that will be similar to the change that took place following the introduction of the PRA’s secondary competition objective in 2014, which led to a significant number of new policies to facilitate effective competition. I therefore ask my hon. Friend the Member for Wimbledon to withdraw the amendment.
In responding to the hon. Member for Wallasey, I will not assume to myself a degree of expertise about the energy market or any failings in that market. However, I completely agree about the need to avoid an overly binary or unbalanced approach to competition in any market. I think we all agree that we need to get the right balance. On how the regulators can safely advance the objectives, my response is as follows: with a balanced approach; with the right level and volume of resources, in terms of both the quality of expertise and the people they attract and retain; and with good governance. The hon. Lady herself, like all Members of Parliament, is also part of the regulators’ governance model.
Tulip Siddiq
The Minister sounds like he is closing his speech, and I have not heard what he thinks about TheCityUK’s suggestion of asking regulators to report their performance against criteria and metrics. Before he finishes, will he give us his opinion?
Andrew Griffith
The hon. Lady is right to pull me up on my failure to address her point, although later clauses and amendments also address it. I am familiar with TheCityUK’s proposal, and the Government are prepared to look at that area. She gave an example of the regulators helping the real economy through sustainable investments, and potentially reporting some metrics against that. That is worthy of consideration.
Stephen Hammond
I should have said at the beginning that I warmly welcome clause 24. The purpose of the amendments was to tease out the Minister’s exact thoughts. I was pleased to hear that he thinks there is regulatory step forward. I was also pleased to hear that the Government may look again at some of the wording in chapter 3. Will he meet me and colleagues, perhaps next week, or some time in the future? With that, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 24 ordered to stand part of the Bill.
Clause 25
Regulatory principles: net zero emissions target
Question proposed, That the clause stand part of the Bill.
Andrew Griffith
I will speak to clauses 25 and 26 in order. As I set out in previous comments, the Government remain committed to reaching net zero greenhouse gas emissions by 2050, as set out in section 1 of the Climate Change Act 2008. Clause 25 reflects the Government’s commitment by introducing a new regulatory principle for the FCA and the PRA to contribute towards achieving compliance with the net zero emissions target. FSMA 2000 sets out eight regulatory principles that the FCA and the PRA must have regard to when discharging their functions. These existing principles aim to promote regulatory good practice across the regulators’ policy-making. The principle in section 3B(1)(c) of FSMA 2000 requires the FCA and the PRA to have regard to the desirability of sustainable growth in the United Kingdom economy in the medium or long term.
The November 2021 future regulatory framework review consultation proposed amending the sustainable growth principle to explicitly incorporate the UK’s statutory climate target. Following feedback to the consultation, and given that the Bill introduces new secondary objectives for the FCA and the PRA to facilitate international competitiveness and growth in the medium to long term, clause 25 removes the sustainable growth principle for the FCA and the PRA to avoid unnecessary duplication.
Clause 25 replaces the sustainable growth principle with a new regulatory principle to require the FCA and PRA to have regard to the need to contribute towards achieving compliance with section 1 of the Climate Change Act 2008. This new regulatory principle will cement the Government’s long-term commitment to transform the economy in line with our net zero strategy and vision to make the UK a net zero financial centre by ensuring that the FCA and the PRA must have regard to these considerations when discharging their functions. A similar requirement will be introduced for the Bank of England and the Payment Systems Regulator, which we will cover in more detail later.
Clause 26 makes consequential amendments to FSMA 2000 to take account of the new regulatory principle in clause 25, and the new growth and competitiveness objective for the FCA and PRA in clause 24. Clause 26 also requires the FCA and PRA to explain how they have advanced the new growth and competitiveness objectives, as well as their existing statutory objectives, in their annual reports to the Treasury, which are laid before Parliament. This requirement aligns with the PRA’s current reporting requirement for its secondary competition objective. I therefore commend clauses 25 and 26 to the Committee.
Emma Hardy
I have not tabled an amendment to the clause, but the Minister will be aware that on Second Reading there was a huge amount of support across the House for strengthening these proposals on net zero and nature. I hope we will see some movement on these issues as the Bill progresses through Parliament.
I want to start by saying why net zero and nature matter and looking at the situation in France and Germany. The German regulator already has a sustainability objective, with a focus on combatting greenwashing. The French regulator already looks at overseeing the quality of information and has set up the Climate and Sustainable Finance Commission. I want the Minister to note that our competitors are already moving ahead in this area.
One thing that came out of the written evidence, which I have just been re-reading, was the need for net zero transition plans and the establishment of a transition plan taskforce. The Minister has not really mentioned that. The purpose of the transition plan taskforce was to look at a gold standard for climate transition plans, but it is not stipulated in the Bill that companies will be expected to develop these and move them forward.
Disappointingly, although the Bill talks about net zero, it says nothing about nature. I wish I could recall who from the Bank of England came to give evidence to the Treasury Committee, but it was incredibly interesting to hear that, in looking at the risks to our country and our future financial sustainability, it is starting to look at the risk to nature and what the decline in nature will cost us all. We have heard much about climate change and the obvious risks it poses to our country and our financial sector, but people are starting internationally to look at the impact that a decline in nature has on our economic wellbeing. Again, nature is not mentioned in the Bill at all.
Craig Tracey
I will speak specifically to clause 26. It is really welcome that this measure has been brought forward, but I have a big worry that the wording of the clause is open to interpretation. I have therefore tabled a new clause that we will get to later. The main change is to amend the wording in the clause that the regulator has complied with the competitiveness duty, “in its opinion”. I think that is quite worrying. There is a worry that it will turn into a tick-box exercise. As Emma Reynolds from TheCityUK pointed out, there is concern that the regulator will end up marking its own homework. The regulator was not even aware that other jurisdictions had international competitiveness duties.
We should also find it concerning that Charlotte Clark from the ABI said in her evidence that she could not recall a new insurance company being set up in this country in the last 10 to 15 years, yet they are being set up in other countries, including in the EU—countries with which we have equivalence. The main reasons seem to be the time that it takes to get regulated and the cost. As my hon. Friend the Member for Wimbledon said, in some instances it is up to 14 times more expensive to get regulated here than in similar jurisdictions that are similarly robust.
I therefore think that the provision needs to be much tighter and to have some proper key performance indicators and metrics. It was good to hear the FCA say that it was looking at those, but we need to set them out clearly. The types of thing that could be in there are an understanding of who is leaving the country for other regimes and why; rule monitoring and evaluation; the level of duplication in the rulebook; the speed and responsiveness of the regulator; and our success in attracting new applicants. As I said, I have a new clause, which we will come to at the end, but it would be great if I could meet the Minister beforehand to talk this through and to see whether it can be incorporated into the Government’s thinking.
Dame Angela Eagle
Again, there is largely agreement about the aims of clauses 25 and 26. We are on the cusp of a complete transformation in the way our economies have to work. Sometimes, I think we do not quite understand the extent of the transformation that will be needed and the speed at which it will have to be done, given that we are so behind in our attempts to reach net zero and avoid catastrophic climate change. It really is the last few hours, in terms of the biodiversity and climate stability of the Earth, for us to be able to do this.
The scale of the required transformation is mind-boggling. Virtually every piece of infrastructure in existence in our society will have to be transformed. That will have to be done through public-private partnerships, investment to lead the market in areas where there is market failure and investment in innovation in financial services to help to provide that investment, but also through proper regulation, which is what these clauses are about. All those things have to be done in a timely way to create the circumstances for realising all the capital investment potential that will be needed to make this change happen, especially in established economies with old infrastructures, which are often the largest emitters of carbon, as it happens. All of that has to be done virtually in parallel, so that we can try to reach these important targets.
It is very important that, through these clauses, the Government have agreed to incorporate the legislative target of reaching net zero by 2050 into this part of financial services law. However, they have amended it by replacing what was there before—the “have regard to sustainable growth”—with the target. Is that the right way to go about it? By getting rid of that “have regard”, do we lose an opportunity to make progress, rather than just focusing on a future output? That is not a philosophical question; it is a practical one. Why have the Government decided to replace the “have regard”, rather than enhance it? Will the Minister reassure us that, in the context of having to retool the way we do almost everything in all our infrastructure, we could not have gone with both? Will there be the potential for people to think, “We’ll put everything off until closer to 2050,” because the “have regard” has been replaced with an end-date output target? Can the Minister justify why the Government thought that was the best approach?
When regulation is being refocused on net zero, there will be those who wish to greenwash what they are doing—I will use that phrase; the Minister understands what it means—in order to continue to attract investment and piggyback on the good will of people who wish this change to happen when, in the case of those companies, it is not happening. I suspect there is a little bit of that going on at the moment. How does the Minister envisage enforcement mechanisms and proper regulation being put in place to ensure that greenwashing is not going on everywhere? Such greenwashing would move us away from meeting the target. Not only would it be to the detriment of consumer interests; it would squeeze out more genuine activities, firms and investment if it were allowed to be too prevalent.
Stephen Hammond
I am not sure whether I am supposed to, Dame Maria, but I refer the Committee to my entry in the Register of Members’ Financial Interests.
Like many Members, I welcome the thrust of clause 25 and think it is important that we are setting the principle of net zero in legislation. However, I agree with my hon. Friend the Member for North Warwickshire. Clause 26 amends FSMA 2000 in relation to the content of the annual report. I will not go through all the arguments that we may well make when my hon. Friend’s new clause is debated, but I want to register with the Minister my concern about the phrase “in its opinion”. There is a reputational risk for the regulator, as much as for anyone else, if someone were to examine it later. I will not detain the Committee any longer, but I will want to speak to this point quite extensively when my hon. Friend’s new clause comes up.
I ask the Minister to look at the phraseology and consider whether it is appropriate. As we have all said in Committee, during the evidence sessions and in widespread discussion of the Bill, the need for clear metrics, regulatory transparency and regulatory accountability is key. That is one of the things we have all welcomed in the Bill.
Tulip Siddiq
We welcome clause 25 and the new regulatory principles for the FCA and the PRA, which will require the regulators, when discharging their general functions, to have regard to the need to contribute towards compliance with the Climate Change Act 2008—legislation that, I remind the Minister, was brought in by a Labour Government.
However, we think that the Bill lacks ambition on green finance. The Government promised much more radical action. We were promised that the UK would become the world’s first net zero financial centre, but we are falling behind global competitors. In the evidence session, William Wright, the managing director of the New Financial think-tank, stated that the UK is a long way behind the EU on both the share and the penetration of green finance in capital markets. Research by the think-tank has suggested that green finance penetration in the UK is at half the level of the EU and roughly where the EU was four years ago.
I will discuss what the Opposition would like to see in the Bill on green finance when we discuss new clause 9. For now, will the Minister set out what assessment he has made of the impact that clause 25 will have on investment decisions and other financial service activities in the sector?
In the evidence session, William Wright suggested that there is “a disconnect” between the Government’s stated position that the UK is already a global leader in green finance and the ambition for the UK to become the leading international green finance centre. Does the Minister really believe that the provisions in clause 25 are sufficient to close that gap? How much further will the Government go on this agenda? Does the Minister think we have been as ambitious as possible in the Bill, considering that the problem is on our doorstep and is so important for future generations?
Andrew Griffith
A lot of valuable points have been raised by Members on both sides of the Committee. This is the right moment for colleagues to make those points, and I hope it is acceptable to the Committee if I take some of those points away and follow up with further information later, rather than dismissing them trivially here.
The hon. Member for Kingston upon Hull West and Hessle raised something that is close to many of our hearts: nature. She is quite right that the Bill is focused on net zero and climate. She is absolutely right that we cannot achieve our climate goals without acknowledging the vital role of nature. That should concern us all, as it is part of the carbon ecosystem. I will take her points away to see whether there is anything else that can be done. I hope she will accept that the datasets and the maturity with which some aspects can be measured are not as sophisticated as in the science of climate change. That might be one impediment to the Government moving forward and baking it into statute, but I will take it away and follow up with the hon. Lady.
The hon. Member for Wallasey is absolutely right about the transformative scale of moving to a low-carbon economy. It will change every single aspect of how we generate energy, the activities we engage in, the homes we live in and our financial centre. We are at one on that. I believe that the wording of the clause and the replacement of the “have regard” achieves that objective, combined with the legislative commitment—by the Labour Government, if the hon. Member for Hampstead and Kilburn so wishes—that is being incorporated into the duty by reference. It does do that. There is an ambition there, and we should seek to satisfy it.
Tulip Siddiq
Obviously I do not want to offend the Minister, but I point him to the facts. I would like to hear what he has to say in response to the evidence given by William Wright, who, I would point out, is not a Labour MP but is independent. The think-tank’s research found that green finance penetration in the UK is at half the level of the EU, and roughly where the EU was four years ago. When the Minister writes to me, will he point me to specific evidence that contradicts what we heard in the evidence session?
Andrew Griffith
I will. I look forward to writing to the hon. Lady to set out my case.
The hon. Member for Kingston upon Hull West and Hessle mentioned transition plans. Our progress on those is absolutely on track and I look forward to that being another area in which the UK is leading.
Question put and agreed to.
Clause 25 accordingly ordered to stand part of the Bill.
Clause 26 ordered to stand part of the Bill.
Clause 27
Review of rules
Question proposed, That the clause stand part of the Bill.
Andrew Griffith
Clause 27 inserts four new sections into FSMA 2000 to ensure that the FCA and the PRA review their rules regularly, so that they remain fit for purpose. It is important for the FCA and the PRA to regularly review their rules after implementation to ensure that they remain appropriate and continue to have the desired effect.
Regular reviews improve ongoing policy development by providing the evidence to make better decisions and helping to develop a better understanding of what works, for whom and when. There is currently no formal requirement for the PRA or the FCA to conduct reviews of their existing rules. Proposed new section 3RA will introduce a requirement for the two regulators to keep their rules under review. There are a range of approaches for assessing the effect of rules, from monitoring a set of indicators to an in-depth assessment of the effect of a rule from both a qualitative and quantitative standpoint.
The Government expect that, under this new requirement, the regulator will decide on the most appropriate approach on a case-by-case basis. The requirement to keep their rules under review should lead to a more systematic approach by the FCA and the PRA, in turn improving regulation, as any ineffective or outdated rules will be removed or revised more consistently.
Alongside that requirement, proposed new section 3RB requires the regulators to publish a statement of policy on how they intend to conduct rule reviews. That will provide clarity and transparency for stakeholders on how and when rules are reviewed, thereby increasing confidence in the regulation of financial services. Under these new requirements, how and when the two regulators review their rules to assess whether they function as intended will be an operational decision for the regulators.
In addition to the new legislative requirements, the regulators have confirmed that they will consult publicly on the statement of policy to ensure that stakeholders have an opportunity to contribute views as the regulators consider their approach.
I reiterate that, as set out in the Government response to the November 2021 FRF review consultation, and in response to calls from industry, the FCA and the PRA have committed to ensuring that there are clear and appropriate channels through which industry and other stakeholders can raise concerns about rules. Those channels will be set out in policy statements in due course. However, without further provision, there will be no formal mechanism for the Treasury to require the regulators to conduct reviews of their existing rules.
As the FCA and the PRA take on increased regulatory policy-making responsibilities following the implementation of the FRF review, there may be occasions when the Treasury considers that it in the public interest for the regulators to review their rules—for example, when there has been a significant change in market conditions or other evidence suggests that the relevant rules are no longer acting as intended.
Proposed new section 3RC of FSMA provides for more effective regulation by allowing the Treasury to direct the regulator to review its rules when the Treasury considers that to be in the public interest. Proposed new section 3RD requires the regulator to report on the outcome of the review and the Treasury to lay that report before Parliament. Any reviews initiated under the power will be conducted by the regulator or, where appropriate, an independent person. The regulator will be responsible for deciding what action to take, if any, in response to any recommendations arising from the review. This measure offers a new avenue for challenge of the regulators’ rule making, where that is required, while maintaining their operational independence.
Respondents to the November 2021 FRF review consultation felt that there should be further measures on accountability, although there was no consensus on what they should be. The Government considered the responses and decided that, while we must still uphold our commitment to independent regulation, the accountability framework needs further strengthening, so on Second Reading the Government announced our intention to bring forward an intervention power to enable the Treasury to direct the regulator to make, amend or revoke rules when there are matters of significant public interest. The Government will provide a further update on that power in due course. With that in mind, I recommend that the clause stand part of the Bill.
Dame Angela Eagle
I have a few questions. The measure is sensible, but at the same time, it can be read as being quite sinister. Perhaps it depends on how the power will be used. The past is not filled with massive numbers of examples of the regulator falling out with the Treasury or the Bank of England, so the measure seems rather like a sledgehammer to crack a nut. The powers are to be used in exceptional circumstances, but those circumstances are not really defined; the Minister’s comment on that would be interesting.
If the measure is a sledgehammer to crack a nut, does it risk giving the impression that regulation in this country is not independent and can be overridden when that suits a Government, rather than when that is in the public interest? Might this compromise outsiders’ views of how our system is regulated? In other words, the cost-benefit analysis of whether the measure is an appropriate reaction might be in the balance. Will the Minister say a little more about how he perceives the power being used and what “exceptional circumstances” are?
We would still like to see what the intervention power that the Minister keeps talking about would actually look like. He has not come forward with the wording of it. Today, we will be halfway through the Committee proceedings on the Bill, and past the time when it may be relevant. Will he bring that wording back on Report, or will we see it while we are still in Committee?
Tulip Siddiq
We support the powers granted to the Treasury in clause 27 to require the regulator to conduct reviews of existing rules. We think that is a proportionate and sensible approach. We agree that mechanisms should be available to allow Ministers to ask a regulator to think again about a rule that may not be working in the public interest. However, while it is important that regulators are held to account, does the Minister agree that the operational independence of regulators must be paramount? Does he therefore agree that, with the powers to direct rule making already included in the Bill, a so-called intervention power would be unnecessary and dangerous?
During the evidence session, the deputy governor of the Bank of England, Sir Jon Cunliffe, said that an “intervention power” risked undermining perceptions of the central bank’s 25-year-long independence. He warned that, in turn, it would undermine the global reputation of our financial services sector. Even though the Minister was there, I will quote him:
“That credibility of the institutional framework is very important to the competitiveness”––[Official Report, Financial Services and Markets Public Bill Committee, 19 October 2022; c. 39, Q76.]
of the UK. Martin Taylor, a former Bank of England regulator and chief executive of Barclays said that, while it would not necessarily turn us into “Argentina or Turkey overnight”, that would be the direction of travel if such a power were introduced. I ask the Minister once again, echoing what my hon. Friend the Member for Wallasey said: why does he believe that the powers in clause 27 are not sufficient, and why do the Government continue to ignore the advice of the Bank of England?
Andrew Griffith
We have debated this matter under a number of clauses already. My commitment to table the draft wording of the proposed intervention power during this Committee remains. That remains the intention. I do not accept the characterisation of a sledgehammer and a nut. What we are doing in the whole of the Bill is giving vast new powers to the regulators that were previously held and exercised, with potential oversight and intervention, from Brussels. We are bringing that into the UK rulebook. The proposed power here, and any proposed intervention power, is a proportionate response to the significant expansion in regulations of financial services, which touch and are capable of touching every aspect of human life in this country.
It is important that we give the Government of the day, subject to Parliament, that failsafe ability. It may one day even be the hon. Member for Hampstead and Kilburn who is exercising that power, and she may be grateful for the foresight of this Committee in providing that, with the caveat that this is clearly anchored in the public interest. That is a well-understood concept. I do not want to rehearse all the points that the Committee heard from witnesses, but it is the Government’s view that this power is necessary. To the extent that we seek to go forward with what is called the public interest intervention power, beyond merely directing regulators to look again at rules, we should discuss that again in the context of what the checks and balances on that would be.
Tulip Siddiq
I am not sure, but I think the Minister was advocating for a general election; I am not putting words in his mouth. I understand what he is saying, but we asked the witnesses to come and give evidence for a reason, so he needs to respond to the concerns of those witnesses, who were clearly concerned about this intervention power. Those two key witnesses said they were worried about undermining the independence of the Bank of England. What is the Minister’s opinion about that?
Andrew Griffith
The Treasury has consulted widely on the future regulatory framework. One of the key points made by all the industry participants, very few of whom were part of the witness sessions—although we did hear from two particular witnesses, we did not hear the same volume of responses as in past consultations—was that industry is firmly of the mind that this is proportionate and potentially required.
I will clarify a couple of things for the Committee, because these matters are often misunderstood. First, we have operationally independent regulators. That is absolutely right, and no one is seeking to interfere in the findings of any particular regulatory review with respect to an industry participant. Secondly, none of this speaks to the scope of the Monetary Policy Committee. Sometimes the debate is couched in terms of monetary policy independence. What we are actually talking about is the regulatory rulebook. There are large public policy considerations for the insurance industry, for example, and in relation to consumer duty matters, such as access to cash and consumer protection, which we will debate in later sittings. Those are all matters that the Government consider and will continue to consider, notwithstanding the evidence given in that witness session. That is the right, proportionate response.
I should clarify that the hon. Member for Hampstead and Kilburn will get her general election in due course, but I fear she will have some time to wait.
Question put and agreed to.
Clause 27 accordingly ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned. —(Joy Morrissey.)
Economic Crime and Corporate Transparency Bill (Fourth sitting)
(2 years ago)
Public Bill CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Chair
We will now hear oral evidence from Angela Foyle and Mike Miller from the Institute of Chartered Accountants in England and Wales. We have until 2.20 pm. Could the witnesses please introduce themselves for the record?
Angela Foyle: I am Angela Foyle. I am the head of risk management and economic crime at BDO Global, but I chair the economic crime sub-committee of the Institute of Chartered Accountants in England and Wales.
Mike Miller: My name is Mike Miller. I am the economic crime manager working within the Institute for Chartered Accountants in England and Wales.
Liam Byrne (Birmingham, Hodge Hill) (Lab)
Q
Angela Foyle: Publicly, it is stated that London is one of the key capitals of money, but that is partly because it is the largest financial centre in the world, so you will inevitably have dirty money flowing through. There is that view. It is something that the US, in particular, has made comment on at times. On the other hand, when talking to Europeans, we are also recognised as being at the forefront of introducing legislation in relation to money laundering regulations and enforcing them, to some extent, compared with other jurisdictions. It is a bit of a mixed bag, depending on who you are talking to and in what context.
Liam Byrne
Q
Angela Foyle: I think what I meant by that is that it is inevitable that you will have some illicit finance where there are significant movements of finance. I am not saying it is good—I think it is wrong. I think we should stop it to the greatest extent that we can, but where do you hide a tree? It would be in a wood. So, where are you going to hide dirty money? It is going to be somewhere where an awful lot of money is flowing through.
It is not that I think it is a positive thing at all; I think it is very negative. I actually spend most of my working life trying to see how we can prevent accountants and others—I have forgotten the word I mean—unknowingly getting involved with it. It is a problem for London that we have to be acutely conscious of, and therefore we have a greater responsibility, in many ways.
Liam Byrne
Thank you—that is well put. Mike, what is your view on that?
Mike Miller: I agree with Angela. London is such a large financial centre and there is such a volume of money moving through it that there inevitably will be, as Angela said, some money that is not well sourced and not well processed. That being said, we work very hard, particularly at ICAEW, to try to clamp down on it. Illicit finance and illicit transfer of funds affect the profession particularly badly. They put people in a very difficult position, both reputationally and legally. You will find the vast majority of chartered accountants and other professionals do not want to engage in unprofessional and malicious practice when it comes to that finance. We work very proactively with Committees, Parliament and across Government to make our representations about how this can be more effectively countered.
Liam Byrne
Q
Angela Foyle: It is interesting, because we would probably put it the other way around. The standard—sorry, I beg your pardon, I was thinking about the earlier Bill. Yes, this Bill has two forms of verification, by either Companies House or authorised corporate service providers. It does not appear to have the wording that would be in the money laundering regulations, which requires there to be reasonable verification measures using a risk-based approach. I think those kinds of words always assist, so that you actually have to assess and understand the risk surrounding the people you are trying to verify first, and therefore, if necessary, enhance your level of verification.
Liam Byrne
Q
Angela Foyle: Around verification, yes. There is a spectrum, however. Requiring that someone has to verify, that is, prove, that that is true goes beyond what is possible for an accountant. I can look at documents. I can take careful measures to ensure that those documents are, or appear to be, valid, but I cannot actually ever say with 100% certainty that x is x; I can simply say that I have done the following work and, based on that, these are reasonable measures on the risk basis. I certainly think that is an area that could be, at the very least, clarified as to the standards expected to ensure that they are consistent.
Liam Byrne
Q
Angela Foyle: It is based on the Financial Action Task Force standards on beneficial ownership, which looks to people who own 25% or more, in some cases, or more than 25% in others. It is one of those challenging issues because, in relation to things such as proxies, often it is not the about the levels that a person owns, it is the fact that x purports to be the person who holds it, when actually they actually do so on behalf on y, which can be very difficult to track through.
Many people look below 25% in any event just to make sure. Particularly with sanctions, they will have a look there. But 25% is a global norm and changing it might cause other challenges. This is the question: are you satisfied that you understand who the people that you are dealing with are, and who is behind them, at all times? It is not necessarily a question of whether it should be 20%, 5% or 25%. It is a hard one for me to answer because I work with 25%, but I will generally have a good look around to see what else there is.
Alison Thewliss (Glasgow Central) (SNP)
Q
Mike Miller: Indirect information provision essentially relates to a third-party database which would allow the easier sharing of information between financial firms. The ones that are already mentioned include banks, crypto exchanges and various different entities that could be privy to malicious financial movements, essentially. The accountancy sector has not been included in that, so for the purposes of a lot of the work that we are doing about the open sharing of information with law enforcement, between bodies, between other firms, it would be helpful for the streamlined moving of information. It would certainly help accountancy firms to identify more quickly, and thus reduce the likelihood of, any bad transactions taking place. An accountancy firm could avoid getting embroiled in things it does not wish to get embroiled in if it had pre-emptive access to any intelligence—that may have been discovered by a bank, for example, looking in more detail at specific financial transactions than accountancy firms tend to—that indicated that it should not be doing business with particular entities.
Alison Thewliss
Q
Mike Miller: I do not have the up-to-date figure with me today, but I can come back to the Committee with that in writing. Generally, in OPBAS, we are obviously very supportive on the need to have professional bodies for oversight of regulation for anti-money laundering. There is obviously a Treasury consultation going on into the potential restructuring of OPBAS. We have been working closely with it to ensure that our members are represented, but also so that it will be the most effective oversight that it can be.
ICAEW is the largest supervisory body in that space. We are very proactive in taking a risk-based approach. We cover a lot of firms, and it is necessary that a lot of those inspections are carried out based on where we assume there is a higher level of risk of illicit financial transactions. Whether that should be changed is obviously something that we will come back to in the consultation.
We have been speaking regularly to Treasury and other groups. They are collecting intelligence to try to determine, I think, some concrete proposals before they put it out to consultation, but we are very supportive of OPBAS. We continue to work closely with it and have a strong supervisory body in place for the PBSs.
James Daly (Bury North) (Con)
Q
Angela Foyle: I am not so sure the first one will affect us, at £1,000. The second one may facilitate certain activities for our insolvency practitioners, particularly where they are appointed in circumstances where they know that there has been some form of fraud—be that tax fraud or what is often called “fresh air invoicing” or invoice discounting fraud, where there is a set amount of money that is known to be tainted—because, currently, all of the assets of the insolvent entity can often be tainted, and defence against money laundering applications have to be made for each and every transaction done. By having that, they will be able to ringfence certain amounts that they know to be tainted—they would obviously do investigations to ensure that they have got that amount correct—and then deal more quickly with creditors and others with the remainder of the funds. In that sense, we certainly welcome that amendment. It is one that we raised with the Home Office, alongside the banks and, I believe, the Prison Service may have wanted it as well.
James Daly
Q
Angela Foyle: There are a number of areas in which it will affect us. We are very much in favour of the changes to Companies House, I must say, and of giving additional powers to it. We are incredibly supportive of that.
One example that we can give relates particularly to the misuse of registered offices. All the firms have found instances of people effectively putting their address as offices of accounting firms, presumably to give them credibility. In some cases, that is linked to using names similar to either regulated or existing lawful businesses. Again, that is clearly intended to facilitate fraud. Currently, it can take months to get people off that address, but with the additional powers, we are hoping that that can be done much quicker.
Similarly, with other misuses, such as the inability to contact businesses, there is also the identification of directors to ensure that you are dealing with the people that you think you are. Even if those perhaps could be strengthened in some ways, I think there is a lot that is positive in the Bill. It is a staging post, but it is a really important one.
Mike Miller: I agree with Angela, particularly on the point about Companies House. We are definitely behind the reasons for and the principles of the Bill; we are very supportive of all that it seeks to do. We have been saying for quite a while that some of these measures are overdue, particularly those on Companies House, as Angela mentioned. We have proposed some tweaks for a few areas, particularly around verification, as we have touched on before. There is going to be a two-tier verification in the sense that Companies House will be responsible in some way or another for the verification of those that are registered in the UK. For overseas entities, that is a bit more of a challenge, because they require legal verification and we currently think that the legislation is such that it does not really allow a reputable business to take on the level of risk of a new client unless they have a particularly established relationship.
We have made some recommendations to our members that they need to exercise extreme caution taking on new clients solely for the purpose of verification. That is so the system works; it is not so that they avoid it. It is so that it does not, first, stop people being able to do business in the UK when they rightly should be able to, and secondly, so that if the larger, more reputable firms do not offer that service, then it becomes something that is picked up by those that we may not necessarily want to offer that service.
We have also recommended a couple of areas where we think it could be strengthened, particularly around notifying Companies House of a change of auditors, so there is a two-pronged approach. That is so that companies themselves, for example Angela’s firm, knows that they have been assigned as an auditor, to make sure that is correct and they audit the company, and for Companies House to make sure that a company is audited as it should be. We think that would reduce the likelihood of discrepancies coming in, going forward. However, overall, we are generally supportive.
Dame Margaret Hodge (Barking) (Lab)
Q
Angela Foyle: I do not know the proportion, but there are about a hundred and something thousand members.
Mike Miller: Yes, about 110,000 members. I am not sure of the proportion.
Dame Margaret Hodge
Q
Angela Foyle: Not by the ICAEW, but there are other institutes out there.
Dame Margaret Hodge
Q
Angela Foyle: We are the bigger one, but they may be by someone else. There are also people who are not regulated by any professional body who can call themselves accountants as well.
Dame Margaret Hodge
Q
There are two things I wanted to ask. One is about the current system of regulation. You as professionals play a role in the system. What changes would you make to ensure the current regulation encompasses all those who call themselves financial advisers or accountants? Secondly, how good are you at your policing role? You obviously have a lobbying role and looking at both your CVs, you are on the lobbying side to make sure regulation fits what your profession wants. I am much more concerned about the policing role. Can you tell me how many people in the last year have been suspended, or whatever it is you do to them, if they have been found guilty of engaging in, facilitating or colluding with economic crime or money laundering or anything like that?
Angela Foyle: I do not think we have the numbers for the people this year.
Mike Miller: We do not have the numbers up to date for this year.
Dame Margaret Hodge
Q
The Chair
I am going to have to curb this and move on very briefly to Tom because we have to finish.
The Minister for Security (Tom Tugendhat)
Q
Angela Foyle: Neither of us is part of the Law Society so we cannot speak for them, but clearly, that was something that was thought to be necessary as a deterrent. Although I expect most of them are likely to be regulated by the Solicitors Regulation Authority for money laundering, rather than the Law Society. However, it must have been a gap that was thought to be necessary to fill. I really do not know, otherwise; I am speculating.
The Chair
Thank you very much. That brings us to the end of the time allotted for the Committee to ask questions. I thank our witnesses on behalf of the Committee for their evidence.
James Daly
On a point of order, Ms Bardell. As a result of Mr Tugendhat’s question, I had better declare an interest: I am a practising solicitor.
Dame Margaret Hodge
Can I ask something wicked? Can the witnesses provide written answers to my questions?
The Chair
They can indeed.
Mike Miller: I am very happy to.
Angela Foyle: Could we possibly have your question in writing, just to remind us?
The Chair
We will arrange for the questions to be delivered to you in a written format and additionally distributed.
Examination of Witness
Peter Swabey gave evidence.
The Chair
We will now hear oral evidence from Peter Swabey of the Chartered Governance Institute UK & Ireland. I hope I have pronounced your name correctly.
Peter Swabey: It is pronounced “sway-bee”, but that is fine. I am used to all sorts of things.
The Chair
Q
Peter Swabey: I am Peter Swabey, and I am the policy and research director at the Chartered Governance Institute UK & Ireland. The institute is the professional body for people who work in governance, which includes company secretaries and governance professionals in all sectors.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
Q
Peter Swabey: The institute and its members look at governance. Effectively, they are the people who are responsible for filing documents at Companies House and for advising boards on good governance. In that sense, they are perhaps less directly involved in economic crime than some of the other bodies you are hearing from.
From our perspective, the Bill is a really good effort. While I was sitting at the back, somebody said that it was regarded as a starter for 10. I think the Bill is a really good start on a lot of things that a lot of people have been thinking that Companies House should have been doing all this time—indeed, many people thought Companies House was doing it all this time, but it has not had the powers to do so. From that perspective, giving Companies House some of those powers is a really big step forward. There are a few things that I would perhaps have done differently, but that is in the realm of detail.
Seema Malhotra
Q
Peter Swabey: The big gap, from my perspective, is around the role of the company secretary or governance professional in the Bill. We were just hearing a bit about the arrangements for who is allowed to deliver documents for the authorised corporate services professionals. In most companies, it would be the company secretary who takes responsibility and ownership for doing that. That is something that we would like to see more specifically included in the Bill. The Government’s intention may be to include that in the regulations that the Secretary of State has the power to make. That is fine—that is regulations—but I would much rather see it in the Bill and, ultimately, the Act.
Seema Malhotra
Q
Peter Swabey: For me, it should reference the role of the company secretary. I have a slightly wider issue than that. The Companies Act 2006 got rid of the requirement for a company secretary in all companies. That was deregulatory—that was fine—but we now rely much more on the reporting that companies do and the filings that companies make, so I believe there should be a requirement for a company secretary, not just in public companies, as there is now, but in larger private companies that also have to meet some of these requirements.
Alison Thewliss
Q
Peter Swabey: Yes, I think there are. We have regular engagement with Companies House and that is one of the things that it is seeking to tackle already, but will also seek to tackle through the powers and resources that it will hopefully get as a result of the Bill. It would great if everything that has to be filed at Companies House can be filed electronically. There are still a number of things that cannot be. Again, that may be changed as a result of the changes that Companies House are making to their system but, as we stand at the moment, there are things that cannot be filed electronically.
In terms of use, there is a question that companies sometimes get feedback on from shareholders, which is on the availability of information, particularly about retail shareholders, and particularly for those companies that have large registers of members. Individuals on this Committee, or me, or whoever—their name and address might be at Companies House in respect of a holding of 100 shares in a company. If it is a big public company with millions and millions of shares, that is probably not that helpful. There are people who buy copies of the register for commercial purposes. It would be quite useful to tighten that up.
Alison Thewliss
Q
Peter Swabey: Yes, I think it is. It is an issue in a couple of ways. We just heard about the challenges in correcting deficient information. There are a number of plcs that have reported that their registered office address has been used for companies of whom they have never heard. If you are a plc with a large number of subsidiary companies, that could quite easily be overlooked by people. As somebody said in the last session, that is then used to give credibility to the potentially fraudulent company that is being set up. Being able to fix that more quickly is certainly an advantage.
James Daly
Q
Peter Swabey: I think it makes it a little more difficult for some people. I am a company secretary, so I would argue that you simply have to plan it all a bit better, and perhaps think about some of that a little more in advance. It will mean that some corporate transactions that you can currently deal with very quickly by simply having a meeting in a room and agreeing that so-and-so and so-and-so are the new directors will now have to go through a process. We are all hoping that, as promised, Companies House will manage the verification process for new directors expeditiously so that that will not hold things up unduly, but it is an additional factor to bear in mind.
