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Peter Aldous (Waveney) (Con)
The Secretary of State for International Trade (Kemi Badenoch)
The Government’s export strategy sets out how we aim to capture up to £170 billion of export sales estimated for 2030 in low-carbon sectors. At the green trade and investment expo earlier this week, we showcased the best renewable energy technologies and innovations that the UK has to offer. Over the last year, the Department for International Trade has supported £5 billion-worth of exports across energy and infrastructure sectors.
Peter Aldous
I welcome my right hon. Friend to her place, and I am grateful for her reply. With 50% of the UK’s offshore wind fleet anchored off the East Anglian coast, local businesses have acquired a unique set of skills, knowledge and expertise that should be promoted abroad, so as to increase trade opportunities. A case in point is the memorandum of understanding between the New Anglia local enterprise partnership and Virginia Beach in the US. I would be most grateful if my right hon. Friend could confirm that a national framework is in place to ensure that we make the most of these great opportunities.
Kemi Badenoch
I am grateful to my hon. Friend for raising that issue and highlighting the good work that DIT is doing. He will be pleased to know that in 2020—the latest figures available—the UK exported £821 million-worth of offshore wind products, with the help of DIT overseas and sector teams. We have a plan in place to carry out promotions, and work is ongoing to continue to build the UK’s extensive export offer and maximise economic value. My hon. Friend will also be pleased to know that in and around his constituency of Waveney, DIT is supporting Lowestoft and Great Yarmouth in the build-out of Iberdrola and Vattenfall’s projects, which are developing capability to export low-carbon technology globally.
Kerry McCarthy (Bristol East) (Lab)
Earlier this week, I had the pleasure of meeting the Foreign Minister from the Maldives. Like many small island states, it would very much benefit from UK support when it comes to renewable energy; it is just not in a position to do that itself. It would also benefit from the lifting of tariffs on tuna, which I hope the Secretary of State is aware of. What support can we give small island states such as the Maldives?
Kemi Badenoch
I thank the hon. Lady for her question. We have a developing countries trading scheme, which we use to assist small countries that are not able to take some of the opportunities that larger, more developed economies can take. I know that Foreign Office Ministers have been having conversations with Ministers from the Maldives, and I am pleased to see that the engagement is extensive. We will do all we can, and I am happy to have conversations on the best way to assist it in reducing tariffs and increasing trade between our countries.
Sir Jake Berry (Rossendale and Darwen) (Con)
The green industrial revolution can seed jobs across the north of England. Will my right hon. Friend say, particularly in advance of COP27, what support is available for small manufacturers in places such as Rossendale and Darwen to ensure that they can access our overseas networks, to push international trade beyond the shores of Lancashire?
Kemi Badenoch
I thank my right hon. Friend for his question. That is one of the things we are promoting during International Trade Week. We have a 12-point export plan, to do precisely what he described. Just this week, I have met export champions across the UK, who have been showing the ways that we can expand our export networks into other countries. I am happy to provide him with more information on what the manufacturing sector in and around his region can do to take advantage of that.
Jim Shannon (Strangford) (DUP)
I welcome the Secretary of State to her place and wish her well in all that she does. I welcome greater trading opportunities for the energy sector. We must also be aware of the need to self-source and provide our own energy, to be self-sufficient. Has she had the opportunity yet to evaluate nuclear energy options for regions such as Northern Ireland and the ability to then increase trade with other nations?
Kemi Badenoch
The short answer to that is no, primarily because that would be a competency of the Department for Business, Energy and Industrial Strategy, but I would very much like to hear more about the trade opportunities that the hon. Gentleman has identified, which DIT can support in conversations with BEIS, to facilitate those sorts of plan.
Ruth Cadbury (Brentford and Isleworth) (Lab)
On behalf of His Majesty’s Opposition, I welcome the Secretary of State to her position on her first outing. The Government have committed to reaching net zero by 2050, but they continue to approve new licences for oil and gas projects. Projects approved before August 2023 could be protected from being stopped under a revised energy charter treaty. We know that other countries have been sued under the treaty when they tried to close down fossil fuel projects under their net zero commitments. How would the Government prevent that from happening in the UK under a revised energy charter treaty?
Kemi Badenoch
I thank the hon. Lady for her question. She should know that the Intergovernmental Panel on Climate Change believes that those projects are consistent with our transition to net zero. She will know that gas is a transition fuel, so it is not possible for us to get to net zero by cutting off gas completely. We need to ensure that the explorations that are taking place are in line with our strategy; I believe that they are. Responsibility for the energy charter treaty lies with BEIS, but we lead on investment provisions and investor-state dispute settlements. We continue to see it as having an important role in these policies and the UK’s trade policy.
Kate Osamor (Edmonton) (Lab/Co-op)
The Secretary of State for International Trade (Kemi Badenoch)
The last World Trade Organisation ministerial conference, attended by my predecessor, my right hon. Friend the Member for Berwick-upon-Tweed (Anne-Marie Trevelyan), brokered an agreement on trade-related aspects of intellectual property rights in relation to covid-19 vaccines. My officials are fully engaged in ongoing discussions regarding TRIPS. The UK remains committed to engaging constructively with the WTO on that.
Kate Osamor
I congratulate the Secretary of State on her new role. A great success was achieved earlier this year when a deal was agreed at the WTO to waiver some rights on the manufacture of covid vaccines, yet the deal does not apply to treatment, so countries such as Pakistan and South Africa are urging an extension of the waiver. Can the Government commit to being a positive voice in negotiations and pledge to support a waiver on covid-19 treatments?
Kemi Badenoch
I cannot make a pledge at the Dispatch Box. I can say that we will do everything we can within the existing framework to support countries that need access to vaccines and treatments. If they are making specific requests about waivers that the DIT can consider, I would be happy for the hon. Lady to write to me so that I can take a look.
Mr Robin Walker (Worcester) (Con)
The Secretary of State for International Trade (Kemi Badenoch)
Building on last year’s success, my Department is holding more than 120 events across the country this week to help businesses of all sizes and sectors to seize export opportunities to support jobs and growth nationwide. I was pleased to welcome more than 100 investors and UK exporters to the green trade and investment summit in Gateshead, attend an Export Academy event in Birmingham and speak at the National Farmers Union dairy export summit to promote UK trade.
Mr Walker
I welcome my right hon. Friend to her place and my neighbour, the Under-Secretary of State for International Trade, my hon. Friend the Member for Mid Worcestershire (Nigel Huddleston), to his. Worcester is home to some fantastic exporters, including Southco, the products of which reach markets as far afield as the United Arab Emirates, Egypt, Turkey, South Africa and Greece. It has been supported by the DIT to achieve exports worth more than £6 million and it is now working on major opportunities in India. As we celebrate International Trade Week, will my right hon. Friend ensure that we redouble efforts to support Worcester and west midlands exporters?
Kemi Badenoch
I am happy to assure my hon. Friend of that. I am grateful to him for highlighting a lot of the fantastic work that is taking place across the country. He will know, as will hon. Members on both sides of the House, that when it comes to exporting, size does not matter. We want to support as many small and medium-sized enterprises as possible to take advantage of the benefits of international trade. The export support service has boosted our international trade adviser network. He will be pleased to know that five advisers operate in his constituency; more than 180 advisers across the country offer tailored support to SMEs to take advantage of the opportunities for international trade.
Chris Elmore (Ogmore) (Lab)
My constituency makes everything from military grade parachutes to television cameras for US television networks. During International Trade Week, it would be good to do more to include the nations of the United Kingdom to ensure that every constituency in Wales, Scotland and England benefits from that much-needed trade, and that businesses in my constituency from Sony to Wepa and Rockwool are celebrated and supported by the Department.
Kemi Badenoch
The hon. Gentleman raises a good point. We need to make sure that our policies are visible across the UK. I saw many businesses from Wales and similar regions in the west of England at the green trade and investment expo. They are pleased with the support that they are receiving from the Department. I think we have a visit to Cardiff planned with the Board of Trade soon. I hope that these are the sorts of things that he and his fellow MPs in Wales will be able to take advantage of.
Nick Thomas-Symonds (Torfaen) (Lab)
After several months in which Ministers have come and gone without even facing questions at the Dispatch Box, it is good to have a chance, in this International Trade Week, to welcome the new team to the Department. I would of course like to welcome the Secretary of State and to wish her well in her new post, and I would also like to start on a note of consensus. The Secretary of State said during the leadership contest in the summer:
“Why should the public trust us? We haven’t exactly covered ourselves in glory”.
I entirely agree with her assessment of her party.
We know where the Prime Minister thinks that Conservative policy on trade has failed, because he called the Australia deal “one-sided”, so can the Secretary of State set out which other aspects of trade policy have failed and how she intends to improve them?
Kemi Badenoch
I thank the right hon. Gentleman for his warm welcome. He makes reference to comments that I made in the summer, and I am very grateful for the opportunity to clarify them. I was actually referring to all MPs and to Parliament, rather than just to this side of the House—[Interruption.] Indeed; we all know Members of all parties who have not exactly covered themselves in glory, and nobody should pretend that this is about those on one particular set of Benches.
The right hon. Gentleman is talking about trade policy, and one of the things I am very keen to highlight is that there is more to trade than free trade agreements. What we need to do is get our exports and investments going; that is the bread and butter of what trade is about. I disagree with his assertion about the one-sided nature of any particular agreement. What I want to see is businesses selling their products outside the UK and investment coming in.
Nick Thomas-Symonds
Well, trade policy certainly has not been covered in glory, because the 80% of UK trade that was to be covered by free trade deals by the end of year is not going to happen, the comprehensive deal with the US is out of sight and the deal with India by Diwali is a promise broken—but is this really any surprise? The Secretary of State’s predecessor said that her then Minister was not always available to answer the phone, the former exports Minister criticised his Department’s own trade fairs and the right hon. Member for South West Norfolk (Elizabeth Truss) was, it seems, prioritising selfies and wine fridges over standing up for Britain. Is not the reality that this Government’s incompetence is costing growth, jobs and prosperity? Quite simply, when will the Secretary of State get a grip of the Department?
Kemi Badenoch
I find every single thing the right hon. Gentleman has said to be laughable. It is very easy to stand at the Dispatch Box and make political points. I am here to actually deliver for the businesses across the UK, and that is what those of us on the Conservative Benches are going to be focused on. This is International Trade Week, so he will know that by 2030 we are forecasting £1.8 trillion-worth of green trade and £170 billion of UK exports. That is not the work of a Department that is failing; that is the work of a Department that is succeeding. I am very pleased with the actions of the officials at the DIT, and I will continue to support them both in the Department and here in Parliament.
James Wild (North West Norfolk) (Con)
The Minister of State, Department for International Trade (Greg Hands)
Joining the CPTPP free trade area is a flagship policy of global Britain and our independent trade policy. The CPTPP covers 11 countries across four continents, and the UK joining will increase its GDP from 12% of global GDP to 15%. Some 99.9% of UK goods would enter tariff-free, and the CPTPP has groundbreaking chapters on business mobility and digital trade.
James Wild
Given the potential prize of access to markets worth £9 trillion, will my right hon. Friend prioritise not only concluding the negotiations, but working with export champions—such as Captain Fawcett in King’s Lynn, which successfully sells its gentlemen’s grooming products around the world—to encourage more firms to export and to boost productivity and growth?
Greg Hands
My hon. Friend raises two very interesting points. The first is the importance of the CPTPP, which is absolutely one of the Department’s highest priorities. The second is the importance of international trade advisers working on the ground. He mentioned his grooming products company in King’s Lynn, and I can also mention KLT Filtration, based in King’s Lynn, to which we have provided support for its Coldstream filters water-purification consumer brand business. There is a lot of DIT activity happening in his constituency in and around King’s Lynn.
Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
It is good to be straight and frank about CPTPP—I am sure the Minister will agree—but if we are to be straight and frank, to have gains for jobs, the economy and living standards, would the Government not need 62 CPTPP deals to compensate for the Brexit economic damage? It also means being straight with small and medium-sized enterprises that they will be exporting to faraway CPTPP countries, with lots of bureaucracy and paperwork instead of tariffs. It will not be as easy as it was before Brexit. I am sure the Minister is all over the numbers, so will he confirm that CPTPP will be worth only one sixtieth of the Brexit damage?
Greg Hands
It is always good to engage with the Chair of the Select Committee, and in my year of absence at the Department for Business, Energy and Industrial Strategy I have genuinely missed him and his questioning of me at the Dispatch Box.
Greg Hands
I am certainly going to answer the question, which is about the opportunities from CPTPP: a free trade area of 510 million people and 11 countries across four continents, with amazingly good chapters on date and digital, mode 4, an SME chapter, liberal rules of origin—all those things are great opportunities. Frankly, it is time that SNP Members started, for the first time, to support a trade deal. They opposed the trade deal with the EU; they opposed the trade deals with Japan, Australia, and New Zealand. I am hoping for the day when the SNP will, for the first time ever, support a trade deal.
Rachael Maskell (York Central) (Lab/Co-op)
The Parliamentary Under-Secretary of State for International Trade (Andrew Bowie)
Europe remains a vital export destination for British businesses, which exported £344.6 billion-worth of goods and services in the 12 months to the end of June 2022. DIT Europe has around 300 trade experts, including a dedicated trade commissioner for the continent. We will facilitate some 500 activities and events to support UK exporters by the end of this financial year alone, including the So British event at the ambassador’s residence in Paris, Poland’s New Mobility Congress, and a significant presence at Berlin’s InnoTrans trade fair.
Rachael Maskell
I welcome the Minister to his place. In light of the devastating state of the economy, with the EU trade deficit showing at 26.7% last month, there must be pragmatism in working with the trade and co-operation agreement, to boost economic yield by removing export barriers such as tariffs and border friction, rather than instigating harsh cuts to our public services, wage restraint, and a subsequent recession in the forthcoming Budget. What discussions has the Minister had with the Chancellor, to ensure that better trade terms are negotiated between the UK and the EU, or will ideology trump the needs of our constituents and sacrifice our public services?
Andrew Bowie
I thank the hon. Lady for her question, but I am afraid this Government will take no lessons from the Labour party on trade deficits, given that it inherited a trade surplus of £4.6 billion in 1997, and left office in 2010 with a trade deficit of £35.1 billion. We have regular discussions with the European Union on how we can increase trade, and the Government are determined to drive up trade not just with the European continent, but with new partners around the world.
Dan Carden (Liverpool, Walton) (Lab)
The Minister of State, Department for International Trade (Greg Hands)
Negotiations between the UK and Mexico are taking place right now, and the second round of talks with Mexico started on Monday virtually, with discussions continuing to be positive and productive. The UK team is focused on ensuring that the new deal works for consumers and businesses across the UK.
Dan Carden
I am grateful to the Minister for his update. I have the privilege of chairing the all-party group on Mexico, which is one of the world’s biggest democracies and the second largest economy in Latin America. Trade deals provide an opportunity not only for economic growth, but on the connected issues of climate, environmental protection, human rights, workers’ rights, sustainable development and gender equality. How is progress going on those issues? I understand that the Government are considering appointing a trade envoy to Mexico. Will the Minister update the House on that progress?
Greg Hands
That may have been a job application from the hon. Gentleman, who I think is taking his APPG to Mexico next week. I wish him every success in his engagement with such an important trade partner, looking forward for the UK. We are engaged in trade negotiations with Mexico at the moment, and all those topics are subject to continuous engagement with the Mexican Government, including on the environment, climate, human rights and labour rights. Whether those things are included in a trade agreement is a slightly different matter, but none the less we take up and engage with such issues regularly with the Government. I am looking forward to the hon. Gentleman seeing at first hand next week the excellent work done by our embassy in Mexico City.
Sara Britcliffe (Hyndburn) (Con)
The Secretary of State for International Trade (Kemi Badenoch)
I am delighted to say that UK exports were £728 billion in the 12 months to the end of August 2022—an increase of £49 billion adjusted for inflation. Through our free trade agreement programme, we are creating new opportunities for UK exporters through FTAs covering £814 billion-worth of bilateral trade in 2021. We are also supporting UK exporters through our export academy, which since October 2021 has provided tailored assistance to over 11,500 businesses.
Sara Britcliffe
Last year, more than 160 of the great businesses that we have in Hyndburn and Haslingden exported goods around Europe and the rest of the world. Increasing exports creates jobs, wealth and better opportunities. Does the Secretary of State agree that liberalising international trade as a function of our new post-Brexit freedoms is key to levelling up our country, as that provides more opportunities for businesses in Hyndburn and Haslingden?
Kemi Badenoch
I wholeheartedly agree with my hon. Friend. Opening up new markets for Great British business, whether through the FTA negotiations or our work on trade barriers, will be key to securing the economic growth that the British people want. I am also pleased to hear that the export strategy is having a positive impact in her constituency. We currently have 72 export champions based in the north-west, close to her constituency, who are sharing their export journeys and acting as role models for new and aspiring exporters. As part of International Trade Week, we have hosted more than 120 events, and four of them have been in the north-west.
Margaret Ferrier (Rutherglen and Hamilton West) (Ind)
A survey of small and medium-sized enterprises for the British Chambers of Commerce found that four in five had not carried out any assessment into what they may need from a trade deal with major international markets. What steps are the Government taking to engage SMEs better with free trade agreements under negotiation?
Kemi Badenoch
The hon. Lady raises a good point. We do have SME chapters in FTAs, but quite a lot of engagement takes place with trade bodies such as the CBI and the Federation of Small Businesses. Many of those trade organisations represent their members fully, but if she thinks that a specific issue has been overlooked in any particular negotiations and she would like to highlight that, she should contact DIT in her capacity as a Member of Parliament and we will look into helping those businesses in her constituency and across the country.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
Dave Doogan (Angus) (SNP)
The Parliamentary Under-Secretary of State for International Trade (Andrew Bowie)
The hon. Members will be aware that His Majesty’s Treasury leads on this policy area. However, I am happy to provide them with an update on the support that my Department is providing to Scottish exporters during the cost of living crisis. The DIT Scotland team based in Edinburgh—I am sure that they are pleased to see His Majesty’s Government increasing their presence in Edinburgh—was established in 2021 with trade and investment expertise dedicated to supporting Scotland’s businesses to grow through exporting overseas. Scottish businesses can access many UK Government services, including the export support service, the UK Export Academy, UK Export Finance and DIT’s overseas specialists in over 100 markets across the world.
Gavin Newlands
I welcome the Minister to his place. However, let us compare export growth in the first quarter of 2019—pre-Brexit and pre-covid—with the first quarter of 2022. In Belgium, it was plus 49%, in Switzerland, plus 42%, in Poland, plus 35%, in Australia, plus 46%, in the Netherlands, plus 23%, in Italy, plus 23%, in Spain, plus 19%, and so on—I could go on and on. The UK’s figure was zero. Does he agree with Saxo Bank’s assessment published in Le Monde that political instability, trade disruption, an energy crisis and skyrocketing inflation are rendering the UK an emerging market country? Why on earth would Scotland want to remain shackled to it?
Andrew Bowie
It is a bit rich for the SNP to talk about political instability and uncertainty given that its own policy is to rip Scotland out of the United Kingdom, doing more damage to Scottish businesses and the economic foundations of our United Kingdom. The global economic situation in which we find ourselves is putting huge pressure on British businesses, but the Government, and especially the Department, are doing everything that we can to support British businesses to export to new markets and the European Union at this time.
Dave Doogan
I welcome my constituency neighbour to his Front Bench role. We are all relieved he has finally landed the job.
Fuel, feed and fertiliser costs are sky-high in Brexit Britain, compounded by the Tories’ cost of business crisis. How does the Minister suggest that my Angus farmers and his West Aberdeenshire and Kincardine farmers compete internationally? Supply-side pressures are manifest in other markets, but they are most acute in the United Kingdom. Our farmers must also now compete with the scandalous Australia trade deal, which will see Australian farmers laughing all the way to the bank while Angus farmers and other Scottish farmers face bankruptcy,
Andrew Bowie
The hon. Gentleman is a champion for Angus farmers and Angus berries, which we would like to see exported to more markets around the world. Indeed, that is why we are in the middle of negotiating access to the comprehensive and progressive agreement for trans-Pacific partnership. That will reduce 99.9% of trade barriers to that part of the world, an exciting, new and growing market for produce from Angus, West Aberdeenshire and Kincardine, Scotland and the entire United Kingdom.
Mr Peter Bone (Wellingborough) (Con)
Before I came to this place, I ran a manufacturing company and did a lot of exporting, in particular to the United States of America. In relation to the second part of this question, when dealing with a big contract one buys the currency forward. However, is it not a fact that the fall in the value of the pound against the dollar has made Scottish exports much more attractive, because they are cheaper in America, and made imports more expensive? Is that not a good thing?
Andrew Bowie
The Government are committed to stabilising the economy, driving down inflation and increasing British exports around the world. My hon. Friend is a great champion for his constituency and I know he will join us in those efforts moving forward.
Virginia Crosbie (Ynys Môn) (Con)
The Parliamentary Under-Secretary of State for International Trade (Nigel Huddleston)
The Government have put in place enhanced scrutiny arrangements for free trade agreements. We publish extensive information prior to negotiations, including our strategic objectives and an economic scoping assessment. During negotiations, we engage closely with Parliament, publishing updates and holding briefings for colleagues. I particularly look forward to working closely with the International Trade Committee, whose members bring considerable knowledge and insight. Signed deals, together with an impact assessment, are laid before Parliament at the earliest opportunity, allowing for extensive scrutiny over several months. The House will debate the Australia-New Zealand trade agreement soon.
Virginia Crosbie
I thank the Minister for his answer and I welcome him to his place. This week, I celebrated Back British Farming Day with Aled Jones, president of National Farmers Union Cymru. One of the best ways we can back our hard-working farmers, such as those in Ynys Môn, is by ensuring that once a trade deal is in force, there are people on the ground who know the market and can help get the most out of the agreements. Will the Minister update the House on the progress the UK Government have made in appointing agricultural counsellors and attachés?
Nigel Huddleston
I thank my hon. Friend, who is always a fantastic champion for her constituents and constituency, as evidenced by Anglesey Day, which was a fantastic event earlier this week here in Parliament. Also this week, my officials gathered over 20 small businesses from across north Wales and Ynys Môn to discuss how they can internationalise their businesses and take advantage of our free trade agenda. She is right: we do not just need to do the deals; we need to get the most out of them. We will get help there, too, because our eight new agri-food attachés will help unlock opportunities in growth markets. All have been recruited and will start work soon.
Dame Nia Griffith (Llanelli) (Lab)
Business organisations, trade unions, consumer groups and the trade Committees in both Houses have all called for greater and more timely parliamentary scrutiny of trade deals. In contrast to Parliaments elsewhere, such as the US Congress, which has scrutiny opportunities right from the initial negotiating mandate through to voting on ratification, this Government have done deals with no chance for this Parliament, and therefore the people we represent, to have a real say. With a new team in place, will the Minister now commit to meaningful parliamentary scrutiny of trade negotiations—not an afterthought—and bring back control to this Parliament?
Nigel Huddleston
I am afraid that I have to disagree with what the Opposition Front Bencher has laid out. The Constitutional Reform and Governance Act 2010—that date is significant, because it was introduced that April under the previous Labour Government—outlines the process, which is rigorous and stacks up well with other parliamentary democracies around the world, such as Australia, New Zealand and Canada, which have similar systems. For example, with the Australia and New Zealand agreements combined, we delivered an oral ministerial statement at the launch of each negotiation; 10 negotiating round updates; extensive information on the deals when we reached agreement in principle; 12 sessions with Select Committees, including private briefings; eight MP briefings on the FTA programme; the Trade and Agriculture Commission reports and section 42 reports well ahead of the CRaG deadline; six months of scrutiny time; and many other things. [Interruption.] I just wanted to make that point, Mr Speaker—
Mr Speaker
I am going to make an even bigger point: we are not reading out phone books as answers.
I call the Scottish National party spokesperson, Drew Hendry.
Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)
I welcome the Minister to his places—I think that is the right thing to say.
It is vital that, for a change, we get a chance to actually scrutinise proposed deals before they become real. India has no detailed plan, for example, to cut emissions, and 70% of its economy is powered by coal. Cabinet Office emails have shown that the former Trade Secretary and Prime Minister decided to
“drop both of the climate asks”
from the UK-Australia agreement to get it “over the line”, even though Australia has a history of coal pollution. Given that the current Prime Minister had to be shamed into attending COP27, does that mean that no legally binding demands will be made in the UK-India discussions?
Nigel Huddleston
Again, I disagree with that characterisation —respectfully, because I am looking forward to a constructive relationship with the Scottish National party, Opposition Members and the devolved Administrations on trade deals. Let us be very clear: we will not sign any deals that are not in the UK’s interests.
Drew Hendry
The Minister did not answer the question. The UK has rolled over 35 EU agreements and signed trade deals with Australia and New Zealand, yet they have included no realistically enforceable measure to plug the climate change gaps that we have pointed out in all of them from the start. The New Zealand text cannot be enforced and climate has been dropped altogether from the Australia deal. There are gleeful reports from India that there will be no more than warm words on climate change. Why is real action on the climate emergency ignored in every deal that this place brings forward?
Nigel Huddleston
The hon. Member mentions “every deal that this place brings forward”, and again, it would be nice if we actually got support from Opposition Members at some point. He will know that our friends, colleagues and trading partners in Australia, in particular, given the situation they face, are as concerned about climate challenges as we are.
Wendy Chamberlain (North East Fife) (LD)
The Minister of State, Department for International Trade (Greg Hands)
We are committed to ensuring that any deal we sign includes opportunities and, where necessary, protections for UK agriculture. British farming is vital to our trade policy and any deal we sign will work for UK farmers, consumers and companies, increasing opportunities and choice while not compromising our high standards. For example, the UK has secured a range of measures to safeguard our farmers in our recent Australia and New Zealand FTAs.
Wendy Chamberlain
As many said, yesterday was Back British Farming Day and, as part of that, I met Quality Meat Scotland. Although we may not have a final say on trade deals in this Parliament, there are real concerns in the agricultural sector that, particularly around environmental and welfare standards, we are at a significant disadvantage from some of the trade deals. Will the Minister underline what the process is for engagement between agriculture and DIT to ensure that this does not happen?
Greg Hands
Over many years, I have done very extensive engagement with the agricultural sector. I have met the brilliant NFU Scotland president, Martin Kennedy, a number of times, for example, to discuss these various issues. There are very important safeguards in the Australia and New Zealand agreements that effectively phase in product-specific safeguards for UK agriculture. Nothing in any trade agreement forces the UK to dilute or weaken our standards. The independent Trade and Agriculture Commission, which is really important in scrutinising trade deals, concluded that
“the UK is able to prohibit imports of products because it has an agreed interest in certain practices in Australia, either because they are agreed to be a common interest, or because they are agreed to result in an unfair trade advantage.”
So, actually, the independent TAC has given us an endorsement as well.
Mr Speaker
Order. Minister, do not take advantage, please! You have had a little bit too long today, and Mr Cairns has been waiting for a hell of a long time. Come on in, Mr Cairns.
Alun Cairns (Vale of Glamorgan) (Con)
Vale of Glamorgan farmers rear some of the best lamb in the world, and Welsh lamb is recognised globally as some of the best sheepmeat. With a new market open in the United States for the first time in decades, what practical support can my right hon. Friend and his Department provide to farmers in the Vale of Glamorgan to best exploit this opportunity so we can ensure that the best Welsh lamb is on the most expensive plates in the United States?
Greg Hands
My right hon. Friend has been a tireless advocate for his farmers and for all Welsh farmers for the past 12 years. During his time as Secretary of State for Wales, he and I had many discussions about the issue. He will be as delighted as I am that Welsh lamb is going to the US for the first time in more than 20 years, now that the US has removed the small ruminant rule. Achieving that has been a key part of our trade policy objectives for some time. The market is estimated to be worth £37 million in the first five years. We continue to engage with the US Administration—we have very good people in Washington and across the US who are making sure that our access to markets continues to be good.
Paul Howell (Sedgefield) (Con)
The Minister of State, Department for International Trade (Greg Hands)
Over the 2021-22 financial year, we removed 192 barriers to UK agricultural produce across 79 countries. That has included opening the markets for UK poultry meat to Japan and for UK pork to Mexico and Chile. Just last month, the first export of British lamb was sent to the USA for the first time in more than 20 years; as I said, the industry estimates that market to be worth £37 million in the first five years. Millions of American consumers will now be able to enjoy top-quality British lamb.
Paul Howell
I welcome the new team to the Front Bench.
Earlier this year, the then exports Minister, my hon. Friend the Member for Arundel and South Downs (Andrew Griffith), visited Billy Maughan and other farmers at the fantastic Darlington Farmers Auction Mart in my constituency. He saw that farmers in our area and throughout the country are proud to produce food to some of the highest standards in the world.
There is real potential to build on existing markets and develop new ones throughout the world. Farmers are keen to see markets developing, and we have discussed how the Government can help to deliver that vision. A key ask from farmers is getting people on the ground in key markets such as the middle east and parts of Asia to promote what we have to offer in terms of quality, sustainability and traceability. What progress can I tell Billy is being made?
Greg Hands
My hon. Friend has been tireless in his advocacy for his Sedgefield farmers, including Billy Maughan and others. We are helping our farmers and food producers to capitalise on the enormous global demand for top-quality British food and drink. We have staff in more than 100 markets around the world, including in the middle east, Asia and the United States, to ensure maximum access for our brilliant produce. That includes two specialist agricultural attachés in the Gulf region and China and three more attachés to cover the Asia-Pacific and India. Next week, I will be visiting Taiwan, which welcomed UK pork exports for the first time in 2018, following my trade talks with Taiwan in 2016.
Ian Levy (Blyth Valley) (Con)
The Parliamentary Under-Secretary of State for International Trade (Nigel Huddleston)
The Department is working tirelessly to remove the trade barriers that British businesses face across the world. In the last financial year alone, we have removed 192 barriers across 79 countries. The removal of just 45 of those barriers is estimated to be worth £5 billion to businesses over five years, but we want to do more. Targeting the 100 trade barriers on our most wanted list has the potential to deliver export opportunities worth £20 billion for businesses across the UK.
Ian Levy
I welcome the team to the Front Bench.
On Monday, my right hon. Friend the Secretary of State visited the port of Blyth to see for herself the offshore blade testing facility at the Catapult. As the only deep-water port in Northumberland, the port of Blyth is at the heart of international trade, but if we are to continue to trade competitively on a global scale, we must look at the bureaucracy surrounding export licences. Will the Minister meet me to look at how we can smooth the way to a more efficient trading platform and drive exports around the world?
Nigel Huddleston
My hon. Friend and I have talked about this before. I know that the Secretary of State very much enjoyed her visit earlier this week. My hon. Friend is absolutely right to highlight the great expertise in renewable energy and green technology sectors in the UK. We need to do more to export those fantastic skills. The Government take our export control responsibilities incredibly seriously, because there are some sensitive areas, but I am extremely mindful of the commercial pressures that businesses face and of the need to process export licences as swiftly and reasonably as possible. I would be happy to meet my hon. Friend to understand in more detail the specific issues that he is facing.
Patrick Grady (Glasgow North) (Ind)
Is it not the case that the Tories’ hard Brexit has actually increased trade barriers at a range of levels? Is the Minister aware of the challenges faced by touring musicians based in my constituency who are trying to take their merchandise to Europe? Although it is a massive area in which they can profit from their business, either it is not viable for them to sell, or they have to source the merchandise in the country in which they are touring, which means there is a loss to producers of such merchandise in the UK.
Nigel Huddleston
We do, of course, have an arrangement with the European Union now. I am familiar with the issues that the hon. Gentleman has raised as a result of my time at the Department for Digital, Culture, Media and Sport, but I know that Ministers at that Department and, indeed, the Department for Transport are engaging with individual countries and progress is being made on those issues, most recently with Spain and Greece. As well as benefiting from the overall agreements, we are trying to unlock barriers individually, sector by sector and country by country.
Kate Osamor (Edmonton) (Lab/Co-op)
The Secretary of State for International Trade (Kemi Badenoch)
I am delighted that this week the Department is hosting our second International Trade Week. Trading around the world can be transformative for UK businesses, which is why, with more than 10,000 business registrations for about 123 events delivered by the Department and external partners, International Trade Week is the Department’s biggest single showcase for the global trading opportunities that are open to our businesses. It also marks one year since the launch of our Made in the UK, Sold to the World export strategy. Throughout the week, businesses have been able to make the most of key export strategy initiatives, such as advice from the export support service and expert support from the Export Academy.
Kate Osamor
We recently heard that negotiations to conclude a trade deal with India have stalled because of the comments made by the Home Secretary about migrants from that country—just another mess to lay at her door. Will the Secretary of State tell us whether she will ensure that the Home Secretary’s hardline opposition to migration will not harm our economic relationships?
Kemi Badenoch
It is not true that negotiations with India have stalled, either because of the Home Secretary’s comments or for any other reason. They are ongoing. What has changed is the deadline: as a result of my becoming Secretary of State, we are focusing on the deal and not the day, and that is the most important aspect. The Home Secretary is well within her rights to discuss migration issues, and her comments were not specific to the India trade deal. She has a responsibility for migration, and she is doing her job properly.
James Daly (Bury North) (Con)
The Minister of State, Department for International Trade (Greg Hands)
I welcome my hon. Friend’s interest in trade with Pakistan. When I visited the country—I was the last Trade Minister to do so—I observed the excellent co-operation that was taking place between businesses in the UK and Pakistan. Big investments by UK firms such as GSK in Karachi are key to the delivery of £3 billion-worth of trade. I am pleased to say that we will be formalising this relationship through a new ministerial-led UK-Pakistan trade dialogue, in which we will co-operate further on reducing and removing barriers to trade.
Gareth Thomas (Harrow West) (Lab/Co-op)
In the first half of the year, British food and drink exports to Europe were still 5% below their 2019 level, but imports from Europe were up by 22%. The last Secretary of State would not take any action to reduce the barriers to trading with Europe and, indeed, cut the funding for business groups to back British exporters. After the economic car crash that she and the rest of the Government caused last month, is it not time that this Secretary of State took a different approach?
Kemi Badenoch
I disagree with the hon. Gentleman. We are doing everything we can to support businesses. He will know that 2019 was before the pandemic, so of course we recognise that supply chain issues have had an impact on exports. I have been referring to this throughout today’s questions session. We have an export support service, and plenty of support in place to assist businesses trading across Europe and the rest of the world.
Gareth Thomas
I am sorry that the Secretary of State continues to take such a complacent attitude to trade with Europe. This is not just about food and drink; recent data shows that exports of cars and car parts are still significantly down as a result of the trade barriers, and many hundreds of small businesses which were exporting to Europe, according to His Majesty’s Revenue and Customs, have simply stopped doing so. The Secretary of State’s own colleague, the Under-Secretary of State for Justice, the hon. Member for Finchley and Golders Green (Mike Freer)—a former exports Minister—has said that businesses which want to export are simply not getting enough support to do so.
Given the desperate need for growth following the kamikaze Budget that the Secretary of State backed last month, can she tell the House whether there will be more or less support for British exports after the Chancellor’s fiscal statement?
Kemi Badenoch
It amazes me that, even now, Brexit is still being blamed for everything. It is about time that the Opposition, who call other people complacent, paid attention to what is going on in the world and got off their personal hobby-horses. On car manufacturing, there is an issue with battery supply from the US, as everybody knows. We are doing everything that we can to support companies in getting the parts that they need. The export support service is doing a fantastic job, and I commend the officials who work in it.
Sir Desmond Swayne (New Forest West) (Con)
Kemi Badenoch
Items moving between countries normally attract customs duty and import VAT, but my right hon. Friend will know that the trade and co-operation agreement means that there will be no customs duty on goods moving between Great Britain and the EU if the goods meet rules of origin. Delivery companies may charge their clients handling fees for moving products internationally, but the Government do not have control over those charges, which are a commercial matter.
Joanna Cherry (Edinburgh South West) (SNP)
Greg Hands
The hon. and learned Lady raises the important issue of human rights, but the UK Government engage around the world in defence of human rights, as she will be well aware from all her interactions in this place. The Scottish National party has always opposed EU trade deals, and the deals that she mentions that include human rights clauses were opposed by the Scottish National party in Brussels. It is a bit rich to say that EU trade deals are great but UK ones are not when she has opposed every single EU trade deal.
Andrew Selous (South West Bedfordshire) (Con)
The Parliamentary Under-Secretary of State for International Trade (Andrew Bowie)
I thank my hon. Friend for his question, and for everything that he does to support business in South West Bedfordshire. Businesses can access advice and support through the Department’s digital exporting programme, which helps UK businesses to use digital, including e-commerce, as a key route to market. To date, the programme has partnered with more than 50 global marketplaces, including Amazon, in more than 20 countries.
Rachael Maskell (York Central) (Lab/Co-op)
Kemi Badenoch
The hon. Lady raises a very important point about the use of trade sanctions. I agree that there are certain countries on which we need an effective trade sanctions policy. Discussions take place across Government, including with Foreign Office Ministers and at official level, and those will continue. I cannot give her the detail of those discussions, but I assure her that we are looking at the issue very closely.
David Simmonds (Ruislip, Northwood and Pinner) (Con)
The Parliamentary Under-Secretary of State for International Trade (Nigel Huddleston)
This is a very important deal. Earlier this year, we launched negotiations between the United Kingdom and Israel on an upgraded, innovation-focused free trade agreement with services at its heart. The first round of negotiations with Israel were completed in September. An upgraded FTA with Israel will cement our relationship with that rapidly growing economy, and take our trading relationship to the next level.
Jim Shannon (Strangford) (DUP)
As the Minister of State knows, the Northern Ireland protocol poses a massive trade barrier for Northern Irish farming and businesses. The farming industry in Northern Ireland is worth £1.3 billion, so what discussions have been undertaken with the Secretary of State for Northern Ireland on smooth and frictionless trade for Northern Ireland’s farmers?
Greg Hands
We know the importance of the agriculture sector to Northern Ireland. We have frequent engagements with, for example, the Ulster Farmers Union, and I was delighted to attend the Irish Whiskey Association reception here in the House of Commons just last week. Obviously, we do not lead on the Northern Ireland protocol, but we make sure the interests of Northern Irish exporters are represented in all our discussions with the Foreign, Commonwealth and Development Office.
Kit Malthouse (North West Hampshire) (Con)
I join my right hon. Friend the Member for Vale of Glamorgan (Alun Cairns) in celebrating the opening up of the American market to UK lamb, not least as much of the lamb slaughtered in his constituency is brought to my constituency to be prepared for export by Randall Parker Foods.
The Minister of State will know that the UK is now the world’s third largest exporter of lamb and mutton meat but, when he talked about CPTPP earlier, he did not mention the lamb industry. He talked a lot about data and services. Will he reassure the House that, when he undertakes that particularly important negotiation, the interests of British food and farming, and most particularly of the British lamb industry, will be at the forefront of his thoughts?
Greg Hands
I welcome my right hon. Friend’s interest, and he rightly represents the key agricultural interests in his Hampshire constituency. CPTPP removes tariffs from 99.9% of British goods. We frequently say in this House that Australia and New Zealand are principally motivated by fast-growing markets in Asia when selling their agricultural produce. This country wants a piece of that action. Our ability to sell British lamb into the far east will be key for us, and DIT is engaging on that through CPTPP.
Margaret Ferrier (Rutherglen and Hamilton West) (Ind)
What recent assessment have Ministers made of the trends in services trade with the EU? What steps are the Government taking to increase that trade?
Kemi Badenoch
There are ongoing discussions about what we can do for services trade. Last month, I met my Dutch counterpart who brought over a trade delegation. We are working with countries individually on everything we can do to improve trade, not just on our services exports but on their exports, too, because they continue to want to sell to the UK.
Wendy Morton (Aldridge-Brownhills) (Con)
Yesterday was Back British Farming Day, and many of us in this place joined the NFU in showing our support for the fantastic British farmers across the country, including in my Aldridge-Brownhills constituency, where we still have a small number of farmers. What more can we do to support our farmers, beyond the fantastic work on lamb in this trade deal?
Kemi Badenoch
I was at the NFU’s dairy export summit yesterday as part of my activities for International Trade Week and Back British Farming Day. My right hon. Friend will be pleased to know that this country’s dairy exports are increasing. I spoke to many businesses at the summit and they want information on exporting. There is a huge gap in knowledge on how to export, and that is one of the areas on which we want to provide additional information to support farmers.
Patrick Grady (Glasgow North) (Ind)
I regularly hear from constituents in Glasgow North who are concerned that the Tories’ desperation for trade deals will lead to a race to the bottom on food standards. Can Ministers guarantee that there will be no chlorine-washed chicken or hormone-fed beef on supermarket shelves in Glasgow North as a result of Tory trade deals?
Greg Hands
I first joined DIT six and a half years ago, and I cannot remember how many times I have had to say from this Dispatch Box that nothing in any free trade agreement alters or reduces UK food and animal welfare standards—that is absolute. The hon. Gentleman talks about our desperation for trade deals, but I would like to see the Scottish National party break the habit of a lifetime and support a trade deal, negotiated by either Brussels or the UK. It is about time he broke his duck and supported one of them.
Greg Smith (Buckingham) (Con)
We heard earlier about our great success in opening up new beef and lamb markets around the world. Earlier this year the Government backed a strategy launched by the NFU to increase agricultural exports by 30% through a 10-point plan. Will the Secretary of State confirm that the Government will continue to work with the NFU to land that 10-point plan to grow British agricultural exports?
Kemi Badenoch
Yes, I am very happy to continue working with the NFU. We, of course, have our own 12-point export strategy plan; I am sure that there is a lot of overlap between the two, but we are all trying to get to the same place, and I am happy to reassure my hon. Friend on that.
Gavin Newlands (Paisley and Renfrewshire North) (SNP)
My hon. Friend the Member for Inverness, Nairn, Badenoch and Strathspey (Drew Hendry) listed the litany of issues with the Government’s approach to trade deals. I mentioned Saxo bank’s assessment of the UK as an “emerging market country”, and with a US trade official describing UK trade policy as a disaster, why does the Secretary of State think the standing of the UK has fallen so far in the eyes of the world?
Andrew Bowie
It is simply untrue that the standing of the UK has fallen anywhere close to where the hon. Gentleman says it has. We are committed to doing trade deals; in fact, this Government have done a record amount of them and are continuing to negotiate, not least on the CPTPP and with others to increase British trade around the world. It would be great if he would come on board and start talking Britain up, instead of talking it down.
Mr Peter Bone (Wellingborough) (Con)
During this hour of International Trade questions, we have had participation from SNP Members, independent Members, Democratic Unionist party Members and Liberal Democrats, but the official Opposition, for most of the period, have had two Back Benchers here. Does the Secretary of State agree that that must mean that the official Opposition approve of what we are doing so much—
Mr Speaker
Order. Mr Bone, that is the most irrelevant question I have heard in a set of questions. This is not like you; I thought your question would be at least on farming—whatever you want it to be.
Mr Speaker
Excellent, that completes questions. Thank you for that contribution—not!
Police Service: HMI Report
(2 years, 1 month ago)
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Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
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Mr Speaker
Before we begin this urgent question, I remind Members that they must not refer to cases that are currently before the courts and should be cautious in referring to any cases in respect of which proceedings may be brought in the future. I now call Sarah Jones to ask her urgent question.
Sarah Jones (Croydon Central) (Lab)
(Urgent Question): To ask the Secretary of State for the Home Department if she will make a statement on His Majesty’s inspectorate’s report on vetting, misconduct and misogyny in the police service.
The Minister of State, Home Department (Chris Philp)
I thank my constituency neighbour, the hon. Member for Croydon Central (Sarah Jones), the shadow Minister, for her question on this extremely important topic. The report published yesterday by His Majesty’s inspectorate of constabulary and fire and rescue services makes for deeply troubling reading. The inspection was commissioned by the previous Home Secretary, my right hon. Friend the Member for Witham (Priti Patel), following the horrific murder of Sarah Everard by a then serving officer, as well as the emergence of wider concerns about policing culture.
The report concludes that it has been far
“too easy for the wrong people both to join and to stay in the police.”
The inspectorate found that on too many occasions vetting was not thorough enough and that in some cases it was inadequate. The Government take the view, as I am sure Members from across the House do, that that is unacceptable. It is particularly unacceptable and disappointing to hear about these vetting failures given that the Government have provided very substantial additional funding to fund the extra 20,000 police officers and additional resources for the police more widely.
The inspectorate concluded that, although the culture has improved in recent years, misogyny, sexism and predatory behaviour towards female officers and staff members “still exists” and is too high in many forces. That is shameful and must act as a wake-up call. That sort of disgraceful conduct undermines the work of the thousands—the vast majority—of decent, hard-working police officers who perform their duties with the utmost professionalism. More damagingly, it undermines public trust. This matters a great deal to all of us, which is why my right hon. and learned Friend the Home Secretary has made it clear that things must change.
Since the report was published yesterday, we have been studying it carefully; this has been my first week in this position, but I have been studying it carefully. It contains 43 recommendations: three for the National Police Chiefs’ Council; nine for the College of Policing; 28 for chief constables and three for the Home Office. The Home Office will most certainly be implementing those three recommendations. The NPCC said in a statement yesterday that it expects police to act on their recommendations urgently. That is most certainly my expectation as well: all of these recommendations will be acted on as a matter of urgency.
We should keep it in mind that the vast majority of police officers are hard-working and dedicated. They put themselves at risk to keep us safe, and we should pay tribute to the work that the vast majority of officers do on our behalf. The report has uncovered obviously unacceptable behaviour and we expect the recommendations to be implemented urgently.
Sarah Jones
I welcome the Minister to his place. However, I have to say that I am disappointed that the Government are not taking more responsibility and leading from the front following such a grim report.
Yesterday’s report is 160 pages of failure—failure to bar the wrong people from joining the police; failure to get rid of them; failure to protect female staff and officers, and failure to protect the public. A lack of proper action to root out racism, misogyny and serious misconduct means that some communities do not trust the police.
This is by no means the first time that serious failings and horrific examples of unacceptable behaviour have been exposed. After the murder of Sarah Everard by a serving officer, the Opposition came to this place and called for change. After the horrific murders of Bibaa Henry and Nicole Smallman, we came to this place and called for leadership. After the shameful case of Child Q, we came to this place and called for reform. After the shocking Charing Cross station report, we came to this place and demanded action. After the Stephen Port inquiry, we came to this place and called for reform. If the Government had acted and led from the front, we could have stopped people being harmed. Leadership must come from the top.
Yesterday, we learned that Metropolitan police officers had been sentenced to prison after sharing racist, homo- phobic and misogynistic WhatsApp messages. For years, there had been warnings—for example, from the independent inspectorate—about serious problems in the police misconduct system, including long delays, lack of disciplinary action, disturbing and systematic racial disparities and lack of monitoring.
We have heard anecdotal evidence of forces expediting the vetting process to meet the Government’s recruitment targets. What does the Minister know about that? What is he doing to ensure that it does not happen? Will the Minister confirm that the roles of police staff, who do a lot of the vetting work and have been subject to cuts, will be protected so that forces can introduce the right systems? Will the Minister follow Labour’s lead and introduce mandatory safeguards and professional standards, led from the top, into every police force in the country to keep everybody safe?
Chris Philp
I thank the hon. Lady for her initial remarks and for her questions.
The Government have taken action. Indeed, the report we are debating was commissioned by the former Home Secretary directly in response to the issues that were raised. The fact that those issues have seen the light of day is thanks to that Government response. The Angiolini inquiry is also under way for exactly the same reason. We work closely with operational policing colleagues to ensure that the issues are properly addressed. I discussed the issues with Mark Rowley, the Metropolitan Police Commissioner, a few days ago, before the report was published.
As for ensuring that there are adequate resources for vetting and related purposes, the spending review settlement that the police currently receive has meant an additional £3.5 billion since 2019 over the three years of the police uplift programme, not just to pay the salaries of extra police officers but to provide the support and resources required to ensure that they are properly trained and integrated.
The hon. Lady was right to ask about professional standards, which are extremely important. In 2017, national vetting standards were set out in statutory guidance, which the College of Policing published. The report recommends updating some elements of that. Misconduct procedures are set out in statute. We expect the recommendations about improving those areas to be implemented, and we expect police forces around the country to ensure that the report’s recommendations are fully implemented.
Sir Peter Bottomley (Worthing West) (Con)
Most serving and retired police officers will feel as aggrieved as everybody else that a small number have been allowed to get away with bad things for too long.
For seven years in this House, working directly with Ministers and the Metropolitan police, I have been pursuing the case of the injustice to Sergeant Gurpal Virdi. I do not expect the Minister to know it, but does he understand that confidence can be restored only when lessons are learned, and that this is a good case to look at?
After reading the book, “Behind the Blue Line”, may I recommend that Home Office and Justice Ministers meet me with Gurpal Virdi, Matt Foot, his solicitor, the Crime Prosecution Service and the Independent Office for Police Conduct to review what went wrong, what should be put right and how the matter will be reviewed?
Chris Philp
I thank the Father of the House for his question. I do agree that the vast majority of police officers, who are hard-working, brave and decent people, will share this House’s shock at the contents of the report. We should keep it in mind, as I say, that the vast majority of police are hard-working, brave and decent people. In relation to the case that he raised, if he is able to write to me with particulars, I would be very happy to look further into it and meet him.
Dame Diana Johnson (Kingston upon Hull North) (Lab)
I welcome the Minister to his place. The report contains very disturbing instances of sexism and harassment perpetrated against women within the police and among the general public, and the systematic failures that contributed to that. The Select Committee has just started an inquiry into police priorities. I want to invite individuals with experience of sexism and abuse within the police and of the systems that failed them to come forward and share those experiences with the Committee. On the specific issues in this report, can the Minister just say whether it is acceptable that police forces are not required to hold face-to-face interviews with candidates or to obtain their employment and character references? How can that be correct and right when the police service has such a pivotal role to play in law and order in this country?
Chris Philp
I thank the right hon. Lady for her question. I strongly welcome the work that her Committee is doing in this area; it is very good that she is doing that. The issue that she raises around misogyny is a serious one. The report finds that progress has been made, but that there is a great deal more to do. I look forward to listening carefully to the recommendations that her Committee makes after it has conducted its own investigation. I think that 35% of officers are now female, which is a record figure—it has never been higher than that—and that an even higher proportion of recent recruits are female, which will hopefully add to the need to improve the culture. The training standards in the Policing Education Qualifications Framework do now include training around bias, tackling prejudice and discrimination, protecting people and looking after people with protected characteristics, but, clearly, there is a lot more to be done.
In relation to the vetting process and some of the issues that the right hon. Lady touched on at the end of her question, there are specific recommendations about them among those 43 items in yesterday’s report, and we expect police forces to adopt all of them.
Rachel Maclean (Redditch) (Con)
I thank the Minister and the previous and current Home Secretary for the leadership that they are showing on this issue, but, clearly, the report makes deeply worrying reading. Obviously, the vast majority of police officers are dedicated and professional, but there are some wrong’uns who are serving in our forces. For example, is it right that male officers are viewing pornography at work on suspects’ phones? Is it right that they are engaging in “booty patrol”, where they are stopping attractive young women who they see driving in cars? When will the Minister come forward with the Government’s response so that women and girls across our country can feel safe and have their trust and confidence in the police restored?
Chris Philp
All of the things that my hon. Friend describes are clearly completely unacceptable. No female officer or female member of the public should experience the things that she has just described. We do expect urgent action to be taken on these areas. The issues that she referenced are included in the 43 recommendations, and we expect implementation of those to be undertaken as a matter of urgency.
Andy McDonald (Middlesbrough) (Lab)
Much has been said at the Government Dispatch Box about the need for integrity, but that has to extend not only to police recruits but to those who purport to govern them. Given that the Tory police and crime commissioner of Cleveland, Steve Turner, has admitted to handling stolen goods from his employer, it cannot be that candidates for such positions who do not disclose their criminally dishonest pasts are able to stand for office or continue in office once such matters come to light. Does the Minister agree?
Chris Philp
I am not familiar with the case the hon. Gentleman refers to, so I will not comment on the particulars. In general, however, when people stand for election, the public pass their verdict.
Sir Jake Berry (Rossendale and Darwen) (Con)
With over 100,000 police officers serving in England and Wales, it is important that everyone in this House accepts that they will be as outraged as we are with the contents of the HMI report. Those police officers will be out on our streets on Saturday night, and the vile individuals identified in the report have made their job of keeping us safe harder. Because they do not have a voice and we do, I rise to say that I stand with our hard- working police officers. I stand with our police officers in Lancashire. They are doing a good job of keeping us safe, and they will be as disgusted as we are.
Chris Philp
My right hon. Friend is absolutely correct. The vast majority of police officers are decent, hard-working and brave people who put themselves at risk to keep us safe, and they will share our horror at these findings.
Wendy Chamberlain (North East Fife) (LD)
As many know, I was a police officer, joining Lothian and Borders police in 1999. I will not pretend that I do not recognise some of the elements of the culture described in the report, but I am concerned that policing by consent, which is the central tenet of policing in the UK, is threatened by reports such as this one. Scotland is not immune—the Minister mentioned Dame Elish Angiolini, who has carried out a similar report in Scotland. We need to sort out the vetting, but I have a real concern that there are people serving in the police force today who should not be there. What actions is the Minister taking to ensure that all forces do that? Given that the picture is quite fractured, with 43 forces, does the IOPC have a role in ensuring that that work is expedited?
Chris Philp
I thank the hon. Lady for her question and for her service as a police officer in Scotland. She is right to point out that this is not just about vetting on entry; it is also about conduct while in office. The recommendations touch on this matter, including in relation to the Home Office and the rule 13 processes around people who are still on probation. I have only been in post for a week, but I do think that making sure that misconduct allegations and wider performance issues are acted on quickly merits further attention, and it is something I will look into.
Alun Cairns (Vale of Glamorgan) (Con)
The significance and seriousness of the report should not be understated, but does my right hon. Friend recognise that the vast majority of police officers are honourable, hardworking and dedicated public servants? Can he assure us that he will take the strongest action to follow through and deliver on the recommendations, but that he will also show and give the greatest confidence to those honourable police officers who are public servants and who work daily to keep us safe?
Chris Philp
My right hon. Friend is absolutely right. This Government and, I am sure, all Members on both sides of the House, stand with and behind the vast majority of police officers, who work hard to keep us safe, often putting themselves in danger to do so. We will continue to give full support to that vast majority while we take urgent action to address the findings in the report.
Tonia Antoniazzi (Gower) (Lab)
The report states that hundreds, if not thousands, of officers who should have failed vetting are now working in police forces across the country, including mine. What measures will he take to identify those individuals and take action?
Chris Philp
There is already a process of periodic re-vetting of serving police officers. One of the 43 recommendations in the report published yesterday is to do that re-vetting more frequently, and that is with police chiefs as we speak.
Scott Benton (Blackpool South) (Con)
It is vital that lessons are learned, and I thank the Minister for confirming that the recommendations in the report will be delivered in full, but does he agree that 99.9% of our police officers in this country do a brilliant job in keeping our communities safe, and that it would be a grave mistake if those who oppose the police for political reasons were to jump on the report as a way to undermine public confidence in the work the police do?
Chris Philp
I agree that the vast majority of police are hard-working, decent and brave. I have not heard any Member attempting to exploit the report today, and I am sure that no Member of this House would do so. I am also sure that all of us will stand with our brave officers who are doing a good job while ensuring that appropriate action is taken where urgent improvement is needed.
Andrew Gwynne (Denton and Reddish) (Lab)
When this urgent question was heard in the other place yesterday, the Minister in the Lords pushed responsibility for standards and reform on to individual police chiefs in individual forces. We know there is a clear postcode lottery with police standards, which is letting the public down. Does this Minister accept that that is wrong and that there must also be leadership from the top at the Home Office too?
Chris Philp
Of course I agree that leadership is important, including setting clear standards and, for example, ensuring that those statutory guidelines were put in place in 2017. Leadership is important, and I believe this Home Secretary and the previous Home Secretary, who commissioned this report and the Angiolini review in the first place, have discharged those responsibilities. The hon. Gentleman is also right to allude to the fact that the police are rightly operationally independent; we must ensure that the institutions and structures are right, that police chiefs are supported as necessary, and that the College of Policing is setting the right standards. That is what many of the recommendations in this report seek to do.
Ruth Cadbury (Brentford and Isleworth) (Lab)
Jonathon Cobban and Joel Borders were serving police officers in Hounslow. Yesterday, they were sentenced to 12 weeks in prison for sharing the vilest misogynistic, racist, ableist and homophobic messages in a WhatsApp group that also included Wayne Couzens and others. In court, they showed no remorse. All those officers had been transferred in from the Civil Nuclear Constabulary to fill gaps in the Met. Is the Minister aware of a wider problem of officers being transferred between forces without any real vetting or suitability checks at the time of their transfer, and what is he doing about it to ensure not only that it does not happen again, but that all officers currently serving in the Met are fully vetted and, if they are found to have issues, are sacked from serving in any police force again?
Chris Philp
I share the hon. Lady’s horror at the case she describes, which was heard in her local area. It is a truly shocking case. On the question of transfers, one reason for the police uplift programme, hiring the extra 20,000 officers, is to ensure that there are no gaps that need to be filled. There are important recommendations among the 43 that address the question of vetting. On her point about checking the existing cadre of officers, I draw attention again to the point I made a few minutes ago about the regular rolling process of rechecking, which the report also refers to.
Nick Smith (Blaenau Gwent) (Lab)
This is a sad saga of Government and police management failure. Understandably, there will likely be increased vetting after this important report, so by when will all the additional 20,000 police officers promised so long ago actually be in post?
Chris Philp
Of the extra 20,000 officers, just over 15,000 were in post by 30 September this year. The information I have been provided with in the last week—my first week in this post—is that by the end of March 2023, in four or five months’ time, all 20,000 will have been recruited as planned.
Clive Efford (Eltham) (Lab)
This issue starts at the very top, and we have missed many opportunities to tackle it. It was also exacerbated by the incredible decision of the Conservatives to cut 21,000 police officers. Now we have a mad dash to try to backfill those gaps in the service. Can the Minister assure us that no lax vetting has been involved in filling those gaps, and what will he do to go back and re-vet those officers to ensure that they are of the highest standard?
Chris Philp
The report made it clear that there have been problems with vetting—that is one of its key and troubling findings. There is a programme of automatic re-vetting of officers on a periodic basis, and one of the report’s recommendations is that that should be done more frequently, for the reasons the hon. Gentleman sets out. More broadly, officer numbers did go down shortly after 2010, owing to the catastrophic economic circumstances at the time, but they are now going up rapidly and by March of next year, as I said a second ago, we will have a record number of police officers—at no point in this country’s history have we had more officers on the books than we will have by March next year. In fact, my understanding is that in the force area covering his constituency and mine there are already a record number of Metropolitan police officers. Never in the Met’s history have there been more police officers on its books than there are today.
Jim Shannon (Strangford) (DUP)
I thank the Minister for his response to the questions that have been asked. I also want to put on the record my thanks to the many police officers who are above reproach and do a wonderful and very courageous job; it is important to say that before asking questions. It is disturbing to learn in this report that petty theft or assault charges were either ignored or not found out in the vetting procedure, which tells us just how broken the system is. What has been done to fix that and to ensure that the past record of people of both genders is known, decisions are made in the best interests of the force and every action is taken to restore the general public’s confidence and trust? That is really important.
Chris Philp
I thank the hon. Member for his question, and I agree with his comments at the beginning. We should keep in mind in this debate, both in the House and publicly, that the vast majority of police officers are decent, hard-working and brave people putting their own safety at risk to keep us safe; we should never lose sight of that fact. I share his concern about the vetting issues that we have discussed, and there are recommendations to improve those. Where applicants have served a custodial sentence or signed the sex offenders register, there is currently an absolute prohibition on them being recruited as police officers, and where they have a criminal conviction of any kind, there is a presumption against their recruitment. That is a rebuttable presumption, so they can make representations, but the presumption is that they will not be hired. Clearly, we need to ensure that that information is always known and always considered, and there are recommendations in yesterday’s report to ensure that that happens.
Abuse and Deaths in Secure Mental Health Units
(2 years, 1 month ago)
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Mr Speaker
Before we begin, I remind Members that they must not refer to cases that are currently before the courts and should be cautious in referring to any cases in respect of which proceedings may be brought in future.
Dr Rosena Allin-Khan (Tooting) (Lab)
(Urgent Question): To ask the Secretary of State for Health and Social Care if he will make a statement on abuse and deaths in secure mental health units.
The Parliamentary Under-Secretary of State for Health and Social Care (Maria Caulfield)
I am grateful to the hon. Lady for raising this important question. Everyone in any mental health facility is entitled to high-quality care and treatment and should be kept safe from harm. The findings from the investigation into the deaths of Christie, Nadia and Emily make for painful reading. The death of any young person is a tragedy, and all the more so when that young person should have been receiving care and support. My thoughts and, I am sure, the thoughts of the whole House are with their families and friends, and I want to apologise for the failings of the care that they received.
As I told the House on Tuesday, these incidents are completely unacceptable. The Secretary of State and I are working closely with NHS England and the Care Quality Commission, and they have updated us on the specific situation and the steps that the Tees, Esk and Wear Valleys NHS Foundation Trust is taking to improve the care at its services. Those include investing £5 million in reducing ligature risks across the estate; improving how it develops and implements care plans for young people; strengthening its policy on observation; and improving staff training and the culture that can exist within the trust.
I recognise that these worrying findings come in the context of broader concerns highlighted by other recent scandals. The Minister for Health and Secondary Care, my hon. Friend the Member for Colchester (Will Quince), was at the Dispatch Box last month responding to an urgent question on the unacceptable abuses at the Edenfield Centre. These challenges are, rightly, the subject of sharp focus in my Department, and we understand that every part of our system has a responsibility to keep patients safe. That is the driving motivation behind our new mental health safety improvement programme and the patient safety incident response framework.
I am not just the Minister for Mental Health; I am also responsible for patient safety, and I am not satisfied that the failings we have heard about today are necessarily isolated incidents at a handful of trusts. The Secretary of State and I are urgently meeting the national director of mental health to look at the system as a whole, the role of CQC inspections and the system for flagging concerns. I will also be meeting the new patient safety commissioner to seek her guidance, and based on that, we will make a decision on how we proceed in the coming days.
Dr Allin-Khan
It pains me that we are here again after failings in patient care and I send my heartfelt condolences to all the families affected. Emily Moore, Nadia Sharif, Christie Harnett: these are the names of three young women who tragically lost their lives after systemic failings to mitigate self-harm. This cannot go on. I thank my hon. Friend the Member for Middlesbrough (Andy McDonald) for his tireless work with the families involved.
Sadly, those are not the only cases. In the last five weeks, there have been reports on the Huntercombe Group, the Essex Partnership University NHS Trust and the Edenfield Centre. Why do undercover reporters seem to have a better grip on the crisis than the Government? Patients are dying. They are being bullied, dehumanised and abused, and their medical records are being falsified—a scandalous breach of patient safety.
The Government have failed to learn from past failings. I wrote to the previous Secretary of State, the right hon. Member for Suffolk Coastal (Dr Coffey), yet I never received a response. I have written to the new Secretary of State and he has not replied. Are the Secretary of State and the Government taking this seriously? It certainly does not seem so.
Will the Government be conducting a rapid review into mental health in-patient services? What are the Government doing to ensure that patients’ complaints about their care are taken seriously? These reports are becoming a weekly occurrence. I ask the Minister to put herself in the shoes of patients in these units and understand what their relatives are feeling. Will she apologise for the anguish that families are experiencing? This is a scandal and the Government should be ashamed.
Maria Caulfield
I will not stand at the Dispatch Box and deny any of the instances that we have seen, their consequences or the failings that have been identified. I apologised in my opening remarks for the care that failed the most vulnerable patients in our system. I commit to right hon. and hon. Members from the Dispatch Box that we are urgently looking not just at these cases but across all mental health in-patient services, and not just at adult mental health, but at offenders and other users of mental health facilities.
We have brought in a number of measures. We introduced new legislation, which was enacted in March, on the use of force and restraint. We are identifying best practice and trying to get that rolled out across the country. We are looking at putting in place a number of measures to improve safety and to support staff in units where staff shortages have been identified as a cause of the problems.
With regard to the hon. Lady writing to the Secretary of State, I signed off a letter to her early on Tuesday, which she should receive any day now. I apologise that she did not previously get responses in a timely manner.
NHS England has commissioned a system-wide investigation into the safety and quality of services across the board, particularly around children and adolescent mental health services. I am pushing for those investigations to be as swift as possible.
On the issue of a public inquiry, I am not necessarily saying that there will not be one, but it needs to be national, not on an individual trust basis. As we have seen in maternity services, when we repeat these inquiries, they often produce the same information and we need to learn systemically how to reduce such failings. My issue with public inquiries is that they are not timely and can take many years, and we clearly have cases that need to be urgently reviewed and to have some urgent action taken on them now. I will look at the hon. Lady’s request but, as I said, the Secretary of State and I are taking urgent advice, because we take this issue extremely seriously. One death from a failing of care is one death too many.
Sir Peter Bottomley (Worthing West) (Con)
Lessons need to be learned and I am glad that the authorities and the Government will do that.
From the time that I served on the council of Mind, which was known as the National Association for Mental Health, I have tried to emphasise the importance of recruiting good people to work in the various categories of profession and assistance in secure units and in the whole mental health field.
I pay tribute to those who, day in, day out and at all hours of the day, cope with some of the most challenging situations and try to help some of the most desperate people. In each of our constituencies, we have tragic suicides; many more are prevented because of the work of these good workers. Let us try to support them and recruit more people to work with them.
Maria Caulfield
I thank the Father of the House for his very important point, because staff shortages often contribute to some of the failings we have seen. We are aiming to recruit 27,000 more mental health workers. As of June this year, there were over 133,000 full-time equivalent people working in the mental health workforce, which is an increase of more than 5.4% compared with June 2021. We are increasing the workforce, but it is a particularly difficult area to work in both in dealing with people with mental health problems and the environments in which they are working. This is not just about recruiting more staff; it is about training, developing and retaining them.
Janet Daby (Lewisham East) (Lab)
Mental health services often feel like the poor relative of the NHS, and financial investment is just not there in the same way. Mental health nurses and support staff work long shifts and are often experiencing burnout, while wards are repeatedly short of staff. There is a high turnover of psychiatrists and many are moving to work overseas. So it stands to reason that there are repeat failures within mental health services and mental health settings. What will the Government do to bring about urgent change and the long-term change that is so desperately needed?
Maria Caulfield
I want to reassure hon. and right hon. Members across the House that mental health is not seen as a poor relation by this Government. We are investing record levels of funding in mental health services—£2.3 billion annually—and we are recruiting record numbers of staff into the service as well. As I said to the shadow Minister, I fully accept the failings that have been laid bare, whether by media investigations or by internal investigations of the individual trusts. I am not shying away from those challenges, and I have set out the urgency with which I and the Secretary of State will be looking at this problem. I want to be satisfied that, across the country, safety is as good as it can be, and that where flags are being raised, they are acted on as quickly as possible, which does mean now, not in 18 months or two or three years. We are seeing young people die because of failings of care, and I understand the urgency of the situation.
Paul Howell (Sedgefield) (Con)
I would like to acknowledge what has been said already about the difficulty for staff working in this environment. It is a very challenging space, and my respect goes to anybody and everybody there. My respect also goes to people who work in suicide prevention, whether in Mind, the Samaritans or organisations like them, because this is a very difficult place.
I would like to come back to the specifics, and I will start by expressing my sincere thanks to the hon. Member for Middlesbrough (Andy McDonald) for his lead on the stuff going on up in our part of the world. It is a tremendous effort, and I applaud him and thank him for it. This week finally saw the publication of the independent investigation into the deaths of the three young ladies in the care of the Tees, Esk and Wear Valleys NHS Foundation Trust. Christie Harnett, one of those young ladies, was a constituent of mine, and her stepfather is among those calling for a public inquiry. I hear what the Minister is saying, but I really would encourage her to have this looked into very closely. I very strongly support the family on this.
Christie, along with Nadia and Emily, were badly let down. In Christie’s case, the report identified 21 care delivery problems and 20 service delivery problems. It was not an isolated mistake; this is systemic and massive, and it really needs to be looked at. May I ask the Minister to support this call for a public inquiry, please, and may I also ask her to confirm that a reply is imminent to the letters delivered by Mr Harnett to Downing Street on 10 October? He cycled from Newton Aycliffe down to here, a distance of 250 miles, to hand them in. This is emotional, but Christie’s family’s description of her in their statement in the report was:
“Family was everything to Christie and we all miss her so much, nothing will ever be the same again now our sunshine has gone.”
It is imperative that we do all we can to give the families of these young ladies what little satisfaction can be delivered by a proper and full inquiry into these atrocious failings.
Maria Caulfield
I thank my hon. Friend for his comprehensive question about the issues we face. He is absolutely right to say that systemic failings were identified, and as I have said, at this stage I have not said no to a public inquiry. We need urgently to address these issues, and ensure that, nationally, the same failings are not happening across the board. My concern about a public inquiry is the time that such inquiries take, and whether a rapid review would be more appropriate. I will make that decision in the coming days once advice has been taken. Nationally, some work is being done. For example, the Care Quality Commission is introducing a new approach into how it undertakes inspections. As with maternity services, one concern I have is that the CQC can do an inspection and rate a service as good, yet soon afterwards incidents are happening. I want to be satisfied that the CQC inspection process and the new approach it is taking will address issues and flag them as quickly as possible.
The National Mental Health Director wrote to every mental health and learning disability trust on 30 September, to ask them urgently to review their services in light of the findings we are seeing. The Secretary of State and I will meet her soon to follow up on that. NHS England is also reviewing everyone with a learning disability or autistic people in long-term segregation mental health in-patient units, because they are extremely vulnerable patients who may not have the ability to speak out when there are problems. I also want to look at whistleblowing, and support staff who want to flag problems but may not feel confident in doing so. We need to look at range of areas, but I very much take my hon. Friend’s points and I will look into the petition urgently today.
Wera Hobhouse (Bath) (LD)
Mental health services are overstretched not only in hospitals but in those services that provide support before patients become so ill that they need to go into hospital. What are the Government doing to support the very overstretched early intervention services?
