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Speaker’s Statement
(2 years, 1 month ago)
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Mr Speaker
I would like to make a short statement about the outcome of the inquiry into events during the Division on Wednesday 19 October. At my instruction officials interviewed or took statements from over 40 Members and officials who were there. The report of their investigation will be published shortly and copies made available in the Vote Office. The key findings are as follows.
The atmosphere was tense and Members were raising their voices to make themselves heard, but there is no evidence of any bullying or undue influence placed on other Members. The crowding made it hard to see what was really taking place. While some Members thought that physical contact was being used to force a Member into the Lobby, the Member concerned has said very clearly that this did not happen. Those with the clearest views of the incident have confirmed this. Several Members took photos during the Division, some of which were posted on social media. I would like to remind Members that taking photos during proceedings is prohibited.
It is important that we treat each other with respect. I take allegations of bullying extremely seriously, and will take swift action wherever necessary to address any improper behaviour in the Chamber or in the Lobbies.
Oral Answers to Questions
(2 years, 1 month ago)
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Michael Fabricant (Lichfield) (Con)
The Secretary of State for Health and Social Care (Steve Barclay)
The recent Health and Social Care Committee report rightly highlights the importance of continuity of care, recognising that there is sometimes a trade-off between speed of access and continuity of care.
Michael Fabricant
I welcome my right hon. Friend back to the Front Bench in this position; it is great to see him there. Investigations in the United States and in Australia show that if there is a close relationship between a patient and one specific general practitioner, the outcomes are better in terms of both morbidity and visits to A&E. What can the Government do to encourage that practice, and what is the Government’s view of that practice?
Steve Barclay
My hon. Friend raises an important point. If one looks at the GP survey of patients, around two in five have a GP that they would like to have continuity of care with, and more than one third of those say that they see them a lot of the time or always. It is more pertinent with complex cases, where that continuity of care adds most value, as opposed to patients who want speed of access on an isolated incident.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
We have seen a cut of almost 5,000 GPs and the closure of hundreds of practices in the past 10 years. My constituents are having a terrible time trying to get GP appointments and, when they do, the lack of continuity of care is impacting the effectiveness of that care; it is a strain to tell the same story again and again, particularly for older people and those with complex conditions. Can the Secretary of State outline what he is actually going to do about it?
Steve Barclay
In fact, around 80,000 more GP appointments a day are happening, so significantly more demand is being met. The Government have invested an extra £1.5 billion to create an additional 50 million general practice appointments by 2024, increasing and diversifying the staff available for those patients seeking care.
Sir Mike Penning (Hemel Hempstead) (Con)
One way GPs can get better outcomes for their patients is to see them face to face if possible, particularly with prostate cancer in men. Men just do not present themselves to their GP as often as they should. Today is 1 November—Movember—so what is the Secretary of State going to do to promote men’s coming forward to see their GPs so that we can get this disease eradicated?
Steve Barclay
First, I pay tribute to the work my right hon. Friend is doing to raise awareness of this issue. It is important that those patients who want access to face-to-face appointments are able to get them, and campaigns such as Movember are a great way of raising that awareness.
Tim Farron (Westmorland and Lonsdale) (LD)
In Cumbria we have lost one in six of our GPs in the past six years, most recently at the Central Lakes medical practice in Ambleside and Hawkshead. Will the Secretary of State pay special attention to the letting of that new contract to ensure that there is a GP service running out of the surgeries in Ambleside and Hawkshead? Will he also give thought to the fact that the Government’s removal of the minimum practice income guarantee has cost many rural surgeries their ability to be sustainable, and consider bringing back a sustainable small surgeries fund so that small rural surgeries can stay open?
Steve Barclay
As a rural MP and having worked in Kendal earlier in my career, I know the geography to which the hon. Gentleman refers. That is why we are investing in more GP training, increasing the number from 2,671 in 2014 to 4,000, but it is also why we introduced the payment of £20,000, to encourage GPs into those areas that are hard to recruit in.
Steve Brine (Winchester) (Con)
The new Secretary of State—it is great to see him back—understands that there is a wealth of evidence that higher levels of continuity of care in general practice are good for patients and, indeed, for GPs themselves. I wonder if I could press him a little further. Is the new ministerial team open to limiting the list size of patients a GP has, as more GPs come online through the Government’s plans? Would he like to see personal lists reimplemented in the GP contract during his tenure?
Steve Barclay
Alongside the Government, no one wants to see better patient outcomes more than GPs themselves. By their training, they are evidence-led, so I look forward to discussing with the GP workforce how we can work together in a constructive spirit to deliver on whatever the evidence is showing. As I said, there is a body of evidence around continuity of care, but it is more weighted towards those with more complex needs, and not every patient prioritises that in terms of access to their GP.
Rachael Maskell (York Central) (Lab/Co-op)
The Health and Social Care Committee report showed that continuity of care was best for patient safety, which is so important, but in order to deliver that, there needs to be some headroom at practice level to bring about a reorientation of local services. How will the Secretary of State create that headroom, and will he adopt the report’s findings in full?
Steve Barclay
I know that the hon. Lady has a lot of expertise in this area, and she raises a valid and important point. That is why, through the GP contract framework for 2020-21, we announced a number of new national retention schemes and continued support for existing schemes to retain more GPs. It is also why, at the other end, we are boosting training numbers, to get more GPs into the pipeline.
Feryal Clark (Enfield North) (Lab)
The Secretary of State says they are investing in GPs, but this Conservative Government have cut 4,700 GPs in the last decade. Patients are finding it impossible to get a GP appointment in the manner in which they want one. Seeing the same doctor for each appointment means better care for patients, but under the Tories, that is becoming rarer and rarer, much like seeing the same Health Secretary at the Dispatch Box. Even his own Chancellor wishes he had done more on the issue of continuity of care, so why is this Secretary of State not matching Labour’s ambition to bring back the family doctor?
Steve Barclay
First, as I have touched on, the number of GPs in training is up. The number of GP appointments is significantly up, because there is more patient demand, so they are seeing more patients. There is often in this House a real focus on GP appointments, and that is important, but it is about the skills of the primary care workforce as a whole. If one looks, for example, at the women’s health strategy, women want to be able to go to specialist services, not always requiring the GP. It is about looking at the primary care workforce as a whole, alongside the appointment of GPs.
Anne Marie Morris (Newton Abbot) (Con)
The Minister of State, Department of Health and Social Care (Will Quince)
Ministers and officials regularly engage with a wide range of organisations to ensure that we are alert to the staffing issues facing the NHS and care sector across our country. We have increased training places for doctors, nurses and allied health professionals and increased access to clinical placements across a wide range of settings. We have also developed apprenticeships and blended learning opportunities to improve access to training that supports remote and rural communities.
Anne Marie Morris
In Devon, workforce shortages are acute. One in 10 nursing places remains unfilled, one in eight mental health roles across the south-west is vacant, and there are no dental practices taking on new NHS patients. That gap is too big to be bridged through current training and recruitment plans. Will the Minister create as a matter of urgency an innovative new career pathway, reducing the time to get new staff to the frontline?
Will Quince
I thank my hon. Friend for her question. She is a passionate campaigner on this issue. I recently responded to a debate on this issue led by her. She also chairs the all-party parliamentary group on rural health and social care. She is right, and we have developed an apprenticeship route for almost all professions in our NHS, allowing people to join the health and care sector immediately on an earn-as-you-learn basis. We continue to work hard to develop pathways into health and care professions, including via our groundbreaking blended online learning programmes.
Jim Shannon (Strangford) (DUP)
In terms of district nursing and community midwifery, is the Minister aware that there are real security concerns about entering homes alone, and that that plays into resignations in many rural areas? Will he address that by providing security devices so that rural, isolated nurses and staff know that they are not alone and are safe?
Will Quince
The hon. Gentleman raises an interesting point. It is not something that has come across my desk in the two days I have had this portfolio, but I will of course meet local integrated care system leaders, and if it is something that they are calling for, I will look to see what we can do to assist.
Mr Robin Walker (Worcester) (Con)
Worcestershire and Herefordshire are rural areas that suffer from a shortage of doctors at both primary and secondary levels. My hon. Friend is an excellent Minister: will he meet me to discuss the strong case for funding places at the Three Counties Medical School in Worcester—a ready-made solution to the problem—which has already seen 851 applications from home students?
Will Quince
I thank my hon. Friend for his compliment. He raises an important issue. I know that my predecessor not only agreed to meet him, but undertook to visit Worcester. I would be happy to make the same commitment.
Alison McGovern (Wirral South) (Lab)
Wirral and Cheshire have many rural areas, with all the same problems that have been described. When I met healthcare professionals on Friday, they were clear that the problem is not just recruitment, it is also retention. Which of the changes that have happened over the past 12 years to make working life for NHS staff less good than it needs to be will he reverse?
Will Quince
Of course retention is as important as recruitment. Since September, we have had the non-repayable training grant, which is a minimum of £5,000 per academic year, additional funding for certain courses, and extra funding worth up to £3,000 for eligible students to cover childcare costs. That is, of course, on recruitment. On retention, we are looking at more access to mental health support and high-quality support while in training and clinical placement, but of course there is more to do.
Andrew Jones (Harrogate and Knaresborough) (Con)
The Parliamentary Under-Secretary of State for Health and Social Care (Maria Caulfield)
The NHS long-term plan commits to investing at least an additional £2.3 billion a year by the next financial year to expand and transform mental health services in England. That will be supported by an additional 27,000 mental health professionals in the workforce to deliver that transformation.
Andrew Jones
I thank my hon. Friend for that answer. I recently met the child and adolescent mental health services team in Harrogate, and they confirmed that there are long waiting lists for attention deficit hyperactivity disorder and autism diagnosis. Will the Minister consider the criteria to help those who need the service most to get the support they need?
Maria Caulfield
I thank my hon. Friend, who raises a good point. He does a huge amount of campaigning in Harrogate and Knaresborough on this issue. We recognise there can be long waits for diagnosis both for ADHD and autism, and that is why we refreshed our national autism strategy last year, backed by more than £74 million to help to reduce diagnosis waiting times. NHS England is now setting out the process of how children, young people and adults might receive a diagnostic assessment much more quickly.
Emma Hardy (Kingston upon Hull West and Hessle) (Lab)
Delayed discharge from mental health beds is preventing people from getting the treatment that they need. In fact, in Humber NHS trust 42% of learning disability beds are taken by people with delayed discharge, 5.5% of secure beds have patients in waiting for adult social care, as do 70% of adult mental health beds, 22% of CAMHS beds and 27% of community beds. To deal with the problem in mental health, we need to deal with the problem of lack of adult social care placements. When will the Government be able to fix that?
Maria Caulfield
The Government actually started working on the plans around delayed discharges this summer, because of course they affect mental health services. They also affect a range of acute beds. With the winter coming, we know that there will be additional pressure on those beds, and that is why we are working with local government social care services and integrated care boards which have responsibility for that in their local areas.
Dr Rosena Allin-Khan (Tooting) (Lab)
In the last four weeks, there have been three investigations on abuse in in-patient mental health settings. The Government should be on top of the situation, not relying on undercover reports from Sky, The Independent, or “Panorama” that show patients languishing in seclusion, excessive use of restraints, bullying and dehumanisation, and falsification of medical records. Patients and their families rightly expect to be safe. Tory chaos has meant that the Government have not engaged with abuse allegations. For weeks there has been no functioning mental health Minister. Will the Minister conduct a rapid review of mental health services, respond to our concerns about in-patient services and apologise to patients and their families now?
Maria Caulfield
Of course we apologise for the cases that we have seen; anyone who watched some of those programmes will have seen the distressing and unacceptable care. I am the Minister with responsibility not just for mental health but for patient safety, so I will be looking at the cases in “Panorama” and other programmes, and at cases across the board, because I want to ensure that in-patient mental health services are as safe as possible. We know that these are some of the most vulnerable patients who often cannot speak out when there are problems. We are looking at the staffing, training and reporting mechanisms. On the case that was highlighted in “Panorama”, the Government are working closely with NHS England, the Care Quality Commission and the individual trusts.
Gill Furniss (Sheffield, Brightside and Hillsborough) (Lab)
The Parliamentary Under-Secretary of State for Health and Social Care (Maria Caulfield)
Gynaecological conditions, including endometriosis, are a priority in the women’s health strategy, which we published in the summer. We are committed to improving care for women with endometriosis and are particularly looking at the patient experience and journey from first seeing their GP through to diagnosis.
Gill Furniss
Last week, the all-party parliamentary group on endometriosis heard from many different women about their shocking experiences of getting diagnosed and treated. Despite the very good women’s health strategy, they are not seeing that on the frontline. Long waiting times, poor care and disbelief from medical professionals are all still too prevalent for women with endometriosis. Commitments in the women’s health strategy are long overdue and women are not fully feeling those benefits. When can we expect to see real progress to back that up and end this national scandal once and for all?
Maria Caulfield
I thank the hon. Lady for her question. The Government introduced the first women’s health strategy to make issues such as endometriosis a high priority. Of course it will take time—we published the strategy only in the summer—but work is happening already. The women’s health ambassador is working to better inform young women about the signs and symptoms of endometriosis, so that they cannot be fobbed off with advice such as, “This is just a normal period.” Better and mandatory training for healthcare professionals in women’s health is being introduced and we are working with the royal colleges to streamline the referral process.
Dr Luke Evans (Bosworth) (Con)
Early diagnosis in endometriosis and many other conditions is important, so I welcome the news that a community diagnostic centre was approved in Hinckley last week. That will bring MRI, ultrasound and CT scans to the heart of my community, but we are looking for more. For the likes of endometriosis, people sometimes need to have a day case procedure. Will the Minister meet me to discuss having a day case unit in Hinckley? A bid is going through that I am keen to see ensured, so that we can get the diagnosis of things such as endometriosis in the heart of my community.
Maria Caulfield
My hon. Friend campaigned hard for the CDC in Hinckley and I am glad that he has been successful. Community diagnostic centres will provide a range of tests to speed up the diagnosis process. I am happy to meet him, because they are just the start of a huge opportunity, particularly for conditions such as endometriosis, to get diagnoses as soon as possible.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
The Parliamentary Under-Secretary of State for Health and Social Care (Neil O’Brien)
Pensioners and children are particularly vulnerable to cold weather, which is why we are spending £37 billion on our energy support package. A typical household will save a third—£700—of what they would have paid this winter. The 8 million most-vulnerable households will get £1,200 in support this year to help with the cost of living. The record block grant agreed at the spending review will enable devolved Administrations to provide further services to support those in need.
Drew Hendry
It is a fact that growing up and living in poor and cold housing leads directly to bad health outcomes. The director of University College London’s Institute of Health Equity, Sir Michael Marmot, stated that the Government must act now, because
“we are facing a significant humanitarian crisis with thousands losing their lives and millions of children’s development blighted”.
That was before the Chancellor’s U-turn on the energy price guarantee, which will mean that average household bills are £4,000-plus a year, or more if they are off-gas grid. Does the Minister think that is acceptable, or will he urge his colleagues to do much more?
Neil O’Brien
I actually agree with the first part of the hon. Gentleman’s point. That is why, as well as the huge direct support to households, we are investing £12 billion in Help to Heat schemes to help make people’s homes warmer and cheaper to heat, another £1.1 billion in the home upgrade grant, and £500 million in the sustainable warmth competition. We take this issue very seriously, and colleagues at the Department for Levelling Up, Housing and Communities are taking further actions to clamp down on squalid housing.
Theresa Villiers (Chipping Barnet) (Con)
Access to GP appointments is particularly important to help to deal with winter pressures, so can the Minister update the House on progress in implementing the improvements promised in October last year to help GPs to expand to meet demand over the winter?
Neil O’Brien
My right hon. Friend is so right, and she has been a powerful champion on this issue. We have invested £1.5 billion to get an extra 50 million GP appointments per year. The number of appointments in September was up 7% compared with the same month in 2019. We now have an extra 2,300 doctors working in primary care compared with 2019, and an extra 19,300 primary care professionals, on the way to the goal of 26,000 extra primary care professionals. This is hugely important, we are investing in it, and my right hon. Friend is right to campaign on it.
Andrew Gwynne (Denton and Reddish) (Lab)
We know that, if poorer communities cannot afford to heat their homes, health inequalities will worsen significantly over the winter months and beyond. Despite the seriousness of this issue, the previous Health Secretary—that is the right hon. Member for Suffolk Coastal (Dr Coffey), in case Members are struggling to keep track—planned to ditch the Government’s long-promised health disparities White Paper. Does the current Minister intend to do the same? If he does, how will he seriously address the dreadful health inequalities that have widened after 12 Tory years?
Neil O’Brien
The hon. Gentleman implies that I disagree with him about this. In fact, the Government are working hard to clamp down on squalid housing. That is exactly what we were doing in my previous Department, DLUHC, and I have just mentioned some of the things that we are doing: the £37 billion we are spending to help people to meet the cost of living, the £15 billion of that that is targeted on the very poorest households, and the £12 billion that we are investing in making people’s houses easier to heat. We will continue to tackle health disparities across the board.
Martyn Day (Linlithgow and East Falkirk) (SNP)
The NHS Confederation wrote to the former Chancellor raising its concerns about rising energy costs and the knock-on effects on health and on NHS services. We all know that this winter we will see people making the choice between heating and eating. Both routes will inevitably lead to more illness and worse health outcomes, so what action are Ministers taking, with their colleagues in Cabinet, to avoid this public health catastrophe?
Neil O’Brien
We are taking the action that I have just been describing in terms of direct support for households. Of course, because health is devolved, we are also helping the devolved Administrations. The Scottish Government, for example, receive £126 per person for every £100 per person of equivalent UK Government spending in England and Wales. That enables the Scottish Government to provide extra help for those in need. It is another example, on top of furlough and the energy support scheme, of how this country is strongest when we all work together constructively.
Mary Glindon (North Tyneside) (Lab)
Paul Blomfield (Sheffield Central) (Lab)
The Parliamentary Under-Secretary of State for Health and Social Care (Maria Caulfield)
Waiting time targets for adult talking therapies were exceeded in 2021-22, with 91.1% accessing those services within six weeks and 98.6% within 18 weeks.
Mary Glindon
Young people in the north-east potentially have to wait up to three years for mental health treatment. Local Metro Radio launched Charley’s campaign to get young people more timely health support. The campaign is in memory of 12-year-old Charley Patterson, who took her own life waiting for treatment. Labour has a fully costed plan to guarantee mental health treatment within a month of referral for patients who need it. Will the Minister commit to adopting that target now?
Maria Caulfield
I thank the hon. Lady for her campaign on this issue. I am very sorry to hear of the tragic case of Charley Patterson. We recognise that, particularly with the pandemic, there has been a significant rise in mental health conditions for young people and children. We are expanding services so that an additional 345,000 children and young people can access NHS mental health support, and we are providing more support in colleges too. I am very happy to meet the hon. Lady to discuss her campaign further.
Paul Blomfield
When I recently visited Sheffield College, students told me about the difficulty they face in accessing mental health services, and it is the same every time I visit a school to talk to students about the priorities for this place and for the Government. According to Mind, one in six young people have a mental health problem. We know that referrals for children and adolescents hit record numbers this summer. Early intervention is crucial but is simply not available. Young people are waiting months and months for their first appointment with child and adolescent mental health services after referral. There is a deepening crisis and, frankly, what the Minister just described will not address it, so what more will she do to ensure proper funding of mental health services for young people?
Maria Caulfield
I have highlighted that there are additional pressures—more children and young people are coming forward with mental health conditions—but I assure the hon. Gentleman that we are putting early intervention directly into schools. Mental health support teams now cover 26% of pupils, with the aim of going up to 35% of pupils by April, and we intend to increase that further. So we are getting in as early as possible. Over 420,000 children and young people were treated through NHS-commissioned services in the last financial year. There is more to be done, but we have made a good start.
James Morris (Halesowen and Rowley Regis) (Con)
There is a real danger that prioritisation of mental health services is not what it was a few years ago. Does the Minister agree that we need to take urgent action on workforce development and other measures to increase capacity for mental health services, so we do not let down the hundreds of thousands of young people who are on the waiting lists? We need to take action now.
Maria Caulfield
I agree and we are taking action now. Our aim is to expand the mental health workforce by an additional 27,000 healthcare professionals by 2023-24. We have already seen an increase—almost 6,900 more full-time equivalent staff. The workforce are the key to that, which is why are investing in them so heavily.
Sir Gary Streeter (South West Devon) (Con)
Waiting times to access mental health specialists in my area are unacceptably high, and I am constantly told there is simply an inability to recruit mental health specialists. I know the Minister works very hard on this subject and she just mentioned what we are doing over the next couple of years. What practical steps can the Government take to ensure that, this year, 2022, there are more mental health specialists available to serve my constituents in Plymouth and south-west Devon?
Maria Caulfield
My hon. Friend makes a good point. We have introduced standards to measure waiting times because the situation is very diverse across the country. NHS England is consulting on introducing five new standards so we can keep track of where the gaps are. Patients can also refer themselves to talking and psychological therapies: over 1 million people have self-referred through the NHS website without having to go and see their GP, so they can get direct access and support when they need it.
Mark Fletcher (Bolsover) (Con)
The Parliamentary Under-Secretary of State for Health and Social Care (Neil O’Brien)
During the pandemic, we provided £1.7 billion to protect dental services. Now, through the improvements announced in the summer and our recent plan for patients, we will pay dentists more fairly and improve access for patients. We are enabling practices to deliver more activity than they are contracted to deliver—up to 110%—practices will have to keep their NHS website details updated, making them easier to find, and we are enabling dentists and their wider teams to work to their full scope of practice, improving access. The number of dentists doing NHS work increased by over 530 last year, but there is much more to do.
Mark Fletcher
The Minister is aware that recent Local Government Association analysis showed that Bolsover has some of the worst dentist provision in the UK. That is highlighted by constituents to me daily. Whether it is getting access to treatment or even registering for an NHS practice, my constituents are struggling. Will the Minister take a look at that and meet me so we can discuss what more we can do for dentistry in Bolsover?
Neil O’Brien
Absolutely. My hon. Friend has been a formidable campaigner on this issue. I know he met the Secretary of State to talk about it in the summer. It is a pleasure to have talked to him already and I am happy to meet with him further. Seven Derbyshire dental providers have been commissioned to deliver extra weekend activity to improve access this winter and, nationally, we are exploring how to incentivise dentists to work in areas where getting an NHS dentist is proving challenging.
Chi Onwurah (Newcastle upon Tyne Central) (Lab)
Effective dental provision is essential not only for quality of life but for nutrition and confidence. Indeed, not being able to access it at important points in life is storing up more trouble for later, yet nine out of 10 dentists are not accepting NHS patients and, with the soaring cost of living, my constituents cannot afford dental treatment. What will the Minister say to them and do to address the millions who cannot get the dental treatment that they need?
Neil O’Brien
The hon. Lady asks a powerful question. As well as the reforms that we started this summer and I announced in our plan for patients, as we start to think about the next dental contract, we are thinking about all the different things we can do to incentivise dentists to work in particularly poorer areas where there is difficulty accessing services. We are also working with the General Dental Council to review the processes that overseas dentists have to complete before they start to provide NHS care, which are sometimes more arduous than those for doctors. We are also thinking about the internal market of the UK and making it easier for dentists in Scotland to practise in England as well.
Dame Maria Miller (Basingstoke) (Con)
I welcome the shift in responsibility for NHS dental services in my area to my local Hampshire integrated care board. That will bring a real improvement by focusing on local priorities, rather than the previous regional approach. Will my hon. Friend join me in encouraging ICBs to ensure that they adequately fund dental services, especially for elderly people and children? Dental health is as much of a priority as any other aspect of our health.
Neil O’Brien
My right hon. Friend is absolutely right. The shift to ICBs is right and it is an opportunity to integrate services in a way that has not been done before. She is right to stress the important preventive role that dentistry can play, which also reduces demand on other services, including accident and emergency.
Dr Alan Whitehead (Southampton, Test) (Lab)
A constituent of mine recently rang the national health contact centre about the possibility of an NHS dentist in Southampton and was told not only that no dentists in Southampton were taking on patients but that no one within 25 miles of Southampton was taking on patients either. What does the Minister have to say to my constituent, who has no prospect of a dentist now and no prospect of a dentist remotely in the future?
Neil O’Brien
That is extremely concerning. This year, in NHS Hampshire and Isle of Wight ICB, there were 1,255 active dentists, compared with 1,248 the previous year. However, there is clearly an issue, which the hon. Gentleman was right to raise in the House. I am happy to talk to him more about that offline to ensure that we can solve that important problem.
Kenny MacAskill (East Lothian) (Alba)
The Minister of State, Department of Health and Social Care (Will Quince)
We are on target to meet the 50,000 nurses manifesto commitment, with nursing numbers more than 29,000 higher in August this year than they were in September 2019 and more than 9,100 higher than in August last year. We are working across a range of delivery partners to invest in and diversify our training pipeline, conduct ethical international recruitment, improve retention and support return to practice.
Kenny MacAskill
Cancer services are buckling both sides of the border and workforce challenges remain the biggest barrier to reducing waiting lists and meeting need. Will the Minister ensure that the long-term workforce plan being developed by NHS England gives consideration to the plans being prepared by NHS Scotland to minimise duplication and try to ensure the best possible patient outcomes in both countries?
Will Quince
I thank the hon. Gentleman for his question. We remain absolutely committed to growing and supporting our vital NHS workforce. In addition to the work already in place to continue growing the workforce, we have, as he mentioned, commissioned NHS England to develop a long-term plan for the workforce, looking at the next 15 years. It is important that we do that in tandem and I will have conversations—I think later this week—with my counterpart in the Scottish Government.
Chloe Smith (Norwich North) (Con)
Workforce does matter enormously to backlogs and cancer backlogs in particular. I have come here straight from a mammogram two years after being diagnosed with breast cancer. Luckily, I am in rude health. [Hon. Members: “Hear, hear.”] However, for my constituents, the Norfolk and Norwich University Hospitals NHS Foundation Trust has met cancer referral targets only once in the last three years. Staff are working extremely hard, including by running more clinics and scaling up services. Will the Minister support the trust to reduce waiting times for my constituents for tests, results and treatment?
Will Quince
I thank my right hon. Friend for her question and I look forward to visiting Norfolk and Norwich University Hospital as soon as possible. She rightly raises cancer referrals. Cancer referrals from GPs are now at 127% of pre-pandemic levels. Cancer treatment levels are at over 107% of pre-pandemic levels, with nine out of 10 people starting treatment within a month. However, as she rightly points out, there is variance across the country and, where trusts have more challenging statistics, we need to address them.
Andy Carter (Warrington South) (Con)
The Minister of State, Department of Health and Social Care (Helen Whately)
When a patient no longer needs acute hospital care, they are usually better off outside hospital and that frees up their bed for somebody else. Delayed discharges are nothing new, but they have been getting worse in part because of the shortage of social care. That is why the Government have announced £500 million to speed up discharges from hospital into social care this winter.
Andy Carter
Warrington is at least 90 beds short in terms of step-down care. A local hospital has too many long-term patients who simply cannot be discharged because there is nowhere for them to go. I am told there is capital funding available. We have two local NHS trusts, a local authority and the integrated care board, which is no longer in Warrington but now in Liverpool, but no action is being taken. Will the Minister come to Warrington to meet local NHS leaders and me, so we can secure access for patients who are spending too long in acute hospital care?
Helen Whately
My hon. Friend is absolutely right about patients spending too long in acute care in his own hospital. We know this is affecting other people around the country. I am very happy to meet him and I would very much like to visit his hospital and speak to his NHS, the local authority and other stakeholders to ensure we can improve the situation.
Barbara Keeley (Worsley and Eccles South) (Lab)
Tony Hickmott is an autistic man who was detained in an in-patient unit for 22 years, often in near total seclusion, against his wishes and those of his parents, Pam and Roy. Tony now has his own home in the community, but the NHS spent £11 million on his detention in the last nine years after doctors considered him fit for discharge. Can the Minister comment on the wasted years Tony and his family spent fighting to get him free? What will she do to release the 2,000 other autistic people and people with learning disabilities detained in in-patient settings who would receive far more effective care in the community?
Helen Whately
The hon. Member raises Tony’s individual case, which is very hard to hear about. She and I know there are too many others in this situation. She will know, too, that I listened to this when I was formerly a Health Minister. It is a difficult problem to solve, but we should absolutely continue to work with the NHS, the Care Quality Commission and local authorities to ensure people who are not benefiting from being in in-patient settings are able to get the care and support they need in the community.
Liz Kendall (Leicester West) (Lab)
The previous Health Secretary promised £500 million social care discharge funding for this winter, but it is 1 November and not a single penny of that money has been seen. I am afraid that the political chaos and incompetence over the last few weeks means that local services cannot properly plan and thousands more elderly people are trapped in hospitals when they do not need to be, with all the knock-on consequences for the rest of the NHS. Will the Minister now tell us: is this money still available? When will it be released? Can she guarantee that it will be genuinely new funding, not found from cuts made elsewhere?
Helen Whately
I am sure the hon. Member heard the answer I gave a moment ago to a similar question. I absolutely acknowledge the challenge of discharges. The challenge is nothing new, but it has indeed worsened, in part due to the availability of social care. That is one reason why the Government have announced the £500 million discharge fund. I am just a few days into this job—[Interruption.] I am looking at the proposals on how this will—[Interruption.] If she will listen, I am looking to make sure that we allocate that money effectively, because we know that money is tight and we must absolutely make sure that every penny of the funding is well spent on improving the discharge from hospital to people’s homes.
Carolyn Harris (Swansea East) (Lab)
The Parliamentary Under-Secretary of State for Health and Social Care (Maria Caulfield)
I am very grateful to the hon. Lady for all her work on issues around the menopause and to all those on the all-party group on menopause for their work. I have read her report and the 13 recommendations. The Government are already working on many of those, from the cost of hormone replacement therapy through to supporting women in the workplace.
Carolyn Harris
The lack of information about symptoms is a recognised barrier to diagnosis. As a result, only 14% of the 13 million menopausal women in the UK have a diagnosis and are accessing treatment. More resource, training and awareness are urgently needed. Will the Government listen to the APPG’s recommendations and commit to a menopause-specific health check for all women?
Maria Caulfield
The hon. Lady is right about the lack of awareness. Awareness is increasing through her campaign and the campaigns of many others. That is why we are seeing a significant rise in the number of women being prescribed HRT, but there is more work to be done. I am looking through the 13 recommendations from her report, and I am very happy, when we meet regularly, to discuss that further.
Clive Efford (Eltham) (Lab)
The Secretary of State for Health and Social Care (Steve Barclay)
We are making progress on increasing numbers. The number of doctors in general practice has increased over the past three years, from 34,729 in September 2019 to more than 37,000 in September this year.
Clive Efford
I am grateful for that answer. I recently met representatives of the local GP network in my constituency who described to me their difficulties in employing GPs. What can the Secretary of State do to ensure that people choose to go into general practice and to make the job much more attractive, so that he hits his target of recruiting 6,000 more GPs, which he is woefully way off doing?
Steve Barclay
I touched on that exact point in an earlier answer. There are parts of the country where it is more difficult to recruit GPs; that is why we have a targeted fund to attract people into those areas, with grants of up to £20,000. Alongside the appointment of GPs, we are also looking at using the wider primary care skills workforce, so that people can get to the appointment that they need.
Priti Patel (Witham) (Con)
Will my right hon. Friend tell me how patients in the Witham constituency will benefit from the really important investment in more GPs and more GP training? And if he cannot tell me today, will he write to me about the progress being made on the Witham health hub, through which more health workers and GPs need to come together to serve the local community?
Steve Barclay
I am grateful for that question. The plan for patients, which was set out by my predecessor, my right hon. Friend the Member for Suffolk Coastal (Dr Coffey), addressed the issue that my right hon. Friend the Member for Witham (Priti Patel) raises on behalf of her constituents. That includes how people make an informed choice about which practice is best for them, how we make it easier for them to book an appointment and how we harness technology better—in particular, the very significant number of patients, including in Witham, who will have downloaded the NHS app and will be able to access services through it from this month.
Harriett Baldwin (West Worcestershire) (Con)
The Secretary of State for Health and Social Care (Steve Barclay)
It is an honour to return to the Department of Health and Social Care to continue its important work, especially ahead of the challenges this winter. I pay tribute to my predecessor, my right hon. Friend the Member for Suffolk Coastal (Dr Coffey), for everything that she has done to get the system ready for the challenges ahead. I welcome my experienced ministerial team to their posts and thank Ministers from the summer. I am also looking forward to robust, I am sure, but—based on our previous experience—very constructive engagement with Opposition Front Benchers.
I am pleased that all GP practices will soon be able to automatically provide patients aged 16 and over with access to the latest information and their health records through the NHS app. We are switching on that ability from today in a process that we expect to be completed by the end of the month. That is an important milestone for patient empowerment and is part of a process that sees patients play an even more active role in managing their health and care. I hope that Members across the House will welcome that on behalf of patients.
Harriett Baldwin
I congratulate the Secretary of State on his reappointment. Will he reiterate the importance of getting ambulance waiting times down? Would he endorse the use of minor injuries units in community hospitals, such as those in Malvern and Tenbury, as a very effective way to open up access through other routes for our constituents?
Steve Barclay
My hon. Friend raises an important point, particularly for category 3 and 4 ambulance journeys. As she highlights, there are numerous aspects to the challenge of ambulance delays: the blockage in the flow from social care and delayed discharge, which we have debated many times in the House; issues in accident and emergency with pre-cohorting, post-cohorting and triaging nurses; conveyance rates, which often vary significantly between ambulance trusts; call handling, which we have put additional money into; and the work of the auxiliary service. My hon. Friend is quite right that within the portfolio of options, minor injuries units are an area that can help to relieve pressure on busy A&Es.
Wes Streeting (Ilford North) (Lab)
I welcome the Secretary of State back and welcome his team, but I have had boxes of cereal with a longer shelf-life than Conservative Secretaries of State. As a consequence of the turnover and chaos, the truth is that the NHS is not prepared for this winter—it cannot even get allocated funds out of the door.
Let us turn to the future. Over the summer, the Prime Minister promised to establish a “vaccines-style taskforce” to tackle the Conservatives’ NHS backlog on “day one” and to have overall waiting list numbers falling by next year. May I ask the Secretary of State who is on that taskforce, how many times it has met and what its programme of work is?
Steve Barclay
I am grateful that the hon. Gentleman raises the issue of vaccines; in fact, I raised it in Cabinet today. The UK is the first country in the world to have introduced bivalent vaccines targeted both at omicron and at the original strain of covid-19. We have now made the covid vaccine and the flu vaccine available to all over-50s; I hope that Members across the House will promote that. I think the UK can be very proud of its work to roll out vaccines against both covid and flu, which are a key part of preventing some of the pressure on our A&Es.
Wes Streeting
I can forgive the Secretary of State for mishearing the question, but what I find unbelievable is that it seems as if this is the first time he has heard about the Prime Minister’s own proposed taskforce to deal with the Conservatives’ NHS backlog. That is what the Prime Minister promised, and that is what I asked the Secretary of State about. This is obviously another case of the Conservatives over-promising and under-delivering.
If the Secretary of State cannot stand by the Prime Minister’s pledges, what about the views of the man next door? When we announced our policy to train a new generation of doctors and nurses, paid for by abolishing non-doms, it was welcomed by the Chancellor as—and I quote—“something I very much hope the government also adopts on the basis that smart governments always nick the best ideas of their opponents.” In the spirit of constructive opposition that the Secretary of State asks for, Labour has a plan to tackle the staffing crisis. The Conservatives do not. It is fully costed and paid for, so will he nick it?
Steve Barclay
The hon. Gentleman skirts over the fact that it is this Government who have opened five new medical schools, who have significantly boosted medical undergraduate training, who are investing more in our NHS as per the long-term plan, who have invested a further £36 billion as part of our covid response, and who are investing in technology and the skills of the workforce as a whole. We are boosting the number of medical trainees and—I touched on this question earlier—we are also boosting the number of doctors in training to be GPs.
Sir Edward Leigh (Gainsborough) (Con)
Steve Barclay
My right hon. Friend raises an important point about face-to-face care, which matters to many constituents, but I gently remind him that in the Lincolnshire integrated care system, 71.9% of appointments were face to face in September 2022. It is not the case that every patient wants a face-to-face appointment; there can be instances in which an online service is better. For patients facing domestic violence, for example, it can often provide a much more convenient service.
Mr Speaker
Order. I know we are bedding back in, but Front Benchers have to think about Back Benchers. These are their questions as well, so please let us make sure that I can call as many of them as possible.
Martyn Day (Linlithgow and East Falkirk) (SNP)
The Scottish Government introduced new national guidelines to make it easier for retiring NHS staff to return to support the NHS, while drawing their pensions. However, there is a substantive issue of pension tax rules pushing senior clinicians to reduce their commitments or retire early. As we know, pension taxation is a wholly reserved matter, so will the Minister address this issue with Cabinet colleagues in order to find a permanent solution that will allow us to help the NHS retain senior staff?
Steve Barclay
Pensions are an important issue, and I shall be meeting the Chancellor later today.
Damian Green (Ashford) (Con)
Steve Barclay
Very much so. The hon. Member for Ilford North (Wes Streeting) asked about a taskforce. With our colleagues in NHS England, we launched a “delayed discharge” taskforce with a “100-day challenge” over the summer; we have also set up an international recruitment taskforce within the Department to prioritise the establishment of a “clearing house for care”. I will not add further to my answer, other than to say that this is a key area of focus.
Wera Hobhouse (Bath) (LD)
Steve Barclay
The wellbeing of staff—especially in the NHS, and especially after the pressure of the pandemic—is a crucial issue, and one on which I have focused in particular since returning to the Department. I look forward to having discussions about it with the hon. Lady.
David Johnston (Wantage) (Con)
The Minister of State, Department of Health and Social Care (Helen Whately)
I have shared my hon. Friend’s concern about this issue in the past, and I know he has taken a long-term interest in it. We must ensure that people living with dementia are prescribed anti-psychotic medication only when it is clinically appropriate., and NHS England is actively monitoring the position. I have already asked for the latest data, and I will be keeping a close eye on it.
Deidre Brock (Edinburgh North and Leith) (SNP)
Steve Barclay
Across the clinical workforce—whether we are talking about dentistry, nursing, social care or doctors—we are seeking to boost recruitment, including international recruitment, and to remove red tape. Within the GP population, however, we are looking at retention, recruitment and boosting the number of trainees.
Elliot Colburn (Carshalton and Wallington) (Con)
The Minister of State, Department of Health and Social Care (Will Quince)
We are fully committed to delivering a new hospital in Sutton, one of the 40 new hospitals to be built by 2030. Officials from the Department and the NHS are working closely with the trust at every step in the process, and I look forward to working with my hon. Friend to deliver this much-needed hospital improvement.
Richard Foord (Tiverton and Honiton) (LD)
The Parliamentary Under-Secretary of State for Health and Social Care (Neil O’Brien)
In the hon. Gentleman’s local NHS this year there were 758 active NHS dentists, up from 736 in the previous year. I have already mentioned some of the steps we are taking to tackle the problem of dental deserts and ensure that everyone in the country can see the dentists—and the GPs—whom they need to see.
Gordon Henderson (Sittingbourne and Sheppey) (Con)
Members of the Kent and Medway integrated care board are doing their best to recruit more GPs, but they are finding it difficult to attract them to our area. One reason is their close proximity to London, where newly qualified GPs can earn thousands of pounds more than they can if they practise in Kent. Will my right hon. Friend consider extending the NHS London weighting allowance to Kent and Medway?
Steve Barclay
Part of the reason for having the targeted funding is so that ICSs can look at those areas under particular pressure for recruitment and do that on a place-based basis. It would be interesting to look at the evidence, but I know that the fund has been used by my hon. Friend’s local ICS.
Nadia Whittome (Nottingham East) (Lab)
Helen Whately
Care workers should be properly paid for what they do, the skills they bring and the compassion they bring to their work. That includes being paid at least the national living wage, which was increased by 6.6% in April. I am also increasing the Care Quality Commission’s oversight of local authority commissioning, and we have created a £1.36 billion market sustainability and fair cost of care fund, which will ensure that local authorities always pay a fair cost of care.
Stephen Hammond (Wimbledon) (Con)
Early access to scans and testing can prevent more serious illness, improve health outcomes, reduce health inequalities and reduce pressure on the acute sector. Will my right hon. Friend prioritise increasing the number of diagnostic centres across the United Kingdom and support my campaign for the establishment of one in Wimbledon town centre?
Will Quince
My hon. Friend is right to say that we are supporting the NHS to deliver up to 160 community diagnostic centres by March 2025, 89 of which are already operational, as part of £2.3 billion of capital funding, delivering around 2 million additional scans so far. Community diagnostic centres are closer to people’s homes in the hearts of communities, and they will help us not just to reduce and bust the covid backlogs but to tackle health inequalities.
Grahame Morris (Easington) (Lab)
As we get older, many of us—individually or our close family and their immediate family—will be touched by cancer. Can the Minister confirm when the 10-year cancer plan will be published in full, and will the Minister agree to meet me and a small delegation from the all-party parliamentary group on radiotherapy to hear more from the experts on the frontline about how we can use this technology to improve cancer outcomes?
Helen Whately
Sadly, cancer takes far too many people before their time, and the Government are determined to improve cancer outcomes in the short term and the long term. I am very happy to meet the hon. Gentleman to discuss this further.
Mrs Pauline Latham (Mid Derbyshire) (Con)
What steps is the Minister taking to improve health outcomes and early diagnosis for people with aortic dissections?
Helen Whately
I know that my hon. Friend has a real understanding of this particular challenge. In March 2022, NHS England launched an aortic dissection toolkit to support the implementation of robust clinical pathways to identify and manage type A and type B aortic dissection, and English regions are working with the cardiac pathways improvement programme to improve diagnosis and treatment.
Dan Jarvis (Barnsley Central) (Lab)
Tens of thousands of NHS workers are entirely dependent on the use of their car to do their vital job, but while petrol prices have rocketed, NHS mileage rates have remained frozen since 2011. Will the Secretary of State look at what can be done to increase NHS mileage rates?
Steve Barclay
That fits within the wider issue of how we work with and support our NHS workforce and what packages we can look at in discussion with Treasury colleagues. Of course, the approach to the NHS is also in line with other Government Departments, but the hon. Gentleman raises an important point and it is obviously one that Ministers discuss.
Maggie Throup (Erewash) (Con)
With flu cases on the rise, what action is my right hon. Friend taking to ensure that all parents are aware that they can access the free nasal vaccine at their GP surgery for all pre-school children?
Neil O’Brien
My hon. Friend’s question gives me an opportunity to thank her for her fantastic work on vaccinations and our world-leading roll-out of vaccines across the country. She has also provided an opportunity to remind everyone of the opportunity to get those life-saving vaccines this winter and to get boosted.
Karin Smyth (Bristol South) (Lab)
This month a care provider in my constituency is closing, citing the workforce crisis. I have listened carefully to the Ministers’ answers, and the current Chancellor spent the last year telling us about the critical need for a workforce strategy. The door is open. Has the Secretary of State had a conversation with the new Chancellor to ask for a workforce plan on which we can all rely?
Steve Barclay
As I said, I am meeting the Chancellor later today.
Jonathan Gullis (Stoke-on-Trent North) (Con)
Forty per cent. of GP appointments are now related to mental health. That is why James Starkie and I launched the cross-party “No Time to Wait” campaign, which had the support of the Prime Minister when he was Chancellor. We have a fully costed plan with the Royal College of Nursing to pilot such a scheme. Is the Secretary of State willing to meet James and me?
The Parliamentary Under-Secretary of State for Health and Social Care (Maria Caulfield)
I thank my hon. Friend for his suggestion. We are committed to boosting the mental health workforce, and I am happy to meet him to discuss his suggestions.
Hannah Bardell (Livingston) (SNP)
My constituent Wilma Ord and her daughter Kirsteen are victims of the Primodos hormone pregnancy drug. Will the Minister update me on where the Government are in getting justice and compensation for the affected families? Many people have died. Will she meet me and other families and representatives from the campaign group to get justice for these families? They have waited far too long.
Maria Caulfield
As the hon. Lady knows, there is an ongoing legal case about Primodos, but I am very happy to meet her and the campaigners because I am keen to hear their experience. Unfortunately, I cannot comment further while there is an ongoing legal case.
Sir Robert Neill (Bromley and Chislehurst) (Con)
I refer to my entry in the Register of Members’ Financial Interests. Last Saturday was World Stroke Day. Will my right hon. Friend the Secretary of State commend the work of the Stroke Association and its “saving brains” campaign? And will he meet members of the all-party parliamentary group on stroke to discuss how we can increase the provision of life-saving thrombectomy services across England and Wales?
Helen Whately
I am very happy to commend the work of the Stroke Association, and I would be delighted to meet my hon. Friend to discuss this further.
Dr Rupa Huq (Ealing Central and Acton) (Ind)
A respected woman pharmacist in my constituency, with a lifetime of NHS experience, went solo with her own practice in the hope and expectation of an NHS licence, which she has been denied. Will the Secretary of State look into the opaque decision-making process? Our increasing population otherwise means increasing demand, and my constituent cannot survive on private alone.
Tracey Crouch (Chatham and Aylesford) (Con)
Suicide is the biggest killer of under-35s in the UK, with more than 200 school-aged children taking their own life every year, including two, very sadly, in my constituency in recent months. We have heard about the pressures on mental health services, so will the Secretary of State look at alternative ways of supporting mental health by meeting the 3 Dads team and his counterpart in the Department for Education to discuss how we can embed age-appropriate suicide awareness and prevention in schools?
Steve Barclay
Part of the reason why we are putting an extra £2.3 billion into mental health is to recognise the sensitivity and the importance of this issue. I am very happy to look at all practical suggestions. The tragedy for constituents is something that unites the House. In particular, I will look at what technology can do to support people.
Kate Green (Stretford and Urmston) (Lab)
The New Statesman has reported that the spend on Healthy Start has fallen by two thirds in the last decade, and this afternoon I will be presenting a Bill that would help to increase take-up. Will the Secretary of State or one of his team meet me to discuss the details of what campaigners and I are proposing so that we can make this helpful benefit reach more of the families it is intended to benefit?
Steve Barclay
I am very happy to ensure that the ministerial team engages with the hon. Lady. I take this opportunity to commend my right hon. Friend the Member for South Northamptonshire (Dame Andrea Leadsom), who has done a huge amount of work on early years, which dovetails with this important issue.
Peter Gibson (Darlington) (Con)
Following a recent unannounced inspection by the Care Quality Commission, some services at Tees, Esk and Wear Valleys mental health trust have improved, but the trust’s overall rating remains “requires improvement.” Can my right hon. Friend assure me and my constituents in Darlington that his Department will keep a laser-like focus on the trust and that he will do everything in his power to ensure the trust carries out the improvements that are so desperately needed?
Maria Caulfield
I thank my hon. Friend for raising this important issue. I understand he recently wrote to the Secretary of State, and we will respond shortly. NHS England and the North East and North Cumbria integrated care board have commissioned an intensive support team review of the trust, and I will keep him updated. He is right to make sure that we keep this high on the agenda.
David Linden (Glasgow East) (SNP)
Children who are born premature or sick are often discharged from neonatal care with energy-intensive equipment, such as oxygen machines, which has an impact in terms of the cost of living crisis. Is the Secretary of State willing to meet Bliss and myself to look at the costs faced by families who come out of neonatal care and how we can support them better?
Steve Barclay
The Bliss charity is recognised across the House for the extremely important work it does, and I know that the ministerial team will be happy to engage with the hon. Gentleman on how we can work on the matter he raises.
BBC Local Radio: Proposed Reduction in Provision
(2 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Emma Hardy (Kingston upon Hull West and Hessle) (Lab)
(Urgent Question): To ask the Secretary of State for Digital, Culture, Media and Sport whether she has considered the impact of the proposed reductions in BBC local radio provision; and if she will make a statement.
The Minister of State, Department for Digital, Culture, Media and Sport (Julia Lopez)
I thank the hon. Lady for highlighting this news announcement that we learned about yesterday, as it gives the House an opportunity to demonstrate the value we all place on BBC local radio services.
We are currently celebrating 100 years of BBC radio. With its unique position in the radio market, the BBC has continued to develop and deliver high-quality and engaging audio services to the country and internationally over the years. BBC local radio is one of the BBC’s crown jewels. Developed in the late 1960s and 1970s, the BBC’s 39 local radio services in England still reach 5.7 million listeners each and every week. As hon. Members know, BBC local radio is highly valued outside London, where stations in Derby, Stoke, Humberside, Cornwall, Devon and elsewhere have higher reach or share numbers than the average.
Changes in patterns of listening mean that the BBC needs to look at its services, and the details about new investment in local investigative reporting are very welcome. But overall we do have concerns about the proposals, which we were not given notice of. I want to take this opportunity to stress that the BBC is rightly operationally and editorially independent from the Government, and that decisions on service delivery are ultimately a matter for it. However, the Government are disappointed that the BBC is reportedly planning to make such extensive cuts to its local radio output. We await to hear more from the BBC about how it expects those changes to impact local communities, including in respect of the provision of local news and media plurality.
At its best, as was particularly shown during the pandemic, BBC local radio is able to bring communities together and it plays a vital role in reflecting local experiences and delivering local news. For older residents living in rural areas, it can be a particular lifeline. The BBC must make sure it continues to provide distinctive and genuinely local radio services, with content that reflects and represents people and communities from all corners of the UK.
We recognise that in the current political context the BBC, like other organisations, is facing difficult financial decisions, but we are also concerned that the BBC is making such far-reaching decisions, particularly about its local news provision, without setting out further detail on how it will impact its audiences and the communities it serves. In the context of a £3.8 billion licence fee income, we do not have any details about how much this proposal is likely to save. The BBC board must make sure that the BBC complies with its charter duties. The Government are clear that Ofcom, as the BBC regulator, must make sure that the BBC is robustly held to account in delivering its mission and public purposes.
We note that as part of this announcement the BBC is also proposing establishing 11 investigative reporting teams across England. That will see the creation of 71 new journalism roles, delivering original stories across TV, radio and online services. As the House will be aware, we are currently undertaking a mid-term charter review, which we have set out and which will evaluate how the BBC and Ofcom assess the market impact and the public value of the BBC in an evolving marketplace and how that relates to the wider UK media ecology, including with regard to commercial radio and local news sectors. Handily, I am scheduled to meet the BBC next week, when I shall see the chairman and director general, and I shall raise with them the concerns that are brought to the Chamber today. We also expect the BBC to brief parliamentarians on its announcements shortly.
Emma Hardy
Thank you for granting the urgent question, Mr Speaker. Let me also welcome the Minister to her place and many of the comments she has made today. BBC local radio stations are vital as sources of information and for sharing communal experiences. I recently attended the Radio Humberside “Make a Difference Awards”, which highlighted the work of local people in their communities. In March last year, Chris Burns, the head of audio and digital for BBC England, celebrated these awards saying:
“The power of radio is huge when it comes to connecting local communities in their hour of need.”
I agree. Local radio, especially Radio Humberside, brings a feeling of belonging and companionship, especially to those who are isolated from everyday interactions. Local radio stations also hold democratically elected local politicians to account, and during the covid lockdowns they provided an invaluable service, enabling and publicising local support initiatives and disseminating up-to-the-minute news.
Local radio has 5.7 million listeners—more listeners than Radio 1 and Radio 5 Live—and it is the embodiment of public service broadcasting, remaining true to the principles behind the creation of the BBC 100 years ago. The plans announced yesterday for changes to the content of local radio—without any consultation at all of local communities—effectively mean that local radio will cease to exist after 2 pm. At Radio Humberside, 139 redundancies are predicted; as well as the impact on the individuals affected, those redundancies represent a collective loss of local expertise and knowledge and of campaigning community voices.
Does the Minister agree that local listeners should have been consulted? Does she agree that the loss of provision will be damaging to local communities as they lose an important voice for their experiences and concerns about local services, democracy and accountability? Finally, does she agree that local radio cannot call itself local when it stops being local after 2 pm?
Julia Lopez
I thank the hon. Lady for her comments and for highlighting the work done by Radio Humberside, as well as the power of radio to connect us in times of need and to ensure local democratic accountability. The mission and public purposes of the BBC include provision of output and services to the UK’s nations, regions and communities. That provision is a key part of the BBC’s remit and we hold the BBC to account for it via Ofcom; it is also something we will look at very closely in the mid-term review.
The hon. Lady highlighted the loss of local expertise. BBC local radio stations have traditionally been a fantastic way to develop local talent which has gone on to be incredibly important national talent, so we have concerns about that. She talked about the need for consultation. I would have hoped to have had more chance to examine these proposals before they were released, and I shall be talking to the BBC about that next week. I am grateful to the hon. Lady for raising these issues.
Julian Knight (Solihull) (Con)
Does the Minister recognise the very real concerns about the potential loss of local distinctiveness through the proposed cuts? Should the BBC really be once again aping the commercial sector by coalescing around theme rather than genuine distinctiveness? That is where we are going with these plans. Does the Minister recognise that the cuts make reforms to radio prominence absolutely crucial? Will she quash growing rumours that the main potential vehicle for such reforms—the media Bill—is to be shelved or delayed?
Julia Lopez
I thank my hon. Friend the Chair of the Select Committee. I am particularly grateful to him and the Committee for their very important work and investigations into local journalism, and for the opportunity to present to the Committee a couple of weeks ago. One of the issues the proposals raise is whether the BBC investing more online has an impact on local news providers, which compete for that online space. On the media Bill, we in DCMS are keen to introduce it as soon as possible and we hope to be able to provide further details.
Stephanie Peacock (Barnsley East) (Lab)
I thank my hon. Friend the Member for Kingston upon Hull West and Hessle (Emma Hardy) for securing this important urgent question, and you for granting it, Mr Speaker.
The BBC is a great British institution and local radio is the cornerstone of it. It is what the BBC does best: whether it be local traffic updates, school closures, weather or other news events, BBC local radio keeps over 6 million people across the country connected to their communities. I know that my local BBC station, Radio Sheffield, keeps the people of Barnsley informed. During the pandemic, it served as a lifeline, providing tailored local updates on the latest case numbers and guidance. More recently, local radio has shown that it has the power to keep national politicians accountable to the people we represent. Of course the BBC needs to change with the times and adapt to a world where people consume their media online, but those adaptations need not be in competition with the services that make the BBC the excellent institution it is.
Under this Government, however, the BBC has been continually undermined. In an already challenging economic environment, the Government’s looming threat of scrapping the licence fee while providing no alternative model has done nothing but further destabilise the position of the BBC. The consequences of that instability are now showing. The journalists on the ground, doing their job, have had to find out through the media that their jobs are at risk of redundancy.
The Minister must take some responsibility and answer the following questions. She said that there was no discussion between the Government and the BBC prior to the decision. What steps will she now take? May I press her again to say when we will finally see the long-awaited media Bill? How will Ministers ensure that people are still able to get high-quality local news and media that keep them connected, especially as local radio stations are often the last local newsroom standing in many areas? Does the Minister acknowledge that threatening the future of the BBC as a whole is already causing it great harm?
Julia Lopez
It is important to ask ourselves what “local” means in this context. If several counties or regions are stitched together, the service ceases to be local and relevant to local people, which we have concerns about. We recognise that the BBC is under pressure, as are many other media organisations, which is why we have a series of reforms that we hope to put through in the media Bill to help it with some of those pressures. However, I say to the hon. Lady that the BBC has a £3.8 billion annual income from the licence fee, and it has that income guaranteed for the next five years. Any media organisation would be grateful to have such stability in its funding settlement. I do not see that as destabilising. It is absolutely right that the Government ask some fundamental questions about the licence fee model in the years ahead. This is a rapidly changing media landscape and it is important that we get these decisions right.
On the next steps, as I mentioned to the House, I am seeing the director-general next week. We also have the mid-term review, where we will be examining some of the very matters being raised in this urgent question.
Damian Green (Ashford) (Con)
Along with many of my constituents, I am a huge admirer of the news and analysis provided by Radio Kent. It is particularly important these days when local commercial radio has effectively completely disappeared. Can the Minister assure the House that, when she meets the BBC, she will impress on it the importance of striking the right balance between traditional means of disseminating such information through radio and the newer online means, because the BBC will need to carry on doing both effectively if it is to fulfil its public purpose?
Julia Lopez
My right hon. Friend raises an important point. One thing the BBC does is serve every community, including those audiences who are not so capable of listening to things online and are not so digitally enabled. I am certainly happy to raise the points that he has just mentioned.
Clive Efford (Eltham) (Lab)
Does not the fact that the Minister was not informed by the BBC ahead of these decisions demonstrate the poor relationship that the Government now have with the BBC? What does she think she can do to improve on that?
Julia Lopez
I think that I have a very positive relationship with the BBC, but it is operationally independent. In the context of some of the changes that are being made, it is important that we have an open and honest discussion about these proposals when we meet next week.
Simon Jupp (East Devon) (Con)
BBC local radio makes a difference to the community that it serves. It is also the service closest to communities that pay the licence fee. I am very concerned by the proposals, which will see an awful lot of programmes shared between BBC Radio Devon and BBC Radio Cornwall, and job losses too. What steps will my hon. Friend take to make sure that local news provision is protected?
Julia Lopez
My hon. Friend has particular experience as a former manager of BBC Radio Solent and a Select Committee member. As I have said previously, I am very grateful to the Select Committee for looking at some of these quite complex issues around local journalism. The question is: at what point does local journalism cease to be local if there is a merging between large geographical counties such as Devon and Cornwall. That causes me concern, and I would be happy to engage with him further on all of those issues.
Derek Twigg (Halton) (Lab)
Many of my constituents listen to Radio Merseyside, which is an excellent local radio station and probably one of the most popular in the country. It certainly has a good track record in dealing with local issues and in holding its politicians and others to account. I have to say to the Minister that we talk about local radio, but it is ceasing to be local because of what we have heard today. The next thing will be whether some of the local radio stations get closed—perhaps in a year or two’s time. That is where we are going. Should the BBC not be concentrating on investing more and on improving further the local content of radio stations? The Minister said that she was not happy with the way that this had been done. When was her Department told by the BBC that it was making these changes?
Julia Lopez
I thank the hon. Gentleman for raising the importance of Merseyside radio. On the matter of holding people to account, my understanding is that the proposals include an investment in investigative journalism, which could be a positive thing, but if we had been given further details, information and notice, I would have had a better understanding of the proposals. We were not given notice beyond the news release yesterday.
Steve Brine (Winchester) (Con)
The Minister is right to say that the Select Committee is very concerned about this announcement. We have taken a lot of evidence, including from her, on this subject. On BBC Radio Solent, which my constituents listen to, we think that, at weekends, there will be no purely local output at all—not even breakfast programmes—except, potentially, sports commentary. That is decimation. We hear that these regional investigative hubs will be put in place of truly local radio. Will the Minister ask the BBC, and will she give the House her opinion, as to whether that is what the licence fee payers—the BBC’s customers—actually want, because I very much doubt that that is the case?
Julia Lopez
The BBC is a public service broadcaster and it is there to deal with types of journalism that are not covered adequately by the market. That is why the BBC has support. If it is not delivering that kind of distinct local and regional content, we have to ask some very serious questions.
Valerie Vaz (Walsall South) (Lab)
Local radio was brilliant when it questioned the previous Prime Minister. Can the Minister reassure the House that this is not a done deal, and can she update the House on her discussions with the director-general?
Julia Lopez
I thank the right hon. Lady for raising those interviews with the previous Prime Minister. That has since led to a regular section on the Radio 4 “Today” programme where local radio stations are making a specific contribution to what is a national broadcasting programme, allowing us to get a much better flavour of what is going on across the country, and of the different opinions that regional and local news providers have on those national stories. That is where the value of the BBC really comes into play, and I really hope that that does not wither on the vine.
Sir John Whittingdale (Maldon) (Con)
I urge my hon. Friend to ask the BBC to think again. Will she remind it that stations such as BBC Essex are greatly valued by listeners and provide a service that is unavailable commercially? Online news is already well supplied by the local media, which is under considerable pressure even without greater competition from the BBC. Will she consider asking Ofcom to look into the impact of this decision on local publishers?
Julia Lopez
My right hon. Friend obviously has a great deal of expertise in these matters and I am grateful to him for raising the great content of BBC Essex. As I have said before, this is a great opportunity to show the strength of opinion across the House; the BBC is there precisely to serve audiences that are not covered by commercial radio. I would be happy to talk to Ofcom, because these are fundamental questions about the purpose of the BBC.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
Can we just think about one example of how BBC local radio has impacted on all our everyday lives? During the pandemic the “Make a Difference: Give a Laptop” local radio campaign saw more than 116,000 laptops donated to schools and raised £1 million. I argue that that enabled children to carry on learning during one of the most disabling periods in our recent history. Is that not one incredibly convincing argument as to why we should protect and finance the BBC properly?
Julia Lopez
I thank the hon. Gentleman for his contribution. He is right to highlight just how important those local radio services were during the pandemic, particularly as we were seeing lots of different restrictions in different parts of the country; they provided people with up-to-date information about the restrictions in their particular area. I appreciate what he says about the funding. We have guaranteed the BBC a large amount of funding for the next five years, but he is right to highlight some of the important work that it has done over the past few years.
Tracey Crouch (Chatham and Aylesford) (Con)
With my other half working in local radio as a presenter, I need to declare a personal interest in this issue. However, my support was strong long before we met, because I have always understood the importance of local radio and its value to its listeners, as I know you do, Mr Speaker, having spoken to you on many occasions about your affection for BBC Radio Lancashire. In a county such as Kent, local news delivered by local journalists who understand local need and culture is essential. It is not just about news, but about conversation and engagement. If my constituents want national news, they will go to the News Channel, but if they want local news, travel, weather, sport and what is going on around the county, they will tune into BBC Radio Kent. Merging Kent with Surrey and Sussex would be a travesty. Without being rude, why would Kent listeners want to hear about a local issue in Surrey or Sussex, and vice versa? Does my hon. Friend agree that any manager who thinks that local content should be shifted online neither knows their demographic—those who are most likely to be digitally disconnected—nor listens to it, and does not understand the definition of public service?
Julia Lopez
I thank my hon. Friend for raising the incredibly important work of BBC Radio Lancashire; I am grateful to be able to give it a shout-out. She raises the prospect of a merged Surrey-Sussex-Kent service, and she is right to highlight that that does not provide the kind of local, specialised content that people are looking for when they turn on the radio, and that there is a real risk that people will just turn to national services because that content is not sufficiently directed at them.
Mr Speaker
Of course BBC Radio Lancashire is so important, having Mike Stevens and Graham Liver there all the time.
Karl Turner (Kingston upon Hull East) (Lab)
We all appreciate the brilliance, the quality, the objectivity and the outstanding journalism, production and research of BBC radio journalists—not least, in Hull, in the coverage of rugby league, which you and I are both fans of, Mr Speaker. I urge the Minister to impress upon the director-general the crucial importance of that local knowledge in local BBC radio.
Julia Lopez
I thank my hon. Friend—I mean the hon. Gentleman—for raising—
Julia Lopez
I thank my hon. Friend for raising the importance of the sports content in particular. I know there is so much passion for people’s local clubs, and if that news service is not there for those local clubs, that sense of disconnection becomes more prominent. I have not had time fully to absorb the proposals, and I think there is some talk of sports content being untouched by them, but I will ask his question of the director-general when I see him.
Kevin Foster (Torbay) (Con)
BBC Radio Devon is a key part of the news picture in my constituency. We have already seen the decline in commercial media, with the local daily paper becoming weekly and newsrooms closing. How will my hon. Friend satisfy herself that when the BBC promises sports coverage, that is not just commentary—for example, of tonight’s game—but about fully covering the clubs, as we have seen BBC Radio Devon covering well a number of issues affecting Torquay United?
Julia Lopez
I am glad my hon. Friend has taken the opportunity to raise the wonderful club of Torquay United and the important coverage that BBC local journalists provide to grassroots sport, which is key to ensuring that support for those small clubs continues. I shall ask the director-general about the importance of services in Devon and other rural counties when I see him.
Hilary Benn (Leeds Central) (Lab)
Further to the point made by my right hon. Friend the Member for Walsall South (Valerie Vaz) about the effectiveness of BBC local radio in questioning the Prime Minister in September—kicked off, of course, by Rima Ahmed from the wonderful BBC Radio Leeds—the Minister will have heard from Members in all parts of the House just how important that local content is to us and our constituents. I urge her to take that sense of unhappiness to her meeting with the director-general and encourage him to change his mind.
Julia Lopez
I thank the right hon. Gentleman for his suggestion. As I hope he has gathered from my responses, this urgent question has been a useful opportunity for the House to make clear its very strong feelings on this issue and has allowed everybody to highlight particular parts of the country, the particular stories that come from those parts of the country and the talent that is nurtured in those local radio stations.
Andy Carter (Warrington South) (Con)
It is true that the local media ecology has changed beyond all measurable doubt over the past 20 years, but nobody provides local radio in the UK like the BBC, because it is set up and funded as a public service broadcaster. That should be at the heart of the BBC’s delivery. Can my hon. Friend assure me that Ofcom will look carefully at the provision of local services to ensure that older audiences are not disenfranchised by this decision? How can she ensure that other local media provision, particularly online provision that relies on local revenues to support its services, is not impacted by the BBC disproportionately acting online?
Julia Lopez
My hon. Friend has great expertise, particularly in the area of radio, so he will understand that there is a delicate ecology here and we must ensure that whatever the BBC does enhances local journalism rather than creating sustainability questions for other local journalists, particularly if it starts to move services online. He makes a good point about radio content being at the heart of the BBC’s public service broadcasting mission, and it is a point I shall make to the director-general.
Ian Paisley (North Antrim) (DUP)
Thank you for calling me so early, Mr Speaker—obviously accelerated by the complete lack of Scottish Nat Members, which I am sure is by accident and not by design, but I do appreciate it.
Before we get carried away on a wave of claptrap, may I ask the obvious question? Does the Minister agree that there are many savings to be made in how the BBC distributes its regional services, and that those savings should be made? There is much duplication within the BBC. Many of us have given the same interview time and again on the same day for a number of regional radio stations and there has been no sharing of that across the BBC regional network, as should be the case. Of course, we have split services in Northern Ireland: we effectively have Radio Ulster and Radio Foyle, and there has been a removal of exciting local issues to do with, for example, 12 July coverage. All that has been removed from BBC radio locally. The Minister needs to make sure that, when she talks to the director-general, she makes those points also.
Julia Lopez
I thank the hon. Gentleman for his contribution. I know he has very strong feelings about the BBC, which we discussed only yesterday in the Lobby. The BBC has a licence fee income of £3.8 billion a year, and there are big questions to be asked about what kind of content it should be delivering with that amount of money. I think the strength of feeling in this House is that this very local content is precisely what the BBC is there to deliver, because the commercial sector does not deliver it. People are content to pay for the licence fee when they think it is providing that kind of service.
Jason McCartney (Colne Valley) (Con)
I declare an interest as a former employee of BBC Radio Tees and freelancer at BBC Radio Leeds. We all welcome investment in digital services and it is good that local sport will continue—speaking particularly as a rugby league fan of the Huddersfield Giants—but the message is coming through loud and clear: the Minister needs to ask the director-general and the chairman to look again at continuation of local coverage after 2 pm. It is vital in my neck of west Yorkshire, not just through the pandemic, but when we have bad weather, for school and college closures and updated road information. It is really important. Will she please press that with the DG and the chairman next week? We need proper local coverage throughout the day, not stopping at 2 pm.
Julia Lopez
I thank my hon. Friend for his contribution, not least because of his own background and expertise in BBC local radio. I have a great deal of sympathy with the BBC’s trying to future-proof the organisation, to ensure it is more available online and to deal with some of the challenges around digital, but it must look at its fundamental purpose. He is right to highlight the importance of local news in relation to specific local updates, whether that is weather, travel or particularly important democratic stories, and I shall be raising those issues with the director-general.
Cat Smith (Lancaster and Fleetwood) (Lab)
I am sure you would agree with me, Mr Speaker, that while all local radio stations are good, BBC Radio Lancashire is the greatest of them all. All the more reason, then, to raise my concern that in Lancashire it is proposed that from 2 pm onwards we have shared services with Cumbria, from 6 pm onwards on weekdays it is shared with Greater Manchester and Merseyside, and on weekends just with Merseyside. Does the Minister agree that that fracturing of BBC local radio is a threat to democracy? For strong democracy we need strong, accountable local media to hold politicians right across our counties—including the greatest county, Lancashire—to account.
Julia Lopez
Let us give another shout-out to BBC Radio Lancashire, just so that Mr Speaker is content with me. The hon. Lady highlights the potential for geographically large and very diverse areas to be stitched together. As I say, after a point that ceases to be local content, and there is a serious question about democratic accountability, given that that is one of the primary purposes of public service broadcasting. Those are very real issues that need to be raised.
Sir Mike Penning (Hemel Hempstead) (Con)
I was surprised to hear that the Minister only heard about this in the last couple of days, because I heard about it last week through a whistleblower from my local area. That is very worrying. The second worrying thing is that the public trust local radio as they do not trust “Newsnight” or “Today”—frankly, because they do not listen to them. They trust local radio. If this is about money, then take half a million pounds out of Gary Lineker’s salary, or one of the others who earn extortionate salaries. That would pay for a lot of people at Three Counties Radio to keep their jobs.
Julia Lopez
I thank my right hon. Friend for raising his concerns. There is a social compact between the public and the BBC that we pay the licence fee on the basis that it provides us with this kind of content, and if it ceases to do that, that raises more fundamental questions. He raises a number of helpful points, and I shall make sure that they are addressed. I know that many Members across the Chamber feel strongly about some of the very large salaries in the BBC, and that goes to the heart of public trust in the BBC. If we had further details and a greater understanding of the cost savings in these proposals, we could have a more serious debate about it.
John McDonnell (Hayes and Harlington) (Lab)
I am the secretary of the National Union of Journalists parliamentary group, and the Minister can imagine the crushing disappointment among NUJ members, because this comes on top of 450 job losses in BBC England and 400 job losses in the World Service. Our concern is that the digital first proposals are undermining the provision of news at the local, national and global level. I am pleased that she is meeting the BBC next week. I ask her to meet the NUJ group as well, so that we can brief her on what we know is happening on the ground as a result of cut after cut after cut from the BBC.
Julia Lopez
I am grateful to the right hon. Gentleman for raising the NUJ’s concerns. It is important that many people get their training in local media organisations, which gives them a great grounding for going national. It is regrettable that these proposals come in Journalism Matters Week, at a time when there are a whole host of challenges facing local journalists.
Kit Malthouse (North West Hampshire) (Con)
I share the alarm expressed across the House and by the Minister at this move. I represent a part of Hampshire that often finds it hard to identify itself in the BBC schedules, squeezed as it is between BBC Radio Solent, which concentrates on the urban areas to the south of the county that are an hour away, and BBC Radio Berkshire, in a different county altogether, yet the BBC does just enough in my part of the world to make sure that the commercial sector cannot function or thrive in North West Hampshire. I urge the Minister not to mess about with this debate, which we have had many, many times over the years about the BBC. May I suggest that she talks to the Competition and Markets Authority about it doing a full review of the impact of the BBC on the commercial sector, both locally and nationally?
Julia Lopez
I thank my right hon. Friend for raising the issues in Hampshire. The mid-term review, which is a relatively new innovation, is looking at some of these questions on competition and market impact. If he has further details that he would like to feed into that about his local challenges in that regard, I would be happy to receive them, because the Department is looking at all these issues, and we expect to report next year.
Kim Johnson (Liverpool, Riverside) (Lab)
The National Union of Journalists has warned that these cuts will not only cost jobs but risk diluting the breadth and quality of relevant local news, particularly for listeners in my Riverside constituency, who are served by the great BBC Radio Merseyside, which has fantastic journalists. Does the Minister agree that this represents a core part of the BBC’s function, and can she inform the House of what action she will take to protect the future of local news on BBC radio and television?
Julia Lopez
I am grateful to the hon. Lady for again raising the NUJ’s point of view. As I have said in previous answers, BBC local radio is a great training ground for a number of journalists, and it would be regrettable if it started to be reduced in size. There are opportunities for journalists in some of the proposals that the BBC appears to be putting forward for investigative journalism, and those are to be welcomed. The BBC invests in a number of other initiatives, particularly the Local Democracy Reporting Service, but these are precisely the kinds of initiative that the BBC should be involved in, and we should all be concerned if it seems to be moving away from that.
Martin Vickers (Cleethorpes) (Con)
This is yet another own goal by the BBC, with no consultation and no dialogue with Ministers. The email that Members received referred to “changing audience expectations”. Actually, what thousands of my constituents expect is to be able to press a button and listen to Radio Humberside, which their radios are permanently tuned to. In the short term, may I urge her to get the BBC to drop these proposals? She referred to the charter review. As negotiations about the charter continue, may I urge her to emphasise that local radio is key to BBC provision?
Julia Lopez
I thank my hon. Friend for his question. He is right to highlight that this is precisely what people expect of and value from the BBC. I have a great deal of sympathy with the BBC needing to change and adapt to the changing media landscape, but it must not at the same time move away from its core purpose.
Mr Toby Perkins (Chesterfield) (Lab)
The BBC is uniquely funded, and it needs to provide unique services. In Chesterfield we are well served by both Radio Sheffield and Radio Derby, and the quality of journalism on those stations is outstanding. It is not a public problem if the BBC is losing market share to Amazon or Netflix. Those organisations do what they do well, and the BBC should not be looking to replicate them; it should be looking to preserve those things that are precious and unique, and BBC radio is absolutely one of those things.
Julia Lopez
The hon. Gentleman makes his point powerfully. It is a core mission of the BBC to provide this kind of distinctive local content that relates to British people in the communities in which they live. If it is not concentrating on precisely this kind of content, there are wider questions to ask about whether it is delivering its remit in the right way.
Alec Shelbrooke (Elmet and Rothwell) (Con)
We have heard Members across the Chamber comment on the accountability of local democracy, but the truth of the matter is that the BBC has been undermining that for quite a while in Radio Leeds. We used to have something called “the hotspot”, which my West Yorkshire colleagues would have been on, and the right hon. Member for Leeds Central (Hilary Benn) and I have done debates together on Radio Leeds. Outside of the breakfast show, none of that happens any more. Some very dedicated people said a long time ago that the BBC was undermining local political content. It said that that content did not get the audience attraction, but it is supposed to be a public service broadcaster. It might be a relief for us not to have the public phone in and question us for an hour, which made us squirm, but it shows that the BBC itself has been undermining these services for a long time, certainly in Leeds, and a lot of very hard-working, dedicated people have been hung out to dry. Will my hon. Friend take a hard look at what the BBC has been doing and make sure that this does not amount to constructive dismissal?
Julia Lopez
I am grateful to my right hon. Friend for raising the important work that is done by BBC Radio Leeds and for giving a longer-term picture of what has been going on within these radio services. I shall speak to the director-general about those issues next week.
Mike Amesbury (Weaver Vale) (Lab)
BBC Radio Merseyside has provided a vital lifeline during the covid pandemic and the current cost of living crisis, as Members across the Chamber have said. It also serves the Cheshire part of my constituency, which is quite isolated and rural. It is a great incubator for new talent. How will the Minister update us on the outcome of the meetings with the director-general and the chairman of the BBC?
Julia Lopez
I thank the hon. Gentleman for raising that point about how the BBC is an important developer of local talent and local journalism. I shall meet the director-general next week and will probably write to Members who have asked questions so that they can have their points addressed from the outcome of that discussion.
Tom Hunt (Ipswich) (Con)
I think that BBC Radio Suffolk is, per head of population, the most listened to in the country. I am glad that we will be spared the indignity of Ipswich Town fans hearing detailed team news from Norwich City; that, at the very least, has been eliminated. Will the Minister confirm that in the move towards digitalisation, older listeners will be taken into account, as they disproportionately rely on and listen to BBC Radio Suffolk and are among its greatest fans? In her discussions with the BBC, will she have a conversation about the huge salaries that some BBC employees who are of questionable talent are currently on?
Julia Lopez
It is not for me to question the talent of those on very high salaries in the BBC. My hon. Friend rightly highlights the very healthy listening figures for local BBC radio stations, particularly among older listeners. These are the people who public service broadcasters are there to serve. It is important that the BBC future-proofs itself and makes sure it is ready for the digital age, but it must not forget its core purpose and mission in the process of doing that.
Grahame Morris (Easington) (Lab)
In my capacity as co-chair of the NUJ parliamentary group, I and other Members of Parliament from both sides of the House had opportunities to meet journalists from BBC News, the World Service and local radio, including some of the journalists from Radio Humberside. I was quite encouraged the Minister has referred to one of the issues they raised—that the BBC has an obligation under its royal charter to ensure that it provides output and services that meet the needs of the UK’s nations, regions and communities. Much of that is provided by BBC local radio. Will the Minister urge Ofcom to undertake an urgent and thorough review of all of the BBC’s digital first proposals, including the impact on BBC local radio, to ensure that the BBC continues to fulfil its public service obligation? Will she also meet the NUJ group?
Julia Lopez
The NUJ is well represented here today, and I am sure it is grateful for that. Ofcom regulates the BBC, but we are undertaking a mid-term review and we shall seek Ofcom’s input into that. The hon. Gentleman raises the digital first strategy, which raises questions about whether the BBC is increasing its presence in online content and whether that has a knock-on effect on local journalism and other local outlets. Those are all issues that we are considering as part of the mid-term review, and I am grateful for his input.
Andrew Bridgen (North West Leicestershire) (Con)
Despite raising about 20% of its total revenue from the midlands, the BBC currently spends only about 2% of its total budget there. The BBC is often accused of being London-focused, London-centric and out of touch with the sentiment of the public outside the capital. Does the Minister agree that any further reductions in regional services will only exacerbate that perception?
Julia Lopez
That issue was a real passion of the former Secretary of State, who secured several commitments from the BBC about moving services out of London and trying to get better representative content, be that socioeconomic or regional and local. My hon. Friend raises an important question about whether the BBC adequately represents every corner of our country, and such questions are ripe for raising.
Andrew Gwynne (Denton and Reddish) (Lab)
The beauty of BBC local radio is that it does what it says on the tin—it is local—and that is true of all the radio stations, including those that cover big cities, such as BBC Radio Manchester. They do not just cover stories in the city centre: they cover stories in the suburbs, in places such as Denton and Reddish. It is important that we keep that local link to news stories and sport. The Minister knows that local radio stations are also an important pipeline for developing the creative media and the workforce for other media outlets. Can she get some guarantees from the BBC that nothing it proposes will harm that creative pipeline?
Julia Lopez
The hon. Gentleman raises an important point about the BBC, which is important not just for the BBC itself but the wider creative economy. Some of the investment that the BBC makes in local journalism has a knock-on benefit for other media organisations, and that creates a flourishing local media ecology. He is right to highlight that, and I am also grateful to him for highlighting the great work of BBC Radio Manchester.
Anna Firth (Southend West) (Con)
The city of Southend has one of the oldest demographics in the country, so will my hon. Friend assure me that she will stress to the BBC how valued BBC Essex is by our elderly population? It does a wonderful job, especially of celebrating our local heroes, such as disability hero Jill Allen-King, and raising thousands of pounds every year for charities as varied as the Music Man Project, the Endometriosis Foundation and prostate charities. Will she stress to the BBC the detriment to our local charities in Southend if that service is restricted?
Julia Lopez
I hope that the BBC listens carefully to all the points that hon. Members are raising today. As a public service broadcaster, the BBC is there to serve all demographics, but particularly those who are poorly served by other means. I am grateful to my hon. Friend for highlighting the charity work that her local radio station, BBC Radio Essex, has been so excellent in pursuing.
Mr Clive Betts (Sheffield South East) (Lab)
I echo the comments made by my hon. Friends already about the excellent services provided by Radio Sheffield—local news, local motoring and local football. The key is the word “local”. People in Sheffield and south Yorkshire want to know what is happening in their immediate communities: frankly, they are not desperately interested in what is happening in Leeds and west Yorkshire. I suspect the reverse is also true. While we seem to be promised that the local morning news will be protected, it appears that excellent programmes such as those on Radio Sheffield in the afternoon will be scrapped and merged into some amorphous regional offering. Will the Minister tell the director-general that that simply should not be allowed to happen and is not what local people want?