James Daly
Q
Peter Swabey: You have to name the directors. You have to give some sort of evidence that the directors are real people who you know, so some piece of personal information about them. That might be their eye colour or their national insurance number. Nobody actually checks that, by the way. You just have to fill the box in. You have to have a registered address for the company and a few other details, but it is a relatively simple process.
James Daly
Q
Peter Swabey: I think it is fair to say that at the moment it is nothing like as secure as any of us would like it to be, and the Bill is a big step forward in tightening that up. I would still like to see it go further in some ways.
Dame Margaret Hodge
Q
Peter Swabey: It is really important to make sure that the hoops through which those authorised company service providers go before they become authorised are significant, to make sure that we can have confidence in that.
Dame Margaret Hodge
Q
Peter Swabey: That would entail detailed verification of who people were, of who the ownership was and how that was structured and, effectively, Companies House having a bar to doing that. Where I would take issue slightly with the premise of your question is when you talked about SMEs not needing or not having space for a company secretary; most of them have an accountant and all sorts of other things. It does not have to be a full-time role; someone can be doing it part time, but what is important is that someone who knows what they are doing is looking after those issues.
Dame Margaret Hodge
Q
Peter Swabey: No, it is not something that our members—
Dame Margaret Hodge
Q
Peter Swabey: I cannot help you much with that, because we are not a supervisory body in that sense.
Dame Margaret Hodge
Q
Peter Swabey: We give advice on what is good governance for organisations, not on the supervisory role.
Liam Byrne
Q
Peter Swabey: You have the directors’ duties under section 171 of the Companies Act and so on. Those are there, but it is difficult to identify exactly how those directors’ duties can be pursued against any defaulting director. For me, that is one of the challenges. Were you to introduce something extra on that, that would be a solution, but again you would need to look at how that could actually be enforced.
Tom Tugendhat
Q
Peter Swabey: The Bill deals with some very specific issues, which are not necessarily those. I think that the Bill would need to be broadened significantly were it going to get into things like sustainability, corporate social responsibility and so on.
Tom Tugendhat
Q
Peter Swabey: No, I think that is very important for governance. What I was saying was that you were then talking about some of the other issues, such as corporate social responsibility, which are probably outwith the scope of the Bill as it stands.
Tom Tugendhat
Q
Peter Swabey: Absolutely, yes.
Tom Tugendhat
Q
Peter Swabey: Yes, you are right. I had not thought of that aspect of it—I was thinking in terms of the reporting that companies do—but yes, in terms of tracking down defaulting companies, I think it will help you.
Tom Tugendhat
Q
Peter Swabey: Yes, absolutely. Removing the ability for companies to go bust one day and reappear the next with a very similar name and very similar directors, but without all those tedious debts that they used to have, is one of the really important issues.
Tom Tugendhat
Exactly—phoenixing.
Peter Swabey: I think that is really important.
Tom Tugendhat
Q
I also wondered if you could talk a little bit about whether you think it is going to help with economic crime. Clearly, although I am not a BEIS Minister, one of my responsibilities is fraud. The presence and disappearance of corporate entities is, I am afraid, something that has caused more than its fair share of fraud. How do you think the Bill might be able to help with that?
Peter Swabey: I think the Bill will help with that by making it possible to have greater confidence in the directors who are responsible for those companies actually being real people. We were talking a little while ago about the ease with which you can set up a company, and the limited verification of directors that goes on. We have a verification process in the Bill that will help to ensure that those people are actually the people you believe them to be, and that there is an address where you can get hold of them and, particularly, where the forces of law enforcement can get hold of them should they need to. That is a real strength.
Tom Tugendhat
I am very grateful, not only for your evidence today, but for the work you do and the oversight you bring. It does make a huge difference, and I am very grateful indeed for it. Thank you.
The Chair
Thank you very much. If there are no further questions from Members, we will thank the witness for his evidence and move on to the next panel. Peter, thank you very much for your time; we greatly appreciate it.
I am going to suspend the sitting, because we have a little bit of time before the next evidence session, and the witness is not in the waiting room yet because she is giving evidence via Zoom.
The Chair
I restart the sitting with our sixth panel . We will now hear oral evidence from Catherine Belton, journalist and author. Catherine is appearing via Zoom. We have until 3.10 pm. Catherine, could you please introduce yourself for the record?
Catherine Belton: Hi, I am Catherine Belton, author of “Putin’s People”. I am a reporter with The Washington Post.
Seema Malhotra
Q
Catherine Belton: There is a very simple answer to this, though I should basically preface all my answers by saying that I am not an expert on the Bill like some of my colleagues, such as Oliver Bullough. I have not studied it deeply, but what I can speak to is the urgency of these reforms, because of the threat posed to our national security. There is also a dire need to push through the anti-SLAPP legislation.
All these deep-pocketed oligarchs are essentially taking advantage of our system and are able to outspend not just journalists but financial watchdogs acting in the public interest. They are outspent and intimidated out of pursuing any real investigation into financial misconduct. They know from the outset that they may lose.
You only have to look at the example of the Serious Fraud Office and its battle against ENRC, which was once listed on the London stock exchange, then delisted and owned by a trio of Kazakh fraudsters essentially. The amount they spent annually on legal cases in the UK was £89 million, which is over the annual budget of the Serious Fraud Office. Though the Bill is of dire importance, without greater spending and funding for our public watchdogs—the National Crime Agency, Serious Fraud Office and other entities—we are going to be stymied from the get-go.
Alison Thewliss
Q
Catherine Belton: The UK, like many other countries, has welcomed capital from places such as Russia with open arms for the past 20 years. It is certainly a place that Russian oligarchs have flocked to, not only because they want to be part of the UK establishment but because they have clearly taken advantage of our lax legislation and regulation compared with the US, for instance. If you are listing a company in the US you face the Sarbanes-Oxley regulations, and you have committed a crime if you are found to have lied on your financial disclosures. Here, there seem to be so many loopholes; people can get away with everything.
We only have to look at our Companies House institution to see that there is very little scrutiny of filings that people are making. We have all heard the obvious examples of people not disclosing anything. I think you are a great expert in the use of limited liability partnerships by Russian money launderers. UK LLPs have seen tens of billions of dollars’ worth of illicit Russian cash move through them over the last decade or so.
Most of those money laundering schemes have been overseen by the Federal Security Service of the Russian Federation. It has a money laundering department called Department K, which has overseen all those schemes and has had an involvement in each and every one of them. I am told by security officials in Moldova—where one scheme used LLPs to move tens of billions of dollars of cash into the UK—that essentially the schemes are used not just by Russians seeking to move money to evade customs and tax, but by the Russian Federal Security Service itself, because it sees the greater flows of cash as cover for it to move its strategic cash into our jurisdiction.
I must again point to the need for SLAPP legislation and ask whether that could, or should, be attached to the economic crime Bill as it stands. If we do not enable journalists and financial watchdogs to look at those entities without fear of getting crushed by enormous lawsuits that will cost more than anyone’s budget allows, then we are going to be open to this type of abuse of our system forever. It was only July when Dominic Raab, the Justice Secretary, finally and wonderfully—it seemed like a miracle at the time—forwarded that anti-SLAPP legislation. It was going to allow for an early dismissal mechanism for cases that were clearly an abuse of the law, and aimed at intimidating journalists and financial watchdogs out of reporting matters of public interest—whether financial misconduct or something else. There has been a great deal of turmoil in Government since then, but we are seeing that SLAPP cases have very much not gone away.
The esteemed Chatham House think-tank recently had to remove the mere mention of a Tory donor, who had previously been convicted of money laundering, from a report on the abuses of the UK system by kleptocrats. The past of our Tory donors is something that we should know about, yet Chatham House had to erase its mention of that donor from its report. Staff looked into how much it was going to cost to defend, even though it was clearly public interest reporting. There was not really much to dispute about it, but they found it was going to cost them £500,000 before the case even got to trial, which means there is something so deeply wrong with our system, and we cannot even begin to combat any of these issues without having these anti-SLAPP measures in place. That is not just for journalists but for the Serious Fraud Office and for other public interest watchdogs.
Alison Thewliss
Q
Catherine Belton: Yes, for sure. Obviously, the companies pursuing these abusive cases should face having to carry the full cost of the case. I have a colleague at the Foreign Policy Centre, Susan Coughtrie, and she and Charlie Holt of English PEN have been working on a new Bill for this SLAPP reform, and I very much recommend that you speak to them as well. That Bill would provide even tougher requirements for cases to really show a likelihood of success.
What the Ministry of Justice proposed was like a three-step set of criteria for judges deciding whether a SLAPP case is a SLAPP case, and whether it should be dismissed before the costs racked up too highly. One of those criteria was whether the case being pursued had a realistic chance of success and it is very clear that this type of criterion needs to be toughened up. I certainly recommend that you speak to Susan Coughtrie at the Foreign Policy Centre about ways in which to do that.
However, I guess that my question to you would be: “Do you think there is a significant possibility that the anti-SLAPP Bill could be attached to the Economic Crime Bill? Is that something that will this speed up?” It is so vitally needed—more than ever. I mean, it is completely—
Alison Thewliss
I think my colleagues and I are interested in hearing this.
The Chair
It is a very important question, but unfortunately we have to stick to Members asking witnesses questions. However, I am sure that you can put those questions to our esteemed Members in other forums.
I will move on to James Daly now, because there are a couple of other Members who are keen to ask questions.
James Daly
Q
However, I just wanted to ask about money laundering. To make a very straightforward point, you obviously need a bank. If you have got a fake financial institution, or a legal entity set up for criminal purposes, you need a means of transferring money, either out of that body or into it. Could you talk about any thoughts or experience that you have, including regarding anything that you have investigated, that touches on that point and on what we can perhaps do to address it?
Catherine Belton: I think it goes back to this issue of LLPs and how these limited liability partnerships have really become, over the last two decades, the vehicle of choice for Russian money laundering schemes in particular—at least the ones that I have studied.
There was the “Moldovan laundromat”, which used LLPs based in the UK, including in Scotland, to move $14 billion out of Russia in illicit cash in the space of four years. That was part of a much bigger process through Danske Bank; I think the total volume of illicit Russian cash coming through Danske Bank was in the realm of $200 billion in just over a decade. That is obviously enormous amounts of cash.
However, it just goes down to the weakness of LLPs and the system that we have created, in which you can have companies established that do not even need to have any real business in the UK; they do not pay taxes here and therefore they did not have to file any accounts. They were not really having to file any beneficial ownership, either. That really means that there has been a huge gap in our legislation. Obviously, the Companies House reform will hopefully provide for more disclosure of beneficial ownership, but there are still so many ways for people to get around it, because Companies House really does not have proper funding to check whether beneficial ownership is being reported properly.
Obviously, the banking system is now under much greater pressure to investigate the source of funds, but while the banking system has become a much more complicated place for people to move illicit money through, the same demands are not placed on hedge funds or private equity funds. There are much less stringent requirements on those types of entities to disclose who their clients are and where the money is coming from. We only have to look at who the major backers of Brexit were. Hedge funds and private equity funds were major donors during the Brexit referendum, and we really had no clue where they were getting the money from.
The Chair
Catherine, we really want to hear from you and make sure that all our other members get to ask questions. We have two other members after James who want to ask questions, so please keep your responses as brief as possible, with all the information that is possible to get across.
James Daly
Q
Catherine Belton: Yes, that is exactly right.
Liam Byrne
Q
Catherine Belton: I think this has become a key way in which the Putin regime is able to extend its soft power and influence and undermine our democracies. That is very clear, because you can have vast flows of pretty much untraceable money, especially in the case of LLPs. Once it goes through a UK LLP, no one has any clue where any of that cash has gone. Vladimir Putin believes that the weakness of the west lies in our incessant drive for profits and the belief that the more Russian cash there is in the UK, the more Russia will have to follow our corporate governance standards.
Unfortunately, there has been a great lack of corporate governance standards, which has allowed our system to be corrupted. It has really laid bare how powerless some of our oversight bodies and enforcement agencies are. You only have to look at the National Crime Agency’s investigation into the source of the donation that Arron Banks gave to the Brexit campaign to see just how feeble our institutions are, at a time when we really need to be empowering them. When the NCA had to look for the source of the £8 million, it could not go any further than the Isle of Man company co-owned by Arron Banks. We do not know where the money came from.
Liam Byrne
Q
Catherine Belton: Yes, I am, of course. Obviously, that has an agenda, especially when the UK Parliament’s own Intelligence and Security Committee has pointed out the very close links between Russian business, the Russian state and Russian intelligence. Basically, Russian businesses very often have to act as arms of the Kremlin or follow Kremlin orders. Russian businessmen have to follow Kremlin orders in order to hold on to their wealth. It is not just money that is coming into our system and making everyone rich; it is money with an agenda, and that agenda can be to undermine our democracy.
Liam Byrne
Q
Catherine Belton: I think it will be half-baked if it does not include that amendment. Obviously, it is great to have better laws, but when financial watchdogs, public oversight bodies and journalists are still unable to cast a light on some of the financial transactions of the super-rich, from fear of these crushing lawsuits, it means that you have a system that is only half working. Law enforcement relies, and has relied in the past, to a great degree on journalistic investigations, including for instance by the OCCRP; its reporting has led to some very important cases.
Dame Margaret Hodge
Q
Catherine Belton: I wrote a book called “Putin’s People”, which was about Putin’s rise to power, the continued role of the KGB and how Russia was using oligarchs—Russian businessmen—to further Russian influence in the world. I was writing precisely about how many of the oligarchs, such as Roman Abramovich, were essentially forced to act as arms of the Kremlin, because otherwise their wealth could be jeopardised. Putin’s hold on power was such that anybody who did not obey his orders could face jail or the seizure of their companies.
Abramovich was very upset when I suggested in the book, quoting three former associates, that he had acquired Chelsea football club on Putin’s orders, in order to acquire soft power and influence in the UK. That, I believe, was public interest reporting. The allegation had been put to his spokesperson, and the response was in the book. He announced that he was suing me personally and HarperCollins—a statement that was swiftly followed by lawsuits from three other Russian billionaires, and then one from the Kremlin oil company Rosneft. The cases were very difficult to grapple with, because there were so many of them all at the same time.
Dame Margaret Hodge
Q
Catherine Belton: Five cases. It cost my publisher £1.5 million to deal with the cases, and they got only to the preliminary hearing stage before they were either settled or withdrawn. Rosneft’s case had to be withdrawn completely because there was no basis for any of its claims. The judge found that one of Abramovich’s claims was completely exaggerated, which allowed us to make minor amendments and avoid the enormous cost of having to continue to fight. Even though we believed that we had a very strong public interest case, our lawyers told us that it would have cost, at a minimum, £2.5 million to continue to defend the great deal of reporting that had gone into my book. It would have taken over a year. Abramovich had twice filed the exact same claim simultaneously in Australia as well, even though he had no business there, and therefore no reputation to protect.
Nineteen media rights organisations said that the cases against “Putin’s People” and my publisher, HarperCollins, bore all the hallmarks of a SLAPP case—that is, they were designed to intimidate the publisher, and they were abuse of process, particularly in the case of Abramovich.
Yes, the judge found that one of his claims was exaggerated, which, according to the Ministry of Justice’s proposal for the anti-SLAPP law, is one of the criteria under which SLAPP cases should be thrown out of court at an early stage. It introduced three criteria. One was that meanings were being inflated or exaggerated by a claimant; that was clearly the case for most of the oligarchs pursuing me. In Rosneft’s case, the judge found that what I had written about Rosneft, the Kremlin oil company, was not defamatory at all, yet my publisher had to spend hundreds of thousands of pounds just to get to the stage of a preliminary hearing, to get it thrown out of court. The proceedings demonstrated how many other UK media organisations had been censoring themselves because they did not want to deal with those enormously costly lawsuits—
The Chair
Catherine, I am really sorry, but I have two more people waiting to ask questions and there is only five minutes. I am so sorry to curtail you.
Seema Malhotra
Q
Catherine Belton: In July, the MOJ forwarded anti-SLAPP legislation. Unfortunately, because of the chaos of the last couple of months, that has not really gone anywhere. That legislation could be attached, as is, to the Economic Crime and Corporate Transparency Bill. The Bill as drafted slightly toughens the criteria for claimants; they have to prove that there is a significant likelihood that they have a real claim. You should speak to the FPC to weigh whether it is worth pursuing their draft laws as a better model, or whether it is enough to use the one already drafted by the MOJ. They had extensive consultations on that, but now it looks like all the momentum has gone. It is astonishing to me that this is not being pursued as a priority, given the situation we are in. It is absolutely vital that we shine light on individuals who may be operating on behalf of Putin to undermine western support for Ukraine, and to undermine our resolve this winter as we face enormous cost of living hikes. It is really important.
Tom Tugendhat
Q
Catherine Belton: You say that this is my 20th or 30th time giving evidence, but unfortunately, it is not. I have only spoken on SLAPPs before. I will leave the realm of Companies House reforms to people who are more expert on it than me.
The Chair
If there are no further questions from Members, thank you very much, Catherine, for taking the time to speak to us.
Examination of Witness
Professor Jason Sharman gave evidence.
The Chair
Last but not least, we will hear oral evidence from Professor Jason Sharman, professor of politics at the University of Cambridge. We have until 3.30 pm. Professor Sharman, could you introduce yourself and give us your background for the record?
Professor Jason Sharman: My name is Jason Sharman and I am a professor of international relations at Cambridge University. I study international money laundering and corruption, often by impersonating would-be corrupt officials, money launderers and terrorist financiers.
Seema Malhotra
Q
Professor Jason Sharman: I would not want to make the perfect the enemy of the good. The legislation is a positive step, but I watched the earlier testimony, and I agree with people who say that the proof of the pudding is in the enforcement. I study politics and international relations; I am less interested in the rules on the books and more interested in what difference they make, if any. If you are a criminal—a money launderer—you do not have to be very original. You do not have to try new things. Things that worked 10, 20 or 30 years ago still work today, so there is no need to change too much.
Seema Malhotra
Q
Professor Jason Sharman: The UK has a combination of a good reputation and lax enforcement. From the point of view of a launderer, that is a bonus: you get double. You get the appearance of probity—other people have mentioned the use of UK companies to open foreign bank accounts—with not much scrutiny and even less enforcement. Transparency is all good and well, but more information by itself does not lead to stronger action against money launderers or corrupt officials.
Alison Thewliss
Q
Professor Jason Sharman: There is certainly more that could be done. Some of it has been mentioned by other people; more money is the obvious one, but that may be necessary but not sufficient. In some ways, the career structure and career incentives for people who work in these agencies needs reviewing: if they start an investigation and it goes well, they get a small bonus to their career. If they start an investigation and it goes badly, they get a very big, indelible black mark, so in terms of career progression, it is safer for them not to investigate things.
One of the main sources of support has not been fully used: there are a lot of people outside the formal enforcement agencies who are very keen to help in this cause, including journalists and those in non-governmental organisations, as well as in the for-profit sector. That potential has not been tapped, so there are certainly things that the Government and the state could and should do, particularly in terms of regulatory agencies; but the area where I think it is possible to make most progress is probably beyond that.
Alison Thewliss
Q
Professor Jason Sharman: It depends what you mean by “secrecy jurisdiction”. A person who has studied this for a long time said this: “People are not surprised when I tell them that the most important tax haven in the world is an island. People are surprised when they hear that the name of that island is Manhattan. People are not surprised to hear that the second largest tax haven is a city on an island. The city is London, and the island is Great Britain.”
We recently formed a shell company with co-authors Michael Findley and Dan Nielson in the United States. It took 137 seconds to incorporate that company. Here, it would probably take you a little longer—it might take you as long as 10 minutes—but you do not really have to show ID in any case, so the barriers are pretty low. If you do not want to use anything as fancy as a limited liability partnership, you can just use a plain old company, and that works pretty well for holding a bank account overseas.
Alison Thewliss
Q
Professor Jason Sharman: I think so. For me, it is telling that in jurisdictions for which incorporations are their lifeblood, such as the British Virgin Islands, it is much slower to incorporate. It takes close to two weeks to incorporate in the British Virgin Islands, and it takes about $1,000. The British Virgin Islands get half of their Government revenue from incorporation fees. They have a real interest in making sure their company registry works well. No one likes red tape and filling out forms, but the idea that you might have to spend a couple of hours instead of 15 minutes, or £50 instead of £12 is, to me, not unreasonable.
James Daly
Q
Professor Jason Sharman: I feel sorry for British Companies House, because it has been given a lot of work without the resources to carry it out. The mismatch between what is expected of an institution and the resources it has to achieve those ends is greater. Company registries are passive, archival organisations.
James Daly
Q
Professor Jason Sharman: No. The UK is typical.
James Daly
Q
Professor Jason Sharman: Yes and no. Generally, yes, but if you want to own property, you never have to touch the banking system. If you want to own a yacht, you can set up the shell company and earn, just like that. You can break sanctions and own property with a shell company, even without a bank account.
James Daly
Q
Professor Jason Sharman: Again, banks have had these requirements to establish the beneficial owners for a while. I think this is good, but it is the enforcement that is key there.
Dame Margaret Hodge
Q
Professor Jason Sharman: I probably differ from many of the other people who have spoken in that I am not a fan of failure to prevent. I think that the goal of these laws is to make life hard for bad people without making life hard for good people at the same time. To the extent that you have really onerous regulation or weaken the presumption of innocence, that is something of an own goal or collateral damage. Before you put people in jail, you should be pretty serious about it. There should be a mental intention there—a mens rea.
I am not really comfortable with the strict liability. There is strict liability in anti-bribery, which means I have to do pointless anti-bribery training every year for the University of Cambridge. It does not do me any good and it does not stop corruption, but it is one of the things that Cambridge feels it has to do because of the strict liability. Again, it is a cost to society that is not included in legislation or in regulatory impact assessments.
Dame Margaret Hodge
Q
“These host states now have a duty to block, trace, freeze, and seize these illicit funds and hand them back to the countries from which they were stolen.”
I do not know who you were referring to there, but, in our case, with the illicit Russian assets frozen in the UK, how do you suggest we seize those funds and how can we repurpose them?
Professor Jason Sharman: It depends. With the Russian assets that are criminal assets, eventually you need to go to a court of law to do that—
Dame Margaret Hodge
Q
Professor Jason Sharman: Indeed. That is hopefully something that the Bill will do something to correct. It may be different if you are talking about sanctions and the money that is currently frozen. It would depend. If we are talking about criminal money, there is an anti-money laundering process of confiscation—civil and criminal.
Dame Margaret Hodge
Q
Professor Jason Sharman: Sanctions. I think you cannot. There is proper process. As I understand it, unless there is a formal state of war that obtains between two states, on what basis are you going to take away—
Dame Margaret Hodge
Q
Professor Jason Sharman: No, you quoted me correctly, but that is money that was stolen in one place and moved to another place, and you have to prove that it was stolen. That is different from saying, “You are a Russian oligarch and we are going to freeze your funds.” It is very different.
Dame Margaret Hodge
Q
Professor Jason Sharman: I would not shed a tear if Russian oligarchs lost their assets.
Dame Margaret Hodge
Q
Professor Jason Sharman: Okay, for the Russian state. In that case, I think that would be wonderful. I know Browder mentioned earlier central bank assets. But, again, there is a precedent here. To what extent would foreign Governments put money overseas? There is a lot of concentration on Russia as a corrupt regime, which I think it is, but it has plenty of company, many of which have assets in the UK.
Dame Margaret Hodge
Q
Professor Jason Sharman: I think not, and I think that the British Government, at least when it comes to sanctioning oligarch assets, which I realise are different from state assets, are in a bind. I think they will have to return those assets to the oligarchs and that they may have to pay damages to the oligarchs. That would be a terrible injustice, but I really worry about what the end game for sanctions is.
Liam Byrne
Q
Professor Jason Sharman: This is probably a typical social science answer, but there are quite a few reasons that make it difficult, because no one corrective, in and of itself, is going to fix the situation. There have been solutions, such as the persons of significant control registry, the unexplained wealth orders and so on, where it has been like, “This is the thing that will unlock the problem”. But instead it is a combination. First off, it is appropriately difficult to take away people’s property. Secondly, the bureaucratic incentives do not favour it. You have this very risk-averse culture within law enforcement agencies. Thirdly, as I said, there is a failure to harness the incredible investigative resources that lie outside the state, in the not-for-profit sector but also in the for-profit sector.
The Chair
Before the right hon. Member for Birmingham, Hodge Hill asks his next question, I remind him that our line of questioning has to relate to the legislation in front of us. With his extensive parliamentary experience, I know that he will be able to do that.
Liam Byrne
Q
Professor Jason Sharman: I think that, as Catherine Belton said earlier, certainly volumes of money into politics have something to do with it, but even if you could come up with a perfect solution to that problem, it may not actually make too much difference in terms of interdicting money laundering and corruption funds into this country. That is not to say it is not worth while doing, but there is this constant phase of saying, “If only we do x, we’ll really be able to fix the problem.” I think it is something where modest progress, incremental progress, is what we should expect, and we have to do lots of different things right in order to achieve that progress.
Liam Byrne
Q
Professor Jason Sharman: Yes.
Tom Tugendhat
Q
Professor Jason Sharman: Yes and yes. I think this is a modest positive step, but, given the track record of legislation, I would say that it has to be implemented. That is where the problem has been heretofore, and I can possibly anticipate that it may be the problem here, too. If you say, “You have to identify yourself as the owner of a company,” and you have entries in Companies House saying, “My name is XXX XXX,” and that does not get challenged, then more information is not necessarily better if that information is junk.
Tom Tugendhat
Q
Professor Jason Sharman: I mentioned briefly that some of my research, together with Mike Findley and Dan Nielson, has been to impersonate would-be money launderers and look to set up companies in various jurisdictions. It is much harder to set up companies, and the standards are much more rigorous, in the Cayman Islands, the British Virgin Islands and the Crown dependencies than in the UK. Of the UK jurisdictions, the UK is the easiest place to set one up, so I think the UK could learn a lot from its overseas territories and Crown dependencies. I noticed with interest that a couple of the other witnesses here said the same.
Tom Tugendhat
Q
Professor Jason Sharman: No, I do not think Companies House will be able to do it. Its main function is passive and archival; it is a library mainly. I think it is just not in its DNA to be otherwise. I think most of the solution for this is in the private sector. I am talking about properly regulated, supervised and audited corporate service providers. I co-authored a report 10 years ago with the World Bank called “The Puppet Masters”, and that was overwhelmingly the conclusion that we came to.
Tom Tugendhat
Q
Professor Jason Sharman: I completely agree. I think, even more, that HMRC, as the regulator for corporate service providers, those enablers, has been completely missing in action. If there were one bit of the public sector that I would change, repurpose or fund, it would be to get HMRC to take its duty to regulate and penalise corporate service providers seriously. It has just been completely missing in action so far.
The Chair
If there are no further questions from Members, I want to thank the witness for his evidence. Professor Sharman, thank you very much for taking the time to come and speak to us.
Ordered, That further consideration be now adjourned. —(Nigel Huddleston.)
Financial Services and Markets Bill (Sixth sitting)
Thursday 27th October 2022
(2 years ago)
Public Bill CommitteesRead Full debate Financial Services and Markets Act 2023 View all Financial Services and Markets Act 2023 Debates Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 27 October 2022 - (27 Oct 2022)
The Committee divided: - Ayes: 5 / Noes: 9 - Question accordingly negatived.
Stephen Hammond (Wimbledon) (Con)
I beg to move amendment 48, in clause 28, page 40, line 39, at end insert—
“3RF Requirement to publish specified information
(1) The Treasury may at any time, by notice in writing, direct a regulator to measure its performance against specified metrics and to publish such information if—
(a) the regulator does not already publish such information, or
(b) the Treasury consider the information published is insufficient for the purposes of holding the regulator to account.
(2) A direction under subsection (1) may—
(a) specify the element of the regulator’s performance to be measured;
(b) specify the appropriate metrics to be used;
(c) specify the period for which performance must be measured; and
(d) specify the date by which the performance information must be published.
(3) As soon as practicable after giving the direction under subsection (1) the Treasury must—
(a) lay before Parliament a copy of the direction, and
(b) publish the direction in such manner as the Treasury considers appropriate.
(4) A direction under subsection (1) may be varied or revoked by the giving of a further direction.”
I again guide the Committee to my entry in the Register of Members’ Financial Interests. Clause 28 amends the Financial Services and Markets Act 2000. It gives the Treasury the power to make or to direct rules. A key element of our discussions has been transparency and accountability, and the amendment is designed to make things a little clearer by ensuring that regulators report regularly and transparently on key metrics. The regulators are already mandated to report to His Majesty’s Treasury in their annual reports, which have to contain some performance metrics; the issue is that those metrics are selected by the regulator themselves. At the moment, an oversight body has the power to send for “persons, papers and records”, but it does not have the power to mandate regulators to report on specific performance metrics over time. I think that that leaves a hole in terms of both accountability to Parliament and transparency of regulators.
I accept the evidence that Martin Taylor gave the Committee that Parliament and the Government have a huge amount of influence. Equally, though, the chief executive of the Prudential Regulation Authority, when asked elsewhere for his thoughts on the competitiveness objective, described a lot of it as a “red herring”. When asked how he would report on the competitiveness objective, he said that he had “no convincing answer”. It is important that there is a convincing answer, and that is, in effect, what my proposed new section 3RF of the 2000 Act would provide.
As I have stated quite clearly, I do not believe that this is about a race to the bottom. We need a well-regulated, tough regulated, transparently regulated jurisdiction. Regular accountability on performance is in no way an infringement of a regulator’s independence; I think that it would enhance the regulator’s reputation. The amendment therefore sets out a number of metrics on which a regulator might be asked to report. That could work relatively easily. For instance, the Treasury could use its powers to set out more clearly the elements on which the regulator should measure and report its performance. It could also set out definitions that are relevant to the measures themselves. I think that the direction potentially should be able to be scrutinised by the public, and particularly by Parliament and the Treasury Committee, and that the information should be published, and published more frequently.
My amendment is designed to ensure that the regulator not only has the objective, but has to report on it on a very clear set of metrics, which would then allow us in Parliament and the public to ensure that it is meeting the objective.
Tulip Siddiq (Hampstead and Kilburn) (Lab)
I thank the hon. Member for tabling the amendment. In principle, Opposition Members are supportive of providing regulators with clearly defined metrics to assess their performance. We would need further information about how it would work in practice before we could lend our support to the amendment, but in principle we are in agreement with the views that the hon. Member has outlined.
The Financial Secretary to the Treasury (Andrew Griffith)
I am grateful to my hon. Friend the Member for Wimbledon for raising this important issue, and I note the potential, in-principle support of the hon. Member for Hampstead and Kilburn, speaking for the Opposition.
The Government agree that it is vital to have appropriate public metrics for holding regulators to account on their performance. FSMA already requires regulators to report annually on how they have discharged their functions, advanced their objectives and complied with their other duties. In addition, schedules 1ZA and 1ZB to FSMA provide that the Treasury may direct a regulator to include such other matters as it deems appropriate in the regulator’s annual report.
As part of their annual reports, both the Financial Conduct Authority and the PRA publish data on operational performance. The FCA annually publishes operating service metrics relating to authorisations, timeliness of responses to stakeholders, and regulatory permission requests, among other things. In April 2022, the FCA also published a comprehensive set of outcomes and metrics that it will use to measure and publicly report on its performance. The PRA annually publishes data on its performance of authorisation processes.
Amendment 48 seeks to allow the Treasury, in addition, to determine what metrics the FCA and the PRA should use to measure their performance and over what period, and other technical aspects of the measurement and publication of metrics. Let me reassure my hon. Friend of the importance that I attach to the matter he has raised. I have discussed it with the CEOs of the PRA and the FCA since taking up my role, and I will continue to do so. I am open to discussing the matter with my hon. Friend outside the Committee to see what further reassurance the Government could give, or what further measures we could take. I therefore ask him to withdraw his amendment.
Stephen Hammond
I thank the Minister for his response, and I thank the hon. Member for Hampstead and Kilburn for hers. Clearly, there is a willingness across the House to look at this matter again, so I am going to take the Minister at his word—as I always do—and accept his kind reassurance. Perhaps he might ask the hon. Lady to join us in that discussion, because it would be beneficial. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Andrew Griffith
Clause 28 enhances FSMA by enabling the Treasury to place an obligation on the FCA or the PRA to make rules in a certain area of regulation. Equivalent provision for the Bank of England and the Payment Systems Regulator is made in clause 44 and in paragraph 7 of schedule 7.
FSMA requires that regulators advance their objectives when they make rules, set technical standards and issue guidance. The regulators must also take into account eight regulatory principles when discharging their functions. It is generally up to the regulators to determine what rules are necessary, but as set out in the future regulatory framework review consultation in November last year, that approach may not always be sufficient. There must be a means for the Government and Parliament to require the regulators to make rules covering certain matters, in order to ensure that important wider public policy concerns are addressed. That approach has already been established in legislation through the Financial Services Act 2021, which required the FCA to make rules that applied to FCA-regulated investment firms.
Clause 28 enables the Treasury to make similar regulations and place an obligation on the regulators to make rules in a certain area. The clause aims to strike a balance between the responsibilities of the regulator, the Treasury and Parliament now that we are outside the EU. It does not enable the Government to tell a regulator what its rules should be; it simply enables the Government, with the agreement of Parliament, to say that there must be rules relating to a particular area. The FCA and the PRA must continue to act to advance their objectives and take into account their regulatory principles when complying with the requirements set under this power. The Treasury cannot require the regulators to make rules that they would not otherwise have the ability to make.
I assure the Committee that this power will always be subject to the affirmative procedure. That is the most appropriate procedure, as it means that Parliament will be able to consider and debate any requirements set in this way. It also ensures that the Government are able to act to ensure that these requirements stay up to date with changing markets, rather than setting them out in primary legislation, where they could quickly become out of date. The clause enhances the FSMA model, enabling the Treasury to ensure that key areas of financial services continue to be regulated following the repeal of retained EU law and in the future. I commend the clause to the Committee.
Question put and agreed to.
Clause 28 accordingly ordered to stand part of the Bill.
Clause 29
Matters to consider when making rules
Emma Hardy (Kingston upon Hull West and Hessle) (Lab)
I beg to move amendment 1, in clause 29, page 41, line 7, at end insert
‘, and also to financial inclusion.
(2A) For the purposes of this section, “financial inclusion” means the impact on those who might be prevented from accessing financial services as a result of the new rules made by either regulator, or from accessing them on the same terms as existed before the making of the new rules.’
The Chair
With this it will be convenient to discuss the following:
New clause 2—FCA: Regard to financial inclusion in consumer protection objective—
‘(1) FSMA 2000 is amended as follows.
(2) In section 1C (The consumer protection objective), after subsection (2)(c) insert—
“(ca) financial inclusion;”.’
New clause 3—FCA duty to report on financial inclusion—
‘(1) The FCA must lay before Parliament a report, as soon as practicable after the end of—
(a) the period of 12 months beginning with the day on which this Act is passed, and
(b) every subsequent 12-month period,
on financial inclusion in the UK.
(2) A report under this section must include—
(a) an assessment of the state of financial inclusion in the UK;
(b) details of any measures the FCA has taken, or is planning to take, to improve financial inclusion in the UK;
(c) developments which the FCA considers could significantly impact on financial inclusion in the UK; and
(d) any recommendations to the Treasury which the FCA considers may promote financial inclusion in the UK.’
Emma Hardy
My amendments relate to the issue of financial inclusion, which those who serve on the Treasury Committee have heard me talk about many times before. I will start with an explanation, which is much better than the one I tend to give, that I found in the written evidence from the Financial Inclusion Commission of what financial inclusion actually is. It speaks about its vision for
“a financially inclusive UK where financial services are accessible, easy to use and meet people’s needs over their lifetime, and where everyone has the skills and motivation to use them.”