Maria Caulfield
As I highlighted to the Father of the House, we are increasing the mental health workforce dramatically, with 27,000 extra mental health workers in the system. We have already increased those numbers this year, compared with last year. We are also providing self-referral mechanisms for patients. For psychological and talking therapies patients can now refer themselves without having to go and see a GP, and more than 1 million patients have taken up that offer. I fully agree with the hon. Lady that early intervention is a key factor, and we are supporting early intervention services so that patients can access them more easily and we have the staff to make that happen.
Andy McDonald (Middlesbrough) (Lab)
I thank colleagues across the House for their kind remarks. We must also pay tribute to the parents, who have so resolutely stuck at this campaign for two and a half years, and we now have these reports. I recognise what the Father of the House said: we admire the work that people do in this sector. It is so difficult. But in these particular instances, we had three young women whose needs were known. It was not as if they came by surprise —those families camped outside the hospital saying, “This hospital is killing my child”. Michael, Christie’s dad, cycled down to London. These issues were known by the families and by the parents. I welcome the Minister’s consideration of a public inquiry and a wider inquiry, but I ask that she meet me, the families and colleagues to discuss these matters. The purpose of this is to secure truth, justice and change. We need change in this environment hook line and sinker. A fundamental review is needed, and I trust the Minister will meet us to discuss these matters further.
Maria Caulfield
May I put on record my thanks to the hon. Gentleman for all he has done in raising these issues and supporting families? He is right. One area of concern with mental health care—we have also seen inquiries into maternity services—is that often patients and families have flagged issues and raised concerns to regulators and the individual trust, but they go unheard.
That is why I want to look at things such as making the whistleblowing process easier. The CQC recognises that and is changing its inspection process to ensure that families, staff, friends and patients have input into inspections. That is also why we introduced the patient safety commissioner, who took up her role in September, so that patients, staff and families have another avenue for raising concerns. If they feel that they are not being listened to at a local level, they have someone to go to who will raise concerns on their behalf.
It is absolutely devastating that the families recognised the problems and their voices were not heard. I would be very happy to meet him and the families to discuss that further.
Alex Cunningham (Stockton North) (Lab)
I join in the tributes to my hon. Friend the Member for Middlesbrough (Andy McDonald). As he and others have said, the report into the tragedy that saw three young women die in the north-east points to multiple failures by the Tees, Esk and Wear Valleys NHS Foundation Trust, which still struggles to deliver the services that our community needs.
The Minister will agree that the trust must learn from the tragedy, but it needs much more support to drive up standards and avoid more deaths. The trust, like many others, struggles to recruit the professional staff that it needs, because they are simply not available. I also question whether it has the capacity to drive the rapid improvement that we need. What plans does she have to intervene at the trust? What will she do to ensure that it and others can recruit the people they desperately need?
Maria Caulfield
As I said in my opening remarks, the trust is taking a number of steps urgently to improve its services, from investing £5 million on reducing ligature risks right through to looking at how it develops and implements care plans. However, the response must be wider than the individual trust. We must ensure that when inspections take place, they pick up the red flags that will alert someone to the problems happening in a unit. The CQC is also changing its inspection processes. It is vital that patients, staff and families can raise concerns if they have them and that they are properly inspected. We need to address this issue at a national level. The trust is not an isolated example—there have been a number of incidences—and both I and the Secretary of State want to be satisfied about exactly where the problems are occurring and that we have a national response, not just individual trusts having to deal with problems themselves.
Liz Twist (Blaydon) (Lab)
With young people’s mental health, we often talk about access to preventive services. That is hugely important, but here we have a tragedy of three young people who were in a mental health facility and sadly lost their lives. One can only send out our thoughts to their families and friends. As we review the mental health strategy and the suicide prevention strategy, what steps will the Minister take to ensure that the lessons learned are incorporated?
Maria Caulfield
I take the hon. Lady’s points. Indeed, legislation on the use of restraint has recently come in, which would have influenced some of the actions that perhaps happened previously. We also have the draft Mental Health Bill undergoing pre-legislative scrutiny in the other place, which may provide an opportunity to reconsider some of these issues. This place can inform that legislation going forward. I will obviously update the House on its progress.
Rachel Hopkins (Luton South) (Lab)
I refer the House to my entry in the Register of Members’ Financial Interests. Too many families are concerned about their loved ones as they wait ever longer for treatment, particularly in children’s mental health services. The Minister said that she wants to look at the system as a whole, so what conversations is she having with the Secretary of State for Levelling Up regarding local government, and local government finances in particular, ahead of the fiscal statement in a couple of weeks? Overstretched and underfunded children’s services in local councils up and down our country are often on the frontline of the crisis in children’s mental health.
Maria Caulfield
The Secretary of State will be having discussions around the autumn statement with colleagues not just in local government but across Departments. The failings that we have seen are of in-patient facilities—these young women had accessed treatment—so the issues are interlinked, but my main concern is about the safety of in-patient facilities. That is where my focus will be over the coming days.
Rachael Maskell (York Central) (Lab/Co-op)
The challenges are not confined to the Tees, Esk and Wear valleys, because the trust also extends to York. The extent of the trust and the size of the organisation perhaps explain some of the challenges. The reality is that the challenges are systemic and widespread. The trust has had 10 years of failed CQC reports, which should have easily raised a flag with the Department way before these tragedies occurred. As well as the steps that the Minister has proposed today, there should be a judge-led public inquiry into what is happening across mental health facilities. Nothing less will do.
Maria Caulfield
I thank the hon. Lady for making those points. As she knows, one of the facilities was closed in 2019 because of failing inspections and it has since reopened under another organisation, so action is taken where failings are found. My concern is that failings are often missed. That is why the director of mental health at NHS England wrote to every single trust on 13 September asking them urgently to review their services. As I said, I am taking advice and will report to the House in the coming days about what action we will be taking.
Jim Shannon (Strangford) (DUP)
I thank the Minister very much for her answers. It feels like new cases of abuse of our vulnerable are coming to light weekly and it shakes our society to its very core. Every one of us is annoyed at what has happened. Humanity is judged by how we treat our most vulnerable and it appears that failures just continue to happen over and over again. How can the thousands of facilities that are doing right by their patients have trust in a system that sees them judged by the gross actions of others? Can the Minister confirm the additional support to ensure every facility has adequate staff and that controls are in place?
Maria Caulfield
The hon. Member is right and that is why I want to review at a national level. We are seeing a number of cases coming forward of unacceptable care in in-patient facilities. As more cases come forward, that gives confidence for others to speak out about the care that they or their loved ones received. That is why I want to take a national approach. Whether looking at staffing levels, practice, the ability to whistleblow when there are concerns, or the inspection process itself, we need to make sure that wherever someone is receiving mental health provision they are safe while they are receiving that care.
Business of the House
(2 years, 1 month ago)
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Thangam Debbonaire (Bristol West) (Lab)
To ask the Leader of the House if she will give us the forthcoming business.
The Leader of the House of Commons (Penny Mordaunt)
The business for the week commencing 7 November will include:
Monday 7 November—Second Reading of the Social Housing (Regulation) Bill [Lords].
Tuesday 8 November—Opposition day (7th allotted day). Debate on a motion in the name of the official Opposition, subject to be announced.
Wednesday 9 November—Debate on a motion on the UK response to the human rights and economic situation in Sri Lanka, followed by a general debate on levelling up rural Britain. The subjects for these debates were determined by the Backbench Business Committee.
The House will rise for the November recess at close of business on Wednesday 9 November and return on Monday 14 November.
The provisional business for the week commencing 14 November includes:
Monday 14 November—General debate on the Australia and New Zealand trade deals, followed by a general debate on Ukraine.
Tuesday 15 November—Opposition day (8th allotted day). Debate on a motion in the name of the official Opposition, subject to be announced.
Wednesday 16 November—Remaining stages of the National Security Bill.
Thursday 17 November—My right hon. Friend the Chancellor will make his autumn statement, followed by business to be determined by the Backbench Business Committee.
Friday 18 November—Private Members’ Bills.
The provisional business for the week commencing 21 November includes:
Monday 21 November—Second Reading of the Seafarers’ Wages Bill [Lords].
Thangam Debbonaire
I thank the Leader of the House for the forthcoming business.
My hon. Friend the Member for Newport East (Jessica Morden), the shadow Deputy Leader of the House, who is on a Bill Committee, reminded me that it is the 183rd anniversary of the Chartist uprising in her city of Newport. Working people marching against an ineffective Government, high prices and low wages, and demanding more frequent elections—does that sound familiar? The Chartists knew how precious democracy was. Sadly, we have not had an election yet this year, but we have had three Prime Ministers, and I wonder what the Chartists would have made of that.
I am glad to see the Leader of the House in her place and not joining the former Health Secretary, the right hon. Member for West Suffolk (Matt Hancock) down under for any bushtucker trials. We know that she enjoys business questions far too much for that, but we also know that she is a bit partial to reality TV, so perhaps I can suggest something a little closer to home. I hear that Channel 4 might be commissioning another season of “Make Me Prime Minister”. Perhaps the right hon. Member for Uxbridge and South Ruislip (Boris Johnson) fancies his chances on “A Place in the Sun”. The whole Government really ought to get themselves on to something that they are actually good at; I understand that applications for “Pointless” have now opened.
Last week, I asked the Leader of the House to wake up the Environment Secretary and warn her that she had just three days left to set the targets on air quality, water, biodiversity and resource efficiency. Unfortunately, when the Leader of the House did not manage to wake her up and she hit the snooze button, she missed the deadline. Is it too much to ask that Cabinet Ministers actually do the job that they are paid to do? When will the Leader of the House get the Secretary of State to meet those legally required targets?
The measures in the Energy Bill are essential for reaching net zero. I understand that much of that Bill has been consulted on and agreed, so why is there more delay? Last week, the COP26 President lost his place at the Cabinet table, and the Prime Minister has finally given in on the hokey-cokey COP27 saga and is grudgingly popping over briefly. Labour is serious about green economic growth, energy security, bringing down people’s bills and winning the race to net zero. We have a plan for all that, but the Tories clearly do not. Will the Leader of the House tell us whether they are planning to drop the Energy Bill—yes or no?
I have raised concerns about the right hon. Member for Uxbridge and South Ruislip ripping off taxpayers by making them pick up the bill for his legal advice in relation to the Privileges Committee’s investigation into him. The Cabinet Office said that it is okay because he was acting as Prime Minister. No—he is being investigated as an ordinary Member of Parliament by a parliamentary Committee for possibly misleading Parliament. Does the Leader of the House think that the former Prime Minister should pay back the £129,700 of taxpayers’ money?
I was surprised to see Scottish National party Members claiming that yesterday’s 38-nil vote on their motion gave them a mandate for a referendum on independence. Even the Prime Minister got more votes than that—just. The recent instalment of the Scottish Government independence papers has been slammed by the Institute for Fiscal Studies as even worse than the Tories’ mini-Budget. Perhaps the SNP ought to focus on sorting out its spiralling A&E waiting times and its struggling-to-function transport network, instead of pursuing its obsession with a referendum. That word did not even appear in the motion.
This morning, we expect the biggest interest rate rise in decades. Under the Tories, we have rising mortgages, rising rents, supermarket prices up by 17% and the price of a basic bowl of pasta up by a fifth, yet the Government still refuse to bring in Labour’s windfall tax on oil and gas giants, despite energy profits doubling. No one voted for this Prime Minister; he has no mandate. Tories are on the side of the richest 1%; Labour is on the side of working people, pensioners and communities. So it is not just the former Health Secretary who ought to be screaming, “I’m a Tory...Get Me Out of Here!” It is time that the public had the chance to vote the rest of them out. When will the Government give the country the choice between their failing trickle-down economics of the past and a fresh start and a bright future with a Labour Government?
Penny Mordaunt
The Chartists were right: democracy is very important, which is why this Government will implement the manifesto on which we stood in 2019, for which we received an overwhelming mandate from the British people.
I send my good wishes and, I hope, those of everyone in this House to our sportsmen and women for their upcoming matches: the men’s cricket team, the rugby league team—I know you are interested in rugby league, Mr Speaker—and especially the England women’s rugby team, who have a semi-final coming up.
The hon. Lady mentions the latest adventures of the right hon. Member for West Suffolk (Matt Hancock). When I heard that a colleague was volunteering to be squeezed into small spaces with slippery creatures, that they would have to swallow unpalatable things to achieve their goals, and that their credibility and dignity were in jeopardy, I assumed that people were talking about a Member on the Opposition Front Bench, not the right hon. Member for West Suffolk.
The hon. Lady kindly reminisces about my time on “Splash!”. Hon. Members may find it hard to believe, given that the elegance of my performance was compared at the time to that of a paving slab being pushed off a scaffold, but I did actually have training. None of my time was spent away from this House. I have helped to save the Hilsea lido, which is currently being restored to its 1930s glory with help from the levelling-up fund.
The hon. Lady refers to policies and delay—high praise indeed from an Opposition who have no plan and no clue about any topic we might care to name. This is controversial stuff: Secretaries of State are going to be allowed to express their views on their departmental policy area. I know; it is radical stuff. Major investment decisions will be reflected on and discussed across Whitehall. In these volatile economic times, people will be thinking about how they can get the most for taxpayers for their money, but we are conscious that decisions on investment will need to be made and that decisions are needed to reassure people on fixed incomes in particular. Those decisions need to be the right ones: that is grown-up, joined-up, stepped-up government. I remind the Opposition that it took a mere two years for the Leader of the Opposition to ditch all his pledges—not so much a bonfire of the policies, more a puff of smoke.
The hon. Lady mentions the conference of the parties. I thank her for that, because it affords me and all Members of this House the opportunity to pay tribute to my right hon. Friend the COP26 President, who has done a tremendous job. The UK should be proud of our record in the area: we are the first major economy to commit to a legally binding target of achieving net zero by 2030.
On the matter of legal advice, it is standard practice that Ministers would have legal advice under those circumstances.
I agree with what the hon. Lady says about our friends in the Scottish National party. One of the great joys of my job and hers is explaining our procedures and practices to people outside this place. SNP Members chose not to use their Opposition day debate to talk about health, education, care, opportunity, social mobility, business, farming or anything else related to the Scottish people. There were no surprises in the topic that they chose or in how they squandered their precious time on the Floor of the House. Their motion is not a mandate; it was not even a binding motion. What was surprising was that not all the SNP voted for it, but there we go.
I am sorry that the hon. Lady did not mention cost of living issues or the fact that this week we are celebrating the welcome £150 core council tax rebate, the second instalment of the £400 energy bills support scheme and the launch of the energy price guarantee in Northern Ireland. Nor did she have any word of sympathy for the travelling public, who will face further strike action on the railways. We will always speak up for working people and the travelling public. I still live in hope that the Opposition might support our legislation.
Further business will be announced in the usual way.
David Johnston (Wantage) (Con)
Earlier this year, I launched a work experience campaign for local young people, as placements had dried up as a result of covid. I am very grateful to companies such as Rebellion, Hachette and Astroscale for taking part. Will my right hon. Friend join me in thanking them? Does she agree that whatever arrangements employers make for their staff to work at home, they must not forget to provide work experience placements in the workplace, because they are a key way for young people to learn the skills that they need?
Penny Mordaunt
I thank my hon. Friend for his work to ensure that all young people in his constituency have access to good work experience, which is part of the journey in establishing norms that are sometimes not established at home or at school. We should be grateful that we have record low youth unemployment, but we want to do everything to ensure that such opportunities are available to everyone in our communities.
Deidre Brock (Edinburgh North and Leith) (SNP)
Last week the Leader of the House asked me a question, Mr Speaker—and I will answer it, now that I have the opportunity.
The Leader of the House quoted those anonymous but, of course, completely legit—I will pause for a knowing wink here—sources from the EU who apparently told eager journalists something that we have actually all known for a very long time: that countries applying to join the EU, as Scotland can once it regains its independence, must commit themselves to joining the euro at some point in the future. Now, the Leader of the House may not know this, but there are in fact seven countries that have been in the EU for between nine and 27 years and still use their own choice of currency—Sweden, Bulgaria, Croatia, Czechia, Hungary, Poland and Romania —so that is not quite the gotcha that Unionists thought it was.
Given the slide in the value of the pound, from $1.64 in 2014 to just $1.13 today, and after the mad ride of the last few weeks, I am not sure that this Government think all that much of the pound anyway. For the purpose of further useful insights for both the Leader of the House and the Labour Front Benchers, enabling them to acquire some grown-up, stepped-up facts on the issues, I suggest that they look out the series of papers that the Scottish Government are producing on all things Scottish independence. A debate on those would, I think, be very useful to the House.
COP27 will take place next week. I was pleased to learn that the Prime Minister has relented and will now be joining our First Minister at Sharm El-Sheikh, but once the dust has settled on that world event, there really should be a Government debate on the outcomes of COP, examining the role that the UK Government played in negotiations and, crucially, how they intend to step up to their responsibilities in tackling the climate crisis. We cannot allow the terrible economic crisis that we face, or even Russia’s dreadful war in Ukraine, to deflect us from our climate obligations. UN reports have warned that the world is close to irreversible breakdown, with no credible path to even the 1.5° C global warming target.
According to a Public Accounts Committee report released on Wednesday, the UK Government’s commitment that the public sector should “lead by example” in meeting net zero is not being fulfilled. The report criticised the poor quality of emissions measuring and reporting, among other things. Just this week, we learned that parts of this place are apparently producing and leaking heat at an alarming rate. I hope the Leader of the House will be taking up those findings with the House services, and I am sure that you, Mr Speaker, will be taking an interest in them as well. The Prime Minister and his Ministers need to front up and reassure the House and the public that they are taking their climate responsibilities seriously. A debate on this in Government time is essential.
Penny Mordaunt
I thank the hon. Lady for doing the homework that I set her last week. I take it all back: she has had a really productive week, figuring out how to square the establishment of the Scottish pound with joining the euro. We appreciate that very much. However, I say to the SNP again that these are not the issues on the Scottish people’s list of priorities. They are worried about health, about poor education standards, and about their bins being collected. We had an amazing situation last night, when Madam Deputy Speaker had to include herself and the Tellers in the count to make the House quorate. The debate is so far removed from the reality of what is happening in Scotland that Members on both sides of the House are not even prepared to show up to disagree with the Scottish nationalists. I would just ask them to drag themselves back to the real world.
I am pleased to hear about the paper that is being produced. I look forward to its including the almost £1.5 billion that the UK Government have committed for 12 city and growth deals covering every part of Scotland, the £42 million for Scottish fisheries, the £1.9 billion for farmers and land managers over the next three years, the £52 million to support the establishment of two Scottish green freeports, the £179 million levelling-up funding for eight Scottish projects, and, of course, the support given for 1,700 jobs through the fantastic £3.7 billion type 26 shipbuilding programme at BAE Systems’ Govan yard, of which I particularly approve. I look forward to the inclusion of all those things in the paper.
Maggie Throup (Erewash) (Con)
A recent Home Office decision to house 400 asylum seekers in two hotels just 50 metres apart in Erewash is a prime example of Members routinely being cut out of decision making by Government Departments. Had I been asked about the accommodation centres, I would have opposed them, due to the unacceptable pressure they will place on services in my constituency. Will my right hon. Friend facilitate an urgent meeting for me, the Home Secretary and the Immigration Minister, so that I can put the case for the immediate closure of those centres? Will she also consider adding local Members to the list of statutory consultees when such decision are made, so that we have a formal say in key decisions affecting our constituents?
Penny Mordaunt
I thank my hon. Friend for raising that issue. Sadly, she is not alone; I think there are colleagues who have had similar experiences. She will understand that this is an incredibly difficult and complex issue that the Home Office is trying to manage. We want to bring forward legislation swiftly that will help us to tackle the issue, and I hope that all Members will support us in that aim. Clearly, it is unhelpful when Members are not made aware of what is happening, particularly as the local authority will need to prepare, and so will need as much notice as possible. Home Office questions are on 14 November, and I will also write on my hon. Friend’s behalf to the Home Office, and ask it to address the issue swiftly.
Mr Speaker
I call the Chair of the Backbench Business Committee, Ian Mearns.
Ian Mearns (Gateshead) (Lab)
I thank the Leader of the House for the statement, and for announcing the Backbench Business debates that will be held next Wednesday. I am sure that we will also have the tasty morsel of a debate in the afternoon after the autumn statement. May I ask Members from across the House who have live applications for a debate registered with the Backbench Business Committee, and who are on the waiting list for a slot for debate, to please respond as quickly as possible when contacted by Committee staff about slots that become available at relatively short notice? It would really help oil the wheels of the machine if responses were more timely.
I have a special entreaty to the Leader of the House on behalf of two constituents, Mr David Shanley and Chelsie Scott. They have systematically and repeatedly been let down by the almost totally unresponsive Home Office visa application and appeal system. My office and I have received the same non-responsive treatment, despite making repeated requests on my constituents’ behalf over the past three years. Six months after their appeal, these people are still waiting for the paperwork confirming the outcome of the appeal. The outcome was in their favour, but they cannot tell anyone about it, because they do not have official recognition of the outcome.
Penny Mordaunt
I thank the hon. Gentleman for his helpful guidance on Backbench Business Committee admin, which I am sure all Members will have heard. May I say how sorry I am to hear about the case that he raised? He will know that I recently met the permanent secretary at the Home Office, in addition to having raised Members’ concerns with the Home Secretary, and if he gives us the details of the case, we will, immediately after the business question, facilitate a surgery for him with the Home Office to ensure that the case is brought to a good conclusion.
Tim Loughton (East Worthing and Shoreham) (Con)
The Home Affairs Committee was hoping to visit Manston today, but the man from the Home Office, he say no. Hopefully we can go next week. As the Leader of the House has heard, most of the questions she has been asked so far have been about the migration system. The Home Secretary herself referred to it as dysfunctional. We have had occasional chances to ask questions of the Home Secretary and the Immigration Minister, but is it not time for a full debate in Government time on the shambles that is the immigration system, which needs to take a holistic approach? We need a proper discussion on how we will tackle this urgent situation, which is filling up our email boxes and is the headline in all the media virtually every day at the moment.
Penny Mordaunt
I thank my hon. Friend for raising the issue, various aspects of which are obviously of concern to all Members of this House. The Government have a good track record of trying to get ahead of these issues. I refer him to the work done swiftly after 2010, under the Cameron Administration, on conflict states, and the use made of expert advice from Professor Paul Collier. Clearly, we will also face challenges two years hence as a result of what is happening on global food security at the moment. These issues need to be debated. I will certainly raise the matter with the Cabinet Office, as well as the Home Office, and I encourage my hon. Friend to use the routes available to him to secure a debate on this very important topic.
Rachael Maskell (York Central) (Lab/Co-op)
Twenty-six per cent. of children in York are living in poverty. Ahead of the Chancellor’s statement, which we are expecting in two weeks’ time, York had a summit this week on the cost of living, where I launched my cost of living handbook to explain where people can both receive help and get help. We need the Chancellor to come forward with that help, because there is not enough money in the system to help the very poorest. Will the Leader of the House make representations to the Chancellor that he needs to increase benefits in line with inflation and to ensure that our civil society has the support it needs to help our communities?
Penny Mordaunt
I point to the Prime Minister’s record on this as Chancellor. He has been very clear that he wants to protect people as we face what will be a very difficult winter and beyond. I have just announced that the Chancellor will make a statement very shortly. There is a huge number of support schemes—we are doing a lot to support people—but they are quite complicated, so I congratulate the hon. Lady on bringing them all together in her booklet.
Kit Malthouse (North West Hampshire) (Con)
The Leader of the House has revealed that the autumn statement on 17 November will be exactly that, a statement. That will possibly give the House only an hour and a half of questions to examine what we are told will be a profound statement with huge implications for our public services and our constituents. It is surely unacceptable that time has not been set aside for the House to properly scrutinise and debate the statement. Should we not learn the lesson of the late, lamented mini-Budget, when the House was not able to do its job of subjecting it to the scrutiny that might well have improved it and avoided the subsequent economic disaster? Will the Leader of the House please find time in the Government’s schedule for the House to do its job of properly scrutinising the statement?
Penny Mordaunt
I have learned something from that episode because we did have a debate and, actually, what people wanted was a statement. It is proper that the Chancellor sets out his statement. All Members of this House will have the ability to question him. If there is appetite for a debate, and my right hon. Friend makes a good case for one, it should be after people have seen the accompanying documents and assessments, which will be of most help to this House. However, I have raised this matter and, if colleagues agree with him, I would urge them to make representations to that effect.
Wera Hobhouse (Bath) (LD)
When he was Chancellor, the Prime Minister announced that the UK would commit £100 million to the Taskforce on Access to Climate Finance, to make it
“quicker and easier for developing countries to access the finance they need”
to address the climate emergency. With COP27 taking place next week, can we have an urgent statement from the Government about progress on that pledge?
Penny Mordaunt
I will write to the Treasury to make sure it has heard the hon. Lady’s request. The UK has achieved much that we should celebrate, not just in our domestic agenda but in our global leadership. More than 190 countries agreed to ditch coal, and leaders representing 90% of the planet’s forests agreed to halt deforestation. Those are just some of the things that our leadership has enabled.
Katherine Fletcher (South Ribble) (Con)
Too many communities in this country are having problems with transport infrastructure, not on a macro scale but on a significant community scale, with schemes that are too big for local councils but too small to draw the attention of the Department for Transport.
Mr Speaker, you will be familiar with Tarleton, a beautiful village in my patch. Up to 300 heavy goods vehicles a day are going past schools, for want of a small road so that they do not have to drive directly through the village. Can the Leader of the House advise on what we can do to better join up local and national Government structures to deliver transport infrastructure for our communities? Can we have a debate in Government time on how we can make what we invest and how we work, work for local people?
Penny Mordaunt
I thank my hon. Friend for that practical suggestion. I understand she is seeking to hold the Government to account on these issues and I wish her well with her campaign to be Chair of the Select Committee. The kind of schemes she is referring to would benefit from the integrated transport block funding, which is for small and medium-sized transport improvements. It is not ringfenced funding and it is channelled through local authorities. I take the point that larger schemes often would not qualify for that. I will write to the Department for Transport to ask it to contact her on its future plans.
Navendu Mishra (Stockport) (Lab)
In January 2021, Citizens Advice estimated that more than 3.5 million people were behind on their council tax, of whom 51% were not behind before the pandemic. As the cost of living crisis deepens, this will, sadly, only get worse. Many local authorities are using debt collection agencies, despite there being no evidence that bailiff use increases collection rates. These agencies and their methods cause additional stress for people who are already facing hardship. As such, will the Leader of the House allow a debate in Government time on tackling the root cause of missed payments and rising household debt across the nation?
Penny Mordaunt
I thank the hon. Gentleman for raising these matters, which are clearly going to be extremely stressful for his constituents and others across the country. I know that the new Secretary of State, who is back in that Department, is very much looking at this agenda and has had a huge focus on trying to get some practical things to happen for people, particularly those who have no hope of repaying those arrears. I will write to my right hon. Friend and ask him to contact the hon. Gentleman’s office.
Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)
Is it still possible for us to have a full debate in Government time on the threat posed by China, both domestically and internationally? After all, it was at the indulgence of the Speaker that three urgent questions were granted—twice when the Government failed to make a statement on the violent attacks on peaceful democracy campaigners in Manchester, and the other day on the appalling activities of Chinese police inside our country. It is thanks to the Speaker that we actually had any discussion of that here. Then there are the Confucius institutes spying on Hong Kong and Chinese students, on which there has still been no statement from the Government. All this depends on the integrated review, which the Government said they were going to change to make China a “threat” rather than a “strategic competitor.” Given that that country is guilty of genocide, arresting peaceful democracy campaigners in Hong Kong, trashing international treaties, slave labour, threatening Taiwan with invasion, attacking Christians, threatening its neighbours, taking over the South China seas and threatening us here domestically, do we not honestly think the Government should take this seriously and have a full debate?
Penny Mordaunt
I thank my right hon. Friend for raising these matters and for all the work he has done to shine a spotlight on these appalling practices. It is bad enough to watch human rights abuses, intimidation, violent assault and other things taking place on their soil, but these things should never happen on our soil. I will certainly write to the Foreign, Commonwealth and Development Office and the Cabinet Office, because this will be of concern to a number of Departments, and ensure that his well-made points, which I am sure are supported by many in this House, are heard by those Departments.
John Cryer (Leyton and Wanstead) (Lab)
The Leader of the House will have been at Prime Minister’s questions yesterday, when the hon. Member for Broxtowe (Darren Henry) asked a question about the disparity in parental leave systems. It is far too complicated to go into at the moment, but it is probably coming up in most constituencies; it certainly is in mine. May we have a statement or debate on that? Secondly, may I support everything that my neighbour, the right hon. Member for Chingford and Woodford Green (Sir Iain Duncan Smith), has just said?
Penny Mordaunt
I thank the hon. Gentleman for putting his support for what my right hon. Friend has said on the record, and I think all in this Chamber agree with those sentiments. I did hear the particularly tragic case that was raised yesterday, and of course I am aware of the wider issues involved in this anomaly. Obviously, the Prime Minister will have heard that too and will be looking at these matters.
Bob Blackman (Harrow East) (Con)
On Sunday 20 November, the annual parade of the Association of Jewish Ex-Servicemen and Women will take place at the Cenotaph. I thank you, Mr Speaker, for granting me an Adjournment debate on the subject. This year’s event is special—it is the 100th anniversary of the commencement of the parades. I have attended them every year since I was elected, but unfortunately a Minister has never been present. It will be too late by the time of my Adjournment debate, so will my right hon. Friend prevail upon her Cabinet colleagues to ensure that a Government representative is at the centenary parade?
Penny Mordaunt
I thank my hon. Friend for raising that important anniversary. It is right to mark such events with all due respect and courtesy to the people involved in those efforts. I cannot give him the assurances he seeks today. If he had given me a bit of notice, I might have been able to do so, but immediately after this session, I shall follow up and see what we can do to fulfil his request. I thank him again for raising the matter.
Kirsten Oswald (East Renfrewshire) (SNP)
We know that every second counts when someone suffers a cardiac arrest and that access to a defibrillator can literally mean the difference between life and death. Does the Leader of the House therefore share my disappointment that East Renfrewshire Labour and Tory councillors failed to support their SNP colleagues’ motion calling for a plan to install defibrillators at every local school? May we have a debate in Government time on why the Chancellor must scrap VAT on defibrillators to make that vital, life-saving kit available in a more accessible way?
Penny Mordaunt
I hope that all Members have undergone defibrillator training. If I can use a defibrillator, anyone can—I am renowned for being totally cack-handed. I call on all Members to undertake that training, which ambulance services and others provide, and to encourage their constituents to do so.
There are many ways in which we can install defibrillators. We should work with the ambulance service to ensure that they are registered, too, so that people know where they are. I am happy to write to the relevant Department to ascertain what organisations we can perhaps put the hon. Lady in touch with so that she can meet her objectives.
Wendy Morton (Aldridge-Brownhills) (Con)
We are a nation of animal lovers—I believe you are an animal lover, too, Mr Speaker. Conservative Members stood on a manifesto that included commitments to tackle several animal welfare issues, such as puppy smuggling and pet theft. Can my right hon. Friend give me an indication of when the Animal Welfare (Kept Animals) Bill will return to this place?
Penny Mordaunt
My right hon. Friend knows that I am going to say that future business will be announced in the usual way, but I reassure her by pointing to our record. We introduced the Animal Welfare (Sentience) Act 2022 and the Glue Traps (Offences) Act 2022, and provided for an Animal Sentience Committee. We have reformed the damaging and bureaucratic common agricultural policy. We have banned exports of live animals for fattening and slaughter and we have built animal welfare into our independent trade policy. My right hon. Friend should be reassured by that and I hope to be able to announce future business on the matter soon.
Clive Efford (Eltham) (Lab)
We have seen the shambles that the Home Secretary is presiding over at Manston immigration centre. A solution to the problem cannot be to dump busloads of asylum seekers in the centre of London, reports of which we have seen. May we have a statement by the Home Secretary about how she will improve the system, and not just an attempt to cover up her errors by imposing injustices on people and leaving them desolate in the centre of London?
Penny Mordaunt
I will certainly ensure that the Home Office hears the hon. Gentleman’s concerns, but the Home Office’s plan to address those pressures is clear. We need to legislate to give ourselves more options, and particularly to return those who do not have a claim to asylum here. I hope that Opposition Members will support the Government in those efforts.
Mr Ian Liddell-Grainger (Bridgwater and West Somerset) (Con)
Can my right hon. Friend turn her attention to fish—dead fish, hundreds of them, floating down the rivers of the Levels as a result of excessive pollution by Wessex Water. If that was not bad enough, the company’s polluter in chief has just been appointed to represent the county at every state ceremony. The recommendation came from Mr Jonathan Hellewell, the Prime Minister’s appointments guru, who must have a screw loose to do that. Picking a serial polluter to be Somerset’s flagbearer is like putting Dracula in charge of blood transfusion. This is a disgraceful mess, and, on behalf of all those dead fish, can we have a debate in Government time, please?
Penny Mordaunt
I thank my hon. Friend for getting his views on record. I am sure that he has met his objective today. I cannot comment on the individual case, but what I can say is that this Government have been doing a huge amount to combat pollution ever since 2018 when my right hon. Friend the Member for Surrey Heath (Michael Gove), the then Secretary of State for Environment, Food and Rural Affairs, fired that first shot across the water companies’ bows. Since privatisation, there has been £150 billion of investment and £25 billion to reduce pollution from sewage. In 2021 alone, the Environment Agency concluded six prosecutions against water companies, with fines totalling more than £100 million. He will also know that there is an infrastructure plan that water companies will be held to account on.
Janet Daby (Lewisham East) (Lab)
Our brave NHS staff never fail to sacrifice so much, especially during the pandemic, yet many health professionals across our country are suffering from work-related issues of stress, anxiety and burn-out. Will the Leader of the House ask the Health and Social Care Secretary to come to the House to make a statement on the urgent need for the Government to pay and compensate healthcare staff at a much higher level than is currently on offer?
Penny Mordaunt
I know that my right hon. Friend the Health and Social Care Secretary is very concerned about services, dealing with the backlog and all the pressures that the NHS will be under this winter. Part of that is the wellbeing and robustness of the workforce, and I know that he cares about that deeply. I will certainly pass on the hon. Lady’s sentiments. Clearly, there is a very clear timetable and process for pay awards and so forth, but I am sure that he will keep the House up to date.
Selaine Saxby (North Devon) (Con)
Please can my right hon. Friend explain who is managing the dispersal of asylum seekers to hotels? Having raised this matter previously, I know that it is not the Department for Levelling Up, Housing and Communities and it does not seem to be the Home Office either. I have it in writing from officials just two weeks ago that the Dilkhusa in Ilfracombe was not suitable to be used and would definitely not be used. Last night, the hotel filled up and there was security on the door, which is not normal for tourist hotels in North Devon. Can my right hon. Friend help me to secure details of what is actually going on at the Dilkhusa right now, and will she ensure that whichever Minister is responsible for these decisions comes to this House to update Members and explain why these decisions seem to be taken without any information reaching the councils or their MPs?
Penny Mordaunt
I am always happy to hear from the hon. Lady, but sorry to hear another similar such case being brought to the House—my hon. Friend the Member for Erewash (Maggie Throup) spoke earlier on the matter. I can confirm that it is the Home Office. I will certainly raise this particular case with the Department on the hon. Lady’s behalf.
I reiterate that the only way that we will take pressure off the system and that we will have the resource to deal with those very genuine cases that we want to look after and protect is to ensure that those who do not have a genuine case to be here are returned and are not putting additional pressure on the system.
Andrew Gwynne (Denton and Reddish) (Lab)
The Government profess that their priorities are to improve education and to level up. I certainly agree that the best way to level up is to improve education. May I impress on the Leader of the House the plight of Russell Scott Primary School in Denton, which was the subject of a £2.7 million refurbishment by Carillion that went wrong? Since then, £700,000 has been spent by Tameside Metropolitan Borough Council patching it up to make it safe. Assessments show that a further £5 million minimum is needed to put right all the defects that Carillion has caused. Even then, it cannot be guaranteed that that will fix the problem. We seemed to be getting somewhere with the Department for Education before the merry-go-round of Ministers. Can we have a statement on school building conditions, so that I can reiterate to the new ministerial team the importance of good-quality school buildings and, particularly, the plight of Russell Scott?
Penny Mordaunt
Across the UK there is a huge programme of not only improving schools but building new ones and introducing new types of education setting; 500 schools will be included in that over the next decade. The circumstances of the case the hon. Gentleman raises are pretty unique, and I am sorry to hear about it. I understand the points he makes about ministerial churn and I will write on his behalf to make sure that a Minister picks this case up quickly. It clearly needs to be put right, and I shall do my best to help him to achieve that.
Andrew Jones (Harrogate and Knaresborough) (Con)
Last week, I visited the construction site of the new Knaresborough swimming pool and leisure centre, which is a £17 million investment by Harrogate Borough Council. The building will be powered solely by air source heat pumps and solar panels. Against the backdrop of concerns about our energy security, please may we have a debate to discuss the timing and implementation of new building regulations to ensure that these new technologies are much more widely used in domestic, commercial and public buildings?
Penny Mordaunt
I thank my hon. Friend for highlighting what sounds like a really fantastic project. I know he is passionate about this subject and sharing good practice and design to ensure that we have modern, sustainable buildings. We have done a lot to cut our emissions as a country—more than any other G7 nation. What he describes is part of the solution to the problem, and I shall make sure that the Department hears of it.
Patrick Grady (Glasgow North) (Ind)
I thank the Leader of the House for her assistance with the constituency cases I raised last week, but I do not think that business questions should be turning into an alternative Home Office surgery. She advised my office team to get in touch and make a Home Office surgery appointment. They have been trying to do that since July, and several times every day this week, and they simply cannot get through. The best they have been offered is a roadshow in Aberdeen, 300 miles away. As other Members have said, please can we have a Home Office Minister come to the House to answer our questions about the absolutely chaotic immigration backlog and how it will be resolved?
Penny Mordaunt
I am sorry to hear that. I do not want this session to turn into a Home Office surgery. Clearly a debate is the proper place for general questions about how these systems are being managed, but I know from my meeting with the permanent secretary that the Department is keen to ensure that Members with individual cases get what they need. The offer from the Home Office is greater than the hon. Gentleman describes: for example, it is possible for him to have a Zoom or Teams call with a caseworker to discuss cases and get them resolved. If he is not getting that offer or is unable to secure such a meeting, my office will facilitate that happening.
Mr Peter Bone (Wellingborough) (Con)
When Tony Blair stepped down from office, the unemployment rate was 5.3%. By the time Gordon Brown stepped down, it had gone up to 10%. When my right hon. Friend the Member for Uxbridge and South Ruislip (Boris Johnson) stepped down, it was only 3.5%. It seems that Labour likes to talk about creating jobs, whereas Conservative Governments get on and create them. Could we have a debate in Government time in which we congratulate the former Prime Minister on his remarkable achievement and discuss why every Labour Government leave office with unemployment higher than when they came in?
Penny Mordaunt
I thank my hon. Friend for his excellent question. It is true: since 2010, we have got nearly 4 million people into work. That is 4 million people who have the dignity of a pay packet; half of them are women and a quarter are disabled people, who did not have many such opportunities before. There are 1 million fewer workless households. Every time our party has left office, we have left the country in a much better position than when we inherited it. The complete reverse is true of the Labour party.
Ruth Cadbury (Brentford and Isleworth) (Lab)
My constituents living at APT Parkview apartments in Brentford are experiencing shocking treatment from their freeholder and managing agents, including John James Collins, Eight Asset Management, SW4 Management and Paradigm Land—just part of the list of interconnecting directors and companies involved with a single block. The residents face increased safety risks, the withdrawal of services they are paying for and a retrospective charge for air conditioning of which they had no prior notice in their tenancy or lease. I am increasingly hearing from constituents in blocks of flats across my constituency who face the worst of this new breed of landlord, exploiting loopholes in tenancy and leasehold law. Will the Leader of the House find Government time for a debate on how we can protect and support those tenants and leaseholders?
Penny Mordaunt
I am sure all hon. Members will have experienced similar cases, where the situation is incredibly complex and it is not clear who the tenant can get redress from. Governance structures and local residents’ associations can only be effective if they know who they are dealing with. These are important matters, and I will ask the Department to provide the hon. Lady and her office with some advice on them. I know, because measures will be brought forward in the legislative programme, that there will be opportunities to talk about these issues on the Floor of the House.
Rachel Maclean (Redditch) (Con)
After Sally Challen became the first woman to have her murder conviction quashed under our coercive control laws, the then Justice Secretary appointed Clare Wade KC to carry out a review of sentencing laws where women are forced to kill their partners after a lifetime of domestic abuse. The very serious issue involves cases in which a woman may need to take a knife to kill her partner, which in itself attracts a higher sentence. The domestic homicide sentencing review is looking into that. Can we ask the Ministry of Justice to provide a debate and come forward with important recommendations, so that we can look at the sentencing laws and have justice for these women, who have been forced to endure an appalling situation?
Penny Mordaunt
I thank my hon. Friend for all the work she has done in this area and put on record my thanks to Clare Wade KC for her work. My understanding is that that report has now been received by the Ministry of Justice and I know it will want to keep the House informed when it has reviewed it and decided what action it will take. This is an incredibly important area, and I am proud of our Government’s record on protecting women: we have outlawed upskirting, created the offence of coercive and controlling behaviour, outlawed the so-called rough sex gone wrong defence to murder and non-fatal strangulation, created the offence of stalking and then doubled sentences for that, among many other things. However, as my hon. Friend points out, there is more to do.
Matthew Pennycook (Greenwich and Woolwich) (Lab)
In my constituency and across south-east London there is significant concern about the impact of the new December train timetable, which Southeastern drew up without any consultation with passengers, local rail user groups or elected representatives. Can we have a debate in Government time about the role of the Department for Transport in this planned alteration to the services my constituents rely on?
Penny Mordaunt
It is vital that passengers are consulted on any changes to services, whether timetabling or other changes, and I shall raise the matter with the Department for Transport. I do not think the date for transport questions has yet been set, but I encourage the hon. Gentleman to raise it directly there too. In the meantime, I shall write on his behalf.
Martin Vickers (Cleethorpes) (Con)
The introduction of the £400 energy bill support scheme was extremely welcome. On 29 July, the Department issued a press release saying that that would include holiday homes. Tingdene, which operates a holiday park in my constituency, has a different interpretation and is refusing to pass on the £400. Could the Leader of the House please arrange for a Minister from the Department to come and make a statement to clarify the situation?
Penny Mordaunt
I thank my hon. Friend for his question. He is right and Tingdene is wrong, but I understand that the Department has to bring forward some more detail about how the scheme will work. That should clearly be done swiftly in order to reassure his constituents, and after this session I shall write to the Department to ask it to bring forward its plans and communicate that to him and other Members of this House.
Justin Madders (Ellesmere Port and Neston) (Lab)
On Tuesday it was announced that 132 McColl’s stores were to close as a result of the merger with Morrisons. Three of those are in my constituency—in Great Sutton, Whitby and Elton. I should declare for the record that my son works in a McColl’s store, albeit not one of those affected by the announcement. It is a real blow to the communities that rely on those local stores, but the other concern is that 55 of the stores, including two in my constituency, have post offices associated with then. Certainly, in Elton we waited for over a year for a replacement post office the last time it closed. I think that deserves a statement from the relevant Minister about what we will do to ensure that those communities do not lose their post offices permanently.
Penny Mordaunt
The hon. Gentleman is right that those stores, whether or not they have a post office, are desperately important facilities for communities, particularly people who are less mobile, and potentially provide a community hub as well. I will make sure the Department for Business, Energy and Industrial Strategy hears his particular concerns about the post office and provides his office with some advice about what he can do.
Anna Firth (Southend West) (Con)
Will my right hon. Friend find time for a statement on the application process for the UK city of culture 2029? People in Southend West feel totally let down by the proposed decision of the Labour-led Southend-on-Sea City Council not even to consider bidding for that coveted status in 2029, despite our world-famous theatres, the longest pleasure pier in the world, the internationally acclaimed Music Man project and international archaeology. Does she agree that the Labour-led council should stop splashing £5 million on agency staff and instead invest in a legacy that would make Sir David proud?
Penny Mordaunt
I know the city of Southend, as it is now, very well and it has a huge wealth of cultural organisations, venues and schemes—my personal favourite is, obviously, the Music Man project. What it seems not to have enough of, however, is Conservative councillors.
Dame Diana Johnson (Kingston upon Hull North) (Lab)
Following the catastrophic Trussonomics, we are told that on 17 November we are likely to face bigger cuts to public services than we saw after 2010. Hull suffered enormously during that decade of austerity, including having Ministers turn down our plans for the electrification of the railway line to Hull. Now that the Government have backtracked on the former Prime Minister’s promise that we would get Northern Powerhouse Rail, could we please have a debate on what levelling up means for cities such as Hull, and how these measures will affect the GDP and growth of this country?
Penny Mordaunt
The right hon. Lady will not have long to wait, and I ask her not to speculate on what might be in the Chancellor’s statement. Since the mini-Budget, the economic situation and the issues that the Treasury is grappling with have been changing and improving. She will not have long to wait to hear the Chancellor’s statement. Rail investment is vital and there are many schemes in the north of England that need to be progressed. There will be ample opportunity to discuss those, both at the time of that statement and in other statements that will be made by the Department for Transport.
Alun Cairns (Vale of Glamorgan) (Con)
The case for a train station at St Athan on the Vale of Glamorgan line is overwhelming, and the demand among the community is unprecedented, yet the Welsh Labour Government have failed to recognise that and to respond. May we have a debate on rail infrastructure spend, so that we can tease out the data to prove the case, and so that I can get to the next stage of the feasibility study and get a train station in St Athan, as has been demanded for so long?
Penny Mordaunt
I thank my right hon. Friend for his vigorous and needed campaign to deliver these important services to his constituents and the wider region. I know that the new Secretary of State for Transport is looking at all these things as a priority. The date for the next Transport questions has not been confirmed, so I will write on his behalf and ask that he is updated.
Gareth Thomas (Harrow West) (Lab/Co-op)
In October 1984, 37 men tried to stop the closure of the Cammell Laird shipyards. They were sent to prison, sacked and lost redundancy and pension rights. I understand that the remaining men and their families have no records of the court proceedings taken against them at the time. Will the Leader of the House encourage Ministers with responsibility for national and local court archives to be sympathetic to requests for assistance to find those records?
Penny Mordaunt
The hon. Gentleman raises an issue that is clearly of great importance to his constituents. We do not yet have a date for the next Justice questions, so if he wants to give me the details or any correspondence he has had with the Ministry of Justice, I will be happy to ensure that Ministers get in touch and give him advice on where such records might be found.
Scott Benton (Blackpool South) (Con)
Over the last few months, I have been inundated with correspondence from constituents regarding retaining the triple lock. It is inconceivable that we would abandon our manifesto pledge on this issue, not least because senior citizens, unlike people of working age, have no means of increasing their income to support themselves with the cost of living. I appreciate that the Government will outline a way forward in two weeks’ time, but may we have a debate in Government time on how we can best support older people with the cost of living?
Penny Mordaunt
I thank my hon. Friend for his efforts to highlight the importance of the triple lock. We know that the older people are, the higher their cost of living. The Chancellor will be making a statement about that shortly, but I thank my hon. Friend for getting his views on the record today.
Alan Brown (Kilmarnock and Loudoun) (SNP)
My constituent Linda suffers from vestibular ear disease, deafness and vertigo, and she has associated mobility issues. She was awarded the standard personal independence payment rate for 10 years, but she cannot get the mobility element, which would contribute to a mobility car, because she is above state pension age. Can we have a Government statement outlining why pensioners are not deemed worthy of a mobility car to allow them to get out and about, and whether the Government will consider a change of policy?
Penny Mordaunt
I thank the hon. Gentleman for mentioning that. Clearly, life is changing for pensioners. Many want to be very mobile, and many want to carry on working. I know that the Department for Work and Pensions is always reviewing its policies and looking to improve not only access to schemes such as Motability, but the schemes themselves. I encourage him to raise this in questions. We had Work and Pensions questions earlier this week, but I will write to the Department with his suggestion, and he knows how to secure a debate on this topic if he wants to.
Robbie Moore (Keighley) (Con)
Although bonfire night is just around the corner, and quite rightly many will wish to enjoy fireworks at organised events, the unfortunate reality is that many of my constituents are plagued by fireworks being let off at all hours of the night throughout the calendar year. That causes distress to many residents and their pets and puts additional pressure on our emergency services, who have to deal with fires or antisocial behaviour. May we have an urgent debate in Government time on licensing provisions on the sale of fireworks, as well as a frank discussion about how local enforcement can clamp down on this antisocial behaviour?
Penny Mordaunt
I thank my hon. Friend for that timely question. There is a comprehensive regulatory framework in place to control the sale, availability and use of fireworks, and we can all encourage our constituents to attend organised bonfire night firework displays. When people do what he describes, it causes distress. I know that he has been campaigning on this issue, and I encourage him to continue to raise it with the Department, but one thing we can all do as we approach bonfire night is encourage people to attend public events.
Alex Cunningham (Stockton North) (Lab)
Mr Deputy Speaker, I know that you are aware of this, but I hope the Leader of the House is also aware of the devastation of sea life off the north-east coast that started 13 months ago and, contrary to the statements of the Tees Valley Mayor, continues to this day. The Environment, Food and Rural Affairs Committee held an evidence session into the tragedy last week, and the Chair, the right hon. Member for Scarborough and Whitby (Sir Robert Goodwill), has since written to the Secretary of State demanding a thorough investigation into the deaths, which may or may not be linked to dredging of the River Tees. I am sure the Leader of the House will agree that it is time for Ministers to be held to account in this House for a year of failures on this issue. Will she encourage them to make a statement?
Penny Mordaunt
From what I understand of that case and the research that has been done on the cause of those deaths—largely of crustaceans, but other sea life as well—the Environment Agency and others have not come to the conclusions that the hon. Gentleman suggests. There would be serious consequences for economic activity in the area and particular schemes if dredging were to cease. I think we would all be concerned about the impact on local sea life and wildlife, but this has to be science-based and evidence-driven. I am not in a position to make that judgment, but that is my understanding of the situation. The hon. Gentleman has put his views on the record, and I am sure he will continue to correspond with the Department on the matter.
Nick Fletcher (Don Valley) (Con)
This time next week, Doncaster may or may not have an airport. Peel, which owns Doncaster Sheffield airport, has had a second substantial offer laid in front of it that will secure the future of aviation in Doncaster and the many jobs directly and indirectly associated with this industry. I believe in capitalism and the good it can do, creating prosperity and jobs, but I do not believe that greed is good, and I do not want Doncaster Sheffield airport to become 800 acres of tumbleweed either. I understand that there have been 13 ministerial meetings regarding this issue, but will the Leader of the House ask the Secretary of State for Transport to speak with Peel directly and ask it to do the right thing: accept this offer and save our airport?
Penny Mordaunt
I thank my hon. Friend for raising yet again this very important issue. He is right that there have been 13 meetings since 21 July. The Government continue to support Peel Group to work with local leaders to find the solution that will benefit local people and, critically, the region’s economy. This is incredibly important. That is why we have the regional airport and ground operations support scheme—we are investing £161 million in these facilities because they are vital to the local economy. My hon. Friend has done everything within his gift to get the right outcome, from securing Adjournment debates to tabling urgent questions, with a huge amount of correspondence and pressure on all parties, and I congratulate him on that. I understand how frustrating it is for him to watch a potential solution not being seized. I urge him to continue in his efforts, and he has the full support of the Government in doing so.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
May I take the Leader of the House back to the answer she has given to a number of Members, including her hon. Friends the Members for North Devon (Selaine Saxby) and for East Worthing and Shoreham (Tim Loughton)? Since we heard the Home Secretary’s statement on Monday, we have seen reports of a bus full of asylum seekers being dumped at Victoria station. The Guardian today reports that there have been incidents of rape and sexual abuse of children in the asylum system. The Immigration Minister last night on television appeared to accept that Manston was not currently operating legally, in contradiction of what the Home Secretary told the House on Monday. Surely we need a debate on this in Government time. We know that the Government control the business of the House, but that is a privilege not to be abused, and when a Department is failing as badly as the Home Office is at the moment, it should be possible for the Government to make time for the House to examine what is happening.
Penny Mordaunt
I thank the right hon. Gentleman and other hon. Members for raising these issues. I know that people are concerned about a system under great pressure. They will want to ensure that refugees are being treated with dignity and that the provision that is needed for those people is in place. He will know that the system is under great pressure. He will also know that the Government and the people of this country are incredibly compassionate and have a fantastic track record of supporting refugees, as in the work we did together on extracting high-needs lone children from camps in Syria and elsewhere, and on the recent scheme for Ukrainian refugees, whom many hon. Members and their constituents are supporting in their homes. We know what good looks like. The situation is that the system is under immense pressure, and we have to find solutions. The Government will bring forward some solutions and I hope that all hon. Members will consider and support those motions.
Patricia Gibson (North Ayrshire and Arran) (SNP)
In a week when BP saw its quarterly profits rise to £7.1 billion, it is long past time to extend the windfall tax and reinstate the cap on bankers’ bonuses while we are at it. Meanwhile, households continue to struggle and pensioners genuinely fear freezing this winter—a fear that has been exacerbated by the fact that the triple lock commitment has been abandoned. Will the Leader of the House make a statement to set out her concerns about a UK that is increasingly unequal? It is already the most unequal state in Europe.
Penny Mordaunt
On the issues that the hon. Lady mentions, I ask her to wait until 17 November when the Chancellor will bring forward his statement. We want to ensure continued stability and make sure that we are balancing the books and protecting the people who need it through what will be a very difficult winter. The Chancellor will do all those things.
Jim Shannon (Strangford) (DUP)
Last month, Chanda Maharaj, a Hindu girl from Hyderabad in Pakistan was kidnapped and forcibly married to an older man. She is one of an estimated 1,000 under-age girls kidnapped from Christian and Hindu minorities in the last year in Pakistan. She was rescued from her abductor but is still in legal limbo. Will the Leader of the House join me in expressing concern for her and the many hundreds of girls in similar situations? Will His Majesty’s Government work with Pakistan to help to tackle that abusive issue?
Penny Mordaunt
I thank the hon. Gentleman for raising that appalling case. I understand that the initial trauma and tragedy of what Chanda Maharaj has been through will be exacerbated by the legal wranglings that he points to. In such cases, where hon. Members are unable to support their constituents, they should raise them with the FCDO, which will clearly be speaking to the high commission. We must do everything we can to ensure that people can start to rebuild their lives and to reduce the number of times that such appalling things happen to young women and girls.
Margaret Ferrier (Rutherglen and Hamilton West) (Ind)
My local authority, South Lanarkshire Council, has submitted a bid to the levelling-up fund. It is an excellent proposal to remediate the hexavalent chromium issues at the brownfield site at Shawfield. As part of Clyde Gateway’s continued redevelopment, it would see untold economic and environmental benefits for my constituents, and it has my full support. Will the Leader of the House ask the Secretary of State for Levelling Up, Housing and Communities to provide an update to the House on the fund’s progress?
Penny Mordaunt
I thank the hon. Lady and wish her well in that bid. Clearly, decontaminating land is key to unlocking its use and her community will be keen to see that happen. Round one delivered more than £170 million for eight projects and I am sure that further funding will be brought forward. I thank her for championing her project today.
Mr Deputy Speaker (Mr Nigel Evans)
I thank the Leader of the House for responding to questions for an hour and 12 minutes.
Points of Order
(2 years, 1 month ago)
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Jeremy Corbyn (Islington North) (Ind)
On a point of order, Mr Deputy Speaker. I rise to make a point of order concerning Prime Minister’s Question Time yesterday. I informed the Prime Minister that I would be raising this point of order this morning. Yesterday, in answer to the Leader of the Opposition, he made reference to me. He gave me no advance notice that he was going to make such a reference, which is surely the convention for all Members of the House, including the Prime Minister. He also gave a wholly inaccurate representation of the 2019 election manifesto, of which he must have been fully aware, because he took part in many debates concerning its contents during the election campaign. Could you guide me, Mr Deputy Speaker, on how the Prime Minister could correct the record? If I am going to live rent free in his head, he could at least accurately reflect what I think and say, rather than inventions made up by him or his office.
Mr Deputy Speaker (Mr Nigel Evans)
I thank the right hon. Gentleman for his point of order and for giving forward notice of it. Members are, of course, responsible for the content of their own remarks in the Chamber. In respect of what is said in the House, parliamentary privilege allows all Members the right of free speech to ensure that we can represent our constituents and express our views without fear or favour, but that is a right that we must exercise with great responsibility. The Treasury Bench will have heard that point of order and I am sure it will be passed on to the Prime Minister.
The Leader of the House of Commons (Penny Mordaunt)
Further to that point of order, Mr Deputy Speaker. In all seriousness, as you know, I take the rules on giving Members notice very seriously, whether that is about visits to constituencies or mentions in the House, so I will certainly follow that up. I suspect, however, that the right hon. Member for Islington North (Jeremy Corbyn) should be prepared for him, and particularly the Leader of the Opposition’s support for him and the manifesto that he stood on, to be mentioned on at least a weekly basis. If he would like to help to correct the record, he could publish the manifesto that he stood on, which would have weakened this country and dismantled NATO.
Mr Deputy Speaker
I will take a further point of order on that, then that will be it.
Jeremy Corbyn
Further to that point of order, Mr Deputy Speaker. I am grateful to the Leader of the House for what she has just said. The manifesto is freely available. Had it resulted in a Labour Government, we would not have such poverty, such food banks and such misery in this country today.
Mr Deputy Speaker (Mr Nigel Evans)
It would appear that it is not only the Prime Minister who lives rent free in your head, Mr Corbyn. I call Mr Wiggin on a separate point of order.
Sir Bill Wiggin (North Herefordshire) (Con)
On a point of order, Mr Deputy Speaker. The House will no doubt be aware and be as sad as I am about the death of Ronnie Radford yesterday. On 5 February 1972, he scored the goal that became the goal of the year when Hereford United beat Newcastle United in the FA cup third round.
Sir Bill Wiggin
Don’t boo! This is serious. Ronnie Radford was a truly wonderful man who set a tremendous example in his modesty and humbleness. I ask the House to read Brian Viner’s article, which pays proper tribute to this footballing icon. With 19 days to go before the World cup, I congratulate Birmingham on putting up a big screen so that people can enjoy football. I hope that that will happen in London, because it would be a shame if Londoners did not get the opportunity to see such a wonderful example of everything that is good about football.
Mr Deputy Speaker
I am grateful to Sir Bill Wiggin—I forgot to give you due deference there, Sir Bill. There were a lot of nods from Front Benchers and hon. Members on both sides of the Chamber when you mentioned Ronnie Radford.
Ian Mearns
Further to that point of order, Mr Deputy Speaker. I point out that I was not booing the late Ronnie Radford, for whom I have a high regard as a non-league player at the time when Hereford defeated Newcastle all those years ago. I was booing that fact that in the next week or so, we will probably see that goal on many occasions, which I think I have seen on only 4,953 previous occasions—every time the FA cup third round comes on each year. I have great respect and fondness for the late Ronnie Radford, but I hate being reminded about that goal.
Mr Deputy Speaker
What can I say other than to ask that our deepest condolences be passed on to Ronnie’s family? He was remembered in the House today.
Patrick Grady (Glasgow North) (Ind)
On a point of order, Mr Deputy Speaker. Lest I be accused of misleading the House—and given that I am serving on the Procedure Committee, which is currently conducting an inquiry into correcting the record—may I clarify what I said to the Leader of the House? Aberdeen is in fact 150 miles away from Glasgow, not 300 miles, even if it might seem like 300 miles for my staff, should they have to travel all the way there. It would be a 300-mile round trip—[Interruption] —and it is not 500 miles or 500 miles more either. I say that just for the accuracy of the record, lest there be any confusion or misunderstanding.
Mr Deputy Speaker
I thank the hon. Member for correcting that as quickly as he has.
Free Trade Agreements: Parliamentary Scrutiny
(2 years, 1 month ago)
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Mr Deputy Speaker (Mr Nigel Evans)
We now come to the Select Committee statement. Angus Brendan MacNeil, representing the International Trade Committee, will speak for up to 10 minutes, during which no interventions can be taken. At the conclusion of his statement, I will call Members to put questions on the subject of the statement, and call him to respond to these in turn. Can I emphasise that questions should be directed to Mr MacNeil, not the relevant Government Minister? Contributions should be questions and should be brief, and those on the Front Benches may take part in the questioning. I call Angus Brendan MacNeil.
Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)
Tapadh leibh, Mr Deputy Speaker, and it is a great privilege to be called. Before I get going, I want to flag up a letter that has been written to party Whips from influential women in the trade space calling for more women to be on the International Trade Committee. While this is not a matter for me as Chair or for the staff of the Committee, we do think it is worth flagging up that this call has been made. This letter has been written to party Whips by Sally Jones, Catherine McGuinness, Nicola Watkinson, Sabina Ciofu and Noreen Burroughes Cesareo. I think it is worth putting on the record that that has happened.
I am grateful to the Backbench Business Committee for the opportunity to make a statement to the House on the 4th report of the International Trade Committee on parliamentary scrutiny of free trade agreements. I would also like to take the opportunity to acknowledge the hard work of hon. Members on the Committee from all parts of the political spectrum, the Committee staff, who work tirelessly, and those who have provided written and oral evidence to us in our FTA inquiries.
This year, we have completed scrutiny on new FTAs with Australia and New Zealand, and we have commented on the specific content in a report on them. However, as we went through those FTAs, there were themes that kept emerging, as they did from other inquiries. In our role as a critical friend of the Secretary of State for International Trade and the Department for International Trade, we have included these in the report to start a constructive conversation about future parliamentary scrutiny. At this stage, I would put in a disquieting or discordant note by saying that a general debate a week on Monday lumping both together does not really cut it at all.
From the evidence we have received and seen ourselves, as well as the international comparisons we have undertaken, it is clear that the way in which the Government engage with others, including Parliament, through planning, negotiating and delivering FTAs is not all it could or should be. It was particularly galling this morning to see the Secretary of State actually blame Parliament for the now Prime Minister calling the Australia deal “one-sided” at one stage during the Conservative leadership hustings.
We are calling on the Government to undertake longer-term consultative reviews on how they approach this and to report back within this Session of Parliament. Our experience of scrutinising the FTAs, and the Australia deal in particular, was far from what we had expected, so we specifically ask the Government to look at how they work with Parliament and its Committees, and to consider how they can bring us in more closely throughout the process. However, we know that doing this well will not be a quick process, so we call on the Government to make changes in the interim to ensure that the scrutiny arrangements are stronger for all future FTAs, not just those following the review.
The Secretary of State has said she will provide indicative timelines for the new FTAs. She has co-ordinated the formal scrutiny period for the New Zealand FTA with the publication of our report, and we are grateful for that. Our report asks for specific further commitments on the time between key stages in that timeline to ensure that we are able to undertake robust scrutiny in the necessary time, and with increased certainty, in advance of the FTAs being signed.
We are also consider that the provisions for parliamentary scrutiny under the Constitutional Reform and Governance Act 2010—CRaG, as it is known—are out of date and should be included in the Government’s review of scrutiny arrangements. As our report notes, when CRaG was being taken through Parliament it was
“in a significantly different context to that of today.”
The fact that it was considered before the vote to leave the EU means that Parliament did not consider CRaG’s suitability for scrutinising a raft of new free trade agreements negotiated solely by the United Kingdom.
The fact that the Government have made additional commitments—they are welcome, although they have not always been met in the spirit, only in the letter—underlines how the CRaG provisions do not go far enough to meet the needs of the new context and to allow strong parliamentary scrutiny. The Government have said they believe that
“CRaG continues to provide a robust framework”.—[Official Report, 12 October 2022; Vol. 720, c. 162WH.]
We respectfully disagree and urge them to reconsider.
Further, CRaG and the additional commitments previously made by the Government, as set out in an exchange of letters between the then Minister Lord Grimstone and the Chair of the International Agreements Committee, Baroness Hayter, have been shown to have insufficient strength. Parliament cannot reject an FTA, but CRaG gives this House, and only this House, the power to delay ratification indefinitely if it so chooses. However, with the Australia FTA we saw that the Government can prevent us from being able to use this power by refusing to grant a debate and a vote within the CRaG period.
The Committee is clear that the Government must commit to any future FTAs being subject to a debate and a vote on a substantive motion within the CRaG period, giving this House the time to discuss the contents of the deal and to show whether it supports ratification. It is not enough for the Government to say they will do this subject to parliamentary time; they must make time, and they must not tie the House’s hands. This must start with the New Zealand FTA, which will be published on Monday. Particularly given that the Prime Minister, who at the time of his resignation as Chancellor pointed out that he felt a deal was “one-sided”, is now Prime Minister and is back to head-in-the-sand business as usual, this really is selling people short. If someone has such a private view, they can have such a public view on FTAs.
Another key theme common to both FTA inquiries and on which we have also received evidence in other inquiries is the need for a single document that clearly sets out the Government’s trade strategy and the role of FTAs within it. The Government have previously rejected calls for this, pointing to various documents as collectively explaining the strategy, but we have seen and heard that this is not sufficient for businesses and other stakeholders. It is also not enough for us, meaning that we lack a single point of reference against which to scrutinise how successfully and coherently the Government are delivering on their trade agenda around a central strategy.
There also remain questions about other important aspects. Sometimes, trade deals are not solely trade-focused; they have aspects that are not trade-focused, for example in relation to human rights and the environment. There have been mixed messages about whether these should be included in FTAs or addressed via other means, or a combination of the two. Some of these aspects may not have been an issue for FTAs already negotiated, but omitting them from future FTAs could be a significant missed opportunity. We are therefore asking the Government to clarify their position on how and where such issues must and should be addressed.
I am not confident, due to a lack of scrutiny, about whether Members fully understand enough about these trade deals. The New Zealand trade deal is worth about one 250th of the damage Brexit is doing to the economy, jobs and living standards. All the trade deals on the horizon will not make up one 20th of that damage. Do Members understand—I am not confident we all do collectively in the House of Commons—that trade deals merely replace tariffs? The paper-free and bureaucracy-free trading that the UK enjoyed in the single market of the European Union is not being replaced, and nothing can be exported from the UK now without paperwork.
In conclusion, I want to welcome again the recent positive movement by the Secretary of State and her predecessor in seeking to rebuild relationships that had deteriorated significantly. These are steps in the right direction, but as our fourth report shows, there is still a lot further to go before Parliament and the public can be assured that new trade deals are being as rigorously scrutinised as they should be. We hope that the Government will consider and rapidly accept our recommendations, which are cross-party, and help us all to achieve this goal for the good of scrutiny in the House and for the good of all Members’ understanding.
The Minister of State, Department for International Trade (Greg Hands)
I congratulate the Committee Chair on his report, which we will obviously respond to in due course, and I thank him for his warm words about the commitment by our new Secretary of State to engage with his Committee.
The Committee has been consistent under the hon. Gentleman’s chairmanship in calling for more scrutiny. This is not the proper place for me to enter a full defence of CRaG, but I have a question for the hon. Gentleman. CRaG is not the whole extent of the scrutiny, and he did not mention that any changes a trade deal would cause to the UK system would need legislative change. For example, the Trade (Australia and New Zealand) Bill is going through the House at the moment, and it is giving ample time for scrutiny to all Members of the House. Will he say a little about some of the other scrutiny opportunities available?
Angus Brendan MacNeil
I thank the Minister for his congratulations and his kind remarks about consistency. What we find is that by that period it is too late. Things are very one-sided and the Whips are pushing things through. If we are to have a place for consideration we have to take the issue away from the partisanship that we have at that stage in the House. I think the Minister knows it could be done better. When the Prime Minister has said, in one frequency, that a deal is “one-sided”, surely that is a message that things could, and should, have been done better.
Ruth Cadbury (Brentford and Isleworth) (Lab)
I add our thanks to the Chair and his Committee for this important and timely report. One thing it rightly focuses on is the lack of a coherent trade strategy. The Committee has previously said that the approach of the Department for International Trade was “flat-footed”. Does the hon. Gentleman agree that we have not been helped by the fact that over the past three years we have seen Trade Ministers arguing with each other during ministerial questions, and one former Secretary of State spending most of her tenure obsessed with her Instagram posts and coffee orders?
Angus Brendan MacNeil
The hon. Lady tempts me down some interesting rabbit holes. I will not argue with any of the points she raises, and I agree with her on one specific point, which is that the call for a trade strategy from the Government is universal. It comes from all sides of the political spectrum and from everybody who comes in front of the Committee. They do not know what the UK Government are trying to achieve. It looks piecemeal and as if they want to come back waving bits of paper saying “trade deals in our time”, just for the sake of that piece of paper. The problem with that approach is that down the line in years to come, areas that have not been defended properly will see economic damage.
What will the Government do about that economic damage when it comes? For instance, farming, fisheries and forestry will see damage from the New Zealand or Australia trade deals, but that is not being dealt with. That sausage factory approach is not good enough. In the end, people who have been damaged and suffered that loss will come complaining to their Members of Parliament—quite rightly. The Government do not realise this is coming down the line, but when it comes it is going to be sore.
Martin Vickers (Cleethorpes) (Con)
As a member of the International Trade Committee I endorse much of what the Chair has said, although he never loses an opportunity to attack Brexit, so we cannot entirely agree on everything.
Does he acknowledge that there is a cross-party majority on the Committee who acknowledge that the relationship between the Committee and the previous Secretary of State caused problems? There is now an opportunity to reset that. Does he agree that a majority on the Committee want more free trade deals, and we want to do all we can to facilitate that while being a critical friend?
Mr Deputy Speaker (Mr Nigel Evans)
I used to be Angus’s vice-chair, and it is good to hear that nothing has changed as far as his views.
Angus Brendan MacNeil
Thank you, Mr Deputy Speaker—I remember many a ding-dong that we had on Brexit, as you may recall. I thank the hon. Member for Cleethorpes (Martin Vickers) for what he said. He is right—I point out the facts and numbers around Brexit, and they are not good. I compare Brexit to going to the horse-racing with £500 and coming back with trade deals worth £2 or £8 or whatever—we are still £490-odd down, but I will leave that there in deference to the hon. Gentleman.
The hon. Gentleman is right that a majority of the Committee want to reset that, and under the circumstances in which we find ourselves, we want to see trade deals. The question is about the terms of those trade deals, and that is where the House should be involved. That is why we look at trade deals that the European Union might achieve with New Zealand or Australia, versus what we have achieved, and we must also remember the words of the Prime Minister, who said that those deals are “one-sided”.