Julia Lopez
The hon. Member’s point goes to the fundamental question of at what point local news ceases to be local. I shall ask the director-general that very question.
Mr Robin Walker (Worcester) (Con)
My hon. Friend was spot on to describe BBC local radio as one of the crown jewels of our public sector broadcaster. BBC Hereford and Worcester was a vital lifeline during the pandemic and many times during the all-too frequent floods in Worcester. In a debate in which we have heard much about rugby league, I am keen to make the case for rugby union. Will she join me in urging the BBC to make sure that BBC Hereford and Worcester is able to cover the fightback and return to the premiership of the Worcester Warriors?
Julia Lopez
I commend my hon. Friend on his plug for the Worcester Warriors. He is right about the very specific stories that are covered by BBC local radio and their importance, particularly in times of need and difficulty during the pandemic or local floods. It is that content that is so valued by communities of the kind that he represents.
Rachael Maskell (York Central) (Lab/Co-op)
It is simple—no local BBC, no BBC. It is where the news breaks and where communities are served, and in York BBC Radio York served us incredibly well during the floods and continues to be part of our community all day and through the night. The most worrying part of the proposals is that we will lose public service broadcasting time in our communities, something that needs to be protected in the light of the commercial sector and its interests. When the Minister meets the director-general, will she ensure that she stresses the importance of public service broadcasting and the need for it to be reinforced in the role of the BBC and its responsibilities to licence payers?
Julia Lopez
The hon. Lady is right to highlight that—it is what public service broadcasting is about. My worry is that such proposals stand to undermine the social compact between licence fee payer and the BBC. We have a special arrangement for the BBC because we expect it to provide the kind of content that is not otherwise provided by the market.
Chris Loder (West Dorset) (Con)
Members have shared their concerns that their local radio station will be merged or shared after 2 pm. What should be BBC Radio Dorset stops at 9 am. We should all be clear about the direction of travel of this proposal. My constituents are clear that their priorities when they pay their licence fee are local programmes and local news. It is not acceptable to them that we have multi-million pound salaries paid by the BBC but local news is not available to them. Will the Minister please petition very strongly the director-general and the chairman of the BBC to change these initiatives and re-prioritise Dorset?
Julia Lopez
I had the pleasure of staying in my hon. Friend’s constituency for a few days recently, when I enjoyed the BBC local services on offer which provided a distinct flavour of the region and the local community he represents. It is a point made by many hon. Members that that is the kind of content that people pay the licence fee for, and the BBC should be in no doubt about that.
Jim Shannon (Strangford) (DUP)
Thank you, Mr Speaker. I thank the Minister for her response to questions today. Impartiality is critical. BBC services in Northern Ireland are somewhat limited, but some programming—outside the oft-biased news pieces—is used to promote cultural events such as a Burns night supper or an Irish evening. Can the Minister confirm that the proposed reduction will include a focus on cutting the cost of some of the overpaid staff and rekindling local cultural programmes that are enjoyable and very informative?
Julia Lopez
I know that the hon. Gentleman feels strongly about issues of impartiality in the BBC, and the former Secretary of State extracted several commitments from it, with a 10-point plan to take that forward. As other Members have, he highlights the issue of salary disparity and whether the BBC is putting money in the right places. Those are all questions that need to be answered.
Mr Speaker
We have saved the best until last. I call Dr Neil Hudson from Cumbria.
Dr Neil Hudson (Penrith and The Border) (Con)
I share the concerns raised by hon. Members on both sides of the House and by the Minister about these retrograde proposals. In rural areas such as Cumbria, people rely on local radio stations such as BBC Radio Cumbria and on terrestrial TV. They provide a lifeline for news and education, mitigate against rural isolation and support people’s rural mental health. Does she agree that we should resist such reductions and that, in fact, we should bolster and support such vital services?
Julia Lopez
I have said several times, and I will say again, that this is the kind of public service broadcasting content that people pay their licence fee for. Hon. Members have got their views on the issue across loud and clear. I am grateful to everyone who has participated in the urgent question and I will take all the comments and issues that have been raised to the director-general when I meet him next week.
Mr Speaker
I think the Chamber is united, which is good. Thank you, Minister.
Overseas Chinese Police Stations in UK: Legal Status
(2 years, 1 month ago)
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Alicia Kearns (Rutland and Melton) (Con)
(Urgent Question): To ask the Home Secretary if she will make a statement on the legal status of overseas Chinese police stations operating in the UK.
The Minister for Security (Tom Tugendhat)
Thank you, Mr Speaker. It is a great pleasure to be here on my first outing at the Dispatch Box to speak about something that, as the House will know, I take extremely seriously. Reports of undeclared police stations in the United Kingdom are, of course, extremely concerning and will be taken seriously. Any foreign country operating on United Kingdom soil must abide by UK law. I have discussed this matter with the police and I am assured that they are investigating allegations of unlawful activity. It would be inappropriate for me to comment further on operational matters.
I will take the opportunity, however, to reassure the House of the Government’s resolve to take the matter seriously. I will also shortly make a statement to the House on safeguarding our democracy. The protection of people in the United Kingdom is of the utmost importance. Any attempt to illegally repatriate any individual will not be tolerated. This egregious activity is part of a wider trend of authoritarian Governments perpetrating transnational repression in an effort to silence their critics overseas and undermine democracy and the rule of law. For example, we have been aware for some time of efforts to interfere in our academic freedoms and university sector, and we have been taking steps to protect our institutions.
This Government are committed to tackling the challenge of transnational repression wherever it originates. It would be unacceptable for any foreign Government to feel able to operate in that way in the United Kingdom, and it must be stopped. The Home Office works closely with Departments across Whitehall and with devolved Administrations to ensure that our national security is protected and that, in particular, those who have chosen to settle here are free to engage in our democratic society without fear of the regimes that they have tried to leave behind.
Through our excellent police forces and the agencies that work with them, we take a proactive approach to protecting individuals and communities from all manner of threats. Where we identify individuals who may be at heightened risk, we are front-footed in deploying protective security guidance and other measures where necessary. I pay tribute to my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith) and particularly my hon. Friend the Member for Rutland and Melton (Alicia Kearns), who has taken over the best job in Parliament as Chair of the Foreign Affairs Committee. They have worked tirelessly on this issue, including with our close international partners.
The upcoming National Security Bill will strengthen our legal powers to deal with transnational repression. Coercion, harassment or intimidation linked to a foreign power that interfere with the freedoms of individuals will be criminalised under the new foreign interference offence in the Bill. Existing criminal offences against a person, such as assault, may also have sentences increased using the state threats aggravating factor in the Bill where they are undertaken for, on behalf of or with the intention to benefit a foreign power. The Bill will introduce a new foreign influence registration scheme, for which many hon. Members have campaigned, including my hon. Friend the Member for Rutland and Melton. That will provide greater transparency around foreign interference in our society.
It is clear, however, that we can and must do more. I have therefore asked officials to step up the work to ensure that our approach to transnational repression is robust, and I have asked our Department to review our approach to transnational repression as a matter of urgency. I will provide an update on that work to the House in due course.
Alicia Kearns
I thank Mr Speaker for granting this urgent question. I take this opportunity to welcome my right hon. Friend to his place and say how reassured I am to have someone of his expertise leading on this important area for our national security.
There are troubling reports of a widespread network of Chinese police stations operating worldwide, including three in our country in Croydon, Hendon and Glasgow. Publicly, those stations are harmless administrative centres for Chinese nationals, but reports suggest that they are actually used to hunt down dissidents and alleged Chinese criminals. The Chinese Government have admitted their existence, so I have some questions for the Minister. What is the legal basis for their operations on UK soil? Are Chinese officials involved in their administration? I welcome that the Minister has tasked an investigation, but will he commit to update the House on it in due course?
Finally, the British national overseas scheme was world leading, but we have a duty to protect those who come here and seek refuge on our soil. Does he agree that, following the Chinese consul general’s attack on a Hongkonger only a couple of weeks ago, we are playing a dangerous game in sacrificing our sovereignty and the safety of not just British nationals, but refugees at the altar of not wanting to upset an authoritarian state?
Tom Tugendhat
I again pay tribute to the work that my hon. Friend has done over recent weeks, in particular, and years in alerting this House and the country to the threats that we have faced from authoritarian regimes around the world. I pay particular tribute to her leadership of the China Research Group, on which I was honoured to work with her before.
The reports that my hon. Friend mentions are not exclusive to this country. Sadly, we have seen authoritarian states exercising repressive tendencies abroad and seeking to extradite, or indeed inveigle, citizens of their own country back to their homeland to extract punishment. That is simply unacceptable. The protections of the UK state need to apply to all those in the United Kingdom and it is absolutely essential that those protections are afforded to all. That is why I am working, and will work further, with the police and agencies to ensure that we are on top of this offence and that, should evidence be shown and proof be given, action will be taken.
I also thank my hon. Friend enormously for her comments about the British national overseas scheme. She is right that that was not only world leading but essential for protecting British nationals in the face of an authoritarian dictatorship, and that those who come here under the scheme should be afforded the same protections, rights and dignity as all British nationals everywhere.
Holly Lynch (Halifax) (Lab)
I, too, welcome the Minister to the Dispatch Box. I am grateful to the hon. Member for Rutland and Melton (Alicia Kearns) for securing the urgent question. As we have heard, the Safeguard Defenders report alleges that the Chinese Communist party has set up parallel policing mechanisms around the world. The report identifies three such stations in Hendon, Glasgow and Croydon that purport to offer services for Chinese nationals abroad. There have been multiple reports, however, that those stations are cracking down on Chinese political dissidents, including Hong Kong ex-pats and Uyghur refugees.
According to the Committee for Freedom in Hong Kong Foundation, people from Hong Kong relocating to the UK are being
“followed, harassed, attacked and intimidated”
by operatives based at the Glasgow station. The recent unacceptable conduct that we witnessed outside the Chinese consulate in Manchester makes it clear that we have to act to safeguard those in the UK from increasingly belligerent measures being undertaken by those acting on behalf of the Chinese state.
With the Minister’s predecessor, the right hon. Member for Stevenage (Stephen McPartland), we discussed in the National Security Bill Committee that the harassment of dissidents was becoming an increasing concern. What assessment have the Government made of these stations and what action have they taken to disrupt these damaging activities? The foreign influence registration scheme is long overdue, as he and others have said, so can he put on record exactly when it will be introduced?
The Government previously stated that the Home Office and the Department for Levelling Up, Housing and Communities have drawn up plans to protect those arriving from Hong Kong from surveillance and harassment. Can the Minister elaborate on what those provisions are? The rule of law and freedom of expression are fundamental principles in our democracy and we must act to make it clear to any overseas regime that only UK police forces undertake policing in this country—with absolutely no exceptions.
Tom Tugendhat
I thank the hon. Lady for the tone with which she has approached not just the urgent question but the National Security Bill Committee, and for the openness and frankness with which she has enabled us to work on a truly cross-party basis on what is fundamentally a national security question for our whole country. I am extremely grateful for the way she has addressed these questions.
The Safeguard Defenders report that the hon. Lady cites certainly raises some very serious concerns. Those are being looked into. Of course, it would not be the first time an authoritarian dictatorship had claimed powers that it does not have, so we are looking into the assessment and, as I say, we will come back to the House with a report when and if action needs to be taken.
On FIRS, the hon. Lady is absolutely right that this is a matter that many of us have raised on numerous occasions. As soon as the National Security Bill is through the House—as she is well aware, that will, I hope, be very soon—those powers will be able to be used to defend not just this country but Members of this House against the intimidation or influence of those who seek to lobby or influence, masking the fact that they are doing so for a foreign state.
On protections, the hon. Lady is, again, absolutely right. The reality is that there is no police force in this country that has jurisdiction except the police forces of the United Kingdom. She is absolutely right that no foreign force should have abilities to influence, detain, hold or pressurise citizens of our country, except those that are agreed to by law.
Dr Julian Lewis (New Forest East) (Con)
I welcome my right hon. Friend to his new post and congratulate him on it. Is he able to explain the criteria under which a so-called diplomat found guilty of a criminal assault would be declared persona non grata? On our concern about unofficial foreign police forces in our country, how safe should Hong Kong students feel in UK universities, given the amount of physical and especially financial penetration of those universities by communist Chinese entities?
Tom Tugendhat
May I thank the Chairman of the Intelligence and Security Committee for his kind words and emphasise my keenness to work with his Committee and Members across the House to make sure that we address this subject together? His question about diplomats is, I am afraid, one for the Foreign Office, but he can be absolutely assured that information arising from any inquiry or assessment by the Home Office or by police forces or agencies will feed straight into the Foreign Office for its evaluation.
As for Hongkongers in UK universities, my right hon. Friend will know that, in a former incarnation, I may have been responsible for the publication of a Foreign Affairs Committee report in 2019 that highlighted the threat that some face in universities. He can be absolutely assured that that has not left my desk.
Madam Deputy Speaker (Dame Eleanor Laing)
I call the SNP spokesman, Stuart C. McDonald.
Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)
I, too, congratulate the hon. Member for Rutland and Melton (Alicia Kearns) on securing this important urgent question, and I welcome the Minister to his place.
These are really alarming and incredibly serious allegations, which, as the Minister says, have to be properly investigated. Indeed, the suggested international scale of these activities across 30 countries on five continents is actually pretty shocking. Given the international perspective, what discussions are the Minister and his counterparts having with colleagues in the EU and beyond about how they can co-ordinate on this matter?
What steps can the Minister say have been taken to ensure that law enforcement and security services have the skills and resources to tackle the matter? This seems a recent and different challenge for them. Will he say a little more about the co-ordination with devolved Governments who have responsibility for policing?
The Minister expressed confidence that the powers in the National Security Bill, which we have debated at some length, will be sufficient to tackle this type of alleged activity. Will he express a willingness to use those powers if these allegations are made out?
Finally, does the Minister agree that, while our attention is rightly focused on the bad actors seeking to control and coerce Chinese residents, BNOs and others, it is all the more important that we remember and support the many other groups, businesses and individuals who do positive work in supporting their communities to contribute to our society?
Tom Tugendhat
I thank the hon. Member for the tone with which he has addressed these questions. This is truly a United Kingdom issue, and the way to address them is for the United Kingdom to work together.
The hon. Member is absolutely right that there are wider dimensions, which include our friends and allies around the world. The Government have already been working with Governments around the world to make sure that we deal with the repression and oppression that we are seeing in different places. He will remember well the way in which the United Kingdom stood so clearly with the Government of Canada to call out the illegal detention of Michael Spavor and Michael Kovrig. I am delighted to say that that will continue.
The hon. Member is right that working with police forces across the United Kingdom—including Police Scotland, which does excellent work—is really important, but it is also important that they have access to the resources that we are able to bring as the United Kingdom. The agencies that do so much to support us all are essential.
I am grateful for the hon. Member’s kind words about the National Security Bill. His support on that Bill has been incredibly important and demonstrates that this truly is a cross-party, cross-nation effort to keep the whole of the United Kingdom safe. He can be absolutely assured that I will not hesitate to use the powers in the Bill should they be required.
The hon. Member’s question on the community is also really important. We need to make it absolutely clear that what we are resisting here is authoritarian Governments seeking to influence free people. We welcome people from across the world. We welcome people from communities that may be repressed at home but can be free here. It is essential that we champion those who can enjoy freedom here, and the Hongkongers are a clear demonstration that this Government and this country welcome those seeking freedom.
Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)
I am grateful to Mr Speaker for granting the urgent question and I congratulate my hon. Friend the Member for Rutland and Melton (Alicia Kearns) on securing it.
I am pleased to see my right hon. Friend at the Dispatch Box; he should duck his shoulders, because he is responsible for none of what I am about to say. May I simply say that we are seeing a litany of general excuses from the Government, albeit not from him directly? A week ago, they had to be dragged to the House twice to talk about the punishment beating that was meted out in Manchester—no statement was offered—and now we have another UQ.
This business about these police stations has been well known and well documented for ages. Every other country that has them is now investigating with a view to getting rid of them—Canada, Chile, Germany, Ireland, Portugal, Spain, Sweden, the Netherlands and the USA are all about to kick them out—but we have still not undertaken a full investigation. Even in Scotland, the First Minister has decided to investigate the Glasgow site; we have done nothing about the two sites here in England.
I simply say to my right hon. Friend—with the best intentions, because he is sanctioned, like I am, by this brutal regime—that we have testimony from endless people, we have a Chinese Government who have set up these police stations, we have Confucius Institutes bullying Chinese students here, we have seen them beaten up on the streets in the UK, and we wonder very much whether they feel safe. Will he therefore take back to the Government, and to the Foreign Office, the message that it is high time they showed some strength and acted immediately to get rid of the diplomats responsible in Manchester, to investigate these police stations and kick them out, and to do the same with the Confucius Institutes? Otherwise, we look like we are dragging our feet compared with our neighbours.
Tom Tugendhat
I welcome the words of my fellow sanctionee. That is one of the few foreign accolades of which I think we are equally proud.
Let me make a few points. First, there is no delay in investigation in this country. I can assure my right hon. Friend that the assessment will be coming forward urgently. As he will well understand, I will be extremely keen to hear the result. May I also remind him of the Prime Minister’s pledge during the leadership race only a few months ago that Confucius Institutes pose a threat to civil liberties in many universities in the United Kingdom and he will be looking to close them?
I thank my right hon. Friend for his words about the Foreign, Commonwealth and Development Office. I am sure that Ministers from that Department will seek to make a statement, but I am sure they will be waiting for the reports that will be provided to them. He is absolutely right that there is no place for those who abuse their diplomatic privilege or the liberties of this country in order to oppress citizens here.
Sarah Jones (Croydon Central) (Lab)
I congratulate the hon. Member for Rutland and Melton (Alicia Kearns) on securing the urgent question. One of the alleged stations is in my constituency. I have to confess that when I first received emails about it from constituents I thought it was some kind of hoax. The address where the police station is supposed to be is that of a business that has written to me recently asking for a meeting, so, at first, I thought it could not possibly be true. It appears now that the reality is much more alarming.
I am grateful to the Minister for stating that he will come back to the House and tell us what his investigations have found, but I wonder whether he can give some reassurance to the people of Croydon—in particular the citizens from China and Hong Kong who live in my constituency—that they will be safe. Perhaps he might agree to meet me to talk about what may or may not be happening in the middle of my town.
Tom Tugendhat
The hon. Lady is absolutely right that a commitment to all citizens of the United Kingdom and all citizens in the United Kingdom is equally valid, wherever they come from and whichever community they are from. Of course I will make that commitment to meet her, and I will be delighted to hear more.
Mr Robin Walker (Worcester) (Con)
I congratulate my hon. Friend the Member for Rutland and Melton (Alicia Kearns) on securing this urgent question. I welcome my right hon. Friend the Minister to his position on the Front Bench and the fact that he says he takes this extremely seriously and that the police are investigating. I raised this issue in the House two weeks ago on behalf of a concerned constituent during a Foreign, Commonwealth and Development Office statement. Unfortunately, the follow-up from the FCDO was transferred to the Home Office, which then communicated to me that it did not intend to respond. Can my right hon. Friend therefore reassure my constituent that there will be a co-ordinated response across Government to what is basically an assault on British sovereignty, and may I suggest that he leads on that response?
Stewart Malcolm McDonald (Glasgow South) (SNP)
I congratulate the Chair of the Foreign Affairs Committee, the hon. Member for Rutland and Melton (Alicia Kearns), on bringing the former Chair of the FAC, the Minister, to the Dispatch Box on this issue, and I greatly welcome his appointment to Government. Although the stations are what has grabbed the headlines and attention of many, the broader issue, as has been mentioned, is the Chinese Communist party using all the instruments of its international architecture, including the Confucius Institutes, to harass, intimidate and track down people. Do the Government now intend to review any and all co-operation agreements they have with law enforcement bodies in China; I am not calling for them to be scrapped at this stage, but will they at least be reviewed, if they do exist? As my hon. Friend the Member for Cumbernauld, Kilsyth and Kirkintilloch East (Stuart C. McDonald) mentioned from the Front Bench, the devolved Administrations have responsibility for policing but also for education. They need to have a seat at the table and be part of a broader strategy in unpicking this reliance on Chinese cash—let us be honest, that is what it is down to. Lastly, given FBI expertise in this area and the success in the US of closing down these stations and closing off opportunities to harass and intimidate people, have the Government at least been in touch with their counterparts in the FBI to tap into their expertise?
Tom Tugendhat
It is like an FAC reunion hearing the hon. Gentleman, my former Committee friend, making his points. He is right that the way we engage with authoritarian dictatorships and powers around the world is constantly under review, and, as he will understand, that is going to be of particular interest to me in my new role. He is also right that the devolved Administrations and Governments need an absolute commitment that they will be part of this conversation, and he knows that I will always work with every part of the United Kingdom and make sure that voices are heard and support is offered. I am committed to the defence of the whole of the United Kingdom. I am also committed to co-operating with foreign partners, and the hon. Gentleman rightly mentioned the FBI. We also work closely with Canada and Australia on many of these issues, and indeed with many European countries, who have been extremely good partners and very firm friends.
Bob Seely (Isle of Wight) (Con)
I add to the FAC reunion. I congratulate the Minister on his new role and my hon. Friend the Member for Rutland and Melton (Alicia Kearns) on securing the urgent question. Do any other states have similar ad hoc covert or overt police stations in the United Kingdom, and for how long have the Government known about these Chinese police stations in the UK? It is great that the Minister speaks tough on this, and I know he has talked about it at length as have many other members of the FAC, but to echo the words of my right hon. Friend the Member for Chingford and Woodford Green (Sir Iain Duncan Smith) and my hon. Friend the Member for Worcester (Mr Walker), we have had increasingly tough words for too long. What we have not had is a realistic and robust defence of our democratic values and democratic institutions, so can the Government now get real on this?
Tom Tugendhat
My hon. Friend is right that it has been alleged that other states have had connections in this regard, and that is being looked at. On the length of time question, I hope he will forgive me for not going into operational details, but he can be absolutely assured that that will prove part of the assessment. As to action, I merely urge him to wait a few moments as I will be making a statement very shortly that I hope will answer some of his questions.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
I congratulate the hon. Member for Rutland and Melton (Alicia Kearns) on securing the urgent question and welcome the Minister to the Dispatch Box. I hope his appointment brings us into an era where Government actions match their rhetoric on this issue, because it simply is not good enough for us to rely on organisations like Safeguard Defenders to bring this to light. I hear what he says about the National Security Bill, and he knows he has support across the House on that, but what we have heard about is not something that requires new legislation; we could be tackling it now. We must look at Chinese influence of this sort in commerce and academia, because if the UK was doing this in China—if the boot was on the other foot—it would be a very different story.
Tom Tugendhat
The right hon. Gentleman makes a good point about reciprocal action. When the Prime Minister appointed me he was extremely clear on how he saw the role of security and what he saw as my responsibility, and the right hon. Gentleman can be assured that I take this extremely seriously. This is an issue that I have been vociferous about for a number of years, and I am very pleased to have the opportunity now to act.
Jason McCartney (Colne Valley) (Con)
I welcome my right hon. Friend to the Dispatch Box and congratulate the Chair of the FAC, my hon. Friend the Member for Rutland and Melton (Alicia Kearns), on raising this important issue. I want to return to the question of intimidation and threats on university campuses and assessments of any foreign state involvement in that. What guidance has been or will be issued to university vice-chancellors about the threats of these transnational oppressive actions?
Tom Tugendhat
My hon. Friend kindly refers to the FAC report of 2019. While I am not going to comment on actions taken towards universities—that is a matter for the Department for Education—the reality is that the communication between my office and that Department will only grow, as, sadly, these incidents appear to.
Hilary Benn (Leeds Central) (Lab)
I welcome the Minister to his place. Can he confirm that the three premises referred to today have at no time been notified to the Government under the Vienna convention on diplomatic relations? If not, will his investigation include looking into how the people working out of these places came to be given visas by the Home Office?
Tom Tugendhat
I can tell from the question that the right hon. Gentleman has had many years of experience in these matters, and he can be assured that those questions are already part of the assessment I will be bringing and will form part of the report that I will conclude.
Christine Jardine (Edinburgh West) (LD)
I also thank the Chair of the FAC, the hon. Member for Rutland and Melton (Alicia Kearns), and welcome the Minister to his place. My constituency is home to the Chinese consulate in Scotland. It is also in a city with a number of universities and a large Hong Kong Chinese population. There are concerns about the activities that we now learn are going on in this country. Can the Minister assure us that the consulate and its activities will be part of this security monitoring exercise?
Tom Tugendhat
The commitment I have made is clear: actions that are incompatible with diplomatic status will be considered. This will be focused on the areas that have been raised, but I assure the hon. Lady that if it leads elsewhere, it will lead elsewhere. I pay tribute to the various universities in Edinburgh for their commitment to freedom and for the way in which they have handled many other issues similar to this one.
Geraint Davies (Swansea West) (Lab/Co-op)
I also welcome the Minister and his statement. I have a good working relationship with the Chinese community in Swansea, who enjoy the peace and harmony afforded to them by the rights and protections that come from living in Britain. Will he assure me that, where Chinese nationals or others are detained in these police stations, their cases will be seen as akin to hostage taking, that the full force of British law will be focused on any breaches of our law—whether intimidation, harassment, bullying or illegal data collection and surveillance—and that we will continue to set examples to ensure that people are safe and known to be safe?
Tom Tugendhat
The rights of citizens in this country have been set out in law in various different ways for a little over 800 years. It is absolutely clear who has and who does not have the right to detain any citizen in this country. The law applies equally to all.
Carol Monaghan (Glasgow North West) (SNP)
I welcome the Minister to his place. As shocking as it is to hear about these police stations, we are aware that China’s reach goes beyond that. Many Chinese citizens living in our communities are here not permanently but for a short time—I talk in particular about the Chinese student community—and will go back to China. Will he detail the steps that he plans to take to ensure that those Chinese students can enjoy the same freedoms as we do in this country without fear of interference from their own Government?
Tom Tugendhat
The hon. Lady is absolutely right to celebrate those Chinese citizens who come here temporarily for study or for other reasons and to highlight that one of the reasons why they come is that our universities across these islands have a long history of academic freedom that allows debate, innovation and challenge that sees ideas flourish and bad ideas fail. It is essential that all students have those rights. That is why the report and assessment will look into how we approach these situations and ensure that all students and citizens, wherever they are from and whatever they are doing, are afforded the same protections, as they should be.
Andrew Gwynne (Denton and Reddish) (Lab)
I refer hon. Members to my entry in the Register of Members’ Financial Interests and congratulate the hon. Member for Rutland and Melton (Alicia Kearns) on securing the urgent question. I also welcome the right hon. Gentleman to the Dispatch Box and the way in which he strongly reaffirmed that people on British soil will always be afforded the fullest protection of their rights and freedoms by the British state. We need to make it perfectly clear to China and others that only one law applies on these shores and it is the law of this land, which this Parliament and the devolved institutions have put in place. Does he think that the existence of these police stations is a breach of international law?
Tom Tugendhat
I entirely agree with the hon. Member about there being one law across this country. After all, that was the point of the common law and the reforms of hundreds of years ago that have seen liberty flourish and opportunity prosper in these islands. He will forgive me but, since I gave up the chairmanship of the Committee, I have forfeited the right to have personal opinions, but the Government have absolutely the commitment that he mentioned that all laws in this country will be voted for and allowed only by this House or the devolved Administrations, and that all citizens here and all those visiting will be under the same law.
Jim Shannon (Strangford) (DUP)
I congratulate the right hon. Member on his long-awaited elevation to Minister. It is genuinely, truly well deserved. Further to my business question last Thursday on the despicable actions taking place in Chinese buildings in the UK, while we all recognise the right of an embassy never to have foreign influence, will he confirm that our underlying moral duty is to ensure that torture is not carried out on any inch of our soil? In accepting that, what diplomatic and legal steps can be taken to prevent torture?
Tom Tugendhat
I thank the hon. Member for his kind words. The House had to wait a little while longer for me to speak from the Dispatch Box than it normally has to wait for him to ask a question to whoever is at the Dispatch Box. I am grateful that he is in his place for my first event.
The hon. Gentleman’s point about torture is incredibly important as that is one of the few completely unconditional rights that every citizen in the country has been afforded for many years. He is absolutely right that any accusations of torture or violations of human rights on these islands or in any way under the jurisdiction of the United Kingdom would be taken extremely seriously.
Madam Deputy Speaker (Dame Eleanor Laing)
That concludes proceedings on the urgent question. I would normally pause while people leave or come into the Chamber, but as I have before me the same dramatis personae for the next item of business, I will filibuster for a moment only to give the Minister a chance to pick up his bits of paper.
National Security
(2 years, 1 month ago)
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The Minister for Security (Tom Tugendhat)
Thank you, Madam Deputy Speaker, for being here for both my first and second outings at the Dispatch Box. I am extremely grateful that Mr Speaker granted the statement and that it follows the urgent question. Again, I pay tribute to my hon. Friend the Member for Rutland and Melton (Alicia Kearns), who took over the chairmanship of the Foreign Affairs Committee from me, not only for the urgent question but for her work over many years in standing up for our freedoms.
I would like to make a statement on national security and safeguarding our democracy. In this new era of global competition, we face constant and concerted efforts to undermine our country and our institutions. A range of actors, including foreign states, are trying to weaken us, to challenge us and to exploit us. We are not alone. It is the burden of liberty shared by democracies around the world. The evidence of that is clear and, sadly, indisputable. Dictatorships are trying to write new rules for a new world. Russia’s illegal war in Ukraine is a terrible example of the growing threat from hostile states to our security. Russia is attacking not just a free people but a free world.
Our integrated review, published last year, makes clear the threat that we are facing. This is not a simple clash of armour but a clash of ideas. Across our society, we are seeing the challenge grow and evolve to pose a strategic threat to the security and prosperity of our nation for many years to come. A generation ago, we had the answer: our technology and our wallets were greater than theirs. Today, technological integration has deepened connections and opened doors into areas of our lives that we once thought closed. Now, as our markets integrate, we need to think about the future of our industry and innovation. Our economic security guarantees our economic sovereignty just as our democratic security guarantees our freedom.
The advanced technologies that our rivals have spent time and money developing have levelled the field and made us more vulnerable. Britain has been on the frontline of the defence of liberty for generations. Our agencies and businesses have faced the reality of this danger for decades. Our Parliament and our politics are now no different. Whether as Ministers or shadow Ministers, on Committee or when leading a campaign, this is about every party and every Member of the House. We have all heard of the attempts of unfriendly states to influence our politics in recent years and of the actions that the security officers of the House have had to take to defend us. They are not working alone. I want to put on record my admiration and gratitude to those who work hard to keep us safe in the House and around the country, because while others are on the frontline of our nation, those of us privileged to be elected—at every level and in every community—are on the frontline of our democracy.
I am here to make it clear that the Government are, and always will be, here to protect our freedoms, and none is more precious than the freedom of our nation to determine its own future. That is, after all, what democracy is about. It is the debate in towns and villages—in person and online—of free people in a free country searching for answers to the problems that we all face. As all of us know, it does not always go our way, but it is the freedom to choose that we all defend. We are taking action to address these threats.
Just as our counter-terrorism legislation in the early 2000s updated the necessary legal powers that our police and security services needed to tackle the growing threat of terrorism, we are enhancing our ability to defend against hostile states and those acting on their behalf. The National Security Bill, which is currently before the House, will give us the powers we need today for the threats that we face now. It will be the most significant piece of legislation to tackle the incursion of state-based threats to our nation in a century. Those actors threaten not just life but our way of life. We have to work even harder to protect and uphold our freedom and the institutions that defend it. From establishing our Defending Democracy programme in 2019 to the continuous work by the National Cyber Security Centre, we have sought to address that, but we must do more. That is why I can announce to the House that the Prime Minister has asked me to lead a taskforce to drive forward work to defend the democratic integrity of our country. The taskforce will work with Parliament, Departments, the security and intelligence agencies, the devolved Administrations and the private sector. It will work to better protect the freedoms and institutions we hold dear—institutions such as this very House.
The taskforce will look at the full range of threats facing our democratic institutions, including the physical threat to Members of this Parliament and those elected to serve across the country, so tragically brought home by the murder of our dear friends Sir David Amess last year and Jo Cox in 2016, and the support on offer through Operation Bridger and by the police. The work of this Taskforce will report into the National Security Council and more details will be set out in the update of the integrated review.
This is not just a taskforce for this Government. It will be cross-departmental and inter-agency, and I will be inviting cross-party co-operation, because, as I have said, this is not just about Ministers in office, civil servants or advisers across Whitehall. This work is for all of us in this House and those who have asked us to represent their interests. The Government have robust systems in place to protect against cyber threats. We are vigilant in ensuring that these are up to date and meet the challenges of the modern world. The National Cyber Security Centre, Government and parliamentary security offer all Members specific advice on protecting personal data and managing online profiles, as well as best practice guidance. I am grateful to Mr Speaker for agreeing to write to all parliamentarians on that important issue.
Finally, it is important to end by underlining that tackling these threats means providing the protection that defends our democratic institutions and the liberties that we cherish so dearly, because the point of security is not to lock us down but to liberate. My job as Security Minister of this great United Kingdom is to give us all the security to live our lives freely, and to debate and choose our future, guarded by the laws and freedoms of our nation. That is my guiding principle. I commend this statement to the House.
Madam Deputy Speaker (Dame Eleanor Laing)
I call the shadow Home Secretary, Yvette Cooper.
Yvette Cooper (Normanton, Pontefract and Castleford) (Lab)
I welcome the statement from the Minister for Security. I know this is an issue that he personally takes very seriously. It is the first job of every Government to defend our national security from hostile states who wish to do our country harm and who strain every sinew to do so with the most sophisticated technology and resources, and from malign actors and extremists, both here and abroad, who want to do us harm and undermine both our democracy and everything we stand for. We pay tribute to the remarkable work of our intelligence and security services who work so hard to keep us safe.
I welcome the Minister’s announcement. We will support the taskforce and its work to defend democracy against a wide range of threats. I welcome the work on physical threats. We remember with great sadness our lost friends Jo Cox and David Amess. Can the Minister clarify that the taskforce will work on how to protect all our democratic institutions against foreign interference? Will it look at cyber-security and, in particular, the way the Government have been operating? While I welcome the seriousness of the statement and the seriousness with which the Minister has delivered it, he will know that it is a far cry from the way successive Cabinet Ministers have responded, and from the lack of seriousness and the carelessness and complacency that we have seen on some of these cyber-security issues.
Conservative Ministers were all warned in guidance after the 2019 election:
“You should not use your personal devices, email and communications applications for Government business at any classification”.
Yet many of them at the highest level ignored it. If we take the last Prime Minister but one, who left office just a few months ago, the right hon. Member for Uxbridge and South Ruislip (Boris Johnson) took a trip without officials at the height of the Skripal crisis to a villa in Italy described by locals as the “Russian mountain” where he met ex-KGB agent Alexander Lebedev. He did not declare it to Foreign Office officials on his return and says he does not remember what was discussed. He had a guest with him, but he travelled home alone and has never said who the guest was. He reportedly took his phone with the same number that he still did not change even when he became Prime Minister and sent private messages on it. If this is a new era of defending democracy and security, can the Minister tell us whether the former Prime Minister took his personal phone with him on his Italy party weekend? Who was his guest and what action is now being taken to prevent that kind of thing ever happening again?
Can the Minister tell us, too, whether that Prime Minister’s successor, the next Foreign Secretary and Prime Minister, the right hon. Member for South West Norfolk (Elizabeth Truss) used her private phone for Government business, including contacting other international leaders? If she did, what is being done to prevent that ever happening again?
There are now questions about the current Prime Minister: he reappointed to the Cabinet as the Minister without Portfolio the right hon. Member for South Staffordshire (Sir Gavin Williamson), who was sacked after a leak investigation over Huawei; and he reappointed the Home Secretary, the right hon. and learned Member for Fareham (Suella Braverman), just six days after she was sacked over a security lapse and who yesterday admitted she had used her personal email not just once but six times in the space of 43 days, all apparently because she could not make her Government IT work properly or did not have it with her. That is not adequate. And we still do not have any answer to the serious allegations about potential leaks when the Home Secretary was Attorney General, which include a briefing to The Daily Telegraph in January about an injunction that the Attorney General was seeking against the BBC in a security service case, which was then used in court to argue against the injunction. Again, if this is a new era, can the Security Minister give us a categoric response as to whether the Home Secretary when she was Attorney General—or her adviser—was involved in that leak?
The Minister will know, too, that there have been briefings and stories around with national security implications. Does he agree how incredibly unhelpful it is to our security services to have national security issues briefed in a way that appears to be about putting party interest before the national interest, and that it does not serve democracy if all these issues are not taken seriously by the person most in charge of defending our national security—the Prime Minister, followed by the Home Secretary he appoints?
Yes, we will support the Minister’s taskforce, but he will need to show us that there is some kind of grip at the heart of this Government on attitudes towards security. When we have one Prime Minister who puts security at risk to go to Italy for a party, another who allegedly used a personal phone for contacting Government Ministers, and a third who is defending his predecessors and reappointing as Home Secretary someone described on the Government’s own Back Benches as “leaky”, that undermines our national security. Our national security is too important for this kind of chaos, so what will the Minister do to ensure that the Government get a grip?
Tom Tugendhat
I thank the shadow Home Secretary for her very kind comments on joining the taskforce and assisting with it, because this is clearly not just a matter for the Government. As she correctly set forward, all of us in this House have responsibilities and the potential to be influenced in different ways. That is why so much of the legislation going through, on which the hon. Member for Halifax (Holly Lynch) is being incredibly co-operative, such as the foreign influence registration scheme legislation, will help us to address many of those challenges. The right hon. Lady will also be aware that the National Security Bill, of which the Opposition have been so supportive in so many areas, will be important in enabling us to challenge some of these different issues.
The right hon. Lady is absolutely right to highlight the fact that we all have such responsibility. Sadly, this is not just a UK matter. Sadly, it is not even a single Government or a single party matter. The reality is that we have seen the intrusion or attempted intrusion into different aspects of all our communications at different points over many, many years. This issue has grown in importance.
I am not going to comment on individual cases, because as the right hon. Lady rightly said, that would be absolutely unhelpful. It would be completely wrong of me to use, for any private party advantage, comments on anything that the agencies have told me in private. She herself has been extremely gracious in accepting briefings on Privy Council terms, and she has, completely correctly, guarded the privacy of them. I know that she has responded to those in exactly the appropriate way, so I place on record my enormous thanks to her for her extreme co-operation in what is fundamentally a matter of national security.
I will bring forward further proposals on the taskforce and would welcome the right hon. Lady’s thoughts, because there is an awful lot that we must do together. Sadly, the next few years are likely to be more challenging than the last. The indications are not great, as she knows. We need to work together. This is not about one party or one Government; it is about defending the British people’s right to choose their future democratically and freely, without the influence of foreign states.
Madam Deputy Speaker (Dame Eleanor Laing)
I call the Chair of the Intelligence and Security Committee, Dr Julian Lewis.
Dr Julian Lewis (New Forest East) (Con)
May I start by apologising to you, Madam Deputy Speaker, and to the House for the fact that I will not be able to stay for the remainder of the statement, as I would normally wish to do?
I congratulate my right hon. Friend again on his new responsibilities. I remind him that, in 2013, extensive new legislation gave considerably greater powers to the intelligence and security agencies. In return for that, an understanding was reached—and there was a memorandum of understanding—between the Prime Minister and the Intelligence and Security Committee that we would have oversight of the various agencies that had improved and increased powers; and that, as the situation changes, we would continue to have oversight of new organisations of the sort that he is announcing today. Will he confirm that the elements of the taskforce’s activities that involve, for scrutiny, access to classified information will fall under the purview of the Intelligence and Security Committee; and that he will break the bad practice that was brought in by the last but one Prime Minister of farming such matters out to ordinary parliamentary Select Committees, which, with the best will in the world, cannot conduct the scrutiny properly because they lack the secure facilities and suitably cleared staff?
Tom Tugendhat
I thank the Chair of the Intelligence and Security Committee, who knows well the importance that I place on Committees. I merely challenge him on one small aspect: there is no such thing as an ordinary Committee in this House. All of them are select and are selected by the House for the purposes that they have been asked to investigate. I make absolutely clear my commitment to work with his Committee and the Committees of others, as relevant, to ensure that the necessary democratic oversight of Government is complete.
Stuart C. McDonald (Cumbernauld, Kilsyth and Kirkintilloch East) (SNP)
I thank the Minister for his statement. Like him and the shadow Home Secretary, the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper), I pay tribute to all those working so hard to protect us.
We all wish the Minister well in his work to strengthen national security and we will work constructively with him to that end. In principle, a taskforce is welcome; the devil will be in the detail and the proof in the pudding. For example, will he tell us more about the timescale and how its membership will be appointed, and will he say more about the participation of devolved Governments in it?
Although we acknowledge that the Minister takes national security incredibly seriously, he will appreciate that lots of questions are still outstanding about his colleagues. As we heard, the former Prime Minister and Foreign Secretary had her phone hacked, apparently revealing highly sensitive discussions and information. Her predecessor had his phone number freely available online for 15 years, and had a meeting with a former KGB agent without officials. A Home Secretary has resigned in recent days over her use of personal phones and emails for official business, only to be reappointed within days. Recent High Court papers suggested that “government by WhatsApp” was the norm. A taskforce is all well and good, but those questions must be answered.
I appreciate that the Minister cannot say much at the Dispatch Box about the hacking of the former Prime Minister’s phone, but can he reassure us that steps are being taken to ensure that nothing similar happens again? Does he agree that there should be some form of inquiry into that incident and will he commit to full co-operation with that? Will he say whether government by WhatsApp is still considered appropriate? Will he confirm the status of the documents that the Home Secretary sent to her private email?
Finally, what steps is the Minister taking to reassure our international partners? We know that they take a dim view of the security mess at the heart of the Government. Frankly, how can we expect them to share anything with us when too many of his colleagues appear to be playing fast and loose with what they are told?
Tom Tugendhat
I thank the Scottish National party spokesman for his co-operative tone in regard to how we will work together on this issue. I will set out details and be in touch with the devolved Governments and Administrations to make sure that their views are fully taken into account and that the important different needs of different devolved areas are respected and play fully into the taskforce.
It is essential that we recognise that, sadly, this is not simply a matter for the United Kingdom. The reality is that the points that the hon. Gentleman made also apply to friends and partners around the world. We have seen very significant reports of intrusion and intervention into electronic communications in other countries. Sadly, that includes France, where President Macron set out his issues with Russian hostile activity at the time of the general election only a few years ago; and there are other such reports in other jurisdictions.
We are working together with friends and partners on this issue, because the reality is that the defence of democracy does not stop at the United Kingdom coast but continues in depth when we work with partners and allies. We will only be safe when we support others to guarantee their freedoms so that ours are even more secure.
Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)
First and foremost, there is no question that in the Government and even in Parliament we have become incredibly sloppy about any idea of security. The carrying of telephones—just switched off—into meetings is a security risk, because they can be switched back on and used as microphones. We know that. I have seen Government Ministers carrying telephones into meetings in their back pocket. That should be stopped. All those phones should be taken off them. We can do many things, and GCHQ is very clear about the penetration of our enemies into our space.
My main point is that in all of this—the Minister is reviewing the integrated review—why in heaven’s name was China not seen as a threat when we did the original review? This is about everything it does, such as the trashing of Hong Kong, the Uyghurs, taking over the South China seas and the attacks on people like me and others, including the Minister, as sanctionees. Will he make sure, first of all, that we lift China back into that bracket as a threat, treat them as a threat and do not excuse it? For those of us who are sanctioned, it would be marvellous if the Foreign Office or even Parliament were capable of giving us any advice about what happens to our families when they have to travel. I find it remarkable that when we ask them that question, we have no idea of what limitations that poses on us, even today.
Tom Tugendhat
I thank my right hon. Friend for his comments. He is absolutely right to cite the fact that China has become a long-term strategic threat. I am afraid that I cannot answer on why it was not raised before; I have only just joined the Government, as he knows.
The question of security is so important for all of us. The National Cyber Security Centre and Parliament’s security office have been extremely open in helping any Member, Minister, shadow Minister, official or staffer who seeks advice on that matter. I pay enormous tribute to the security officer for her work and the way in which she has assisted many of us at different points to realise the threats that are against us and how to best protect ourselves.
Let me make this commitment absolutely clear: there is no defence of democracy without defending every Member of the House. Whichever party we are from and whichever cause we champion, we are here because free people chose us to be here. It is our responsibility to make sure that that freedom endures in the work and in the voices that we hold.
Andrew Gwynne (Denton and Reddish) (Lab)
I again welcome the right hon. Gentleman to his post and the commitment that he is showing to try to get together a cross-party approach to his taskforce. National security is absolutely crucial. It is the job not just of the Government, but of each and every one of us in this House—in the Opposition and on the Government Benches—to take that seriously. Will the Minister bring updates on the work of the taskforce to the House so that we can scrutinise its work? Also, what level of information will Members be provided with given the sensitivity of some of the subjects that he will look at?
Tom Tugendhat
I thank the hon. Gentleman for his entirely correct assessment that this is not just about the Government. Actually, it is not just about this House, but about many of the businesses that support us in various ways and many of the businesses that we are privileged to represent in the communities that we are lucky enough to serve. I absolutely agree that this is a matter for all of us.
I also pay tribute to the hon. Gentleman for the tone in which he has approached the issue, because the reality is that I will have to bring—in fact, will willingly bring—reports back to the House, but some of them may be caveated. They may not include some details that Members would quite understandably ask for, but which may not be appropriate for wider reading, for reasons that the hon. Gentleman understands and has already expressed. I assure him that I will ensure that this House is able, in the appropriate way, to scrutinise the work that I conduct on behalf of our people and our country.
John Redwood (Wokingham) (Con)
What urgent action will the Government take so that we grow more of our own food, produce more of our own oil and gas, and refill our depleted reservoirs? Having more domestic supply of the basics is now fundamental to national security, given the obvious threats from Russia and others.
Tom Tugendhat
I will not comment on the details of the taskforce, but I think I can safely say that that is a little beyond even what I was hoping for. I will not go into details, except to say that my right hon. Friend is absolutely right: the reality is that supply chains in our country and around the world have changed as covid has influenced different issues, and sadly the nature of the decoupling that some states have sought to pursue has changed the way in which we must consider our own security.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
One area of Government policy that I suggest would benefit from the fresh eyes of the Minister is the need for a whistleblower defence under the National Security Bill. The Minister may be aware that an amendment will be moved on Report; it might facilitate the Bill’s passage if he met me and other hon. Members behind the amendment before then.
Tom Tugendhat
The right hon. Gentleman makes his point extremely clearly. He knows that the new Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake), is responsible for the Bill alongside me and has his own views on the subject. No doubt my hon. Friend will be extremely willing to meet the right hon. Gentleman. If not, I shall.
Vicky Ford (Chelmsford) (Con)
I welcome my right hon. Friend to his place; he is a great champion of freedom and his taskforce is an excellent idea. To protect our democracy, it is vital that we protect those who work in our democratic institutions, especially all Members of this House, from misinformation, cyber-attacks and online attacks. It is also vital that we continue to work with other countries, because it is only by working together that we can champion democracy and let democracy prevail. Does my right hon. Friend agree?
Tom Tugendhat
I pay enormous tribute to my right hon. Friend, whose work in the Foreign, Commonwealth and Development Office was incredibly important in championing democracy and freedom around the world. Indeed, some of her work that was not always celebrated was in championing journalism. One thing we should recognise fully is that democracy does not work without a free press: I know that I am going to regret these words, but what they write and how they write it are as much a part of our democratic institutions as the words that we use in this Chamber. Making sure that our press is free and without influence is as important to democracy as making sure that we are, too.
Dan Jarvis (Barnsley Central) (Lab)
I warmly welcome the Minister to his important new role. He and I have spent many years safeguarding the security of information; these are matters that I know he takes very seriously, and I wish him well in the role.
Because I know the Minister takes these matters so seriously, I want to return briefly to the shadow Home Secretary’s point about the importance of doing the right thing and the importance of personal conduct. In addition to the measures that the Minister has outlined to the House today, there is an absolute requirement for a vigilant mindset among all Members of this House, but most critically among Ministers, who need to show leadership in the area. Does he agree that when it comes to matters of national security, everyone—everyone—must adhere to the protective regime or be deprived of access and removed from their position if necessary? Those are the rules, and everyone should follow them at all times.
Tom Tugendhat
May I take a moment to pay enormous tribute to my friend? We met in Helmand about 16 years ago, when he was commanding a unit that I was sent to check up on. Well, he is checking up on me now—and he is quite right to hold me to account for my words, as I was sent to hold him to account for his actions back then. He is absolutely right. I know that his bedtime reading is the US army field manual: the first words are “Every day, do one thing to improve your defensive position.”
Aaron Bell (Newcastle-under-Lyme) (Con)
I welcome my right hon. Friend to his place. It was a pleasure to serve with him on the National Security Bill Committee. I also welcome the taskforce that he has set out.
Last week, a number of us went with the armed forces parliamentary scheme to Shrivenham, where we not only heard from some of the leading experts in cyber in our armed forces, but saw the new Defence Cyber Academy, which was announced only a few weeks ago by the Defence Secretary. Will the Minister work with our armed forces on cyber to protect British companies and our institutions from Russian and Chinese cyber-attacks that put our national security at risk?
Tom Tugendhat
I thank my hon. Friend for his kind words and for his work on the Bill Committee; he has been an absolute stalwart on the issue and has been a very dear friend for a lot longer. I also pay tribute to the armed forces parliamentary scheme and its work to make Members of this House aware of the various ways in which the armed forces play such a vital role in our national life. My hon. Friend’s comments on cyber awareness are absolutely correct, and I agree with every word.
Gavin Robinson (Belfast East) (DUP)
As the Democratic Unionist party spokesman for home affairs, may I express my personal delight at seeing the Minister in his place? I hope that when he is constructing this welcome taskforce, he will recognise that our recent history and our contemporary position in Northern Ireland mean that we have a contribution to make.
The Minister and I were elected at the same time. Since then, we have had the strategic defence and security review, the modernising defence programme, the national security capability review and the integrated review, which formed part of his statement. There are two common threads in those four exercises: the threats get bigger, but the budget remains the same. Does he have an assurance at this stage that if the taskforce brings forward a new programme of work to address emerging threats, it will have the associated budget to tackle them?
Tom Tugendhat
I thank the hon. Gentleman for his kind words. As he will know, not only is the voice of Ulster heard very clearly in the integrated review, but it actually holds the pen. It is a pleasure to commit to working with him and others across the United Kingdom to make sure that voices are heard. On resources, we are in the early stages: at the moment we are setting out how we can work together better, but there is an awful lot still to do.
Dr Ben Spencer (Runnymede and Weybridge) (Con)
I thank my right hon. Friend for his statement and warmly welcome him to his place.
In the same way that the UK took a leading role in international collaboration against the Russian invasion of Ukraine, is it taking a leading role in international collaboration against cyber-attacks by hostile actors?
Tom Tugendhat
My hon. Friend is quite right to talk about international co-operation, because this is not something that we can do alone. Our partners around the world are absolutely integral to our defence. Through agencies such as GCHQ and wider work through the National Cyber Security Centre, the United Kingdom has regularly been leading different forms of engagement and different ways of co-operation. My hon. Friend has my absolute commitment that that will continue and grow, because the way we extend the UK’s influence and defend ourselves is by making sure that our friends and allies are safe, too.
Derek Twigg (Halton) (Lab)
I welcome the Minister to his post and welcome the taskforce. While I have no reason to doubt his integrity or commitment to security, I am a little disappointed that although the shadow Home Secretary and my hon. Friend the Member for Barnsley Central (Dan Jarvis) both raised the issue of the Government’s integrity with respect to security, he has not addressed it. I thought he might have taken that opportunity, given the situation with Ministers’ email use and the security issues surrounding it. We know that mobile phones and other phones are being used, we have seen the former Prime Minister going off to meet an ex-KGB agent, and there is an issue about Russian money in the Conservative party. I thought that the Minister would address the question of how we can have confidence that he and the Government will put things right to ensure that they take security within the Government seriously.
The question that I want to ask the Minister is very simple. Given that the focus has rightly been on Russia and China, on what is happening in Ukraine—obviously—and on energy security, may I suggest that it is important for us not to lose sight of the fact that we need to keep on top of the issue of how we combat terrorism? It seems to have been left on the back burner recently, but we need to know and feel more comfortable about what the Government intend to do to protect the country from terrorism.
Tom Tugendhat
I thank the hon. Gentleman for what he has said. He is absolutely right. There is, sadly, no let-up in the concern about terrorism, and we know that the fact that we do not hear of incidents does not mean they were not prevented by our fantastic agencies in various different ways. The experience that I think must be the most sobering I have had for a long time was walking into my present role and hearing an update on the threats that we face every day, and the different ways in which our fantastic agencies and the officers who serve them have been conducting themselves in order to protect us. They are absolutely the best of us, and we are blessed and honoured to have them working for us and serving our state.
As for the hon. Gentleman’s other points, he will forgive me if I do not go into details. He knows why that is. As the shadow Home Secretary correctly said, it would be inappropriate to discuss operational matters for party advantage.
Simon Fell (Barrow and Furness) (Con)
As the chair of the all-party parliamentary group on cyber security, I welcome my right hon. Friend’s statement. I am sure he is well aware of the importance of disinformation and misinformation and the harm that it is causing to our country at the moment, whether by undermining our democracy or by spreading conspiracy theories. But if he is in any doubt about that, I recommend to him the BBC series “Death by Conspiracy?”, which shows how our constituents are being hurt, and even dying, as a result of the sharing of disinformation by, often, foreign actors.
With that in mind, will my right hon. Friend agree, within the taskforce, to look at the role of legal but harmful content and keep it under review? Will he also ensure that we look at the Computer Misuse Act 1990 and its possible reform? Some of the people who are working hard daily to keep us and our businesses safe are currently under threat of legal action just through doing their jobs.
Tom Tugendhat
I thank my hon. Friend for his work on the all-party parliamentary group. He is to right to highlight the threat of disinformation and, indeed, the way in which cyber is being used against us. I am not entirely sure whether it was flattery or mere coincidence that as soon as I took this job, the BBC ran a series of programmes called “The Capture” in which the Security Minister—rather better-looking than me—had managed to annoy a certain hostile power of which we have been speaking this afternoon, and was subject to a number of cyber-attacks. I very much hope it was coincidence, not prediction.
Mr Kevan Jones (North Durham) (Lab)
As a member of the Intelligence and Security Committee, I welcome the announcement of the Minister’s taskforce. Some of the issues he has raised were highlighted in our Russia report of 2020. I heard his commitment to the Chair of the ISC to work with him closely, but may I just say to him that, like the rest of us, he is—to use a Robin Day phrase—a here today, gone tomorrow politician? We need this taskforce’s scrutiny to be embedded in the memorandum of understanding between the Committee and the Government, because otherwise—this point was raised by my hon. Friend the Member for Denton and Reddish (Andrew Gwynne)—it will be impossible for much of the taskforce’s work to be scrutinised in this place.
Tom Tugendhat
The right hon. Gentleman is right to suggest that institutions and structures are what guard us against the “here today, gone tomorrow” whims of politicians, and that setting up such structures is the way we keep ourselves safe. Indeed, the best of our institutions have endured for hundreds of years in order to guarantee those freedoms. The right hon. Gentleman can be absolutely assured that I will be looking at ways in which we can embed such structures to ensure that we keep ourselves safe.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
I congratulate the Minister and welcome him to his new role. May I ask him to answer a serious and simple question? He has made great play of cyber-security and the need for us to be technologically aware of threats. If he was made aware that a civil servant or Government employee had been sacked for sharing Government documents in personal email accounts or devices, would he sanction that person’s re-employment, even if they had apologised?
Tom Tugendhat
One of the reasons I have always enjoyed debating with the hon. Member is the fact that he finds new ways of asking old questions. I was delighted to hear the question, but I am afraid I am going to return to my old answer, which is that I will not comment on ongoing cases.
Hilary Benn (Leeds Central) (Lab)
When it was reported in the press that the former Foreign Secretary’s phone had been hacked, the former head of MI6 said that Ministers needed to be properly educated about the use of their telephones. If we are absolutely honest—and the point has been made already today—all of us need to be properly educated about not just the use of our phones, but the use of our emails. Does the Minister agree that perhaps it is now time for us to move to a more proactive approach with Members, to ensure not only that we have the excellent advice that is available but that people are looking to make sure that we are following that advice? If the House authorities decide to go down that road, will he ensure that people with all the expertise available to him will be able to attend to give us practical advice about everything we ought to be doing to keep our part in our democracy safe?
Tom Tugendhat
The right hon. Gentleman has made an extremely valid point. I can assure him that any requests from parliamentary security and the excellent lead that we have in the person who currently holds the role will be looked at with extreme willingness. Any request to defend our democracy by those of us who have been privileged to be elected to this House, or indeed those who have been privileged to be elected to others, will be taken extremely seriously. The same, by the way, applies to academic freedom and to many other institutions. They are absolutely fundamental to the liberties of our country.
Andy Slaughter (Hammersmith) (Lab)
In her resignation letter, the Home Secretary said:
“As soon as I realised my mistake, I rapidly reported this on official channels, and informed the Cabinet Secretary.”
Nothing in that statement is correct, according to the Home Secretary’s own account when she wrote to the Chair of the Home Affairs Committee yesterday. She waited several hours, she was confronted rather than volunteering information, and she finally reported her breach of security not to the Cabinet Secretary but to her special adviser. If we are being charitable, there is a conflict between the Home Secretary’s versions of events, and surely that merits an independent investigation if we are to have confidence in the person who is primarily responsible for our national security.
Tom Tugendhat
The hon. Gentleman has made his points, and the Home Secretary answered yesterday.
Clive Efford (Eltham) (Lab)
But the Minister is aware that there are questions about whether the Home Secretary has full security clearance. Can he give the House an assurance that she has that clearance and, if not, what are the implications for national security?
Tom Tugendhat
All members of the King’s Privy Council have access to the information that is necessary to conduct their tasks.
Madam Deputy Speaker (Dame Eleanor Laing)
And now, in his traditional place, Jim Shannon.
Jim Shannon (Strangford) (DUP)
Thank you, Madam Deputy Speaker. A taskforce for all the United Kingdom of Great Britain and Northern Ireland has to be excellent news, and I welcome it.
The Northern Ireland protocol is stirring up tensions in Northern Ireland. What steps will the Minister and the Government take to deal with the people who chant in support of the IRA—the same IRA, the same fifth columnists, who want to destroy our United Kingdom of Great Britain and Northern Ireland, and who carried out the indiscriminate murder campaign of pure evil with which they devastated Northern Ireland during the troubles—and what steps have been taken to ensure support for the Police Service of Northern Ireland at all times to combat the very real threat of terrorism from republicans or, indeed, from any mindset in Northern Ireland?
Tom Tugendhat
I thank the hon. Gentleman for his second question today; I hope I will be privileged to take many more. He can be assured that all security policy will include the whole of the United Kingdom, and that I will be absolutely committed to working with the PSNI and numerous other police forces.
Madam Deputy Speaker (Dame Eleanor Laing)
Just before I conclude the proceedings on the statement, let me say, as Chairman of the Consultative Panel on Parliamentary Security, that I wish to add my thanks to the Minister for what he has said today, and for the work to which he has dedicated himself so enthusiastically.
Avian Influenza
(2 years, 1 month ago)
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The Minister of State, Department for Environment, Food and Rural Affairs (Mark Spencer)
With permission, I would like to make a statement on the Government’s response to the current avian influenza outbreaks. The Department for Environment, Food and Rural Affairs’ avian influenza disease control measures aim to minimise the economic burden of the outbreak on the food, farming and tourism industries and on the wider economy while protecting public health. However, we recognise that the industry is under serious pressure. The UK Health Security Agency advises that the risk to public health from H5N1 remains very low, and the Food Standards Agency has said that there is no food safety risk for UK consumers. The strain is the European strain of H5N1.
Outbreaks of avian influenza in both kept and wild birds continue to occur on an unprecedented scale, with cases continuing to be confirmed into year two of the outbreak for the first time. October has seen a massive escalation in the number of cases confirmed, with 91 cases of highly pathogenic avian influenza confirmed in poultry and captive birds: 82 cases in England, four in Scotland, four in Wales and one in Northern Ireland. This compares with a total of 158 cases in the year between October 2021 and 30 September 2022 and with 26 cases in the winter of 2020-2021.
We recognise the significant financial pressure that an outbreak of avian influenza can have on producers. Current rules are designed to encourage good biosecurity standards, and this remains a top priority. On Wednesday 26 October, to help producers to deal with the impacts of the UK’s worst ever avian influenza outbreak, DEFRA confirmed changes to the avian influenza compensation scheme, which will be implemented in addition to a relaxation of rules for the sale of previously frozen seasonal poultry products. Farmers who breed turkeys, geese, ducks or capons for their meat will have the option to slaughter their flocks early and freeze products, which can then be defrosted and sold to consumers between 28 November and 31 December 2022. While we produce over 11 million turkeys in the UK every year and there is no immediate threat to the food supply chain as a result of current outbreak, this measure will help to mitigate any potential risks to the Christmas food supplies.
Work with the sector has shown that there has been too much uncertainty in the past about the entitlement to compensation in the event of a confirmed case of avian influenza outbreak, where healthy birds are culled to help disease control. We are therefore altering the operation of the existing compensation scheme for avian influenza to give earlier certainty about the entitlement to compensation. This will be linked to decisions taken at the start of planned culling, rather than at the end. It will also allow us to reflect the particular impact of this unprecedented outbreak. Earlier clarity about compensation should also lead to swifter payments to help with cash-flow pressures. We will be applying this approach from 1 October 2022.
Biosecurity is the essential defence against avian influenza, but despite it being a legal requirement in the avian influenza prevention zone in force and a baseline for industry assurance schemes, veterinary investigations at infected premises continue to reveal unacceptable lapses in biosecurity. It is essential that the industry play its part in helping to prevent further outbreaks. Mandatory housing measures for all poultry and captive birds are to be introduced to all areas of England from one minute past midnight on the morning of Monday 7 November, following a decision by the United Kingdom’s chief veterinary officer. The housing measures legally require all bird keepers to keep their birds housed and to follow stringent biosecurity measures to help to protect their flocks from the disease, regardless of type or size.
Finally, any future decisions on disease control measures, including the use of vaccination, will be based on the latest scientific, ornithological and veterinary advice. I urge all bird keepers, from those keeping large commercial flocks to those with one or two birds in the back garden, to adopt the best practice biosecurity advice measures required in the avian influenza prevention zone. I commend this statement to the House.
Daniel Zeichner (Cambridge) (Lab)
I thank the Minister for giving me advance sight of his statement, which is welcome but should have been made weeks ago, as the devastating impact on the wild bird population has been known for months and the impact on producers has been getting worse and worse week by week. Yesterday, the Government finally announced that a full bird housing order would come into effect from Monday 7 November. That is coming too late, with over 3 million birds having been culled already, so why did it take so long? And because birds do not recognise borders, can the Minister tell us about discussions with the devolved Governments on introducing similar restrictions? With the imminent return of more migratory birds, we could rapidly see this spreading further across the four nations.
On the compensation scheme, can the Minister tell us how much it is costing? He mentioned the uncertainty about entitlement. There may be uncertainty in his Department, but the real complaint has been about the inability of the Animal and Plant Health Agency to move quickly enough when incidents are reported, and that is his Department’s responsibility. We know what the problem is: the shortage of vets and the lack of catchers and cullers. The vets went back to Spain and Portugal, but his Department had no plan or capacity to deal with a new crisis, and now we have one. Can the Minister tell us what the vacancy rates are at the APHA? Just how short is the agency? And if everyone there is working on avian flu, as they need to be, what effect is that having on issuing the dreaded export certificates that all our exporters now need?
We are told that the outbreak has spread at a much faster pace this year than previously, with the chief vet telling parliamentarians this morning that, in terms of the number of cases, we are six weeks ahead of where we were this time last year. What impact will this have on our food supplies? We know that the disease affects turkeys and geese much more severely. The Minister says that there is no immediate threat, but it is reported that we already have a 20% supply issue with free-range turkeys. Is he confident that we will have enough turkeys for Christmas?
The Minister is right to say that biosecurity is critical for preventing the spread, and producers must take the responsibility, but what support are the Government offering to farmers to help to implement effective biosecurity measures and what checking is being done to ensure that such measures are at the right standards? Looking to the future, what is he doing to give seasonal producers the confidence to restock next year? Finally, what of vaccines? Other countries are moving quickly. What is the Minister doing to ensure that trade issues are resolved and that every effort is being made to get a vaccine in place? This is a serious situation, and the Government have been slow to react and slow to report to this House. They need to do better.
Mark Spencer
I am disappointed that the hon. Gentleman has taken that approach and wants to make this a party political issue. Interestingly, Wales, where the Labour party is in control, has not moved to do this at this stage. We are announcing before the Welsh Administration. We are actually working quite closely with the devolved Administrations. We have taken this decision now because we are following the most up-to-date science and veterinary advice. We are led by the science and by our veterinary advisers. It is fair to say that the housing order has a twofold impact on the spread of avian influenza, whereas biosecurity can have a 44-fold impact on the spread, which is why our focus has been completely on biosecurity. As I say, we continue to talk to our colleagues in the devolved Administrations. We have constructive conversations and we are working closely with them.
It is clear that there is capacity within the DEFRA vets service to deal with this challenge. The vets are on site and on farms and they are dealing with it. When it comes to food supplies, we are confident that our food supply networks are enough to ensure that we have turkeys for Christmas. We have the most robust supply chains available to us and there should not be a problem as long as we continue to keep the strictest biosecurity.
The hon. Gentleman’s final comment was about vaccines. The advice I have been given is that the current vaccines are not as effective against the current strain of European bird flu as we would have hoped. Vaccines are available for birds kept in zoos that do not enter the food chain but, because of trade deals, there is a challenge with vaccinated birds entering the food chain. We are having conversations and working as closely as possible with our colleagues in Europe, who face the same challenges, to find a way forward.
Dr Neil Hudson (Penrith and The Border) (Con)
I thank my right hon. Friend for his update on this incredibly concerning situation. My thoughts go out to people on the frontline on farms, who are in among their birds. It is incredibly distressing and devastating for all involved in tending or looking after birds and animals that are dying or need to be culled as part of the control process. We saw that with foot and mouth, and we are now seeing it with avian flu.
I thank the vets and officials involved in disease surveillance and control during this incredibly stressful time. Does my right hon. Friend agree that this confirms that the APHA needs to be adequately staffed and resourced to protect animal health and welfare and biosecurity, and that we must refurbish and fund its headquarters down in Weybridge as a priority?
Mark Spencer
I acknowledge my hon. Friend’s expertise in this area. The APHA has the resources to deal with this enormous challenge, but we recognise the pressure it is under. We will make sure it is well resourced to go about its business.
Pete Wishart (Perth and North Perthshire) (SNP)
I thank the Minister for his helpful update and for giving me early sight of his statement.
This outbreak is serious and potentially ruinous for those who depend on the poultry trade, or whose livelihood depends on the keeping of birds. All summer in Scotland, we have seen the impact of this episode of bird flu on our iconic bird colonies in places such as East Lothian, Galloway and St Kilda, with distressing scenes of these beautiful birds washing up on so many of our beaches.
In response to this emerging issue, the chief veterinary officer in Scotland joined her colleagues across the UK in declaring an avian influenza prevention zone. As the Minister said, the risk to the public is very low, and in Scotland we have had only four recorded cases, but I am sure he agrees that the situation must be kept under constant review.
I welcome the Minister’s announcement on the changes to the compensation scheme, and the industry will welcome that it allows for swifter payments in the run-up to Christmas. The Scottish chief veterinary officer has said that the housing of birds should not be seen as a silver bullet, and the Minister will be aware that we are not following the example of England on the mandatory housing of birds at this stage. Does he agree that the housing of birds is not a silver bullet? What further measures can be put in place, short of the housing of birds?
The Minister talked about his engagement with the Scottish Government, and perhaps he could tell us more. How regular are those meetings, and what has been the focus of conversation? We in Scotland will do everything possible to mitigate the risk and to ensure that we get reliable data so that everything we do is evidence-led.
Mark Spencer
I thank the hon. Gentleman for his comments and for the co-operation of the Scottish Government. We work very closely at official level and at chief veterinary officer level to ensure that we are working in tandem to mitigate the risks. As he identified, there is no risk to the public. Of course that continues to be monitored, but we do not foresee there being a risk to public health. He also spoke about the tragedy happening within our wild bird population. We are seeing devastating losses of many wild birds, and we hope their stocks will recover once we get through this terrible outbreak.
Sir John Whittingdale (Maldon) (Con)
I thank my right hon. Friend for his statement. However, the compensation arrangements he outlined will do very little to help small producers such as KellyBronze in my constituency, which lost 9,800 turkeys from a flock of 10,000 in the space of a weekend, before the vet even arrived. Will he look to pay compensation from the date of notification, if the flock proves to be positive, as is the case for other species suffering from, for instance, foot and mouth disease? Will he confirm now that “freeze and thaw” will be available on the same basis next autumn, to give farmers the confidence to invest in birds for Christmas 2023?
Mark Spencer
I, too, have met my right hon. Friend’s constituent Paul Kelly, who made representations to me on behalf of KellyBronze. We have moved the start of compensation to as early as legally possible without the introduction of primary legislation. We are seeking to assist farmers as much as we can when they are caught out by this terrible disease. “Biosecurity, biosecurity, biosecurity” is the message I want to get across. It is very difficult, as it takes only one mistake—one quick visit to a unit with infected faeces on our boots—to devastate a whole flock.
Cat Smith (Lancaster and Fleetwood) (Lab)
I recently held a farmers forum in Lancaster and Fleetwood, and it is fair to say that the farmers in my community are deeply concerned about avian flu, but they are also concerned about the shortage of vets. Is the Minister confident that his Department has access to enough vets to contain the avian flu outbreak?
Mark Spencer
We have full confidence that we have enough vets to deal with this outbreak. Those vets are working long hours with great dedication, but I hear the hon. Lady’s comments about the concerns of poultry keepers and farmers up and down the country. We should not underestimate the mental health impact on farmers when they lose their livelihood and their flocks. It puts them under huge pressure.
Philip Dunne (Ludlow) (Con)
I welcome the improvements to the compensation arrangements. I am aware that the National Farmers Union’s poultry board visited the Department last week to try to impress upon my right hon. Friend and his officials that paying compensation to farmers who have lost birds to culling but not to farmers whose birds have died from avian flu has made it very difficult to provide adequate compensation for poultry farmers whose livelihoods have been devastated by the impact of this disease, many of whom are in my south Shropshire constituency. I urge him to say whatever else he can about compensation applying to birds that have already died, prior to notification by vets.
Secondly, will my right hon. Friend comment on flexibility on the labelling of free-range eggs? The housing requirements for layers need some flexibility to allow free-range certificated flocks to continue.
Finally, the vaccine development is welcome. Will my right hon. Friend bring the same urgency to bear on avian flu vaccines as is applied to human covid vaccines? Will he engage with retailers in this country as soon as possible to ensure that they are willing to supply vaccinated meat?
Mark Spencer
I thank my right hon. Friend for his three questions. First, we have moved the date for the compensation scheme to as early as legally possible, to try to assist farmers with the challenges they face. He mentioned the labelling of free-range eggs. The law currently allows 16 weeks from the second a bird is housed, before eggs may no longer be called free-range. We have a while before the end of that 16-week period, when eggs would have to be labelled as barn-reared. That can be done with a simple label to say the eggs are barn-reared, rather than free-range.
As with covid, vaccination will be the route out of this problem, but we need our best scientists to concentrate on developing an effective vaccine. We need to work with our colleagues across the European Union so that birds and products exported for food will be accepted into their marketplace, as well as keeping conversations open with retailers to ensure they are also happy.
Tim Farron (Westmorland and Lonsdale) (LD)
Twenty-one years on from foot and mouth disease devastating our communities in Cumbria, we are especially sensitive to not only the animal welfare consequences of outbreaks of animal diseases such as avian flu, but the crushing impact on people, livelihoods and the wider community. Will the Minister say more about the support he will be giving—compensation and other support—to poultry farmers directly affected and to those who will be indirectly affected by this hammering of their business, which puts their businesses at risk? Given that the Department has delayed imposing mandatory housing until next week, what evidence is there that this window could not now trigger panicked and unsafe practices, creating greater infection and increased misery for communities such as mine?
Mark Spencer
Clearly, the housing order came in following the best scientific and veterinary advice that we have, but I cannot reiterate enough the impact that improved biosecurity has on those units over a housing order. I recognise the impact that foot and mouth disease had in the hon. Gentleman’s part of the country and the mental scars it leaves on livestock holders. We have brought forward the compensation scheme so that cash flow is assisted. In bringing forward the moment at which the compensation scheme kicks in, we have also brought forward the moment at which the compensation is received in the bank account of the affected farmer. However, we cannot pay compensation for consequential losses further down the track. As a society, we will have to monitor and support those whose mental health is affected and address the impact that has on many, many families up and down the country.
Duncan Baker (North Norfolk) (Con)
It feels as though Norfolk is at the epicentre of this bird flu epidemic. In parts of my constituency, on the Norfolk broads, we have multiple reports of wild birds, including many swans, dying on our rivers and lying in the water. The Environment Agency is struggling to cope and there appears to be little consideration for the wild bird deaths. Will my right hon. Friend ensure that trained wildlife volunteers and rescue charities are given the necessary and special permissions to help with this emergency and are given special legal clearance to assist with the clear-up operation?
Mark Spencer
My hon. Friend is right to identify that Norfolk, north Essex and Suffolk are at the epicentre of this and have been under a housing order for some time. Obviously, he has made representations to me in private, as has my hon. Friend the Member for Bury St Edmunds (Jo Churchill), who is in her place. There are some challenges in identifying where the disease is spreading, and members of the public can certainly help by reporting sightings of dead birds, to make sure that we are tracking where the disease is spreading.
Dan Jarvis (Barnsley Central) (Lab)
As the Minister acknowledged, this is a deeply concerning for poultry farmers, and that concern is felt right across Yorkshire, as I know it is right across the country, not least because of the proximity to the crucial Christmas period, as he said. I wish to ask him about testing, because he will know that entire flocks can die in the time between reporting a suspected case and testing. Is any additional resource required to be put in place in order to enable a more rapid testing process?
Mark Spencer
Currently, we feel as though we have enough resource and are able to get on to farms quickly enough to identify the disease where possible, and that is the moment when compensation begins. As the hon. Gentleman has identified, rapid diagnosis and quick action are required, and at this moment we feel as though we have the resources to deliver that service.
Maggie Throup (Erewash) (Con)
I thank my right hon. Friend for his statement. Although, as he has stated, the risk to humans from avian flu thankfully remains low, we know from recent experience that clear public information will be key to minimising the spread of the virus and keeping our constituents safe. Using the lessons learnt from covid, and indeed from previous foot and mouth outbreaks, what steps is he taking to ensure that the public know what to do if they come across sick or dead birds as they go about their everyday lives?
Mark Spencer
My hon. Friend’s experience during the covid pandemic is extensive and valuable to us. My advice to members of the public is not to interfere with those dead birds, not to pick them up and not to move them, but to report them to their local authority if they see them dying on the roadside.
Jim Shannon (Strangford) (DUP)
I thank the Minister for his response. In my constituency of Strangford, in Northern Ireland, I am aware of two confirmed outbreaks of avian flu, one in Ballywalter, 4 miles from where we live, and one in Kircubbin, 3 miles south of where we live. I am also aware of an avian influenza outbreak in Castle Espie, which is a wildlife refuge only 4 or 5 miles across Strangford Lough from where we are. A lot of migrating wild fowl—brent geese, wigeon, teal and mallard—are coming in, so clearly the possibility of an avian influenza outbreak not only in my area but across all of Northern Ireland is real. What can be done from a United Kingdom of Great Britain and Northern Ireland perspective, and also with the Republic of Ireland? This thing is so big that we can only deal with it together. Perhaps the initiative to make that happen across the whole of the United Kingdom of Great Britain and Northern Ireland and the Republic is one that you might want to push, Minister.
Mark Spencer
The hon. Gentleman is right to identify that this is not an England-only problem; it is an international challenge and we need to co-operate and work with our international colleagues. Later this week, I will be going to the OECD, where I will be meeting international farming Ministers to discuss this and many other challenges that we face. He is right to identify the need for international co-operation required to solve this terrible challenge.
David Duguid (Banff and Buchan) (Con)
I welcome the statement from my right hon. Friend, particularly on the measures relating to compensation earlier in the process, which will be most welcome, not least because, as he will be aware, one recent outbreak of avian flu in Scotland has been in my constituency in recent days. The shadow Minister rightly says that the disease knows no borders, so may I ask the Minister what discussions he has had in recent days with the Scottish Government on this matter? Does he agree with Robert Thompson, the chairman of the NFU Scotland poultry working group, that the same housing order measure should be implemented in Scotland? Does the Minister also agree with his statement that, although the biosecurity hygiene measures do exist in Scotland, as has been pointed out by the hon. Member for Perth and North Perthshire (Pete Wishart), the main risk is from the wild bird population to those flocks that are still outside?
Mark Spencer
One big challenge we face is that there has not been a break in the disease; traditionally, over the summer period the disease has “gone away” and disappeared. Unfortunately, the levels of infection have continued over the summer period and wild bird populations now heading towards the UK for the winter, to warmer areas such as Scotland from the north pole, are bringing that disease with them. There are not many places in the country that see Scotland as warm, but if you live in the north pole I suppose it is. Our level of co-operation with the devolved Administrations is exemplary. This is one area in which there is no political axe to grind, and the level of co-operation and engagement across the whole of the UK is exemplary.
Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)
The Minister said in his reply to the shadow Minister that there was close co-ordination with the devolved Administration, and he has made that point repeatedly during the debate. However, the Rural Affairs Minister said in the Senedd last week when answering questions that she had had no contact with the previous Secretary of State and had written only to the new one. Perhaps that is not surprising, given that the previous Secretary of State was not in post for particularly long. Will the Minister ensure that that co-ordination is happening not just at official level but at ministerial level?
Mark Spencer
That is a good question, and I make the commitment to the hon. Gentleman now that my door is open to colleagues from across the UK and the devolved Administrations to have those conversations. There are a lot of conversations taking place at official level and certainly the chief veterinary officers meet regularly.
Aaron Bell (Newcastle-under-Lyme) (Con)
We have already had avian flu in the north of Newcastle-under-Lyme, following an outbreak in Kidsgrove last month. I welcome my right hon. Friend’s statement and what he is doing, given the increasing numbers, and the compensation scheme he has set out today, but to reassure consumers will he also set out what the UK Health Security Agency has said about the risk to public health and what the UK Food Standards Agency has said about poultry products, including eggs, and whether they remain safe to eat?
Mark Spencer
I can be absolutely categorical: there is absolutely no identified risk to human health. That continues to be monitored. We have the highest levels of food safety available to us. The Food Standards Agency is engaged in the process and has given us every assurance that there is no impact on human health at all.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
I will not respond to the Minister’s disgraceful attack on Scotland’s mild and gentle climate. Surely though, the difference between avian flu and foot and mouth and other diseases of that sort is that avian flu is rife in the wild bird population? It is absolutely heartbreaking to walk on the beaches of the Northern Isles at the moment and see the number of dead birds being washed up all the time. The RSPB told me last week that some species, such as the great skua—perhaps not the most sympathetic species—could be threatened as a consequence. What more than biosecurity can we do to ensure that the link between the wild and domestic bird populations is broken?
Mark Spencer
The truth is that it is very difficult. Biosecurity is the best tool available to us, but as the right hon. Gentleman says, the disease continues to spread in wild bird populations. To a certain extent, we have to hope that nature finds a way of resolving this on its own and that birds with immunity to the virus are able to breed with other immune birds and so build up the natural immunity that can overcome this terrible virus.
Scott Benton (Blackpool South) (Con)
I thank the Minister for his statement and for the actions his Department has already taken. Sadly, Blackpool has been affected by avian flu—40% of the swan population in Stanley Park died last winter and a high number of cases was reported recently among seabirds. Although I understand that the risk to the general public remains very low, what steps is his Department taking to raise awareness of this issue, and what steps should members of the public take to report suspected cases?