I would think that that aim and ambition would be supported by everyone. I will add that the Financial Inclusion Commission is a cross-party, cross-organisation group that recommends financial inclusion.
The commission also said in its evidence that
“over a million people in the UK do not have a bank account, one in four households lack insurance protection and one in five adults would not be able to cover more than one month of living expenses if they lost their source of income.”
Financial inclusion is a hugely important and relevant issue. Some 22% of UK adults have less than £100 in savings. The commission says that it believes the Financial Conduct Authority
“does not have the powers to adequately reflect vulnerable consumers’ interests when considering potential regulatory changes.”
That was its argument for my amendment, which is about “have regards”.
I also came across written evidence from the Phoenix Group. I was a little surprised by it, but in a happy way. The Phoenix Group is a FTSE 100 company, and it also argues for the FCA to have regard to financial inclusion. It says in its evidence:
“Financial exclusion is one of the biggest drivers of poor consumer outcomes in the UK – it is a clear oversight that there is no specific statutory requirement for the FCA to address, or even consider, financial inclusion issues across its work.”
It goes on to talk about this in relation to pensions, in particular. It said one of the problems it encounters in the
“long-term savings and pensions space”
is what it calls the “guidance gap” when it comes to making decisions about pensions. It believes that requiring the FCA to have regard to financial inclusion could start to address some of these issues. I have to say that before I read all of the evidence, I had not heard a FTSE 100 company arguing for that.
In oral evidence, the FCA pushed back on the need for a “have regard” for financial inclusion. We might have expected that; people tend to push back on having things added to their workload, even when the evidence says something else. The push-back tends to suggest that the FCA has a consumer duty and therefore does not need a “have regard” for financial inclusion. However, there is a big difference between the consumer duty and the “have regard” that I am talking about.
The consumer duty deals with people who are able to access products, but I am talking about the people who cannot access products at all because they are excluded from the financial market. The clients I am referring to are the ones the market does not want. That is happening more and more as we face the cost of living crisis. In real life, the people we are talking about end up being disadvantaged by paying more for credit, more for insurance and more for services, as we heard in evidence from Martin Coppack of Fair By Design.
The financial inclusion forum, chaired by HMT and the Department for Work and Pensions, addresses some issues, but it has been criticised as a closed talking shop. There are no selection criteria for who is invited and very little is published on what it does, what it discusses, or its actions and outcomes. Many of the organisations that back the “have regard” requirement for the FCA sit on that group already, and they recognise that what we have done is not enough, which is why they are calling for the requirement. In addition, we cannot get the toughest issues talked about at the financial inclusion forum—many allies have asked for the poverty premium to be on the agenda, but with no luck—and it does not seem to have many positive outcomes.
Dame Angela Eagle (Wallasey) (Lab)
It is a pleasure to follow my hon. Friend the Member for Kingston upon Hull West and Hessle, whose comments I wholeheartedly support. I suspect there will be widespread support among Committee members for the objectives of her amendment. Perhaps the Minister will argue that a “have regard” to financial inclusion is the wrong way to go about it, but I would argue that not having these things in mind when an industry is being regulated can make a situation worse.
We know the level of financial exclusion because my hon. Friend mentioned the figures. I do not intend to go over all that, but essentially what we have—this has developed because of the way the market works—is a retail financial services sector that is very focused on a set of quite complex products. It is also very focused on its distribution networks and not so much on the customer. Retail financial products have often focused on the relationship between those who introduce products and those who sell them on to the ultimate customer, often with quite rewarding levels of sales commission. The bad end of that kind of financial services model is that we get a structure that is not focused enough on consumers, and a range of ever-increasing complexity that costs more and excludes more people who might be on basic incomes.
Over time, the dynamic of that structure means that the financial services sector gets more and more complex, more and more focused on the distribution networks, and less and less focused on the end customer. One understands that when the industry starts complaining about the lack of financial education. There is some truth in that, but there is also truth in the fact that the opacity of the price mechanisms and the complexity of the products that the industry comes up with make it confusing, and of course that increases the cost base, which excludes more low-paid people.
A previous Administration that I might have been a member of tried to address the issue with stakeholder products that were meant to be much simpler with very up-front but capped pricing that everybody would understand. Those were throttled out of existence because the industry did not really want them to succeed, and what has happened since—not by anyone’s design but by the dynamics of the way the market works—means that there is less and less available for those who have small amounts of income because the products are simply not profitable in the current structure of our retail financial services.
This is a systemic issue that needs to be solved, because we need a financial services retail sector that serves everybody. We do not have one, and we are getting to a stage where market dynamics make it less and less likely that we will have one; they are actually excluding more people. I think that a “have regard” that prompts thought about structures and, perhaps, about the regulation of some simpler products that could be made available is a really important part of addressing that market failure.
Like my hon. Friend the Member for Kingston upon Hull West and Hessle, I am worried that the Minister will say that we have consumer protections in place. This is not about those who are currently consuming the products; it is about those who cannot even afford to have basic bank accounts, those who have to go to money lenders because they are in such precarious circumstances, and those who pay the poverty premium because accessing financial services costs so much more as a percentage of their overall income than it costs someone on a higher income. I can tell the Minister—I am sure he has come across this in his own constituency—that many people who exist on very tight incomes, and who really have to budget, shy away from having basic accounts because they cannot afford to go into deficit and be charged a fee. That would destroy all their very careful balancing.
This issue is particularly important for people who are on benefits and have them paid into a bank account at a set time, but who have bill payments coming out at a different time. I would really appreciate it if the Minister would think profoundly about how the problem can be solved, so that our financial services sector can get to a stage where it can make profit—a modest profit perhaps, but some profit—out of dealing with people on much more modest incomes. After all, there are millions of them, and the dynamic of the market structures we have at the moment is moving provision away from people on lower incomes.
Emma Hardy
On my hon. Friend’s point about consumer duty, the evidence suggests that one of the unintended consequences is that it can make some currently marginally profitable products unprofitable, thereby excluding more people from them, so one of the things that the consumer duty is trying to address is actually making it more difficult for some people in society to have anything.
Dame Angela Eagle
I agree with my hon. Friend.
I will wrap up. Given that this is a systemic issue, a “have regard” is the best way of dealing with it. I hope that the Minister will think carefully about that and about how it might help us arrest the dynamic that is taking financial services away from people on modest incomes, and making it less and less profitable for the industry to serve them, leaving them much diminished in their attempts to engage appropriately in our society in ways that many people take for granted, such as by having a credit card and bank account, or being able to conduct electronic cash transfers and so forth.
Siobhain McDonagh (Mitcham and Morden) (Lab)
I rise to support my hon. Friend the Member for Kingston upon Hull West and Hessle. Like her, I am on the Treasury Committee, and I have to say to this Committee: please pass the amendment, so she can stop talking about it in our meetings! [Laughter.] To be fair to her, it is something that she repeats and that bears repeating, because I fear that if the FCA is not responsible for having regard to financial inclusion, the responsibility continues to sit with us as MPs. Who became aware that closing bank branches in town centres was getting to be a problem? Who was concerned about access to ATMs, especially free ATMs? It was MPs, through their constituents raising the issue with us. This is a cross-party effort. It is not the sole responsibility or the sole campaign issue of one side of the House.
More and more of our hard-working, respectable constituents are being excluded from financial products. They desperately want to insure their cars, but if they pay their car insurance monthly, they pay more. They desperately want to contribute to their pensions and life insurance policies to give comfort to their families. They want to do all those things, but an increasing proportion of them are being excluded from those products. If the FCA had regard to how the issue affects an ever growing part of our society, we would at least have a different way of looking at it.
An issue that I know is close to your heart, Dame Maria, is women’s exclusion from many financial products, given the nature of their work, including part-time work and periods off work for raising children. In the end, the taxpayer picks up the bill if those products are not available. It is in the interests of all of us—our constituents and our parties—to support the amendment in the name of my hon. Friend the Member for Kingston upon Hull West and Hessle.
Tulip Siddiq
When I was first elected, I was told by another MP here that I should pick an issue, stick to it and talk about it constantly. I pay tribute to my hon. Friend the Member for Kingston upon Hull West and Hessle for following that advice to a tee. I follow in the steps of my hon. Friends the Members for Kingston upon Hull West and Hessle, for Wallasey and for Mitcham and Morden, who spoke about financial inclusion and how it affects us all. Later, we will debate essential face-to-face banking services. For now, I want to focus on the poverty premium, which my hon. Friend the Member for Mitcham and Morden mentioned: the extra costs that poorer people have to pay for essential services such as insurance, loans or credit cards.
We believe that everyone should have access to financial services—whether it is savings schemes or insurance—when they need them, regardless of their income and circumstances. If the Government are serious about building a strong future for our financial services outside the EU, they should recognise that the Bill is an opportunity to rethink how financial resilience, inclusion and wellbeing are tackled in the UK.
We support amendment 1 and new clauses 2 and 3, which would give the FCA a new cross-cutting “must have regard” to financial inclusion measure as part of its regulatory framework. As the Minister knows, that would mean that the FCA would have to consider financial inclusion across all its activities and report on its progress.
In our evidence session, Fair by Design talked about the higher costs that poorer people have to pay for insurance products. Research from the Social Market Foundation, with which the Minister will be familiar, has shown that those who are unable to pay for their car insurance in annual instalments face an average extra cost of £160. Surely the Minister agrees that that is unjust, and that regulation must play a role in tackling the poverty premium. If he accepts that principle, what is the argument against introducing a new “have regard” provision to empower the FCA to monitor how well financial services are meeting the needs of low-income consumers? For example, a “must have regard” for financial inclusion could allow the regulator to review practices such as insurers charging more to customers who pay for their insurance in monthly instalments.
Does the Minister recognise that exclusion from financial services is a growing problem in the UK? If he rejects the arguments for a “have regard”, what solution does he propose instead? It is something we all see in our casework as constituency MPs.
Andrew Griffith
I thank hon. Members for their contributions. I appreciate the work of the hon. Member for Kingston upon Hull West and Hessle. I have been to Hull, but I think that everyone has constituents who face precisely the problem of which she speaks, so I will depart from my text.
The Government oppose the new clauses and the amendment. However, we have heard from the FCA its opposition to this measure and its contention that it is not required. It would say that—I understand that point. I would be happy to consider how the Government respond. That is the most worthy response I can make; I am not inclined to dismiss any of the hon. Lady’s arguments.
Andrew Griffith
I will give way; I do not propose to speak for very long on this point, anyway.
Craig Tracey
I am very much in favour of financial inclusion, but we have to be careful about how we achieve it. I was an insurance broker before coming here. The reason I left was that the cost of regulation on our business meant that we disappeared from the high street. That meant that vulnerable people had less access to insurance. We see more and more access points moving out, and having to go online, so people are losing out. Does the Minister agree that, although we must ensure that we are looking after the most vulnerable people, more regulatory burdens will put up the cost and affect the availability of products?
Andrew Griffith
I thank my hon. Friend for that intervention. He put it far better than I did, bringing to bear his personal experience, but that was precisely the point that I was making.
Siobhain McDonagh
Does the Minister agree, though, that unless we know what is happening and somebody keeps the figures, there can be unintended consequences? Martin Coppack from Fair by Design made the point that he has been trying to get this thing done for years and what he has found is that when he goes to the internal Treasury committee that considers financial exclusion, it says, “It’s not our job to keep the numbers. Go to the FCA.” The FCA says, “It’s not our job to keep the numbers. Let’s go back to the Treasury.” Surely it needs to be somebody’s responsibility, so that we understand and know the direction of travel.
Andrew Griffith
Once again, the Government will not oppose those points for the sake of opposing them. I would like to take this matter away. Powerful arguments have been made and the FCA has made its contention. I think it is entirely appropriate that the Government consider the matter further.
Emma Hardy
I will take Members back to the evidence given by the Phoenix Group as to why the FCA should “have regard”. I think there is broad consensus that financial inclusion is important. The difference of opinion is regarding what we do to achieve it. This point relates to that made by my hon. Friend the Member for Mitcham and Morden. Phoenix said that the “have regard” responsibility should lie with the FCA because it is
“the single UK body with the clearest ability and access to information”.
That is the main point. We heard evidence from a Minister from the Department for Work and Pensions and a Minister from the Treasury, because there is a question around where financial inclusion fits into social policy and financial policy; there is a bit of a mush over who is responsible. Sometimes when we find that lots of people are responsible for something, in reality no one is responsible, because everyone can always say that it is the other person who is responsible and not them. That evidence from Phoenix Group was powerful.
The organisation also said:
“With many of the most pressing issues falling in between the remits of government and regulators, this makes addressing financial inclusion problems more difficult.”
We need the FCA to “have regard” for this matter, to act as that single body to gather the information and look at the issue more seriously, otherwise, we will be failing, as we have done for years, to achieve any real outcomes. I will therefore be pushing the amendment to a vote.
Question put, That the amendment be made.
Andrew Griffith
Under the FSMA model, the detailed rules that apply to firms are generally set by the regulators, acting within a framework set by Government and Parliament.
FSMA requires the regulators to act in a way that advances their statutory objectives when discharging their general functions, including those of making rules, setting technical standards and, in the case of the FCA, issuing guidance. It is generally up to the regulators to determine which rules are necessary, and, when they make rules, to do so in a way that advances, and is compatible with, their objectives. They must also have regard to their regulatory principles. Clauses 29 to 32 ensure that relevant regulator actions, including rule making, are proportionate and reflect important matters of public policy as appropriate.
The objectives and regulatory principles in FSMA are cross-cutting and apply to everything the regulators do. They have not been designed to suit particular policy areas. That is why Parliament, through the Financial Services Act 2021, introduced a limited number of factors that the PRA and FCA must consider when making rules in certain areas—for example, when implementing the latest Basel standards.
Clause 29 therefore provides the Treasury with the ability to specify, by way of regulations, matters that the FCA and PRA must “have regard” to when making rules in a particular area. The regulators will be required to outline how they have considered these “have regards” in their public consultations, just as they do already for objectives and regulatory principles. The power for the Treasury to specify matters in regulations will always be subject to the affirmative procedure. That means that Parliament will be able to consider and debate any “have regards” introduced using the new power.
Clause 30 contains a mechanism to manage the interaction between the regulators’ rule-making and supervisory responsibilities and the Treasury’s deference decisions, including equivalence decisions. Deference is a process endorsed by the G20, in which jurisdictions and regulators defer to each other on relevant matters when it is justified by the quality of their respective regulatory, supervisory and enforcement regimes.
It is the responsibility of the Government to determine whether overseas regulatory and supervisory standards are equivalent to our own, and therefore whether to defer to an overseas jurisdiction. The rules that the regulators make will have a direct bearing on the criteria against which the Treasury assesses overseas jurisdictions for that purpose.
To manage that interaction, clause 30 creates a requirement for the FCA and PRA, when proposing changes to rules or supervisory practices, to consider the impact on deference afforded by the Treasury to overseas jurisdictions, and to consult the Treasury should they determine that the proposed action may lead the Government to review their deference decisions. That consultation process will allow the Treasury to provide regulators with its views on how their actions will impact existing deference decisions, and ensures that the regulators holistically consider deference when considering a change to their rules or supervisory practices.
Clause 31 has a similar purpose. It contains a mechanism to manage the interaction between the regulators’ rule-making and supervisory responsibilities, and the Treasury’s responsibilities in upholding the UK’s international trade obligations. The Government are responsible for ensuring that the UK complies with commitments arising from international trade agreements that the UK has agreed.
The clause supports the existing FSMA model by creating a statutory requirement for the regulators when making changes to rules or supervisory practices to consider whether there is a material risk that these changes are incompatible with an international trade obligation. They must give written notice to the Treasury before proceeding if such a risk arises. Clauses 30 and 31 are necessary and proportionate measures to manage the respective responsibilities of the Treasury and the regulators in these areas.
Clause 32 inserts new section 138BA into FSMA to enable the Treasury to allow the FCA and the PRA to waive or modify their rules where appropriate. Setting the same rules for everyone can sometimes come with unintended consequences. Recognising this, existing section 138A of FSMA already gives the regulators some discretion; however, the existing provisions require the relevant regulator to have determined that a rule is “unduly burdensome”, or would not achieve the purpose for which the rules were made, before modifying or disapplying rules.
We want our regulators to be more proportionate and more agile. The new power in clause 32 will therefore give the Treasury the ability to enable the FCA and the PRA to waive or modify their rules in a wider range of circumstances, which will make it easier for regulator rules to reflect different business models and practices where appropriate. Importantly, it will also ensure that some existing waiver regimes in retained EU law can be maintained. I therefore commend clauses 29 to 32 to the Committee.
Question put and agreed to.
Clause 29 accordingly ordered to stand part of the Bill.
Clauses 30 to 32 ordered to stand part of the Bill.
Clause 33
Responses to recommendations of the Treasury
Question proposed, That the clause stand part of the Bill.
Andrew Griffith
Under section 1JA of FSMA 2000 and section 30B of the Bank of England Act 1998, the Treasury must make recommendations to the FCA and the Prudential Regulation Committee at least once in each Parliament on aspects of the economic policy of His Majesty’s Government. The FCA and the PRC, as the governing committee of the PRA, should have regard to these matters when carrying out their functions.
Currently, there is no statutory requirement for the FCA and the PRC to respond to the Treasury’s recommendations and explain how they have had regard to them. Clause 33 therefore amends section 1JA of FSMA 2000 and section 30B of the Bank of England Act 1998 to create a requirement for the FCA and the PRC to respond annually. The response must outline the action the regulator has taken or intends to take, or the reasons it has not taken and does not intend to take action, on the basis of the recommendations. The response will be laid before Parliament by the Treasury.
The clause is therefore intended to increase transparency of how the FCA and the PRA have taken into account these recommendations. As a result, this clause aligns the FCA and the PRC with the statutory requirement for the Bank of England’s Financial Policy Committee, which is already required to respond to the recommendation letters sent to it by the Treasury. Finally, this measure formalises an emerging practice, as the FCA and PRC have previously responded to recommendation letters from the Treasury. I therefore commend the clause to the Committee.
Tulip Siddiq
I have one quick question for the Minister. Are the Government required to consult or give advance notice before sending a policy letter to regulators? If not, is there a risk that the new “have regards” for different policy areas could be dropped on the regulators from nowhere, and could distract the FCA and PRA from their primary and secondary objectives?
Andrew Griffith
That is, of course, possible, but it would be unusual. There is regular discourse between His Majesty’s Treasury and regulators, and I consider the risk that the hon. Lady raises relatively small. The regulatory bodies would consult on that change if required.
Question put and agreed to.
Clause 33 accordingly ordered to stand part of the Bill.
Clause 34
Public consultation requirements
Stephen Hammond
I beg to move amendment 49, in clause 34, page 47, line 38, at end insert—
“(2B) The FCA must publish a list of all of the consultees.”
Again, I guide the Committee to my entry in the Register of Members’ Financial Interests. The amendment is very simple. I welcome clause 34. It sets out public consultation requirements and, after proposed new section 1RA of FSMA 2000, inserts proposed new section 1RB, concerning requirements in connection with public consultation. The key word here is “public”. Proposed new section 1RB(2) states:
“The FCA must include information in the consultation about any engagement by the FCA with…statutory panels”.
That is a public consultation, or it should be. Therefore it seems only appropriate that the FCA and the PRA list all the consultees to the public consultation. That is what amendment 49, for the FCA, and consequential amendment 55, for the PRA, provide. That is a very simple request. If the Government cannot agree to it today, I hope that they will take it away about think about it very carefully.
Andrew Griffith
Amendment 49 seeks to require the FCA to publish a list of all respondents to any public consultation. I recognise that my hon. Friend the Member for Wimbledon intended for the requirement in amendment 49 also to apply to the PRA, where the same issues would arise.
The Government believe that policy making is at its most effective when it draws on the views, experience and expertise of those who may be impacted by regulation. Meaningful stakeholder engagement makes it more likely that final proposals will be effective, understood and accepted as fair and reasonable. The Government also recognise the importance of transparency in supporting the effective scrutiny of the regulators, and are bringing forward a number of measures in the Bill to support that.
I remind my hon. Friend that FSMA already requires the FCA to publish information regarding responses to their public consultations. In particular, section 138I of FSMA requires the FCA to publish an account, in general terms—I accept that that is different from what my hon. Friend proposes—of representations made in response to consultation, and of the regulator’s response to them.
Although I therefore support the ambition behind the amendment, there is a risk that the additional requirement on the FCA to publish a list of all consultees to every consultation could deter stakeholders that want to respond confidentially from engaging fully with the regulators’ consultations.
The Government sympathise with my hon. Friend’s point, but I ask him to withdraw his amendment. I am happy to meet with him, with officials, to see whether there is a different way in which he can obtain the comfort he desires, or in which we can take the matter forward.
Stephen Hammond
I am very pleased to hear what the Minister said, because he has broadly accepted the thrust of what I said. I think he is offering me the chance to explore with him the circumstances in which a body does not wish for its name to be published in respect of a consultation. I am prepared to have that conversation with him so that I understand why he thinks that that might constrain the FCA and PRA. With that reassurance from the Minister, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Andrew Griffith
FSMA 2000 requires the PRA and FCA to set up and maintain a number of stakeholder panels, also known as statutory panels. Those panels are intended to provide valuable insight, advice and challenge to the regulators’ rule making, drawing on the experience and expertise of their respective memberships. The regulators have regular meetings and discussions with their panels. In those, most major policy and regulatory proposals are presented for comment at an early stage.
The FCA’s statutory panels are the financial services consumer panel, the practitioner panel, the smaller business practitioner panel, and the markets practitioner panel. The Bill also puts the listing authority advisory panel on a statutory footing. The PRA’s statutory panel is the practitioner panel, and the Bill also puts its insurance sub-committee on a statutory footing as the insurance practitioner panel. The Payment Systems Regulator has one statutory panel, which covers the full range of the PSR’s responsibilities.
The additional responsibilities that the regulators take on following the repeal of retained EU law will result in the regulators making more rules across a broader range of topics. The UK’s departure from the EU will therefore increase the opportunities and the need for the regulators to consult their statutory panels from the outset of policy and regulatory development; that was not possible to the same extent while the UK was a member of the EU. It will strengthen the panels’ important ability to provide stakeholder input into the development of policy and regulation.
Clause 34 therefore requires the FCA and PRA to include information in their public consultations about any engagement that they have had with statutory panels. Clause 35 requires the regulators to provide information in their annual reports on their engagement with the statutory panels of the FCA, PRA and PSR over the reporting period. The FCA and PRA already voluntarily provide some information on panel engagement as part of their annual reports. This clause will formalise the existing practice, ensuring clear and consistent communication by the regulators.
The regulators, working with the panels as appropriate, will be responsible for determining how to meet these requirements. Importantly, the regulators will not be required to publish information that they deem to be against the public interest. That will ensure that the FCA and PRA can find the appropriate balance between transparency and the confidentiality crucial to ensuring an open exchange of views between panel and regulator. I therefore recommend that these clauses stand part of the Bill.
Tulip Siddiq
I will speak to clauses 34 and 35 together. Statutory panels make an invaluable contribution, based on panel members’ experience and expertise, to the FCA’s and PRA’s policy-making functions. However, we feel that transparency is vital in ensuring that the public feel that financial services regulation is working in their interests. That is why we support these clauses, which we recognise will increase transparency by guaranteeing consistent communication by regulators about their engagement with panels. Does the Minister agree that representation of the voices of consumers and the public on the FCA’s statutory panels also plays an important role in upholding the transparency of the regulatory process? Ultimately, it is the public, both as consumers and as taxpayers, who are most impacted when regulations go wrong and when regulators fail to adequately uphold consumer protections or financial stability.
I draw the Minister’s attention to the written evidence to the Public Bill Committee from the Finance Innovation Lab. It recommended that
“the government mandate public interest representation of at least 50% on all groups and committees providing advice and making decisions about financial services policy and regulation.”
I want to know whether the Minister has considered the Finance Innovation Lab’s argument about the transparency of statutory panels, and whether that could be strengthened by
“ensuring that the voices of consumers and citizens are given at least equal weight to the voice of industry.”
If he is not familiar with the written evidence, he is welcome to write to me later.
Dame Angela Eagle
I support the position of my hon. Friend the Member for Hampstead and Kilburn. Given the transfer of powers from Brussels to the UK and the fact that a lot of the current structure is up for discussion and potential change—although we hope it will not all change at once—there is bound to be much more interest in the regulators’ decisions for lobbying purposes than there would be normally in any given year. That level of interest will last until the system settles down into whatever its future tracks will be.
In those circumstances, the regulators must be able to demonstrate robustly that there has been no kind of industry or regulatory capture via some of these panels, and that consumer interest has been properly represented. When I talk to consumer stakeholders and groups, there is certainly a view that the balance is not right at the moment, which is why I am so supportive of what my hon. Friend has said from the Front Bench.
We have to be able to demonstrate, in a transparent way, that meetings that may be confidential for very good reasons are not something else. Will the Minister give us some ideas about how consumer representation in these technical panels can be properly shown to be robust and how transparency can be improved, given the fluid context for a lot of these decisions and future structures?
Andrew Griffith
I thank the hon. Members for Hampstead and Kilburn and for Wallasey for their points. We must be alive to the risk of producer capture, and these clauses are a real step forward in bringing the required transparency to the composition of these panels and their recommendations. The Government recognise the importance of the consumer voice; panels that have diverse backgrounds and different expertise avoid group-think, which is an important aspect.
Through this Bill, the Government will introduce a requirement for regulators to maintain statements of policy in relation to their process for recruiting members to panels. That in itself is a step forward. However, it would not be right to move forward with a specific numerical threshold. The panels are there to challenge the policymaking process, in order to give a voice to practitioners, as well as consumers,. They are not of themselves representative. The representative function is one that we discharge here in Parliament, and I think that is the appropriate balance.
Question put and agreed to.
Clause 34 accordingly ordered to stand part of the Bill.
Clause 35 ordered to stand part of the Bill.
The Chair
We have a lot to cover this afternoon, so I urge Members to take note of the groupings of amendments so we can move through this at the appropriate pace.
Clause 36
Engagement with Parliamentary Committees
Andrew Griffith
I beg to move amendment 3, in clause 36, page 49, line 31, leave out
“and the regulatory principles in section 3B,”
and insert—
“(ba) demonstrate that the FCA has had regard to the regulatory principles in section 3B when preparing the proposals,”.
This amendment ensures that the notification provisions align with the duty in section 1B(5)(a) of the Financial Services and Markets Act 2000, for the FCA to have regard to the regulatory principles set out in section 3B of that Act.
The Chair
With this it will be convenient to discuss the following:
Government amendment 4
Clause 36 stand part.
Andrew Griffith
I will speak first to clause 36 and then turn to Government amendments 3 and 4. Parliament, through primary legislation, sets the overall approach and institutional architecture for financial services regulation. This includes the regulators’ objectives and requirements to ensure appropriate accountability. Parliament therefore has a unique and special role in relation to the scrutiny and oversight of the FCA and the PRA. Given the regulators’ wide-ranging powers, which they exercise independently of Government, it is vital that Parliament can continue to effectively scrutinise and hold the regulators to account. This is particularly important given that the regulators will have additional rule-making responsibilities following the repeal of retained EU law.
Parliament has a number of existing mechanisms to scrutinise the regulators, including the targeted scrutiny provided by Select Committees. The Government’s view is that those are appropriate and flexible and should continue to be the principal ways in which Parliament holds the regulators to account. Clause 36 adds to these existing tools to support more effective accountability of the regulators to Parliament. The clause also addresses concerns raised in debates during the passage of the Financial Services Act 2021.
Members of both Houses highlighted the importance of the regulators having sufficient regard to the conclusions of parliamentary scrutiny, and the importance of parliamentarians receiving sufficient information from the regulators to facilitate their scrutiny and ensure that it is effective. The clause inserts new provisions in FSMA to require the FCA and the PRA to notify the Treasury Committee when they publish consultations on proposed rules, setting out how they exercise any of their general functions, or on proposals under a statutory duty.
The new provisions also require the regulators to draw the Treasury Committee’s attention to certain key aspects of a consultation, including how proposals advance their objectives and have had regard to the regulatory principles. The clause also requires the FCA and PRA to respond in writing to formal responses to any of their public consultations from any parliamentary Committee. While it is expected that the regulators would always respond, this will give Parliament reassurance by placing this on a statutory footing. The Government consider that placing those requirements on the regulators on a statutory basis is appropriate due to the unique circumstances of the financial services regulators’ wide remits, and their position as independent public bodies that are accountable to Parliament.
I now turn to amendments 3 and 4, which make a technical change to the new requirements for the FCA and PRA to notify the Treasury Committee when they publish a consultation. Clause 36 contains a minor drafting error, by requiring the regulators to set out how the proposed rules are “compatible” with the regulatory principles. The Government have tabled these amendments to correct that and remove any ambiguity, and to align the requirement in clause 36 with the broader requirements in FSMA.
Tulip Siddiq
The Minister has already said that he is open to discussion about this, but I specifically want to turn to the role of the Treasury Committee. The Opposition are pleased to see a strengthened role for the Treasury Committee in scrutinising financial services regulation. However, TheCityUK, in its written submission to the Committee, set out that, while the Treasury Committee has the power to send for persons, papers and records, it does not have the power to mandate the regulators to report on specific performance metrics over time.
TheCityUK argues that the efficiency and effectiveness of regulators, and the impact of their operational performance on UK competitiveness, would be improved by greater accuracy, transparency and accountability in operational performance metrics. It has proposed an amendment to give the Treasury powers to require regulators to report specified operational performance metrics, with the Treasury Select Committee consulted on the metrics to be reported. Those could include the regulator’s performance against its secondary objective or its “have regard” for net zero targets, for example. I wanted to hear what the Minister thinks about those proposals.
Dame Angela Eagle
As a member of the Treasury Select Committee and—for an all too brief time—acting Chair, I am also very interested to hear what the Minister has to say about this.
Andrew Griffith
I am struggling to add incrementally to what the Government have said earlier today regarding our receptivity to the idea of greater transparency, and an ability to design or influence the metrics that are being reported. I observe that the Treasury Select Committee appears fairly formidable in its ability to compel witnesses and information, and I would be interested to hear more about any deficiencies or impediments that that Committee, under its acting Chair or its permanent Chair, feels exist. This would certainly be an opportunity to rectify those, but I suggest that either I meet with the hon. Member for Wallasey, or she writes to me in a little more detail about what would help the working of that important Committee.
Amendment 3 agreed to.
Amendment made: 4, in clause 36, page 50, line 41, leave out paragraph (b) and insert—
“(b) demonstrate that the PRA has had regard to the regulatory principles in section 3B when preparing the proposals,”—(Andrew Griffith.)
This amendment ensures that the notification provisions align with the duty in section 2H(2) of the Financial Services and Markets Act 2000 for the PRA to have regard to the regulatory principles set out in section 3B of that Act.
Clause 36, as amended, ordered to stand part of the Bill.
Clause 37
Duty to co-operate and consult in exercising functions
Question proposed, That the clause stand part of the Bill.
Andrew Griffith
The clause will insert proposed new section 415C into FSMA. The new section introduces a statutory duty for the Financial Conduct Authority, the Financial Ombudsman Service and the Financial Services Compensation Scheme to co-operate on issues that have significant implications for each other, or the wider financial services market.
The FCA is the conduct regulator for the financial services sector; the FOS is an alternative dispute resolution service for financial services complainants, such as consumers and smaller businesses; and the FSCS provides financial protection for eligible customers of financial services firms authorised by the FCA. While each has a distinct role within the UK’s regulatory architecture, the work of each organisation will often be relevant to, or have implications for, the others. When issues with wider implications emerge, it is crucial for the functioning of the UK’s regulatory system and achieving the best outcomes for consumers that those organisations co-operate to determine the most appropriate approach to managing them. The organisations already co-operate voluntarily through the wider implications framework. That voluntary framework was launched in January 2022 to promote effective co-operation on wider implication issues.
Clause 37 will enhance that co-operation and ensure that these arrangements endure over time. It will also ensure that the FCA, the FOS and the FSCS put appropriate arrangements in place for stakeholders to provide representations on their compliance with the new duty to co-operate on matters with wider implications.
I will now set out some of the detail of how the clause will function in practice. Proposed new section 415C(3) requires that each regulator maintains a statement of policy explaining how it will comply with this duty. Proposed new subsection (1)(b) requires that those organisations consult other organisations as appropriate, including other regulatory bodies, on wider implication matters. Proposed new subsection (6)(a) requires that they publish an annual report on their compliance with the duty, and proposed new subsection (7) requires that they outline representations received from stakeholders on their compliance with the duty to co-operate on wider implication issues.
Ultimately, this clause will support better outcomes for financial services firms and consumers by maximising collaboration among the FCA, the FOS and the FSCS on issues with wider implications. I have summarised the effects of the clause, and I therefore recommend that it stand part of the Bill.
Question put and agreed to.
Clause 37 accordingly ordered to stand part of the Bill.
Clause 38
Listing Authority Advisory Panel
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Clause 39 stand part.
Amendment 51, in clause 40, page 54, line 26, after “persons” insert “, at least two of which must be external to the FCA, the Treasury, or the Bank of England,”.
Amendment 52, in clause 40, page 54, line 31, at end insert—
‘(9A) The FCA must consider representations that are made to it by non-governmental bodies and recognised industry or trade association bodies.”
Amendment 53, in clause 40, page 54, line 32, leave out “from time to time” and insert “annually”.
Amendment 54, in clause 40, page 55, line 22, leave out “from time to time” and insert “annually”.
Clauses 40 to 42 stand part.
There is quite a lot in this group. If you refer to the selection list, you will see what is to be taken together.
Andrew Griffith
I will first speak to clauses 38, 39, 40, 41 and 42, and I will then turn to amendments 51, 52, 53 and 54.
Clauses 38 and 39 concern the FCA’s and the PRA’s statutory powers. As we have already discussed, FSMA 2000 requires the PRA and FCA to set up and maintain stakeholder panels, also known as statutory panels. These panels provide valuable insight, advice and challenge to the regulators’ rule making, drawing on the experience and expertise of their respective memberships. The regulators have regular meetings and discussions with those panels, in which most major early policy and regulatory proposals are presented for comment. The confidentiality of the panel’s contributions allows the regulators to engage the panels when policy is in the early stages of development ahead of public consultation, and enables the panels to act as a critical friend. The panels represent a diverse range of stakeholders, including consumers, small businesses and market practitioners.
In addition, the FCA also voluntarily operates the listing authority advisory panel, which operates in a similar manner to its statutory panels, and represents the interests of issuers of securities and advises on the FCA listing function. In addition to its statutory practitioner panel, the PRA voluntarily operates an insurance sub-committee for that panel, which represents the interests of insurance practitioners.
Clauses 38 and 39 amend FSMA, to place the FCA’s listing authority advisory panel and the PRA practitioner panel’s insurance sub-committee on a statutory footing. These clauses also set requirements for the FCA and the PRA in relation to these panels, in line with the existing requirements for other statutory panels. That includes appointing a chair to be approved by the Treasury.
Clause 40 requires the FCA and the PRA each to establish and maintain a new statutory panel dedicated to supporting the development of their cost-benefit analysis. CBA is an important part of the regulators’ policymaking process. It helps the regulators to understand the likely impacts of a policy and to determine whether a proposed intervention is proportionate.
Under FSMA 2000, the FCA and the PRA are already required to undertake and publish a CBA when consulting on draft rules, unless certain exemptions are met. Respondents to the October 2020 future regulatory framework review consultation expressed significant concerns about the rigour and scope of the regulators’ CBAs and supported enhanced external challenge as a way to improve the quality of the regulators’ CBAs.