I was speaking to a member of the Trade and Agriculture Commission who said that—I had better phrase it this way—the Australia trade deal was the biggest giveaway of agricultural liberalisation that has been seen in any trade agreement. We should remember that free trade agreements are not about free trade; they are about bureaucratic trade, and they usually replace tariffs with bits of paper. There is nowhere where trade occurs as freely—to return to that word—as it did with the European Union before Brexit.
John Spellar (Warley) (Lab)
Members on both side of the House share some concerns about the performance of previous Trade Ministers—not only their attitudes to the way deals were conducted, but their relations with this House. May I also express disappointment with the position of the Committee, and perhaps strike a note that dissents from the general congratulatory tone? The Chair rightly identified the issue of questioning Government strategy, but I am not clear what the strategy and trade policy of the International Trade Committee is. I heard nothing in the contribution to outline a recognition that trade has been of enormous benefit to humankind over centuries, and particularly since the second world war, in bringing hundreds of millions, if not billions of people across the planet out of poverty, and nothing about the opportunities for trade. Those who argued for us staying in the EU were surely arguing about the benefits of trade.
I also do not see any indication of the countries with which we ought to be doing trade deals, and I would like a response on that. If we are not able to do trade deals with countries such as Australia and New Zealand with which we share history, family, strategic, security and defence relations, who can we make agreements with? Please do not just tell me it is the EU. We need to look in government but also, I would argue, in the Committee, at having a consistent trade policy, and I look forward to that in future debates.
Angus Brendan MacNeil
I am grateful to the right hon. Gentleman —it is good to be criticised, because that forces people to look inwards and see exactly what is happening and what needs to be done. The role of the Committee is first to scrutinise and sometimes to help the Government, and indeed, as the Minister will know, perhaps to chide them. It is also to set the agenda at times—that alludes to other countries, as the right hon. Gentleman says. We can trade with countries without trade deals, but the terms of trade vary. We pay tariffs, and usually when we get rid of those in a trade agreement we have bureaucracy instead.
The right hon. Gentleman gives me the opportunity to raise an important point on the Floor of the House, which is about resources. He is asking the Committee to do more. Yes, the Committee can do more. We are aware we can do more, but we are very aware that our workload leaves a heavy burden on Committee staff. If he can add his voice to other voices to ensure that the Committee is well resourced, we will be eternally grateful to our critical friend on the Labour Back Benches.
Patrick Grady (Glasgow North) (Ind)
I regularly hear from constituents in Glasgow North who are concerned about the inability of many of us to effectively scrutinise trade deals. We are lucky if we get even a straight up or down vote on the whole proposition, rather than having any influence over the detail of those deals. Does the hon. Gentleman share my concern that this is another aspect of Brexit? We were told that Brexit was about taking back control for this House, and the restoration of parliamentary sovereignty, but what he describes in his report sounds an awful lot like an Executive power grab, where instead of Brussels bureaucrats it is Whitehall mandarins and unaccountable Tory Ministers deciding policy. Surely if the Government really believe in parliamentary sovereignty and the sovereignty of this House, they should adopt the recommendations in the Committee’s report in full.
Angus Brendan MacNeil
I thank the hon. Gentleman for his fair comments about empowering the House on trade deals. That should be welcomed, particularly by Government Members given that they are in the majority. It might also help better trade deals come into existence and be signed—trade deals that people can unite behind, rather than giveaway trade deals or, in the words of the Prime Minister, “one-sided” trade deals. I am not sure whether having revolving doors, with Secretaries of State or other Ministers going from position to position, really helps. It is good to see a retread, if I may be so gentle, because I think this is the Minister’s second or third time back—[Interruption.] The third time, with, I trust, a body of institutional knowledge coming back to the Department. There is a concern, however, that these things gain a momentum of their own. A previous Prime Minister—but which one? The one from Uxbridge—was desperate to see bits of paper being signed. There was that going on.
I understand why the hon. Member’s constituents are frustrated. The House should have a say and have input. There are people out there who will be affected by trade deals, and they should have those concerns reflected in the House of Commons so that the negotiators can know, before they start to negotiate, what the difficulties are for certain parts of the UK and, when trade-offs are made, if the damage is to Welsh hill farmers for the benefit of City types in London, that is recognised in future fiscal transfers.
Backbench Business
(2 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text
Smokefree 2030
(2 years, 1 month ago)
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Bob Blackman (Harrow East) (Con)
[R]: I beg to move,
That this House has considered the recommendations of the Khan review: Making smoking obsolete, the independent review into smokefree 2030 policies, by Dr Javed Khan, published on 9 June 2022; and calls upon His Majesty’s Government to publish a new Tobacco Control Plan by the end of 2022, in order to deliver the smokefree 2030 ambition.
I thank the Backbench Business Committee, on which I have the honour to serve, for enabling us to have the debate this afternoon. On behalf of the all-party parliamentary group on smoking and health, which I chair, I welcome the Under-Secretary of State for Health and Social Care, my hon. Friend the Member for Harborough (Neil O'Brien), to his new role as public health and primary care Minister. The all-party group has a long track record of acting as a critical friend to the Government on this agenda and I am confident that that collaborative and constructive approach will continue.
May I take the opportunity to commend the hon. Member for City of Durham (Mary Kelly Foy), who co-sponsored the debate application with me but is not able to be here today? She is currently recuperating from a stay in hospital. I am sure that the whole House wishes her a speedy recovery.
The all-party group originally proposed the debate before the summer recess to ensure that Parliament had the opportunity to scrutinise the independent review by Javed Khan OBE, “Making smoking obsolete”. When the Secretary of State—well, the then Secretary of State, my right hon. Friend the Member for Bromsgrove (Sajid Javid)—announced the Khan review in February, he said that it would
“assess the options to be taken forward in the new Tobacco Control Plan, which will be published later this year.”
We have since had several changes of Health Ministers and Secretaries of State, but it should not be forgotten that a new tobacco control plan was first promised in 2021.
Achieving the Government’s smokefree 2030 ambition and making smoking obsolete is vital to the health and wellbeing of our entire population. It will also help to deliver economic growth, because smoking increases sickness, absenteeism and disability. The total public finance cost of smoking is twice that of the excise taxes that tobacco brings into the Exchequer. Each year, many tens of thousands of people die prematurely from smoking, and 30 times as many as those who die are suffering from serious illnesses caused by smoking, which cost the NHS and our social care system billions of pounds every single year.
Javed Khan’s review, which was published in June, concluded that, to achieve the smokefree 2030 ambition, the Government would need to go further and faster. He made four recommendations that he said were critical must-dos for the Government, underpinned by a number of more detailed interventions. I will concentrate on the four main recommendations, given time.
The four must-dos were: increasing investment by £125 million a year to fund the measures needed to deliver smokefree 2030; raising the age of sale to stop young people from starting to smoke; promoting vaping as an effective tool to help people to quit smoking tobacco, while strengthening regulation to prevent children and young people from taking up vaping; and prevention to become part of the NHS’s DNA and the NHS committing to invest to save. Since then, we have had conflicting reports about whether the Government intend to publish a new plan at all. That has been deeply concerning to me and others who support the ambition and want to see it realised. To abandon, delay or water down our tobacco strategy would be hugely counterproductive when the Government are trying to reduce NHS waiting lists, grow the economy and level up society.
As well as increasing funding, Khan recommended enhanced regulation. Both of those are supported by the majority of voters for all political parties, and the results of a survey published just this week show that tobacco retailers share that view as well. I therefore commend the “Regulation is not a dirty word” report by ASH—Action on Smoking and Health—to the Minister. It shows that most shopkeepers support existing tobacco laws and want the Government to go further in protecting people’s health. Retailers want tougher regulations—that is what they think will be good for business—and not deregulation.
There is no time to be lost. When the ambition was announced, we had 11 years to deliver it. Now, we have less than eight years, and we are nowhere near achieving our ambition, particularly for our more disadvantaged communities with the highest rates of smoking. Research cited in the Khan review estimates that it will take until 2047 for the smoking rates in disadvantaged communities to reach the smokefree ambition of 5% or less. Will the Minister put on record his commitment that the Government, having considered the Khan review recommendations, will publish a new tobacco control plan by the end of 2022 to deliver the smokefree 2030 ambition?
As Javed Khan made clear with his leading recommendation, smokefree 2030 cannot be delivered on the cheap. However, public health interventions such as smoking cessation cost three to four times less than NHS treatment for each additional year of good health achieved in the population. Yet that is where the cuts have fallen to date. The public health grant fell by a quarter in real terms between 2015 and 2021, and funding for tobacco control fell by a third, while NHS spending continues to grow in real terms.
Last week, London launched its tobacco alliance with a vision to deliver the smokefree 2030 ambition across London. Cabinet members for health and wellbeing from across London are writing to the new Secretary of State to make clear their commitment to achieve the ambition and pleading for the funding they need to deliver it. Before I became the MP for Harrow East, I was a councillor in the London Borough of Brent for 24 years, so I am well aware of what local authorities want to do on tobacco, but they lack the resources they need so to do.
Javed Khan called on the Government to urgently invest an additional £125 million a year in a comprehensive programme, including funding for regional activity such as that proposed in the capital. His recommendation was that, if the Government could not find the funding from existing resources, they should look at alternatives such as a corporation tax surcharge—a windfall tax—and a “polluter pays” tax. Banks and energy companies have been made subject to windfall taxes, so why not the tobacco manufacturers, who make eye-wateringly high profits from products that kill many tens of thousands of people every year? Four manufacturers, who are collectively known as “big tobacco”—British American Tobacco, Imperial Brands, Japan Tobacco International and Philip Morris International—are responsible for 95% of UK tobacco sales and the same proportion of deaths. For every person their products kill, it is estimated that 30 times as many suffer from serious smoking-related diseases, cancers, and cardiovascular and lung diseases caused directly by smoking.
A windfall tax could be implemented immediately through the Finance Bill. Experts on tobacco industry finances from the University of Bath have estimated that that could raise about £74 million annually from big tobacco. However, that is much less than the hundreds of millions in profits that big tobacco makes annually, because it would be a surcharge on corporation tax paid in the UK and tobacco manufacturers, just like the oil companies, are very good at minimising corporation taxes paid in the UK. For example, Imperial Tobacco, which is responsible for a third of the UK tobacco market, received £35 million more in corporation tax refunds than it actually paid in tax between 2009 and 2016. In contrast, a polluter pays levy would take a bit longer to implement, but it could be designed to prevent big tobacco from gaming the system as it currently does with corporation tax.
The polluter pays model we propose enables the Government to limit the ability of manufacturers to profit from smokers while protecting Government excise tax revenues, so it is a win-win for the Government and for smokers. Unlike corporation taxes, which are based on reported profits and can be—and indeed are—evaded, the levy would be based on sales volumes, as is the case in America, where a similar scheme already operates. Sales volumes are much easier for the Government to monitor and much harder for companies to misrepresent.
The scheme is modelled on the pharmaceutical price regulation scheme—the PPRS—which has been in operation for over 40 years and is overseen by the Department of Health and Social Care. The Department already has teams of analysts with the skills to administer a scheme for cigarettes, which would be a much simpler product to administer than pharmaceutical medicines. Implementing a levy would not require a new quango to be set up, as the Department has all the expertise needed to both supervise the scheme and allocate the funds.
Despite paying little corporation tax, the big four tobacco companies make around 50% operating profit margins in the UK, far more than any other consumer industry. Imperial Tobacco is the most profitable, with around a 40% market share in the UK. It made an operating profit margin of over 70% in 2021. Why should an industry, whose products kill when used as intended, be allowed to make such excessive profits, when 10% is the average return for business? The polluter pays model caps manufacturers’ profits on sales and could raise £700 million per year, which is nearly 10 times as much as a windfall tax.
Amendments to the Health and Social Care Bill calling for a consultation on such a levy were passed in the other place. Health Ministers were sympathetic, but the Treasury was opposed so they were reversed when the Bill came back to this place to be considered. However, that was before the Government knew they had a fiscal hole of around £40 billion that had to be filled. The £700 million from tobacco manufacturers would more than provide the £125 million additional funding that Khan estimated was needed for tobacco control. That would leave £575 million a year that could be used for other purposes, perhaps even for other prevention and public health measures which otherwise in the present economic climate are unlikely to secure funding.
The polluter pays principle has been accepted by Conservative Governments in areas such as the landfill levy, the tax on sugar in soft drinks and requiring developers to pay for the costs of remediating building safety defects. The Government promised to consider a polluter pays approach to funding tobacco control in the prevention Green Paper in 2019. Surely, we can now put it into practice.
Liz Twist (Blaydon) (Lab)
The hon. Gentleman will know that in the north-east smoking remains the leading cause of death, as well as of inequalities in healthy life expectancy. The all-party group has come forward with the polluter pays model, which is really important, and I ask the Government to consider it again as a means of funding the essential work on stopping smoking.
Bob Blackman
I thank the hon. Lady for her intervention. Clearly, there is a difference in smoking rates across the country, and we need to ensure that that is addressed. I will come on to that in my speech in a few moments.
We need the levy to be introduced, so will the Minister commit to investigating the feasibility of a windfall tax, backed up by a polluter pays levy, to provide the funding needed to deliver smokefree 2030?
I want to talk about the need to protect generations to come. The Government are set to miss the ambition, set in the 2017 tobacco control plan, to reduce SATOD— smoking status at time of delivery—rates to 6% by 2022. Currently, 9.1% of women, or about 50,000 women a year, smoke during pregnancy. Smoking during pregnancy is the leading modifiable risk factor for poor birth outcomes, including stillbirth, miscarriage and pre-term birth. Children born to parents who smoke are more likely to develop health problems, including respiratory conditions, learning difficulties and diabetes, and they are more likely to grow up to be smokers. Reducing rates of maternal smoking would contribute directly to the national ambition to halve stillbirth and neonatal mortality by 2025.
Younger women from the most deprived backgrounds are the most likely to smoke and be exposed to second-hand smoke during pregnancy. Rates of smoking in early pregnancy are five times higher among the most deprived areas than the least deprived. That contributes to this group having very significantly higher rates of infant mortality than the general population. As such, if we can drive down rates of smoking in younger, more deprived groups we will then have a rapid impact on rates of smoking in pregnancy. Two thirds of those who try smoking go on to become regular smokers, only a third of whom succeed in quitting during their lifetime. Experimentation is very rare after the age of 21, so the more we can do to prevent exposure and access to tobacco before this age, the more young people we can stop from being locked into a deadly addiction.
If England is to be smoke free by 2030 we need to stop people from starting smoking at the most susceptible ages, when they are adolescents and young adults, and not just help them quit once they are addicted. The all-party group, which I chair, has called on the Government to consult on raising the age of sale for tobacco to 21, which, when implemented in the US, reduced smoking in young adults by 30%. This is a radical measure, but one that is supported by the evidence and by the majority of voters for all political parties, retailers and young people themselves. It would have a huge impact on reducing smoking rates among young mothers, who are more likely than older women to smoke. It would also reduce rates among young men, so reducing the exposure of young pregnant women to second-hand smoke throughout their pregnancy. If men smoke it makes it harder for pregnant women and new mums to quit smoking, and makes it more likely that mother and baby will be exposed to harmful second-hand smoke. Will the Minister consider committing to a consultation on raising the age of sale for tobacco, as supported by both the public and tobacco retailers?
Finally, I want to warn the Minister about the Institute of Economic Affairs’ alternative smokefree 2030 plan, which popped into my inbox yesterday. The IEA’s plan is an alternative that is entirely in the interests of the industry, which is hardly surprising given the funding the IEA has received from big tobacco. The IEA itself refuses to be transparent about its funding, but through leaked documents it has been exposed as being funded by the tobacco industry for many years. I am sure the Minister is aware that the UK Government are required, under article 5.3 of the international tobacco treaty, the World Health Organisation framework convention on tobacco control, to protect public health from the
“commercial and other vested interests of the tobacco industry”.
The guidelines to article 5.3, which the UK has adopted, spell out that that includes organisations and individuals that work to further the interests of the tobacco industry, which includes industry funded organisations such as the IEA and the UK Vaping Industry Association.
I look forward to hearing contributions from across the House. I hope my hon. Friend the Minister will echo the words of his predecessors in his new role and restate for the record on the Floor of the House the Government’s commitment to complying with article 5.3. I hope he will state that on his watch the Government will continue to prevent the tobacco industry-funded organisations from influencing tobacco control policy.
Alex Cunningham (Stockton North) (Lab)
I draw the attention of the House to my interests as a vice-chair of the all-party parliamentary group on smoking and health. I, too, welcome the Minister to his place and wish him well. I look forward to working with him. I congratulate the hon. Member for Harrow East (Bob Blackman) on an excellent and measured speech. I could make my shortest speech ever by simply saying, “I agree with Bob.” I won’t. [Laughter.] I will reiterate some of the points he made.
When I wander through parts of my constituency, particularly the areas of greater deprivation, I am struck by the number of people who still smoke, including children on their way home from school in school uniform. I know that in recent times rates of smoking have come down across the borough of Stockton-on-Tees, thanks to initiatives by the council, health staff and Fresh, the north-east charity that helped drive a reduction. Although the incidence of smoking has come down overall, it is still a major issue in areas such as the town centre ward, where it remains high, as does the number of young women smoking in pregnancy.
Sadly, public health is in a dire state after 12 years of Conservative rule and, in recent times, the promise to act on smoking does not align with what is being delivered. Time and again, Members from across the House have asked for the long-overdue tobacco control plan, but despite making commitments to introduce the necessary measures to further reduce tobacco harm in this country, the Government have not done so. We will never meet the Government’s targets if we do not have a plan, so I hope that the Minister will today give us a date for the plan and promise to make available the resources to make it work.
I want to be a little parochial and make it clear again why I have always focused on this health issue, in particular, during my 12 years in Parliament. In my patch of Stockton, 13.2% of adults smoked in 2019 compared with 13.9% in England. That rises to 19.1% among those in routine and manual occupations. When we look at the proportion of women who smoked during pregnancy in 2021, it is worrying that the figure for Stockton was 14.1% compared with 9.6% nationally. The fact that one in 10 expectant mothers smoke across the country is bad enough, but the proportion is 50% higher in my patch and much higher, again, in deprived communities. Smoking can be a family issue. Any expectant mother committed to quitting will struggle if their partner or others in their household smoke. We need a plan to work with whole families to discourage smoking and end the dangers to the unborn child.
There is, of course, an economic argument to invest in smoking cessation. At the local level, smoking costs £62.3 million every year. That includes £47.2 million in lost productivity and costs of £9.2 million to the NHS and £5 million to social care. It is particularly distressing that 7.4% of our Stockton North population suffer from asthma—higher than the 6.5% across England. Furthermore, the level of COPD—chronic obstructive pulmonary disease—in my constituency is 3.1%, which again, is 50% higher than the rate of 1.9% across England. In England, 14.1% of people have high blood pressure, but the proportion is 16.2% in my constituency. It is therefore no surprise that 75% of adults in the north-east support the ambition to reduce smoking prevalence to less than 5%—fewer than one in 20 people—by 2030, with just 9% opposed. Along those lines, 76% of adults in the north-east support activities to limit smoking or think that the Government should do more.
We can all celebrate the fact that, in the past five years, the fastest decline in smoking rates in England has been in the north-east, although that was from a very high starting point. That is due to highly effective regional collaboration between local authorities and the NHS, supported by Fresh, to which I referred earlier, but they cannot do that alone. Government action could have a fast impact if they were to bring in legislation introducing the further regulation of tobacco products, as the hon. Member for Harrow East mentioned.
Liz Twist
My hon. Friend is speaking powerfully about the experience in the north-east and nationally. He will be aware that, between 2007 and 2019, when the Government led the way in introducing tough new regulations, our smoking rates declined far faster than in the rest of Europe and most of the world, but that has dropped off, so we need to take further action. Is he aware of this recent research into smoking habits? University College London’s smoking toolkit study has surveyed smokers’ behaviour monthly since 2006. After years of steady decline in adult smoking—the proportion went from 24.1% in 2006, as he said, to 14.8% in 2020—smoking rates have stagnated, standing at 14.9% as we reach the end of 2022. Worse still, although the uptake of smoking among young adults declined year on year from 2007, that started rising again after 2019.
Alex Cunningham
I am grateful to my hon. Friend; I was not aware of some of the research to which she referred. However, the reduction in smoking has plateaued in recent times, and that is lamentable. I have a big enough heart to say that the Conservative Government have done much over the years to reduce smoking, building on much of what the Labour Government did between 1997 and 2010, but we cannot allow ourselves to stop there. We need to do so much more.
There are often arguments—many of which are put forward by front organisations funded by the tobacco industry—that further smoking regulation would be the “nail in the coffin” for small businesses, but that is not so. As the hon. Member for Harrow East mentioned, a recent survey commissioned by Action on Smoking and Health found that small tobacco retailers in the UK support further measures to reduce the harm of tobacco, including increasing the age of sale from 18 to 21, mandating a licence to sell tobacco and requiring tobacco companies to pay for services to help smokers to quit. John McClurey, a retired local retailer from Newcastle said, “Tobacco is a burden” to small businesses. The Government could help to lift that burden and charge the tobacco companies to do so.
In my last speech on smoking in Westminster Hall, I again stressed the need for a levy on the tobacco companies, but Ministers were reluctant. The new Minister will want to take action in this space. As we all know, cash will be tight and the Budget in two weeks’ time will be difficult, so he can earn himself brownie points by requiring the industry that makes billions in profits while killing our people to pay up instead. It needs to pay, because more than 4,000 people died prematurely from smoking in the north-east alone last year, with 30 times as many suffering disease and disability caused by smoking.
Going hand in hand with the personal suffering caused by smoking is the economic cost to our already disadvantaged communities. In their election manifesto, the Government claimed:
“We are committed to reducing health inequality.”
Why, then, are there such pronounced inequalities? In the north-east, 42% of smoking households are in poverty and tobacco spending accounts for a higher share of gross disposable household income per head than in any other UK region or nation. Please do not give me the argument that if people are poor, they should give up their fags. Smoking is an addiction and they need help to quit. Ending smoking in such communities would not just benefit the health and wellbeing of individuals but inject money into local economies that was previously going up in smoke.
The Minister will know that, at the current rate of decline, poorer communities risk being left behind as we move towards the hoped-for smokefree 2030. It will not happen in the communities to which I have referred without robust action. Most of the quitting has been done by people from better-off communities, and the benefits have largely accrued to those communities. In 2019, fewer than one in 10 professional and managerial workers smoked—well on the way to the smoke-free target of less than 5%—compared with nearly one in four workers in routine and manual occupations.
Half the difference in life expectancy between rich and poor is due to smoking, which means that the scope for reducing health inequalities related to social position is limited, unless the many smokers in lower social positions can succeed in stopping smoking. Smoking is linked to almost every indicator of disadvantage. Those overlap different communities, so smokers in routine and manual occupations, or who are unemployed, are also more likely to be living in social housing and to be diagnosed with mental health conditions.
There is a clear need for a new tobacco control plan that targets investment and enhanced support at disadvantaged smokers, wherever they are. As long as smoking remains the norm in some communities, not only will it be harder for smokers to quit, but smoking will continue to be transmitted from one generation to the next. The evidence shows that most people who smoke started as children. Prevention is key, so what will the Government do to reduce the appeal of cigarettes?
Liz Twist
Does my hon. Friend agree that raising the age of sale, as the APPG proposes, would reduce youth uptake? According to the UCL modelling that I spoke about, it would reduce smoking among 18 to 20-year-olds by a third. It would narrow the inequalities in uptake: as my hon. Friend has powerfully explained, children from more disadvantaged backgrounds are more likely to take up smoking.
Alex Cunningham
I have no doubt that everything my hon. Friend says is totally on the money. We can take action, and it need not cost the Government a fortune either. My hon. Friend raises the issue of age. Some parts of the UK have a Check 25 policy—would it not be wonderful if we could introduce such a check on the sales of cigarettes? It might help to put an end to smoking among younger people.
High smoking rates among people with mental health conditions are a leading cause of premature death and disease. Smoking accounts for two thirds of the reduction in life expectancy for people with a serious mental illness. The smoking rate among people with serious mental illnesses is more than three times that of the general population. The rate among people with depression and anxiety is just under twice that of the general population, but they account for 1.6 million smokers. There is now good evidence that smoking exacerbates levels of poor mental health, whereas stopping smoking contributes to improvements in mental health. Tobacco remains the biggest cause of cancer and death in the UK, so Cancer Research would like to see the ambition to make England smoke free by 2030 implemented. I ask the Minister whether we can expect to see that ambition realised.
I would like to say a little about “The Alternative Smoke-Free 2030 Plan” published by the Institute of Economic Affairs, which the hon. Member for Harrow East has also received. After the disastrous free-market policies promoted by the IEA and adopted by the last Prime Minister and Chancellor, I find it hard to believe that any current Minister would give any credence to the IEA’s recommendations on anything. However, the hon. Member makes an important point: as a party to the World Health Organisation framework convention on tobacco control, the Government and all public authorities are required to protect
“their public health policies…from commercial and other vested interests of the tobacco industry”.
If the Minister is in any doubt about the role played by the IEA, he should take note of the leaked documents that show that during the passage of the tobacco products directive, Philip Morris International described the IEA as a “media messenger” on its behalf, able to assist in “policy outreach” to “pro-actively relay our positions”, while British American Tobacco described it as a “vehicle for delivery” of its UK reputation initiatives. I would like the Minister to restate for the record, on the Floor of the House, the Government’s commitment to complying with paragraph 3 of article 5 of the convention and to preventing tobacco industry-funded organisations from influencing tobacco control policy.
The arguments for bringing tobacco regulation forward are multifaceted and can no longer be ignored. As a member of the APPG, I look forward to working with a new Minister who can do the maths to realise the cash value of a tobacco control plan, especially if we make the polluters pay, and—better still—who can help us to ensure that we have healthier people in all our communities.
Maggie Throup (Erewash) (Con)
It is a pleasure to follow the hon. Member for Stockton North (Alex Cunningham). Like him, I could tear up my speech after listening to that of my hon. Friend the Member for Harrow East (Bob Blackman). I congratulate my hon. Friend and the hon. Member for City of Durham (Mary Kelly Foy) on securing this important debate, which I have been eagerly awaiting for some time. I wish the hon. Member for City of Durham a speedy recovery.
I thank the all-party parliamentary group on smoking and health, which is so excellently chaired by my hon. Friend the Member for Harrow East, for all its work on this important area. It has undoubtedly been instrumental in changing the Government’s policy on smoking and their perception of the issue. I am sure that its work has contributed to saving many lives. I thank my hon. Friend for his invitation to become a member of the APPG; I am delighted to accept.
The reasons why we need to tackle smoking and become smoke free by 2030 have been well rehearsed in previous debates in Westminster Hall and this Chamber and repeated today, but I make no apology for highlighting the key reasons again. Smoking remains the single biggest cause of preventable illness and death. Surely we have a duty to do everything in our power to prevent ill health and death. Shockingly, cigarettes are the only legal consumer product that will kill most users: two out of three smokers will die from smoking unless they quit. More than 60,000 people are killed by smoking each year, which is approximately twice the number of people who died from covid-19 between March 2021 and March 2022, yet it does not make headline news. In 2019, a quarter of deaths from all cancers were connected to smoking.
The annual cost of smoking to society has been estimated at £17 billion, with a cost of approximately £2.4 billion to the NHS alone and with more than £13 billion lost through the productivity costs of tobacco-related lost earnings, unemployment and premature death. That dwarfs the estimated £10 billion income from taxes on tobacco products. People often tell me that we cannot afford for people to stop smoking because of the revenue generated by the sale of tobacco, but I argue that as a society, and for the good of our nation’s health, we cannot afford for people to smoke.
Achieving smoke-free status by 2030 will not only save the NHS money but, more importantly, save lives. If we are determined to bring down the NHS backlog, we need to prevent people from getting ill in the first place. If we want to achieve our goal of improving productivity, we need a healthy workforce. It takes a brave and bold Government to implement policies whose rewards will mainly be reaped by the next generation, but that is the right thing to do.
I want to focus on just one of the well-researched and well-received recommendations in the Khan review: the age of sale. The fact that retailers use the Challenge 21 and Challenge 25 schemes indicates just how hard it is to determine a young person’s age. Age of sale policies are partly about preventing young people from gaining access to age-restricted products such as cigarettes and alcohol. More importantly, as Dr Khan states, they are about stopping the start. Dr Khan recommends
“increasing the age of sale from 18, by one year, every year until no one can buy a tobacco product in this country… This will create a smokefree generation.”
That may seem pretty drastic, but so are the consequences of smoking. If we ask smokers when they started, the majority will say that it was when they were in their teens. The longer we delay the ability to legally take up smoking, the fewer people will take it up, and the fewer will therefore become addicted. Let’s face it: never starting to smoke is much easier than trying to quit.
We have already proved in the UK that raising the age of sale leads to a reduction in smoking prevalence. Increasing the age of sale from 16 to 18 in 2007 led to a 30% reduction in smoking prevalence for 16 and 17-year-olds in England. Other hon. Members have mentioned the change in America. I would argue that increasing the age of sale by one year every year is more acceptable than raising it in one go from 18 to 21, for example, or even to 25.
Dr Khan has also called for additional investment in the stop smoking services currently provided by local authorities. However, I am a great believer in making every contact count—every contact that someone makes with a GP, as an out-patient, as an in-patient or on a visit to a pharmacy. Every time a smoker sees a healthcare professional, it should be seen as part of the healthcare professional’s duty to better the health of their patient.
I was honoured to share the stage with Dr Javed Khan at the launch of his review in June, and I was pleasantly surprised by the virtually universal welcome that his recommendations received. Indeed, polling carried out by YouGov backs that up: 76% of respondents support Government activities to limit smoking, or think that the Government should do even more; just 6% say that they were doing too much; 76% support a requirement for tobacco manufacturers to pay a levy or fee, to finance measures to help smokers quit and prevent young people from smoking; 63% support an increase in the age of sale; and, for the benefit of those on the Government side of the Chamber, 73% of those who voted Conservative in 2019 support the Government’s smoke free 2030 ambition.
In our 2019 manifesto we committed ourselves to levelling up, and that commitment has been reiterated by our new Prime Minister. Levelling up is not just about infrastructure; it is also about levelling up our health and life chances. That is particularly important for my constituents, because 16.6% of adults in Erewash are currently smokers, which is above the national average. With average annual spending on cigarettes estimated to be around £2,000, it is not just the health of smokers that is being affected, but their pockets as well. Becoming smoke free by 2030 would lift about 2.6 million adults and 1 million children out of poverty, and so would aid our levelling-up agenda.
Before I end my speech, I want to raise the issue of e-cigarettes, or vaping. The Khan review contains a specific recommendation on this, and I want to explain why it is so important. As with cigarettes, the age of sale is 18, but time after time I see young people at the end of the school day using vapes—and that is outside schools without sixth forms. It is illegal for a retailer, whether online or on the high street, to sell vaping products to anyone under the age of 18, so I am not sure how under- age users are obtaining the devices. The manufacturers are obviously aiming some of their marketing at this age range through the use of cartoon characters, a rainbow of colours, and flavours to match. The function of e-cigarettes should be solely as an aid to quit smoking, and not, as I fear, as a fashion accessory and, potentially, the first step towards taking up smoking.
The proliferation of vape shops in our high streets and online proves that vapes have become an industry in their own right, and are now being used by tobacco companies to maintain their profits as restrictions on tobacco increase. I therefore ask the Minister to work with his colleagues in the Home Office, the Department for Levelling Up, Housing and Communities and the Department for Education to see what more can be done to clamp down on the illegal supply of vapes to those under the age of 18. I also ask him for an update on progress in getting a vaping device authorised through the Medicines and Healthcare products Regulatory Agency—a step that would send the strong message that vapes are an aid to quitting smoking and not an alternative to smoking.
Finally, let me ask a question that has already been asked by other Members today: will the Minister provide a date on which we can expect the tobacco control plan to be published?
Madam Deputy Speaker (Dame Eleanor Laing)
I call the shadow Minister, Andrew Gwynne.
Andrew Gwynne (Denton and Reddish) (Lab)
It is a pleasure to speak in this important debate. It has been a small but, I think, perfectly formed debate, in which there has been a large degree of consensus throughout the House on our ambition for England to be smokefree by 2030.
I commend the hon. Member for Harrow East (Bob Blackman) not just for the work he has done on this subject over a long period, particularly in the all-party parliamentary group, but for the way in which he introduced the motion, which, as my hon. Friend the Member for Stockton North (Alex Cunningham) observed, enabled us to say, “We agree with Bob.” I congratulate my hon. Friend for his own work on the subject. I thank the hon. Member for Erewash (Maggie Throup) for her contribution, and also thank her for her time as the public health Minister: I used to enjoy our debates across the Dispatch Box, and I wish her well in whatever comes next.
The Health and Social Care Front Bench is a bit like a whirling dervish at the moment. We had the hon. Member for Erewash a few months ago, then the hon. Member for Sleaford and North Hykeham (Dr Johnson)—she was in post for just six weeks, and I want to thank her as well for the work she did in that short time—and now we have the new Under-Secretary of State for Health and Social Care, the hon. Member for Harborough (Neil O’Brien), whom I welcome. Let me also echo the words of the hon. Member for Harrow East in wishing my hon. Friend—indeed, my friend—the Member for City of Durham (Mary Kelly Foy) a speedy recovery after her hospital treatment.
It is now nearly five months since the release of the Khan review. Both the hon. Member for Erewash and I spoke at the launch, and I think the review was universally welcomed. It was generally agreed that we must move apace in ensuring that we meet the ambition of a smokefree 2030. In those five months we have had three different Health Secretaries, and we are now on our third Prime Minister. I do not blame the current Minister for all this chopping and changing, but it is little wonder that the Government have failed to find time to respond to the Khan review amid the endless changes. I hope that when the Minister responds to the debate, we will finally be given some clarity. I hope he will set out a timetable for when the Government will respond to the Khan review, and will outline which measures in the review itself the Government are currently considering. I also hope he will be able to reassure Members on both sides of the House that the Government stand by their commitment to create a smokefree England by 2030.
The importance of that smokefree 2030 cannot be overstated. Tobacco is the primary driver of health inequalities throughout the United Kingdom. In 2019-20, there were more than half a million hospital admissions and more than 74,000 deaths attributed to smoking. My constituency of Denton and Reddish straddles two local authorities, Tameside and Stockport in Greater Manchester. The public health charity Action on Smoking and Health—ASH—estimates that smoking costs those two local authorities about £172 million in lost productivity and health and social care costs. That is unsustainable.
Behind those stark economic figures, however, are individual lives that are being harmed or lost as a direct result of smoking. We know that more than 50% of people over the age of 16 who smoke say they want to quit—in fact, many say that they wish they had never started in the first place—and it is therefore imperative that the Government support them in their efforts to do so. Unfortunately, stop smoking services have suffered a 33% real-terms cut in their budgets since 2015-16. There is a drastic need for that to be reversed.
The Government have made a commitment to a smoke- free 2030, which is commendable. We support them, and we want them to succeed. However, a commitment alone is not enough: we want to see action to get there, and we need to see that action fast. The former Secretary of State had an interesting relationship with the tobacco industry, to put it mildly. She had previously accepted hospitality from the industry, and had voted against several sensible public health tobacco measures. During her brief but eventful tenure, it was reported that she had scrapped the Government’s proposals to publish a tobacco control plan, as well as the health disparities White Paper. I asked the Minister about the White Paper earlier this week during Health questions, and received something of a non-answer. I will therefore ask my questions again today, in the hope of getting some clarity. Are the Government planning to scrap the health disparities White Paper—yes or no? Are they planning to scrap the tobacco control plan—yes or no? We need transparency, as there seems to be an information vacuum in the Department of Health and Social Care. If the Government are indeed rowing back on their public health responsibilities, they should have the guts to say so, and face scrutiny for that decision.
By doing everything from inviting tobacco lobbyists into the heart of No. 10 to accepting gifts from the big four tobacco firms, the Government have shown themselves too willing to ally themselves to an industry that is damaging the health of the nation. However, the damage done by the tobacco industry is not confined to public health. Recent analysis conducted by The Daily Telegraph has revealed that the Russian Government have received almost £7 billion from tobacco companies in taxes since Putin’s invasion of Ukraine. That is despite several tobacco companies pledging to cut ties with Russia. I would be interested to know what the Minister makes of this revelation. Will the Government make it crystal clear to tobacco companies that they are expected to follow the lead of those companies that have ceased trading with Putin’s tyrannical regime?
Labour Members believe that if we want to ease pressure on our NHS and improve public health, we need to get serious about prevention. That means ensuring equitable access to smoking cessation services, and taking on tobacco companies that profit at the expense of public health. Smoking prevalence is not a problem that the Government can ignore and hope will magically go away. As a Greater Manchester MP, I have been really encouraged by Greater Manchester’s “Make Smoking History” strategy. If the Minister has not looked at that, I encourage him to do so, because it really is best practice. Indeed, it is cited as best practice in a case study in the Khan review.
Greater Manchester’s comprehensive approach to tobacco control means that smokers in Greater Manchester have more offers of support in quitting than ever before. Thanks to the scheme, smoking rates among people in routine and manual jobs have reduced faster in Greater Manchester than in any other region of England. If these strategies can work regionally, they can, with the political willpower, be scaled up to national level.
I urge the Minister to take the brave decisions. They are sometimes tough and often very unpopular with a significant vocal minority of people, but taking those decisions is the right thing to do, as history often shows. Smoking has gone up among young adults aged 18 to 24 in the past three years. To put that in context, in 2007, around 41% of young people said that they had smoked. By 2019, that had fallen to just a quarter, but in the short space from 2019 to 2022, that increased to a third. That is going in the wrong direction. Between 2007 and 2020, smoking fell, as successive Governments really ratcheted up the regulation of smoking and introduced smoke-free laws. They increased the age of sale from 16 to 18; banned the display of tobacco products; introduced standardised packaging and large, graphic health warnings; banned smoking in cars with children; and, lastly, banned menthol in 2020. Those measures worked, but they have to continue, as does the pace of change, if we are to meet the goals of Smokefree 2030.
The last Labour Government implemented one of the biggest and most significant public health interventions in modern political history. I am most proud of it, but it was not popular in all quarters; I was almost banned from holding surgeries at Denton Labour club. It was the ban on indoor smoking. When we go abroad to countries that still have smoking indoors in public places—in bars, restaurants and cafes—we wonder how on earth we put up with that in our country until fairly recently. Absolutely nobody with a modicum of common sense would want to reverse that legislation.
When we were in government, we supported taking the bold steps necessary to protect public health, and many thousands of lives were saved as a result. That is why we want the Government to commit to Smokefree 2030. They will miss that target unless they up the pace of change, accept the recommendations of the Khan review, and legislate to put measures in place. For far too long, public health has been an afterthought, or a battleground on which to have ideological arguments. We have had obesity strategies scrapped, tobacco strategies binned, and health inequalities widened. This neglect cannot continue. We will support the Government in being brave on public health. We will give the Minister the majority he needs, if he does not have one, to pass the right measures in this House. Labour Members will do right by Britain, and encourage the Government to do the same. Be brave, and build a healthier, happier and fairer Britain; we will support you.
The Parliamentary Under-Secretary of State for Health and Social Care (Neil O’Brien)
I thank my hon. Friend the Member for Harrow East (Bob Blackman) and the hon. Member for City of Durham (Mary Kelly Foy) for securing this important debate. I add my voice to the voices of those who have wished the hon. Member for City of Durham a speedy recovery. A lot of the people who contributed to this debate, including the hon. Members for Stockton North (Alex Cunningham), and for Blaydon (Liz Twist), and my hon. Friend the Member for Erewash (Maggie Throup), who all spoke eloquently, have personal experience on this subject, and a real passion for and dedication to achieving a smoke-free England by 2030—a goal to which the Government are completely committed.
I am pleased to update the House on the Government’s work on the Khan review—the independent review of Smokefree 2030 published in June. Tragically, smoking remains the single biggest cause of preventable illness and death across the country. There are still six million smokers in England, and up to two out of three of them will die from smoking unless they quit. Smoking causes seven out of 10 cases of lung cancer, and most people diagnosed with lung cancer die within a year. One in five deaths from all cancers in the UK was connected to smoking in 2019. Smoking substantially increases the risk of heart disease, heart attack and stroke. Smoking is responsible for around 3.7% of all hospital admissions, and so costs the NHS a staggering £2.4 billion each year.
People who start smoking as a young adult lose an average of 10 years of life expectancy, or around one year for every four years of smoking after the age of 30. As many hon. Members have said, action is vital if we are to meet the Government’s manifesto commitment of extending healthy life expectancy by five years by 2035. The Government are committed to levelling up society and extending the same chances in life to all people across the country. As various Members have said, smoking is one of the largest drivers of health inequalities, and rates vary substantially across the country; we heard about that from the hon. Member for Stockton North. As Dr Khan stated in his independent review, smoking prevalence is four and a half times higher in Burnley than in Exeter, so there is huge variation around the country.
Smoking is a huge drain on the household finances of the most disadvantaged families. In Halton in Cheshire, smokers spend an estimated £3,551 a year on tobacco—nearly 15% of their income. That is a shocking statistic. Reducing smoking presents a huge economic opportunity to increase productivity and people’s incomes. Smoking is very high in certain populations, and as my hon. Friend the Member for Erewash said, a third of all cigarettes smoked in England are smoked by people with a mental health condition—an incredible fact.
Behind all these statistics are individuals, families and communities who are suffering from the harms of tobacco. That is why we are so committed to our goal to be smoke free by 2030. We have committed to doing more to help smokers quit and to stop people taking up this deadly addiction in the first place, because we know that most smokers want to quit and many wish they had never started.
The UK is considered a global leader on tobacco control, and investment in evidence-based stop smoking interventions, a strong regulatory framework, local authority stop smoking services and the NHS has ensured that we now have the lowest smoking rate on record: 13.5% in England, down from 21% in 2010 and 45% in 1974. That is a huge change in our society.
In the 2017 tobacco control plan, we set a bold ambition to reduce smoking prevalence among 15-year-olds from 8% to 3% or less by the end of 2022. I am pleased to say we are well on track to meet that target. The Government have also committed to an escalator that increases duties by more than two percentage points above inflation until the end of the current Parliament. In 2010, the average price of a packet of cigarettes was £5.70; and in 2022 the average price is £12.72. Since 2010, duty on cigarettes has more than doubled, and a minimum excise tax has been introduced to increase the price of the very cheapest cigarettes, because we know that one of the most effective ways of stopping people smoking is making it more expensive.
On top of that, we continue to fund a range of comprehensive tobacco control interventions. We have provided £72.7 million to local authority stop smoking services through the public health grant, and more than 100,000 people have quit with the support of a stop smoking service in 2020-21. This year alone, we have provided £35 million to the long-term NHS commitment on smoking, which means that by the end of 2023-24 all smokers admitted to hospital, whether an acute hospital or a mental health hospital, will be offered NHS-funded tobacco treatment services. We will be using those regular touch points, as my hon. Friend the Member for Erewash suggested, to drive down smoking.
My hon. Friend the Member for Harrow East asked about maternal smoking, and the same model is being provided for expectant mothers through the new smokefree pregnancy pathway, including focused sessions and treatments. A new universal tobacco treatment offer is being piloted as part of specialist community mental health services for long-term users of specialist mental health and learning disability services, to help the most vulnerable populations.
The change in treatment for women who smoke in pregnancy is remarkable. Women now routinely get a carbon monoxide test. People will be offered support. In some cases, there are exciting experiments with vouchers and financial incentives that can help, particularly in some poorer communities, people to stop smoking. There is a lot of work on maternal smoking.
Since leaving the EU, we have implemented a new UK-wide system of track and trace for cigarettes and hand-rolled tobacco to deter illicit sales. I have talked about how we have increased duties to drive up prices and to deter smoking, which would of course be undermined if illicit products were circulating.
We have limited the number of cigarettes that people can bring into the country via duty free to 200, making it much harder for those who want to illegally evade excise duties on tobacco. That will help to prevent the sale of cheap cigarettes, further reducing the illicit market.
Although smoking rates have fallen, we recognise that they are not falling fast enough. That is why we asked Dr Khan to undertake the independent review to help the Government to reduce the devastation that smoking causes. The review makes a number of bold recommendations.
Stop smoking services run by local authorities and funded through the public health grant continue to offer smokers the best chance of quitting, and people who get help from local stop smoking services are three times more likely to quit successfully than those who try to quit unaided. I pay tribute to the work of those services, and I assure them that they remain a key part of the Government’s smokefree 2030 ambition.
Alex Cunningham
The Minister knows as well as I do that local authorities have been under tremendous financial constraints in recent times. How can we ensure that local authority public health continues to be funded so that these services can continue? At the moment the services are quite inadequate.
Neil O’Brien
The hon. Gentleman is right that these services are hugely important. All authorities saw an increase last year and there is a 2.8% increase this year, with funding heavily weighted towards more deprived areas, but there is much more we need to do, and we keep it under active review.
We are also building investment in anti-smoking marketing campaigns. It was heartening to see the number of people who joined the annual Stoptober campaign last month. This well-known initiative encourages smokers to abstain for 28 days each October, as we know that smokers who manage to quit for 28 days are five times more likely to quit permanently. In England, the Stoptober campaign has now helped more than 2.1 million people quit since its inception in 2012.
Dr Khan also called for the NHS to prioritise further action to stop people smoking. The long-term NHS plan commitments are a huge step towards preventing smoking-related illness, and they are making significant progress towards reducing preventable ill health and reducing the burden of smoking on the NHS. I have talked about using touch points in hospitals to offer people help to stop smoking.
We have discussed vaping as a substitute for smoking. We recognise that vaping is far less harmful than smoking and can be an effective quitting device. We also recognise that there is more the Government can do to tackle the myths and misconceptions that surround vaping. Our recently published “Nicotine vaping in England” report set out the most up-to-date evidence on vaping, providing an even more compelling case for supporting smokers to switch. However, in recognition of the recent increase in vaping rates among children, which my hon. Friend the Member for Erewash mentioned, we are doing more to prevent children from vaping. We have updated our online materials, and we are working closely with the Department for Education to communicate with schools on how best to set policies around vaping.
My hon. Friend asked a specific question about the MHRA and medical licensing. We are working closely with the MHRA to support a future medically licensed vaping product, which would carry many benefits, including tackling scepticism of e-cigarettes among healthcare professionals. We understand that several products are applying for medical licences early next year. I pay tribute to my hon. Friend for all the work she has done on public health.
As a world leader in tobacco control, the Government continue to support lower and middle-income countries to implement effective tobacco control strategies, and through official development assistance funding to the World Health Organisation-led framework convention on tobacco control 2030, we are supporting a further nine countries to protect their populations from the harms of tobacco.
Both my hon. Friend the Member for Harrow East and the hon. Member for Denton and Reddish (Andrew Gwynne) mentioned article 5.3 of the tobacco control treaty, to which I can confirm the Government are absolutely committed. I consider myself forewarned about the report mentioned by my hon. Friend the Member for Harrow East.
The Government are determined to address the challenges raised by the independent review and to meet our bold smokefree 2030 target. I understand the compelling arguments made by the Khan review and the very strong evidence in the recent “Nicotine vaping in England” report. Over the coming weeks, we will be quickly taking stock on whether a refreshed tobacco control plan is the best way to respond, and on how and when to take forward all the suggestions made by that review.
The Government recognise that more action needs to be taken to protect our people from this dangerous addiction. We know that the action we take must be comprehensive, bold and ambitious. The prize of reaching a smokefree 2030 will be huge for this country, particularly for our most disadvantaged citizens. I thank all hon. Members who have taken part in this debate.
Bob Blackman
With the leave of the House, I thank my hon. Friend the Minister, who is new in post, for answering this debate. I am grateful for the extremely welcome support from the shadow Minister, which demonstrates the will on both sides of the House to deliver a smokefree 2030.
I thank all colleagues who have contributed, including the hon. Members for Stockton North (Alex Cunningham) and for Blaydon (Liz Twist), and my hon. Friend the Member for Erewash (Maggie Throup).
Achieving a smoke-free England is key, and it is a major part of the levelling-up White Paper’s mission to increase life expectancy by five years by 2035. I know this is close to the Minister’s heart, because he was previously the Minister for Levelling Up. I remind him that in that role he said:
“ultimately on public health and on prevention, we need to think extremely radically and really floor it, because otherwise the NHS will just be under humongous pressure for the rest of our lifetimes because of an ageing population.”
I think we all agree with those statements. He needs to act radically and immediately on the Khan review and bring forward those proposals. I think he has the commitment of the whole House to deliver them, if legislation is required, but he could do much of what is in the Khan review just by regulation.
We need a tobacco control plan that will end smoking, increasing healthy life expectancy and narrowing inequalities, but without funding, a plan will not deliver. That is why we are proposing the polluter pays levy, which is popular, feasible and supported by voters of all political persuasions and by tobacco retailers. The idea has come to pass and we must now implement it.
Question put and agreed to.
Resolved,
That this House has considered the recommendations of the Khan review: Making smoking obsolete, the independent review into smokefree 2030 policies, by Dr Javed Khan, published on 9 June 2022; and calls upon His Majesty’s Government to publish a new Tobacco Control Plan by the end of 2022, in order to deliver the smokefree 2030 ambition.
Private Rented Sector White Paper
(2 years, 1 month ago)
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Lloyd Russell-Moyle (Brighton, Kemptown) (Lab/Co-op)
[R] I beg to move,
That this House has considered the White Paper A fairer private rented sector.
I thank my co-chair of the all-party group on renters and rental reform, the hon. Member for Dover (Mrs Elphicke), who is the co-lead sponsor of today’s debate, and the 30 other MPs from across the House who supported it. I also thank the Backbench Business Committee for ensuring that we have such a timely debate on the matter. Of course, I direct Members to my entry in the Register of Members’ Financial Interests and declare that I am the chair of that all-party group.
Many commentators have said that the private rented sector is really three markets. The first is the luxury and high-end market, where people wish to pay high amounts for quality housing. To some extent, that market does not need the regulation we are discussing here. It will not be harmed by it, but this regulation is not aimed at it. The second is the market for people who are unable currently to buy a home or wish to have the flexibility of renting. This White Paper is about making their market a feasible, long-term, sensible one that they can live in. The third is for people who need social housing and often wider wraparound support. They should not really be in the private rented sector, as it will never be appropriate for them, but the White Paper still must protect them while we deal with the social housing problems that the Government, in the Bill they are bringing forward on Monday, recognise we need action on.
The core of the debate is about how we create a private rented sector that is stable, affordable and safe, and where all parties have access to justice. I do not think that is a controversial thing. If it is not, the question is: how do we go about achieving those principles? It is not about whether those principles are desirable. Again, I believe there is broad consensus on the ways of doing it, most of which are laid out in the Government’s White Paper, “A fairer private rented sector”, published in June. It not only covers the points I have mentioned, but discusses information, enforcement, children and pets in the home, and giving people the protections they need.
The chief executive of the National Residential Landlords Association said, on the release of the White Paper, that the
“headline commitments to strengthening possession grounds, speedier court processes and mediation are helpful”.
The renters’ campaign group Generation Rent said:
“This is a serious set of proposals that will help to raise standards in private rented homes and restore some balance to the relationship between tenants and landlords.”
The charity Shelter said:
“This White Paper promises people safety and security in their home”.
I could go on with the countless other ringing endorsements of the White Paper and its proposals that are coming from across the sector, with everyone wanting to go further on one bit or another, but welcoming the core.
That is why it came as such a shock to many of us when it was briefed to The Times at the beginning of last month that all of that was being dropped. In Prime Minister’s questions on the same day, the former Prime Minister—I know it is hard to keep up with which one we have at the moment, but I am referring to the right hon. Member for South West Norfolk (Elizabeth Truss)—recommitted to a ban on section 21, but the full status of the rest of those proposals remains unclear. I hope that the Minister will continue in the good vein that the Minister but one initiated. I put no blame on her immediate predecessor, who did not have the brief long enough to make a difference one way or another. This is about how we make the pledges that we all put in our manifesto a reality.
Let me deal with the substance of this issue. I start with the root of so many of the problems in the private rented sector: the issue of people’s stability and security in their home. Section 21 provides the ability for a landlord to evict without any reason a person from their home—that structural power imbalance is hugely consequential and exists in almost no other form of contract that we have today.
On safety standards, I know of many cases in which renters do not wish to complain about the condition of their property, through fear of revenge evictions. The law at the moment is not good enough on revenge evictions; it currently requires a council to have made an assessment that the home is unsafe or in poor condition, in accordance with the housing health and safety rating system, in order for someone then to have the protections from eviction. That sets the bar well beyond where it is practically useful if it is to protect a renter who complains about something such as a boiler not working or the windows jamming.
On affordability, section 21 is creating a crisis that is spiralling out of control, where we see a wave of assured shorthold tenancies coming to an end and section 21 being used to get higher rents, pushing up inflation, to above 20% in some areas. I know of a schoolteacher who received a demand for a 40% rent increase at the end of their lease. Unable to pay, he is now sofa surfing and homeless. A school teacher who is working full time is homeless not through any fault of his own but due to the state of the housing market today.
Shelter commissioned research to show that some 230,000 private tenants have been served with section 21 notices since the Government made their first pledge in 2019—that is one every seven minutes. But that does not even show the scale of the problem, because a notice is not usually required; knowing they have no rights, renters will often just leave when the landlord asks them to do so, at an inconvenience to themselves. Section 21 provides no real recourse, no appeal and no exemptions, and even if it did, we know that the current court system has delays coming out of its ears, so taking things to court will not be an answer to these problems.
Last week, in preparation for this debate, I asked renters to get in touch with me with their stories. One of the many replies I received was from a young couple who said that before they moved in the landlord agreed to carry out a deep clean, but when they entered the flat they found that it had an insect infestation and it had not been cleaned for months. Both the agent and the landlord refused to do anything. Later, the couple found that two windows were broken and so they asked for repairs, but, again, there was a refusal to do anything. They contacted the council, but it did not carry out an in-person inspection—we all know the pressures on councils—and in the end, on the balance of things, it just accepted the landlord’s word against that of the tenants. At the first possible instance, in November 2021, the couple were issued with a section 21 notice. They had a three-month-old baby and they were homeless.
I have countless other such examples, and I am sure many other Members do, so it is no wonder that the commitment to deal with this was a cross-party commitment in all manifestos, but we cannot allow the abolition of section 21 to be in name only. We must not allow the next crisis to be the use of section 8 evictions due to rent arrears. If we simply abolish section 21 but allow landlords to increase rents uncontrollably, we will create a loophole that a lorry could be driven through. If a renter complains about the state of a property and the owner wants them out, the owner will just raise the rent to £10,000 a month and evict the tenant. The current rental increase protections are inadequate for protecting renters. When I last looked, the only way to make an application to the tribunal was by fax. That is ridiculous.
Potential economic evictions were foreseen by the Renters Reform Coalition, and I am pleased that the White Paper addresses the issue. It states:
“We will only allow increases to rent once per year... We will end the use of rent review clauses, preventing... rent increases that are vague or may not reflect changes in the market price… where increases are disproportionate, we will make sure that tenants have the confidence to challenge unjustified rent increases through the First-tier Tribunal”.
Those are the Government’s words. If that works, it will be a game changer for stability in the rental market. Personally, I would like the Government to take on more rental controls. I know that they have ruled that out, but I hope that others will press them on the matter. My friend the hon. Member for Dover will say more about rental controls. However, the proposal in the White Paper is a sensible compromise on which we can start to make progress.
I note the concerns of the National Residential Landlords Association about moving from periodic tenancies and the effects on student housing. It points out that both landlords and students need to know that a property will be available many months ahead. I am sure that the Government are working on solutions to that perceived problem, but if I could offer one piece of advice, it would be, please leave the proposals in the White Paper as they are. More loopholes will be taken advantage of.
I offer a solution. Dare I say that there should be an opportunity, if not a duty, for universities to house all their students who wish to be housed? Universities could engage in tenancies with the private rented sector. They would be permanent periodic tenancies, and universities could license rooms to their students. That would give the private rented sector the security it needs and students the wraparound support they often require. In our communities, we often hear complaints about people not coming forward. Such a solution would give universities the knowledge that their students were in safe and secure accommodation. It could also work for other institutions and would still mean that the decent homes standards that the White Paper requires had to be fulfilled in such accommodation.
Security of tenancy is particularly urgent. We are facing a difficult time, with many landlords selling their properties. Mortgage rates are going up and many landlords may wish to leave the market. That is fine. Some say that landlords leaving the sector means that rental provision leaves the sector. However, for every landlord who leaves the sector, there is another homeowner or private rented landlord entering it. My fear, which is shared by many, is that turmoil in the housing market will mean that renters are evicted so that landlords can sell property to another buy-to-let landlord, who would often be more than willing to allow a renter who had been paying rent for a long time to stay there.
The Government stated:
“We encourage any landlord who wishes to sell their property to consider selling with sitting tenants, which may provide an easier and faster solution.”
However, most mortgages do not allow that. I ask the Minister to sit down with mortgage providers and work out a way in which buy-to-let tenancies could facilitate that. It might mean a slightly higher premium in some circumstances or some conditions, but it needs to happen now.
Ideally, we would have a system such as TUPE, whereby when an employer is taken over, the employees continue in employment. If a landlord is taken over, the tenants should continue to live in the property. We should aim for that. Of course, a new buyer might choose to move in and renovate the property. The existing clauses allow them to remove a tenant as they see fit.
There is broad agreement on both side of the House and in the sector on access to justice. Unless we take enforcement and the ability to access redress seriously, this is all a waste of time. The rogue landlords list was set up in 2018 with a great deal of fanfare. It was meant to be a game changer. Earlier this year, the Government were asked how many landlords were on the list. The answer was 61. That makes a joke of the entire system. I could probably name more than 61 in my constituency, let alone the country. That is even more reason why the White Paper’s proposed property portal, which would require all landlords and properties to be registered, is the only way forward. I think that the Government have come to realise that. I genuinely believe that they have seen the error of their ways. That is why they talked about establishing an ombudsperson to
“provide fair, impartial, and binding resolutions for many issues without resorting to court.”
The White Paper goes on to say:
“The Ombudsman will have powers to put things right for tenants, including compelling landlords to issue an apology, provide information, take remedial action, and/or pay compensation of up to £25,000.”
That is spot on. It empowers renters and gives them a body to seek redress, but it also means that landlords know that there is a place where they will be fairly heard. That, combined with the removal of section 21, is a life changer for many. It will give people the ability to complain about poor housing.
One person told me:
“One electrician said that the wiring was the worst he had ever seen. The poor wiring led to us having a power cut, which was only repaired with a temporary fix. The landlord admitted that they were aware of the oven being faulty at the start of the tenancy but refused to fix or replace it.
Our hot water didn’t work when we moved in—the landlord had a friend (who wasn’t a qualified gas safety engineer) disconnect our heating from the boiler without telling us. We had to call out emergency gas and electrical technicians to fix these issues and shortly after” —
surprise, surprise—
“we were served with a Section 21 notice.”
If the Government enact their proposal, renters could go to the ombudsperson and get their home fixed to a decent standard, and they would not have to fear a section 21 eviction notice.
It is vital to include deposit protection schemes in the responsibilities of the ombudsperson. Decisions about such schemes should be published on the property portal. At the moment, they are not and they are only sporadically enforced.
Last year, the APPG heard from a young woman in her early 30s. She said that she was still sharing a house in an insecure renting arrangement, despite earning £35,000 a year. She spoke about wanting to start a family with her partner, but said that she could not because she could not provide a stable home. The system has robbed that young woman of the ability to start a family. The White Paper could not just address some of the imbalances in the system but restore dignity to millions of renters.
As is customary, I will finish with some questions for the Minister. Will she commit to implementing all sections—that 12-point plan—of the White Paper? Does she recognise that the pledge to abolish section 21 is not about getting rid of a clause called section 21 but about providing stability, security, and justice in the housing market? Will she commit to introducing the draft legislation this year? If not, when will that happen? Will she commit, as I have asked, to meeting mortgage lenders to discuss buy-to-rent mortgages with sitting tenants?
Mrs Natalie Elphicke (Dover) (Con)
I thank my friend and co-chair of the all-party parliamentary group for renters and rental reform, the Member for Brighton, Kemptown (Lloyd Russell-Moyle) for his opening speech.
Housing is a long-standing interest of mine, and I draw Members’ attention to my entry in the Register of Members’ Financial Interests.
Reforming the private rented sector is an important area of work for all Governments, and I and other Conservative Members signed up to that in the 2019 manifesto on which we were elected. The vehicle for that important pledge is the White Paper, “A fairer private rented sector”, which was published in June. There has been much change in the short time since the White Paper’s publication. I welcome the Under-Secretary of State for Levelling Up, Housing and Communities, my hon. Friend the Member for Kensington (Felicity Buchan) warmly to her place, and I hope she will not mind if I place on record my considerable regard for the work that her predecessor at the time of the White Paper’s publication, my hon. Friend the Member for Walsall North (Eddie Hughes), undertook.
I wish to illustrate the pressures of capacity in the private rented sector by reference to my own constituency and across Kent, before turning to why these reforms are so important and need to be progressed urgently.
Today, the Home Secretary is visiting Dover. The situation of housing people who have crossed the channel illegally in small boats is putting a huge strain on housing and local services. It is not unheard of for local people to be turfed out of accommodation by landlords who want higher rents. There are concerns that landlords are looking to cash in on lucrative, long-term Home Office contracts. That is why we must push forward on these reforms.
It is a great pity that the Home Secretary had not planned her visit to Dover and to Kent so that she could meet Kent MPs and Kent council leaders to discuss at first hand the serious local impact on residents, including the struggle to access affordable private-rented housing. I hope that she can meet us urgently to discuss these issues. The extent of the issue was laid bare in a strongly worded letter to the Home Secretary from Kent council leaders yesterday. They said:
“Put simply, Kent is at breaking point. Our public services, including health, social care and schools are already under extreme pressure. We have approaching 20,000 households on the waiting list for social housing, soaring costs, limited availability of private sector rented housing and temporary accommodation all fuelled by being in an expensive south-east London periphery, while having pockets of severe deprivation and low average earnings… Kent’s housing sector cannot absorb further asylum places on top of those existing burdens over and above local demand.”
How does the concern expressed by the council leaders translate to my constituents on the ground? Let me give an example of its impact in my constituency. My constituent, who I shall refer to as Emily, is a mother with seven children. She was required to leave her privately rented property on no notice, under section 21, and there was no suitable accommodation. In the end, she was offered accommodation in Leeds, some 280 miles away. She has ended up living with her mother in a two-bedroom house, sleeping on the sofa and the floor. Her grandmother told me how upset she was that migrants were housed in four-star hotels while her granddaughter and great grandchildren faced these conditions and impossible choices.
In an attempt to shut down debate, too often such concerns can be labelled as extreme or even racist. There is nothing extreme for a person to be concerned about their family; that is about as mainstream as it comes. In my area, inevitably, given the scale of the small boats crisis, it is the issue of accommodating migrants and asylum seekers that puts this additional strain on the private rented sector and services. In other areas, it might be holiday lets, Airbnbs or student accommodation. But the underlying point is the same: there needs to be reform of the sector, which needs to be implemented as set out in the White Paper, and consideration of all these different housing markets and drivers.
Building on the White Paper, there is other work that could drive improvement and understanding of local market dynamics further, and that might require supplementary solutions—be that Airbnb registration or other measures. I would be happy to meet my hon friend the Minister to discuss this further.
Pages 7 and 8 of the White Paper set out a 12-point plan of action for private renters. In effect, it is a 13-point plan, as page 8 references that this plan is a support for the journey to home ownership. I shall shortly be developing an argument for a 14th point to that plan: support on the journey to council housing and social housing.
There are three types of housing tenure in England: owner occupation; social rented; and private renting, which is property owned by a person who is different from the tenant and let out at rates and on terms and conditions that are different from those that apply to registered social landlords.
The private rented sector has grown rapidly in recent years. As it has become more dominant, it is inevitable that that has been at the expense of both the social rented and home ownership sectors. Throughout the 1980s and 1990s, and right into the early 2000s, the proportion of total housing in private rented stock was around 10%. Between 2008 and 2017, it mushroomed to more than 20% of all stock, before settling to its current level of around 18.5% of stock. That translates into a doubling from about 2 million to more than 4 million households in private rented homes.
In the context of this debate, housing stability means that a person knows where they stand; that if they pay their rent or mortgage and they do not behave outrageously, they have the choice as to whether to stay in their home. That is not the case for private rented tenancies. The landlord chooses whether a person can stay or must leave, no matter how long they have been in a property or how good a tenant they have been. That is what these reforms are trying to address—otherwise, the expense, time, disruption, distress and uncertainty caused by a section 21 notice all falls on the tenant.
Improving housing stability is at the heart of abolishing section 21 no-fault evictions. The reform is intended to take away the immediate day-to-day worry and concern for tenants that they will wake up one morning to a notice saying that they have to go. The longer-term solution is to introduce more affordable accommodation and council housing as well as promoting home ownership.
Dover District Council is a Conservative council that is compassionate and active in many ways. It has embarked on a council house building programme to help prioritise local need. I wish to give a couple of examples. Walter Hammond Close is a development in Dover, which comprises 16 studio flats, all let at social rents, providing interim housing for local people facing homelessness. It complements the Elizabeth Carter Court project in Deal. Completed in August, it provides eight one-bedroom flats, which are also let at social rents, providing interim accommodation for local people facing homelessness. Those two excellent examples of the work being undertaken by the council are encouraging, but the council cannot build enough to keep up with demand. That is why we need a large-scale affordable and council housing programme across the country.
Helping constituents with private-rented housing is a staple of our work as MPs. I want to refer to one of my constituents, who I shall call Natasha. Her granddad asked for my help. He said:
“My granddaughter and her child have been given notice to quit by a private landlord in Dover and have been desperately looking for alternative accommodation without success… She has suffered domestic abuse, ensuing mental health difficulties”—
for which she has had counselling and has recovered amazingly well. He went on to say that she lives in a property with a dangerous electricity system and that they had battled with the landlord about this for months. He said:
“The current situation is that we are now 52 days away from Natasha’s eviction date, which, ironically, is Christmas day… Here is a young single mother and her two-year-old child who have been given the most awful situation to face when all they wanted to was…to live in a safe environment.”
It is vital for Natasha and all the others in Dover and Deal and all over the country that these measures are brought forward into legislation promptly. I had been concerned that there had been some hesitation about this, so I would be grateful if the Minister could confirm when we can expect these measures to be brought forward.
In Natasha’s case, as hon. Members will have heard, there was an electrical safety issue in her flat. She battled for months, but it did not get fixed. Natasha is now in flat two and her child is three. This is her current position:
“The property is a privately rented flat. The area where she lives affects her three-year-old child’s health due to traffic fumes. He now has a constant cough. The area is overrun by rats, which can be heard scratching and scurrying in the walls of the property and can be seen in the surrounding areas.”
I look forward to seeing how the proposals in the White Paper will help Natasha and the many other cases that fill my inbox and, I am sure, the inboxes of many other Members across the House.
There is good intent in the ombudsman’s proposals for redress, but that redress needs to be extremely swift and enforcement robust. In order for that redress to happen, landlords need to be identifiable as well as accountable. At the present time, we do not know how many landlords there are. In addition to potential revenue loss to the Exchequer, this makes accountability and traceability of landlords very difficult and expensive for councils in instances where they wish to take public health or other enforcement action.
I welcome the proposed measures for the property portal, but I ask the Minister to consider what steps may be taken to ensure that the information contained in it is validated as to ownership and management, and that it can support efforts to ensure that all taxes are paid where they are due, and that the new proposed ombudsman, local authorities and other enforcement agencies may be able to access the portal in order easily to fulfil their obligations.
I wish to move on to the White Paper’s plan around rent management and challenging excessive rent rises. Even before the current cost of living crisis, rent levels were unaffordable for many. The Local Government Association’s view is that the best way to increase housing security is to address the unaffordability of housing, which is the key reason why people lose their tenancies and become homeless.
I agree completely that affordability is a vital ingredient of a good home. In the longer term, there is a need to rebalance the housing market through a tenure strategy to make sure we balance affordable and council housing and increased home ownership alongside a reduction in the private rented sector, but in the near term, there is increasing pressure on rents, making them unaffordable and unsustainable for many.
In the White Paper, the Government rule out rent controls to set rents at the outset of the tenancy. In recent weeks I have proposed controls to freeze current rents for up to the next two years, while the current economic pressures are expected to reach their peak. The proposal would comply with the premise set out in the White Paper because it affects only rent rises, not base rent levels. The measure would be deflationary, not inflationary, and would be to the wider benefit of everyone, including landlords.
A case may be argued for managing rents more widely, but to some extent high rents are the symptom, not the cause. As the hon. Member for Brighton, Kemptown eloquently set out, the private rented sector has expanded to become all things to all people. It is providing both homes to those who can and should be home owners with a mortgage, and a roof over the head of those who have none, who should be in affordable housing.
I understand that many landlords want to be compensated for any costs they pass on to tenants—indeed, some of them are very vocal on that subject—so the nature of the landlord and their relationship with the property is important. The UK landlord market is unusual compared with some other countries, dominated as it is by individuals, not by housing organisations and institutional landlords. The latest English private landlords survey shows that some 94% of landlords are individuals representing 84% of tenancies, so they are strongly dominant. About half of them are longer-term landlords of more than a decade. When people were asked to describe themselves as a landlord, over half said they considered their properties to be a long-term investment to contribute to their pension, and 27% said they considered them to be an investment for capital growth. So while for the tenant the property is their home, for the landlord it is first and foremost an investment, and as we all know, investments can go up and down.
Just as there are longer-term structural issues around tenure, there are longer-term issues with savings and investment vehicles, including property. In that context, I ask the Minister to consider whether the financial management proposals on rents set out in the White Paper could be developed further, and whether there should be more robust measures to assist renters during this cost of living crisis. Communications I have received from landlords seem to suggest that they are unable to weather changing market conditions in the way that other businesses are expected to. The assumption seems to be that the tenant should bear all the financial costs and risk; otherwise, the landlord threatens to sell, even in a falling market.