Mark Spencer
As I said earlier, it is important that members of the public do not interfere with dead birds, as they could inadvertently spread the virus by doing so. It is possible to report the discovery of a dead bird either to DEFRA or to the local authority, and that helps the Department to identify where the disease is spreading.
Carla Lockhart (Upper Bann) (DUP)
I thank the Minister for his statement. This is indeed a worrying situation. If avian flu were to enter our commercial flock in Northern Ireland, it would have a devastating impact on our poultry industry, including many family farms, on international trade and on the wider economy. Can the Minister confirm that all resources to address outbreaks and prevention—finance and compensation, labour and gas stocks—are being made available? Specifically on compensation, can he confirm that there is adequate finance to pay it and that it will be paid promptly?
Mark Spencer
We do have adequate resources to deal with the challenges we face. We brought forward the compensation payments, which will lead to earlier payments being made to those being compensated. It is worth acknowledging, however, that farmers are not interested in compensation; they want to keep their flocks safe, and the best way they can do that is through biosecurity. That is not just about washing wellington boots and hands, of course. For example, when bedding introduced to housing has been stored outside, there is a risk that it has come into contact with infected bird faeces. Stringent scrutiny of all the biosecurity measures taken on farms is essential to prevent the spread of the virus.
Richard Foord (Tiverton and Honiton) (LD)
My question is also about compensation, which I know our constituents do care about. Although it is good to hear the Minister recognise that there has been uncertainty about entitlement to compensation, I am unconvinced that the new approach has been applied since 1 October. In my part of Devon, poultry farmers have been severely affected in recent months. Earlier today, I tried to call the Animal and Plant Health Agency to check its advice on how soon after avian influenza is identified farmers will be entitled to compensation. After unsuccessful phone calls with two advisers, I was asked to email them. How has the APHA guidance for our farmer constituents on the earlier availability of compensation been improved since 1 October?
Mark Spencer
To be clear, the rules had not changed on 1 October. They changed last week and we backdated the changes to 1 October, so the kick-in moment for compensation for farmers who sadly lost their flocks after 1 October moved slightly backward. I can write to the hon. Member directly setting out the advice APHA is giving farmers on a sheet of paper so that he can familiarise himself with it.
Mr Deputy Speaker (Mr Nigel Evans)
I thank the Minister for his statement today and for responding to the questions.
Points of Order
(2 years, 1 month ago)
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Siobhain McDonagh (Mitcham and Morden) (Lab)
On a point of order, Mr Deputy Speaker. In Prime Minister’s questions last Wednesday, the Prime Minister stated:
“I am pleased that we had a record number of new homes built in the last year”.—[Official Report, 26 October 2022; Vol. 721, c. 297.]
Department for Levelling Up, Housing and Communities quarterly data for the most recent year shows that 174,930 homes were completed in 2021; however, a higher number of properties were built in several years between 1969 and 1990, and an even higher number were built as recently as 2019, despite the figures being far below the Government’s own target. Stating that a number is “a record” clearly implies that it is the highest number that has been achieved. Given that the number of new homes last year is neither a record nor even close to a record, will you advise me on how that can be corrected?
Mr Deputy Speaker (Mr Nigel Evans)
I thank the hon. Member for giving notice of her point of order. She will know that the Chair is not responsible for any answers that Ministers give from the Dispatch Box, but those on the Treasury Bench will have heard what she had to say and there will be plenty of opportunities for her to pursue this matter, as I am sure she will. It is a judgment for the Prime Minister as to whether he wishes to correct the record, but the hon. Member has an opportunity at PMQs tomorrow, if she can catch the Speaker’s eye.
Mark Jenkinson (Workington) (Con)
On a point of order, Mr Deputy Speaker. Last week, I was called to give evidence to the Serjeant at Arms on the events that allegedly occurred outside the entrance to the No Lobby on 19 October. For the record, during these alleged events, I was at the opposite end of the No Lobby as a Teller. We saw colleagues, some of whom I had pastoral responsibility for as their Whip, harangued and harassed by Members of the Opposition, and subsequently by their local opposition and the media. That abuse stemmed from a photograph which should never have been taken and which the Chair of the Committee on Standards then attempted to justify to this House with a misleading impression. I seek your advice, Mr Deputy Speaker, on what actions are available to Members of this House who feel aggrieved by these events and are worried about inflammatory language and actions, particularly from those whose own behaviour we can reasonably expect to be beyond reproach.
Brendan Clarke-Smith (Bassetlaw) (Con)
Further to that point of order,
Mr Deputy Speaker. Following the widespread publication of photographs on social media and in other parts of the media, I wonder whether we could have some clarification for the House on the use of photography in and around the voting Lobbies.
Chris Clarkson (Heywood and Middleton) (Con)
Further to that point of order, Mr Deputy Speaker. The hon. Member for Rhondda (Chris Bryant), who has been notified that I will be mentioning him in the Chamber, claimed in a point of order on 19 October:
“I saw Members being physically manhandled into another Lobby and being bullied.”—[Official Report, 19 October 2022; Vol. 720, c. 804.]
Later, on the BBC, he claimed that he saw signs of “clear bullying”. Let us leave aside the fact that the first instinct of most people, if they saw signs of clear bullying, would be to help the perceived victim rather than to take photographs for social media. May I ask your advice on this, Mr Deputy Speaker? In light of the findings of the Speaker’s report earlier today, would it be in order for the hon. Member to come to the Chamber and correct the record as he has clearly misstated what happened?
Mr Deputy Speaker
The hon. Member has informed the hon. Member for Rhondda (Chris Bryant) that he was mentioning him, and I do not think that he was named by either the hon. Member for Workington (Mark Jenkinson) or the hon. Member for Bassetlaw (Brendan Clarke-Smith). All I can say is that the Speaker has had an investigation and has issued a statement today, which he did at the beginning of the proceedings. I understand that the photograph has been taken down and an apology made.
It has been made absolutely clear by the Speaker that no photographs should be taken in areas where no authorisation has been given. That matter has now been dealt with comprehensively and we should now—[Interruption.] The Chair does not have the responsibility to bring Members to this Chamber, but I am certain that the hon. Member has been informed, as has been said. I know that he is detained elsewhere, otherwise I am sure that he would be have been in the Chamber. It is up to him whether he makes that public apology.
Bill Presented
Healthy Start Scheme (Take-Up) Bill
Presentation and First Reading (Standing Order No. 57)
Kate Green, supported by Sir Stephen Timms, Ms Karen Buck, Clive Efford, Paul Maynard, Mary Kelly Foy, Tim Loughton, Daisy Cooper, Jim Shannon, Ruth Cadbury, Sir Peter Bottomley and Kate Osborne, presented a Bill to require the Secretary of State to ensure that families eligible for the Healthy Start Scheme are registered to receive it; to confer certain powers on Government Departments and agencies and public bodies for that purpose; to provide for an opt-out where the family wishes; and for connected purposes.
Bill read the first time; to be read a Second time on Friday 24 March 2023, and to be printed (Bill 178).
Internet Access (Children Eligible for Free School Meals)
(2 years, 1 month ago)
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Siobhain McDonagh (Mitcham and Morden) (Lab)
I beg to move,
That leave be given to bring in a Bill to place a duty on the Secretary of State to ensure that all children eligible for free school meals have a broadband connection and facilities to access the internet at home; and for connected purposes.
The technological advance in our society and the reliance that we all now have on the internet is indisputable. Whether it is for work, entertainment, shopping, bills or even connecting to our friends and family through social media or video calls, the internet has changed every part of everybody’s life—or at least almost everybody’s life.
There is a digital divide in our society: those who have digital access and those who do not. Although the consequences of being on the wrong side of the digital divide are felt at all stages and ages, and we can and should debate those consequences in this House, it is the divide for our children and young people that I wish to focus on today and that this Bill aims to close.
I wish to start by setting the scene. I am sorry to do this, but I will take us back to the beginning of the pandemic. During the lockdowns, Marcus Rashford scored the most important goal of his career, using his platform to highlight that food poverty is not restricted just to school term times. It was a campaign of which any left winger wearing red would be proud. However, support for children who are entitled to free school meals should be about more than just the food.
When schools closed, it was not just lunch that disadvantaged children missed out on, but connectivity. Before the lockdowns, approximately 9% of children did not have access to a laptop, desktop or tablet. Ofcom estimated the number to be up to an extraordinary 1.78 million children. Those children most likely to be on the wrong side of the digital divide were already leaving school 18 months behind their classmates, and the gap was and is getting worse.
Then schools closed and teachers and pupils moved to remote learning overnight. Millions of children started the day with Joe Wicks’ online exercise classes. They completed schoolwork sent remotely by their teachers, and they joined their classmates in live remote-learning lessons. It was not perfect, but it was an extraordinary feat, achieved thanks to the dedication of our teachers and to the support and patience of home-schooling parents.
Schools such as the outstanding Ursuline High School were already at the forefront of technology, giving every pupil a tablet and offering six lessons a day from home, but others did not have the kit required. A quarter of children on free school meals did less than one hour’s schoolwork a day. While approximately 30% of private school pupils attended four or more online lessons per day during the first lockdown, just 6.3% of state school pupils did the same.
Those figures should come as no surprise, considering that one in five children did not always have access to a device for online learning while schools were closed. The Government were dragged kicking and screaming to provide the kit and connectivity required for those children who could not log in and learn from home, but for far too many children, that support arrived either too late or not at all. The roll-out of devices was nothing short of shambolic: just 5% of teachers in state schools reported that all their students had a device, compared with 54% at private schools.
Almost a year after schools first closed, the Daily Mail had to run an emergency campaign to secure more laptops for the children who were being left behind, a damning National Audit Office report concluded that the Department for Education did not even aim to provide equipment to all the children who lacked it, and 80,224 of the devices provided in the roll-out arrived after schools had reopened. While the Government slowly recognised the importance of the devices, a piece of kit is only educationally useful if it comes with the connectivity required to use it.
The inescapable reality is that, for those still on the wrong side of the digital divide, every click widened the attainment gap. Those pupils will have returned to school even further behind their peers. Meanwhile, a further 880,000 children were in households with only a mobile internet connection. I do not know about other hon. Members, but Mum’s mobile does not strike me as an acceptable solution for logging in and learning from home.
However, this is no problem for the past. Schools may be long reopened—I hope they never close again—but the days of pen and paper are long gone and the technological age that we now live in is here to stay. Homework, research, catch-up—so much is now online. The consequence is that children on the wrong side of the digital divide are now even more disadvantaged than before. That is even before we consider the wider impacts of digital exclusion, from the inability to develop digital skills for the world of work to being unable to socialise online with family, friends and peers. Not only is the reliance on connectivity indisputable, but it is growing.
If we accept that internet access and digital devices are part of a child’s learning in a modern-day classroom, then we must also recognise how essential is the kit and connectivity required for taking part. Even before covid, evidence suggested that digitally excluded young people aged 11 to 18 could be spending 60 fewer hours every year learning online at home, compared with their peers—a figure that will only have soared.
That is why I am calling for every child entitled to free school meals to have internet access and an adequate device at home. I recognise that free school meals may not be a complete measure of need, but I believe it is the best measure we have. After all, data collected before the pandemic found that the likelihood of internet access increased with income, with households with an average income of £6,000 to £10,000 being half as likely to have access compared with households earning more than £40,000.
Compared with the vast sums squandered through the pandemic, this is a low-cost, straightforward and tangible step forward. It is no silver bullet, but it would make a life-changing difference to children on the wrong side of the digital divide—children such as 10-year-old Abi in my constituency, who in lockdown secured entry to the Tiffin Girls’ School, one of the most prestigious grammar schools in the country, while working in a cramped homeless hostel with only a refurbished phone donated by Tesco Mobile to get connected.
The impact for Abi will be lifelong, but data and devices should not come down to the lottery of charitable giving; nor should they be deemed a luxury any more. They are an educational essential. This Bill would give the golden ticket that Abi received to every child entitled to free school meals—call it social mobility, call it levelling up or whatever you want.
This is no short-term measure. A recent UNICEF report found that if action is not taken now to support children and young people, there will be an estimated gap of 4 million highly skilled workers by 2024. It took the intervention of a premier league footballer for Ministers to agree that no child should go to bed hungry. No matter where we sit in this Chamber, surely we can all agree that no child’s education should be dependent on their internet connection.
Question put and agreed to.
Ordered,
That Siobhain McDonagh, Julie Elliott, Darren Jones, Dame Margaret Hodge, Mrs Emma Lewell-Buck, Sir Stephen Timms, Catherine McKinnell, Kim Johnson, Apsana Begum and Stephen Hammond present the Bill.
Siobhain McDonagh accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 18 November, and to be printed (Bill 179).
UK Infrastructure Bank Bill [Lords]
Tuesday 1st November 2022
(2 years, 1 month ago)
Commons ChamberRead Full debate UK Infrastructure Bank Act 2023 View all UK Infrastructure Bank Act 2023 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: HL Bill 3-R-I(Rev) Revised marshalled list for Report - (1 Jul 2022)
The Chief Secretary to the Treasury (John Glen)
I beg to move, That the Bill be now read a Second time.
The UK Infrastructure Bank Bill will finalise the bank’s set-up and ensure that it is a long-lasting, enduring institution. The Bill will set out its objectives to tackle climate change and support regional and local economic growth in legislation, as well as giving the bank a full range of spending and lending powers, so that it can benefit communities across the country and help the UK achieve its net zero goals. The bank is already having an impact. Since summer 2021, when the UK Infrastructure Bank became operational, 10 deals worth close to £1.1 billion have been done, including providing financing for a new £500 million fund that could double the amount of subsidy-free solar power in the UK.
This is a Bill for the whole UK. Thanks to £22 billion-worth of capacity, the bank will be able to support infrastructure investment and the levelling up of the whole UK. The bank represents a step change in the Government’s ability to crowd in private sector capital and to address the economic and climate challenges the country faces. The UKIB will focus on prioritising investments where there is an under-supply of private sector financing, which we expect will unlock a further £18 billion of investment.
Before I go on, I would like to thank my noble Friend Baroness Penn for her work in bringing the Bill through the other place. The Bill has already undergone thorough scrutiny, as Members would expect, and I look forward to discussing it further today and in Committee in a few weeks’ time.
It is worth remembering why we set up the UKIB. Four years ago, the National Infrastructure Commission published its national infrastructure assessment. It recommended that the UK create its own domestic bank if funding for economic infrastructure was to be lost from the European Investment Bank. As Members will recall, the UK did lose its EIB funding, worth around £5 billion a year. However, I would like to be clear that this is not intended to be and is not a direct replacement for the EIB funding, which, given its very broad remit, at times crowded out private sector funding. There was widespread consensus that we would need to bring forward plans for the UKIB, which we did, and I pay tribute to my right hon. Friend the Member for Hereford and South Herefordshire (Jesse Norman), who played an instrumental role in bringing those plans to fruition.
When establishing the bank, we were cognisant of three specific recommendations from the NIC. First, that there would be governance to safeguard the operational independence of the bank. We will come on to it later, but one of the key purposes of the Bill is to protect exactly that. It will make it impossible for the Government to simply dissolve or sell the bank without further legislation. We will also be unable to alter its core objectives on climate change and regional and local economic growth.
Secondly, the bank should provide finance to economic infrastructure in cases of market and co-ordination failures, catalysing innovation. We all know that infra- structure projects take a long time and cost a lot of money, and I want to see more private investment in such projects. Often, however, the private sector does not provide enough finance to emerging innovative technologies that have a higher risk profile—for example, net zero technologies or those that are in areas of the UK that do not historically get financing.
John Redwood (Wokingham) (Con)
Can the Chief Secretary explain why the bank is investing in a very expensive cable electricity link between the United Kingdom and Germany, given that we are in the same time zone and have similar weather, and both countries are chronically short of electricity capacity? It does not sound like a good idea to me.
John Glen
I will not be able to comment on specific investments. As I said, a series of investments have been made in the last 12 months, and I would be happy to correspond with my right hon. Friend and put him in touch with the bank so that the logic behind that decision can be explored with him.
Richard Fuller (North East Bedfordshire) (Con)
May I broaden out the question the Chief Secretary has just answered? Can he explain the oversight of the bank? There will be a report after a certain number of years, but will it be regulatory oversight, oversight by Parliament or oversight by the Treasury?
John Glen
I am grateful to my hon. Friend for the work that he did in the Treasury in recent months as my successor as Economic Secretary.
The board of the bank has been filled over the summer so that the right expertise has come in to oversee the investments and metrics for success. They will be accountable through normal processes and accountable to Parliament. Indeed, the chairman and chief executive of the bank have made themselves available to Parliament through the process of this legislation, and I attended meetings with them earlier this year with Members of the House of Lords. I know that they are willing to be scrutinised on the logic of their evolving processes and remit so that they can capture the wisdom of this House and the other place.
With regard to the climate change objectives, significant public and private investment will be needed to achieve the UK’s infrastructure policy goals, and low-carbon investment will need to be significantly scaled up to deliver net zero. That is highlighted by the fact that the UK’s core infrastructure—power, heat and transport networks—account for more than two thirds of UK emissions. Without the bank, the private sector is likely to focus its investment on lower-risk technologies and sectors, and we will not achieve regional and local economic growth without better infrastructure in every region of the country.
Disparity in infrastructure across the country has been identified as a key driver of economic inequalities, and central to the Government’s ambitions to level up is setting up new institutions boosting productivity, pay, jobs and living standards. The bank will help to grow the private sector and support it to deliver opportunities in parts of the country where they are lacking. Without intervention, the private sector is likely to continue to target geographic areas that have historically received higher levels of private capital. Targeted advice, support and challenge from the bank can help raise ambition and boost the capability of regional and local government as they tackle complex infrastructure projects.
Finally, the NIC recommended that the bank be set up in 2021. As I have already mentioned, the bank has been operational since last summer and has £22 billion of capacity. The bank is also operating across the UK and has already invested in each of our four nations. I am pleased that each Government have supported the bank, and discussions for a legislative consent motion are progressing well.
In that context, I come to the provisions of the Bill. It will complete the setting up of the bank as an operationally independent institution. It is a short Bill of 11 clauses, broadly split across three areas. First, the Bill enshrines the bank’s objectives and activities in legislation to provide clarity for the bank and the market on the bank’s long-term purpose. That is covered in clause 2, which includes the bank’s core objectives; its activities, including providing finance for the private sector and public authorities; and a definition of infrastructure.
The definition of infrastructure is inclusive and based on existing definitions in the Infrastructure (Financial Assistance) Act 2012 and the United Kingdom Internal Market Act 2020. Crucially, given the bank’s scope, we have focused the definition on economic infrastructure. As a result of the Bill’s passage through the Lords, we included energy efficiency in the definition to clearly signal policy intent. I am sure that we will discuss that further in this debate and in Committee.
I highlight that we have taken a power to amend the activities and definition of infrastructure to allow the bank to keep pace with an innovative market. We have not, however, taken the same power to amend the bank’s objectives. That is vital in providing clarity to the market and to ensure that the bank is not fundamentally changed without further primary legislation.
Secondly, the Bill will allow the bank to provide financial assistance to the private and public sector including, crucially, giving the bank the power to lend directly to local authorities in Great Britain and to the Northern Ireland Executive. That is covered under the bank’s activities in clause 2 and further defined in clause 10 and clause 5, which allows the Treasury to put the bank into funds.
It is important to note that the bank will be able to lend directly to each UK nation, including their local authorities. In the case of Northern Ireland, we have designed the bank to be able to lend directly to local authorities and the Northern Ireland Executive. That accounts for the fact that the Northern Ireland Executive hold responsibility for most capital infrastructure projects that would be the responsibility of local authorities in the rest of the United Kingdom. As I said at the beginning of my remarks, this is a Bill for the whole UK.
Richard Fuller
One of the objectives is that the bank should make a positive financial return. Can my right hon. Friend explain to the House why that is not in the Bill?
John Glen
I would be very happy to look into that matter and respond to my hon. Friend at the end. It is probably deemed to be unnecessary, but I will give absolute clarity, or the Exchequer Secretary will when he closes.
Thirdly, the Bill supports the operational independence of the bank by setting out clear governance and accountability in how it will be run. That is covered by the remaining clauses, including board requirements in clause 8, reporting requirements in clause 6, a review of the bank that will also look into its additionality in clause 9, and the ability for the Treasury to issue a strategic steer in clause 3 or a direction in clause 4.
Although the bank is still in its infancy, it is already taking a leading role in the clean infrastructure market. Over time, we expect the bank to catalyse new markets of infrastructure by crowding in private capital to help meet our climate change ambitions and level up across the UK. In much the same way that the EIB helped to catalyse the offshore wind market, where the UK is now a global leader, the UKIB will help to catalyse the infrastructure markets and technologies of the future.
Indeed, the Bill will be at the heart of our focus on our long-term energy security. It will help the Government to deliver more renewables, including more offshore wind. I have no doubt that the bank will grow to be a sophisticated and adaptive tool, which will allow the Government to quickly place capital behind the projects that this country needs. I reiterate to hon. Members on both sides of the House and to the wider public that we have designed the bank to endure and be a long-lasting institution that will deliver the long-term priorities on which we all depend. I greatly look forward to this afternoon’s debate and to drawing on the expertise of hon. Members on both sides of the House.
James Murray (Ealing North) (Lab/Co-op)
I will set out the views of the Opposition. We will not oppose the Bill today, as it seeks to put the UK Infrastructure Bank, which has been operating on an interim basis since June 2021, as we heard, on a statutory footing. We support the establishment and strengthening of the bank, and we want the new institution to play its part in tackling climate change and supporting regional and local economic growth.
The need for economic growth is central to the challenges our country is facing today, and it comes after 12 years of low growth under the Conservatives. During the last Labour Government, despite the global financial crisis, the economy grew by 2.1% a year. Since 2010, however, the Tories have grown the economy by just 1.5% a year. The outlook under the Tories now is even worse, with growth forecast to be the worst in the G7 over the next two years. As the previous Chancellor recently admitted, under the Conservatives we have been stuck in a “vicious cycle of stagnation”.
That stagnation in our economy has seen real wages fall and the tax burden rise for working people in this country. Even before the disastrous mini-Budget, working people were paying the price for the Conservatives’ record of failure on the economy. What the then Chancellor announced on 23 September poured petrol on the fire, as Ministers unleashed a discredited and reckless economic approach on the British public. Trickle-down economics, unfunded tax cuts and an ideological slashing of protections for workers and the environment—no wonder the former Prime Minister and Chancellor were removed from office so quickly, and no wonder the current Chancellor has had to U-turn on almost every measure. The truth is that this economic crisis was created in Downing Street. The damage has been done, and working people will be paying the price for years to come.
Part of the reason for the Conservatives’ failure to grow the economy as it could have been growing over the last decade has been their failure to invest in the infrastructure our country needs. As we look ahead to the coming decade, investment in our country’s response to the climate emergency could not be more critical, both to protect the environment and to grow the economy.
That is why Labour’s green prosperity plan is so important. Under our plan, we would invest in wind, solar and nuclear power to make our electricity system zero-carbon by 2030, we would insulate 19 million homes across the country, bringing down carbon emissions and people’s home energy bills, and we would invest in new jobs in industries of the future, from electric vehicles to clean steel.
We recognise that the UK Infrastructure Bank can play an important role in supporting essential investment. We therefore welcome the fact that one of its objectives, set out in clause 2 of the Bill, is to help tackle climate change. But setting up the bank is not enough on its own; we need a Government who will drive forward the agenda of green investment that we need. Sadly, the Government’s record makes it clear that they will fail to rise to that challenge.
There is evidence of that failure littered throughout the past 12 years. Ten years ago, the Government set up the Green Investment Bank. Five years later, they sold it off to a private equity group. The Public Accounts Committee said that the bank had
“failed to live up to original ambitions”.
The Committee was clear that, in selling it off, the Government had been focused on
“how much money could be gained from the sale over the continued delivery of GIB’s green objective.”
Supporters of the current Prime Minister on the Conservative Benches may remember that, two years ago, the then Chancellor published a video on his YouTube channel titled: “Rishi Explains: Green Home Grants”. In that video, the now Prime Minister excitedly announced that the brand-new green homes grant scheme was open for applications. However, I was not able to find any videos of him explaining why the green homes grant scheme closed six months later and saw £1 billion cut from its budget. Although he seems to have forgotten to make a video explaining that, the Environmental Audit Committee was happy to set out its views. In its report, “Energy Efficiency of Existing Homes,” it concluded that the scheme had been
“rushed in conception and poorly implemented”
and described its administration as “nothing short of disastrous”.
Richard Fuller
The Opposition spokesman talks about the importance of sticking with plans and of permanence. That is quite right; this is infrastructure, which lasts a long time. Will he therefore use this opportunity on the Floor of the House to give the assurance that, should Labour form a Government in the near future, it will make no changes to the objectives listed in the Bill?
James Murray
It would be a strange parliamentary procedure for the Opposition to commit to a Bill that has not even passed into law yet; let us see what happens in Committee and on Report and what the Government do, and indeed what we inherit when we become the next Government if we win the next election. So much has changed over the last few weeks; we do not know exactly what we are going to inherit and it is not sensible to make commitments now. We will set them out in our own time ahead of the next election.
Of course, the Government’s record of failure over the last 12 years continues to this day. In January, the Government pledged £l00 million to help Britishvolt, a UK battery start-up company, to build its planned battery gigafactory in Blyth, but when Britishvolt faced a critical hurdle yesterday and needed to access some of that funding, the Government refused. If the Government are not prepared to back a British business investing in green technologies and new jobs in Blyth, what on earth are they doing? When this money was announced, the then Business Secretary said the new factory was
“exactly what levelling up looks like.”
It turns out he may have been right, as this is exactly what levelling up looks like under this Government: broken promises, a record of failure, and a Government unable to deliver the investment and jobs we need.
The truth is that the Government and the newly appointed Prime Minister have a record of failure on investing in green infrastructure for our country and our economy. So, while we welcome the new UK Infrastructure Bank and its focus on tackling climate change, we know that no matter how well it plays its part, the British people need a Government with an effective plan to make the investment in the jobs, homes and energy supplies of the future a reality.
I have focused so far on the first of the UK Infrastructure Bank objectives set out in this legislation: helping to tackle climate change. The second of the two objectives in the legislation is also critical for the bank’s success, and is described as being
“to support regional and local economic growth.”
We firmly support that objective, and we want to see all parts of the country benefit from investment in green jobs of the future, along with improved rail and other transport services, and other essential modern infrastructure, including broadband. But when it comes to supporting economic growth across the country—“levelling up” as the Government used to call it—we know that words ring hollow unless people see change. That is why clause 2(6) is so important, as it seeks to make sure the bank has regard to the first mission of the Government’s “Levelling Up” White Paper when exercising its functions under this Bill. We have heard rumours that the Government may seek to remove this new requirement from the Bill now that it is back in the Commons. I am sure the Minister will agree that doing so would make it clear the Government have abandoned their commitment to levelling up, so I urge him in his closing remarks to confirm that this requirement will remain in the Bill.
Finally, along with doing all it can to help tackle the climate crisis and to support economic growth, we believe that the UK Infrastructure Bank must also play its part in helping create good-quality jobs with decent pay and conditions. All businesses and bodies receiving public money from the UK Infrastructure Bank must have a plan to create those good jobs with decent conditions, and there must be tough contractual sanctions to make sure those commitments are honoured. To make sure the bank keeps that focus on good jobs at the heart of its approach, there must be a worker representative on its board.
After 12 years of low growth from the Conservatives, there is a vital need to invest in the infrastructure of the future. We need to invest across the country in new transport, new digital infrastructure, new sources of energy that are sustainable and secure, and new high-quality jobs with decent pay. That is why we support the establishment of the UK Infrastructure Bank and this Bill’s aim of putting it on a statutory footing.
We will of course press Ministers in the Commons Committee and Report stages to improve this legislation, and, as well as seeking changes from Ministers, we will defend changes made in the Lords that we believe have improved the Bill. Alongside the insertion of levelling up targets that I have mentioned, we welcome the amendment that changed the definition of “infrastructure” to refer to the circular economy, nature-based solutions and energy efficiency. We further support those amendments that strengthened requirements on the Government to have a more regular and meaningful review of the bank’s effectiveness and impact.
However, even if we succeed in strengthening this Bill and the operation of the bank, we know the country needs far more from its Government. We need a Government who will use this bank as part of a far more ambitious plan to grow the economy, to make the transition to net-zero, and to create jobs and industries in all parts of the country.
The record of this Government to invest in greener homes, energy, and jobs is one of failure. The latest so-called “growth plan” from the Conservatives crashed the economy, and their newly appointed Prime Minister is doomed to fail, as he is trapped so tightly by a need to put his party first, leaving the country second. The truth is we need a fresh start to face the challenges of the future, and the sooner the British people get the chance to have their say, the better.
Richard Fuller (North East Bedfordshire) (Con)
It is a pleasure to welcome this sensible Bill, which puts the operations of the UK Infrastructure Bank on a statutory footing. It is pleasing that the Opposition will support the Bill, but it was somewhat worrying to hear the Opposition spokesperson, the hon. Member for Ealing North (James Murray) say that the Labour party was not committed to its objectives. That will send a worrying signal to investors in infrastructure, who want to see a long-term view from both sides of the House on the plan for UK infrastructure. Perhaps he might clarify in his closing speech that Labour will commit today to make no changes whatsoever to the Bill’s objectives. It would be helpful for him to make that indication.
It is right that amendments were made to the Bill in the House of Lords to include issues to do with the circular economy and nature-based solutions. That will broaden its aspect and applicability.
In opening, my right hon. Friend the Minister referred to the European Investment Bank. It is true that the UK used to benefit significantly from investment funds coming from the EIB, but those really came to a close in 2016-17 and, as that was five or six years ago, we should be honest about the need to get the bank moving. I am not trying to push for quicker movement, but this is an opportunity to start getting to the £5 billion or £8 billion that the UK Investment Bank said was its objective in its strategic plan this summer.
I turn to crowding in, which is one of the three parts of the bank’s “triple bottom line”, as it calls it. That is absolutely the right thing. There is plenty more that we can do, and I know that the Government are focused on that. With Solvency 2 and pension fund money being made available for more infrastructure expenditure, will the Minister update the House on the Government’s thinking about that?
The City of London and the Government have made tremendous strides in promoting green finance and London as a centre for that. Again, it would be useful to hear an update from the Minister on the UK’s leadership position, which the bank could play a significant part in helping us to deliver.
One of the most important parts of the 2019 review of infrastructure finance was about how the Government can provide a reliable delivery pipeline. That means that they are clear about the projects that they wish to promote and have a timetable that paces them out over a number of years. The National Infrastructure Commission can—it does not always—do a good job of that. Perhaps we will hear more about that in the near future.
I return to the point that I put to the Minister about another part of the triple bottom line: generating
“a positive financial return”—
which it says is
“in line with the Bank’s financial framework.”
Perhaps that is the answer to why it is not in the Bill, but it would be helpful to have a little more transparency about what the financial framework would be and how it will be brought to the House for some regulatory oversight. Will that be through hearings of the Treasury Committee or other reports that may be made to the House from time to time?
That is an important factor in the UK Investment Bank’s goals and the role that it can play in helping the UK to achieve net zero. Let us be frank: when, I think, four or five years ago, the House committed to achieving net zero in a certain timeframe, there was no price tag attached. It was the biggest commitment ever made without a price tag attached for the British taxpayer. The UK Investment Bank can play a role in making sure that that price tag gets smaller and smaller. In fact, one objective the UK Infrastructure Bank says it wishes to focus on is the transition to subsidy-free models. That is absolutely essential to some key aspects of how we achieve net zero, in particular the decarbonising of home heat where we will need to attract private sector capital and long-term, patient capital. We will need the Government, through the UK Infrastructure Bank, to provide some catholic investment and, most importantly, the product structures that enable drawing in of that capital behind the most effective way, while also being able to show how we get out of the taxpayer funding it all. We cannot afford to make unfunded pledges again and again on not only this generation of taxpayers, but on future generations of taxpayers. That is why I am particularly keen on pressing the Minister and, should I be fortunate enough to sit on the Public Bill Committee, investigating further—[Interruption.] I guess that is a straight no, Mr Deputy Speaker—how we can ensure that the commitments to a positive financial return and to transitioning from subsidy-free models are given more weight in the structure of the UK Infrastructure Bank.
Finally, I draw the attention of those on the Treasury Bench to clause 4, on the power of direction. This is a familiar topic, I think, in various parts of the Treasury at the moment. I would be interested if in his winding-up speech the Minister provided us with a little more of his thoughts. There was a debate on that in the other place. It might be helpful if the Minister updated us on what further thinking there has been on the power of direction.
This is a very sensible Bill. It confirms what is already the case and I am sure it will go through the House with very great speed.
Mr Deputy Speaker (Mr Nigel Evans)
The Whip on duty has made a note of your enthusiastic application to sit on the Committee.
Stewart Hosie (Dundee East) (SNP)
On what has just been said, the issues relating to the power of direction in clause 4 and the steer that can be given on the strategic priorities by the Treasury deserve to be explored in a little more detail. When I see words like
“the Government will not normally”
and I think about what the Government do not normally do in relation to Scotland, I think the hon. Member for North East Bedfordshire (Richard Fuller) is right to be slightly anxious.
However, I give the UK Infrastructure Bank and the Bill a broad welcome. Taking the Bill at face value, there is nothing to criticise in its objectives of helping to tackle climate change and supporting the efforts to meet the UK Government’s 2050 targets. Nor is there anything to criticise in the objective to support regional and local economic growth. What I would point out, however, is that—the Minister alluded to this—the delivery of support to facilitate local and regional growth is provided in Scotland by the Scottish Government, local government and other agencies, and that the green targets in Scotland, for example the earlier net zero target, are also set independently in Scotland. It is therefore important that the UKIB supports the devolved Governments’ objectives and does not, even inadvertently, end up working against them. That is important, because Scotland has its own infrastructure investment plan, our own global capital investment plan and our own national strategy for economic transformation that provides the framework for the Scottish Government’s policy priorities.
There is—I am sure the Minister is aware of this—clearly an overlap between the strategic objectives of the UK Infrastructure Bank and the Scottish National Investment Bank, particularly in the context of tackling climate change and supporting regional economic growth. The UKIB’s aims include:
“to help tackle climate change”
and
“to support regional and local economic growth”.
The Scottish National Investment Bank’s aims include:
“investing in inclusive and sustainable economic growth”
and
“investing to promote environmental wellbeing”.
To ensure that both banks meet their goals and deliver the maximum impact for the people of Scotland, and in line with the objectives being set in the Bill, it is essential that the two banks are able to work together to identify and support appropriate infrastructure projects in Scotland. It is also vital that Scottish interests are appropriately represented and that there is an awareness of the Scottish economic context and the Scottish Government’s policy goals. To ensure that there is alignment between both of the bank’s aims, there should be an administrative mechanism, such as a memorandum of understanding, between the UK Infrastructure Bank and the Scottish National Investment Bank to ensure that policy alignment is maintained. I fear that, unless we have such a mechanism, UKIB’s aims might be undermined and there will ultimately be a risk that it will not deliver fully on its objectives.
It is also vital that the creation of UKIB is not seen as an excuse to reduce further the Scottish or any other departmental or devolved Administration budget. We have already had a £1.7 billion real-terms cut since last December. However, I welcome the Bill and its strategic objectives, including tackling climate change, but it is vital that the Scottish Government’s more ambitious climate targets are reflected either in the Bill or in the way in which the bank operates.
My next point is on the bank’s activities, which are clearly described in clause 2 as
“providing financial assistance to projects wholly or mainly relating to infrastructure”
and
“providing loans to relevant public authorities”—
and so on. That is broadly welcome, as is the description of infrastructure underpinning the “circular economy”—not least because the Scottish Government are introducing a circular economy Bill to advance a zero-waste and circular economy by increasing reuse and recycling rates and improving waste and recycling services. It is important that the investment bank can therefore fund existing bodies such as non-governmental organisations, think tanks and other agencies that are already specialists in their fields. Let us take, for example, the Scottish Institute for Remanufacturing at the University of Strathclyde, which enables industry to become part of the circular economy. To date, the Scottish Institute for Remanufacturing has committed substantial sums to support Scottish remanufacturing to become part of the circular economy.
I also particularly welcome the express inclusion of railways, including rolling stock, in the description of infrastructure. However—this is a very narrow point—I was at a loss as to why there was no specific reference to electrified rail or carbon-neutral rolling stock. That may be implicit in the Bill’s intentions, but it would nevertheless have been helpful to see it.
On strategic priorities and plans, the Bill states:
“The Treasury must prepare a statement of strategic priorities…The Treasury must comply with subsection (1)…The Treasury may revise or replace the statement…The Treasury must lay a copy…before Parliament…The Bank must…act in accordance with strategic plans which reflect the Treasury’s statement”.
I can well understand why the Treasury would be intimately involved in the creation and the nuts and bolts of setting up a bank, but I am at a bit of a loss as to why devolved Administrations, other agencies, the Department for Business, Energy and Industrial Strategy, the Department for Environment, Food and Rural Affairs and even those responsible for levelling up have no specified role in setting out the bank’s strategic priorities.
My final point is that, sadly, as has been mentioned, we have been here before with the Green investment bank. The Minister said twice in his opening remarks that he wanted the bank to be long-lasting and to endure, and I agree entirely. However, the way in which the Bill is drafted fails to provide the certainty that many of us would like about its future. The Treasury has too much power over the investment bank’s functions and there are few safeguards to ensure that the bank is not sold off to a private company. It is vital that the Bill contains more of an assurance that UKIB will not meet the same fate as the green investment bank: it was privatised and is now owned by the Macquarie Group. The Green Investment Group, as it is now known, carries out extremely valuable work, but it is vital that the new investment bank is not set up at public expense and public risk only to be sold off later. I am sure that right hon. and hon. Members will recall that when it became clear that the old green investment bank was to be privatised, the decision was described as reckless. This is what was said at the time:
“The Green Investment Bank is not just the government’s most lauded innovation in the war against climate change. It has kept investment in the real economy going at a time when bank lending had fallen to an all-time low. It has played a critical role in supporting the UK economic recovery.”
I would like the UK Investment Bank to be long-lasting and to endure. The last thing we would like to see is the public purse and public risk being used to establish an institution that is then privatised, no doubt with some Minister hoping for preference later and a seat on the board. That is not what our party considers the circular economy.
Sarah Olney (Richmond Park) (LD)
I welcome the Chief Secretary back to the Dispatch Box; it is genuinely a pleasure to see him back. It is quite ironic that we are here today to discuss setting up or reinstating something that was previously working well, because that rather mirrors his career. As has been mentioned, we had a green investment bank—it was a Liberal Democrat creation during the coalition Government years—and what we are really doing is setting it up again. It was sold off to the private sector, as the right hon. Member for Dundee East (Stewart Hosie) mentioned, and it made £144 million in profit for its new Australian owners last year, which just goes to show what an important role is being played by our funding partners for our climate change objectives.
The Liberal Democrats believe that it was a short-sighted move to sell off the green investment bank in the first place, so we very much welcome this Bill to set up something similar again. However, we worry that it might be too little and too late to make a real impact. Over the past seven years, numerous opportunities will have been missed to make substantial investments that could have made a real difference in progressing towards our net zero targets.
One of our big concerns is that the infrastructure finance that will be made available through the bank is very small in comparison with the challenges that we face with climate change and with levelling up. The bank will therefore need to mobilise a huge volume of private finance to meet the Government’s infrastructure goals and international climate goals. The bank has £22 billion of financial capacity over the next five years, but the Institute of Chartered Accountants has estimated that we will need £40 billion of investment per year to deliver net zero by 2050, and the Office for Budget Responsibility has projected that £1.4 trillion of investment will be needed by 2050 to deliver our climate change objectives. We really need the bank to be a success and mobilise those funds if we are to honour our climate commitments.
The Bill rightly identifies tackling climate change and achieving net zero as its strategic objectives, alongside supporting regional and local economic growth. However, as Liberal Democrat colleagues in the Lords have expressed, there is a need for a joined-up approach to protecting our environment, with biodiversity included as an objective alongside climate change. Since the Government sold off the green investment bank, the markets have failed to deliver on developing floating offshore wind, electric vehicle charging infrastructure, marine and tidal energy, broadband roll-out, carbon capture and storage or insulation—there is such a long list. So many green technologies could have been supported via the continuation of the green investment bank.
We want more ambition from the Government on the green agenda. We would like to see net zero achieved by 2045 rather than 2050, with a proper green industrial strategy so that we have a long-term plan in place. We want bold action to fire up net zero, from new targets for zero-carbon flight to new industrial strategies for hydrogen and power cabling and a major restructuring of the UK economic model to ensure that it is fit for the future.
To achieve climate targets, we need to limit warming to 1.5° by 2030. I welcome the Government’s concession in the other place that they will include investment in energy efficiency in the bank’s remit, as they have repeatedly failed to decarbonise our housing stock and take steps to reduce fuel poverty, but it is important to remember that effective investment requires much more than making money available. We need to ensure that finance is channelled into developing the skills needed to enable a green transition and help British businesses to become global leaders in key future technologies.
In 2012, the green investment bank was created. Ten years later, we are starting again, but the Liberal Democrats wish the project well. We want the Bill to proceed swiftly through the Commons and the bank to be successful.
Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)
It is a pleasure to contribute to the debate, and to make a very short speech about the sort of projects that I hope the UK Infrastructure Bank will support. Given that we are talking about more than £20 billion, I am surprised that a great many Members of Parliament are not making specific bids. However, I will make the best of the time available to me.
This bank was created to replace the European Investment Bank, which, as you well know, Mr Deputy Speaker, had a proud record of investing in Wales. In the decade preceding the EU referendum, the EIB made £2 billion worth of investments in a wide range of sectors in Wales, including social housing, transport, energy, water and education. Wales was promised “not a penny less” during the referendum campaign, so a benchmark figure should be £200 million of investment in Wales per annum, adjusted for inflation. The Welsh Government have already expressed their concern that there is an overall shortfall of more than £1.1 billion in the Welsh budget as a result of our departure from the EU. I hope that the Minister will clarify whether the “not a penny less” promise applies to UK Infrastructure Bank spending.
Before I turn to the main focus of my speech, I want to touch on governance and accountability. Infrastructure development in my country is largely the responsibility of the Welsh Government, and I therefore welcome what the Minister said in his opening remarks about a greater role for the devolved Administrations. However, I am sure he will be aware of the Welsh Government’s view—as well as that of various Senedd Committees—that that Government should have equal status in terms of establishing the bank’s governance structures, as well as a role in setting its remit.
Currently all the bank’s directors are appointed by the Chancellor, and one small and obvious first step would be for the Welsh Government to appoint a director. According to the House of Commons Library, between five and 14 directors can be appointed by the Chancellor. While this would still be a far cry from an equal partnership, if the devolved Governments appointed one each, that would still allow 11 appointments for the Chancellor, including those of the chair and chief executive.
On the issue of scrutiny, it seems to me completely reasonable for the bank to be subject to a statutory requirement to appear annually before the relevant Senedd Committees. It may surprise Ministers and indeed other Members, but the Welsh Government do not brief Welsh MPs on their position in relation to UK Government Bills. In view of the work that has taken place in the Senedd and the statements made by Welsh Government Ministers about the Bill, they would do well to inform Welsh MPs of their reasons for not allowing those of us who bother to research their proceedings to understand where they are coming from. However, my understanding is that following close scrutiny of the Bill, the Welsh Government, as well as three separate Senedd Committees, believe that every clause requires the Senedd’s consent, as opposed to the six clauses for which the UK Government are currently seeking consent.
Furthermore, I understand that the Welsh Government have made it clear that they will not grant consent to the Bill unless their concerns about governance and accountability are addressed—perhaps the Minister was being slightly optimistic in his opening remarks—because the bank operates on a UK-wide basis, and will be able to exercise functions in Wales in areas of devolved competence.
If the new Prime Minister wants to restore integrity and accountability to the premiership, he surely knows that a key part of that process is resetting intergovernmental relations not only with the EU but with the Welsh and Scottish Governments. As I have said, nearly all post-Brexit related Bills are being used to trample over the devolved settlements. This is the first big test for the new Administration: that the UK Government is going to adopt the more grown-up approach of collaborating fully with the national Governments within the Union. Can the Minister guarantee that the bank will not support any projects in Wales that the Welsh Government oppose?
What I really want to talk about, however, is a project that I believe falls perfectly within the UK Government’s stated aims for the new bank, namely helping to address geographical wealth inequalities within the British state and helping to tackle climate change. The Minister will be aware of the protracted discussions about the proposed Swansea Bay tidal lagoon. In 2013, plans were announced to develop the lagoon. The development received planning permission in 2015, but plans collapsed in 2018 after the UK Government decided that they could not justify a contracts for difference financing model for the scheme. Since then, new proposals for a £1.7 billion lagoon were announced in October last year. DST Innovations hopes to build the lagoon over a 12-year period as part of the wider Blue Eden scheme that will include the UK’s largest floating solar farm, 5,000 cutting-edge eco-homes and a high-technology battery factory creating 1,000 jobs. The lagoon itself aims to produce 320 million MW of electricity, and agreement has already been reached with Swansea Council for a plot of land for the battery facility.
Such a project would place south Wales at the forefront of global environmental technology innovation. It would be a transformative project for the area and I am sure we all agree that we want to see the plans come to fruition. My concern is that we have felt close to delivering a Swansea lagoon on many occasions. I therefore ask the Government: is there scope for discussions between the infrastructure bank and the developers—that is, if they are not already happening? The ability of the bank to offer guarantees, for instance, could be useful in helping the developers to draw down the private finance they are seeking, hopefully at a preferential or slightly more favourable rate.
New technologies such as this come at a premium, but I hope the British Government will have learned from wind and solar that, once established, these technologies become much cheaper and an essential part of the electricity generating mix. Tidal is also a reliable energy source, giving it added value compared with other renewable technologies. Tidal technology off the Welsh coast offers huge opportunities for Wales, and I am sure the Minister will be aware of proposals for a far bigger lagoon, over 30 km in length, off the north Wales coast.
Furthermore, the Welsh Government last month announced the creation of their own renewable energy generation company, with initial plans to develop wind technology on public land. I really welcome this policy, because my constituency houses many wind developments that are owned by the state-owned companies of other Governments, which means that the profits from the use of Welsh resources leave Carmarthenshire and leave Wales. Revenue from the new Welsh Government-owned company will be reinvested in schemes to increase energy efficiency in the Welsh housing stock, and it therefore becomes circular—another stated aim of the bank. Clearly, there is therefore scope for formal links between the UK Infrastructure Bank and the company owned by the Welsh Government.
Bill Esterson (Sefton Central) (Lab)
Labour supports the creation of the UK Infrastructure Bank, and we support the Bill’s placing the bank on a statutory footing. In Committee, we will want to see changes to ensure that the bank focuses on strategically important areas, not least energy efficiency, nature-based solutions and job creation. We will also want to see changes to the governance of the bank, for example ensuring that there is a workers’ representative on the board of the bank.
This Government have a terrible record on infrastructure over the last 12 years, whether it is their cancellation of Northern Powerhouse Rail or their dismal failure to invest in renewable energy or take decisions on new nuclear. Their lack of strategy and planning was also shown when they closed the UK’s gas storage facility. Indeed, these 12 years of failure on infrastructure are central to the Conservative Government’s failures of low growth, low productivity and low investment.
Those 12 years of failure were also the prelude to the disastrous mini-Budget of 23 September. The Bank of England was forced to step in four times to support financial stability and rescue pensions, and there was criticism of the UK Government by the International Monetary Fund. Interest rates went through the roof, there was huge volatility in the pound and inflation is higher than in comparable countries. So, yes, the Conservatives crashed the economy. The result is higher mortgage payments for households, higher borrowing costs for businesses, chaos from the Government, crisis for ordinary people and crisis for the economy. The economic failure by the Conservatives has left the UK ill-prepared for the current energy crisis, pushing up bills and risking energy shortages.
A strategic approach to infrastructure is essential, and it is Labour’s industrial strategy that follows the evidence from across the economy. Unlike the Conservatives, our plan follows evidence from around the world. At the heart of our plan is Labour’s green energy plan. We will invest in the energy sources of the future. Our plan will deliver self-sufficiency in renewable energy by doubling onshore wind, trebling solar and quadrupling offshore wind, all supported by the creation of a publicly owned “Great British Energy” company. Our plan will create half a million jobs in renewable energy and a further half a million jobs in insulating 19 million homes over 10 years. Our plan will invest in the technologies and industries of the future, from EV charging points, supporting a burgeoning electric car industry, to clean steel and developing shorter, more resilient supply chains. Our plan will create jobs, cut bills and deliver energy security, and it will transform our prospects after 12 years of economic failure by this Government.
The UK Infrastructure Bank has to take a long-term view in the national interest. So what is the Government’s record? The sale of the green investment bank to private equity, yesterday’s distressing news about Britishvolt and the failure of the green homes grant scheme—all mentioned by my hon. Friend the Member for Ealing North (James Murray) and all examples of where the UK Infrastructure Bank could do so much better to ensure a greater chance of success with the right strategic mandate.
What should be the approach of the UK Infrastructure Bank? Labour’s industrial strategy will deliver prosperity through partnership: the Government working with business and trade unions to create thriving businesses, prosperous workers and successful communities that benefit from investment in the whole country and from a strategy that supports the everyday economy as well as those in advanced manufacturing. The question for this Government is whether their approach to the UK Infrastructure Bank matches the scale of our ambition.
It is worrying that, just last week, the Prime Minister answered a question about onshore wind by talking about offshore wind. I wonder whether he understands the difference. His refusal to end the moratorium on onshore wind is telling, and it certainly is not an indication that this Government intend to make a bold, ambitious commitment to benefiting from the opportunities of a low-carbon economy. A good test of whether this Government really are committed to infrastructure investment is whether the new bank will deliver the decarbonisation we need and whether it will enable this country not just to survive but to thrive, by making the most of the massive economic opportunities available from the energy transition.
We have exciting technologies in wind, solar, tidal, carbon capture and storage, nuclear and hydrogen. Will the bank give investors the confidence they need to develop the benefits for our domestic economy and for export markets, too? So far, the bank has faced criticism for following the market rather than setting new strategic priorities for big infrastructure projects. Will the bank really support local and regional economic growth? After 12 years of failure, people can be forgiven for being somewhat sceptical.
An industrial strategy is a partnership between Government, employers and workers. In government, we enshrined partnership working in the Olympic Delivery Authority to ensure good local jobs, and to ensure that those jobs were central to the construction of Olympic facilities. We set up the Automotive Council with employers and trade unions to protect local jobs. We will be pursuing amendments in Committee to enshrine a commitment to local jobs in the bank’s remit, and we will push for worker representation on the board. That is the recommendation of E3G, which says that a diverse representation includes workers. Partnership in a successful economic and industrial strategy depends on worker representation. We will follow the evidence in our approach. Our amendments in Committee will push this Government to do so, too. Labour’s approach to infrastructure and industrial strategy is through partnership. We recognise that success will follow when Government work with business and with workers.
Investing in infrastructure in a low-carbon future can deliver across the country, not least because of how the exciting opportunities are geographically spread. It can deliver prosperity in every community. The jobs in insulating 19 million homes will, by definition, be created in every community, especially in those with the poorest housing stock, which are those with the greatest need of good jobs as well as warmer homes. We can transform our prospects at home and through the export potential of new technologies. But the bank has to be on a sound footing, alongside a strategy and with objectives that are consistent with the way the bank is set up. We support the creation of the bank. It is a great way for us to implement our plans in government. It is a great way to give businesses and investors certainty. It is a great way of offering prosperity to communities through the creation of new jobs. But the bank has to be allowed to be ambitious, to push for new opportunities and to set the market, not just follow it. That is what an industrial strategy does. It is what Government can contribute to as a partner, where business would otherwise struggle to attract investment. It is also how to transform our economy, our country and our communities.
Mr Deputy Speaker (Mr Nigel Evans)
I welcome the Minister back to the Dispatch Box.
The Exchequer Secretary to the Treasury (James Cartlidge)
I begin by saying how grateful I am to all the Members who have contributed today; it has perhaps been more a case of quality than quantity. When we talk about the funding of this important bank, it is a case of both quality and quantity. We are talking about billions of pounds of investment for two crucial priorities for this Government and this country: levelling up and net zero.
Let us be clear that that work is already under way, with the bank delivering very important projects to date, as we can see when we consider the following: £107 million for the redevelopment of the former Redcar steelworks site on Teesside, which will drive forward the offshore wind sector and create 800 jobs; 4,000 more jobs unlocked by investment in green transport in Birmingham, connecting its city centre, Solihull and Birmingham airport through a zero emissions corridor; spades already in the ground to ramp up solar and meet our energy needs, with plants opening in Newport, south Wales, and Strensham, Worcestershire; and fast, affordable and reliable broadband to 8 million homes across 285 towns and cities in England and Wales by 2025, with a further investment to deliver ultrafast broadband to businesses and households in rural Northern Ireland.
Let me turn to the comments made by the Opposition spokespeople, as I am grateful for their support. I could not tell at times whether it was enthusiastic or slightly reluctant, but either way I am very grateful that we have a consensus in this Chamber on the importance of delivering this Bill, including from the SNP, whose support I am also grateful for.
Both the hon. Members for Ealing North (James Murray) and for Sefton Central (Bill Esterson) spoke about our record. Let us be clear about something: between 1990 and 2019 our carbon dioxide emissions in this country fell by a staggering 44%—they fell by almost half. I do not think there is any other industrialised economy that can compare on that. In the same period, our economy grew by three quarters, because we can have growth and cut emissions—we are proving that. That is why the bank has the dual mission to deliver on net zero and on investing in local and regional economic growth. [Interruption.] The hon. Member for Sefton Central chunters from a sedentary position. He was critical of our efforts on offshore wind and renewables, but we have the largest capacity of offshore wind in Europe. I am proud, as the MP for South Suffolk, of the extraordinary contribution of offshore wind off East Anglia and what it is doing to drive forward this country’s journey to net zero. The difference here is that we are doing it in the real world. Let me put that in context. Renewables in 2010 made up just 7% of our total energy, whereas this year the figure was up to 43%. We have seen extraordinary growth and we should all be very proud of that.
Both the Labour spokespeople asked the specific question on worker representatives. I understand where they are coming from, but we do not believe this amendment would be necessary. We have asked the bank to abide by the corporate governance code to the extent appropriate to the UK Infrastructure Bank, which specifies that the board should engage with the workforce through either a director appointed from the workforce, a former workforce advisory panel or a designated non-executive director. The bank has appointed a NED, Marianne Økland, who will take on this role. I hope that that answers that question.
The hon. Member for Sefton Central asked about our commitment to levelling up, so let me be clear. The levelling-up fund has already awarded £1.7 billion, and there is £2.6 billion from the shared prosperity fund, £3.2 billion from the towns fund and £5.7 billion from the city region sustainable transport settlements. I call that a commitment to levelling up, and we on the Government Benches are proud to be pushing that forward.
My hon. Friend the Member for North East Bedfordshire (Richard Fuller) speaks on these matters with great expertise; not only was he a Treasury Minister, but we must not forget that in the real world he was a successful businessman in his own right. He posed some very good questions, including one about the target rate of return. I can be clear that in the framework document for the bank, a target return of 2.5% to 4% by the end of 2025-26 is set out. We think there would be problems were we to state that target in law—one can imagine the potential downside—but to ensure transparency there will be a review of the bank’s operations within seven years. The review will look specifically at additionality—the degree to which investment is additional—because although we support the bank, we all have to defend the interests of taxpayers. We look to them as I look to you as I speak, Mr Deputy Speaker.
My hon. Friend also asked about green finance leadership. I can confirm that according to the latest global green finance index compiled by Z/Yen, London is once again classed as the greenest finance centre in the world. Rumour has it that a certain Treasury Minister might well be in Egypt next week promoting that very point.
On the power of direction in clause 4, no one should get too excited; we are not talking about a return to the good old days of socialism. I confirm that the bank is operationally independent. The Treasury can already issue directions to the bank under companies law and as set out in the bank’s framework document. Clause 4 simply puts the existing power on a statutory footing for transparency and accountability.
I am grateful to the right hon. Member for Dundee East (Stewart Hosie) for his welcome and for his discourse on rolling stock. As the son of a father who was into model railways, train sets and all the rest of it, it brought back some memories. He and the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) both spoke about devolved issues. All I can say is that we at the Treasury have had very positive discussions with the devolved Administrations, and the bank itself has of course spoken to both the Development Bank of Wales and the Scottish National Investment Bank. I am sure we will have further discussions and a very positive relationship. On specific investment, I say to the hon. Member for Carmarthen East and Dinefwr that the bank is operationally independent, but I am sure it will take into account the points he put on the record today.
The hon. Member for Richmond Park (Sarah Olney) made a very good point when she spoke about the sheer scale of the investment needed to deliver net zero. We in His Majesty’s Treasury are well aware of that. That is why it is so important that the funding capacity from this bank will be £22 billion, crowding in a further £18 billion. That is a huge step forward, but we know there is more to do, which is why it is important that the Bill is before the House. It is the next step in a necessary but exciting journey of transformation of infrastructure projects in our country. It will establish the bank in the market and ensure its longevity in the future.
As my right hon. Friend the Chief Secretary to the Treasury said in his opening speech, we have designed the bank to be a long-lasting institution to deliver long-term priorities and projects on which we all depend and, above all, net zero and levelling up. For that reason, I commend the Bill to the House.
Question put and agreed to.
Bill accordingly read a Second time.
Uk Infrastructure Bank Bill [Lords]: Programme
Motion made, and Question put forthwith (Standing Order No. 83A(7)),
That the following provisions shall apply to the UK Infrastructure Bank Bill [Lords]:
Committal
(1) The Bill shall be committed to a Public Bill Committee.
Proceedings in Public Bill Committee
(2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Tuesday 22 November 2022.
(3) The Public Bill Committee shall have leave to sit twice on the first day on which it meets.
Consideration and Third Reading
(4) Proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which proceedings on Consideration are commenced.
(5) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.
(6) Standing Order No. 83B (Programming committees) shall not apply to proceedings on Consideration and up to and including Third Reading.
Other proceedings
(7) Any other proceedings on the Bill may be programmed.— (Jo Churchill.)
Question agreed to.
UK Infrastructure Bank Bill [Lords]: Money
King’s recommendation signified.
Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),
That, for the purposes of any Act resulting from the UK Infrastructure Bank Bill [Lords], it is expedient to authorise—
(1) the payment out of money provided by Parliament of:
(a) any expenditure incurred under or by virtue of the Act by the Treasury; and
(b) any increase attributable to the Act in the sums payable under or by virtue of any other Act out of money so provided; and
(2) the payment out of the National Loans Fund of any sums payable out of the Fund by virtue of the Act.—(Victoria Atkins.)
Question agreed to.
Business without Debate
BUSINESS, ENERGY AND INDUSTRIAL STRATEGY
NHS Dental Care in Halifax
(2 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate
Holly Lynch (Halifax) (Lab)
Constituents in Halifax have increasingly been contacting me, saying that they are simply unable to get an NHS dental appointment under any circumstances. The British Dental Association says that more than 43 million dental appointments were lost between April 2020 and April 2022, including more than 13 million appointments for children. The pandemic made the situation and the backlogs worse, but the system was already broken.
The petition, which was signed in hard copy as well as 549 signatures online, states:
The Petition of residents of the constituency of Halifax,
Declares that petitioners are concerned about the lack of access to NHS dental care registration and appointments in Halifax; further that residents have been unable to receive both urgent and routine treatments at NHS dentists; and further that there are concerns that residents in Halifax are being advised by NHS England to enquire about appointments further afield which is impractical for many people.
The petitioners therefore request that the House of Commons urge the Government to improve NHS dental care provision in Halifax so that residents can access care easily and locally.
And the petitioners remain, etc.
[P002777]
Menai Suspension Bridge: Impact of Closure
(2 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Virginia Crosbie (Ynys Môn) (Con)
This debate is particularly poignant in the light of the recent collapse of the Gujarat suspension bridge in India with the loss of so many lives. I want to put on record that my thoughts are with those affected and that I am grateful that safety measures have been put in place on the Menai Bridge and that no one has been hurt there—yet.
The Menai suspension bridge was designed by Thomas Telford and went into use in 1826. It is a masterpiece of 19th-century engineering, a grade I listed structure and, until the Britannia bridge opened to traffic in 1980, it was the only road connection between Ynys Môn—the isle of Anglesey—and mainland Wales. Responsibility for this bridge and the road going over it is devolved to the Welsh Government, who contract a commercial company—UK Highways A55 Ltd—to carry out repair and maintenance works.
Members may ask: why I have brought this debate to Westminster? There are two reasons. The first is that the link to the mainland is critically important to my Ynys Môn constituents and the businesses on Anglesey. The bridges are an important link for local commuters, students and residents of Ynys Môn, for those visiting Anglesey for shopping, holidays or work, and of course for freight transport. The second is that both bridges form a vital link in the transport infrastructure of the United Kingdom. They form part of the land bridge between continental Europe and the UK, and the island of Ireland via the port of Holyhead. The land bridge is used by thousands of hauliers and freight vehicles, and a failure in either bridge over the Menai straits impacts the route and, as a result, the British economy.
Indeed, Sir Peter Hendy, in his 2021 Union Connectivity Review described the A55, which includes the Britannia bridge, as
“a key route for communities and businesses with connections to Manchester and Liverpool Airports and the island of Ireland via Holyhead”.
He further noted:
“Stakeholders in North Wales regard capacity and journey times on the A55 as a significant barrier to growth”,
with the road becoming
“vulnerable and overstressed during incidents or significant road work events”
and lacking “viable diversion routes”. He recommended that work was needed to improve the A55.
Until Friday 21 October, the Menai and Britannia bridges between them carried around 46,000 vehicles over the Menai straits every day. Then, suddenly, at 2 pm on a normal working Friday, that stopped. The Menai bridge was closed by the Welsh Government with immediate effect and no advance warning, on the urgent advice of structural engineers. I completely agree that safety must be our priority. If the Menai bridge needs to be closed to protect people and vehicles then that must of course happen. What has been shocking is the closure of such an important bridge without warning, without contingency plans and without thought for the local and national impact.
Local people were taken completely by surprise. Many Anglesey residents were at work on the mainland in places such as Bangor University and our general hospital, Ysbyty Gwynedd. Children and young people were in lessons in mainland schools and colleges. They were effectively left stranded, finding themselves stuck along with lorries going to and from the port of Holyhead, as the Britannia bridge gridlocked.
Robin Millar (Aberconwy) (Con)
I was canvassing in my constituency the morning after the closure, and spoke to a couple of residents who told me that they work at Ysbyty Gwynedd, the hospital in Bangor, and, as a consequence of the closure, on the Friday afternoon and evening it had taken them three and a half hours to leave the car park. Does my hon. Friend agree that that kind of knock-on effect from such a sudden and unplanned closure could perhaps have been avoided with a little more thought and a little more notice?
Virginia Crosbie
My hon. Friend makes the point clearly that the impact of the bridge closure is far-reaching, touching not only other constituencies but every single person’s life in mine—and yes, it should have been avoided.
The Welsh Government have said that the bridge will be closed for 14 to 16 weeks. The impact on my constituents has been huge. I have had parents on the phone in tears because they do not know when or how their children will get home from school. For those working on the mainland, attending appointments, visiting loved ones in Ysbyty Gwynedd or simply trying to go shopping, a journey that previously took 20 minutes now takes two to three hours.
Jonathan Edwards (Carmarthen East and Dinefwr) (Ind)
I congratulate the hon. Lady on securing this debate; this is a vital issue, and it is right and proper that it is addressed and discussed in this House. Does she support the words of Anglesey or Ynys Môn council, which is asking drivers travelling to the mainland not to go off the A55 at Gaerwen and take the shortcut, because it is creating more problems at a pinch point nearer the bridge in Llanfair?
Virginia Crosbie
I thank the hon. Gentleman; he makes a very good point about Isle of Anglesey County Council’s directing traffic. The closure has huge implications for local traffic and local businesses, which I will go into further in my speech. Constituents in Llanfairpwllgwyngyll cannot leave their homes because the roads through the village are blocked by drivers trying to shortcut the A55 queues.
Businesses in Menai have seen their takings plummet; one shop holder contacted me to say that the usually bustling town centre was empty and one day last week she had taken no money at all for the first time in her shop’s history. People on Anglesey, already worried about how long it takes to get an ambulance in an emergency, now know that ambulances will also have to tackle huge traffic jams in both directions.
Hauliers using the port of Holyhead are already looking for alternative routes to Ireland because of the extra hours now being built into transportation time. Holyhead is the second busiest roll on-roll off port in the UK and a hugely important link for passengers and freight between the UK and Ireland. It is also a major local employer, both directly and indirectly.
One would think that, with such an important strategic piece of infrastructure, a sudden and unplanned closure would be the result of some kind of unforeseen event. However, in a statement in the Senedd a week ago, Lee Waters, the Deputy Minister for Climate Change—the Welsh Government does not have a Transport Minister—said:
“As part of the last principal inspection in 2019, a concern about the resilience of hangers that support the suspension bridge were identified and led to a weight restriction being imposed on the bridge while further studies were carried out.”
In a meeting last week with local Arriva UK Bus managers, we discussed the fact that the weight restriction was put in place only in June 2022, almost three years after the review. Arriva told me that because it was introduced at very short notice, it had been forced to restrict bus services because of the extra time now needed to cross the Britannia bridge instead of the Menai bridge. The impact locally has been most severely felt at a care home in Penmon that the bus service can no longer serve, affecting carers, residents and visitors.
The delays now being caused by the full closure of the Menai bridge mean that Arriva has had to rip up its timetable completely. It now faces the financial burden of increased fuel costs, longer trips, bus drivers unable to get to work and the loss of some passengers.
I spoke earlier about the port of Holyhead, which is a significant UK port. In 2019, 1.9 million people and 5.3 million tonnes of goods moved via the port of Holyhead to and from the island of Ireland. Back in 2020, in the run-up to Brexit, amid concerns about delays at the port, the Welsh Government recognised the importance of Holyhead when it said:
“Holyhead is the second busiest roll on/roll off port in the UK…The Welsh Government is responsible for the trunk road network, and we must ensure that plans are in place to deal with any potential disruption at this major port. We want to ensure access to the port of Holyhead remains as easy as possible. We want to minimise disruption for the communities of Anglesey and the travelling public”.
[Interruption.] It is disappointing that they did not extend that consideration when it came to maintaining the Menai bridge. It is disappointing too that, for what effectively constitutes a local emergency, they are not meeting key stakeholders to answer these important questions until 8 November—20 days after the closure.
Robin Millar
As a schoolboy, I did a project on the rebuilding of the Britannia bridge, which, as my hon. Friend will know, parallels the Menai crossing to the Menai straits. At the time, it was seen as a great step forward and an advancement that would increase the capacity of the crossings and alleviate some of the load on the Menai bridge. That was, dare I say it, more than two decades ago now—nearly four decades ago, even. Perhaps my hon. Friend will be in a position to agree with me in a moment that the loads on these roads and these bridges, including the Menai bridge, will have increased significantly over that time. There are two questions that she is bringing out well in her speech: the question of capacity, which has grown over the years, and the question of resilience, planning and forethought. Does she have a comment to make on how those might be addressed better in the future?
Virginia Crosbie
I thank my hon. Friend for intervening at a critical time; diolch yn fawr. He makes a valid point about the importance of this bridge and the fact that we need to hear from the Welsh Government what their plans are, so that we are not in this situation again.
Until July this year, when the weight restriction was introduced, the Menai bridge had transported high-sided and vulnerable vehicles when wind restrictions prevented them from travelling over the Britannia bridge. Indeed, the winds are sometimes so bad that the Britannia bridge is closed completely, and all vehicles have to use the Menai bridge. That can also happen when there is an accident on or near the Britannia bridge. This is exactly what Sir Peter Hendy referred to in his review. I am sure Members will appreciate that, as we move into the winter months, the risk of high winds in north-west Wales increases significantly. With the Menai bridge closed, vehicles will not have a fallback during restrictions and closures on the Britannia bridge. That is a further discouragement for hauliers who would normally use the port of Holyhead.
For years, the Welsh Government have been talking about putting a third bridge across the Menai straits. The 2019 report on the Menai bridge might have been the perfect time and reason to progress such a scheme. Sir Peter Hendy’s connectivity review adds meat to the argument. The Welsh Government’s own report into a third bridge, carried out in 2016, says:
“The impact of not investing in the scheme has been clearly set out, with detrimental effects on the economy of the Isle of Anglesey and north west Wales, poor international connectivity and worsening performance of the trunk road network in terms of journey times, reliability and resilience. All of which will constrain the opportunity for future growth in Anglesey, surrounding areas and in particular impact on the ability of the Nuclear Power Programme to achieve its full potential.”
A third bridge would make Anglesey much more accessible, as well as making it more attractive to businesses interested in locating there. Instead, the Welsh Government simply put all road building on hold in June 2021 to carry out a road review—a review that, incidentally, we have heard nothing further from. That is not such a problem around Cardiff, where there is good public transport infrastructure, but it is less helpful for someone working in a nursing home in Penmon whose bus is suddenly withdrawn due to weight restrictions on the Menai bridge.
I mentioned that the Welsh Government contract with a company called UK Highways A55 Ltd to maintain and repair the A55 across Anglesey, including the Menai bridge spur. They have repeatedly and, some might say, disingenuously referred to this company as “UK Highways” in statements, press releases and posts about the closure. That has led many local people—including, bizarrely, the local Labour party—to assert incorrectly that this is a UK Government issue. What could be the reason for that? With so many seats in north Wales now Conservative, are the Welsh Labour Government concerned that local people feel closer to Westminster than they do to Cardiff? Do they feel the need to drive a wedge between north Wales and Westminster?
My constituents have felt at first hand the neglect of north Wales by the Welsh Labour Government—huge disinvestment, one of the lowest GVAs in the UK, poor educational outcomes, a local health authority in crisis, transport links annihilated, the loss of major local employers and an annual haemorrhage of young people in search of work. It is small wonder if they want to align themselves with Westminster instead of Cardiff, and yet the Welsh Government’s priority is to increase the number of Senedd representatives from 60 to 96 at an estimated cost of £100 million. That will mean one representative in the Senedd for every 33,000 people in Wales. In Westminster the number is more like one representative for every 100,000 people. One hundred million pounds—just think how many doctors that would employ or bridge hangers it would repair.
The closure of the Menai bridge is typical of the disdain in which Cardiff holds north Wales and the United Kingdom. It is the critical infrastructure of the UK that is being destroyed by a Welsh Labour Government that simply do not care, supported by a co-operation agreement with Plaid Cymru—a party, incidentally, which would rather see Wales an independent third-world nation than bring new nuclear and good quality jobs to Ynys Môn, simply because a large power station at Wylfa would generate more energy than Wales alone needs so some might go to England.
I have done all within my power to support my constituents and raise this matter. I requested an urgent question last Monday; I raised the matter at both business questions and Cabinet Office questions last week; I have called this debate; and I have the support of the Leader of the House who has written to the Secretary of State for Wales expressing her concern.
I urge the Minister— llongyfarchiadau, congratulations to him on his appointment as Parliamentary Under-Secretary for Wales—to get answers from the First Minister of Wales, not just for the people and business owners of Ynys Môn but for the people of the United Kingdom. Why did the Welsh Government allow that critical piece of transport infrastructure to fall into such poor repair that an emergency closure was necessary? What steps will be taken to support and compensate local people for the loss of earnings, increased fuel and childcare costs, distress and inconvenience caused by their incompetence? What will they do to minimise the impact on the port of Holyhead, its employees and the people and businesses that rely on it? How will they make sure this does not happen again? How will they ensure that we have robust transport and communication links with the mainland, because without those, Ynys Môn cannot possibly attract the investment and opportunity that our young people so desperately need? Finally, when will they start to realise that the country they are responsible for extends further north than Merthyr Tydfil?
Mr Deputy Speaker (Mr Nigel Evans)
It gives me great pride to call someone to the Dispatch Box as a Minister whom I knew years before he was even a Member of Parliament. Dr James Davies.
The Parliamentary Under-Secretary of State for Wales (Dr James Davies)
Diolch yn fawr, Mr Dirprwy Lefarydd. It is a pleasure to be at the Dispatch Box for the first time, particularly in relation to an important matter affecting north Wales. I congratulate my hon. Friend the Member for Ynys Môn (Virginia Crosbie) on securing this debate, and I thank my hon. Friend the Member for Aberconwy (Robin Millar) and the hon. Member for Carmarthen East and Dinefwr (Jonathan Edwards) who have also contributed.
I know just how important Thomas Telford’s iconic Menai suspension bridge is to people and businesses on Anglesey and across the whole of north Wales. It is therefore right that we are having a debate on the sudden and unexpected closure of the bridge at 2 pm on Friday 21 October, since when all traffic has been diverted via the Britannia bridge, which—through the innovative design by Robert Stephenson and with some modifications since—carries the railway and main road traffic from the A55 north Wales expressway. Good connectivity between Anglesey and the mainland is crucial for the people and economy of north-west Wales, and the whole of the United Kingdom. The Government are committed to good connectivity, as evidenced by Sir Peter Hendy’s Union connectivity review.
I understand the concerns that local residents and businesses have about the disruption. This matters to them and it matters to Members of Parliament and the UK Government. As my hon. Friend the Member for Ynys Môn made clear, the UK Government are not responsible for roads in Wales. Many aspects of transport, including the construction and maintenance of roads and road bridges, have been devolved matters for more than 23 years.
The Menai suspension bridge carries the old London to Holyhead trunk road, the A5, for which the Welsh Government in Cardiff Bay are responsible. The closure of the Menai bridge was therefore a decision made by the Welsh Government. It was informed by the private company contracted by them to maintain the route, the UK Highways A55 Ltd, and their structural engineers who had concerns about the brittle nature of hangers installed in 1938. There are questions to be answered about the specification of the contracted maintenance schedule for the bridge and the stalled consideration of a third crossing of the Menai straits. Those concerns tie in with understandable frustration at the Welsh Government’s roads review, which has led to road projects across Wales having been put on hold since June 2021.
Good government does not coast along in neutral. In the immediate term, the Welsh Government should publish a timetable for the completion of repairs and the reopening of the bridge. That reassurance is the least that residents facing ongoing uncertainty while maintenance is carried out should receive. As a matter of urgency, I also urge the Welsh Government to allow access across the Menai bridge for emergency vehicles if that can be safely facilitated.
Robin Millar
I welcome the Minister’s remarks and I take the opportunity to welcome him to his place. It gives me great pleasure to see a north Wales Member restored to one of the offices of the Wales Office.
The Minister makes an important point when he talks about the ownership and operation of assets. In between what he has said about maintenance and a third crossing, however, there is a gap where Sir Peter Hendy’s review talked about the establishment of a UK-wide transport infrastructure network, and the ownership and investment into that. I do not think that anybody is saying—the Minister was not suggesting—that the bridge should not have been closed if that was required on safety grounds, but there is a question of capacity and resilience, how that is managed and where that planning can take place. Perhaps the capacity for that would lie in a UK-wide transport infrastructure network. Does he think that this road and that bridge would fit well within that characterisation?
Dr Davies
I thank my hon. Friend for those comments. He is right that this is a strategic route and a trunk road. The Union connectivity review highlights the importance of such roads. When the Government respond to that review, we need to consider his comments.
There is no emergency department in any hospital on the island of Ynys Môn and such facilities are located at Ysbyty Gwynedd on the mainland in Bangor, which is why emergency vehicle crossing is imperative. I urge Welsh Ministers at Cardiff Bay to improve access across the Menai bridge as soon as it is safe to do so to minimise disruption to residents and the economy.
I accept that maintaining the world’s first major suspension bridge with grade I-listed status poses challenges, but the Welsh Government are well funded to deliver their devolved responsibilities. They receive 20% more funding per person from the UK Government than is the case in England. At the 2021 spending review, the Government allocated an additional £2.5 billion a year on average to the Welsh Government over the period through the Barnett formula. That was on top of their annual £15.9 billion baseline. The Conservative Government therefore put in place the largest annual block grants, in real terms, of any spending review settlement since devolution.
I take the opportunity to remind hon. Members of the Government’s excellent record of investment in north Wales. We have provided £120 million for the north Wales growth deal as part of more than £790 million for city and growth deals across Wales. In addition, the levelling-up application submitted by my hon. Friend the Member for Clwyd South (Simon Baynes) led to the awarding of £13 million towards the Pontcysyllte aqueduct world heritage site project. That was one of 10 Welsh projects that received a total of £121 million in round one of the levelling-up fund. A further £126 million has been allocated to north Wales through the UK shared prosperity fund as part of £585 million over the next three years. The shared prosperity fund is one of the successors to EU structural funding. The core UK Government allocation equates to a generous £150 per head for north Wales. These investments, plus the community renewal fund and the community ownership fund, demonstrate the UK Government’s commitment to Anglesey and north Wales as we continue to level up all parts of our country.
Residents will naturally remain as concerned as I am about the disruption caused by the closure of the Menai suspension bridge. I reassure them that connectivity is a priority for the UK Government. I thank hon. Members for this afternoon’s debate. I will write to the Welsh Ministers highlighting the concerns that have been raised by my hon. Friend the Member for Ynys Môn, along with the Government’s own observations, and urging the Welsh Government to reconsider long-term solutions to address the issues that have been underscored by the temporary closure of the Menai suspension bridge.
Question put and agreed to.
Draft Drivers' Hours, Tachographs, International Road Haulage and Licensing of Operators (Amendment) Regulations 2022
(2 years, 1 month ago)
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The Minister of State, Department for Transport (Jesse Norman)
I beg to move,
That the Committee has considered the draft Drivers’ Hours, Tachographs, International Road Haulage and Licensing of Operators (Amendment) Regulations 2022.
It is a delight to see you in the Chair, Ms McVey.
The draft regulations will be made under the powers conferred by section 31 of the European Union (Future Relationship) Act 2020. They are to implement fully some of the international road transport provisions in the trade and cooperation agreement between the European Union and United Kingdom, which was entered into on 30 December 2020 and is known as the TCA. The regulations are mainly about drivers’ hours and tachograph rules for most commercial drivers of lorries and coaches, but also involve international haulage access to the UK.
Section 29 of the European Union (Future Relationship) Act 2020 provides a general implementation clause under which domestic law, including EU regulations retained as UK law, is, where necessary, interpreted in order to implement the TCA. On top of that, the changes being proposed by the statutory instrument will formalise the relevant TCA provisions into UK domestic law to provide legal clarity. That will also enable UK enforcement officers to enforce against EU commercial drivers in the scope of lorries and coaches operating in the UK.
The regulations amend in the first place the retained EU regulation (EC) 561/2006, which sets out driving time rules for commercial drivers. Secondly, they amend the retained EU regulation (EU) 165/2014, which sets out rules on the installation and use of the tachograph device, a recording device used for the enforcement of the driving time rules. Thirdly, the regulations amend the retain EU regulation (EC) 1072/2009, which sets out rules on cabotage movements. They also amend the domestic Goods Vehicles (Licensing of Operators) (Temporary Use in Great Britain) Regulations 1996, which set out the rules for non-GB operators’ access to GB roads.
Michael Fabricant (Lichfield) (Con)
I notice that the explanatory memorandum states that the SI
“also removes some access rights for EU operators to reflect the market access in the TCA”
Can my right hon. Friend say what sort of rights are being removed from EU operators?
Jesse Norman
I thank my hon. Friend for his question, and I will come on to that further in my speech. He brilliantly anticipates.
The drivers’ hours and tachograph regulations are essential to keeping our roads safe, and are retained as UK law by the European Union (Withdrawal) Act 2018. The retained EU drivers’ hours regulations set maximum driving times and minimum break and rest times for most commercial drivers of both lorries and coaches. For example, the rules mean that after four and half hours of driving, a driver must take a 45-minute break. Additionally, daily driving time is normally limited to nine hours. The consequences of driving any vehicle when fatigued can of course be catastrophic and the potential risks associated with heavy commercial vehicles are particularly severe. The rules are enforced by both the Driver and Vehicle Standards Agency and the police. They do that through targeted roadside checks and by visiting operators’ premises. The principal tool used by enforcement officers is the record generated by the tachograph. As I have said, that device records the driving, rest and break times of individual vehicles and their drivers.