Stephen Hammond
Again, I direct the Committee to my entry on the Register of Members’ Financial Interests. I warmly welcome the creation of cost-benefit panels. In my view, the greater the understanding of the cost and benefit of a regulation, the greater the understanding of the impact, and therefore the effectiveness, of the regulation, and the greater the transparency of that process.
I am pleased that the Bill includes this clause because it sets out the agenda, membership, metrics and outputs that each of these panels should make. I guess the real answer I am trying to get from the Minister—I have listened carefully and I think we have had most of the response, but I want to test him a little more—is that, if we are to get all the desirable outcomes from setting up these panels, we must know how much they are a creature of the regulator and how much they are independent of the regulator.
The Minister clearly said that there is an implicit assumption that the regulator would follow an independent line for these panels. If the purpose of the panels is purely to provide evidence and they are controlled by the regulator, those recommendations will be accepted, but it is key that there is an independent panel.
I agree that regulators are not in ivory towers, as Martin Taylor said in his evidence to us. I do not think there is substantial implicit control, nor do I think there is not an implicit desire to see independence, nor do I think that there is not implicit influence by His Majesty’s Treasury. However, if we want to build the world’s leading regulatory regime, it must be seen to be tough and proportionate, and that is why these panels are very helpful. I therefore support the aim of clause 40.
My amendments seek to address the concern that the panel has marked its own homework—the excuse that “the dog ate my homework”—and the point about independence. I understand that members of the panel could already be external, but I want to make it clear that “could” is not enough; there should and must be external members. I hope that the Minister will be able to give me that further reassurance that that is very much the intention of the Bill.
I take on board exactly what the Minister said about my amendment 52, in that the FCA already has to consider the representations and place them on record. However, I am quite concerned by the wording. I think the Minister got my point, which is about the wording “from time to time”. Those of us who have had the honour to stand at the Dispatch Box will have been asked questions such as, “When is that happening, Minister?”, to which the response is often, “Soon,” or, indeed, as we heard the Minister say this morning, “In due course.”
The regulator might say to us that it is going to publish the responses “from time to time”. I take the point that the Minister does not want to fetter the regulator, but I am concerned that, if there is not something either in implicit guidance to the regulator or potentially set out, “from time to time” could be whenever the regulator chooses and potentially not annually. Therefore, if it were to say “annually or more frequently” I would be a lot happier. I listened to the Minister’s comments and I think he probably has sympathy with what I am saying, but I will listen to his response to my remarks.
The Chair
Before I bring in the next speaker, I apologise to the hon. Member for Wimbledon, who I probably should have brought in first. I apologise for that; it is a bit awkward.
Dame Angela Eagle
It is odd hearing the Minister’s response before we have spoken to the amendments. I just want to make a few comments about cost-benefit analysis, which is not an easy science. I am an avid observer of the Government’s attempts to do a cost-benefit analysis. Let us put it this way: it often leaves plenty to be desired when we start looking at how the Government have decided to cost the effect of their legislative suggestions, and we go into the detail of it and see how back-of-an-envelope and dubious some of it is. I do not want to sound too sarcastic, but perhaps if the CBA panels get to be good, they could teach the Government a thing or two about how to do their own analyses.
It is often a difficult but desirable thing to try to estimate the cost of particular suggestions, especially when regulators impose them in other areas. It is important that regulators think about proportionality for the industry itself. Also, in an industry where all the costs are likely to be passed on to the consumer, it is extremely important that it can be done sensibly, properly and in a way that stands up to scrutiny, and I hope that the scrutiny would be there for others to look at.
One often comes up against quite blank walls when trying to interrogate Government cost-benefit analyses, and one ends up going down dead ends and not really understanding how the judgments about the costs have been made, so the better we can get at the science in whatever context, the better for everybody.
It is important that clause 42 exists to try to provide balance and transparency about who will be on the panels, because we would not want them to be captured by particular parts of the structure. We need to have some objectivity if their work is to have credibility and deserves to be taken into account in regulators’ decision making.
Andrew Griffith
I will be brief. The hon. Member for Wallasey has great experience of these matters. I suspect we are all familiar with the analogy of Government regulatory impact assessments, which, as the hon. Lady says, are probably vulnerable to the criticism of being opaque, with the science and data not fully laid out. Indeed, I am aware of past suggestions by bodies such as the Institute for Government that there be specialist committees and support given precisely for that purpose. That is analogous, although it concerns not the working of Government legislation, but regulators exercising their rule-making powers. All those observations are pertinent to this point.
My hon. Friend the Member for Wimbledon came back to me on the point about the reasonableness of the phrasing “annually or more frequently”. He makes a good point. As we know, there are many cases in statute where it is specified that something should be annual. Every Government Department is required to lay its own annual reports before Parliament, and we impose that annual burden on many private and third sector enterprises, whether via the Charity Commission or the Companies Act 2006.
Stephen Hammond
Indeed. We ask the FCA to produce an annual report as well, so this is not out of line with other expectations.
Andrew Griffith
My hon. Friend has finished my point for me. This is not uncommon in statute, so while the Government do not accept the amendment and will vote against it, I have committed—and I do so again—to meet my hon. Friend and consider these matters further before Report.
Stephen Hammond
Having listened to the Minister, I think amendment 51 might already be included in the Bill, amendment 52 appears to be fettering, and 53 and 54 —it looks like I am going to enjoy substantial tea and biscuits at the Treasury next week. As such, I do not intend to press my amendments to a Division.
Question put and agreed to.
Clause 38 accordingly ordered to stand part of the Bill.
Clauses 39 to 42 ordered to stand part of the Bill.
Clause 43
Exercise of FMI regulatory powers
Question proposed, That the clause stand part of the Bill.
Andrew Griffith
The Committee has previously discussed the repeal of retained EU law so that it can be replaced with an approach to regulation designed for the UK. As part of that, the Bank of England will take on additional responsibility in relation to the regulation of central counterparties and central securities depositories. Clause 43 sets statutory objectives for the Bank of England to advance, and regulatory principles for it to consider, when fulfilling those responsibilities.
Currently, the Bank has an objective to protect and enhance UK financial stability. Clause 43 confirms that that will continue to be the Bank’s primary objective when regulating CCPs and CSDs, reflecting the vital role played by those financial market infrastructures. The clause also sets out further considerations to which the Bank must have regard when pursuing that objective. First, the Bank must have regard to the effect that its regulation may have on the financial stability of other countries where FMIs provide services. It must also have regard to the desirability of regulating CCPs and CSDs in a way that is not determined by the location of users of their services.
The UK is home to clearing and settlement markets used by market participants around the world. UK CCPs and CSDs are therefore pieces of important infrastructure used by firms in many jurisdictions. As such, it is right that the UK authorities, in regulating these firms, should consider their impact on the financial stability not just of the UK but of other countries.
The clause also introduces a new secondary objective for the Bank in relation to its regulation of CCPs and CSDs. This requires it to facilitate innovation in the provision of services as far as is reasonably possible, subject to pursuing its primary objective. The Bank will pursue this new objective with a view to improving the quality, efficiency and economy of these services. The Bank must also have regard to a set of general regulatory principles, which largely mirror those in place for other regulators.
However, there is also a new principle on the desirability of facilitating fair and reasonable access to services provided by CCPs and CSDs. This recognises that individual firms can often serve the majority of the market in their specialist areas and aims to ensure that their customers can continue to access these services on fair terms.
To further reflect the Bank’s increased responsibility in this space, the clause also sets up a new statutory financial market infrastructure committee in the Bank of England and makes provision about its make-up. The committee will be responsible for the Bank’s functions in relation to these matters but the Bank may also expand the committee’s remit to cover other functions, if it deems that to be appropriate.
Clause 45 updates FSMA to reflect the Bank of England’s increased responsibilities for the regulation of CCPs and CSDs, and ensures that the Bank has the appropriate powers to supplement its new general rule-making power. The clause also applies a range of accountability mechanisms to the Bank’s regulation of CCPs and CSDs, which the Bill also introduces for other regulators. These measures have previously been discussed by this Committee and include, for example, the power for the Treasury to set out matters that the Bank must consider when making rules in specific areas of regulation.
Together, clauses 43 and 45 are vital in ensuring that the Bank is accountable for its use of the new powers and follows the appropriate public policy objectives when exercising its powers. I therefore recommend that these clauses stand part of the Bill.
Question put and agreed to.
Clause 43 accordingly ordered to stand part of the Bill.
Clause 44
Bank of England: rule-making powers
Question proposed, That the clause stand part of the Bill.
Andrew Griffith
Clause 44 closely relates to clauses 27 and 28, which the Committee has already considered. As we have discussed, clause 27 covers requirements for regulators to review their rules so that they remain fit for purpose, while clause 28 enables the Government to place an obligation on the regulators to make rules in certain areas. Clause 44 applies these same mechanisms to the Bank of England, in respect of its regulation of central counterparties and central securities depositories.
The clause introduces a new section of FSMA, which places a requirement on the Bank to ensure that the rules are reviewed regularly after implementation, to confirm that they remain appropriate and continue to have the desired effect. New section 300J of FSMA, which the clause will introduce, requires the Bank to publish a statement of policy for how it conducts rule reviews.
As the Bank takes on increased responsibility, there may be occasions when the Treasury considers that it is in the public interest for the Bank to review its rules, in the same way that we discussed earlier in relation to the PRA and FCA. Therefore, the clause introduces new section 300K of FSMA, which provides a mechanism for the Treasury to direct the Bank to review its rules. New section 300L of FSMA requires the Bank to report the outcome of the review and requires the Treasury to lay this report in Parliament. As with the corresponding measures for the PRA and the FCA, the Government consider that this offers a new avenue for challenge of the Bank’s rule making where required, while maintaining its operational independence. The clause 44 also places conditions on the Treasury’s exercise of the power, so that it will direct the Bank to review its rules only where it considers it to be in the public interest.
As discussed when the Committee considered clause 28, it is right that, in the context of increased responsibilities, the Treasury should have the ability to require the making of rules in certain areas of financial services regulation. This is equally true of the Bank in regard to its regulation of CCPs and CSDs. The clause therefore introduces new section 300M of FSMA, which enables the Treasury to place an obligation on the Bank to make rules in a certain area. The use of this power will be subject to the affirmative procedure in Parliament. The power does not enable the Government to tell the Bank what its rules should be; it simply enables the Government to say that there should be rules, with the agreement of Parliament.
The clause ensures that the same enhancements to the FSMA model that we have discussed will apply to the Bank as it regulates CCPs and CSDs. These are important tools to ensure that the Bank’s rules are relevant and appropriate. I therefore commend the clause to the Committee.
Tulip Siddiq
We support the clause, which will empower the Treasury to require the Bank of England to carry out a review of a specific rule, but let me ask the Minister again: does he not agree that such a mechanism is sufficient to highlight to the Bank of England where the Treasury believes a rule may not be working in the public interest and therefore requires a rethink? Surely the provisions under clause 44, and elsewhere in the Bill, provide the Treasury with sufficient powers to hold the Bank of England, the PRA and the FCA to account. Why is an intervention power necessary?
Numerous City stakeholders have written to us to warn of the dangers of such a measure. For example, Barclays stated in its written evidence that
“historically the UK has benefited from a global reputation for having a strong, stable and predictable regulatory framework, developed by effective institutions with clear roles and responsibilities. It is critical to ensure any new intervention powers do not risk or undermine this reputation.”
The Minister was there when Martin Taylor told us that the proposed intervention power had a “bad smell”. The Bank of England has warned that it could diminish the independence of our regulators in the eyes of the global markets. If the financial services sector is sceptical of an intervention power, and experts at the Bank of England have given powerful warnings of the risks of introducing such a power, why is the Minister even contemplating such a provision?
Andrew Griffith
I do not wish to detain the Committee further with a repetition of these points. The hon. Lady makes her points in a lucid fashion, but the Government simply disagree. It is appropriate for us to have laid out in statute the relevant responsibilities, both for the Treasury and for regulators. We are giving the regulators, including the Bank of England in this respect, vast areas of additional responsibility. There were previously intervention powers, which sat at the Brussels level. We are now repatriating those to create a rulebook that is appropriate for the United Kingdom.
The hon. Lady cites selectively, if I may say so, from the evidence that the Committee heard. If she engages widely with industry—as I know she does—she will hear other voices that talk about the need for us to have an agile and flexible system. As part of that, it is sometimes appropriate for us to direct.
Tulip Siddiq
I will not detain the Committee too long. The Minister keeps referring to the industry, which he seems to suggest is supportive of the intervention power, but no one has seen it. Has he consulted the industry? Everyone I have spoken to has said that they have not seen the details of the intervention power, so how does he know they support it?
Andrew Griffith
The hon. Lady makes a very good point, but how does she know that she opposes it? I suggest we come back to this debate another day, when I hope to fulfil my commitment to bring the intervention power in front of the Committee.
Question put and agreed to.
Clause 44 accordingly ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned. —(Joy Morrissey.)
Economic Crime and Corporate Transparency Bill (Fourth sitting)
Thursday 27th October 2022
(2 years ago)
Public Bill CommitteesRead Full debate Economic Crime and Corporate Transparency Act 2023 View all Economic Crime and Corporate Transparency Act 2023 Debates Read Hansard Text Amendment Paper: Public Bill Committee Amendments as at 27 October 2022 - (27 Oct 2022)
The Chair
We will now hear oral evidence from Angela Foyle and Mike Miller from the Institute of Chartered Accountants in England and Wales. We have until 2.20 pm. Could the witnesses please introduce themselves for the record?
Angela Foyle: I am Angela Foyle. I am the head of risk management and economic crime at BDO Global, but I chair the economic crime sub-committee of the Institute of Chartered Accountants in England and Wales.
Mike Miller: My name is Mike Miller. I am the economic crime manager working within the Institute for Chartered Accountants in England and Wales.
Liam Byrne (Birmingham, Hodge Hill) (Lab)
Q
Angela Foyle: Publicly, it is stated that London is one of the key capitals of money, but that is partly because it is the largest financial centre in the world, so you will inevitably have dirty money flowing through. There is that view. It is something that the US, in particular, has made comment on at times. On the other hand, when talking to Europeans, we are also recognised as being at the forefront of introducing legislation in relation to money laundering regulations and enforcing them, to some extent, compared with other jurisdictions. It is a bit of a mixed bag, depending on who you are talking to and in what context.
Liam Byrne
Q
Angela Foyle: I think what I meant by that is that it is inevitable that you will have some illicit finance where there are significant movements of finance. I am not saying it is good—I think it is wrong. I think we should stop it to the greatest extent that we can, but where do you hide a tree? It would be in a wood. So, where are you going to hide dirty money? It is going to be somewhere where an awful lot of money is flowing through.
It is not that I think it is a positive thing at all; I think it is very negative. I actually spend most of my working life trying to see how we can prevent accountants and others—I have forgotten the word I mean—unknowingly getting involved with it. It is a problem for London that we have to be acutely conscious of, and therefore we have a greater responsibility, in many ways.
Liam Byrne
Thank you—that is well put. Mike, what is your view on that?
Mike Miller: I agree with Angela. London is such a large financial centre and there is such a volume of money moving through it that there inevitably will be, as Angela said, some money that is not well sourced and not well processed. That being said, we work very hard, particularly at ICAEW, to try to clamp down on it. Illicit finance and illicit transfer of funds affect the profession particularly badly. They put people in a very difficult position, both reputationally and legally. You will find the vast majority of chartered accountants and other professionals do not want to engage in unprofessional and malicious practice when it comes to that finance. We work very proactively with Committees, Parliament and across Government to make our representations about how this can be more effectively countered.
Liam Byrne
Q
Angela Foyle: It is interesting, because we would probably put it the other way around. The standard—sorry, I beg your pardon, I was thinking about the earlier Bill. Yes, this Bill has two forms of verification, by either Companies House or authorised corporate service providers. It does not appear to have the wording that would be in the money laundering regulations, which requires there to be reasonable verification measures using a risk-based approach. I think those kinds of words always assist, so that you actually have to assess and understand the risk surrounding the people you are trying to verify first, and therefore, if necessary, enhance your level of verification.
Liam Byrne
Q
Angela Foyle: Around verification, yes. There is a spectrum, however. Requiring that someone has to verify, that is, prove, that that is true goes beyond what is possible for an accountant. I can look at documents. I can take careful measures to ensure that those documents are, or appear to be, valid, but I cannot actually ever say with 100% certainty that x is x; I can simply say that I have done the following work and, based on that, these are reasonable measures on the risk basis. I certainly think that is an area that could be, at the very least, clarified as to the standards expected to ensure that they are consistent.
Liam Byrne
Q
Angela Foyle: It is based on the Financial Action Task Force standards on beneficial ownership, which looks to people who own 25% or more, in some cases, or more than 25% in others. It is one of those challenging issues because, in relation to things such as proxies, often it is not the about the levels that a person owns, it is the fact that x purports to be the person who holds it, when actually they actually do so on behalf on y, which can be very difficult to track through.
Many people look below 25% in any event just to make sure. Particularly with sanctions, they will have a look there. But 25% is a global norm and changing it might cause other challenges. This is the question: are you satisfied that you understand who the people that you are dealing with are, and who is behind them, at all times? It is not necessarily a question of whether it should be 20%, 5% or 25%. It is a hard one for me to answer because I work with 25%, but I will generally have a good look around to see what else there is.
Alison Thewliss (Glasgow Central) (SNP)
Q
Mike Miller: Indirect information provision essentially relates to a third-party database which would allow the easier sharing of information between financial firms. The ones that are already mentioned include banks, crypto exchanges and various different entities that could be privy to malicious financial movements, essentially. The accountancy sector has not been included in that, so for the purposes of a lot of the work that we are doing about the open sharing of information with law enforcement, between bodies, between other firms, it would be helpful for the streamlined moving of information. It would certainly help accountancy firms to identify more quickly, and thus reduce the likelihood of, any bad transactions taking place. An accountancy firm could avoid getting embroiled in things it does not wish to get embroiled in if it had pre-emptive access to any intelligence—that may have been discovered by a bank, for example, looking in more detail at specific financial transactions than accountancy firms tend to—that indicated that it should not be doing business with particular entities.
Alison Thewliss
Q
Mike Miller: I do not have the up-to-date figure with me today, but I can come back to the Committee with that in writing. Generally, in OPBAS, we are obviously very supportive on the need to have professional bodies for oversight of regulation for anti-money laundering. There is obviously a Treasury consultation going on into the potential restructuring of OPBAS. We have been working closely with it to ensure that our members are represented, but also so that it will be the most effective oversight that it can be.
ICAEW is the largest supervisory body in that space. We are very proactive in taking a risk-based approach. We cover a lot of firms, and it is necessary that a lot of those inspections are carried out based on where we assume there is a higher level of risk of illicit financial transactions. Whether that should be changed is obviously something that we will come back to in the consultation.
We have been speaking regularly to Treasury and other groups. They are collecting intelligence to try to determine, I think, some concrete proposals before they put it out to consultation, but we are very supportive of OPBAS. We continue to work closely with it and have a strong supervisory body in place for the PBSs.
James Daly (Bury North) (Con)
Q
Angela Foyle: I am not so sure the first one will affect us, at £1,000. The second one may facilitate certain activities for our insolvency practitioners, particularly where they are appointed in circumstances where they know that there has been some form of fraud—be that tax fraud or what is often called “fresh air invoicing” or invoice discounting fraud, where there is a set amount of money that is known to be tainted—because, currently, all of the assets of the insolvent entity can often be tainted, and defence against money laundering applications have to be made for each and every transaction done. By having that, they will be able to ringfence certain amounts that they know to be tainted—they would obviously do investigations to ensure that they have got that amount correct—and then deal more quickly with creditors and others with the remainder of the funds. In that sense, we certainly welcome that amendment. It is one that we raised with the Home Office, alongside the banks and, I believe, the Prison Service may have wanted it as well.
James Daly
Q
Angela Foyle: There are a number of areas in which it will affect us. We are very much in favour of the changes to Companies House, I must say, and of giving additional powers to it. We are incredibly supportive of that.
One example that we can give relates particularly to the misuse of registered offices. All the firms have found instances of people effectively putting their address as offices of accounting firms, presumably to give them credibility. In some cases, that is linked to using names similar to either regulated or existing lawful businesses. Again, that is clearly intended to facilitate fraud. Currently, it can take months to get people off that address, but with the additional powers, we are hoping that that can be done much quicker.
Similarly, with other misuses, such as the inability to contact businesses, there is also the identification of directors to ensure that you are dealing with the people that you think you are. Even if those perhaps could be strengthened in some ways, I think there is a lot that is positive in the Bill. It is a staging post, but it is a really important one.
Mike Miller: I agree with Angela, particularly on the point about Companies House. We are definitely behind the reasons for and the principles of the Bill; we are very supportive of all that it seeks to do. We have been saying for quite a while that some of these measures are overdue, particularly those on Companies House, as Angela mentioned. We have proposed some tweaks for a few areas, particularly around verification, as we have touched on before. There is going to be a two-tier verification in the sense that Companies House will be responsible in some way or another for the verification of those that are registered in the UK. For overseas entities, that is a bit more of a challenge, because they require legal verification and we currently think that the legislation is such that it does not really allow a reputable business to take on the level of risk of a new client unless they have a particularly established relationship.
We have made some recommendations to our members that they need to exercise extreme caution taking on new clients solely for the purpose of verification. That is so the system works; it is not so that they avoid it. It is so that it does not, first, stop people being able to do business in the UK when they rightly should be able to, and secondly, so that if the larger, more reputable firms do not offer that service, then it becomes something that is picked up by those that we may not necessarily want to offer that service.
We have also recommended a couple of areas where we think it could be strengthened, particularly around notifying Companies House of a change of auditors, so there is a two-pronged approach. That is so that companies themselves, for example Angela’s firm, knows that they have been assigned as an auditor, to make sure that is correct and they audit the company, and for Companies House to make sure that a company is audited as it should be. We think that would reduce the likelihood of discrepancies coming in, going forward. However, overall, we are generally supportive.
Dame Margaret Hodge (Barking) (Lab)
Q
Angela Foyle: I do not know the proportion, but there are about a hundred and something thousand members.
Mike Miller: Yes, about 110,000 members. I am not sure of the proportion.
Dame Margaret Hodge
Q
Angela Foyle: Not by the ICAEW, but there are other institutes out there.
Dame Margaret Hodge
Q
Angela Foyle: We are the bigger one, but they may be by someone else. There are also people who are not regulated by any professional body who can call themselves accountants as well.
Dame Margaret Hodge
Q
There are two things I wanted to ask. One is about the current system of regulation. You as professionals play a role in the system. What changes would you make to ensure the current regulation encompasses all those who call themselves financial advisers or accountants? Secondly, how good are you at your policing role? You obviously have a lobbying role and looking at both your CVs, you are on the lobbying side to make sure regulation fits what your profession wants. I am much more concerned about the policing role. Can you tell me how many people in the last year have been suspended, or whatever it is you do to them, if they have been found guilty of engaging in, facilitating or colluding with economic crime or money laundering or anything like that?
Angela Foyle: I do not think we have the numbers for the people this year.
Mike Miller: We do not have the numbers up to date for this year.
Dame Margaret Hodge
Q
The Chair
I am going to have to curb this and move on very briefly to Tom because we have to finish.
The Minister for Security (Tom Tugendhat)
Q
Angela Foyle: Neither of us is part of the Law Society so we cannot speak for them, but clearly, that was something that was thought to be necessary as a deterrent. Although I expect most of them are likely to be regulated by the Solicitors Regulation Authority for money laundering, rather than the Law Society. However, it must have been a gap that was thought to be necessary to fill. I really do not know, otherwise; I am speculating.
The Chair
Thank you very much. That brings us to the end of the time allotted for the Committee to ask questions. I thank our witnesses on behalf of the Committee for their evidence.
James Daly
On a point of order, Ms Bardell. As a result of Mr Tugendhat’s question, I had better declare an interest: I am a practising solicitor.
Dame Margaret Hodge
Can I ask something wicked? Can the witnesses provide written answers to my questions?
The Chair
They can indeed.
Mike Miller: I am very happy to.
Angela Foyle: Could we possibly have your question in writing, just to remind us?
The Chair
We will arrange for the questions to be delivered to you in a written format and additionally distributed.
Examination of Witness
Peter Swabey gave evidence.
The Chair
We will now hear oral evidence from Peter Swabey of the Chartered Governance Institute UK & Ireland. I hope I have pronounced your name correctly.
Peter Swabey: It is pronounced “sway-bee”, but that is fine. I am used to all sorts of things.
The Chair
Q
Peter Swabey: I am Peter Swabey, and I am the policy and research director at the Chartered Governance Institute UK & Ireland. The institute is the professional body for people who work in governance, which includes company secretaries and governance professionals in all sectors.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
Q
Peter Swabey: The institute and its members look at governance. Effectively, they are the people who are responsible for filing documents at Companies House and for advising boards on good governance. In that sense, they are perhaps less directly involved in economic crime than some of the other bodies you are hearing from.
From our perspective, the Bill is a really good effort. While I was sitting at the back, somebody said that it was regarded as a starter for 10. I think the Bill is a really good start on a lot of things that a lot of people have been thinking that Companies House should have been doing all this time—indeed, many people thought Companies House was doing it all this time, but it has not had the powers to do so. From that perspective, giving Companies House some of those powers is a really big step forward. There are a few things that I would perhaps have done differently, but that is in the realm of detail.
Seema Malhotra
Q
Peter Swabey: The big gap, from my perspective, is around the role of the company secretary or governance professional in the Bill. We were just hearing a bit about the arrangements for who is allowed to deliver documents for the authorised corporate services professionals. In most companies, it would be the company secretary who takes responsibility and ownership for doing that. That is something that we would like to see more specifically included in the Bill. The Government’s intention may be to include that in the regulations that the Secretary of State has the power to make. That is fine—that is regulations—but I would much rather see it in the Bill and, ultimately, the Act.
Seema Malhotra
Q
Peter Swabey: For me, it should reference the role of the company secretary. I have a slightly wider issue than that. The Companies Act 2006 got rid of the requirement for a company secretary in all companies. That was deregulatory—that was fine—but we now rely much more on the reporting that companies do and the filings that companies make, so I believe there should be a requirement for a company secretary, not just in public companies, as there is now, but in larger private companies that also have to meet some of these requirements.
Alison Thewliss
Q
Peter Swabey: Yes, I think there are. We have regular engagement with Companies House and that is one of the things that it is seeking to tackle already, but will also seek to tackle through the powers and resources that it will hopefully get as a result of the Bill. It would great if everything that has to be filed at Companies House can be filed electronically. There are still a number of things that cannot be. Again, that may be changed as a result of the changes that Companies House are making to their system but, as we stand at the moment, there are things that cannot be filed electronically.
In terms of use, there is a question that companies sometimes get feedback on from shareholders, which is on the availability of information, particularly about retail shareholders, and particularly for those companies that have large registers of members. Individuals on this Committee, or me, or whoever—their name and address might be at Companies House in respect of a holding of 100 shares in a company. If it is a big public company with millions and millions of shares, that is probably not that helpful. There are people who buy copies of the register for commercial purposes. It would be quite useful to tighten that up.
Alison Thewliss
Q
Peter Swabey: Yes, I think it is. It is an issue in a couple of ways. We just heard about the challenges in correcting deficient information. There are a number of plcs that have reported that their registered office address has been used for companies of whom they have never heard. If you are a plc with a large number of subsidiary companies, that could quite easily be overlooked by people. As somebody said in the last session, that is then used to give credibility to the potentially fraudulent company that is being set up. Being able to fix that more quickly is certainly an advantage.
James Daly
Q
Peter Swabey: I think it makes it a little more difficult for some people. I am a company secretary, so I would argue that you simply have to plan it all a bit better, and perhaps think about some of that a little more in advance. It will mean that some corporate transactions that you can currently deal with very quickly by simply having a meeting in a room and agreeing that so-and-so and so-and-so are the new directors will now have to go through a process. We are all hoping that, as promised, Companies House will manage the verification process for new directors expeditiously so that that will not hold things up unduly, but it is an additional factor to bear in mind.
James Daly
Q
Peter Swabey: You have to name the directors. You have to give some sort of evidence that the directors are real people who you know, so some piece of personal information about them. That might be their eye colour or their national insurance number. Nobody actually checks that, by the way. You just have to fill the box in. You have to have a registered address for the company and a few other details, but it is a relatively simple process.
James Daly
Q
Peter Swabey: I think it is fair to say that at the moment it is nothing like as secure as any of us would like it to be, and the Bill is a big step forward in tightening that up. I would still like to see it go further in some ways.
Dame Margaret Hodge
Q
Peter Swabey: It is really important to make sure that the hoops through which those authorised company service providers go before they become authorised are significant, to make sure that we can have confidence in that.
Dame Margaret Hodge
Q
Peter Swabey: That would entail detailed verification of who people were, of who the ownership was and how that was structured and, effectively, Companies House having a bar to doing that. Where I would take issue slightly with the premise of your question is when you talked about SMEs not needing or not having space for a company secretary; most of them have an accountant and all sorts of other things. It does not have to be a full-time role; someone can be doing it part time, but what is important is that someone who knows what they are doing is looking after those issues.
Dame Margaret Hodge
Q
Peter Swabey: No, it is not something that our members—
Dame Margaret Hodge
Q
Peter Swabey: I cannot help you much with that, because we are not a supervisory body in that sense.
Dame Margaret Hodge
Q
Peter Swabey: We give advice on what is good governance for organisations, not on the supervisory role.
Liam Byrne
Q
Peter Swabey: You have the directors’ duties under section 171 of the Companies Act and so on. Those are there, but it is difficult to identify exactly how those directors’ duties can be pursued against any defaulting director. For me, that is one of the challenges. Were you to introduce something extra on that, that would be a solution, but again you would need to look at how that could actually be enforced.
Tom Tugendhat
Q
Peter Swabey: The Bill deals with some very specific issues, which are not necessarily those. I think that the Bill would need to be broadened significantly were it going to get into things like sustainability, corporate social responsibility and so on.
Tom Tugendhat
Q
Peter Swabey: No, I think that is very important for governance. What I was saying was that you were then talking about some of the other issues, such as corporate social responsibility, which are probably outwith the scope of the Bill as it stands.
Tom Tugendhat
Q
Peter Swabey: Absolutely, yes.
Tom Tugendhat
Q
Peter Swabey: Yes, you are right. I had not thought of that aspect of it—I was thinking in terms of the reporting that companies do—but yes, in terms of tracking down defaulting companies, I think it will help you.
Tom Tugendhat
Q
Peter Swabey: Yes, absolutely. Removing the ability for companies to go bust one day and reappear the next with a very similar name and very similar directors, but without all those tedious debts that they used to have, is one of the really important issues.
Tom Tugendhat
Exactly—phoenixing.
Peter Swabey: I think that is really important.
Tom Tugendhat
Q
I also wondered if you could talk a little bit about whether you think it is going to help with economic crime. Clearly, although I am not a BEIS Minister, one of my responsibilities is fraud. The presence and disappearance of corporate entities is, I am afraid, something that has caused more than its fair share of fraud. How do you think the Bill might be able to help with that?
Peter Swabey: I think the Bill will help with that by making it possible to have greater confidence in the directors who are responsible for those companies actually being real people. We were talking a little while ago about the ease with which you can set up a company, and the limited verification of directors that goes on. We have a verification process in the Bill that will help to ensure that those people are actually the people you believe them to be, and that there is an address where you can get hold of them and, particularly, where the forces of law enforcement can get hold of them should they need to. That is a real strength.
Tom Tugendhat
I am very grateful, not only for your evidence today, but for the work you do and the oversight you bring. It does make a huge difference, and I am very grateful indeed for it. Thank you.
The Chair
Thank you very much. If there are no further questions from Members, we will thank the witness for his evidence and move on to the next panel. Peter, thank you very much for your time; we greatly appreciate it.
I am going to suspend the sitting, because we have a little bit of time before the next evidence session, and the witness is not in the waiting room yet because she is giving evidence via Zoom.
The Chair
I restart the sitting with our sixth panel . We will now hear oral evidence from Catherine Belton, journalist and author. Catherine is appearing via Zoom. We have until 3.10 pm. Catherine, could you please introduce yourself for the record?
Catherine Belton: Hi, I am Catherine Belton, author of “Putin’s People”. I am a reporter with The Washington Post.
Seema Malhotra
Q
Catherine Belton: There is a very simple answer to this, though I should basically preface all my answers by saying that I am not an expert on the Bill like some of my colleagues, such as Oliver Bullough. I have not studied it deeply, but what I can speak to is the urgency of these reforms, because of the threat posed to our national security. There is also a dire need to push through the anti-SLAPP legislation.
All these deep-pocketed oligarchs are essentially taking advantage of our system and are able to outspend not just journalists but financial watchdogs acting in the public interest. They are outspent and intimidated out of pursuing any real investigation into financial misconduct. They know from the outset that they may lose.
You only have to look at the example of the Serious Fraud Office and its battle against ENRC, which was once listed on the London stock exchange, then delisted and owned by a trio of Kazakh fraudsters essentially. The amount they spent annually on legal cases in the UK was £89 million, which is over the annual budget of the Serious Fraud Office. Though the Bill is of dire importance, without greater spending and funding for our public watchdogs—the National Crime Agency, Serious Fraud Office and other entities—we are going to be stymied from the get-go.
Alison Thewliss
Q
Catherine Belton: The UK, like many other countries, has welcomed capital from places such as Russia with open arms for the past 20 years. It is certainly a place that Russian oligarchs have flocked to, not only because they want to be part of the UK establishment but because they have clearly taken advantage of our lax legislation and regulation compared with the US, for instance. If you are listing a company in the US you face the Sarbanes-Oxley regulations, and you have committed a crime if you are found to have lied on your financial disclosures. Here, there seem to be so many loopholes; people can get away with everything.
We only have to look at our Companies House institution to see that there is very little scrutiny of filings that people are making. We have all heard the obvious examples of people not disclosing anything. I think you are a great expert in the use of limited liability partnerships by Russian money launderers. UK LLPs have seen tens of billions of dollars’ worth of illicit Russian cash move through them over the last decade or so.
Most of those money laundering schemes have been overseen by the Federal Security Service of the Russian Federation. It has a money laundering department called Department K, which has overseen all those schemes and has had an involvement in each and every one of them. I am told by security officials in Moldova—where one scheme used LLPs to move tens of billions of dollars of cash into the UK—that essentially the schemes are used not just by Russians seeking to move money to evade customs and tax, but by the Russian Federal Security Service itself, because it sees the greater flows of cash as cover for it to move its strategic cash into our jurisdiction.
I must again point to the need for SLAPP legislation and ask whether that could, or should, be attached to the economic crime Bill as it stands. If we do not enable journalists and financial watchdogs to look at those entities without fear of getting crushed by enormous lawsuits that will cost more than anyone’s budget allows, then we are going to be open to this type of abuse of our system forever. It was only July when Dominic Raab, the Justice Secretary, finally and wonderfully—it seemed like a miracle at the time—forwarded that anti-SLAPP legislation. It was going to allow for an early dismissal mechanism for cases that were clearly an abuse of the law, and aimed at intimidating journalists and financial watchdogs out of reporting matters of public interest—whether financial misconduct or something else. There has been a great deal of turmoil in Government since then, but we are seeing that SLAPP cases have very much not gone away.
The esteemed Chatham House think-tank recently had to remove the mere mention of a Tory donor, who had previously been convicted of money laundering, from a report on the abuses of the UK system by kleptocrats. The past of our Tory donors is something that we should know about, yet Chatham House had to erase its mention of that donor from its report. Staff looked into how much it was going to cost to defend, even though it was clearly public interest reporting. There was not really much to dispute about it, but they found it was going to cost them £500,000 before the case even got to trial, which means there is something so deeply wrong with our system, and we cannot even begin to combat any of these issues without having these anti-SLAPP measures in place. That is not just for journalists but for the Serious Fraud Office and for other public interest watchdogs.