In that context, I ask the Minister what work has been undertaken to assess resilience to market changes in the landlord market with the mortgage lenders, as happens for individual owner occupiers, and whether stronger mortgage market regulation is needed for landlords with buy-to-let mortgages, to make sure they have sufficient planning and affordability to weather different market conditions. Is the Minister considering interest support or greater interest deductibility to support under-capitalised landlords in the near term? I would be grateful if she also considered whether such support could be linked to, for example, landlords committing to keep their rents in check during this cost of living crisis.
There is strong evidence that the inherently insecure nature of the private rented sector has an adverse impact on people living under that type of tenure. There are measures in the White Paper that will incrementally move the private sector forward, and I welcome them. I look forward to working with my hon. Friend the Minister on this important aspect of her work.
Navendu Mishra (Stockport) (Lab)
Thank you for calling me so early in the debate, Madam Deputy Speaker. This is a very important issue in my constituency and across England. More than 7,000 households—households, not people—are on the waiting list at Stockport Homes, which is one of the main providers of housing in my constituency, and 11 million people rent privately in England. That underlines the importance of this debate, and I am grateful to my hon. and good Friend the Member for Brighton, Kemptown (Lloyd Russell-Moyle) for securing it.
We heard about reforms the Government were going to bring in some three years ago; unfortunately, in the three long, hard years since, we have seen very little progress. I will describe two separate cases that have recently come into my inbox. The first involves a family of three—a single mother with two teenage children, one of whom has severe autism. They were served with a section 21 notice of no-fault eviction. The mother had always paid her rent and kept the house spotless, and the family had lived in the property for 12 years. When they were served the section 21 notice, the landlord said they wanted to sell, but my constituent suspects that the landlord was seeking a higher rent in the market.
Sadly, the family were evicted. They were rehoused in a hotel outside the borough of Stockport, which caused massive problems for the family, including the 16-year-old son with a medical condition. The three of them were accommodated in a small hotel room, and Stockport Homes has had to extend the six-week period for hotel costs because the son is unable to cope with the trauma of moving into temporary accommodation before being rehomed. Stockport Homes is also paying the storage costs, which the family will have to reimburse, increasing the pressure on the family. The mother is flexible about where the family can be rehoused; she is just desperate for a permanent home. There has been a mental impact on the entire family, but particularly on the son who has autism. It is a serious case and I wanted to highlight it in the Chamber.
The other case is also quite tragic. I was contacted by a recently bereaved constituent who was on a protected tenancy. Her private landlord’s agent had asked for her rent to be increased from £350 a month to £800 a month. She had been living in that one-bedroom flat with her late partner for 44 years on a protected tenancy, with very little upkeep and maintenance of the property undertaken. The valuation office was approached and the formal rent valuation process was gone through. The rent for the property was determined to be £450 a month, not £800 a month as the agent was demanding. This tenant was fortunate to have protected tenancy status at a time when she was most vulnerable, after the loss of her partner of 44 years. Sadly, most people are not so fortunate. Those are two serious cases, but I could go on. My inbox is filled with similar cases of people who are desperate to get housing.
I am grateful to several organisations, but particularly Shelter, which provided an important briefing for the debate. Research from Shelter conducted in April 2022—three years after the Government first committed to scrapping section 21 no-fault evictions—shows us that every seven minutes a private renter is served with a section 21 notice and that more than 200,000 renters have been evicted in the three years since the Government first said they would scrap no-fault evictions. These figures are staggering and very worrying. Other colleagues have mentioned Generation Rent and other organisations, including Shelter, which conduct important research and act as a lifeline for many people in that desperate situation.
While we are debating housing, I want to mention Mrs Sheila Bailey, a local councillor in my constituency who very sadly passed away recently, and highlight early-day motion 428, which I tabled in this House to pay tribute to her work. She was a champion for housing in particular, and played an important role in creating Viaduct Housing Partnership, a local housebuilder, when she was cabinet member for that portfolio.
I know there are several other speakers, so I will not take much more time. I want to mention the inadequacy of local housing allowance. I have raised this matter on several occasions via both oral and written questions. According to the Office for National Statistics, the median rent for a one-bedroom flat in the private rented sector in Stockport borough is £600, yet, by the Government’s own admission in answers to written parliamentary questions I have tabled, in the two broad rental market areas that fall under that local authority, 71% and 52% of households respectively have a gap between local housing allowance rates and their rent. That needs to be looked at.
I could say a lot more; a vast amount of casework comes through my office via letters, emails and telephone calls from people desperate to find housing in my borough. Stockport, I would say, is the best place to live out of the 10 boroughs in Greater Manchester—in fact, I would say it is the best place to live in England—but that means that the housing market is very competitive. People are facing hardship as it is because of the failed economic policies of this Government, but in addition, in Stockport, we have a problem where housing is in a dire state. We must ensure that people are not left behind.
Lastly, I must mention Stockport Tenants Union, which was set up just over two years ago and provides support to people across the borough; Jonathan Billings, who is a long-standing campaigner against homelessness and has set up a charity named EGG, or Engage Grow Go; and the Wellspring in Stockport, which has been serving the local community for decades. My hon. Friend the shadow Minister will speak later on, but I want to congratulate my hon. Friend the Member for Liverpool, Wavertree (Paula Barker), who has just been appointed to the role of shadow Minister for homelessness and rough sleeping.
The Opposition are taking this issue very seriously. We cannot wait three more years for action, or even three more months—we must ensure that it is delivered quickly.
Selaine Saxby (North Devon) (Con)
I thank the hon. Member for Brighton, Kemptown (Lloyd Russell-Moyle) and my hon. Friend the Member for Dover (Mrs Elphicke) for securing this important debate.
Apparently I have mentioned this in the House before, but North Devon has a housing crisis. The enormous growth in short-term holiday lets and second homes has resulted in an unsustainable shortage of houses for local residents to live in. Matters are now at such a stage that many businesses and public services are simply unable to recruit and numerous businesses are unable to operate full time.
Many will say, “Well, don’t you welcome your tourists?”. Indeed we do welcome our tourists, but we would like them also to eat in our local pubs and restaurants, which are unable to open full time because they cannot get staff, because there is nowhere for anyone to live.
The private long-term rental sector across Devon has declined by more 50% in the last two years and by more than 60% in my own North Devon constituency. Unfortunately, Government policy has not helped. The changes to landlord tax relief made it preferential to have a short-term furnished holiday let rather than a long-term rental tenancy.
Although the changes were introduced in 2017, they only became fully effective in 2020, when most of us were rather consumed with the pandemic, and came into effect at the same time that people were suddenly desperate to escape to wide-open spaces such as my beautiful constituency. Moreover, as soon as we were allowed to go on holiday, people rushed to North Devon and the prices paid for our holiday lets soared.
In addition, the legislation we passed only last week to raise stamp duty thresholds still applies to second homes and holiday lets. That is more complicated, because we desperately need more people to become long-term landlords again—we must find a way to reverse the demise we have seen in that area. I recognise the challenges, but I hope that we will be able to consider how some of the policies designed to help people to get on to the property ladder are just facilitating more people’s buying second homes or short-term holiday lets that sit empty for half the year.
The Department for Digital, Culture, Media and Sport’s consultation on a registration scheme for second homes or short-term holiday lets is now complete, but we still have no date for when the results will be released, which leaves councils with few tools available to them to tackle the surge in properties that lie empty for months of the year, yet are still more profitable to their landlords than a long-term rental. We must ensure that there are change of use clauses for properties made into holiday lets. Those properties were built as homes and should be lived in. If they are a business, they should have to declare a change of use and be taxed accordingly.
This situation is made even harder by the increased requirements on landlords with regard to energy performance certificates, with rural and coastal properties often requiring huge amounts of investment to achieve the necessary rating. That is resulting in even more rental properties being sold or converted to less regulated short-term holiday lets. While I agree that we must ensure properties do not leak, we need to recognise that rural housing stock is very different from urban housing stock and find other, more creative ways to tackle this, so that landlords do not take the logical way out of selling or moving on to a different type of tenancy.
Swathes of long-term tenants in my constituency have found themselves evicted under section 21 notices, so that landlords could take advantage of the tax breaks available to them when their property is let out as a short-term holiday let. Post pandemic, a small two-bed long-term rental in my patch may cost £800 a month, whereas a short-term holiday let will cost at least that per week, and probably double.
Because of the lack of rental properties in my patch, when people are evicted, there is simply nowhere to go. The council housing list is so long that people are being rehomed as far away as Bristol. Some families stay in the area for their children’s schooling, and we now have multiple children being bussed or taken by private taxi 10 to 15 miles each morning to their primary school. At a time when council resources are under pressure, we are adding layer upon layer of extra cost, simply because we do not have enough homes for people to live in.
For tenants, section 21 notices have been horrific—we all have awful stories of people’s experiences—but not all landlords are bad. Many find themselves struggling to evict people who have not paid rent, for example, and section 21 notices are taking up to 18 months to get through the courts in my constituency. I hope that, as we see some progress in this area, landlords are not demonised, because we need more landlords to come forward, so that we can tackle this section of the market. It is the relationship between landlord and tenant that drives a successful rental relationship. Although we feel that that relationship is unbalanced at present, I hope we can support both sides of this delicate balance. We need to find a way to give security to tenants but also give landlords the ability to evict when they genuinely need to. The concern with some of the proposed legislation is that we are already seeing landlords choosing not to risk not being able to evict a tenant. When a landlord could have a short-term holiday let in my patch, why would they have a long-term rental?
We need the housing stock we have to be better utilised and not sat empty for half the year, but I do not disagree that we need to build more homes. Over 16,000 people are currently on Devon’s housing lists, and even if those lists closed now, at the current rate of building, it would take over 32 years to clear the backlog. We need urgent intervention in the housing market in Devon and many other places around the coast. The demise of long-term rentals makes moving to remote, rural and coastal locations to work nearby impossible, and we have so many job vacancies that many companies are simply not operating at full capacity. If we want economic growth, we need workers who can live close to their place of work and find affordable accommodation.
For communities to thrive, they need people living there all year round, so that we do not have the winter ghost towns that blight far too many of our popular tourist destinations. We warmly welcome tourists, but the balance between visitors and workers is now not there, and urgent intervention is needed. MPs in seats like mine have been raising these issues for years with multiple Ministers, and I hope that this Minister will remain in post long enough to deliver substantive change and find a way to reverse the demise of the long-term rental sector.
Florence Eshalomi (Vauxhall) (Lab/Co-op)
Thank you, Madam Deputy Speaker.
“Being a new and first time mum is hard and challenging without having your foundations stripped from you, evicted with no warning, in the middle of winter, when other rent is hard to secure”.
Those are the words of my constituent Katherine, who gave birth to her baby boy in June. Last December, Katherine signed a two-year contract with her landlord, informing them that she wanted a longer contract to give herself stability during her pregnancy. Unfortunately, she received an email in October saying that the owner had noticed that market prices had increased a lot recently and would like to adjust the rent. After she explained the situation to the letting agent and landlord, however, she was told that the landlord was now moving back into the property—surprise, surprise—and there was no room for negotiation. That has left her and her young family without the security of a home and facing eviction just weeks before her child’s first Christmas.
Sadly, having listened to other examples this afternoon, I know that Katherine is not alone in Vauxhall or across the country in facing the sharp end of our imbalanced rental market. My hon. Friend the Member for Brighton, Kemptown (Lloyd Russell-Moyle) outlined the similar situation of a young woman in her 30s who is hoping to start a family. Katherine has started her family, but now faces that difficulty in the rented sector.
It cannot be right that tenants are expected to find thousands of pounds in moving costs in the space of just two months after a landlord serves a section 21 notice. It cannot be right that tenants, who are paying ever-increasing rents, are denied the most basic security of knowing whether they will have a roof over their head in a matter of weeks. It cannot be right that, during the sharpest cost of living crisis in decades, tenants are expected to bid extortionate amounts against each other to secure even the most basic of properties, as happened recently to a constituent in Clapham.
My hon. Friend the Member for Stockport (Navendu Mishra) mentioned that rents in his constituency total about £600; in my constituency, the average rent for a one-bedroom flat starts at £2,000. A tenant recently contacted me to say that they had contacted an online letting agent to go and view a property, only to be informed that 35 people were already in the queue waiting to view and that they should expect to bid for the property.
The Government announced an end to section 21 notices in April 2019. Since then, we have had four Prime Ministers and six housing Ministers, but not a single act to end section 21 notices. During his short period out of the role, the recently revived Secretary of State for Levelling Up, Housing and Communities reportedly urged the previous Prime Minister, the right hon. Member for South West Norfolk (Elizabeth Truss)—stay with me now—to stick to a commitment to ban section 21. I will be honest that I am glad to see him back in that role, because I think that he was making some headway in key areas on housing, including cladding. Now, however, I hope that he will put his money where his mouth is and bring forward a date for a renters reform Bill today.
Rents in London have risen by an average of 15%, and across the country by an average of 11.8%. That is not sustainable for our constituents. Sadly, any reforms will come too late for my constituent Katherine in her current property. As the Government delay and dither, more people will be left in a desperate situation as a result of section 21 notices. It is within our grasp to fix this issue. I am grateful to the hon. Members for Dover (Mrs Elphicke) and for North Devon (Selaine Saxby) for raising the issue, but I hope that they will push their Ministers to make sure that we see reform come through now.
Bob Blackman (Harrow East) (Con)
It is a pleasure to follow my co-chair on the all-party parliamentary group for ending homelessness, the hon. Member for Vauxhall (Florence Eshalomi). I draw the House’s attention to my entry in the Register of Members’ Financial Interests.
As my hon. Friend the Member for Dover (Mrs Elphicke) said, the private sector rental market in this country has expanded not just to cover what it was intended to provide—a way for people to let out houses as they choose—but to take into account what is needed for social rented housing. I will start with our biggest problem, which is that all political parties have failed for 30 years to build enough socially rented homes in this country. The reality is that we need to build 90,000 socially rented homes a year to provide what is required. At the moment, we expect the private rented sector to pick up that slack, so we have to then interfere with the market.
I counsel my hon. Friend the new Minister to ensure that we do not look at the issue in a piecemeal way, because we need to reform the whole market, not just bits of it. As I have said on many occasions, the biggest cause of homelessness in this country is the end of a private sector tenancy through the serving of a section 21 notice. However, if someone gets a section 21 notice now, they can, thanks to the Homelessness Reduction Act 2017, at least approach the local authority and seek help and assistance, whereas previously they could not.
We have the challenge that, if all we do is abolish section 21, we will force private sector landlords to move to section 8 evictions and all that involves. The problem then is that it not only becomes an expensive process across the board, but lands the tenant, who is probably completely innocent, with county court judgments against their name, and when they go for another private sector tenancy, they get told, “Sorry, you’re a bad risk and we’re going to up the deposit or impose conditions on you to get the private sector tenancy.” That is wrong in principle. What we have to do is to look at the complete area of the market.
One other issue, which my hon. Friend the Member for Dover mentioned, is the changes that have taken place in the promotion of the private rented sector by previous Governments. When Gordon Brown was Chancellor of the Exchequer, he promoted the concept of buy to let, which has of course continued to expand across the piece. When George Osborne was Chancellor, he put brakes on the incentives to do that, which of course did not kick in for several years after he proposed them. The result is that many private sector landlords are leaving the market because it is no longer as profitable as it once was. Where do they go? They go to the Airbnb market or the completely unregulated sector, which my hon. Friend the Member for North Devon (Selaine Saxby) mentioned.
The risk is that, unless we look at the whole ambit of this, all we will do is reduce the size of the sector, increase rents overall and make sure that tenants are put in a worse position than they were in the first place. So there has to be a complete revolution in this regard. I commend the White Paper for offering a menu of choices, but I think we still need to go further in looking at the entirety of the sector to prevent that from happening.
The hon. Member for Brighton, Kemptown (Lloyd Russell-Moyle) made the point about a landlord being able to sell a property with a sitting tenant. Why not? Many mortgage providers will now allow that to happen—not enough, I would accept, but many do. As we have heard, 94% of landlords have one or two properties, and they dominate the market. Most landlords want the position of having a good tenant, who pays their rent and does not misbehave. If that happens, why should they not continue on that basis?
The model in this country is a six-month assured shorthold tenancy, with limitations on renewing that tenancy and, indeed, conditions on both sides that the landlord and the tenant should honour. My view has been this. The Housing, Communities and Local Government Committee—the predecessor to the current Levelling Up, Housing and Communities Committee—did an inquiry on this, and we recommended long-term tenancies of three years or more, so that people had security of tenure. A capability was enshrined within that about how rents could be increased—in other words, once per year and in line with inflation—so that both sides knew, with predictability, how that should be. That, to me, is a way forward.
We also suggested having a specialist housing court. Rather than have the expensive processes we currently have, we could have a housing court that would concentrate purely on these subjects. We have to face up to the fact that, every single day in this country, there are 300,000 people sofa surfing who cannot get anywhere to live. Also, 7%, at least, of private sector tenants are in severe rent arrears. Some people say, “Well, 7% isn’t too bad”, but that means 300,000 people or families in severe rent arrears who face eviction through the courts at any one time.
Unless we address this problem—I have warned successive Ministers, and we have mentioned how many Ministers we have had—we are going to face a homelessness crisis the like of which this country has never seen before. The reality is that the moratorium on evictions during the covid pandemic was the right thing to do—without question. There were people who could not afford to pay the rent during that time. Perhaps their jobs disappeared, or the benefits system did not catch up with them or they did not apply properly. Others just refused to pay because they knew they could get away with it. I have no sympathy for those people. I have several examples in my constituency where tenants just refuse to pay their landlords; from their perspective, they are reprehensible.
As things have unwound and the economy is coming back into fruition, we are seeing rents and pressures on tenants rise, and a rush by certain unscrupulous landlords to try to increase rents dramatically before the renters’ reform Bill comes into play. We need measures immediately to counter those issues. I have a question for the Minister. I understand that she is new to the job, but there were strong rumours that the renters’ reform Bill would be delayed and postponed, and perhaps even kicked into the long grass. I hope that the Bill will be published and brought forward as rapidly as possible, with, if necessary—I do not normally agree with this—retrospective measures to prevent what could happen while the Bill completes its passage through Parliament; in other words, unscrupulous landlords evicting tenants or hiking their rents to get them out, and causing further problems. We must include within that Bill what to do for the entirety of the market: both the Airbnb market and short-term lets. If we do not, we will drive private sector landlords to the more profitable end of short-term lets without any regulation, and without anything to assist people who desperately need accommodation.
I welcome my hon. Friend to the Front Bench. One quiz question I often have is, “How many Housing Ministers have we had since 1997?” I think we are up to 32 in 25 years. I am afraid that demonstrates the problem we have in this country: a lack of long-term planning in terms of the Ministers at the Department. I welcome the Minister to her position and hope she can give us some good news.
Rachael Maskell (York Central) (Lab/Co-op)
It is a pleasure to follow the hon. Member for Harrow East (Bob Blackman). I sat on the levelling up Bill Committee, and seven Ministers served us during that time, so I share that frustration. We need a long-term strategy to ensure we address the housing crisis we face.
I congratulate the hon. Member for Dover (Mrs Elphicke) and my hon. Friend the Member for Brighton, Kemptown (Lloyd Russell-Moyle) on securing this important debate, which has caused hon. Members to stay behind on a Thursday because we care so passionately about housing. I also welcome the new Minister to her place. I trust she will produce the goods that we are all longing for: not just a fairer private rented sector and a 12-point plan, but the first step of a comprehensive strategy to address once and for all the housing crisis that we see.
The private rented sector has now become the backstop to housing, as opposed to local authorities, which traditionally had that role. As a result, power has shifted from the state into the hands of private landlords, which is why we face some of these deep-seated crises. In York, 20.4% of people live in the private rented sector. I have looked at the number of class 1 measures that need to be taken because of a failure to keep those homes in good condition. A quarter of homes have trip hazards, poor wiring, mould, rodents—the list goes on. That is why today’s measures on raising those standards are so important. But that can be only a first step.
Most landlords are there to serve a community in their own way, but also to realise the value of their estate and investment. Much extraction of property and money removes those opportunities from anybody else. For any tenant I speak to in the private rented sector, renting is not their choice. It is a matter of needing a home and for many people that home is not satisfactory for them. Since the year began, we have seen a plethora of section 21 notices; they are rising in number. I will talk about that because we are seeing a rise in costs and a decline in conditions. Looking at costs, my constituents spend 32% of their income on rent, which means that, with the cost of living crisis and energy costs, there is little left to start saving for that longed-for home. Property prices are rising in York at a rate that is running away from people, so they are trapped, with no assets, in the private rented sector. We must facilitate people’s ability to break out from that.
Some costs fall heavily on people who receive local housing allowance. I really hope that the Minister will talk to colleagues about that—I appreciate that there is crossover of interest in housing—and how the broad rental market is evaluated. The average rental cost in York is £945 per calendar month, and yet someone would receive only £650 in their LHA for a two-bedded property. That gap means that people cannot afford to live in the private rented sector and have nowhere to go. Ultimately, we see that many people with the vital skills needed to ensure that our economy can function are leaving our city. There are deep-seated challenges because the rental market covers a much broader area than York, which has a particular hotspot in property expense.
We also see people taking real advantage of section 21 notices because of the short-term holiday let market. The hon. Member for North Devon (Selaine Saxby) focused her speech on that, and I will do so, too, because it is hitting holiday hotspots across the country at such an alarming rate. Private landlords are flipping their properties over from the private rented sector to short-term holiday lets. In York, a landlord can get £700 from a property for a weekend. In the light of the measures spoken about by the hon. Member for Harrow East and the changes first in buy-to-let mortgages and then when George Osborne pulled back some tax advantages, landlords say that their margins are too tight to maintain their properties in the private rented sector so, to make any profit on their assets, they need to flip their properties.
We have more than 2,000 short-term holiday lets just in my constituency and the surrounding area, which are hollowing out streets and communities. Ultimately, because of that market, people are being kicked out of their homes and having to leave the area and their jobs, and children are being taken out of school. That is why I have a private Member’s Bill—the Short-term and Holiday-let Accommodation (Licensing) Bill—before Parliament. I hope that the Department will work with me to bring it into being and regulate and license short-term holiday lets. It is due to have its Second Reading on 9 December, and it could transform our ability to regulate that market. That is where the inequality sits and where we need to see significant change.
I welcome the measures in the White Paper for greater accountability and for greater power for tenants—something that has been so absent. That is why I very much hope to see those measures brought forward in a Bill at the earliest possible stage. An ombudsman is a way of bringing powers to book, but it needs to be properly resourced. If it is not, it will be ineffective in bringing about the changes that we need to see and to put curbs on landlords wanting to exploit the system.
I turn to students. My hon. Friend the Member for Brighton, Kemptown mentioned the challenges in student accommodation. I met York Residential Landlords Association to discuss the matter as well as the universities in York. Purpose-built student accommodation has an exemption and can issue just one-year tenancies to students. However, in the private rented sector, there is not that option. That will cause real challenge. Next year’s students are already seeking out their accommodation. Landlords are saying that if the legislation comes in, they will simply start looking for their accommodation during the exam period. That, clearly, would not be in anyone’s interests. My hon. Friend the Member for Brighton, Kemptown came up with a really sensible and positive suggestion, and I hope the Minister can look at it, but we do need to solve this issue for the sake of students. I have 40,000 students in one form or another in York, so it is a major issue for us.
I hope the Minister, in her time in the role, will look internationally at good practice, as there is much to learn from across the globe. In particular, I am attracted to measures taken in Finland where tenants are provided with resourcing, instead of just a local housing benefit, to start being able to access the property market themselves. It is an interesting model that should be considered as an opportunity.
I concur with hon. Members from across the House on the need to build social homes. We really do have a crisis, and when there is a crisis urgent measures need to be taken. The problem with housing is that it is still seen as a short-term fix for developers trying to make their revenue. We have to think far more long-term about it. I urge the Minister to think about the opportunities her Government have to use public land for public good. I am talking about disposals of Ministry of Defence land, NHS property services, Network Rail and so on—significant estates. If we can build social housing and affordable housing on those estates, as opposed to housing to market, it could be a real game changer. The interest of the spending Department is to receive a capital receipt, but if we can find that as a mechanism to deliver the housing our communities need it could be really important.
I will close on this point. When Nye Bevan sat where the Minister is and had the opportunity to deliver housing—I think we all recognise that he delivered more for social housing and more for housing in our country than any other Minister ever has, and I certainly pay tribute to him—he said that the only way to deliver the housing the country needed was to empower local authorities, municipal authorities, to have the authority to go ahead and build. He built and he delivered. I trust the Minister will, too.
Fleur Anderson (Putney) (Lab)
I thank my hon. Friend the Member for Brighton, Kemptown (Lloyd Russell-Moyle) and the hon. Member for Dover (Mrs Elphicke) for securing this very important debate. It is definitely one of the biggest issues in Putney, Southfields and Roehampton in my constituency. I thank the London Renters Union, Generation Rent and Shelter for their campaigning work to raise concerns that are very common across my constituency, but also for their work in supporting renters. I commend Wandsworth Council for its 1,000 Homes scheme, which are all going to be council housing. That is the right way forward, because, as so many Members have pointed out, the housing crisis across our country needs to be addressed and can only be done so with more homes.
I speak today on behalf of the 41,000 renters in Wandsworth, especially those who feel they are stuck in a rental system that is overheating, burning through their finances and taking an emotional and mental health toll on their lives because of the imbalance of power. We look to the White Paper and to legislation to address the imbalance of power between landlords and renters. Renters are spending so much money, yet still have an insecure system.
There is much in the White Paper that is welcome, but I am beginning to lose faith in whether any of it will be delivered. I hope to hear warm and encouraging remarks from the Minister today, but also pledges for action. The long-awaited renters reform Bill has still not been brought to the House. I therefore ask the Minister: where is it and when will we see it? The Government promised renters reforms in the 2021 Queen’s Speech, but as yet have failed to deliver. The private rented sector did not even get a mention in the most recent Queen’s Speech, yet the stories told today, and there are many more that I know of, really highlight the need for change.
To give one example, I was evicted from my rented home 20 years ago. The landlord told the three of us that we would have to leave because they were going to sell the house. Someone visited who claimed to be a solicitor—I am still not sure whether they were. They made sure that we paid our rent right up to the end, rather than using our deposit for the last month, so we did that quite properly. However, the landlord then gave some spurious reasons for not paying back our deposits and took them all. By then, we had moved on to different places. We could not afford to go to the small claims court. It was all too difficult. We then went back to the property only to find out that it had been re-rented to another group—and on went the landlord. That was so unfair, and it has stayed with me ever since.
The other day, on the way to see a constituent, I went past a house where the family were moving out. They were absolutely furious. They—a nurse and a policeman—had been given a section 21 notice to leave, because they had complained about the mould in their flat. It was a revenge eviction, or—as I hear about so often—an eviction because of complaints to the landlord. They were asked to leave and could not afford to move to any other property in the area, so they were going to have to move north of London and come back every day to their local jobs in south-west London. Their lives were being upturned and, to them, it seemed so unfair.
I also heard from someone locally who described herself as a “beginner teacher”. She moved into a flat that seemed to be absolutely fine, but very soon after moving in, she found that there was damp and spreading black mould in the bedroom. That had an impact on her health. The landlord did not acknowledge the complaints for a long time, took no action to get rid of the mould, and then, after 10 months, served her with a section 21 notice. She had to leave. I have no doubt that the next tenant then moved in, found the same thing and the whole cycle continued, allowing the landlord to leave alone the black mould and the health and safety concerns.
I have also heard from many survivors of domestic abuse, for whom the state of the private rented sector has a huge impact. The fear of abuse versus the fear of homelessness ensures that many women who should move out for their safety do not. Women’s Aid reported that the high costs of the private rented sector create a barrier for many women who want to leave their abusive partners.
The Conservatives pledged to ban section 21 evictions in 2019, and I have raised that issue several times in the House since being elected. They have still not been banned. The latest Prime Minister has yet to confirm whether it is his policy to do so, so I hope to hear from the Minister that the legislation will end no-fault and revenge evictions.
Since the Government first promised to end section 21 evictions in 2019, around 230,000 private renters have been served notice. As has been mentioned, that is an eviction every seven minutes. The introduction of the legislation is very urgent for so many people. Renters need the Government to legislate now to provide them with immediate protection. There have been lots of nice words and aspiration but no delivery. That is perhaps not surprising as there have been five Housing Secretaries —or is it six?—since I became an MP.
Too many people are stuck in a system with no power to challenge rogue landlords and no savings to get on the housing ladder, and they are in housing that falls well below acceptable standards. Renters need a deal that gives them the security and dignity that they deserve, yet the system’s problems are getting more and more acute. Everyone has been vying to give the highest costs of the private rented sector in their constituency, but I thank I can beat all the previous hon. Members. In Putney, the average rent for a two-bedroom flat is £3,900 a month. That is nearly £47,000 a year. [Interruption.] A one-bed flat is about £2,700. That is astronomical. A rented property will go on to the market first thing in the morning. By 11 o’clock, there will be many visits. By 1 or 2 o’clock, offers will be put in and those ratchet up through the afternoon. I have heard of landlords asking for three years’ rent up front and increasing monthly costs. Respective renters have to outdo one another in what they can offer to a landlord, when they are not entirely sure what will make a difference in the sector. I know many people who are having to move out, move to a different place and entirely change their life. They also know, as I do, that their children will not be able to afford to rent in the area they live in.
The insecurity of the sector is having a huge impact on the social housing sector, where many people are living in increasingly overcrowded homes with more and more children. Their fear of moving into the private rented sector is so great that they are living in those overcrowded homes far longer than they otherwise would. It is not just for the private rented sector that we need reform.
Four in 10 under-30s now spend more than 30% of their pay on rent, according to the data. That is a five-year high, and it is absolutely shocking. The Minister knows exactly what the situation is like, especially in London. Demand for homes to rent privately in London has exploded post pandemic, and the ratio of prospective tenants to rooms available is 7:1. The private rented sector also has the highest prevalence of category 1 hazards, which are those that present a risk of serious harm or death. Poor housing costs £1.4 billion a year to the NHS and £18.5 billion to society as a whole.
There are more than half a million more households with dependent children in the private rented sector than there were in 2005; they make up 30% of the sector. Eviction from private tenancy is the second leading cause of homelessness in England. It is all happening in the context of an unprecedented cost of living crisis. I am so worried about what it will mean for my constituents in Putney through the winter ahead.
As I say, much of the White Paper is welcome and will make a huge difference, but it makes no promises about in-tenancy rent increases. It lacks detail on the decent homes standard and makes no mention of the previously promised lifetime deposit. There is a lack of legislation to help renters to afford legal advice when using the new PRS housing ombudsman.
I welcome hon. Members’ comments about students. Will the Minister meet Universities UK to look at ways to make the student rented sector far more secure? I have an interest: I currently have two students in my family, and I have had three, so I have spent a lot of my own money on the student private rented sector. I know that lots of student unions are running campaigns to say, “You don’t have to rush into getting your tenancy very early in the academic year, signing up to unaffordable conditions and paying huge amounts during the summer.” Any way in which universities could take on a larger amount of the private rented sector and ensure that it is stable and fair for students would be welcome and revolutionary.
There is lots of work to do. As a minimum, legislation needs to include increased security of tenure, including longer notice periods, a longer period of protection from no-fault eviction, and an assurance that tenants will be compensated when forced to move. Secondly, there needs to be increased protection from abuse. In particular, landlords must provide unequivocal evidence when they are selling or moving back in. There needs to be a longer no re-let period, with increased resources for local authorities to investigate abuse. Finally, there needs to be a focus on affordability, a limit on unaffordable rent increases, a rent tribunal system that is easier to access—in fact, easy to access—and an end to automatic eviction for arrears. Most of all, we need clarity from the new Prime Minister on whether he will honour the 2019 manifesto pledge to end section 21 evictions.
Renters in my constituency and up and down the country deserve safe, secure and affordable homes. It is time for the Government to put their money where their mouth is and deliver for them.
Ms Karen Buck (Westminster North) (Lab)
I congratulate my hon. Friend the Member for Brighton, Kemptown (Lloyd Russell-Moyle) and the hon. Member for Dover (Mrs Elphicke) on securing this debate, but I must be honest: I find it disappointing that we are having a general debate on the private rented sector yet again, three years after we were promised legislation. The time is overdue for us to get beyond discussing policy in the round and on to discussing the substance of legislation and amending it.
Having said that, we have had some really strong speeches. I was struck by the speeches of Conservative Back Benchers, who sounded—well—like us, really. I am pleased that it seems to be appreciated that there are limits to deregulation and we have hit the bumpers in that regard—particularly in respect of short-term lets, which have had a devastating effect on lettings in a number of towns and coastal communities and, of course, in inner London, notably my own constituency, which has the largest private rented sector in the country.
In the years during which we have been waiting for the Government to enact the promised legislation, we have been plunged into a deepening affordability crisis for renters, who are facing an increasing squeeze on their incomes. London rents are now averaging £2,000 a month, and since last year have increased by 20% in inner London and just over 15% in London as a whole. Nationally, one in five renters have faced an increase of £100 a month. As 45% of renters have no savings at all, the fact that they have managed to survive for this long is a miracle. However, as we go into the winter with a cost of living crisis, there is a real risk that a catastrophic number of people will be tipped into homelessness, and certainly into poverty. Even more than any other tenure group, these people will face a choice between keeping a roof over the heads, eating and heating.
It needs to be said that there is an inequalities dimension to this. My hon. Friend the Member for Brighton, Kemptown was right to say that there are three different rental markets. We are most concerned with the average renters, people who would otherwise be buying but are deferring buying because of the cost of rents, but we must also consider the third or so who constitute the poorer renters. Of those, a disproportionate number are women-led households and black and minority ethnic communities. It is members of black and minority ethnic communities who are least likely to have mortgages, and who are therefore most likely—especially given the squeeze on social housing—to find themselves trapped in the poorest-quality private rented accommodation and the most expensive in proportion to income, with all the consequences that will have for those communities. It is important for the Government to understand the inequalities dimension, and to frame the legislation accordingly.
The Evening Standard, which has rightly had a continuing focus on the private rented market, recently ran a piece headed “London’s renting crisis: brutal choices, heartbreak and escalating costs faced by renters at breaking point”. That is absolutely accurate. The competition for rental properties is unprecedented. We hear stories of auctions with people having to bid against each other, and of deposits and other up-front costs. Every time someone has to move, not only do they have to deal with a deposit, but the moving costs are piled on top of that. It is no wonder that younger renters cannot afford to buy, and are locked out of the housing market that most wish to join, as a result of that combination of rents and recurring one-off costs which eat into their incomes.
Today’s interest rate rises will feed into mortgages, which is entirely due to the Government’s mishandling of the economy, and which means that people will be trapped even deeper and for even longer. Those at the lower end of the market who, in any normal and healthy system, would have been enjoying the security and the fair rents of social housing appropriate to their circumstances and their income are locked out as well, because the number of lettings in social housing has plummeted by more than 100,000 in the last 10 years alone.
Why is that? It is because over the past 12 years the Government have deliberately chosen not to build social housing. One of the first acts of the 2010 Government was to halve the housing investment grant, making it impossible for local authorities to build. But it is also because—this has not been understood by successive Ministers—there always used to be a flow out of social housing and into home ownership, and that has effectively stopped.
People end up trapped in the social housing that we do have. They are unable to move into the home ownership that they aspire to, and that they would have been able to afford a decade or 15 years ago. They are keeping those social housing properties and tenures for longer, so there is not a flow into them from other households, and that of course bleeds into increasing homelessness.
We have an affordability crisis and a security crisis—a section 21 notice is issued every seven minutes. We also have a standards crisis and a decent housing crisis, particularly at the bottom end of the market. Close to 1 million households are in substandard accommodation. The private rented sector is the tenure with the worst standards; more than 500,000 premises have category 1 hazards, which represent serious threats to health or life. We have a growing crisis for older renters, who are trapped in the private rented sector. They never expected to be without the means to improve their accommodation.
Hon. Members have cited case studies, and I too want to read one into the record. This is the kind of story that we hear in our surgeries about people in inappropriate and substandard accommodation:
“I have a special needs boy. He has hypoxia, ischaemic brain injury, epilepsy, global development delay, hepatitis… my flat in the last two months was flooded with rainfall bcz the roof has a big leak. We sleep on the floor, so mattress, furniture, clothes get wet… Recently the ceiling light exploded, so now there’s no power in the property. Our flat is only electric supply, no gas. So now there’s no food, no heater, nothing I can do. We are struggling financially bcz my child needs 24-hour support and he has lots of appointments so that’s why”
my constituent
“can’t go to work… So it’s difficult to survive like this…no one will understand my pain.”
I am afraid that that is not uncommon. This kind of case comes before us time and again. People with no power, and no purchasing power in the private rented sector, get stuck in properties, and landlords—I do not call them rogue, because there are far too many of them for us to regard them as exceptions—will exploit that for their own purposes.
We need the promised legislation, but we need more than that. I want to flag up two other issues that need to be seriously addressed. We have heard reference to enforcement; it should not be an empty word. Enforcement requires resources. If the Government do not resource a policy change, and do not give local authorities the resources to take enforcement action against bad landlords in cases of substandard accommodation, that will be exploited. When a landlord is seeking an eviction under section 8 rather than section 21, it is even more important that the tenants have power, or somebody who is on their side and can support and assist them.
Local authorities prosecute in only 1% of cases in which poor-quality accommodation is brought to their attention. Why is that? Sometimes it is because local authorities do not focus on the issue, but it is also a question of resources; councils in London in particular have lost 20% of their resources in the last 10 years. The Government must address the issue of capacity to deal with environmental health matters, and capacity in legal aid on housing, because once again we see evidence of advice deserts, and of people being unable to access housing lawyers.
I want to raise one more issue, which I do not think the Government have addressed. In a post-section 21 environment, if we get there, there will be even more risk of illegal evictions. I come across illegal evictions in my casework; people ring my office to tell me that a landlord is inside their property illegally, and is driving them out. Unfortunately, we have very little data on this, because the Government do not collect data on the extent of illegal evictions. The Greater London Authority and the Mayor of London are doing very good work teaching the police how to handle illegal evictions, and teaching them not to step back and regard an illegal eviction as a civil matter between two parties. However, that work is not done nationally, and a great deal more needs to be done about that.
There is a lot that we can do. If we ever get the legislation, we would look to amend it to improve protection of tenants from illegal eviction; I hope that the Government can address that.
Renters deserve security, affordability and decency. At the moment, far too many do not have any of these things. They all have to be addressed together and in a wider context that includes advice, representation and enforcement. Above all, they all have to be addressed now.
Matthew Pennycook (Greenwich and Woolwich) (Lab)
It is a pleasure to wind up this important debate on behalf of the Opposition. I congratulate my hon. Friend the Member for Brighton, Kemptown (Lloyd Russell-Moyle) and the hon. Member for Dover (Mrs Elphicke) on securing the debate, and I thank the Backbench Business Committee for allowing time for it.
I also thank my hon. Friends the Members for Stockport (Navendu Mishra), for Vauxhall (Florence Eshalomi), for York Central (Rachael Maskell), for Putney (Fleur Anderson) and for Westminster North (Ms Buck), and the hon. Members for Harrow East (Bob Blackman) and for North Devon (Selaine Saxby), for their excellent contributions and powerful case studies. Collectively, they highlighted both the particular challenges facing private renters and how these challenges vary across the country, and that, irrespective of geography, there is a need to overhaul the private rented sector and to better regulate both short-term holiday lets and excessive rates of second home ownership as a matter of urgency.
I put on record our thanks to all the organisations that have made the case for rental reform over so many years, including Generation Rent, Crisis, Citizens Advice, the Joseph Rowntree Foundation, Shelter, Z2K, the New Economics Foundation, the Law Centres Network and various renters unions, as well as all the private renters who bravely shared their experiences publicly and the journalists who provided them with space to tell their stories. Their collective efforts have been integral to ensuring this issue is kept firmly at the top of the political agenda.
Labour strongly supports fundamental reform of the private rented sector, and we have called for it for many years. Regardless of whether they are a homeowner, a leaseholder or a tenant, everyone has the basic right to a decent, safe, secure and affordable home. Yet as this afternoon’s debate has reminded the House, millions of people renting privately live day in, day out with the knowledge that they could be uprooted with little notice and minimal, if any, justification.
On an individual level, the lack of certainty and security that is now inherent to renting privately results not only in ever-present anxiety about the prospect of losing one’s home but, for those at the lower end of the private rental market who have little or no purchasing power and who are increasingly concentrated geographically, as my hon. Friend the Member for Westminster North said—there is an equalities dimension to this, too—a willingness to put up with often appalling conditions for fear that a complaint will lead to instant retaliatory eviction. That is why some of the worst housing standards are to be found in the private rented sector and why, despite the existence of many good landlords and a steady, if glacial, improvement in conditions overall, one in five private rented homes still does not meet the decent homes standard and one in 10 has a category 1 hazard posing a risk of serious harm.
For tenants forced to live in such substandard properties, whether they wake up every day to mould, vermin or dangerous hazards, what should be a place of refuge and comfort is instead a source of daily unease and, in many cases, torment and misery, which takes a huge toll on their physical and mental health.
Far too many tenants are evicted each year from a private tenancy without due cause, which is why so-called no-fault section 21 notices are a leading cause of homelessness in England. This broken system can no longer be tolerated, not least because the numbers affected have risen markedly over recent decades, as the hon. Member for Harrow East said.
This House last legislated to fundamentally alter the relationship between landlords and tenants in 1988, when I was just six years old—I suspect you were not that much older, Mr Deputy Speaker. The private rented sector has changed beyond recognition in the more than three decades since. Some 11 million people now rent from a private landlord. As well as the young and mobile, the sector now houses many older people and families with children, for whom greater security and certainty is essential for a flourishing life.
To ensure private renters get a fair deal, we need to transform how the sector is regulated and finally level the playing field between landlords and tenants. That is why, with important caveats, Labour welcomed the proposals in the White Paper when it was published in the summer. We unequivocally support the proposed ban on section 21 evictions. There is no justification for such notices, and they should have been scrapped long ago. We support the introduction of minimum standards in the private rented sector through the extension of the decent homes standards, although we have real concerns about how it might be enforced in practice given that it is not an enforceable standard in the social rented sector, where it already exists.
We recognise that landlords will need recourse to robust and effective grounds for possession in circumstances where there are good reasons for taking a property back, for example, because of antisocial or criminal behaviour. However, we want assurances that such grounds cannot be abused unfairly to evict tenants and that they will be tight enough to minimise fraudulent use of the kind we have seen in Scotland.
We welcome the proposed limit of rent increases to once per year, but we take issue with the inadequacy of the proposed measures in their ability to address unreasonable within-tenancy rent hikes of the kind that are likely to increase markedly once section 21 is scrapped and with the absence of any measures to tackle illegal evictions, a point that has been raised by my colleagues.
Labour would go further in several important respects, introducing a more comprehensive new renters’ charter, but we do want to see all 12 of the proposals set out in the White Paper translated into primary legislation as a matter of the utmost urgency. I cannot emphasise enough the need for that urgency, a point we have pressed time and again with successive Ministers, to no avail. There is a desperate need for the Government to act quickly, because the problems inherent in a sector that for far too many renters has always been characterised by insecurity, high rents and poor conditions, have become acute in recent months, as those renting privately struggle to cope with the impact of high inflation and rising prices.
As hon. Members will know, and as we have heard this afternoon, in many parts of the country rents in the private rented sector are surging and the costs involved with moving are soaring. With the Government having decided, once again, to shamefully freeze local housing allowance, millions of hard-pressed tenants are now being stretched to breaking point, with the risk of mass arrears and evictions that entails. What is so frustrating for Labour Members, and for those outside campaigning for renters’ reform and for private tenants themselves, is that instead of introducing legislation that we could have fast-tracked through this House to address this looming winter crisis, all we have, despite years of promises from successive Conservative Administrations that they would enact renters’ reform, is the White Paper and a vague promise, one that I had from the Minister’s predecessor just last week, to introduce a Bill at some point during the more than two years that remain of this Parliament.
Florence Eshalomi
On urgency, figures from the Local Government Association show that the ending of a private rented tenancy is the most common reason for homelessness, with this being responsible for 37% of homelessness between January and March this year alone —in those three months. Does my hon. Friend see that this urgent crisis needs solving now?
Matthew Pennycook
I absolutely agree with my hon. Friend on that, and I will come on to say why I think the situation is particularly urgent and what has happened in terms of the delay that has been caused. It is not good enough that the Government have taken so long to make progress on this issue. It is not as though they have not had ample time to legislate, even accounting for the impact of the pandemic. It is now well over three years since the Conservative Administration of the right hon. Member for Maidenhead (Mrs May) promised to abolish section 21 no-fault evictions. In that time, not only have hundreds of thousands of tenants been evicted through a section 21, but more than 45,000 households have been threatened with homelessness as a result of being served such notices. As my hon. Friend just mentioned, the figures released so far this year suggest that possession claims resulting from them are increasing markedly as the cost of living crisis intensifies.
Faced with a phenomenally difficult winter, private renters cannot wait until 2024 for the Government to act. I say to the new Under-Secretary of State for Levelling Up, Housing and Communities, the hon. Member for Kensington (Felicity Buchan), whom I welcome to her place, that every extra month the Government delay bringing forward the renters’ reform Bill they have promised means thousands more private renters suffering. The Government must act, and they must act now. If they introduced emergency legislation enacting the proposals set out in the White Paper, Labour would support it and work with the Government to ensure it made rapid progress. But it is the Government alone who control the business of this House and only they can ensure the necessary legislation is given the priority it deserves. As I have put to Ministers before and sadly suspect I will have to do so again, it is high time the Government stopped talking a good game about private rented sector reform and finally got on with delivering it, because private renters have waited long enough for the protections that they deserve and that they rightly expect.
The Parliamentary Under-Secretary of State for Levelling Up, Housing and Communities (Felicity Buchan)
I thank the hon. Member for Brighton, Kemptown (Lloyd Russell-Moyle), my hon. Friend the Member for Dover (Mrs Elphicke) and the Backbench Business Committee for securing this important debate on the proposals in our White Paper. I thank Members who have spoken for their considered and constructive tone and for speaking powerfully on behalf of their constituents. I also thank hon. Members for their warm words about my hon. Friend the Member for Walsall North (Eddie Hughes), who worked so hard on the White Paper. I pay tribute to my right hon. Friend the Member for Pendle (Andrew Stephenson), who took that work forward.
The Government are determined to deliver a new deal for tenants and landlords in the private rented sector. Hon. Members have made a number of points about reform and I hope to address as many of them as possible in the time I have. If I do not reach some of the points, I am happy to sit down with hon. Members on a one-to-one basis.
I want to make a couple of observations about the sector as a whole. As Members know, the private rented sector has grown significantly in recent decades. It has doubled in size since the early 2000s, with landlords and tenants becoming increasingly diverse. The sector provides a home for 11 million people—19% of all households. At least 1.3 million of those are families with children. However, the sector is also the least secure and has some of the lowest-quality housing. Too often, the current system does not work for tenants, or for the many good landlords operating in the sector.
Everyone in our society deserves to live somewhere decent, warm, safe and secure. The Government are determined to make that vision a reality.
Hon. Members will know that the White Paper sets out a 12-point action plan, and I note that it has received support from Members on both sides of the House. The changes that it sets out amount to a significant shake-up of private renting. We know how important it is to get it right. We are grateful to our partners across the housing sector who have worked closely with us on developing the reforms. We will continue to consult them closely as we move the process forward.
Several hon. Members raised the issue of the poor quality of some privately rented homes. The majority of landlords and agents treat their tenants fairly and provide good-quality, safe homes, but that is not always the case. Too many of the 4.4 million households who rent privately live in poor conditions and pay a large proportion of their income to do so. Poor-quality housing undermines renters’ health and wellbeing. It can affect their educational attainment and it reduces pride in local areas.
I am proud of the action that the Government have already taken to put things right. We have strengthened local authorities’ enforcement powers by introducing fines of up to £30,000, extending rent repayment orders and introducing banning orders for the most serious and prolific offenders. We have introduced new regulations, which require landlords to install smoke and carbon monoxide detectors and ensure that the electrical installations in their properties are safe. We are concluding our overhaul of the housing, health and safety rating system, which is the tool used to assess hazardous conditions in rented homes. That will make it more accessible to tenants and landlords and allow more efficient enforcement.
The Homes (Fitness for Human Habitation) Act 2018 empowered all tenants—private and social—for the first time to take their own action against landlords who let unfit properties. As a result, conditions have improved over the past 10 years, but we know that there is more to be done. Alongside this we have consulted on introducing a legally binding decent homes standard in the private rented sector. That consultation closed on 14 October and we are currently reviewing responses.
Many hon. Members talked about tenancy reform and, clearly, that is critical. Our reforms will provide tenants with security. They will also ensure that good landlords are still able to gain possession when necessary.
Hon. Members have rightly mentioned the insecurity caused by section 21 no-fault evictions. It is not right that a landlord can ask a tenant to leave without giving a reason. The Government are clear that they want to support the majority of landlords who act responsibly, but it is not right that tenants live in fear that their lives may be uprooted at the whim of the minority of rogue landlords. That is why, as we have set out in our manifesto and confirmed in this House, the Government have committed to abolishing section 21 of the Housing Act 1988 and giving millions of private renters a secure home.
At the same time, the White Paper proposes to simplify complex tenancy structures. It will move all tenants who currently have an “assured” or “assured shorthold” tenancy on to a single system of periodic tenancies. Periodic tenancies will allow either party to end the tenancy when they need to. That will enable tenants to leave poor-quality properties without remaining liable for the rent, or to move more easily when their circumstances change—for example, to take up a new job opportunity. Landlords will always have to provide a specific reason for ending a tenancy.
Good landlords play a vital role in providing homes for millions of people across the country. We want to reassure them that the new system will continue to be a stable market for landlords to invest and remain in. No one will win if our reforms do not support landlords as well as tenants. It is only right that landlords should be able to get their properties back when their circumstances change, or when tenants break the rules. A number of hon. Members mentioned the real issues attached to antisocial behaviour. We will reform grounds of possession so that they are comprehensive, fair and efficient, and we will streamline the possession process, removing unnecessary restrictions on landlords seeking to recover their property.
Alongside that, we will continue to listen to landlords and students, as mentioned by a number of hon. Members —landlords provide much-needed accommodation to thousands of students every year—to ensure that the sector continues to work for those in higher education, and I will continue to have those conversations.
I am sure that hon. Members will agree that going to court should be a last resort, when all other avenues have been exhausted. But we know that sometimes it is unavoidable, and that court proceedings can be costly and time consuming for landlords. That is why we are working with the Ministry of Justice and HM Courts and Tribunals Service to streamline the process and ensure that the most serious cases are prioritised. I just checked on the fax point and can assure Members that people can email or make paper submissions. Alongside that, we are reviewing the bailiff process. That is currently a big source of frustration and delay.
Many Members have mentioned issues surrounding the cost of living—
Lloyd Russell-Moyle
Will the Minister give way on the legal question?
Lloyd Russell-Moyle
Does the Minister not recognise that the lack of legal aid is a huge problem for people in the private rented sector? In the last Session, I introduced a Bill that would have cost the Government nothing but provided £20 million in legal aid and early legal support for private renters by taking the interest from the £2 billion- worth of deposits held in this country and putting it into a special, reserved fund for legal aid for renters. Would she look at that measure, so that the court process is supported?
Felicity Buchan
The hon. Gentleman will recognise that legal aid does not fall within my remit, but I am happy to meet him and have a conversation.
We empathise strongly with those affected by the cost of living issues. That is why the Government have provided over £37 billion in cost of living support this year to those who need it the most. We have given unprecedented support to protect households from high energy prices. For tenants who are unable to afford their rental payments, there is a range of potential support available through the welfare system.
My hon. Friend the Member for North Devon (Selaine Saxby) and the hon. Member for York Central (Rachael Maskell) both raised the issue of second homes and holiday lets. I am aware of the pressures in their constituencies. The White Paper contains a proposal on that issue, and I point both hon. Ladies to the Department for Digital, Culture, Media and Sport’s call for evidence on the topic.
Rachael Maskell
The DCMS call for evidence has closed, but I have a private Member’s Bill before the House. Will the Minister’s Department work with me to ensure that we can regulate short-term holiday lets?
Felicity Buchan
Specifically, that falls under the DCMS, but I am happy to have a conversation with the hon. Lady.
Selaine Saxby
The DCMS consultation took months to see the light of day, and my local council submitted pages of evidence. I recognise that the issue falls within the remit of the DCMS, but one of the reasons constantly given for the inability to tackle it is that it lies with a different Department, either LUHC or DCMS. If anything can be done to bring the Departments together to enable progress to be made, we would be most grateful.
Felicity Buchan
I hear my hon. and good Friend, and I will do everything I can to facilitate that.
I hope that all Members present today recognise that this Government are committed to reforming the private rented sector in a fair and balanced way, abolishing no-fault section 21 evictions and strengthening and clarifying landlords’ rights when seeking possession.
Felicity Buchan
I am sorry, but I have been told that I need to conclude.
The Government are committed to giving tenants the security and peace of mind they need to settle down with confidence and make their house a home. We are committed to empowering tenants so that they can make informed choices and raise concerns, and to supporting responsible landlords. As I said at the outset, we stand by our manifesto commitments to abolish no-fault evictions and to ensure that landlords have rights to repossess when that is required. We published the White Paper in June and we are discussing it with interested parties. The consultation on the decent home standard closed on 14 October, and we are reviewing the responses. We will publish the next steps in this extremely important sector in due course.
Lloyd Russell-Moyle
I am very pleased with the contributions we have had today. I again thank the co-chair of the APPG, the hon. Member for Dover (Mrs Elphicke), and we heard good responses from my hon. Friends the Members for Stockport (Navendu Mishra), for Vauxhall (Florence Eshalomi), for York Central (Rachael Maskell), for Putney (Fleur Anderson) and for Westminster North (Ms Buck) and from the hon. Members for North Devon (Selaine Saxby) and for Harrow East (Bob Blackman).
I will not repeat what other hon. Members have said, but my greatest disappointment is that I still do not really know when something is going to come forward. We all know that “in due course” in Government and parliamentary language means the never-never. That is what the Minister has promised us: the never-never. It might come or it might not—we do not know. I am afraid I do not think that is good enough because only last week there was a debate in Westminster Hall on a similar topic, so it is not as though the Department was not forewarned that these questions would be asked. It is not good enough because at least a timetable, even an amendable one, could have been put down.
I am disappointed that we have not had that, but I am pleased that the Government are still committed to reforms. I just want them to get on with it, because we have heard of the desperate need and the proposals in the White Paper are not enough. We did not quite hear a commitment to every single one of the 12 points in the White Paper; we just heard a reiteration of the evolution of section 21.
I will take the Minister’s words in good faith. I am sure we can meet about some of these issues in person, one to one, but I want to see that timetable and I hope she will commit to updating the House “in due course”, in due course.
Question put and agreed to.
Resolved,
That this House has considered the White Paper A fairer private rented sector.
World Biosphere Day
(2 years, 1 month ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Selaine Saxby (North Devon) (Con)
Today is World Biosphere Day, and as UNESCO has said:
“With each passing year, the urgency of tackling environmental issues becomes clearer: we only have one planet, and it is in danger. Our relationship with nature and with other living beings needs a radical rethink in order to address these issues—we need to design and create a truly shared world.
Biosphere reserves have shown that it is possible to live in this world while also establishing a sustainable and harmonious relationship with nature.
The International Day for Biosphere Reserves is an invitation to take inspiration from the solutions already implemented in these spaces to build genuinely sustainable development everywhere, with full respect for nature and for the living world.”
The UNESCO Man and the Biosphere programme was launched 50 years ago as an intergovernmental and interdisciplinary science programme to research and address the conflicts between humankind and the natural environment. Under the programme, living laboratories called biosphere reserves are designated by UNESCO at the request of member states, with the designations tending to be managed by local partnerships.
There are 738 UNESCO biosphere reserves in the world, in 134 countries, and only seven of them are in the UK: Wester Ross, Galloway and Southern Ayrshire, the Dyfi valley, Brighton and Lewes Downs, Isle of Wight, Isle of Man and North Devon. We were lucky in North Devon to be home to the UK’s first ever biosphere reserve, launched in 1976—one of the first in the world—covering 5,000 sq km of land and sea and integrating land and marine management.
Redefined in 2002, North Devon’s biosphere is this year celebrating its 20th birthday alongside this first International Day for Biosphere Reserves. Birthday congratulations are also due to south-west Scotland, on the 10th birthday of its two biospheres this year.
North Devon’s biosphere is centred on Braunton Burrows, the largest sand dune system in England, which stretches into neighbouring constituencies. The Braunton Burrows core area consists of fixed and mobile sand dune systems; I feel most privileged to have been able to walk the area with a local warden and see the water germander in one of the only two locations it still survives in the UK.
The boundaries of the reserve follow the edges of the conjoined catchment basin of the Rivers Taw and Torridge and stretch out to sea to include the island of Lundy. The biosphere reserve is primarily lowland farmland and comprises many protected sites, including 63 sites of special scientific interest, which protect habitats such as culm grassland and broad-leaved woodlands. It also includes Barnstaple and Ilfracombe in my North Devon constituency and stretches into neighbouring Bideford, Northam, and Okehampton.
The biosphere links designations such as Dartmoor, Exmoor, North Devon area of outstanding natural beauty and Lundy and the land, sea and rivers between them. It is managed by a partnership of 34 organisations from national agencies, local government, non-governmental organisations and community groups. I would like to take this opportunity to thank them all for their work and commitment. I am truly lucky to be able to call the biosphere home.
UNESCO sets out three functions of a biosphere reserve: conservation, learning and research, and sustainable development. Biosphere reserves aim to create and maintain sustainable communities where people can live and work in an area of high environmental quality. These areas can then provide a blueprint for other areas to learn from. The reserve must be environmentally, economically and socially sustainable. To achieve that, the reserve oversees management of natural resources, initiatives to develop the local economy and an effort to reduce inequalities between people.
The biosphere programme delivers policy testing for Government of integrated approaches to tackling environmental, economic and social issues. These living laboratories research the conflict between human activity and our natural environment. The programme’s remit includes several large-scale projects that have been developed through the partnership. A £1.8 million improvement project along the River Taw, funded by the Environment Agency, is designed to decrease polluted surface run-off from fields and urban areas into the river. The project will restore habitats and remove obstacles such as weirs that prevent animals from freely moving between sections of the river. It is hoped that the decrease in pollution will also increase beach quality in places such as Instow, which failed water quality tests in 2012—one of only 16 beaches in the south-west to fail.
A nature improvement area proposed to protect and enhance the catchment of the River Torridge—home of Tarka the otter in Henry Williamson’s book of the same name—was chosen by the Department for Environment, Food and Rural Affairs as one of 12 nationally important landscapes that will receive funding to restore and recreate ecosystems in the area. Other large projects work to use the natural environment to offset the negative impacts of human activities within the biosphere.
The success of the last 46 years’ work shows that on land and sea, biospheres have driven a local nature recovery plan, and in our marine environments they have improved the levels of phosphates. This was the first work of its kind in the country. They have pioneered projects in the 25-year environmental plan, and as part of that they have developed natural capital strategies for the region, which are now in operation with the community renewal fund. Alongside new environmental land management scheme trials, this drive for nature encourages others. Today the National Trust has announced the largest grassland project, stretching from Woolacombe to Exmoor.
The work of our North Devon biosphere also extends abroad, with partnerships in Kenya supporting biospheres there to deliver projects and working with European biospheres to co-ordinate a network of forests. In south-east Asia, work is being done on marine planning and conservation alongside community health. As UNESCO’s oldest intergovernmental scientific programme, our global biospheres are a testament to what we as a world can achieve when we work together. Working together is the only way we are going to combat the global climate crisis, and as we pass on the presidency for COP, 3 November should stand as a reminder of the importance of international collaboration.
The path that biospheres have carved for the last 50 years shows that we can live in a sustainable way. It is not a choice between modern life or saving our planet; both can be achieved. It is up to us all to make it a reality. I thank Andy Bell for his tireless work for the biosphere and his help with the detail behind my speech. The Minister knows from her visit to my constituency how stunning our environment is, and I hope she will therefore support my battle against the disruption to our sand dunes caused by cabling from development projects for floating offshore wind that is too small to go to the main connection point. I also hope she will consider strengthening the protections for our biospheres and perhaps, as a special first birthday present for the International Day for Biosphere Reserves, give them formal status here in the UK.
Mr Deputy Speaker (Mr Nigel Evans)
Bob Seely has permission from the mover of today’s motion and the Minister, who is nodding, to take part in the debate.
Bob Seely (Isle of Wight) (Con)
Thank you, Mr Deputy Speaker, for letting me take part briefly in the debate. My hon. Friend the Member for North Devon (Selaine Saxby) is in competition with me and a relatively select few to deliver more than anyone else for her wonderful patch. I hear nothing but amazing reports of the work that she is doing. Similarly, I try to deliver as much as I can for my folks on the Isle of Wight. We both care so much for our wonderful parts of the UK. I thank her and the Minister for letting me contribute to the debate.
I agree with much of what my hon. Friend has said and I will stress two points. Before I do, our Island biosphere designation came quite late—we got it a few years ago after a campaign led by our area of outstanding natural beauty organisation—but I thank Joel Bateman, Councillor Jonathan Bacon and, more recently, Holly Jones and Natasha Dix for their impressive work in delivering that successful bid to UNESCO and since. There are 17 UNESCO sustainable development goals that we are trying to work into the Isle of Wight Council’s planning. We have lots of exciting projects, such as regenerative farming, carbon sequestration in soil and local agricultural, net zero homes, active travel and smart renewable grids that we are trying to do off the back of getting biosphere status.
The first valuable point that my hon. Friend made that I want to stress is that there is no similar designation in British law that achieves the same effect. I am keen for the Government to take it on board that we have this valuable designation that combines the human world, the natural world and the maritime world. That is actually quite unique; there is nothing like it in UK law, but should there be? For example, 75% of the Isle of Wight comes under some form of UK designation: there are eight separate designations and 13 distinct areas. For an island of our size—it is only 15 miles by 30 miles —that is highly fragmented and somewhat over-complex, and creates a needless bureaucracy when it comes to nature protection and planning. I would love to know how the Government could incorporate and recognise biospheres within UK law. At the moment, we have a tapestry on the Island, but we need a blanket, which is the idea that the biosphere gives.
My second pitch, in the brief time that I have, is that if the Government are going to bring in a Bill about protected landscapes, such as national parks and AONBs, which I hope they do, and if they are going to slightly fudge the difference between them and perhaps bring in new designations, one of the new designations could be a biosphere designation, which would give biospheres a status within UK law, or an island designation. If we are going to have city parks, why can we not have island parks? It is not a national park on an island but an island park that looks at human habitation, maritime protection and landscape protection as a single whole.
I would argue that an island park designation for the Isle of Wight would have AONB status throughout. We have only a finite amount of land and we cannot keep giving it up endlessly to low-density, car-dependent, un-environmentally friendly greenfield developments; we need to use land better. We could have maritime and landscape protection, as highlighted by my hon. Friend, and we could use the island park designation to attract tourism and help with our identity, as the biosphere potentially does. We could perhaps get some targeted support for agriculture, because we do not have an abattoir on the Island, so all the livestock goes to the mainland for slaughter, which adds cost and inhibits the circular economy that we need. Those are some of the ideas that an island designation or a biosphere designation could provide.
The biosphere is about human habitation, so we could also do a great deal with culture. The Isle of Wight was one of the most celebrated places in Victorian England with Tennyson, Keats and many others coming down to enjoy it and paint it. People fell in love with the place and sometimes used it as an escape from mainland Britain. Other people based themselves there, such as the Bonchurch school of artists and the Freshwater set with Julia Margaret Cameron. We also had—who wrote “Alice in Wonderland”?—Lewis Carroll, who used to hang around there back in the day hoping to catch a glimpse of Tennyson. We have had a phenomenal cultural input. Given the Island’s culture, together with its unique species and unique dinosaurs—we have more dinosaur finds than anywhere else in Europe, and in fact it is one of the leading dinosaur places in the world—and our landscape, there has to be a better way of recognising and protecting that. We could do so either by making biospheres part of UK law or, for the Island as a separate issue, having an island designation, which other islands—the Isles of Scilly, Arran in Scotland—could eventually share. It could be a very good idea to have some kind of island designation in UK law. I thank my hon. Friend so much for bringing forward this debate, and I look forward to what the Minister has to say.
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Trudy Harrison)
Mr Deputy Speaker, I know, because we had a little chat earlier, that you share my enthusiasm for this debate, and I cannot imagine a better way to spend the end of the parliamentary day than celebrating the very first World Biosphere Day. Let me begin by thanking my hon. Friend the Member for North Devon (Selaine Saxby), for securing this timely debate—because today is indeed the day—and my hon. Friend the Member for Isle of Wight (Bob Seely) for playing his part today.
As my hon. Friend the Member for North Devon recognised, I have personal experience of North Devon thanks to her very generous invitation, when I was the cycling Minister last summer, to join her on a bike on the Tarka trail. So I have seen for myself the beauty of North Devon, and I absolutely appreciate why her area has secured UNESCO world biosphere status. The UNESCO biosphere programme began in 1971 and there are, as we have heard, seven accredited biosphere reserves in the UK. I would like to spend a little time highlighting the programme and its success, and also the importance of nature.
It is incredibly important that we recognise that much global GDP—more than half, in fact—depends on biodiversity. Over $44 trillion is estimated to be moderately or highly dependent on biodiversity. The loss of tropical rainforests, the collapse of global pollinators and the reduction in marine fisheries would lead to a contraction of global GDP by 2.4% by 2030. That is exactly why we are acting locally and thinking globally. Central banks are directly exposed to nature risk. The Dutch and French central banks have found that 36% and 42% of their portfolios, respectively, are highly dependent on nature.
What has occurred at the North Devon biosphere reserve in is only possible because of collaboration. There is very little that one person can achieve on their own, but I do want to join my hon. Friend with a special mention for Andy Bell, who has co-ordinated the North Devon biosphere reserve partnership. Since its designation 46 years ago—it is as old as me—the biosphere reserve has enabled the fantastic creation of four extra marine conservation zones. It has improved the water quality with habitat and on-farm actions in 34 catchments, planted over 60 hectares of woodland in partnership with landowners, created 20 hectares of saltmarsh, restored 1,500 hectares of culm grassland with the Devon Wildlife Trust and improved over 120 km of riverbank habitat.
This absolutely demonstrates the value of the biosphere programme in bringing together a broad range of stakeholders with a shared endeavour to connect people with nature, and as a mechanism to leverage funding to deliver sustainable development at the catchment scale. It is all very much in line with the principles set out by the biosphere sustainable development aims. This is through nature conservation, with the protection of biodiversity and cultural diversity, and through scientific research, underpinning development through research, monitoring, education and training. We need sustainable development that is socially, culturally, economically and environmentally aligned, symbiotically supporting each other.
The International Day for Biosphere Reserves is UNESCO’s invitation to take inspiration from the solutions already implemented in those areas, and to build genuinely sustainable development everywhere, with full respect for nature and the living world. I absolutely recognise the role that the Man and the Biosphere programme has played in achieving sustainable development goals, by sharing experiences and testing policies. That includes the sustainable management of biodiversity and natural resources, and mitigation and adaptation to climate change.
I also wish to recognise our newer biosphere reserves. Those include the Brighton and Lewes Downs, known as the living coast biosphere reserve, which covers more than 390 square kilometres of land and sea, and—my hon. Friend the Member for Isle of Wight is in his place—the Isle of Wight, which was awarded UNESCO biosphere status in 2019, and covers 914 square kilometres of land and sea. Both those areas are undertaking similar local engagement through their respective biosphere reserve partnerships, reflecting their distinct local terrestrial and marine ecosystems. My hon. Friend called on me to recognise further protections, and we are looking at that as part of what was set out in the Environment Act 2021 for how we protect land. I know that he has already had conversations with DEFRA and Natural England about national park status, and I look forward to engaging in conversations to support that.
Bob Seely
It is kind of the Minister to say that. I am talking about island park designation, not a national park—some of my farmers would be very concerned if they thought I am planning a national park behind their back. It is some kind of designation under the new planning system. I would love a national park, but I think that ship has sailed.
Trudy Harrison
I am grateful to my hon. Friend for that clarification—island park designation, indeed—and I look forward to meeting him to discuss that in more detail.
This is an intergovernmental science programme, and the key point is that we use our biosphere reserves to test our approaches for sustainable development in the real world. That is critical to inform initiatives such as local nature recovery strategies, which are a key tool to meet many of our environmental targets under the Environment Act 2021. As my hon. Friend the Member for North Devon said, a foundation of our new approach to sustainable development will be working with farmers and environmental land management.
Those schemes will pay for more sustainable farming practices, and improve animal health and welfare. They will also bring environmental benefits, including landscape-scale environmental changes, which will be a crucial step towards achieving our 25-year environment plan and subsequent environmental commitments, and our net zero goals. That is why we are working extremely closely with farmers and other agricultural and environmental stakeholders to help shape the new schemes through our tests and trials, including the North Devon landscape pioneer, which took place in the North Devon biosphere reserve.
One of the three main functions of biosphere reserves is the conservation of biodiversity. Under the Environment Act, we have committed to halting the decline in species abundance in England by 2030, and to setting at least one other long-term target for biodiversity. Those targets will drive wide-ranging actions to deliver nature recovery. Our three-pillar approach to restoring and improving biodiversity includes: restoring and creating habitat that is greater, bigger, better, and more joined-up; tackling pressures on species and their habitats, for example by addressing pollution—something I know my hon. Friend cares deeply about—and improving water quality; and taking further targeted action for specific, threatened species.
We are already taking action through, for example, our nature for climate fund, which provides £750 million for the creation, restoration and management of woodland and peatland habitats, and our green recovery challenge fund, which is estimated to deliver 600,000 hectares of habitat creation and restoration within and outside protected sites.
On the international front, the UK is committed to securing an ambitious outcome at COP15 to halt and reverse biodiversity loss globally by 2030. We will continue to champion the protection of at least 30% of land and sea globally and recognise that significantly increasing finance from all sources is absolutely needed to halt nature loss.
At least £3 billion of the UK’s international climate finance will go towards solutions that protect and restore nature and biodiversity. We have launched a £500 million blue planet fund to support developing countries to protect the marine environment and develop sustainable marine economies.
I thank my hon. Friend the Member for North Devon once again for securing the debate, and for raising the profile of our biosphere reserves in facilitating sustainable development at the local, national and international scale, and thus their contribution to a wide range of Government objectives.