The EU cabotage regulation was also retained as UK law by the European Union (Withdrawal) Act 2018. To explain for those unfamiliar with cabotage operations, it means the transport of goods between two places—the loading and unloading of goods—within a single country by a haulier registered in another country. Since 1 January 2021, international market access for hauliers operating between the UK and EU has been governed by the TCA —that returns to the point raised by my hon. Friend the Member for Lichfield.
The general implementation clause in the European Union (Future Relationship) Act 2020 means that domestic legislation has effect, so as to implement the commitments in the TCA. However, in order to enable full and effective enforcement, in this case including in relation to visiting EU haulage operations, it is important to align the domestic legislation fully with the TCA’s provisions. There are three broad categories of amendments that the draft regulations are making. First, they will amend the retained EU drivers’ hours and tachograph regulations to include some specific international road transport aspects that were not required in the context of a no-deal exit from the EU without the TCA.
Secondly, the draft regulations will amend the retained drivers’ hours and tachograph regulations to introduce prospective changes agreed in the TCA relating to the introduction of the smart tachograph version 2 from August 2023. That includes bringing some smaller vehicles over 2.5 tonnes, used commercially for international journeys, into the scope of the regulations from July 2026. Thirdly, the draft instrument will amend the retained EU cabotage regulation and the domestic goods vehicles operators’ licensing regulations to reflect the international road haulage access rights in the TCA. Currently, the legislation still reflects some of the market access arrangements when the UK was a EU member state. However, the retained regulation, (EC) 1072/2009, has already been amended to reflect the reduced cabotage rights for EU operators in the UK following their usual type of arrival with an inbound international load.
The further changes via the SI will include removing the right of EU operators to undertake cabotage operations when entering the UK without a load. The draft regulations have the effect and are essential to ensure legal clarity and to implement and enforce fully the commitments in the TCA. They do not increase the substance of regulatory burdens placed on UK drivers and operators, which are subject to drivers’ hours and tachograph rules. They will also ensure a level playing field for UK operators, by removing road haulage access rights to EU operators to mirror the access rights given to UK operators in the TCA. UK haulage already faces enforcement action in the EU if it breaches TCA commitments, but in some limited areas UK domestic law to implement the TCA as it applies to EU haulage in the UK needs to be harmonised fully.
I hope that Members will join me in supporting the draft regulations, and I commend them to the Committee.
Gill Furniss (Sheffield, Brightside and Hillsborough) (Lab)
It is a pleasure, as usual, to serve under your chairpersonship, Ms McVey. I welcome the new Minister to his rightful place.
I am pleased to say that the Opposition will not oppose the SI, because the regulations are based on existing requirements made under the TCA. However, I must mention a few issues relating to driver welfare in the logistics sector. Lorry drivers play a vital role in keeping our shelves stacked, our medicines stocked and our economy moving, but all too often they are overlooked and made to work in conditions that would be unacceptable in other professions. Facilities to allow drivers to eat and sleep, and to use the toilet with some basic dignity are hard to come by on our roads. The industry has been crying out for action to be taken but that has fallen on deaf ears for far too long. Although limited steps have been taken to address the medium and long-term factors surrounding those issues, there is still no plan in place to tackle the urgent problems.
According to the Government’s own figures, lorry parking capacity utilisation has reached 83%, up from 76% five years ago. That is teetering on the edge of the critical utilisation level of 85% set by the Department for Transport. In fact, it is above the 75% level that the industry widely views as full capacity. In some areas, such as the east of England, capacity is as high as 95%. Overall, the Road Haulage Association estimates a shortage of 11,000 lorry parking spaces nationally. Those issues are culminating in an acute lack of recruitment and a shortage of lorry drivers. If we are encourage more people, particularly younger people and women, into this incredibly important profession, those issues must be addressed urgently.
Such basic facilities would be taken as a given in any other vocation, so why have lorry drivers been left behind? I hope that the Minister will look into those issues as a priority and take action where his predecessors have kicked the can down the road. The Opposition will not oppose the SI, but I hope the Minister will address those issues either now or in writing.
Jesse Norman
I am very grateful to the hon. Lady for her kind words, and for the questions that she has put on important topics. She is absolutely right to focus on the issue of driver welfare. She may be aware that the Government have now topped up to £52 million the investment that we have been making in the industry to support better facilities for drivers.
Current rules grant flexibilities to allow for workflow patterns but within very constrained limits, and therefore with an eye to the preservation of the wellbeing and welfare of drivers. The hon. Lady is absolutely right to pick up the point of a driver shortage. She may be aware that the Government took a lot of actions during and since the recent supply shortage to try to train, encourage and incentivise more people to join the industry and to become heavy goods vehicle drivers. The Department for Education has invested £34 million to create skills bootcamps, and there is also HGV driver training available through apprenticeships and other work through Jobcentre Plus.
Chris Loder (West Dorset) (Con)
Does my right hon. Friend agree that it is not just the Government’s responsibility but that of employers in the private sector to look after their staff and make sure that they have adequate staff to deliver the service required?
Jesse Norman
My hon. Friend is absolutely right, of course, but the question was put as to Government policy and that was why I responded to it. Of course, we all recognise that the power of the private sector is something considerably larger in many respects than that of Government. There is evidence that wages are going up and that will itself provide an incentive to more drivers. As regards the Government, we have been pressing hard on the issues of driver welfare and driver shortage.
The hon. Member for Sheffield, Brightside and Hillsborough is right to raise the matter of lorry parking, which has been an issue for a long time. Various studies bear on the question of parking availability and freight, as she will be aware, but it, too, is an issue taken extremely seriously by the Government. I expect and hope that further progress will be made in that respect.
Question put and agreed.
Financial Services and Markets Bill (Seventh sitting)
Tuesday 1st November 2022
(2 years, 1 month 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 1 November 2022 - (1 Nov 2022)
The Committee divided: - Ayes: 6 / Noes: 9 - Question accordingly negatived.
The Chair
With this it will be convenient to discuss that schedule 7 be the Seventh schedule to the Bill.
The Economic Secretary to the Treasury (Andrew Griffith)
Good morning, Mr Sharma. It is a pleasure to serve under your chairmanship.
If it pleases the Committee, I would like to draw the Committee’s attention to a letter that I have written to you, Mr Sharma, and to the interim Chair of the Treasury Committee. I had previously undertaken that it was my intention to table for the consideration of the Committee some draft wording on a public interest intervention power. As a result of the new Prime Minister wishing to understand what is an important matter in more detail, such that consideration can be given to points that have been made and to whether the proposed wording is the right wording, I regret that it will not be possible for us to table a proposal at this stage. There will be further consideration of the matter on Report and at other stages, and my commitment to write to the Treasury Committee, as well as to members of this Committee, as soon as we have draft wording for Members’ consideration, stands. I give that commitment to the hon. Member for Hampstead and Kilburn as well.
The clause introduces schedule 7, which sets out corresponding or similar provisions to those introduced for the Financial Conduct Authority and the Prudential Regulation Authority in chapter 3 of the Bill, relating to the accountability of the payment systems regulator. As the Committee is aware, the Bill repeals retained EU law pertaining to financial services. That means that the regulators, including the Payment Systems Regulator, will generally be responsible for setting the direct regulatory requirements for supervised entities where those were previously contained in retained EU law.
As the Committee has already discussed in some detail, it is important that that increase in responsibility for the regulators is balanced with clear accountability, appropriate democratic input and transparent oversight. It is also important that the accountability measures are applied consistently across the regulators. Schedule 7 therefore makes provisions corresponding or similar to those in chapter 3 in a way that is relevant to and appropriate for the PSR.
The accountability provisions are applied to the PSR by amending the Financial Services (Banking Reform) Act 2013, which is the domestic legislation governing the PSR. The key distinction is that because the PSR makes rules via powers of direction, as opposed to having the rulebook like the FCA, the accountability requirements on rule making apply where the PSR imposes a generally applicable requirement. Those are the PSR’s equivalent for rule making. Overall, the provisions in the schedule apply the accountability measures in a relevant and appropriate way to the PSR’s legislative framework and regulatory remit. This will ensure consistency in the application of the accountability provisions across the financial services regulators.
Tulip Siddiq (Hampstead and Kilburn) (Lab)
It is a pleasure to serve under your chairmanship, Mr Sharma. I have just one question for the Minister. How does he foresee the Payment Systems Regulator’s new sustainable growth principles taking account of the UK’s net zero emissions target? How will that balance work in practice? Will the regulator be required to report against its performance?
Andrew Griffith
In substance, the Payment Systems Regulator, in the same way as the FCA, the Bank and the PRA, will have the target as one of its principles. It will be for the PSR to decide how it reports against that. These are ultimately decisions for the regulators themselves to put into practice. To the extent that I have more information at this stage, I will write to the hon. Lady with any clarity I can provide.
Question put and agreed to.
Clause 46 accordingly ordered to stand part of the Bill.
Schedule 7 agreed to.
Clause 47
Cash access services
Martin Docherty-Hughes (West Dunbartonshire) (SNP)
I beg to move amendment 40, in clause 47, page 68, line 9, after “of” insert “free of charge”.
This amendment makes reference to the provision of free of charge cash access services in Schedule 8.
The Chair
With this it will be convenient to discuss the following:
Clause stand part.
Amendment 41, in schedule 8, page 150, line 27, after “service”)” insert
“free of charge or on the payment of a fee”.
This amendment changes the definition of cash deposit services to include both those which are free of charge and which require the payment of a fee.
Amendment 42, in schedule 8, page 150, line 29, after “service”)” insert
“free of charge or on the payment of a fee”.
This amendment changes the definition of cash withdrawal services to include both those which are free of charge and which require the payment of a fee.
Amendment 16, in schedule 8, page 151, line 36, after “concerning” insert
“both free of charge and paid access”.
Amendment 17, in schedule 8, page 154, line 12, after “appropriate” insert
“and must include the provision of free of charge cash access services”.
Amendment 18, in schedule 8, page 154, line 18, leave out from “is” to the end of line 22 and insert “—
(a) an absence of free of charge cash access services in a locality in a part of the United Kingdom, or
(b) a circumstance which limits the ability of persons in any locality in a part of the United Kingdom to—
(i) withdraw cash from a relevant current account, or
(ii) place cash on a relevant current account.”
New clause 10—Access to cash: Guaranteed minimum provision—
“(1) The Treasury must, by regulations, make provision to guarantee a minimum level of access to free of charge cash access services for consumers across the United Kingdom.
(2) The minimum level of access referred to in subsection (1) must be included in the regulations.
(3) Regulations under this section shall be made by statutory instrument, and may not be made unless a draft has been laid before and approved by resolution of each House of Parliament.”
New clause 11—Duty to collect data on cash acceptance—
“(1) The FCA must monitor, collect and publish data in relation to levels of cash acceptance amongst retailers and service providers within the United Kingdom.
(2) The FCA must publish 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 levels of cash acceptance amongst retailers and service providers within the United Kingdom.
(3) The FCA can, by written notice, require a retailer or service provider to provide to the FCA information that it may reasonably require for the purposes of exercising its duties under subsections (1) and (2).”
New clause 12—Access to cash: Guaranteed minimum provision for small businesses—
“(1) The Treasury must, by regulations, make provision to guarantee a minimum level of access to free of charge cash access services for small businesses across the United Kingdom.
(2) The minimum level of access referred to in subsection (1) must be included in the regulations.
(3) Regulations under this section shall be made by statutory instrument, and may not be made unless a draft has been laid before and approved by resolution of each House of Parliament.”
Martin Docherty-Hughes
It is good to see you in the Chair, Mr Sharma, and other hon. Members here today. It is a pity that my hon. Friend the Member for Glenrothes cannot be with us, as he has played a large part in constructing these amendments. I know that other hon. Members will want to participate in a debate on free-of-charge access to cash. I look forward to hearing what they have to say. At the moment, depending on what the Minister has to say, it is my intention to press the amendment to a vote, but I will listen to the Minister’s comments.
It is important to give some examples about the reduction in free access to cash. People sometimes wonder where the constituency of West Dunbartonshire is. We are bound by Glasgow to our east, where we become an urban element of the west of Scotland. We move further west through Clydebank, into Dumbarton and through the Vale of Leven, becoming suburban and then semi-rural, to the base of Loch Lomond itself. The community has a diverse demographic, with a range of deprivation that also impacts on people’s need to access physical cash.
In the last four years in West Dunbartonshire—I am sure this experience is mirrored not only in Scotland but the rest of these islands—we have seen a drop of 27% in access to ATMs, or automated teller machines. That is three ATMs, coupled with closures of local bank branches. We are a population of more than 90,000, but we seem to have only three or four bank branches left, which is extraordinary. My constituents face being forced to travel across a range of areas, including sometimes into the city of Glasgow, to access cash. My hon. Friend the Member for Glenrothes and I think it is vital to protect our constituents and the constituents of all other Members, too, in making sure that they have access to free-of-charge cash, notably for the most disadvantaged groups and the elderly.
Let me declare a non-pecuniary interest as the chair of the all-party parliamentary group on Estonia. Estonia is usually used as an example of what a digital state should be. After the fall of the Soviet Union it picked itself up and ran with a full digital agenda. One of its biggest learnings was that no one should be left behind in the race to digitalisation, critically in relation to access to cash. For the Estonian Government, and the Estonian Parliament, making sure that any financial system is not only fit for purpose in the digital age but that it takes everyone with it, including access to services and free access to cash, was their big learning curve. They believed that they failed in that process to begin with.
I hope that, when reflecting on the amendment, the Government realise that there is a huge opportunity to maintain access to cash for a range of reasons. We can talk about our constituents, and predominantly those who are elderly or from disadvantaged groups who use cash on a more regular basis. We can also talk about small and medium-sized businesses, a lot of which have moved to digital transactions. When Members go to a small shop in their own constituencies, they will notice that a lot of transactions have moved to digital due to the pandemic, but shops still have a substantial amount of cash that comes through their doors. One of the big problems that shops also have—not just free access to cash for those consuming their products—is depositing their takings at the end of the day. They are finding that very difficult as well. Businesses rely on consumers who use cash, especially in disadvantaged communities.
I am mindful of what the NM Group said in its submission:
“Cash remains an important form of payment for millions across the UK, particularly during times of economic hardship.”
The narrative of the cost of living crisis is used across the House, so there is clearly an agreement that people are facing economic hardship and that access to cash during that time is critical. That is why we think amendment 40 is important, as are the other amendments in this group.
We should also note that the payment method with the lowest economic friction, providing businesses and members of the public with a crucially important alternative, is cash. It is an important way for people to manage their finances, especially those in a disadvantaged group or those who are elderly who do not use digital money. I also note that the figures published by LINK, UK Finance and the Post Office show that around £10 billion in cash is withdrawn each month. That is £120 billion per annum in physical cash from ATMs, or from bank counters and post offices. The volume of withdrawals from the LINK system alone equates to about two withdrawals per month for each adult member of the UK population.
To bring my thoughts to a conclusion, we need to also be mindful of some of the infrastructure. UK consumers can access cash from over 55,000 ATMs, 11,500 post offices and certain bank branches—if they are not closing down in our local communities. The number of post offices is actually shrinking; there are no longer two or three post offices in a community—there is maybe only one. Over 90% of cash withdrawals take place at actual ATMs. The critical issue around free cash deposit and withdrawal services within the amendment is extremely important.
The access to cash review in 2019 noted that we cannot sleepwalk into a cashless society. That reflects back to what I was saying about the Estonian learning about digital infrastructure: it can leave a substantial number of people behind. That was the reality for Estonia. Cash continues to be important. Contactless payments and online banking can make it easy for some people to live entirely cash-free. However, given the volumes of cash in society, its usage remains extremely high. That reminds us that we do not live in a cashless society. The LINK network still handles around 1.6 billion transactions a month—that was the average in 2021. On average, adults still withdrew over £1,500 a year. During a global pandemic, cash was still being physically used. It is important to listen to the Minister and the Government’s view on it, although it is my intention to press the amendment to a vote. I look forward to hearing what others say.
Shaun Bailey (West Bromwich West) (Con)
It is a pleasure to see you in the Chair, Mr Sharma—
Siobhain McDonagh (Mitcham and Morden) (Lab)
I apologise to the hon. Member; I am getting my procedure a bit mixed up, Mr Sharma, so I wonder whether you could clarify something for me. I have amendments 16, 17 and 18, on the issue of free access to cash. When will it be convenient for me to come in?
Shaun Bailey
Thank you, Mr Sharma. I do not want to add too much to what the hon. Member for West Dunbartonshire has said. He has articulated well the reasons why the original clause and his amendments are vital to our communities. The stark reality is that cash is still an important part of our local economic infrastructure, and more so for my communities, where we have seen two bank closures in the last 18 months. Many have had free access to cash taken from them. That is compounded by other infrastructure challenges, such as the lack of public transport and the inability to access free cash services elsewhere.
The amendments tabled by the hon. Member for West Dunbartonshire are interesting and strike a balance in seeking to ensure that our communities can access a vital service, mainly cash. I listened with interest to him explaining the rationale behind his amendments, because I think we agree. We have to remember who these measures are ultimately targeted at. I often think of people with vulnerabilities who utilise cash as part of their budgeting. They use it every day, and for them it is a vital part of being able to continue to sustain themselves. Although the technological revolution over the last few years in particular might be great for some, for others it is not. For the communities that I represent and the areas where people are really trying to get by, cash plays a vital role in ensuring that people can function and manage their finances and their affairs. It is therefore vital that we have a strategy in place.
The amendments proposed by the hon. Gentleman, particularly the element of keeping the service free of charge, is important, particularly for communities like mine. We all talk about acute pockets of deprivation, but I remind the Committee that I represent the fourth most deprived ward in the west midlands. For many people, paying for ATMs is simply unacceptable. It takes away from them a vital part of the means they need to subsist and survive. Ensuring that we have a strategy to keep access to cash free for those who rely on it every day is vital. If we do not, we create a cycle whereby, because people have to pay out to access the means by which they survive, they use less and less of their income.
At a time when we are dealing with an acute cost of living crisis and people’s incomes are stretched, it is vital that the main source that they can use to survive is not tagged with a condition that makes it harder for them to access it. I agree with the philosophy, so to speak, behind the hon. Gentleman’s amendments. This is about enabling people to just survive and do the basics that they need to do. It is as simple as that.
I think of a constituent who came to my constituency office the other week. She could not access an ATM and was absolutely distraught. Her bank branch had just been closed and she did not know where to go. She was distraught and we had to help her out. That is at the forefront of my mind when I think of these amendments and what the Government are trying to achieve through their policy and strategy documents.
I ask my hon. Friend the Minister—I am afraid that he has had a bit of a shopping list from me, which I know his officials will have noted down—to ensure that cash is kept at the forefront of the Treasury’s thinking. I appreciate what the clauses are meant to achieve, but I hope that the Minister will take note of the intention behind the amendments, even if the Government decide not to support them, and ensure that the issue is brought to the forefront.
Siobhain McDonagh
It is a wonderful moment when there is unity on both sides of the Committee. SNP and Conservative Members, as well as—I hope—my Labour colleagues, are coming together to ask the Government not just for access to cash, but for free access to cash. I believe that much of the Bill arises as a direct result of Members of Parliament doing our constituency work and understanding our constituents’ concerns.
Dame Angela Eagle (Wallasey) (Lab)
My hon. Friend’s amendments are an extremely important part of the debate, and I hope that the Government accept them. I should point out that when I sat on the Treasury Committee several iterations ago, we held an inquiry about free access to cash. We got agreement that all machines that charge for withdrawals should say so up front rather than right at the end. Although that transformed some of the problems, we are now discussing access to cash itself. It is funny how these things evolve but the issues remain the same.
Siobhain McDonagh
I thank my hon. Friend, who I understand is currently serving as the interim Chair of the Treasury Committee.
Siobhain McDonagh
My amendments 16, 17 and 18, together with new clauses 10, 11 and 12, address access to free cash, which is indisputably important in our society. Ten per cent. of UK adults—5.4 million people—continue to rely on cash to a great or very great or extent in their daily lives. One in five people says that they would struggle to cope in a cashless society, and that struggle would disproportionately affect those on lower incomes, the elderly and people with physical or mental health difficulties.
Without Government intervention, we are losing free access to cash in our society. In my constituency, the number of free-to-use ATMs has declined by 36% in the last five years, while the number of pay-to-use ATMs has increased by an extraordinary 22%—there is money to be made somewhere. The problem is not confined to Mitcham and Morden: since 2015, the UK has lost more than half its branch network—5,003 branches—at a terrifying rate of 54 branches each and every month.
Through my amendments, I wish to draw the Committee’s attention to the notable decline in the provision of free-to-use ATMs. Since August 2018, the UK has lost 12,599 free-to-use ATMs—a decrease of nearly 24%. Meanwhile, almost a quarter of ATMs now charge people for access to their own cash. It is no wonder that more than half of consumers experienced one or more issues accessing cash at a bank branch in the past year.
Who are the losers in this cashless society? The access to cash review unsurprisingly revealed that those earning less than £10,000 per year were 14 times more likely to be dependent on cash than those earning more than £30,000 per year, and yet they are the residents of the areas where free access to cash is hard to come by.
Take Pollards Hill in my constituency, where a ridiculous clause in the lease prevents the new Co-op from opening a free-to-use ATM because of two paid-for cash machines further down the row of shops. Residents are taking out small sums of money in order to control their budgets, some of them at just £10 a time, but they are charged £2 to take that out—a 20% charge for every single payment. They literally have to pay for access to their cash. Surely the legislation must be tightened to avoid imposing additional costs such as that on the most hard-pressed.
I believe that the need for access to cash is growing. Age UK highlights that one in five older people still relies on cash for everyday spending. The cost of living crisis has seen households reliant on cash counting out the pennies to ensure that they can make ends meet—it is no wonder that in August, the Post Office handled its highest total of cash ever. The evidence is overwhelming and I believe that there should be a societal duty on the Government to ensure that the most vulnerable people in our society have free access to cash and are not left behind.
It is not just me who has such concerns. The hon. Member for Vale of Clwyd (Dr Davies), now the Under-Secretary of State for Wales, stated on Second Reading that he hoped the Government would commit to protecting free cash withdrawals and deposits, presumably in light of Prestatyn losing TSB, Barclays, HSBC, NatWest and Royal Bank of Scotland in recent years, initially leaving the town’s high street without a single bank or cash machine despite being a major regional shopping centre.
On 19 April, the hon. Member for Beaconsfield tweeted after the announcement of bank branch closures in her constituency that she would take up the issue in Westminster, describing crisis talks with the banks on access to cash on high streets everywhere as essential. I am sure she agrees that this is the moment to vote where her voice was.
The hon. Member for Havant has seen at first hand how damaging the removal of access-to-cash provision has been for his most vulnerable constituents, having launched campaigns against TSB, NatWest, Barclays and HSBC in recent years, and having raised his concerns with HSBC about the potential impact on the elderly, who might not be able to access online banking and are reliant on face-to-face services. The hon. Member for Orpington has seen Nationwide, Santander and Barclays close in Petts Wood. He pledged to hold the latter to account in support of those residents who do not use mobile or online banking. Well done to that Member!
The hon. Member for Grantham and Stamford, in advance of the closure of the HSBC branch in Bourne, shared concerns with his constituents about the impact on his elderly constituents whom he said relied on the bank as a vital service in the town centre.
Gareth Davies (Grantham and Stamford) (Con)
The hon. Lady is making a fantastic speech—let me say that straight out of the gate—but may I clarify that her proposed access-to-cash solution is for the Treasury to make an intervention on the regulator?
Siobhain McDonagh
I do not believe that the regulator, the FCA, will force through free access to cash unless we legislate for that. As Members, we are responsible for that. I suppose I am trying to say that hon. Members are doing their job excellently by highlighting concerns in their constituencies. Even though we have been through a very rough time in politics and a lot of our constituents are unhappy about the turbulent times we have entered, many of them still have faith in democracy, party politics and our system because Members do that sort of work. I believe that we need to follow through when we are given the power to do so.
I have more. The point was even more strongly expressed by the hon. Member for West Bromwich West, who made a powerful speech. Following HSBC’s decision to close its branch in Wednesbury, he gave this message to his constituents:
“The argument of go to West Brom is not good enough! I am determined to fight this”—
good on him!
The hon. Member for North Warwickshire described the impact on local residents as “obvious” when the Lloyds Bank branch closed, leaving Coleshill High Street without a bank branch. As an MP for a rural constituency, the hon. Member for Hastings and Rye detailed her concerns to our witnesses last week about her constituency being able to access cash free, and about the distance her residents would have to travel otherwise.
I do not doubt that my constituency neighbour, the hon. Member for Wimbledon, shares my concern about the loss of cash machines and bank branches in Morden town centre, which we share. One of the only remaining free-to-use ATMs is hidden in a Cashino—an arcade. That is extraordinary.
Government Members need not worry: the new Chancellor shares their view. He was pictured in the Alton Herald just last November celebrating the arrival of a new free-to-use cash machine in his constituency. I say to the Minister: do not worry. If these amendments pass, the Chancellor is right behind you.
Given what appears to be an overwhelming consensus on the issue, I hope Members on both sides of the Committee acknowledge that the Bill needs to be amended to ensure not only that there is access to cash but that there is free access to cash. They will be lauded in articles in their local newspapers and posts on Twitter and their social media for passing these amendments.
Emma Hardy
It is an absolute pleasure to follow my hon. Friend the Member for Mitcham and Morden, who is just awesome. Is awesome a parliamentary word? It should be. On a personal level, let me say how much I enjoy being on the Treasury Committee with such incredible Labour women. It is brilliant—inspiring.
To follow on from a couple of points that my hon. Friend made, I hope the Minister’s response will touch on the baseline geographical distances between free cash points. It frustrates me immensely that in one of the poorest estates in my constituency, the ATM charges £1.50 every time people use it. We would like some details about the geographical distances between the places where people can access free cash.
We should also look at why businesses do not take cash. As my hon. Friend said during the evidence sessions, it is often because there is nowhere for them to deposit it. If we are to make access to cash free, which I completely support, we should also help businesses to take cash. There is no point having free cash if it cannot be used. Bank or other branches should accept cash, and we should look at the geographical distances.
I got a bit frustrated when banks were closing branches in my constituency, because they said, “Well, the other one is only one-point-however-many miles away, so it’s fine.” I said, “It is not easy for people to get to.” There is sometimes an assumption that everyone is able to drive and has the mobility to go around and find a free cash machine, but that is not always possible. Can we look at geographical distances, at businesses accepting cash and at ensuring branches accept cash so that businesses can pay it in? My hon. Friend made a powerful speech on cash access and the principle that people’s access to their own money should be free.
Tulip Siddiq
I will speak to clause 47 and the various amendments tabled to it by my hon. Friend the Member for Mitcham and Morden and the hon. Member for Glenrothes, who cannot be here because of a personal commitment. I pay tribute to him and all the work he has done so far. While we sympathise with the principle behind amendments 41 and 42, we believe that the amendments tabled by my hon. Friend the Member for Mitcham and Morden would better achieve free cash access. Before I continue, I pay tribute to her for all her work on financial inclusion. She is not stopping her fight for justice, and she talked about this being a societal duty. She also has a ten-minute rule Bill that seeks to persuade the Government to give free internet access to children on free school meals. I pay tribute to her work.
We are delighted that after years of delay, the Government have brought forward some legislation to protect access to cash. The industry, particularly the major banks, should be applauded for coming together to help protect cash services at the end of last year, which put this legislation on a statutory footing. However, the delay in bringing forward the Bill has cut off whole sections of society from our economy, including millions of the most vulnerable, the poorest and older people, as my hon. Friend the Member for Mitcham and Morden pointed out. It has also damaged smaller businesses that rely on cash.
On top of this, almost 6,000 bank branches have closed since 2015 on this Government’s watch, and the Bill does nothing to protect essential face-to-face banking services, which the most vulnerable in our society depend on for financial advice and support. I know we are discussing new clauses 4 and 5 later, which will protect access to essential in-person banking services, so I will stay focused on cash for now, but I do not feel that we can have this debate without talking about face-to-face banking services, or the lack thereof.
It is inevitable that payment systems will continue to innovate, but a recent report from the RSA that I am sure the Minister is aware of found that 10 million people still depend on cash and that the pandemic, which saw an acceleration in the digitisation of payment systems, has made it increasingly difficult for many of us to pay for the goods and services we need—especially people from a lower socioeconomic background.
The Bill is a welcome step in guaranteeing access to cash, but clause 47 goes nowhere near far enough in ensuring that cash is available for those who depend on it. My hon. Friend the Member for Mitcham and Morden pointed out how so many people in her constituency—where I was born, I am proud to say—still rely on cash, especially free cash. The Bill makes no commitment to protect free access to cash. That is what we are worried about. That is why we support amendments 16, 17 and 18, as well as new clause 10, which were all tabled by my hon. Friend the Member for Mitcham and Morden. They would provide a guaranteed minimum provision of access to free cash.
Protecting free cash access has never been more important, as I am sure the Minister will agree. Data collected by the Post Office has shown that the use of cash in recent months has increased. As the cost of living crisis deepens, the poorest in society are increasingly turning to cash to manage their budgets on a week-by-week, often day-by-day basis. Data collected by the consumer group Which? found a notable decline in the provision of free-to-use ATMs in recent years.
In July 2022, there were around 12,000 fewer free-to-use ATMs in the UK than there were in August 2018. That is a decrease of nearly 24%. Does the Minister agree that forcing the poorest in society, who are increasingly reliant on cash, to pay for access to cash in the middle of the worst cost of living crisis on record risks further deepening financial exclusion in our country? Is this the kind of society we want to live in?
I am sure the Minister knows of Natalie Ceeney, chair of UK Finance’s Cash Action Group. During the Committee’s evidence session, she made it absolutely clear that the Government have a societal duty to ensure that the most vulnerable people in the UK have free access to cash.
Which? warned that if these clauses do not make it clear that they will protect free cash withdrawals and deposits, the entire objective of this part of the Bill will be undermined. Which? is right to stress the importance of free cash withdrawals and deposits. That is crucial to securing cash acceptance. There is little point in the most vulnerable having access to cash if they have nowhere to spend it. That is why Labour will support new clause 11, which would place a duty on the FCA to collect data on cash acceptance.
During her oral evidence, Natalie Ceeney also warned that we have to ensure that the Bill
“covers small businesses as well as consumers. Small businesses, typically…pay for their cash access.”––[Official Report, Financial Services and Markets Public Bill Committee, 19 October 2022; c. 51-52, Q101.]
Increasingly, small business owners also have to travel long distances to deposit. That is a dangerous disincentive for them to accept cash. Natalie Ceeney also pointed to Sweden, where shops have largely stopped taking cash. If the UK wants to avoid a similar outcome, we must ensure that small businesses can deposit cash easily. That is why we will push new clause 12 to a vote. It would guarantee minimum provision of free cash access services for small businesses.
The Minister is likely to respond that we must wait for the Government’s access to cash policy statement. If he does, will he confirm when that statement will be published? Does he not agree that, if the Government are truly committed to protecting free access to cash services, there is no reason not to make protections for free access explicit in the Bill?
Andrew Griffith
I will speak first to clause 47, before turning to the many amendments and new clauses proposed by hon. Members.
Although the transition towards digital payments brings many opportunities, the Government’s view is that cash remains an essential payment mechanism for many, particularly those in vulnerable groups. I am particularly familiar with the work of Age UK in this respect. Protecting access to cash for those who rely on it is a priority for the Government, and clause 47 delivers on that.
The hon. Member for Mitcham and Morden highlighted not just her own concerns about the issue but, rather thoughtfully, those of all hon. Members, to which I should add mine as well.
Siobhain McDonagh
I thank my brilliant researcher, Dan Ashcroft, for finding the great comments of all the Conservative Members. It was harder to find anything from the Minister, so it is good to find out what he believes about free access to cash.
Andrew Griffith
As part of the research for this debate, I looked at the prevalence of free-to-use ATMs in the constituencies of members of the Committee. My quite rural constituency is somewhat bereft compared with the embarrassment of riches, surprisingly, in the constituency of the hon. Member for Kingston upon Hull West and Hessle, which has a staggering 120 free-to-use ATMs, reportedly. That puts many of us to shame.
Andrew Griffith
That was the figure supplied to me; I will happily correct the record if that is not the case.
Emma Hardy
I am astounded that there are 120. I would be grateful if the Minister could show us a map of where they are, because I certainly have not found them. What can I say? We like our cash in Hull.
Andrew Griffith
Very good.
Until this moment, there has been no substantive legislative framework for access to cash. No regulatory authority has the legislative responsibility or powers to ensure that cash withdrawal and deposit facilities are available for people and businesses to use. We should not underestimate the degree to which the Government are moving on this important issue.
Clause 47 addresses cash access in statute for the first time. It introduces schedule 8, which sets out a legislative framework granting the Financial Conduct Authority responsibility to seek to ensure that there is reasonable provision of cash deposit and withdrawal services across the UK. It also gives the regulator the powers it needs to fulfil that responsibility.
The hon. Member for Wallasey talked about the pioneering work by the Treasury Committee. We should all celebrate this clause; we should celebrate the achievement of this House in significantly moving forward the protection for access to cash. We just need to remember that what we are talking about here is a very small increment—from the statutory protection of access to cash, to the precise terms on which that is agreed. I understand that there may be different views on that, but we should not allow that to detract from the significant advance on access to cash that the Bill represents.
The Treasury will publish a policy statement in due course, and doing that “in due course” is the right thing to do. There will be the right moment to do it—
Andrew Griffith
The hon. Lady is very good at anticipating what I would not say. Perhaps she is going to finish my sentence for me.
Tulip Siddiq
Well, we have certainly spent enough time together. “In due course” is very vague, as I am sure the Minister will agree. Can he not give us any sort of timeline? I have not had a straight answer to this question for a few months now—to be fair, I recognise that it was not him in that chair, but his predecessor.
Andrew Griffith
I am a big fan of taking one step at a time, and the step in front of us today is to pass clause 47 and put it on the statute book—to make that very significant advance in the statutory protection of access to cash. I look forward to continuing my tenure and engaging with the hon. Lady, and it seems appropriate for us to bring forward the policy statement very rapidly once Royal Assent has been achieved, taking this important topic step by step.
The hon. Member for Kingston upon Hull West and Hessle nodded vigorously at the obligations on the FCA to collect more data. I think that that is absolutely right. One challenge, as cash potentially diminishes over time, is to ensure that we nevertheless have the right and detailed datasets in order to continue to protect our constituents.
Emma Hardy
Without wishing to return to a previous debate, one way we could ensure that the FCA collects data is to ensure that it has regard to financial inclusion.
Andrew Griffith
The hon. Lady has made that point powerfully, and I assure her—notwithstanding the disappointment that I seem to continue to cause to the hon. Member for Hampstead and Kilburn—that that has lodged very firmly with the Government and is something I would hope we can continue to discuss before Report.
The provisions introduced by clause 47 are vital to support those who continue to use cash. With that, I recommend that the clause stand part of the Bill.
Let me now turn to the amendments. Amendment 40 would change the description of schedule 8 in clause 47 to refer to free-of-charge cash deposit and withdrawal services. Amendments 16 to 18, in the name of the hon. Member for Mitcham and Morden, concern free access to cash. There is a commendable focus on this issue from Members on both sides of the Committee, and we heard the intervention from my hon. Friend the Member for West Bromwich West about his constituents and their vulnerabilities.
The Government do not believe that it is appropriate for legislation itself to stipulate that access to cash must be free. Let me try to explain why, because I understand the consternation of some hon. Members. This very significant step forward having been taken to protect statutory access to cash, the Government are concerned that taking a blanket approach might have unintended consequences and leave us stuck with legislation that is too prescriptive. In turn, that might stifle innovation by industry to support cash access. For example, ensuring the free provision of cash for certain vulnerable consumers is quite different from ensuring provision for business customers, which could be delivered through different solutions.
The provisions in schedule 8 ensure that legislation provides appropriate flexibility now and in the future. Consistent with a lot of the debate that we have heard about the independence of regulators and the regulatory model being baked into financial services regulation since the Financial Services and Markets Act 2000, the Government believe that the FCA is best placed to deliver a sustainable, agile and evidence-based approach to managing cash over time in order to respond to the needs of people and businesses. The FCA has the flexibility and powers to do that.
The Chair
Before I call Martin Docherty-Hughes, I inform the Committee that I will take one vote on amendment 40. There will be no other vote on this group.
Martin Docherty-Hughes
Thank you, Mr Sharma.
It was interesting to hear what the Minister and Members on the Government Back Benches had to say—I congratulate the hon. Member for Mitcham and Morden on the litany of exasperation from the Back Benches, which I thought was well played. I was glad to hear the hon. Member for West Bromwich West agree with the vast majority of what I had to say, and I go back to what the Minister said about the statutory protection of cash. If that is the truth, 27% of free ATMs in West Dunbartonshire would not have closed in the past four years.
I am usually minded to push my amendments to a vote. I seek some reassurance from my colleagues on the official Opposition Benches that if I do not push my amendment to a Division, all the amendments in the name of the hon. Member for Mitcham and Morden will be moved. The Clerk may want to give some advice to the Chair on that issue, because I know that if I withdraw my amendment, I can bring it back on Report. I look for some clarification on that issue first.
The Chair
The advice is that if you withdraw your amendment, I will take one of the three amendments from the hon. Member for Mitcham and Morden.
Siobhain McDonagh
Just to clarify, Chair, will you take 16, 17 or 18, or will you take the whole bunch?
The Chair
You choose one of those three, and I will take it if the hon. Gentleman decides not to push his amendment to a Division.
Martin Docherty-Hughes
I think I am getting my assurance that one of those amendments will be pressed to a vote by the official Opposition, so in order to make sure that we have a coherent and agreed process, I will not push my amendment to a Division. However, I make it clear to the Government that I have not heard anything today that means that free access to cash will be safeguarded for my constituents, and I will probably bring my amendment back on Report. I look forward to voting with my colleagues in the official Opposition. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 47 ordered to stand part of the Bill.
Schedule 8
Cash access services
Amendment proposed: 16, in schedule 8, page 151, line 36, after “concerning” insert
“both free of charge and paid access”.—(Siobhain McDonagh.)
Question put, That the amendment be made.
Siobhain McDonagh
I beg to move amendment 19, in schedule 8, in page 154, line 12, at end insert—
“(2A) Before making a determination under subsection (2), the FCA must publish how it intends to define and assess the reasonable nature and extent of provision when making the determination.”
The Chair
With this it will be convenient to discuss the following:
Amendment 21, in schedule 8, page 154, line 32, at end insert—
“(7) In carrying out its functions for the purposes of section (1) the FCA may put in place arrangements for the purposes of ensuring that members of the public, elected officials, community groups, local authorities, councils, and other local persons the FCA considers may have an interest, can request a review of their local community’s access to cash needs.”
Amendment 20, in schedule 8, page 154, line 32, at end insert—
“(8) Upon making a determination of local deficiency in the course of carrying out its functions under subsections (1) to (7), the FCA must—
(a) make provision for the publication of this assessment, and
(b) outline steps to be taken by relevant parties to address such deficiency.”
That schedule 8 be the Eighth schedule to the Bill.
Siobhain McDonagh
I rise to support my amendments 19, 20 and 21, which are grounded in transparency and evidence, requiring the Financial Conduct Authority to collect and publish relevant data related to access to cash. Examples include enabling public bodies to request a review of the local community’s access to cash needs or to publish how they intend to define and assess the reasonable nature and extent of provision when meeting a determination of access to cash; making provision for the publication of that assessment; and outlining steps to be taken by relevant parties to address such a deficiency.
Currently, under the voluntary agreements put in place by the Cash Action Group to preserve access to cash, individuals or community groups can request a review of their access to cash where they consider it to be inadequate. Where unmet needs are identified, LINK can recommend the installation of a new cash access point. I must say that it is doing precisely that in my constituency, in Pollards Hill, so I am grateful to LINK and the Cash Action Group for their progress.
The amendments call for a similar ability for individuals or communities to request a review of local cash provision, irrespective of whether baseline geographic distances set in the Treasury’s policy statement are met. I argue that that should be enshrined in the Bill to give consumers confidence that their concerns in their local areas will be considered by the regulator. Whether for transparency, fairness or consumer confidence, it is vital that the legislation compels the FCA to publish both the criteria that will apply when determining whether a cash access point is required in a community and the assessment of a local community’s access to cash.
I hope that chimes with commitments made by the hon. Member for Vale of Clwyd on Second Reading, when he argued that assessments of the needs of communities should be transparently published and that there should be a formal process of appeal. Surely such an appeal is impossible unless the data is collected, understood and available. I hope that this uncontroversial call will have the support of hon. Members as we seek to strengthen access to cash for communities and individuals up and down the country.
Tulip Siddiq
I shall speak to schedule 8 and amendments 19, 20 and 21 together. We recognise that the Bill sets out an important, overarching framework to protect access to cash. However, many critical elements, such as the baseline geographic distances that will apply to withdrawal and deposit facilities and which are factors that the FCA will take into account when assessing a local area’s needs with regard to access to cash, will be set out in a policy statement to be published by the Treasury. That makes it impossible for members of this Committee, more widely, Members of Parliament to judge whether the Government’s proposals will deliver an adequate level of free access to cash services. That is why the organisation Which? and others have called on the Government to assess the significant gap by setting out, in Committee, the details of the draft policy statement, which will determine the proposed baseline distances between cash facilities.
As my hon. Friend the Member for Mitcham and Morden has said, we also want the Government to set out how local deficiency of free cash access will be assessed by the regulator and how local people can request an FCA review of their communities’ access to cash needs. That is why we will be supporting amendments 19, 20 and 21 today. If the Conservative party does not lend its support to the amendments, will the Minister set out how he will ensure that Parliament has adequate opportunity to scrutinise the Government’s draft policy statement before the Bill leaves the House of Commons?
Andrew Griffith
I shall speak first to amendments 19, 20 and 21, before turning to schedule 8. Amendments 19 and 20 seek to introduce requirements on the FCA in relation to how it will determine reasonable provision of cash access services and how it will assess and address local deficiencies in provision. I am grateful to the hon. Member for Mitcham and Morden for raising that important issue, and I recognise the strength of feeling expressed by many in the debate on Second Reading and here this morning. I reassure the hon. Member that the Treasury has considered the matter carefully, and will continue to consider it through its approach to a policy statement.
Siobhain McDonagh
I would suggest to the Minister, though, that the FCA was late to the party over bank branch closures and that the groundswell created by people and by Members of Parliament forced the FCA finally to act. Who believes that individual communities, particularly poorer communities, have the same strong voice as the chief executive of a major high street bank? That is not going to be the case, and we know it is not going to be the case. We also know that unless the guidelines are there, people will not be listened to.
I held a public meeting about the closure of my local Halifax branch, and I could not convince anybody from the Halifax to attend. The idea that we can get these things done by institutionally agreeing that those people will understand the same things we understand, and understand the concerns of those who come to our advice surgeries and the concerns in our constituencies, is also not the case.
Andrew Griffith
The hon. Lady makes a powerful point that I will take away, but I perhaps do not entirely share her view of the FCA. It will be interesting to explore that further. However, I should congratulate her, which I omitted to do earlier, on successfully procuring a new LINK ATM for Pollards Hill. If she would like me to do so, I should be delighted to come to witness her opening this important facility for her constituents.
Let me turn to amendment 21. Following the Government committing themselves to legislating, industry has, in parallel, established voluntary arrangements to co-ordinate its response to provision of cash access—that includes the process for LINK, of which the hon. Lady has availed herself; LINK operates the UK’s largest ATM network—to assess a community’s needs in the event of closure of a core cash service or a request made by a local community, or indeed by a diligent Member of Parliament representing their constituents.
The Bill will provide the FCA with powers over operators of cash access co-ordination agreements such as those operated by LINK, so it provides a legislative safety net. However, members of the Committee will recognise that no decisions can be made in respect of designating any firms until we get the Bill on the statute book—the important work in which we are engaged today.
More widely, the Bill will require the FCA to use its powers to seek to ensure reasonable provision of cash access services—we are giving the FCA the corpus of work to do that. The Bill will allow the FCA to make rules or issue a direction requiring designated entities to establish a process to allow cash users to request reviews, should the regulator consider that appropriate. I understand the point made by the hon. Member for Mitcham and Morden about the conduct to date, but I would respectfully say that we are also giving the FCA very significant powers and putting duties upon it. The Treasury, the Select Committee and Parliament itself will continue to scrutinise those duties, and ensure that they are being fulfilled diligently. For that reason, I ask her not to press amendments 19, 20 and 21 to a vote, following a good debate on them.
Briefly, schedule 8 has attracted considerable interest from Members. Part 1 of the schedule inserts a new part 8B, titled “Cash access services”, into FSMA 2000. That introduces the legislative framework for access to cash and establishes the FCA as the responsible regulator. The schedule places a new statutory responsibility on the FCA to exercise the powers granted to it for the purpose of seeking to ensure that there is reasonable provision of cash access services in the UK. The FCA is then responsible for determining what it considers to be reasonable provision—I understand that some hon. Members would like to go further and be more prescriptive on that—while having regard to the policy statement, which will be issued in due course and at the appropriate moment by the Treasury, and any local deficiencies in the provision of cash access that the regulator has identified, the impacts of which it considers significant.
The FCA may also have regard to other matters that it considers appropriate. The FCA has already developed extensive monitoring of the coverage of cash access, and has undertaken research on the use of cash to inform its approach. In terms of the entities that will be subject to FCA oversight, the Government believe that it is right that the largest retail banks and building societies are held accountable for ensuring that their customers or members can continue to access cash services. The schedule therefore gives the Treasury powers to determine which banks and building societies—[Interruption.] I can see from the expression of the hon. Member for Mitcham and Morden that Halifax may well be auditioning as a candidate. It would be wrong for me to prejudge that list, but I imagine that hon. Members have lots of potential candidates to put to the Treasury.
The schedule gives the Treasury powers to determine who they should bring within the scope of FCA oversight through the designation regime. Furthermore, the Treasury will be able to designate operators of cash access co-ordination arrangements for FCA oversight. In order for it to fulfil its new role effectively, the Bill grants the FCA the ability to make rules, issue directions and impose disciplinary measures, including financial penalties upon any of the organisations designated by the Treasury. The new legislative framework will be an effective, proportionate and strong way to ensure that there is reasonable provision of cash access across the UK in the future. I therefore recommend that the schedule stand part of the Bill.
Siobhain McDonagh
We will come back to the amendment, and those with which it is grouped, but for now I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 8 agreed to.
Clause 48
Wholesale cash distribution
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss that schedule 9 be the Ninth schedule to the Bill.
Andrew Griffith
In addition to ensuring reasonable provision of cash access services in the UK, it is vital that we have an effective, resilient and sustainable wholesale cash system to support continued access to cash.
The UK’s wholesale cash infrastructure is a system of cash centres that sort, store and distribute banknotes and coins. A decline in the transactional use of cash has put pressure on the business models of the existing wholesale cash networks. Over time, the industry is expected to transition to a smaller overall network.
Clause 48 and schedule 9 contain provisions to give new powers to the Bank of England to oversee the wholesale cash distribution industry by creating a two-level regime. First, it gives the Bank oversight over, and the ability to regulate, the market activities of the wholesale cash industry. That will ensure the effectiveness, sustainability, and resilience of the system. Secondly, it gives the Bank the ability to prudentially regulate a systemic entity in the market, should one form in the future, to manage risks to financial stability.
Schedule 9 enables the Treasury to make a wholesale cash oversight order, which specifies an entity as a recognised entity. That will set out whether an entity is recognised as having market significance only, or systemic significance. If a firm has market significance, it will be subject to the market oversight regime. If it is systemically significant, it will be subject to both the market oversight regime and the prudential regime.
The Treasury does not currently consider any entity to be systemic, but the provisions will ensure that the Treasury and the Bank can respond effectively to future changes in the market to manage risks to financial stability. It is expected that the industry will transition to a smaller overall network, potentially with fewer operators, in the coming years.
The powers given to the Bank under both parts include the ability to publish principles and codes of practice, gather information, give directions as required, make inspections and enforce the regime. Under the regime, the Bank can also collect fees, which must relate to a scale of fees approved by the Treasury. The Bank will seek to exercise its powers proportionately.
Schedule 9 also requires the Bank of England to prepare and publish a policy statement on its regulatory approach before exercising its powers under the legislation. The Bank will launch a consultation on that policy statement shortly. Once the regime is operational, the Bank is required to provide an annual report on the regime to the Treasury, which must be laid before Parliament.
In summary, clause 48 and schedule 9 are necessary to ensure that the wholesale cash industry remains effective, resilient and sustainable. The measures form part of the Government’s action to support the continued access to cash. I therefore recommend that clause 48 and schedule 9 stand part of the Bill.
Tulip Siddiq
We welcome clause 48, but I have two questions for the Minister. First, how will Parliament and industry be consulted on the scale of the fees placed on businesses by the Bank to cover the operation of the scheme, and on the penalties for non-compliance? Clause 48, as drafted, allows the Treasury to designate an entity as being subject to the Bank’s new prudential regimes for the wholesale cash industry, but how will the Government ensure that the Bank is adequately consulted on additions to the regime?
Andrew Griffith
The answer is that, in the normal way, the measures will be laid before Parliament. If there is any extra detail with which I can furnish the hon. Lady, I will write to her.
Question put and agreed to.
Clause 48 accordingly ordered to stand part of the Bill.
Schedule 9 agreed to.
Clause 49
Recognised bodies: senior managers and certification
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss that schedule 10 be the Tenth schedule to the Bill.
Andrew Griffith
The clause introduces schedule 10, which provides for the new senior managers and certification regime—SMCR—for financial market infrastructures. The existing SMCR was first introduced following the 2008 financial crisis to strengthen governance in financial services firms and to promote high standards of conduct among all staff. Today, the regime applies to most authorised firms across the financial services sector, including banks and insurers; however, it does not apply to firms that are regulated outside the main FSMA authorisation framework. The clause addresses that by allowing a new SMCR to be created for certain types of financial market infrastructure. It will help to bring governance requirements for such systemically important firms in line with the majority of the financial services sector.
Schedule 10 provides for the new regime by inserting proposed new chapter 2A into part 18 of FSMA 2000. That will allow for an SMCR to be applied to central counterparties and central securities depositories through the negative resolution procedure. The schedule also allows for the regime to be extended in future to recognised investment exchanges and credit rating agencies, should that be appropriate. The power can be exercised by the Treasury through the affirmative resolution procedure in respect of credit ratings agencies, and through the negative procedure in respect of recognised investment exchanges. The Government will undertake consultation with relevant parties before deciding on whether the regime should be extended to such entities.
The key features of the new regime mirror those of the existing regime: a senior managers regime, a certification regime and conduct rules for all employees. The certification regime applies to employees whose roles do not have senior management functions but could cause significant harm to the firm or its users. Those roles must be performed only by employees who have been certified by the firm as being fit and proper to perform the roles. The regime will also allow regulators to make conduct rules for all employees of the firms.
Schedule 10 also provides supervisory and disciplinary powers for the Bank and the FCA, including the power to impose financial penalties and to take action against misconduct. The Bank and the FCA will be able to make prohibition orders such that any individual they do not consider to be fit and proper can be banned from performing a function at one of those types of entity, or at any authorised or exempt financial services firm.
The new regime will be an effective and proportionate way to strengthen governance arrangements and to promote high standards of conduct among all staff. I therefore recommend that the clause and schedule 10 stand part of the Bill.
Question put and agreed to.
Clause 49 accordingly ordered to stand part of the Bill.
Schedule 10 agreed to.
Clause 50
Central counterparties in financial difficulties
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Government amendments 9, 24 to 28, 10, 29, 11 and 12, 30, 13 to 15, and 31.
That schedule 11 be the Eleventh schedule to the Bill.
Andrew Griffith
The clause introduces schedule 11, which expands the existing resolution regime for central counterparties, or CCPs. CCPs provide clearing services for large volumes of financial trading activity and are systemically important pieces of market infrastructure.
Resolution is the framework for managing the failure of systemic financial institutions. It provides the Bank of England, the UK’s resolution authority, with the tools required to manage the failure of a financial firm safely. If a CCP got into difficulty and could not continue to provide its clearing services, there could be serious consequences for financial markets, affecting financial stability and potential risks to public funds
Although the UK has an existing resolution regime for CCPs, introduced in 2014, a fuller and stronger set of powers will enable the Bank to take faster and more extensive action than it can now. Schedule 11 will therefore expand the existing CCP resolution regime, providing the Bank with a comprehensive set of tools and powers to protect financial stability and limit contagion within the financial sector. That includes powers to remove impediments to resolvability in a CCP before it gets into any difficulties, and the ability for the Bank to put a CCP into resolution before the CCP’s own recovery measures have been exhausted, if continued recovery actions would be likely to compromise financial stability.
The schedule gives the Bank the powers needed to impose losses on the CCP and its clearing members in the first instance of the very unlikely event of failure, thereby protecting public funds. It also enables the Bank to take control of a failing CCP to stabilise the CCP and ensure the continuity of critical clearing functions while it is in resolution.
By expanding the existing regime we are also ensuring that our regime reflects international standards, as set out by the Financial Stability Board. That will cement the UK’s reputation as a global leader in providing clearing services and further enhance confidence in the UK’s financial system. The provisions therefore demonstrate the Government’s ongoing commitment to high standards and effective stewardship of the UK’s financial services sector, so I recommend that clause 50 and schedule 11 stand part of the Bill.
I also commend amendments 9 to 15 and 24 to 31. They are technical amendments that will ensure that schedule 11 functions as intended, reflecting the original policy intent by rectifying drafting errors and ensuring the legislation is applied consistently across the UK.
Tulip Siddiq
Because of the volume of trades cleared through CCPs, the failure of one could pose risks to the stability of the financial system. We therefore welcome clause 50 and the Government’s various technical amendments. Does the Minister agree that, because of the high risk to the financial system that a failed CCP could pose, the expanded regime must be brought in as a priority? How long after the Bill has passed will the provision become law and the regime be implemented?
Andrew Griffith
I agree with the hon. Lady that, given the systemic importance, it is important to bring the regime into place as quickly as possible. It will be for the Bank to consult on that. I expect the Bank to do that shortly after Royal Assent and then bring forward the necessary measures to put it in place. I hope that is enough for the hon. Lady at this time. We want to see the implementation proceed as quickly as possible.
Question put and agreed to.
Clause 50 accordingly ordered to stand part of the Bill.
Schedule 11
Central counterparties
Amendments made: 9, in schedule 11, page 205, line 21, leave out “9A” and insert “9B”.
This amendment corrects a cross-reference so that the provision refers to paragraph 9B of Schedule 17A to the Financial Services and Markets Act 2000, which is inserted by clause 10 of the Bill.
Amendment 24, in schedule 11, page 228, line 22, leave out sub-paragraph (1) and insert—
“(1) This paragraph applies where the Bank uses one or more of the stabilisation options mentioned in paragraph 1(3) in respect of a CCP unless the CCP has ceased to be subject to the exercise of any stabilisation power mentioned in paragraph 1(4).”
This amendment widens the scope of paragraph 39 of Schedule 11, on shadow directors etc, by ensuring that it applies following the exercise of any of the Bank’s stabilisation options under Schedule 11, not just the powers in paragraph 38.
Amendment 25, in schedule 11, page 228, line 28, leave out
“, or as a temporary manager under paragraph 6,”.
This amendment is consequential on Amendment 27 and omits the reference to temporary managers as they will be included in the list of relevant persons in paragraph 39(3) under Amendment 27.
Amendment 26, in schedule 11, page 228, line 38, at end insert—
“(e) the Insolvency (Northern Ireland) Order 1989 (S.I. 1989/2405 (N.I. 19));
(b) the Company Directors Disqualification (Northern Ireland) Order 2002 (S.I. 2002/3150 (N.I. 4));”.
This amendment ensures that the list of relevant enactments in paragraph 39(3) of Schedule 11 includes the relevant Northern Ireland legislation so that the position regarding shadow directors is consistent across the UK.
Amendment 27, in schedule 11, page 228, line 41, at end insert “, and
(c) a temporary manager appointed under paragraph 6 of this Schedule.”
This amendment ensures that the list of relevant persons in paragraph 39(3) of Schedule 11 includes temporary managers, for consistency with the bank resolution regime.
Amendment 28, in schedule 11, page 255, line 43, after “EMIR” insert
“where they have a contractual relationship as principal with the CCP”.
This amendment operates on paragraph (d) of the definition of “relevant person”, to limit that group of persons entitled to compensation to those who are direct creditors of the CCP.
Amendment 10, in schedule 11, page 256, line 16, leave out “or 29(3)” and insert “, 29(3), 66(2) or 73(2)”.
This amendment provides that the definition of “residual CCP” applies to properties transferred under paragraphs 66(2) and 73(2) of Schedule 11 (transfers subsequent to resolution instrument and transfers subsequent to share transfer to bridge CCP).
Amendment 29, in schedule 11, page 257, line 43, at end insert—
“(5) An obligation imposed on the residual CCP or a group company under sub-paragraph (2)(d) or (e) continues to apply despite the residual CCP or group company entering insolvency, and may not be disclaimed by a liquidator under section 178(2) of the Insolvency Act 1986 or Article 152(1) of the Insolvency (Northern Ireland) Order 1989.”
This amendment provides an equivalent provision to section 64(6) of the Banking Act 2009 (continuity obligations relating to property transfers), to ensure that certain obligations continue to apply despite the residual CCP or group company entering insolvency.
Amendment 11, in schedule 11, page 259, line 25, leave out
“CCP whose business has been transferred”
and insert “transferred CCP”.
This amendment provides the correct terminology in relation to share transfers, to which this provision relates.
Amendment 12, in schedule 11, page 259, line 26, leave out “property” and insert “share”.
This amendment provides the correct terminology in relation to share transfers, to which this provision relates.
Amendment 30, in schedule 11, page 260, line 19, at end insert—
“(5) An obligation imposed on the transferred CCP or a former group company under sub-paragraph (2)(b) or (c) continues to apply despite the transferred CCP or former group company entering insolvency, and may not be disclaimed by a liquidator under section 178(2) of the Insolvency Act 1986 or Article 152(1) of the Insolvency (Northern Ireland) Order 1989.”
This amendment provides an equivalent provision to section 67(6) of the Banking Act 2009 (continuity obligations relating to share transfers), to ensure that certain obligations continue to apply despite the residual CCP or former group company entering insolvency.
Amendment 13, in schedule 11, page 267, line 2, leave out “or onward” and insert “, onward, bridge or subsequent”.
This amendment is consequential on Amendment 14.
Amendment 14, in schedule 11, page 267, line 3, after “50,” insert “52, 66,”.
This amendment adds to the list of instruments in paragraph 105(6) to include instruments made under paragraphs 52 (bridge CCP: share transfers) and 66 (property transfer subsequent to resolution instrument).
Amendment 15, in schedule 11, page 267, line 5, leave out “or onward” and insert “, onward, bridge or subsequent”.
This amendment is consequential on Amendment 14.
Amendment 31, in schedule 11, page 299, line 30, at end insert—
“(g) the Insolvency (Northern Ireland) Order 1989 (S.I. 1989/2405 (N.I. 19));
(b) the Company Directors Disqualification (Northern Ireland) Order 2002 (S.I. 2002/3150 (N.I. 4)).”—(Andrew Griffith.)
This amendment ensures that the list of relevant enactments in paragraph 165(2) of Schedule 11 includes the relevant Northern Ireland legislation so that the relevant law can be applied consistently across the UK in the event of a resolution of a CCP.
Schedule 11, as amended, agreed to.
Clause 51
Insurers in financial difficulties
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Government amendments 32 and 33.
That schedule 12 be the Twelfth schedule to the Bill.
That schedule 13 be the Thirteenth schedule to the Bill.
Andrew Griffith
Clause 51 introduces schedules 12 and 13. The UK insurance industry is the largest in Europe and the fourth largest in the world, managing investments of more than £1.8 trillion. It is an incredibly important part of our financial services sector. The UK’s insurance sector is robustly regulated and supervised, well capitalised and resilient to shocks; as a result, insurer insolvency is uncommon. However, as the UK is a global financial centre, the Government are through the Bill enhancing the powers available to the authorities to manage an insurer in financial distress. That will strengthen protections for policyholders and mitigate potential value destruction when an insurer fails.
Schedule 12 makes provision for the powers of the court in relation to the liabilities of an insurer that is, or is likely to become, unable to pay its debts. I will describe its key provisions. The schedule defines an order made in the exercise of such powers as a write-down order, which involves reducing the value of an insurer’s contracts. It makes amendments to FSMA that are designed to make the new procedure more viable for an ailing insurer.
Part 2 of the schedule introduces the new role of a write-down manager—an officer of the court who will monitor a write-down. The manager will consider, on an ongoing basis, whether a write-down remains likely to lead to a better outcome for an insurer’s creditors and policyholders than if the write-down were not in effect.
Part 4 of the schedule provides for the PRA to amend its rules governing the Financial Services Compensation Scheme, requiring the scheme to provide top-up payments to certain policyholders affected by write-down orders. This safeguard aims to ensure that FSCS-protected policyholders are not worse off following a write-down than they would have been in insolvency.
Amendments 32 and 33 ensure that the drafting meets full policy intent. Amendment 32 ensures that the moratorium on legal proceedings does not interfere with certain collateral and security arrangements among participants in the financial markets. It also provides the Treasury with the power to amend the list of exclusions, which is given legal force by amendment 33. Both amendments mirror exclusions and a similar power to amend the exclusions contained in schedule 13.
Schedule 13 inserts proposed new schedule 19C into FSMA. It introduces provisions for the enforcement of contracts while an insurer is undergoing a write-down or certain insolvency proceedings. The changes are intended to provide certainty and stability to an ailing insurer’s financial position. The schedule defines “financial difficulties” and provides for restrictions on policyholder surrender rights when an insurer is judged to be in such difficulties.
Surrender rights allow policyholders to surrender life insurance contracts in exchange for cash value. Annual withdrawals of up to 5% of the policy value will continue to be permitted. The provisions will mitigate against the possibility of mass surrenders by policyholders, which could further destabilise an insurer in financial difficulties. However, part 2 of schedule 13 also enables specific parties, including the court, to consent to a surrender when satisfied that not doing so would cause hardship to a person.
Part 3 of schedule 13 provides that while an insurer is in financial difficulties, relevant contracts to which the insurer is party cannot terminate because the insurer is in financial difficulties. That seeks to mitigate the risk of value destruction, business disruption, policyholder harm and cost arising from the contracts being terminated.
Andrew Griffith
The clauses contain a mix of substantive and technical amendments to FSMA, which lists the functions and responsibilities of the FCA and the PRA and requires them to perform them in line with their statutory objectives and principles. Clause 52 adds to that list the responsibilities conferred on the PRA and FCA by the Bill and any functions conferred on them by future regulations made under the Bill.
On clause 53, currently, except in a few specific circumstances, the FCA and the PRA cannot use their disciplinary powers against firms that committed misconduct when they were authorised if they cease to be authorised. That means that if a firm has committed misconduct while authorised, and that comes to light only once the firm has ceased to be authorised, the regulators cannot take disciplinary action. It also means that when an authorised firm is under investigation for misconduct, the regulators must sometimes choose to maintain the firm’s authorisation to preserve the ability to sanction it following the conclusion of the investigation. To address that, the clause will enable the FCA and the PRA to take action against unauthorised firms in relation to misconduct that occurred while they were authorised.
Clause 54 enables the regulators to impose conditions on new controllers of financial services firms when to do so would advance their statutory objectives. That fills a gap in the regime identified by the PRA and the Treasury Committee in its Greensill inquiry. It will give the regulators more flexibility to manage changes of control in a way that they consider appropriate with reference to their statutory objectives.
Clause 55 makes two minor technical changes to the legal framework governing the Financial Services Compensation Scheme. The Office for National Statistics reclassified the FSCS as a public financial auxiliary in 2020. To reflect that change and bring the FSCS in line with other public financial auxiliaries, clause 55 removes both the requirement for the FSCS to have an accounting officer and the Treasury’s power to require certain information in connection with accounts.
Clauses 56 and 57 are necessary to reflect the regulators’ additional rule-making responsibilities when retained EU law is repealed. Under the comprehensive FSMA model of regulation that the Bill enables, the direct regulatory requirements that apply to firms will generally be in regulators’ rulebooks rather than set out in legislation.
Clause 56 inserts proposed new section 141B to FSMA, giving the Treasury the power to make consequential changes to legislation to reflect changes to regulator rules. At the moment, domestic and EU legislation sometimes makes reference to regulator rules; the power will ensure that the legislative framework remains up to date and consistent if those rules change. It is a consequential power only.
Clause 57 enables the Treasury and regulators to make ambulatory references to regulator rules and domestic legislation respectively. That means that when the Treasury references regulator rules in secondary legislation, it can do so in such a way that the references will automatically update to refer to the current version of the rules whenever the regulator updates them, thereby ensuring that the regulator rulebooks and the legislation will remain consistent over time, without the need for constant amendments in response to respective changes.
Clause 58 allows the Treasury to amend and repeal provisions in part 9C of FSMA that were introduced by the Financial Services Act 2021, which dealt with the immediate post-Brexit priorities for financial services, including by implementing the latest Basel standards, while the wider approach to regulation was considered as part of the Government’s future regulatory framework review.
Sections 143C and 143D of FSMA create duties for the FCA to establish the investment firm’s prudential regime, and section 143G requires the FCA to have regard to certain matters when making rules as part of that regime. Those provisions will be replaced by the general approach to obligations and “have regards” that the Bill introduces, which the Committee has already considered. Clause 58 enables those sections to be amended to avoid duplication.
Clause 59 introduces small technical amendments to two provisions of FSMA that cover transitional arrangements. The amendments ensure that an existing power to make transitional arrangements under sections 426 and 427 of FSMA is updated to correctly refer to the current regulators—the FCA and the PRA—and is available to the Bank of England when it is acting as a FSMA regulator. I recommend that the clauses stand part of the Bill.
Tulip Siddiq
We welcome this series of technical clauses, but I have two questions for the Minister. First, will he set out what disciplinary action regulators could take under clause 53 against firms that are no longer authorised? Secondly, on clause 55, the Transparency Task Force has recommended the creation of a financial regulators’ supervisory council, which would have a number of roles, including appointing and overseeing the Financial Services Compensation Scheme, to ensure greater independence. If the Minister is aware of that proposal, what assessment has he made of it? If he is not, I would be happy to hear his thoughts about it after the sitting.
Andrew Griffith
I thank the hon. Lady for those points. The powers that the regulators will have in relation to formerly authorised firms will mirror those that they have in relation to authorised firms: they will have the full range of powers to seek information and to impose sanctions, remedies and conduct. The substantive purpose of the measures is to ensure that those powers are not extinguished at the moment a firm becomes unauthorised.
I am not familiar with the detail of the proposal for a financial supervisory board that the hon. Lady mentioned, but we have a good framework for the supervision of financial regulators. I and the Government will always be interested in any practical suggestions to enhance that without duplication and unnecessary obfuscation about where true responsibilities lie.
Question put and agreed to.
Clause 52 accordingly ordered to stand part of the Bill.
Clauses 53 to 59 ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned. —(Joy Morrissey.)
Economic Crime and Corporate Transparency Bill (Fifth sitting)
Tuesday 1st November 2022
(2 years, 1 month 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 1 November 2022 - (1 Nov 2022)
The Committee divided: - Ayes: 7 / Noes: 8 - Question accordingly negatived.
The Chair
I have a few preliminary reminders. Please switch electronic devices to silent. I am afraid no food or drink is permitted, other than water. Hansard colleagues will be grateful if Members could email their speaking notes to hansardnotes@parliament.uk; alternatively, pass them to the Hansard colleague in the room.
We now begin line-by-line consideration of the Bill. The selection list for today’s sittings is available in the room. It shows how the selected amendments have been grouped together for debate. Amendments grouped together are generally on the same or a similar issue. Please note that decisions on amendments do not take place in the order in which they are debated, but in the order in which they appear on the amendment paper. The selection and groupings list shows the order of debates. Decisions on each amendment are taken when we come to the clause to which the amendment relates. Decisions on new clauses will be taken once we have completed consideration of the existing clauses. Members wishing to press a grouped amendment or a new clause to a Division should indicate when speaking to it that they wish to do so. As Dame Margaret Hodge is not here, I call Seema Malhotra to move amendment 77.
Clause 1
The registrar’s objectives
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
I beg to move amendment 77, in clause 1, page 2, line 10, at end insert—
‘Objective 5
Objective 5 is to act proactively by—
(a) making full use of the information, intelligence and powers available to the registrar in order to identify issues of concern, and
(b) sharing information about any issues of concern with relevant public bodies and law enforcement agencies.
(2) In this section, an “issue of concern” includes—
(a) inaccurate information,
(b) information that might create a false or misleading impression to members of the public,
(c) an unlawful activity.’
I will come back with further mention of the clause later. The amendment was tabled by my right hon. Friend the Member for Barking—[Interruption.] Who has just arrived—
Seema Malhotra
My right hon. Friend will want to speak to her own amendment, but I will lay out a few comments. She is right that we need Companies House to become a more active agent in our efforts to combat economic crime as a result of the Bill—I am sure the Minister will agree that we do not want an economic crime Bill No. 3 in the House, and nor do we have the time for delay in sharpening our response and defences against economic crime.
In evidence given to the Committee, Thom Townsend from Open Ownership stated that the clause—or the important objectives laid out in it—
“seems like a ridiculously low bar.”––[Official Report, Economic Crime and Corporate Transparency Public Bill Committee, 25 October 2022; c. 63, Q136.]
He is absolutely right. I am sure that all Members listening to that evidence agreed. My right hon. Friend will speak to her own amendment, but we very much support it, because this House needs to send a clear message about our expectation of a proactive role for the registrar—not just a reactive role.
Why is it so important to do so now? As Companies House now begins its transformation to reform its systems, processes and capabilities, part of that will be about its culture, and in line with what this House will expect, the proceedings of this House and this Committee will be important in sending that message. It is our job to ensure that the objectives and powers are very clearly laid out in legislation, so that there is no confusion over our expectations.
The fifth objective in the amendment would raise the “ridiculously low bar” of the first four objectives, as stated by Thom Townsend, from minimising risk to proactively identifying suspected uses of the register for criminal purposes and acting accordingly. As the Secretary of State herself stated on Second Reading:
“We want to ensure that there are more restrictions on who can register with Companies House so that we prevent the abuse of the regime.”—[Official Report, 13 October 2022; Vol. 720, c. 285.]
But I am sure that my right hon. Friend the Member for Barking will want to speak to her own notes on this. Thank you, Mr Robertson, for giving me the opportunity to do so.
Dame Margaret Hodge (Barking) (Lab)
Sincere apologies for being late, Mr Robertson. I want to start by welcoming the Under-Secretary of State for Business, Energy and Industrial Strategy, the hon. Member for Thirsk and Malton, to his role. I have worked very closely with him over the past few years, and it is great to see somebody who understands the issues sitting in his seat. I hope that we can have very positive engagement with him while considering the Bill.
Like the hon. Gentleman, I welcome the reforms. The amendments that we have tabled, including this amendment, are all designed to improve the quality of the legislation that we pass. I hope that they will be taken in that spirit. Having been a Minister in my time, I am very aware of the fact that when amendments are tabled by hon. Members, whether they are on the Opposition or the Government Benches, there tends to be a mood of “reject” from the officials advising the Minister. I simply say to him that many of the amendments that we are putting forward, like this one, are really there to improve the Bill. They are not about trying to raise contentious issues. Perhaps as we proceed, we will come across more contentious issues, but this amendment is not contentious; it is simply to secure an improvement. It is not party political, and I think it reflects common sense. I hope that the Minister will feel able to accept this particular amendment.
Why have we tabled the amendment? I draw the Minister’s attention to the Government’s own factsheet on the Bill, which states that broadening the powers of the registrar of Companies House is designed—that is my word—so that the registrar can become a “more active” gatekeeper over company creation and a custodian of more reliable data. Companies House itself has six strategic goals, one of which is to combat economic crime through active use of analysis and intelligence. We have there a commitment from Government and from the organisation itself that it should take a proactive role in using the information that it has.
Our amendment would embed in legislation the Government’s intent and the organisation’s goals. It would ensure that that intent and the goals were on the statute book and therefore implemented in the future. Too often, as the Minister knows, we have organisations and bodies that have powers but simply do not use them. We can think of His Majesty’s Revenue and Customs and its oversight of company service providers as just one example of where there is a power but, without emphasis on that duty in legislation, it tends to get ignored. The aim of our amendment is just to ensure that what is a power becomes a strong duty.
Why does that matter? Companies House holds a massive amount of data: information about 4.5 million companies, with more than 800,000 new companies incorporated each year and more than 10 million documents filed annually. That data is full of red flags that should be proactively investigated to ensure that we really bear down on economic crime. We want to pursue the wrongdoers, and if we get that stronger investigation and it is known that Companies House does use its proactive powers, that is a good preventive measure because it is much less likely that the ne’er-do-goods will indulge in bad practice.
Let us look at the sort of stuff that has come out so far. There are endless examples: five beneficial owners control over 6,000 companies—a massive red flag. They are clearly not the real beneficial owners. Four thousand beneficial owners are under two years’ old, including one who is not born yet. The company Atlas Integrate Services LLP was registered in September this year. The person of significant control in that company is just two months’ old. In her two months of life, she has not just found time to start a business but apparently has got married, as she is listed as “Mrs” in the register.
We know from all the leaks how Companies House and our UK corporate structures are used and abused by bad people. I take just one example from the FinCEN files: 3,267 of the LLPs and the LPs were holders of bank accounts that involved suspicious transactions—British corporate structures. Of those 3,267 British corporations, 1,656—over half—were created by just four agencies. Nine agencies created more than 100 UK entities. One agency created 646 limited liability partnerships and limited partnerships. Those are examples of strong red flags that suggest malpractice.
It is not just the perpetrators who benefit but the victims who suffer, as the Minister knows. The only successful prosecution in this space is that of Kevin Brewer—the Minister will probably remember the case. This was a man in his 60s who deliberately set about showing the flaws in the system in Companies House. He set up a company called John Vincent Cable Services Ltd, when Vince Cable ran the Department that the Minister is now in. He did that in 2013. He then wrote to Vince Cable to tell him what he had done.
In 2016, he used the names of James Cleverly and Baroness Neville-Rolfe to set up another company. Again, he wrote to them. All he was doing with drawing attention to what was wrong with the system, but he was prosecuted. The Government proclaimed that prosecution as a great victory of how Companies House is vigilant over the quality of the data. Nothing could be more wrong. I think the Minister will agree that, in effect, he was a whistleblower. He was treated abominably by the authorities. That throws into stark relief the lack of action taken against others responsible for setting up bogus companies.
I urge the Minister to accept the amendment. It is common sense. It simply ensures that there is a strong duty on Companies House to use that wealth of data to investigate, proactively raise red flags and talk to the enforcement agencies. I hope that he sees the amendment as something that adds to the value of the Bill.
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Kevin Hollinrake)
It is a pleasure to serve with you in the Chair, Mr Robertson, and to speak after the right hon. Member for Barking. As she knows, and I hope all Committee members know, I am—like her—incredibly ambitious for the Bill. Hopefully, the dialogue we have in this room over the next few weeks will serve a great purpose to ensure that this legislation is fit for purpose.
I entirely agree with the thrust of the amendment. Of course we want a proactive gatekeeper of the information. The right hon. Member for Barking highlights many examples, as does the shadow Minister, the hon. Member for Feltham and Heston, who talked about the culture of the organisation. She is absolutely right that the culture needs to be focused on making sure that the information held by Companies House is accurate, but we need a balance. We must avoid an impossibly bureaucratic and expensive system. The right hon. Member for Barking highlights some of the problems of dealing with a register of this size. There are between 4 million and 5 million companies and about 7 million or 8 million directors in the UK. To independently verify all those records, one by one, is clearly a huge challenge.
On changing the culture of the organisation, the Bill has its four objectives: accuracy, completeness of records, reducing risk and reducing the chances of unlawful activity. I would also point to the text in bold type in clause 1—the objective
“to promote integrity of registers”.
That does exactly what the right hon. Lady intends with her amendment. To me, promoting the integrity of the registers speaks to the proactivity that we want to see. We definitely want to see Companies House sharing information with law enforcement agencies proactively, for example.
The right hon. Lady spoke about a number of obvious cases that would raise red flags, and that happens because Companies House is not operating as she wants it to. One of the key bases of the Bill is to change the role of Companies House from registry to gatekeeper, and to promote integrity properly and proactively by identifying information on a risk-based approach.
Liam Byrne (Birmingham, Hodge Hill) (Lab)
I join my colleagues in welcoming the Minister to his post, in what is a very welcome appointment, and I apologise to you, Mr Robertson, for being slightly late this morning.
Surely the Minister must see that there is a world of difference between action to promote the virtue of something and action to prevent the badness of something. I have been a Minister too. I have created Government agencies. I have tried to enshrine objectives in agencies, from which a business plan is then written. It is incredibly important to say what we mean and mean what we say when we are specifying the objectives of an agency such as Companies House. I urge him to think again about the amendment. It is not simply a matter of word play. It is about doing what is needed to be done.
Kevin Hollinrake
I am grateful for the right hon. Gentleman’s work in this area. We should not get into semantics. The key point, as he says, is making sure that we have a plan that sits behind the objectives, and Companies House is currently working on how it will perform its duties under the objectives. That is key. We can legislate all we want in here, but legislation is less important than implementation. The implementation of the rules is key. We must ensure that the plan is robust and that it identifies the red flags on a risk-based approach and shares that information with the relevant law enforcement agencies that have their duties to undertake. “Promoting integrity” does what the right hon. Member for Barking wants.
Dame Margaret Hodge
I am grateful to the Minister—I know he is struggling. Why not put this objective in? If Companies House is going to do this work anyway, what is the objection? Why not let it stand there? It will ensure the work over time. Our lives are always short as Ministers. The Minister is not going to be there all the time. Other people are going to take over from him. We want Companies House to be proactive throughout the time that the legislation lasts. Why not put this objective in?
The only reason I can think of for why the Minister is getting objections from his civil servants—I assume the objections are coming from them—is that Companies House will not carry out this proactive role, because it will prioritise its other role of verifying information, and we will lose the advantage of the wealth of data with integrity that we could use to eliminate the wrongdoers.
Kevin Hollinrake
I take the right hon. Lady’s point, but I do not agree. Clearly, we will seek to improve many things as the Bill goes through its various stages. However, if we look at the objectives themselves, objective 1 is to
“ensure that any person who is required to deliver a document to the registrar does so.”
That is, to me, a proactive condition and objective. We probably have arguments about the drafting, but the nature of what we seek to achieve is the same. I would therefore politely ask that the amendment is withdrawn.
Seema Malhotra
On this occasion, having heard what the Minister has said, I think that this is an ongoing debate. We will want to have some further discussion and perhaps come back to the issue on Report. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Alison Thewliss (Glasgow Central) (SNP)
I beg to move amendment 71, in clause 1, page 2, line 10, at end insert—
“(4) The Secretary of State must ensure that the registrar has sufficient resources to fulfil the objectives set by subsection (3).”
This amendment would require Companies House to be properly resourced in line with its new responsibilities.
Much like with the previous amendment, it seemed sensible to bring things to the attention of the Government right at the very start of the Bill, because matters can get diluted over time. If we put this issue front and centre of the Bill, and say that the Secretary of State must ensure that the registrar has sufficient resources to fulfil the objectives set by subsection (3), that puts an obligation on the Government, and on future Governments, to follow through on the recommendations regarding the very worthy legislation in the Bill.
We heard a lot of evidence about earlier legislation. I served in Committee on some of it, such as in the evidence sessions for the Joint Committee on the Draft Registration of Overseas Entities Bill, and in Committee for the Sanctions and Anti-Money Laundering Act 2018. Over the years, there has been much legislation, but, as Bill Browder said in his evidence, without any enforcement of that legislation, and without the resources to ensure it is followed through, the Government can write as much law as they like but it does not actually matter.