Alison Thewliss
Q
Catherine Belton: Yes, for sure. Obviously, the companies pursuing these abusive cases should face having to carry the full cost of the case. I have a colleague at the Foreign Policy Centre, Susan Coughtrie, and she and Charlie Holt of English PEN have been working on a new Bill for this SLAPP reform, and I very much recommend that you speak to them as well. That Bill would provide even tougher requirements for cases to really show a likelihood of success.
What the Ministry of Justice proposed was like a three-step set of criteria for judges deciding whether a SLAPP case is a SLAPP case, and whether it should be dismissed before the costs racked up too highly. One of those criteria was whether the case being pursued had a realistic chance of success and it is very clear that this type of criterion needs to be toughened up. I certainly recommend that you speak to Susan Coughtrie at the Foreign Policy Centre about ways in which to do that.
However, I guess that my question to you would be: “Do you think there is a significant possibility that the anti-SLAPP Bill could be attached to the Economic Crime Bill? Is that something that will this speed up?” It is so vitally needed—more than ever. I mean, it is completely—
Alison Thewliss
I think my colleagues and I are interested in hearing this.
The Chair
It is a very important question, but unfortunately we have to stick to Members asking witnesses questions. However, I am sure that you can put those questions to our esteemed Members in other forums.
I will move on to James Daly now, because there are a couple of other Members who are keen to ask questions.
James Daly
Q
However, I just wanted to ask about money laundering. To make a very straightforward point, you obviously need a bank. If you have got a fake financial institution, or a legal entity set up for criminal purposes, you need a means of transferring money, either out of that body or into it. Could you talk about any thoughts or experience that you have, including regarding anything that you have investigated, that touches on that point and on what we can perhaps do to address it?
Catherine Belton: I think it goes back to this issue of LLPs and how these limited liability partnerships have really become, over the last two decades, the vehicle of choice for Russian money laundering schemes in particular—at least the ones that I have studied.
There was the “Moldovan laundromat”, which used LLPs based in the UK, including in Scotland, to move $14 billion out of Russia in illicit cash in the space of four years. That was part of a much bigger process through Danske Bank; I think the total volume of illicit Russian cash coming through Danske Bank was in the realm of $200 billion in just over a decade. That is obviously enormous amounts of cash.
However, it just goes down to the weakness of LLPs and the system that we have created, in which you can have companies established that do not even need to have any real business in the UK; they do not pay taxes here and therefore they did not have to file any accounts. They were not really having to file any beneficial ownership, either. That really means that there has been a huge gap in our legislation. Obviously, the Companies House reform will hopefully provide for more disclosure of beneficial ownership, but there are still so many ways for people to get around it, because Companies House really does not have proper funding to check whether beneficial ownership is being reported properly.
Obviously, the banking system is now under much greater pressure to investigate the source of funds, but while the banking system has become a much more complicated place for people to move illicit money through, the same demands are not placed on hedge funds or private equity funds. There are much less stringent requirements on those types of entities to disclose who their clients are and where the money is coming from. We only have to look at who the major backers of Brexit were. Hedge funds and private equity funds were major donors during the Brexit referendum, and we really had no clue where they were getting the money from.
The Chair
Catherine, we really want to hear from you and make sure that all our other members get to ask questions. We have two other members after James who want to ask questions, so please keep your responses as brief as possible, with all the information that is possible to get across.
James Daly
Q
Catherine Belton: Yes, that is exactly right.
Liam Byrne
Q
Catherine Belton: I think this has become a key way in which the Putin regime is able to extend its soft power and influence and undermine our democracies. That is very clear, because you can have vast flows of pretty much untraceable money, especially in the case of LLPs. Once it goes through a UK LLP, no one has any clue where any of that cash has gone. Vladimir Putin believes that the weakness of the west lies in our incessant drive for profits and the belief that the more Russian cash there is in the UK, the more Russia will have to follow our corporate governance standards.
Unfortunately, there has been a great lack of corporate governance standards, which has allowed our system to be corrupted. It has really laid bare how powerless some of our oversight bodies and enforcement agencies are. You only have to look at the National Crime Agency’s investigation into the source of the donation that Arron Banks gave to the Brexit campaign to see just how feeble our institutions are, at a time when we really need to be empowering them. When the NCA had to look for the source of the £8 million, it could not go any further than the Isle of Man company co-owned by Arron Banks. We do not know where the money came from.
Liam Byrne
Q
Catherine Belton: Yes, I am, of course. Obviously, that has an agenda, especially when the UK Parliament’s own Intelligence and Security Committee has pointed out the very close links between Russian business, the Russian state and Russian intelligence. Basically, Russian businesses very often have to act as arms of the Kremlin or follow Kremlin orders. Russian businessmen have to follow Kremlin orders in order to hold on to their wealth. It is not just money that is coming into our system and making everyone rich; it is money with an agenda, and that agenda can be to undermine our democracy.
Liam Byrne
Q
Catherine Belton: I think it will be half-baked if it does not include that amendment. Obviously, it is great to have better laws, but when financial watchdogs, public oversight bodies and journalists are still unable to cast a light on some of the financial transactions of the super-rich, from fear of these crushing lawsuits, it means that you have a system that is only half working. Law enforcement relies, and has relied in the past, to a great degree on journalistic investigations, including for instance by the OCCRP; its reporting has led to some very important cases.
Dame Margaret Hodge
Q
Catherine Belton: I wrote a book called “Putin’s People”, which was about Putin’s rise to power, the continued role of the KGB and how Russia was using oligarchs—Russian businessmen—to further Russian influence in the world. I was writing precisely about how many of the oligarchs, such as Roman Abramovich, were essentially forced to act as arms of the Kremlin, because otherwise their wealth could be jeopardised. Putin’s hold on power was such that anybody who did not obey his orders could face jail or the seizure of their companies.
Abramovich was very upset when I suggested in the book, quoting three former associates, that he had acquired Chelsea football club on Putin’s orders, in order to acquire soft power and influence in the UK. That, I believe, was public interest reporting. The allegation had been put to his spokesperson, and the response was in the book. He announced that he was suing me personally and HarperCollins—a statement that was swiftly followed by lawsuits from three other Russian billionaires, and then one from the Kremlin oil company Rosneft. The cases were very difficult to grapple with, because there were so many of them all at the same time.
Dame Margaret Hodge
Q
Catherine Belton: Five cases. It cost my publisher £1.5 million to deal with the cases, and they got only to the preliminary hearing stage before they were either settled or withdrawn. Rosneft’s case had to be withdrawn completely because there was no basis for any of its claims. The judge found that one of Abramovich’s claims was completely exaggerated, which allowed us to make minor amendments and avoid the enormous cost of having to continue to fight. Even though we believed that we had a very strong public interest case, our lawyers told us that it would have cost, at a minimum, £2.5 million to continue to defend the great deal of reporting that had gone into my book. It would have taken over a year. Abramovich had twice filed the exact same claim simultaneously in Australia as well, even though he had no business there, and therefore no reputation to protect.
Nineteen media rights organisations said that the cases against “Putin’s People” and my publisher, HarperCollins, bore all the hallmarks of a SLAPP case—that is, they were designed to intimidate the publisher, and they were abuse of process, particularly in the case of Abramovich.
Yes, the judge found that one of his claims was exaggerated, which, according to the Ministry of Justice’s proposal for the anti-SLAPP law, is one of the criteria under which SLAPP cases should be thrown out of court at an early stage. It introduced three criteria. One was that meanings were being inflated or exaggerated by a claimant; that was clearly the case for most of the oligarchs pursuing me. In Rosneft’s case, the judge found that what I had written about Rosneft, the Kremlin oil company, was not defamatory at all, yet my publisher had to spend hundreds of thousands of pounds just to get to the stage of a preliminary hearing, to get it thrown out of court. The proceedings demonstrated how many other UK media organisations had been censoring themselves because they did not want to deal with those enormously costly lawsuits—
The Chair
Catherine, I am really sorry, but I have two more people waiting to ask questions and there is only five minutes. I am so sorry to curtail you.
Seema Malhotra
Q
Catherine Belton: In July, the MOJ forwarded anti-SLAPP legislation. Unfortunately, because of the chaos of the last couple of months, that has not really gone anywhere. That legislation could be attached, as is, to the Economic Crime and Corporate Transparency Bill. The Bill as drafted slightly toughens the criteria for claimants; they have to prove that there is a significant likelihood that they have a real claim. You should speak to the FPC to weigh whether it is worth pursuing their draft laws as a better model, or whether it is enough to use the one already drafted by the MOJ. They had extensive consultations on that, but now it looks like all the momentum has gone. It is astonishing to me that this is not being pursued as a priority, given the situation we are in. It is absolutely vital that we shine light on individuals who may be operating on behalf of Putin to undermine western support for Ukraine, and to undermine our resolve this winter as we face enormous cost of living hikes. It is really important.
Tom Tugendhat
Q
Catherine Belton: You say that this is my 20th or 30th time giving evidence, but unfortunately, it is not. I have only spoken on SLAPPs before. I will leave the realm of Companies House reforms to people who are more expert on it than me.
The Chair
If there are no further questions from Members, thank you very much, Catherine, for taking the time to speak to us.
Examination of Witness
Professor Jason Sharman gave evidence.
The Chair
Last but not least, we will hear oral evidence from Professor Jason Sharman, professor of politics at the University of Cambridge. We have until 3.30 pm. Professor Sharman, could you introduce yourself and give us your background for the record?
Professor Jason Sharman: My name is Jason Sharman and I am a professor of international relations at Cambridge University. I study international money laundering and corruption, often by impersonating would-be corrupt officials, money launderers and terrorist financiers.
Seema Malhotra
Q
Professor Jason Sharman: I would not want to make the perfect the enemy of the good. The legislation is a positive step, but I watched the earlier testimony, and I agree with people who say that the proof of the pudding is in the enforcement. I study politics and international relations; I am less interested in the rules on the books and more interested in what difference they make, if any. If you are a criminal—a money launderer—you do not have to be very original. You do not have to try new things. Things that worked 10, 20 or 30 years ago still work today, so there is no need to change too much.
Seema Malhotra
Q
Professor Jason Sharman: The UK has a combination of a good reputation and lax enforcement. From the point of view of a launderer, that is a bonus: you get double. You get the appearance of probity—other people have mentioned the use of UK companies to open foreign bank accounts—with not much scrutiny and even less enforcement. Transparency is all good and well, but more information by itself does not lead to stronger action against money launderers or corrupt officials.
Alison Thewliss
Q
Professor Jason Sharman: There is certainly more that could be done. Some of it has been mentioned by other people; more money is the obvious one, but that may be necessary but not sufficient. In some ways, the career structure and career incentives for people who work in these agencies needs reviewing: if they start an investigation and it goes well, they get a small bonus to their career. If they start an investigation and it goes badly, they get a very big, indelible black mark, so in terms of career progression, it is safer for them not to investigate things.
One of the main sources of support has not been fully used: there are a lot of people outside the formal enforcement agencies who are very keen to help in this cause, including journalists and those in non-governmental organisations, as well as in the for-profit sector. That potential has not been tapped, so there are certainly things that the Government and the state could and should do, particularly in terms of regulatory agencies; but the area where I think it is possible to make most progress is probably beyond that.
Alison Thewliss
Q
Professor Jason Sharman: It depends what you mean by “secrecy jurisdiction”. A person who has studied this for a long time said this: “People are not surprised when I tell them that the most important tax haven in the world is an island. People are surprised when they hear that the name of that island is Manhattan. People are not surprised to hear that the second largest tax haven is a city on an island. The city is London, and the island is Great Britain.”
We recently formed a shell company with co-authors Michael Findley and Dan Nielson in the United States. It took 137 seconds to incorporate that company. Here, it would probably take you a little longer—it might take you as long as 10 minutes—but you do not really have to show ID in any case, so the barriers are pretty low. If you do not want to use anything as fancy as a limited liability partnership, you can just use a plain old company, and that works pretty well for holding a bank account overseas.
Alison Thewliss
Q
Professor Jason Sharman: I think so. For me, it is telling that in jurisdictions for which incorporations are their lifeblood, such as the British Virgin Islands, it is much slower to incorporate. It takes close to two weeks to incorporate in the British Virgin Islands, and it takes about $1,000. The British Virgin Islands get half of their Government revenue from incorporation fees. They have a real interest in making sure their company registry works well. No one likes red tape and filling out forms, but the idea that you might have to spend a couple of hours instead of 15 minutes, or £50 instead of £12 is, to me, not unreasonable.
James Daly
Q
Professor Jason Sharman: I feel sorry for British Companies House, because it has been given a lot of work without the resources to carry it out. The mismatch between what is expected of an institution and the resources it has to achieve those ends is greater. Company registries are passive, archival organisations.
James Daly
Q
Professor Jason Sharman: No. The UK is typical.
James Daly
Q
Professor Jason Sharman: Yes and no. Generally, yes, but if you want to own property, you never have to touch the banking system. If you want to own a yacht, you can set up the shell company and earn, just like that. You can break sanctions and own property with a shell company, even without a bank account.
James Daly
Q
Professor Jason Sharman: Again, banks have had these requirements to establish the beneficial owners for a while. I think this is good, but it is the enforcement that is key there.
Dame Margaret Hodge
Q
Professor Jason Sharman: I probably differ from many of the other people who have spoken in that I am not a fan of failure to prevent. I think that the goal of these laws is to make life hard for bad people without making life hard for good people at the same time. To the extent that you have really onerous regulation or weaken the presumption of innocence, that is something of an own goal or collateral damage. Before you put people in jail, you should be pretty serious about it. There should be a mental intention there—a mens rea.
I am not really comfortable with the strict liability. There is strict liability in anti-bribery, which means I have to do pointless anti-bribery training every year for the University of Cambridge. It does not do me any good and it does not stop corruption, but it is one of the things that Cambridge feels it has to do because of the strict liability. Again, it is a cost to society that is not included in legislation or in regulatory impact assessments.
Dame Margaret Hodge
Q
“These host states now have a duty to block, trace, freeze, and seize these illicit funds and hand them back to the countries from which they were stolen.”
I do not know who you were referring to there, but, in our case, with the illicit Russian assets frozen in the UK, how do you suggest we seize those funds and how can we repurpose them?
Professor Jason Sharman: It depends. With the Russian assets that are criminal assets, eventually you need to go to a court of law to do that—
Dame Margaret Hodge
Q
Professor Jason Sharman: Indeed. That is hopefully something that the Bill will do something to correct. It may be different if you are talking about sanctions and the money that is currently frozen. It would depend. If we are talking about criminal money, there is an anti-money laundering process of confiscation—civil and criminal.
Dame Margaret Hodge
Q
Professor Jason Sharman: Sanctions. I think you cannot. There is proper process. As I understand it, unless there is a formal state of war that obtains between two states, on what basis are you going to take away—
Dame Margaret Hodge
Q
Professor Jason Sharman: No, you quoted me correctly, but that is money that was stolen in one place and moved to another place, and you have to prove that it was stolen. That is different from saying, “You are a Russian oligarch and we are going to freeze your funds.” It is very different.
Dame Margaret Hodge
Q
Professor Jason Sharman: I would not shed a tear if Russian oligarchs lost their assets.
Dame Margaret Hodge
Q
Professor Jason Sharman: Okay, for the Russian state. In that case, I think that would be wonderful. I know Browder mentioned earlier central bank assets. But, again, there is a precedent here. To what extent would foreign Governments put money overseas? There is a lot of concentration on Russia as a corrupt regime, which I think it is, but it has plenty of company, many of which have assets in the UK.
Dame Margaret Hodge
Q
Professor Jason Sharman: I think not, and I think that the British Government, at least when it comes to sanctioning oligarch assets, which I realise are different from state assets, are in a bind. I think they will have to return those assets to the oligarchs and that they may have to pay damages to the oligarchs. That would be a terrible injustice, but I really worry about what the end game for sanctions is.
Liam Byrne
Q
Professor Jason Sharman: This is probably a typical social science answer, but there are quite a few reasons that make it difficult, because no one corrective, in and of itself, is going to fix the situation. There have been solutions, such as the persons of significant control registry, the unexplained wealth orders and so on, where it has been like, “This is the thing that will unlock the problem”. But instead it is a combination. First off, it is appropriately difficult to take away people’s property. Secondly, the bureaucratic incentives do not favour it. You have this very risk-averse culture within law enforcement agencies. Thirdly, as I said, there is a failure to harness the incredible investigative resources that lie outside the state, in the not-for-profit sector but also in the for-profit sector.
The Chair
Before the right hon. Member for Birmingham, Hodge Hill asks his next question, I remind him that our line of questioning has to relate to the legislation in front of us. With his extensive parliamentary experience, I know that he will be able to do that.
Liam Byrne
Q
Professor Jason Sharman: I think that, as Catherine Belton said earlier, certainly volumes of money into politics have something to do with it, but even if you could come up with a perfect solution to that problem, it may not actually make too much difference in terms of interdicting money laundering and corruption funds into this country. That is not to say it is not worth while doing, but there is this constant phase of saying, “If only we do x, we’ll really be able to fix the problem.” I think it is something where modest progress, incremental progress, is what we should expect, and we have to do lots of different things right in order to achieve that progress.
Liam Byrne
Q
Professor Jason Sharman: Yes.
Tom Tugendhat
Q
Professor Jason Sharman: Yes and yes. I think this is a modest positive step, but, given the track record of legislation, I would say that it has to be implemented. That is where the problem has been heretofore, and I can possibly anticipate that it may be the problem here, too. If you say, “You have to identify yourself as the owner of a company,” and you have entries in Companies House saying, “My name is XXX XXX,” and that does not get challenged, then more information is not necessarily better if that information is junk.
Tom Tugendhat
Q
Professor Jason Sharman: I mentioned briefly that some of my research, together with Mike Findley and Dan Nielson, has been to impersonate would-be money launderers and look to set up companies in various jurisdictions. It is much harder to set up companies, and the standards are much more rigorous, in the Cayman Islands, the British Virgin Islands and the Crown dependencies than in the UK. Of the UK jurisdictions, the UK is the easiest place to set one up, so I think the UK could learn a lot from its overseas territories and Crown dependencies. I noticed with interest that a couple of the other witnesses here said the same.
Tom Tugendhat
Q
Professor Jason Sharman: No, I do not think Companies House will be able to do it. Its main function is passive and archival; it is a library mainly. I think it is just not in its DNA to be otherwise. I think most of the solution for this is in the private sector. I am talking about properly regulated, supervised and audited corporate service providers. I co-authored a report 10 years ago with the World Bank called “The Puppet Masters”, and that was overwhelmingly the conclusion that we came to.
Tom Tugendhat
Q
Professor Jason Sharman: I completely agree. I think, even more, that HMRC, as the regulator for corporate service providers, those enablers, has been completely missing in action. If there were one bit of the public sector that I would change, repurpose or fund, it would be to get HMRC to take its duty to regulate and penalise corporate service providers seriously. It has just been completely missing in action so far.
The Chair
If there are no further questions from Members, I want to thank the witness for his evidence. Professor Sharman, thank you very much for taking the time to come and speak to us.
Ordered, That further consideration be now adjourned. —(Nigel Huddleston.)
Westminster Hall
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Local Air Quality Breaches
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PUBLIC ACCOUNTS COMMITTEE
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Mrs Sheryll Murray (in the Chair)
We begin with the Select Committee statement. Dame Meg Hillier will speak on the publication of the 22nd report of the Public Accounts Committee, “Tackling local air quality breaches”, for up to 10 minutes, during which no interventions may be taken. At the conclusion of Dame Meg Hillier’s statement, I will call Members to put questions on the subject of the statement, and call Dame Meg Hillier to respond to them in turn. Questions should be brief. I call the Chair of the Public Accounts Committee.
Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
It is a pleasure to serve under your chairmanship, Mrs Murray. I record my thanks to the National Audit Office and the Public Accounts Committee for this report. As many Members will know, the National Audit Office does great work to support us, analysing the numbers from Government and making sure that we are working on the basis of the facts in front of us. I record a special thanks to my deputy Chair, the hon. Member for The Cotswolds (Sir Geoffrey Clifton-Brown), who chaired this particular session of the Committee’s work. We also took evidence from the Department for Environment, Food and Rural Affairs—it is good to see the Minister in her place—the Department for Transport, and National Highways on their work to tackle air quality in England. Our report covers the nitrogen dioxide programme and work to address other air pollutants.
The Committee was particularly keen that we make a statement on this report in the House because of the vital importance of the issue. Quite simply, poor air quality can cause significant damage to people’s health, as well as harming the environment. There is some good news: emissions of most air pollutants have been falling in recent decades in the UK. However, poor air quality continues to cause damage to people’s health and the natural environment. As we highlight in our report, the Committee on the Medical Effects of Air Pollutants estimated that human-made air pollution in the UK has an effect equivalent to between 28,000 and 36,000 deaths each year. Of course, there was the very tragic case of a young girl who died, where the coroner concluded that her asthma had been exacerbated by the pollution around the south circular in south London.
There are two types of air quality target in the UK: national emissions ceilings, which are breached if too much of one pollutant is emitted across the UK within a year, and local concentration limits—about which I think most Members get the most letters—which are breached if the average level of a pollutant in a specific area is too high. Current national targets cover pollution from ammonia, particulate matter, nitrogen oxides, non-methane volatile organic compounds and sulphur dioxide, as well as others. Between 2010 and 2019, the UK complied with most of its legal air quality limits for major pollutants at local and national levels, with the exception of the nitrogen dioxide annual mean concentration limit, of which there have been long-standing breaches. The Committee was particularly concerned about those breaches, and the report reflects that concern.
The Department for Environment, Food and Rural Affairs and the Department for Transport helpfully established the Joint Air Quality Unit in 2016 to oversee delivery of the Government’s plans to achieve compliance with air quality targets. Measures to tackle nitrogen dioxide pollution include bus retrofit and traffic management schemes and, in some areas, clean air zones where vehicle owners are required to pay a charge if their vehicle does not meet a certain emissions standard. Through their nitrogen dioxide programme, the Government have directed 64 local authorities to take action to improve air quality. They have also commissioned National Highways to examine breaches on the strategic road network in England. I should say that across that network, only a total of about 51 miles has actually breached that limit across 31 local areas. Air pollution is often very localised, and only about 250 homes are directly affected by that air pollution, because it dissipates. However, one of the challenges is how to measure it, and I will touch on that challenge in a moment, because the Committee is concerned that the Government need to look at the model for measurement as we go forward.
As of May this year, a lifetime budget of £883 million has been committed to the programme to support local councils, and the Government separately spent £39 million to improve air quality on the strategic road network between 2015-16 and 2019-20. The Government published a clean air strategy in January 2019, outlining their approach to air quality much more broadly. At the time, we took evidence from the Government, and they have since published their air pollution control programme to make sure that the 2030 targets are met.
However, the Committee concludes that current policy measures are insufficient to meet four of the five 2030 emission ceiling targets set for the UK as a whole. There has been progress, but there is still a lot to do. Progress to address illegal levels of nitrogen dioxide pollution in the 64 authorities and 31 sections of the strategic road network, which I mentioned, has been slower than was expected in 2017. Central Government had expected that there would be a change within three years, but as of 1 April this year, 17 local authorities were still in the process of implementing measures. It has been four and a half years since the target was set, and most of those 17 authorities do not have a firm completion date, although eventual compliance is expected because of the Government’s moves to introduce electric vehicles and other upgrades to vehicles. However, we have separately looked at the electric vehicle programme, and there are challenges there too.
One of the main conclusions of our report is that the public find it hard to find information about air quality in their area, and it is difficult to know what has been done by either central Government or local government to address illegal levels of pollution. We conclude—I do not think it is rocket science—that air quality issues require local government and the national Government to work very closely together, yet we do not think that the Government have quite got the balance right. The lack of a co-ordinated central communications campaign means that activities by local councils are not always supported by a strong national message about the need for air quality measures. For example, low emission zones can be unpopular locally but are vital. Often, it is about the Government saying, “You need to take measures in order to reduce emissions,” but when measures are taken, they are not always backed up by the national message. National messaging can also help to make sure that people know how they can be affected by air quality breaches and how they can take mitigating action, especially if they have respiratory problems, because that obviously has a very big impact on their health.
Of course, as the Public Accounts Committee, we are very concerned about value for money, and we would like the Government to look at how money is being spent across Whitehall on air pollution issues. We know it is difficult to get a precise figure, but we think it important that DEFRA takes a lead and nudges or pushes other Departments to identify in their budget what they are spending, so that we can all see that, DEFRA will be able to see that and, crucially, Departments can be held to account to make sure that they are doing their bit to tackle air pollution in the UK.
I will not go through every recommendation in detail, but the issue of information is worth highlighting. The Government’s main source of public information on air quality is the UK AIR website, but this is impenetrable for the average user if they want to find out information about their local area, and it does not present very clear information on the legal limits for each pollutant. It needs to be looked at again, and I hope that the Minister hears this and will feed it back to the Department. We really believe in transparency—not just the Public Accounts Committee, but all Members of the House—and it needs to be pushed through, because the best group of people to help us tackle air pollution can be local people, who have a real interest in the issue and who need to be able to see what is going on. They can also adapt their behaviour, perhaps by travelling less and thinking about not using cars on short journeys, in order to tackle pollution in their area.
One of the other issues is the national model that the Government use to identify areas that are likely to breach air quality limits. They use that information to direct councils to take action, but the national model does not directly use the results of monitoring by local authorities. Instead, there is a national network of monitoring stations, which is a good thing, but there are obviously gaps—they are not everywhere—and the Government have to use that for the national model. Some local authorities have raised with the Committee their concerns that this may result in an unfair situation, whereby councils with high levels of nitrogen dioxide pollution are not required to take action because the national model did not predict a breach. It sounds quite technical, but it is actually about local government and the national Government working closely together, having a good look at the model, and making sure that the uncertainty in the model is highlighted.
The Committee is clear that local authorities have a key role to play. As I said, they have the freedom to set different exemption criteria and different charging levels for clean air zones and so forth, but the joint air quality unit at Government level has been a bit inflexible and lacks understanding of local politics, with too much emphasis often placed on clean air zones as the default option, instead of measures that may be more suited to the area. I am a great believer in local communities deciding as much as possible for themselves, while Government have an overarching view and challenge where there is a failure at local level. There is a will in local government to deal with this and we need to see a better way of working between local and national government. I hope that is landing with the Minister.
We have recommended introducing a national communications campaign on air quality to provide a strong national message about how we can all change our behaviour and the purpose of those measures to support us all in staying healthy and keeping the air clean in our areas. We have also recommended ensuring that councils have sufficient flexibility to determine the approach in their area. In summary, we have seen some progress, but there is a lot to do. If the Government take their foot off the pedal, we would very concerned. The impact of not tackling air quality is not something we can contemplate The bones of action are there but there needs to better working together. That is the summary of our report.
Mr Ben Bradshaw (Exeter) (Lab)
Did the Committee arrive at an overall ballpark figure as to the cost to society as a whole from air pollution? I think you, Chair, and I were on an unprecedented joint transport, local government and environmental committee two or three years back that looked into air pollution and I think we arrived at a figure in the ballpark of £20 billion a year in terms of health and other costs to the country. Those figures are always quite useful, as I am sure my hon. Friend the Member for Hackney South and Shoreditch (Dame Meg Hillier) agrees, when making arguments for the Treasury about the cost-benefit of taking real, meaningful action on an issue such as air pollution.
Dame Meg Hillier
I thank my right hon. Friend for his question. The National Audit Office has looked into that in detail. I do not have a figure to hand, but he is right. All these measures have an important role in health prevention, which plays a hugely important role in the cost. NHS spending was just over 40% of the resource spending of all Whitehall Departments. When we think of it like that, there is a clear incentive for Government to work together to tackle things such as air pollution to try and reduce health problems and health inequalities, which will also have an impact on an already massively overstretched NHS budget.
Backbench Business
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Colleges Week 2022
(2 years ago)
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Westminster Hall is an alternative Chamber for MPs to hold debates, named after the adjoining Westminster Hall.
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Mrs Sheryll Murray (in the Chair)
I remind Members that I would like to leave a couple of minutes at the end for Mr Aldous to wind up.
Peter Aldous (Waveney) (Con)
I beg to move,
That this House has considered Colleges Week 2022.
It is a pleasure to serve with you in the Chair, Mrs Murray. I thank the Backbench Business Committee for granting this debate, in which we shall consider, celebrate and reflect on Colleges Week and the work that colleges do in local communities all over the UK. We are actually a week late, as Colleges Week was last week. The recent changes to the parliamentary timetable made it impossible to secure this debate then, but that may not be a bad thing. The debate now coincides with the appointment of a new Prime Minister, who has already highlighted his determination to put further education and vocational schooling at the forefront of his Government’s work and his policies. With that in mind, I welcome the Minister, my hon. Friend the Member for Morley and Outwood (Andrea Jenkyns), to her place. I look forward to her restating the Prime Minister’s commitment.
This is an opportune moment to not only showcase the great work that colleges are doing, but highlight how, with the right means and support, they can do even more to promote the communities that they serve, deliver sustainable economic growth and help local people to realise their dreams and achieve their ambitions. As well as looking forward with the new Prime Minister and his new team, it is appropriate to take stock after what has been a hectic 18 months for colleges in policymaking terms. In January 2021, the “Skills for jobs” White Paper was published; the Skills and Post-16 Education Act 2022 received Royal Assent earlier this year; and colleges are now working with local employers, councils, local enterprise partnerships and other interested parties to put in place local skills improvement plans, or LSIPs.
It is important to emphasise the multitasking work that colleges are carrying out. They are driving the post-covid recovery, supporting learners who, through no fault of their own, are having to catch up. They are helping to deliver the net zero economy. In my own constituency, East Coast College is in the vanguard of promoting training for the jobs that are needed in the offshore wind and nuclear sectors. I should point out that this week may not be Colleges Week, but it is actually Offshore Wind Week, and it was a pleasure to welcome local apprentices to RenewableUK’s reception on Wednesday afternoon.
Colleges are addressing regional inequalities. Meaningful and proper levelling up will be delivered only if the colleges are provided with resources so that they can play their full role. They are also promoting lifelong learning. In today’s world, a job for life is a thing of the past. There are so many people with so much potential with whom colleges can work to acquire the skills to achieve their ambitions.
Finally, colleges can ensure that the economic growth we all want is sustained and enduring—not a short-term boom followed by a painful bust—and helps to deliver the improved productivity that the UK so desperately needs.
Martin Vickers (Cleethorpes) (Con)
I congratulate my hon. Friend on obtaining this important debate. My constituency, like his, is heavily dependent on the offshore sector from an economic point of view. I want to take the opportunity to congratulate Peter Kennedy and his team at Franklin Sixth Form College in Grimsby, which serves my constituency. Would my hon. Friend agree that apprenticeship courses in particular are vital if we are going to get our young people into the offshore and similar sectors?
Peter Aldous
I agree wholeheartedly. Later in my speech, I will highlight some of the strategic working that is required to make the most of the opportunities in the offshore energy sector that are emerging not just on the east coast, but all around the UK.
I have the privilege and honour of chairing the all-party parliamentary group for further education and lifelong learning, for which the Association of Colleges provides the secretariat. It is appropriate to take stock of the work that colleges do and the impact they have on their local communities. English colleges educate more than 1.6 million students every year and employ approximately 103,000 full-time equivalent staff. Some 913,000 adults study or train in colleges, while 611,000 16 to 18-year-olds study in colleges. There are 166,000 people on apprenticeship provision in colleges, and the average college trains 1,000 apprentices. Some 110,000 people study higher education in a college. Some 23% of 16 to 18-year-olds and 24% of adult students at colleges are from minority ethnic backgrounds; 21% of students in colleges have a learning difficulty and/or disability; and 46,000 college students are aged 60 and over.
Those figures demonstrate that colleges are the Heineken of the UK education and training system: they reach the parts and the places that other establishments do not. They invariably do this to a high standard, with 91% of colleges judged “good” or “outstanding” at their most recent inspections. Colleges support the Government’s ambitious plans to roll out T-levels, increase apprenticeship delivery, promote adult learning and introduce higher technical qualifications. While colleges are up for these challenges, there are significant obstacles in the way of them playing the role they want to—a role that will bring so many benefits to local people and communities.
First, despite a 2021 spending review that recognised some of the long-established funding issues facing colleges, further education funding still compares extremely unfavourably with both university and school funding. In its 2021 annual report on education, the Institute for Fiscal Studies highlighted that:
“Further education colleges and sixth forms have seen the largest falls in per-pupil funding of any sector of the education system since 2010–11.”
Although the budget for 16 to 18-year-olds is rising for the five-year period from 2020 to 2025, the pressures of extra catch-up hours, increased prices and the cost of living are holding back progress on flagship programmes in key national skill shortage sectors. The situation is exacerbated by the dramatic energy price increases. Some colleges have long-term contracts with suppliers agreed in 2021, which means that they are not covered by the six-month scheme. However, it means that they face the prospect of treble, quadruple or even worse price increases in 2023. It should be borne in mind that for many technical and vocational courses, there is no good alternative to in-person education at the college.
Secondly, colleges across the country are finding it increasingly difficult to recruit and retain staff, given the widening gap between what skilled teachers can earn in colleges and what they can earn in industry or even in schools. An Association of Colleges survey, commissioned by the Financial Times, shows that 85% of colleges reported staff shortages in construction courses, 78% in engineering and 62% in IT and computing. In August, the AOC wrote to the then Prime Minister, my right hon. Friend the Member for South West Norfolk (Elizabeth Truss), urging her to make investment in schools a central plank of her premiership. I hope the Minister will confirm, following this morning’s comments attributed to the new Prime Minister, that his Government will make that commitment.
Thirdly and finally, colleges are concerned about the speed of the Government’s reforms to level 3 qualifications. It is right to have the ambition of having a respected and well-understood set of technical qualifications in place across England. However, it is a worry that funding for 160 existing qualifications will be withdrawn when clear replacements are not yet in place. It should be demonstrated that these replacements properly prepare students for progression, meet the needs of industry and promote social mobility. Concerns remain that T-levels will not be accessible to all students ready to do a level 3 qualification and that the required industry placements will not be readily available. I urge the Minister to work with colleges and business to address these worries, so that this flagship policy has a positive and proper launch and does not immediately run aground.
One of the great things about colleges is that they are innovative, imaginative and entrepreneurial. It is in that spirit that Stuart Rimmer, the principal of East Coast College in Lowestoft and Great Yarmouth, has brought together colleges and trainers from across the UK that run energy-related courses to form the national energy skills consortium. The consortium meets virtually three to four times a year, and I have the privilege of being invited to those meetings. Clean energy and the low-carbon economy provide an enormous opportunity for creating new and exciting well-paid long-term jobs, often in deprived areas where they are badly needed. The consortium has the objective of maximising those opportunities and removing barriers that might get in the way. My right hon. Friend the Member for Spelthorne (Kwasi Kwarteng) made a presentation to the consortium when he was Energy Minister, and my hon. Friend the Member for Brentwood and Ongar (Alex Burghart) joined us in the summer, when he was skills Minister. I hope the Minister will also meet us in the near future.
In following up the meeting with the former skills Minister in July, Stuart Rimmer highlighted three issues that must be addressed if colleges are to properly train people to acquire the necessary skills to work in the energy sector. First, he said it is wrong that colleges and universities are required to take high-risk, up-front investment decisions to build capacity and deliver training for nationally important infrastructure projects, such as Hinkley Point and Sizewell C. Secondly, he said that energy and civil construction qualifications required by employers should be brought into core funding for young people, apprentices and adult learners. Thirdly, he said that, while local skills improvement plans will play an important role in ensuring that skills promotion is tailored to, and bespoke for, local areas, it is important for the energy sector, where supply chains often extend across the whole the UK, that a national framework is in place. The consortium, along with the National College for Nuclear and other bodies, such as the Engineering Construction Industry Training Board, is keen to work with Government to ensure that this strategic approach is pursued.