Question put and agreed to.
Draft Football Spectators (Relevant Offences) Regulations 2022
(2 years, 1 month ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Minister of State, Home Department (Chris Philp)
I beg to move,
That the Committee has considered the draft Football Spectators (Relevant Offences) Regulations 2022.
It is a pleasure, as always, to serve under your chairmanship, Mrs Murray. I expect many members of the Committee will be aware of the recent concerns about football-related violence, disorder and antisocial behaviour. In fact, the 2021-22 season saw arrests far higher than in any of the previous seven seasons. The increase in that year followed a long-term downward trend, but is none the less a matter of significant concern. A particularly low point came during the Euro 2020 tournament, where we saw not only horrendous and unacceptable racist abuse directed at some England football players but serious incidents in the vicinity of Wembley stadium, particularly on the day of the final in July 2021.
Baroness Casey, in her review of those events, found numerous infractions, one of which was the blatant use of cocaine by some football fans in front of other law-abiding citizens, including young children. That is completely unacceptable. A recent study found cocaine traces on nearly all tested toilet cisterns at major football grounds, and the police have carried out match day operations to seize drugs at football matches and to arrest individuals. Unfortunately, the trend of using and supplying cocaine at football matches continued into the 2021-22 season, during which, according to police data, there were over 140 reported arrests for drug offences.
The police have been clear that they have seen an increase in drug-fuelled disorder across all forms of regulated football matches. Cocaine, which is a matter of particular concern, is a class A drug. It is highly harmful and often leads to extremely disorderly behaviour. The trend of detection of cocaine use at football matches is extremely worrying. We have therefore taken the necessary steps to lay this instrument, which will see all those who attend football matches and who supply or use class A drugs subject, or potentially subject, to football banning order proceedings upon conviction.
Football banning orders are an appropriate and effective tool to help to combat football-related disorder. In addition to a regular criminal conviction and whatever sentence may get passed, football banning orders can be used to ban the individual from attending regulated football matches for between three and 10 years. That will obviously prevent troublemakers from continuing to attend football matches, and will provide an extremely strong deterrent. We are determined, alongside the police, to drive down football-related violence and disorder, and this instrument is an extremely important part of that work. I commend the draft regulations to the Committee.
Naz Shah (Bradford West) (Lab)
It is a pleasure to serve under your chairmanship, Mrs Murray. The official Opposition are grateful to the Minister for setting out the context of the draft regulations, to which we have no objection.
Question put and agreed to.
Financial Services and Markets Bill (Ninth sitting)
Thursday 3rd 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 3 November 2022 - (3 Nov 2022)
The Committee divided: - Ayes: 6 / Noes: 8 - Question accordingly negatived.
The Committee divided: - Ayes: 6 / Noes: 9 - Question accordingly negatived.
Emma Hardy (Kingston upon Hull West and Hessle) (Lab)
I beg to move, That the clause be read a Second time.
I wish to say from the beginning that I will push the new clause to a vote. I move the new clause in the name of my hon. Friend the Member for Walthamstow (Stella Creasy). As we heard in evidence, buy now, pay later companies offer consumers the opportunity to spread payments, but they remain unregulated. They represent a large, growing and unregulated form of debt, the growth of which was fast-tracked during the pandemic. Because the loans are initially interest free, consumers lack the key consumer credit protections they receive with other products, which potentially puts them at risk.
We know that buy now, pay later products drive people to spend more money because the providers tell us so. That risks pushing people to spend money that they do not have, without adequate protection against mis-selling. In the cost of living crisis, millions more consumers have turned to this form of credit to make ends meet. As with all forms of high-cost credit, regulation is critical to ensuring that buy now, pay later can be a constructive way for consumers to manage their financial situations.
Labour put forward a proposal to that effect in 2020, which the Government voted down. In 2021, the Financial Conduct Authority called for regulation, and the Government did a U-turn. Now, over two years later, consumers are still waiting for those vital protections, but there is little sign that the Government recognise the urgency to act. In the meantime, the industry has rapidly expanded, so the risks to consumers have grown, which has further increased the need to intervene.
In 2021, Citizens Advice reported that 41% of buy now, pay later users had struggled to make a repayment. One in 10 have been chased by debt collectors, rising to one in eight among young people. Some 25% have fallen behind on another household bill in order to pay a buy now, pay later bill. Those effects of this form of credit were echoed in research by StepChange. Its data shows that 40% of buy now, pay later customers took negative coping actions to cover the debt that they had accrued through this service, including using credit to repay credit, falling behind on housing payments or utility bills, asking family or friends for help, and cutting back to the point of hardship. The figure is 40% for buy now, pay later and 21% for users of other forms of credit.
With Christmas approaching, it is likely that more consumers will be driven to use buy now, pay later and risk unaffordable debt. Equifax data from Christmas 2021 showed that 9% of Christmas shoppers in 2020 used buy now, pay later to spread the cost of presents, and that a quarter of all 18 to 34-year-olds plan to use buy now, pay later to buy presents this Christmas. Last year, one in five people using buy now, pay later said that they felt pressure to buy presents for family and friends, and roughly a quarter—27%—said that they would struggle to afford Christmas without its help. These trends are only likely to increase. The Equifax data shows that two in five users report missing at least one payment in the past, and half of them say that they have been hit with extra fees as a result.
New clause 1 therefore requires that urgent action be taken now to ensure that consumers are protected against being sold unaffordable debt by these companies. It would ensure that some key protections form part of the regulation. That includes ensuring that buy now, pay later users have access to the Financial Ombudsman Service, that there are credit checks before use, and that users are protected by section 75 of the Consumer Credit Act 1974. Those changes would bring buy now, pay later products into line with other forms of credit and ensure that our consumer credit landscape could not be pulled apart by other forms of credit demanding bespoke arrangements.
Dame Angela Eagle (Wallasey) (Lab)
I add my voice to those supporting new clause 1. I commend my hon. Friend the Member for Kingston upon Hull West and Hessle for her speech on this very important issue and my hon. Friend the Member for Walthamstow, who has long campaigned to bring buy now, pay later credit companies into some form of regulation. Obviously, their emergence has been assisted by the shift to online shopping, which we all have experienced and which was turbocharged during the lockdowns.
The consumer credit legislation that protects customers from taking on unaffordable levels of debt and paying over the odds for credit, in a way that is often quite opaque, did not anticipate the existence of online shopping or the explosion in the kind of credit that is now easily available to those who roam the internet or look at TikTok and see lovely things that are just within reach. I speak as someone who has been around for quite a while and whose parents used to put money away in shops so that they could afford Christmas presents, before consumer credit exploded in the way that it did. The Consumer Credit Act tried to make that fair and to regulate it. This is another switch in velocity, capacity and the availability of things, and it is very difficult to discern what the price is when you take something out.
We are now in an instant gratification culture, rather than the place where we said, “Put money away months before and hope you can afford to get the Christmas presents you want for your kids.” It is now a case of instantaneous availability—literally a click on a website. Klarna and various other of the buy now, pay later organisations are everywhere that it is possible to spend money. It is very difficult to imagine how that might be adding up—what the price of it actually is—when a person is in the middle of a purchase, particularly a younger person who is used to that kind of instant availability. It is very difficult for anyone to argue sensibly that the people who are clicking and making those purchases have a good idea of the price of the credit and the burden of the repayments they are taking on.
New clause 1 seeks to bring the new fintech ways of getting access to consumer credit—if I can put it that way—within the existing consumer protections in the Consumer Credit Act 1974, which admittedly is now pretty long in the tooth. Clearly, it is important for those to whom we give the job of protecting consumers to think in detail about how that can best be done, but it is pretty difficult to argue that we should allow the current circumstances to persist. I am interested to hear what the Minister has to say about that.
It is important that people have time to think about what they are doing and that the pricing of credit is obvious at the time of the click, so that people can make genuine decisions and not feel that they have been conned, that the price is wrong or that they have got themselves into a vortex of increasing costs that were not in front of them at the time. The consequences of allowing an entire generation to have access to that kind of consumer credit without protections are too dire to contemplate.
I hope the fact that this Parliament has always put consumer protection at the heart of what it does and legislated for that purpose will prevail, and that the Minister will think about how we can sensibly and quickly bring this part of the growth industry of credit, including consumer credit, into the protected space.
Harriett Baldwin (West Worcestershire) (Con)
Thank you, Mr Sharma, for allowing me to contribute to the debate on new clause 1. My colleagues on the Treasury Committee have raised a very interesting and topical subject for us to debate regarding the best way forward. I must declare an interest, as someone who has bought things on the internet and has used this convenient way of paying for them. Clearly, when we have the FCA in front of us, we need to ask how it is approaching regulation in what has been an area of innovation, where fintech has really come to the fore.
It will be very interesting to hear the Minister’s reply to the points that have been raised, and what he sees as the best way forward. That innovation is supporting our retail sector, but at the same time, consumers deserve to know what they are getting into and to have good information when they make decisions. I look forward to hearing the Minister’s comments.
Siobhain McDonagh (Mitcham and Morden) (Lab)
I, too, support new clause 1, not because I wish to stop buy now, pay later as a form of credit or to restrict people’s choice, but because I want people to fully understand what they are getting into before they do it. I did not understand what Klarna was. I like the Space NK website as much as the next woman who likes to spend too much money on skin products, but I could not quite understand why all of a sudden, about two years ago, Klarna was mentioned as a means of buying now and paying later. I thought, “How terrifying. If you cannot pay that ridiculous price this month, how are you going to pay that ridiculous price next month?”.
My hon. Friend the Member for Walthamstow has done some brilliant work on this issue. Buy now, pay later is the form of credit for the under-30s. They use it more than store cards or credit cards. It is often used on clothing websites, primarily by young women who buy different sizes to see which dress they actually want.
Martin Docherty-Hughes (West Dunbartonshire) (SNP)
I rise to support the new clause moved by the hon. Member for Kingston upon Hull West and Hessle.
Some things do not change. The technology might, but the need for continuation of consumer protection does not. I heard Members talk about parents using buy now, pay later. I remember buying a sideboard with my sister in the ’80s using the old-fashioned financial system of paying money every week—that took a long time to pay back. That reality does not change, and this form of credit is now happening with single items, whether they be trousers or shoes, or make-up, which raises a whole range of diverse issues. We cannot lose sight of the fact that most people who might utilise the service in my constituency might not know that they do not have the appropriate consumer protections. The SNP will support the new clause if it is pushed to a vote.
Tulip Siddiq (Hampstead and Kilburn) (Lab)
It is a pleasure to serve under your chairmanship again, Mr Sharma. I start by paying tribute to my hon. Friend the Member for Walthamstow, as others have done, for tabling the new clause and for her relentless work in the House to highlight the risks that unsecured credit poses to the most vulnerable in society, including many of my constituents in Kilburn. I also pay tribute to her successful campaign for better regulation of payday loans and companies. I am sure everyone has heard her speak on that campaign in the Chamber at some point.
As my hon. Friend the Member for Kingston upon Hull and Hessle said, we are disappointed that the Bill has failed to address buy now, pay later regulation. For years, the Government have promised to regulate the sector, but have not done so, which has left millions of consumers without protection. I recognise that many of my constituents, particularly the young, value buy now, pay later products, because they allow people to pay for expensive products over time. However, the products can also result in debt building up quickly and easily. That is why it is so important that the sector is properly regulated, as my hon. Friend the Member for Mitcham and Morden outlined.
An investigation by the FCA, the Woolard review, which reported in February last year, found that many consumers simply do not know that buy now, pay later products are a form of credit, which means that some people do not consider the risks associated with taking out such products and may not look at the products as carefully as they might have done otherwise. That should be deeply concerning to all of us here, and it has left the most vulnerable, financially excluded people at risk of getting trapped in a cycle of debt. The review made it clear that there is an urgent need to regulate all buy now, pay later products.
We are almost two years on from the review and nothing has been done—no action has been taken. The Government’s consultation concluded in June, and this Bill was the perfect opportunity to bring forward provisions to regulate the sector. Will the Minister explain why the Government have chosen not to do so? It is not just consumers who are in desperate need of regulation. As shadow City Minister, I have engaged with the main players in the buy now, pay later sector in recent months. They too have called on the Government for proper regulation to provide certainty for businesses and to keep bad actors out of the market. I hope the Minister will explain why his Government have chosen to leave consumers unprotected and have ignored calls from the sector by failing to include this regulation in the Bill today.
The Economic Secretary to the Treasury (Andrew Griffith)
It is a pleasure to serve under your chairmanship, Mr Sharma. It is always a pleasure to follow the hon. Member for Hampstead and Kilburn. I would like to add my recognition for what the hon. Member for Walthamstow has achieved, particularly when it comes to payday loans.
The debate on this clause is not about the ends. Rather, it is about the means and the best way of proceeding from here to an end that, as we heard from my hon. Friend the Member for West Worcestershire, is common to both sides of the Committee. However, there is a difference. The Government will not be supporting this amendment. I want to make it clear that we are trying to find the best path on which to proceed, and we are trying to get this important area right.
The amendment would require the Treasury to make regulations to bring buy now, pay later products into regulation within 28 days of the Bill’s passage. I contend that that would be breakneck speed. I hear and understand the frustration of colleagues that the legislation has taken a certain amount of time to mature, but it is also an innovative product and something that provides real utility to millions of people. It is important that we get this right.
The challenge for us in bringing forward appropriate regulations in this domain is that we must ensure we give no succour to the greater evil of informal or illegal credit. As we look to regulate the credit market, we have to acknowledge that what we do not regulate creates a floor, beneath which nefarious providers operate—for example, those whom the hon. Member for Walthamstow has been vigilant in cracking down on.
I understand the desire to move at pace, but I do not accept that nothing has happened. The FCA has significantly moved the dial on this, although there is more to do. It is our contention that we should do it in a thoughtful way and by consulting with the sector, which is supportive of endeavours to bring forward the right amount of legislation.
We also acknowledge that to many people credit can be a valued lifeline. Like the hon. Member for West Dunbartonshire, I remember being sent to do the weekly grocery shop, and that shop provided credit of a buy now, pay later form. As a growing family, and particularly at certain moments of the year, we had a more-than-average amount of groceries. It was a real lifeline. It was a way to spread the cost in a measured way. We should recognise that we must be very careful of the unintended consequences.
Dame Angela Eagle
I am glad to hear that the Minister was helpful to his mother when growing up by doing the grocery shop. He has just made a subtle point about unintended consequences of unregulated lenders—nefarious was the word he used. We would all associate ourselves with that. I wonder if the Minister would talk about speed, given that he does not agree with a month. When does he expect this process to bring forward the wherewithal to incorporate this kind of lending into regulation? Is it his view that the price and consequences of the interest rates that are attached to lending like this should be presented far more upfront when it comes to the button being clicked?
Andrew Griffith
I will address both of those points. In terms of timing, the Government published, as the hon. Member knows, a consultation on the proposed approach to regulation in October 2021; I acknowledge that was some time ago. The response to that consultation was published in June 2022. The Government are now developing the necessary legislation and intend to consult on that draft legislation soon. The Government aim to lay secondary legislation in mid-2023.
The hon. Member talks about price, and I will defer to her expertise if this is the case, but my understanding is that the category that is defined as “buy now, pay later” is required to be credit-provided for no more than 12 months, in no more than 12 instalments, and interest free. So although I am an addict for data, and I believe that transparency is—in most markets—the best oxygen, in this case it is clear and established that this product category is not allowed to charge interest. That does not mean that it does not have charges; there is hidden small print, and I understand and support the need for that.
Dame Angela Eagle
I accept what the Minister has said, but the price here is not an interest rate, it is actually what happens if one does not make the payments. It is the consequences of falling behind that are the issue rather than an interest rate.
Andrew Griffith
I think that the hon. Member and I are at common cause in terms of what we are talking about. To make a wider point, I think we would all understand and aspire to a culture that was “save first, and buy later”. What we are talking about are societal changes. We live in a society where too many people have early recourse to debt and where we perhaps do not have the level of financial education that we would like. That is something that I discussed yesterday with the Money and Pensions Service.
There is a great deal more work to do. I would like to champion that in my relatively new ministerial role. Although it is important that we regulate, and although we have to recognise that, however much we try to work upstream, there will be people who are exploited or simply vulnerable, or who are not operating on the sort of level of financial resilience that they should be. I know the Treasury Committee spends a great deal of time on that; it is a concern to me and the ministerial team in the Treasury. That is an area that we can collaborate and work on; it need not be something that we divide over. That is particularly pertinent to younger people.
As well as committing to move forward with regulation, we commit to do so in a measured way, in the right way and at the right time. That also brings into consideration wider initiatives about financial education in general.
Emma Hardy
I want to press the new clause to a vote.
Question put, That the clause be read a Second time.
The Chair
With this, it will be convenient to discuss new clause 5—Essential banking services access policy statement—
“(1) The Treasury must lay before the House of Commons an essential banking services access policy statement within six months of the passing of this Act.
(2) An ‘essential banking services access policy statement’ is a statement of the policies of His Majesty’s Government in relation to the provision of adequate levels of access to essential in-person banking services in the United Kingdom.
(3) ‘Essential in-person banking services’ include services which are delivered face-to-face, and may include those provided in banks, banking hubs, or other service models.
(4) The policies mentioned in sub-section (2) may include those which relate to—
(a) ensuring adequate availability of essential in-person banking services;
(b) ensuring adequate provision of support for online banking training and internet access, for the purposes of ensuring access to online banking; and
(c) expectations of maximum geographical distances service users should be expected to travel to access essential in-person banking services in rural areas.
(5) The FCA must have regard to the essential banking services access policy statement when fulfilling its functions.”
This new clause would require the Treasury to publish a policy statement setting out its policies in relation to the provision of essential in-person banking services, including policies relating to availability of essential in-person banking services, support for online banking, and maximum distances people can expect to travel to access services.
Tulip Siddiq
I would like to say from the outset that I will push new clauses 4 and 5 to the vote.
New clause 4 would require the Treasury and the FCA to conduct and publish a review of the community need for, and access to, essential in-person banking services, and enable the FCA to ensure that areas in need of such services receive them, and to make sure that banking services have a minimum level of access.
New clause 5 would require the Treasury to publish a policy statement setting out its policies in relation to the provision of essential in-person banking services, including policies relating to availability of such services, support for online banking and maximum distances that people can expect to travel to access banking services.
Of course Labour welcomes the fact that, after years and years, we finally have a Bill that introduces protection for access to cash. However, the Bill has some serious gaps that we are concerned about. We have already debated in a previous sitting the Government’s failure to guarantee free access to cash, but this Bill also does nothing to protect essential face-to-face banking services, which the most vulnerable people in our society depend on for financial advice and support.
Analysis published by the consumer group Which? found that almost half the UK’s bank branches have closed since 2015. That has cut off countless people from essential services. In its written evidence to us, Age UK called for the Bill to be amended to protect the in-person services that older people rely on, such as the facility to open a new account or apply for a loan, to ensure that banking services can meet their needs.
However, it is not just older people who struggle without support. Natalie Ceeney, chair of the Cash Action Group, who many Committee members will know, warned us at our evidence session of the significant overlap between those who rely on access to cash—around 10 million British adults—and those who need face-to-face support. She said that
“every time I meet a community, the debate goes very quickly from cash to banking. It all merges. The reason is we are talking about the same population.”––[Official Report, Financial Services and Markets Public Bill Committee, 19 October 2022; c. 49, Q98.]
She is completely right: it is the most vulnerable, the poorer people in society and the older members of society, who depend on that extra face-to-face help, for instance in making or receiving payments, or dealing with a standing order. These are the people who will be left behind if this question about banking is left completely unaddressed. Nor should we forget those without the digital skills needed to bank online, people in rural areas with poor internet connection, or the growing number who cannot afford to pay for data or wi-fi as the cost of living crisis deepens.
As the FCA warned in its written evidence to us, the powers granted to the regulator by this Bill do not extend to the provision of wider banking services beyond cash access. That is why I hope the Minister will today commit to supporting new clauses 4 and 5, which will give the FCA the powers it needs to protect essential in-person banking services.
Just to be clear, Labour is not calling for banks to be prevented from closing branches that are no longer needed—far from it. Access to face-to-face services could be delivered through a shared banking hub or other models of community provision. We also recognise that banking systems will inevitably continue to innovate, which is a good thing. Online banking is a far more convenient way for people to make payments and manage their finances. However, we must ensure—indeed, as constituency MPs we have a duty to ensure—that the digital revolution does not further deepen financial exclusion in this country.
That would require protecting face-to-face services and putting in place a proper strategy for digital exclusion and inclusion. Banking hubs or other models of community provision must be part of that solution. These spaces have the potential to tackle digital exclusion through their dedicated staff, who can teach people how to bank online and provide internet access for those without it. I was delighted to hear this week’s announcement from the Cash Action Group that the sector will be launching additional banking hubs on a voluntary basis, but if we want to ensure that no one is left behind—the most vulnerable in our society—these services must be protected by legislation. I ask the Minister to support these two new clauses.
Siobhain McDonagh
I rise to support new clauses 4 and 5, which we know are supported by our constituents. No matter what kind of constituency we represent, whether it is wealthy, rural or urban, people are desperate for face-to-face services. Recently, in Mitcham town centre, Barclays and Halifax have closed. I stood outside both branches for a week during their opening hours, asking customers why they wanted face-to-face services and if they used online banking. In both cases, about 50% of customers had no access to online services, either because they did not know how to access them or were too frightened to use them because they were concerned about being scammed. That is an enormous concern, but it is completely rational and understandable, when we consider how many people are scammed.
This is about those quintessentially un-financial market issues of community and human contact. The closure of our banks and building societies is symptomatic of so much more—of our town centres being destroyed, of people feeling excluded from progress and the new society, and even of their feelings of loneliness. I am not suggesting that it is the banks’ job to resolve issues of loneliness, but we can talk about these issues as much as we like; people crave human contact to give them the confidence to use financial services and their bank accounts.
The branch staff do an enormous amount for our communities by protecting some of our most vulnerable constituents from doing things they really should not do, such as giving their life savings to people who they have never met who have offered to marry them. So much goes on in our banks and building societies, but it is only through the closure of banks in my town centre that I have understood what is really happening. Banks are retreating from branches on the high street but also from phone services. The number of banks that will allow people to do things by phone is reducing. Anyone here who has tried to contact their bank by phone knows that unless they have a significant amount of credit on their phone, they will not get through any time soon.
Emma Hardy
I thank my hon. Friend for the incredible speech that she is making. Looking at the Royal National Institute of Blind People briefing, does she agree how important it is for visually impaired or blind people to be able to access telephone and face-to-face banking services?
Siobhain McDonagh
Absolutely. As always, I agree with my hon. Friend. I think we will see an even greater explosion of financial fraud if there is an ever-quickening closure of branches in our town centres, and even more reductions in the ability to access services by phone. Unless there is regulation, we can appeal to the best motives of banks and building societies, but I understand that they are challenged. They have new competitors that do not have the infrastructure of the branches or staff. They are doing everything online, but they are doing it for a particular segment of society that does not, and will not, include everybody. We really have to grapple with that.
The work by the CASH Coalition has been excellent, but unless there is pressure from regulation, that will not happen. The idea that we all have to wait for the last bank in our town centre to close before we can even start thinking about a banking hub is as good as useless. I am only saying things that every member of the Committee knows, and that we know the consequences of. We have an opportunity today to do something about it on behalf of our most vulnerable constituents.
Dame Angela Eagle
It is a pleasure to follow the powerful speeches of my hon. Friends the Members for Hampstead and Kilburn and for Mitcham and Morden on this important issue. It is not an issue that affects most people, who have been able to make the switch to online banking and find it more convenient—although it has to be said that there is an increasing level of worry about online banking services because of the increasing prevalence of fraud and scams. We dealt with that in earlier parts of the Bill, but we touched only the very edge of it, as the tide of the problem rises. I am sure that we will come back to the issue many times in future Bills.
A significant number of our constituents cannot participate, for whatever reason, in the IT and tech changes that have made banking available on our phones and computer screens, and that allow us to chat to various bots that put us through to the places where we need to go. I do not know whether the Minister has had occasion to phone a bank recently or, to be honest, any other service after the pandemic, but it is one of the most frustrating things that anyone has to do. It seems there is only one phone line for all the telephone access points. One has to hang on listening to appalling music for hours on end.
Dame Angela Eagle
We will have to come in a Digital, Culture, Media and Sport Bill to outlawing the appalling music that one has to listen to when trying to access any kind of service, private or public, by phone. We have to remember that many people cannot hang on the phone forever. They cannot afford to, and they are the people who tend to need the most help. They may have pay-as-you-go phones that run out quite rapidly. They may be unable to afford to hang on at the whim of an artificial intelligence bot, or the fewer and fewer actual human beings at the other end. They cannot access even ordinary banking in the way that the majority of people do. As I have said, that can be for a number of reasons. All Members present may get to a stage in our lives when we cannot either, and when we cannot remember our PIN numbers.
Dame Angela Eagle
We already have trouble with our PIN numbers, but many people’s memories fail as they get older, or they may be in the early stages of Alzheimer’s or other dementias. They cannot remember things, they cannot deal with the security issues that are required to make banking in this way safe, and they cannot go and ask somebody to help them.
Emma Hardy
On that point, will my hon. Friend flag to the Minister that, if a bank machine does not have buttons and is just a touch screen, it is very difficult for blind and partially sighted people to know where the numbers are, so as to put their PIN in correctly? That is another reason why face-to-face banking is so important.
Dame Angela Eagle
My hon. Friend makes an extremely good point: tech developments sometimes leave people behind. That is not usually deliberate; sometimes it is thoughtless. However, we in Parliament must ensure that all citizens in this country are able to participate in what is, increasingly, effectively a utility, even though it is not in public hands—I make no comment one way or the other about that. Being unable to access banking services for whatever reason is a real disadvantage, whatever an individual’s age or time of life.
That is a primary reason why we must ensure that what the market cannot provide, regulation provides. I am interested in what the Minister has to say about that. This issue will get bigger as more and more services go online. Regulation cannot happen merely at the end of a process, when access has completely disappeared. Even in some places where bank offices still exist, not everybody can access them. As a Parliament, we are people who point our regulators in particular directions to deal with emerging issues, and this is an important one. I look forward to what the Minister has to say.
Stephen Hammond (Wimbledon) (Con)
It is a pleasure to serve under your chairmanship, Mr Sharma. I will make a short speech. It is more of a speech of curiosity. I listened very carefully to my next-door neighbour, the hon. Member for Mitcham and Morden, who said what most members of the Committee would probably say. She will know as well as I do that everybody looks at my constituency and thinks “leafy Wimbledon suburbia”. But she will also know that parts of south Wimbledon, of Raynes Park and of Morden town centre, which we share, have exactly the problems that she spoke about.
I may have misheard the hon. Lady, but she said that she did not wish to compel banks to stay open, or did not think that we necessarily could do so, and she spoke therefore about the establishment of banking hubs. What I am curious about is how banking hubs would be established. Are we saying that, as part of getting or maintaining a banking licence, there should be a contribution to a social fund, so that banking hubs can be established around the country? Are we saying that that levy should be extended, particularly because some of the harm that we are talking about is the rise of online banking? Should online banks make a contribution to the cost of those banking hubs? Or are we saying—I think it was said that the hubs should be inside local authority areas—that local authorities should offer them, for instance in town centres?
That is a genuine point of curiosity. As in previous discussions with the hon. Members for Kingston upon Hull West and Hessle, for Wallasey, and for Mitcham and Morden—my next-door neighbour—there is huge sympathy for ensuring that our constituents, including vulnerable constituents, have access to banking services. But we need to more tightly define the practicality of how we ensure that they have that access.
Siobhain McDonagh
I am completely open-minded about how the hubs are paid for, but they have to be paid for from the banking sector itself. I would not wish to put the responsibility on already overstretched local authorities. Many high street banks have had decades of loyal support from these customers, and they cannot just walk away from that responsibility and ignore them. They have been good, loyal customers. There should be a banking hub, but not at the point that the last bank closes. We need to have a view towards what happens in the future. There can be collaboration about sites, but there needs to be access to those services.
Stephen Hammond
That is extremely helpful in setting out the thought processes behind the new clause. One of the issues that the hon. Member for Hampstead and Kilburn might wish to clarify is that, if the hon. Member for Mitcham and Morden is correct, the new clause has to contain the stipulation that to get a banking licence in the United Kingdom, one needs to pay a certain amount of social levy so that banking hubs can be established. For me, that is the issue with the clause. I therefore suggest that the hon. Member for Hampstead and Kilburn might want to take it away and bring it back on Report, or have a discussion with the Minister about exactly how the levy that the hon. Member for Mitcham and Morden is effectively talking about is to be established. This new clause does not make that clear, and therefore, frankly, the practicality of the new clause—notwithstanding that we all agree with its intent—is clearly flawed.
Andrew Griffith
I once again note the strength of feeling on both sides of the Committee. The hon. Member for Mitcham and Morden has spoken in a number of debates on clauses of the Bill about the importance of bank branches to our constituencies and local communities. When I visit her constituency to see the opening of the new cash machine, perhaps I will be able to review the provision for myself.
Andrew Griffith
The Government do not support the new clause, but if I may make eyes at the Opposition, I would be very open to accepting an amendment about appalling hold music, as suggested by the hon. Member for Wallasey. That is something to look forward to—I am not sure I should say that in front of my Whip, but one has immense sympathy with the point made.
There are very real issues here, which no one disputes. I am familiar with the sobering challenges that the hon. Member for Wallasey talked about. I know from my meetings with charities that one in three of us will end up with dementia. The RNIB has done fantastic work for those with impaired sight or sight loss, and Age UK does lots of great work in our constituencies—very practical work, as well as raising these issues. I am very open to meeting representatives of all three organisations, so I am happy to give that commitment: they are on my long list of people to meet in this role.
Notwithstanding the wider debate about the role of statute in protecting bank branches from closure, I am keen that we harness the positive uses of technology to try to solve problems. We know that voice recognition can help people who are partially sighted, and the internet now has a great deal more regulation—every website now has accessibility options for people with sight issues—so there are things we can do to close that delta. The point about the importance of the consumer voice is also very well made and understood. It is very important that we make sure there is the right level of consumer representation and consumer voice across our entire financial regulatory system, rather than its representatives solely being producers or practitioners.
Emma Hardy
This might not be strictly within the scope of the new clause, but will the Minister take away the point about the problems with touchpads when people pay for things in shops? With flat surfaces, it is incredibly difficult for visually impaired and partially sighted people to know which buttons they are pressing when entering their PIN number. It is one of those cases where, as the Minister has said, technology advances and does not mean to discriminate against people, but it is causing difficulties.
Andrew Griffith
I do understand that point, and I will take it away. We are all challenged by the wonderful two-factor authentication that even the parliamentary authorities require of us as we log in, and I understand that as we move from analogue to digital, some really important protections are sometimes lost.
The availability of alternative channels by which customers can access their banking means that this issue is quite distinct from access to cash. We have talked about access to cash, and we understand the significant steps forward presented in the Bill and the new duty on the FCA. That is very positive. Where a branch is the only source of cash access services, the closure of that branch will be within the scope of the powers, which starts to address the issue of branch closure. We are giving the FCA powers to do its job. As we know, the purpose of the Bill is to give the FCA powers, not for Parliament to be overly prescriptive. In that circumstance, the FCA could delay the closure until some other reasonable provision for access to cash applied.
Tulip Siddiq
The Minister mentions the FCA, and I also want to take the chance to respond to the earlier comments by the hon. Member for Wimbledon. I am not endorsing a specific model—this is something to consider—but the proposed banking hub could work in exactly the same way as the current banking hub model, which is funded by the sector and regulated by the FCA, which also ensures that sites provide in-person services as well. If the Minister is willing to talk further on the provisions in the new clause—the hon. Member for Wimbledon was generous in suggesting that he would do so—I would be happy to explore banking hub models with him.
Andrew Griffith
There is a great deal of good evolution. I suspect that members on both sides of the Committee would say that it has come quite late in the process, but nevertheless there has been evolution in the banking hub solution—that dynamic, sector-led initiative—as well as the work of the Post Office, which offers in-person facilities for a wide range of, if not all, transactions. There may be a gradient of availability, but post offices that offer a certain range of services to deal with the most common and frequently made transactions are almost ubiquitous. The need to travel for more complex needs would not be an unsurprising feature in this market.
I welcome the initiatives developed by the Cash Action Group, Natalie Ceeney and UK Finance, and implemented by LINK, which are making the local assessments to determine where shared solutions are most appropriate. The industry has committed to shared bank hubs in 29 locations across the UK. Yesterday, it committed to a further four, in Luton, Surrey, Prestatyn, and Welling in south-east London. There is a good rate of change coming now, albeit from a low base.
The Government’s perspective is that while many people need and prefer to use in-person banking services, at this time it would not be proportionate to legislate to intervene in the market. Instead, we want to see the impact of closures understood, considered and mitigated wherever possible by the array of initiatives that have been put forward. I will continue to work with the sector, the FCA and other stakeholders from both sides—I mentioned some earlier—on this important issue.
Dame Angela Eagle
The Minister says that it is not enough of a problem at the moment to legislate. Why might that be the case? This is not going to become less of an issue. As more people get to the stage where they cannot access services, I suspect it will get worse rather than better. Could he give the Committee an idea of his thinking about how bad the situation would have to get before regulation would be appropriate? We must make certain that we do not leave millions of people behind and shut them out of access to necessary banking services.
Andrew Griffith
While taking nothing away from the hon. Member’s view, and indeed her experience in this space, I do not entirely share her pessimism that it is a one-way street and that the problem will only get worse. Solutions will be deployed. The rate at which banking hubs can be deployed, the sorts of services that people use, and technology will all evolve. I talked earlier, as she did, about some of the challenges of an ageing society in which loneliness is prevalent, both in urban and rural areas. There are initiatives, both community-led and technological, to help with some of that. We do not decry in any way the statement that there is a problem. I do not think that Members have heard that from me, or from any Government Members. The aim is to proceed in a proportionate manner.
Martin Docherty-Hughes
The Minister talks about how he wants the impact of closures to be understood in the decision-making process. Understood by whom? The banks are telling us why they want to close their branches: they are saving money. The FCA is saying, “The banks are closing their branches to save money.” Our constituents know what it means to lose a bank branch. There is nothing new here. We understand why banks are closing their branches: they want to save cash. They do not want to continue a local service for our constituents, so what does the Minister mean by “understood”? Understood by whom—the banks, the FCA or our constituents?
Andrew Griffith
Ultimately, the banks are downstream of the widespread issue that is the change in consumer behaviour. We have heard both in evidence and in comments made in Committee that 86% of transactions are now digital. The use case of going to a bank branch has evolved rapidly in my lifetime and the lifetime of all Committee members. That is the ultimate macro issue that we are dealing with. Is that issue understood? I think it is.
Solutions could be brought to the table, in terms of both a greater toolkit for the FCA and greater prominence and scrutiny of the FCA as it uses the existing toolkit and the new powers in the Bill. There are also industry-led solutions, which having perhaps started slowly are increasing at greater pace. Proportionality is about giving those developing trends time to mature to see what models can be developed, while accepting the underlying need for action.
I therefore ask the hon. Member for Hampstead and Kilburn to withdraw the motion.
Tulip Siddiq
After listening to contributions from Members on both sides of the Committee, I would like to have a conversation with the Minister about the new clause. I will bring it back at a later stage, but for now I beg to ask leave to withdraw the motion.
Clause, by leave, withdrawn.
New Clause 6
National strategy on financial fraud
“(1) The Treasury must lay before the House of Commons a national strategy for the purpose of detecting, preventing and investigating fraud and associated financial crime within six months of the passing of this Act.
(2) In preparing the strategy, the Treasury must consult—
(a) the Secretary of State for the Home Office,
(b) the National Economic Crime Centre,
(c) law enforcement bodies which the Treasury considers relevant to the strategy,
(d) relevant regulators,
(e) financial services stakeholders,
(f) digital platforms, telecommunications companies, financial technology companies, and social media companies.
(3) The strategy must include arrangements for a data-sharing agreement involving—
(a) relevant law enforcement agencies,
(b) relevant regulators,
(c) financial services stakeholders,
(d) telecommunications stakeholders, and
(e) technology-based communication platforms,
for the purposes of detecting, preventing and investigating fraud and associated financial crime and, in particular, tracking stolen money which may pass through mule bank accounts or platforms operated by other financial services stakeholders.
(4) In this section ‘fraud and associated financial crime’ includes, but is not limited to authorised push payment fraud, unauthorised facility takeover fraud, and online and offline identity fraud.
(5) In this section, ‘financial services stakeholders’ includes banks, building societies, credit unions, investment firms, Electric Money Institutions, virtual asset providers and exchanges, and payment system operators.”—(Tulip Siddiq.)
This new clause would require the Treasury to publish a national strategy for the detection, prevention and investigation of fraud and associated financial crime, after having consulted relevant stakeholders. The strategy must include arrangements for a data sharing agreement between law enforcement agencies, regulators and others to track stolen money.
Brought up, and read the First time.
Tulip Siddiq
I beg to move, That the clause be read a Second time.
We fully support the provisions in the Bill that enhance the protection for victims of authorised push payment scams, but we feel that an opportunity has been wasted to do something on fraud prevention. UK Finance, the financial services trade body, recently published data that revealed that the amount of money stolen directly from hard-working families and businesses’ bank accounts through fraud and scams hit a record high of £1.3 billion in 2021. That is bad enough at the best of times, but even worse during a cost of living crisis. We need to get to grips with new types of fraud such as identity theft and online scams, which have seen criminals get rich at the public’s expense, with people’s life savings stolen and their economic security put at risk.
The current approach to fraud will always leave law enforcement agencies one step behind the criminals, who are exploiting new financial technologies and bank accounts to steal and hide the public’s money. The Opposition want to see enforcement agencies given the powers that they need to crack down on digitally savvy criminals, and to track stolen money through payment system operators, electronic money institutions and cryptoasset firms. If the Government are serious about tackling fraud, they will support our new clause to allow regulators and enforcement agencies to pursue criminals and bring them to justice wherever they hide their stolen money, and to protect people’s financial security.
New clause 6 would put in place a single, dedicated national strategy to tackle fraud. It would deliver a co-ordinated, interagency response across the Treasury, the Home Office, the National Economic Crime Centre, law enforcement agencies, the major banks and wider partners in financial services, telecommunications and social media centres. It would put in place a data-sharing agreement to help investigators and the sector prevent fraud and track stolen money. That agreement would extend beyond the banks to include social media companies, fintechs, payment system operators and other platforms that are exploited by tech savvy criminals. That is important, because for too long, tackling fraud has been solely the banks’ responsibility. That approach is completely outdated.
Mike Haley, the chief executive of CIFAS, said in evidence to the Committee:
“Provisions that facilitate greater data and intelligence sharing, particularly on suspicions of fraud and financial crime, would have the biggest impact in helping to prevent this type of crime. It is a crime that is at scale and at speed in the online environment. To be able to share the mobile numbers that are being used, the devices and the IP addresses at speed across the whole of the environment—payment providers, fintechs and telcos—would be enormously powerful. This is a volume crime, and we need to have prevention at the core of any national strategy. That would have a massive positive impact.”––[Official Report, Financial Services and Markets Public Bill Committee, 19 October 2022; c. 68, Q129.]
The new clause would facilitate that sharing. Does the Minister agree with Mike Haley? If so, will he commit the Government to introducing a fraud strategy with data sharing at its heart?
I am sure, because I have heard the Minister speak so many times in this Committee, that he will tell us to be patient; he will say that change is coming. However, the millions of people who have fallen—or will fall—victim to fraud cannot afford to be patient any more. We cannot drag our feet over this. Scams will continue to rise, and countless more lives will be destroyed or lost. We need to make sure that the outdated way of tackling fraud is challenged once and for all. I ask the Minister to support the new clause.
Dame Angela Eagle
It is a pleasure to talk about this extremely important issue. The Treasury Committee produced a long and detailed report on this issue, with a series of recommendations. I hope that the Government will work cross-departmentally to put those into effect. Data sharing certainly featured in our views in that inquiry.
It is hard to contemplate the size of the explosion in fraud, how little of it is captured, and how few of the perpetrators are brought to justice. That is partly because of the massive number of chances for fraudulent activity to be perpetrated, which have come with changes in access to banking and digital capacity. They range from push frauds, fraudulent emptying of bank accounts and credit card cloning, all the way through to the text messages that we all get regularly on our phones.
The text messages tell us, for example, that we have recently been near someone who has covid—the message is purportedly from the NHS—and we need to give them our banking details so we can pay £1.75 for access to a PCR test. We have all seen them. I am getting a load now on energy support—probably everyone is getting them—which say that the Government’s support for energy bills has to be applied for and that we have to give these people our banking details. These are very plausible texts, which many people fall for. There are phone calls as well, purportedly from the bank, and emails too. This is a sophisticated level of fraud that is psychologically very well organised.
Emma Hardy
One message worth highlighting that I received was, “Hi mum, I’ve lost my phone. Please send some money to this number.” I rang both my daughters to ask, “Is this from one of you?”. They both said it was not. This “Hi mum” one that is going round at the moment has caught many people out. These messages play on emotions and can make people deeply concerned when they receive them.
Dame Angela Eagle
It makes people deeply concerned and it makes them do things that they obviously live to regret in the fullness of time.
Increasingly, there are also phone calls from fraudsters pretending that they are the fraud police and that the person’s bank account has been accessed for fraudulent purposes. It is very difficult to keep up with the level of activity on our phones—we are being bombarded every day—and that is without considering the scamming that the FCA is fighting, day in, day out, on products offered online, such as pensions, insurance and investment products, all of which regularly lie beyond the regulatory border, but can lead to massive amounts of financial loss if they are believed. It is also without considering the areas where younger people tend to get their financial advice, such as TikTok and other places, where we probably—it has to be said, Mr Sharma—do not spend that much of our time.
The windows for getting to people with these kinds of fraudulent intents and sophisticated frauds widen constantly. The capacity to deal with them does not widen as regularly and, by definition, legislation is much slower than the innovation of these people.
We have asked the authorities that are tasked with fighting fraud what they are doing about it. The Treasury Committee has taken evidence on the topic, and we were struck by how fragmented those fighting fraud are across Departments and by how process-related, rather than output-related, the evidence from the authorities was. They said things like, “We have 150 different things that we are meant to do by 2023, and we have done 91% of them,” but fraud is still massively increasing all the time.
We need a system—a national fraud strategy—that looks at the output of fraud, rather than the processes or tick boxes by which the different anti-fraud authorities, which are fragmented all the way through, justify what they are doing. In reality, even if there is lots of work going on, the outcome is not nearly what we would want to see. Levels of fraud are rising significantly, affecting more and more people, and there are fewer and fewer successes in dealing with it.
It ranges from very sophisticated money laundering kinds of fraud—we are not talking about money laundering here, but we could talk about it for a very long time, and about the way banking structures seem to facilitate it—to lower levels of fraud. There is fraud that is perpetrated from outside our country’s boundaries and there is sophisticated money laundering activity. We are talking about frauds that are ruining the lives of the many constituents who fall victim to them. Many people do not get compensation when they have been conned into sharing their bank details and have had their bank accounts emptied or their credit cards cloned, because they have had a hand in it in some way. I know that the authorities work closely with the banks to create circumstances in which compensation can be given when there is no fault, but there are big blurred lines.
Martin Docherty-Hughes
If the hon. Member for Hampstead and Kilburn presses the new clause to a vote, I will certainly support it. I declare an interest as the chair of the all-party parliamentary group on blockchain.
To build on what the hon. Member for Wallasey said, in subsections (2)(f) and (3)(d) and (e), we have a huge opportunity to help the Government by ensuring that there is a strategic overview of how fraud impacts on the technology sector. The problem is not necessarily the technology but the people utilising it. Distributed ledger-type technologies, for example, are used to access investments and assets, but those who are supposedly selling assets are taking advantage of technology that a lot of younger people use.
Critically, I hope that the Government hear the concern that there might be no strategic overview of how such technology can be manipulated. The tech is fine, but we must consider that manipulation—particularly of closed distributed ledger technologies and closed blockchains—and how it can block out the people who actually buy into those systems. I hope that the Government hear what has been said on the new clause.
Emma Hardy
I support the new clause. I refer the Minister to the evidence given by Mike Haley, the chief executive of CIFAS. In respect of fraud, he said:
“Absolutely, there should be a national strategy, and prevention should be at its core.”
He said that the Home Office was looking at
“publishing a national strategy; it has been much delayed and it is very much anticipated.”
One reason for including a national strategy in the Bill is the need for that strategy to be introduced as quickly as possible.
Mike Haley also said that he would like that strategy to be
“more ambitious, and to cover the public and private sectors, as well as law enforcement.”
He made the very good point that
“fraudsters do not decide one day, ‘We only go after bounce back loans because that is a public sector fraud.’ They will go after a loan from the NatWest bank, or a mortgage.”––[Official Report, Financial Services and Markets Public Bill Committee, 19 October 2022; c. 68, Q130.]
He highlighted the inability to share information and said that some people might say that GDPR was preventing them from sharing information. He went on to say:
“It is a crime that is at scale and at speed in the online environment. To be able to share the mobile numbers that are being used, the devices and the IP addresses at speed across the whole of the environment—payment providers, fintechs and telecos—would be enormously powerful. This is a volume crime, and we need to have prevention at the core of any national strategy. That would have a massive positive impact. ”––[Official Report, Financial Services and Markets Public Bill Committee, 19 October 2022; c. 38, Q129.]
Our witnesses called for a national strategy that looks at crime seriously and that is more ambitious than that suggested by the Home Office and broader in scope. Although many of the frauds relate to small amounts, they are numerous and they cause people significant harm. When the Minister responds, I would like him to recall that oral evidence and the reason why our new clause calls for a national strategy.
Andrew Griffith
I will be brief. The Government are committed to tackling fraud, and we recognise that it goes far wider than financial services. There absolutely should be a national strategy, and there will be.
The Government recognise that tackling fraud requires a unified and co-ordinated response from Government, law enforcement and the private sector better to protect the public and businesses from fraud, reduce the impact on victims, and increase the disruption and prosecution of fraudsters. That is why the Government, led by the Home Office, which is the right body to be the lead, but with full Treasury input, will publish a new broad-based strategy to address the threat of fraud. I hope the Opposition will welcome that. The Government intend to publish it later this year.
Andrew Griffith
Indeed.
The Government will work with industry to remove the vulnerabilities that fraudsters exploit, we will work with intelligence agencies to shut down fraudulent infrastructure, and we will work with law enforcement to identify the most harmful offenders and bring them to justice. We will also ensure, with all partners, that the public have the advice and support they need. That should reassure the Committee that a clear strategy to tackle fraud will be forthcoming and that the new clause is unnecessary.
I note the Opposition’s concerns about data sharing, which are specifically referenced in the new clause. I reassure them that the Payment Systems Regulator has work under way with industry participants to enhance data sharing to prevent fraud. The PSR’s managing director, Chris Hemsley, did not raise any legislative barriers to data sharing for that purpose when he gave evidence to the Committee recently.
I will rise to the challenge put down by the hon. Member for Wallasey to turn the tide on fraud, because we all must acknowledge that it is a critical policing issue in this day and age. In that spirit, I hope that she will join us to ensure that her colleagues reverse their opposition to the Public Order Bill, which is tying up hundreds of thousands of police hours that could usefully be spent prosecuting the challenge of fraud. I also hope that she supports our initiative to cut red tape in policing and to end woke policing, so that we no longer arrest people for Twitter posts, we do not send the police off to dance the Macarena at carnivals or Pride events, and they no longer take the knee. If the hon. Lady is as serious as we are about tackling fraud, she has to acknowledge that there is a need to think about how we allocate our resources.
Dame Angela Eagle
After what I thought was quite a consensual debate, it is slightly unworthy of the Minister to resort to those comments in the week when there has been an inspectorate report about the misogyny, behaviour and culture of a lot of the police force. That needs to be reformed so that all members of our communities, whatever their age, gender or ethnicity, can trust the police; we all want to see that.
Will the Minister admit that so-called woke policing is not an issue in fraud? The issue is fragmentation. Woke policing was not raised during the great number of Treasury Committee evidence sessions about the fraud, so it was unworthy of him to make those points at the end of his speech. We need a system that is not fragmentated and that is focused relentlessly on output, and where there is cross-departmental working and proper funding, as well as data sharing, so that we can crack down on something that all of us want to see driven out of our system.
Andrew Griffith
I would never want to be unworthy in the hon. Lady’s eyes, so I am distressed that my offer to build consensus about how the police could best deploy their resources has, at this first stage, been rebuffed.
I ask the hon. Member for Hampstead and Kilburn to withdraw the motion.
Tulip Siddiq
The Minister was doing so well and I was hoping we could go through this sitting without hearing the Conservatives say the word “woke” once, but unluckily that has now been crossed off my bingo sheet.
I will press the new clause to a vote, because I want to hold the Minister to account and ensure he does not push this commitment too far down the road, and because every person in the sector I have spoken to has stressed the importance of legislative change when it comes to data sharing.
Question put, That the clause be read a Second time.
Economic Crime and Corporate Transparency Bill (Seventh sitting)
Thursday 3rd 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 3 November 2022 - (3 Nov 2022)
The Committee divided: - Ayes: 10 / Noes: 7 - Question accordingly agreed to.
The Committee divided: - Ayes: 10 / Noes: 7 - Question accordingly agreed to.
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Kevin Hollinrake)
I beg to move amendment 1, in clause 32, page 22, leave out lines 8 to 12 and insert—
“(1) This section applies in relation to a person who has, at any time on or after the day on which section 32(2) of the Economic Crime and Corporate Transparency Act 2022 comes fully into force, become a person subject to relevant financial sanctions and who remains so subject.”
This amendment and Amendment 3 would mean that a person who is subject to sanctions is disqualified under the GB directors disqualification legislation only if those sanctions relate to asset-freezing.
The Chair
With this it will be convenient to discuss the following:
Amendment 93, in clause 32, page 22, line 12, after “force” insert
“, or a person who is suspected of the facilitation of the evasion of sanctions by a person so designated.”
This amendment seeks to expand the criteria for disqualifying individuals from being company directors to include people suspected of facilitating evasion of UK sanctions by sanctioned individuals, in addition to sanctioned individuals themselves.
Government amendments 2 and 3.
Amendment 83, in clause 32, page 22, line 20, at end insert—
“11B Designated persons: requirement to notify the registrar
(1) This section applies in relation to a person who becomes a designated person as defined by section 9(2) of the Sanctions and Anti-Money Laundering Act 2018 on or after the day on which section 32(2) of the Economic Crime and Corporate Transparency Act 2022 comes fully into force.
(2) If the person changes any details relating to any company on the register in the three months prior to the person becoming a designated person, the registrar must inform the Office of Financial Sanctions Implementation and the National Crime Agency of the changes made.”
This amendment requires Companies House to notify the OFSI and NCA if a designated person has changed any details relating to a company in the three months prior to their designation.
Clause stand part.
Clause 33 stand part.
Government amendments 4, 5 and 6.
Clause 34 stand part.
Clause 35 stand part.
Kevin Hollinrake
It is a pleasure to see you in the Chair, Ms Elliott.
Government amendment 1 is one of six amendments that the Government have tabled to clauses 32 and 34. Before I discuss the Government amendments and those tabled by the Opposition, it is worth explaining what clause 32 does in order to understand better the purpose of the Government amendments.
Currently, individuals subject to an asset freeze—designated persons under the regulations that contain prohibitions or requirements of the sort referred to in section 3(1)(a) of the Sanctions and Anti-Money Laundering Act 2018—can continue acting as a director. They can also be involved, directly or indirectly, in the promotion, formation and/or management of a company. It is not appropriate for asset-frozen individuals to be company directors. It would be perverse for a person who is forbidden from dealing with their own funds or economic resources none the less to be free to direct a company.
Clause 32 prohibits individuals subject to an asset freeze from acting as directors, and does so by amending the Company Directors Disqualification Act 1986 to prohibit individuals subject to an asset freeze on or after the day the provision comes into force from acting as directors of companies or directly or indirectly taking part in or being concerned in the promotion, formation or management of a company. Such individuals will only be permitted to take part in such activities with the leave of the court.
An individual in breach of that prohibition will be committing an offence, the maximum penalty for which will be two years’ imprisonment or a fine, or both. It will be a defence for the person if they did not know and could not reasonably have known that they were subject to an asset freeze at the time that they acted as a director or were involved in a promotion, formation or management of a company. The provision will take effect in England and Wales, and Scotland; clause 34 makes the equivalent provision for Northern Ireland.
Government amendments 1 to 6 all work to the same purpose. Collectively, they will ensure that new director disqualification measures impact those who should be prevented for public policy reasons from acting as directors, namely individuals who are subject to an asset freeze. The amendments will also ensure that we do not disproportionately and unnecessarily extend measures to categories of people whose sanction status has no bearing on whether they are fit to act as company directors. The narrower definition introduced via the amendments includes only designated persons subject to asset-freeze measures of the sort described in section 3(1) (a) of SAMLA.
Stephen Kinnock (Aberavon) (Lab)
Could I trouble the Minister to explain a little more about what categories of people who are sanctioned should therefore allowed to be designated as unqualified as directors under the legislation? He has said that amendments are an attempt to narrow the definition to assets-based, but is he therefore saying that someone who is sanctioned for human rights abuses should nevertheless be able to be qualified as a GB director?
Kevin Hollinrake
I will go on to describe the categories. As the hon. Gentleman knows, an assets freeze is a type of financial sanction. Only those sanctions are relevant to someone’s ability to manage, form or promote a company. Non-asset freeze financial sanctions, such as securities and money market instrument prohibitions, can apply to a broader category of person beyond designated persons, for example, all persons connected to a particular country. To subject entire populations of countries to the directorship ban is grossly disproportionate. It would also be operationally unenforceable, as only designated people appear in published sanctions lists.
Dame Margaret Hodge (Barking) (Lab)
I do not understand that. I do not know whether the Minister can explain it in ordinary language. It sounds to me like people with other financial interests will not be subject to this measure. I am sorry if I am being clueless, but I just do not understand what is being excluded at this point, and therefore what is included in this very welcome amendment.
Kevin Hollinrake
As I said in my explanation, for sanctions such as securities and money sanctions, those market instruments can affect entire populations; they do not just affect an individual. Those kinds of broad actions affect whole populations.
Kevin Hollinrake
The right hon. Lady can intervene again if she wants further clarification.
Dame Margaret Hodge
If someone has some ownership in the securities market—I am not a financial expert, so I do not know whether I am understanding this right—and one took action on the assets, that would have an impact beyond the individual. Is that what we are being told?
Kevin Hollinrake
No, that is not what the right hon. Lady is being told. If someone has ownership, they have an asset, and therefore if that asset is frozen they are a designated person. It is just that the instruments themselves can affect the broad category of people who may or may not own assets. What we are trying to do is target people who actually own the assets.
Dame Margaret Hodge
I am very grateful. This is really to understand it. If somebody is sanctioned, are they the sort of individual we would want to be a director of a company?
Kevin Hollinrake
It is not a person who is sanctioned. What we are trying to say is that everybody who is subject to an asset freeze is a designated person—exactly the kind of person the right hon. Lady would want to see sanctioned. Rather than getting into a to-and-fro debate, perhaps we can write to her and explain the situation in layman’s terms.
Kevin Hollinrake
Furthermore, the Foreign, Commonwealth and Development Office does not currently designate people in relation to non-asset freeze financial sanctions. Although that may change in the future, a directorship ban may not necessarily be the most appropriate measure to impose on those designated for non-asset freeze financial sanctions.
Stephen Kinnock
On the point about the FCDO not sanctioning anything apart from asset freezes, does it not impose travel bans? Is a travel ban not a non-asset freeze type of sanction?
Kevin Hollinrake
Yes, that is right. What we are focusing on in the Bill is people who are subject to asset freezes, not travel bans. Hon. Members can argue that other people should be banned from being the director of a company, but we do not think this is the appropriate place to make that restriction.
Stephen Kinnock
Are the Government saying that if somebody has been sanctioned and given a travel ban but not an asset freeze, they are still a fit and proper person to be a director of a British company?
Kevin Hollinrake
The point is that they may be or they may not be. Putting a broad ban in the Bill just because somebody is subject to a travel ban is not the appropriate way to do it, in terms of whether they are a fit and proper person to run a company.
Stephen Kinnock
Are the Government seriously arguing that somebody who has been sanctioned by the FCDO and given a travel ban but not an asset freeze is still a fit and proper person to be a GB director? If the Minister is saying that the Bill is not the proper place to deal with that issue, where in our legislative framework will it be made clear that somebody who has a travel ban under FCDO sanctions is not a fit and proper person to be director of a British company?
Kevin Hollinrake
What we are talking about here is financial sanctions. These matters relate to companies and financial sanctions, not to travel sanctions.
Let me explain these points further. Not automatically imposing these measures on potential future scenarios will give the Foreign, Commonwealth and Development Office the flexibility it needs to impose the most appropriate and meaningful conditions on people designated for financial sanctions beyond asset freezes. Without these amendments, director disqualification measures introduced by the Bill would automatically apply to anyone against whom the designation power under section 9 of SAMLA 2018 is utilised—for example, transport or immigration sanctions, or any future measures that His Majesty’s Government choose to design. Although those are extremely serious matters, such sanctions ought not by necessity impact on the person’s ability to act as a company director. Furthermore, should there be a future need to extend director disqualification measures to people subject to those broader sanctions, that can be done via future legislation as and when the need arises.
Dame Margaret Hodge
I am genuinely sorry to interrupt, and I am looking at the Minister for Security as well. It seems to me that if we consider the behaviour that somebody has done to be so bad that we want to sanction them in whatever way—through a travel ban, asset freeze or other mechanism—surely in those conditions we do not think they are a fit and proper person to start a business? I cannot see the logic of this; I cannot see where the pressure is coming from to have a distinction between the two, and why we should want it. Why are we putting this down? Why should somebody who has been guilty of a human rights abuse, who may not have an asset that we can sanction, still need to be defined as somebody who is not a fit and proper person to set up a company here? We do not want them to do that, do we?
Kevin Hollinrake
I think the best way forward on that is for myself and the Minister for Security to have a conversation. We can set out some of the reasons why that is the case in more detail in writing, as I promised to do earlier. We can then have a further discussion from there.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
When the Minister writes to my right hon. Friend the Member for Barking—which I am sure will be copied to all members of the Committee—it would be helpful to understand who would have been in scope in the original drafting, what specifically changed and who would be out of scope in the revised drafting. It would be clearer for us to know whether it has narrowed correctly, whether it is a tightening—and we should be happy with it—or whether, inadvertently, in dealing with one matter it has excluded others who might be useful to draw into the scope of the provision.
Kevin Hollinrake
That is perfectly reasonable. I tried to set out those kinds of example earlier, so I am very happy to clarify that in a letter to both the hon. Lady and the right hon. Member for Barking. Our position is that somebody might be subject to a travel ban for a number of reasons, and that does not necessarily exclude them from being a fit and proper person to run a company. Now, Members may think of some reasons why that individual should not be a fit and proper person, but I will set out why that person may still be fit and proper, and then we can all either agree, disagree or find a way of dealing with it.
Liam Byrne (Birmingham, Hodge Hill) (Lab)
It seems that if somebody is subject to a travel ban, they will fail pretty much every “know your customer” rule for every financial institution in the country. Indeed, we have set out regulations precisely to ensure that there are those tripwires. How will a company director be able to fulfil their duties? If the Minister cannot answer now, perhaps he can set that out in the correspondence to follow.
Kevin Hollinrake
That is exactly what I have already agreed to do. We will move on from that point, but, briefly, there will be instances where that person is not necessarily described as unfit or not proper to run a company, but we will set that out.
Amendment 83, tabled by the right hon. Member for Barking, introduces enhanced data sharing provisions to enable Companies House to more proactively identify and exchange information regarding suspicious activity with partners, including with law enforcement agencies. That is in addition to existing information sharing gateways and arrangements.
The Government believe it is better and more flexible to allow relevant operational agencies to formulate their own preferred approach to information exchange, rather than to define it inflexibly in primary legislation—[Interruption.] The right hon Member for Barking looks at me quizzically. I think she has picked up on one particular situation where she wants Companies House to act in a certain way, but she must agree that we could pick up myriad different situations where we might want Companies House to do something if we sat down and made a list. I am sure she does not want to get into the micromanagement of what Companies House should do in every circumstance. There will be millions of different things we expect Companies House to do. We prefer to give Companies House the objective of promoting the integrity of the registers and then hold it to account through the objectives and the provisions of the Bill. Specifying every single condition that we expect Companies House to operate in a certain situation is the wrong thing to do.
Liam Byrne
The last Bill Committee I had the pleasure of serving on was for the Data Protection Act 2018, which implements the general data protection regulation and prescribes all manner of protections for data privacy. This is our worry. When the new duty set out by the Minister for Companies House clashes with GDPR legislation, how do we resolve those clashes of principles to allow Companies House to share the data they need to share with the people they need to share it with in order to pinpoint the bad guys?
Kevin Hollinrake
That is a fair point and it is covered in the Bill, which seeks to make it easier for Companies House to share information proactively with other organisations or, indeed, commercial organisations and vice versa. Here, we are talking about specifying the exact circumstances in which that should happen, which we think is the wrong approach.
I now turn to amendment 93, which seeks to expand the criteria for disqualifying individuals from being company directors to include people suspected of facilitating evasion of UK sanctions by sanctioned individuals, in addition to the sanctioned individuals themselves. Any person enabling or facilitating the evasion of certain sanctions would already be committing an offence, for example, under regulation 19 of the Russia (Sanctions) (EU Exit) Regulations 2019. The maximum penalty on indictment is seven years in prison or a fine. Those are already dissuasive measures to ensure compliance with sanctions.
It is not appropriate and proportionate to apply director disqualification and offences to an individual who is only suspected of facilitating the evasion of sanctions. It is not clear what would constitute such suspicion and at what point a person would be prohibited to act. That could mean exposing an individual to criminal liability in circumstances reliant on suspicion alone, which I am sure the right hon. Member for Barking would not want to see. The uncertainty of what would constitute the criminal offence and potential interference with presumption of innocence has implications for the rule of law. I therefore ask hon. Members not to press their amendment.
I will now speak to clause 33. New section 11A of the Company Directors Disqualification Act 1986, introduced by the Bill, prohibits individuals subject to relevant financial sanctions, such as asset freezes, from acting as directors of companies. The clause limits the scope that prohibition by disapplying it for building societies, incorporated friendly societies, NHS foundation trusts, registered societies, charitable incorporated organisations, further education bodies and protected cell companies. The Secretary of State may, by regulations, repeal any of the subsections in the section, therefore applying the prohibition on individuals subject to an asset freeze from acting as directors in any of the organisation types in the clause. That allows the Secretary of State to apply those measures only to company directors in line with the policy focus of the measures in the Bill, without that unnecessarily applying to other entities currently not in scope. That will take effect in England and Wales and Scotland. Clause 35 makes equivalent provision for Northern Ireland.
Stephen Kinnock
Clause 32 raises important questions about who we should and should not allow to hold positions of power and responsibility in UK companies.
Currently, under the 1986 Act, the circumstances in which a disqualification order can be imposed are strictly limited. For the most part, they involve individuals with a criminal record for breaches of company legislation involving UK companies. Clause 32 expands the disqualification criteria to provide an explicit prohibition on any sanctioned individual serving as a company director. That is entirely proper, but the Opposition’s question is: why are the Government not going any further? They have considered who should be banned from serving as a company director, but the decision to add only those specifically designated under UK sanctions legislation feels like a missed opportunity.
We tabled amendment 93 to better understand and probe the Government’s thinking and to explore how additional changes could contribute to the Bill’s aims. The amendment is largely self-explanatory: it would add to the criteria those who aid and abet sanctioned individuals, or so-called “enablers” who help sanctioned individuals to evade our laws. The Minister will be aware of the army of lawyers, accountants and other so-called service providers who are in many ways doing Putin’s dirty work in London. In our view, it is crucial that they are caught in the net that the Bill seeks to cast.
Kevin Hollinrake
I totally agree with the hon. Gentleman that we need to clamp down on the enablers of dirty money, but does he understand the point behind the provisions? There are serious penalties for somebody convicted of breaking sanctions—up to seven years in jail—but his amendment seeks to penalise somebody who is not convicted but merely suspected of facilitating that kind of activity. Does he understand why that is a difficultly for the Government?
Stephen Kinnock
I do understand that; the Minister makes a valid point. As I was saying, this is what one might describe as a probing amendment to try to get from him a sense of the proactive action the Government are going to take to go after those enablers.
Dame Margaret Hodge
The Minister is quite right to say that the powers are there, but I hope he agrees that a way to facilitate this would be to introduce a new criminal offence of failure to prevent economic crime. In that case, the enablers to whom my hon. Friend refers could be caught and rightly punished for their role in colluding or facilitating economic crime.
Stephen Kinnock
I thank my right hon. Friend for that extremely useful and eloquent intervention. That is absolutely the case, because the enablers are, by definition, experts in knowing how to play and game the system. We know it is going on, but they are notoriously difficult to track down. If we put the onus on industries to act proactively to prevent this sort of activity, that changes the game and makes prevention much more of a duty. I agree with the Minister that we cannot punish people if they are only suspected, but we can have a proactive ex ante approach. I would be grateful to hear his thoughts on that. In many ways, the amendment was designed to illicit a response from the Minister on what my right. hon Friend has just so rightly described.
The Minister has already pointed out that specifically designated individuals represent just the tip of the iceberg in terms of the scale of economic crime in the United Kingdom. There are any number of others who seek to exploit weaknesses in our laws and our ability to enforce them—for example, by creating opaque corporate structures to hide kleptocrats’ assets. Adding to the criteria those who help to facilitate the evasion of sanctions by designated individuals—not necessarily as our amendment suggests, but through a more root-and-branch, proactive ex ante approach—is one way the Government could really improve the Bill. I would appreciate the Minister’s thoughts on that. Restrictions on company directorships, as envisaged by amendment 93, should go much further.
Clause 33 extends the provisions of clause 32 to sectors other than companies—for example, building societies—and clauses 34 and 35 extend the same provisions to Northern Ireland. We support those clauses and, of course, amendment 83, which was tabled by my right hon. Friend the Member for Barking.
At various points in recent years Ministers have outlined a number of specific proposals, which now appear to have fallen by the wayside. It seems reasonable to expect that all companies should have at least one director who is an actual human being. We do not have to be experts to intuit how easy it is to abuse the existing system, which allows a company to name another company as its director provided that at least one human being is on its board. In the Government’s own words in a 2021 consultation paper:
“Evidence suggests that the use of corporate directors can muddy the waters around ownership and provide a screen behind which to conduct illicit activity…More generally the opacity they create can weaken corporate governance by preventing individual accountability.”
The Government even went so far as legislating in the Small Business, Enterprise and Employment Act 2015 to enable the Secretary of State to impose a ban on corporate directors. After more than seven years, however, regulations to implement that have yet to be published. In fact, clause 37—on which my hon. Friend the Member for Feltham and Heston will speak shortly—makes some changes to the relevant section of the 2015 Act. The apparent intent of the changes, which is to make it easier for corporate directors to be held to account for their action, is certainly welcome, but what is not clear to Opposition Members is why the Government have decided to amend the primary legislation—namely, the 2015 Act—when, as we understand it, the secondary legislation to implement the ban on corporate directorships under that Act has still to be introduced. Perhaps the Minister will shed some light on that.
Another glaring omission is the issue of nominee directorships. As long ago as 2013, the Government raised that as an issue that company law reform should deal with. Again, the Government’s own words provide us with a useful summary of the problem:
“Where a company is being used to facilitate criminal activity, the individuals who really control the way that the company is run will likely want to avoid making this information public. They may use ‘nominee directors’ to do this. Nominee directors are individuals who go on the public record as the director of the company to be, effectively, a ‘straw man’ or ‘front man’ for the company. The beneficial owner ‘stands behind’ the nominee and controls the way that the company is run”,
de facto. The failure to address that in legislation remains a cause for serious concern.
Kevin Hollinrake
I am not sure I understand the hon. Gentleman’s point. Irrespective of who the directors are, if people of significant control are exerting such influence, they will have to be named and have their ID verified under the Bill.
Stephen Kinnock
My understanding is that the regulations under the 2015 Act have not yet been put in place. Our question is: why are the Government not implementing those regulations but instead seeking to introduce the provisions in the Bill? That is simply a point for clarification and explanation. We welcome the fact that ID verification is provided for, but we are trying to get to the bottom of who a nominee director is and who actually controls a company. It would be useful to understand what happened between 2015 and 2022 to prevent the implementation of the regulations.
Kevin Hollinrake
Two separate things are going on. The Bill enables regulations to ban corporate directorships unless the corporation itself has all its directors named and they are all actual persons and ID-verified. It will do exactly that. The other point that I think the hon. Gentleman is talking about is people who sit behind companies and influence them but might not be named in those companies. If people do that, they are persons of significant control; under the definitions in the Bill, someone does not have to own 25% of the shares of a company to be a person of significant control, but they have to be named and ID-verified.
Stephen Kinnock
I will stand up and then allow my right hon. Friend to intervene.
Dame Margaret Hodge
As I understand it, if the owner of a company is an opaque company in the British Virgin Islands or another one of our tax havens, the ability to get behind that and see the person of significant control is pretty nigh impossible, so there is still a mechanism there. People could intentionally set up a company in the UK that is totally owned by a company established in the BVI. That information is not currently on the public register, although we are anxiously waiting for it to be so in 2023. There is no way of getting the persons of significant control verified, because it is outside our control.
Stephen Kinnock
I will now stand up and allow the Minister to intervene on me.
Kevin Hollinrake
There are two separate things going on here: ownership and directors. We were talking about directors, and the right hon. Lady is now talking about ownership, which is a slightly different thing, but we will talk later about ownership and how that information has to be made public under this legislation.
Stephen Kinnock
I thank the Minister; I think he has just provided clarification that he is confident that there is now a ban on the use of nominee directors as a front to obscure true beneficial ownership. We are grateful for that absolute reassurance. There was perhaps a misunderstanding on our side of some of the technicalities in the Bill that I am seeking to probe, so I am grateful to the Minister for that clarification.