We want to see resources put front and centre of the Bill, right up there at the start, and to hold future Governments to the important principle of funding this work. If the registrar is not funded to carry out the work it is being given to do, it just will not do that work. That has been the evidence of Companies House over many years. If it is not funded as well as empowered to do the work, it seems very unlikely that it will complete the tasks that the Government and all of us in this room expect of it. I therefore think the amendment is important and urge the Minister to accept it.
Seema Malhotra
The amendment tabled by our SNP colleagues would amend clause 1 to require the Secretary of State to ensure that Companies House is adequately resourced to achieve its objectives. I raised the matter on Second Reading, and I am sure we will come back to it.
On Second Reading, the Minister himself talked about legislation with implementation, and I am sure that he will have some sympathy for the sentiments of the amendment. As Jonathan Hall said in his evidence:
“The one thing that I think would make all the difference would be to resource Companies House.”––[Official Report, Economic Crime and Corporate Transparency Public Bill Committee, 25 October 2022; c. 34, Q70.]
We support the principle of the amendment, but we are looking to address the same issue in our new clause 26, which we will discuss later. It is right to put the issue on the radar today and have it on there as we proceed through Committee. I look forward to coming back to further discussions on how we ensure that Companies House is adequately resourced.
Liam Byrne
This is an important debate, and I think that the Minister’s reply will be, in a sense, a useful “Second Reading” debate on how he will deal with the problem of resourcing. I know that he, as a new Minister, will have spent the weekend reading all of the evidence that we gathered last week. It was very much like an autopsy on the state of economic crime in our country—grisly and appalling. He will have been not shocked, because he is familiar with the facts, but reminded starkly that he is a Minister at a watershed in the debate. It is clear that the time to act is now.
The world is divided, and there is a great kleptosphere from Kaliningrad to Kamchatka, so it is important that we set out our stall as a place not just of free trade, but of fair trade, as well as, crucially, clean trade. That is where economic advantages will flow from in the years to come. It is therefore a matter of enormous national shame that we have become such a hotbed of money laundering. It is appalling that about 40% of the corporate structures used for Danske Bank money laundering were here in the UK, and appalling that we have become such a country.
Hundreds of billions of pounds-worth of money stolen from the Russian people has been laundered through UK corporate structures, yet last week we heard from Bill Browder and Catherine Belton that UK corporate structures are absolutely being used by friends and allies of President Putin to move money abroad to help to finance Russian intelligence operations and other nefarious activity. However, as Mr Browder said, we are not prosecuting the crime and, as my right hon. Friend the Member for Barking pointed out, there has been only one prosecution despite hundreds of billions being stolen and moved through UK corporate structures.
In part, we are not prosecuting the crime because we are not policing the crime, and all of us on the Committee will have heard loud and clear last week’s evidence from City of London police and the National Police Chiefs’ Council, which said that they need more resource. It is as simple as that. They cannot afford the specialists they need to police this area, and the task of policing such crime would be an awful lot easier if we ensured that there was a proper gateway doing its job in Companies House.
We know that Companies House needs more resource as there has already been a wide-ranging debate. Indeed, the Minister, in his pre-ministerial life, is on the record as having speculated about what some of the resources might need to look like. We hope he will repeat those comments on the record as a Minister of the Crown in the Committee today.
Let us be clear about the risks, which were starkly described for us last week by the independent reviewer of terrorism legislation: there is a direct relationship between economic crime and national security. This is not simply a question of bad people stealing lots of money from good people; it is about a threat to our country. The Minister has an opportunity to ensure not only that our economy is operating on a clean-trade basis, but that our national security defences are strengthened. That is why the amendment is important, and why it is important that the Minister set out clearly today how he is going to approach the solution to this problem.
Kevin Hollinrake
I am grateful to the hon. Member for Glasgow Central, who I worked closely with on the Treasury Committee, for all her work on economic crime. I absolutely agree we need the right resources to go alongside the Bill, so I am fully committed to anything I said before in the Chamber or otherwise about ensuring that that resourcing is available. I certainly agree with the right hon. Member for Birmingham, Hodge Hill when he talks about clean trade—absolutely right. We do not want this country associated with dirty money in any shape or form.
The right hon. Gentleman gave an interesting example about the money laundering through Danske Bank, which was, as he said, hundreds of billions of pounds-worth of Russian money stolen from the Russian people flowing through UK shell companies to its destination. That was subject to regulatory action and potential criminal enforcement; it is not as though the matter was held secretly until it was identified locally in Danske Bank. Danske Bank will get sanctioned for that, so it is not as though law enforcement is not happening. However, the right hon. Gentleman and I would agree that, too often, big banks turn a blind eye to the problem on the basis that it is quite profitable for them, and the fines are ultimately a cost of doing business. What we need to do is hold people properly to account, including individual directors.
Dame Margaret Hodge
I agree, but the point with Danske Bank, as with so many of these massive scandals, is that it was a whistleblower who uncovered wrongdoing, not the enforcement agencies. We will come to whistleblowing later in our considerations, but what we want is for the enforcement agencies—in this case, Companies House—to be equipped to do the work themselves and not to rely on whistleblowers.
Kevin Hollinrake
I agree with the right hon. Lady’s point. As she knows, I am a big fan of improving the legislation on whistleblowers. I am delighted to say that role is part of my portfolio and I am determined to take that forward as quickly as possible.
Liam Byrne
The Minister is being characteristically generous in giving way. The point about Danske Bank is that the money was moved through UK corporate structures that should not have been set up in the first place. If we had a stronger verification regime—if we had a stronger set of obligations on Companies House and a better-resourced Companies House—we would surely have run a chance of the crime being prevented, because the checks would have created a tripwire that would have stopped the structures being set up and the money being moved through them. The point about resources and duties is incredibly important.
Kevin Hollinrake
I absolutely agree. That is the nature of and the substance behind the Bill—making sure that the resources fit the need and that Companies House can promote the integrity of the register and work with law enforcement agencies to share that information and identify the red flags with a risk-based approach. We need to make sure that the work it is doing is appropriate to the task it has been given and that it is sufficiently funded.
Currently, the fees for Companies House are set at a level commensurate with its activities. The Bill seeks to massively increase the scope of its functions to that gatekeeper approach, so it has to be sufficiently funded. The funding started in this spending round, with £63 million for personnel and improving technology to be able to more easily identify the red flags. Companies House is bringing in external expertise to look at its work and what it will need to do to take the expanded activities into account. We need to make sure that as we go forward the resources will be sufficient for it to deliver on its new duties. It is right not to put the cart before the horse. We cannot say, “It should be £50” or “It should be £100”. Various figures have been thrown about. I think the Treasury Committee suggested £100. We need first to identify what it will cost for Companies House to cope with the new duties and then set the figure attached to that cost, to make sure that it has the right resources but does not become a huge bureaucracy that is out of control in terms of costs.
Seema Malhotra
We are very quickly getting to the crux of the issues on resourcing for implementation. He referred to independent experts coming in to work with Companies House on its new capabilities and how it will need to be resourced. Will there be a recommendation from those experts on how much resource will be required? We have the objectives and we have debated whether they are sufficient to achieve the goals of the Bill, and we will come back to that point, but will there be a recommendation on how much resource is required and will that recommendation be a matter of public debate?
Kevin Hollinrake
Yes, in both cases. That work is going on now. Those recommendations will then be discussed with me and my colleagues in the Department and we will come back to the House. The decisions we make will be approved by the House under the affirmative procedure.
Liam Byrne
I suppose we may as well get all the details out now. The estimates for how much extra resource Companies House might need range from three times to 10 times its current level. I was very surprised to hear from Companies House that it was proposing to employ only 100 extra people. That is an increment of about £5 million to £6 million extra, which feels radically short of what is proposed and for the implications of the Bill. Will the Minister therefore put our minds at rest by saying to the Committee that those figures will be radically improved when the Companies House business case for the next financial year is approved?
Kevin Hollinrake
The shadow Minister also wants to intervene, so I shall take the interventions together.
Seema Malhotra
My intervention also relates to that of my right hon. Friend the Member for Birmingham, Hodge Hill. There is a risk of underestimating the amount of work, and of that then being locked in. I hope that during the course of the Committee, if we are to use our time to best effect, there will be further challenge to the scope of the work or to the expectations of how much work happens. We do not want the scoping for resources to be based on the Bill at the start; that is not necessarily what it will be at the end. Will the Minister clarify that the resourcing plan will be made in light of the ambition of the Bill, because we do not want it to fall short? The Minister’s words—about legislation with implementation—will keep coming back to him, and I am sure he is the first to want not to fall short of them.
Kevin Hollinrake
Those words will live with me as long as I am in Parliament.
Kevin Hollinrake
That is hugely important. The hon. Lady makes exactly the right case: for us to give a figure now, whether that is £50 or £100, is to put the cart before the horse. We all agree that the right resources will be needed, but they will be based on the duties in the final version of the Bill approved by both Houses. That is what we will seek to do with Companies House. My intention is absolutely that Companies House will do that.
In response to the point made by the right hon. Member for Birmingham, Hodge Hill, it is not just about people. I do not yet know the extra numbers that Companies House will dedicate to this work, or when. That is what we need to see in a clear plan that it will set out. Technology, however, can also play a huge part. Companies House holds a huge amount of data, public and non-public, that law enforcement agencies can make use of with a risk-based approach. Technology can certainly play a part, and that is not always inexpensive.
Liam Byrne
My sense is that the Minister will steer clear of specifying the order of magnitude by which we need to increase Companies House resources. That is a disappointment to many of us, but will he therefore advise the Committee how as a House of Commons we best guard against the risk of under-resourcing Companies House once the Bill has reached Royal Assent?
Kevin Hollinrake
Scrutiny—by Ministers and by Back Benchers, such as those in Committee and in all parts of the House. Parliamentary scrutiny is the most important thing—scrutiny of the plans of Companies House, to ensure that they are fit for purpose. I promise that no one is keener to see that than me.
May I address one other point in this conversation? Parkinson, for all his work, came up with two laws: first, that work expands to fill the time available; and, secondly, that expenditure rises to meet income, which we probably all recognise from our personal lives, but we could say the same of Government. We do not want to set a figure now, because if we did so, Companies House might expand to fill that envelope—
Kevin Hollinrake
But I do not. I want to see the plan, to ensure that it is fit for purpose and that it delivers an excellent service at the lowest cost to the taxpayer. That is what we need to do. Doing it this way around is a better way.
Dame Margaret Hodge
Several things arise from the Minister’s great contribution. First, I look forward to his support for our amendment to ensure proper parliamentary scrutiny of the work of Companies House, which will come later in our consideration of the Bill. Secondly, one knows how spending reviews go, and this will never become a top priority. I hope that the Government will see it is a security issue, but until they do so, it will not become a top priority for expenditure. That is why the Opposition—supported by the Minister, I hope, given his passion—want to put a figure into the legislation, to link it to inflation and to ringfence it, so that no Treasury official down the line can get hold of it. The final thing I wanted to ask—
Dame Margaret Hodge
I will be brief. We think that Companies House has to do more in a whole range of areas if it is to be effective, such as on information on directors and proper control of company service providers. We do not want to create another cohort of people who allow bad things to take place. Those things will require greater resources. Will the Minister make a commitment today on that? If we are successful in passing the amendment, will he take those things into account when thinking about the financing?
Kevin Hollinrake
Thank you, Mr Robertson. I think it is wrong to put a figure in the Bill. Do I believe that Companies House should be properly resourced? Absolutely, but we need to ensure that that happens through this process and through Companies House’s plan. I can reassure the hon. Lady on one thing: Companies House is supposed to get paid by the fees that it collects to cover its activities. It is not like the Treasury, which goes and nicks some of the money. It does not want that to become a tax; the organisation is funded by its fees. I think we would all agree to ensure that it is self-funded to the level that it needs to properly deliver on its duties. For all those reasons, I hope the hon. Member will withdraw her amendment.
Alison Thewliss
I would like to press the amendment to a vote because it does not set a figure or commit the Government to any particular sum of money, but guards against the under-resourcing that has plagued Companies House for many years. According to openDemocracy, economic crime costs the UK £290 billion a year, whereas Spotlight on Corruption tells us that the Government spend only £852 million on enforcement, or 0.042% of GDP. A lot more needs to be done. I am not committing the Government to any figure whatsoever, but the amendment would ensure that the register has the resources to fulfil its objectives. It is a simple and neat amendment.
Question put, That the amendment be made.
Kevin Hollinrake
The Government acknowledge the growing unease in many quarters about the limitations on the company registrar’s ability to manage the quality of information that finds its way on to the register for which she is the custodian. The entirely new objectives introduced by the clause set the scene for the rest of the Companies House measures in the Bill. They signal the biggest step change in the whole ethos of Companies House and the registrar since that role was established in 1844, which I think the Committee will welcome.
The objectives make it clear to all that the registrar will no longer simply be the passive recipient of information; in performing her duties and functions as modified and expanded in the other Bill provisions that we will discuss in Committee; the registrar will be emboldened to be much more active in her guardianship role. No longer will Companies House be a passive receptacle for company information; nor will it simply accept in good faith what it is given. This Bill will give the registrar wide-ranging new powers to assist her to query more information and to reject filings that the registrar does not believe meet the standards of proper delivery or which do not tally with information that the registrar already holds. The registrar will be able to analyse and share information with other bodies, including law enforcement.
Those are just a few examples of how Companies House will operate differently in the future. The new powers will be exercised with the new objectives introduced by this clause firmly in mind. The objectives are geared towards ensuring that information that companies and others provide is complete, accurate and not misleading, and towards minimising the extent to which companies and others carry out or facilitate the carrying-out by others of unlawful activity. The Government are confident that, in aggregate, their introduction will make Companies House a far more effective gatekeeper.
Seema Malhotra
I am grateful to the Minister. Now that we are debating clause stand part, perhaps I can officially say “welcome” to him—I was saving it until now. It is indeed good to see him in his place and to be having the debates with him on the Front Bench.
We have debated aspects of clause 1, and have raised relevant questions. The issue is not whether we agree with the objectives, because of course we agree with all the objectives that have been outlined. The issue is whether they go far enough. Objective 1 is about delivering documents to the registrar. Objective 2 is about those documents containing all the information that they are required to contain. Objective 3 is designed to minimise the risk of information on the register creating a false or misleading impression to the public. Objective 4 is about minimising the extent to which companies and firms carry out or facilitate the carrying out by others of unlawful activities.
I think we might ask ourselves the question again and again: why has it taken this long to get here when we have been having debates on the need to tighten up Companies House for so long and legislation has been promised for some time? When we read the provisions, I think we can say again: is this really the extent of our ambitions? Getting to second base is not the same as getting a home run, is it? I think that is the question and will remain the question. Although we agree with clause 1 and what is in it, we are going to keep asking the question about whether the basis on which so much else will be based in the Bill will be strong enough to give Companies House all it needs, along with the message about its duties to achieve its objectives.
This legislation is designed to tackle economic crime. As we have heard in the debate, it is also designed to protect UK national security. Those are two really serious matters that go together. We are talking about making it harder for kleptocrats, criminals and terrorists to engage in money laundering, with an impact on other crimes: crimes that go on in our streets, crimes related to drugs, crimes related to low-level theft and, now, even the security of our mobile phones and our data and conversations. So much more is at stake in terms of what goes on in people’s everyday lives and their everyday security, much more than perhaps we envisaged when this legislation was first promised at least six years ago. The scale of the challenge has absolutely increased, and the question is as much about whether we will be forward-looking in the legislation as it is about tackling the scale of the problem, on the basis of which legislation began to be drafted perhaps one or two years ago.
Liam Byrne
I think this has been a disappointing start to the Committee. Last week in the evidence sessions, I read out the objectives and asked the witnesses what they thought of them. We had anti-corruption organisations there—people who have given their lives to tackling corruption and economic crime—and they were very clear, saying the objectives were too weak and needed to be stronger. I will set out the politics of this for the Minister, new in his role as he is. He is on the wrong side of the argument. He risks going into the debates we are about to have as someone who it is too easy for His Majesty’s Opposition to characterise as soft on economic crime. That is not his position. It is not a position he wants to be in. I hope he will reflect on the debate we have had today and come back with stronger and proactive anti-corruption objectives, including a duty to prevent corruption placed on Companies House.
To summarise the debate we have had, we are going to have a set of objectives for Companies House. Then we are going to match the resources to those objectives. The problem with setting the bar for our objectives too low, too soft and too weak is that we end up setting a resource base that is too low, too soft and too weak. On this side of the Committee—on both sides I think—we would rather see a much tougher set of policy objectives, and we would want Companies House to have the requisite resources to fill that role. I am afraid the Minister has found himself on the wrong side of the argument today. I hope that he reflects and comes back—possibly on Report or in the other place—with a strong set of objectives and the resources to match.
Kevin Hollinrake
I thank the right hon. Gentleman for his comments. I do not agree with what he has said. I read through much of the evidence given to the Committee before I was part of it, and Transparency International said that
“the Government has taken an important step toward cracking down on kleptocrats, criminals and terrorists—including associates of the Putin regime—who abuse UK companies for nefarious purposes.”
It also says that the Bill
“presents a number of welcome reforms to the operation of Companies House that, if implemented effectively, would help to prevent money launderers from abusing the UK’s company incorporation system”.
There are people who agree with what we are doing here. We should of course reflect on the comments that have been made by hon. Members in the Committee, but I do think these objectives are important steps forward. We must ensure that they are effective, that there are no Swiss cheese loopholes, as the shadow Minister mentioned, and that the relevant bodies are properly resourced. That is a body of work I will continue with over the next few weeks.
Question put and agreed to.
Clause 1 accordingly ordered to stand part of the Bill.
Clause 2
Memorandum of association: names to be included
Seema Malhotra
I beg to move amendment 85, in clause 2, page 2, line 15, at end insert—
“(2A) After subsection 1, insert—
‘(1A) The memorandum must also state—
(a) the nationality of the each subscriber; and
(b) the country in which each subscriber is ordinarily resident.’”
This amendment would require a memorandum on the formation of a company to include the nationality and country of ordinary residence of each subscriber (a subscriber being one of the company’s initial shareholders at the time it was set up) along with their name.
The Chair
With this it will be convenient to discuss clause stand part and clauses 3 to 8 stand part.
Seema Malhotra
Clause 2 is important, and we have no concerns with it at all. It amends section 8 of the Companies Act 2006 to state that, for individuals, “name” means a forename and surname, and it goes into further detail. It is another example of an area where it is extremely surprising that our system has lasted for so long while being so feeble in the extent of the information it requires of company subscribers. Subscribers are initial shareholders in the company when it was set up: those who sign the important memorandum of association in forming the company.
Currently, information about subscribers is extremely limited, and there is no verification or definition of what constitutes a subscriber’s name. That relates to the deeper issue, to which we will continue to refer in Committee, around the transparency of shareholders. Alongside our discussions of directors and officials, we must ensure that we keep shareholder transparency very much centre stage. Not having clear names affects the reliability of the subscriber information held by Companies House.
We welcome the clarity provided by clause 2, but we believe that the Bill could go further in requiring information from company subscribers. That is why we tabled amendment 85, which would insert a new provision that would require the memorandum on company subscribers to include the nationality of each company subscriber and the country in which the subscriber is ordinarily resident. Without that information, which should be verifiable, the formation of a company that registers with Companies House could be questioned by the registrar.
Transparency International has remarked that the UK has a terrible reputation as a hub for dirty money. That is something we do not even need to keep saying, because we are so used to hearing it. That is exacerbated and enabled by a lack of transparency about those who own and control UK-registered companies. If the Bill is to fulfil its ambition of clamping down on dirty money flowing through our economy, the Minister should support the amendment, which would provide that greater transparency and scrutiny of who owns companies registered with Companies House. I look forward to the Minister’s response.
Alison Thewliss
I rise to support this useful amendment. It is fundamentally about enhancing the transparency of the register and what we know about the people on the register. It is also about tracing control: who owns what and where they happen to be. That is useful. Those are things that the Bill should look to fix. The Bill is about putting right things that are not quite right. The amendment adds to the richness of the information that is available to people. It seems perfectly logical that the Minister should support it.
Liam Byrne
Let me go back to 1855 for a moment, which is when this House last debated the creation of limited liability companies. It is worth every member of the Committee studying the Hansards of those debates, because the speeches reveal that, when our ancestors in this place made it possible for people to pool together small amounts of capital but nevertheless receive a limit on the liability that they would encounter if things went bad, their view was that it was in the common good of the country to allow in Britain the invention of limited liability, which had operated in the United States for some time. The common good of the country was the guiding principle by which the debate was shaped, and eventually the Bill was passed.
Right now, too many people are not contributing to the common good, and are using UK corporate structures to circumvent their obligations to pay tax and obey the law of the land. We should be trying to crusade against that, and this amendment would help us do that.
At the end of this year, the register of beneficial ownership for property will be published, but it is already clear that there are shell companies that own assets, including property in expensive parts of this country, whose nominal shareholders are resident abroad. There has been an enormous surge in non-resident, foreign national shareholders of shell companies that own property in this country. We have not only the phenomenon of shell companies but, as Oliver Bullough made clear, the new phenomenon of shell people.
The Minister has a decision to take. Will he put in place measures that help us guard against that risk and ensure that we honour the principles that were agreed back in 1855, or will he leave our enforcement regime as weak as it is today?
Kevin Hollinrake
Before I turn to the amendment tabled by the hon. Members for Feltham and Heston and for Aberavon, it might be helpful if I set out the intentions and effect of the clause.
The purpose of the companies register is to provide details of company ownership, and via these clauses the Government are introducing measures in this Bill to improve transparency requirements and increase the usefulness of the information held on the shareholders, subscribers and guarantors of UK companies. Clause 2 provides that each person who decides to form a company—a subscriber—must state their name on the memorandum of association. Currently, a subscriber does not need to state their full name—they can merely state their name as J. Bloggs, for example—as there is no definition of “name” for subscribers in the Companies Act 2006 or the associated regulations. This clause provides that, in relation to a subscriber, “name” means forename and surname. In that example, the person would have to state “Joe Bloggs”.
The shadow Minister and the right hon. Member for Birmingham, Hodge Hill are absolutely right to try to get to the basis of ownership and control of companies. That is why we are focusing our attentions on the people who control companies—namely, the directors and persons of significant control. As the right hon. Gentleman states, if somebody really owns the company, that information would have to be disclosed and that person’s identity would have to be fully verified.
I remind the Committee that persons of significant control are not just those who hold more than 25% of shares in a company. They can also be people who own more than 25% of the voting rights of a company, people who have the right to appoint or remove the majority of the board of directors, and people who might influence or control the company through other means—namely, a nominee. The company may also be controlled by a trust or firm without a legal personality. The provisions really focus on directors and persons of significant control, which are defined in a number of ways.
Amendment 85 would require that the memorandum of association also states the nationality of the subscriber and the country in which each subscriber is ordinarily resident. Subscribers are the persons who agree to form a company and become its members by subscribing their name to a memorandum of association. Upon incorporation of the company, they become its members and usually, but not always, its shareholders. Their details are recorded in the company’s register of members.
The Bill already contains provisions that could not only achieve the intent behind the amendment, but require the same information from a wider category of person. Clause 45 inserts new section 113A into the Companies Act 2006. New section 113A provides a power for the Secretary of State to make regulations that amend the particulars required to be entered into a company’s register of members. That power could be used to require the nationality and country of ordinary residence of all members to be entered into a company’s register of members.
Dame Margaret Hodge
Is the Minister minded to use that power to enter the nationality of individuals on a company’s register of members?
Kevin Hollinrake
I am certainly minded to consider all aspects of the debate we have had in Committee and to discuss the matter with the Secretary of State and others. We are here to inform the debate, and Members on both sides of the House are better informed as a result.
Liam Byrne
In the light of that remark, will the Minister go further and tell the Committee how he will tackle the problem of shell people if we are unable to get information about them? Shell people is the phenomenon of having what look like foreign nationals or residents of other countries controlling shell companies, which may, in turn, own assets in this country. If it is not possible for us to establish the nationality or the ordinary residence of those people, how will we know whether we have a problem? If, for example, people put down their nationality as British, we would know where to find them, but if we do not have that information, we risk getting a little lost.
Kevin Hollinrake
If the person is a director or owns more than 25% of the shares in a company, they have to have their identity verified. If the right hon. Gentleman means nominees, such a person could easily be living in the UK. I am not sure that the right hon. Gentleman would be better served by knowing where they were based, unless we were taking a risk-based approach to people from a certain nation.
Kevin Hollinrake
Such as Russia. It is key that the ID verification works for directors and persons of significant control—that is where we are on that. We need to debate whether the amendment, which seeks to find out the nationality of company members, who are not necessarily shareholders or directors, serves any purpose at all.
Liam Byrne
We might as well pursue this point while we have the time. The 25% threshold is obviously very high, and an amendment will be tabled seeking to lower it. If that does not go through, however, the risk is that there will be members on the register with a significant or even a controlling stake of below 25% in a company, yet we will not know where they are resident or where they live. We are now running that risk.
Kevin Hollinrake
The definition of “persons with significant control” accounts for exactly that—it accounts for the fact that a person with influence on a company might have any level of shareholding, even including zero shares. That is catered for in the definition of “persons with significant control.” Of course, there is always discussion about how we find out about and verify such information, which is very difficult to ascertain in any circumstance. The subject of ID verification is interesting to debate. I have discussed different aspects of it with officials and we should definitely consider it further.
The regulations under new section 113A will be subject to the affirmative resolution procedure, so the overall intent behind the amendment would be better addressed in a wider conversation about what additional information, if any, it would be proportionate to require every company to provide about its members via these regulations. I hope I have provided some assurance that this amendment is not necessary. Therefore, I would be grateful if the hon. Member for Feltham and Heston would withdraw it.
Clauses 3 to 8 will require those seeking to form a company to confirm that they are doing so for lawful purposes. The clauses make it absolutely explicit that those forming companies are welcome to do so only if they intend to do so for a lawful purpose. Through the requirement and provision of the new statement, subscribers to a new company can be in no doubt that if they are found not to be telling the truth, action can be taken against them.
Clause 4 will require applications to register a company to include a statement that none of the company’s subscribers, founding members or initial shareholders is a disqualified director. The definition of “disqualified person” is provided in proposed new section 159A(2) of the Companies Act 2006. Clause 4 enables the registrar of companies to reject the application if any subscriber is a disqualified director. The registrar should reject such applications, because by being involved in the formation of a company, a disqualified person breaches the law.
Under clause 5, an application to incorporate a company must include a statement confirming that all the company’s proposed directors have either verified their identity or are exempt from verification requirements.
Dame Margaret Hodge
How will the exemption be defined? Will the regulations confirming the exemption be subject to the affirmative procedure? Also, I draw to the Minister’s attention an example that he could look at: Fedotov took advantage of exemptions to use Russian stolen wealth in the UK. These exemptions are very dangerous; I want to hear from the Minister how we will ensure that they are properly regulated and monitored by Parliament.
Kevin Hollinrake
The right hon. Lady makes a fair point. I am sure that she will accept that the Secretary of State is as keen as she is to clamp down on this activity. Exemptions can be made when directors undergo sufficient scrutiny on employment. Also, the director’s ID can be confirmed without verification when the prohibition to act as a director while unverified does not apply. An example would be directors appointed by the community interest companies regulator under section 45 of the Companies (Audit, Investigations and Community Enterprise) Act 2004.
Dame Margaret Hodge
I am worried about this. Will the Minister look at how Fedotov managed to get an exemption, and then perhaps write to Committee members about it? Then we could see whether there is a systemic issue, and whether we ought to have a better overview of the way in which exemptions are determined.
Kevin Hollinrake
I can see the officials writing like mad. I am sure that they will have picked up on that. I am happy to look at this as well. I reassure the Committee that the affirmative procedure is required, so that we can ensure sufficient scrutiny of exemptions from the obligation on directors to verify their identity, and so that Members can see why those exemptions are proposed.
We will come to other identity verification clauses later in Committee, but I am confident that Members will agree that clause 5 is vital. It improves the accuracy and integrity of the companies register by allowing the registrar to refuse incorporation of a company if the directors are neither ID-verified nor exempt from the requirement to be ID-verified.
Clause 6 requires a company’s subscribers to provide a statement when an application to register a company is filed confirming that none of its proposed directors is disqualified or ineligible to be a director. Disqualified or ineligible people include undischarged bankrupts and individuals subject to asset freezes. The clause allows a registrar to reject an application to register a company if a proposed director is disqualified or ineligible for appointment. The registrar’s rejection prevents the company from being formed. If the statement confirms that a proposed director who is disqualified has received a court’s permission to act, the registrar will accept the registration. The clause helps to ensure that disqualified and ineligible directors do not make it on to the companies register.
Clause 7 requires that applications to register a company include a statement that none of the people with initial significant control is a disqualified director. People with initial significant control are individuals or legal entities that will own or control the company once it is registered. The clause will ensure that the registrar has the necessary information and power to reject an application if the person with initial significant control is a disqualified director.
Alison Thewliss
This is about new registrations. Will the registrar go back through the Companies House records to find people who may still be on the register but ought not to be, because they have been disqualified?
Kevin Hollinrake
All directors and people with significant control need to be ID-verified for existing companies, and the same obligation will be placed on new corporations.
Finally, clause 8 will permit an application for the registration of a company to contain a statement that the identities of its persons with significant control have been verified. The clause will allow persons with initial significant control to comply with the ID verification requirements at the point of registering a company. Where a company’s subscribers cannot make a statement confirming that persons with significant control have complied with ID verification requirements, the company will nevertheless be registered. The registrar will then direct the persons with significant control to comply with the identity verification requirements.
Seema Malhotra
It is a pleasure to speak to clause 2 and to clauses 3 to 8. I have been listening carefully to the Minister and have a few questions. I have made extensive remarks in support for clause 2, so I do not intend to go much further on that. Suffice to say that we have had an important debate, and I think the Minister will find that we will continue to come back to some of these matters.
On the point about the nationality of the subscriber and the country in which they are ordinarily resident, I did not hear the Minister give a clear answer as to whether the Government might consider tabling future amendments if they do not want to support ours. I have good faith in the Minister and want him, on day one of taking up his responsibilities, to take on board hon. Members’ points, so I would be grateful if he could come back to us on how he plans to consider that matter. My hon. Friend the Member for Aberavon may want to apply a similar principle to other clauses, so it would be most helpful if the Minister could take away the point about the subscriber’s nationality and the country in which they are ordinarily resident.
We support clause 3, which will ensure that when a company registers, it cannot be formed for unlawful purposes. It is extraordinary that we have not made that clear before or sought such a declaration previously, but it is a necessary provision in the light of the scale of abuse of Companies House by those whom we are now seeking to prevent from doing so in the future. We need to clear out companies that are not performing the functions that we would expect of a company registered in the UK. As the Minister goes through the resources question as to how quickly we will be looking to Companies House to go through and verify existing company records, this will fall into that important cleaning-up exercise. It is a necessary provision and is intended to ensure that if such a declaration turns out to be inaccurate, the registrar can reject the company’s filing on the basis that a false filing offence will have been committed. That is an important step forward.
Clause 4 will ensure that when a company registers, it must declare that none of its subscribers—its initial shareholders—is a disqualified director. We welcome the clause, because it is important to think about people’s roles and how games could be played with Companies House, and therefore with Britain and the British public, without cross-checks and balances in place. The clause is necessary to ensure that the registrar is able to actively reject and remove company subscribers who have been disqualified as directors. It cannot be right that somebody who has been found unwilling or unable to meet their legal responsibilities as a director could still be involved in, and have control of, the formation of a new company. It was a loophole in the Companies Act 2006 that a disqualified director was not prevented from owning a newly established company. It was a loophole ripe for exploitation, but we welcome clause 4.
Liam Byrne
I want to reinforce the last point made by my hon. Friend the Member for Feltham and Heston. If we are going to equip the Minister with new powers, it is important that he tells the Committee, at this stage, how he intends to use them. The key question is: what is his deadline for ensuring that every single company on the register has fulfilled the obligations created by these clauses? Can he clarify what his risk tolerance for bad behaviour will be?
I ask the Minister that because I was forced to table parliamentary questions in October last year, which revealed—extraordinarily—that 11,000 companies on the Companies House register had still not disclosed their persons of significant control, even though it was a legal requirement at the time. That is a very big number, but despite that fact, only 119 convictions had been secured for wayward directors.
If we are going to give Companies House the new obligations and new duties that the Minister is taking through, but they are not going to be enforced, then frankly there is very little point in the Bill. If the Minister is not able to today, I hope that he will write to us later to confirm two things. First, will he confirm that his intention is for 100% of companies to meet their obligations under the Bill? Secondly, I think the whole Committee would welcome his setting out a timescale for seeing that target secured.
Kevin Hollinrake
A number of points have been raised. The shadow Minister talks about the veracity of information and how we can become certain of it. As she knows, we are talking about a huge number of records—double-digit millions when adding up companies and directors. If we added shareholders, that would be many millions more.
The focus of this debate should be on who is controlling a company, be it a zero shareholding, small shareholding or larger shareholding. That is why traditional ID verification focuses on directors, who are obviously the officers of a company and control it, or a person of significant control—someone who sits behind that organisation. That is why we ask for those IDs to be verified. That can be done by Companies House or a corporate service provider. Some of those have a dubious reputation—I am sure that will be discussed in Committee—but let us see this for what it is: many of them are bona fide, reputable organisations such as Deloitte, EY and PwC. If someone has proven their identity to those organisations [Interruption.]—I am someone who can see his wrongdoing, but I do not see wrongdoing on every single corner. Most people working in commercial enterprise are decent, honourable people who seem to do the right thing. We should keep that in the context of this debate.
The duty is on a director of an organisation to make a statement to say that their identity has been verified. If that statement is false, criminal sanctions are attached. That is how this is regulated. It would make no sense for Companies House to revisit tens of millions of records to ensure that people at Ernst & Young and Deloitte have properly verified the identity of an individual. They are subject to those criminal sanctions.
On multiple disqualifications, I think the hon. Member for Feltham and Heston was talking about some kind of “three strikes and you’re out” system for a director. The Insolvency Service has the opportunity to ban a director for up to 15 years. It is fair to say that if someone had constantly not paid their tax or filed their accounts and had been banned, their days as a director would be just about done by the time they had got three penalties of 15 years.
The exemptions, as I said before, will be brought forward by affirmative regulations. The provision is intended for when there is no need or purpose to going through another round of ID checks, to avoid needless bureaucracy. We should all welcome that because, as anyone who has been at any organisation knows, bureaucracy equals cost for somebody—whether that be a cost on commercial enterprises or on the taxpayer. We have to be careful not to step too far unnecessarily.
Liam Byrne
That is an important point. The Minister is basically telling the Committee that he wants to ensure that the verification checks are proportionate, but across Government—in the Passport Office, the visa service and benefits agencies—there is a well-established infrastructure for verifying identities. If people are applying to become a director or a person of significant control, it is hard for many of us on the Committee to understand why the checks on their identity should be much lighter than those applying for other benefits from the state.
Kevin Hollinrake
I do not understand why the right hon. Gentleman says that the checks are lighter. This is ID verification where the individual has to be identified against a form of ID such as a passport. It is a proper ID verification. That process will be brought forward so that the Committee can decide whether it is fit for purpose. It is absolutely right that we do that, but these are proper ID verification requirements.
The deadline for ID checking of existing directors is 28 days from the commencement of this legislation—[Interruption.] The right hon. Member for Birmingham, Hodge Hill is not even listening, even though I am answering his question. Existing directors will need to be verified within 28 days. The deadline that he asked for is 28 days from the commencement of the legislation.
Seema Malhotra
I thank the Minister for his comments. I think he has committed to write to me about nationality and country; he did make a note. Did he make a note? Did I get that right? It is a matter that my colleague will also be raising, but I think he said that he would write to me with the Government’s view on that matter. On the basis of that, I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 2 ordered to stand part of the Bill.
Clauses 3 to 8 ordered to stand part of the Bill.
Clause 9
Names for criminal purposes
Question proposed, That the clause stand part of the Bill.
Kevin Hollinrake
I do not think I did commit to write to the hon. Member for Feltham and Heston, but I am happy to do so if she would like. I am definitely committed to considering all the contributions to the debate.
The Companies Act 2006 contains a range of provisions, whose focus it is to mitigate potentially undesirable impacts arising from a company’s choice of name. For example, it is already unlawful to incorporate a company the name of which, in the opinion of the Secretary of State, constitutes an offence or is offensive. Clauses 9, 10, 11, 12 and 13 will place further controls and restrictions around the choosing of company names by making amendments to the Companies Act 2006.
Clause 9 will give the Secretary of State the ability to prevent the registration of a company name that, in his view, is intended to facilitate the commission of an offence involving dishonesty or deception, such as fraud. It is sadly all too common for Companies House to observe the opportunistic establishment of new companies, whose names, for example, appear to exploit natural disasters or humanitarian crises. At present, Companies House has no means of preventing the registration of company names capable of facilitating deception of this nature. This provision will provide that power.
Clause 10 builds on existing safeguards in the Companies Act 2006, which restrict the extent to which companies can adopt names that give the false impression of a connection with a UK public authority. At present, if a name was to suggest association with UK national or local government, the devolved Administrations or specified local authorities, the Act and associated regulations provide a framework within which consent needs to be sought. The clause supplements that framework by providing safeguards in the international sphere. However, rather than applying a system of consenting, the starting assumption will be to prohibit names that, in the opinion of the Secretary of State, give a misleading impression that the associated company is linked to a foreign Government or its agencies.
Such a prohibition will also apply to names that reference recognised international organisations—for example, NATO or the United Nations. Of course, there may be occasions where overseas Governments and international bodies quite legitimately wish to incorporate companies in the UK. The clause would not prevent those companies from having names that connect them with a Government or body where that connection is a true reflection of reality.
Clause 11 will give the Secretary of State the responsibility to reject the registration of names that comprise or contain what, in his opinion, constitutes computer code. Company names are a potential vehicle through which bad actors can infiltrate the systems of those who access or download them. Computer code embedded or incorporated within a company name has the potential to subvert and to exploit the networks of unwitting third parties. That is clearly something we would wish to guard against.
Clause 12 inserts a provision that effectively prevents a company from re-registering a name that has already been the subject of a direction. That change will prevent an administratively burdensome cycle of repeat name-change directions, which is clearly better avoided.
Clause 13 prevents directors and shareholders from carrying a name to another company when they have already been denied its usage, as a consequence of either a direction from the Secretary of State or an order made by a company names adjudicator. It does, however, recognise that there might be instances in which secondary use would be quite legitimate. Scope is therefore provided for the Secretary of State to approve a name, notwithstanding the general prohibition introduced by the clause.
Seema Malhotra
We support clause 9. We recognise that it amends the Companies Act to give the Secretary of State the ability to prevent registration of a company if they think the name of that company is intended to facilitate dishonesty or deception. Companies House deals with up to 100 cases of corporate identity theft every month, and given that this form of fraud and others are starting to become more prevalent, it is right that there be these new powers to prevent registration, stemming—we hope—the flow of new fraudulent registrations. An incredible amount of distress arises from the impact of that dishonesty and deception.
Clause 10 inserts into the Companies Act a new section prohibiting company names falsely connected to foreign Governments and international organisations, and the Minister has spoken about why that section is important. It gives the Secretary of State the ability to prevent the registration of a company with a proposed name that, in the Secretary of State’s opinion, suggests a connection with a foreign Government, its offshoots or international bodies where none actually exists. As has been mentioned, that could be the UN or NATO, or any other body. Of course, we support the principle behind that measure, but in the interests of transparency about the use of that power, could the Minister clarify whether, when the Secretary of State is asked to make a judgment in such a situation, he expects that the judgment will be publicly shared—that, for example, Companies House might report on the uses of that power as part of its reporting?
I also want to clarify how the power will be used. When a company is formed that the Companies House registrar suspects is not actually connected with a foreign Government or other international body, but looks like it might be, will the registrar have a duty to flag such instances with the Secretary of State? That is important, because it comes back to the question of the proactiveness of the registrar’s duties, so it would be helpful to clarify it. What about the scenario where an attempt is made to register a company with a proposed name that, were it to be raised, would go through that process and very correctly be stopped by the Secretary of State, but it is not picked up by Companies House? If that situation arose for any reason—it could be new staff, or it could be the pressure of time because of insufficient resources; mistakes can be made in those circumstances—could a third party then apply for the name of that company to be changed? How would that work if it were an international organisation?
If uses of the power were reported by Companies House, would we be able to search and see that a number of people had sought to set up a company called United Nations Associates, or something like that? Would we be able to have a sense of how Companies House is perhaps being used in that way?
Should a company that has had its name changed by direction of the Secretary of State continue to seek to trade under that company name—perhaps in an overseas jurisdiction, if the name is falsely connected with foreign Governments—it would be helpful to clarify what measures could be taken, and by whom, to seek to put an end to that. There may be an obvious answer.
Alison Thewliss
I want to highlight again to the Minister the issues in these clauses that Graham Barrow raised in the excellent evidence that he gave to the Committee last week. He said:
“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.”
His suggestion was that the system needs to have
“a little bit of friction”.–––[Official Report, Economic Crime and Corporate Transparency Public Bill Committee, 27 October 2022; c. 109, Q204.]
Instead of Companies House turning around an application in less than 24 hours, a little bit of time should be taken to assess and analyse it.
The human element of this process is also important. Some of it may be possible to achieve with clever computer algorithms to sift out any companies whose names are too similar to existing ones, but there needs to be human judgment as well. This goes to the point of Companies House resourcing and staff being able to understand what they see in front of them. That will take expertise and long-term knowledge, not only of the company in front of them but of the existing companies on the register—and they are there in their millions.
I will address a point that has not really been raised before about clause 11 and names containing computer code. When these kinds of things come up, I reach for the expertise that I have pretty much at hand. I went to my husband and asked him about this, because it is his profession—he is a computer coder by trade—so I thank Mr Joe Wright for his assistance. I said, “Is this really a problem, and what does it actually mean?” My understanding is that the clause is to guard against SQL injection into the Companies House register, because anyone pulling that out of the register can have their systems corrupted by companies that register with computer code.
My husband directed me to a very useful article, which people should have a wee look at, by Neil Brown on decoded.legal that looks into this in some detail. A company has been registered using computer code. It was registered under the name ; DROP TABLE "COMPANIES";-- LTD, which has some computer code around it. Dr Michael Tandy registered that company name, but Companies House did not publish the name on its register; it said that the name was available on request. Can the Minister clarify whether the clause will deal with that specific case, or whether it is broader than that?
The article by Neil Brown raises some questions. What exactly would be prohibited? The Bill does not define computer code; it prohibits the use of names that
“in the opinion of the Secretary of State”
are computer code. I do not know whether the Minister knows his SQL from his JavaScript, but that seems like a big judgment and responsibility to put on Government Ministers. In its very essence, computer code is just an instruction to a computer, and that instruction can be in plain English text as well. Can the Minister tell us exactly how this will be assessed and what systems will be put in place at Companies House to define what computer code is, in practice? That, again, comes down to the human element—someone understanding exactly what is in front of them.
I urge the Minister to give a wee bit more clarity about what is code, what is not code and what exactly the clause is intended to catch. There are such companies on the Companies House register, and because code can be in text that we would understand—rather than a series of numbers, letters and symbols—it might be more difficult to enforce this. I would be grateful if the Minister could help us understand a wee bit better how the Secretary of State’s complete discretion to define what is and what is not computer code will be used in practice.
Dame Margaret Hodge
This question is really just for information. Can the Minister explain why the three categories were chosen for inclusion in the Bill? Why are we only looking at these? What was rejected, and why did these three come about? I cannot understand it. Is there a right to appeal if somebody chooses a name for a legitimate reason but it is misunderstood by Companies House? Who will take the decision? Is that something the Secretary of State will delegate to Companies House, or will it have to come up for ministerial approval every time?
A slight aside: some of us had dinner last night with Catherine Belton, and she talks convincingly about the way that companies linked to the Kremlin have individuals who do not reveal that link. The link to foreign Governments is more worrying than the idea of someone abusing the name of foreign Governments to set up, say, a travel agency to go to Russia. That sort of thing seems to me perfectly all right. The other side of this coin is what causes great concern. It can become a vehicle for money laundering and hiding a lot of the Kremlin’s money in banks abroad.
Seema Malhotra
I echo the concerns raised by my right hon. Friend the Member for Barking. She has drawn out some important distinctions. One is where there has been duplicity in setting up a company with a particular name, and there may be good reason for wanting to challenge that. She has highlighted the safeguards, but she is right that we need clarity in relation to kleptocrats and real connections to foreign Governments, which the Bill is trying to stop.
I thank Joe Wright. The hon. Member for Glasgow Central is right, because technology and people who use it are getting more and more sophisticated. Embedded computer code can maliciously infect the systems of those who access or download data. I saw the very real impact of data getting on to servers when I recently visited a company in Liverpool for a roundtable. Their systems had gone down, but luckily they had safeguards to stop what had happened. How quickly viruses, spyware and other means of destruction can travel, and they pose such security risks for companies and countries. That is an important part of our security, so it would be helpful to have some further information on that.
We welcome clauses 12 and 13 as important provisions. Clause 12 ensures that companies cannot use names that are misleading or used to mask criminal purposes. Clause 13 provides a mechanism to ensure that where there is good reason for a direction to change company names, it is not bypassed by those who use the registrar for fraudulent purposes. What enforcement mechanisms would come into force in such situations?
Kevin Hollinrake
On a point of correction, I said in answer to a question from the right hon. Member for Birmingham, Hodge Hill that existing directors and people with significant control had 28 days to verify their identity. That figure has not been set yet. It will be set in a commencement order, which I will find out more about. The 28 days applies to relevant legal entities.
Kevin Hollinrake
I have only six minutes left, so if the right hon. Member wants to hear from me on all those points, he will have to keep it very short.
Liam Byrne
Could the Minister also clarify his target for compliance? I hope it is 100%, but if he could clarify that as well, I would be grateful.
Kevin Hollinrake
I am grateful. Of course, my target will certainly be 100%; I cannot imagine why it would not be. The 28 days refers to the time that relevant legal entities will have to rectify their identity from receipt of the registrar’s direction.
To answer the hon. Member for Glasgow Central on computer code, there have been a small number of instances where Companies House systems have identified computer code. What constitutes that may change and evolve over time, so the drafting is future proof. Companies House already has a security capability that will develop and evolve over time. Where necessary, Companies House’s internal scrutiny functions will consult other experts.
The right hon. Member for Barking asked what had been rejected. No other categories were rejected in the course of policy development. I think that these categories were deemed important, but I do not know of any others that were considered. The right to appeal regarding the name change would be through a judicial review. Clearly, it is fair to say that Companies House will use its judgment.
To answer the right hon. Lady’s point on the Secretary of State’s functions, Companies House exercises those functions. There is a well-established administrative process by which Companies House makes the Department aware of potentially problematic names, so the Secretary of State can also exercise their judgment. On how we identify any of those names, of course, a lot of that is technology-based.
Dame Margaret Hodge
I am really sorry, but I just want clarification. Does that mean the decision is taken by both Companies House and the Secretary of State—or a Minister on their behalf?
Kevin Hollinrake
As I understand it, Companies House makes the decision under delegated authority.
On trading styles or business names, which the shadow Minister mentioned, that is clearly not something that Companies House oversees directly, because it does not have a register of trading styles or business names. However, it does rely on third-party information to understand what a company may be trying to do regarding its trading style.
On the other problem—the other side of the coin, as the right hon. Member for Barking says—of money laundering and people supporting the Russian state, those matters are, of course, principally dealt with through money-laundering regulations or, indeed, sanctions regimes. People supporting the Russian regime, for example, should very often be subject to sanctions.
Question put and agreed to.
Clause 9 accordingly ordered to stand part of the Bill.
Clauses 10 to 13 ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned.—(Scott Mann)
Financial Services and Markets Bill (Eighth sitting)
Tuesday 1st November 2022
(2 years, 1 month 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 1 November 2022 - (1 Nov 2022)
The Economic Secretary to the Treasury (Andrew Griffith)
It is a pleasure to serve under your chairmanship, Mr Sharma.
Clauses 60 and 61 deliver on the Government’s commitment to replace the Bank of England’s cash ratio deposit scheme with a new Bank of England levy. Under the cash ratio deposit scheme, banks and building societies with over £600 million in eligible liabilities must place a portion of their deposits with the Bank on a non-interest-bearing basis. The Bank then invests the deposits, and the income generated is used to fund the costs of the Bank’s monetary policy and financial stability functions.
However, the Bank of England’s policy remit and policy responsibilities have grown in recent years, and the cash ratio deposit scheme has not generated the income required to fully fund those functions. As a result, the shortfall has been funded by the Bank’s capital and reserves. Clause 60 replaces the scheme with a new Bank of England levy, repeals the provisions governing the cash ratio deposit scheme in the Bank of England Act 1998, and inserts new section 6A and new schedule 2ZA into the Act.
As with the cash ratio deposit scheme, the new levy will fund the Bank’s financial stability and monetary policy activities. The same eligible financial institutions participating in the cash ratio deposit scheme will pay the levy, with contributions proportionate to their size. Each year, the Bank will be required to publish information setting out the policy functions that it intends to fund through the levy, and the amount that it intends to levy.
The Bank will remain subject to National Audit Office value-for-money reviews to ensure that it remains cost-effective. The levy will deliver a more reliable and stable funding stream to the Bank, and banks and building societies will benefit from greater certainty about the size of their annual contributions towards those functions. Secondary legislation will be introduced in due course to set out further details of the operationalisation of the levy, including how institutions’ contributions will be determined. The Treasury will consult on the draft legislation and has committed to review it every five years.
Clause 61 simply makes a number of consequential amendments to the Bank of England Act 1998 that are required to reflect the new levy. The levy will provide greater certainty to the Bank, as well as to financial institutions. I therefore recommend that clauses 60 and 61 stand part of the Bill.
Emma Hardy (Kingston upon Hull West and Hessle) (Lab)
The operation of the cash ratio deposit scheme referred to in clauses 60 and 61 is subject to changes in two variables—the gilt rate and the size of deposits eligible for the scheme—so I have two quick questions for the Minister. How did the recent crisis in the gilt market affect the Bank of England’s income under the scheme, and how has the recent crisis in the gilt market, and the subsequent actions taken by the Bank, informed Government thinking on clauses 60 and 61?
Andrew Griffith
There is not a direct relationship between the recent turbulence in the gilt market and the Bank. The clauses will deliver a more reliable income stream to the Bank to fund its activities, because it will receive a levy rather than the income on the difference between interest-free deposits—the money that it gets from levy payers—and the returns that the Bank is able to harness from them.
The current scheme was set up in an environment of higher rates, when higher yields were obtainable. The recent experience over many years of much lower levels of return is the reason why the Bank has not been able to fully finance its activities simply from those interest-free deposits. I hope that answers the hon. Lady’s question.
Question put and agreed to.
Clause 60 accordingly ordered to stand part of the Bill.
Clause 61 ordered to stand part of the Bill.
Clause 62
Liability of payment service providers for fraudulent transactions
Question proposed, That the clause stand part of the Bill.
Andrew Griffith
Clause 62 enables and requires the Payment Systems Regulator to take action to improve the reimbursement of victims of authorised push payment scams, or APP scams as they are commonly known. APP scams occur when someone is tricked into sending their money to a fraudster. Almost 200,000 cases of these scams were recorded in 2021, with known losses to victims totalling £583 million. Sadly, fraudsters often target the most vulnerable people in our society.
Under the European regulatory system that we have inherited, there is no statutory or regulatory requirement for payment service providers to reimburse victims of these scams. We need to do better and we can do better for victims of fraud in the UK.
Although the creation of a voluntary industry reimbursement code has improved matters, reimbursement outcomes for victims have been inconsistent and only around half the money stolen is being reimbursed. As a result, many victims are left facing significant losses; in the worst cases, victims lose their life savings.
We recognise these issues and so clause 62 does two things. First, it removes legal barriers in retained EU law that currently prevent regulatory action by the PSR. That will finally enable the PSR to mandate reimbursement in any payment system under its supervision.
The PSR has the relevant expertise, powers and objectives to tackle this crucial issue. However, regulation 90 of the Payment Service Regulations 2017, which form part of retained EU law, prevents the PSR from using its powers to require reimbursement. Therefore, clause 62(11) amends regulation 90 of the 2017 regulations to remove the existing legislative barrier to regulatory action. That will enable the PSR to use its relevant powers in relation to APP scam reimbursement across any payment system designated for regulation by the PSR.
Secondly, clause 62 places a specific duty on the PSR to take action in relation to the faster payments service. This service is the main UK instant payment system and is currently the payment system within which the highest volume of APP fraud is committed. Therefore, action is needed in this regard as a priority.
Clause 62 places a duty on the PSR to consult on a draft of the regulatory requirement in relation to the faster payments service within two months of this legislation coming into force, and the PSR must impose the requirement within six months of the clause coming into force. In 2021, 97% of APP scams occurred across the faster payments service, because it is the UK’s main payment system for instant consumer-bank transfers. Therefore, by requiring the PSR to take action in relation to the faster payments service, the legislation will improve outcomes in the vast majority of APP scam cases.
As a result of the clause and subsequent regulatory action, consumers will be more consistently and comprehensively protected when they fall victim to an APP scam. This is a vital measure to ensure that customers are protected amid the growing threat posed by APP fraud.
I therefore recommend that the clause stand part of the Bill.
Tulip Siddiq (Hampstead and Kilburn) (Lab)
Labour fully supports clause 62, which enhances protection for victims of authorised push payment schemes, but we are deeply disappointed that the Bill does nothing to strengthen fraud prevention.
When asked about fraud in February, the former Chancellor, the right hon. Member for Spelthorne (Kwasi Kwarteng), claimed that fraud and scams are not something that
“people experience in their daily lives”,
which is tone-deaf. Essentially, he dismissed crime as inconsequential. In the real world, countless lives have been destroyed by fraud and scams, and I am sure the Minister will have examples from constituents in his inbox. There is a new Chancellor now, but the lack of ambition in this Bill on fraud shows that the Government’s approach to fraud remains the same. We will debate my new clause 6 on broader strategies for tackling fraud later, but I want to focus on the inadequacies of the provisions in clause 62.
UK Finance has estimated that the amount of money stolen directly from the bank accounts of hard-working families and businesses through fraud and scams has hit a record high of £1.3 billion. That is bad at the best of times, but it is even worse in the midst of a deepening cost of living crisis. That is because the Government have failed to get to grips with new types of fraud, such as identity theft and online scams, which have seen people’s life savings stolen and their economic security put at risk. I ask the Minister to explain why his Government continue to fail to take fraud seriously and continue to push responsibility on to just the banks. For example, the Bill ignores the fact that digitally savvy criminals are increasingly exploiting a range of financial institutions, such as payment system operators, electric money institutions and crypto asset firms, to scam the public.
In its written evidence to the Committee, Santander UK stated:
“Bringing crypto-exchanges into the scope of the Payment Systems Regulator’s powers to mandate reimbursement for APP fraud would be consistent with the principle of ‘same risk, same regulation’ and would introduce important new protections for consumers in area where risk of fraud is significant.”
I ask the Minister to explain why clause 62 completely ignores the emerging fraud and scam risk that EMIs and crypto asset firms pose to the public. What is his response to Santander’s evidence? Barclays similarly asked for clause 62 to be amended to expand the reimbursement protections beyond faster payments scheme payments to cover payments made over other relevant payment schemes or systems. Will the Minister explain why the Bill provides only for the reimbursement of fraud victims who send money using the faster payments system and why other payment systems have not been included in the scope of the Bill?
Emma Hardy
In reading the written evidence, there was an interesting cautionary tale from Mobile UK about how the banks introduced two-factor authentication through SMS without speaking to it. It found that fraudsters had worked out that they could get a one-time code by having a duplicate SIM card and intercepting the code sent from the bank, which immediately made me slightly worried about using two-factor authentication text message schemes. Mobile UK was able to find a way around that, but it highlights the need to involve as many stakeholders as possible when looking at fraud.
Mobile UK’s evidence was damning. Its conclusion stated:
“The mobile sector is committed to fighting fraud; the banking sector is clearly also committed, but, from the fraudsters point of view, this is a very low risk crime, as the chances of being pursued are very slim. This has to change.”
I recognise that some of these points are outside the scope of the Bill, as they would involve policing, investment and national crime agencies, but there are lots more things that could be done in the Bill to deal with fraud.
In its written evidence, Barclays said it welcomed that all payments made over FPS are covered by the new protection, but that it
“would note there are other relevant commonly used payment schemes and systems that should benefit from the same protection—for example, the CHAPs payment scheme, and ‘on us’ payments… The Bill should therefore be amended to give the PSR power to require participants in other payment schemes to reimburse scam victims.”
That seems to be incredibly sensible advice from Barclays.
It was echoed in the evidence given by Which?:
“to avoid gaps in protections the PSR should also be required to work with other regulators to introduce reimbursement requirements, including for payments made between accounts held with the same bank or payment provider (which are regulated by the FCA) and for the CHAPs payment system used for high-value transactions”.
That is exactly the same as what Barclays said.
There seems to be a lot of consensus among consumer representative groups such as Which? and in the banking sector about broadening out the provisions, looking at other ways in which fraudsters are working, and dealing with the issues raised by Mobile UK. At the moment, the people who are committing these frauds seem to be getting away with it.
Andrew Griffith
I will be brief. We all join hands in taking any action that we can against fraudsters. It is a terrible crime, and one that is on the rise, and the Government will do everything in our power to take action.
I say to the hon. Member for Hampstead and Kilburn that I will take no lessons from the Opposition on fraud. The impediment to cracking down on this issue lies solely within EU law. It is this Government that have withdrawn from the European Union—a policy that her party now belatedly supports, but did not for many years. It is only by bringing forward this legislation and withdrawing from the European Union that we are able to put in place clause 62.
Andrew Griffith
I will happily give way to my colleague, who I think, unlike the Opposition, still wants to be part of the European Union.
Martin Docherty-Hughes
Definitely. Is the Minister therefore saying that the European Union was promoting fraud within the financial framework of the United Kingdom of Great Britain and Northern Ireland? Is that what he just said?
Andrew Griffith
I wish the hon. Gentleman was attentive to what I was saying. That was not what I said; I did not use the word “promote” in any way. I said it was an impediment. Clause 62 addresses the fact that under retained EU law, it is not possible to take the action that we wish to take on push payment fraud. That is a fact, and that is why we came forward with the Bill. There are many other things the Government are doing outwith the Bill to tackle fraud, and I will happily sit down and talk with anybody—and meet with any party—who has practical suggestions to tackle fraud.
Dame Angela Eagle (Wallasey) (Lab)
The Minister is reasonably new to his post, but will he look at the Treasury Committee’s report on fraud, which contains a great deal of very practical things the Government could do to crack down on what is a growing problem? Everybody recognises that the anti-fraud authorities—the people who are trying to fight this—are very fragmented, there is no co-ordination across the piece and there is very little enforcement of the laws that are already there. That is why fraud is a growing problem—the rewards are so fantastic and the risks that fraudsters take are so miniscule that no fraudster is ever put off by the thought that they might get caught.
Tulip Siddiq
UK Finance found that fraud has hit a new high under this Government. Is the Minister going to blame the EU, once again, for that record high? Would he like me to send him the UK Finance report?
Andrew Griffith
I am sorely tempted, but I will resist the urge to rise to that.
If my officials can find the report to which the hon. Member for Wallasey refers, I will look at it, and outwith the Bill, I will ensure that our efforts are equal to the task. I accept that fraud is rising, and in particular that this level of fraud is rising. That is facilitated by both online technology—there are other measures outwith the Bill to tackle and police the unregulated online world—and, as we heard earlier, the shift from cash, which suffered from its own forms of fraud and theft, into a more digital world.
Emma Hardy
Will the Minister refer to the specific examples that Barclays and Which? raised around CHAPS payment and other payments? If he is unable to give a full response today, I hope that he will consider before Report whether we could extend some of the provisions in the clause to cover the specifics that Barclays and Which? raised.
Andrew Griffith
I can confirm to the Committee that, because the measure relates to all payment systems that fall within the remit of the Payment Systems Regulator, the measure is not confined solely to fast payment. Fast payment makes up about 97% of reported fraud—those are UK Finance figures—so of course it makes sense for it to be the first in our sights, but the clause will follow fraud and payment systems as they evolve. That is its whole purpose. It is not confined simply to the faster payment system. If that is the understanding that Barclays and Which? have, we should correct it, because any of the PSR-designated platforms are in scope.
Tulip Siddiq
The Bill provides for the reimbursement of fraud victims who send money using the faster payment system. Is the Minister saying that other payment systems are included in the scope of the Bill?
Andrew Griffith
Yes. If that is not correct, I will write to members of the Committee, but my understanding is that all the measures that we have been talking about cover the scope of the Payment Systems Regulator.
Question put and agreed to.
Clause 62 accordingly ordered to stand part of the Bill.
Clause 63
Credit unions
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss that schedule 14 be the Fourteenth schedule to the Bill.
Andrew Griffith
The Government are a strong supporter of the mutuals sector, and recognise the unique role that credit unions play in their communities. Clause 63 introduces schedule 14, which makes amendments to the Credit Unions Act 1979—a particularly good year—to allow credit unions in Great Britain to offer a wider range of products and services, thereby supporting the growth, diversification and development of the sector.
The Credit Unions Act 1979 sets out the regulatory framework for credit unions and specifies the products and services that they can provide. Schedule 14 adds proposed new subsection (3ZZA) to section 1 of the Act, introducing a new optional object, or objective, for credit unions, which specifies additional products and services that they may now choose to offer. The services included are hire purchase agreements, conditional sale agreements, and insurance distribution services. When the Association of British Credit Unions Ltd consulted the sector in 2019, those were the additional products and services that credit unions wanted to be able to offer their members. In order to offer those additional products and services, credit unions must obtain permission from the Prudential Regulation Authority or the Financial Conduct Authority in the same way as other providers, and of course secure approval from their members.
Schedule 14 also grants the Treasury a power to add further products or services to the new object via a statutory instrument. That will ensure that the Government can continue to support credit unions in Great Britain to expand into other areas. The schedule also adds proposed new section 11E to the 1979 Act, which makes provision in relation to those new products and services. It caps the interest that a credit union can charge on hire purchase agreements and conditional sale agreements at 3% per month. That cap already applies to loans offered by credit unions.
The schedule gives the Government the power to amend the cap in the future via secondary legislation. The Government already have that power in relation to other credit union products and services. It allows the cap to keep pace with changes in the economic environment and allows credit unions to offer hire purchase agreements, or conditional sale agreements, to corporate members, subject to member agreement. The aggregate outstanding balance that can be owed to corporate members is capped at 10% of a credit union’s total aggregate balance under those agreements.
The Bill also makes provision for a credit union’s ability to lend to and borrow from other credit unions. Section 11 of the 1979 Act will be amended to clarify that credit unions may offer loans to other credit unions, regardless of whether they have a membership link. That will further support the growth, diversification and development of the sector.
The Bill introduces a requirement for credit unions to submit annual returns to the FCA, and to be subject to the “year of account” provisions in the Co-operative and Community Benefit Societies Act 2014. Those amendments will ensure greater regulatory oversight and support good corporate governance practices. Together, clause 63 and schedule 14 will support the credit union sector to grow sustainably for years to come, and help them to expand their reach as providers of affordable credit. I therefore recommend that clause 63 and schedule 14 stand part of the Bill.
Tulip Siddiq
Clause 63 contains some welcome and long-overdue provisions, such as enabling credit unions to offer a wide range of products. However, I do not think the Bill does much to address the outdated regulatory regime facing credit unions as a whole. We will discuss Labour’s proposals to address that, and the barriers facing the wider co-operative and mutual financial services sector, when we debate new clauses 7 and 8.
However, for now, I will push the Minister on some of the areas where the Building Societies Association—and others—has called for bolder action in its written submission to the Committee. First, why do clause 63 and schedule 12 not relax the same-household requirements for family members? Secondly, why does the Bill fail to restrict access to the register of members, in line with best practice for the protection of members’ personal data?
Martin Docherty-Hughes
I agree with the official Opposition on clause 63. I must say, we have talked about 1979, but I would mention 1977, when the Dalmuir Credit Union was opened, and I was number 501 with a membership card, around the age of six, on the church hall stage.
I am very aware of the good works that credit unions such as Dalmuir, Dumbarton and Vale of Leven do in my constituency, and, I am sure, across other Members’ constituencies, but I share the concerns expressed by the official Opposition about the existing infrastructure. I hope that the Minister can say something to alleviate concerns about that existing framework—not only for credit unions but for other local banks, which have been diminished over the past couple of years—and about how the legislation helps to grow this sector of mutual financial support in local communities. We know our banks and post offices are closing, but the credit unions, especially, can be a good cause on which we can all agree.
Andrew Griffith
I thank the hon. Members for West Dunbartonshire and for Hampstead and Kilburn for raising those points. I look forward to hearing the debates about the new clauses that have been tabled.
The Government are on the side of credit unions. We would like to see the mutual and co-operative movement flourish. We need more diversity, affordable options and access to credit. The Government introduced this clause with the absolute intention of helping to expand the range and create more economic opportunities for those bodies. If we have, in some way, fallen short of what could be achieved, I look forward to hearing more about that. I cannot comment on the specific point made by the hon. Member for Hampstead and Kilburn about sharing households and data, so perhaps she would allow me the courtesy of writing to her afterwards if I can find out anything about those points.
This Bill is part of a wider set of measures. On Friday, we discussed on the Floor of the House a Bill to help to prevent the demutualisation that has reduced the number of mutuals in recent years. I was pleased to give Government support to that Bill. There is an ongoing conversation with the Law Commission on the options to review the Co-operative and Community Benefit Societies Act 2014 and the Friendly Societies Act 1992. There is a very good case for looking at modernising the legislation in this sector.
Question put and agreed to.
Clause 63 accordingly ordered to stand part of the Bill.
Schedule 14 agreed to.
Clause 64
Reinsurance for acts of terrorism
Andrew Griffith
This clause is targeted to support the effective management and oversight of money on the public accounts. It confers on the Treasury a power to issue a direction in order to oblige public sector bodies extended a guarantee under the Reinsurance (Acts of Terrorism) Act 1993 to comply with the necessary controls so that money on the public accounts is managed appropriately.
The power will be a safeguard to ensure that public sector bodies within scope comply with the requirements expected of a public sector body, in line with Government policy and the expectations of Parliament. The clause also confers a specific power to direct such bodies to appoint an accounting officer.
Ultimately, ensuring compliance with these requirements will provide value for money, probity, regularity and propriety in the public sector bodies within scope. The ability to issue a direction is a backstop power that will only be used if the relevant body does not comply with the requirements expected of a public sector body.
The new power is similar to powers the Treasury already has to issue directions to central Government Departments in relation to their estimates and accounts. For transparency and accountability, the clause also requires the Treasury to publish and lay any given direction before Parliament.
Emma Hardy
As well as my campaign for financial inclusion, I am sure Members will have heard me talk about flooding. I have not tabled an amendment to the clause, but I might be minded to in order to have a further conversation in future.
The clause addresses reinsurance for acts of terrorism. Has the Minister explored looking at reinsurance for acts of flooding? We have the Flood Re scheme, as I am sure he is aware, but that only applied up to 2007 and properties built after that are not included, nor does it apply to businesses. With this welcome move to consider reinsurance for acts of terrorism, has the Minister thought about other aspects, specifically flooding?
Tulip Siddiq
We welcome clause 64. I support the principle of the Treasury guaranteeing support for reinsurance in the event of a terrorist attack, but how will the provisions in the clause ensure that the taxpayer is adequately protected from such risks? How will the Treasury hold any public sector body to account regarding the requirements in the clause? Will the Minister provide some detail on the role of the accounting officer, in terms of ensuring that public sector bodies have sufficient oversight of the requirements of the clause?
Andrew Griffith
On the point about flooding, that is simply outwith the scope of the Bill. The Flood Re scheme is the responsibility of the Department for Environment, Food and Rural Affairs, and it is not something that falls under this Bill or the Acts I have mentioned.
The role of the accounting officer is the same as colloquially accepted in any public body—the person responsible for maintaining financial records and owning that liability. The governance remains with the board of directors of the relevant body and the duty to the taxpayer is exactly the same as it would be. The clause effectively gives step-in rights or the power to direct in particular circumstances. It does not alter where the core cost and liability start and should remain.
Question put and agreed to.
Clause 64 accordingly ordered to stand part of the Bill.
Clause 65
Banking Act 2009: miscellaneous amendments
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Clause 66 stand part.
Government amendments 5 to 7.
Clauses 67 to 69 stand part.
Government amendment 8.
Clauses 70 and 71 stand part.
Government amendment 23.
Clauses 72 and 73 stand part.
Government new clause 13—Chair of the Payment Systems Regulator as member of FCA Board.
Andrew Griffith
First, I shall speak to new clause 13 and Government amendment 23, which appear in my name, before speaking to clauses 65 to 73 and Government amendments 5 to 8, which also appear in my name.
New clause 13 adds the chair of the Payment Systems Regulator to the board of the FCA. Since the PSR was established in 2014, the roles of the PSR chair and the FCA chair were performed by the same person. As a result, the PSR chair has always been on the FCA board. However, the FCA chair and the PSR chair roles will now be performed by separate individuals, following the appointment of Ashley Alder as the FCA chair in July 2022. The composition of the FCA board is set out in the Financial Services and Markets Act 2000, and the new clause adds the PSR chair to the FCA board. This will help continued effective co-operation between the FCA and the PSR. Government amendment 23 provides for those changes to come into effect two months after Royal Assent.
Clause 65 makes five minor but necessary technical amendments to the Banking Act 2009, to ensure that it continues to function as intended. Clause 66 sets out a small number of definitions to ensure that the provisions of the Bill are interpreted correctly.
Turning to clause 67, the Bill makes a number of changes to the matters that the regulators must consider when they consult on rules. In particular, the Bill introduces a new growth and international competitiveness objective and a new regulatory principle to consider the Government’s net zero target. The clause allows the regulators to fulfil their obligations to consider such matters in consultations that are published before the Bill receives Royal Assent. That means that the regulators can begin acting to meet all their new consultation obligations in this Bill as soon as they are ready to do so, avoiding any unnecessary delays to important regulatory reforms.
Government amendments 5, 6 and 7, which appear in my name, widen the effect of clause 67 to include any obligation to consult introduced by the Bill. That includes, for example, the obligation for the FCA and the PRA to consult their cost-benefit analysis panels.
Clause 68 provides for any expenditure incurred under the Bill to be paid out of money provided by Parliament in the usual way. Clause 69 empowers the Treasury to make consequential changes to other legislation, to ensure that the provisions in this Bill function effectively where they interact with existing legislation. The Treasury will be required to use the affirmative procedure to make consequential provisions that amend, repeal or revoke any provision of primary legislation. That will ensure that there is appropriate parliamentary scrutiny of the exercise of this power.
Clause 70 provides for powers delegated by the Bill to be exercised by statutory instrument. The clause also allows the Treasury to make regulations under this Bill that include ambulatory references to rules and other instruments. Government amendment 8 makes a technical change to clause 70 to ensure that the power to restate and modify saved legislation can rely on the power to make ambulatory references provided for by the clause.
Clauses 71 to 73 are technical in nature. Respectively, they set out the territorial extent of the Bill, when provisions in the Bill will come into force, and the short title of the Bill. I therefore recommend that clauses 65 to 73 stand part of the Bill, and commend Government amendments 5, 6, 7, 8 and 23 and new clause 13 to the Committee.
Tulip Siddiq
I will go through the clauses in this group and ask my questions in turn.
Clause 65 will give the Treasury powers to consider whether a payment system using digital settlement assets or a digital settlement asset service provider is likely to threaten financial stability and should therefore be considered for recognition. How will the Treasury consult the Bank of England when making such a decision? How will the Treasury ensure that the Bank has the expertise it needs to have effective oversight of the operators of a new digital settlement asset or recognised payment system?
I understand that clause 67 and associated Government amendments 5, 6 and 7 would mean that all consultation duties arising from the Bill can be met by consultations made before commencement. The Minister can correct me if my understanding is wrong, but will the Government ensure that this does not result in consultations becoming mere tick-box exercises, with no real impact on the design or implementation of the reforms?
We welcome new clause 13, which will enable better integration across the Payment Systems Regulator and the FCA. What does the Minister hope to achieve with this provision, and how will the FCA and the Payment Systems Regulator be held to account against it? I just want a bit more detail from the Minister on this clause. How will the Treasury guarantee that there are adequate safeguards in place to ensure that the chair of the Payment Systems Regulator does not influence FCA decisions where it may not be appropriate?
Finally, the Minister might not be aware of this, but there are rumours in the press that the Government were exploring merging the Payment Systems Regulator and the FCA. They might just be rumours, but that would be an absolute disaster for consumer protection, so will the Minister, if he has heard these rumours—or if he is the source of them—confirm that the Government have no plans to merge the regulators?
Andrew Griffith
I will write to the hon. Lady about digital settlement assets, in order to try and fully understand what she was pushing at with her question.
On clause 67 and the amendment, the propensity to consult in this space is extremely prevalent, because of the need and desire to get the practitioner and the consumer voice fully represented. Indeed, the hon. Lady and I could both spend a large proportion of our lives responding to the many consultations that are held. However, I have seen no evidence whatever that those consultations are merely tick-box exercises, and I can assure her that that is not the intention. I look forward to engaging with those consultations as we go through this, as they are a fundamental part of the regulatory structure.
On new clause 13 and the chair of the PSR being on the FCA board, I think the hon. Lady mostly welcomed that as an opportunity for the two regulators to work closely together. As I explained, that is de facto the status quo. To the extent that there were any conflicts, I would expect the responsibility to manage and police those conflicts to lie primarily with the chair of the board, as it would in any board. That said, I want a Payment Systems Regulator and a Financial Conduct Authority that work hand in hand, cheek by jowl. I do not anticipate many examples of where we would see conflicts. What we want is effective close working together, as more and more of the systemic risk in the financial system sits with payment service providers.
I have not seen rumours of a PSR and FCA merger. Of course, the PSR effectively emerged from the FCA. It is certainly not my intention to merge them, nor am I aware of any proposals to do so. If anything, by establishing the PSR chair as a separate body or separate person, those two organisations are actually become strong siblings rather than being forced together. That is my understanding.
Tulip Siddiq
The rumours were in the press and the sector was quite worried about it. I appreciate the Minister’s clarification of his position.
Question put and agreed to.
Clause 65 accordingly ordered to stand part of the Bill.
Clause 66 ordered to stand part of the Bill.
Clause 67
Pre-commencement consultation
Amendments made: 5, in clause 67, page 81, line 2, leave out “relevant”.
This amendment, read with Amendments 6 and 7, broadens the effect of clause 67 so that it applies to all consultation duties arising under the Bill rather than only those duties specifically mentioned in subsection (3) of that clause.
Amendment 6, in clause 67, page 81, line 7, leave out “relevant”.
See the explanatory statement for Amendment 5.
Amendment 7, in clause 67, page 81, line 9, leave out subsection (3).—(Andrew Griffith.)
See the explanatory statement for Amendment 5.
Clause 67, as amended, ordered to stand part of the Bill.
Clauses 68 and 69 ordered to stand part of the Bill.
Clause 70
Regulations
Amendment made: 8, in clause 70, page 82, line 17, at end insert
“, except so far as making provision by virtue of section 4(1)”.—(Andrew Griffith.)
This amendment ensures that clause 4(1) of the Bill (power to restate and modify saved legislation) is within the scope of clause 70 for the purpose of being able to rely on the powers in clause 70, when making regulations by virtue of clause 4(1).
Clause 70, as amended, ordered to stand part of the Bill.
Clause 71 ordered to stand part of the Bill.
Clause 72
Commencement
Amendment made: 23, in clause 72, page 82, line 35, at end insert—
“(aa) section (Chair of the Payment Systems Regulator as member of the FCA Board);”.—(Andrew Griffith.)
This amendment provides for NC13 to come into force two months after Royal Assent.
Clause 72, as amended, ordered to stand part of the Bill.
Clause 73 ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned. —(Joy Morrissey.)
Economic Crime and Corporate Transparency Bill (Sixth sitting)
Tuesday 1st November 2022
(2 years, 1 month 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 1 November 2022 - (1 Nov 2022)
The Committee divided: - Ayes: 7 / Noes: 9 - Question accordingly negatived.
Stephen Kinnock (Aberavon) (Lab)
I beg to move amendment 87, in clause 14, page 8, line 11, leave out “at least” and insert “no more than”.
This amendment, and Amendments 88 to 93 would require that, when a company is ordered to change its name under the provisions of this Bill (including in cases where the name is considered misleading or it may facilitate criminal activity) the company must comply with the order within 28 days. This requirement would replace the Bill’s provision to provide the company with a potentially unlimited period of time to comply with the order.
The Chair
With this it will be convenient to discuss the following:
Amendment 72, in clause 14, page 8, line 16, at end insert—
“(2C) The Secretary of State must publish the use of any such direction as set out in subsection (2B) on the registrar’s website.”
This amendment would add a requirement for the Secretary of State to publish any extension of the period of compliance set out in subsection (2B) on the Companies House website.
Amendment 88, in clause 14, page 8, line 19, leave out “at least” and insert “no more than”.
This amendment is linked to Amendment 87.
Amendment 89, in clause 14, page 8, line 23, leave out “at least” and insert “no more than”.
This amendment is linked to Amendment 87.
Amendment 90, in clause 14, page 8, line 29, leave out “at least” and insert “no more than”.
This amendment is linked to Amendment 87.
Amendment 73, in clause 14, page 8, line 34, at end insert—
“(3B) The Secretary of State must publish the use of any such direction as set out in subsection (5)(a)(3) on the registrar’s website.”
This amendment would add a requirement for the Secretary of State to publish any extension of the period of compliance set out in subsection (5) on the Companies House website.
Clauses 14 to 16 stand part.
Amendment 91, in clause 17, page 10, line 5, leave out “at least” and insert “no more than”.
This amendment is linked to Amendment 87.
Amendment 74, in clause 17, page 10, line 10, at end insert—
“(The Secretary of State must publish the use of any such direction as set out in subsection (4) on the registrar’s website.”
This amendment would add a requirement for the Secretary of State to publish any extension of the period of compliance set out in subsection (3) on the Companies House website.
Clause 17 stand part.
Amendment 92, in clause 18, page 11, line 13, leave out “at least” and insert “no more than”.
This amendment is linked to Amendment 87.
Amendment 75, in clause 18, page 11, line 18, at end insert—
“(4A) The Secretary of State must publish the use of any such direction as set out in subsection (4) on the registrar’s website.”
This amendment would add a requirement for the Secretary of State to publish any extension of the period of compliance on the Companies House website.
Clauses 18 to 26 stand part.
Amendment 76, in clause 27, page 16, line 19, after “person” insert—
“and published on the registrar’s website”.
This amendment would add a requirement for the Secretary of State to publish any written notice of exception based on the national security etc. on the Companies House website.
Clause 27 stand part.
Stephen Kinnock
It is a pleasure to serve under your chairship, Ms Bardell.
I add to the comments of my right hon. and hon. Friends in welcoming the Under-Secretary of State for Business, Energy and Industrial Strategy, the hon. Member for Thirsk and Malton, to his place. Over the past few weeks and months, it has been a bit difficult to keep track of who is going where and of the blizzard of appointments. His appointment in particular stood out as a very wise decision by the Prime Minister. We very much look forward to working with the Minister on the Bill and on other issues.
I must add that I am looking forward to working with my colleague the shadow Minister, my hon. Friend the Member for Feltham and Heston. We will work together on the Bill, but I represent the shadow Home Affairs team, looking at the issues through the lens of security, which is so important to our country and is very much the other side of the coin from the economic resilience issue that we are also exploring.
I will speak to clauses 14 to 28 and the amendments to them. Economic crime has a devastating impact on an individual level for our constituents and businesses, and at a national level for our national security and economic resilience.
The Chair
Order. May I say that clause 28 stand part will be a separate debate? I remind the hon. Gentleman that in this group, we are debating up to clause 27 stand part.
Stephen Kinnock
Up to and including clause 27, finishing, and then moving on to clause 28. Thank you for that clarification, Ms Bardell.