The UK desperately needs sustained economic growth that reaches all parts of our four nations, and in which all people, whatever their backgrounds and ages, can participate. Colleges are already doing great work, but if they are given the resources and means, they can do much more. Working with the Government, they can help to put this traumatic and turbulent time behind us, and we really can build back better.
Mr Ben Bradshaw (Exeter) (Lab)
It is a pleasure to serve under your chairmanship, Mrs Murray. I congratulate the hon. Member for Waveney (Peter Aldous) on securing this debate and on his excellent speech. The colleges sector has in him a doughty champion. He gave a very effective and comprehensive summary of what colleges can achieve and how much more they can do with the right national policies in place.
I wish to illustrate that success and potential with the story of my local college in Exeter, which is a good example of what colleges can do and how they can transform not just individual people’s lives but the economic performance of a whole community. When I was first elected, more than 25 years ago, Exeter College was a pretty mediocre, middling kind of place. It was dilapidated and did not have great results, and that reflected a lack of aspiration in education in my city generally. Our high schools were also not very good.
Over the past 25 years, that picture has been completely transformed by some good policies, local leadership, and the almost unique partnership and collaborative education system that we have built in Exeter, involving the college, the university and our high schools under the umbrella of a community-run trust named after the great educationalist Professor Ted Wragg, who used to run the school of education at the University of Exeter. That led to a huge improvement in attainment and results in not just our high schools and primary schools but our college and university.
When I was first elected, families would send their children out of Exeter to neighbouring schools in the countryside because they were better and also had sixth forms. The high schools in Exeter do not have sixth forms; most young students do their A-levels at Exeter College. We used to haemorrhage a lot of young people into the private sector, if the families could afford to send them.
Today, the opposite is the case. We are attracting students from parts of Cornwall—from your constituency, I am afraid to say, Mrs Murray—and from Dorset and Somerset. Those young people travel for two hours on the bus every day to Exeter and back—a four-hour journey—to attend Exeter College. At sixth form, we are attracting young people from private schools to Exeter College because its results are so good and its standards so high. We are also attracting students from outside Exeter into our high schools because they are performing so well.
I want to give a couple of examples of the levels of achievement that Exeter College has been hitting in recent years. This year’s A-levels were the best ever: an astonishing 69% of students got either A*, A or B, and 16 students secured places at Oxford or Cambridge. Last year, Exeter College was the top college in England for apprenticeship starts, and it has consistently bucked the national trend of decline by increasing the number of apprenticeships every year. Exeter College is the biggest T-level provider in England, with results this year 4% above the national average.
There are a few individual achievements that I would like to highlight. Last year, the highest performing A-level PE student in the country with one of the major awarding bodies was from Exeter College. Given the difference between our facilities and those of some of our leading private schools, that is an incredible achievement. One of only four students in the country to score top grades in digital T-levels was from Exeter College. A female joinery apprentice from Exeter College won best in country in the Institute of Carpenters’ national competition.
As well as those incredible academic and skills achievements, the college also performs an important community role. Over the last year, it has been educating 300 Ukrainian refugees, helping them to improve their English as a foreign language. However, the college and its excellent principal, John Laramy, would not want me to extol its achievements without, as the hon. Member for Waveney did, highlighting some of the challenges—for both the college and the tertiary sector as a whole.
First, there is the issue of space. Exeter College has grown rapidly in quite a restrictive city-centre location. It has been regularly constrained in what it can do because of a lack of physical space. It had to introduce 10 mobile classrooms on to the site this summer and to pause its expansion of T-levels because of a shortage of space. It really needs funding from the Government’s FE transformation fund to continue to fulfil its full potential, and I am glad that I have had the opportunity to make that point to the Minister directly.
Secondly, there is recruitment. As the hon. Member for Waveney said, the cost of living crisis has significantly impacted the college’s ability to recruit qualified staff, and Brexit has also had an effect. Although there are problems across the board, they are particularly acute construction, digital and engineering—all subjects in which we need to succeed as a nation if we to achieve the growth the hon. Gentleman referred to and the improvement I am sure we all want to see in our productivity as a nation.
I hope the Government will come forward with policies to address some of these issues. Like the hon. Gentleman, I was very encouraged to read the briefing in The Times today about what the new Prime Minister would like to do with our education system. Radical ideas are long overdue, and on the face of it the ideas that have been put forward are very good, but this will be a big challenge to deliver on. I would be interested to hear whether the Minister can give us any more details in her summing up.
I will conclude by suggesting that many colleges across the country, including Exeter College, are already doing much of what was outlined in the No. 10 briefing in The Times today, but they could do an awful lot more with the right policy framework, if the staffing and skills supply issues were addressed and if the necessary funding was in place. As the hon. Gentleman said, FE colleges have been historically underfunded compared with A-levels and universities. If we could tackle all those things, we could really achieve the vision that the new Prime Minister outlined in The Times and work together—cross-party—to do exactly what he hopes to achieve.
Harriett Baldwin (West Worcestershire) (Con)
It is an honour to serve under your chairmanship this afternoon, Mrs Murray.
I, too, congratulate my hon. Friend the Member for Waveney (Peter Aldous) on securing this important debate. It is a pleasure to follow the right hon. Member for Exeter (Mr Bradshaw), because he outlined what successful colleges can look like. I will hold to that vision as I speak about the situation in my constituency and about the Malvern Hills College situation in particular.
I want to start by thanking the Minister, because on taking post she wrote me an incredibly helpful letter. She has clearly studied the situation at the wonderful Malvern Hills College very closely, but I will reiterate it for the record and for the benefit of colleagues. The college has been in existence in the centre of Malvern for nearly 100 years. In 2016, the trustees entrusted its ownership to what has become Warwickshire College Group, which is obviously headquartered in Warwickshire, the neighbouring county. In their wisdom and prudence, at the time of the transfer the trustees put in place a covenant on this precious building in the heart of Malvern. I will read the covenant into the record. The property cannot be used for anything
“other than a Further Education College and ancillary uses thereto without the prior written confirmation from the Transferor that the Transferor is satisfied…that the Learning and Skills Council (or any successor in function) has properly determined that there is no longer a functional need for a college in Malvern”.
Malvern is a beautiful town of 35,000 people. It is a growing town. Places such as Malvern are exactly where we need to have the precious resource of a good college—I see that colleagues are nodding their heads. With the vision that has been outlined, and stability in our education team, which I hope will endure, I hope that we can focus on the fact that the community very much wishes to retain the site as a college—so much so that, through the Bransford Trust, a local philanthropist is offering a substantial sum to purchase the site so that it can be maintained as a going concern in the heart of Malvern. Our local council, Malvern Hills District Council, has allocated a £400,000 grant to secure the future of the college, and our county council has also very helpfully allocated a £400,000 grant. Between them, there is a substantial—possibly multimillion-pound—offer to keep the site working as a college in the heart of Malvern.
Hon. Members would think that that would satisfy the board and trustees of Warwickshire College Group—that they would remain faithful to the covenant, the district council would not lift it, and the college would rise like a phoenix from the closure that Warwickshire College Group announced under the cloak of the pandemic. Unfortunately, so far the board seems to have focused on ensuring that it simply gets maximum value for the site and is able to sell it—presumably, for a housing development.
That is not what the community wants. We have protested; we have marched outside the college. We have also put forward a very valuable offer to take the college from Warwickshire College Group. I look forward to meeting the group’s new chair, Anna Daroy, and its president, Louise Bennett, who are both actually from Worcestershire, to emphasise to them how important it is to find a happy solution.
Unfortunately—I use parliamentary privilege to make these remarks—Warwickshire College Group has chosen to retain lawyers and to sue Malvern Hills District Council. It is using public money to sue my council to get it to lift the covenant, on the pretext that the Learning and Skills Council no longer exists, and its successor body, the Education and Skills Funding Agency, feels that there is sufficient provision in the area. That would mean that we as a community cannot determine the future of the college.
I want a future for our college like the one that the right hon. Member for Exeter outlined for his constituency. We are a thriving town, and we want a college right in the heart of it. That is why I have updated colleagues on what is happening. I hope that, having listened to this tale of woe, the Minister’s very helpful letter to her officials will say, “We do have the power.” The Secretary of State has the power to determine that she wants to see the college preserved in the heart of Malvern.
I assure hon. Members that the people of Malvern almost unanimously wish to see this wonderful college preserved. We have a plan and a business case. While this situation goes on, the site is being left to go to rack and ruin. That is in nobody’s interest. Will the Minister urge her officials to look at this issue one more time? Will she tell them that she has the power to do something here? Power to her elbow.
Marion Fellows (Motherwell and Wishaw) (SNP)
It is an absolute pleasure to serve under your chairmanship, Mrs Murray. I congratulate the hon. Member for Waveney (Peter Aldous) on securing this debate, even if it is a week late.
OECD data shows that Scotland is the most educated country in the UK and Europe. Data from 2021 shows that 55.2% of Scotland’s 25 to 65-year-olds have been through further or higher education. That is partly due to Scottish colleges, which I was surprised to find have a system that does not operate in England—or did not operate the last time I looked, which was when I served on the Education Committee here. We have a system called articulation. It is very possible for a student to start in a college in Scotland aged 15, perhaps—an early leaver—and study for a national qualification, then move on to do a higher national certificate, a higher national diploma, and sometimes go on to do a bachelor of arts degree at that college. Alternatively, they can choose to move on to another place—a university such as Edinburgh Napier or Glasgow Caledonian—and go straight into their second or third year, continuing their academic studies there.
It is a really good system; I know, because I used to work as a further education lecturer. I retired in 2011—that went well—but I loved teaching in further education colleges because of the breadth, width and variety of students. I am pretty sure that the same happens in England. We were very involved in retraining people who had lost jobs when major factories closed down, such as Motorola in Livingston, where I worked. We were also heavily involved in helping women returners; indeed, one of my proudest achievements—if I may be so immodest—is that I helped many women who had perhaps left school very early. In particular, I remember one woman who was 15 when she became pregnant and left school. She came back looking for a wee part-time course many years later, and I put her straight on to a higher national certificate course. She went forward, and eventually articulated to a university and got a degree—not because of my efforts, but because of her own.
It is always a pleasure to look back on my time in colleges, just to reflect on the opportunities that they give our young people, our middle-aged people and our older people. My husband went to Motherwell College, as it was then—it has had a refresh since—and did an access to higher education course. All our children had gone to university, and he thought he might try it himself.
Harriett Baldwin
One of the most upsetting things said to me about Warwickshire College Group’s decision to close Malvern Hills College was that most of the students were older. Surely, that is not the kind of message that we want to be sending out across our land.
Marion Fellows
I am appalled at that remark—not the hon. Lady’s remark, but that being given as a reason to close down a college. No matter where in the UK we live, lifelong learning is an extremely important tool for every one of us. It will help the economy, but it also gives us more satisfied and better citizens. We can all learn, no matter what age we are; I am a continual reminder of that in my role as disability spokesperson for my group here.
I am really pleased to be able to say that 93% of Scottish pupils who left school last year had gone on to a positive destination, including work, training or further study, nine months later. Many of those pupils go on to local colleges; in fact, many attend local colleges while they are still at school, doing things such as foundation apprenticeships, which are a really good start for people who are not quite so academic. When I did my teaching qualification in further education, many years ago in the 1990s—that is how long ago it was—I did a study of how we deal with academic and vocational education, comparing Scotland and Germany.
Marion Fellows
I am going to leave it there, because I see the hon. Member for Waveney nodding vociferously, but in Germany, for example, vocational education has parity of esteem with academic education; no part of the UK has managed that yet. It is important for all of us that that parity of esteem should become a reality before too long.
It would be remiss of me not to talk about widening access as part of Colleges Week. When I was at West Lothian College—there’s a name check—I taught disabled students and students who came from very deprived backgrounds. To give them an opportunity was a privilege because many of them had been told at school, “Sit at the back of the class. You’re not going to go to university so just sit there and don’t make a noise so we can teach these really bright people at the front.” They arrived in college and if I handed out a piece of work they would say, “I cannae dae that.” That was their first reaction and, because they had been so held back at school, for six months of any course we had to say to them, “Yes, you are able”. At college, they blossomed. Again, it is a privilege to watch students doing that.
I may be straying far too much into my recent history, so I will move on and talk about my local college, New College Lanarkshire. It has six campuses, although I hasten to add that the best—certainly the largest—is in Motherwell in my constituency, right on the edge of where the Ravenscraig steelworks used to be. It is a large college and has a wide variety of courses, with everything from a national qualification in hospitality to a BA in music and musical theatre.
Some hon. Members may have heard of Lewis Capaldi, who is a graduate of New College Lanarkshire and recently went back to Motherwell to talk to people doing music courses there. I, too, had the privilege of talking to them one day, reminiscing about when I first heard the Beatles; I was talking to one student and was absolutely surprised to find the whole area had stopped what they were doing to listen to this historical monument talking about the ’60s. The students are always winners and big contestants in the WorldSkills UK competition—indeed, last year, the Motherwell campus hosted the event. I take the opportunity to thank everyone this year who is going forward.
It would be remiss of me not to talk about the people who work in colleges. Everyone involved in colleges in my experience has been glad to work there and be part of the journey made by students. I have already declared that I am a former FE lecturer, but I do not know a single FE lecturer who does not go over and above to help their students achieve the best they possibly can.
I am pleased to have spoken in the debate. There are some issues that the Minister could take forward in terms of the differences in colleges in Scotland. I am always going to stand up here, when I can and when it is true, to say that we do things better in Scotland. We certainly get that articulation route better and we have a slightly more positive attitude towards vocational qualifications and their worth to the economy. If there is a large job loss at a large company, the Scottish Government call on local colleges to upskill and help those folk get jobs, perhaps in another industry. That is why lifelong learning is so important.
Helen Hayes (Dulwich and West Norwood) (Lab)
It is a great pleasure to see you in the Chair, Mrs Murray. I congratulate the hon. Member for Waveney (Peter Aldous) on securing the debate. He has a long track record of advocacy for the further education and skills sector, and he resolutely champions the cause of FE, often in a difficult environment, with great commitment.
I want to take this opportunity to apologise on behalf of my hon. Friend the Member for Chesterfield (Mr Perkins), who was due to respond to the debate but is unfortunately unwell today. I know how disappointed my hon. Friend is to miss this important opportunity to speak up for the sector and outline Labour’s approach, but he feared that the entire room would end up with his very heavy cold if he were to turn up. However, I am delighted to have the opportunity afforded by my hon. Friend’s absence to celebrate the amazing work of colleges and I pay tribute to Lambeth College, Southwark College and Morley College, all of which provide a wealth of opportunities to learners from my constituency.
As has been said, last week was Love Our Colleges Week. Every one of us has an FE college serving our local areas, and they are incredibly important institutions, which Labour wants to see far better supported and utilised. We are hugely grateful to the Association of Colleges for all the work that it does all year round, and its Love Our Colleges Week celebrations continue to get better and better each year.
I thank everybody who has contributed to the debate. The hon. Member for Waveney clearly set out the breadth of provision in colleges across the country, from post-16 qualifications to higher education, and the vital role that colleges have in building the skills that our economy needs for growth. My right hon. Friend the Member for Exeter (Mr Bradshaw) talked about the excellent work of Exeter College and the impact that it has on the economy of Exeter and the wider Devon area. I should also say that Exeter College has been fortunate to have my right hon. Friend as its champion for the past 25 years.
The hon. Member for West Worcestershire (Harriett Baldwin) spoke of the terrible situation facing Malvern Hills College, and I wish her every success with her campaign to ensure that learners in Malvern and her wider constituency have access to the important opportunities that the college previously provided. The hon. Member for Motherwell and Wishaw (Marion Fellows) spoke compellingly of her experience of teaching in further education colleges and the role that colleges play in helping women returners. That was certainly the experience of my mother, who was able to gain her GCSEs and A-levels, and ultimately to graduate as an occupational therapist, in exactly the same years that I did those same qualifications, thanks to the provision that a local college provided in her place of work, which was our local hospital at the time. The hon. Lady also talked about the role that colleges play in retraining workers who have faced redundancy, which is important work.
Further education colleges perform amazing work across their communities. Often colleges are the most visible places in a town or city, and people go there if they want to learn, retrain or improve their skills. Colleges are the brokers of second chances—the repair shop that gets so many people on the path to a better future. They literally change the lives and prospects of learners in every community on every single day of the week, and the funding cuts that they have experienced over 12 years has been a national act of destruction. After another tough year for our colleges, the theme of Colleges Week—staff, students and skills—really says it all, because colleges are all about people, with learners and staff at their centre.
The greatest advocates for our colleges are the learners themselves. Regardless of whether they are heading towards university or the workplace, or returning to the labour market, learners speak volumes for the value of our FE colleges. The learners in our colleges are inspirational. Some have had poor experiences in formal education, others want to retrain and change career, and some simply want to pursue a vocational path that academia just cannot offer.
The staff in our colleges never fail to impress with their dedication, hard work and love of the work they do. They are all too aware of the role that they play in their local area to support learners to get on in life, to increase in confidence and to achieve their goals. Just this month, Labour’s shadow FE and HE Ministers, my hon. Friends the Members for Chesterfield and for Warwick and Leamington (Matt Western), visited West Notts College and Nottingham Trent University to learn more about the exciting new collaborations between further and higher education institutions and how they can offer an holistic education experience to learners. Labour sees collaboration and working together as the right approach for the sector after years of market forces being allowed to dictate the direction. Neither FE nor HE should be placed as more important than the other. A Labour Government will facilitate partnerships that draw on the strengths of both sectors to improve learning opportunities in every community in the country.
Sadly, as we celebrate Colleges Week and the work of colleges, many institutions still face uncertainty about rising energy prices. It is vital that colleges are able to plan for the future, and I urge the Government to end the uncertainty with regard to spiralling energy costs.
Another issue that has faced our colleges this year has been the Government’s obsession with axing BTECs and stripping away level 2 and level 3 qualifications. It would be helpful to get an early steer from the new Government as to what their approach is to the question of level 3 qualifications, because the new Secretary of State for Education was pretty critical of BTECs when she held the skills brief.
Labour has been proud to back the Protect Student Choice campaign, which saw an impressive collaboration between the FE and skills sector, businesses, student groups, and others too numerous to mention, in their attempts to salvage BTECs, which are held in high regard by employers. We welcomed the Government’s U-turn on level 3 BTECs and would be grateful to know today what the approach of this Government will be. We also share the concerns of many in the sector regarding the axing of valuable level 2 courses. We would be glad to know whether that policy will be reviewed by the new Minister.
While we celebrate the achievements of colleges and their staff and learners during this debate, we should acknowledge that the best approach for the further education and skills sector is collaboration and proper funding, with a well resourced further education estate working hand in hand with employers, learners, higher education institutions and devolved authorities in order to deliver world-class skills. I hope that the new team at the Department for Education heed this call. I thank all hon. Members for their interest in this sector, and I thank every single person working in our colleges for the life-changing work that they do.
The Parliamentary Under-Secretary of State for Education (Andrea Jenkyns)
It is, as always, a pleasure to serve under your chairmanship, Mrs Murray. I start by congratulating my hon. Friend the Member for Waveney (Peter Aldous) on securing this important debate. I am well aware that further education colleges are an important part of education in his constituency. There are some great colleges doing some good work in his area, such as East Coast College, Suffolk New College and West Suffolk College. He mentioned our right hon. Friend the Prime Minister’s commitment to technical and vocational qualifications. I have been saying for some time that I want to see parity of esteem whereby technical and vocational qualifications are held in the same high esteem as academic qualifications, so it is music to my ears to hear our new Prime Minister talk of this. I definitely think that is the right direction and I fully support him in this.
My hon. Friend the Member for Waveney also touched on the importance of apprenticeships, as my hon. Friend the Member for Cleethorpes (Martin Vickers) did, and how important it is that they are future-proofing our economy. We are also looking at working with emerging industries to ensure that we can future-proof our economy. This is certainly something that I have been working on. My hon. Friend the Member for Waveney mentioned how colleges reach across all sections of society; I think every Member in this room agrees with that. They really reach out to the hard-to-reach places.
I thought that, before beginning my main speech, I would just touch on some of the things that hon. Members brought up. The right hon. Member for Exeter (Mr Bradshaw) proudly highlighted the excellent work of his local college. I am also pleased to hear how he is championing T-levels. I know his principal, John Laramy, is a strong advocate for T-levels, so please pass on my regards. The right hon. Member for Exeter discussed the challenges of space, which I know from some of the colleges in our local areas can be a challenge. I will happily meet with the right hon. Member and his college principal to look at options. As your principal is an advocate for T-levels, they have already received £2.5 million, which is half the cost of refurbishment. The great news is that they are successful in securing the approval for wave 4 of T-levels; that is testament to the great work that they are doing in that area.
I have to say to my hon. Friend the Member for West Worcestershire (Harriett Baldwin): you have been an amazing advocate for your college. When I got this position three months ago, yours was one of the first letters I received. I want to pay tribute to the great work that you do in championing this. Obviously, if legal wranglings are going on I cannot comment on that, but I am happy to meet my hon. Friend and stakeholders to discuss things further in person. I also pay tribute to my hon. Friend for the amazing work that you do as chair of the APPG—
Mrs Sheryll Murray (in the Chair)
Order. The Minister is speaking through the Chair. Just a gentle reminder.
Andrea Jenkyns
Thank you, Mrs Murray.
I thank my hon. Friend the Member for West Worcestershire for the great work she does on the APPG on global education. I also thank the hon. Member for Motherwell and Wishaw (Marion Fellows) for the great work she has done in the sector. My sister worked in FE for quite a number of years and I know the challenges, but at the same time I know how you pull out all the stops for your students. Thank you for the work that you do.
Mrs Sheryll Murray (in the Chair)
Order. The Minister really should not be referring to me.
Andrea Jenkyns
Sorry. I thank the hon. Member for Motherwell and Wishaw for discussing how important it is for us to build up strong relationships with our devolved nations. I will work on doing that with my counterparts. It was wonderful to hear the story of how FE has helped one of the hon. Member’s constituents. On T-level results day this summer, I went to a college in the north-west. It was amazing—I wish I could bottle that enthusiasm and spread it across the whole country. Students told me how the T-level and being at college actually changed their lives. That shows the great stuff that colleges do.
Colleges do fantastic work up and down the country, every single day. I have already mentioned some of the colleges I have visited. Darlington College had a fabulous robotics department; Leeds College had engineering and construction. They are amazing learning environments enabling students to flourish, get on in life and land the jobs they have always dreamed of.
FE colleges have a role like no other education provider; they reach parts that other education providers cannot reach. They deliver the skills a nation needs to support growth. That could be at level 1 or level 7. They support those who need a second chance and those who need to reskill and retrain. They support those who need higher-level technical skills, and they work with schools, other providers, universities and employers. They are a jack of all trades, and, importantly, also masters of them all.
All that is happening in colleges up and down our country, helping to level up the nation and support social mobility. That is why I see colleges as engines of social mobility, encouraging students to reach beyond what they thought was possible and smash expectations. Colleges focus on what can be achieved by every student who comes through the doors. As a former BTEC girl, I get that. I will touch briefly on what the hon. Member for Dulwich and West Norwood (Helen Hayes) said about BTECs. We need to get on the record that we are not doing away with BTECs; we are reforming the whole landscape to ensure that every qualification that anybody takes leads to good outcomes for the students. That is so important; outcome is everything for students because they invest so much time in their education.
Helen Hayes
Can I get some clarity from the Minister on her plans for level 2 and 3 BTECs?
Andrea Jenkyns
I will cover those points later in my speech.
My BTEC experience—I studied for a BTEC national in business and finance—helped me on my way; importantly, I gained transferable skills. I fully recognise that others like me—and indeed not like me, which is a real beauty of the FE sector—will benefit from the provision that colleges deliver, as they offer so much in our communities, to our students and to our economy.
With the recognition of the value and worth of colleges comes the need to ensure that they are properly funded, which is why throughout this Parliament we have sought to substantially increase investment in post-16 education. We are investing: £3.8 billion more in FE and skills over this Parliament, including an extra £1.6 billion for 16-to-19 education in 2024-25; an extra £500 million for T-levels, when they are fully rolled out; £1.34 billion in adult education and skills through the adult education budget in 2022-23; and £2.5 billion over the course of the Parliament for the national skills fund to support eligible adults to upskill and reskill. We are also increasing apprenticeship funding to £2.7 billion by 2024-25.
We are also investing in facilities, as I mentioned earlier, with £2.8 billion in capital investment to improve the college estates, and over £400 million to ensure that they have the facilities and equipment needed for T-levels. We have big ambitions for colleges and the whole further education sector, but we cannot shy away from the challenges, which I know some hon. Members have mentioned.
Rising costs and the energy crisis are hitting everyone. Colleges are certainly no exception. The investments that I have outlined will help to support the sector to deliver on its ambitions against this backdrop. The energy relief scheme that the Government announced only last month will be a much needed help for colleges. We are working continually with the sector, and I have asked colleges to let us know about their cost pressures, so we can consider that in determining the next steps. I will listen carefully in order to fully understand the challenges and opportunities that the sector faces, and to understand the challenges that colleges face. We ask a lot of them, but we know that they can deliver what learners, businesses and the country needs. The whole nation needs to be thankful for what colleges do.
Regarding skills reforms, colleges play an important role in our ambition to develop one of the best technical education systems in the world. I am pleased to hear that the Opposition are on the same page as us. We value the importance of technical education, so it is great that we are in government and delivering on this. We are investing in the skills system so that colleges have the means and support to offer learners the chance to retrain, upskill and reskill anywhere in the country, so that they can get good jobs wherever they live.
Since the publication of the “Skills for jobs” White Paper in 2021, we have been working closely with colleges to improve courses and qualifications to ensure we are focused on giving people the skills they need to get into great jobs. Colleges have been pivotal in the delivery of new, high-quality provision, and we thank them for all their hard work these past few years in rolling out this significant reform programme.
Successive reviews, including the Wolf review and the Sainsbury review, have found that the current qualifications system is overly complex and does not serve students or employers well. This is why we have undertaken a series of reviews of academic and technical qualifications at level 3, level 2 and below. As I said earlier, this is about outcomes for students. The reviews will ensure that every funded qualification has a clear purpose, is high-quality and will lead to good outcomes for students. We have already removed funding approval for over 5,000 qualifications that have low, or no, publicly funded enrolments at level 3. That is the right move. Although we want momentum, we want to introduce these reforms at a manageable pace, given the extent of change in the wider qualification landscape, including at level 3.
Let me turn to higher level technical education. Many colleges are already delivering excellent higher technical education, yet uptake of these courses is low compared to other levels of study internationally and previous figures in England, despite strong employer demand for higher technical skills. We are therefore delivering supply and demand-style reforms to grow uptake of high-quality higher technical education. Our reforms are focused on quality, to lay foundations for the long-term sustainable growth of higher technical qualifications.
My hon. Friend the Member for Waveney mentioned local skills improvement plans. Employer representative bodies have been appointed to lead on the development of local skills improvement plans in all areas of the country. That includes the Norfolk chamber of commerce, which is leading on the LSIPs across Norfolk and Suffolk, including in my hon. Friend’s constituency.
We have moved quickly since launching LSIPs in the “Skills for jobs” White Paper in January 2021. We piloted the plans and the development fund to see what worked well, legislated to put LSIPs on a statutory footing, and ran competitions to find the strongest employer bodies to lead on developing each employer-led plan. LSIPs place employers at the heart of our local skills, facilitating more dynamic working arrangements between employers, colleges and other training providers. Together with the strategic development fund, which supports providers to make changes to their curriculum, LSIPs make technical education more responsive to employers’ needs.
I know that the sector is facing challenges with the recruitment and retention of teachers; that is one of the main things that colleges around the country tell me. I recognise that great teachers are fundamental to the success of our skills system, which is why our “Skills for jobs” White Paper sets out our continuing support for the FE sector to recruit and train great teachers. We will support the sector through the national recruitment campaign programmes to recruit industry professionals into FE teaching roles, and upskill FE teachers to deliver new T-levels by improving the quality of FE initial teacher training education.
Let me turn to the Office for National Statistics reclassification. I appreciate that there are some concerns in the sector about this work, but we are continuing to work closely with the sector, and will provide information and guidance for providers in the event of a reclassification. We will ensure that any changes are managed smoothly, and that all in the sector are kept fully up to date at all stages so that providers can continue to deliver the best provision for learners. It is important to recognise that this is the moment that the FE sector remains classified as part of the private sector, and colleges should continue to operate as usual.
Most providers are doing a brilliant job of transforming the lives of people in their community, but our funding system does not always help them to do so. We want to change this and ensure that the system actively supports FE providers to work collaboratively with local providers, employers and other key stakeholders. Our reforms to funding and accountability for colleges will help us to ensure that colleges are better supported to focus on helping their students into good jobs. We have reduced the complexity of funding so that colleges can focus on their core role of education and training, and define clearer roles and responsibilities for the key players in the systems.
We want to build a world-class further education system that delivers for the whole nation. A key part of this is ensuring that colleges are fit for the future, with better facilities and great buildings. That is why, through the FE capital transformation programme, we are investing £1.5 billion over six years between 2020 and 2026 to upgrade and transform the FE college estate.
I am particularly proud of our skills bootcamps, and I pay tribute to colleges for the way in which they have embraced them, as one of the newest programmes. I visited a skills bootcamp on heavy goods vehicle driving, and I got to drive one of the big trucks myself. I saw a few people looking scared when I got behind the wheel, but I managed not to crash it, thankfully; it was amazing. I met a young chap with severe mental health problems, who was a real champion for a men’s mental health charity that helps with suicide prevention. He said that retraining through the skills bootcamp gave him a new lease of life.
Skills bootcamps have the potential to transform the skills landscape by helping local regions and employers to fill in-demand vacancies, and are an important block in the foundations of our skills reforms. I am therefore delighted that colleges are playing an integral part in supporting their delivery in local areas. They are helping to fulfil the aims of the programme by providing opportunities to adults and plugging the skills gaps. Funding for skills bootcamps from the last spending review will enable us to continue to grow that offer significantly with support from colleges. That will help tens of thousands of adults across the country to gain new skills.
We touched briefly on T-levels. We got off to a great start: our first cohort of T-levels achieved an impressive overall rate of 92.2%. I am a real advocate of them, because they are great for social mobility. Middle-class families can get work experience, internships and so on through their connections, but those from disadvantaged areas find it much more difficult to get work experience. It is excellent for young students to get that on their CV, as it helps them to climb the ladder and go on to a great career.
It is clear that the great work of providers such as colleges is setting students up for successful careers and equipping them with the skills the country needs. The numbers of T-level providers and students are increasing quickly, and we are confident that that will continue. In 2021 alone, 5,450 people took up T-levels. Students tell us that they favour these courses, especially when they have industry placements.
I thank my hon. Friend the Member for Waveney for securing this debate, and for supporting and promoting the sector. I also thank other Members for their equally valuable input. The debate has made it clear that FE colleges are held in high regard throughout the land. The Government and I believe colleges are important, and that is backed up by serious investment. This debate has not changed my position; I am even more convinced of it after hearing the great things that hon. Members have said about the FE sector.
I was impressed and moved by the points that hon. Members made about the colleges in their constituencies and the great work that their constituents do. I have already said that the Government value the importance, impact and value of the FE sector, and our policies and investment back that up. I am honoured to be the Minister with responsibility for further education colleges. Hon. Members can rest assured that I will continue to be their champion.
Peter Aldous
We have had a very good debate. Perhaps it would have been greater if more Members were here, but we have the graveyard slot on a Thursday afternoon.
I want to highlight some of the issues that Members raised. The right hon. Member for Exeter (Mr Bradshaw) and my hon. Friend the Member for West Worcestershire (Harriett Baldwin) spoke about the good and bad that colleges can do. It is clear that Exeter is a long way advanced on a path that I hope my constituency goes down too. The right hon. Member for Exeter and I both represent coastal communities, and coastal communities have real challenges right through the education system. In Exeter, the college has come together with a very high-quality higher education institution and has worked with the primary and secondary schools to raise standards across the board and create a centre for excellence. We can all learn from that.
Then we heard about the—dare I say it?—tragedy of what is happening in the Malvern Hills. When it comes to regeneration, levelling up and ensuring that the whole country can participate in the proceeds of growth, there is a hole in the heart of the Malvern Hills, because they will not have that opportunity.
We all talk about levelling up and want to show how our particular constituencies can benefit. We probably all—I am the worst example of this—want shiny new edifices. We want roads, railways and bridges—I have a great bridge coming—and we need to build them as a catalyst for growth, but ultimately it is the investment in flesh and blood, rather than concrete and steel, that will ensure meaningful and long-term growth. That is what colleges have to offer. All 650 MPs have a college in or within striking distance of their constituency, and colleges will be the engine of regeneration. The Government should be commended for bringing in reforms and recognising the importance of the sector, but they need to take the sector with them and work with it. There is sometimes an anxiety about the speed of travel.
The debate on the Skills and Post-16 Education Act, which took place across both Chambers in the last Session, was a good one. My slight regret is that it was a real opportunity to make a landmark Act and we did not quite grasp that. Perhaps some of the amendments that were tabled in the other place, which probably had that intention in mind, should have been taken on board. LSIPs have enormous potential and, as the Minister said, put employers at the heart of these reforms. However, if the employer, who is in the driving seat, kicks out the other partners—the colleges, universities, local enterprise partnerships, mayors or councils—that car will quickly go off the cliff, so they need to be collegiate with colleges when playing their role. In my own area in Norfolk and Suffolk, that is indeed what is happening.
Staffing is a challenge. Look at what is happening in East Anglia with the opportunities in offshore wind and in nuclear at Sizewell. It is a real challenge to getting teachers and trainers with skills in fabrication and the other expertise we need. The Government must focus on that and employers must also play their role.
I will finish on the matter of funding. As a Conservative, we probably overlooked the sector for much of the past decade. In 2021, we woke up to that, and the spending review was largely positive as far as FE is concerned, but it is not the end of the journey; it is the very beginning.
In the next 10 days, some important decisions will be made. The Government will have to make tough choices, but they should be very cautious about making cuts to the sector. It seems like a long time ago now, but we had that growth plan in September. We all want growth, but it needs to be sustained and its proceeds available for everyone to participate in. In my constituency, very few people earn in excess of £150,000, but we want everyone to be able to participate in the proceeds of growth, and investing in our FE colleges enables us to do that and enhances social mobility.
When we achieve growth, it should not just be a quick boom to coincide with the electoral cycle, followed by a bust. It should be sustained and gradual growth that everyone can participate in. That is the role that colleges can play. I hope that today we have made an important contribution to ensuring that that can happen.
Question put and agreed to.
Resolved,
That this House has considered Colleges Week 2022.
World Menopause Day
(2 years ago)
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Carolyn Harris (Swansea East) (Lab)
I beg to move,
That this House has considered World Menopause Day.
It is a pleasure to serve under your chairmanship, Mr Hollobone. I thank the Backbench Business Committee for granting time for this important debate. I am delighted to co-sponsor it with the right hon. Member for Romsey and Southampton North (Caroline Nokes), who shares my passion and determination to improve access to support and treatment for those experiencing symptoms of the menopause.
Anyone in or around Parliament last week might have noticed a buzz of activity. The reason, obviously, was that last Tuesday was World Menopause Day. It was an honour to welcome a group of women who have been instrumental in campaigning for change, from grassroots campaigners to clinicians and celebrities who are using their platform to amplify the message. The day ended with a rally in Old Palace Yard, almost 12 months on from our last Westminster menopause rally. Last year, I stood among jubilant women in Parliament Square. We were celebrating the fact that the Government had listened and committed to dramatically reducing the cost of NHS prescriptions for hormone replacement therapy in England, which would bring them somewhere near the free prescriptions in Wales, Scotland and Northern Ireland. They also committed to setting up a taskforce to look at other barriers women face.