It is worth noting that the World Bank published a report just a few months ago that explained how, under current UK law, nominee directors of UK companies can neglect their duties by failing to submit accounts and certify companies as dormant, even though tens of millions of pounds are passing through those accounts. A crucial point is that the impunity of delinquent nominee directors is especially pronounced if such nominees are not UK residents. On the rare occasions that they are questioned, such directors tend to make the legally false argument that because they are only nominees they have no responsibility to know anything about the company, let alone control its actions.
The lack of progress on this issue—certainly until the Bill’s introduction—has raised concerns with us. Again, perhaps the Minister will say a little more about the Government’s thinking. What does he think has been the impact of not implementing the regulations from the 2015 Act? Can he reassure us with absolute confidence that the issue of delinquent nominee directors will be eradicated by the passing of the Bill?
Alison Thewliss (Glasgow Central) (SNP)
The hon. Gentleman is making a really important point about nominee directors. Is he aware of a “File on 4” programme —I believe it was aired last year—about nominee directors being recruited via Facebook groups and paid to take on that role? Is he concerned that it may still be possible to do that? Does the Bill need to do more to clamp down on the recruitment of nominee directors who get some money for taking on that role?
Stephen Kinnock
The hon. Lady raises an extremely important point and illustrates the absurdity of the situation we have got into. There seems to be a “wild west” approach to running corporate affairs in the UK and it is simply not acceptable. I thank her for that intervention and reiterate my hope that the Minister can give us an absolute reassurance that the issue of nominee directorships will be dealt with firmly and clearly in the Bill, without any loopholes. I also hope he will share any other thoughts he may have on the matter.
Liam Byrne
It is a pleasure to serve under your chairmanship, Ms Elliott. I am sorry that I have not checked the sartorial guidance for the Committee, but I assume it is okay for me to speak without a jacket on. I defer to the Chair if she wants me to clothe myself more adequately.
Liam Byrne
The Minister probably did not intend to set hares running, but he certainly has with his suggestions this morning. I know he will be alive to the Foreign Affairs Committee report on illicit finance that was published under the chairmanship of the right hon. and gallant Member for Tonbridge and Malling (Tom Tugendhat), who is now the Minister for Security, but I wish to share some of its headlines to underline a point that was wholly missing from the Minister’s presentation.
Let us start with the really bad news. First, the Select Committee concluded that
“assets laundered through the UK are financing President Putin’s war in Ukraine.”
Secondly, the report said:
“The Government’s unwillingness to bring forward legislation to stem the flow of dirty money is likely to have contributed to the belief in Russia that the UK is a safe haven for corrupt wealth.”
It is very welcome that the Government introduced sanctions and have brought forward this Bill, but I am afraid the Foreign Affairs Committee came to the conclusion that our sanctions regime was “underprepared and under-resourced.” We on the Select Committee found that there was not the capacity in the FCDO to match the speed and power of the sanctions regime brought into force by our American colleagues and, indeed, the EU. That is why the House was treated to the spectacle of a piece of enabling legislation that allowed us simply to copy and paste the sanctions regime from other countries into UK law.
There is a serious worry that the FCDO is not equipped to drive through the requisite disqualification of directors at the speed at which it should if it takes decisions on sanctions. I hear what the Minister says about creating some—I guess he would say—safeguards against the automatic suspension of directors, but in the absence of such a regime there is a real concern about an enforcement gap, because the FCDO sanctions and compliance team simply does not have the capacity to work things through with Companies House to ensure that the consequentials are followed through and that directors are disqualified when it is appropriate.
Among the measures that we in the House have previously invented are some of the provisions that I took through in the UK Borders Act 2007. We basically wrote into law the automatic consideration of sanctions such as the suspension of directorships. Many Opposition Members would be an awful lot more confident that bad people would be disqualified from directorships if they were sanctioned if we had some kind of legislative provision that created a duty, and therefore a burden, on Ministers and their officials to automatically consider people for the suspension of their directorships if a sanction of any description was imposed upon them.
This Committee is a chance for us to air different points of view about how we ensure that, as the Minister wants, London is a world capital of clean trade. I put this case before him so that he can reflect on it and perhaps come back to the Committee with further thoughts.
Dame Margaret Hodge
It is a pleasure to serve under your chairship, Ms Elliott.
I rise to speak to amendment 83. I did not quite understand the Minister’s attack on or dismissal of it on the basis that it was somehow an attempt to provide a detailed way for authorities to act. That is way beyond what we are attempting to do; all we want to do is make sure the authorities are aware. The Minister and I know, from working in this policy area for a long, long time, how poor all the enforcement agencies are at sharing information. When whistleblowers and others provide information about wrongdoing, too often that falls between the various enforcement agencies, gets lost and nothing ever gets done. We are not here to tell those agencies how to carry out their work, but to ensure that there is better communication.
The amendment addresses some of the issues my right hon. Friend the Member for Birmingham, Hodge Hill just raised. It tries to strengthen the sanctions regime against individuals and to stop those individuals moving their assets before they get sanctioned. Under the FCDO, the sanctions process inevitably takes a long time and people know they are about to be on the sanctions list, so they have time to rearrange their affairs so their assets cannot be frozen.
All the amendment would do—it is very simple—is put a duty on Companies House to tell the enforcement authority, whether that is the Foreign, Commonwealth and Development Office, the Office of Financial Sanctions Implementation, the National Crime Agency or whoever, about any changes that may have occurred in the accounts held by Companies House of individuals who have been sanctioned and whose assets have been frozen in the three months prior to those sanctions being put in place. That is crucial, but why?
In July 2022, OFSI and other UK Government agencies, together with the Joint Money Laundering Intelligence Taskforce, issued a red alert, which I hope the Minister has had a chance to look at. His colleague, the Minister for Security, the right hon. Member for Tonbridge and Malling (Tom Tugendhat), will certainly have done that. It sets out the evasion tactics that individuals use and that enablers, whom my hon. Friend the Member for Aberavon mentioned, take to support that evasion. The action that designated individuals take, supported by their advisers, includes the transfer of assets, such as shareholdings, to trusted proxies, such as relatives or friends. To quote the red alert, they will
“sell or transfer assets at a loss in order to realise their value before sanctions take effect”
and they will
“divest investments to ensure ownership stakes are below the 50% threshold”
needed for sanctions.
There are numerous other examples—the red alert includes a list of about 15 such examples—of ways that people avoid sanctions and avoid their assets being taken. The individuals may seem to have got rid of their assets, but they will retain control. They will have simply hidden their control and the form that that control takes, but in reality they will still have control. In some instances, assets have been transferred or directed to jurisdictions where sanctions are not in place, such as China, Brazil, India or the United Arab Emirates, or have been converted into cryptoassets, which we will come to later in our discussions about the Bill.
I came upon such tactics in the case of Usmanov, as we have discussed before, who dodged the sanctions, particularly in relation to his Mayfair mansion—I cannot remember how many millions that is worth. The shares in his London property firm were transferred to his Russian business empire on 21 February, less than a fortnight before he was sanctioned. The transfer involved property owned by Klaret Services UK Limited being sold to Russia’s largest iron ore company, Metalloinvest, in which Usmanov has a 49% share. That is just below the 50% threshold, although it is in Russia. That transfer is legal—he was able to act legally and within our law—and he was able to do it because we were so slow to sanction.
The sanctions against Usmanov did not cover his companies, so when he transferred the Mayfair property to a company, a different mechanism would have had to be adopted to capture its owner. As he had a 49% share in that company, it would have been difficult to pursue that. Both the shareholding in the company and the transfer mattered. Under our amendment, Usmanov would not have got rid of the property. Companies House would have had to give the enforcement agencies information about the transactions that had been undertaken in the three months prior to the sanctions, and those agencies could have taken action on it.
Kevin Hollinrake
I always listen to the right hon. Lady very carefully, so she can be sure that I have been listening. I am keen to tie up—as the shadow Minister, the hon. Member for Feltham and Heston, put it—any loopholes that we identify in the legislation. That is one of the purposes of Committee stage.
Broadly, I think the Committee and the wider House would accept that our sanctions regime, and the supervision regime at Companies House, are not fit for purpose today—that is why we are legislating. Clearly, the actions taken by Russia in recent months have further highlighted the work we need to do and the reform we need to put in place. The comments are welcome, and I think we are all trying to get to the same end point; we just want to make sure people do not suffer unintended consequences in the process.
I think the right hon. Lady said that Companies House is very poor at sharing information. That is probably a little unfair. Currently, it is not there to share information, other than by putting things on a public register for people to seek out; that has been its role in the past. Today, it is a register—we might call it a dumb register—and that is what we are seeking to change. We are seeking to give the registrar responsibility for promoting the integrity of the registers so that people can rely on the information in them and, as it says in the registrar’s objectives, to minimise unlawful activities and the facilitation of unlawful activities.
Dame Margaret Hodge
Obviously, Companies House has not had to do this to date; it has just been a library of dud data, really. What I was drawing to the Minister’s attention—I am sure he agrees with this—is that all the enforcement agencies working in this territory are poor at sharing information. That is why the stuff we get from whistleblowers so often falls through the middle somewhere and does not get tackled. That is why we should put a duty on the agencies to share information; we would not tell them how to do it, but just say, “This is really important if we are to bear down on wrongdoing.”
Kevin Hollinrake
I am still not sure I agree. Of course there are elements of our enforcement agencies that we are all frustrated by at times, but to my mind nobody goes to work to do a bad job. People are doing their best, often in very difficult circumstances. We all agree that we need to hold our enforcement agencies to account and properly resource them. What we are trying to do is provide them with more powers and ability, and then hold them to account for the use of those powers.
Liam Byrne
The Minister is being characteristically generous. As he reflects on the huge wisdom of the amendments tabled by my right hon. Friend the Member for Barking and perhaps returns to the Committee with some of his own, could he share with us how many of the 1,200 individuals and 120 businesses that have been sanctioned since Russia’s invasion of Ukraine have had directorships suspended?
Kevin Hollinrake
I do not know the answer to that question. When the Bill has received Royal Assent, it will facilitate exactly that process. At the moment, Companies House does not have the powers we would like it to have to bring that about. That is exactly what we are debating.
On amendment 83, I think the right hon. Member for Barking implies that Companies House knows of the changes with a company on an ongoing, dynamic basis. That is not how things work. Companies House does not have access to information until a company files an annual return. Companies do not provide information to Companies House on a daily or even monthly basis. That is not how it works.
Dame Margaret Hodge
But under the legislation, companies will have to provide information on changes of directorships and so on within 28 days, we hope—we had this argument yesterday—so Companies House will have that. I am not expecting it to go through 4 million companies, but there must be a way that the information can be highlighted by the IT system and, if we know a director is somebody who has been sanctioned, that information can be shared. Under the legislation, if a company has changed a directorship, as Usmanov did, it will have to provide that information within 28 days or whatever, and surely that will be there to share.
Kevin Hollinrake
A change of directorship, yes, but I do not think that is the situation the right hon. Lady was describing. She was talking about a movement of assets, as I understand it. I do not know the detail of the case she is talking about—[Interruption.] May I finish? If she is trying to prevent a person from moving assets around on the basis that Companies House needs to know about that as it is happening, that situation cannot be delivered. Companies can move assets around without asking the permission of Companies House or notifying it, so her amendment does not serve any purpose in that regard.
The right hon. Lady is absolutely right that any information that Companies House is made aware of and deems to be pointing to some kind of risk should be shared with the relevant agencies. We all agree with that point, and the Bill allows Companies House to do that for the first time. That is what we are trying to facilitate, but directing it to act in a certain way on a certain piece of information will lead us down a million rabbit holes, and we do not have the time or the ability to implement that through the Bill. We have to give it the powers and then let it get on with it while holding it to account against those broader objectives.
Alison Thewliss
My reading of the amendment is that it relates to a person changing any details relating to any company in the register in the three months prior. One of the red flags that Graham Barrow raised when he gave evidence was companies that switch their name backwards and forwards multiple times within a short space of time. Surely that would be a useful red flag for Companies House to report on, and the amendment would empower it to do that.
Kevin Hollinrake
That situation would be covered under the Bill because company naming is part of it. That is a different thing from what the right hon. Member for Barking was describing. She was taking about the movement of assets, and Companies House would not have access to that information on a dynamic basis. It clearly would have information on a name or director change, and it can act as it deems appropriate, in terms of notifying authorities or making further enquiries about what the company is doing.
Seema Malhotra
I am grateful to the Minister for giving way. I feel that we have allowed this conversation to get a bit more complicated than it needs to be on one specific point in relation to amendment 83, and I think the Minister has made it slightly more complicated too.
I understand that the Minister may be wondering whether a huge scope of things have happened in the three months prior to a person becoming a designated person. Does he agree that proposed new section 11B(2) could be tighter so that where it says, “If the person changes”, it specifies changes to owners, directors or other information relating to the company on the register in the three months prior to the person becoming a designated person? There should be a way, through the design of the computer systems, which is being undertaken as part of the transformation in Companies House, for the registrar to trigger an automatic alert when somebody becomes a designated person to inform the Office of Financial Sanctions Implementation and the National Crime Agency that something had happened on the record in the previous three months. That would therefore not require a huge amount of resource and labour, but there would be a useful report and trigger if the Bill required the registrar to do that.
Kevin Hollinrake
I do not disagree with that, but my point was not that it would be too much work for the registrar; I never said that at all. My point was that may well be that the Companies House registrar looks at the amendment—she may be listening to this debate—thinks, “It’s a really good idea to do that,” and builds that into her systems. As legislators, we could direct Companies House to do a million things, but surely we should give it the power to share this information in a way that provides the most appropriate risk alert processes. We should let it get on with it while holding it to account for the broader objectives. We should not micromanage Companies House.
Seema Malhotra
I thank the Minister for giving way. I do not think this is a case of micromanagement, and nor are we asking for hundreds of things. We are making a specific request, based on specific research. I think an automatic alert could be triggered, and perhaps the Minister—
Seema Malhotra
I will just finish my point. Should the registrar be watching this debate and decide that an automatic alert is a good idea, does the Minister agree that the power of information sharing would enable the registrar to consult the Office of Financial Sanctions Implementation and the National Crime Agency should a relevant change have occurred in the previous three months?
Kevin Hollinrake
As I have already said, such information-sharing is exactly what the Bill facilitates. It may well be that Companies House decides that that is exactly the right trigger to share information with the OFSI. Our view is that we should not direct Companies House in that level of detail as to how the registrar should perform her wider duty. We will continue to disagree on that point if the hon. Lady presses her amendment.
Stephen Kinnock
I thank the Minister for allowing me to intervene where I should have done in the first place. On the quantum that we are considering, as my right hon. Friend the Member for Birmingham, Hodge Hill has just said, 1,200 individuals and 120 businesses have been sanctioned since Putin’s illegal invasion of Ukraine. We are not talking about a huge number. Perhaps the terms of the amendment tabled by my right hon. Friend the Member for Barking could be more tightly drawn to make it clear that it is not about every movement of assets and everything a company has done, but simply designed to ensure that if there was a change of director or change of address, the registrar should share that information with the other relevant agencies. The quantum is quite small, so would the Minister consider that proposal?
Kevin Hollinrake
I think we need to move on, and I think the hon. Gentleman is missing the point as well. This is not about my deciding whether the proposal is right or wrong, or whether Companies House has or has not got the resources. For me, it should have the resources that it needs. However, it is for the organisation itself to determine the best way to alert other authorities to the risk. That is the principle at issue here, and it is one to which I will strongly adhere.
The argument about enablers has been well made, and we have referred to corporate criminal liability and the failure to prevent that. As the Committee is aware, I have been a key advocate in introducing such liability for fraud and other offences. Members may have noted the details of a case this morning, in which the current offence of failing to prevent bribery was a key element in the case against Glencore, which has pleaded guilty to that offence. The Serious Fraud Office launched a successful prosecution against Glencore and, although the number of times it has proceeded against a company is far too few, that prosecution shows that the current legislation can be effective. I am keen to discuss that further in our proceedings.
On travel bans and securities, Committee members might find it useful to sit down with officials to discuss those measures, so that they then understand why those things might not mean that a person is not a fit and proper individual to be a director of a company. I would be happy to extend that opportunity to members of the Committee.
The hon. Member for Glasgow Central spoke about nominee directors and associated abuses. Under the terms of the Bill, any director, nominee or otherwise, who acts outside the terms of the legislation and is subject to the control of another undisclosed person could be put in jail for two years. That is exactly what we are seeking to do and to clamp down on such inappropriate use of companies.
In terms of what the hon. Member for Birmingham, Hodge Hill said—is it right hon. or hon?
Kevin Hollinrake
Quite right, too; the right hon. Gentleman was Chief Secretary to the Treasury—I will go no further. The Foreign and Commonwealth Office is not responsible for the Office of Financial Sanctions Implementation—that is a function of His Majesty’s Treasury—which determines how the sanctions regime works once people are sanctioned. The OFSI ensures that the regime works effectively. It is fair to say that when that organisation was established fairly recently, it was not ready for the amount of work it had to do. It has been scaled up to make it a more effective organisation, which has been discussed in the context of resources generally.
Liam Byrne
Let me give the Minister a bit of feedback from my time as Chief Secretary to the Treasury. If a spending Minister comes before the Chief Secretary to say: “I’m really sorry, but we have a legal duty to do this”, it is an awful lot easier for them to win the case for the resource that they need than when they do not have the weight of that legal duty on their shoulders. Therefore, automatic consideration of a sanctioned individual for suspension of a directorship is a good thing to enshrine in a legal duty. I am trying to be helpful to the Minister, because I want him to be able to win arguments with the Treasury for the resources that he needs to achieve the objectives we both share.
Kevin Hollinrake
Yes, but we have to make careful use of our resources, otherwise there would be no money left.
We agree that sanctioned individuals should not be allowed to be directors of companies. That is what we are talking about, so there is no disagreement. Our disagreement is about how we share information between different agencies, and whether we should tell them how to do it, or they should do it themselves. We are parliamentarians; we are not experts in financial crime or how the financial system works. Wherever we can, we should leave it to the experts to determine the best way to share the information between agencies and—the important thing we are doing here—give them the powers to do that.
Question put, That the amendment be made.
The Chair
We now come to amendment 83, which has just been debated. Does Dame Margaret Hodge wish to move the amendment formally?
Dame Margaret Hodge
I just wish to tell the Committee that I will write to Companies House and see what response I get from the chief executive or director. Subject to that, at this stage, I will not move the amendment.
Clause 32, as amended, ordered to stand part of the Bill.
Clause 33 ordered to stand part of the Bill.
Clause 34
Disqualification of persons designated under sanctions legislation: Northern
Ireland
Amendments made: 4, in clause 34, page 23, leave out lines 13 to 17 and insert—
‘(1) This Article applies in relation to a person who has, at any time on or after the day on which section 34(2) of the Economic Crime and Corporate Transparency Act 2022 comes fully into force, become a person subject to relevant financial sanctions and who remains so subject.’
This amendment and Amendment 6 would mean that a person who is subject to sanctions is disqualified under the NI directors disqualification legislation only if those sanctions relate to asset-freezing.
Amendment 5, in clause 34, page 23, line 23, leave out ‘designated person’ and insert ‘person subject to relevant financial sanctions’.
This amendment is consequential on Amendments 4 and 6.
Amendment 6, in clause 34, page 23, line 23, at end insert—
‘(4) In this Article —
“designated person” has the meaning given by section 9 of the Sanctions and Anti-Money Laundering Act 2018;
“person subject to relevant financial sanctions” means a person who is a designated person for the purposes of any provision of regulations under section 1 of the Sanctions and Anti-Money Laundering Act 2018 that imposes a prohibition or requirement for a purpose mentioned in section 3(1)(a) of that Act (asset-freezing).’—(Kevin Hollinrake.)
See Member’s explanatory statement for Amendment 4.
Clause 34, as amended, ordered to stand part of the Bill.
Clause 35 ordered to stand part of the Bill.
Clause 36
Disqualified directors
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Clauses 37 to 43 stand part.
New clause 35—Person convicted under National Minimum Wage Act not to be appointed as director—
‘(1) The Company Directors Disqualification Act 1986 is amended as follows.
(2) After Clause 5A (Disqualification for certain convictions abroad) insert—
“5B Person convicted under National Minimum Wage Act not to be appointed as director
(1) A person may not be appointed a director of a company if the person is convicted of a criminal offence under section 31 of the National Minimum Wage Act 1998 on or after the day on which section 32(2) of the Economic Crime and Corporate Transparency Act 2022 comes fully into force.
(2) It is an offence for such a person to act as director of a company or directly or indirectly to take part in or be concerned in the promotion, formation or management of a company, without the leave of the High Court.
(3) An appointment made in contravention of this section is void.”’
This new clause would disqualify any individual convicted of an offence for a serious breach of the National Minimum Wage Act 1998, such as a deliberate refusal to pay National Minimum Wage, from serving as a company director.
Kevin Hollinrake
Before I turn to the new clause, I will set out the intentions and effect of the clauses in the group. As part of the reform of Companies House, it is necessary to update the provisions regarding company directors. Most crucial to that is the introduction of a prohibition on people acting as company directors when they have not had their identities verified and reported their directorships to Companies House. That is a critical part of improving the integrity of the companies register. Accordingly, it is appropriate to provide teeth to ensure compliance with those obligations. The Bill will also create grounds for director disqualification if the person fails to verify their identity.
On new clause 35, all businesses, irrespective of their size or business sector, are responsible for paying their staff the correct minimum wage. The vast majority of responsible employers make sure they get it right. I assure the hon. Members for Aberavon and for Feltham and Heston that the Government take enforcing the minimum wage seriously, and we are clear that anyone who is entitled to be paid the minimum wage should receive it. We take robust enforcement action against employers who do not pay their staff correctly. Every area of regulation affecting businesses, whether it is employment practices or environmental impacts, has its own enforcement and penalty frameworks.
It is not entirely clear why we should single out breaches of the national minimum wage—important though it is—as being worthy of leading to disqualification. Nor does it immediately follow that someone who has breached their regulatory obligations in one of those areas should automatically be considered unfit to be a company director in the round. Having said that, I have some understanding when it comes to the new clause. There have been 16 people convicted under the National Minimum Wage Act 1998. I want to do some further research on that to see what has happened to those people and their director qualification or disqualification. That might inform debate more clearly.
I draw hon. Members’ attention to the fact that the greater flexibility in the Bill over the use of Companies House fees will cover the company investigation teams at the Insolvency Service, allowing the Government the potential to expand their work and go after a greater proportion of rogue directors. I respectfully ask hon. Members not to press the new clause.
Dame Margaret Hodge
This is a question of clarification: if a director is disqualified, can he or she still act as a shadow director?
Kevin Hollinrake
It depends on how the right hon. Lady defines a shadow director. If she is implying that they are a person of significant control influencing others, which I guess is what she means, I will point her to the definitions of a person of significant control. They are those who hold
“more than 25% of shares in the company…more than 25% of voting rights in the company…the right to appoint or remove the majority of the board of directors”
that might influence or control a company through other means. That means that the person is still covered under the legislation; if a person is exerting that control, they should be designated as a person of significant control and ID verified, as discussed previously. Any person who became disqualified before the clause comes into force and is disqualified at that time will also cease holding the office of director.
Clause 37 amends some yet to be commenced provisions of the Companies Act 2006 on when a corporate director can act and minimum age requirements for directors. The Small Business, Enterprise and Employment Act 2015 amended the 2006 Act to establish—as the hon. Member for Aberavon said—that company directors should, in future, be natural persons except where they have met specific requirements determined by regulations. We will bring forward those regulations following the enactment of the Bill to establish the exemptions to the general natural person director rule. After a transition period, companies must ensure that any corporate directors on their boards are compliant with the regulated exemption criteria. Where they fail to do so, those director appointments will be void once the transition period ends.
The clause makes it clear that should any non-compliant corporate director continue to act in the capacity of either a de facto or shadow director after the end of the transition period, they will be held liable for the consequences of their actions as they would be if they were a validly appointed director. The clause makes a similar clarification in respect of the principles that will apply in respect of an individual who does not meet minimum age requirements for a company director. In such instances, the appointment would also be void, but those who continue to purport to act as a director or operate in a shadow capacity will continue to be exposed to personal liability none the less.
Clause 38 repeals the power for the Secretary of State to require that companies with disqualified directors who have been given permission by the court to act as a director make a statement to the registrar confirming that permission. The power is no longer required, because the Bill introduces new requirements to provide statements about disqualification and permissions to act in sections 12, 12A, 167G and 790LA.
Clause 39 introduces a prohibition on an individual acting as a director unless their ID is verified or exempted from that requirement under the regulations. It establishes a duty on a company to ensure that unverified individuals do not act as directors unless they are exempted from the ID verification requirement. Failure to comply with the duty constitutes an offence committed by the company and every officer of the company who is in default.
Clause 40 will make it a criminal offence for a person to act as a director unless their appointment has been notified to the registrar. It will be a defence for a person to prove that they reasonably believed that the notice of their appointment had been given to the registrar. The actions taken by an unverified director, or a director whose appointment has not been reported to the registrar, will remain valid to ensure that third parties who have relied on the actions of an unverified director are not unfairly disadvantaged.
We want there to be consequences for not complying with ID verification obligations, and clauses 41 and 42 help us to achieve that. The clauses allow for the disqualification of individuals where they are persistently in default of the ID verification requirements for directors and people with significant control, or where they have been convicted by consequence of such contravention. Clause 41 legislates in respect of Great Britain, with clause 42 legislating to create equivalent powers for Northern Ireland.
Finally, clause 43 makes amendments to section 246 of the Companies Act 2006 regarding addresses on public record. It is consequential to other amendments to no longer require companies to hold their own local registers of directors.
The Chair
Before I call Seema Malhotra, I remind the Front-Bench spokespeople that they need to indicate to the Chair that they want to speak.
Seema Malhotra
Thank you, Ms Elliott. It is a pleasure to serve under your chairship.
I will speak for the Opposition on clauses 36 to 43, and I will say a few words about our new clause 35. We welcome what the Minister said, and we do not propose to push the new clause to a vote today, but I want to put some of our comments on the record. It would be useful if the Minister could clarify when he might want to come back and continue the conversation, subject to being able to look at further data on those who have been convicted under the legislation.
As we have established, clause 36 inserts proposed new sections 159A and 169A into the Companies Act, so that those who are disqualified from being a director under UK law cannot be appointed as one. New section 169A also says that a person who has been appointed as a director ceases to be one if they are disqualified. The two new sections appear straightforward, but has the Minister considered whether the provisions could be extended to ban the appointment of directors who may have been disqualified outside the UK? The Government could pursue that by extending the definition of directors disqualification legislation in new section 159A(2) to cover the analogous disqualification regimes in such jurisdictions as the Secretary of State may designate in regulations. That would allow the UK Government to specify or choose countries that have disqualification regimes that we would be happy to rely on. It seems that it might be a useful consideration, and I would be grateful for the Minister’s comments on that.
On clause 37, section 87 of the 2015 Act contains amendments that have not yet been brought into force. It requires all directors to be natural persons, and it contains provision for circumstances in which people under 16 can become directors. We support the clause, which would amend the provisions to ensure that persons remain responsible for their acts as directors—I think we have had a brief conversation on this—even though they are no longer legally considered to be directors. That is important, because the practical consequence of the clause is that if a person continues to act like a director, even if they have officially been removed from office, they can still be legally responsible for any breaches of the law that they commit as a director. That could be on wrongful trading or other matters. We welcome the clause. It is an important provision to ensure that shadow directors remain liable for contraventions of the Companies Act 2006. We recognise the need for clause 38 and support it.
Clause 39 introduces provisions that would provide that an individual cannot act as a director of a company unless their ID has been verified or they benefit from an exemption specified by the Secretary of State. In addition, it provides that breaching that would be a criminal offence for the director, the company and every other responsible officer, punishable by a fine. In practice, it would mean that once the clause comes into force, individuals should not take any actions on behalf of the company in their capacity as director until they verify their identity. We welcome and support the clause. We agree that that is a positive step in ensuring that directors are who they say they are. Hopefully, it will also mean that people will be less likely to commit or even attempt to commit economic crimes.
Questions remain on the implementation and enforcement of identity verification, some of which we have discussed previously. We recognise that there are ongoing concerns. Martin Swain of Companies House said that we are still in the “design phase” for ID verification. It is difficult to be clear on the implications of the legislation we are passing without having clarity over ID checks. When will they be operational? What can we expect to be in them? How quickly will we and the registrar expect them to be completed? Will the Minister confirm that they will be of the highest standards? Nick Van Benschoten of UK Finance said in his evidence to the Committee on verification standards that one of the key points is that they
“fall short of minimum industry standards.”––[Official Report, Economic Crime and Corporate Transparency Public Bill Committee, 25 October 2022; c. 7, Q3.]
I am sure the Minister will want to ensure that ID verification will be of the highest standard.
I would like to press the Minister on the part of the clause that grants the Secretary of State the power to exempt certain directors from not acting until their identity has been verified. I am seeking clarity on why the measure is needed. Will it be for categories of people or individuals? Finally, will any use of the exemption be transparent and reported on? I think we have raised before the need to ensure there is sufficient clarity and accountability on the use of the powers.
Clause 40 makes it a criminal offence, punishable by a fine, for someone to act as a director unless their company has notified the registrar within 40 days. We welcome that, but I would like the Minister to clarify subsection (5), which allows a defence for a director who can prove they reasonably believed their company had been given notice of a director’s appointment. In the interest of working with the Government on this, may I ask the Minister for assurances on what would constitute proof of reasonable belief in this instance? Would it be possible to provide an example of where an exemption from sanctions might be applied? The Minister may want to write to me.
We welcome clauses 41 and 42. I realise we may be coming to the end of the sitting, so I will speak to clause 43 in detail later.
Ordered, That the debate be now adjourned.—(Scott Mann.)
Economic Crime and Corporate Transparency Bill (Eighth sitting)
Thursday 3rd 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 3 November 2022 - (3 Nov 2022)
The Committee divided: - Ayes: 7 / Noes: 9 - Question accordingly negatived.
The Committee divided: - Ayes: 7 / Noes: 9 - Question accordingly negatived.
The Chair
I remind the Committee that with this we are discussing the following:
Clauses 37 to 43 stand part.
New clause 35—Person convicted under National Minimum Wage Act not to be appointed as director—
“(1) The Company Directors Disqualification Act 1986 is amended as follows.
(2) After Clause 5A (Disqualification for certain convictions abroad) insert—
‘5B Person convicted under National Minimum Wage Act not to be appointed as director
(1) A person may not be appointed a director of a company if the person is convicted of a criminal offence under section 31 of the National Minimum Wage Act 1998 on or after the day on which section 32(2) of the Economic Crime and Corporate Transparency Act 2022 comes fully into force.
(2) It is an offence for such a person to act as director of a company or directly or indirectly to take part in or be concerned in the promotion, formation or management of a company, without the leave of the High Court.
(3) An appointment made in contravention of this section is void.’”
This new clause would disqualify any individual convicted of an offence for a serious breach of the National Minimum Wage Act 1998, such as a deliberate refusal to pay National Minimum Wage, from serving as a company director.
Seema Malhotra (Feltham and Heston) (Lab/Co-op)
It is a pleasure to serve under your chairship, Mr Robertson. I will continue to speak to this group, finishing with a few remarks about clause 43 and our new clause 35.
We welcome clause 43 and recognise that it reflects new circumstances that arise from the Bill’s abolition of local registers of directors, set out in clause 50. We have further questions on that, which we will deal with when we come to later clauses.
On new clause 35, let me put our argument on the record. I thank the Minister for his comments, which I hope suggest that we will move on in some form, perhaps with the data he comes back with. Will he update us on when he expects to come back to us, so that we can come to a conclusion, and perhaps on an alternative way to make progress on the matter, during the passage of the Bill?
The reason my hon. Friend the Member for Aberavon and I tabled new clause 35 is to include provision such that persons convicted under the National Minimum Wage Act 1998 cannot be appointed as company directors. There are real questions about whether we would want an employer who wilfully neglected or refused to pay the national minimum wage to a worker who qualified for it to be the director of a company after the Bill comes fully into force. The new clause would strengthen a lot of the measures in the Bill, because we are talking about people we hope to trust to undertake their responsibilities as a director.
The Bill introduces a substantial amount of regulation about who can and cannot serve as a company director as a result of criminal or potentially criminal practices, so this feels like the right place for consideration of such a measure. I will welcome the Minister’s comments and I look forward to continuing to work with him as we make progress.
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Kevin Hollinrake)
It is a pleasure to speak with you in the Chair, Mr Robertson.
I am not quite clear when I will be able to get the information that we should have before we look at the matter in new clause 35. I think it is right to identify the scale and nature of the problem before we legislate, but I am certainly keen to do so, not least in my role as the person responsible for labour frameworks and markets.
I will respond to one or two of the comments of the hon. Member for Feltham and Heston. We already have power to ban directors disqualified overseas, under section 5A of the Company Directors Disqualification Act 1986. We can and have taken steps to disqualify directors who have been convicted of relevant foreign offences. On exemptions, I think we dealt with exemption from identity verification in a previous sitting. This will be set out in regulation, but that will probably include people who have already had their ID verified, for example.
The hon. Lady also asked about the defence of “reasonably believed” in clause 40. That would cover a situation where somebody had broken the rules but perhaps did not know that the rules had been broken. That would of course be subject to some kind of investigation, and the person could say, “It wasn’t me who submitted the return. I am not guilty of an offence.” It is a defence that somebody believed the information had been submitted correctly when actually it had not. I think that is a reasonable provision, which investigators would be able to take into account before taking forward a prosecution.
Question put and agreed to.
Clause 36 accordingly ordered to stand part of the Bill.
Clauses 37 to 42 ordered to stand part of the Bill.
Clause 43
Registrar’s power to change a director’s service address
Amendment made: 7, in clause 43, page 31, line 10, at end insert
“(but see subsection (4A)).
(4A) Subsection (4)—
(a) does not limit the service address that may be registered for the director under regulations under section 1097B (rectification of register), and
(b) ceases to apply in relation to the director if a new service address is registered for the director under those regulations.’”—(Kevin Hollinrake.)
Where a director’s service address is moved to their residential address under section 246 of the Companies Act 2006, subsection (4) imposes restrictions on further changes. This amendment ensures those restrictions do not bite on further changes under new section 1097B (inserted by NC5).
Clause 43, as amended, ordered to stand part of the Bill.
Clause 44
Register of members: name to be included
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Clauses 45 to 48 stand part.
That schedule 1 be the First schedule to the Bill.
Kevin Hollinrake
A core purpose of the companies register is to provide details of company ownership. Users of the register, such as those who use it to confirm basic information about a company or to carry out due diligence work, have reported some problems with the way company ownership data is recorded. These clauses introduce measures to increase the usefulness of the information held on the members of UK companies. Collectively, they will mean that users of the register have more certainty about who they are doing business with, building confidence in the integrity of the companies register and preventing bad actors from exploiting it.
Clause 44 amends sections 112, 113 and 115 of the Companies Act 2006, which concern the provision of information relating to the members of a company. The clause provides that in the case of an individual, the requirement to enter a name in the register of members and the index of members means entering the individual’s forename and surname. In the future, entries will have to read “Joe Bloggs” and not “J. Bloggs”. The clause is necessary because there is currently no definition of “name” for members in the 2006 Act or associated regulations.
Clause 44 also provides that in the case of an individual usually known by a title, the title may be entered in the register of members and the index of members instead of the individual’s forename and surname. The 2006 Act currently allows directors to state their title instead of their forename and surname, or in addition to either or both of them, but it does not contain equivalent provision for members. The clause provides that if a person’s name or title is entered in a company’s register of members in a form that does not comply with the new requirements, that does not affect the person’s becoming a member of the company. It may well be that that was not the fault of the member themselves.
The objective of the clause is to increase transparency rather than introduce a condition around name format into the concept of membership. If a company fails to comply with the requirements of section 113 and/or section 115 of the 2006 Act, an offence is committed by the company, and every officer in default, so non-compliance can be pursued.
Clause 45 inserts into the 2006 Act new section 113A, which will allow the Secretary of State to make regulations to change the information required to be entered in a company’s register of members. Regulations could, for example, require all members to provide an address. Currently, the initial members, or subscribers, of a company are required to provide their name and address, but those who become members later are only required to provide their name.
As reforms are implemented to Companies House and the companies register, it is possible that further opportunities to improve information on shareholdings will be identified, on which the Government would want to act swiftly. For example, law enforcement may identify additional types of information that the registrar could require that would help in the prevention and detection of crime.
The power in clause 45 will align the position for members with that for directors and people with significant control, in respect of which there are already powers to amend the required information. Information provided in a company’s register of members is provided to Companies House via the company’s confirmation statement. This power will increase the usefulness of the information on the companies register.
Clause 46 amends section 125(1) of the Companies Act 2006, which gives the court the power to rectify the register. Without the clause, the court may order the rectification of the members register only in relation to names. The clause broadens the rectification power so that it is available in respect of any information on the members register. It means that a person aggrieved, any member of the company, or the company can apply to the court for rectification of the members register if the register does not contain necessary information, or if it contains unnecessary information. It is conceivable that information other than names may be included in a company’s register of members in error.
Given that clause 45 gives the Secretary of State the power to make regulations that require additional information to be entered in a company’s register of members, it is crucial that the rectification power is broadened. Information provided in a company’s register of members is provided to Companies House via the company’s confirmation statement. A wider power to rectify the members register will increase its integrity and, by extension, that of the company’s register as a whole.
As well as introducing measures to increase the transparency of company ownership, the Bill will introduce measures to prevent the abuse of personal information held on the Companies House register. Proposed new section 120A of the Companies Act, inserted by clause 47, allows the Secretary of State to make regulations that empower the registrar to order a company to refrain from using or disclosing individual membership information, except in specified circumstances. Members of a company will then be able to apply to the registrar to request that the order be made to the company.
Clause 47 also amends sections 114 to 116 and 120 of the Companies Act, so that where a company is ordered not to use or disclose member information, other obligations that would otherwise require that information to be inspectable by the public are switched off. The clause also provides that if a company fails to comply with an order for the restriction of the use or disclosure of information, an offence is committed by the company and every officer of the company who is in default. Adding such an offence is proportionate given the serious risk that individuals who have applied for protection face.
Clause 48 amends the Companies Act to remove the option for private, non-traded companies to elect to keep information about their members solely on the central register maintained by the registrar. The effect will be to require private companies that previously chose to keep information only on the central register to maintain their own register of members. It will be the sole responsibility of the company to update and maintain its register of members. The register of members is separate from the register of companies, which is maintained by the registrar.
Clause 48 also inserts a new transitional provision in relation to the abolition of the option to elect to keep members registers at Companies House rather than locally, requiring companies to enter in their register of members all the information that would have been required had the election never been made. Such companies will then be required to provide any updates to the registrar about their members via the confirmation statement. The clause also makes various consequential amendments to other sections of the Companies Act, which are in schedule 1.
Clause 48 also clarifies that, while the provisions relating to the central register were in force, the information about the members of a company that elected to hold membership information on the central register is to be considered prima facie evidence about the members of the company. However, from the point that the central register is abolished by the Bill, the prima facie evidence about the members of a company can be found in the company’s own register, held under section 113 of the Companies Act 2006.
Seema Malhotra
I thank the Minister for his comprehensive walk through these clauses, which I am sure he wrote overnight. It was very helpful. I have a few questions, but I will start by speaking to clause 44, which amends the Companies Act 2006 so that for individuals entered in a register of members, commonly denoting shareholders, “name” refers to a forename and surname. I have made the point before that it is quite staggering that we have not had such specification of the information that should be required. We absolutely welcome this measure and the encouraging of greater transparency of company shareholders.
We support the clause, but it seems to be countered by moves that arguably encourage less transparency of shareholders. In particular, the withdrawal of the central register, with information held only by the company rather than centrally, will make it harder to have public access and knowledge of who shareholders are.
It is important for us to emphasise why transparency continues to be so important. Transparency International has noted that, until now, shareholder information has been extremely limited and difficult to access. That has been a core factor in the UK’s unwanted reputation as a hub for dirty money and economic crime. The lack of any substantial rules and regulations around shareholder information reduces the reliability of the information published by Companies House and, in turn, of the totality of information about a company held by Companies House. We have tabled amendments to later clauses, but I wanted to make that broader point. While we talk separately about directors, officers and shareholders, in the end we are talking about entities working together as a whole, and wanting transparency about activity, and who is involved in it, as a whole.
Clause 45 concerns the power to amend required information. As the Minister outlined, the clause allows the Secretary of State to make regulations to specify changes to the information that must be entered in a company’s register of members. This is an important clause, and I have a couple of questions for the Minister. First, is there any consideration of what information may be required? I think there was some suggestion about the addresses of company members. In the Minister’s opinion, would the clause provide for a potential future decision by the Secretary of State to bring forward proposals to request identity verification and perhaps directors’ IDs from shareholders with shares of less than 5%?
I wonder whether this should be among the requirements for transparency of shareholder information in the Bill, which specifies changes to information that must be entered. If there are measures that could be brought forward, should they not be in the Bill rather than in future regulations? Is it a case of simply saying, “We will go as far as we think is relevant now and leave the option open for additions later”? Where the Minister thinks there could be further measures later, it would be interesting to debate whether some of them could be brought forward.
The Minister clearly set out the arguments for clause 46, and we support the expansion of the court’s powers.
Clause 47 relates to the register of members and the protection of information. As the Minister outlined, the clause would allow the Secretary of State to make regulations requiring a company to refrain from using or disclosing individual membership information except in specified circumstances. I was not fully clear who may make applications to the registrar not to use or disclose information. There may well be good reasons for such a request, but what individuals do the Government have in mind and in what circumstances could such a direction be made? Procedures in the future may result in less transparency, and for good reason, but it is important that we understand the reasons for that and that they are on public record as we consider the Bill.
It is possible that transparency is countered by the implementation of the Bill and the subsequent legislation for which it makes provision. That may reduce transparency by backdoor means, as it were, and reduce its scope to apply to those very individuals whom we may want to subject to such transparency. I am sure that the Minister understands why we want to probe that issue.
Clause 48 concerns the removal of the option to use the central register. Given all the measures relating to transparency and shareholder information, I am concerned about their total effect. The important principle running through the Bill is increased transparency in terms of publication and searchability, but the Bill also provides for private companies to exercise the option not to be on the central register. Perhaps I have not followed all the detail relating to the disclosure of shareholder information, but after the Bill’s implementation, I think there will be less publicly available shareholder information and not more. I look forward to the Minister’s response to those concerns.
Kevin Hollinrake
I think I have noted all the points raised by the hon. Lady. She is absolutely right that, in future, the Secretary of State could, through regulations, elect for the collection of more information from shareholders or any other relevant parties. We must all acknowledge that we do not want to put undue burdens on people who are trying to go about their normal, legitimate, bona fide commercial business. We are trying to strike a balance to ensure that we get the information from those we need it from, who may be acting for nefarious purposes.
On the hon. Lady’s point about the circumstances in which someone may want to remove details from the public register, that individual could be a celebrity, who would not want their address held publicly, or someone who fears domestic abuse. Those are the types of cases and circumstances that may arise. The information would still be held, just not in public. The law enforcement agencies would still have access to it, but the general public would not. When making such an application for removal, an individual would have to demonstrate evidence of risk, and could not simply say, “I want that information removing.” The registrar can refer cases to law enforcement agencies if she is in any doubt about whether the application has been made for bona fide reasons. She can also revoke a removal, if she feels that she has been given false information. I think they are reasonable provisions, and that judgment will be exercised.
On updating the register, the hon. Lady has tabled amendment 104, which we will consider in the next group. Perhaps we will have a good debate about that then.
Question put and agreed to.
Clause 44 accordingly ordered to stand part of the Bill.
Clauses 45 to 48 ordered to stand part of the Bill.
Schedule 1 agreed to.
Clause 49
Membership information: one-off statement
Seema Malhotra
I beg to move amendment 104, in clause 49, page 34, line 32, after “time” insert “and annually thereafter”.
This amendment would require a confirmation statement with company membership information as set out in clause 49 subsection 2 to be submitted annually.
The clause requires a company to provide a full list of shareholders when the first confirmation statement is filed after clause 44(3) comes into force. As I said, the clause is a welcome step in increasing the transparency of shareholder ownership and information, which we support strongly. Nevertheless, as has been said, the provisions in the Bill on shareholder information could and should go further. That is the context in which we tabled the amendment.
The amendment would provide that the confirmation statement about the company membership under this clause is submitted not only on a one-off basis but annually. The principle of shareholder information being submitted is one we support fully. If the Government believe that should be a one-off, I would be grateful if the Minister could explain why it need not be annual.
As I have mentioned, opaque shareholder ownership is a significant barrier to ensuring transparency and tackling economic crime. An example that has been cited already is Savaro Ltd. In August 2020, tonnes of ammonium nitrate exploded in Beirut port, killing more than 200 and wounding thousands more. The reported owner of the chemicals was a UK-registered private limited company called Savaro Ltd. The data provided by Savaro Ltd gives an insight into the poor quality of shareholder information held at Companies House and how that hinders investigation. Transparency International highlighted how, to identify the shareholders, it had to go back to 2015 for documents that named Status Grand as the sole owner.
Instead of identifying shareholders annually, companies only have to say that no shareholders have changed. The information is hidden in PDF documents, so it is unnecessarily time-consuming to establish who held shares in an entity at a particular point in time. Savaro is a clear example of how annual shareholder data, which the amendment would provide for, could assist considerably in investigating even criminal activity in UK companies.
Let me pre-empt the Minister’s pushing back on the amendment. One common argument against companies providing shareholder names annually is that it would prove too onerous a task for UK companies, but in answer to a written parliamentary question that I tabled his predecessor outlined that the average number of shareholders in UK companies in 2021-22 was only 2.15. The average number of directors was 1.59, so the number of shareholders was not that much higher. To argue that it would be onerous for the majority of companies to provide shareholder information does not seem so credible when set against the low average number of shareholders by comparison with company directors, as set out in the Government’s own data.
I urge the Government to consider this important amendment and hope the Minister will respond positively on how we might move forward with the sentiments and arguments behind it.
Kevin Hollinrake
I am grateful to the hon. Lady for her amendment. Clause 49 requires companies to provide to the registrar a one-off snapshot of relevant membership information when the first confirmation statement is due following the clause’s commencement. The amendment would require companies to provide that relevant membership information annually thereafter. The hon. Lady—or is she right honourable?
Kevin Hollinrake
It is only a matter of time. The hon. Lady cited the disturbing case, which I too read about, of Savaro Ltd in Beirut. It may be helpful for me to clarify how the clause as drafted works with existing company law. Companies are already required to provide a confirmation statement at least annually, which records changes in membership information in the previous period. One of the principles behind the confirmation statement is that companies should not be required to resubmit information that has already been filed on the register. Through the process, companies are required to either confirm the information submitted previously or provide Companies House with any updates to a variety of information, including the information contained in their register of members.
For example, if information submitted previously about a company’s members needed to be updated, or there were new members to disclose information about, the existing confirmation statement process already requires the disclosure of that information. Clause 49 introduces a requirement for companies to file a one-off snapshot of relevant information. That will be the means for companies to provide full names for all their members, as required by clause 44. That will give Companies House the starting point to display the information in a more user-friendly way. That information will then be maintained through existing confirmation statement requirements—annual updates, in effect.
The hon. Lady makes a good point about the usability of the information and the different PDFs being held. Companies House is looking at that. The Government would welcome suggestions on how best to display the information—a simple table would be preferable, in my view—which is to be determined as part of the implementation. That will involve user testing in the usual way to ensure that the information is displayed in a user-friendly way, as the hon. Lady seeks. Although I appreciate the intent behind the amendment, it would serve only to duplicate existing requirements, and would introduce the requirement to deliver potentially the same information on a yearly basis in cases where there had been no change in membership. I would therefore be grateful if she could withdraw it.
Seema Malhotra
I thank the Minister for his comments and his recognition of the important sentiments behind the amendment, which I will withdraw. I think some of the measures he outlined regarding the format of the information on Companies House and searchability will go a long way to addressing the point. I hope that we will be able to continue a dialogue on that, perhaps under his guidance about how we can best engage, to ensure that what is published is searchable and meets the important sentiments of transparency, so that frankly we never have another Savaro Ltd. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Question proposed, That the clause stand part of the Bill.
Kevin Hollinrake
Clause 49 is linked to clause 44, to which I spoke a few seconds ago and which introduces new requirements in respect of the names information to be provided to the company in relation to its members, for inclusion by the company in its register of members. Currently, information on shareholders can be contained across multiple filings. The clause requires certain companies to provide the registrar with a one-off list of all shareholders, including their names and how many shares they hold. The first confirmation statement will be due after the new names requirement in clause 44 comes fully into force.
Collecting that information via a one-off snapshot will improve the usefulness of the information on the register by enabling Companies House to display the information in a more user-friendly way. Companies will then confirm the information submitted previously, or provide any updates to Companies House—via the existing confirmation statement process—on the information contained in its register of members.
Seema Malhotra
I have no further points to add.
Question put and agreed to.
Clause 49 accordingly ordered to stand part of the Bill.
Clause 50
Abolition of local registers etc
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss the following:
Amendment 69, in schedule 2, page 148, line 40, at end insert—
“167GA Unique identification number for directors
(1) On receipt of notification of a person becoming a director, the registrar must allocate that director a unique identification number, unless such a number has already been allocated to that person.
(2) Any information supplied to the registrar under or by virtue of this Act about a person who has been allocated a unique identification number under subsection (1) must include that number.”
Amendment 68, in schedule 2, page 150, line 36, at end insert—
“167KA Limit on number of directorships held
(1) Where notice has been given to the registrar that a person (P) has become a director, the registrar may determine that P may not hold that directorship.
(2) The registrar may make a determination under subsection (1) if the registrar considers that P holds an excessive number of directorships.
(3) The factors that the registrar may take into account in making a determination under subsection (1) are the experience, expertise and circumstances of P.
(4) If the registrar makes a determination under subsection (1), P may not hold office as a director of the company.”
Amendment 70, in schedule 2, page 150, line 39, after “167G,”, insert “167GA”.
This amendment would provide for penalties to apply to anyone failing to provide their unique identification number (see Amendment 69) to the registrar.
That schedule 2 be the Second schedule to the Bill.
Kevin Hollinrake
In last year’s consultation on the powers of the registrar, the Government asked stakeholders for their views about the requirements for companies to hold their own registers and to deliver the information contained in them to Companies House. Stakeholders were also asked whether the election regime, by which companies can choose to keep their registers only at Companies House, should be retained. They were clear that centralising certain registers with Companies House could reduce burdens on businesses. In response, the Government said that we would continue to consider updating the registers regime accordingly.
The Government have decided that, where possible, a single source of information about companies is preferable, and that that source should be Companies House. In future, the definitive registers of directors, secretaries and persons of significant control will, in all cases, be held by the registrar rather by companies themselves. Clause 50 introduces schedule 2, which contains the amendments to the Companies Act to implement that policy by setting out the requirements and processes that will apply upon the abolition of local registers and the existing election regime. The changes will apply to registers of directors, of secretaries and of persons of significant control.
Schedule 2 sets out the detailed requirements necessary to give effect to the new regime for companies’ registers. The schedule is necessarily long and detailed because of the complexity of re-engineering the existing system to repeal obligations to maintain local registers and replace them with a regime that will result in the population of central registers. What have largely been a range of duties for companies to maintain records are broadly being transposed into an analogous set of obligations to report that information to the registrar. In many instances, companies are currently obliged not only to maintain registers but to notify the registrar of changes to them. The eradication of local registers will therefore serve to ease burdens on business.
However, it is worth drawing attention to a number of areas in which the new registers regime will involve new reporting obligations for companies. Proposed new section 167G will replace section 167 of the Companies Act 2006 and introduce additional requirements on companies. When notifying the registrar of a new director, companies will be required to make statements to verify the director’s identity and that the individual is not disqualified or otherwise ineligible to be a director.
Proposed new section 790LB will permit that the notification of a new person with significant control, which is required under proposed new section 790LA, is accompanied by a statement confirming that the individual’s identity is verified. If a statement is provided in relation to a registrable relevant legal entity—a legal entity that itself has significant control in a company—it must specify the name of one of its relevant officers and must confirm that their identity is verified. The notice must be accompanied by a statement from the relevant officer confirming that they are the relevant officer of the registrable relevant legal entity.
On amendment 68, which was tabled by the hon. Member for Glasgow Central, given that in our consultation on potential reforms for inclusion in the Bill the Government considered the possibility of including a cap on directorships, I am sympathetic to the underlying intention of the amendment. Approximately three out of four respondents to the consultation opposed a cap. The Government chose not to proceed with one, believing it preferable to verify identities and provide more accurate linkage of records, thereby providing a more accurate picture of involvement with companies. That reasoning stands today.
Analysis of the companies register, together with comparison against other data sets and the reporting of anomalies from obliged entities, will assist in identifying circumstances in which we believe the number of directorships poses a risk of criminal activity. That information will be shared with the relevant enforcement and supervisory bodies.
The amendment proposes a form of fitness test rather than a cap. I acknowledge that this removes some concerns about the bluntness of such a cap and addresses some of the concerns raised by respondents in our original consultation. However, in return the amendment undermines the agency of company owners to act independently and in their own interests when appointing people to run the business they own. It places the registrar in the position of being a higher authority for such appointments. Would they ever have at their disposal the evidence to make a negative determination? What would be the implications of a negative determination on the actions taken by a validly appointed director up to the point of such a determination?
The possibilities in this policy area were given careful consideration as part of the Government consultation. We have not identified a legislative proposal along the lines of 68 amendment that is workable or appropriate. It would undermine business confidence in the UK if companies could not be sure whether their director appointments would take effect. We believe that the new and existing powers to analyse and query information and on identity verification, along with the enhancement that will be brought to linking people across multiple roles and the wider data-sharing possibilities for the registrar, all serve to strengthen our capacity to identify possible grounds for concern. Such concerns can be reported to the relevant agencies, investigated and acted upon, including by pursuing the disqualification of directors, if appropriate. I hope I have clarified why we do not believe the amendment should be taken forward.
Amendments 69 and 70 will be redundant once the expanded power under section 1082 is exercised, as amended under clause 66. The effect will be that all individuals who are under a duty to verify their identity will be assigned a unique identifier when they successfully complete identity verification. This will include all directors, who will commit an offence if they act as a director without having their identity verified.
Seema Malhotra
Will the Minister clarify what he said? Will all directors be given a unique identifier?
Kevin Hollinrake
Yes, that is in clause 66. Further detail about the use and allocation of unique identifiers will be set out in regulations made via the affirmative procedure, so Parliament will have sufficient opportunity to scrutinise them. There is no need, therefore, for the inclusion of a penalty for directors who fail to provide the registrar with their unique identifier. It will be the registrar who issues a director with a unique identifier, not the company or the director. I hope my explanation has provided further clarity on why the amendments are not needed. I urge the hon. Member not to press the amendments to a vote.
Seema Malhotra
May I ask your advice on procedure, Mr Robertson? Should I speak now on clause 50, the amendments and schedule 2, or should the SNP amendments be moved first?
Seema Malhotra
Thank you, Mr Robertson.
The importance of clause 50, which relates to schedule 2, is obvious and requires no further comment. The Minister’s description of schedule 2 as long and detailed was on the button. Its length is understandable given the changes it is making by abolishing the requirement for companies to maintain their own registers of directors, registers of directors’ residential addresses, registers of secretaries and registers of people with significant control. Instead, that information will be held centrally by the registrar, with the important provision that companies have a duty to update the registrar of any change to the information.
We welcome the proposed changes in clause 50, but I want to comment on amendments on 68, 69 and 70 tabled by my SNP colleagues, to which I am sure they will speak. Amendment 68 would limit the number of directorships that one individual may hold. Where notice has been given to the registrar that a person has become a director, the registrar may determine that they should not hold that position, if the registrar considers that they hold an excessive number of directorships. That may be achieved by setting a cap on the number of directorships held and it might be possible to override that limit if there were good reason, and a simple means introduced by which that application and argument could be made to the registrar. Such a proposal could be implemented sensibly to bring about the benefits that it offers, especially in the light of some of the abuses committed.
From our evidence sessions and debates in Committee, we have learned that individuals with multiple directorships are a massive red flag in terms of potential criminal activity. In evidence to us on 27 October, Bill Browder said:
“Why is it okay to have a person be a director of 400 companies? That does not make any sense to me. Why should there not be some limitation—maybe 10? Ten companies is a lot of companies—but 400 companies, or a thousand companies?”
––[Official Report, Economic Crime and Corporate Transparency Public Bill Committee, 25 October 2022; c. 74, Q151.]
A limit on the number of directorships could easily be set in legislation and that would not stop people conducting their lawful business, but it would make it harder for criminals to use the system and our company structures to launder money and act as drivers of economic crime. It is worth reflecting on the fact that the evidence for that change came from a range of professional bodies. They also said that if they were directors of four, five, six or seven companies, how would they have the time to undertake their responsibilities with the required due care? The Minister referred to the consultation on this issue and said that three out of four of those consulted opposed a cap. Can he give us clarification on the year of that consultation? There are some questions about how we might interpret some of the responses, given the number of respondents and how many responded to all the questions.
In the light of that, I will make a few other remarks. The Association of Accounting Technicians, a registered charity based in London that acts as a professional body for accounting technicians worldwide, echoes Mr Browder’s assessment. In September 2020, it published an article recommending a cap of 15 directorships for one person, but it recognised, I think as we all do, that it is a difficult balancing act. We do not want to stop legitimate, lawful and productive activity, but we want to have a way of putting a stop to mechanisms that are easy to abuse. The AAT noted that there was a cap of 15 in Ireland, a general cap of 20 in India, and a cap of five in France that applies to public companies only.
Bodies that responded to the Government’s consultation made other interesting comments. There was a wide range of views on the cap, from two to 100 I think, with many suggesting between 15 and 25. This is an important conversation in the light of the scale and nature of economic crime, how it is changing, and the scale of abuse of our company structures. Some action has been undertaken in slightly different contexts, with less clarity about what has been happening with Russian money, Russian oligarchs and the connection to our international security. This year has really helped to challenge and expose much of that, albeit six years after legislation on economic crime was first promised. The point is that we have reached a place where our eyes are wide open now—or definitely wider, if not open completely.
Some of the wider comments and contributions to the Government’s consultation may well be worth going back to, in the light of what other countries do seemingly without impeding their economy or their companies’ activities. India is a good example of a nation whose trade is growing and that has a real focus on both domestic growth and international trade. I worry that we are closing down some of these debates, when this is a time to review them, perhaps with a slightly more open mind.
Seema Malhotra
The Minister asks a fair question. He is not necessarily stating a cap. Given what has come out in the consultation, and what has been in the articles about whether there should be a cap and what would be right for British companies, it is certainly open to further conversation. It is interesting that in the Government’s consultation many were suggesting between 15 and 25, which is in the ballpark of what has been happening in other countries. The make-up of our economy could be slightly different. We have to understand it in the round, and in the context of our economy, but it is a question of a scale of 400 to 1,000.
If the Minister is saying that there might be a level at which there starts to be a red flag, and implicitly that Companies House may implement the legislation, perhaps Companies House and the registrar will say, “Maybe we’ll just do a procedural check if we have 25-plus directorships.” I do not know. That is where data and analytics help, rather than a ballpark figure. It must be within a considered understanding of how our economy works, and how and where legitimate business is carried out, with a view from directors as well. We might find that it is an easier answer to reach, because it does not have to be one that only we, as Members of Parliament, comment on; it has to be informed.
We are not arguing for a hard cap. We are saying that, as the logic of the SNP amendment outlines, rather than managing on a case-by-case basis, having a way to manage risk structurally and procedurally is an important response to the evidence, the nature of use that we have seen and the situation we find ourselves in today. There is room to learn from the experience of other countries.
Amendment 69 would insert a provision into schedule 2, requiring that:
“On receipt of notification of a person becoming a director, the registrar must allocate that director a unique identification number, unless such a number has already been allocated to that person.”
Amendment 70 follows from that, and would provide penalties for anyone failing to provide their unique identification number to the registrar. We support the spirit of the amendments, but I refer the Committee to our amendments 102 and 103, which we will be speaking to in later debates. Our amendments take a slightly different approach and place a duty on the registrar to give every director a unique identification number, which is published on the registrar’s website. I think that approach is tighter.
I hope in his response that the Minister will be clear about what the registrar is required to do versus what they can do, and what will be and will not be published on the unique identifiers for directors.
Alison Thewliss (Glasgow Central) (SNP)
I rise to speak to amendments 69, 68 and 70. These are connected amendments to schedule 2. I appreciate the point about clause 66, but we will get to that when we get to it, and we are here now.
The evidence from various witnesses last week, which I have heard over many years, is that the Companies House register is a mess. The amendments seek to tidy it up to some extent. A unique identifier that follows a person all the way through, from becoming a director of a company to perhaps resigning as a director of that company and going on to be a director of a different company at a later stage, would help to trace that person through the Companies House system.
I have mentioned in previous debates that there are three Alison Thewlisses on the Companies House register. They are all me, but they appear three times, and nobody would necessarily know that they are the same person. It would make sense to have a unique identifier attached to me as a person so that people can easily find and trace my history as a company director.
I looked up the Minister on the Companies House register. He is there five times. There are five Kevin Paul Hollinrakes out there in the world. It would be useful for companies doing due diligence or for people seeking to look at somebody’s directorship history if there was only one Kevin Paul Hollinrake on the register and we could see a complete picture of all those registrations over the course of his life and career.
That is the main purpose of the amendments—to make registrations traceable and to make the system easier for users and for me, if I want to be a company director, to provide the correct information. I could say, “I am already a director—here’s my number; just add it on to the previous things I have.”
Amendment 70 seeks to prevent people getting around that system and trying to register themselves perhaps by using their middle name or a different name, as if they were a different person. The unique identifier, once allocated to a person, should always follow that person through the system. If I try to register with my middle name or a married name rather than my maiden name, the system should pick it up. That is often an issue for women in the system. They might look very much like two separate people, with a married name and a maiden name, but they are in fact the same person. That unique identifier within the system would help trace people through, simplifying it for everyone.
Kevin Hollinrake
The hon. Lady has obviously read clause 66, “Allocation of unique identifiers”, which I think is what she is seeking to achieve. What about that clause does she not like?
Alison Thewliss
Broadly, I support clause 66. The amendments are not to that clause, but to schedule 2, to tighten it up and to improve it in any way we can. I accept what the Minister says. Labour, too, has an amendment to tighten the provisions, and I dare say I will support that as well, when we get to that stage, because all such amendments are to press the Government to tighten things up and to improve the Bill.
On amendment 68 and the number of directorships held, in evidence we heard Bill Browder suggesting the scenario of a drunk Latvian having their passport taken and being registered as a director in hundreds and hundreds of companies. Bill Browder said rightly:
“Why is it okay to have a person be a director of 400 companies?” ––[Official Report, Economic Crime and Corporate Transparency Public Bill Committee, 25 October 2022; c. 74, Q151.]
Clearly, that is ridiculous. There is no way that someone could fulfil their obligations as a director if they were the director of 400 companies at once. It would be impractical to suggest that anyone could.
Also, Thomas Mayne said:
“On the point about directors, there certainly should be”
a limit—
“it is crazy that you have these people with 1,000 companies.”––[Official Report, Economic Crime and Corporate Transparency Public Bill Committee, 25 October; c. 79, Q162.]
It really is.
I do not want to put a specific number in the Bill—that would be something for Companies House and regulations to decide—but we clearly all understand what an excessive number of companies is. Four hundred is excessive and 1,000 is ludicrous. Perhaps the cut-off could be at 20 or 30, although even at that I would struggle to say that someone could make a good job as a company director keeping an eye on all those companies. It is worthwhile looking at the issue, because it is a red flag in the system: if one person is registered to multiple companies, that is a red flag, and it should be something that triggers Companies House to look into them in more detail.
Seema Malhotra
The hon. Lady is making a powerful argument. The Minister asked her what she thought was not sufficient about clause 66. Does she agree that arguing for a unique identifier is about ensuring that it actually happens? The wording of proposed new paragraph (d) in clause 66(2)(c) is to
“confer power on the registrar…to give a person a new unique identifier”.
It is a power, rather than a duty. That seems to be at the heart of the disagreement—is it a power or is it a duty?
Alison Thewliss
I agree. I do not want to go too far on clause 66, as we have not reached it, but this is about ensuring that something is in the Bill, that it is hard and fast that it happens, rather than having a suggestion, something that the registrar might like to consider, or some kind of “have regard to”. It needs to be there and specified. That is what we are trying to achieve.
Proposed new subsection (3) in amendment 68, on what Companies House should take into account in making its determination under the clause, specifies the “experience, expertise and circumstances” of a director. If someone has long-term experience of running companies that actually existed and have filed accounts, there is something tangible there and then Companies House can say: “Oh yes, that person has 30 directorships, but they are active in all those directorships, and we know what they are.” However, if someone has no active activity that Companies House can fill in, that becomes a red flag under amendment 68. It would give Companies House a degree of discretion. Wherever it might want to put the number is also a factor.
The Minister is trying to suggest that having such a check would be an inhibition to business. I do not believe that, and I am interested to hear what evidence the Minister has to suggest that such a limit on directorships would inhibit businesses in any way. As the Labour spokesperson, the hon. Member for Feltham and Heston, mentioned, other countries have such a rule. Those restrictions are in place elsewhere around the world, so the comparison would be interesting: do they feel that businesses, directorships and the involvement of people in companies are inhibited by having such a rule? We are proposing a change to the Bill to help Companies House do its job, to help it with the red flags and to give it an action to take once it has seen the red flags and identified them through something such as holding multiple directorships.
Kevin Hollinrake
Let me quickly respond. The shadow Minister wanted to know the date of the consultation that the three out of four figure came from. It happened between 2019 and February 2021, so it was pretty recent.
The issue of whether there should be a cap and where it should be set has been raised by both hon. Members. We think it is wrong to set a cap. The hon. Member for Glasgow Central asks the interesting question of, “Why do we need all these companies, and why do they need to be registered?” We believe that it is ours not to reason why. We believe in freedom and that people should be allowed to live their lives as they choose. We do not seek to put restrictions on people for no good reason.
Kevin Hollinrake
I will go on. We think there may be a nefarious reason why a person is a director of many companies. The hon. Member for Glasgow Central mentioned red flags in her speech, and that is exactly how we see this operating. It may well be that Companies House determine that there is a cap of 20, and when somebody gets to 20 directorships, then they become a risk. It may then look further into what that person is doing and share that information with law enforcement agencies. We would rather leave it to the discretion of the registrar to determine where the red flags should be, rather than impose it through the Committee.
The hon. Member for Glasgow Central took the opportunity to google my directorships, and she found that incredibly easy to do. Just type in “Kevin Hollinrake directorships” and it lists all my directorships.
Kevin Hollinrake
It is my name and all my directorships are listed underneath.
Kevin Hollinrake
I am sure it is on Companies House right now. There are 20 records. The hon. Member for Glasgow Central would maybe say that I cannot be director of any more companies, as I am already director of 20, but I have valid reasons for being directors of all those. I can promise her that none of it was for criminal purposes. The hon. Lady may say there should be a limit, but we think that basically we should leave it to the discretion of Companies House and the registrar to do the right thing—set the red flags where most appropriate and then identify risk and act accordingly.
Alison Thewliss
The Minister talks about not wanting to look at someone’s motivation for having, say, 400 company directorships. It is really is a case of, “There might be a reason, but we’re not going to ask about it. Why should we?” I think Companies House should be inquisitive about somebody who has 400 directorships, but the Minister is not tasking it to be inquisitive through the legislation. Tasking Companies House to be specifically inquisitive on that point is important, because the Bill does not put a duty on it or give it the right to be inquisitive.
Looking at the Companies House register, it appears that the Minister is listed five separate times—with one appointment, with zero appointments, with one appointment, with another appointment and with 18 appointments. They all appear as separate entries, not as one single person. A unique identifier would seek to grab those entries and put them in one place. That would make more sense. It would make it more traceable. I gave the example of myself being in there three separate times with three separate directorships, which are from very different points in time. If the entries were all in one place, it would be a neater and tidier way of logging them.
The Chair
Does the Minister wish to speak again? No, okay.
Question put and agreed to.
Clause 50 accordingly ordered to stand part of the Bill.
Schedule 2
Abolition of certain local registers
Amendment proposed: 69, in schedule 2, page 148, line 40, at end insert—
“167GA Unique identification number for directors
(1) On receipt of notification of a person becoming a director, the registrar must allocate that director a unique identification number, unless such a number has already been allocated to that person.
(2) Any information supplied to the registrar under or by virtue of this Act about a person who has been allocated a unique identification number under subsection (1) must include that number.”—(Alison Thewliss.)
Question put, That the amendment be made.
Kevin Hollinrake
The clause would make amendments to the Companies Act 2006 to streamline filing obligations and remove unnecessary burdens, and to provide more protection of personal information than is currently the case. Clause 50 will remove the option for a company to elect to hold its register of directors or its register of people with significant control solely on the central register—the one held by the registrar.
Currently, when companies elect to hold their registers at Companies House, personal information, such as a date of birth, is publicly available on the register. That is because the election regime replicates what would happen if a member of the public asked to view the registers at the company’s registered office. When the election regime is removed, clause 51 will ensure that date of birth information is protected from public inspection, in the same way as dates of birth from non-elected filings are protected. The clause also provides that information such as dates of birth provided prior to 10 October 2015 will not receive automatic protection in the same way. Other provisions in the Bill will enable individuals to apply to protect historic information when it still appears on the public register.
The clause will amend the Companies Act 2006 to streamline and protect personal information of individuals that could otherwise increase the risk of identity theft or other fraud. It clarifies the extent of that protection, which, with some exceptions, will be applied to documents received from 10 October 2015.
Seema Malhotra
As the Minister mentioned, the clause amends the Companies Act in relation to individuals’ dates of birth and when they can be restricted from disclosure. The measures are important for occasions when the disclosure of someone’s date of birth would be inappropriate or unnecessary, so we support the clause.
Question put and agreed to.
Clause 51 accordingly ordered to stand part of the Bill.
Clause 52
Filing obligations of micro-entities
Question proposed, That the clause stand part of the Bill.
Kevin Hollinrake
This group of clauses will improve the quality and value of financial information on the companies register.