The National Crime Agency estimates that £100 billion of dirty money flows through the UK every year and that fraud is causing £190 billion of damage to our economy. According to PwC, 64% of businesses have experienced fraud, corruption, or other economic or financial crime within the past two years, which is up from 50% only four years ago.
The Labour party believes in stronger action to defend our national interest, our economy and our national security from the organised criminals, fraudsters, corrupt oligarchs and kleptocrats. Indeed, as the shadow Home Secretary, the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper), said on Second Reading:
“Ours is a country that has long prided itself on the rule of law and on strong economic institutions, which is what traditionally made it a good place in which to invest, but that is being undermined by economic crime”.—[Official Report, 13 October 2022; Vol. 720, c. 291.]
It is also being undermined by the illicit money flowing through what many call “Londongrad”. As much as that brings shame, it should also bring pride that we are coming together as parliamentarians to debate and scrutinise this important Bill.
We support the Bill, but the devil is in the detail. With 250 pages, a huge amount of detail needs extensive discussion. Part 1 is critical, because it aims to get to the crux of one of the major barriers to tackling economic crime. That problem is the underfunding, lack of regulation and lack of teeth at the heart of Companies House.
Clauses 9 to 22 cover legislation on changes to company names. I have moved amendment 87 and tabled amendments 72, 88 to 90, and 73 to clause 14, as well as amendment 91 to clause 17 and amendment 92 to clause 18. We are surprised that the Bill states that when a company is directed to change its name under the Companies Act 2006, including in cases where the name is considered misleading or might facilitate criminal activity, that company must comply with the direction in “at least 28 days”. That requirement would replace the provision to provide the company with a potentially unlimited period of time to comply with the order. In a moment, I will pause to allow the Minister to clarify whether that provision is deliberate, because it appears to be both rather confusing and rather too generous. Surely, it should say that the company must comply with the order within 28 days. That is what the amendment seeks to achieve—as opposed to “at least” 28 days, it must be within 28 days.
The Bill includes lengthy provisions on company names, and sets out how and for what reason a company may be required to change its registered name. The aim of those provisions is to enable companies’ names to be prohibited in cases where they may be intended to facilitate dishonesty, deception or another criminal offence. Although that aim is laudable, there appears to be a disconnect between the seriousness of the offences that the Government are seeking to prevent, and the lengthy periods of time that Ministers are prepared to allow for a company to comply with an order to change its name.
Given that such an order will generally be made only when a Minister has identified a clear risk of harm in relation to a company’s name—including a risk of fraudulent or other serious criminal activity—it is hard to understand why a company would then be given potentially limitless timeframes to comply with that order. The Opposition believe there should be, at the very least, a time limit on orders to change a name believed to be intended to deceive the public of the company’s true purpose. Companies that fail to comply with such an order within a reasonable period of time, and a 28-day limit seems reasonable to us, should also be penalised if they cannot provide a good reason for any delay or refusal to comply. I am happy to pause here if there is anything that the Minister would like to clarify.
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Kevin Hollinrake)
I am happy to do that. The issue is in the drafting. I had to read this on a number of occasions and speak to officials before I got my head around it, but the provision achieves the purpose that the hon. Gentleman sets out. Clause 14(5)(2) states:
“The direction must be in writing and must specify the period within which the company is to change its name.”
It is a fixed period of time. It sets out the ability to give a company more time in certain circumstances, but the intention is to do exactly as the hon. Gentleman wants: a company has 28 days to comply. It will be told how long it has to comply, and that may well be 28 days.
Stephen Kinnock
I thank the Minister for that response. As he pointed out, he had to read the provision several times in order to be clear on the drafting. Clause 14 (5)(3) says:
“The period must be a period of at least 28 days”.
Our intention is to make it clear that it has to happen within 28 days. There is a clear difference between “at least” and “within”. “At least” gives the impression that a company could have an unlimited period of time beyond those 28 days, whereas if we clearly state that it must happen within 28 days, then there is no room for doubt whatsoever. Would the Minister like to come back to me on that?
Kevin Hollinrake
Again, if the hon. Gentleman reads that in the context of clause 14(5)(2), he will understand that it is a fixed period of time. That is what companies will be given.
Stephen Kinnock
Maybe the Minister and I are just not seeing it through the same lens. I agree that there should be a fixed period, but I think it should be clearly defined that the fixed period must be a maximum of 28 days. Does the Minister think that the Bill as drafted makes that clear?
Kevin Hollinrake
The point is there may well be valid circumstances where a company might take longer than 28 days, for example if it needs to seek a resolution from its shareholders or directors. In those cases, a company might then apply to Companies House or the Secretary of State to extend that time period. That is where the “at least” comes in, and it must be seen in the context of the “within”. Listen, I am not a lawyer. I do not think the hon. Gentleman is a lawyer. The lawyers have chosen to draft the legislation in this way. I do think it serves the purpose, but I can understand why the hon. Gentleman is seeking clarification.
The Chair
Order. The hon. Member needs to respond first. Then the right hon. Lady can intervene.
Stephen Kinnock
You are absolutely right to keep us in line, Ms Bardell. We need to ensure we can operationalise the Bill in the clearest and most succinct way that leaves absolutely no room for doubt. The Bill is designed to regulate a sector of the economy that is like water; if it can find cracks to slip through, it will find them. We are trying to close those loopholes.
Dame Margaret Hodge
I am bewildered. The Minister may be too. Proposed new subsection (4A) in clause 14(5)(b) sets out that an application must be made “within the period of three weeks”. Obviously the lawyers do not think it is bad to put “within a period of three weeks” in that particular context. If someone says “at least”, that is a minimum, not a maximum. At least is a minimum. I cannot think that a lawyer would not have common sense about it. Perhaps the Minister wants to go away, reflect on this and move an amendment later. I do not believe lawyers are quite that removed from reality and common sense. It literally says in that clause “made within”. The lawyers do not mind using that term sometimes, so why can they not use it always?
Stephen Kinnock
My right hon. Friend has hit the nail on the head. I hope the Minister will reflect on that.
Moving on to clauses 15 to 22, we are content with clause 15, which would allow for objections based on the company name being misleading outside the UK and for the shareholders and directors of said company to be joined as respondents or defenders in the claim. In their February 2022 White Paper, the Government explained the rationale for expanding the grounds for objections to be made to a company’s name. It was broadly accepted that the current restrictions, for instance on names that imply a link to the UK Government, were too narrowly drawn.
Responses to the consultation reflected widespread concern about the impact company names that are clearly deliberately misleading might have on legitimate businesses in cases where rogue companies try to suggest they have a connection to a well-known business and thus benefit from wider public recognition of, and perhaps even loyalty to, an established brand. Such appropriation of company names is now understood as a means of scamming would-be investors out of their money. Earlier this year, for example, there were high-profile reports of a scam involving a company calling itself Diageo Partners Ltd. It attempted to solicit an investment by presenting itself as an arm of the well-known drinks company of that name. Another case flagged by the Financial Conduct Authority in January involved similar attempts by scammers to link themselves with the financial institution Wells Fargo.
Clause 15 is a welcome recognition of those issues and should go some way toward addressing them. However, many legitimate companies that raise objections via the Company Names Tribunal are currently facing delays of three months or more before they can get a decision. I wonder whether the Minister could explain what steps the Government will take to help speed up the Company Names Tribunal process and ensure that fraudulent company names are corrected as quickly as possible.
Kevin Hollinrake
I will address the hon. Gentleman’s points in my full response. There are some amendments we have tabled that address his exact points, and I would like to speak to those in detail.
Stephen Kinnock
Excellent.
We support clause 16, which gives extra powers to the Secretary of State to direct a company to change its name only if he or she deems it to be as little as “a risk of harm” and makes it clear that harm can apply outside the UK. However, in clauses 15 and 16, the Bill seeks to broaden the scope of misleading or otherwise harmful effect, which can be used as grounds to require a change of name. The provisions cover the potential for a misleading company name to cause harm in any part of the world, not just in the UK, and that is surely welcome recognition of the reality of today’s landscape of online fraud. Clearly, scammers and fraudsters have no respect for national borders and it is right that a UK company that is causing or attempting to cause harm in another country should be subject to enforcement actions requiring it to stop. The wording used in clause 16 and elsewhere, referring to actions that pose a risk of harm to the public, is exceptionally broad. Will the Minister expand on how that definition might be given greater clarity and, indeed, clearer definition? Will he provide some practical examples of how those powers might be used? I look forward to his insights.
Clause 18 introduces a procedure that allows the Secretary of State to direct a company to change its name where the name breaches the requirements of the Companies Act 2006, including as amended by the Bill. Failure to comply would be a criminal offence by the company and all responsible officers. The provisions in clause 20 would empower the registrar forcibly to change the name of the company if the company does not do so. That all sounds eminently sensible and we support the measures.
We support clause 21, which makes consequential amendments to the new powers to change a company name under the Bill, for example, because it contains computer code. That requires the registrar to replace the old name with the new one on the register. We also support clause 22, which provides for the Secretary of State to allow company names that are otherwise prohibited where considered necessary for national security or to prevent or detect serious crime.
While the previous clauses refer to company names, clauses 23 to 27 refer to a company’s trading name or business name, which can be different from the company name registered with Companies House. Business or trading names do not need to be registered with Companies House, but they need to adhere to the general restrictions listed in part 41 of the Companies Act 2006.
Clauses 23, 24 and 27 make similar changes to trading names as clauses 10, 16 and 22 in respect of company names. We have no objections there, although my hon. Friend the Member for Feltham and Heston might wish to speak to her amendment to clause 27 shortly. Clause 25 prohibits a company from using a business or trading name that is the same as a company name that it has been ordered to change. Continuing to use a trading name in such circumstances amounts to a criminal offence by the company and every responsible officer. Clause 26 states that where a company has been ordered to change its name, it is a criminal offence for an officer or shareholder of that company, with some exceptions, to use that company’s name as the business name for another company. We recognise the sound reasoning behind each of those clauses.
The Chair
Order. Will the Minister take a seat for a second? Seema Malhotra wants to make a contribution. If Members are looking to speak to amendments, may I remind them of the convention of bobbing? It helps the Chair out.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
Thank you, Ms Bardell. I do not think we were fully clear between us. It is a pleasure to serve under your chairship. I rise to speak to amendment 76, which is in my name and the name of my hon. Friend the Member for Aberavon. I want to conclude on the remarks he has already made.
Clause 27 sets out exceptions to name change directions if the Secretary of State is satisfied that it is in the interests of national security, or of preventing and detecting serious crime, for a business to carry on operating under a name that goes against regulations. We have tabled this amendment to require any exemption to a name change direction on the grounds of national security to also be subject to appropriate transparency.
Amendment 76 is a probing amendment designed to clarify the purpose and circumstances in which the Secretary of State can use their powers of exemption, and who will be aware of how the exemption is being used. The Minister may tell me that some of this is subject to greater security. In that case, which body or Committee would be aware, even under Privy Council rules, of the use of these powers?
Kevin Hollinrake
It is a pleasure to serve with you in the Chair, Ms Bardell.
As Members will have noted, this group is large and includes both amendments and clauses. The hon. Member for Aberavon—I appreciate his kind words and those of the hon. Member for Feltham and Heston—has tabled many amendments, and they would make changes across multiple clauses. It will therefore be helpful for all Members if I lay out the effects of the clause as currently drafted, before turning to the amendments and the many points made during the debate.
Clauses 14 to 22 together form the majority of the chapter on registered company names. At present, the Companies Act 2006 leaves it to the discretion of the Secretary of State to determine the time period within which a company must comply with a direction to change its name. Clause 14 amends that to standardise the various direction-issuing powers already found in part 5 of the Companies Act 2006 and those that are inserted by this Bill. This means that in all instances where companies are directed to change their registered names, they must do so within at least 28 days of the date of the direction. [Interruption.] There are two things I would say to the hon. Member for Aberavon. Clause 14 must be looked at in context, and the point is that proposed new subsection (2A) of section 64 of the Companies Act would give
“a period of at least 28 days beginning with the date of the direction.”
Combined with new subsection (2) of section 76 of that Act, as inserted by clause 14(5) of this Bill, that means the direction will be a fixed period. There will be a fixed period, just as he wants, and in all likelihood it will be 28 days. It may sound like odd drafting, but the “at least” part is to ensure that the direction cannot be less than 28 days to give companies a reasonable chance to make the change. Once the decision has been made on how long the company will get, that will be a fixed period, unless the company provides justification for changing it.
Dame Margaret Hodge
Further on in the Bill, there are a lot of Henry VIII powers. I cannot see the justification in this context, and perhaps the Minister can advise us why we cannot put 28 days in the Bill. It has to be “at least”, but it also has to be “at most”. Let us just put that in the Bill. I do not know why we give any Minister discretion on this. It ought to be in the Bill.
Kevin Hollinrake
It is in the Bill. The point is that the company, in some circumstances, can effectively apply to have that time period extended. That is the point of this; that is where the “at least” bit comes in.
Seema Malhotra
Perhaps the Minister can clarify whether a period of 128 days given in writing would be in line with the terms of the clause. Did he go back to the lawyers to see whether the clause could be redrafted to read that the period must be a maximum of 28 days, beginning with the date of direction? That would still allow for the terms of proposed new subsection (2B) and a permitted extension within three weeks.
Kevin Hollinrake
We need to allow for some discretion when certain companies cannot comply because of certain consequences and for whatever reason. As a simple example, a company might have to get an agreed resolution between directors or shareholders to change its name. That is why the term “at least” applies in the clause.
I would like to move on, because there is more that I would like to share with you, which deals with the issue from a different direction. I will come back to you, I promise you.
The Chair
Order. May I remind the Minister and other Members to speak through the Chair?
Kevin Hollinrake
I apologise. I will not do it again.
Clause 15 makes a set of changes in how objections to a company name are to be considered by the company names adjudicator, established under section 70 of the Companies Act 2006. In cases brought before the adjudicator under section 69 of the Act, the company complaining over another’s misuse of a name is known as the applicant, and the counterparty to that complaint is the respondent. Clause 15 amends section 69 in several ways. First, in recognising that the activities of companies registered in the UK are not constrained by our borders, it removes the geographic scope of complaints that the adjudicator can consider. That allows the adjudicator to consider the ability of a company name to mislead members of the public in jurisdictions other than the UK.
Secondly, the clause plugs a loophole in the existing legislation that allows directors of respondent companies to resign their position to avoid being joined alongside the company itself in the adjudication proceedings. Finally, at present it is the case that unless it can be demonstrated that the respondent registered a name in order to obtain money from the applicant, an application must be dismissed if the respondent has begun trading under the name or has incurred substantial start-up costs. That defence will no longer be available.
Clause 16 amends the Companies Act to lower the bar in terms of the harm test. Currently, section 76 of the Act allows the Secretary of State to direct a company to change its name if, in his opinion, the name gives such a misleading indication of its activities that it is likely to cause harm to members of the public. In future, the Secretary of State will form a view on the basis of whether the name poses a risk of harm, instead of considering whether the name is likely to cause harm, thus giving the Secretary of State greater discretion in the exercise of that power. The clause also clarifies that the potential harm at issue need not manifest itself in the UK alone, but might do so anywhere in the world.
Stephen Kinnock
The Minister is being very generous in giving way. The issue with clause 16 is the term
“pose a risk of harm to the public”,
which seems to be very broad. Can he expand on how that risk might be more clearly defined? Can he give a practical example of how the proposed powers might be used?
Kevin Hollinrake
If I may, I will come back to the hon. Gentleman on that point once I have some information on it from my officials.
Clause 17 will give the Secretary of State the ability to direct a change of a company name where, in his view, it has been used, or is intended to be used, to facilitate the commission of an offence involving dishonesty or deception, such as fraud.
Stephen Kinnock
Briefly on clause 17, I would just like to mark the card because, again, there is an issue with the use of the phrase:
“The period must be a period of at least 28 days”
in proposed new section 76A(3) of the Companies Act. I suggest that that phrase should be replaced with “This period must be a period of no more than 28 days, beginning with the date of direction”, because I think it would be so much clearer and tighter.
Kevin Hollinrake
I will come to that, but the hon. Gentleman’s solution to that does not give any discretion should a company need more time. [Interruption.]
Kevin Hollinrake
That is the reason why the clause is drafted in that way, but I will come back to the hon. Gentleman’s point before the end of my remarks.
The ability to direct a change of a company name recognises that there may already be some companies, among the 4.5 million or so companies already on the register, with names that are facilitating criminal conduct or have the ability to do so. In order to address those instances that may come to the Secretary of State’s attention, the clause will give him the ability to direct a company to change its name. The clause also sets time frames for compliance, penalties and methods of appeal.
I turn now to clause 18, which gives the Secretary of State the ability to direct the change of any company name already on the register of companies that appears to them to contravene any requirement of part 5 of the Companies Act 2006. The Secretary of State can also direct a change of name if, at the time of registration, they had proper grounds for forming an opinion on whether the name was in itself an offence or was offensive, being used for criminal purposes or contained computer code. Without the ability to take action to address such names once incorporated, undesirable impacts can go unchecked. A consequential amendment applies this section to provision on overseas companies.
Clause 19 complements clause 11 of the Bill. Clause 11 makes it unlawful for a company to be registered with a name that contains or comprises computer code. Clause 19 addresses the possibility that computer code lurks among the names of the 4.5 million or so companies already on the register, empowering the registrar to determine a new name.
Clause 20 provides the registrar with the power, by her own action, to change a company’s name where it has not followed a direction to do that itself. Where she does so, she must inform the company and annotate the register accordingly.
Clause 21 makes a consequential amendment related to the administrative aspects of the company name-changing powers contained within the Bill, specifically the duty of the registrar to issue a new certificate of incorporation following a change of a company’s name.
Clause 22 introduces a section into part 5 of the Companies Act that gives the Secretary of State discretion to disapply any prohibition on naming a company or operating under a company name where, in his view, that is justified in the interests of national security or for the purposes of preventing serious crime. On the point about the exercise of national security, commitments to transparency on security exemptions might well by their nature defeat the purpose of the exemption’s use.
I turn now to amendments 87 to 92, tabled by the hon. Members for Aberavon and for Feltham and Heston. The amendments concern clauses 14, 17 and 18, which I have just taken Members through. I thank the hon. Members for the amendments, as they have helpfully highlighted a gap in the Bill. We acted on that yesterday by tabling amendments that address the issue and, I hope, resolve it, albeit in a different way. I refer hon. Members to new clause 34, which effectively allows the registrar to instantly suspend the material on the register referring to the name. In that way, the Bill gives the Secretary of State a new range of powers to direct companies to change their names that supplement and strengthen the existing powers under the Companies Act. [Interruption.] That is on page 65 of today’s amendment paper.
In respect of the existing provisions, it is at the Secretary of State’s discretion to determine the period within which a company must comply with directions. Clause 14 of the Bill seeks to regularise that period across both existing and new direction provisions in part 5 of the Companies Act. That period would be a minimum of 28 days from the date of direction. These amendments seek to make the period no more than 28 days.
I have sympathy with the view that companies should not be afforded longer than necessary to take the steps to comply with a direction. I would, however, draw hon. Members’ attention to the fact that, in respect of the new classes of prohibited name, the Bill is drafted to provide the registrar with the discretion to remove the name of the subject of the direction from the publicly accessible register where a direction has been issued. I assure hon. Members that where there is potential for harm to be caused, the registrar will exercise that discretion and, therefore, the harm will cease at the point the direction is issued, regardless of the length of the compliance period.
Where a name is removed from the register, it would normally be replaced with a company registration number. I anticipate that we will legislate in secondary legislation for the registrar to annotate the register, explaining that the name had been changed because it was the subject of a direction. The Opposition’s amendments have highlighted that the suppression capability is not at present available to the registrar in all circumstances where a direction might have been issued. The Government amendments will ensure that in future it will be. Members can see those amendments in the amendment paper and will have the chance to debate them in a future sitting.
Clauses 23 to 27 comprise a chapter on business names. Clause 23 mimics clause 10, which I explained earlier, in the context of the use of business names in the UK. It builds on existing safeguards in part 41 of the Companies Act 2006, which makes it an offence for a person to carry on business that gives the impression of a connection with the UK Government and public authorities. The clause supports that framework by making an amendment to the 2006 Act that provides safeguards in the international sphere. The clause also contains the same safeguards for those conducting business with legitimate connections.
Clause 24 amends section 1198 of the 2006 Act to lower the threshold for the likelihood of harm required to satisfy the legal test. Currently, it is an offence for a person to carry on business in the UK under a name that gives such a misleading indication of activities that it is likely to cause harm to members of the public. In future, the offence will be based on whether the name poses a risk of harm to the public.
Clause 25 closes a loophole in existing legislation. At present, there is nothing to prevent a company that is the subject of a direction or order from carrying on business in the name that it has been directed or ordered to change. The clause makes it an offence to do so. There are exceptions to that where the period for complying with the direction or order has not passed, where the company has since been registered with the name following approval under proposed new section 57B of the 2006 Act, or where the direction or order was given before the clause commences.
Clause 26 introduces a proposed new section in the 2006 Act and builds on what is done in clause 25. Clause 26 makes it an offence for a company to carry on business in the UK under a name that another company has been directed or ordered to change where both companies share, or have shared, the same officers or shareholders.
Clause 27, the final clause in the group, introduces a proposed new section in the 2006 Act and gives the Secretary of State discretion to disapply any restriction or prohibition on carrying on business under a name, if it is in the interests of national security or for the purposes of preventing or detecting serious crime. Where such discretion is exercised, the Secretary of State must give written notice of confirmation to any relevant person. It is necessary that sufficient flexibilities exist in all areas to take the steps most appropriate to safeguard security and target serious crime.
Amendments 72 to 76 would impose a duty on the Secretary of State to publish details of instances where he had extended the deadline for companies to comply with directions that he had issued to them to change their company name. I am not sure, however, that it would achieve what the Opposition really intend it to. It is of course always dangerous to make assumptions, but I suspect that what those who have tabled the amendment really want is for information to be published about each and every direction that the Secretary of State has issued, and that is not what it would do. I reassure hon. Members that we will consider how that information might best be made available—potentially, for example, through annotations of the companies register, which would of course be available to view through the Companies House online service.
I thank Members for their patience. I have taken them through a technical but important part of the Bill. I hope that they will appreciate that their amendments perhaps do not have the desired effect, particularly taking into account the Government amendments that have been tabled.
Stephen Kinnock
I thank the Minister for coming back in such detail on our points. We certainly look forward to studying new clause 34. We have not really had an opportunity to look at it yet, but it is great to see that the Minister and his team have taken our amendments on board and come up with something that will hopefully enable us to find common ground.
I want to make two additional points. The first goes back over the ground of “at least” versus “within” debate. I spoke earlier about proposed new section 76A(3), on page 10, as introduced by clause 17(4), which says that the period must be a period of “at least” 28 days; our amendment suggests that it should be “no more than” 28 days. The Minister said that making that change would give no leeway to the Secretary of State to be able to override in certain cases. We accept that there are certain cases where further direction is required to extend the period; there may well be extenuating circumstances, and we certainly do not want to create a straitjacket for businesses—we take that point. However, proposed new subsection (4) does precisely that. That is why we should lay out in proposed new subsection (3) that the basic principle is “no more than” 28 days. We have no desire to change the provisions of proposed new subsection (4)—with extenuating circumstances, the Secretary of State should be able to extend the period.
We would be more than happy with that change. It only requires the insertion of “no more than” in proposed new subsection (3), and no change to proposed new subsection (4). That would give the right balance between the need for a basic, tightly defined standard and still having the ability for the Secretary of State to extend the period where required.
Kevin Hollinrake
As I said before, I think the Bill achieves the same objective; it might not be with the words of the hon. Gentleman’s choosing, but I think the objective is served by the drafting we have. It may well also be served by the drafting he suggests, but I do not see the point of changing the wording when it already does the same thing.
Stephen Kinnock
I thank the Minister for that response.
My second point is on clause 15, which considers changing names. As we have said, the clause is a welcome recognition of the issues around name changes and companies using names for fraudulent purposes—trying to give themselves connections to well-known brands and so on. Many legitimate companies that raise objections via the company names tribunal are facing delays of three months or more before they get a decision. I asked whether the Minister could assure us that the Government are alive to the issue. What steps might they be taking to speed that process up?
Kevin Hollinrake
I am happy to. I think we would all acknowledge that, due to various reasons beyond any of our controls, tribunals have fallen behind in the cases they are hearing. I am very happy to look at the timeframes that the hon. Gentleman refers to, as I was not aware of specific issues. The important principle behind the clauses is that they allow the Secretary of State, via Companies House, to bear down very quickly when there is the risk of harm to individuals, companies or others.
Stephen Kinnock
In the light of the fact that new clause 34 has been tabled, which we have not yet had the opportunity to study, we will not press the amendment. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Chair
Does the hon. Member for Feltham and Heston wish to move any of the other amendments?
Seema Malhotra
In the light of there being some connection between them all, I think we will not press them.
Clause 14 ordered to stand part of the Bill.
Clauses 15 to 27 ordered to stand part of the Bill.
Clause 28
Registered office: appropriate addresses
Stephen Kinnock
I beg to move amendment 86, in clause 28, page 17, line 14, at end insert—
“(2A) An address is not an ‘appropriate address’ if—
(a) it is not a place where the business of the company is regularly carried out;
(b) the registrar, upon inspection, has reasonable grounds to suspect that the company does not have permission to use the address; or
(c) it is a PO Box address.
(2B) The Secretary of State may by regulations make provision—
(a) for exceptions to subsection (2A) above; and
(b) for the registrar to exercise discretion to disapply subsection (2A) in exceptional cases.”
This amendment seeks to clarify the Bill’s definition of an “appropriate address” for a company’s registration.
The Chair
With this it will be convenient to discuss the following:
Amendment 94, in clause 28, page 17, line 32, at end insert—
“(4A) After section 87, insert—
‘87A Duty of the registrar to verify appropriateness of address of registered office
(1) This section applies where the registrar has received—
(a) a statement of the intended address of a company’s registered office (under section 9(5)(a)), or
(b) notice of change of address of a registered office of a company (under section 87(1)).
(2) The registrar must assess the risk that the company is involved in economic crime.
(3) If following the assessment required by subsection (2) the registrar considers that there is a real risk that the company is involved in economic crime, the registrar must—
(a) take steps to determine whether the address which has been supplied is an appropriate address within the meaning of section 86(2), and
(b) refer the matter to the relevant law enforcement agency.’”
Clause 28 stand part.
Clause 29 stand part.
Stephen Kinnock
This important amendment seeks to clarify the Bill’s definition of an appropriate address for a company’s registration. We have talked many times, both in this Committee and elsewhere, about red flags in company formation and registration. It must be an overriding aim of the Bill to ensure that any indicators of suspicious activity can be swiftly and easily identified in order to ensure that the appropriate investigations and, where necessary, enforcement actions are carried out at the earliest possible opportunity.
One thing is glaringly obvious from the many recent reports on how criminals are able to exploit weaknesses in the company registration system. The widespread, unchecked use of false addresses for criminal purposes is surely one of the most urgent problems for the Bill to address. In evidence to the Committee last week, there was a high degree of consensus from all our witnesses that the fraudulent use of addresses is among the most serious problem within the current register.
Bill Browder provided a cogent summary of the issue. I will not quote him in his New York accent, but I am sure you can imagine it. He said,
“This whole post-box idea just lends itself to anonymity and so on. Why do people not just register their companies at their own home or their own business address if there is a legit company? What is this business with 2,000 companies in one strange industrial park in Glasgow?”––[Official Report, Economic Crime and Corporate Transparency Public Bill Committee, 25 October 2022; c. 74, Q152.]
Though all due respect to SNP colleagues—I am quoting, Ms Bardell, please don’t shoot the messenger!
It is now a well-established fact that there can be hundreds, perhaps even thousands, of different companies registered to a single address. It is hard to think of a more obvious red flag. Ensuring that Companies House can more quickly and easily identify and investigate specific addresses used illegitimately by multiple companies is a vital prerequisite for better enforcement of laws on economic crime.
There are other fairly basic steps that the Government could take to tighten up rules on the kinds of addresses companies can provide as part of the registration process. Amendment 86 provides some specific examples of how that could be done. We hope that the amendment can serve as a starting point for efforts to ensure a much more rigorous set of registration requirements than those currently in place. An obvious place to start is to tackle the apparent overuse of PO box addresses. They have been linked with fraud and other criminal activity in several high-profile cases highlighted in recent media reports.
The FinCEN files also provide evidence of the scale of the problem in the UK. In its February 2022 report on economic crime, the Treasury Committee also described how PO boxes provide many criminal enterprises with a highly convenient way to establish a front for illicit activities while making detection and tracing of those involved much more of a challenge for law enforcement. Amendment 86 would seek to tackle the issue by establishing a general presumption against allowing companies to designate PO box addresses when registering, while leaving open the possibility for exceptions to be made in some cases where there may be legitimate reasons to do so.
Our amendment also goes further by introducing a general requirement for companies to provide a UK address where it actually conducts its business on a regular basis. The absence of such a requirement under the current rules makes it much easier to obscure the true purpose of a company and much harder for law enforcement to trace that and control it.
In part 2 of the Bill, the Government are seeking to strengthen requirements for limited partnerships to provide an address that is its principal place of business in the UK. The Opposition welcome that approach and believe that it could and should be applied more broadly. Therefore, amendment 86 proposes that the address requirement for all companies should be brought closer in line with those of limited partnerships under part 2, as proposed by the Government.
The amendments are all designed with our shared aims and values at heart. I hope that the Minister will take time to reflect and consider their worth.
Alison Thewliss (Glasgow Central) (SNP)
I support the amendment tabled by the hon. Member for Aberavon, and that tabled by the right hon. Member for Barking, because a lot more needs to be done to regulate what is an appropriate address and to verify it in the real world.
In his evidence, Graham Barrow mentioned a 92-year-old gentleman whose name has just been used by scammers for a second time. People fraudulently use names and addresses that belong to real people to set up companies and those people have no idea that their names have been abused. Graham Barrow also highlighted a piece on “You and Yours” on Radio 4 where a lady who had had Asda Limited registered to her terraced house in Huddersfield received 7 kg of post, and all kinds of other threats from bailiffs and others who turned up at her door. That goes to show how the current system is not working. I seek to be reassured by the Minister that the proposed clauses will be sufficient to deal with the problem.
Over many years I have been familiar with problems associated with Scottish limited partnerships—SLPs. The Ferret reported in October 2021 about a company named The Edinburgh Office—a company formation, agent-type of business—which had registered 2,000 companies at their registered address of 101 Rose Street South Lane in Edinburgh—there are no such things in Glasgow, obviously, but these things happen in Edinburgh. Perhaps they do not happen in Aberavon, but they happen in many, many places around the country. Such companies hide behind mailbox addresses. Many of them were at best iffy, others involved outright criminality and all kinds of nefarious activities.
There was a photograph in The Ferret article—I cannot pass it on to include in Hansard—which showed a boarded-up building. That should be a red flag: 2,000 companies registered to a boarded-up building that does not look like a working building at all, but those companies were allowed to carry on their business. I do not know whether the clauses will make a real difference and people will be empowered to check whether those addresses exist in the real world and are being used.
There is also the issue of companies abusing actual companies’ real addresses too. David Leask and Richard Smith, who have been excellent investigative journalists, taking Scottish limited partnerships to task for many years, reported in The Times back in April this year that an SLP in the name of Alexey Krapivin called Clover Consulting Partners gave its listed address as that of the Edinburgh legal firm Burness Paull. Burness Paull said that it knew nothing about it. Clearly, it had been receiving mail, so I do not know the extent to which it checks such things, after receiving mail for a company that does not exist. In any event, it ceased to offer services for company formation to companies of that kind back in 2018.
This company had been using Burness Paull’s address with absolute impunity, and it was not new to dodging the Companies House rules. The company was formed in 2005 and made no meaningful filings to Companies House until it was forced to register a person of significant control in 2017. That was 12 years of non-compliance with the existing Companies House rules, yet there was no comeback on that. I seek from the Minister provisions in the clauses around enforcement, which is not happening under the current rules. I need to be convinced by him that it will happen under the rules that he is laying out.
The clauses talk about fines on a standard scale, and all those kinds of things. Those fines are not even being issued. I have asked parliamentary questions about that. Since the rules came into force only one Scottish limited partnership has been fined for failing to register a person of significant control, and that fine was £210—nothing, in the scheme of things. I ask the Minister whether the rules will be enforced. Will addresses be checked, to ensure that they are real businesses, carrying out real work, with real companies and real people? If not, will he accept the amendment, which goes some way to ensuring that the companies exist at the addresses that they say they do. Without boots on the ground to check such things, it does not matter whether we set it up in Aberavon, Glasgow or Edinburgh; nobody will know that it is not true.
Liam Byrne (Birmingham, Hodge Hill) (Lab)
It is a pleasure to serve under your chairmanship, Ms Bardell. I support the amendment, and that tabled by my right hon. Friend the Member for Barking, because in many ways they go to the heart of whether the Minister is serious about stripping economic criminals of their balaclavas and cloaks of anonymity, which currently allow them to perpetrate some of the worst economic crime on the planet.
I said this morning that when we offer privileges to people in this country, whether benefits or a visa, we put them through the most substantial identification checks. We put those applying for visas for this country through a whole set of biometric checks, which I introduced. When we introduced them the first time around, and began washing those biometric checks against police computers, we discovered that visas had been issued in the past to some of the most obnoxious criminals on earth.
Verification checks are a good thing. I would say that they are required if we are to grant individuals the economic privileges that come through limited liability. That is the privilege that we are giving people when they register a company at Companies House. It is not just a free-for-all; it is a privilege that we created for the common good, and we should therefore ensure that we give it to not just anybody who happens to turn up but people we know. That is why we need a very clear story from the Minister about the regime that he will bring forward to ensure that the cloak of anonymity—these balaclavas on economic criminals—are gone once and for all. Unless we have that reassurance, the Bill will not be worth the paper that it is written on.
Dame Margaret Hodge
I rise to support amendment 86 and to speak to amendment 94 in my name. I have to say to the Minister that this is the first debate where there is a flaw in how the legislation is drafted, such that when the Bill becomes active, it will not serve the purpose that we all desire of it. I can see how we got there, but I ask him to consider looking at it in another way.
Kevin Hollinrake
Permission should certainly be sought; it is just that some people do not seek permission. That is the point behind the clause. We are putting provisions in place to clamp down on that behaviour and completely eradicate the possibility of someone doing that.
Dame Margaret Hodge
Okay, but I have not read anywhere in the Bill of a legal duty placed on an individual establishing a company to seek the permission of the person whose address it is, whether a householder or a business. I cannot see that in the Bill, so it would be helpful if the Minister could direct me to it.
That is point No. 1. My second point is that there is massive abuse of addresses, to which other Members have already pointed. In the FinCEN files, which I happened to have looked at again recently, one case involved a private address in Leicester that was used as the company address of 36 shell companies.
Kevin Hollinrake
I draw the Committee’s attention to the wording of clause 28, on an “appropriate address”:
“A company must ensure that its registered office is at all times at an appropriate address…An address is an ‘appropriate address’ if, in the ordinary course of events…a document addressed to the company, and delivered there by hand or by post, would be expected to come to the attention of a person acting on behalf of the company”.
It is therefore impossible to see how people could just pick any address, as some do now; that clearly would not be an appropriate address, because there would be nobody there to hand the correspondence on.
Dame Margaret Hodge
Interestingly enough, the example that I was halfway through describing proves that one could still choose an address and have documents delivered to it, but, if one had not sought permission of the person whose address it is, it could still be a phoney address.
To follow through on the example in the FinCEN files, a private address in Leicester had 36 shell companies, all with accounts in the Danske Bank in Estonia. The address was in fact that of the home of a Latvian cleaner called Dace Streipa—I hope I pronounced that correctly. When she was confronted by the journalist investigating the FinCEN files, she claimed to know nothing about it. Letters had kept appearing at her house, but she did not know what to do with them.
The other FinCEN files example was that of 175 Darkes Lane, Potters Bar, which I am sure the Minister will remember. It was home to more than 1,000 companies. It may be, then, that there is an obligation, but someone could choose any address, including my home address if they so wanted, and I am not sure that there is an obligation for the person who chooses that address to seek my permission to do so. If I am wrong, I am happy to take that back, but I do not think the clause that the Minister directed me to covers that. We want to stop the cuckooing activity.
Clauses 61 and 62 put duties on Companies House to ensure that identities are verified, but there is no duty to ensure the verification of addresses. That duty is needed: it is part of the proactive role that we talked about at the beginning of this morning’s debate. It should be proportionate and could be done with a risk-based assessment, but if we do not place a duty on Companies House to perform some sort of check on the addresses that are submitted in relation to the formation of each company, as well as a check on the identity of the individuals, we are digging a hole for ourselves and will find that the legislation we pass is not effective in the way that is wanted. I ask the Minister to give the idea really serious consideration, because I do not think the Bill goes far enough to give us the certainty that we seek on the legitimacy of companies that are formed.
The Chair
Order. Before I call the Minister, I remind the Committee that it is helpful if Members indicate in their substantive contribution whether they are going to press or withdraw an amendment.
Kevin Hollinrake
I hear clearly the comments made on both sides of the argument, but I think the provisions in the Bill do tackle the issues that Members are trying to tackle—
Kevin Hollinrake
The right hon. Lady should let me develop my argument, if she does not mind.
We are all aware of the frequent problems that arise when criminals incorporate companies using an address that belongs to a person who has nothing to do with that company, or when criminals hijack the details of a legitimate company and change the address to one that is invalid or ineffective. The Bill contains provisions that will not only reduce the risk of that happening, but mean that when it does happen the registrar can take swifter action to remedy the situation, which I think is what Members are asking for.
The Bill will operate like this. Clause 28 imposes new duties on companies to ensure at all times that their registered office address is an appropriate address. The companies and individuals involved would be guilty of an offence if they did not make sure that the address was appropriate—
Kevin Hollinrake
Let me develop my point a little bit. The meaning is clearly defined in the Bill: an appropriate address is an address where it can be reasonably expected that documents sent to the company will come to the attention of a person acting on the behalf of the company. It is inconceivable that a Latvian lady in Leicester who does not know why she is getting correspondence could be defined as somebody who is able to pass on the documentation to a person acting on behalf of the company.
Kevin Hollinrake
Let me just finish the other critical part of the definition. An appropriate address is an address where an acknowledgement of the delivery of documents is capable of being recorded.
Dame Margaret Hodge
The Minister has not answered the point about whether, in the Latvian cleaner example, her permission would legally have had to be sought for that address to be used, but let us put that to one side. He says that if it does happen, swift action will be taken; how on earth would that ever come to the knowledge of Companies House? How would it ever know if there is no system of spot checking to ensure that the addresses that are used are true? There is no system in the Bill. The main point of this whole argument is that we need a checking system—I accept that not every address would be checked, but it could be a spot-checking system—to ensure that the addresses are valid. That is not in the Bill.
Kevin Hollinrake
And I do not think the right hon. Lady imagines that the registrar could go around them all. I am glad we agree on that.
Kevin Hollinrake
I would like to finish the point. The key point is that the measure requires the people who control the company, be it the directors or persons of significant control, to make statements. If they make false statements or fail to comply with the requirement, they will be committing a criminal offence, as is every officer of the company who is in default.
What the right hon. Member for Barking seems to want is to have armies of address checkers going around the country. This is ex post regulation, which is a more effective means of regulation. I do not suppose that anybody on this Committee wants to inhibit the lawful, commercial activity of the vast majority of companies that go about their normal commercial business every single day.
Kevin Hollinrake
No, not at this point in time.
We are striking a balance between the two. These measures have to be seen in the context of the wider provisions of the Bill on checking the identity of directors and persons of significant control—the people who are controlling the company. If people make false statements, those people and that company will be guilty of an offence.
The shadow Minister wanted to intervene.
Seema Malhotra
Does the Minister agree that being able to use analytics to determine that 1,000 companies are registered at one address would not mean manually going through and using resources in that manner, and would mean—taking a risk-based approach—that we would identify where something needed to be done?
Kevin Hollinrake
Absolutely. We all agree with that. The registrar will look at that.
Kevin Hollinrake
If it is an example where 2,000 companies are registered at an address near Edinburgh, and somebody tries to register that address, that may well lead to a red flag. Companies House is investing in that capability, as part of its work. It is not just about people, but systems and automation of systems, in order to see those red flags. At that point in time, the system would potentially do what the right hon. Member for Barking wants it to do—raise a red flag. That could then be queried with the directors and the people who control the company, and could alert law enforcement authorities. I do not think anybody here is suggesting that Companies House becomes another law enforcement authority. There has to be information sharing between Companies House and the law enforcement authorities.
Liam Byrne
The Minister is being characteristically generous in giving way. The problem the Committee has with the argument about ex post facto regulation is that, if we take the example I gave this morning of the requirement to register persons of significant control, there are still 11,000 companies that have not registered persons of significant control, but there have only been 119 convictions. There is an enormous enforcement gap, which is a real concern to the Committee, not least because the powers that the Minister is seeking are for companies to verify an address, rather than creating a duty to verify the address. Witness after witness gave evidence to the Foreign Affairs Committee on the duty to verify the address, which is why that Committee, of which the Minister for Security was Chair, concluded that there must be a tough verification regime in place at Companies House.
Kevin Hollinrake
The right hon. Gentleman may think a duty to check 4.5 million addresses is proportionate. I think it would be disproportionate. The vast majority of those addresses are bona fide addresses of bona fide companies. We have to take a risk-based approach; I think we would both agree on that.
The right hon. Gentleman returns to resources. We have already had a long debate on resources. He knows that I agree that the registrar, and the law enforcement agencies for that matter, must have sufficient resources to ensure that the registration of persons of significant control is undertaken. That body of work is ongoing now with Companies House.
Stephen Kinnock
Would the Minister consider a PO box address to be an appropriate address—yes or no?
Kevin Hollinrake
No, and I will come to that point shortly.
Clause 29 provides an important new power for the registrar to deal effectively with those abusing our systems. As we have discussed and all agree, for too long criminals have acted with impunity, providing fraudulent addresses for companies set up deliberately to scam people, many of them vulnerable. We know the distress and inconvenience that can cause to many constituents, including when bailiffs arrive at the door in connection with a matter with which that person has no connection.
Alison Thewliss
What happens to all the companies that currently have a PO box, and how long do they have to comply with this measure?
Kevin Hollinrake
As for the period of compliance, we will let hon. Member know. There is a huge volume of records. We want Companies House to be more proactive. We do not want it to be swamped by information being supplied to it all at once. We need to make sure that the commencement order is carried out sensibly. Red flags could well be applied to a company address that has many other companies attached to it. If a company had registered multiple company directors or persons of significant control or had recognised multiple companies at one particular address, that should be the kind of red flag that, following a risk-based approach, would require checks and balances to be put in place. Those companies would be struck off the register and other actions would be taken against the individuals.
The new definition in clause 28 negates the need to include the reasonable suspicion element of amendment 86. Where the registrar, informed by the intelligence and information available to her, has reasonable grounds to suspect that the company does not have permission to use the address, she may come to the view that in the ordinary course of events, the appropriate address conditions will not be met. The registrar will then either reject it or change it according to the circumstances.
Seema Malhotra
If I am following the Minister’s arguments as he intends, is he saying that his view of objective 4 and how it would be interpreted means it would be implicit that the registrar would be expected to check addresses and ensure minimum fraudulent activity and so on? In response to the amendment tabled by my right hon. Friend the Member for Barking, which called for a duty on the registrar to verify the appropriateness of the address using a risk-based approach, I believe the Minister argued that that was implied and would therefore be done under the objectives as they stand.
I put it on the record that we agree with the new clauses and amendments that he has outlined and that were debated with clause 29. They are important. Does the Minister think that, even after his new powers and requirements are in place, the gap will be closed sufficiently? To say that the registrar could act on intelligence available to her either implies that somebody will give it to her or that there will be a function that will operate as if there were a duty. Is that his intention?
The Chair
I remind Members that interventions are supposed to be interventions and not substantive contributions.
Kevin Hollinrake
The objectives promote the integrity of the register. That is quite clear. The registrar therefore has the responsibility to act. The intelligence and information available to her could come from a number of sources, such as third-party sources, law enforcement agencies or financial institutions. Red flags within an organisation can come from a number of places. If a red flag leads to the conclusion that there are reasonable grounds to suspect the company does not have permission to use the address, the conditions will not be met and the registrar will either reject it or change it, according to the circumstances. The golden thread running through that is that the registrar has the power to act on information based on the risk-based approach, which conforms to the request from the right hon. Member for Barking that we do spot checks. A risk-based approach is far more effective than random spot checks. That is what we are trying to get to here.
The hon. Member for Glasgow Central asked about when people would have to move away from PO box addresses to an appropriate address. The earliest commencement by regulation is two months after Royal Assent.
Lastly, I turn my attention to the first element of amendment 86, which would have the effect of compelling companies to register their main place of business as their registered office. That would be problematic for many good companies. Let us take, for example, a company with a large, rural manufacturing facility, which might be considered its main place of business, and a city centre showroom. There are perfectly legitimate reasons for such a company to favour the city over the country as its registered office location. The amendment would prevent that. I hope hon. Members will be reassured that the provisions will be an effective means by which to monitor and police the accuracy of company address information and will feel able to withdraw their amendment.
Turning to amendment 94, I hope the right hon. Member for Barking will agree with me that the Bill’s new definition of what constitutes an appropriate address for the purposes of a company’s registered office address is an improvement on what has existed up to now. It requires the company to have authority to use the address on pain of criminal sanction for the company in breach and every one of its officers in default. I trust she and the Committee members will welcome the provisions that I have just described. I do not think it is proportionate to agree to routine or spot checking for each and every company and, in our view, we need to take a risk-based approach, which I think we all agree with, to make sure Companies House resources are used fruitfully.
In the light of the reforms proposed in the Bill, Companies House, armed as it will be with new powers and objectives, will home in on those companies that are most likely to be engaged in criminal activity. In some cases, intelligence and information-sharing enabled by measures in the Bill might suggest that the registered office address is a clue to that criminal behaviour and might prompt any one of a number of different approaches on the part of the registrar and, potentially, law enforcement agencies. For example, it is my expectation that in future Companies House will consider carefully whether to process multiple incorporations emanating from a single address, as described earlier, and deploy the new querying powers available to it before doing so.
Ultimately, the Bill seeks throughout to focus effort and resource where it will achieve the most meaningful impact. I hope that the right hon. Member for Barking will be reassured that proactive intervention, based on sound risk assessment, is a more cost-effective approach to take and that she will feel able to withdraw her amendment.
Liam Byrne
Perhaps the Committee could take more comfort from the approach the Minister has enunciated this afternoon if he could give us a sense of how many companies he thinks Companies House would be able to check under the new regime each year? Can he give us a sense of the scale and proportion?
Kevin Hollinrake
That is something that we will need to see—the plan for Companies House and the resources needed for that. A figure of £50 or £100 was quoted; if the company formation fee was £50, that would raise £20 million a year. That is quite a significant amount of money. As I said, cart and horse, first we need to see what powers and resources Companies House needs, and then we can apply the right levy in terms of the company formation fee to ensure that the resources are available. A review will also be conducted to ensure that those resources will still be available as time goes on. On that note, I conclude my remarks.
Dame Margaret Hodge
I want to say a number of things. First, may I say to Conservative Back Benchers that I do not think anyone in the room wants to do anything other than encourage maximum commercial activity to maximise growth? Right? I have looked at the issue for a long time, and my view, which I believe is shared by the Minister, is that if we do not sort out the dirty money, Britain will become a less attractive place in which to invest and grow. Let us be clear that we are not in any way trying to over-regulate or impede economic and commercial activity; we want to encourage it. Let us have that as a shared objective.
Secondly, I accept and applaud the work the Government have done on trying to hone down the definition of appropriate address. The proposed clauses and amendments on that are really important, but then comes the “but”, which is that all the evidence we have, from all the leaks we have had over the past decade or so, demonstrates that shell companies abuse addresses for nefarious purposes. That is how they work.
In his concluding remarks, the Minister said that Companies House would intervene “where intelligence and reasonable information was made available to her”. We are not asking for the addresses of 4.5 million companies, or whatever the figure is. The idea of knocking on the door of all such companies is obviously completely and utterly totally absurd, and that is why we are calling for a risk-based approach. The shadow Minister, my hon. Friend the Member for Aberavon, made a very good point; if we could just use the technology intelligently, we could then see whether the same address was being used by 10, 20 or 30 companies. There are ways of doing that, but at present, there is no duty or obligation on Companies Houses to check. I have not found it, but perhaps the Minister will be able to show it to me. We also know that if we do not make that duty clear, it will fall out of the in-tray and go to the back of the to-do list. We then leave the opportunity available for dirty money to enter the country and not be checked by Companies House.
Kevin Hollinrake
If the right hon. Lady looks at the literal interpretation of her amendment, she will see that it puts an obligation on Companies House to check every single address in the UK. It says:
“Duty of the registrar to verify appropriateness of address of registered office”.
It does not say “on a spot-check basis”. It seems to be a blanket provision. I agree with much of what the right hon. Lady has said, but I think we need to be careful. The drafting of this has to be right, because, as she rightly says, we do not want to impede the normal commercial activity of 4.5 million businesses in the UK. That would be detrimental to our constituents and the citizens of this country.
Dame Margaret Hodge
What I would say in answer is that we have had incredibly good advice on drafting, from both the House itself and our own advisers. I would urge the Minister to look at subsection (2) of my amendment, which looks at risk. If the amendment is not drafted absolutely perfectly, then I apologise, but we have done the best we can with the resources available to us. I am not in any way suggesting a 100% check. I am suggesting a risk-based check. If this provision is not included, we will be back in three years’ time and the Minister will be saying, “Oh my god, there’s a massive loophole, and we have to fix it.” Fix it now. That is all we are saying.
If I have the drafting wrong, I am happy to talk to the Minister and get it right. I want a risk-based check by Companies House for when red flags come out. By looking at and interrogating computer data, the registrar actually does it herself, instead of waiting for and depending on intelligence and reasonable information that is available—as the Minister said, in his words, which I assume were provided for him.
Liam Byrne
When my right hon. Friend has those conversations with the Minister, will she ensure she also talks to the Minister for Security? He was Chair of the Foreign Affairs Committee when it took evidence from a number of witnesses who explicitly called for a duty to verify addresses. That point was underlined in the Foreign Affairs Committee’s last report on illicit finance.
Dame Margaret Hodge
I am very happy to do that. I think we all want the same thing. All we are trying to do is find the best way of doing it. I will be pressing this amendment to a vote, I am afraid. My warning to the Minister is that if he does not do the work in this area, he will find that he has left a very wide loophole, which will be exploited by those who want to use us as a destination for illicit finance.
Stephen Kinnock
It is difficult for me to match what my right hon. Friend the Member for Barking has so eloquently said and what other colleagues have said. I think we need to reinforce the point that we need somewhere in the Bill a very clear indication that it is the duty of the registrar to conduct risk-based assessments. If not, the Bill will leave a loophole, and we should not allow that to happen. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment proposed: 94, in clause 28, page 17, line 32, at end insert—
‘(4A) After section 87, insert—
“87A Duty of the registrar to verify appropriateness of address of registered office
(1) This section applies where the registrar has received—
(a) a statement of the intended address of a company’s registered office (under section 9(5)(a)), or
(b) notice of change of address of a registered office of a company (under section 87(1)).
(2) The registrar must assess the risk that the company is involved in economic crime.
(3) If following the assessment required by subsection (2) the registrar considers that there is a real risk that the company is involved in economic crime, the registrar must—
(a) take steps to determine whether the address which has been supplied is an appropriate address within the meaning of section 86(2), and
(b) refer the matter to the relevant law enforcement agency.”’—(Dame Margaret Hodge.)
Kevin Hollinrake
I beg to move, That clause 29 be transferred to the end of line 33 on page 76.
This motion would move clause 29 to the end of Part 1 of the Bill. It is proposed that it would be placed there under a new italic cross-heading, alongside other new clauses about moving addresses in the companies context (see NC5 and NC6).
The Chair
With this it will be convenient to discuss the following: Government amendment 7.
Government new clause 5—Rectification of register: service addresses.
Government new clause 6—Rectification of register: principal office addresses.
Government new clause 8—Power to require businesses to report discrepancies.
Government amendments 44 to 48.
Government amendment 50.
Kevin Hollinrake
The purpose of this set of amendments and new clauses is to better standardise address information requirements across the Companies Act 2006 to allow the registrar to take appropriate action when information is erroneous or misleading.
It is important for users of the company register that the information they find on it is accurate and has genuine utility for them. The amendments standardise the address information that companies will be required to file in relation to corporate directors, company secretaries, relevant legal entities and registerable persons—the latter two being the categories of people with significant control of a company. In future, a service address and a principal office address will be required for all those categories. The former measure will give certainty about where documents can be served, and the latter will give clarity about the physical whereabouts of the party concerned.
New clauses 5 and 6 address the circumstances in which it appears that the stated service address does not fulfil its requirements or that the person of significant control or the company cannot demonstrate that the stated address is their principal office address. The new clauses imitate section 1097A of the Companies Act 2006 as amended by clause 29 of the Bill.
Clause 29 amends the 2006 Act to give the Secretary of State the power to make regulations enabling the registrar to change a company’s registered office address when there is reason to believe that it is no longer appropriate. That power, and those contained within this group of amendments, will be an important weapon in the fight against identity hijack and abuses of innocent people’s address details.
Similarly, the purposes of the remaining amendments in the group are to strengthen the framework for changing address when it is expedient to do so, and to improve the utility of address data. I trust that the Committee will agree that these well-considered amendments and additions will add value for users of the Companies House registers and afford further protection against the nefarious use of private individuals’ information.
Seema Malhotra
I am grateful for the opportunity to speak in support the Government’s amendments and new clauses, which we welcome.
As the Minister has set out, new clauses 5, 6 and 8 give the Government the power to introduce regulations that authorise or require the registrar to change addresses and to serve documents to those with significant control. He also mentioned that new clause 5 mirrors section 1097A of the Companies Act, which confers a regulation-making power to enable the registrar to change a company’s registered address, and an equivalent power for a company’s service address. New clause 6 does the same for the registered principal address of a relevant person
As we have been discussing today, registering an address at Companies House does not require the permission of the owner or occupier of that location. It goes without saying that the negative impacts are significant, from visits from debt collectors or bailiffs to damage to a company’s credit rating. Under the regulations, anyone can apply to the registrar to have the registered office of a company changed, following a procedure. It is right that the Bill broadens that power to service addresses and principal addresses. Those are important steps, and the wider amendments close loopholes on company addresses.
New clause 8 allows documents to be served on persons of significant control over a company as well as on directors, secretaries and others. Amendment 44 requires a corporate director to include a principal office in all cases, rather than its registered or principal office. Amendments 46 and 47 do the same for corporate secretaries. Amendment 45 requires a company to provide a service address for directors who are not individuals. Amendment 48 requires a company to provide a service address for persons of significant control who are not individuals. Amendment 50 requires a principal office to be provided for all partners that are a legal entity in a limited partnership.
It goes without saying that all those amendments are welcome in limiting the value of registered offices used as a way of concealing where a company does its business. We support them, but a question remains about the missing link in the chain. We must ensure that, in the use of the powers that we have been talking about, the registrar will—I hope, from our discussions with the Minister—in due course have a duty to ensure that whatever can be done with a risk-based approach can make the most use of the additional powers and requirements being introduced in the Bill. Without that, it feels as if their impact will be far less, and the achievement of the goals of those powers and requirements will be considerably less than otherwise.
Question put and agreed to.
Clause 30
Registered email addresses etc
Question proposed, That the clause stand part of the Bill.
Kevin Hollinrake
Clauses 30 and 31 relate to new requirements for companies to provide an email address to the registrar. When the Companies Act 2006 was drafted, the vast majority of filings presented by companies to Companies House were on paper, and communications to companies from Companies House were posted to the company. The effect of that, especially in the modern digital world, is to slow things down. These days, the vast majority of filings are made digitally, and the Companies Act needs to change to reflect that reality and more modern working practices.
Clause 30 will require that all companies maintain an appropriate email address. One benefit of that is that communications with a company can be expected to be quicker. In addition, it is a cheaper way to communicate and will provide savings for both Companies House and businesses. A failure to provide an appropriate email address will be an offence, and when a company notifies a change to its registered email address it will be obliged to provide a statement that the email address is appropriate. That will assist the registrar in instances where the email address is found not to be appropriate, and it turns out to be something other than a genuine mistake. I provide reassurance, however, that the effect of subsection (7) is that registered email addresses will not be made available for public inspection. That will reduce the risk of their being used fraudulently.
Clause 31 describes the means by which companies already on the register must provide their appropriate email address. Companies will be required to provide the appropriate email address in a statement submitted alongside their first confirmation statement after the requirements outlined in clause 30 come into effect. That transitional period has been selected to reduce the burden both on companies and on Companies House. Given the number of companies already registered with Companies House, it will provide a staggering of notifications of appropriate email addresses, allowing Companies House to deal with them in a timely manner. Companies will not have to provide an extra document to Companies House until they already have to make a required filing. That is a sensible and proportionate method of ensuring compliance with the new requirements. If the company does not supply the appropriate email address with its confirmation statement, it will be in breach of the requirements.
Seema Malhotra
I have just a few remarks. We have no issues at all with the clauses, and welcome them. Amending the Companies Act to require all companies to maintain an appropriate email address that can be used in correspondence and administrative matters with Companies House seems appropriate. The email address would be trusted, and any emails sent by the registrar would be expected to come to the attention of a person acting on behalf of the company. We therefore support clause 30.
It is also very sensible to have a transitional period. I am not sure whether clause 31 says how long the transitional period will last before the previous clause comes into effect, and I am not sure whether the Minister said so either. He may have a view on that, or he may come forward with it later.
Kevin Hollinrake
I am happy to come back to the shadow Minister with that information in due course.
Question put and agreed to.
Clause 30 accordingly ordered to stand part of the Bill.
Clause 31 ordered to stand part of the Bill.
Ordered, That further consideration be now adjourned. —(Scott Mann.)
Westminster Hall
(2 years, 1 month ago)
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Religious Education in Modern Britain
(2 years, 1 month ago)
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Martin Vickers (Cleethorpes) (Con)
I beg to move,
That this House has considered religious education in modern Britain.
It is good to be here serving under your chairmanship, Dame Maria. Some families—sadly they are a minority, I am sure—will deliver religious education to their younger members, who will grow up with an understanding of whichever faith the family adheres to. But the majority of children, I suspect, learn something of religion at school.
The point is important, because a rounded religious education helps our young people to appreciate the place of religion in our culture, and supports them as they develop their own world view. RE will help them take their place in society. It will support them to be effective and engaged in both the workplace and the wider community, and allow them to critically consider the fundamental questions of life, God, meaning and purpose on the basis of which they will live their lives in modern Britain. It will enable them to learn from centuries of reflection on those questions.
I recall attending a parents’ meeting when my daughter was at junior school. The headteacher said that he regarded school and RE lessons as taking young people to the threshold of faith. That phrase has always stuck with me. It is a valuable one, and I would like our schools to adhere to it.
Life in modern Britain demands a knowledge not just of Christianity but of other faiths. A knowledge of the Christian faith is important not just as an end in itself but as a way of understanding much western culture, art and music. Many of the phrases used in everyday language come from the Bible. We frequently hear sports commentators refer to a “David and Goliath struggle”; if Grimsby Town, which I support, were drawn against Manchester City, that would certainly be appropriate. There are others, such as “the writing is on the wall” and “the salt of the Earth”, and two in particular that we politicians should particularly note: “how the mighty have fallen” and “a house divided against itself cannot stand”.
If we accept the importance of RE, and we accept that it is in school that most of our young people will learn of the importance of religion in our society, we must ask whether our schools are providing RE to a high standard. I googled “law on school worship”, which referred me to the gov.uk website, which then referred me to guidance note 1/94—“94” indicating the year it was published. Is guidance from 28 years ago still relevant to modern Britain, or should it be updated? The guidance states:
“All maintained schools must provide religious education and daily collective worship for all registered pupils and promote their spiritual, moral and cultural development.
Local agreed RE syllabuses for county schools and equivalent grant-maintained schools must in future reflect the fact that religious traditions in the country are in the main Christian whilst taking account of the teaching and practices of other principal religions. Syllabuses must be periodically reviewed.
Collective worship in county schools and equivalent grant-maintained schools must be wholly or mainly of a broadly Christian character, though not distinctive of any particular Christian denomination.”
If, as the guidance states, all schools must provide that, what are the Government doing to ensure that they do? Way back when, I attended Welholme Primary and Havelock schools in Grimsby, and we indeed had a daily assembly with prayers and a hymn. Around a third of my class also attended Sunday school, as I did at Grimsby’s All Saints’ church, which is appropriate to mention on All Saints’ day. Adding those who attended All Saints’ to those who went to local Methodist and Catholic churches, we appreciate that the vast majority of young children in the area attended Sunday school and got a good grounding in Christian teachings.
Let me refer again to the Government website and the collective worship in schools document. The section headed “Government aims” states:
“The Government is concerned that insufficient attention has been paid explicitly to the spiritual, moral and cultural aspects of pupils’ development, and would encourage schools to address how the curriculum and other activities might best contribute to this crucial dimension of education.”
That was the view of the Conservative Government in 1994. Does it remain the view of the Government? I trust the Minister will clarify that.
I suggest that we have a postcode lottery in the provision of RE across the UK. Some of our children receive a comprehensive, well-taught religious education; unfortunately, others receive merely a tokenistic level of teaching. According to the Christian Institute, the Department for Education school workforce census 2021 demonstrated a worrying trend in schools—reporting on other curriculum subjects, but not on RE. That trend was higher in schools following the agreed syllabus and academies without a religious character, at 23% and 22% respectively, while the figure for schools with a religious character was only 5%. One school in five reported offering zero hours of RE for year 11, in a breach of their statutory responsibility. Just under a third—27.4%—of academies without a religious character reported providing zero hours of RE to year 11. About 10% of all schools reported zero hours in years 7, 8 and 9, on average. The figure with respect to provision in academies without a religious character is significant.
Ian Byrne (Liverpool, West Derby) (Lab)
I thank the hon. Member for bringing this important debate to this place.
Yesterday was a day of mixed emotions for me as it was the end of De La Salle School in my Liverpool constituency of West Derby: the school was handed over to a non-faith academy. I want to thank the De La Salle Brothers for their fantastic service to West Derby and nearly 100 years of Catholic education, which positively changed the lives of so many of my constituents. That ended yesterday.
While I will work closely with the academy to ensure that our children continue to get excellent education, does the hon. Member agree that it is crucial that religious literacy is improved? Religious literacy is so important at a time when persecution and the limiting of religious freedoms have increased globally. It is also crucial to maintain the independence and integrity of the subject in schools of a religious character. In Catholic schools in particular, the academic discipline of RE is based on theological teaching, which is already vigorous and has been developed and refined over centuries.
Dame Maria Miller (in the Chair)
Order. I remind Members that it is courteous to those present for the debate to ask questions, not make statements. If any Member wishes to make a speech, please catch my eye.
Martin Vickers
The hon. Gentleman makes some important points, many of which I would agree with.
On provision from academies without a religious character, 13% report zero hours. What action are the Government taking to improve that state of affairs? I hope the Minister will directly address the fact that there should be a national plan for RE, and the fact that all secondary school teachers of RE should be well qualified and specifically trained to teach high-quality RE, either through initial teaching education or continuing professional development. The Government must reintroduce initial teacher training bursaries for RE to support trainee teachers into the profession.
On a national plan for RE, the national curriculum is used as a benchmark for standards in other subjects; if academies do not choose to follow it, they must provide a curriculum that is similarly broad and ambitious. However, there is no national standard for RE, and therefore no effective means to challenge weak or even invisible provision. Former schools Ministers have argued that RE is a vital part of fostering understanding among different faiths and beliefs. Despite that, by the Government’s own admission, no Government money was spent on RE projects in schools over the five years between 2016 and 2021. By way of comparison, during this time English has received £28.5 million, music £387 million, maths £154 million and science £56 million. I suggest there should be a national plan for RE, at least on par with music.
I turn to teacher training and bursaries. At present there are insufficient RE specialists to meet the demand in secondary schools. The Department for Education has missed its recruitment target for secondary RE teachers in nine of the last 10 years, whereas the total number of secondary teachers in history and geography has risen over that period by 6% and 11% respectively. The number of teachers of RE declined by almost 6% during that time.
Recently, the Department for Education failed to include RE in the list of subjects eligible for initial teacher training bursaries, meaning that trainee RE teachers continue to have no financial support from Government despite historic under-recruitment. The result is that pupils are now three times more likely to be taught RE by someone with no qualification in the subject than, for example, in history. RE often becomes the lesson filled by a teacher of another subject with a few spare lessons on their timetable. Recruiting sufficient specialists into training takes such a long period that it leaves senior leaders with no choice but to cut RE or fill lessons with teachers who mainly teach another subject.
Ofsted inspections can make or break a headteacher’s career. Their ratings can affect pupil admissions and, consequently, capitation funding. They can attract or put off high-quality applicants for teaching posts. As a result, school teachers frequently pay more attention to Ofsted than guidance from the Department and even the law. Evidence from a 2019 survey conducted by the National Association of Teachers of Religious Education showed that 61% of academies without a religious character received an inspection rating of “good” or “outstanding”, while only 50% of non-faith academies were compliant with their duties for delivering RE. Of community schools, 62% received a “good” or “outstanding” rating, but only 60% were RE-compliant. This contrasts with Ofsted’s approach to teaching other aspects of a school’s basic curriculum, which sits outside the national curriculum.
Failure to deliver relationships and sex education— the subject RSE—that meets Ofsted standards almost guarantees a rating of “requires improvement” or “inadequate”. In its report “The Watchmen Revisited” from February 2020, the think-tank Policy Exchange suggested that Ofsted defended this position by saying that the teaching of RSE is a matter of providing for the personal development of pupils, whereas the teaching of RE is simply about compliance with the law.
The Policy Exchange report concluded,
“We consider this approach concerning. Firstly, the view that RSE is of importance in personal development but that Religious Education is simply about compliance is a value judgement that suggests a lower importance is being placed upon matters of faith than upon other subjects. More fundamentally, regardless of a person’s individual beliefs about the relative importance of RSE or Religious Education, it is not the role of Ofsted to determine which statutory obligations schools should, or should not, be required to comply with, but rather to inspect according to the democratically expressed will of Parliament, or, in cases of Department for Education policy, the will of its democratically elected Ministers.”
It may also help if I remind hon. Members that the UK Government is a co-signatory to the statement on freedom of religion or belief and education, which states that signatories will commit to
“prioritising inclusive curricula and teaching, matched to all students’ needs, regardless of their background, that provides foundational skills for all”.
Signatories will also
“support teaching that promotes the equality of all individuals, regardless of their religion”.
I am sure the Minister will agree that freedom of religion or belief is a key principle that must be upheld. By taking the actions I have outlined today, we can be sure that the UK remains fully aligned with that principle. Sadly, a lack of knowledge and understanding about religious and non-religious world views, exacerbated by the reduced provision of RE, limits school leavers’ ability to have respect and tolerance for people with different religions and beliefs in their own communities.
The rise of faith hate crime in Britain is another indicator that more high-quality education in religion and world views is needed. RE is essential in equipping young people with the knowledge they need to work and interact with those who have different perspectives. It not only plays a vital role in ensuring that young people receive a broad and balanced education; it also ensures that our children are well equipped to interact and engage with their peers in our local communities.
Dr Matthew Offord (Hendon) (Con)
I congratulate my hon. Friend on his speech, and I am very pleased to see the Minister back in his rightful place in the Department for Education. Does my hon. Friend agree that faith-based schools have greater educational attainment rates than schools that have no religious element? Places such as the Hendon constituency in the London borough of Barnet have above-average exam results as a result.
Martin Vickers
My hon. Friend makes an important point, with which I entirely agree.
Modern Britain is a global Britain. It is more common than ever to meet people from all over the world in both a professional and personal capacity, and to deal with business partners, colleagues and friends who draw from a wide range of world views. Some surveys indicate that almost 70% of the world’s population affiliate with a religious tradition, so if we do not provide our children with knowledge of religious and non-religious world views, we are leaving them ill prepared for life in the modern world.
To recap, my main asks today are that the importance of RE should be reflected in a properly funded national plan for RE, with all pupils taught by well-qualified and trained teachers who have access to bursaries where necessary. This will ensure that high-quality RE is delivered, thereby promoting respect and tolerance, encouraging strong community relations and promoting freedom of religion or belief. Through a comprehensive, well-taught curriculum in RE, our children can engage with diversity with confidence, sensibility and respect. As my hon. Friend the Member for Hendon (Dr Offord) pointed out, we are pleased to see the Minister back in his place, and I urge him to give strong consideration to the points I have made. I hope that he will agree to meet me and the RE Policy Unit to discuss matters further.
Luke Pollard (Plymouth, Sutton and Devonport) (Lab/Co-op)
It is good to see you in the Chair, Dame Maria. I thank the hon. Member for Cleethorpes (Martin Vickers) for introducing the debate so well and for clearly setting out his asks, which are shared cross-party.
I declare an interest as the proud son of a theologian. My mum taught me from an early age the importance of not just understanding difference but celebrating it. That is at the heart of the utility of religious education—the teaching of religions in modern Britain. If a cause can unite a fabulously camp lefty MP such as me and Government Members, I have to say to the Minister—it is good to see him back—that it is a cause worth listening to, because it unites the entire stretch of parliamentary debate.
RE is often valued for its contribution to values education—the teaching of values, which are the foundational building blocks of our society. Our diverse society provides an opportunity for students to examine values from a variety of religious and secular points of view. That is at the heart of what teaching religious education can provide as an output. Although the west is increasingly secular, it is worth saying that we are an outlier globally. The vast majority of people on our planet lead a religious life in some way, and we are setting our children up to fail if we do not teach them the value of understanding different societies, so that they can draw on the benefits of that diversity in their own lives and in a way that benefits our culture as a whole.
British culture would not be where it is today if it were not for religion. Regardless of whether someone is religious or not, understanding our culture, philosophy and politics matters, and that will be so much harder unless we equip our young people from an early age with an understanding of religion, the different values within religion, the tensions between religions and the fact that, at the heart of every major world faith, is a similar principle: to love each other and to do good to one another. However it is formed, in whatever book it is written, and however people worship, it is the same human principle of looking after one another.
Religious education matters, and it should matter to more of us more often today. Teaching a child to engage in the differences in the sensitive area of religion equips them with the skills of critical thought and listening to others and with the attitudes of empathy and discernment, expressed with courtesy. Those words matter because that is the type of person I want to see leaving our school system: someone who has strongly held, thoughtful views of their own, but who can also listen to someone else, even if they disagree, and who can challenge their own views and help inform others.
Like dance, modern languages and drama, RE is an endangered species in our school curriculum; it is being squeezed out by an attempt to focus on a smaller number of subjects. That is not to say that the subjects the Government have focused on in recent years are not worthy of focus—maths and English are important for everyone—but our education system should deliver well-rounded young people to the world. Without an understanding of RE, there is a hole in their education.
RE is vital to being not only a good global citizen but a good British citizen, which is what we should seek to create. That is why this debate is about not just faith but politics. At the next general election, I would like every major political party to include a simple line in their manifesto stating that RE should be taught more in schools. Parties should say, “We recognise the value of this. We think there is importance in studying it.” We should therefore focus on how we train our teachers and ensure they are equipped with the deep knowledge to interrogate and communicate faith and share experiences with others. That is why the asks of the hon. Member for Cleethorpes were so powerful.
The good folks at NATRE have done a great job in sharing briefing materials with Members—I am sure we will hear that a few times. In particular, I pay tribute to Katie Freeman, a brilliant young RE teacher from Plymouth, whom many hon. Members will have met. The way she expressed to me her calls for a national plan for RE made it human. It is not just a document to sit on a Department for Education shelf; it is a way of motivating RE teachers to see their own value and of saying to them, “What you teach our young people matters.” It is a way of saying that weak or invisible teaching should be challenged, whether by Ofsted, governing bodies, headteachers, parent governors or children themselves, with a focus on what has happened.
Over the past five years, more and more teachers have come into our school system with zero hours of teaching in RE, so they lack a deep knowledge of religious education. Teacher training lasts five years, and 20% of teachers reported no RE training, and a further 20% reported less than three hours’ training. That is wholly insufficient if teachers are to understand the fabulous diversity of faith on our planet, let alone how to communicate it to our young people.
I support the call for the Government to look again at reintroducing initial teacher training bursaries for RE. If we are to value RE in our school system, we must value the teaching of it and, therefore, the training of teachers in it. As mentioned, having a national standard for religious education to challenge Ofsted is really important.
Worship is not religious education, but it is what many people come to this debate through. They are concerned that the values they were taught have somehow deteriorated or been eroded or removed. However, the same value that we come to the debate with should encourage us to ensure that every child has an understanding of the diversity of faith, the diversity of values and, importantly, the similarity of values. When hate is on the rise, we have a choice about what we do about it. We need to arrest the immediacy of rising hate—the hate crimes against people based on their religion, background or sexuality—but we do so best when we root out the causes of that hate. That is not just with a counter-terrorism strategy or increased policing; it is with education.
I wish the Minister the best of luck in his role. I encourage him to look at how religious education can be not just a hallmark of the Department for Education’s approach to our young people, but part of our overall strategy to address rising hate in our society by working across Government to celebrate diversity and equip all our young people not just to understand the world they are going into but to thrive in it and benefit from the diversity in our communities and across our planet.
Fiona Bruce (Congleton) (Con)
It is a pleasure to serve under your chairmanship, Dame Maria. It is also a pleasure to participate in this debate called by my hon. Friend the Member for Cleethorpes (Martin Vickers), and I commend him for his speech. It is a particular pleasure to follow the hon. Member for Plymouth, Sutton and Devonport (Luke Pollard), my co-officer on the all-party parliamentary group on religious education. I have rarely felt more in agreement when listening to a speech by an Opposition Member—I am almost concerned about that. I absolutely agree that RE should be taught more in schools.
It is important that today’s generation, who will grow up to be tomorrow’s citizens and leaders, should have a knowledge-based understanding of religion and religious beliefs. It is important that that is taught in schools because, as we have heard, it is often the only place in today’s increasingly secular society where it will be heard by young people.
As we have also heard, understanding religion is critical to understanding so much of what is happening in the world today. Modern Britain is a global-facing Britain, and hate speech is on the rise—often much more so even than in this country. I will turn to the international perspective in a moment, but it is critical that we give our young people an opportunity to understand the religious context and content of society today and ensure that they have mutual respect for, and understanding of, those of different faiths or beliefs.
In that regard, RE does work. A pupil from Manchester spoke movingly about how studying RE helped him to be a better friend to a classmate during local repercussions following the bombing at the Ariana Grande concert. We hear, too, of how often other faiths are now shared in our schools. Nursery children at a Catholic pre-school have enjoyed a series of lessons on Eid, Diwali, Hannukah, Christmas and Chinese new year. It is vital that we continue to rigorously teach content-based and knowledge-based religion in our schools.
Understanding different religions is critical if our young people are to navigate the international scene that they are growing up and living in. My hon. Friend the Member for Cleethorpes mentioned the percentage of people across the world who regard religion as important, but there is also the increasing disturbance affecting different religious groups across the world. The Pew Research Centre assesses that 83% of the world’s population lives in countries where there are high or very high restrictions on those living with religious beliefs. Yet the issue is profoundly under-recognised and under-addressed compared with many other global concerns.
Sadly, hate is on the rise across the world. People are losing their jobs, education, homes, livelihoods, families, freedom, access to justice and even their life itself simply on account of what they believe. People are being discriminated against, marginalised, beaten, threatened, tortured and killed, often by their own authoritarian Governments—the very Governments that have a duty to protect their freedom of religion or belief.
I have the privilege of serving for a year and a half now as the Prime Minister’s special envoy for freedom of religion or belief. It is distressing to see how, in the year and a half since I was appointed, religious disputes across the world have escalated. Putin is weaponising Orthodox Christianity in the war against Ukraine. We have seen the military coup in Myanmar exacerbating the persecution of religious minorities, such as the Rohingya Muslims. We have seen the Taliban takeover of Afghanistan, with every religious group there, other than those willing to succumb to the Taliban’s ways, now oppressed and living in daily fear. In Russia, Jehovah’s Witnesses are now being imprisoned as criminals, simply for being pacificists and for being unwilling to serve in the army. We see daily disturbances in Iran, where the Baha’is cannot own land and are restricted from going to university. Elsewhere, Ahmadiyya Muslims cannot vote and, in Nigeria, tens of thousands of Christians and moderate Muslims have been massacred by Islamic extremists. That is the world our young people are growing up in.
Even in what we might call peaceful countries, religion is a key issue and motivating factor in people’s lives. This week, in the elections in Brazil, religious views were a key factor when people decided how to vote. They will also be a factor in the US mid-term elections next week. To deny our young people an understanding of different religions and their importance in people’s lives is to do them a disservice as they grow up and mature. Those who wish to water down the content of religious education are doing our young people a disservice.
We cannot have RE watered down so that it is just an opportunity to have a chat or to discover oneself. How can young people discover and understand anything unless they are given information and knowledge-based academic teaching, so that they can make informed decisions about their way in the world? They have plenty of opportunities in this country to understand the secular environment they live in, but few opportunities to understand the importance of religion to so many others and, hopefully in time, to themselves.
In closing, I would like to pay tribute to the report on religion and world views provided by the Independent Schools Religious Studies Association. It contains some excellent comments and content, which I will not go into, because I am conscious other colleagues need time to speak. However, the report states:
“Religion is more than a worldview—it is a way of life, which involves community, shared values and the sense of the transcendent.”
That is critical; it is so important for young people to be given an opportunity to understand that in the world today, when so many of them are often questioning and looking for answers.
Jim Shannon (Strangford) (DUP)
It is a pleasure to serve under your chairmanship. Dame Maria. I too thank the hon. Member for Cleethorpes (Martin Vickers) for setting the scene so well and for giving us a chance to participate. It is good to see the Minister is his place, and I look forward to hearing his comments, as well as those of the shadow Minister.
This debate could include many conflicting opinions, yet I trust we can all come from a place where we respect the ideal of faith. Although we may treasure our individual faiths, there is undoubtedly a place for all in the diverse United Kingdom of Great Britain and Northern Ireland. I know that the ideal of religious education differs from region to region. I bring the Northern Ireland perspective to these debates, as I always do, and that is somewhat different yet again. The importance of religious and theological teaching could not be more prominent today, given the expansion of belief and the ever-changing faiths we all have.
It is great to be here today to discuss the importance of religion in schools, both primary and secondary. According to the Council for the Curriculum, Examinations and Assessment, religious education in Northern Ireland is a compulsory part of the school curriculum. As I am sure all hon. Members are aware, Northern Ireland is no stranger to different and diverse religious beliefs and the impact they can have on modern society. For young people to be able to understand our changing world, they must be able to interpret different religious issues.
The Department for Education and the four main Churches in Northern Ireland define the religious studies curriculum, allowing for the teaching of the revelation of God, the Christian church and morality from both Protestant and Roman Catholic perspectives. That is as it should be, because the personal relationship someone has with the Lord Jesus is what is important, not their denomination or the church they go to.
Seven out of 10 people—73%—surveyed across the United Kingdom—agreed that the role of religious education in schools is to provide pupils with opportunities to learn about other people, beliefs and cultures. A further 65% stated that the subject also allows young people to evaluate their own political beliefs. That is why the hon. Member for Cleethorpes referred to political beliefs with a religious viewpoint.
I understand that some young people nowadays have become disillusioned with religion, but it is crucial that they have a basic understanding of how religion plays a part in modern society and indeed in modern Britain. Parents are allowed to withdraw their children from some or all aspects of the teaching of religious education, but I always encourage them not to do that, regardless of what they may think of that religion. Having strong faith oneself is one thing, but being able to understand and respect other people’s faith starts from a young age—as early as P4 teaching in Northern Ireland.