This year, many of the same women were back again. They were as determined as they were last year. They were loud—possibly a little louder than last year. But they were a little less jubilant, a little more sceptical and far less confident in the Government’s commitment to the promises that they made in October 2021. However, they have not given up.
At the rally, Menopause Mandate launched a wonderful book, “It’s Beyond a Joke”, a collection of real lived experience stories from women. Some are graphic, some are funny, but some will break your heart. Every one is an honest account of a woman’s personal menopause journey, and every one is different, because no two women experience the same menopause. There are stories of misdiagnosis, insufficient workplace support and HRT shortages. There are stories from women who are struggling to afford the cost of the menopause, and from women who are hitting brick wall after brick wall when they try to access support. Thankfully, there are stories from women who faced some dreadful experiences but came out the other side—stronger, happier and ready to be their wonderful selves all over again.
Dr Lisa Cameron (East Kilbride, Strathaven and Lesmahagow) (SNP)
I thank the hon. Lady for bringing this vital debate to Parliament. Her speech is a wonderful contribution on what so many people have gone through. Does she agree that menopause is not just a physical condition or response in the body, but something with a mental health and wellbeing impact? People need access to specialist services and clinicians, so that their psychosocial needs can be met in a holistic way.
Carolyn Harris
I certainly agree with the hon. Lady. I myself spent eight years on antidepressants, believing that I had mental health problems, only to discover that I was actually menopausal. I can assure everyone that that was a relief.
I urge the Minister, his colleagues and any Member who does not have a copy—copies are available in my office—to read the book, and to join the campaign for change and for better access to menopause care. As I said, it has been almost a year since the first Westminster menopause rally, which followed the introduction of my private Member’s Bill, the Menopause (Support and Services) Bill.
Since then, we have seen a Government in chaos. There have been three different Health Secretaries, but now one has returned. An HRT tsar has come and gone within a few short months, leaving merely a list of recommendations. The HRT stock crisis rumbles on, months after the Department of Health and Social Care promised that it would be resolved. We still await the promised annual prepayment certificate for HRT prescriptions in England. As families up and down the country struggle with the costs of fuel, food and energy continuing to rise at an alarming rate, the prepayment certificate is more important than ever. Choices are being made on where to cut back on household expenses and on which luxuries can go. Menopause is not a choice and HRT is not a luxury but, for many women, the monthly cost of their prescriptions will be one of the casualties of family finance cutbacks. It is therefore vital that the promised prepayment certificate is implemented as soon as possible—women have already waited a year. The latest date we were advised for its introduction was April 2023. I would be grateful if we could have a guarantee from the Minister today that this will not slip any further.
Around the same time as my private Member’s Bill on menopause, the all-party parliamentary group on menopause, which I chair, launched its inquiry into the impact of the menopause. Earlier this month we published our latest report, which highlighted a number of areas where urgent change is vitally needed, including a call for better training for medical professionals. Stories from “It’s Beyond a Joke” show just how much that is needed. One woman says:
“The GP doesn’t want to ‘dabble’ in drugs with me”.
Another writes:
“The GP had no idea…Despite me telling him how much better I felt on HRT, it seemed that he was only concerned with getting me to stop taking it as soon as possible”.
A third shares:
“I spoke to my female GP. Her response when I mentioned the menopause was ‘Well you’re about the right age’. She prescribed antidepressants”.
Evidence taken during the APPG inquiry saw the same pattern of misdiagnosis, ongoing symptoms and repeated appointments with GPs. I am not blaming GPs. At most, they will have had only a few hours’ training on the menopause during medical school, and some will have had none at all. I am pleased that the women’s health strategy commits to changing that, but it really does not go far enough. The women who are suffering now cannot wait seven years for current medical students to enter practice. We need a programme in place to upskill those who are practising and prescribing to support women today and ensure that everyone who needs it has access to accurate and comprehensive information and treatment.
We also need the Government to make resources available to the health service to allow it to provide this training and support to help it to improve its menopause service. Adding menopause to the quality and outcomes framework would also help. Incentivising doctors to improve their knowledge of menopausal symptoms and treatment options would undoubtedly increase levels of diagnosis and, ultimately, benefit patients.
The APPG report also recommends that all women be offered a specific menopause check-up with their GP. Identifying and addressing symptoms early is vital. We know that some women will go through perimenopause and reach menopause early on. For some, this is due to medical treatment or surgical procedures, while for others it is due to a natural decline in their hormones. For a high percentage of women, an appointment in their 40s to discuss symptoms and treatment could be life-changing. Early detection saves women not only months and possibly years of unnecessary pain and anguish, but careers, relationships and lives—it is no coincidence that the suicide rate among women increases by 16% between the ages of 45 and 55.
We also need to look at the postcode lottery that women face in accessing HRT. The stark divide between those who can afford to see a private menopause specialist and those who cannot, coupled with the different products offered as primary treatment options in different parts of the country, results in women from lower socioeconomic communities being far less likely to be able to access the best care. Evidence taken during the APPG inquiry made a clear case for the need for a national formulary, which would allow prescribers across the country to offer their patients a choice of all available HRT products.
Another issue that became a key topic of both the report and the book is support in the workplace. A report published earlier this year by the Fawcett Society found that, shockingly, one in 10 women is leaving the workplace due to a lack of support, with thousands of others reducing hours and avoiding promotion. This trend was echoed in the evidence sessions during the APPG’s inquiry and the stories submitted to the Menopause Mandate book. One woman said:
“I have had to recently step down from my role at work as I’m still not able to perform at the level needed…I tried to keep my chin up and work through, but this failed.”
Another wrote:
“I had to retire early, aged 59, as I simply couldn’t cope anymore. So, I lived in poverty for four years. I had so little money I bought no new underwear until I got my pension. I even stole toilet paper from cafes to make ends meet.”
Another woman said:
“I was dismissed from my job because of my debilitating symptoms…I was told by my employer that I was ‘fabricating an illness’. According to them, I had made it into work and looked fine.”
She was told that there was nothing wrong with her.
Such stories are devastating and, sadly, far too common. Thankfully, we are seeing change, and employers are gradually realising that they need to do more. Just two weeks ago, I hosted an event alongside Swansea City football club for businesses in Swansea to learn more about what their staff are experiencing and what employers can do to help. I was delighted by the turnout and was particularly encouraged by the desire among employers in my city to do so much more. I would love nothing more than for Swansea to be a city that really understands and embraces the menopause, and this week I saw signs of that beginning to happen. I went to watch the football on Sunday—the Swansea-Cardiff derby—and I was astounded by the number of men who came up to me, congratulated me on the work I am doing on the menopause, and asked for selfies to show their wives, so that their wives would be proud that they had spoken to the menopause MP. I hope that translates into votes.
By contrast, I heard of a woman who had gone to see her GP for some help for her symptoms. She was told by her GP, “That Carolyn Harris has a lot to answer for.” Well, perhaps I do, but is it really too much to ask that those who are suffering have access to the best possible care and treatment, and that menopausal women across society are given the attention and respect that they deserve in medical settings, in families and in the workplace? Currently, only a quarter of businesses have menopause support policies in place, but by making simple adjustments, employees will feel valued and, ultimately, businesses will retain loyal and experienced members of staff.
We really are just at that start, and I hope that the Government will sit up and listen and prioritise this area of women’s health. Progress is slowly being made, and the conversations taking place in the media and across communities are wonderful to see, because the more we talk, the more we learn. But it is not enough on its own. Support remains woefully inadequate, which, for 51% of the population, is really not good enough.
Twelve months ago, Government Ministers stood at the Dispatch Box and promised that change was coming. Twelve months ago, women celebrated triumphantly in Parliament Square. Twelve months ago, we all felt that our voices were finally being heard. Twelve months on, our economy is very fragile, families are struggling and menopausal women feel that they have been let down. We cannot keep waiting for the Government to fulfil the promises they have made.
Some colleagues in this Chamber will have been lobbied by their constituents to attend today’s debate. Many will have posted menopause-related content, which I know will have been well received by their constituents, because the menopause revolution is marching on. We are not going away. We are not going to stop asking for what is needed, and we will not be silent. We are not asking for special treatment, and we are not asking to be treated differently. We just want the resource, the respect and the support for women to experience the normality that the menopause can all too often rob them of.
Mr Philip Hollobone (in the Chair)
The debate can last until 4.30 pm. I am obliged to call the Front Benchers at no later than 3.57 pm, and the guideline limits are 10 minutes for the Scottish National party, 10 minutes for His Majesty’s Opposition, and 10 minutes for the Minister. Then, Carolyn Harris will have three minutes to sum up the debate at the end. It is Back-Bench time until 3.57 pm and eight Members wish to contribute. There is a strict four-minute limit and I strongly discourage speakers from accepting interventions, because if you do, it means that somebody will drop off the list. If you keep it to four minutes, everybody will get in.
Selaine Saxby (North Devon) (Con)
It is a pleasure to serve under your chairmanship, Mr Hollobone. I offer my congratulations to the hon. Member for Swansea East (Carolyn Harris) and my right hon. Friend the Member for Romsey and Southampton North (Caroline Nokes) on securing this important debate and on giving us the opportunity to speak out and help raise awareness further.
I wanted to speak today to thank the hon. Member for Swansea East for her tireless work on raising awareness, improving education and increasing the availability of HRT to women across the country. I have to confess that I have learned more about the menopause since becoming an MP than in the previous half a century. I also want to thank the previous Health Ministers who have delivered the women’s health strategy, included the menopause in schools’ sexual health and relationships education and ensured it is included more fully in healthcare professionals’ training.
The Fawcett Society reports that one in 10 women has left a job due to menopause symptoms. At a time of such huge job vacancies across the country, I am sure the Minister, given his former roles, will agree that anything that can be done to facilitate more women feeling able to continue in their jobs and careers is vital. The vast majority of women report no employer support, no policies, no awareness and no training. I hope that by raising the menopause in the House again this afternoon, more women and their employers will think about what more can be done.
HRT is increasingly available more widely and I urge all women of that certain age to speak with their doctors about whether HRT may help with their symptoms, and to ensure they get their full year’s supply on that single prescription. Ladies, let us take back control of this time in our lives. Go and see your GP and ask the question. Speak to your friends and support each other, as half of us of that certain age are anxious and losing confidence. We can help each other. Indeed, these debates are highly therapeutic for all of us to recognise that the brain fog is not quite a senior moment yet.
Rachel Hopkins (Luton South) (Lab)
It is a pleasure to serve under your chairship, Mr Hollobone. I thank my hon. Friend the Member for Swansea East (Carolyn Harris) for her continued work in this area, together with the right hon. Member for Romsey and Southampton North (Caroline Nokes). I also thank the Backbench Business Committee for agreeing to this debate.
Approximately 13 million women in the UK are peri or postmenopausal. Ten per cent of women over 50 quit jobs due to menopause symptoms. Ninety per cent. of women get menopause symptoms, yet women get inadequate support due to the taboo around menopause in work, society and home life, as well as medically. The cost of HRT creates socioeconomic divides in access to support for the menopause, and I reiterate the point made so well about the fact that the Government’s commitment to securing the cost of HRT will not come into place until April 2023. Given the current cost of living crisis, that has a real impact on working-class women in my constituency of Luton South, particularly as the menopause is not a choice.
Similarly to the hon. Member for North Devon (Selaine Saxby), I want to focus on menopause in the workplace. As our workforce age year on year, studies show that around 75% to 85% of menopausal women are in work. It is hugely important to tackle attitudes and policies relating to the menopause in the workplace, to ensure that women are supported and do not feel forced into leaving their positions. We have heard how nearly 1 million women leave the workplace due to menopause every year, and that just exacerbates gender inequality in the workplace and the gender pay gap. There are many employers who are still failing to consider menopause as a proper health condition and who lack supportive policies that help those going through the change.
Women who have experienced the menopause while at work have discussed their frustration at suffering from loss of concentration, brain fog, fatigue, anxiety, hot flushes, sweats or bleeding while they are at work. And the brain fog is real—I can assure the Minister of that.
Many of these symptoms of menopause are taboo, and they have a detrimental effect on women’s position and ability to advance their careers. Many women have said that they are unable to carry out their jobs to the best of their ability due to the impact of the menopause. Seventy-seven per cent. of women say that they experience one or more of its symptoms, which makes it very difficult for them. Sixty-nine per cent. experience difficulties with anxiety or depression due to menopause. Eighty-four per cent. experience trouble sleeping, and 73% experience brain fog, which I have experienced myself.
I urge the Minister to ensure that the Government update and promote guidance for employers on best practice policies on menopause at work and supportive interventions. That should include the economic justification and productivity benefits of doing so, and it should be tailored to organisations of different sizes and resources, to ensure that it is as effective as possible. What interaction has the Minister and his Department had with the TUC and trade unions on this key workplace issue regarding menopause?
Finally, I want to give a shout-out to the women who have supported me as we have all shared our menopause experiences. This is for my menopause massive: Trish, Sarah, Julie, Caz, Liz, Helena, Anne-Laure and Marie. We have all experienced different angles of the menopause and I have learned more from them than from a lot of the stuff that is out there.
Dame Andrea Leadsom (South Northamptonshire) (Con)
It is a pleasure to serve under your chairmanship today, Mr Hollobone.
I pay particular tribute to the hon. Member for Swansea East (Carolyn Harris). Not only did she share some purple hair dye with my daughter, who at the time was 17, but she persuaded my daughter, who is now 18, to ask me about the menopause, so in my household anyway, the hon. Member is quite a famous person.
I also pay tribute to my right hon. Friend the Member for Romsey and Southampton North (Caroline Nokes). I always get confused by that constituency name, because I represent South Northamptonshire, so it is somehow a real tongue-twister; I am sure she understands.
I also pay tribute to everyone here today who is now openly talking about the menopause. For me, all the way through until I started menopause—quite late, as it happened—I did not know the foggiest thing about it, literally. What is it? Nobody ever talked about the menopause, and that is extraordinary. We all chat about Viagra, and that serves a very different purpose; but the menopause, which affects 100% of women at some point in their lives, is somehow a taboo subject, particularly the consequences for women—feeling terrible, not being able to sleep and all the things that hon. Members have been talked about today.
Yet 41% of medical schools do not teach menopause as a mandatory subject. How utterly bizarre is that? It is completely strange. A study by Newson Health highlighted that 79% of women surveyed had visited their GP regarding clearly menopausal symptoms, yet only 37% were given hormone replacement therapy, and 23% were given antidepressants. In addition, women often face a wait of more than a year to get help. It is utterly ridiculous.
As Liz Earle, who is famous for her face products but is a real campaigner for helping women through the menopause, has said:
“It’s all about how to have a better second half of life, and I do believe the second half can be even better than the first.”
Hear, hear to that. Actually, in the second half of life, once the kids have grown up and you have got your life back and you are now an MP and want to get on, you actually want your hormone replacement therapy to be available on tap—don’t you, Mr Hollobone? “Yes”, I hear you say—shout, even.
I know that the Minister of State will be very sympathetic, because he really is a good listener, and while the menopause may not be his normal dinner-time conversation either, he will appreciate how important it is to all women of a certain age.
I will finish with the words of a lovely constituent who came to see me at my surgery:
“My GP encouraged me not to give up and 6 months later, after taking HRT, I’m now a new woman.”
So let us hear it for new women.
Marion Fellows (Motherwell and Wishaw) (SNP)
It is a pleasure to serve under your chairmanship, Mr Hollobone, especially in this debate. I will probably not take four minutes—that will sound strange to many folk who hear me here regularly—but I am just here as a cheerleader. I went through the menopause—I was trying to work it out, but my arithmetic is absolutely rubbish—about 30 years ago. I know it is hard to believe, but it is true. It was an early-ish menopause, and no one spoke about it. It was the Cissie and Ada time—Les Dawson and his colleague, who just mouthed “the change”.
I find it refreshing, glorious and essential that we talk about menopause. The hon. Member for Swansea East (Carolyn Harris) knows that she is my heroine, even though I got to meet Richard Gere and she did not—that has always been a bone of contention between us. I pay tribute to her and her work. I also pay tribute to the right hon. Member for Romsey and Southampton North (Caroline Nokes), with whom I served on the Education Committee. They are great role models, including for people like me.
Another of my role models is my First Minister in Scotland, Nicola Sturgeon. She recently went to a centre in Coatbridge—I may have got the location wrong—to talk to other women about the menopause. That would not have happened even five or six years ago, but it is vital for all the reasons that everyone has talked about. We have heard the statistics about working women who are going through the menopause, and about the lack of understanding from employers.
I was fortunate, because I worked in an FE college and I commanded the room. If I felt hot, the students had wide open windows. If I did not feel too great, they kind of tiptoed around me, but I did not tell them that I was suffering from the menopause. They did not really know what was going on. It is important that younger women, younger men and older men know what the menopause involves. We must not make life even more difficult for 50% of the population, who are experienced—usually highly experienced—working colleagues.
I say to colleagues here: more power to your elbow. I think you are all doing a wonderful job, and I am just sailing along on your coattails. Mr Hollobone, I think you are having an education this afternoon.
Caroline Nokes (Romsey and Southampton North) (Con)
It is a pleasure to serve under your chairmanship, Mr Hollobone. I pay tribute to the hon. Member for Swansea East (Carolyn Harris), and to my hon. Friend the Member for Lewes (Maria Caulfield), who did so much to ensure that people can get prescriptions for HRT over the counter. I also pay tribute to my hon. Friend the Member for Mid Sussex (Mims Davies), who is here but cannot speak in the debate. In her role as employment Minister, she recognises that the menopause is not simply a health issue; it also affects the economy, employment and women’s wellbeing in later life. I hesitate to use that phrase; I must declare my interest.
I will give the Minister a hard time. Back in July, the Women and Equalities Committee published our “Menopause and the workplace” report. I recognise that he is a Health Minister, but I hope he understands my disappointment that we are still waiting for a Health response to our report. This afternoon, I was sent an email apologising again for the fact that tomorrow the response to that report will be one month late, and telling me to expect the full response in the coming months. It is a very bad plan to tell a menopausal woman to wait for anything. They should not be waiting for their single prescription over 12 months, and we should not be waiting for months for the Government to come up with a response to a very sensible—I would say that—report.
What do I actually want from that response? I want to see flexible working, so I want an employment Bill. That is not the Minister’s responsibility. I want to see a consultation on whether the menopause should be a protected characteristic. That is not the Minister’s responsibility either. I am disappointed, because we should have a cross-Government response to the report.
We should see mandatory workplace policies, with the Department for Business, Energy and Industrial Strategy leading the way to provide that resource to employers, free of charge on its website, as easy as anything. Great organisations such as Henpicked already do that. I was at the Menopause Friendly employers awards last month, and it was absolutely brilliant. Lots of employers have signed up, but why is BEIS not leading the way on that? We want to see the enactment of section 14 of the Equality Act 2010. That will be lost on the Minister; he will not know what I am talking about. I urge him to talk to the Government Equalities Office and at least consider that.
I want to see menopause ambassadors Government. It was great that Maddy McTernan was appointed HRT tsar, but she has returned to vaccines now. I want confidence from the Health Minister, as I have him here today, that Dame Lesley Regan will stay in place as the women’s health ambassador and that there will be a real commitment to the women’s health strategy. I shuddered when we had an “ABCD” of priorities, because I thought, “How long does it take to get to W for women’s health?” That was from the former Health Secretary; I hope the new Health Secretary will reinvigorate the women’s health agenda, and I urge the Minister to encourage him to do so.
I would like to see the Government working with a large-scale public sector employer to trial menopause workplace leave. I hesitate to point this out to the Minister, but it seems to me that the NHS is a large-scale public sector employer with lots of women working in it, so it might be ideal. I also want to see better training for GPs, and I want to know who is supporting our GPs. It is great that the workforce in general practice have been hugely feminised over the last few decades, but those women working in the health service also need support.
I want to champion the local women doing such fantastic work, whether that is Claire Hattrick and Jo Ibbott in Hampshire, or the brilliant GP I met at the Sutton Women’s Centre, where I went to do a menopause event, who was absolutely taking the message out there: “Your menopause can be celebrated and enjoyed, but it also needs to be managed.” For my final shot to the Minister, let us have a national formulary, let us deal with HRT shortages once and for all, and let us ensure that the info is out there for women.
Gerald Jones (Merthyr Tydfil and Rhymney) (Lab)
It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate my hon. Friend the Member for Swansea East (Carolyn Harris) and the right hon. Member for Romsey and Southampton North (Caroline Nokes) on securing this debate to mark international Menopause Day, and also on their work to raise awareness of the need to be talking much more about menopause and to challenge many of the taboos that exist around this issue in women’s health. Potentially, around 51% of our population will experience menopause, so the lack of discussion absolutely needs to be challenged. I know that, in my hon. Friend the Member for Swansea East, there is no better champion to bring a focus to this issue and shine a light on the needs of women across the nation, and of course those of their families.
I absolutely do not profess to be as aware as many others here of the issues and challenges faced by women going through the menopause, but I recognise that it is a significant issue and one that has a big impact on society, workplaces and, more importantly, women themselves. That is why it is incumbent on us all, including men, to be aware and to do everything possible to offer support, because we know that around 75% of menopausal women experience symptoms and that around one third of those suffer severe symptoms.
We have heard from hon. Members about the various studies showing that around 75% to 85% of menopausal women are in work. There is a great need to tackle attitudes and implement policies related to the menopause in the workplace, to ensure that women are supported and do not feel forced out of their jobs. It is staggering to learn that nearly 1 million women leave their workplaces due to menopause every year, and we all appreciate that that will exacerbate gender inequality in the workplace and, indeed, the gender pay gap. It is unfortunate and absolutely wrong that many employers still fail to consider menopause as the proper health condition that it is. We know, too, that there is a significant lack of supportive policies to help those going through the menopause.
Women who have experienced the menopause while working have discussed the frustration of suffering from a loss of concentration—we have heard many examples today—brain fog, fatigue, anxiety, hot flushes, sweats and bleeding while at work, along with a range of other symptoms. My awareness of the symptoms and impact of menopause was raised when I was invited—that is perhaps not the right word—by my hon. Friend the Member for Swansea East to a menopause event at the Labour conference in Brighton last year, where, among other things, I attended a session of menopause bingo. That certainly raised my awareness—yes, there are lots of symptoms.
Many will have seen the Fawcett report, “Menopause and the Workplace”, which has been referred to today. It highlighted the fact that only 22% of women and trans men disclose when they are experiencing the menopause, while half said that it made them less likely to apply for promotion and a quarter said that they would consider early retirement. These are quite depressing figures. Surely the Government must therefore co-ordinate and support an employer-led campaign to raise awareness of menopause in the workplace and help to tackle the taboo surrounding menopause and work. Of course, the most important thing is that employers recognise the need to be aware and offer support to their employees. Policy may differ, but the key thing is that employers do not ignore the issue. Sadly, that has been the case for too long with many employers.
I end by once again congratulating my hon. Friend the Member for Swansea East and the right hon. Member for Romsey and Southampton North, and thanking all those involved in the APPG for the work it does to support women and their families across the UK and to tackle the lack of awareness. The APPG’s recent report highlighted the impact of this issue, and it is incredibly welcome. The report rightly highlights the need for reform and the need for more to be done to increase awareness. I hope that the Government will listen and take action.
Danny Kruger (Devizes) (Con)
It is a pleasure to serve under your chairmanship, Mr Hollobone. I express my appreciation to the hon. Member for Swansea East (Carolyn Harris) and my right hon. Friend the Member for Romsey and Southampton North (Caroline Nokes) for securing the debate and for all the work they do in this space.
I want to speak briefly on the grounds of my chairmanship of the all-party parliamentary group for prescribed drug dependence. As the hon. Member for Swansea East says, one of the great tragedies in this space is the ignorance of GPs and their willingness to quickly diagnose depression or some other condition that requires prescription drugs, which are often misprescribed and people struggle for years to get off them. That comes at a huge human cost and at great financial cost to the NHS, and it takes a huge toll on our society. Our research for our APPG demonstrates that there are at least half a billion pounds of savings to be made to the health service if we stop misprescribing habit-forming, dependence-inducing medication.
What to do? I agree with the recommendations we have heard about, particularly those in the APPG report. I also look forward to the Government’s response to the report from the Women and Equalities Committee, which my right hon. Friend the Member for Romsey and Southampton North chairs. I am not sure about the value of expanding protected characteristics to include the menopause, but I would be interested to see what the Government say about that. I do not know that the Equality Act is the solution to every ill in our society, but it is a valid suggestion. Fundamentally, we need to treat each other better, at all levels.
I particularly recognise the imperative of improving training in primary care. GPs absolutely need to understand the symptoms of the menopause and not misdiagnose, disregard or belittle people who present with those symptoms. What we have heard is shocking. I particularly welcome the suggestion that the GP quality and outcomes framework should include the menopause and that training should be improved.
Then, of course, we have employers. As we have heard from my right hon. Friend, millions of people are suffering in their careers as a result of misunderstanding and discrimination against menopausal and perimenopausal women, and I echo the recommendation that all large employers should have proper menopause policies in place. Fundamentally, it is down to all of us to understand the menopause. Obviously, men do not experience it—I have to say, though, that brain fog is not confined to women—so it is a case of sympathy, not empathy. But our job, as men, is to understand the menopause, to help women in our lives who are experiencing it, and, whether as employers or relations, to be there for them and support them through it.
My daughter is here today, wondering what we are talking about. I will quickly mention my mother, who has been on HRT for many years. We hear all the terrible stories about the menopause, but my mother is a great success story of what HRT can do. She is a tremendous advocate for it, and I honour her for talking publicly about it.
I very much welcome what the Minister has to say. This should be a priority for the Government. I particularly welcome the emphasis that we need to see on women’s health, and I echo the point that my right hon. Friend the Member for Romsey and Southampton North made on that.
Charlotte Nichols (Warrington North) (Lab)
What a pleasure it is to serve under your chairship, Mr Hollobone. I preface my remarks by putting on record again my thanks, and the thanks of women across the country, for the steadfast campaigning work of my hon. Friend the Member for Swansea East (Carolyn Harris), who has ensured that this important topic is kept on the parliamentary agenda. She has also been such a wealth of information and advice when I need pointers for constituents who come to me with issues related to the menopause. Everything I know about the menopause and the help I have been able to give others is thanks to this woman right here. From me and from my constituents in Warrington North, thank you, Carolyn.
I would also like to thank the hon. Member for Motherwell and Wishaw (Marion Fellows) for sharing her experiences—and to ask what moisturiser she uses, as I cannot believe that those experiences were 30 years ago.
From speaking to friends, family and colleagues experiencing menopause and perimenopause, I know how transformative access to appropriate treatment can be. So many have told me that HRT has given them a new lease of life and given them back the ability to function that they thought they had lost, having struggled with brain fog and cognitive impairment. That is not a normal sign of ageing. We risk writing off thousands of women years before they have reached their peak, because of how insidious it is and how mad it makes them feel.
As the recent Fawcett Society report already mentioned shows, almost one in 10 women are leaving the workforce as a result of the menopause and a lack of support, denying their employers and our economy the benefit of their experience and making it more likely that they will experience poverty as they grow older. However, as we have heard from hon. Members in this debate and debates that we have held previously, there are certain groups that may find it harder to access appropriate support and guidance beyond the postcode lottery for GP services.
Women who start the menopause early may be less likely to be diagnosed, as watchful waiting is too often the course of action, leaving them suffering in the meantime. Women from ethnic minority communities and women of colour too often do not see themselves represented in medical literature or online campaigning; and for religious or cultural reasons, the discussions may not happen in families. I am glad that campaigners such as Menopause Mandate are making a concerted effort to improve the visibility of women of colour in their campaigning, highlighting the voices of women of colour and helping women to identify their own symptoms and experiences with those of role model campaigners. Trans people, especially those taking hormone replacement, women on contraception that disrupts or stops their menstrual cycle, or women who have had medical procedures including endometrial ablation, may be more likely to miss some of the symptoms of menopause, particularly as periods are one of the first things they will be asked about if seeking medical support, and they may not be aware of the other ways they might be affected.
Women should not have to go private to be taken seriously, to see a specialist or to have a choice of HRT products. My constituents are growing increasingly frustrated with the pace of change and with the GP backlogs under this Government that make getting an appointment harder than ever.
My hon. Friend the Member for Swansea East rightly said that what women experiencing menopause need is resource, support and respect. I hope that the Minister today will update Members and our constituents on progress that is long overdue towards those aims, and on when we might see the employment Bill, through which we can ensure that women experiencing menopause have the rights to the support they need to help them to stay in the workforce.
Jim Shannon (Strangford) (DUP)
It is a real pleasure to speak in this debate. The reason why I wanted to be here was, first, to support the hon. Member for Swansea East (Carolyn Harris), but I also commend the right hon. Member for Romsey and Southampton North (Caroline Nokes) for all that she has done. I wanted to be here because my wife went through the menopause. The two hon. Ladies will know it, but others will know it as well. It is not because I am any wiser than anybody else; it is because, from the close relationship that I have with my wife, which is pretty understandable, I perhaps appreciate more than most, from a man’s point of view, what it means for a lady to go through all those extreme circumstances.
I recognise the passion of the hon. Member for Swansea East in relation to the challenges of menopause, a word that she has put on the lips of nearly everybody in the media—on the radio and in the papers. Therefore, whenever the hon. Lady has brought these things forward, I have always been here to support her, and I wanted to do that today. I apologise, Mr Hollobone. You know where I was; we had lost 50 minutes in the main Chamber and that was the reason why I could not be here on time. However, I want to make some points very quickly.
What needs to be addressed is the lack of specialist treatment and care for menopause and the issues that can arise as a consequence. I hope that the Minister can give us some idea of the position on specialist care. That specialist care needs to be in all the hospitals that we have across the United Kingdom. I know that it applies to us in Northern Ireland, where the Minister does not have responsibility. In Northern Ireland, we have the Kingsbridge Private Hospital, which opened the first menopause clinic in Northern Ireland. It is great to have that, to have a private clinic, but provision is needed for those who cannot source treatment and care from the private clinic because they do not have the financial resources to do so. That puts the emphasis on the NHS. It is only right that access to specialised treatment and care for menopause is implemented in the NHS as well. We need to see specialist menopause treatment rolled out in all hospitals. We need to provide for women experiencing the difficulties of menopause the personally tailored treatment that they unquestionably deserve.
GPs are always the first call for women suffering from menopause. Those women deserve clarity and conclusiveness from GPs, rather than, as often happens—I say this with respect—stagnation and short answers. “We’ll get you a blood test, then we’ll offer you some HRT, or you can just grin and bear it.” Those are the offers that are made, so it is of the utmost importance that we rectify the training process for GPs to include more than a passing module on the effects of menopause and its treatment. The side effects of menopause sometimes include osteoporosis, broken bones, or aches and pains. Those are the realities for ladies, and probably for my dear wife as well.
I made this point once before in another debate, but it is important to repeat it: women are unable to work for long periods of time without suffering from the menopause. Women over 40 are the fastest-growing demographic in the workforce. That is the group we are talking about—the group who need the help—so we look to the Minister for that help, and other Departments will need to provide it as well. It is estimated that some 900,000 women in the UK have left their jobs as a result of menopausal symptoms. That is an issue that has to be addressed, maybe not by this Minister, but certainly by the Minister who has direct responsibility for it.
My last point is that the mental health of women can be shattered by the remorseless effects of menopause. There are women who are not only unable to go to work, but who struggle to maintain any rudimentary sense of a social life, unable to see their friends, do their job or enjoy themselves. That is a crushing impediment to sustainable mental health, and it needs addressing. As a man, I am very happy to ask for what every lady in this Chamber has asked for, and what other men have asked for as well, because it is only right that it should happen. We look to the Minister for answers, and we hope that we will get them.
Kirsten Oswald (East Renfrewshire) (SNP)
It is a pleasure to serve under your chairship, Mr Hollobone. I am delighted to be in the Chamber with this very fine group of women and men to speak in this debate, and I congratulate the hon. Member for Swansea East (Carolyn Harris) and the right hon. Member for Romsey and Southampton North (Caroline Nokes) on having secured it. The hon. Member for Swansea East’s opening speech was outstanding, and exemplified her approach to this issue, which—unusually for this place—is something we can all agree on. That is quite refreshing.
It is also refreshing to be in the Chamber talking about this issue. It is very slowly—far too slowly—getting better, but as the right hon. Member for South Northamptonshire (Dame Andrea Leadsom) said, we do not speak about it enough. That is what needs to change, and we in this place have a big role in pushing for that to happen. We all know what I am talking about, don’t we? My hon. Friend the Member for Motherwell and Wishaw (Marion Fellows) referred to it: that unspoken sense of “This is not quite proper to discuss”, that it is maybe wrong, or a bit unspeakable. Well, it is not. It is absolutely normal; it will affect more than half of us. Not to put too fine a point on it, I suspect that if it was the other half of us who experienced menopause, we might hear a good deal more about it, and we might see better provisions at work and in wider society.
There are some important voices out there who are doing a brilliant job of keeping the issue on the wider radar and making sure that these conversations about menopause are not unspeakable—that they do happen. We have heard about Liz Earle, and I also want to mention Davina McCall. Her work—I am very grateful to Carolyn McCall for drawing my attention to it—is really helpful in getting people talking. My hon. Friend the Member for Motherwell and Wishaw talked about Nicola Sturgeon, and I think the First Minister of Scotland discussing menopause and her own feelings about it is really powerful and important. It does not matter who you are or what your job is: menopause is something that will affect all us women.
Locally, too, I would like to mention some of the wonderful work that goes on in East Renfrewshire. My friends and colleagues Councillors Annette Ireland, Caroline Bamforth and Angela Convery are great advocates for women, and are practically supportive as well; they are the ones who champion information sharing and practical steps to support women going through the menopause. Councillor Ireland shared a great graphic from NHS Greater Glasgow and Clyde on World Menopause Day. It was really helpful—I did not know all those facts, and I think about this issue quite a lot, for personal as well as work reasons. We should know these things.
The average age for a woman to reach the menopause is 51. One in 100 women reaches menopause before the age of 40. Some 70% of women—as the hon. Member for Strangford (Jim Shannon) referenced—experience some form of mental health impact during the menopause, and 38% of partners feel helpless when it comes to supporting their other halves through the menopause, as we heard clearly just now. This one gave me the heebie-jeebies: menopause symptoms can last for 15 years. I am not sure I can cope with that. I did not know that until recently and I have not quite come to terms with it. I heard that fact, and a lot more, at the Menopause Café at The Bank in Neilston, which I went along to recently. It was absolutely brilliant. It was utterly reassuring, informative and full of smashing women having really frank conversations and supporting one another. If someone is at the point in their life when they are able to go along to something like that, please do so.
We cannot do all of this ourselves. Even those of us in this Chamber cannot do all of this ourselves, nor should we think we can. We need structures put in place to support and inform women, and create the space to talk. Women’s health issues should be a topic of conversation any and every day. The polite silence that surrounded things for far too long needs to be consigned to history. I mention the voice of the hon. Member for Strangford in that; he speaks up about those issues, and it is very helpful.
I really appreciate the work that has been done in Scotland on free period products. I mention that because, as well as appreciating the practical support that provides, we need to be comfortable talking about periods if we are going to be comfortable talking about menopause. I also appreciate the free prescriptions that we have in Scotland under our SNP Scottish Government. That is a bit of a game changer in terms of HRT provision. As the hon. Member for Swansea East said, menopause is not a choice and HRT is not a luxury. She is absolutely right. It sounded to me a wee bit like women in England are facing a menopause tax. That is really challenging in the context of the current cost of living crisis, as the hon. Member for Luton South (Rachel Hopkins) raised.
Women’s health matters here, it matters in Scotland and it matters all over the UK. In Scotland, as the first country in the UK to publish a women’s health plan last year, I think it is important that we are constantly looking at those things, as we need to be. We have got a specialist menopause service in health boards. That is important because it needs to be a subject that we are focused on.