Clause 52 will require a micro-entity company to file both its balance sheet and profit and loss account with the registrar. It removes the current option available for a micro-entity to omit—or fillet out—its profit and loss account when filing its accounts with Companies House. Clause 53 will require small companies to file a profit and loss account, and a directors’ report, when filing their accounts with the registrar. Clause 54 ensures that clauses 52 and 53 operate as intended by amending references to the existing small company and micro-entity filing obligations in the Companies Act 2006.
Clause 55 requires any companies seeking an audit exemption to provide an additional statement from their directors. That will help to deter fraudulent under-reporting by companies and, where a company director has provided a false statement, provide additional enforcement evidence that can make it easier to successfully prosecute directors. Finally, clause 56 removes the option for small companies, including micro-entities, to prepare and file a set of abridged accounts.
Collectively, the clauses will ensure that more financial information for micro-entities is publicly available on the register, helping to inform better business and lending decisions. They will ensure that the company’s turnover—one of the three eligibility criteria that determine the size of the company and what it must file with the registrar—is publicly available. The clauses will also provide greater transparency of micro-entity accounts, which will help to deter fraudulent or criminal activity and make such activity more easily identifiable.
It is crucial that we strike the right balance between transparency and burdens on business. As micro-entities already file a copy of their annual accounts for other purposes—tax returns with His Majesty’s Revenue and Customs, for example—the changes will not be overly burdensome for them.
Seema Malhotra
I thank the Minister for his comments. We welcome the measures in these clauses.
As the Minister said, clause 52 updates the filing requirements for micro-entities. A company is a micro-entity if it has any two of the following criteria: a turnover of £632,000 or less, a balance sheet of £316,000 or less, or 10 or fewer employees. The technical definition of a small company is any company that has any two of the following criteria: a turnover of £10.2 million or less, a turnover of £5.1 million or less, and 50 employees or less. Although we use the terms micro and small entities—in terms of the scale and size of other companies, that is significant—they can be larger than the terms indicate. That increased transparency from clause 52 is important.
We welcome clause 52 as a reflection of the fact that insufficient information is filed from those micro-entities to give a true and fair view of their financial position. The minimal disclosure requirements at present have also made them attractive to fraudsters who want to present a false picture.
There were 1.3 million micro-entity accounts filed in 2019-20. It is the most common choice for account filings. The Government’s December 2020 consultation on improving the quality and value of financial information on the register noted:
“Fraud investigation bodies have reported that micro-entity accounts are often used by companies that are investigated in money laundering cases.”
It is therefore absolutely right to tighten things up and seek greater transparency in the accounts and financial positions of companies’ activities. However, that raises the important question of whether any further work might be needed on micro-entities, although that question is for another debate.
On roll-out time, the Bill’s impact assessment suggests on page 76 that familiarisation time will be needed to get micro-entities up to speed with the changes, but there should not be significant additional costs, as companies already collect and submit additional information to HMRC in tax filings. In the light of what we and the Minister have said, we want moves that stop the criminal behaviour, but do not impede ordinary, good, productive and lawful business, so the measures are welcome. We want to see them come into force as soon as is practicable. The Secretary of State may make a determination later about when to bring the requirements into force, but perhaps the Minister will indicate today when he expects the Government will want the new requirements on micro-entities to become operational.
We welcome clause 52 as a necessary means to ensure that small businesses that are not micro-entities file full accounts to the registrar—which, again, will increase transparency and the availability of information. Clause 54’s consequential amendments seek to ensure that clauses 52 and 53 function as intended.
I want to make a few comments on clause 55. Perhaps the Minister can clarify the exemptions from audit requirements under this clause. When a company seeks an exemption from the requirement to have its accounts audited—for example, because it is a small company with £10 million or less in turnover—the clause would require directors to make a statement confirming that the company qualifies for an exemption.
I would appreciate it if, in the interest of the robustness of legislation, the Minister would expand on the clause and clarify what qualifies a company to have an exemption in that regard. The Government brought in an increase in audit exemption levels, effectively making more companies eligible for exemptions, and that goes back to the 2013 EU accounting directive, which sought to simplify requirements on companies submitting accounts and gave member states the flexibility to increase the small company accounting and audit exemption thresholds. Is there likely to be any review of those thresholds? Perhaps the Minister can enlighten me as to whether there is clear demand for that.
In the light of current circumstances—the clamping down on, and growth in, economic crime, as well as the transformations we will have seen in the last six, eight or 10 years—will the Minister tell us whether the high thresholds brought in by the Government have reduced audits and the transparency of information on the register? Have they affected the extent to which information filed by companies is trusted? Is the Minister interested in considering whether the levels for audit exemption are acceptable and right in the context of current economic crime, or does he think, in the light of the opportunities presented by the Bill, that there is reason to look at any of that again?
We welcome clause 56 as a necessary provision for improving the accuracy of information in relation to small companies.
Kevin Hollinrake
I will check the implementation date of the new rules around filing full accounts and let the hon. Member know in detail.
In terms of the audit exemption, the threshold is currently £10.2 million. We will always keep that under review, because we are trying to ease the burden on business while ensuring that nothing untoward is happening. Having been through the process myself, I know that auditing a business is very extensive, exhaustive and expensive. It is absolutely right that we seek to reduce burdens on business whenever we can, while also putting appropriate checks and balances in place.
Question put and agreed to.
Clause 52 accordingly ordered to stand part of the Bill.
Clauses 53 to 56 ordered to stand part of the Bill.
Clause 57
Confirmation statements
Question proposed, That the clause stand part of the Bill.
Kevin Hollinrake
The clauses in this group will help the registrar to fulfil their new objectives, as set out in clause 1. Clause 57 obliges companies to notify the registrar of additional information that is required to be delivered under new requirements brought in via the Bill. Companies will have to do this before, or at the same time as, delivering their annual confirmation statement. The new information of which companies will have to notify the registrar will be to confirm the company’s lawful purpose. If it is the company’s first confirmation statement, as it is a newly incorporated company, the company will need to notify the registrar of any changes that have happened between its application for incorporation and the incorporation taking place.
The annual confirmation statement is a fundamental aspect of that data. It provides an opportunity for a company to focus its attention on the statutory requirements that it has to meet, and it also re-establishes the benchmark against which a company is assessed by others, including the registrar.
Clause 58 ensures that the registrar will have up-to-date information that will allow them to uphold the investigations and sanctions regime more effectively. The accuracy of the information provided in the confirmation statement is obviously of key importance, given that making false statements, or failing to deliver confirmation statements, may result in an offence being committed.
Dame Margaret Hodge (Barking) (Lab)
What happens if it is a false statement? Who will uncover that?
Dame Margaret Hodge
I ask the question for a reason. I did not intervene during the previous debate, but the Minister might know—I certainly do—that thousands and thousands of microbusinesses are supposed to put their annual accounts in to HMRC, but do not do so, and nobody ever goes after them. There therefore may be thousands and thousands of businesses that put in false statements. Given the anti-regulatory stance that the Minister has displayed today, I am just interested in knowing who will actually check the statements and what will happen then.
Kevin Hollinrake
I am very disappointed that the right hon. Lady regards me as anti-regulatory. I want a system that allows good, bona fide businesses to go about their daily business without unnecessary checks and balances. We cannot control everything that goes on in our society but, in the main, businesses are lawful, and undertake lawful and legitimate commercial activity.
If the right hon. Lady expects a world in which we check every single filing, nobody will be doing any commercial work in our society. The only people we will have will then be box-checkers, and where would the tax revenue come from to pay for all the things that both she and I want in our society?
We must have a proportionate balance between regulation, the cost of resourcing regulators and the needs of law enforcement agencies. That is why our belief, which I know is not entirely hers, is that we need to take an intelligence-based approach to regulation. That is the most effective way to do it.
Seema Malhotra
I think we all agree that we do not want to do things that impede lawful activity—that is not a matter for debate, really. The question is whether the systems will be strong enough. They do not have to be burdensome; there are ways in which systems can have automatic checks, and be underpinned by clear roles and responsibilities. The question of who would know whether there are errors in a confirmation statement, and how that would be checked, is quite an important one for ensuring that we are not—
Kevin Hollinrake
I do not disagree. I agree with the hon. Lady about automation, but checking every single document and every single file would be ludicrously burdensome, because 99% of those filings would be legitimate documents. I speak as somebody who has been an authorised person under the FCA, so I know how many checks, and double-checks, someone in such a position has to make. The vast majority of people who the FCA regulates do a bona fide, legitimate job.
We are trying to find the people who are not doing so, and what we are trying to do through the Bill is to allow the sharing of information and the cross-referencing of information to identify all the red flags—the hon. Lady talks about automation—and then trigger alerts that can be investigated. I think that we all agree about that, and that is the approach that we are taking.
As I was saying, these measures will all ensure that companies, once formed, will reassert to the registrar via their annual confirmation statement that the company’s intended future activities are lawful.
Clause 59 will oblige a company to notify the registrar via its first annual confirmation statement of a change in its principal business activity if such a change takes place between the company’s application to be incorporated and the incorporation taking place. That addresses the fact that there is currently no duty to notify the registrar during the incorporation process. This new obligation builds on the existing obligation in section 853C of the Companies Act 2006, whereby companies have to notify the registrar of a change in principal business activities via their annual confirmation statement.
Clause 60 amends section 853J(4) of the Companies Act so that the framing of criminal offences is consistent with similar provisions in this Bill. It also makes the same amendment to section 853L(1), which concerns the offence of failing to submit a confirmation statement on time. It will clarify that every officer of the company who is in default can commit the offence, as well as every director of the company. It also corrects an irregularity with the framing of the offence, which currently imposes strict liability on all the company’s directors and secretaries, regardless of whether they are in default—in other words, regardless of whether they authorised, permitted, participated in, or failed to take all reasonable steps to prevent, the contravention. I hope right hon. and hon. Members agree that it is important that these measures reach the statute book.
Seema Malhotra
We welcome clause 57 which, as the Minister said, prescribes the company’s duty to notify the registrar about certain events and provide certain information in advance of and at the same time as the delivery of the annual confirmation statement. That is obviously very important.
We have already debated some of the issues that clause 58 addresses. It is obviously an important clause, and the Minister has outlined that the approach is to hope for accuracy, based on risk assessments and red flags. We understand that, but it still does not feel as strong as we need it to be. It does not feel clear and strong on detecting issues, and it does not give the registrar a clear expectation of what the Minister intends. It felt a little like the Minister was just hoping that everything would work out. We should be clearer about what steps should be taken on detection, prevention and enforcement, and ensure that that is as strong as possible through the passage of the Bill. That is incredibly important, because we know that those are weak areas.
My right hon. Friend the Member for Birmingham, Hodge Hill made the very important point that we need to clarify what is expected of the registrar. They will be subject to many different demands, and in some ways it will make their life easier if they see in Hansard that there is a clear expectation from the Government, the Minister and the House about what is to be done. That would aid the call for greater resources, as it is frankly a way of making savings from enforcement later, and increasing the speed of detection will considerably lower the cost of economic crime. I hope that the Minister recognises that I am putting these comments and questions to him in the hope of detecting ways of tightening up the message about what we expect, in order to better implement the Bill and its stated goals.
We welcome clause 59, which I think we referred to earlier. Clause 60 will align terminology around existing offences relating to confirmation statements. The Minister outlined the detail of that. I raise a similar question as previously, because I seek clarity from him on what it will mean in practice for companies that breach the new provisions around confirmation statements. What is the result of failure to comply with the provisions, and who will be held to account? Clarifying that would be quite helpful. It would also be helpful to understand whether the Bill will allow for retrospective penalties, should information on the confirmation statements turn out to be misleading, and perhaps purposefully misleading.
Kevin Hollinrake
The hon. Lady raises some good points on retrospective penalties. I will find out that information and come back to her.
Question put and agreed to.
Clause 57 accordingly ordered to stand part of the Bill.
Clauses 58 to 60 ordered to stand part of the Bill.
Clause 61
Identity verification of persons with significant control
Question proposed, That the clause stand part of the Bill.
The Chair
With this it will be convenient to discuss new clause 27—Reporting requirement (identity verification)—
“(1) The Secretary of State must publish an annual report on the progress of establishing identity verification procedures in relation to proposed officers and persons with initial significant control.
(2) The first report must be published within three months of this Act being passed.
(3) A further report must be published at least once a year.
(4) The Secretary of State must lay a copy of each report before Parliament.”
This new clause would add a requirement on the Secretary of State to report on the progress of establishing identity verification procedures for proposed company officers and persons with initial significant control.
Kevin Hollinrake
I am aware that hon. Members have tabled amendments in relation to ID verification in the groupings to follow, but I will first speak to the first clause in this chapter. Clause 61 introduces requirements for people who own or control companies to undergo ID verification to improve the reliability of information on the company register. The UK was the first G20 nation to introduce a public beneficial ownership register of companies: the people with significant control register, which has more than 5.8 million entries about people with significant control over entities on the company register. The clause will apply ID verification requirements to persons with significant control and relevant legal entities on the register. It is a vital clause.
If a company has not voluntarily delivered a statement confirming that the identity of a person with significant control is verified, the registrar will direct such a person with significant control to make an identity verification statement within 14 days. A company might be owned or controlled not only by individuals, but by legal entities—for example, other companies. To be a registrable relevant legal entity, a legal entity must meet certain conditions, and be subject to its own disclosure requirements. It is registrable in relation to a company if it is the first legal entity in the company’s ownership chain.
Where there is a registrable relevant legal entity in relation to a company, and the company has not voluntarily made an identity verification statement for that RLE, the registrar will direct such a relevant legal entity. That direction will require the entity to make a statement within 28 days, naming its verified relevant officer. The statement by the RLE must include a statement made by the relevant officer confirming that they are a relevant officer for the entity. That will prevent individuals from being notified without their consent or any relation to the entity.
The clause creates a duty on persons with significant control to maintain their verified status as long as they are registered with the registrar. The RLEs will also be under a duty to maintain a verified relevant officer as long as they are registered with the registrar. That is to ensure that a verified individual is always traceable for each RLE. Failure to comply with the registrar’s directions or to maintain a verified status is an offence under the clause.
Stephen Kinnock (Aberavon) (Lab)
It is a pleasure to serve under your chairship, Mr Robertson. I think it is safe to say that we are coming to one of the most significant and consequential aspects of the Bill.
Clauses 61 to 67 take up a full 15 pages and provide a framework for the verification of the identities of individuals listed on the register of people with significant control, whom I will henceforth refer to as PSCs. Since its launch in 2016, the PSC register—more colloquially described as the register of beneficial owners of UK companies—has made important progress towards corporate transparency, but it remains very much a work in progress.
Much of this Bill is rightly concerned with closing loopholes in existing legislation and, as it stands, the PSC system has loopholes that are big enough to drive a coach and horses through. Even if we could rely on the good faith of all those who register, we would still be stuck with the fundamental problem of the 25% ownership threshold. The ease with which that can be used to circumvent the registration requirement—for instance, simply by splitting ownership shares between four people, who may all be family members—has been extensively discussed and is well documented.
During last week’s evidence sessions, my right hon. Friend the Member for Barking rightly drew attention to the case for a threshold set much lower than 25%. In response, Professor Elspeth Berry argued that although the threshold should certainly be lowered, even
“a zero percentage could be considered.”––[Official Report, Economic Crime and Corporate Transparency Public Bill Committee, 27 October 2022; c. 103, Q194.]
That is the case, given how many different and probably more relevant ways there are of measuring corporate control in the modern business environment.
The Government will likely argue that 25% is a widely used international standard, but we should be clear about what that means. Nowhere is it suggested in any of the international frameworks to which the UK is a party that 25% ownership is anything more than an example of how a country might seek to define beneficial ownership. In fact, many jurisdictions set ownership thresholds much lower than that. Some jurisdictions—including Belize and Jersey, which are not exactly known as paragons of corporate transparency—use a 10% threshold. The Government’s failure to take the opportunity provided by the Bill to revisit the definition of beneficial ownership is, to put it mildly, a disappointment.
I will now look more specifically at ID verification. Clause 61 is the first of a series of clauses in which the Government enable new powers to be introduced to ensure that information on PSCs can be verified. Subsequent clauses stipulate that full details of the verification regime will be set out in regulations at a later date.
The Opposition find the absence of substantial details on verification procedures in the Bill perplexing. It is now more than three years since the Government launched the first of what turned out to be no fewer than four separate consultations on proposed reforms to Companies House, which included proposed ID verification powers. It is not at all clear why, after all this apparent effort, Ministers are still unable to set out specific plans in legislation. Perhaps the reason is that they have been struggling to make a decision and stick to it.
In the first consultation document back in May 2019, the Government stated fairly unambiguously that they believed that Companies House should be given responsibilities for ID checks. That view was reiterated in subsequent consultation documents published in February 2021, which seemed to indicate that the Business Department is better at flogging a dead horse than at drafting legislation. More than a year passed before the Government finally published a White Paper. By that time, Ministers appeared to have gone lukewarm on handing responsibility for ID checks to Companies House, with a shift in emphasis towards outsourcing the checks to third parties that are collectively known as trust or company service providers. Somewhat confusingly, they are now referred to in the Bill as “authorised corporate service providers”, or ACSPs.
That is extremely problematic, for a whole range of reasons. First and foremost, TCSPs represent a highly fragmented sector, making supervision of their activities very difficult indeed. Some may be supervised by professional bodies—for example, if they provide accountancy or legal services—while others may be supervised by HMRC. In some cases, there is no supervision at all, leading RUSI’s Helena Wood to compare the sector to the wild west. Ministers now propose to place an enormous amount of trust, faith and responsibility on the shoulders of TCSPs, about which they know very little.
Speaking to the Treasury Committee earlier this year, Graeme Biggar, the then director-general of the National Economic Crime Centre, said:
“We are developing a plan with HMRC and the Treasury to have both more supervision of, and more enforcement against, company formation agents. We are on it, but it is not the most developed of our plans. We have really got to do more work on that.”
It would be excellent if the Minister could give us an update on the progress of the work that Mr Biggar referred to in that evidence.
As things stand, it is hard to imagine what the Government were thinking with the proposals in these clauses. This is not just a case of sharing responsibilities for supervision between the public and private sectors, as is already the case in the legal, accountancy and some other sectors; this is about outsourcing a set of tasks to the least regulated, least understood and potentially least reliable part of the entire financial services industry. The Government’s own assessment in their national risk assessment was that TCSPs pose a high risk of being used for money laundering purposes. A previous risk assessment said:
“Ineffective AML supervision leads to inadequate compliance with the rules, and low and poor quality reporting of suspicious activity”.
For at least the past seven or eight years, official reports and media coverage have documented the involvement of UK-based TCSPs in the efforts of oligarchs, many of whom are Russian, to conceal their wealth in opaque webs of corporate structures. It should be clear by now that the Opposition have serious concerns about the proposal to outsource ID checks to the sector. We have therefore tabled new clause 27, which would require annual reporting on the progress towards establishing verification procedures, in order to probe the Government’s rationale for the policy. I hope that the Minister will take seriously the concerns I have just outlined, and that due consideration will be given to whether the policy is really in the interests of tackling economic crime and improving corporate transparency.
May I just ask you for clarification, Mr Robertson? Do you wish me to stop there or—
Stephen Kinnock
I would be very happy to pause and provide the Minister with an opportunity to respond, if he wishes to do so, on clause 61.
The Chair
As you wish. I will bring Alison Thewliss in next, but we can come back to you, Mr Kinnock.
Alison Thewliss
I wholeheartedly support Labour’s new clause. There is an awful lot more that needs to be done to tighten up the measure on verification. Nick Van Benschoten, in his evidence, said:
“On the verification measures, one of the key points is that they fall short of minimum industry standards. Verification of identity is necessary but not sufficient. A key thing we have noted is that the Bill does not provide for order-making powers to allow Companies House to verify the status of directors or beneficial owners, and for that sort of requirement on company information agents and so on. That seems an odd gap.”––[Official Report, Economic Crime and Corporate Transparency Public Bill Committee, 25 October 2022; c. 7, Q3.]
I wholeheartedly agree with that. It is the key part of the Bill. If we are not going to verify people on the register, there is almost no point in having the legislation. It is the verification that is crucial.
Hand in hand with that are the fines for not complying with the verification. I draw the Minister’s attention, again, to the people with significant control over Scottish limited partnerships. There has been one fine of £210 since the rules came into place. That is no kind of deterrent whatsoever. The rules need to be here, the verification needs to be right, and the sanctions for not complying must be enforced. I would say that even the sanctions are far too low.
Leaving trust and company service providers to verify identity leaves the door wide open to abuse. There is already abuse, and the Government’s position in the Bill is to continue to allow that to happen. As the hon. Member for Aberavon said, trust and company service providers have been identified in numerous Government documents as being the gap that allows money laundering and international crime. That cannot be allowed to continue in the Bill. If the Government leave the door open for the trust and company service providers, they will continue to abuse the system and the register will continue to be full of absolute guff.
I raised the issue of verification in the House, albeit, I appreciate, with a different Minister, the hon. Member for Torbay (Kevin Foster). He suggested that a decision had not yet been made on how the verification system would work. My suggestion was that it go through the UK Government’s existing verification scheme, which is used for passports, driving licences and tax returns, because that system is already up and running. The response suggested that that had not yet been decided.
However, it was drawn to my attention today that Companies House has already put out a tender for a verification system. A tender went out on 10 October and closed on 24 October for an “authentication digital delivery partner”, looking for people to come and work on this system. I am curious to know why, when we have not yet got this legislation in place, the Government have tendered the contract and closed the application process for the company to build the system.
I would be grateful for some clarification from the Minister on exactly what the status is of that £3.7 million contract, which Companies House has already put out to tender. Why has it gone out before the Bill has concluded if Companies House does not know what it is building yet, and when amendments are still being tabled? I appreciate that the Government want to move at speed, but putting the cart before the horse in this way seems quite wrong.
We would like the verification to be strengthened, but if the Government have already instructed a contractor on what it will build, why are we even here this afternoon?
Dame Margaret Hodge
I seek your guidance, Mr Robertson: we are talking about clause 60, are we not?
Dame Margaret Hodge
Yes; the others come later.
After the excellent speech by my hon. Friend the Member for Aberavon, I will speak briefly. I have two things to say. We will come back to the issue of shareholders, data and the threshold, which is really important, and I will certainly come back to the issue of trust or company service providers, because Labour Members all think that it is key to get that right if we are to have any credibility about the integrity of the list.
I want to talk about new clause 27. The Minister has said a number of times that he does not want to impede business. I do not think any Opposition Member wants to impede business either. We want to have smart regulation, not too much regulation. The purpose of this debate is to ensure that the regulation is indeed smart. At the moment, there are too many flaws.
The Chair
For clarification, we will not vote on new clause 27 until later in the proceedings, and probably not today. We are discussing it now. In view of the fact that new clause 27 has already been raised, would you like to speak to it now, Mr Kinnock?
Stephen Kinnock
I have made the points that I wish to make about new clause 27.
Kevin Hollinrake
As an overriding point, we all know how important the integrity of the ID verification system is. I completely agree with that and we need there to be confidence in it.
On the point raised by the hon. Member for Glasgow Central, it is not right that a tender has gone out already. A request for information has been put out to determine some of the characteristics of the suppliers to learn what services they provide, but a tender has not gone out. Once determined, the ID verification system will be brought to the House to be approved by affirmative resolution. There will be opportunities for debate at that time to make sure it is fit for purpose, both in the framework and how it will be operated.
On the comments the hon. Member for Aberavon made about persons of significant control, first, I think he makes the exact case that we would make. A 25% threshold is pretty much the global standard, but even if it were lowered, people could find ways around it—even if there were a 0% threshold, as was suggested by Professor Elspeth Berry. That is why the definition of a person of significant control is not solely about the percentage of the shareholding of a company. There are five definitions, including one I that believe will interest the hon. Gentleman, which is somebody who, other than by shareholding,
“has the right to exercise or actually exercises significant influence or control”
over a company. Therefore, there could be zero shareholding and they would still be a person of significant control. How is that enforced? If directors allow that to happen and do not declare that they have a person of significant control, they are liable for a fine and a custodial sentence of up to two years. We do deal with that in a reasonable way.
Some valid concerns have been expressed about company formation agents. I am happy to write to the National Crime Agency to ask what it has done about them. However, not all company service providers are company formation agents; there is a distinction. A company service provider may well be a large accountancy practice, such as Deloitte, PwC or KPMG. The hon. Member for Aberavon stated that such organisations know very little about their clients and offer a blanket service, but I do not think that is fair. My accountants can verify my ID and they know a great deal about me, I can promise the hon. Gentleman.
Of course we must make sure that the system is robust, and I acknowledge that there are some concerns about the supervision of those registered as supervised for money-laundering purposes. Of course we must be sure that the system is right. As hon. Members are aware, I think, the Treasury is looking at means of improving the regime to ensure that the supervision is much better, and it needs to be. The difficulty is—we will have more debate about the issue in forthcoming sittings—whether we want to get everything perfect in the system before we start ID verification, or whether we start ID verification. In my view, it is essential that we get that ID verification done as quickly as possible. Waiting until the AML supervision regime is absolutely perfect would be a mistake, in my view. The two things should happen concurrently.
I understand the reasoning behind new clause 27. I completely agree with the idea of giving confidence to Parliament that the matters are being taken forward. I am happy to commit to return to Parliament to communicate by whatever means is preferable—written ministerial statement or oral statement—what progress has been made to ensure that Parliament has the information that it needs to hold Companies House and other agencies to account.
The Chair
The Minister is finished. If someone else wishes to speak, they can stand in the normal way and indicate.
Dame Margaret Hodge
I am grateful to the Minister for saying that he will return to Parliament, but new clause 27 is designed to ensure that there is an annual report to Parliament. That means that our successors—certainly mine—will be able to hold Companies House to account over time. He knows that accountability is absolutely vital to ensuring the integrity of the system.
Question put and agreed to.
Clause 61 accordingly ordered to stand part of the Bill.
Clause 62
Procedure etc for verifying identity
Stephen Kinnock
I beg to move amendment 108, in clause 62, page 47, leave out lines 14 and 15.
The Chair
With this it will be convenient to discuss the following:
Amendment 109, in clause 62, page 47, leave out lines 18 to 20.
Amendment 78, in clause 62, page 47, line 20, at end insert—
‘(2A) No verification statement may be made by an authorised corporate service provider until the Treasury has laid before Parliament a report confirming that the Treasury’s review of the UK’s anti-money laundering and countering the financing of terrorism regulatory and supervisory regime has been completed.’
This amendment prevents an authorised corporate service provider from making a verification statement prior to the completion of the Treasury’s review of the UK’s anti-money laundering regime.
Amendment 107, in clause 62, page 47, line 20, at end insert—
‘(2A) The regulations must make provision for the evidence required to verify an individual’s identity for the purposes of subsection (2)(a) to include—
(a) an identity document with a photograph of the individual’s face; and
(b) an identity document issued by a recognised official authority.
(2B) For the purposes of subsection (2A)(b) above, “a recognised official authority” includes—
(a) a department or agency of the UK government;
(b) a department or agency of any of the devolved nations;
(c) a department or agency of the government of another country;’.
Amendment 110, in clause 62, page 47, leave out lines 34 to 37.
Amendment 111, in clause 62, page 47, line 43, leave out from “registrar” to the end of line 44.
Amendment 112, in clause 62, page 48, leave out lines 4 to 26.
Clause stand part.
Stephen Kinnock
I have spoken at some length about the Opposition’s concerns about the provisions in clauses 62 and 63 to authorise third-party trust or corporate service providers—or authorised corporate service providers, as they are described in the Bill—to carry out ID checks on the Government’s behalf. Amendments 108, 109 and 110 to 112 would simply remove those provisions from the Bill in the hope of prompting a rethink by the Government.
I should like to explain the thinking behind the amendments tabled by me and my hon. Friend the Member for Feltham and Heston. The purpose of amendment 107 goes back to what I have said about the surprising lack of specific details on the proposed verification process. As I have said, it is not as though the Government have not had enough time to think through what procedures might be necessary; four consultations have already taken place on the topic. Amendment 107 would incorporate into the Bill requirements for some form of official identification, including photo ID, to be submitted to the registrar. That should not be controversial. In fact, the amendment would merely reflect international best practice guidelines, including those published by the Financial Action Task Force, the IMF and the World Bank, among others, and the commitments made in the Government’s own White Paper.
Dame Margaret Hodge
It is a pleasure to rise to speak under your chairmanship, Mr Robertson, and I do so to speak to amendment 78. The amendment is part of a batch of amendments that we will get to later. I hope that hon. Members will bear with me if I speak longer on amendment 78, so that amendments 79, 82 and 83 will not require a long explanation.
This is one of the most important series of amendments that we have placed before the Committee. The purpose is to ensure that we close any loopholes, so that we do not find ourselves back in debate in a couple of years’ time, bemoaning the fact that we failed to create watertight legislation and that we do not have the information and data that we need to hold businesses to account.
I stress that our aim is not to be bureaucratic. The last thing anybody wants is bureaucratic regulation. However, if we do not have effective, smart regulation, we will not achieve the objective, which is shared across the House, of bearing down on illicit finance and on the abuse of our corporate structure system by ne’er-do-wells. Today, we are paying the price of those who came before us, from both political parties, who thought that by simply deregulating the whole of the financial services sector, they would encourage growth in the economy. They did encourage growth, but they also made us a destination of choice for too much illicit finance. That has come into focus with the war in Ukraine and the role of Russians in bringing their financing here. That money is used to fund Putin and his allies in the attack on Ukraine.
The Government have decided to outsource responsibility for checking the unique identification of beneficial owners. I can see why they have done so. It is quicker to do it that way than to build up the necessary resources in Companies House. Like my hon. Friend the Member for Aberavon, I would have had more confidence if we had done it in house, but that was the Government’s decision. The purpose of my amendment is not to challenge that decision. However, we need to trust the corporate service providers. We need to trust both the professionals and the others involved, whether they are lawyers or accountants, to do the job properly and honestly. At present, confidence and trust are not there.
I thought that the Government were on the same page on this issue. From all the leaks, and from all the information and intelligence about how illicit wealth from all the kleptocracies has reached our shores, I thought that they understood the role played by the TCSPs. I thought they understood the role that the TCSPs play, and therefore shared our concern that we need to get that regulatory framework right before we unleash a new system that, if it is not right, could lead to us peopling the new Companies House register with dud information that we do not want.
James Daly (Bury North) (Con)
I refer to my entry in the Register of Members’ Financial Interests as a practising solicitor and a partner in a firm of solicitors. The right hon. Lady has essentially said that everybody involved in the legal sector and financial advisers are potentially dishonest. They absolutely are not. The vast amount of people involved in the sector are honest, decent people who have a lot of regulation and try their damnedest to abide by all of it. The picture that the right hon. Lady paints is not correct.
Dame Margaret Hodge
That is not what I said. The hon. Gentleman may have chosen to interpret it that way—
Dame Margaret Hodge
No, I did not. I said that none of the professions has sufficient supervisory or regulatory capabilities, policies or practices in place to pull out the bad apples. I have nowhere ever stated that that applies to everyone, but I hope the hon. Gentleman agrees that the extent of people setting up shell companies —we are talking largely about shell companies—as vehicles to move illicit finance, whether through drugs, kleptocrats or people trafficking, is shocking.
Let me tell the hon. Gentleman my most egregious story, which has been mentioned—the Savaro story. We had this terrible explosion in Lebanon, with hundreds of people killed and lots of property destroyed. We were told that it was fertiliser held in the warehouse that was going to Mozambique. A couple of months after the explosion, I was rung up by a Reuters journalist with whom I have worked down the years, who said, “Did you know it was a UK limited company—Savaro Ltd?” He went on to say that not only was it a UK limited company, but, interestingly enough, it had told HMRC it was dormant, so it had not filled in its tax returns. It was registered in the name of a company service provider, a woman who lived in Cyprus. There were two lies in the system: a lie about the company service provider, and lying to HMRC.
I gave the usual quote and was then overwhelmed by people from Lebanon contacting me, including the Bar Association, all of whom were trying to find out the origins of what had happened. It then emerged that three Ukrainian Syrians—this was before the Ukrainian war—were the real owners. There was no way the fertiliser was going to be used in Mozambique; it was going to Assad to drop as barrel bombs on the civilian population of Syria. That is the sort of shocking outcome that comes from lack of proper regulatory control.
Kevin Hollinrake
I will deal first with amendment 78, tabled by the right hon. Member for Barking. As she knows, it would place a restriction on the permitted ID verification processes set out elsewhere in the Bill. It would allow a person such as a company director or beneficial owner seeking to verify their identity through an authorised corporate service provider to do so only once His Majesty’s Treasury had completed its review of the AML supervisory regime and laid the report before Parliament. I think that if the right hon. Lady thinks about it, she will probably want to go further than that, based on her remarks. I think she wants to go ahead only once the AML regime is properly supervised generally, not just to the point where we have the report from the Treasury. We are potentially talking about getting some way down the line before we are in a situation where she would be happy with the regime.
I take on board many of the comments the right hon. Lady made. Parts of the regime are not operating as they should—I quite agree. We absolutely need to fix that. As with other amendments proposed today, I am sympathetic to the intention; however, I think that there better ways to do it.
The practical effect of the amendment would be to place a temporary restriction on the functions that legitimate businesses may carry out. That restriction is unrelated to and may be unaffected by the publication of the review to which it is linked. It is anomalous and unfair that those businesses affected will still be subject to their current regulatory obligations to carry out ID checks. However, they will be prevented from making a statement reporting to Companies House that such checks have taken place, effectively delaying the whole regime. I also draw attention to the impact of the right hon. Lady’s amendment on those people who use agents to manage their interests. I accept that some are shady characters, but, as my hon. Friend the Member for Bury North stated, the overwhelming majority are not.
Alison Thewliss
The Home Office report, “National risk assessment of money laundering and terrorist financing 2020,” states:
“Company formation and related professional services are therefore a key enabler or gatekeeper of”
trade-based money laundering activity. Should that not raise more concerns for the Minister?
Kevin Hollinrake
The hon. Lady is mixing up two different things. I am not saying that some company formation agents are not shady—I have just said that. However, not all service providers are company formation agents. Many are bona fide solicitors or accountants that are household names. I think we need to keep this in perspective. The hon. Lady cites statistics on the capability of some of the sector in terms of proper supervision. According to OPBAS, 50% of professional body supervisors were “fully effective”. I think that figure should be much higher, but in its opinion 50% are fully effective, so it is not as if there are not some actors in this area that are doing the job absolutely right.
Many company directors and people with significant control that are currently registered at Companies House, all of whom will need to verify their identity under the transitional provisions post enactment, would prefer to do so by using their professional adviser. They will suddenly find that their long-established legal adviser is deemed fit by the Government to verify their identity for money laundering purposes, but unfit to report that to Companies House. The amendment would therefore create considerable inconvenience to individuals, as well as to corporate service providers.
I can assure the right hon. Member for Barking and the Committee that I will urge my counterparts at the Treasury to bring forward their consultation as quickly as officials can ready it. I also point to the powers in the Bill that will enable the registrar to keep an audit trail of the activity of agents to support the work of supervisors both immediately and following any changes from the Treasury’s review. I hope my explanation has provided reassurance.
Let me touch on one or two of the right hon. Lady’s other comments. On the light-touch financial services regulation that I think she was suggesting was responsible for the global financial crisis, this is not deregulation. This is the opposite of deregulation; we are making regulations about the verification of ID. I would also point to the penalties for wrongdoing. In certain circumstances, if someone is found guilty of the aggravated offence of false filing under these rules—I think some of the examples she gave would constitute that—the sanction would be two years in jail. That is not for fraud, but for the false filing. There are real teeth to this legislation, which will reduce the likelihood of this stuff happening in future.
The right hon. Lady’s amendment would effectively delay the whole regime we are talking about. She talks about Transparency International. As I said earlier, TI welcomes the reforms to the operation of Companies House that will effectively help to prevent money launderers from abusing the UK’s system. We need to ensure that this happens as effectively as possible. I agree with many of the concerns that she raises, but it is wrong to delay implementation as she suggests.
I turn to amendments 107 to 112. I thank hon. Members for their contributions. The procedure for ID verification, including the evidence required, will be set out in secondary legislation under the powers in new section 1110B of the Companies Act 2006 inserted by clause 62 of the Bill. The regulations will set out the technical detail of ID verification procedures, which will reflect evolving industry standards and technological developments. The regulations can specify the process of ID verification and the evidence of identity that individuals will be required to provide when verifying their identity with the registrar. The amendments, particularly amendment 107, would limit the documents acceptable for the purposes of ID verification to photographic IDs issued by Government agencies and identity documents issued by a recognised official authority. That would exclude individuals who do not have a photo ID, such as a passport, from verifying their identity.
Stephen Kinnock
It is absolutely clear that our amendment 107 uses the words “to include”. We are not limiting anything. The amendment sets out what the minimum should be. Surely the Minister agrees that an identity document with a photograph of the individual’s face and an identity document issued by a recognised official authority should be the bare minimum we would want in the Bill.
Kevin Hollinrake
Under the cross-Government identity proving framework in “Good Practice Guide 45”—GPG 45—a combination of non-photographic documents, including Government, financial and social history documents, can be accepted to achieve a medium-level assurance of identity. That includes birth certificates, marriage certificates and recent utility bills. The framework, which also recognises ID documentation from authoritative sources, such as the financial sector or local authorities, is routinely used to build a picture of identity. Restricting that process by defining a recognised authority as a Department or agency could therefore inadvertently disenfranchise individuals from meeting ID verification requirements. I take the hon. Member’s point that the amendment seeks to include certain forms of ID, but it might not serve the purpose that he thinks it would.
Seema Malhotra
I understand what the Minister says in relation to GPG 45. I wonder whether he has considered that, in circumstances where an identity document with a photograph of the individual’s face may not be available, for whatever reason, in some way having a photograph of the person’s face is the most important thing. Is that something he has considered as part of verification checks?
Kevin Hollinrake
All these matters need to be considered in the round when we come to the further details of ID verification. I was simply pointing out some of the shortcomings of the amendment.
In certain circumstances, non-photographic verification should also be available, to ensure that the Companies House service meets digital inclusion drivers and accessibility requirements, as set out in the Department for Digital, Culture, Media and Sport digital identity and attributes trust framework. The Companies House service must also adhere to the public sector equality duty.
The ability to verify using a range of documentation will maximise the number of service users able to verify digitally or at all. Not having that route would prospectively drive users toward assisted digital or non-digital routes, resulting in additional burden, an impact on ease of doing business, and increased cost and resource. It would also lead to far higher rejection rates, impacting company incorporations and appointments. As I said, the vast majority of companies are law-abiding, and it is disproportionate to put this burden on them.
I turn to the amendments that seek to remove parts of clause 62. Again, I have sympathy with my colleagues who are concerned about the effectiveness of the AML regime. Indeed, the measures in the Bill requiring corporate service providers to register with Companies House are intended to support the AML regime—a point raised earlier by the right hon. Member for Barking. There is a requirement for corporate service providers to register with Companies House as well as an AML supervisor. We will know who corporate service providers are registered with, and we will be able to provide their supervisors with information that will enable them to do their job more effectively. Where corporate service providers fail to act effectively, the registrar will be able to suspend or de-authorise them.
The practical effect of the amendments would be to limit verification pathways to the registrar only, preventing verification by the AML regulated sector from being acceptable for the purposes of ID verification under the Companies Act. That is unnecessary, and it would come at the expense of people and businesses conducting their activities entirely legitimately.
About half of company formations are currently submitted by third parties, very many of which take their responsibilities seriously and are highly diligent in conducting ID verification checks. They include high street accountants, regional legal firms servicing small businesses, and so on. I am concerned that preventing third parties from being able to register with Companies House and verify identities would have disproportionate consequences for those entities, possibly driving business away from them. That effect would be particularly acute where ID verification is taken as a package with company formation and other services. It is not clear how the amendments would affect the ability of corporate service providers to deliver documents on behalf of their clients if they are not required to be authorised, for example if they represent limited partnerships.
Many company directors and people with significant control currently registered at Companies House, all of whom will need to verify their ID under the transitional provisions post enactment, would prefer to do so by using their professional adviser. They would suddenly find that their long-established legal adviser was deemed fit by the Government to verify their ID for money laundering purposes under the money laundering regulations but unfit to do so under the Companies Act. The amendments would therefore create considerable disruption for individuals as well as corporate service providers. I hope that my explanation has provided reassurance and that hon. Members will consider withdrawing their amendments.
I have already described the new powers provided by clause 62. Beyond that, it is important to note that the regulations provided for by the clause can also specify the records that authorised corporate service providers will be required to keep in connection with the verification or reverification of identity. Those record-keeping obligations on authorised corporate service providers can be enforced through offences for non-compliance. Additionally, the Secretary of State can confer, by regulation, discretion on the registrar about when an individual’s identity ceases to be verified. The individual will then be required to re-verify their identity. Finally, regulations under the new sections introduced by the clause will be subject to the affirmative resolution procedure.
Stephen Kinnock
No. I have made clear to the Minister that we are deeply unhappy, particularly with the failure to take on board the recommendations under amendment 107 and the very important points my right hon. Friend the Member for Barking made.
Dame Margaret Hodge
Similarly, I will take the matter up elsewhere during the course of the Bill.
Stephen Kinnock
I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 62 ordered to stand part of the Bill.
Clause 63
Authorisation of corporate service providers
Dame Margaret Hodge
I beg to move amendment 81, in clause 63, page 49, line 38, at end insert—
“(3A) When an application is made under this section, the registrar may request evidence from HMRC that a fit and proper person test has been carried out on the applicant.”
This amendment allows the registrar to request evidence from HMRC that a fit and proper person test has been carried out on a person applying to be an authorised corporate service provider.
The Chair
With this it will be convenient to discuss the following:
Amendment 82, in clause 63, page 49, line 45, at end insert—
“(ba) the registrar is satisfied—
(i) that HMRC has carried out a fit and proper person test on the applicant, and
(ii) that the applicant has met the requirement of the fit and proper person test, and”.
This amendment would mean that the registrar could only grant an application to become an authorised corporate service provider if satisfied that an applicant had passed HMRC’s fit and proper person test.
Government amendment 8.
Amendment 79, in clause 63, page 52, leave out from line 42 to line 28 on page 53, and insert—
“1098G Duty to provide information
(1) The registrar must carry out a risk assessment in relation to any authorised corporate service provider to establish whether the verification of identity by the authorised corporate service provider is likely to give rise to a risk of economic crime.
(2) If the risk assessment identifies a real risk of economic crime, the registrar may—
(a) require an authorised corporate service provider to provide information to the registrar; or
(b) require a person who ceases to be an authorised corporate service provider by virtue of section 1098F—
(i) to notify the registrar;
(ii) to provide the registrar with such information relating to the circumstances by virtue of which the person so ceased as may be requested by the registrar.
(3) The registrar may require information to be provided on request, on the occurrence of an event or at regular intervals.
(4) The circumstances that may be specified under section 1098F(2) or 1098G(1) (ceasing to be an authorised corporate service provider and suspension) include failure to comply with a requirement under subsection (1)(a).
(5) A person who fails to comply with a requirement to provide information under this section commits an offence.
(6) An offence under this section is punishable on summary conviction by—
(a) in England and Wales a fine;
(b) in Scotland and Northern Ireland a fine not exceeding level 5 on the standard scale and, for continued contravention, a daily default fine not exceeding one-tenth of level 5 on the standard scale.”
This amendment would give the registrar the power to require information from an authorised corporate service provider. This would replace the current provision in the Bill giving the Secretary of State a power to make regulations requiring the provision of such information.
Dame Margaret Hodge
I will speak very briefly. It would be nice if the Minister could agree to the amendments, which are simply there to tighten up the oversight of the bodies. Amendments 81 and 82 are connected, and would force HMRC to do what it is not currently doing and carry out proper checks on the TCSPs and monitor them properly. Amendment 79 gives the registrar the power to require information. At the moment, as I read the Bill, there is no power for the registrar to challenge any of the information provided to her by any corporate service provider.
Kevin Hollinrake
I thank the right hon. Lady for her contribution. Clause 63 introduces a requirement for third party agents who wish to provide corporate services to clients, such as incorporating companies and filing documents on their behalf, to be registered with Companies House as authorised corporate service providers. ACSPs will be required to be supervised for the purposes of the money laundering requirements at all times and to notify the registrar of any changes to supervision.
I understand and am sympathetic to the intention behind amendments 81 and 82. They are driven by concern that the UK’s AML supervisory regime is not as robust as it could be. The Government recognise that, as do I. It is being addressed by my colleagues at the Treasury, who are responsible for the supervisory regime. I am afraid, however, that the amendments would duplicate some of the regulatory obligations of HMRC, the default supervisor for corporate service providers, by adding to the role of the registrar of companies. Their effect would be to make an agency of my Department responsible for overseeing activities of another Department. Not only is that duplicative, but it is wrong for one branch of Government to mark the homework of another branch. The most efficient means to address any issues with the quality of supervision is to tackle them at source, which is work that HM Treasury is undertaking on supervisory reform. I hope I have provided clarity on why the amendments are not needed.
On amendment 79, I understand the right hon. Lady’s concerns, but I consider the amendment to be unnecessary. As I have set out, under the measures in the Bill corporate service providers will need to confirm they are supervised for the purposes of the money laundering regulations, register with the registrar and, in the case of an individual, have their identity verified before they are allowed to form companies or registerable partnerships or to file on their behalf. The ID verification checks undertaken by those providers will achieve the same level of assurance of the claimed identity as those undertaken through the direct verification route.
Dame Margaret Hodge
I am grateful to the Minister for giving way. Yes or no: will Companies House be able to challenge at any point information given to it by a TCSP—an authorised provider?
Kevin Hollinrake
As I understand it, yes, Companies House will have the rights and powers to do that, though we do not at this point know to what extent it will do so. The right hon. Lady spoke in a previous debate about spot checks. It would seem sensible to take that kind of risk-based approach. Certainly, an AML supervisor would have that ability as well.
Providers will be required to declare that they have completed all the necessary identification checks when they interact with the registrar. Under money laundering regulations, all agents are required to retain records, and the registrar can request further information and ID verification checks if necessary, which I think answers the question that the right hon. Lady just asked. The agent will be committing an offence if they fail to carry out the ID checks to the required standards, or at all.
Under the Bill, proposed new sections 1098F and 1098G of the Companies Act 2006, as introduced by clause 63, will enable the registrar to suspended and deauthorise an authorised corporate service provider. The Bill will allow the registrar to maintain an audit trail of agent activity and to share it with supervisors. That will serve as a prompt to supervisors to up their game. I hope that that explanation has further clarified why the amendments are not needed.
Dame Margaret Hodge
I will look in detail later to ensure that what I asked for is there, but I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Amendment made: 8, in clause 63, page 50, line 23, leave out “registered or”.—(Kevin Hollinrake.)
This amendment would mean that a firm applying to become an authorised corporate service provider would always have to state its principal office, rather than having the option of stating its registered office.
Stephen Kinnock
I beg to move amendment 98, in clause 63, page 53, leave out from line 29 to line 5 on page 54.
This amendment removes the provision enabling the authorisation of foreign corporate service providers.
The Chair
With this it will be convenient to discuss the following:
Amendment 99, in clause 63, page 53, line 37, leave out from “that” to “similar” and insert,
“has been assessed by the National Crime agency as having”.
This amendment would ensure that the judgement as to whether foreign jurisdictions have similar regulatory regimes would be in the remit of the National Crime Agency, rather than in the view of the Secretary of State.
Amendment 100, in clause 63, page 53, line 40, at end insert—
“(2A) No person who is subject to a relevant regulatory regime under the law of a territory outside the United Kingdom may become an authorised corporate service provider if there is evidence that they have been disqualified from acting as a corporate service provider in any other jurisdiction”.
This amendment ensures no corporate service provider based outside the United Kingdom can become an Authorised Corporate Service Provider if there is evidence that they have been disqualified from acting as a corporate service provider abroad.
Stephen Kinnock
Once again, I find myself somewhat baffled by what the Government are trying to get into the Bill. The provisions set out under clause 63 in proposed new section 1098I of the Companies Act 2006 would enable the Secretary of State to allow foreign corporate service providers to operate in the UK, outside the scope of the UK’s money laundering regulations. There has been such extensive coverage in recent years of the risks that that would entail that I am really quite amazed that this needs to be reiterated yet again, but, in a nutshell, any UK laws attempting to regulate the activities of company formation agents, some of which have been responsible for the most flagrant examples of money laundering and sanctions evasion according to recent reports, could well be rendered essentially meaningless by these few clauses.
I say that because, if enacted as drafted, the clauses would appear to hand the Secretary of State a blanket power to disapply the money laundering regulations to foreign agents, on no one’s authority but his or her own. We need not look too far for examples of how profoundly damaging that could be to our own laws, given how significant the divergences often are between anti-money laundering regimes in countries such as the UK, and those in overseas jurisdictions better known for their corporate secrecy than anything else. In fact, we need look no further than the UK’s own overseas territories and Crown dependencies.
Any Member who is either unaware of or in denial about the scale of the problem would be well advised to read an enlightening, although also alarming, article published by Forbes on 9 March 2022. It had the somewhat provocative title of “Evading Sanctions: A How-To Guide For Russian Billionaires”. The piece documented the use of opaque offshore corporate structures to launder literally billions-worth of assets held by Russian oligarchs in the last few months and years. What is most troubling about the account is that most of the jurisdictions that it specifically mentions as hotbeds of money laundering and sanctions evasion are UK-linked territories. It will surprise nobody that the list includes the Isle of Man, the British Virgin Islands and the Cayman Islands—in other words, the usual suspects.
I do not wish to dwell too long on the overseas territories, because I am sure there will be further discussions in the Committee when we come to debate later sections of the Bill. The point the Opposition are trying to make is simply that if we are going to allow businesses of any kind to operate in the UK, we should expect them to abide by our laws. If we start letting them off the hook, for reasons that Ministers have entirely failed to make clear, we are complicit in their actions. In short, the proposed new section 1098I would have us trust in the infinite wisdom of the Secretary of State to allow corporate service providers to operate outside the law, on the basis that those powers would be used only in cases where the relevant overseas jurisdiction has a regulatory framework with “similar objectives” to the UK’s own rules.
I frankly do not trust the wisdom of the Secretary of State to use those powers for good. I do not believe that it is at all appropriate for such sweeping, ill-defined powers to be conferred on the present or any other Secretary of State. Although amendments 99 and 100 are probing amendments that give us the opportunity to seek answers from the Minister on these extraordinary provisions, amendment 98 is intended quite simply to remove the powers from the Bill.
Kevin Hollinrake
Once more, I am sympathetic to the aims of the amendments. They are driven by concerns that AML supervisory regimes outside the UK may not be robust. That is why the Government are specifying that authorised corporate service providers must be subject to the UK’s AML regime. Nevertheless, it is possible that in the future the UK may become a party to an agreement—a trade agreement, for example—that would require it to accept applications from abroad where that regime is equivalent to that of the UK. I do not think the example the hon. Gentleman gave of Russia would qualify in that regard.
The power in the Bill would facilitate such an agreement and remove the need for primary legislation to implement it. I draw Members’ attention to the wording already in the Bill, in proposed new section 1098I(2), introduced by clause 63. The UK would only become a party to an agreement if it could be assured that the regime was no less effective than its own. To be confident of that parity, the Secretary of State would need to establish that a regime was the equivalent of the UK’s by considering evidence and advice from a range of sources, including the National Crime Agency. That would include the consideration for whether prospective authorised corporate service providers are disqualified under the relevant legislation.
As the legislation makes clear, the power would be subject to the affirmative resolution procedure and parliamentary scrutiny. While I understand any concerns expressed, I hope that Members will withdraw the amendment.
Stephen Kinnock
I thank the Minister for his response. As with the previous debate, I am not particularly happy with the position, and we will look for opportunities to return to the issue during the further passage of the Bill. I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 63, as amended, ordered to stand part of the Bill.
Clause 64
General exemptions from identity verification: supplementary
Question proposed, That the clause stand part of the Bill.
Kevin Hollinrake
We debated the clause at length in the previous groupings. I do not propose to repeat the arguments, and I hope the Committee agree with the Government’s position.
Stephen Kinnock
We have no further comments to add on clause 64.
Question put and agreed to.
Clause 64 accordingly 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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Climate Change and Human Security
(2 years, 1 month ago)
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Wera Hobhouse (Bath) (LD)
I beg to move,
That this House has considered climate change and human security.
It is a pleasure to serve under your chairship, Mr Efford. I am grateful to the Backbench Business Committee for granting me this debate, which follows on from the debate we had last year on global human security. There is an urgent need to consider how compatible the UK’s security approach is with tackling the climate emergency.
The climate threat is one of the largest threats facing humans. Too many politicians are still treating our vital net zero targets, which will keep temperature rises below 1.5° C by 2050, like buses: if we miss one, we can just catch the next. We must comprehend that there will be no coming back and no next time if we miss net zero by 2050. Doing so would be catastrophic, exacerbating worldwide challenges such as rising sea levels and the loss of natural resources. It would contribute to increased conflict, poverty, malnutrition and gender inequality. Some 1.2 billion people are set to be displaced due to climate change by 2050. If people are concerned about migration now, they have not seen anything yet.
Climate change can no longer be seen as a problem for the future; it is having a material impact on people worldwide now. Between 1970 and 2019 global surface temperatures increased at a higher rate than in any period over the past 2,000 years. Since 1950 the global number of floods has increased by a factor of 15 and wildfires have increased by a factor of seven. The abnormally hot and cold temperatures experienced worldwide contribute to as many as 5 million deaths a year—that is now, not in the future. Climate change is causing havoc around the world. Last month a new study of the Greenland ice cap concluded that a major rise in sea levels of 27 cm is now inevitable, even if fossil fuel burning worldwide were to end overnight. That is terrible news for the 150 million people globally who live less than 1 metre above sea level.
Earlier this year Pakistan was just one of the countries across south Asia that experienced a heatwave that took temperatures over 50° C. That country has now faced floods that have directly affected 33 million people, causing at least $10 billion in damage. Spring rains in Somalia have been the weakest in 60 years, contributing to drought and famine across east Africa, which has put 22 million people at risk of hunger and starvation. Devastating climate change effects can also be seen at home. The World Weather Attribution group found that human-induced climate change made the recent UK heatwave at least 10 times more likely. The Joint Committee on the National Security Strategy has declared that the UK’s critical national infrastructure is
“very vulnerable to extreme weather and other effects of climate change”.
Over 570,000 UK homes are not suitable for high temperatures.
We are not just in the middle of a climate crisis; nature is in crisis too. Our way of life, especially in developed nations, is exploiting our global resources in a way that is becoming increasingly unsustainable for our planet. As nature declines, so does the quality of human life. Pollution and poor air quality alone cost millions of lives every year across the globe. We in the UK are not excluded, and all those things beg the question of whether the way in which we currently look at security policy limits the extent to which the Government keep us safe.
We are used to the Government declaring that their first duty is to keep citizens safe and the country secure. However, the way that they define our security matters. For years, we have thought that security is about the risks to our nation from hostile actors. That narrow conception risks sidelining the climate threat. The Russia-Ukraine war has shown that temptation. We have already seen countries such as Germany move back to using coal. Even in the UK, the former Prime Minister used the war to lift the fracking ban, and announce more than 100 new licences for oil and gas drilling in the North sea. It is of course important that we are properly aware of and equipped to tackle risks from hostile actors. However, the need for energy security should never lead us to downplay the existential threat that the climate crisis poses to humanity.
The term “human security” was first championed by the United Nations Development Programme in its annual report on human development. It is about security for people, and emphasises economic, food, health, environmental, personal, community and political security. Human security puts the experience and wellbeing of the individual at the centre of security policy, prioritises international co-operation over national competition, and focuses on the shared security of all humanity. The concept of human security is acknowledged by multiple influential international organisations, including the UN, the International Committee of the Red Cross, and the World Bank.
The climate threat goes beyond national borders, and has far-reaching consequences. State-centric security practices cannot comprehend the vast array of threats that we face. We must move towards a model of security that cares for people above all else. If we do so, the true scale of the climate threat is thrust into the spotlight. Countries must be incentivised to prioritise it. After all, the sooner we act, the more people can be protected. The Intergovernmental Panel on Climate Change suggests that limiting global warming to 1.5°C rather than 2°C may save around 520 million people from frequent exposure to heatwaves.
Putting climate action at the heart of any Government plan is the best way to protect the UK against hostile actors. Putin’s war has shown how long-term dependence on fossil fuels can power hostile regimes. Russia has used Europe’s dependence on its natural gas as a weapon. If the UK had moved towards renewables harder, faster and earlier, Putin would not have that leverage, and our constituents would not be paying the price for the war.
What must be done to protect people from the climate threat? How can a human security approach help the world to reach net zero? A human security approach addresses the root causes of vulnerabilities, and takes early action on emerging risks. Threats such as climate change are predictable and incrementally destructive, yet consecutive Governments have failed to do anything meaningful about them in the long term. The worst impacts of climate change stretch well beyond average election cycles. The evidence is clear that the costs of climate change are dwarfed by the consequences of inaction.
The country’s finances are already straining under the weight of recent Conservative Government incompetence. They are set to shatter completely if we do not get a grip of the climate emergency now. The London School of Economics predicts that we will lose £340 billion a year by 2050 because of this Government’s refusal to take action fast enough. University College London issued similarly stark warnings about the world’s financial system, which is set to lose 37% of global GDP by the end of the century as a result of the climate crisis. Such losses will be unrecoverable.
That economic dark age is not inevitable. A green future should be seen as a prosperous one. A recent University of Oxford report states that if we move to a decarbonised energy sector by 2050, the planet will save $12 trillion. A net zero economy is an opportunity for this country. We can be the world leaders in this financial age.
Change must begin at home. The Liberal Democrats are calling on the Government to announce an action plan, backed by a £150 billion public investment programme, to fire up progress to reach net zero. Our plan proposes a major restructuring of the UK’s economic and financial model, and investment in renewables is vital to it. Renewables are the world’s cheapest source of energy now. Investing in them is good for the planet. It secures our energy and protects our wallets. As the Committee on Climate Change notes, reducing demand for fossil fuels will help to limit our constituents’ energy bills.
The UK must invest in renewable power so that at least 80% of electricity is generated from renewables by 2030. That is a tough target. We set the targets, but fail to deliver them. We must press ahead to make more of our renewable energy targets. The Government must now deliver on the many promises and targets they have set for the nation. We desperately require a department at the heart of Government that is dedicated to co-ordinating the many fragmented activities across Government and society. We urgently need to bring back the Department of Energy and Climate Change, which provided essential leadership during the coalition years. Will the Minister tell us whether the Government have any intention of re-establishing such a Department, given that we are falling behind in the delivery of our net zero targets?
The climate crisis should be at the forefront of every decision the Government make between now and the time that net zero is reached. We Liberal Democrats propose having both a department of climate change and a Cabinet chief secretary for sustainability to co-ordinate all Government activity in response to the climate emergency. That would ensure that climate change is given the priority it deserves in every Government action and in every Department.
The UK must put aside its damaging approach of isolation and the language of division. Climate change is a huge problem that can be solved only through collaboration with everybody else. I recently met John Kerry, who noted that the approach to climate change in the US changed completely when Joe Biden became the new President. Leadership matters, and we need such leadership from our Government now.
Ahead of COP26, the then Chancellor, the right hon. Member for Richmond (Yorks) (Rishi Sunak), cut air passenger duty on domestic flights. Last May, he brought in a windfall tax that incentivised firms to invest in fossil fuel extraction. During the latest Conservative leadership campaign, he pledged that he would make it more difficult to build onshore wind farms in England. To have our new Prime Minister effectively dragged along to COP27 is humiliating for the UK. That is not the leadership we need from our new Government. The UK must lead from the front to encourage others to act. As the Committee on Climate Change suggests, it should prioritise strengthening the ambitions of countries around the world while preparing for a focus on climate finance and adaptation at COP27 next week, and COP28 next year.
For too long our response to climate change has been complacent. Climate action cannot be ditched in favour of status quo interests. After all, people can never be secure in a world ravaged by extreme weather events. It is time the world moved away from viewing our security simply at state level and started looking at the bigger picture. We cannot be safe until the world is safe from the worst fallouts of the climate emergency. The floods, heatwaves, wildfires and storms of 2022 are alive in our minds. There is no better time than now to put in long- lasting protections to save current and future generations from the crippling consequences of climate change.
Climate change must become part of the UK’s security thinking. The Conservatives must get a grip and take the lead on this issue. I hope that the UK Government will look at my recommendations. We are all in a war against climate change and must begin to treat it as such.
Patrick Grady (Glasgow North) (Ind)
It is a pleasure to serve under your chairmanship, Mr Efford. I congratulate the hon. Member for Bath (Wera Hobhouse) on securing such an important debate and my hon. Friend the Member for Glasgow South (Stewart Malcolm McDonald) on supporting it, as numerous Members have done.
In 2007 the Stern report stated that climate change was the greatest and widest-ranging market failure that the world had ever seen, but here we are—all these years later—and it seems that warning is still falling on deaf ears. I used to stand in Westminster Hall debates and say that climate change threatens to undo progress towards the millennium development goals and the sustainable development goals. After only seven years since I was elected in 2015, we can now say that climate change is undoing progress towards the millennium development goals and the sustainable development goals. It is making it harder to reach poverty eradication targets, gender equality targets, and education and health targets. In some cases, we are going backwards on those indicators, after a period of progress that should be acknowledged.
Climate change is not something that is happening somewhere else, in faraway parts of the world; as the hon. Member for Bath said, it is beginning to disrupt our own way of life in these islands, across western Europe and across what we call the developed world, and it is becoming increasingly clear that things are going to get worse before they start to get any kind of better. This is an issue of huge concern to my constituents in Glasgow North, who I hear from regularly on all the points raised by the hon. Lady.
Glasgow could not have been prouder to host COP26 last year, but the conference was not a one-off: the clue is in the name. It is part of a process, and in the very near future—next week—COP27 will take place, where the work must continue on the progress towards making real the commitments to which Governments have pledged, whether that is coming up with the funds that have been committed to mitigation and adaptation measures, or making clear statements and demonstrations of action towards the targets that have been agreed upon and that we need to go further and faster to reach. The security implications—in the broadest meaning of that word—can already be seen all around the world.
The scarcity of vital natural resources, water scarcity and crop failure are often the root of instability in so many of the flashpoints and troubled parts of the world that we debate not infrequently here in Westminster Hall, including the situation in Tigray, Ethiopia. I firmly suspect that if people had more confidence in predicting the rains and being able to grow crops to feed themselves and their families, the chances are that the instability there and in so many other parts of the world would be significantly lessened. Many of the roots of such conflicts are to do with scarcity, particularly of water and food, the supply of which is directly affected by climate change.
Wera Hobhouse
Does the hon. Gentleman agree that we always look at these things in silos and do not make the connections, and that if we put climate change in the centre of the connections we created, we might tackle these issues much better?
Patrick Grady
The hon. Lady is absolutely right. I will reflect a little more on those interconnections later. This is exactly about that kind of domino effect, because the Government are really concerned about the small boats crisis and people coming to the United Kingdom, but what are many of those people fleeing? They are fleeing scarcity and instability in their home countries. The changing climate is leading to the massive displacement of populations across the world. Difficult though the UK Government might think the migrant crisis is on the shores of Great Britain, it is considerably greater in other parts of the world, such as Africa and Asia, where there are massive movements of populations—and climate change is at the root of it all.
It is worth reflecting on the instability that even the concept of climate change is starting to cause; and I will return to some of these ideas later. There is climate change denial in so many parts of the world, even in so-called western liberal developed democracies. When climate change starts to become an ideological divide, that in itself causes instability and is part of a polarisation that we are seeing across the world, particularly in the United States, which the hon. Member for Bath mentioned. The extremes of response to the climate crisis that we have seen in the space of the change of one Administration—and the risk of that swinging back in the other direction—is in itself a significant challenge to the world’s ability to respond to climate change. That has an impact on the politics of those countries and, perhaps, to a certain extent here.
Here at home we are also experiencing the effects of climate change. Just in the past 12 months we have experienced increasing extremes of weather. There was a heatwave not just down here in London: we even had record temperatures up in Scotland. Although on one level people might make a joke about that and say it is quite a nice thing—“It makes a change” and so on—it is becoming a new reality that we have to adapt to, and that is not cost-free.
As the hon. Lady said, climate change also affects the food supply and food security in Scotland and across these islands. Last week, there was a Westminster Hall debate about global food security; we used to talk about food security as a problem elsewhere, but it is becoming a real challenge in the United Kingdom too. That is also true of our energy security, as she set out.
There is a real danger of a feedback loop: we have a shortage of energy so we dig more coal out of the ground and burn it, but that worsens the problem of climate change and increases the challenge and the costs to the Government in the long run. The Government have to grasp that tackling climate change is the ultimate idea of preventive spend. We are going to have to pay for the costs of a changing climate, which has largely been brought about by the process of industrialisation in the west over the past 150 years or so, and we can do that either now in such a way that we prevent, mitigate and adapt to the changes, or later as the changes become more extreme and severe. That will cost us more in the long run, so it makes financial sense to start to invest now in tackling the causes and effects of climate change. It will also enhance our security.
That brings me to my challenges to the Government. I do not know what the right word is, but this is not about ideology. There may be free market, right-wing solutions to the climate crisis—setting aside what Lord Stern said back in 2007—so bring them forward. Let the market compete to find the most effective form of renewable energy and the most effective way to maximise crop yields, but not in a way that continues to cause problems. Externalising the costs of those things in the first place led to where we are.
Some of us might think that we need a bit more in the way of state intervention and direction of spending, but we should all start from an agreement that the climate and nature emergency is real. Sadly, I am not 100% convinced that everyone on the Government Benches would be willing to stand up and say that. In the Chamber, I asked the previous Secretary of State for Business, Energy and Industrial Strategy, the right hon. Member for North East Somerset (Mr Rees-Mogg)—in the short time he was in post—whether he believed that the climate emergency is real and that anthropogenic climate change is happening today, and he completely dodged the question. Ministers in the western world in this day and age should not be dodging that kind of question. The answer to the question, “Is anthropogenic climate change happening today in front of us?” is yes. There might be a debate about how we tackle it, how we respond and how we prevent it from getting worse, but the answer to the question is yes.
I am sure the Minister will confirm that the Government’s position is that the climate change that is being experienced all over the world is the direct result of human behaviour over the past 150 years or so. It might be a bit difficult to get the Government to start to adopt the language of climate justice and to recognise the historical obligation that we in the west have to people in other parts of the world who are being hit by climate change first and hardest, but the point of debates such as this is to put those points to them and hear them argue either why that is not necessary or why they do not agree.
In among all that is the mainstreaming of our net zero targets. We should put that at the heart of Government policy and then, yes, debate how things will be delivered and the best way to invest resources, and the best way to let the market respond, if that is what people believe, or whether to let the state intervene more heavily, if that is what people believe.
Wera Hobhouse
The hon. Gentleman is generous to give way again. He is coming to the issue of delivery. Ultimately, we all agree that the pathway is there but the delivery is not happening fast enough. That really worries me, which is why I said at the very beginning of the debate that this is not a bus that we can miss: we have to get on with things now. Does the hon. Gentleman agree with the Climate Change Committee, which has said that the Government must now urgently focus on the delivery of their own targets?
Patrick Grady
Yes, absolutely. The Government have agreed to the targets and achieved a certain amount of cross-party consensus on them. That is important given how some people want to use the very concept of climate change as a political wedge issue, when in fact it is something that should unite us as far as possible. Especially among all the chaos and revolving doors for Ministers of late, the Government should speak with one voice on these issues. Irrespective of which Department or Minister happens to respond to this debate, we should hear the voice of the UK Government, with all the weight that that is supposed to carry.
Even though we do not have a Foreign, Commonwealth and Development Office Minister responding to today’s debate, it is important to address the question of the aid budget, its diminution, the cuts to it that are being applied across the board and the risk of further cuts to come. I come back to my point about preventive spend. If we do not support small farmers in different parts of Africa to grow sustainable crops without the need for expensive and polluting fertilisers, if we do not support communities to access fresh and clean water, and if we do not support girls to get into education so that they can raise healthier and stronger families and contribute to their economy, we really should not be surprised if, further down the line, those people start to get quite annoyed and upset about the kind of lifestyle that is being forced upon them and decide to take matters into their own hands. Indeed, they may decide to get on a small boat and come across to the United Kingdom, where everything seems to be much more comfortable. The Government must realise the importance of preventive spend and not just address the issues of climate justice and poverty eradication but understand that it is to everybody’s benefit to tackle such issues.
We all have to agree that this is the defining challenge of our times. By all means we should have a debate about the precise way in which we can reach our goals, but let us not argue about whether those goals have to be met, because not meeting them will simply make matters considerably worse, not just for people overseas but for people on these islands, too. We have to continue to hold the Government to account in the way that our constituents want us to, and we have to hope that the Government are prepared to recognise the consensus that can exist and get us forward and closer to tackling the causes and effects of climate change.
Jim Shannon (Strangford) (DUP)
It is an absolute pleasure to serve under your chairmanship, Mr Efford. I thank the hon. Members for Bath (Wera Hobhouse) and for Glasgow South (Stewart Malcolm McDonald) for leading this debate. It is also a real pleasure to follow my friend and colleague the hon. Member for Glasgow North (Patrick Grady); he and I agree on this subject. I agree with the hon. Lady on it, too.
I am pleased to add my contribution to this debate. There has been some confusion over the past few days regarding the confirmation of the attendance of the Prime Minister at the COP27 summit in Egypt, which starts this Sunday. I am pleased that the original decision was reviewed and that the Prime Minister will now attend the summit to commit to our COP26 promises, as he should because he leads this country.
We all recognise the commitment that the Government gave at COP25 and COP26. I know that the Minister will respond to confirm the positive direction that the Government have taken and how important that is. As Members have rightly stated, climate change is set to exacerbate worldwide challenges such as rising sea levels, poverty and malnutrition. To say that we have a role to play is clearly an understatement: we have a massive role to play, not just singularly but collectively with other countries.
I look forward to hearing the Minister’s comments from a human security perspective, too, as that is just as important. I know he will respond in a positive fashion. As my party’s spokesperson on human rights, human security means a great deal to me and my party. Like other Members, I receive hundreds of emails each week about many different and pressing issues from my constituents in Strangford; however, I must say that climate change and its impact on human security feature highly in my mailbox, so I am pleased to support Members in this debate.