The High Court in Northern Ireland ruled that exclusively Christian religious education and worship was discriminatory. However, we must ensure that this ruling, and the calls for it to be considered UK-wide, do not diminish the place of the larger practised religions, such as Christianity, in religious education, but rather allow learning about other faiths equally. I have the utmost belief in Christ as my saviour, but that does not mean that the faiths of Judaism, Sikhism or Islam are of no interest to me.
I can recall the 1960s and 1970s, when I was at secondary college. Our religious education teacher asked the class whether we wanted to know about other religions, and the answer from us all was that yes, we did. Our teacher then introduced us over a period of time to other religions. In the closed society we were in, we perhaps did not have any knowledge of other religions. That teaching gave us an opportunity to understand these things at an early stage. Through another teacher in a different subject I had the chance to understand Irish history. As a proud Unionist, it did not do me any harm to understand Irish history—understanding it a wee bit better never made me less of a Unionist. It does not harm anyone to understand things from another perspective, but it does let people develop a wider understanding and respect for others, which is what I try to do in my life.
We live in an ever-changing world; nowadays people can believe and be practically anything. In my eyes, one thing that does not change is the importance of religion—not just my own belief in Christianity, but everyone else’s beliefs as well. As chair of the APPGs for international freedom of religion or belief, and for Pakistani minorities, I know that the study of religious education allows us a chance to learn about religions without feeling the socialisation or pressure of today’s society.
As always, there was not a thing that the hon. Member for Congleton (Fiona Bruce) said that I do not agree with. She touched on the Uyghurs, the Falun Gong in China, the Baha’i in Iran, the Yazidis in Iraq and the Rohingya Muslims. In Nigeria, which we visited in May and June, we ascertained just how bad the persecution of Christians was, but it is getting worse—there is less understanding. That is so frustrating, because the people we talked to told us they were trying to bring things together, but the reality is that that is not happening.
Fiona Bruce
Does the hon. Gentleman agree that it is not too lofty a thing to say that helping our young people understand how important it is to respect the freedom of religion or belief of others of different faiths and beliefs contributes towards nothing less than global peace? So many atrocities across the world start small and locally and then grow. If we can develop a generation in this country that has respect, and we can promote that across the world, we will be able to stop local friction developing so that people can learn how to live together peaceably. We will then see a better world for the next generation.
Jim Shannon
I wholeheartedly agree with the hon. Lady. That is something we should all strive to make happen. I am reminded of the Hindus in Pakistan and the Ahmadi Muslims in India as examples of people across the world with a different religious viewpoint who are terribly persecuted, both physically and mentally.
My youngest staff member chose to drop religious education at GCSE in order to focus on mathematics, as that was what she wanted to do. She has since said on numerous occasions that she does not feel informed about what people believe and why they choose to believe it. She says it was great to pursue mathematics, but in a way it is a pity that she did not get that understanding at an earlier age.
While I appreciate that education is devolved and our curriculum guidelines differ slightly, the principle that religion is important remains the same. I call on the Education Secretary—we are pushing at an open door—and respective regional Ministers to ensure that the teaching of religion in modern Britain remains in our schools to help to tackle religious discrimination and promote respect for others with a different religion or faith. It is difficult to see a path forwards if we do not know where we have come from. For me, the teachings of Christ, which tell a child that they are loved and chosen, that there is a plan for lives and that they are not alone, are imperative. When social media tells them that the opposite is true, we need the calming influence of religious education in schools.
I am far from perfect—I am probably the most imperfect person in this room—but I believe that the creator, God, has a job that he has set only me to do. Oh, that more of our young people across this great nation would understand their unique, divinely appointed role and that, no matter what the world may say to them, they are special and worthy. I believe that RE plays an important part in understanding that. It is as essential a skill as home economics or technology. When we talk about the important things for future vocations, we should note that religious education in schools is a calming influence and gives us a better understanding of those around us. The hon. Member for Cleethorpes referred to a Scripture text, and I will finish by quoting Jeremiah 29:11, which says:
“‘For I know the plans I have for you,’ declares the Lord, ‘plans…to give you hope and a future.’”
Who does not need that?
Sir Edward Leigh (Gainsborough) (Con)
Happy All Saints’ day, Dame Maria. I congratulate my hon. Friend the Member for Cleethorpes (Martin Vickers), who indeed is a very good friend, on securing this debate.
It is not all doom and gloom. There is an extraordinary, vibrant faith school sector in this country that provides tolerance and superb religious education. Indeed, I was a bit torn over whether to come to this important debate or to the mass at my granddaughter’s primary school this morning; however, I could not miss this debate because the subject is so important. My hon. Friend the Member for Cleethorpes made a powerful case in his introduction to the debate. It is extraordinary and, in a way, shocking that one in five schools offers zero hours of religious education. That is around 500 secondary schools. My hon. Friend is therefore right to say that children are subject to a postcode lottery. The entire thrust of our education reform since 2010 has been to drive up standards in all subjects.
It is a fundamental principle that parents are the primary educators of their children; that is in the universal declaration on human rights and the European convention on human rights. The state’s role, then, is to act as the agent of parents and facilitate their role. That we have a diverse ecosystem of schooling in this country reflects that our society is a rich tapestry, rather than a boring grey cloth. Each child is an individual, and finding a school or other educational route that matches and suits the needs and nature of that individual child is the task of their parents.
I agree with my hon. Friend the Member for Cleethorpes that we need a national standard in religious education. I am rather bemused at the decline of religious education and the ability of so many schools to ignore what is in the Butler Education Act and more recent guidance. As I understand it—the Minister can comment on this—it is the duty of schools to provide some religious education.
My hon. Friend, again, is right to say that parents need the tools to challenge poor or non-existent provision. We need to give them the levers that they can pull to raise standards in our schools and hold staff and school leadership to account. The statistics he has cited regarding the number of RE specialists are disconcerting. We know—it is clear from this debate—that the current provision of RE in schools is not enough, but it seems that we also do not have the number of properly trained specialists to meet the existing level of provision. I hope this debate may make a difference.
I am sympathetic to our Education Ministers. I think we have achieved great things since 2010, and the Minister of State, Department for Education, my right hon. Friend the Member for Bognor Regis and Littlehampton (Nick Gibb), has achieved so much himself; I think of him a lot as I try to converse with my granddaughter, who is learning through phonetics, rather than the alphabet that I was brought up on. The Minister has achieved great things, and he and other Ministers have been responsible for the free schools programme that has fundamentally shifted the balance away from a decrepit, left-leaning echo chamber in education provision. Parents have been put in the driver’s seat, and we have greatly lowered the barriers to entry into the education sector for those who wish to start new schools. However, there are still problems that need working out.
In that context, I mention the faith schools admissions cap, which I have campaigned against for many years; the Minister is well aware of my views. I am disappointed that we have not got rid of the totally counterproductive admissions cap for faith-based free schools. It was introduced as a sop to our Liberal coalition partners in the wake of the Trojan horse scandal, when Islamist extremists were infiltrating schools. That policy has been a total failure—it has not achieved what it was supposed to. First, all the schools involved in the Trojan horse scandal were secular, not faith based.
Secondly—this is the key point—the admissions cap only hits schools that are over-subscribed from outside their faith grouping. Whatever their merits or virtues, Islamic-run state schools tend to educate members of their communities and receive very little interest from non-Muslims. Catholic schools, on the other hand, are incredibly popular with non-Catholics, but although Catholic schools educate many non-Catholics, their primary purpose is obviously to provide a Catholic education to Catholic children. For that reason, our Catholic schools have not been able to take part in the free schools programme. In fact, the only practical effect of the cap is to prevent new Catholic schools from being founded. The policy is not even in legislation—all it would take is the Education Secretary’s signature for it to go away. In our 2017 manifesto, we made a promise to parents that we would scrap the counterproductive admissions cap and allow the Catholic schools sector to expand. We have still not fulfilled that promise, and I very much hope that when the Minister sums up the debate, he will deal with that issue.
Returning to general matters, I know—we all know—that Ministers are balancing a wide range of priorities, but our job in this debate is to remind them that RE is important, and needs to be backed up with funding and support. We last had a debate on this subject in 2011, as my hon. Friend the Member for Congleton (Fiona Bruce) mentioned. She was far too modest; it was her debate. Since that time, she has been made the Prime Minister’s special envoy for freedom of religion or belief. She made a point that I will repeat, because it is obvious: the fact that we live in a world where persecution of people for their religious beliefs or world view is increasing only reinforces the importance of religious education as a school subject, and religious literacy more broadly. The hon. Member for Plymouth, Sutton and Devonport (Luke Pollard) spoke powerfully in that respect—I think we all agree with everything he said, and he said it in a very moving way.
My hon. Friend the Member for Congleton is right that as Britain becomes more diverse, we face more challenges. There is a danger that Britons know less and less about their own background, and how central Christianity has been to the development of our society—to our family of nations, our monarchy, our democracy and our constitution. Indeed, Christian iconography is all over this building. Meanwhile, Britons from newer communities often have very vibrant and active religious faiths: Christian, Muslim, Hindu and otherwise.
Without sufficient religious education in schools, there is a danger that newcomers will find there is no culture to assimilate or acclimatise to, because the natives have forgotten it themselves. We need a holistic and inclusive approach that teaches pupils about not only their own faith, which is vital, but others; in this country, Judaism, Islam and Hinduism are important. Catholic schools in England and Wales devote at least 10% of their curriculum to RE, which allows them to do preciously that. Pupils in Catholic schools spend more time learning about other faiths and world views than students in most secular schools. Despite over a third of pupils in Catholic schools being non-Catholic, the withdrawal rates are almost non-existent at 0.02%, according to the Catholic Bishops’ Conference survey data. I wonder if the lessons from the model that Catholic schools provide could be deployed in other state schools. This is an excellent and important debate, and I hope it makes a difference.
Dame Maria Miller (in the Chair)
We now move on to our last two speakers before I call the Front Benchers at 10.37 am. Perhaps the two gentlemen could split the time between them, so that we can get everybody in—that is about seven or eight minutes.
Jonathan Gullis (Stoke-on-Trent North) (Con)
It is a pleasure to serve under your chairmanship, Dame Maria. I declare an interest as someone who was an RE teacher—although not a specialist, I must confess, which may upset some in the room—and my partner is a head of religious education. Of course, hon. Members will understand the lobbying that took place at home before attending today’s debate.
I congratulate my right hon. Friend the Member for Bognor Regis and Littlehampton (Nick Gibb) on his return as the Minister for School Standards. I did not have the honour of following him directly—although I told him that was my lifelong dream—but being replaced by him is something I am more than happy to take, because he is one of the best Ministers that this Government have had since 2010. A lot of the Gove-Gibbean reforms, as I always refer to them, have meant that education standards have dramatically improved in this country. As someone who worked on the frontline for eight and a half years and saw that at first hand, I want to thank him for his work in this area then and now.
RE is a compulsory subject. It blows my mind to this day that although it is compulsory, some schools are not delivering it up until the age of 18, as is meant to be the case. There has therefore been a watering down of the quality and take-up of this subject in schools, and I have witnessed that at first hand. The term “postcode lottery” is perfect; I have worked in London, Birmingham and other parts of the country as a secondary school teacher and seen at first hand the impact it has had on pupils wishing to take the subject forward. In some schools, pupils were made to take RE, and in others it was an option. It is sad to see the low take-up, which is why we are seeing a driving down of recruitment figures.
It is clear that people who want to come into teaching do not feel that RE is valued in our curriculum. Although I am broadly supportive of a national standard for RE teaching to ensure that there is equalisation across the country, there is an easier way to put RE on the map. I know the Minister disagrees with me about this, but I dare to utter it: we could put RE in the EBacc, giving it the same status as history and geography. Many RE departments sit within the humanities department and feel like the ugly duckling in that department when RE is the only subject not to go in that EBacc pot. Doing so could have a positive impact, enabling pupils and parents to understand that RE is a subject that is worthy taking, and giving it the status it requires to be in schools. That will have a positive impact on recruitment figures, and on the take-up of RE into GCSEs and post-16 education.
When it comes to recruitment figures, I confess that I was the Minister who signed off the latest round of bursaries and scholarships, and I accept that RE was not on that list. That is because—for good reason—subjects such as physics and geography, which also face under-recruitment, offer highly competitive professional wages in the private sector. On top of the £30,000 starting salary that we are committed to delivering as per our manifesto, we had to give bursaries for those subjects—particularly physics, for which new teachers will get a £29,000 scholarship—to drive up recruitment. Had I had longer than my 50 days in post, I would have ensured that RE was included in that list. We reintroduced the bursary for teaching English. It would be good to see that happen in religious education as well. I will certainly support that from the Back Benches.
Although I do not think that someone needs to be a specialist to teach RE to a high standard—of course, I am biased as someone who did that myself—having more specialist teachers for a subject will always improve educational outcomes and attainment. There is no one better than someone with that passion. I am interested in politics and was trained in citizenship, so I was able to deliver those subjects with passion and gusto. Similarly, my partner, who did philosophy at university, is able to go into school and deliver incredibly high-quality religious education teaching. Again, I accept my bias, but her ability to teach is because of her passion for her subject area and the deep knowledge she has gained through her degree. The more we can do to drive up specialisms, the better.
Hate crimes and radicalisation are real threats, as we know at first hand in Stoke-on-Trent. The attack on Fishmongers’ Hall was carried out by a man from my constituency who had been radicalised within Islam. Islam is not a radical religion—let us not forget it is the faith that says, “To kill one human is to kill all of mankind”—but sadly there are those in every faith who push a perverse ideology. We also see that on the far right in the great city of Stoke-on-Trent, with some people pushing a white nationalist agenda.
If we do not have high-quality religious education alongside the fantastic Prevent work that is undertaken by the city council, police and local schools, how will we ever tackle the misunderstandings, mis-teachings and perverse ideologies that are pushed, particularly on to young people? That is why it is so important that we get religious education right, and we make sure that young people understand and challenge their misconceptions.
It is most important that we accept that faith schools are an important part of our system, and even allow some schools to select by faith. The idea that we would not push RE to be a compulsory subject that is taken up properly in the school system seems to be a bit of an oxymoron, and challenges what we are saying in other areas. We should be pushing work at schools such as St Wilfred’s, St Mary’s and St Thomas’s—all within Stoke-on-Trent North, Kidsgrove and Talke—to give a high-quality, faith-based education alongside a high-quality, rigorous curriculum. The Minister would want and demand that, and I fully support him in that.
I hope that we have sent a big signal today. This is definitely a cross-party effort and feeling. The hon. Member for Plymouth, Sutton and Devonport (Luke Pollard) gave a fantastic speech, and his idea that every Government and every party should commit to religious education in their manifesto is something that I will push within the Conservative party come the next general election.
Nick Fletcher (Don Valley) (Con)
It is a pleasure to serve under your chairmanship, Dame Maria. I congratulate my hon. Friend the Member for Cleethorpes (Martin Vickers) on securing a debate on this important issue.
It was less than two months ago that Her late Majesty the Queen lay in state in Westminster Hall. As a nation, we remember that time with sorrow, but we have immense gratitude for her life of service and faithfulness. In that life, she was strengthened by a personal faith in Jesus Christ. That was explored in the only book to which she personally wrote a foreword, entitled “The Servant Queen and the King she serves”, which was published on her 90th birthday. Her personal faith in Christ, which sustained her in service to people of all faiths, was also an expression of important principles at the heart of the UK’s culture, law and constitution.
The cross and orb that surmount St Edward’s crown, which is used in the coronation, represent the same truth as the title of that book. When the monarch sits on the throne wearing the crown, he or she is sitting below a representation of the cross of Christ that itself sits atop an orb representing the globe. The meaning is profound: the monarch is accountable to God for his or her rule. All human rulers reign under God. The laws that they enact must be accountable to a higher standard of morality, embodied in the character of God as seen in Christ and in his word.
The cross represents the fact that we all fall short of that higher standard. None of us can live up to it, but Christians believe that Jesus suffered on the cross so that we can be redeemed and restored to have a relationship with God. They believe that he rose again to reign as the ultimate king, not of a kingdom of this world—as he said to Pontius Pilate—but of a spiritual kingdom. His reign sets the example of servant leadership—of the one who stooped to wash the feet of his disciples and then stooped lower, even to the grave. Many people—young, old and of all faiths—admired the expression of that in our late Queen’s life of service. However, there is a real concern that our education system robs young people of the chance to understand the substance of Christian belief, which shaped not only the life of our late Queen and of our nation, but the lives of countless people in this country and across the world.
Of course, Jesus Christ was Jewish, not British or European. Christianity is not a uniquely western religion, and, sadly, we as a nation have often fallen very short of his example, but without an understanding of Christianity it is not possible to understand British culture or the foundations of our institutions and laws. It is right that the law requires state-funded schools to provide religious education to all pupils, and that that education reflects the fact that religious traditions in Great Britain are in the main Christian, while taking account of the teachings and practices of the other principal religions represented in our country.
It seems to me that that balance is exactly right. We are not about excluding other religions from consideration —quite the opposite. They should be properly recognised and taken account of in the preparation of the RE syllabus, but RE needs to recognise the particular place of Christianity in Great Britain. Young people are entitled to be taught about it; that is what the law requires. However, under pressure from many competing demands, the failure of Ofsted to hold schools to account regarding this requirement means that it is all too tempting to let it slip, particularly when the failure to invest in teachers and to resource religious education makes it hard to deliver the subject well, yet RE is a popular subject at GCSE and A-level. I would therefore be grateful if the Minister could tell us what can be done to ensure that schools respect the will of Parliament in this matter.
Stephen Morgan (Portsmouth South) (Lab)
It is a pleasure to serve under your chairmanship, Dame Maria. I congratulate the hon. Member for Cleethorpes (Martin Vickers) on and thank him for securing this important debate on a subject that is vital to the future of young people and our country.
Let me take this opportunity to welcome the Minister of State, Department for Education, the right hon. Member for Bognor Regis and Littlehampton (Nick Gibb) back to his place. Although he is the fourth Minister in post in the 10 months I have had the privilege to shadow the role—I do not know whether that is my doing or his—I look forward to working with him to put our nation’s children first and give our schools the support they so desperately need.
It is clear from the contributions this morning that Members from throughout the House agree that religious education is a vital part of children and young people’s development. I pay tribute to RE teachers up and down the country for their professionalism and dedication.
The hon. Member for Cleethorpes spoke about the importance of religious education and of religion’s importance to art, culture and society. He raised concerns about the postcode lottery of RE teaching in schools and the need for a national plan for RE. I was also struck by his remarks about the contribution that RE can make to the prevention of hate crime.
Those views were echoed by my hon. Friend the Member for Plymouth, Sutton and Devonport (Luke Pollard). As ever, he spoke passionately, recognising and celebrating the diversity and importance of RE and the role it has to play in the curriculum. He also spoke about the importance of training RE teachers. He raised the issue of tackling rising hate crime and said there should be a cross-departmental effort on that, including by investing in RE. Other Members spoke about why all this matters at a time of uncertainty and conflict, when we are mindful of the world that young people are growing up.
The critical role that religious education plays in children’s learning is felt throughout the country. According to the RE Policy Unit, 64% of the UK adult population think that an education in religion and world views is an important part of the school curriculum. However, although Members have made clear in this debate the importance of religious education in schools and the role that RE plays in the development of children’s understanding of the world around them and their fellow classmates, the cracks are starting to show in the Government’s attempt to deliver RE.
According to analysis in the National Foundation for Educational Research report that was published earlier this year, the recruitment of secondary school RE teachers was nearly 20% below the level required to meet the 2022 target. The report also said it was expected that the recruitment of secondary school RE teachers would finish below this year’s target, despite it being a subject that has
“recruited relatively well in recent years”.
The RE Policy Unit has highlighted the lack of RE specialism in schools—a concern raised by Members in today’s debate. According to the unit’s 2022 report, 25% of RE lessons are taught by teachers with no A-level qualification in the subject—more than three times the proportion for history. Furthermore, the same report also identified a fall in the number of GCSE entries, with entries for a full RE course falling by close to 20% between 2016 and 2021. The organisation’s conclusion about the Government’s performance on religious education was that words need to be backed up with action. Labour agrees.
Let me put to the Minister a number of questions; I look forward the response. What specific action is he taking to ensure that the Government meet their targets for the recruitment of secondary school RE teachers, to address the lack of RE specialism in schools and to address the concerning drop in full-course GCSE entries for RE? Will he introduce a national plan for RE? If not, what are his reasons for not doing so?
Ministers will point to the wider economic fallout for their failure to recruit the teachers we need, but the actions of the past 12 years of this Government have got us into this mess. Labour is ambitious about our children’s futures and would deliver the well-rounded education they need and deserve, to ensure that they are ready for work and for life. If Conservative Ministers will not deliver that, a Labour Government will.
The Minister of State, Department for Education (Nick Gibb)
It is a pleasure to debate this important subject under your beady eye, Dame Maria. I congratulate my hon. Friend the Member for Cleethorpes (Martin Vickers) on securing the debate.
Quality religious education is an important part of a knowledge-rich curriculum. It ensures that all pupils understand the value and traditions of Britain and other countries, and helps to foster an understanding among different faiths and cultures in our modern, diverse nation. In his powerful speech, the hon. Member for Plymouth, Sutton and Devonport (Luke Pollard) rightly said that a proper understanding of politics and culture requires a deep knowledge of the world’s great religions. That point was echoed by my hon. Friend the Member for Cleethorpes, who cited common phrases such as “the writing is on the wall”, “the salt of the earth” and—perhaps pertinently to this place—“how the mighty have fallen”, all of which come from the Bible.
My hon. Friend the Member for Congleton (Fiona Bruce) demonstrated how important academic knowledge of religion is to an understanding of many of the great events and conflicts around the world. The hon. Member for Strangford (Jim Shannon), citing two teachers from his school days—which were probably a few decades ago—reminded us of the important role that teachers play in our lives. They ensure that we have the knowledge—in his example, of Irish history and of other world religions—that we need to understand the world.
RE is an important part of a modern school curriculum that aims to promote the spiritual, moral and cultural development of children and young people and to help them to prepare for the responsibilities and experiences of adult life. It is important that pupils know about the world’s key religions. We need to develop students’ knowledge and understanding of religious beliefs, of the teachings and sources of those beliefs, and of the key religious texts and scriptures of all the world’s major religions.
Knowledge of world religions is also valuable in supporting Britain’s relationships with other countries. It is clearly important to understand the values and perspectives of those with whom we wish to conduct business or build diplomatic relationships. It is because of the importance of the subject that it remains compulsory that all pupils at maintained state-funded schools in England—including, through their funding agreements, academies—study religious education up to the age of 18.
My hon. Friend the Member for Cleethorpes will be aware of statistics that indicate that 64% of the UK adult population think that an education in religion and world views is an important part of the school curriculum, and that 71% agree that the subject should reflect the diversity of backgrounds and beliefs in the UK today. We require schools to publish on their websites details of their curricula, including RE. We want parents to have a clear understanding of what their child will be taught and to be able to talk to the school if they have any questions or concerns.
The support for RE shown by Members in this debate is reflected in the continuing popularity of the religious studies GCSE, to which the shadow Minister, the hon. Member for Portsmouth South (Stephen Morgan), referred. Provisional 2022 figures show that 34.3% of pupils at the end of key stage 4—some 221,000 of them—took the GCSE in religious studies. It has more entries than each of art and design, computing, business studies and PE. In 2010-11, the figure was 195,109, but that was of course for the full-course GCSE. At that time, there was also the short-course GCSE. The 2010-11 figure amounted to 31% of the cohort. In 2016-17, the figure was higher than it is today, with 264,000 pupils—some 45% of the cohort—taking the GCSE.
My hon. Friend the Member for Stoke-on-Trent North (Jonathan Gullis) raised the issue of the EBacc, as he is wont to do. As he will know, we deliberately kept the EBacc small enough to enable pupils to study other subjects, such as music, art, RE or vocational subjects. Our overriding concern when we introduced the EBacc was that the core academic subjects it represents—English, maths, science, languages, and history or geography—were being denied to too many pupils, especially the more disadvantaged. Let me take this opportunity to pay tribute to my hon. Friend for his period in office as Minister for School Standards. I know he is committed to raising academic standards in schools. He did so during his period in office and will continue to do so in the other roles he plays, in which I wish him well.
My hon. Friend the Member for Cleethorpes referred to a decline in the time spent teaching RE. While figures will vary from school to school, at a national level the proportion of time secondary schools spend teaching RE has remained broadly stable: it made up 3.2% of all teaching hours in 2010 and 3.3% in 2021.
The hon. Member for Strangford raised the issue of the right to withdraw from RE. Although our view is that RE is an important subject, we think it is equally important that parents and older students have a right to withdrawal. We currently have no plans to change the situation.
In respect of a school’s RE curriculum, except for subject content specifications for the religious studies GCSE and A-level, the Government do not prescribe curriculum content, how RE should be delivered or how many hours should be taught.
Carla Lockhart (Upper Bann) (DUP)
In Northern Ireland we recently had an outrageous court judgment that declared that exclusively Christian RE lessons in primary schools are unlawful. In my mind, this ruling reveals the real agenda of so many: the removal of Christianity from school settings. In this broken land and society, we are seeing the breakdown of the family unit and soaring rates of suicide, born out of hopelessness. Surely the teaching of love, hope and charity within Christianity is what society needs more of, not less of?
Nick Gibb
The hon. Member makes an important point—those are common features of the world’s major religions—but obviously RE and education is a devolved matter in Northern Ireland.
RE is part of each school’s basic or wider curriculum. While academies, free schools and most maintained schools designated as having a religious character may design and follow their own RE curriculum, all other maintained schools must follow their area’s locally agreed syllabus for RE. The locally agreed syllabus specifies details of the RE curriculum that they should deliver and is monitored by the standing advisory council on religious education that is established by each local authority.
I understand the concern raised by several Members that some schools may not be taking their duty to teach RE seriously. I should be clear that all mainstream, state-funded schools are required to teach RE. Schools that are not teaching RE are acting unlawfully or are in breach of their funding agreement. Any concerns that a school may not be complying with the requirement to teach RE should in the first instance be raised via the school’s complaints procedure. If a complaint is not resolved, the issue can be escalated via the Department for Education’s school complaints unit.
Members have cited the figure that one in five schools are not teaching RE—I think my right hon. Friend the Member for Gainsborough (Sir Edward Leigh) made that point. Actually, the Department does not collect data on schools’ level of compliance with the requirement to teach RE, but it does collect data on the hours of RE teaching by teachers. The data cited by my right hon. Friend is drawn from individual schools’ timetabling systems, so it does not really represent a completely accurate picture. For example, it may not pick up instances when RE is taught as part of another subject or under a different title.
Sir Edward Leigh
Will the Minister issue general guidance to all schools that they must fulfil their statutory requirements in this area?
Nick Gibb
I will keep that idea under consideration. We have already issued guidance about the teaching of religious education in schools.
Regardless of whether teachers are following a locally agreed syllabus for RE or one designed by their own school or a multi-academy trust, ensuring that they have access to high-quality teaching resources is important, as it is for every other subject. We intend to support the teaching of RE through the procurement of full curriculum packages by Oak National Academy—that goes to the point made by my right hon. Friend. We want to make sure that what is taught is of high quality, and that applies not just to RE but to other subjects. Oak is playing an important role in providing resources for teachers and, in the second tranche of its procurement process, will be procuring curriculum materials, maps and plans for religious education.
As the hon. Member for Portsmouth South and others said, recruiting and retaining teachers is crucial to every curriculum subject, so the Department is driving an ambitious transformation plan to overhaul the process of teacher training. This includes stimulating initial interest through world-class marketing, providing support for prospective trainees, and using real-time data and insight from our new application process to help to boost recruitment where it is most needed. In the 2020-21 academic year, we exceeded the postgraduate initial teacher training target for religious education teachers, achieving 129% of the target. The equivalent target in the 2021-22 academic year was narrowly missed, as we achieved 99% of the target. We will keep these issues under review.
My hon. Friend the Member for Cleethorpes and the hon. Member for Plymouth, Sutton and Devonport raised the issue of initial teacher training bursaries. As the Government do not provide bursaries for every subject, I can understand the disappointment of those who are not eligible, and I do not put all the blame for that on to my hon. Friend the Member for Stoke-on-Trent North. These are difficult decisions that are taken every year as we decide how to allocate the scarce resource of the bursaries. They are allocated to take account of recruitment historically, the forecast economic conditions and the teacher supply needed in each subject. That allows us to focus the bursary expenditure on subjects with the greatest need and ensures that we spend money where it is needed most. My hon. Friend got that decision absolutely right in his period in office.
Specialist teacher training and continuous professional development are important for every subject. In some cases, subject knowledge enhancement courses may be appropriate for those training to become a specialist. This is where a School Direct lead school or an initial teacher training provider can identify applicants who have the potential to become outstanding RE teachers, but who need to increase their subject knowledge. There is an eight-week subject knowledge enhancement course to help them to become specialist teachers.
Jonathan Gullis
The Minister is completely correct to say that continuous professional development is so important to being a high-quality teacher, but sadly we are the only country in Europe that does not have enough specified hours for teachers to do teacher training throughout the academic year. This is something I was looking at in the Department while I was there. Does the Minister agree that to enable the eight-week course to be taken up by non-specialists, such as someone like me, we will need to be able to protect time for teachers to get that professional development?
Nick Gibb
My hon. Friend is absolutely right, and we have clear guidance to schools about mentoring and continuous professional development. The early career framework was implemented to help teachers in the first two years of their career to make sure they have the right mentoring and training so that they can turn into accomplished teachers.
My hon. Friend the Member for Cleethorpes raised the matter of collective worship, which is an important part of school life. It encourages pupils to reflect on the concept of belief and the role it plays in the traditions and values of this country, and equips them with the knowledge they need to interact with other people. It deals with how we live our lives and includes important moral and ethical issues. Any concerns that a school is failing to provide a daily act of collective worship should in the first instance be raised via the school’s complaints unit.
Sir Edward Leigh
Before the Minister sits down, will he deal with my point about the faith cap, which does not achieve anything?
Nick Gibb
My right hon. Friend will recall that when that decision was taken by my right hon. Friend the Member for East Hampshire (Damian Hinds), Catholic schools were encouraged to use the voluntary aided route to establish a new school. Of course, we will continue to keep all these issues under review.
I reiterate the Government’s commitment that schools in England should continue to teach religious education. It is mandatory now and we have no plans to change that, but there is scope to work on achieving greater consistency in standards. We will seek to improve that through the work of the Oak National Academy.
Fiona Bruce
The Minister may recall that this summer the UK hosted a very successful international conference on freedom of religion or belief, to which 88 Governments sent delegates. Out of that, the International Religious Freedom or Belief Alliance is working on developing workbooks for primary school pupils to help them to understand the importance of not discriminating against others of different faiths or beliefs, just as pupils in many countries across the world understand not to discriminate against, say, disabled pupils. Will the Minister meet me as we work on that project? We now have 42 countries in our alliance, and our aim is eventually—while respecting those countries’ different cultures—to promote and ideally disseminate that through the Education Departments of our respective countries.
Nick Gibb
I would be delighted to meet my hon. Friend. I pay tribute to her for the superb work she does in her role as special envoy. I would also be delighted to meet my hon. Friend the Member for Cleethorpes and the RE Policy Unit to discuss these issues further. I think that is a good note to end on, so I will finish my remarks there.
Martin Vickers
This has been a wide-ranging debate, and I thank all colleagues who have taken part. It shows that there is considerable concern about RE teaching in our schools. The Minister rightly pointed out the procedure for dealing with complaints about schools not meeting their legal obligation, but I hope that he and his ministerial colleagues can be a little more robust in getting that message down through the system so that parents have the confidence and knowledge to challenge what they may perceive as a lack of RE teaching for their children.
This has been an exceptionally good debate. I took note of the fact that there is an annual decision about bursaries, and I urge all colleagues to lobby the Minister so that, when that comes around again next year, RE may be just that bit luckier than it was under my hon. Friend the Member for Stoke-on-Trent North (Jonathan Gullis).
I share the disappointment of my right hon. Friend the Member for Gainsborough (Sir Edward Leigh) about the fact that the Minister was not quite there on the renewed guidance. Guidance is important, as no end of agencies and authorities that we deal with tell us, “Our Government guidance says this.” I welcome this debate, and I thank all colleagues who have taken part.
Question put and agreed to.
Resolved,
That this House has considered religious education in modern Britain.
Drug Reclassification: Monkey Dust
(2 years, 1 month ago)
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Dame Maria Miller (in the Chair)
I will call Jack Brereton to move the motion and then I will call the Minister to respond. There will not be an opportunity for the Member in charge to wind up, as is the convention for a 30-minute debate.
Jack Brereton (Stoke-on-Trent South) (Con)
I beg to move,
That this House has considered the reclassification of the drug Monkey Dust.
It is a pleasure to speak with you in the Chair, Dame Maria, although this is not a pleasurable subject for debate. My aim is to see monkey dust, a new psychoactive substance that is currently a class B drug, reclassified as class A. There are compelling reasons for doing so. I have received considerable local support in my constituency for reclassification, including through the survey and petition that is currently live on my website, which calls for the reclassification of that horrific drug.
If I explain that up to two thirds of all monkey dust-related incidents in the west midlands region are reported to occur in Stoke-on-Trent, the House will understand why local feelings in my home city are running so high. Monkey dust is a class B drug from a set of stimulants known as cathinones, which include the class C drug khat. Unlike khat, which is a reasonably mild, natural stimulant, monkey dust is a powerful synthetic drug. It is a stimulant that can make the user euphoric or hallucinate, lose control of their body, become aggressive and/or fall into a deep depression. It is a fine off-white powder costing £10 to £15 per gram, with only 3 mg needed for a hit. That means that a hit can cost as little as £2 on the street, making it cheaper than alcohol. Its effects usually last a few hours, but they can last for several days.
Jim Shannon (Strangford) (DUP)
I commend the hon. Gentleman for securing this debate. He is absolutely right to refer to the cost factor. Does he not agree that the fact that monkey dust can be bought for such a small fee means that our young teenagers can afford to use that toxic substance, which can spiral to using other drugs? Immediate reclassification is needed to send a clear message that any abuse of drugs will not be tolerated, that the consequences will be substantial and that it is simply not worth the risk to sell or buy monkey dust, Spice, or any other new fad that is making the rounds.
Jack Brereton
I entirely agree with the hon. Member. That is a key factor. It is very sad to see that a lot of the people who are addicted and taking the drug are very young. That is one of the biggest tragedies.
Both the effect of monkey dust and its duration are unpredictable. In Stoke-on-Trent, it is known simply as “dust”, and it comes in sub-categories that include the street names of fluff and tan. Dust can be snorted, injected, piped or bombed. Piped, as it sounds, means smoked in a small pipe, and bombed, also called parachuted, means wrapped in edible paper and swallowed. That can include the use of cigarette paper or toilet tissue, which are not obviously palatable, but such is the strength of the addition that synthetic cathinones can hold, users will endure great indignities to consume it, never mind acquire it, and there is scant dignity in the effects.
Dust can lead to a psychotic state. Because it dulls all pain, it can lead users to harm themselves while feeling nothing short of invincible. Police officers have described tackling those under the influence as like trying to wrestle with the Incredible Hulk. Dust can also cause convulsions and lead users to overheat. Death from hyperthermia is a result of the most extreme cases of overheating.
Sometimes users will combat the feeling of heat by stripping off clothing—which, as they are totally disinhibited by the drug, can mean any and all clothing. There are also the risks of hypoventilation and acute respiratory distress. The collapse of users into a seemingly comatose state is a sight that residents fear is becoming normalised in our city.
Jonathan Gullis (Stoke-on-Trent North) (Con)
I thank my hon. Friend and Stoke-on-Trent buddy for securing this fantastic and important debate. In 2018, it was described as an epidemic in Stoke-on-Trent and, sadly, we are back there again. The drug takes advantage of vulnerable people and creates severe mental health issues. That is why I implore the residents of Stoke-on-Trent North, Kidsgrove and Talke to sign my hon. Friend’s petition. Does he agree with me that what we want is not just a reclassification, but additional support for Staffordshire police to catch the criminals who push such filth on our streets?
Jack Brereton
I entirely agree with my hon. Friend that we are seeing an epidemic on our streets in Stoke-on-Trent. We do need additional support for many of those services, because what we see on the streets of Stoke-on-Trent is totally unacceptable.
With such unpredictable and severe effects, it is little wonder that this drug is also known in other parts of the world as zombie dust and, most disturbingly, cannibal dust, after reports of face-eating in America. In my constituency, a user actively ate through a glass window of a local shop.
Tragically, Stoke-on-Trent has been hit with an unenviable reputation as the centre for monkey dust abuse. The human cost of this awful drug and the gangs pushing it is a continuing problem for the city and local services, despite considerable efforts from Staffordshire police. The consequences of this illicit drugs trade hit residents, who live in fear of violence from dealers and users.
I can give many examples of those fears and the reality behind them. The responses to my survey fall into roughly five categories of concern. The first focuses on the effects on the users, and includes a response from an ex-user with first-hand experience of what they called “this poison”. Another respondent said:
“You become unrecognisable as a person.”
Secondly, there are concerns about the consequences for neighbours and communities, particularly children and pensioners. Comments include:
“As a hard-working, law-abiding citizen, I don’t feel I should have to walk among zombies.”
“It is frightening walking around with our children seeing people high, shouting at the top of their voices.”
“Monkey dust creates antisocial behaviour and misery that does not belong in any decent society.”
“We saw a man standing on a bus shelter. He was throwing things at people and shouting abuse.”
Thirdly, there are concerns about the strain on the time and financial resources of the emergency service, and other local services in responding to dust-related incidents, or fighting the addiction. A respondent who works for the rough sleepers’ team told me:
“I and many professionals have been of the opinion that monkey dust needs to be correctly classified urgently, in order to reduce the impact it is having.”
Another, from a community church, wrote of feeling
“so helpless in how to care for and support people who have become addicted to monkey dust. I see them ruining or losing their lives.”
There was a suggestion that dust is
“taking up hundreds of hours of emergency services’ time every month.”
Fourthly, there are concerns about the problems caused for local businesses, and the viability of our high streets and town centres. That was a common theme in responses. Comments include:
“Another nail in the coffin for our town centres.”
“I feel unsafe when shopping.”
“A terrible impression of our town. People after taking drugs are stumbling around and begging outside supermarkets.”
“The theft if rife. Everything you work hard for gets taken.”
“It is intimidating to leave the office late at night when there is a gang of six, eight or more drug dealers and/or drug users loitering on a private office car park. The dealers consider themselves to be above the law.”
Fifthly, there is the devastating, tragic situation of family and friends. Those comments are particularly distressing. On respondent wrote simply:
“My son is a drug addict.”
Another said her children’s father turned to the drug when they split up:
“My children now have an absent father. He was a man that worked all the hours God sent until he had a momentary weakness and accepted this drug.”
Another said:
“My daughter was introduced to this horrendous drug, which was instrumental in causing her death.”
Another wrote that her daughter, aged 37, when on the drug had her three children taken off her:
“I am at my wits’ end how I can help her off this vile poison.”
There was also a case where a couple were raising her sister’s four children because the sister had fallen to this addiction. These are truly tragic cases that are becoming far too frequent.
How would reclassifying monkey dust help? As one respondent to my survey put it:
“Authorities need to come down hard on the dealers. Reclassifying dust at cat A sends a clear message that this won’t be tolerated.”
Several respondents compared monkey dust to heroin in its effects and its addictiveness, and could not understand why dust is not in the same category. In fact, there are examples of users and people around users confirming that monkey dust is in some ways worse than heroin—there is, for example, no equivalent of methadone as a synthetic replacement, because dust itself is a synthetic drug. In a documentary produced by the University of Westminster called “Stoke-on-Dust”, a user said that the psychological effects of dust were, to her, worse than heroin, which she had been addicted to since the age of 14.
That documentary features a campaigner called Baz Bailey. Baz tragically took his own life in July 2020, having struggled with his own mental health. He was a great man who did amazing charitable work, and his efforts to rescue his son from monkey dust became for him, typically, a campaign to rescue everyone’s son and everyone’s daughter. Baz said:
“I 100 per cent believe the drug should be reclassified because it’s something that can take over someone. We want to send a message to these dealers that the community won’t just lie down and take what they’re doing.”
He was right: we won’t—we can’t. That reclassification needs to be part of a wider push that includes much more action on preventative work to reduce the root causes of drug abuse and addiction.
Aaron Bell (Newcastle-under-Lyme) (Con)
I thank my hon. Friend for paying tribute to my constituent Baz Bailey. Monkey dust is a big problem in Newcastle-under-Lyme, which borders Stoke-on-Trent. We have had a number of deaths associated with monkey dust; we have also had a number of intimidatory behaviours, with people climbing on to buildings or breaking into people’s houses naked at 3 am. We have seen people in Newcastle town centre in the zombie-like state that my hon. Friend referred to. I urge him to continue his campaign to get monkey dust upgraded to category A, and to work with me and my colleague and hon. Friend, the Member for Stoke-on-Trent North (Jonathan Gullis), to help the police treat this issue with the seriousness it deserves in north Staffordshire.
Jack Brereton
I entirely agree with my hon. Friend about the need to take a holistic approach to this issue. The local police, local authorities, health services, schools and third-sector organisations should work together to address the wider issues in our communities. It is very positive that earlier this year, Stoke-on-Trent City Council was awarded more than £5 million by the Office for Health Improvement and Disparities to invest over the next three years to develop the substance misuse service locally. We also need a wider conversation about how we divert young people from gang culture in the first place and protect the vulnerable, who are targeted by drug pushers, from being criminally exploited. Reclassification will help to disrupt supply by increasing the risks and consequences associated with being involved in supply; prevention and rehabilitation will help to disrupt demand. We must not neglect either side of the drugs market equation, and we have yet to do enough to tackle monkey dust—demand and supply, which go hand in hand—because we are failing to punish with the sanctions required.
My constituents are regularly aghast at the lenient sentences reported in our local newspaper, The Sentinel. Those include a 12-month sentence, suspended for 18 months, for a user who terrified a pensioner by climbing into her house at 5.30 in the morning, leaving her with ongoing flashbacks, before going on to undertake shoplifting. Another user stabbed her partner in the hand with a kitchen knife before going to Tesco, having twice attacked him with a meat cleaver previously—she got just 12 months. We need to be much, much clearer that the sanctions for supplying and acting under the influence of monkey dust will be severe.
Jonathan Gullis
My hon. Friend makes a great point: it is essential that we get the additional support that we urgently need as a city. We are trapped in part between Birmingham, Manchester and Liverpool, where gangs operate and come into our city—there are also gangs within the city of Stoke-on-Trent. That is why we need additional resources: this cannot just be left to the local authority, which is the second poorest in England when it comes to collection of council tax, to deal with. Does my hon. Friend agree that for that reason, the Minister needs to make sure that the Home Office comes up with a special taskforce, almost, for Stoke-on-Trent to tackle this scourge?
Jack Brereton
I agree entirely with my hon. Friend. Stoke-on-Trent is fantastically located right at the heart of the UK, but that also means that we are more exposed to those county line drug issues and the trade of drugs that is coming through our country from Liverpool through to other larger cities. It is absolutely vital that we get those resources and support.
To conclude, I again turn to a comment from my survey, because it sums everything up:
“Monkey dust is a scourge, similar to heroin, and should be treated as such.”
I hope the Minister will have time in his diary to visit Stoke-on-Trent. My fellow local MPs, along with Ben Adams, the Commissioner for Police, Fire & Rescue and Crime, Councillor Abi Brown, the leader of the council, and I would all welcome the opportunity to show him some of those issues on the ground in our area.
The Minister of State, Home Department (Chris Philp)
It is a great pleasure to serve under your chairmanship, Dame Maria. I begin by congratulating my hon. Friend the Member for Stoke-on-Trent South (Jack Brereton) on securing this important debate, supported as always with enthusiasm, passion, conviction and ability by his colleagues, my hon. Friends the Members for Stoke-on-Trent North (Jonathan Gullis), for Newcastle-under-Lyme (Aaron Bell), and for Stoke-on-Trent Central (Jo Gideon). They are phenomenal advocates for their city and their part of Staffordshire.
My hon. Friend the Member for Stoke-on-Trent South has made an extremely moving and compelling case for the terrible effects that monkey dust, and in particular the forms of monkey dust known in Stoke-on-Trent as either fluff or tan, has on his constituents—not just those who are taking it but those affected by their behaviour. I was struck by the eloquent description towards the end of his excellent speech where he described the shocking activities of people under the influence of the drug, and the impact that that has on their partners and innocent members of the public going about their daily business or even asleep at home late at night. It is very clear the drug can have a devastating impact, both on those who use it and on law-abiding members of society.
As my hon. Friend the Member for Stoke-on-Trent South set out, monkey dust is the street name for drugs that form part of a family called cathinones, which are central-nervous-system stimulants that act in a similar way to amphetamines. My hon. Friend has raised concerns about that previously, including in a 2018 Westminster Hall debate on synthetic cannabinoids. He has at least a four-year track record of raising the issue in the House.
As he set out, drugs, including monkey dust, are a corrosive and destructive force in society. This Government are very focused on preventing drug misuse through the criminal justice system and policing, as well as through treatment and recovery. The Government have a 10-year drugs strategy. We want to force down drug supply though the criminal justice system. That is one of the reasons why we are recruiting 20,000 extra police officers—a key focus for them will be combating drugs. Of those officers, over 15,000 have already been recruited, I think. As of 30 September this year, 265 extra officers are now policing the streets of Staffordshire, and part of their focus is on the drug problem.
We also need to ensure that people who are suffering from drug addiction are treated. There is a whole programme of expenditure that the Government have set out in our 10-year strategy published last December. In the current three-year period, £780 million has been allocated specifically for treatment and recovery to cure people’s addiction. That is on top of the existing public health grant expenditure. Stoke-on-Trent is in the first wave of authorities receiving that extra money; the funding this year specifically for Stoke-on-Trent is approximately an additional £1 million, over and above the existing public health grant, to try and treat addiction. If we can stop people becoming addicted it removes the market from the people who are supplying those drugs, and it stops members of the public being harassed and intimidated in the way that has been described.
Jonathan Gullis
We are, of course, delighted with the 265 brand-new police officers in Staffordshire, which has been welcomed by the commanders of Staffordshire police. Sadly, our former chief constable was an abomination. That meant we had a really poor neighbourhood policing plan, which sadly led to a tough inspectorate report of Staffordshire police by His Majesty’s inspectors. That is why any additional support that can be given to enable our fantastic new chief constable, Chris Noble, and our police and fire commissioner, Ben Adams, to get the technology and to get the officers and police community support officers time in the community to build intelligence on where criminal gangs and county lines are organising would be of great help. Will the Minister ensure that he takes that case of additional funding back to the Home Office?
Chris Philp
We will look at police funding in the relatively near future. Next year’s settlement will be published in draft form for consultation in December and then finalised, typically, in late January or early February. I will certainly take on board that representation for Staffordshire.
I am delighted to hear from my hon. Friend the Member for Stoke-on-Trent North that his new chief constable is taking a good approach to policing, including by focusing on neighbourhood policing, getting police visible on the streets and spending time tackling criminals, rather than anything else. It is that focus on protecting the public and being visible that has worked in the Greater Manchester force, which has just come out of what is sometimes called special measures, because its chief constable took a similar approach to frontline policing and getting the basics of policing right.
My hon. Friend also mentioned time and ensuring that police spend time fighting crime, catching criminals and patrolling the streets, instead of being tied up in what can be counterproductive or wasteful bureaucracy. A report is currently being conducted by Sir Stephen House, a former senior Metropolitan police officer who is now working with the National Police Chiefs Council, to look at ways of reducing and stripping back bureaucracy and burdens on police time, such as administration and reporting of non-crime matters. I will work closely with Sir Stephen on that to try to ensure that police officer time is spent on the streets protecting our constituents, not doing counterproductive administration.
Aaron Bell
To reiterate what my hon. Friend the Member for Stoke-on-Trent North (Jonathan Gullis) has just said, there really needs to be a focus on our town centres. In lots of the so-called red wall seats, our town centres have been hollowed out, with people on drugs on the streets. I am very pleased not only with our new chief constable, Chris Noble, but with my new borough commander in Newcastle, John Owen, both of whom are really focusing on antisocial behaviour in the town centre. We have so much money coming into Newcastle from the town deal and the future high streets fund, but it will not go for anything if people do not feel safe in the town centre.
Chris Philp
I completely agree about the importance of visible, active town-centre policing. In fact, I have seen it in my own town centre in Croydon. I met our borough commander, or basic command unit commander —the chief superintendent—only last Friday, and he made exactly the same point. The police uplift programme has delivered officers to police Croydon town centre, which does make a difference. We want to see that replicated in towns and cities across the country. The police uplift programme provides the numbers of officers to do exactly that.
I should probably turn to the central ask of the debate—I am not trying to avoid the question or obfuscate in any way—which is the question of how this family of drugs, cathinones, is classified. It may be worth reminding colleagues of the maximum prison sentences available for those convicted of the supply and possession of class A, B and C drugs. These are the maximum sentences, which courts often do not use because sentencing guidelines set out the sentence that should be used in practice, having regard to the circumstances of each case. These are the current maximum sentences that the courts have at their disposal for supply: for class A drugs, it is life in prison; for class B drugs, 14 years; and for class C drugs, a maximum, again, of 14 years. For possession, the maximum sentences are: for class A drugs, a maximum of seven years; for class B drugs, a maximum of five years; and for class C drugs, a maximum of two years.
I stress that those are maximum sentences and a court will very often sentence a long way below the maximum, depending on the circumstances of the case. Increasing the classification obviously increases the maximum, but it will also increase the likely actual sentence, because courts will look at the maximum when they sentence in each individual case. The sentencing guidelines are pegged off the maximum sentence. I thought it was worth setting that out as a little bit of background.
On the classification of drugs under the Misuse of Drugs Act 1971, the Government have a statutory obligation to consult the Advisory Council on the Misuse of Drugs before making any change to the classification. That was last looked at in relation to cathinones in 2010, when the ACMD advised the Government to maintain the class B classification. From what I have heard from my hon. Friends the Members for Stoke-on-Trent South, for Stoke-on-Trent North, and for Newcastle-under-Lyme, what has been happening in those places since 2010 represents a significant escalation, or deterioration, in what has been happening on the ground. Indeed, it sounds like a phenomenon that has been happening in the last three, four or five years.
In response to the debate, I intend to commission Home Office officials to advise on whether we should submit the cathinone family of drugs to the ACMD for an updated evaluation to see whether reclassification is needed. We need to make sure that does not displace some other drug from the pipeline, but I will ask for that advice today and I am happy to revert to my hon. Friends the Members for Stoke-on-Trent South, for Stoke-on-Trent North, and for Newcastle-under-Lyme once that advice has been received and considered. I hope that that shows that this Westminster Hall debate has prompted action which otherwise would not have taken place. We will start the process of considering whether to submit this to the ACMD, while taking into account whether there is space in the pipeline. That demonstrates the value of these debates. I have only been in this job for three working days, but were it not for this debate the matter would not have come to my attention.
Jack Brereton
I thank the Minister for his efforts and words. That will make a huge difference. I recognise that there is an independent process, but I hope the decision ultimately results in the reclassification of the drug. I thank the Minister for all his efforts in just three days; I am sure he will continue in that regard.
Chris Philp
I thank my hon. Friend for his comments. There are three steps in the process. First, we need internal Home Office advice on whether we should submit this to the ACMD, which I will commission today. Secondly, having analysed the situation, if the advice concurs with what my hon. Friend said, we will make the submission. However, it depends on what the advice says. Thirdly, after submission, the ACMD will then have to do its work. I should be honest and say that none of those steps are guaranteed, but I will initiate the first step today.
We are almost out of time, so on that note, I thank my hon. Friend the Member for Stoke-on-Trent South for initiating the debate, my hon. Friends the Members for Stoke-on-Trent North and for Newcastle-under-Lyme for their extremely valuable contributions and the passionate eloquence that, as always, they show, and Home Office officials who have been supporting work in this area. I look forward to further debates on topics of importance in this new role.
Question put and agreed to.
Public Sector Pay: Proposed Strike Action
(2 years, 1 month ago)
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Beth Winter (Cynon Valley) (Lab)
I beg to move,
That this House has considered the matter of proposed strike action in response to public sector pay announcements.
It is a pleasure to serve under your chairmanship, Sir Edward. We are deep in a cost of living emergency 12 years in the making, which is about to be made even worse by this Tory Government. I sought this debate because of the perilous situation resulting from the cost of living crisis. Poverty is already increasing, and current and future decisions by the Government will make it even worse. The number of trade unionists in public sector work being balloted for industrial action over pay now exceeds 1 million. That is because the Tories are holding down their pay and driving industrial action, and would rather suppress industrial action than end the conflicts through a fair pay award.
I want to make three fundamental points. First, public sector pay has been eroded in real terms for 12 years through this Conservative Government’s austerity measures, which have destroyed morale and damaged recruitment and retention. Secondly, the proposed public sector pay settlement in this cost of living crisis is the worst so far and will reduce living standards significantly. Inflation is at over 10%, and the cost of energy, food and fuel is higher. Reports in today’s The Times and The Daily Telegraph suggest that a real pay settlement will be even worse next year and will anger public servants more—rightly so. Finally, there is an alternative to more austerity and the suppression of industrial action, which is to fund a fair, inflation-proofed pay rise through a fairer taxation system.
This summer has been described as the summer of solidarity. There has been major strike action in the postal and telecoms sectors and on the railways, with a great degree of public support despite the impact. We are now seeing a huge escalation of that, with widespread balloting for industrial action in response to meagre public sector pay offers across universities, Departments, hospitals, schools and fire stations.
Last week, 60,000 University and College Union members in higher education met the Trade Union Act 2016 threshold and confirmed that they were ready to defend their pay. Some 150,000 Public and Commercial Services Union members will conclude their ballot at the end of this week. In health, the Royal College of Nursing is now at the end of a historic first UK ballot of 300,000 nurses, and we have seen the start of pay ballots of another 400,000-plus members of Unison, GMB and Unite, which all conclude at the end of this month.
Mike Amesbury (Weaver Vale) (Lab)
My hon. Friend is making such a powerful speech. Does she agree that, regardless of whether they are railway workers, health workers, BT and Openreach workers, education workers, teachers or support assistants, it is our fight? It is about a fair day’s pay for a fair day’s work: genuinely levelling up.
Margaret Ferrier (Rutherglen and Hamilton West) (Ind)
Such a low pay offer will inevitably lead to disillusion. We are already seeing the detrimental impact of low pay on the NHS workforce. Essential public sector services will struggle to recruit and retain staff, and workers will be drawn to the private sector in the hope of higher wages. Does the hon. Lady agree that Ministers must urgently undertake a full impact assessment before finalising any decisions on a full pay offer?
Beth Winter
I thank the hon. Lady, and I will come to that later.
Let me return to my speech. In education there is an unprecedented situation: two major education unions, the National Education Union and NASUWT, voting together alongside the National Association of Head Teachers. In the fire service, over 30,000 members of the Fire Brigades Union are doing the same.
Why is that? The latest statistics show average regular pay growth of 6.2% for the private sector and 2.2% for the public sector—both below inflation, but one much further below it than the other. We are now talking about a potential 1.5 million public sector workers being balloted on the Tories’ low pay agenda.
Sir George Howarth (Knowsley) (Lab)
I apologise: I will not be able to stay for the entire debate as I have another commitment in the House. My hon. Friend is making a powerful case for why, in all justice, public sector workers should not be the the most penalised, and they will obviously agree with her. Another consequence is that, as the TUC recently highlighted, there will be labour shortages in vast parts of the public sector, as workers decide they can get more pay in the private sector. Who can blame them? However, in terms of public policy, that will be a real problem.
Beth Winter
Yes, and we all welcome the TUC coming to Parliament tomorrow for the day of action.
Early in the new year, there could be significant co-ordinated strike action, and the TUC is planning for such action. It is absolutely right to do so, because the Government are creating public sector poverty to balance their own books. We must understand why people are being forced to strike. Because of the burden of low pay in the context of the worst cost of living crisis in living memory, trade unionists in the public sector have no option but to consider industrial action. They are being forced to take action to survive. The Tories’ plan to suppress industrial action does not ease the financial burden on households.
I will briefly go through my three key points. First, the background to the current situation is the erosion of public sector pay over 12 years. When David Cameron came to power in 2010, his first speech in Downing Street referred to “difficult decisions”, and we heard the Prime Minister use the same line last week. The TUC has called the 10 subsequent years a “decade of lost pay”. Nurses and paramedics will see their pay shrink by £1,100 and £1,500 respectively this year.
It is worth reflecting on the human cost for workers on the ground, because behind all the figures are real people. One PCS member has said:
“To try and survive the cost of living crisis, I keep my lights off at home, live the vast majority of time in just one room and don’t use my central heating. I’ve already taken every conceivable cost-cutting measure I can.”
It is absolutely appalling that, in this day and age, somebody is forced to do that through no fault of their own. It is a damning indictment of the impact of 12 years of austerity that imposed pay freezes on our hard-working public sector staff. Those who sacrificed so much during the covid pandemic to keep our sectors running have been left badly exposed in the cost of living emergency.
Secondly, in this year’s pay review body consultations, unions were unequivocal in demanding an inflation-proof pay rise and stating that the Government’s offer was a significant real-terms pay cut for key workers. On teachers’ pay, the NEU was clear that Government evidence to the pay review body failed to explore the impact of pay cuts on
“teacher recruitment, retention and morale”.
On NHS pay, the RCN said that the pay announcement
“makes it harder, not easier, for them to cope with the rising cost of living.”
Unison’s Christina McAnea said:
“If there is to be a dispute in the NHS, ministers will have no one to blame but themselves.”
In a violation of the pay review body process, the civil service did not consult unions until it met the PCS union a few days before publication. The union said:
“this process was farcical and could not under any circumstances be considered a serious consultation.”
There are lots of questions to be answered.
Finally, local government workers have lost an average of 27.5% from the value of their pay when measured against the retail price index. It is unsurprising, then, that 78% of councils experience recruitment and retention difficulties. I am really pleased that we are joined today by Unison members from Barnet, who have been striking for 12 continuous days in support of a colleague regarding non-payment of sick pay. I know other Members will speak more about that in their contributions. I welcome the Unison members and thank them for joining us today.
I want to address the situation in Wales. Trade unions are balloting for strike action in Wales against the pay awards set by the Welsh pay review bodies, who have offered the same as in England. The offers are insufficient—just as much a pay cut—and need to be revised upwards. There is one significant difference: in Wales we are completely reliant on a funding settlement from the Treasury. When Conservative Ministers inflict pay cuts here, they offer little or no space for Wales to do differently.
I will quote our First Minister, Mark Drakeford, who said at the Labour party conference:
“As a point of principle I absolutely believe public sector workers should be fairly rewarded and that they shouldn’t see take-home pay eroded by inflation…they should at least match inflation.”
Rebecca Evans, the Finance Minister, said:
“we absolutely need the UK Government to undertake to provide a decent pay uplift.”
That fair funding demand has been echoed in my constituency. I undertook a cost of living survey and I delivered a petition to Parliament a couple of weeks ago for fair funding and an inflation-proofed income.
My third and final point is that there is absolutely no justification for public sector pay cuts when an inflation-proofed rise is affordable. When the human cost of more cuts is so great, we must surely explore alternatives to further cuts. If we are to give workers the inflation-proofed pay rise that they deserve and need, we have to fund a pay settlement that can match the 10.1%. That is not an unreasonable expectation. People are saying they do not wish to be poorer this year because they are key workers. We have to identify what that would cost.
The Institute for Fiscal Studies green budget from earlier this month, which the Library directed me to, makes it clear that departmental budgets were predicated on pay awards in the region of 3%. That is far below the current rate of inflation and below the pay awards of roughly 5% announced over the summer. The IFS estimates that offering an inflation-matching pay award to all public sector employees would add more like £17.8 billion. I am under no illusions—that is a significant amount of money—but we are talking about livelihoods, people’s lives, households and families, and the difference between existing and living. We therefore have to look at new ways of raising revenue to pay for it.
Clive Lewis (Norwich South) (Lab)
I thank my hon. Friend for this critical debate; I notice there are more civil servants in attendance than there are Government Members, which is shameful.
I want to pick up on the human cost that my hon. Friend mentioned. In 2011, on my first day in the job as a young parliamentary candidate, I stood on a picket line with Unison members in the mental health services. They were not just striking for pay, but because they were warning the public about the cuts coming to mental health. We have now had a decade of failure. I look now at GMB ambulance workers who have said that a third of the deaths that they see are because of delays caused by bottlenecks in the NHS—caused by the cuts. Does my hon. Friend agree with me that we cannot let the Government blame strikers, public servants or even climate activists for the deaths that occur because of what they are doing on their watch?
Beth Winter
I thank my hon. Friend for that powerful comment. I fully agree.
How will we pay for pay awards? The time has come for the Government to seriously look at establishing the infrastructure and valuation systems to levy taxation on wealth. There has been increasing interest in wealth taxation in recent months and years. The Wealth Tax Commission has given a rigorous academic base to understand how we could levy either a one-off or annual wealth tax. Tax Justice UK argued last week that the Government could raise up to £37 billion a year through a number of taxes on wealth, including equalising capital gains with income tax rates to raise £14 billion a year.
The Institute for Public Policy Research and Common Wealth think-tanks’ latest research on taxing share buyback profit transfers found we could raise £11 billion. The Wealth Tax Commission simulator suggests that around £18 billion could be raised through an annual wealth tax of 2% on wealth over £5 million. It is clear that the resources are there; the Government must examine and use them.
To conclude, this pay settlement is an attack on living standards, on top of a decade-long attack on people. There is an alternative that means we have to look at new revenue streams that tax wealth to increase public key worker pay. If the Government do not act to ensure a proper settlement on public sector pay and a progressive, fair taxation system to pay for it, living standards and livelihoods are going to get worse for the people that we all represent.
We have arrived at this crisis, and are experiencing it acutely and in an unequal way, due to policy choices—choices driven by political decisions and priorities. Society cannot thrive if we do not get our priorities right. My priority is the living standards of my constituents in Cynon Valley and every single person throughout the United Kingdom. I will continue to support all actions to make that happen, and stand shoulder to shoulder proudly with workers. Diolch yn fawr.
Several hon. Members rose—
Sir Edward Leigh (in the Chair)
If everybody is to get in, you need to limit your comments to five minutes, please. I call John McDonnell.
John McDonnell (Hayes and Harlington) (Lab)
Thank you, Sir Edward. I congratulate my hon. Friend the Member for Cynon Valley (Beth Winter) on securing the debate. I want to talk specifically about the industrial action taking place in north-west London.
Industrial action across the country is about weekly and daily pay. In my constituency and elsewhere, there are real issues in north-west London around the payment of sick pay. I also welcome the Barnet Unison members to the Gallery today. They are now on their 11th day of all-out strike action. This is the only dispute of all-out action that Unison has endorsed and supported in the union’s recent history. The workers—the Unison members—are employed by Barnet Homes group, an organisation completely owned and managed by Barnet Council. By the way, it is managed by a CEO on an annual wage of £202,000, with bonuses on top.
The dispute is about a low-paid worker who was injured at work, but Barnet Homes refused to pay the first week of sick pay. That was an outrage. People were furious about the treatment of this worker, so his colleagues decided to seek negotiations to respond, to see whether they could get an appropriate response from the management. Management refused and made offers that were completely unacceptable, some of them nonsensical. The workers consulted, discussed, balloted and came out for industrial action, not just for one day but for all-out action.
Hon. Members here who have been on industrial action will know the consequences of that for individual incomes, particularly for low-paid workers. It is an act of courage. I want to pay tribute to the Unison members here today for the courage they have shown in taking action to protect a vulnerable colleague.
I will say this: the message from here today and across the House is that the council and Barnet Homes need to get back round the negotiating table, with a serious settlement to this dispute. I also want to say to Barnet Homes, “Start respecting your workers. Start respecting what they do.” I express my solidarity with the Unison strikers today. If this debate does nothing else, I hope it shames Barnet Homes and the council, if necessary, into settling this dispute.
The disputes taking place at the moment are about not just pay on a daily basis, but terms and conditions of employment, and issues such as the payment of sick pay. So many working people are on the edge, hit by 10% inflation—or 14%, on foodstuffs. In our area of north-west London, house prices and rents are unaffordable for ordinary working people on an average wage. On that basis, I place my solidarity—the solidarity of the whole Chamber, I hope—on the record in support of the Barnet strikers.
David Linden (Glasgow East) (SNP)
It is a pleasure to follow on from the right hon. Member for Hayes and Harlington (John McDonnell). I congratulate the hon. Member for Cynon Valley (Beth Winter) on securing the debate and bringing this issue to the Chamber. I should also declare my membership of Unite.
In having this debate, we need to think about how we ended up in this mess. When the Minister gets to her feet later and talks about the difficult choices the Government must make, she must do so reflecting on the fact that they have been in power for 12 years. They have been in control of the economy, and the economic chaos that has been unleashed in the UK recently is a result of the Thatcherite economic experiment undertaken by the former Prime Minister and Chancellor. Working people will now have to pay as a result of the botched mini-Budget, which had to be abandoned, with a new fiscal statement coming on 17 November. As we watch the new Chancellor of the Exchequer start to unpick the mini-Budget, it still astonishes me that, through all the turmoil, one thing that has still not been unpicked is the lifting of the cap on bankers’ bonuses. The idea that the Minister will stand up in this Chamber at quarter to 4 and say, “We need to make difficult choices but, by the way, bankers can continue to have excessive bonuses to encourage them to incentivise risk,” should give the Government food for thought.
When approaching this debate, we should always remember that the right to withdraw labour is a fundamental human right, and it is enshrined in section 44 of the Employment Rights Act 1996—it appears that plenty of Conservative Back Benchers are exercising their right to withdraw their labour by not turning up to this debate, and we extend our solidarity to them in that regard. With this Government, we are beginning to see—we will see this with the Transport Strikes (Minimum Service Levels) Bill—that there will be a continued attack on working people and trade unions. This will not necessarily be popular with Labour colleagues here, but the challenge for the right hon. and learned Member for Holborn and St Pancras (Keir Starmer) is not to play these games with the Government, no to get as close as possible to them and not to go for that middle-ground vote. He should be brave, stand up for workers and not just try to be a pale imitation of the Tories. We know that the Government are determined to attack workers’ rights. We heard only recently that the new Secretary of State for Work and Pensions has talked about ways in which the Government can try to water down rights for those on maternity allowance.
The situation on industrial action in Scotland—this is not to say that we do not have our own problems with industrial action—is that over 70% of Unite’s members voted in a consultative ballot to accept the revised offer made by the Convention of Scottish Local Authorities. The revised offer will fully consolidate £2,000 for those earning up to £20,500; it is the equivalent of an increase of about 10% to 11% for the lowest paid. It is estimated that the revised offer resulted in a £600 million package being brought forward by COSLA and the SNP Scottish Government.
However, there is an uncomfortable reality for someone such as myself and for my party. Given the fixed fiscal framework—the hon. Member for Cynon Valley talked about some of this in a Welsh context—yes, we have limited tax-varying powers in Scotland, and there is a much broader debate to be had about that. However, the reality is that we cannot have Scandinavian public services with Singapore tax rates, and that is something that people in all parts of the UK will have to confront. The Government cannot talk about their desire to level up while simultaneously saying they want to slash tax for people, and that includes things such as a race to the bottom on corporation tax. Yes, there are challenges, and unfortunately the Scottish Government, as a result of rightly pushing ahead with that increased pay offer, will now have a challenge trying to find savings elsewhere. I happen to have a solution to that: Scotland should take all its own economic decisions, rather than having Tory Ministers in London make those decisions for us, but that is a point for another day.
I will finish by mentioning the comments from the general secretary of the Scottish Trades Union Congress, Roz Foyer, who recently spoke at the SNP conference. She said that the Scottish TUC has robust discussions with the Scottish Government, but that one of the biggest differences is that the Scottish Government will actually listen and work with it, unlike the Government in Westminster, who introduce appalling bits of legislation, such as the Transport Strikes (Minimum Service Levels) Bill. When that Bill comes before the House, it can be assured of SNP opposition, and I hope it can also be assured of opposition from Labour and from many people in this Chamber who want to stand up for working people.
Chris Bryant (Rhondda) (Lab)
It is always a delight to see you in the Chair, Sir Edward.
I should declare that I am a member of the GMB. When I was a priest in the Church of England, no union would take us, because if we did go on strike, it would not be very obvious what had not happened. MSF took us on for a while, and then we became members of Unite, but when Burberry was trying to close its factory in Treorchy, Rhondda, a few years ago, I worked so closely with the GMB that I thought it was right to join. I am a very proud member.
I start with the principle that it is a fundamental human right for people to be able to withdraw their labour, and any attempt to undermine that right is a contradiction of all our human rights. There may be many different reasons why someone needs to withdraw their labour, but it is worth reminding people that no trade unionist, trade union leader or member of a trade union ever takes the decision to go on strike lightly, for the very simple reason that, apart from anything else, it costs them and their family money—goodness gracious, the miners of the Rhondda knew that in spades back in the 1980s. Individual members of trade unions are proud of the work they do, so they do not want to not be in work—they want to be in work.
Many of the people we are talking about have been described as “key workers”. That phrase came into existence during the covid pandemic, when people suddenly discovered that bus drivers, train drivers, bus conductors and people who work in supermarkets or for a local council—many of whom suffered more than anybody during covid, because they were at daily risk—are all key workers because the whole of the rest of the economy simply cannot function without them. Those people know that they are essential to society, and they do not want to let down their customers, clients, passengers and patients or the people with whom they work. They are proud of their work, and they want to be in work, so it takes a lot to get a trade union or an individual member to vote for strike action.
My constituency neighbour, my hon. Friend the Member for Cynon Valley (Beth Winter)—not “Sinon Valley”, as Tony Blair always used to call it—is absolutely right about the cost of living crisis. Energy costs in our constituencies are often even higher because many homes are difficult to insulate and to keep warm and dry, as they are basically made out of stone and rubble. If someone is on very low wages, seeing their energy costs double in a year makes a dramatic difference, whatever the Government may have done this year, and people are anxious about what will happen after April. Inflation for the poorest is even higher than the 10.1% that has been mentioned, not least because poorer people spend more of their money on the essentials in life—food, energy and housing costs—and the cost of cheaper brands has risen the most. The cost of things that fill kids’ bellies more readily, such as pasta, have risen by 45%, 47% or 48%, while bread has gone up by 34%, so inflation is even worse for the poorest.
My constituency may be different from other poorer constituencies, because more than 70% of people in the Rhondda own their homes. Many have small mortgages, but some have substantial ones. They may not have taken a long fixed-rate mortgage, because they were not sure how things would work out and did not want to be in a difficult situation in five years’ time. If someone sees their monthly rate going from £300 to £500, they will be thinking about losing their home. The problems that many pensioners are having are intensified by the fact that, if they had a small pension pot of, say, £35,000 in July, it may now be worth only £25,000 after the mini-Budget, so the annuity they might get if they retire now will be lower.
Then, on top of all that, there is wage suppression, which we have seen for 12 years for nearly every key worker. Apart from anything else, that has been counterproductive. One reason we are not getting people back into work is that there is an enormous backlog in the NHS. I am not making a partisan point here, because we have the same problem in Wales—there is an NHS backlog across the whole UK. If wages are suppressed in the NHS, fewer and fewer people will choose to work in it, more and more people will retire, and more and more people will leave it entirely, which will exacerbate the problem.
I completely support the CWU’s strike at the Royal Mail. It seems utterly preposterous to make such a small offer to the workers when significant amounts have been awarded to senior managers and shareholders. That is completely wrong. In my patch, people are worried about Royal Mail deliveries, but I am not blaming the staff; I am blaming the managers, because quite often they simply have not employed enough people to get the work done. I should add that I also support the CWU in its dispute with Openreach, which suffers from exactly the same problems as the Royal Mail.
My final points are about the Government’s role. First, it is to ensure that the laws in this land are fair to the employer and the employee. I do not think we have laws that are fair to the employee at the moment—I think the law is unbalanced. The former Prime Minister—the one we have just lost—would not have been able to become Prime Minister if the rules that presently exist for a strike ballot had been exercised for her. That is an utter hypocrisy in the Government’s line.
Secondly, where the Government have a direct, indirect or even just tangential interest or role in a dispute, they should do everything in their power to keep both sides at the table. In my experience, trade union members and trade union officials are the best deal makers in the land. The Government should learn from them and not the other way round.
Sir Edward Leigh (in the Chair)
Let us be fair to all our colleagues—five minutes, brothers, please.
Grahame Morris (Easington) (Lab)
It is a pleasure to serve under your chairmanship, Sir Edward. I, too, congratulate my good and hon. Friend the Member for Cynon Valley (Beth Winter) on securing this important and timely debate.
It is only right and proper that I refer to my entries in the Register of Members’ Financial Interests. I am a proud trade unionist. I am a member of Unite and chair of the Unite parliamentary group, I am co-chair of the National Union of Journalists parliamentary group and I am a member of several other trade union groups, including the justice unions, the National Union of Rail, Maritime and Transport Workers, the Public and Commercial Services Union and the Bakers Food & Allied Workers Union.
I have discovered that the UK has the most restrictive trade union laws in the developed world. Indeed, the Conservative Government’s pernicious Trade Union Act 2016 introduced very onerous, rigorous ballot thresholds. As my hon. Friend the Member for Rhondda (Chris Bryant) pointed out, few if any right hon. or hon. Members here today would have been elected if those same conditions had been applied to our parliamentary elections. However, trade unions are meeting those thresholds, with unions reporting record turnouts and record “yes” votes.
In the limited time I have, I want to illustrate the situation facing trade union members in just a few of the public sector unions. After 12 years of Conservative cuts, pay freezes, and attacks on pensions and terms and conditions, workers have been left with no choice. The civil service has rarely faced such a huge number of challenges in such a short period. Indeed, the PCS has launched a national ballot for industrial action, which I think closed yesterday, because its members face an unprecedented cost of living crisis. The Government plan to cut 91,000 civil service jobs; in response the PCS is calling for an end to those cuts, a 10% pay rise, a living wage of at least £15 an hour and an immediate 2% cut in contributions that PCS members have overpaid to pensions since 2018. That seems completely reasonable.
If we look at the railways, far from rewarding rail workers for their Trojan efforts during the pandemic, the Government have exploited the economic disruption that it caused and the restructuring that has been brought about on the privatised railways. Workers employed by Network Rail have been told that there will be an open-ended pay freeze from 2021. RMT members in most train operating companies received no pay rise in 2020, and from January 2021 the Government informed them that there was no budget to increase wages. Cleaners are in an even worse position, along with outsourced staff, who have been pushed to the brink of poverty. The RMT has calculated that rail cleaners on the national minimum wage have seen their annual earnings fall by £844 in real terms in the last year, even allowing for the April uplift.
Prison officers, who do an incredibly difficult job, often in hostile environments, are not allowed to take industrial action. It is important to welcome the fact that, after two years, the Government have finally accepted —the Minister is nodding because she was the Minister who did this—the recommendation of a £3,000 pay rise to staff on a fair and sustainable contract. However, that is not enough to make up for 21 years of cuts, as evidenced by the proliferation of food banks in prisons and the number of prison officers leaving the service.
A similar situation is reported by the National Association of Probation Officers. The Fire Brigades Union is in a similar predicament—staff were initially offered 2%, which has been upped to 5%, but with the caveat that the Government will not fund the additional 3%. The industrial action that we have seen across the public sector is a consequence of failed Government policy.
I must stress the vital importance of protecting the fundamental right to withdraw labour. The Government are threatening to introduce legislation to further undermine basic employment law. The right to strike must be protected at all costs.
Apsana Begum (Poplar and Limehouse) (Lab)
It is a pleasure to serve under your chairmanship, Sir Edward. I congratulate my hon. Friend the Member for Cynon Valley (Beth Winter) on securing this important debate. She is a powerful advocate for her Welsh constituents.
It is important that we recognise that the below-inflation pay rises announced by the Government over the summer, which have prompted a series of strike ballots, have come on top of a brutal decade of pay cuts for key workers in the public sector. Under successive Conservative Governments, nurses, teachers, refuse workers and millions of other public servants have seen their living standards decimated.
Research by the Trades Union Congress released in August 2022 showed that one in five key worker households has children living in poverty and that the number of children growing up in poverty in key worker households has increased by 65,000 over the past two years, to nearly 1 million this year. How can that be right? What a shameful indictment of any Government.
Despite now facing the biggest squeeze on household finances since comparable records began, the Government continue to knowingly drive families, children, pensioners and the most vulnerable in our society into desperate poverty, with real-terms cuts in social security payments made earlier this year. Austerity is and always has been a political choice. The challenges we now face do not come out of the blue. There is a reason why a key component of Labour’s 2019 manifesto was its green new deal, driven by public ownership of the energy sector, and making sure that taxpayers got real value for money.
It is important to be clear that any failure to deliver pay awards in line with inflation means that this Government are choosing—deliberately and knowingly—to allow key workers in the public sectors to face even more hardship, after a brutal decade of pay freezes and cuts. Not only that, but given that our public services are already at breaking point, it would be an act of national vandalism to slash vital services to fund tax cuts for the super-rich.
Since being elected to this House, I have listened to tributes to the tireless work of our public sector workers, who go above and beyond the call of duty. However, they need more than warm words; they need action, so there is extra poignancy to this debate. It is particularly important to have in the forefront of our minds the enormous contributions that workers have made during the pandemic, despite the failures at all levels that contributed to thousands of staff dying all across various workforces.
If there is large-scale public sector strike action in the months ahead, the Government have only themselves to blame. They have chosen to hold down public servants’ pay while giving bankers unlimited bonuses. They have chosen to foster inequality and injustice while serving the super-rich. Public sector pay restraint disproportionately affects women and ethnic minority communities, so I ask the Minister whether a detailed and comprehensive equalities impact assessment of the Government’s plan is available.
I will always stand in solidarity with the trade union movement in Parliament and on the picket lines. It is amazing to see courageous Barnet Unison members in the Public Gallery. I will always oppose the Government’s cynical attacks on working people.
Kenny MacAskill (East Lothian) (Alba)
It is a pleasure to serve under your chairmanship, Sir Edward. I pay tribute to the hon. Member for Cynon Valley (Beth Winter) for securing this very timely debate. Like others, I am fully supportive of the strike action, and I think the Government’s proposed actions, especially the Transport Strikes (Minimum Service Levels) Bill, are entirely unacceptable and counterproductive.
As others have said, no one chooses to go on strike. The tales of strikes on a whim and fancy, whether in the motor industry in the midlands or the shipyards on the Clyde in the 1970s, are simply apocryphal. It is even harder to go on strike now, and the consequences are probably greater, given the cost of living crisis. People do not choose to go on strike on a whim and fancy. The loss of income is significant, and they worry about the danger and damage they do to those in whose interests they serve. There is also the practical fact that returning to work is difficult because they have to catch up on work that has piled up.
I accept that it is difficult for a Government to deal with public sector strikes. They are often responsible and answerable for agencies without having direct control over various departments—I have been there myself—but, as others have said, the right to strike is fundamental.
In a democracy, people cannot simply have the dubious privilege of being able to vote once every four or five years—although that will become even harder if they have to produce identification, which many do not have. They must also have control over the terms and conditions of their work and over their life. That is why the ability to withhold rent is significant, and why those on direct benefits often face difficulties in dealing with landlords. The right to strike is fundamental. It is not simply about pay; it is also about terms and conditions of employment.
Not everybody in our democracy has the right to strike. As a former Justice Secretary, I recall that the police do not have the right to strike. Nobody challenges that, but we probably have to go further to ensure that things such as the Police Negotiating Board are able to enforce positions on the Government and other agencies. There has to be a quid pro quo for the right to strike being taken away.
The hon. Member for Easington (Grahame Morris) referred to the POA, which is unable to go on strike. In Scotland, it does have the right to strike; I was offered that dubious denial in Scotland by Jack Straw, but I declined it, and I have to say that the POA has always retained that trust. It came out on strike during my period of office, but it gave us notice. It was out for a limited period, and it conducted itself in a dignified manner, for which I am extremely grateful.
The attempt to withhold the ability for people to come out on strike is fundamentally wrong. The Bill being introduced by the Government also strikes at the heart of devolution. In Scotland, we have CalMac, which is basically the Government carrier, and ScotRail, which is provided and owned by the Scottish Government, yet the powers are being taken here by a Transport Secretary and a Government that are not representative of Scotland.