Why does it matter? We have heard about the really challenging situations that some menopausal women face. There is a 16% increase in the suicide rate of women aged between 45 and 55; that is a really stark statistic. We do not talk about that. That is a taboo that we need to address. The silence, inability or lack of knowledge about some of those facts means that many women—most women, I guess—should know more. There is an awful lack of knowledge among women generally about what menopause can mean. My hon. Friend the Member for Motherwell and Wishaw spoke very powerfully about the silence and the unknown, and the problems they can cause. That lack of knowledge damages lives. We have heard about what that means in reality, whether that be for family life or work. We must remember that this affects more than half the population.
I welcome the Women and Equalities Committee report. The right hon. Member for Romsey and Southampton North spoke very powerfully about why it is important that we consider looking at making menopause a protected characteristic—that we look at reasonable adjustments. From my point of view, bravo to the Scottish Government for their focus on fair work. There will be another action plan shortly, focused on fair work—with focus on women and those over 50. It would be interesting to hear where the UK Government are on that.
I know it is perhaps unfair to ask this Minister, but I would like to know where he thinks the employment Bill is—I certainly cannot see it anywhere. It is really important. The employment Bill would be the appropriate vehicle to deliver a lot of the structures in relation to work and the menopause. Menopause support in the workplace will not happen by magic; it is our job here to facilitate some of that. Things like the right to flexible working from day one, for instance, might be the very thing that helps a woman who is going through menopause cope and sustain.
The graphic that I mentioned had a couple of really interesting statistics about work, which I thought were important. Nearly half of women—45%—feel that menopause symptoms have had a negative impact on their work. That should terrify us. We have heard repeatedly today that 10% of women have given up work or thought about giving up work because of their symptoms. That is a huge chunk out of the labour market. I appreciate that, despite the lack of an employment Bill—and I continue to hope one appears—there are employers out there that are doing great things on the menopause anyway. Well done to them; they will be the employers of choice, they will be the ones who retain the talent in their workforces and they are the leaders—we will all know who they are.
I appreciate that dealing with menopause in the workplace might not always be completely straightforward. Menopause is not linear, and that is before I even get into my questions about the huge gaping holes in knowledge about how menopause interacts with polycystic ovary syndrome and other medical conditions. Even at the most basic level, the symptoms, duration and physical and emotional impact are very individual and variable, but women need us in this place to get a grip on the issue, because at the moment many of them feel unable to seek support for the menopause at work. That could be the same for any one of us, or for our friends and family members. We will all know—perhaps we are—women who have experienced uncertainty, misery, confusion and symptoms of all kinds.
The hon. Member for Warrington North (Charlotte Nichols) spoke eloquently about the groups who are even more disadvantaged in all this. Some of us might sail serenely through the menopause, but it is still far too often the case that women’s troubles—I really, really hate that phrase—are not to be spoken of or dealt with. The reason that we have not done that is simply sexism. That is all there is to it. Let us decide that we are not going to accept that anymore, because this issue matters. Let us talk and share, as the hon. Member for North Devon (Selaine Saxby) said, and let us push for improvements in education and employment.
My hon. Friend the Member for Motherwell and Wishaw spoke eloquently about why younger people need to know about the menopause. We should not suddenly need to know about it when we reach middle age. Let us talk about the menopause and how we can practically improve things, because women’s health should be part of normal, everyday conversations. We should make sure that the conversations relate to our work and our families, and to people of different age groups and different backgrounds, because the menopause is absolutely normal and we need to talk about it as if it is.
Feryal Clark (Enfield North) (Lab)
It is a pleasure to serve under your chairmanship, Mr Hollobone. I pay tribute to the hon. Member for Swansea East (Carolyn Harris) and the right hon. Member for Romsey and Southampton North (Caroline Nokes) not just for securing today’s debate to mark World Menopause Day, but for being tireless champions of women. They have been pioneers and continued to make women’s voices heard at a time when, frankly, no one wanted to listen. The work that they have done already is beginning to change the lives of millions of women. On behalf of women my age, I thank them very much. I look forward to continuing to work with them and standing alongside them. I also thank all Members for their contributions to the debate.
As we have heard throughout the debate, too many women continue to suffer in silence and are afraid to break the taboo of speaking about menopause. Many have been misdiagnosed or simply ignored. It is a national scandal, and women, who make up 51% of our population, should not be made to put up with it. Having a frank and honest conversation in this House is a start, but when women cannot have frank and honest conversations with their own doctors, what hope do we have? From the consultation for the Government’s women’s health strategy, we know that 84% of women feel that their voices are not being heard when it comes to healthcare. That is simply not acceptable.
It is essential that women have confidence that the healthcare professionals treating them have the knowledge and understanding to provide quality healthcare. According to the charity Menopause Support, four in 10 British medical schools do not have menopause education on their curriculum, as we heard from the right hon. Member for South Northamptonshire (Dame Andrea Leadsom). Without changing that, we will continue with a generation of healthcare professionals who simply do not know what to do when it comes to menopause. We know the Government are trying to make headway on this issue, and I really welcome the commitment made in the women’s health strategy to improve education, particularly in primary care. I would be grateful if the Minister could clarify what discussions have been had with the General Medical Council to ensure that the proposed new medical licensing agreement makes specific reference to menopause. Furthermore, can he clarify what actions will be taken to upskill current staff, given the commitment in the women’s health strategy to lifelong learning?
We have heard today, as we have on several occasions in recent months, about the problems caused by the shortage of HRT. It should not be a luxury. It is not a “nice to have”. It is an essential part of treatment, recognised by the National Institute for Health and Care Excellence, that makes a real difference to the lives of women going through menopause.
When alarming problems with supply became apparent, it took a public outcry from women—as it often does with women’s health issues—for the Government to sit up and listen. Despite repeated warnings, nothing was done. Not only did that deepen problems in the supply chain, but it put a cost burden on many women who can ill afford it during a cost of living crisis.
Delaying changes to prescription charges meant that some women were left paying up to £200 more for HRT this year. For many, that is simply unsustainable. There have already been delays in delivering the Government’s commitment to a single annual prescription charge for HRT. Will the Minister confirm that there will be no more delays and that the commitment will be delivered in April 2023, as promised by numerous Ministers?
Issues of access are compounded for black and minority ethnic women, with 45% needing multiple GP appointments to establish they were experiencing symptoms of menopause or pre-menopause. That is a shocking statistic, which shows a system that far too often ignores women’s concerns. Given the now former Health Secretary’s decision to scrap the health inequalities White Paper, I would be grateful if the Minister would outline the specific steps being taken to address that disparity.
This issue adds to the growing pile of those the Government are just not doing enough on. We can have all the ambassadors, tsars, reviews and taskforces in the world, but they mean nothing if there is no tangible action to improve women’s lives. No more talking shops, Minister; we need action. If the Government think that the issue will go away and that women will put up and shut up, they are sorely mistaken. That is proven by today’s debate and by the voices of women in the media. Women from every party in this House, every corner of the country and every part of society are speaking up. They will not stop until their voices are heard and justice is done. I look forward to the Minister’s response to all the questions raised today.
The Minister of State, Department of Health and Social Care (Will Quince)
It is a pleasure to serve under your chairmanship, Mr Hollobone. It is great to be back and to be reappointed. I congratulate the hon. Member for Swansea East (Carolyn Harris) on securing this important debate about World Menopause Day. With reference to the comments of the hon. Member for Motherwell and Wishaw (Marion Fellows), this has been an education, certainly for me and no doubt for you, Mr Hollobone, as these debates should be.
Eddie Hughes (Walsall North) (Con)
I rise as the husband of a menopausal woman. I pay tribute to my wife Clare and to PHS Group for the support that it has given her. Does the Minister agree that all men of all ages need to understand more about the menopause so that they can provide support to colleagues and family members who are experiencing its challenges?
Will Quince
I certainly agree with that. I also want to say thank you in passing to PHS Group; it is important that employers play their part, and it is good to hear about what that organisation is doing. I did some work with it on the period product scheme in a previous role as Minister for Children and Families. We should celebrate companies that are doing the right thing by their employees.
Somebody said that the hon. Member for Swansea East—I will call her my hon. Friend—has a lot to answer for. There is no more effective campaigner in the House of Commons. I recognise the incredible work that she has done in raising awareness of the menopause, which affects millions of women across our United Kingdom. I also thank her for chairing the all-party parliamentary group, which recently published its first report, on menopause support.
It will not have escaped your notice, Mr Hollobone, that I am not my hon. Friend the Member for Sleaford and North Hykeham (Dr Johnson). I have stepped in at the last minute, and I wish her well.
The hon. Member for Swansea East said that women are more sceptical and less jubilant. Although I am not the Minister responsible for this policy area or brief, the hon. Lady knows me and knows the issues on which we have campaigned together. She knows that, in me, she has an ally at the Department of Health and Social Care. She referred to men at the football coming to get a selfie with her. I think I speak for all men in the Chamber when I say that I would be honoured to have a selfie with her. In seriousness, I was moved by the stories that she and others told of the impact of the menopause on women in the workplace. In bringing about the change that we all want to see, she has an ally in me. That change is an issue not just for the Department of Health and Social Care but for BEIS. I have heard that loud and clear.
I thank my right hon. Friend the Member for Romsey and Southampton North (Caroline Nokes) for all her work as Chair of the Women and Equalities Committee. Its recent report, “Menopause and the workplace”, to which she referred, demonstrates the significance of the topic to the House. I know that my hon. Friend the Member for Sleaford and North Hykeham has written, albeit today, to my right hon. Friend to explain that we are carefully considering the Committee’s recommendations. We will respond in due course, and I will ensure that that happens—I will chase it up today. I will also speak with BEIS and the Government Equalities Office about the issues my right hon. Friend raised.
I thank all Members who have spoken, whether on behalf of themselves or their constituents, to mark World Menopause Day. It is important to say that 51% of our population will experience the menopause. There is no question but that the stigmatisation of this important part of life must end. That begins with us talking more openly about the symptoms and the treatment and support available. Vitally, when women talk, we have to listen.
I would like to update the House on the Government’s important work in this area and to reflect on how far we have come and the distance we still have to go, and I will respond to as many of the points raised by hon. Members as I can. For too long, women’s experiences of menopause support have not been good enough. That was the clear message from our call for evidence on the women’s health strategy last year. The menopause was the third most selected topic for inclusion in the strategy. It was chosen by 48% of nearly 100,000 individual respondents.
During last year’s debate on World Menopause Day, the Government committed to listening and to making menopause a priority for our women’s health strategy. I am delighted that the first ever women’s health strategy for England has been published. It contains our 10-year ambitions and the immediate actions we are taking to improve the health and wellbeing of women and girls across our country, from adolescents through to older age. It details an ambitious programme of work to improve menopause care.
It is important to stress that we are not implementing the strategy alone. As I think was said already, we appointed Professor Dame Lesley Regan as the first women’s health ambassador. The hon. Member for Swansea East and I have worked with her on both baby loss and maternal health. She is an expert, and she will do an amazing job as the first women’s health ambassador for England. She will help us to raise the profile of women’s health and break down harmful taboos. I have no doubt that she will bring a range of voices to help us implement the strategy and deliver on our commitments.
Numerous Members raised healthcare support. I bring to the House’s attention the NHS England national menopause care improvement programme, which is improving clinical menopause care in England and reducing disparities in access to treatment. That important work sits alongside a menopause education and training package that the NHS is developing for healthcare professionals.
I turn to the important point of raising awareness. My right hon. Friend the Member for South Northamptonshire (Dame Andrea Leadsom) said that we know more about Viagra than about the menopause, and she may well be right. Awareness is vital to tackling the stigma around the menopause. We want everyone in this country to be educated about the menopause from an early age. All women going through the menopause and perimenopause should be able to recognise the symptoms and know their options. We are transforming the NHS website into a world-class first port of call for women’s health and have recently updated the menopause page.
As my hon. Friend the Member for North Devon (Selaine Saxby) rightly pointed out, we should educate the next generation of boys and girls to help break taboos and ensure that children growing up today can speak about the menopause openly. Menopause is included—I know this as a former schools Minister—in the statutory relationships, sex and health education curriculum, and we are working across Government to understand women’s health topics that teachers feel less confident about to provide further support.
The hon. Member for Enfield North (Feryal Clark) raised the issue of HRT supply. Although most HRT products remain in good supply, various factors, including increased demand, have led to supply issues with a limited number of products. That has improved significantly recently, and we have been working hard to ensure that women can access the treatment they need. We are implementing the recommendations of the HRT supply taskforce and continuing to use serious shortage protocols where appropriate. We keep that under close review.
The hon. Members for Swansea East and for Enfield North and my right hon. Friend the Member for South Northamptonshire mentioned the cost of HRT—an incredibly important issue. We are committed to reducing the cost of HRT prescriptions through a bespoke prepayment certificate for HRT, which we will introduce from April 2023, subject—here is the caveat—to the necessary consultation with professional bodies. The hon. Member for Swansea East asked me for a cast-iron guarantee, but she knows that I do not make promises that I cannot keep. I am not the Minister responsible, but I do know and firmly believe that politics is the art of the possible, and as long as I am a Minister of State at the Department of Health and Social Care I will ensure that the Department’s feet are held to the fire to deliver on that April 2023 ambition. It is taking longer than any of us would like because we have developed an entirely new system, and we have to create an implementation programme as well.
Caroline Nokes
I am not sure that what we have heard is entirely consistent. The Minister, who I know will work hard on this, indicated that there still needed to be a consultation with professional bodies, but he then indicated that the delay was in bringing forward a whole new technical system. Can he clarify that point?
Will Quince
My right hon. Friend is right to push me on that point. The reason for any potential delay would only be around the consultation that we would need to have. The delay—as in why we could not have done it before April 2023—is because we needed to design a whole new system. We are confident that that will be okay for April 2023. I am caveating it only because I am not the Minister responsible, and I try wherever possible not to make promises that I definitely cannot deliver on. I will not be the Minister delivering on this, but I have no doubt that the Minister who will be responsible will be able to update my right hon. Friend in due course.
Importantly, numerous Members mentioned menopause in the workplace, and, as I mentioned earlier, there were some very difficult stories. As a former Department for Work and Pensions Minister, I know the impact that that has on individuals who want to go to work and on employers, so we have to tackle that. This summer the Government responded to the independent, Government-commissioned report into menopause in the workplace, and we committed to working with a range of stakeholders to consider what more we can do. That will include an employer-led, Government-backed communications campaign on menopause in the workplace.
My right hon. Friend the Member for Romsey and Southampton North mentioned the civil service and the NHS. They are two of the biggest employers and they have signed Wellbeing of Women’s menopause workplace pledge, which is a public commitment to making our organisations a supportive and understanding place for employees going through the menopause. I encourage all other employers to do the same.
Hon. Members also referenced an employment Bill. Again, that is a promise that I cannot make because it does not fall under the remit of the Department of Health and Social Care. Nevertheless, I will have that conversation with my counterpart at BEIS.
I want to ensure that the hon. Member for Swansea East has plenty of time to sum up, so I will conclude by thanking all right hon. and hon. Members for their contributions to this important debate and for their dedicated work across Parliament to improve the experiences of women in this country going through the menopause. As I said, they have an ally in me at the Department of Health and Social Care. I am glad that we have had the opportunity to discuss this hugely important topic and that I have had the opportunity to update the House on the work under way. It is vital that this conversation continues.
Carolyn Harris
I thank the Minister for his kind words. We have worked together previously and I trust his word—I look forward to the certificate happening in April 2023.
I thank all colleagues for everything they have said. Women out there are listening to this debate, and they are grateful that we are talking about the menopause, because it is talking about it that will make a change.
The hon. Member for Strangford (Jim Shannon) did not enlighten the House about the fact that he is now a local hero, after I mentioned him on “Loose Women” as a male menopause warrior. He has now been elevated to sainthood in Strangford.
We are changing the narrative, and we are changing it by talking—in here, to women, to Ministers and to each other. We have taught so many women about the situation they are in. Who would have thought we would be doing that as MPs? The right hon. Member for Romsey and Southampton North (Caroline Nokes) and I sometimes feel like doctors when we are asked for advice on the menopause. So many people have asked to have that conversation.
I am going to contradict the words of a song written by the male menopause warrior-in-chief, Sir Rod Stewart, that says,
“I don’t wanna talk about it”.
Well, that is wrong, because we do need to talk about it. We should talk about it, and we will talk about it until every one of the 13 million women in this country who are not having the appropriate treatment for the menopause have the respect they deserve and their lives are returned to normal.
Question put and agree to.
Resolved,
That this House has considered World Menopause Day.
Written Statements
Shale Gas Exploration
(2 years ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Secretary of State for Business, Energy and Industrial Strategy (Grant Shapps)
As the Prime Minister set out when entering office, and in the House yesterday, the Government support the core ambitions set out in the 2019 manifesto. The Government will therefore revert to a precautionary approach and only support shale gas exploration if it can be done in a way that is sustainable and protects local communities. We will be led by the evidence on whether this form of exploration can be done in a way which acceptably manages the risk to local communities.
In the November 2019 manifesto, the Government confirmed a moratorium on shale gas exploration in England with immediate effect. Having listened to local communities and assessed the state of the science we ruled out changes to the planning system. As set out in the manifesto, we will not support shale extraction unless the science shows categorically that it can be done safely.
In line with the British Geological Survey report on the scientific advances in hydraulic fracturing since 2019, forecasting the occurrence of large earthquakes and their expected magnitude owing to shale gas extraction remains a challenge with significant uncertainty.
The Government are confirming today that we will again take a presumption against issuing any further hydraulic fracturing consents. This position, an effective moratorium, will be maintained until compelling new evidence is provided which addresses the concerns around the prediction and management of induced seismicity. This is in line with the commitment made in the 2019 Conservative manifesto.
While future applications for hydraulic fracturing consent will be considered on their own merits by the Secretary of State, in accordance with the law, shale gas developers should take the Government’s position into account when considering new developments.
[HCWS346]
High Speed 2 Update
(2 years ago)
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The Secretary of State for Transport (Mr Mark Harper)
Review of High Speed 2, including programme update, local community impact and engagement, environment, benefits and programme governance. Forecast costs by phase (2019 prices) Phase Target cost Total estimated costs range 2 1 £40.3 billion £35 billion to £45 billion 2a To be determined £5 billion to £7 billion 2b western leg To be determined £13 billion to £19 billion3 HS2 East (west to east midlands)4 To be determined To be determined 1The numbers set out in the tables have been rounded to aid legibility. Due to this, they do not always tally. 2Rounded to nearest billion. 3Removal of the Golborne Link from the scope of the phase 2b western leg bill scheme reduces the overall estimated cost range of the phase 2b western leg to £13 billion to £19 billion. 4 The Government confirmed in the integrated rail plan (IRP) that a high-speed line between the west and east midlands (known as HS2 East) will be taken forward, with HS2 trains continuing to Nottingham, and to Chesterfield/Sheffield (via Derby) on the upgraded conventional rail network.
Overview
I am reporting continued progress on High Speed 2 in this, the Government’s fifth update to Parliament. Phase 1 (west midlands to London) remains within the budget and schedule range, is hitting construction milestones, has made progress on key procurements, and is supporting more jobs and apprenticeships than ever before. HS2 Ltd is progressing key activities for phase 2a to support the next stage of delivery, and since the last report the phase 2b western leg Bill had its Second Reading, in June 2022, and is progressing through the legislative stages. This report shows how, at this important time, we are continuing to grow the economy and bring communities together across the north of England, the midlands and the south.
Key achievements in this reporting period (February to August 2022 inclusive) are:
HS2 now has over 350 active sites between west midlands and London, since 2017 over 950 apprentices have been recruited and, as of September, over 29,000 jobs are being supported.
Laing O’Rourke Delivery Ltd has been awarded the contract for the construction of the HS2 interchange station at Solihull, worth up to £370 million (in 2022 prices). The contract will involve the finalisation of the detailed design and the subsequent construction of the station.
“Dorothy” became the first tunnel boring machine (TBM) to complete its first bore and is now preparing for the second parallel tunnel. The 1-mile tunnel preserves the ancient woodland above at Long Itchington wood. Four TBMs have now been launched on phase 1 and driven a total distance of approximately 8.4 miles.
In May, the Canterbury Road vent shaft became the first diesel-free work site on the HS2 programme. This is a significant step towards the project’s aim to be net-zero carbon from 2035.
The Phase 2b western leg hybrid Bill secured its Second Reading in the House of Commons, by 205 votes to six, and the first additional provision was deposited in July.
This report uses data provided by HS2 Ltd to the HS2 ministerial taskforce for phases 1 and 2a and covers the period between February 2022 and August 2022 inclusive. Unless stated, all figures are presented in 2019 prices.
Programme Update
Schedule
On phase 1 (London to west midlands), delivery continues to accelerate towards peak construction next year. The forecast for initial services from Birmingham to Old Oak Common remains within the range of 2029 to 2033, with HS2 Ltd currently reviewing its detailed construction and systems installation schedules to address some pressures within this range.
Phase 2a (west midlands to Crewe) remains on track to be delivered between 2030 and 2034. Land possessions and enabling works are under way. The next stage is to appoint the design and delivery partner who will oversee the construction phase, award the advanced civil works contracts and begin the early stages of procuring the main works capacity.
On phase 2b western leg (Crewe to Manchester), the delivery into service date range remains 2035 to 2041, as provided in the strategic outline business case.
Affordability
The approximate cost range for the elements of the scheme committed to by the Government for phases 1, 2a, 2b western leg is £53-71 billion in 2019 prices. This range does not include HS2 East, which is at an early stage of development and cost estimates are subject to further work from HS2 Ltd and Network Rail
Phase 1 remains within its overall budget of £44.6 billion, which includes contingency held respectively by HS2 Ltd and by the Government. The previous HS2 Minister noted in his last report to Parliament his concern at the steady increase in cost pressures on phase 1 reported alongside drawdowns in contingency. In accordance with the arrangements in its development agreement with the Department, HS2 Ltd has indicated that, if unmitigated, the final delivery cost is likely to exceed its target cost of £40.3 billion, based upon its forecast of future spending. As a result, in September the Department commissioned HS2 Ltd to develop and implement actions to bring projected costs back in line with the target cost.
To date, out of the phase 1 target cost of £40.3 billion, £18.3 billion has been spent, with an additional £1 billion for land and property provisions, and £10.6 billion has been contracted and has not been spent. The remaining amount is not yet under contract. The target cost does not include Government-held contingency.
HS2 Ltd has drawn £1.5 billion of its £5.6 billion delegated contingency for phase 1—an increase of £0.2 billion since the last update—leaving about £4.0 billion.
HS2 Ltd is projecting around £1.9 billion of net additional cost pressures on phase 1—an increase of about £0.2 billion since March. Of the £1.9 billion, the key pressures are:
An estimated £1.1 billion (increase of £0.3 billion since the last update) for potential additional main works civils costs stemming largely from lower than planned productivity and additional design costs.
A pressure of £0.4 billion on the cost estimate for the HS2 Euston station. The move to a smaller, less complex 10-platform, single-stage delivery strategy at Euston, as confirmed in my predecessor’s report, is now the basis for ongoing design work and other activities. The Department anticipates that this will assist in addressing some of the cost pressure at Euston as the updated station design is developed over the coming months. This work will also consider and address the appropriate level of contingency that should be held to manage risks that are likely to arise during the construction of an asset of this complexity. I will provide further updates as this work progresses over the course of the next 18 months.
A pressure of £0.3 billion (increase of £0.1 billion since the last update) against HS2 Ltd’s budget for changes to Network Rail infrastructure at Euston and Old Oak Common that are required to operate the new HS2 stations.
A further £0.1 billion of net cost pressures presenting on other parts of the programme. This is the aggregate total of smaller potential cost pressures.
A total of £0.8 billion of net savings and efficiencies have been identified within phase 1. These principally consist of savings across the main works civil portfolio and savings in the acquisition and resale of land and property. These have partly offset gross cost pressures resulting in the net figure above.
On covid-19 costs, HS2 Ltd’s assessment of the likely financial impact of the pandemic on delivering phase 1 remains estimated within the range of £0.4 billion to £0.7 billion. Further claims are subject to detailed scrutiny by the Government and will only be allocated against contingency once this assessment has been finalised. Further detailed claims are currently under review by HS2 Ltd and further updates will be provided in future parliamentary reports.
Following confirmation of the move to the more efficient 10-platform station design and single-stage build at Euston station, significant elements of the design work on the original 11-platform station can no longer be used. As the cost of this earlier design work has ceased to be of future benefit to HS2 Ltd, the related costs were reported as an “impairment” in HS2 Ltd’s published annual report and accounts for 2021-22.
The phase 2a budget remains unchanged, with a cost range of £5.2 billion to £7.2 billion. The Government intend to set a target cost alongside publication of the full business case.
On phase 2b western leg, the financial case of the strategic outline business case published in January 2022 presented an estimated cost range of £15 billion to £22 billion. Removal of the Golborne link from the scope of the phase 2b western leg Bill scheme has reduced the overall estimated cost range to £13 billion to £19 billion.
Consistent with the rest of the economy, the HS2 programme is experiencing high levels of inflation. HS2 Ltd is working with its suppliers actively to mitigate inflationary cost increases. The Department for Business. Energy and Industrial Strategy and Office for National Statistics September construction update showed that construction materials across all work in the UK have experienced inflation of 18% from August 2021 to August 2022. While inflation is not affecting the overall affordability of HS2 in real terms, because the total budgets and cost estimates for each phase are set in 2019 prices, it is creating pressures against its existing annual funding settlements, which have been set in cash. I am clear that HS2 Ltd and its supply chain must do all that they can to mitigate inflationary pressures.
Delivery
Work continues at pace on phase 1, with several significant developments to report. Across the programme HS2 Ltd reports that it has moved 24.4 million m3 of earth, the equivalent of over 9,760 Olympic-size swimming pools’ worth. The new launching gantry “Dominique” has installed the first decks of the Colne Valley viaduct, which will be the longest railway bridge in the UK. The viaduct will carry the new high-speed line across a series of lakes and waterways on the north-west outskirts of London. Across the phase 1 route, 8.4 miles of tunnel work has been driven so far. Progress has recovered well following an enforced shutdown to investigate and learn lessons from a small tunnel fire that took place in May this year. TBM Dorothy safely completed the first bore under Long Itchington wood in Warwickshire in July.
At Old Oak Common, station work continues with the Old Oak Common and Park Royal Development Corporation, the London Mayor and the Department for Levelling Up, Housing and Communities to bring forward proposals for the regeneration of the area around the station.
Stage 1 of the two-stage design and build contract for Birmingham Curzon Street station is expected to conclude later this year, subject to agreement of an affordable target price.
In July, HS2 Ltd awarded the contract to design and build the interchange station in Solihull to Laing O’Rourke Delivery Ltd. The contract, worth up to £370 million (in 2022 prices), will see work in two stages to finalise the detailed design and then build the station. HS2 Ltd continues to work collaboratively with private and public sector stakeholders to support the ambitions of the Urban Growth Company and the local authority to realise the economic and social benefits of HS2 and provide up to 30,000 new jobs and 3,000 new homes.
HS2 Ltd continues tendering for phases 1 and 2a rail systems packages (including track, catenary, mechanical and electrical, power, control and communications).
At Euston, HS2 Ltd and its construction partner, Mace Dragados, are continuing to optimise design and construction efficiencies. Work progressing on site includes demolitions, piling of the station box structure, the construction of a relocated London underground traction sub-station, the creation of a new utility corridor and construction of a new six-storey site accommodation block. In parallel, HS2 Ltd and Network Rail, with support from the Euston Partnership, are working together to develop a cost-effective design that provides integration between the HS2 station and the redevelopment of the Network Rail station and delivers value for money. Lendlease, the Government’s master development partner at Euston, hosted the first in a series of public exhibitions and outreach events due to take place over the next year to gather feedback from the community and understand how proposals for a Euston masterplan can support local aspirations.
On phase 2a, early environmental works continue at multiple sites along the route and the design for enabling civils works progresses at pace. Illegal protestors were successfully evicted from two key sites.
The phase 2b western leg Bill had its Second Reading in June 2022. The first additional provision (AP1) was deposited on 6 July, giving effect to Parliament’s instruction to remove the Golborne Link from this Bill while alternatives are considered. HS2 Ltd has held eight in-person events and three webinars ahead of depositing the first AP, attended by over 400 people. 134 petitions against the Bill and 21 against AP1 were received and a Select Committee is being convened to consider these petitions. A supplement to the strategic outline business case was published at Second Reading, setting out the impact of removing the Golborne Link from the Bill on the scheme’s business case. As the Bill progresses, HS2 Ltd is working to develop a robust future delivery strategy for the scheme.
The Government are continuing work to develop plans for HS2 East, a new high-speed line between the west midlands and east midlands, which would enable HS2 to serve Nottingham and Sheffield (via Derby and Chesterfield). Development of plans for HS2 East is being carried out by HS2 Ltd and Network Rail, in conjunction with work to electrify the Midland main line. The output of this work will be used to inform future decisions on how to progress the scheme, including how HS2 East can support economic growth aspirations in the region. The Government have recently provided funding to support the East Midlands Development Company to develop a revised HS2 growth strategy to reflect proposals for HS2 East.
Local community impact and engagement
Local impacts are unavoidable on a project of the scale of HS2. However, I expect HS2 Ltd to do its utmost to reduce disruption where it is reasonable to do so and to treat communities affected by construction with respect, sensitivity and professionalism. Independent construction inspectors continue to assess the considerate delivery of HS2 works. Following a public recruitment process, the Government announced on 25 April that Stewart Jackson had been appointed for three years as the independent HS2 residents’ commissioner.
The HS2 helpdesk has recorded 181,585 enquiries or complaints since its launch in 2018. I am pleased that 100% of urgent construction enquiries and complaints between April and August 2022 have been responded to within two working days.
The community and business funds (CEF and BLEF) are available to communities and business groups that are disrupted by construction of the railway. Over £12.4 million has so far been granted to 216 projects, helping HS2 to leave a positive legacy in areas near the new railway.
In its 2021 community engagement strategy, “Respecting People, Respecting Places”, HS2 Ltd committed to continue to involve communities in opportunities to benefit and learn from the project. So far, 9,258 engagement activities have taken place along the line of route, with 101,614 people attending. HS2 Ltd has visited 91 primary schools, involving 7,598 children in “playing it safer” sessions.
Protestors have continued to target land required for construction of the railway. HS2 Ltd estimates that illegal protest has cost the project £36.5 million in direct costs and around £110 million in consequential costs, such as delays, to date. HS2 Ltd has successfully enforced several civil injunctions. In September 2022 it was granted a route-wide injunction by the High Court, prohibiting trespass on and obstruction of access to land owned by the Secretary of State that HS2 Ltd is entitled to possess. It is not intended to prevent lawful protest. The injunction is now active along the phase 1 and 2a routes. The injunction order contains provision for the injunction to be discharged or varied at any time and is relisted for renewal each May.
Land and property
In 2020, a comprehensive review of land and property acquisition led to 36 proposals for change, intended to improve the experience of property owners affected by the new railway. I am pleased to report that, two years later, all 36 proposals have been progressed as far as possible, including HS2 Ltd’s online portal that makes it much easier for property owners to track their claims. I continue to seek further improvements in the operation of HS2 land and property schemes and the treatment of people impacted.
Environment
Over 800,000 trees and shrubs have been planted as part of HS2’s green corridor.
HS2 continues to be at the forefront of efforts to decarbonise construction and to leave a positive environmental legacy. Since the last report, the first diesel-free construction site has started in action, including using the UK’s only electric crawler cranes. The programme has successfully trialled hydrogen fuel cells to replace large diesel generators, eliminating noise and air quality impacts for local residents. It has also made use of cutting-edge Formula 1 technology to use fuel more efficiently. New conveyor systems have been introduced, for example in Warwickshire, to reduce impacts to residents by reducing HGV traffic on local roads.
To support the achievement of biodiversity targets, £1.5 million of funding has been provided for six environmental enhancement projects in the Trent Sow parklands and Cannock Chase area of outstanding natural beauty associated with phase 2a.
HS2 Ltd will publish the latest environmental sustainability progress report soon, which will provide up-to-date information on HS2’s environmental impacts and activities. HS2 Ltd will also shortly publish its ancient woodland summary report, with details of how it is mitigating impacts on these irreplaceable habitats.
Benefits
I am delighted that, as of September, HS2 is supporting over 29,000 jobs. To date, 2,580 businesses are already working on the project—over 60% are SMEs and 97% are UK-based. The programme will create 2,000 apprenticeships, with over 950 having been recruited since 2017, and there have been 2,200 jobs starts by people who were previously workless.
The Government will publish an HS2 local growth action plan later this year on how we will continue to support HS2 places to realise their local growth and regeneration ambitions.
On active travel, the Department has asked HS2 Ltd to assess making design changes in five more locations on phase 2a, in addition to the 20 locations HS2 Ltd is already committed to making design changes on phase 1. HS2 Ltd is continuing to assess the feasibility of repurposing haul road and maintenance access tracks for local community benefit, with pilot projects being progressed.
The Government are exploring how we can support inward investment opportunities linked to HS2 and particularly how we can encourage large national and international investors to consider investing in places with HS2 stations and the surrounding areas.
Programme Governance and Controls
An updated HS2 Ltd framework document was published in August. It governs the corporate relationship between the Department and HS2 Ltd, confirming key responsibilities, accountabilities, and expectations. I will provide an update on the recruitment of a permanent chair for HS2 Ltd in my next report. Until the permanent chair is in place, Sir Jonathan Thompson will continue to chair board meetings in his capacity as deputy chair.
Forward Look
On phase 1, preparation continues for a TBM launch at Long Itchington wood to create the second bore, before this TBM is moved to Bromford tunnel in Birmingham. Following the recent successful launch from West Ruislip of the TBM named Sushila by local schoolchildren, preparations are under way for the next TBM to be launched from this site shortly.
In the next six months, HS2 Ltd will further develop its approach to managing the supplier alliance that will be delivering the rail systems packages such as track installation, overhead catenary and signalling systems. This will include developing and testing its internal processes and systems to manage the integration risk between the 14 different suppliers, development of its leadership capability and the evolving governance arrangements as it moves from a civils-led programme to a systems and operability-led programme.
I will continue to engage closely with Parliament and will provide my next update in spring 2023.
Evolution of phase 1 HS2 Ltd contingency (2019 prices) drawdown over last five parliamentary reports | |||||
|---|---|---|---|---|---|
Oct 2020 report | Mar 2021 report | Oct 2021 report | Mar 2022 report | Oct 2022 report | |
Total HS2 Ltd contingency drawdown and % used | £0.3 billion (5%) | £0.4 billion (7%) | £0.8 billion (14%) | £1.3 billion (23%) | £1.5 billion (28%) |
Total HS2 Ltd contingency remaining | £5.3 billion (95%) | £5.2 billion (93%) | £4.8 billion (86%) | £4.3 billion (77%) | £4.0 billion (72%) |
Evolution of phase 1 Government-retained contingency (2019 prices) drawdown over last five parliamentary reports | |||||
|---|---|---|---|---|---|
Oct 2020 report | Mar 2021 report | Oct 2021 report | Mar 2022 report | Oct 2022 report | |
Total Government- retained contingency drawdown and % used | £0 billion (0%) | £0 billion (0%) | £0 billion (0%) | £0 billion (0%) | £0 billion8 (0%) |
Total Government- retained contingency remaining | £4.3 billion (100%) | £4.3 billion (100%) | £4.3 billion (100%) | £4.3 billion (100%) | £4.3 billion (100%) |
8 As highlighted in the October 2021 report, £0.015 billion has been allocated to enable Old Oak Common to increase the number of trains it serves before opening services to Euston Station from three to six trains per hour but has not yet been drawn down from Government-retained contingency. |