I have been critical of the Scottish Government on ScotRail, and especially on CalMac Ferries, but at the end of the day the solution is to democratise them so that we get a people’s CalMac that represents not just the Government but those who are served by it and the communities, and so that those who work in it are provided for. What we should not be doing is taking away the right to strike. That fundamentally undermines the position of the Scottish Government and it should not be taking place. It should be possible to replicate the relationship that I built up with the POA between the Scottish Government and the RMT. I think they are in a better place than they are south of the border. The solution is always, and must always be, dialogue and discussion, not an attempt to dragoon people back into work and to take steps to undermine that fundamental democratic right. That is the wrong direction. At the present moment, my sympathies and support go to those on strike, because they need it in this cost of living crisis.
Justin Madders (Ellesmere Port and Neston) (Lab)
It is a pleasure to see you in the Chair, Sir Edward. I refer to my entry in the Register of Members’ Financial Interests and to my membership of Unite and the GMB.
The right to join a trade union is a basic democratic right, as is someone’s right to withdraw their labour. Trade unions play an invaluable role in ensuring justice is served, defending workplace rights, pay, and terms and conditions for their members. Far too many people experience insecurity, uncertainty and exploitation at work. In-work poverty is on the rise, and years of wage restraint have created the circumstances that we now find ourselves in, where the ever growing gap between wages and the cost of living has become a chasm. The result is that millions of people are now actively considering taking part in the act of last resort: industrial action. What is the Government’s response? To spout anti-trade union rhetoric, to denounce those wishing to take up their rights to withdraw their labour and to introduce yet more anti-trade union laws, which will do nothing to address the underlying issues that those taking action face.
Already this year, we have seen agency worker regulations as the latest attempt to undermine those taking industrial action. So far, it looks like they have not worked, because we know that agency staff are unlikely to choose a role that requires them to cross a picket line against one that does not. We know that inserting third-party agency workers into a dispute is likely to inflame tensions and elongate strikes in the impacted sector. We know that it places agencies supplying those workers in an invidious position, risking their business reputation and financial situation. We also know that many roles that may be on strike require technical skills or training and training agency workers to do those jobs is expensive and time-consuming. Allowing agency workers in during a strike will shift a negative focus on to those workers and it will not address the underlying issues.
It is little wonder, given those factors, that on the face of it the regulations have done nothing to reduce industrial action. They create a nice headline for the Tory supporters in the media and provide useful soundbites for the next set of leadership candidates, but achieve nothing useful. Yet the Government want to go further. It has been suggested that tailored minimum thresholds, including staffing levels, will be determined in each industry in an attempt to delegitimise industrial action and effectively remove the right to strike. That is as impractical as it is immoral. For example, how can a railway be run safely on a skeleton staff? Twenty per cent of signal boxes cannot be operated, and it is far from clear what the consequences will be if unions do not comply with agreements on that. Will their action become unlawful? What is the minimum service? Is it different in different sectors? Who decides? Where is the liability if workers refuse to comply? Are we looking, with these proposals, at fundamentally changing the nature of the employment relationship so that a third party, the trade union, can compel an individual to attend work? So many questions, so little connection with reality.
Then there are the double standards we have seen in recent times, whereby the last Prime Minister but one was elected by an electronic ballot, but trade unions, despite there being a review five years ago, are still not allowed to use electronic voting for industrial action. Such embarrassing double standards cannot be defended.
There are, as we know, about 6.5 million trade union members in the UK. Every one of us present today will have constituents who are members of trade unions—ordinary men and women who want to organise themselves collectively to strive for better working conditions. We should be supporting them and not attempting to thwart them in their efforts to improve those working conditions. A happy workforce is a productive workforce. It is good for employers and it is good for the economy. We should therefore be saddened to hear that research by the TUC has found that one in three workers do not feel comfortable approaching their managers about a problem at work. More than a third of workers do not feel they or their colleagues are treated fairly, and half of all workers say their line manager did not explain their rights at work properly. Trying to attack trade unions and limit the right to strike will address none of those underlying issues.
It is time the Government ditched their ridiculous, outdated and prejudiced view that trade unions are the enemy within. It is time the Government respected the views and rights of those who choose to take strike action. It is time the Government addressed the chronic underfunding of public services, which has led us to the current situation.
Richard Burgon (Leeds East) (Lab)
It is a real pleasure to serve under your chairship, Sir Edward. I, too, congratulate my hon. Friend the Member for Cynon Valley (Beth Winter) on securing this important debate.
We are seeing an assault on living standards, and their biggest decline in the 70 years since records began. From energy costs to food, and from mortgages to rents, everything is going up—everything except pay. In fact, over the past year, wages have fallen dramatically by almost 3% in real terms. That does not happen in a vacuum, of course; it comes after a decade of austerity slashing public services and the tightest squeeze on wages in 200 years.
Average wages are still below 2008 levels and falling. We are now likely to have had two decades of lost wage growth. One jaw-dropping statistic is that average wages would now be around £10,000 higher if they had carried on rising at pre-financial crisis levels. It is no wonder, then, that workers have had enough. Things have been bad so far but, with real-terms pay set to plummet over coming years, they will get whole lot worse.
That is the context in which so many workers are balloting for strike action and saying, “Enough is enough.” Before I was elected to Parliament, I was a trade union lawyer in Leeds for 10 years, so I know from experience that it is complete rubbish when the right-wing Tories and newspapers say that workers go on strike at the drop of a hat. Workers go on strike as a last resort, when they feel that they have no other option, especially when their pay and terms and conditions are being attacked, and they feel that they are being disrespected by their bosses and by the Government. As we have heard, the term “key workers” quite rightly became popular during the worst of the pandemic, but that term is used less and less by Ministers these days, and we should reflect upon the reasons why.
Inflation of 10% means a real-terms pay cut of 8% for nurses, teachers and many others. Pay cuts will be justified by talk of a need to cut back our services to fill spending holes. We will hear the language of “tough choices” and “difficult decisions”, but any time I hear those phrases being used by Conservative Ministers, I know that the easy choice—sticking the boot into those who can least afford to take it—is on the way. Those real-terms pay cuts, piled on top of a decade of lost pay, mean that we need to consider alternatives. What is the alternative to cuts? What is the alternative to tax hikes on the many? I would argue that there are alternatives.
We do not need cuts or tax hikes on ordinary people. We could tax the very richest instead. Why not end non-domiciled status, which would raise £3 billion? Why not have an annual 1% tax on wealth above £5 million, which would raise £10 billion? Why not have a 45p income tax rate on earnings above £80,000 and a 50p tax rate on earnings above £125,000, which would raise £6 billion? Why not equalise dividend and capital gains tax with income tax rates, which would raise £21 billion? Those four measures would raise a total of £40 billion, which is the so-called gap that needs filling according to Treasury briefings.
Pay cuts are a political choice and the Tories are choosing to push people into poverty. They plan to make working people pay for the cost of the pandemic, just as they made working people pay—through austerity —for the bankers’ crisis. At a time of pay cuts for the many, the wealthy few are having a bonanza. Britain’s billionaires have increased their wealth by £55 billion in the last year alone, City bankers’ bonuses are up 28%, and the average pay of bosses at Britain’s 100 top firms is now £3.6 million a year. It does not have to be this way; there is a better way forward. Let us support our trade unions and working. We call upon the Government to choose the real alternative that is necessary: wealth taxes, rather than further cuts to people’s pay in real terms, and further cuts to our vital public services.
Tony Lloyd (Rochdale) (Lab)
Let me add to the point made by my hon. Friend the Member for Leeds East (Richard Burgon). Why not make people like me pay national insurance contributions once we have passed the statutory age for retirement? Why not lift the cap on national insurance contributions, which would raise real money for our national health service? That would be a credible way forward. I hope that the Minister has listened intently. It is perhaps unfair that she is nearly on her own, apart from the hon. Member for Broadland (Jerome Mayhew).
It is true that the internationally recognised right to strike is circumscribed quite badly in this country. However, the real question that Conservative Ministers should address is this: why are so many people, across so many occupations, so angry that they are prepared to take industrial action? We have seen it with Royal Mail, Openreach, the Fire Brigades Union and PCS, and I could go on.
I want to concentrate on a couple of issues. In the end, when people take the opportunity to go on strike, it points to a fundamental malaise in the workplace. They have very few alternatives. One is to look for work elsewhere. That is a real issue when there are around 132,000 vacancies in our national health service, and when a third of teachers are leaving teaching after five years, when they have seen their salaries go down by around 20% since austerity began in 2010. The issue of retention should worry the Government just as much as the summer of solidarity and the woeful winter that we are heading into.
The Government have to get real about this situation. Looking at the national health service, it has been said so many times that it is almost tedious to repeat that we applauded health workers during the pandemic, but now we are saying to health workers across the piece that we do not value their work. It is astonishing that the Royal College of Nursing and the Royal College of Midwives are balloting for industrial action. It is almost beyond belief, and certainly beyond any kind of precedent. The Government should worry about that, because they have broken something that was precious: the commitment of people to their workplace and to those whom they serve, because they now have to look at defending their own families.
It is not that midwives and nurses do not want to be there for the people whom they serve. I have had great experiences with the national health service; I know the dedication that people are prepared to give on a daily basis. We have to ask: what has gone so badly wrong that the Government have forced people into this situation? It is similar with teaching. Healthcare and teaching are two professions that are so fundamental to the quality of our way of life. We can talk about the private sector generating resources, but when someone is ill, they want a nurse, and a child wants a teacher. Those things are so important.
Now that we are in this crisis, the Government have got to look in the mirror and ask themselves what has gone wrong. Of course we can find alternative sources of funding, and we must, because that is the political choice. My challenge to the Minister is not to condemn strikers; I will support those who feel they have to take industrial action. I want them not to strike, but that depends on the Government coming forward and agreeing to make the political choice to not go back into austerity for those people in the public sector. They need to make the political choice to reward them in a way that is adequate. The Minister on her own today may not be able to give us an answer, but I urge her to go back and tell the Prime Minister and the Chancellor that this is what we demand.
Sir Edward Leigh (in the Chair)
I remind hon. Members that if you wish to speak, it is courteous to be here right from the beginning. I call Claudia Webbe, but just for a couple of minutes—it is not fair on the Opposition spokesman otherwise.
Claudia Webbe (Leicester East) (Ind)
You are very kind, Sir Edward; it is a pleasure to serve under your chairship. I thank my hon. Friend the Member for Cynon Valley (Beth Winter) for securing this important debate.
Another winter of discontent looms over hard-working public sector workers. We are talking about loyal, hard-working workers who put society above their own needs to see us through the worst of the pandemic. They are dedicated, industrious workers whose pay has declined in real terms, whose benefits have been eroded, whose hours have increased and whose food and energy bills have become unaffordable while they suffer in-work poverty.
Public sector workers are in two or sometimes three jobs, relying on food banks with their heating off. These people are down, yes, but not out. Workers are organising up and down the country. They are balloting and co-ordinating mass strikes to make this Government listen. It is a shame that hospitals in Leicestershire, including the general hospital in my own constituency of Leicester East, have opened food banks to feed dedicated NHS staff. Nurses’ pay is no longer enough to pay for food. They carried us through the pandemic and, in response, this Government sent them to food banks.
Covid-19 proved that the Government can act when they announced billions of pounds of new spending to fight coronavirus, support businesses and protect livelihoods during the crisis. The Bank of England created £200 billion of new money via quantitative easing to buy Government and corporate bonds. It then designed a new covid corporate financing facility to lend directly to big business and started funding the Treasury directly via the ways and means facility, which, in essence, is the Government’s overdraft at the Bank. The Government can spend without borrowing from private markets.
A month ago, the bankers’ Budget presented by the former Chancellor, the right hon. Member for Spelthorne (Kwasi Kwarteng), caused a financial market crisis that led the Bank of England to bail out the Government to the tune of £65 billion. Any excuse that the Government might use for not raising the pay of public sector workers, who need it the most, has been well and truly shattered. When the Government set a Budget, it does not function like a household budget. The Government cannot run out of money, but they seem reluctant to use it—or refuse to do so—for public sector workers. In-work poverty, like austerity and the cost of living crisis that is heaping misery on families, is a political choice made here. Where have the hundreds of billions of pounds of fresh cash created by the Bank of England gone? They have gone into the pockets of the rich. Total wealth in the UK, skewed heavily at the top, is now an earth-shattering £15 trillion—five times our GDP. The wealth of those in the top 20% has doubled from £5 trillion in 2008 to nearly £10 trillion in 2020.
As we have heard, there are myriad options available to raise funds from the wealthiest. Wealth taxes, taxes on trades in financial markets, inheritance and unearned income taxes are just a few of the ways we could raise billions from wealth. We could fund public sector pay by redistributing the idle wealth from that £15 trillion. We must fund the NHS and bring our essential services back under public ownership. That is how we reduce inequality and how we should go about levelling up, if we really mean to do it.
When public sector workers call for wages to be increased in real terms and the Government respond by saying that they need to balance the budget, they are, to be frank, being disingenuous. The ideology of the free market and of deregulation results in profits and power for the few and misery for the masses. Industrial action is completely justified, and it will always remain a human right to withdraw one’s labour—
Sir Edward Leigh (in the Chair)
Order. Could the hon. Lady bring her contribution to an end?
Claudia Webbe
I will wind up now. That is despite the Government wanting a return to feudal Britain. Austerity, which has been debunked by many progressive scholars as economically illiterate, needlessly pushed working people into another level of destitution, and contributed to more than 140,000 deaths in the UK. Put simply, whether it is austerity or the cost of living crisis, crisis after crisis has made the UK worker pay with their lives while inequality widens and the wealth trickles up.
Chris Stephens (Glasgow South West) (SNP)
It is a pleasure to serve under your chairmanship, Sir Edward, and I thank everyone who has contributed to this debate. Like others, I refer Members to my entry in the Register of Members’ Financial Interests, particularly the fact that I chair the PCS parliamentary group and am a member of Glasgow City Unison. I wish my Unison comrades from Barnet all the best, and I am sure that my successor as treasurer of Glasgow City Unison will make a substantial contribution to them.
I will make a few points about why I think it is important that Members of Parliament provide solidarity and support to those taking industrial action, whether they be members of the Communication Workers Union or the RMT or local government workers in Scotland. If our constituents decide to withdraw their labour, that gives us, their elected representatives, an opportunity to meet them and to find out how they feel both about the dispute and about other more general issues. This is about showing that support and listening and engaging.
Like my hon. Friend the Member for Glasgow East (David Linden), I want to voice my solidarity and support for the Government Back Benchers who have taken industrial action by not turning up today. There is a serious point to that. If any public sector workers watching this debate are represented by a Conservative politician—which only adds to the trials and tribulations of life—they will be asking, “Where were they to represent me and speak about my issues?” It is a real shame that there are no Government Back Benchers present.
I will refer in my speech to the excellent PCS briefing and TUC research. First, it has to be acknowledged that wage restraint in the public sector has been a complete and utter failure. It is not wages that have driven inflation—it is prices, particularly energy prices. There is a lack of regulation in the energy market and a real feeling out there that the energy regulators act on behalf of energy companies, not consumers. The Government’s position seems to be, “Well, we clapped the nurses on a Thursday night, but we aren’t going to pay them.” Imagine if the public took that view on energy companies and told them, “Every Thursday night we are going to clap you, but we aren’t going to pay you.” Perhaps they would start to listen then.
The cost of food is also an issue. The PCS briefing gives a litany of evidence of workers in UK Government Departments utilising food banks to help them get through life—including those who work for the Department for Work and Pensions. People who work in the Department that is the so-called safety net for the general public are having to use food banks and other affordable food projects and food aid programmes in order to get by. What is the cost of the benefit payments being made to those working in Government Departments? At one time, 40% of DWP workers were getting tax credits. Could the Minister write to us with the percentage of workers in each Government Department who are being paid benefits by the state to top up their wages?
That is the political choice, as my hon. Friend the Member for Glasgow East and others have pointed out. Giving bankers unlimited bonuses while at the same time holding down public servants’ pay is completely the wrong priority, particular for those public sector workers who kept the economic wheels turning during the pandemic. It is an absolutely ludicrous sense of political priorities. It is a disgrace that the UK Government’s response to industrial action is to try to roll back workers’ protections, and to threaten the right to strike.
We have the most aggressive anti-trade union laws in the world and, ludicrously, trade unions are prohibited from being able to ask for their members’ opinion either online or in the workplace. Is it not ironic that it is the Conservative party, which had workplace balloting in here to decide its leader, that decided not to allow trade unions to ballot online to take industrial action? Before anybody says that such action has economic consequences, I say that the leader of the Conservative party certainly had economic consequences and caused more damage than trade unions have for many years.
As the hon. Member for East Lothian (Kenny MacAskill) pointed out, the Transport Strikes (Minimum Service Levels) Bill will impact the settlements with the devolved nations. It suggests that the Secretary of State for Transport will be able to tell the Transport Minister in Scotland what the minimum service levels will be. That is not the Secretary of State’s job. Quite frankly, it is a disgrace.
It has been a long debate, and I have limited time, but I want to touch on the clear economic case for giving public sector workers the money that they deserve. Some 70p in every £1 of public money, whether from grants, public sector contracts or, yes, public sector wages, ends up in the private sector economy. Public sector workers spend their wages; they do not put them in a shoebox and hide them under the bed. They spend that money in the private sector. That is why urgent action is needed to end in-work poverty. In the UK, we see an explosion of affordable food projects to help people get by week to week. That should not be taking place.
I hope that the Government talk about their dialogue and discussion strategy. Trade unions have driven social and political change across these islands. Trade unions exist because the chances of bosses being visited by three ghosts at night are unreasonably slim. That is why the trade union movement—I am a proud trade unionist—seek changes in this country.
Sarah Jones (Croydon Central) (Lab)
It is a pleasure to serve under your chairmanship, Sir Edward. I congratulate my hon. Friend the Member for Cynon Valley (Beth Winter) on securing such an important debate. It is wonderful to see that so many people, at least on this side of the House, have attended.
It would be helpful if the Minister, whom I welcome to her new position, would answer three questions that were raised in the debate. My hon. Friend the Member for Rhondda (Chris Bryant) talked about the fundamental right to withdraw one’s labour. It would be helpful to hear that the Government absolutely support that right, and to establish that that remains Government policy. My hon. Friend the Member for Rochdale (Tony Lloyd) asked why the Minister thinks there are so many people in our country who are considering going on strike, which is, as we have heard, an absolute last resort for people. Why does she think we are in that position?
My hon. Friends the Members for Easington (Grahame Morris) and for Ellesmere Port and Neston (Justin Madders) referred to reports that the Government are looking to restrict the right to strike in certain circumstances. It would be reassuring for hon. Members to hear from the Minister that that is no longer the case. There have been some reports that those plans have been dumped, but some that they have not. Will the Minister tell us?
Many people have raised the dire situation that we find ourselves in after a disastrous mini-Budget and a disastrous 12 years of low wage growth and low economic growth. Communities are fragile, people are fearful, and public services are very vulnerable. As pay stagnates and inflation rises, more and more trade unions are having to come to the difficult decision to ballot on pay deals. The Times reports today that the Treasury is looking at pay rises of 2% across the board. Will the Minister comment on the accuracy of those reports, and on whether the Treasury is considering such a significant real-terms pay cut?
We have talked about public sector workers’ conditions and pay, which are now forcing them out of their jobs. Forgive me for raising this issue, but I was in my constituency this morning. We are supposed to have eight speech and language therapists in Croydon, but we have only two. They cannot recruit to that role, because people find it too hard to do that job on the pay levels they are offered. Labour wants to see a Britain that is fairer, greener and more dynamic, with strong public services that provide security and opportunity. One thing we know for certain is that what does not grow the economy is the fantasy of trickle-down economics. Building the strength of our people is the way to build our economy.
Frances O’Grady at the TUC said recently that the biggest act of solidarity that the Labour party can do for working people is to deliver a Labour Government, and I agree. The hon. Member for Glasgow East (David Linden) said some most peculiar things about my right hon. and learned Friend the Member for Holborn and St Pancras (Keir Starmer). It might be helpful to reassure him of the policies that we would introduce in government. We believe in decent pay and conditions, and the new deal of the deputy leader of the Labour party, my right hon. Friend the Member for Ashton-under-Lyne (Angela Rayner), will be written into law within the first 100 days of a new Labour Government.
David Linden
Will the right hon. and learned Member for Holborn and St Pancras (Keir Starmer) stand by the pledges he signed in the leadership contest?
Sarah Jones
We are here to debate what public sector workers need in terms of pay, not to make slightly cheap points.
Within the first 100 days of a Labour Government, we will outlaw fire and rehire; ban zero-hours contracts; secure rights at work from day one; reform statutory sick pay; reform and strengthen paternity and maternity rights; oversee the roll-out of fair pay agreements to drive up pay and conditions for workers; and introduce an economic policy that will deliver high skilled, well-paid jobs, such as those with Great British energy, which will be a publicly owned energy company to invest in clean UK power.
In this economic climate, and after a decade of stagnating pay, it is understandable that our trade unions have come to the point where they have to strike and ballot their workers. Nobody wants to see a strike. Let us be clear: nobody wants people to be forced into that situation. It is a failure of management and Government that these strikes are now proposed. It is up to the Government to get around the table and avert any strikes.
If they play politics, people will remember. In the case of National Rail, the then Transport Secretary, the right hon. Member for Welwyn Hatfield (Grant Shapps), refused, for no good reason, to meet the trade unions to try to secure a deal. I have met my constituency members of the CWU. The Government could intervene in the Royal Mail dispute, because the issues are not just about pay—they are about all of the conditions that go with that work, as well as the universal service obligation. The Government could help in that sector, but they choose not to. We will update trade union legislation to make it fit for a modern economy, and empower working people collectively to secure fair pay, terms and conditions.
I would, if I had time, talk about my brief. The police do not have the right to strike, but they have turned away from the Police Remuneration Review Body because they felt that the process has been so unfair. I do not have time to talk about our fire service, with which I also work. I met the Cornwall branch of the Fire Brigades Union yesterday. The Government have failed to introduce the emergency services network, which has been promised for years and the overspend amounts to millions of pounds. That means that cuts are being sought simply to fund this Government’s mistakes.
In conclusion, I want to leave the Minister with some more questions. I have asked a few already, but it would be helpful to hear her say that she will not use these situations to provoke rather than to solve. It is the Government’s role to get in the mix with these problems and to try to solve them, not to stoke division. We have seen a lot of that from this Government, and it is not helpful. It would also be helpful to hear whether the Minister is committed not just to protecting public sector pay, but to doing all she can to enhance it, so that people can deliver the services they love so much, and on pay that means they can afford to feed their families.
The Financial Secretary to the Treasury (Victoria Atkins)
It is a pleasure to serve under your chairmanship, Sir Edward. I congratulate the hon. Member for Cynon Valley (Beth Winter) on securing the debate. I will try to do her the courtesy of sitting down a couple of minutes before the end of the debate so that she can sum up.
I thank all Members for their contributions. I agree with every single contribution that has emphasised how important and valued our public sector workers, such as nurses, police officers, prison officers and teachers, are to our country. They are a source of great pride to us all, as the hon. Member for Rhondda (Chris Bryant) so eloquently said. I also agree that they deserve to be paid fairly, especially at a time when the cost of living has been rising. We understand the importance of recruiting and retaining the very best people in our public services, but we have to take care to ensure that we are responsible with the finite resource of taxpayers’ money—our money, which we and tens of millions of other people throughout the country pay—and consider the consequences of decisions that are taken in Whitehall.
In his statement in Downing Street, the Prime Minister was clear that economic stability and confidence are at the heart of this Government’s agenda. That is why he is so focused on tackling inflation. We have already heard about the difficult impact that inflation has had on day-to-day essentials, such as the cost of food, heating our homes and getting to and from school and work. They have all become more expensive, which means our wages and our salaries do not go as far as they used to. Sadly, wage inflation, particularly in the tight labour market that we have here in the United Kingdom—by the way, we should be proud that we have such a high employment rate—adds to the cycle of rising prices. That is the conundrum that we face.
On help with the cost of living, I must emphasise, not least because our constituents are listening, that a great deal of help has already been announced, including the energy price guarantee and the energy bill relief scheme. Our most vulnerable households will receive £1,200 of support this year through those measures, the council tax rebate and a one-off payment of £650 in cash for those on means-tested benefits. There are also other measures, but I am conscious of the time and I want to get to the meat of the topic.
Chris Bryant
Does the Minister agree that one of the most shameful things we have seen over the last few years is nurses going to food banks run by their own hospitals because their pay is not enough for them to survive?
Victoria Atkins
In his speech, the hon. Gentleman spoke about the rising cost of food. The pressures of international events, such as the war in Ukraine and its impact on grain supplies, which we know about from the coverage on our televisions, and on pesticides and agricultural tools, including those that farmers in my constituency need to help to feed our country, all play a part in that. The help we have provided, including the measures regarding wages, which I hope to get to in a moment, is vital and we need to keep the situation under constant review.
The hon. Member for Cynon Valley raised many questions about tax. I reassure her that the top 5% of earners are projected to pay half of all income tax in the next financial year. Income tax provides the largest form of income that the Government have. The top 1% of earners are projected to pay more than 28% of that amount, which is right because those with the broadest shoulders should bear the most.
Victoria Atkins
I will make a little progress, if I may.
Pay settlements need to be affordable for our economy and avoid driving the wage-price spiral I have referred to. We know that parts of the private sector are unable to match current rates of consumer price inflation, so there would be an impact if we went down that route with the public sector. We have to protect the economy over the long term by not leaving the next generation—our children and grandchildren—with spiralling debt. We are a country that funds our promises and pays our debt.
Victoria Atkins
I am going to make some progress. I will allow the hon. Gentleman to intervene in a moment.
Members will know that there are different processes for different parts of the public sector. Indeed, the devolved Administrations play a vital role in relation to some of the critical professions that we have just spoken about. In Wales, decisions on pay for teachers, doctors, nurses and other NHS staff are made by the Welsh Government, so I trust that the hon. Member for Cynon Valley will have discussions with the Welsh Administration in relation to those sectors.
In Scotland, decisions on teachers, police, prison officers, local government workers and workers for the devolved Administration are not made by the UK Government. Although health is devolved to Scotland, doctors, dentists and NHS “Agenda for Change” staff are nonetheless covered by the pay review bodies that report in England, which I will deal with in a moment.
David Linden
The Minister is talking about those with the broadest shoulders bearing the weight of this financial crisis; will she encourage His Majesty the King to pay inheritance tax on his earnings from the Duchy of Lancaster?
Victoria Atkins
We keep all taxes under review. The hon. Gentleman will know that there is a statement coming in two weeks’ time. I am not going to comment on any decisions in relation to taxes, as it would be improper to do so, but I hope that he and the hon. Member for Glasgow South West (Chris Stephens) will speak to their SNP counterparts in their own Administration to ensure that they do as they have encouraged in this debate in relation to matters that are devolved.
Victoria Atkins
I am going to move on to the independent pay review bodies, because they play a really important role for some sectors and the pay that they receive.
Pay for many local government workers is agreed between the Local Government Association and trade unions, without direct involvement from the Treasury. Departments determine pay awards for many civil servants within the parameters set by the Government, but pay for most frontline public sector workforces, including nurses, teachers, police officers and armed forces, is set through the relevant independent pay review body. It will take evidence from the Government but also, importantly, from trade unions and wider independent research.
When I was prisons Minister, I had a gruelling session in which I was cross-examined by the prisons pay review body. I was delighted to accept the overwhelming majority of its recommendations when they came forth, with the only exception being the recommendation about the most senior prison officers, working on the principle that those with the broadest shoulders will be able to play their part in this endeavour.
On the point made by the hon. Member for Easington (Grahame Morris), working conditions for the public sector must focus on pay but also, importantly, on how people feel treated and how they feel in their workplace. That was something I tried to engender as prisons Minister, and I hope we will be able to build a real narrative about how our people are valued.
I am conscious of the time, so I shall address one or two of the pay increases that the independent pay review bodies have been able to deal with. Nurses at all NHS pay bands will receive at least a £1,400 increase, and all teachers will receive a minimum 5% increase to their pay, which will help early-career teachers to reach the Government’s commitment on starting salaries of £30,000. There are many other statistics that I could mention.
My final point is that we are disappointed that some public sector unions are considering strike action over pay. We want unions to engage not just with the Government, but with the pay review bodies and the devolved Administrations, in the processes that will run this year. We all know about—indeed, Members have been good enough to talk about it—the impact that strikes have on hard-working families, but I very much hope that we all understand just how vital these workers are. I will finish there to give the hon. Member for Cynon Valley time to sum up.
Beth Winter
I thank all Members for their contributions. As others have said, it is woefully inadequate that nobody from the Government Back Benches is present.
In summing up, there are three key points for me. First, it is time for the Government to listen. Given the Minister’s comments just now, I really despair, because it seems she is not listening to the reality for so many people in this country—
Sir Edward Leigh (in the Chair)
Order. Sorry, but I have to end the debate at 4 o’clock sharp. I have no choice; I apologise.
Motion lapsed (Standing Order No. 10(6)).
Airspace Modernisation Strategy
(2 years, 1 month ago)
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Christine Jardine (Edinburgh West) (LD)
I beg to move,
That this House has considered the progress of the Airspace Modernisation Strategy.
It is a pleasure to have you chair this debate, Sir Edward. I think it is fair to assume that if I were to say to most of my constituents—and to most people—the words “airspace modernisation strategy”, they would not necessarily immediately assume that it directly affected them or was something they might even get emotional about. But they would be wrong.
For as long as I have been elected, my inbox has been full of reactions from people reaching out to me because of their distress at the constant noise, the lack of sleep and the pollution caused by the local airport, all of which are reasons why it is difficult to overstate the importance of the current airspace modernisation exercise to our communities, to our airports themselves and, of course, to the climate.
The airspace above the UK is, as we know, some of the world’s most complex. It has been variously described as an invisible motorway network or an infrastructure in the sky, and it is at least as crucial to the UK’s domestic and international connectivity as our more tangible ground-based networks. However, its use and air routes were designed in the 1950s for a very different generation of aircraft. Modern planes and their capabilities, and modern navigation technology, make it possible to move towards having more efficiency and environmental protection.
Aircraft can now follow clearer and less complicated structures, fly more directly and reduce emissions. With such changes and modernisation, passengers can be more confident that their holidays, business trips and deliveries will not be affected by costly delays, and that they will be offered quicker, quieter and cleaner flights, which is the aim of NATS, as a founder member of the International Civil Aviation Organisation’s global coalition for sustainable aviation. We are also told that changes will make it possible to achieve the 2050 net zero emissions target that the aviation industry has set itself.
Of course, we all want the modernisation exercise to succeed, but we also have to recognise that since it was launched the circumstances have changed. It will now be more complicated and more expensive. At a time when the aviation sector is recovering from the impact of covid, the additional costs will place an enormous burden on our airports. Along with NATS, they have to follow the Civil Aviation Authority’s seven-stage CAP1616 airspace change process. That is why I felt it was important to raise this issue and its implications, to examine progress, and to ask whether more can be done to support our communities and to put our airports through this exercise more smoothly and effectively.
Fleur Anderson (Putney) (Lab)
I have a lot of constituents writing to me about flights coming into Heathrow at 4 o’clock in the morning. Does the hon. Lady share my concern, and the concerns of my constituents, that more and more special dispensations are being given to break the Heathrow airport night-flight quota? Does she agree that as part of this modernisation all airports in urban areas should be beginning to move towards an eight-hour night-flight ban?
Christine Jardine
I thank the hon. Lady for her important intervention on another aspect that is reflected in communications from my constituents. As the effects of the pandemic on air travel have lessened, so the number of night flights has increased, as have the number of complaints. Not to criticise the airports, but they seem unable to do anything about flights simply arriving late and companies being willing to pay to the levy. This is caused by delays because we have not yet modernised the airspace and flights are taking longer. I completely agree that that is an important effect of the delays that we have to take into account.
The pandemic damaged the profitability of our aviation and travel industries. It has made the cost of this modernisation exercise much more difficult to absorb. Just last year, on the announcement of £5.5 million of Government funding, the chief executive of the Airport Operators Association described airspace modernisation as,
“essential for aviation to build back better, so that a recovery of 2019 passenger levels does not come with 2019 noise impacts and carbon emissions.”
That is very much what the hon. Lady was talking about—the 2019 impacts on night flights and pollution. That is part of the reason why it is so important to the communities throughout the country who live beside or beneath airport flightpaths that we address this issue.
In Edinburgh, the situation is further complicated. The mailbox I mentioned is full of concerns and complaints, because new flightpath plans for Edinburgh airport have been the subject of planning consultation and rejection by the Civil Aviation Authority for more than five years. By the time the modernisation is completed—if it is completed on schedule—it will have been more than a decade since the exercise to modernise the approach and take-off routes was launched. That has had an impact on not just my constituents but those in adjoining constituencies who live under the approach. Their patience has been stretched.
It has been difficult for the airport, too. Please remember that Edinburgh airport is vital to the economy of not just the city but Scotland, in providing employment and connectivity around the globe. The delays have been expensive at a time when it has had to bear the impact of the pandemic, which I mentioned. It now finds itself, like every other airport in the country, competing for the best results it can get from the modernisation. We all want the Civil Aviation Authority to get this right—of course we do—but we want that within a timeframe that is acceptable for those who have lived with the effects of an outdated scheme for 20 years. We do not want them to wait 20 more.
Ruth Cadbury (Brentford and Isleworth) (Lab)
Does the hon. Member agree that although the Civil Aviation Authority should obviously continue to have a primary duty in respect of safety, it should also have greater responsibility than it currently has for the environmental impacts of aviation on not just climate change but noise?
Christine Jardine
I do. I completely agree with the hon. Lady; she makes a good point. The environmental improvements that we are seeing in aircraft, such as the use of sustainable fuels and vertical take-off aircraft, all need to be taken into account in the modernisation. I am told by various organisations that they have not been, or that after the airport gets the latest instructions from the Civil Aviation Authority, something else is improved and, by the time they go back with the proposals, the goalposts have shifted again. It is vital that the latest technology and improvements are part of the modernisation and that we do not find that when it comes into place it is already out of date.
Steve Brine (Winchester) (Con)
It is good that the hon. Lady has secured this debate. I represent Winchester; Southampton international airport is next door to me but not in my constituency. No matter how the flightpaths into that airport are changed, it will either please one group or community and displease another, or displease the first and please the second. It is only really moving the pieces around. The hon. Lady’s point about using modern technology for quieter, cleaner and more efficient aircraft has to be part of the airspace modernisation programme; otherwise we will go through a whole world of pain for little change in some regional airports, such as the one next door to my constituency.
Christine Jardine
I thank the hon. Member for his point, which is absolutely correct. There is a danger that we just shuffle everything around and a different community bears the brunt, whereas there are improvements being made that could improve the situation for everybody.
At this point, let me I thank and pay tribute to those in my constituency and around all our airports: without them, we would not be able to pursue this issue. Because they have been vocal about the impact, we are able to highlight just how important it is to get this right. It is our duty to look after the wellbeing of the people we represent. When I receive as many messages as I do talking about the decline in the mental and physical health of people living under the flightpaths, I believe it is our responsibility to do everything we can to ensure that this exercise is successful.
I have, then, several asks of the Government. Will they assure us that everything possible is being done to take into account the technological changes and overcome the problems and delays caused by the pandemic, when many airspace modernisation programmes—as part of this exercise—had to be paused?
I know that it will cost money, which is my second ask. The Airspace Change Organising Group has the financial backing to support our airports, many of which were devastated by the pandemic. They will not get back to 2019 levels and do not have the financial resources any more; they need more support.
Finally, but perhaps most importantly, I ask that we do everything possible to improve communications and ensure that local communities are aware of how the plans are progressing and what the potential benefits are for them. CAP1616 places a greater emphasis on consultation with stakeholders than there was previously, but I know from my own constituents and local airport that that is not enough. I am told by the airport that the communications are not what they should be, and that that is slowing down their progress in getting in successful modernisation proposals and getting them through.
At a time of so much uncertainty, in politics and in our economy, we can surely never have had a stronger reminder that confidence and trust come from communication and listening. We need the clarity, communication and reassurance for our airports, our aviation industry and—most importantly—our communities that this exercise is progressing swiftly and being effectively organised.
The Minister of State, Department for Transport (Huw Merriman)
It is a pleasure to serve under your chairmanship, Sir Edward. I thank the hon. Member for Edinburgh West (Christine Jardine) for securing a debate on one of the Department for Transport’s biggest infrastructure programmes in airspace modernisation.
First of all, I will set the scene for the airspace modernisation strategy. As the hon. Member told us, the UK’s airspace is among the most complex in the world, yet there has been little change to its overall structure since the 1950s. Without modernisation, our airspace will struggle to keep up with the growing demand for aviation. Airspace modernisation, as she said, can deliver quicker, quieter and cleaner journeys. It will use new technologies to create more direct routes, faster climbs and less need for holding stacks, so that the aviation industry can grow safely, customers do not experience the delays otherwise predicted, and there are opportunities to reduce noise and carbon emissions. I heard her three asks, and I hope that I can embed responses to them in my speech.
Ruth Cadbury
I thank the hon. Member for Edinburgh West (Christine Jardine) for securing this debate, and I welcome the Minister to his new role. He says that airspace modernisation has a number of advantages, including for growth, but does he recognise that those of us with constituencies near Heathrow, including my hon. Friend the Member for Putney (Fleur Anderson) and me, will not see route changes because our constituents live under the locked-in approach paths to the airport? Airspace modernisation could lead to increased pressure for more flights arriving at Heathrow. The cap of 480,000 flights per annum could be at risk. We already experience flight noise for the bulk of every 24 hours; does he share my concern that there is a risk that we could experience more flights, albeit quieter ones?
Huw Merriman
I thank the hon. Lady for her kindness at the start of her comment, and for the point that she makes. That cap is in place. She is right that, through modernisation, there will be an ability to increase capacity. It might be best if I wrote to her to clarify, because I recognise that her constituents want certainty on this point.
Although a redesign of our airspace might not be as tangible as other major transport projects, it would nevertheless be a vital pillar of future growth of the aviation industry. CAP1616, the Civil Aviation Authority’s guidance document on airspace change, was introduced in 2018 to make the process fairer and more transparent, and to provide the opportunity for adequate engagement with local communities and other stakeholders impacted by airspace changes. I say that in reference to the third point that the hon. Member for Edinburgh West asked me about. The process rightly continues to be kept under review. Given the implications that airspace changes can have for safety, security and the environment, it is necessary for the programme to be subject to robust and transparent procedures.
The airspace modernisation strategy underpins the future development of the UK’s aviation sector. It provides clear direction on how to bring our ageing legacy airspace design up to date, and how to take it into the future, for modern aircraft and technology. On the future airspace strategy implementation, one of the most complex and pressing aspects of airspace modernisation is the need to redesign outdated flightpaths to and from our airports. The future airspace strategy implementation programme is a fundamental component of the airspace modernisation strategy. FASI is a UK-wide upgrade of terminal airspace, involving our 22 airports. The work to co-ordinate a more efficient airspace system is being done in collaboration with the Airspace Change Organising Group and National Air Traffic Services. Earlier this year, the Civil Aviation Authority accepted the second iteration of the Airspace Change Organising Group’s master plan for UK airspace change proposals in the airspace modernisation strategy.
On the hon. Lady’s second point, there is Government funding of £9.2 million to support these proposals and continue this important work. Edinburgh airport, which is in her constituency, received £484,500 of Government funding through the programme. The funding allows airports to remain in the FASI programme, and I am pleased to say that much progress has been made under that initiative.
Fortunately, the aviation industry is recovering. This year, traffic levels returned to 85% of pre-covid traffic, and some airports forecast that growth will exceed 2019 levels in just a few years’ time. It is therefore only right that we return to the “user pays” model, under which airports fund the modernisation of their airspace. Those costs may be passed on to customer airlines, but it will ultimately be the passengers who benefit from the changes through quicker, quieter and cleaner journeys.
Fleur Anderson
I, too, welcome the Minister to his place. Would he agree that the modernisation strategy is an opportunity to acknowledge the damage done to the mental health of residents who live under flightpaths and are woken up at 4.30 am regularly? Does he agree that it is an opportunity to look at a longer night ban, and to consider and reduce the number of exemptions from the rules? Exemptions have been given to so many flights. It would be not just customers who benefited, but residents living under the flightpath near airports such as Heathrow.
Huw Merriman
I thank the hon. Member for her intervention, but I think it is right that I stick to the airspace modernisation strategy. I know she has concerns about night-time flights. I touched on the fact that the strategy gives us an opportunity to add more capacity, but that should not be seen as altering anything that works with regard to night-time flights. I take the point about the impact on residents, and on their mental health and wellbeing. That is why I welcome the fact that there is so much transparency and consultation. I know that the timescales may be frustrating, but it is important that everyone can have their say, particularly those most impacted.
I will move on to decarbonisation and jet zero, which the hon. Member for Edinburgh West touched on. As she will be aware, the UK has committed to an ambitious target to reach net zero emissions by 2050. The UK was the first major world economy to put such a target in law, and we continue to focus the efforts of our aviation industry on the jet zero strategy. Airspace modernisation will help us to reach that target by reducing delays and allowing aircraft to fly more direct routes. That will mean that aircraft burn less fuel and so reduce their carbon emissions. By moving to best-in-class aircraft and undertaking modernisation, we could deliver carbon dioxide savings of between 12% and 15% by 2050. Additionally, airspace modernisation will allow new technology to be introduced, such as performance-based navigation. That will improve the accuracy of aircraft flight and create opportunities to better avoid noise-sensitive areas and so provide residents with respite.
I turn to the Scottish regional approach and the benefits of airspace modernisation. Another key initiative of the airspace modernisation strategy is the deployment of free route airspace. Rather than crossing the upper airspace through a series of waypoints, aircraft can now fly on a direct flightpath between entry and exit points. That will reduce aircraft fuel burn and CO2 emissions. The first free route airspace in the UK was opened over Scottish airspace this year. Up to 2,000 flights use that crucial part of the UK’s airspace every day, and it supports 80% of transatlantic traffic, so NATS estimates that the change will save 12,000 tonnes of CO2 a year—the equivalent of the CO2 emissions from 3,500 family homes.
To safeguard airspace modernisation and its benefits, the Government have introduced new powers through the Air Traffic Management and Unmanned Aircraft Act 2021. I thank the hon. Member for Edinburgh West for her engagement and support during the passage of that legislation. It allows the Secretary of State for Transport to direct an appropriate entity to progress or co-operate with an airspace change proposal, if doing so would assist in the delivery of the airspace modernisation strategy. Of course, the exercise of those powers will be carefully considered and progressed only when absolutely necessary.
To end, airspace modernisation is vital to unlocking the benefits of a growing UK aviation sector. Without modernising our airspace, we cannot realise benefits for passengers, communities, operators and the economy. The Government remain committed to delivering this key piece of infrastructure, and I thank the hon. Member for Edinburgh West for raising this important subject.
Question put and agreed to.
Fertility Treatment and Employment Rights
(2 years, 1 month ago)
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Nickie Aiken (Cities of London and Westminster) (Con)
I beg to move,
That this House has considered fertility treatment and employment rights.
It is a pleasure to serve under your chairmanship, Sir Edward. This week we mark National Fertility Awareness Week, so I am incredibly grateful to have secured this important debate. I would like to put on the record my heartfelt thanks to the incredible Fertility Matters at Work, Fertility Network UK, Burgess Mee Family Law and Dr Michelle Weldon-Johns. These organisations and individuals have been instrumental in driving forward positive change in this area, and I would not feel equipped to speak on this issue without their help.
Issues to do with fertility treatment affect hundreds of thousands of people of all ethnicities and socioeconomic backgrounds. Infertility does not discriminate. Fertility treatment is emotionally draining, costly, risky and often long. People can go through multiple cycles before conceiving. According to the latest figures from the Human Fertilisation and Embryology Authority, the UK fertility regulator, it takes an average of three cycles of in vitro fertilisation to achieve success. Cycles can be unpredictable, and women have to deal with the symptoms, the risk of complications, and day-to-day practicalities, such as self-injecting with hormones.
Undergoing fertility treatment is difficult at the best of times, but it is particularly difficult to juggle it with a job. Whereas there is employment legislation to do with pregnancy, maternity and paternity leave, there is no enshrined legislation that compels employers to give employees time off work for fertility treatment or an initial consultation. The Equality Act 2010 was well-intentioned and removed some forms of discrimination in the workplace, but unfortunately it does not prevent discrimination against those pursuing fertility treatment as it does not class infertility as a disability.
Despite the World Health Organisation describing infertility as
“a disease of the… reproductive system”,
in practice, there is little recourse to legal, medical, practical and emotional support for both men and women undergoing fertility treatment. For example, most workplace protection policies exclude elective medical procedures, which puts fertility treatment on a par with cosmetic surgery. I am sure you will forgive me, Sir Edward, for saying that we should not equate fertility treatment with cosmetic treatment such as a nose job or, dare I say, a boob job.
Steve Brine (Winchester) (Con)
I am pleased that my hon. Friend got this debate. I want to back up what she is saying: we should treat fertility as a medical issue, but we do not. The National Institute for Health and Care Excellence guidance says that women should be able to access three full cycles. That in itself—saying “three strikes and you’re out”—would be cruel enough, but the reality is that many people would love to get to three cycles; as a result of local decision making, they often do not even get two. Do we not need to level up fertility treatment across our constituencies?
Nickie Aiken
I absolutely agree with my hon. Friend. There is so much pressure on the NHS, and on the provision of proper fertility treatment, that many people have to spend their savings or remortgage their home to pay for private facility treatment. I hope this debate will lift the lid on the lottery that still exists.
Women are, of course, protected from pregnancy-related unfair treatment and discrimination throughout the protected period. However, for those undergoing fertility treatment, this protected period would begin only at implantation, not before. That means employers are unlikely to be liable for pregnancy discrimination in relation to any unfair treatment prior to implantation. That leaves people vulnerable to unfavourable treatment or dismissal during the earlier stages of treatment, and without any legal recourse.
Data from Fertility Matters at Work shows that one third of people going through IVF treatment have considered leaving their job rather than facing workplace discrimination. The organisation’s findings also indicate that many people feel uncomfortable discussing IVF treatment openly with their employer, and struggle through the journey largely unsupported and in silence. Some said that they feared that the fact that they were having fertility treatment would be held against them, and that they would not be considered for the next promotion, or might even face redundancy.
Florence Eshalomi (Vauxhall) (Lab/Co-op)
I thank the hon. Lady for making a passionate speech on such an important issue. Given that 3.5 million people in the UK face fertility issues, should not employers look at how they can come up to date and make sure that there is space for their staff to discuss the issue in the workplace?
Nickie Aiken
I completely agree. One in six couples experiences fertility issues. That is a huge number of people, as she says. If we are to retain brilliant people in their jobs, we must do more to support them at such a difficult and emotional time.
The Fertility Matters at Work research found that when people spoke to their employers, many felt that what they said was used against them when it came to future opportunities and progressing in the company. The reality of the issue was brought to light by a constituent of mine. I commend her for her bravery in sharing her story; it led to my campaign. She had been working in finance for 19 years. Everything was going well. She was a senior person in her organisation. Sadly, she found she could not conceive naturally, and realised that she had to go for IVF. She did everything under the radar because she did not feel that her employer would be supportive. Sadly, complications in the treatment led to her being in hospital for two weeks; there was then a further four weeks of recovery. The hospital wrote a sick note for her employer that said, “complications due to IVF.” The cat was out of the bag.
When my constituent went back to work, her employer immediately called her into a meeting and told her that she was being moved abroad; she had no choice. She stuck to her guns and went through the IVF. She was told that if she went for the implantation, she could be sacked. She went for the implantation and then decided that she would have to go off work because of stress.
Peter Dowd (Bootle) (Lab)
As the hon. Member said, more than one third of employees undergoing fertility treatment consider leaving their job because of the problems she has described. Does she agree that that is not good for the economy, let alone the personal and financial circumstances of the person concerned? That is why this debate is so important, and I thank her for initiating it.
Nickie Aiken
The hon. Member is absolutely right. We have to ensure that we retain these brilliant people in their jobs. We have 1 million job vacancies, and we know how difficult it is to recruit people to jobs, so why do we make it as hard as possible to keep people in their jobs when they are going through fertility treatment?
My constituent nearly ended up in an employment tribunal, but because she was in early pregnancy and did not want the stress any more, and because she was finding it difficult to pay the lawyers’ fees, she came to an agreement with her employer and signed a non-disclosure agreement. Since then, she has been unable to speak about her case in public. She came to me in confidence, which is why I took up this cause, so I thank her. She is not the only one. Since I started the campaign, I have been contacted by scores of people, but I know that thousands of women are affected every year. Many women have told me that admitting they are undertaking IVF or any form of fertility treatment can be considered career suicide. We should not allow women to feel that they have to put having a baby up against progressing their career. In the 21st century, why can they not do both? It is important that we listen to such stories, act on them, and provide women and their partners—men or same-sex partners—with the respect and the protections that they need. After all, it is 2022, not 1922. That is why I started this campaign.
The first part of my campaign is my private Member’s Bill, the Fertility Treatment (Employment Rights) Bill, which is due to have its Second Reading on 25 November. The Bill would give individuals the right to take time off for fertility treatment, just as they would if they had antenatal appointments. It is supported by leading charities and non-governmental organisations, as well as the Chartered Institute of Personnel and Development. The Bill goes hand in hand with the incredible work that this Government are already doing to support women in work, through policies on the menopause, couples requiring neonatal leave, and those who have experienced baby loss. I hope that the Government will fully support the Bill on Second Reading.
I know how long it can take to get a private Member’s Bill through the House, but there are also other steps that we can take. We must encourage employers now—today—to take proactive steps to support people undergoing fertility treatment. That is why during this week, National Fertility Awareness Week, I am launching my fertility workplace pledge. The pledge calls for employers of all shapes and sizes to lead the way by voluntarily signing up to a clear set of commitments relating to accessible information, awareness in the workplace, staff training and, crucially, flexible working. Tomorrow morning, I will hold an event here in Parliament, to which all hon. Members are invited. It brings experts and academics together with leading businesses that, I am delighted to say, have already signed up to a pre-launch of the fertility workplace pledge, including NatWest, Metro Bank, Zurich, Channel 4, Co-op, Cadent Gas, UKHospitality and a huge array of UK law firms. I am particularly proud that the House of Commons has also agreed to take part.
By signing the fertility workplace pledge, all those organisations will improve their workplace culture and the wellbeing of their staff, which in turn reduces stress and sick leave, and safeguards against employee tension. Importantly, it will put no unnecessary burden on their businesses. That shows that businesses are supportive of the key principles of my Bill. We must remember that the pledge is voluntary. No matter how hard we try, without the necessary legislation and protections, thousands will be left vulnerable to discrimination.
There are so many misconceptions about fertility treatment, especially in the workplace. Many think that it is a lifestyle choice for older career women who have waited too long before trying to start a family. That could not be further from the truth. More than 40% of women who resort to treatment are under 35, and many turn to IVF for medical reasons, such as having gone through early menopause or cancer treatment. It is also a route to having a family for LGBT couples, as well as for those who do not have a partner or are clinically infertile. People should never be penalised because they cannot conceive naturally.
It is time to recognise fertility treatment as a very important part of reproduction. We have a falling birth rate in this country. We cannot put unnecessary hurdles in the way of people who want to start families. After all, our children are our country’s future. We must support everyone who is going through fertility treatment in order to conceive, and give them the employment rights that they need and deserve.
Several hon. Members rose—
Sir Edward Leigh (in the Chair)
Order. If everyone is going to get in, speeches must be kept to no more than five minutes.
Jim Shannon (Strangford) (DUP)
It is always a pleasure to speak in any debate in Westminster Hall under your chairmanship, Sir Edward. I commend the hon. Member for Cities of London and Westminster (Nickie Aiken) on leading the debate today. Some of my constituents back home told me about the hon. Lady’s debate, and I am very pleased to participate. I thank her for her ongoing interventions and for introducing her private Member’s Bill on fertility treatment and employment rights. I look forward to hearing further contributions from other Members from all parts of the House. It is always a pleasure to see my good friend, the right hon. Member for Romsey and Southampton North (Caroline Nokes). We seem to be on the same side in these debates, and it is good to see her in her place.
It is an unfortunate and sad reality for many women and couples wanting to have children that natural conception is not always an option. Seeking fertility treatment is the most viable option. Across the UK, some 1.3 million IVF cycles have resulted in the birth of 390,000 babies—that is one in three, which unfortunately means that two in three are not successful. That is the reality. IVF and other fertility treatments are incredibly common nowadays, yet the provision of employment rights for women undertaking this treatment is feeble. I could use stronger words, but it would be inappropriate. We look to the Minister to strengthen what the hon. Lady wants to bring forward. I believe everyone in this Chamber wants that to happen.
In some cases, men require time off for sampling and consultancy appointments. There is a need for clarity on employment rights for that. There are two in this equation: the lady who wants to conceive and the man who wants to be part of that. Employer discretion has played a pivotal role in deciding time off for fertility treatment. There are no specific UK rights, but there should be. Perhaps the Bill of the hon. Member for Cities of London and Westminster will change things.
This is not an issue that applies solely to small businesses—often, large chain stores across the UK have no specific guidelines whatsoever on employment rights for fertility treatment, and really have no desire to even try to address those issues. One constituent of mine who is only 24 made the interesting point that if she were trying to conceive naturally, there would be no expectation to tell her employer that she is trying for a baby. However, given she had to go down the IVF route, she had an obligation to tell her employer because of the additional time off that she would need for appointments. Something does not add up there. In my book it is quite clear, and others will reiterate that.
Another woman contacted me at the tail end of the third lockdown to tell me that her employer stated that if her IVF appointment took over three hours, including travel time, she would be forced to take holiday. If human resources considered that she was attending too many appointments, she would have to make up the time. There is a big lack of compassion and understanding there.
Couples should not be penalised for fertility issues that lie completely out of their control. There is a huge mental strain on both men and women who are seeking fertility treatment. The ladies who have come to see me over the years as an elected representative—as a Member of the Legislative Assembly in my previous job and as an MP—sit there and their faces betray their stress and anxiety. We need to do better. There are 3.5 million people in UK and 5% of people in Northern Ireland who struggle to get pregnant naturally. We must do more to normalise the fact that there is a right to those appointments, as there is a right to a GP or a dental appointment. A woman’s ovulation cannot be pinned to a certain day off or a lunchtime break. There must be flexibility as a norm.
Consideration must be given to the overall cost of the process, too. For employees who are not paid for the time they take for appointments or are made to take statutory sick pay, there are often already extreme financial pressures going on through the cost of IVF treatment. Additional pressure from employers is unnecessary and unfair. NI Direct has stated that employees will be entitled to paid time off for antenatal care only after the fertilised embryo has been implanted. There is not even an understanding in the Department. In many cases, the most important check-ups are before implantation. These are the issues that we must focus our time on.
I have high hopes for the hon. Lady’s private Member’s Bill. As my party’s spokesperson for health, I support it and its intentions fully. I hope for a future for couples where they can get the support from their employers as needed, both before implantation and after. We all want the best for our constituents, so it is crucial that we stand here today and represent those facing difficulties with fertility and managing employment.
Caroline Nokes (Romsey and Southampton North) (Con)
It is a pleasure to serve under your chairmanship, Sir Edward. I congratulate my hon. Friend the Member for Cities of London and Westminster (Nickie Aiken) on securing this important debate and on her introduction. I am equally delighted to see the Minister in her place and, if I am allowed to say, slightly relieved that we have a Department for Business, Energy and Industrial Strategy Minister to talk about fertility and work, because too often in this place I come to talk about the menopause and work and am confronted with a Health Minister.
It would be expected of me to start instantly with a pitch for an employment Bill, because I make that pitch every time I come here. I say, “We need to have an employment Bill; we were promised it in the Queen’s Speech some years ago, but it is still not forthcoming.” I am going to put it in the hands of the Minister for Science and Investment Security, my hon. Friend the Member for Wealden (Ms Ghani) to produce the aforementioned Bill.
I pay tribute to my hon. Friend the Member for Cities of London and Westminster for securing the PMB slot and making progress in that regard. We need to see some legislation around this. Make no mistake, this is a “women in work” issue. I know that is very gendered, and I am going to move away from that in a moment. But it is about securing women’s place in the workplace and ensuring that they keep opportunities. As the hon. Member for Bootle (Peter Dowd) said, this is a fiscal issue, about the individual fiscal wellbeing of families and the economy as a whole.
There are very few points I want to make and I will be brief. We have heard it explained by other Members that IVF ends in failure for two thirds of parents going through it. It is a gruelling and stressful process, which is why flexibility in employment and adequate time off is so important. It is why we need employers to be understanding. We often talk about mental health in the workplace. I have spent the past 18 months talking about menopause in the workplace, and the importance of having policies in place in the workplace that support individual employees and a culture of openness, so that we do not have the secrecy, shame and fear of coming forward with these issues. People should be supported to take off the time that they need, and that should not be part of their holiday entitlement. We have heard that it can be long and gruelling. Most people’s holiday entitlement would simply not be enough.
I said I had made it a gendered issue, and it is not. The reality is that partners need to be there to support the woman who is going through IVF. We must recognise the need for same-sex couples to have that support, and the need for support to be available when surrogates are used. We may like to think about traditional family units, but families come in all shapes and sizes nowadays. It is crucial that we recognise there is a role for LGBT couples to get this support.
There are some great examples out there. I look at companies such as NatWest and Centrica, which have led the way in fertility policies in the workplace. I was pleased to hear from the Co-op, which employs in the region of 60,000 people in this country. Even in the past few weeks, it has published its policy on paid leave for fertility treatments, making the point that the time off provided is flexible and unrestricted. It makes the point that it cannot assume what individuals going through fertility treatment need. The measures extend to partners accompanying those going for fertility treatments, with paid leave for up to 10 appointments per cycle. That gives a measure of how significant a commitment that is, both from the individual and the employer.
We have a great deal of work to do in this area. It is too little understood and too little spoken about. I pay tribute to my hon. Friend the Member for Cities of London and Westminster for the great work she is doing in National Fertility Awareness Week to raise this issue.
Carla Lockhart (Upper Bann) (DUP)
I thank the hon. Member for Cities of London and Westminster (Nickie Aiken) for securing this debate. It is an important issue and one, as a female MP, I get lobbied on regularly. I am sure we all know couples who have gone through the IVF journey. No couple would choose to have to go down that pathway to start a family.
When speaking with many couples, they have told me of the physical, mental and emotional rollercoaster of hope, disappointment, joy and despair. For some, it brings that little bundle of enjoyment, and for others it brings heartache. In the midst of such a journey, to be fully focused on work, in the right frame of mind and physically capable, is undoubtedly too much for some. It is wrong that there is currently no legal entitlement to time off in such circumstances.
Members will know that as the law currently stands, employees undergoing IVF have limited IVF-specific protections prior to embryo transfer. Most of their legal protections stem from standard employment protections to prevent discrimination. In such unique circumstances, a unique legal provision for additional employment rights is needed.
I am conscious that the hon. Member for Cities of London and Westminster has tabled a private Member’s Bill to address the lack of legal provision to give women time off. As a party, we will support that Bill on the basis that IVF treatment should be categorised as antenatal treatment, and thus patients should be given the same work rights. To me, that is a sensible provision and I will fully support the Bill as it progresses though the House.
I will briefly mention one other fact. For many, IVF is a multi-cycle experience. Unfortunately, in Northern Ireland couples are entitled to only one cycle of IVF. That is very distressing for couples and puts more pressure on them. Within the “New Decade, New Approach” document, which restored the devolved Administration, there was a commitment to provide three cycles of IVF. Unfortunately, that has not been fulfilled. Last week, the Government moved to fulfil part of the NDNA agreement with the Identity and Language (Northern Ireland) Bill, but that commitment, which brings about new life, has not been fulfilled. I encourage the Minister to take up that issue and run with it, and allow the Government to deliver on that promise within the NDNA agreement.
We want a society that values life; we want a culture where women feel valued. Women go through much in the workplace, including miscarriage, pregnancy, IVF and the menopause. Employers need to support women in the workplace, and therefore this debate is very welcome.
John Howell (Henley) (Con)
It is a pleasure to serve under your chairmanship, Sir Edward. I congratulate my hon. Friend the Member for Cities of London and Westminster (Nickie Aiken) on her wonderful campaign. If I can support it, I will do so.
By coincidence, this morning we were discussing general cultural issues related to getting pregnant. The conclusion was that if a man had a child—if it is clear what I mean—that would be an excuse for the employer to give him a pay rise and to change his job. If a woman gets pregnant, she is just put to one side. We have heard how the whole fertility treatment process is very stressful. In fact, we have only heard about a portion of it. If we read about the number of tests that they need and the details of how they go through it, we can see how very frightening it can be. I think we have to remember the effects of that stress on people’s work.
It is not just women who are involved in this; males can have infertility problems as well. They can be due to lifestyle habits, for example smoking, or hormonal changes, for example low testosterone. That leads me to mention some figures produced by AXA. One of the most important was that 85% of employees undergoing fertility treatment said that it had had a negative impact on their work. A phenomenal number of people involved in this process experience a profoundly negative impact on their work.
We have already heard that a third of those undergoing IVF treatment—in fact the figure that I saw was 38%, so it is a little higher than a third—have either considered or have actually quit their jobs as a result of the impact on particularly their mental health. Although we have tried to separate mental health from other reasons for approaching this subject, we cannot separate them. They are intimately linked, and the mental health applications that take place have to be looked at very carefully and with a great deal of consideration.
I cannot understand why a business would not want to allocate time specifically for fertility treatment. I cannot understand why it is not part of their natural, compassionate approach to dealing with employees. They are compassionate in many other ways, which is to be applauded, but given that this issue directly affects the work that people undertake and the way in which they operate, I cannot understand why businesses do not allocate time for fertility treatment.
I am pleased by the number of companies that my hon. Friend the Member for Cities of London and Westminster has already signed up to her campaign, and I look forward to their involvement and to being able to take it forward. As we have heard, this issue is a major problem not just for this country, but for the western world. Unless we take it seriously, we will end up in even greater trouble than we would otherwise be, and I thank my hon. Friend for the work that she has done to make sure that we are all aware of it.
Angela Crawley (Lanark and Hamilton East) (SNP)
It is a pleasure to serve under your chairmanship, Sir Edward. I congratulate the hon. Member for Cities of London and Westminster (Nickie Aiken) on securing this incredibly important debate, and on all her work in Parliament on the Fertility Treatment (Employment Rights) Bill. I wish her every success with its Second Reading. I welcome the Minister to her place, and I hope that we will continue to have fruitful discussions on many issues, including my Bill on miscarriage leave, which I will undoubtedly continue to lobby her on.
We have heard from many Members that this is being National Fertility Awareness Week, so I am grateful that we are having the debate. As always, the hon. Member for Strangford (Jim Shannon) passionately conveyed his constituents’ experiences. My right hon. Friend the Member for Romsey and Southampton North (Caroline Nokes) spoke of the importance of making changes to workplace cultures to reflect modern families and the different routes to parenthood.
As we have heard, there are currently around 3.5 million people in the UK who experience fertility treatment. They do so for several reasons, but the most common is infertility. However, an increasing number of same-sex couples are undergoing treatment to start their own families, and a growing number of individuals are opting to preserve their fertility. Sadly, although advances in assisted fertility have allowed many more families who are unable to conceive without assistance through donor sperm or egg donation to opt for treatment, such as IVF, intrauterine insemination or surrogacy, this issue continues to be shrouded in secrecy and carries an element of stigma. As we have heard, those who have that lived experience do not appear to have a voice in the process, meaning that millions of UK citizens face the prospect of fertility treatment alone and in silence, and there are no specific rights within UK law to protect those who need time off from work.
No doubt the Minister will give the same response—I hope she will not—to what I have raised on several occasions regarding my Bill, which would introduce paid miscarriage leave for couples experiencing pregnancy loss before 24 weeks, but I will take this opportunity to remind her that the introduction of an employment Bill would have addressed many of the issues relating to guaranteed rights for workers. It is unfair that any employee should have to take annual leave for medical-related appointments, or even to take time off for what is already an arduous process.
Fertility treatment is undoubtedly one of the most challenging experiences that a couple can undertake. It is precarious, unpredictable and uncertain. Trying to plan for hormone cycles, treatment and blood appointments —nothing can prepare someone for what they will go through and the time that they will need from their employer. It can change and be fairly unpredictable, which is why it is essential that we understand the emotional impact that infertility can have. It cannot be underestimated.
Fertility treatment can be both traumatic and emotionally draining. It can be arduous and long, and it can take months or years. For couples who continue to go through that process, it can result in many unsuccessful attempts. Until a person has gone through it themselves, they will never fully appreciate how challenging it is.
I want to end with the testimony from a couple who wrote to me:
“Our plan was to grow our family, we saved and planned for fertility treatment. We didn’t plan for a global pandemic, cancelled treatment cycles, we didn’t anticipate how long our treatment would take, but we knew there was a possibility it may not work.
Thankfully, after several failed embryo transfers, we are now beginning to feel the excitement of being 16 weeks pregnant. While the journey steam rolls ahead it’s hard to stop and reflect on the pains and heartaches along the way…It’s the surrendering control to that little soul when it decides to join us was nothing short of a lesson in patience and gratitude.”
The reality is that nothing can prepare people for fertility treatment. Will the Minister signal to those undergoing fertility treatment that she will commit to introducing statutory rights for workers going through fertility treatment? Will she commit to introducing an employment law Bill, which we have long awaited over successive Parliaments? It is high time that the Government took action to bring employment law up to date in this country, whether by introducing fertility and miscarriage leave or by enacting the Taylor review. I urge the Minister to act now and introduce leave for the many couples who need it.
Justin Madders (Ellesmere Port and Neston) (Lab)
It is a pleasure to see you in the Chair, Sir Edward. I congratulate the hon. Member for Cities of London and Westminster (Nickie Aiken) on securing this debate and on her excellent speech. She said that there is little legal, medical, practical and emotional support for those seeking fertility treatment. That encapsulates the broad issues facing people in that situation; obviously, we are looking at a very specific issue today. I agree that IVF should not be considered on a par with cosmetic surgery—it is a very different thing altogether.
The hon. Lady really brought it home to me how far we need to go. She gave the example of her constituent who was told that she would be sacked if she undertook IVF treatment. That is the sort of thing that we would expect to have been said in the ’70s to someone who said they were pregnant. Rightly, society and the law have said that that kind of response is unacceptable. The hon. Lady summed it up well when she said that people should not be penalised for being unable to conceive naturally.
There were a lot of good speeches from Back Benchers. As always, the hon. Member for Strangford (Jim Shannon) gave a good contribution. I think everyone was pretty much in agreement about the importance of this issue.
The right hon. Member for Romsey and Southampton North (Caroline Nokes), who does an excellent job in all sorts of areas on equality in the workplace, said that we need to create a culture of openness and support for employees, and I hope this debate engenders that. She also asked about an employment Bill. The Minister is standing in today, but she may know that I have asked many previous Ministers when we can expect such a Bill. I am not expecting an answer, so to the right hon. Lady I say that I suspect it will take a Labour Government to introduce the plethora of employment legislation that this country desperately needs.
I am grateful to the hon. Member for Cities of London and Westminster for securing this debate. This issue has not traditionally received the attention it deserves because people understandably find it difficult to talk about, but we need to foster a culture of openness.
As we have heard, infertility and fertility treatment are the second most common reason for a woman to visit her GP—the most common is pregnancy. About one in seven couples are affected by infertility, which is about 3.5 million people in the UK. Since 1991, 1.3 million IVF cycles have been undertaken, resulting in 390,000 babies being born. IVF has become commonplace over those three decades: 6,700 IVF cycles took place in 1991, and 69,000 took place in 2019. I doubt that a tenfold increase in employers’ awareness has accompanied the increase in IVF treatment, which is why this debate is so important.
Steve Brine
It is interesting to hear those figures. There is a group who are not included in those figures, for whom all these issues around fertility challenge do not exist because they are banned from fertility treatment. Current legislation means that people living with HIV are banned from using such treatment. HIV medication is so effective these days that someone with HIV who is on it cannot pass HIV on, so their babies can be born without HIV. There is therefore no medical reason for this law to still exist. Are the Opposition aware of that situation? Do they think that law is a really brutal bit of discrimination that belongs to another age?
Justin Madders
I thank the hon. Gentleman for his intervention. I was not aware of that; obviously it is a matter that comes within the Department of Health’s bailiwick, so I would have to defer to my shadow colleagues in that sector. However, perhaps in a few days he will have a new role that will enable him to put a focus on this issue in a way that we have not seen so far.
We have heard a number of statistics that show why fertility treatment is such an important issue in the workplace. Fertility Network UK says that 56% of those seeking such treatment reported decreased job satisfaction; 63% admitted to reduced engagement; 36% had increased sickness absences; and 38% had seriously considered leaving their job or actually quit their job because they were trying to conceive—a statistic that should shame us all. Similarly, recent research published by Zurich found that 58% of women undergoing IVF treatment withheld that information from their employer and 12% of women left their job completely because their employer was unsupportive. These are statistics that we absolutely have to challenge and change.
It is easy to see why those undergoing fertility treatment report such experiences. Both from what we have heard today and from issues reported in the media, it is easy to see why so many people—particularly women—report feeling vulnerable and distressed about discussing these issues with their employer. I think that almost all in society are sensitive to how emotionally challenging and stigmatising seeking fertility support can be. However, having to physically administer treatment while in the workplace, and possibly while alone in a toilet stall, must be extremely difficult for those who have to do it, and fearing that a line manager might be questioning where they are while they do that can only add to the anxiety that people feel. Then there is the issue of whether someone’s treatment will negatively impact on their career, because they have an unsympathetic line manager. The experience can be very isolating. We have to change the culture to make sure that women feel supported and do not feel alone during these times.
In conclusion, the statistics that I have cited and the testimony today should give us all food for thought about whether we have got the balance right and make us consider whether there is sufficient support for those with fertility issues. The picture that has been presented today overwhelmingly suggests that we have not got that balance right at all.
The Minister for Science and Investment Security (Ms Nusrat Ghani)
It is a pleasure to serve under your chairmanship, Sir Edward.
I am standing in today for the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake), but I want to put it on the record that we work as a team within BEIS—it is absolutely spot-on that BEIS is responding to this debate today.
I congratulate my hon. Friend the Member for Cities of London and Westminster (Nickie Aiken) on securing this important debate about fertility treatment and employment rights. We have heard so many shocking stories about the impact that this invasive treatment has on women, couples and families. However, I will take a moment to say that we have probably all been a little bit complicit in this situation, have we not? So many of us will know girlfriends, family members or colleagues who wanted to keep this treatment a secret; we have kept it a secret for them, because they were anxious about the behaviour they may experience at work. It is so important to get this issue out into the open. I pay tribute to my hon. Friend: putting together the fertility workplace pledge will be a fantastic contribution during her career in Parliament, which has only just begun. I thank her so much for bringing this matter to the fore.
There have been a lot of discussions about the challenges of infertility treatment and the impact that it has on women and couples, and potentially on their employment as well. We know from the statistics that so many people are going through the treatment, so it is shocking that it is still a secret. In 2019, about 53,000 patients had 69,000 IVF cycles and 5,700 donor insemination cycles at licensed fertility clinics in the UK. Those are huge statistics. The fact that women and couples feel that they cannot talk about their treatment in case they are treated in an inappropriate fashion is shocking.
National Fertility Awareness Week, which is actually this week, is a superb event; it starts off with awareness of fertility fairness, awareness of fertility in the workplace and evolves into awareness of infertility. It is great to have heard some male contributions today. There is also fertility education and taught fertility, as well.
I pay tribute to everyone who has contributed today, including the hon. Members for Strangford (Jim Shannon) and for Upper Bann (Carla Lockhart), and my right hon. Friend the Member for Romsey and Southampton North (Caroline Nokes)—who would dare to challenge my right hon. Friend, the Chair of the Women and Equalities Committee? Additionally, I pay tribute to my hon. Friend the Member for Winchester (Steve Brine), who has a tremendous record on health issues; I am also a little bit anxious about responding to his point. Of course I also pay tribute to my hon. Friend the Member for Henley (John Howell), who always speaks so sensibly as well.
I will quickly go through some of the work that the Government are doing and hopefully respond to some of the questions that were put, too. There is no denying that IVF is one of the most invasive fertility treatments. I do not understand why anybody would compare it to a cosmetic procedure; that is just absurd. It is invasive, gruelling and stressful, and it can last for years. We all have girlfriends who have started the process; it takes many years and has a financial impact as well, so there is no denying that it is an incredibly difficult thing to do. Also, injecting is a private matter and many women want that private space to inject themselves as well.
What we are talking about today is the fact that women and couples just cannot come forward and explain that they are going through this treatment, because they are anxious about how they are going to be treated in the workplace. As has been mentioned, that is an absurd anomaly because we are struggling to fill jobs and we want skilled people, who are loyal and who understand the workplace, to remain in work.
Something is not quite right and we know that the situation has to change. The issue is cultural, because we want people to be able to come forward, present what they are going through and have the support that they need within the workplace. We obviously need a cultural change, which is why the pledge is so important. Sometimes it is quicker to get businesses to move than Government, so, once again, congratulations to my hon. Friend the Member for Cities of London and Westminster for putting that pledge in place.
I want to reflect on some of the work being done by the Government. We have the women’s health strategy, which looks at the system as a whole: educating society at large and looking at the role that the health sector, employers and individuals can play. This summer, the first Government led “Women’s Health Strategy for England” was published, and a woman’s health ambassador was appointed to drive system-level changes to close the gender health gap. The theme of the health and wellbeing fund 2022 to 2025 is women’s reproductive wellbeing in the workplace. The fund supports organisations to expand and develop projects that support women experiencing reproductive health issues to remain in, or return to, the workplace.
The Government also have an active agenda on work and health more widely. We want employers and employees to have better interactions about work and health. That is particularly important in tackling some of the perception issues around women’s health generally, and IVF specifically. The Government’s response to the “Health is Everyone’s Business” consultation was published in July 2021. It sets out some of the measures we will take to reduce health-related job losses; that was spoken about today and is obviously a major issue that needs to be addressed. “Health is Everyone’s Business” did not consult on infertility or any other specific conditions. It looked at system-level measures to support employers and employees to manage any health condition in the workplace.
There has been some conversation around the employment rights Bill, and why it was not in the Queen’s Speech. That was raised by the hon. Member for Lanark and Hamilton East (Angela Crawley) and my right hon. Friend the Member for Romsey and Southampton North. We are obviously disappointed that the Queen’s Speech did not include an employment Bill for the third Session of this Parliament, but some good things have come out recently that are cross party; I know that my colleague, the hon. Member for Ellesmere Port and Neston (Justin Madders), wanted to have a little pop at the Conservative party, but we work with Members across the House.
Numerous private Members’ Bills have been introduced on employment rights as a result of the PMB ballot. In particular, there has been the Neonatal Care (Leave and Pay) Bill, the Employment (Allocation of Tips) Bill, the Protection from Redundancy (Pregnancy and Family Leave) Bill, the Carer’s Leave Bill and the Employment Relations (Flexible Working) Bill.
Good work is being done through private Members’ Bills, even though we may not have the employment Bill that everybody is asking for in this debate. The private Member’s Bill of my hon. Friend the Member for Cities of London and Westminster will require employers to allow employees to take time off for appointments for fertility treatment, as she said. I know that the Minister responsible will engage with her intensely before the appropriate time is made available for the Bill to return to the House.
I am anxious that we do not put across too much of a negative story on existing rights and entitlements, because there is already some good stuff out there. Even though there is no overarching right to time off for medical appointments, there are a number of ways employees may be able to take time off to attend medical appointments, including for IVF. I do not want anyone listening to feel any more stressed than they already do, if they are considering or going through IVF.
Many employers are willing to agree informal flexible working arrangements on a short-term basis. An individual may be able to take annual leave, or agree general unpaid leave with their employer. Fundamentally, the pledge campaign that my hon. Friend has put in place will really challenge some employers who have an old-fashioned view. It would be a badge of honour for these firms to say, “We have this in place”, because it will not only attract new staff but retain the staff they currently have.
If an individual is unwell, they can take a period of sickness absence and may be entitled to statutory or occupational sick pay. We cannot legislate to make employers act with compassion, but if employers want to employ committed employees one of the things they can do is adopt the fertility workplace pledge. It is a really positive step in taking this agenda forward and, as we have heard, a number of employers have already signed up, so I have no doubt that over a period of time it will grow and grow.
I will reference some of the comments made by colleagues. My hon. Friend the Member for Winchester spoke about NICE guidance on three opportunities at IVF. I am speaking outside of my brief, as these issues fall to the Department for Health, but we recognise that NHS-funded access to fertility services has been varied for a long time, and our ambition is to see an end to the postcode lottery. The Government published the health strategy in July this year, which made a commitment to address the geographic variations over the 10-year lifetime of the strategy. I have no doubt that my hon. Friend will carry on campaigning for that. The hon. Member for Lanark and Hamilton East talked about miscarriage leave. Once again, that is outside of BEIS—it falls to the Department for Health.
Angela Crawley
I want to comment on that specific point. This is about the right to paid leave, so it does sit specifically within the BEIS portfolio.
Ms Ghani
I will give a response to that as well, which will hopefully provide some satisfaction.
Miscarriage is obviously a personal experience; there are opportunities to try and request time away from work, and we need to ensure employers understand that. The pledge, for example, is one way of getting employers to understand how important it is to treat their employees with due care if they want to retain people in work. I think I covered the points made by my right hon. Friend the Member for Romsey and Southampton North; if I have not, I am sure she will pop up and intervene. She has not, so I believe that she is satisfied, which is a wonderful place to be when it comes to that particular Member.
I am not directly responsible for this brief, but I want to confirm with colleagues that I am incredibly passionate about it. So many people have gone through these issues, and here in Parliament we can promote it in particular and stop women being discreet about something that is so difficult and evasive.
I have already set out some of the Government’s activity in supporting health issues, in particular when it comes to those undergoing IVF. We have talked about how difficult it is to employ and retain loyal staff, and what we have been discussing is one way of dealing with that issue. Why would employers not sign up to the fertility workplace pledge? It does not make sense. I encourage my hon. Friend the Member for Cities of London and Westminster to do as much work as she can to promote the companies that sign up and out the companies that do not. I am determined to work with all my colleagues in BEIS to ensure that we are playing a full role in driving this agenda forward.
I thank everyone once again for this helpful and informative debate; it is important that we talk about these issues openly, and I wish my hon. Friend luck with the progress of her private Member’s Bill.
Nickie Aiken
I thank everyone for taking part in such an important debate. When I was first contacted by the constituent I mentioned in my speech, to be honest I was not aware that people undergoing fertility treatment did not receive employment rights and could not take time off on paid leave for treatment. That is wrong.
By raising this issue in Parliament, I hope to give people going through fertility treatment, and those who may go through it in future, the sense that they are supported by Parliament and businesses across the country. We must lift the taboo and ensure that people who want to speak about it—some will want to keep it quiet, and we respect that—and want such support deserve to have that support from their employer. I hope we can get the private Member’s Bill through, or that the Government adopt it eventually, when we have an employment Bill.
I repeat that business leaders who are serious about inclusion and retention must be willing to discuss fertility openly and to create policies to support employees in that phase of their life. I hope the legislation gets through, but in the meantime the fertility workplace pledge will provide accessible information, awareness in the workplace, staff training and flexible working. I hope that more and more businesses, big and small, will take part in the pledge, signing up to it and giving their employees the support that they deserve. I ask all hon. Members available tomorrow to pop into Room R in Portcullis House to support the fertility workplace pledge by having a photograph taken and speaking to the experts who will be there.
This is just the start. I want to ensure that people going through fertility treatment feel heard and supported, and that they get the rights they all deserve. We need more babies in this country, whether naturally or through fertility treatment. The plain fact is that if we are to continue to grow our economy, we need more babies, so let us ensure that people undergoing fertility treatment have the support.
Question put and agreed to.
Resolved,
That this House has considered fertility treatment and employment rights.