Some notable events in the past couple of years have posed a real potential threat to human security. For example, the United Kingdom’s Climate Change Committee has found a 16 cm rise in UK mean sea levels since the start of the 20th century. That cannot be ignored: it is a fact of life. We have to address those things. Can we address them in a way that will make a difference? I think we can.
Like other areas of the United Kingdom, Northern Ireland has fallen victim to multiple extreme weather events in the past couple of years. We used to say that these sorts of floods happened every 100 years, but no: the 100-year floods happen every four or five years now. They happen regularly. On Tuesday night, I phoned my mother, as I do every night, and she said she had never rain quite like it. She is 91 years old, by the way, so she has been in this world for a long time. If she says that to me, I tell you what: I can say there has been some exceptional rainfall. The yellow warnings and the floods are there.
Most memorably, in summer 2018 we saw the warmest June since 1910, with the mean temperature 2.1° above the 1981-2010 average. That is another example of extreme weather—another 100-year event. It ultimately resulted in a hosepipe ban, which some laughed at at the time, thinking it was ridiculous. In hindsight, it shows the impact that climate change has had on our daily lives and security. In the summer of ’22, we had extreme heat that I cannot recall having experienced for a long time, and water levels fell in many places.
I am interested in planning matters. I see an example of the practical, physical way that change is coming in my constituency, where planning conditions have been introduced in the past couple of years to stop people building on floodplains, which they should not be doing, by the way. Ten or 20 years ago, and whenever I first joined Ards Borough Council in 1985—that was not yesterday either—that was not an issue: people were able to build on that land. Now, they cannot. Why is that happening? It is because climate change is coming and things are changing. With what it can see and from its plans, the planning department has projected where the floodplains will be. In some areas, we would have to go back to the beginning of the century to see where the land flooded in some exceptional conditions.
The Northern Ireland Assembly’s equivalent of the Department for Environment, Food and Rural Affairs is the Department of Agriculture, Environment and Rural Affairs. DAERA has released its climate change adaptation programme for 2019-24. It underlined the impacts of the “beast from the east”—that is not Russia, by the way. The “beast from the east” was a spell of extreme weather conditions. We all experienced them in the United Kingdom of Great Britain and Northern Ireland. They were exceptional. Northern Ireland experienced a spell of severe weather with low temperatures and significant snow, the likes of which we had not seen for a lifetime. It caused a real problem for travel and, moreover, healthcare provision was significantly interrupted. We must take into consideration the effects that climate change has on our local businesses and especially our food security. That is why today’s debate is so important.
Food security is described as people having physical, social and economic access to sufficient, safe and nutritious food. It is important for human security reasons such as poverty. We should expect to see a rise in poverty as our access to food decreases. It is my understanding—I am sure the Minister will confirm this—that the United Kingdom imports some 46% of our food. I know that the Government have committed to producing more food at home, as I believe we should—we need to be more self-sufficient—but the fact is that we import 46% of our food products from around the world.
We are ever mindful that we cannot grow everything here, so there will always be some imports. Northern Ireland has a population of 2 million but we have a highly productive farming sector. We export some 75% to 80% of our produce overseas to mainland EU and further afield. We are bucking the trend in relation to the rest of the United Kingdom, and that indicates how important our farming sector is to us in Northern Ireland.
It is clear this is not a domestic concern alone: internationally, we must come together as nations. This is a world crisis. We are here debating this issue at Westminster, in the mother of Parliaments, but we need buy-in from the rest of the world to make it happen. We need to take a joint approach to tackling climate change. There are widescale human security issues that can apply globally if we do not commit to our prior engagements, including the Paris agreement and the Kyoto protocol.
I know this is something that the hon. Member for Glasgow North is interested in, as, I suspect, everyone is. I chair the all-party parliamentary group for international freedom of religion and belief. In 2018, we published our report “Nigeria: Unfolding Genocide?” Why is that applicable to today’s debate? This debate is not about food; it is about more than that. The FCDO response to the report was that it was climate change driving violence in Nigeria, not attacks on religious minorities. The fact is that it is a combination of both.
When the APPG visited Nigeria in May and June this year, we had discussions and talks with Government officials and some of the landowners in north-east Nigeria where things are happening. The Fulani herders are losing their grassland to the encroachment of sand and desert, so they moved further south into the land that just happens to be owned by Christians, along with some Muslims. In other words, the Fulani herdsmen are moving their cattle and herds closer to and encroaching on land that farmers need to grow their crops and look after their families.
Climate change is affecting us all, but not equally. The latest correspondence this week between Open Doors and some of the APPG’s members indicated that tensions are continuing to rise in Nigeria to an even greater level than when we visited back in May and June. When it comes to the issue of human security and climate change, that is a supreme example of what is happening. That is why we need to do things collectively and better together.
Minority groups and often religious minorities find themselves facing the worst impacts of climate change. In many cases, families want to produce food just to feed their families—not necessarily to sell on, although they may barter on occasions—and for Christians in north-east Nigeria, for example, land degradation is combined with the constant threat of attacks from Boko Haram or the Fulani herders.
Climate change and human security is not a topic that will be going away any time soon. The hon. Member for Glasgow North is absolutely right: we might have talked about the matter six or seven years ago, saying “the threat of”, but no, the threat and the reality is here today. I agree with him absolutely. We have the opportunity to respond in a timely and vital fashion. Delay can no longer be looked upon as acceptable in any way. We must ensure our commitments to our promises made at COP 25, COP26 and this weekend at COP27 and do what we can to curb national disasters, not just here in the United Kingdom of Great Britain and Northern Ireland but for all nations around the world. We all need to live together and do our best for everyone.
Clive Efford (in the Chair)
Do any other Back Benchers want to speak?
No. In that case, I call Stewart Malcom McDonald.
Stewart Malcolm McDonald (Glasgow South) (SNP)
I am grateful. It is a pleasure to see you in the Chair, Mr Efford, and I congratulate the hon. Member for Bath (Wera Hobhouse) on securing the debate. It was a pleasure to be a co-sponsor—or whatever the correct terminology is—in the application to the Backbench Business Committee. Though the issue is serious, nothing says taking climate security seriously like the acres of empty green chairs before us on a Thursday afternoon in the House of Commons.
Nothing says taking climate change seriously like, after being the host country for COP26—as was mentioned by my hon. Friend the Member for Glasgow North (Patrick Grady), from north of the Clyde; we were only too pleased to host that conference in my home city of Glasgow—a grudging Prime Minister sulking his way to Egypt for the COP27 conference. Nothing says taking climate security seriously like stripping the COP President and the Minister present today of their places in Cabinet. Indeed, if all that was not bad enough, even the King—a man who, in this country at least, is perhaps uniquely credible on the international stage on climate change and the environment—was banned from going to COP27, not just by the former Prime Minister, but the new Prime Minister. Come Monday next week, maybe a new Prime Minister will have changed that. As well as having a practically empty Chamber, I am willing to bet that this debate, which is scheduled to last 90 minutes, will not go the full way and we will adjourn early. [Interruption.] I can hear some challenges to that behind me.
Turning to climate security, I know the Minister takes his portfolio extremely seriously and I do not aim this at him—in fairness, it may have been down to how the application was made—but it would have been good to have an FCDO or even a Defence Minister to respond to the debate.
Richard Foord (Tiverton and Honiton) (LD)
Does the hon. Member agree that the failure of the UK Government to invest properly and sufficiently in renewable energy in recent years has damaged our ability to see security through the lens of human security, rather than what matters to Governments? Does he agree that the £4.5 billion of energy exports to the UK that Russia profited from last year emboldened that country to sustain its traditional state-centric view of security and, in that sense, has exacerbated climate change?
Stewart Malcolm McDonald
I agree with the hon. Gentleman and will come to some of those points in turn. I want to speak about how I view climate security and where it fits in the broader issue of the security strategy across Government. We can learn great lessons from countries such as Sweden, which follows what is called a total defence concept, where the dynamic and changing threat picture that countries and national Governments face is given commensurate space in their national security strategy. Whether that is the hard military invasion, a pandemic, a shock weather event or a virus, the dynamic threat picture is represented in that national security strategy.
As my party’s spokesperson on defence, I have found it difficult to criticise the MOD over the past 10 months, not least in what it has done to support Ukraine, as have many Members across the House. However, we now have a situation where the integrated review, which can only be two years old, was going to be reviewed and then was maybe going to be reviewed, and I understand that it will now definitely be reviewed under this Prime Minister. We have an opportunity to get this right and give climate change and climate security the representation it deserves in the overall national security posture of the UK. I have an interest in this as a Scottish Member of Parliament. There are unique factors about climate change for our part of the country but, as hon. Members have said, this is a matter for the planet as a whole. In thinking about how we work on that, there are three key areas when it comes to defence and security. Climate change is a threat multiplier. The secretary-general of NATO, Jens Stoltenberg, gave an eloquent speech earlier this year on how that threat multiplier can and should be taken seriously by NATO member states. Indeed, it runs through NATO’s strategic concept, and NATO is one of the twin pillars of European security.
The second pillar is the European Union’s strategic compass. Traditionally, the European Union has not done as much in the area of defence and security, but it is doing more. When NATO leads on hard security—military security—the European Union absolutely complements it as the second twin pillar for things such as disaster management and resilience, and for dealing with climate change and other shock events that its member states will experience. That makes the case for the British Government to take off the blinkers and pursue a comprehensive defence and security treaty with the European Union in which it can partner with a major role-setter. About half a billion others on our shared continent can partner on a strategy for climate change.
Even more importantly, the European Union can help pursue a strategy that gives the global south its rightful place at the table. For all the experiences we have in this country—whether it is in the high north of Scotland, or the extreme weather in July this year—those in the global south feel ignored not just on climate, but on much else. To see the manifestation of that, we only have to look at the votes at the United Nations in condemnation of Russia and in support of Ukraine. Across the global south, the pattern of abstentions and voting against the interests of European and Ukrainian continental security, or against sanctions on the Russian regime being deepened and widened, is a product of our ignoring the global south for far too long.
I will end by talking about an issue that the hon. Member for Glasgow North rightly mentioned: climate scepticism. I want to go slightly further and talk about climate disinformation. We will all be asking our constituents to do more as we try to achieve our climate goals. We will be asking them to do more now, as the cost of switching on the boiler and leaving on the lights goes up and up and up. What an opportunity there is for climate deniers, sceptics or whatever we want to call them to pursue political strategies, much like we have previously seen in other policy areas in this country and elsewhere, not least the United States. What an opportunity there is to pursue disinformation strategies against what is a major threat to the people on this planet: climate change. What an opportunity there is for those on the extreme right—I certainly do not include the Minister in that—to sow disinformation, increase polarisation and set democratic countries off course in what they have to do on climate change. That is why it is really important that we have a national strategy to counter disinformation on this issue and much else, and that we build as much information resilience as possible across the population.
Wera Hobhouse
Is it not true that we really need unmitigated support from the Government? Otherwise, we will not tackle the immense problem that we are facing.
Stewart Malcolm McDonald
Yes, and that is perhaps a neat way for me to conclude my remarks. We do need that support, and we need all the parts of the state architecture working in concert with devolved Governments, the private sector and many other actors to pursue a national strategy for robust climate security that is at the centre of a broader national security strategy that works in concert with European and NATO allies and gives the countries of the global south their rightful place at the table.
Kerry McCarthy (Bristol East) (Lab)
It is a pleasure to see you in the Chair, Mr Efford. I thank the hon. Members for Bath (Wera Hobhouse) and for Glasgow South (Stewart Malcolm McDonald) for securing this debate, which is a very timely one, given that COP is about to start. I think I agree with the hon. Member for Glasgow South that this debate should have fallen within the remit of the FCDO or the Ministry of Defence, but the Minister and I, with our climate change briefs, will try to do justice to some of the issues that have been raised.
The hon. Member for Bath was right to talk about Putin’s hostile actions in Ukraine, which have drawn energy security to the forefront of people’s minds. It has always been quite difficult to get people interested in energy policy—it is sometimes seen as a very techy issue—but when we put it in the global context of how undue reliance on Russian energy supplies affects our security and the security of many countries, the lesson to be learned is that we need to be more self-sufficient. Obviously, the way to achieve self-sufficiency is through a quicker shift towards renewables, and—as I hope Members spotted—at its recent conference in Liverpool, Labour made a pledge for clean power by 2030. That is not just based on the awareness that we need to tackle the climate emergency, or that renewables are far cheaper—nine times cheaper—than gas; it is about our energy security needs as well.
It was interesting to hear the hon. Member for Bath talk about the impact on the financial system. I have spoken to insurance companies that are having to reappraise what they do, given that some of the risks they are used to insuring against are getting to the stage where they are either uninsurable, or those companies are far more likely to have to pay out on them. Flooding is an obvious example, but there is also this issue of stranded assets when it comes to their investments. Both the hon. Member for Glasgow North (Patrick Grady) and the hon. Member for Bath talked about how this is an opportunity, and as the shadow Secretary of State for climate change, my right hon. Friend the Member for Doncaster North (Edward Miliband), said at Labour conference,
“It’s cheaper to save the planet than it is to destroy it.”
Most people—although perhaps not the previous BEIS Secretary, the right hon. Member for North East Somerset (Mr Rees-Mogg)—are beginning to realise that we have huge opportunities in this space.
The hon. Member for Strangford (Jim Shannon) spoke about the irony of there being flooding one moment in Northern Ireland and hosepipe bans the next, which brought home the fact that this is not just something that is happening in the most climate-vulnerable countries: we are seeing the impacts of climate change everywhere. Even just in recent times, we have seen floods in Pakistan, as has been mentioned; droughts and famine in east Africa; extreme weather events hitting central America, the Caribbean and the Asia-Pacific; and wildfires in California. We are seeing those physical manifestations of climate change around the globe, and the associated geopolitical risks.
Obviously, climate migration—the outflow of people from areas where their lives or livelihoods are threatened—is one of those risks. In some cases, those people are in mortal danger and it is imperative that they flee; in other cases, it is because their former way of life is no longer economically viable. A report from the World Bank suggests that 216 million people may be displaced by 2050 due to climate breakdown. Of course, not all of those people will choose to leave their homes, but they will then be left in an increasingly vulnerable situation where they are likely to be in immense poverty and at risk of resorting to desperate measures.
The other aspect is the battle over resources—for example, the melting of the ice on the third pole, the Himalayas. That is absolutely crucial to the water supply in India and China, and we may well see those two major superpowers at war with each other over access to that resource. Increasingly, we also see criminal elements being involved in deforestation in a bid to plunder the forests. Somali piracy, which was an issue a few years ago, is not quite a climate change issue, but it is closely linked to overfishing. It might not be climate change, but it is about the plundering of the world’s natural resources, and the inadvertent consequences of Somali fishermen not being able to make a living from their traditional way of life, and therefore turning to other activities.
The climate crisis accelerates instability around the world, and opens up a vacuum in which extremism can fester. As the UN Secretary-General said, it is a “crisis amplifier”. It often contributes to a breakdown of law, increased inequality and rapid social change. For example, in the Lake Chad basin, Boko Haram has taken advantage of a scarcity of natural resources to conscript young people to its cause. In war-torn Yemen, the humanitarian crisis has been exacerbated by drought. ISIS has exploited water shortages in the middle east. As well as turning people towards terror, the damaging effects of climate change also risk leaving countries dependent on hostile states. A delegation from Madagascar is here this week, for example, and we know the role that China is beginning to play there. Countries in desperate need of economic support and security are turning to China, which gives China a huge degree of influence over their politics and full access to their resources.
I appreciate that this is a matter for FCDO, but one way in which the Government could make an immediate impact, if they wanted to, would be to reinstate our overseas aid commitment of 0.7% of GDP. The cut was a stark betrayal of the world’s poorest people, and may well have security consequences. Given our respective briefs, however, I will focus primarily on COP and what can be achieved there.
At COP, there should be a big focus on climate mitigation, renewed ambition when it comes to countries’ nationally determined contributions, and a focus on keeping 1.5° alive. Somebody said during a debate this week, I think, that 1.5° is on a life support machine, but we certainly must ensure that it is still very much the ambition. However, COP cannot be just about mitigation. We must also hear much more about adaptation, and how we can support the most climate-vulnerable countries as they try to make their nations more resilient. That could be about building sea walls; about natural defences against rising sea levels, such as planting mangroves; or about buildings that can better withstand extreme weather events.
There is a lot that we can do, but those countries need finance. In some cases, they are very poor countries that would normally be in receipt of aid, or they are tiny countries, for example the small island developing states. They tell me that they find it almost impossible to access climate finance. There are too many hurdles for them to jump over. In some cases, that is because they do not have the resources: they are tiny countries, and do not have the people to do all the research for the paperwork.
According to the UN, the 10 most environmentally fragile countries receive a mere 4.5% of all climate funding. That falls far behind other nations. It is not just about giving them climate finance; it is also about supporting them with their own initiatives. For example, the island and coastal states are increasingly looking at blue bonds. I know that Seychelles is doing so, as is—I think—Belize. As the centre of global finance, whether it is green finance or blue finance, the City of London could play a good role by helping those countries to access that money. That would be money from investors that are looking to do climate offsetting, for example. I am not that keen on carbon offsetting. It is not the solution to reaching 1.5°, but if there is an opportunity to get climate finance to climate-vulnerable countries, the UK ought to be playing a leading role.
We need to see progress at COP27 on loss and damage, too. There should be a formal mechanism in place so that those with the responsibility and capacity to pay for it do so. I was part of a meeting last week in Parliament with John Kerry, the US climate envoy. I asked him about the issue, and it was good to see that he thinks that it is important. He spoke about trying to bring forward progress on loss and damage, so that it is something we can deliver on at the 2023 COP, rather than perhaps something for 2024.
I also met the Foreign Minister of the Maldives recently, on Tuesday. That is an island state with a small population that covers a massive territory when we include the ocean around the islands. Seventy of its islands flooded this year. I wonder whether the Minister remembers when the then President Nasheed held a cabinet meeting underwater with scuba gear. I think he addressed the Conservative party conference around the same time. He was highlighting the fact that they will all be living under water if they are not supported. They are paying a price for a problem not of their own making.
The Foreign Minister spoke to me about how the country hopes to get to fully renewable energy by 2030. Although its own carbon footprint is absolutely minuscule, it is doing its bit. The islands are of course surrounded by salt water, but fresh water is really important, and the rain water is so polluted by the industrialisation of neighbouring India that it cannot be used. That demonstrates the interface between what the industrialised world is doing, and small countries such as the Maldives. They cannot sort out this issue by themselves. They need collective responsibility to be shown.
On finance, it was shocking to hear that the UK has not yet coughed up its contributions to the green climate fund and the adaptation fund—the $300 million promised in Glasgow. We currently hold the COP presidency. If we cannot meet our promises when we are meant to be showing leadership, we really cannot expect anybody else to do so. It is a total abdication of responsibility, as is the Prime Minister’s reluctance to attend COP27. He is going now, but it is pretty obvious he regards it as an inconvenience. I suspect he is only going because the former Prime Minister, the right hon. Member for Uxbridge and South Ruislip (Boris Johnson) is going and he does not want to be upstaged.
I hope that when he gets there, the Prime Minister rises to the challenge. It is crucial that, in the outgoing days of our presidency, we bring together countries to co-operate and that we show climate leadership. I hope that he has a bit of an epiphany as he flies out to Sharm El Sheikh and realises that he is there to do a serious job, and that he does it.
The Minister for Climate (Graham Stuart)
It is a pleasure to serve under your chairmanship, Mr Efford, and to participate in this important debate, although it is a shame that there are not more people here on this Thursday afternoon. What we have lacked in quantity of Members, we have perhaps made up for in quality of contribution.
I congratulate the hon. Members for Bath (Wera Hobhouse) and for Glasgow South (Stewart Malcolm McDonald) on securing the debate. I pay tribute to them for their work in promoting the importance of the international agenda. The hon. Member for Bath has been a strong voice for climate action and the protection of women and girls in that context throughout her time in Parliament, constantly challenging the Government to do more. I thank her for her commitment to the issue.
I do not want to be divisive, but I would gently say that if we were to compare the hon. Lady’s useful contribution with that of the hon. Member for Bristol East (Kerry McCarthy), the spokesperson for His Majesty’s Opposition, it was more balanced. If one listened purely to the comments of the hon. Member for Bristol East, one would think the Government were a laggard and the country was far behind. One would not believe that we had invested more in renewables than any other European nation, that we had transformed the economics of offshore wind, hosted COP26 and led the global conversation—that my colleague, the COP26 President, my right hon. Friend the Member for Reading West (Alok Sharma), had taken us from the beginning of our presidency, when just 30% of the world’s GDP was covered by net zero, to now, when that figure is 90%.
There are plenty of things to pick apart in what any Government do, but surely it is perfectly possible to acknowledge the situation honestly. If people give speeches that absolutely fail to reflect the reality, they do not gain credibility, they lose it. It is perfectly possible to challenge this Government effectively, but it is best to acknowledge the reality of where we are at in order to do so. The hon. Member for Glasgow South talked about climate disinformation. I suggest that there are certain Members here who are guilty of that by not acknowledging what has gone on.
Graham Stuart
I will come back to the hon. Gentleman in a moment, but I want to talk about him. I acknowledge his strong support for the people of Ukraine, which has created a severe context for our discussion on energy and climate, and his support for helping them in their fight against Putin. I wanted to acknowledge that before I give way to him.
Stewart Malcolm McDonald
I thank the Minister for acknowledging that. He is brave to want a debate on credibility right now. It is not disinformation to point out that the COP presidency—of which he correctly seems so proud—has been demoted from the Cabinet, or that he himself has been removed from the Cabinet, or that the Prime Minister has been dragged kicking and screaming to COP. That is not disinformation; it is fact. Calling it disinformation is disinformation in itself.
Graham Stuart
To be fair to the hon. Member, he is a good debater. I was not particularly referring to those points, which are political fair play and not in themselves inaccurate, albeit presented in a certain way. Failing to recognise our overall position and making out that we are somehow, as we heard suggested by another hon. Member, not investing in, promoting and seeking to accelerate renewables is to misrepresent the situation. I sometimes think that, even by myself in a telephone box, I am capable of creating an argument where there would otherwise be agreement.
Wera Hobhouse
I am a little perplexed by what the Minister said. I said in my speech that, yes, we made lots of pledges and there are lots of targets. We are agreed on those, but it is about the delivery. The Committee on Climate Change itself has said that the delivery of the targets we have set ourselves is far too slow. We need to accelerate the pace of change. Will he acknowledge that we need to accelerate the pace at which we move toward net zero?
Graham Stuart
The hon. Lady is right in that respect, but it is important to acknowledge where we are. We have gone further and faster than any major economy on Earth in reducing our emissions while also leading the global conversation. If we do not acknowledge those points, we do not create a properly contextualised conversation. That is all I have sought today, but I entirely agree with her; my job from the Prime Minister is precisely about accelerating this. We need clean baseload, and that is why we are seeking to do more on nuclear. It is a great shame that the Opposition parties—with some exceptions—do not support that. It is interesting to see that if Scotland were to have 100% renewable energy, it would be reliant on the baseload provided by nuclear in England.
Kerry McCarthy
The Minister is talking about what the Government are doing on renewables. It was not clear, in his response to the shadow Climate Secretary at COP questions this week, what the current position is on the ban on onshore wind. We know that the new Prime Minister spoke against onshore wind during his unsuccessful leadership campaign. Can the Minister confirm if there is now a ban on onshore wind, or if it has been lifted?
Graham Stuart
Onshore wind is our single largest renewable source, providing about 14 GW altogether, 3 GW of which are in England. In order to deliver, we need all these energy sources, but we need to do this in a way that works with the grain of communities, whether that is through ground-mounted or roof-mounted solar, onshore or offshore wind, nuclear, hydrogen, carbon capture, utilisation and storage—without which it is hard to see how we can do industrial decarbonisation. We need all those things in order to deliver the targets, which, as the hon. Member for Bath suggested, are extremely challenging, but which we are on a firmer path toward than any other major economy on Earth.
It is great that the Americans have now come back to this agenda, and it is good that they passed the Inflation Reduction Act to promote it. I met with John Kerry recently, and discussed how we need to work co-operatively. In that context, at Glasgow we brought about the break- through agenda, looking sector by sector at collaborative ways to drive forward change across nations.
The UK, and indeed the world, as colleagues have said, is facing unprecedented challenges. I and the Government agree with the picture that has been painted. The food and energy crises, the war in Europe, inflation and recovery from the covid-19 pandemic are all part of the context, but in all the short-term pressures, around energy bills and the like, we must not lose our focus on climate change and we must recognise that it has an impact on human security, precisely as the propagators of the debate have suggested.
Extreme weather events are increasing in frequency and severity, and this summer we observed record-breaking temperatures, as other hon. Members have said, across Europe, the US and China, including the temperature rising above 40°C in this city for the first time. It was reported that the European Union saw 53,000 excess deaths in July as a result of the heat. As has been mentioned, the devastating floods in Pakistan affected 33 million people and a third of the country—an area about the size of Britain—was under water at one stage, which is truly horrifying.
These events serve to underscore the point that climate change and its impacts are being felt today, not in some distant future. It is driving food and water scarcity, displacement, migration and humanitarian and economic crises, while eroding resilience and reducing our capacity to respond. People, countries and regions will be impacted differently and over different timescales, but climate-related disruptions will increasingly strain international security arrangements globally, precisely as has been said today, causing a knock-on impact on human security worldwide in ways that we cannot always predict. Urgent action is needed to adapt and build the resilience of people, economies and ecosystems to current and future climate change and nature loss, and to the associated risks and impacts.
Climate change exacerbates existing vulnerabilities. It was acknowledged as a threat multiplier by the UN Security Council and the science is absolutely clear. A rapid reduction in greenhouse gas emissions and a significant scaling up of investment in climate change adaptation is needed to avert the most damaging impacts, but some of those impacts are already baked in, as has been said. That is why the integrated review identified tackling climate change and biodiversity loss as a leading priority over the coming decades—so it is in our national security strategy, in the form of the integrated review—and highlighted the inextricable links between climate change, nature and national security.
We were the first country to bring the security implications of climate issues to the UN Security Council in 2007, and the first to convene a leader-level debate on climate security in 2021. We have also convened workshops within NATO and we are seen as an international thought leader on the security implications of climate change—something to which hon. Members are contributing today. So we recognise and understand that human insecurity caused by climate change is a significant challenge.
The UK’s COP26 presidency helped us to continue our leadership in this area. COP27 starts on Monday in Egypt, and the Prime Minister’s attendance demonstrates the importance this Government attach to the climate agenda. An African COP, in a continent on the frontline of climate change, will rightly shine a light on the need to follow through and deliver on the commitments that have already been made, and scale up action on adaption and mitigation. COP26 secured many important commitments. Countries reaffirmed their commitment to keep 1.5°C alive, albeit on life support. Among many other important pledges, developed countries agreed at least to double their adaptation finance from 2019 levels by 2025. Those commitments must now be delivered.
To achieve human security in the face of climate change, the world must act. We need to reduce emissions faster than ever before. We need to seek to stop damage to nature and rebuild the biodiversity that is so central to human security, so we will continue to push for a landmark agreement to protect nature at COP15, the convention on biological diversity in Montreal in December—that is the other big COP, so we have COP27 and COP15. We need to enable countries and communities to avert and minimise losses and damages, while providing means to address impacts when they occur.
We estimate that, between April 2011 and March 2022, the UK’s international climate programmes directly supported 95 million people to adapt to the effects of climate change. We have pledged to double our international climate finance to £11.6 billion between 2021 and 2026, with the goal of mitigating climate change and supporting countries to adapt and build their resilience to its impacts, as well as protecting and restoring nature. Those investments directly support the improvement of human security.
We can and will do more. It is not just about the amount of money spent; the UK is making sure we spend smarter, plan more effective responses and utilise our world-class diplomatic service to support countries to be more resilient in the face of climate impacts. It is also about following through on our commitment to deliver net zero and nature action at home and internationally and to support the scaling up of adaptation globally as we build the legacy of our presidency and support Egypt to drive forward progress.
Hon. Members are right to challenge us to ensure that this takes place right across Government. I met the lead non-executive director of BEIS this afternoon, who leads on net zero. All Departments now have a non-executive member on their board with responsibility for net zero, because it is a matter for every Department. Through the Climate Action Implementation Committee and other Cabinet Sub-Committees, in my role as Minister for Energy and Climate Change I will be working to ensure that Ministers in every Department recognise the imperative to deliver net zero.
Kerry McCarthy
The Minister mentioned the Climate Action Implementation Committee, which came up in, I think, Prime Minister’s questions or perhaps COP questions. The Prime Minister is no longer chairing that Committee. The Chair of the Environmental Audit Committee, I think, asked who will chair it, but we did not get an answer. Can the Minister tell us who is in charge?
Graham Stuart
The Climate Action Implementation Committee has up to now been chaired by the COP26 President, my right hon. Friend the Member for Reading West. He will cease to be President of COP in a few days, of course, but he will lead our negotiations through Sharm El Sheikh. It will be up to the Prime Minister, I guess, but I do not know. It is quite likely that it might be the Minister for Energy and Climate Change—I do not know. It will be a Minister who leads that Committee, which reviews carbon budgets, gets presentations from the Climate Change Committee and others and ensures that we stay on track, as we must if we are to deliver that.
Our agenda is not just about avoiding harm; it is strongly in our national interest. By leaning in ahead of the rest of the world, by cutting our emissions more than many others, and by investing in renewables in a way that has led Europe, we can create industrial capability that we can then export to the rest of the world. We genuinely can do the right thing by the environment, build a more prosperous and reindustrialised nation—in some parts of the country—and serve the interests of humanity and the planet as a whole, while delivering greater economic security and prosperity at home. That is very much what we are focused on; it is all about accelerating what we are doing in order to enable that. That will be my job and those of my officials.
The transition to a net zero economy presents job and export opportunities. McKinsey estimates that the low-carbon transition could present a £1 trillion opportunity for UK business by 2030; it is genuinely enormous. At Glasgow, we took steps to make London the first net-zero aligned financial centre. There are opportunities for the City of London and our industry in things such as hydrogen and carbon capture. Up in the north-west and right across the country, there is an appetite to see that happen. Taking a lead will drive prosperity here in the UK and globally, as global markets transform.
International action enables us to meet our own net zero target more efficiently and cost-effectively, while positioning ourselves to take advantage of the global economic opportunities that arise. If we engineer it right, we can come out not only with a net zero, emissions-free energy system, but one that is internationally competitive because we have helped to lead the global conversation and others are following us. We can use our natural resources—for example, the North sea basin—not just to get out the oil and gas for now. With ever higher environmental standards around production, that is the right thing to do while its production declines. We can also use it for offshore wind, storage of CCUS, and storage of hydrogen, which might be part of that whole hydrogen story. We have a European resource here by which we can help to serve the whole continent of Europe in a way that helps with the net zero challenge, and also helps with prosperity, not least in areas that otherwise would be left behind, because levelling up remains a central mission for us.
COP27—we will hand over the presidency next week, a year on from the brilliant COP26 hosted in Glasgow—is an opportunity for the world to come together to address climate change. With the Prime Minister at the helm and leading our delegation, the UK will be front and centre in driving forward meaningful action, without which the security of all humanity is at stake. I entirely agree with colleagues across the Chamber who have given such powerful speeches today in support of that positive objective.
Clive Efford (in the Chair)
Before I call Wera Hobhouse, I just point out that, although we have nine minutes left, this is not an opportunity for a second speech, but a short summing up.
Wera Hobhouse
I take that on board, Mr Efford. I thank Members for contributing to this debate. The fact that people were wondering who would respond to this debate—the MOD, the Foreign Office or indeed BEIS—seems to reinforce my call that we should have the Department of Energy and Climate Change back, which would co-ordinate all the questions and issues that we have debated this afternoon. That would address them together, rather than always having them addressed in a fragmented way.
I am pleased that so many Members have contributed from across our family of nations, which shows how important this debate is for all our constituents. As the hon. Member for Strangford (Jim Shannon) said, our MP mailboxes are full of constituents’ concerns and worries about their futures if we fail to act. That very much shows how this is a human issue and how the security issues of countries should be brought down to the human level. We must do more. The Government can always blow their own trumpet—they do that very well—but I must point out where the Government can and must do better. We must no longer dither and delay. We must deliver now.
Question put and agreed to.
Resolved,
That this House has considered climate change and human security.
Yemen Peace Process
(2 years, 1 month ago)
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Mrs Flick Drummond (Meon Valley) (Con)
I beg to move,
That this House has considered the peace process in Yemen.
It is a pleasure to serve under your chairmanship, Mr Davies. I thank the Backbench Business Committee for granting this important and timely debate.
Just over 60 years ago, I was born in Steamer Point Hospital in Aden, and I began a long fascination with Yemen in its various guises. I was born with British citizenship as my father was serving in the British Arab army, and we left when I was three. Ever since then, I have tracked how things have changed over the years as I have written down the changing names of my country of birth. I have not been back since but I dream to, much like the right hon. Member for Walsall South (Valerie Vaz) and her brother, the former Member for Leicester East, who were also born in Yemen.
Over the last 60 years, Yemen has been divided and come back together again, and it has now become a long-forgotten war for many. Why is Yemen important to us? The UK has a historic interest in Yemen through the existence of the Aden colony from 1839 to 1967. More importantly, today we are the UN penholder. The Government must continue to play their leading role in promoting peace. I pay tribute to the UN special envoy, Hans Grundberg, and his predecessor, Martin Griffiths, for all their work.
Today I will set the scene, as I know others will want to talk about different aspects. I thought it would be good to remind people about the complexity of the war and our role. That is not to say that we should impose a western-centric, top-down structure of government for Yemen. That has been disastrous in places such as Iraq. Like other middle eastern countries, Yemen is made up of different communities, and there is currently little feeling of a whole national identity. The war is not as clear as some may wish it to be. Often, there is too much focus on Saudi Arabia and the Iranian involvement, but it is an internal civil war, not a surrogate or proxy war. Although outside countries are involved, either by backing the Houthi rebels or supporting the Yemeni Government, they do not necessarily control them politically.
Yemen has had a history of civil wars for centuries, and a continual battle along the Saudi Arabian border—a border that has cut through some of the historical Yemen. It is a country divided by tribal and religious loyalties. The Houthis are more doctrinally close to the Sunnis than the Iranian Shi’ite regime with which they are often linked by the outside world. The Houthis are also more conservative than the southern tribes in their Sunni doctrine.
John Spellar (Warley) (Lab)
The hon. Lady seems to be implying that there are only allegations of Iranian involvement with the Houthis, whereas the Iranian regime is absolutely up to its neck in this, stimulating and providing massive amounts of material. Frankly, the Houthi attacks would not be successful without the destructive and disruptive behaviour of the Iranian regime.
Mrs Drummond
If the right hon. Gentlemen was listening carefully, I said that although other countries are involved, they are not politically involved. They may be supported militarily, but the Houthis are thinking for themselves rather than being dictated to by the Iranian Government. That is the point that I was trying to make.
The sectarian divide in Yemen is not clearcut, as tribal loyalties cut across religious beliefs, making it a confusing and shifting picture, particularly for those looking from the west. Unification in 1990 was to bring forward a representative Government, with elections every seven years. However, it was fragile because of the problems with power sharing that we see elsewhere, including closer to home.
The origins of the present war lie in the political and economic marginalisation of northern Yemen by the former President Saleh. Many of the 301 members of the Yemeni Parliament, who were elected under universal suffrage, felt disenfranchised and unable to effect change. That was a missed opportunity to show that democracy works, in a part of the world surrounded by authoritarian regimes.
The war is a result of decades of exclusion of different parts of the population around the country. Yemen has been run by elites who have concentrated power with their own allies and disenfranchised large parts of the population, even when elections were held. With that in mind, we need to look at how that impacts the peace process and the route to lasting peace.
On 2 April, Yemen’s warring parties began a two-month nationwide peace brokered by the UN. That was extended until October, but it has not been extended again, although the fighting has not resumed at the same intensity as before. On 7 April, President Hadi transferred his powers to a new eight-person Presidential Leadership Council, and the new President is Rashad al-Alimi, a politician with long experience and a diplomatic background.
The six-month ceasefire has been the nearest thing to a reprieve since civil war broke out eight years ago. Casualties have come down countrywide, there has been an increase in fuel deliveries, and international commercial flights to and from Sanaa have recommenced for the first time in six years. However, the latest proposal put forward by the special envoy has not been accepted by the Houthis. The proposal is wide ranging and includes the payment of civil servants’ salaries and pensions, the opening of specific roads in Taiz—the second most populous city—a commitment to release detainees urgently, and the strengthening of the de-escalation mechanism through the military co-ordination committee. The main obstacle is that the Houthis want their security forces to be included in the salary payments to civil servants, which the Government could not accept. This is really disappointing.
Taiz has been in a state of a partial siege since the beginning of the war, and life has been tough, with a war economy inflating prices and insecurity. It was not until 2021, when Hans Grundberg became the first diplomat to visit Taiz since the start of the war, that the profile of the city and its plight were raised. Improving communications with and around Taiz must be central to negotiations, and this is one of the areas where the UK Government can help by working with the special envoy to call on the Houthis to show flexibility.
The outside world must remind the Houthis that all citizens have benefitted from the peace over the past year. Any attempt to prevent oil and goods from arriving at the port of Hodeidah impacts on the already difficult humanitarian crisis. Food is becoming more expensive as it becomes even more scarce, and there is not enough equipment to keep hospitals and schools functioning. Only 48% of the aid needed through the 2022 Yemen humanitarian response plan has been funded so far. The Houthis must realise that working towards a long-term peace process will help that and is in everybody’s interest.
Politically, the Presidential Leadership Council under President al-Alimi has unified the resistance to the Houthis. The Southern Transitional Council is the most well-known group, so we should recognise the role of Mr al-Zubaidi and, just as importantly, the other members —Tareq Saleh, Abdullah al-Alimi Bawazeer, Sultan al-Arada from Marib, General al-Bahsani, Othman Majali and Abu Zara’a al-Muharrami for their contribution to leading the council. However, the situation with the PLC is delicate, and support from the international community is vital to maintain its credibility.
John Spellar
The hon. Lady mentioned the Southern Transitional Council. She may be about to come on to this, but what consideration should be given in the discussions to the desire for self-determination in south Yemen?
Mrs Drummond
I do not think it is for us to determine the future of Yemen. It is up to the people to decide what they would like to do through the negotiations, so I would not dream of putting what I think on to what they are going to decide. That is very important, as I mentioned at the beginning. We cannot apply our western-centric views to what is going on in Yemen. If the people decide that they want to divide as they used to be, that is fair enough, but I do not think we should be talking about that at the moment—
John Spellar
Does the hon. Lady recognise that there is considerable demand in southern Yemen for a degree of self-determination, if not independence, and that that is very much recognised by the south Yemeni diaspora here in the UK? This is not about us pressing for that as colonialists; it is very much a local demand.
Geraint Davies (in the Chair)
Order. When someone intervenes, the speaker needs to accept the intervention before the other person starts speaking.
Mrs Drummond
Thank you, Mr Davies.
It is all very well for people in the UK to say that that is what should happen, but the country has been divided before. It came back together and started to have a Government who, unfortunately, were not run properly. Unifying the country could happen again, but if it is the will of the people of Yemen to divide again, we must accept that. It is up to the people of Yemen who are living there and those who are running the Government, who are beginning to run it with a lot of credibility. We have to wait for that to settle down.
The special envoy and other allies must also make clear that help and aid will come if the Government of Yemen take the opportunity to move on from their former position under President Hadi. Any weakness will be exploited by the Houthis and delay any future peace process. The UN special envoy has been tireless in his diplomatic efforts, and has been asking for a new six-month truce to allow time for negotiations for a formal ceasefire, the resumption of an inclusive political process, and talks on wider economic issues. We must help to make those things happen. On the humanitarian angle, Joyce Cleopa Msuya, the UN Assistant Secretary-General for Humanitarian Affairs, has spent time in Yemen, helping the 4.3 million people who have been internally displaced since the start of the war in 2015. Her role can also help to encourage negotiations, showing that peace brings dividends. Mine clearance needs to be a priority, as mines are presently being washed into farm fields.
Before the civil war, 45% of the population of Yemen lived below the poverty line; that figure is now around 90%. Today, 24 million people are in danger of famine, of whom 14 million are at acute risk, and 2 million children are at risk of starvation. Huge parts of the population are being sustained by relief efforts. The UK has always been one of the leading donors supporting Yemen, providing more than £1 billion of aid during the conflict, and many British non-governmental organisations have been doing fantastic work. However, we must recognise that the Yemeni economy will need considerable help and support even after a return to peace.
Yemen is facing huge challenges from climate change, with near-constant drought and desertification of agricultural areas. Since the start of the war, the population of Yemen has doubled, but GDP per head has more than halved. There is a need to rebuild Yemeni society on an equal and fair basis, which includes the promotion of women’s rights. Lastly, there is the threat of an environmental disaster from the oil tanker FSO Safer, moored off the coast of Hodeidah. I have been raising awareness in Parliament about that potential catastrophe for many years. I am pleased that the UN has now raised enough money to start transferring the oil to a temporary vessel, but I have an immediate ask of the Government: that they work with our partners to make sure that transfer is completed as soon as possible, and to secure a safe disposal of the Safer. If that is not done, there is a risk of environmental damage to the whole of the Red sea for decades.
This war has gone on for too long, and too many people have died or been displaced. I urge the UK Government to work tirelessly with all parties and bring peace to a region that deserves it. The British Council is already working in the north and the south; there is a huge demand for English teaching and transferrable skills in Yemen. Our soft power influences can be a big help to Yemen in its post-war reconstruction and rehabilitation. That is important, because there is a compelling geopolitical reason why the west must help the people of Yemen: China or Russia, for example, could fill the vacuum, which could be disastrous for the region’s security. Our support for people in crisis in the world, helping them to build stable and fair regimes, is an investment in our own security as well as theirs. If we can achieve that, then perhaps I, the right hon. Member for Walsall South, and many Yemenis displaced around the world can one day safely return.
Valerie Vaz (Walsall South) (Lab)
It is a pleasure to serve with you as Chair, Mr Davies, and I thank my hon. Friend the Member for Meon Valley (Mrs Drummond) for suggesting this debate. We both went along to the Backbench Business Committee and were able to pitch the debate, because—like my brother and my sister—she and I were born in Aden, and we did say we wanted to go back and visit it in all its beauty. I left when I was 10 years old, so I do remember quite a lot of it. It is important that the Backbench Business Committee has granted us this debate at this time, because amid the millions of ongoing problems and crises that are going on around the world today, the prolonged conflict in Yemen has been forgotten.
We wanted to draw the House’s attention to the dreadful state of affairs in Yemen, which has already been outlined by my hon. Friend the Member for Meon Valley and which we cannot simply stand by and watch from the sidelines. We are a great nation and we have always stood up against what is wrong in this world—we were the framers of the European convention on human rights—and we owe that to the thousands of innocent people who are dying in Yemen.
I will set out the background to the conflict. It has been eight years in the making, which is almost as long as the time I spent in Yemen. The eight-year-old conflict in Yemen is between the internationally recognised Government, who are backed by the Saudi-led military coalition, and Houthi rebels, who are supported by Iran.
After almost a decade of this prolonged conflict, the parties involved are far from reaching a peaceful solution. The failure in October 2022 to renew the ceasefire agreements is alarming and disturbing. But it is good that there was a ceasefire. The peace efforts gained some momentum in April, when Yemen's new governing council helped to consolidate anti-Houthi forces, a move that could set the stage for inclusive negotiations. The first nationwide ceasefire in years allowed commercial flights to resume from Sanaa and some fuel ships to dock in Hodeidah.
After six months of relative peace, however, the parties failed to renew the ceasefire agreements. Both the Yemeni Government and the Houthis have blamed each other for the disintegration of the deal, which has led them back to heavy fighting and plunged Yemen into a full-scale crisis.
I will outline some really upsetting and disturbing statistics, which my hon. Friend the Member for Meon Valley has already touched on. The United Nations Development Programme estimates that more than 370,000 people have died as a result of this war, with indirect causes, such as lack of food, water and health services, causing almost 60% of those deaths. According to the United Nations Refugee Agency, three out of four Yemenis require humanitarian aid and protection and 4 million are internally displaced. Five million are at risk of famine and the cholera outbreak has affected over 1 million people. Fewer than half of the health facilities in Yemen are functioning, and many that are operational do not have even the basic equipment they need. Some health workers have not even been paid their salaries. In March, about 17.4 million people were in need of food assistance, with a growing proportion of the population having to cope with emergency levels of hunger. The conflict’s death-toll has been growing.
This is an urgent humanitarian situation, because the crisis in Yemen is exacerbated by the effect of the war on the humanitarian footprint and thousands of innocent people. An economic crisis continues to compound the ongoing humanitarian crisis in Yemen. In autumn last year, the sharp depreciation of Yemen’s currency significantly reduced people’s purchasing power, so it was more difficult for them to purchase even the basic necessities, taking them even further out of reach. With around three quarters of Yemen’s population living in poverty, disease is rampant and of course the pandemic made matters worse.
This beautiful country is being destroyed and fragmented, town by town, street by street, and house by house. We are in the midst of a terrible war in Yemen and the humanitarian impact of this war on the Yemeni people, especially women and children, is painful for us to watch as silent bystanders.
So how can we go forward? The UN-backed peace negotiations have made limited progress. I, too, want to acknowledge the incredible work of Hans Grundberg, the UN’s special envoy of the Secretary-General to Yemen. He is looking at de-escalating mechanisms through the military co-ordinating committee, turning swords into ploughshares and spears into pruning hooks. And of course I also acknowledge Martin Griffiths for his work on the Stockholm agreement.
The regional conflicts and tensions among the actors involved have simply turned this crisis into a prolonged war. All the actors involved seem to be wedded to a military solution, but war can never be a solution for the millions of people who are suffering.
I have a series of questions for the Minister. Will he pursue every effort for an immediate ceasefire in Yemen, as well as for the implementation of the Stockholm agreement? Will he look at establishing a new international accountability mechanism for Yemen? The existing mechanism is simply not enough. We need independent reporting on war crimes. Will the Minister, as the UK penholder, consider drafting an appropriate resolution immediately that moves the country on to a peace process? We have done it in Northern Ireland. There are people who can facilitate a peace process. Even today, there is peace negotiated in Ethiopia.
We cannot stand by and watch the destruction of a country and the death of so many innocent civilians. The situation in Yemen is tragic and heartbreaking. The war and the stalemate have led to the worst humanitarian crisis in the world, because of widespread hunger, disease and attacks on innocent civilians. The country is burning and the people are suffering. I know we have our own problems to deal with here, but ignoring this massive crisis is a disgrace to humanity.
Bob Stewart (Beckenham) (Con)
It is a real pleasure to speak under your chairmanship, Mr Davies. Yemen is important to us, and I want to concentrate on why that is. The south-eastern end of the Arabian peninsula was once crucial to the functioning of the British empire. A settlement in Aden was occupied by Royal Marines in 1839. It became a bunkering port for passing ships on the way to India. After the opening of the Suez canal in 1869, Aden became vital as a staging post for ships going to and from India and the far east. When oil replaced coal as the main fuel for ships, the importance of Aden was reinforced, particularly as it is so close to the middle-eastern oil fields. Unsurprisingly, BP built a rather large facility there.
As time passed, Aden and its hinterland became a formal part of the British empire, the Aden protectorate. That was the southern bit, as my two lady friends, my hon. Friend the Member for Meon Valley (Mrs Drummond) and the right hon. Member for Walsall South (Valerie Vaz), will recall, although they were still in nappies when I was running around there—I am old, in other words. I have lost my place now.
Valerie Vaz
Yes, we have reminisced a lot together about what a lovely country it was. It was wonderful for me that there were so many different nationalities there; I was taught by Italian nuns and had Greek friends. There were people from Goa, and all sorts of other people, including of course the Arabs, with their brilliant hospitality. I am sure the hon. Gentleman will agree that we need to restore that beautiful country.
Bob Stewart
I thank the right hon. Lady, whom I call a good friend, although she is not formally meant to be a friend; technically, she is not a friend, but she really is a friend. I have been able to find my place now—thank you.
The colony of Aden consisted of 23 sultanates when we were there. There were emirates, sultanates and several independent tribes. All this was run from London and controlled by the British Government, although not completely. In the 1950s, when I was there, some tribes were in open rebellion against British authority, which led to a protracted insurrection that we all remember. Well, others might not remember it as much as I do.
In 1967, the United Kingdom had enough. Aden was given independence as South Yemen, and British forces withdrew. The Aden protectorate was renamed the People’s Republic of South Yemen. The Yemen Arab Republic was to its north—that is the division we were talking about. In 1990, north and south joined to become Yemen.
My particular interest in Yemen comes from the fact that as a child I lived there from 1953 to 1957. I was there because my father served there, like the father of my hon. Friend the Member for Meon Valley. My father was a company commander in the 1st Battalion of the Aden Protectorate Levies, charged with keeping order “up-country”, as we called it. He was always away, and I never really saw him. He was always on operations, and there was pretty fierce fighting. In 1955, he was awarded the Military Cross.
Since 1990, Yemen has gone from bad to worse. It is such a dangerous place that it would be utterly foolhardy for foreigners to go there without protection. We have already identified how poor the country is; it is actually very poor. It is the poorest country in the middle east and a very fragile state. Yemen has essentially become a cockpit where some would say the two main branches of Islam are fighting tooth and nail by proxy. The official Government of Yemen are now backed by Saudi Arabia, Jordan, Egypt, Morocco, Sudan, the Gulf states and, through them, us as their allies, and the United States. The rebels are mainly from the northern Shi’a Houthi grouping, who, I seem to recall, used to take great delight in shooting at my father in the 1950s.
Mrs Drummond
They are not Shi’a; they are Sunnis from the Zaidi part of the Sunni doctrine.
Bob Stewart
Forgive me if I got that wrong; I am perfectly willing to be corrected. To complicate the situation further, al-Qaeda has turned up. Perhaps the most dangerous of the al-Qaeda factions is in Yemen. Just to make the problem even more difficult, so-called Islamic State is present as well, or Daesh, as I might prefer to call them. That is a very rude word in Arabic, and I will not explain what it means, but frankly it is correct.
We have a responsibility here, because we drafted the original UN Security Council resolution 2216 in April 2015, which demanded that the Houthis withdraw from all their seized areas and relinquish all seized arms. We established an arms embargo against the Houthis and the forces loyal to the former president. Security Council resolution 2216 was passed unanimously. The five permanent members of the Security Council must agree it; otherwise it does not pass. In this case, four did. Russia did not, but it abstained, which under the rules allowed the resolution to pass, so it passed unopposed. United Nations action on the ground has not been very effective, but that does not stop leaders of the United Nations doing their very best to try to sort out the situation.
There remains little access to large parts of Yemen, but I am pleased that the UK provides so much aid. Are we the fourth or the second-largest provider of aid to Yemen?
Bob Stewart
We are second. Aid must get through. We have mentioned people starving and a lack of medical supplies, but all I can remember about Aden is how little water there was there. Water is crucial—good clean water. Certainly, in the early days, some of the Saudi-led airstrikes went wrong, and they have clearly killed innocent people. However, in 2016, when I visited the Riyadh air operations centre, which controls all operations, I was impressed by the attitude of the air controllers and the coalition pilots to what ex-military people like me call weapons release. From what I saw, they were doing their very best then, and have done since, to avoid civilian casualties. Indeed, I heard real evidence that they often returned with full bomb loads. They were not positive that they would not hurt people, so they did not have weapons release.
The Gulf Co-operation Council and Saudi Arabia are very close allies of our country. We must be quite clear that, regardless of its mistakes, the Saudi-led coalition is operating under the authority of a unanimously adopted Security Council resolution. It is acting for the Security Council. It is acting for the forum of the world. It is doing the work on the ground in response to the Government of the world, if one wants to think of the United Nations like that. After all, the usurpation of power in Yemen was illegal. The Government of Yemen are a legal Government. We do well to remember that. It is far too easy for us to sit here and castigate what our allies do sometimes. The Saudi-led coalition is doing its very best to implement international law and the Security Council resolution that we, the British, drafted.
Obviously, everyone here realises that the only way ahead for Yemen is a political solution. That solution must obviously involve the United Nations. I suspect that it has to involve countries such as ourselves, other Arab countries and the United States. Perhaps, dare I suggest, it has to include Iran.
According to the United Nations, as we have heard, 150,000 people have been killed in the war in Yemen, and that does not include the 227,000 who died as a result of famine. I cannot believe that people in this world are dying because they do not have enough food. That is appalling. It is something that, as human beings, we have a real responsibility to sort out. Lack of food, kids dying—it is just dreadful. The lack of healthcare facilities just piles it on, too.
I should stop shortly, because others want to speak, but I hope that I have emphasised that we, the British, have a responsibility for action in Yemen. I know that the Foreign, Commonwealth and Development Office is acutely aware of the United Kingdom’s long-standing concern about what has happened in the country, and that the issue is not on the backburner. It is very difficult to sort this one out, but surely a world that can land a spacecraft on a flipping comet can find a way to stop Yemen going through the bloody awful hell that it is enduring.
Several hon. Members rose—
Geraint Davies (in the Chair)
I want to take the Front-Bench spokespeople at 3.58 pm, and by my arithmetic that leaves eight minutes each for the three remaining speakers.
Mr Khalid Mahmood (Birmingham, Perry Barr) (Lab)
It is always a pleasure to serve under your stewardship, Mr Davies. I thank the hon. Member for Meon Valley (Mrs Drummond) and my right hon. Friend the Member for Walsall South (Valerie Vaz) for putting the debate together. It is of huge importance, and good to hear of the fond memories that they, and certainly the right hon. Member for Beckenham (Bob Stewart), have of the place where they spent part of their lives. I gained my information on this subject over almost 40-odd years. My father had a friend called Said Abdi who came from Yemen. He would tell us about the issues and what was going on there. He was a Labour councillor, and he introduced me to the Labour party, so I have a lot to thank him for.
As has been said, significant human rights abuses have taken place in Yemen. There has been huge, indiscriminate mining of the ports by the Houthis, and they have recruited young people as soldiers. That is inhumane and barbaric. As the right hon. Member for Beckenham said, there have been issues and mistakes made in some of the military attacks by the coalition, but there have also been huge sacrifices, particularly by the UAE. It lost over 150 soldiers in an ambush on its camp; we have to recognise that. That is a huge tragedy, but the biggest tragedy is for those people in Yemen whose children are starving, and who have all sorts of diseases that we would not expect people to have in this day and age. It has been a sorry state of affairs for the whole country. What is essentially a proxy war should not affect the people of Yemen, but it is being played out by people from a different arena using Yemen as a base.
My concern—it was raised by my right hon. Friend the Member for Warley (John Spellar), who is not in his place—is about south Yemen. We have a group of people who can, in this difficult situation, make at least some things work. On the negotiations, I am not advocating a partitioned country; I am saying that there should be support given to people to manage their own affairs regionally. That would not only give some stability to the region, but get the peace process moving, because we could see elements of peace there. It is no secret that the interference—the supply of arms—has predominately been by Iran. The only way we will get the peace process moving is by engaging people and getting them together to understand what the conflict is about.
The United Nations is producing a report, and has been involved for a long time, but that work needs to be reinforced with more robust reporting about what is going on, and that reporting needs to consider people’s actual position. It needs to consider all of Yemen, but particularly south Yemen. We need to make progress, and we can only do that by trying to resolve at least an element of the problem, and seeing how we can move forward. Considering the time, I will stop, but it is important for the Minister to look at how we can get the peace negotiations going and engage with the south.
Claudia Webbe (Leicester East) (Ind)
It is a pleasure to serve under your chairship, Mr Davies. I thank the hon. Member for Meon Valley (Mrs Drummond) for bringing forward this important debate and the Backbench Business Committee for granting it. We are debating the peace process in Yemen, but the brutal fact is that before the UK can make any meaningful contribution to any peace process in Yemen, the Government need to make up their mind what their position and intentions are towards Yemen and the horrific situation there. The Government are wringing their hands about the deliberate killing, widespread rape and intentional starvation of millions of people—there are more than 20 million people in need of humanitarian assistance and 4 million displaced—while knowingly fuelling the emergency by refusing to ban arms sales to one of the main actors in that brutality, with the ridiculous excuse that there is “no clear risk” that weapons sold to one of the main aggressors against civilians in Yemen might be used on civilians in Yemen.
UK-produced weapons make up around 20% of Saudi arms purchases. Even the US Government, which made up most of the rest of the Saudi arms supply, has now decided to pause its weapons sales to the country and has gone as far as to reset its military relationship. At the same time, we have the UK acting as penholder for Yemen on the United Nations Security Council, supposedly taking the lead on the Council’s activities and resolutions regarding Yemen. The UK Government do not just wring their hands about the emergency that they help to fuel; they lead the international hand wringing.
The penholding has done nothing practical to improve the situation for Yemeni civilians. Instead, earlier this year the UN decided to shut down its investigation into war crimes in Yemen, apparently under pressure from the Saudi Government—a lack of oversight that observers say has seen an acceleration in the rate of atrocities committed as perpetrators feel able to act without scrutiny, let alone consequences. The UN’s abdication of its role in Yemen mirrors the UK’s two-faced stance, and makes it all the more urgent that the UK finally acts in a manner consistent with its expressed concerns about all the horrors taking place in Yemen.
Ending arms sales to Saudi Arabia is the obvious first step if our Government are serious about the UK’s role in helping to end the mass murders, rapes and starvation. But it must not end there. The UK must also use its penholder role to—
Bob Stewart
Can I ask the hon. Lady who she thinks is most responsible for the mass murders and rapes? According to my understanding, it is the Houthis.
Claudia Webbe
I think our responsibility is to work towards peace, and we need to focus our efforts on ending the arms sales that rain bombs down on the Yemeni people.
The UK must use its penholder role to push the UN into restoring its mandate for war crimes investigation immediately to ensure that those who carry out those crimes are identified and held to account. The horrific situation in Yemen demands nothing less than a concerted and consistent political stance and a matching push for action. Instead of turning a blind eye while companies profiteer from the horror, the Government must step up now.
Jim Shannon (Strangford) (DUP)
I give special thanks to the right hon. Member for Walsall South (Valerie Vaz) and the hon Member for Meon Valley (Mrs Drummond). I think they both set the scene very well for a subject we are terribly interested in.
I have an incredible friendship with the right hon. Member for Beckenham (Bob Stewart), but I might have to disagree with him on one small point. I want to set this out at the beginning to have it out of the way: I believe that Saudi Arabia does stand condemned in the courts of this world for its bombing of innocent women and children. It cannot be ignored. I want to put that on record. At the same time, the right hon. Gentleman is right that when it comes to the issues of sexual abuse, murder, arrests and intimidation, that is clearly down to the Houthis. I have expressed my deep concerns about the unholy alliance between Iran and the Houthis, which disturbs me greatly, as it disturbs peace in the middle east and across the whole world.
I declare an interest as chair of the all-party parliamentary groups for international freedom of religion or belief and for the Pakistani minorities. There are many issues in this debate, but I want to focus on one issue. Being chair of those APPGs gives me a deep interest in the issue of persecution. Recent FCDO reports on Yemen have stressed abuses occurring such as arbitrary arrests, the mistreatment of journalists, sexual violence against women and children and the persecution of religious minorities. It is the ordeal facing religious minorities that I want to focus on today. These are the stories we are getting back from Yemen. I want to focus on that specifically, as everyone else has done a marvellous job of highlighting the issues from different perspectives. It is important we do so.
When the ceasefire came into force in Yemen this April and was later extended, a glimpse of peace seemed visible on the horizon. We all hoped it would last longer than six months, as the right hon. Member for Walsall South referred to. A glimpse of peace was visible for a short period. However, regrettably, such ceasefires do not translate into an improvement for Yemeni Christians in particular. An Open Doors analyst for Yemen observed that:
“Christians with a Muslim background seeking emergency supplies are vulnerable to discrimination and mistreatment, if their faith is known…Their names can be removed from distribution lists, especially if help is being given out through local mosques where it can be checked whether someone is a good Muslim or not, based on mosque attendance.”
With all the terrible things people have said for the Yemeni people themselves, it is even worse for Christians. It poses a serious risk to the majority of Christians in Yemen, as 95% of them are converts from Islam.
The situation also raises grave concerns about the fair distribution of humanitarian aid reaching Yemenis. We all want to see more of that, but it has to be fair and equal for everyone. A lack of freedom of religion or belief for converts should not be dismissed in the name of humanitarian disaster. It has to be equal in its distribution. At this moment in time, it is not. Of course, the crisis facing Yemen is manifold and complex, but one human rights issue should not be neglected for the sake of others, particularly as research shows that where freedom of religion or belief is protected, other human rights conditions tend to improve as well. I have always believed strongly that religious belief—whatever that belief is—of ethnic groups and human rights march hand in hand together. They cannot be separated as different things —they are one.
Suspended fighting in Yemen can, in short, mean little tangible improvement for Christians as the humanitarian crisis looms, but the staggering scale of humanitarian disaster should not lead to policy makers and authorities ignoring the plight of Yemen's religious minorities. Indeed, a report last year by the UN High Commissioner for Human Rights documented some of the awful disregard for religious minorities in Yemen, revealing that the conflict, which seems to many to be a Sunni-Shi’a divide, leaves no room whatever for people of other faiths. Experts found that Houthi leader Abdul-Malik al-Houthi incited violence and discrimination against religious minorities for his own political and personal ends, including Baha’i and Jewish communities. In March, he said that the Christians, Jews and Baha’is
“don’t want to coexist…They want to take away the sovereignty of Islam.”
No, they do not; they just want the same rights, the same parity and the same equality as everyone else. They should never be treated differently just because they have a different view. I would say that if it were Muslims, because they should all have the same equality of treatment.
The report further documented practices designed by parties to the conflict to silence their perceived opponents or punish them for their religious beliefs and legitimise their power through the spread of fear. Like others, I speak on behalf of the Christians, Baha’is and Jews— on behalf of all the ethnic minorities that are being discriminated against by al-Houthi in Yemen.
Any peace process in Yemen must remember the country’s Christians and other religious minorities and ensure that solutions to the crisis, however temporary they may be, respect and protect the rights to freedom of expression and freedom of religion or belief. As chair of the APPG for international freedom of religion or belief, I speak up for those of a Christian faith, those of other faiths and those with those with no faith because I believe that everyone should have the same equality. We do not see that in Yemen today.
Parties to the conflict must cease the arbitrary arrests and acts of harassment aimed at preventing the free exercise of those rights, including those directed at religious minorities and human rights defenders. We hear much about human rights defenders across the whole of the middle east. They play a very significant role, and they have been targeted too. We cannot wait until the humanitarian crisis is under control to protect those rights; they need to be safeguarded now.
Today, I just want to highlight the plight of the persecuted Christians and ethnic groups to all hon. Members and especially the Minister, for whom I have the greatest respect. I know that what I am saying is very close to his heart. I hope we can address this matter and see the plight of others in Yemen who are perhaps hidden. We want them to be treated equally and with parity, the same esteem, the same religious freedom and the same humanitarian aid. At this moment in time, they are not.
Alyn Smith (Stirling) (SNP)
It is a pleasure to see you in your place, Mr Davies. It is a genuine pleasure to wind up for the SNP in this debate. We have heard some very thoughtful contributions. I warmly commend the hon. Member for Meon Valley (Mrs Drummond) and the right hon. Member for Walsall South (Valerie Vaz)—the best part of Walsall, as I understand—for their very thoughtful contributions, and their empathy and good sense. I am struck by the sensitivity and humanity that we have heard from all points of the political compass.
I am glad that nobody fell into the trap of easy answers. As Members may be aware, the middle east is close to my heart. I grew up in Riyadh in Saudi Arabia, and my parents have just retired back from Kuwait. My mother-in-law lived in Aden until 1967. My family has sand in our blood. In the middle east, everything is connected to everything else, and in Yemen more than elsewhere. We should beware easy answers; there is very little black and white in any of the middle east, and particularly in Yemen. I am glad that we have not had too many easy answers this afternoon.
I also agree with a thoughtful point by the hon. Member for Meon Valley, who said that this is primarily a civil war. I agree: to categorise it as a proxy war is slightly insulting to the Yemeni people. There are a number of real disputes going on in the Yemeni territory as it exists at the moment, but the tragedy is that we cannot deny the external aspects of prolonging the conflict. The UK has a case to answer in that. It is not an impartial bystander; it has chosen a side via its foreign policy.
A number of excellent points have been made. I will try to distil them down to a few questions and points from our perspective to the Minister—I welcome him to his place, and I look forward to working with him on this and other issues. The SNP will always be constructive where we can be. Our worldview is different from that of many of the other parties here, but on international affairs there is less opportunity for domestic point-scoring, and less need for it, given that every 10 minutes a child dies in Yemen. We need a common effort and to assist each other to find a resolution to the issue, so I will focus on peace, aid and arms in my remarks
The UK is the penholder on Yemen at the United Nations. Because of that and by dint of our history and connection to the region, we are in a position to assist with the problem. As the right hon. Member for Walsall South said, the Stockholm agreement is in the doldrums. In the view of the UK Government, does that remain the best mechanism to reboot the peace process? The UK is supporting the special representative, but what can be done to give added impetus to that process? Perhaps there is now an opportunity, given the good news from the African Union today about the situation in Ethiopia. Progress is possible, so there could be progress in Yemen if there were a new impetus.
On the accountability mechanisms, there have been war crimes on all sides. None of us should indulge in the idea that it is some sort of competition: there have been war crimes on all sides and there needs to be a proper accountability mechanism for war crimes committed by anybody. I would be glad to hear about support for the UK’s continuing efforts to properly investigate those crimes and bring the perpetrators before the International Criminal Court.
On aid, there is a clear distinction between the position of my party and that of the UK Government. We deplore the cut from 0.7% to much lower and we think that was badly timed. All the world was dealing with covid and the idea of covid being used as a pretext to cut aid is entirely wrong, but we lost that argument. I welcome the fact that in March 2022 the UK pledged £88 million in aid for Yemen, but that compares to the figure of £214 million in 2020-21. Surely the situation has not improved since then. We should consider providing far higher amounts of aid, particularly post-covid and given the impact of the war in Ukraine on grain supplies to the wider middle east and Yemen specifically. We would like to see much more aid because the humanitarian crisis is not getting better, and will get worse.
If we want to hear big numbers, the UK’s position on arms exports cannot be taken out of consideration. Since March 2015, the UK has sold £8.6 billion worth of arms, which is a significant sum. To be clear, I am not against the arms trade or arms companies, but I would like to see far higher standards to safeguard the use of those arms, particularly in such a complicated conflict as the one in Yemen. Will the Minister commit to suspending arms sales to Saudi Arabia while there is a fuller investigation than we have seen to date? There is a case to answer. Will a wider and more comprehensive package of aid be brought back?
I am glad to wind up for the SNP in the debate. There are a number of points of agreement across the House. If the Minister takes steps towards a meaningful, durable peace in Yemen, he will have my full support.
Bambos Charalambous (Enfield, Southgate) (Lab)
It is a pleasure to serve under your chairmanship, Mr Davies, I believe for the first time. I welcome the Minister to his place, and I look forward to working with him on this and many other issues. I thank the hon. Member for Meon Valley (Mrs Drummond) and my right hon. Friend the Member for Walsall South (Valerie Vaz) for securing this timely and important debate on the peace process in Yemen.
I believe the debate is important to raise awareness about the fragile political situation in Yemen and the ongoing humanitarian crisis. I welcome the opportunity to hear from the Government about what actions they are taking to help the people of Yemen. All of us, regardless of political party, are united in wanting to see a permanent ceasefire in Yemen and a political reconciliation between the warring factions. I and the Labour party believe that there is no military solution to the conflict and that inclusive political dialogue is the only route to a sustainable resolution.
The UK is the penholder on Yemen at the UN Security Council, which means the UK has the power to draft and table Security Council products on Yemen, including press statements, resolutions, presidential statements and more. Within the UN, the UK has the power to lead the way in efforts to forge a political, not military, solution to the conflict. It is important to consider that in our discussions about Yemen and about the actions the UK Government can take to help bring about a lasting peace. We need to focus on those efforts.
The relative calm brought about by the six-month truce has allowed some Yemenis to dream of a better future. It is therefore deeply disappointing that the truce came to an end last month, on 2 October, and that efforts to renew it have been unsuccessful so far. I will return to the truce and the prospects of its renewal in more depth, but first I want to outline the devastating impact of the war.
As hon. Member know, the conflict began in 2014 when the Iranian-aligned Houthis seized the capital, Sanaa, and much of northern Yemen, and later forced the Government into exile. In March 2015 a Saudi-led coalition, including the United Arab Emirates, began a military campaign, backing the internationally recognised Government. The toll of eight years of war on Yemen’s population has been extreme and the war has devastated the country. There have been thousands of civilian deaths, and the famine caused by the war has endangered millions of lives. Across Yemen, 16.2 million people—60% of the Yemeni population—continue to experience acute food insecurity. The UN has described the war in Yemen as the world’s worst humanitarian crisis, and it is estimated that 377,000 people have been killed or have died as a result of the war and the associated crises in basic food and other necessities.
Against this dire backdrop, the recently ended truce offered a beacon of hope and brought some welcome developments. Despite claims of violations by both sides, the truce brought about a sharp drop in fighting. Save the Children has calculated that the truce led to a 34% drop in child casualties and a 60% drop in the displacement of people. According to al-Jazeera, residents in Sanaa reported that their daily lives dramatically improved during the truce, and that prices came down as more essential goods entered the city. Evani Debone, a communications co-ordinator at the Adventist Development and Relief Agency Yemen, told al-Jazeera that the truce had given Yemenis hope for peace. She said:
“Children who go to school are not afraid of airplanes any more. Having the next generation of Yemen not being afraid and not running from the war, as well as having the right to live their lives again is the most important thing when we think about the truce.”
The truce established a partial opening of the Houthi-controlled Sanaa International airport and the key Houthi-held Red sea port of Hodeidah. During the truce, flights restarted at Sanaa International airport for the first time since 2016 and, according to the UN, fuel imports into the port of Hodeidah are calculated to have quadrupled during the truce, allowing people to regain some level of normality in their lives. The truce also called for the lifting of the Houthi blockade on Taiz, the country’s third largest city, but little progress was made there after talks aimed at reopening local roads stalled. Another sticking point was the funding of public employees, many of whom have not received salaries for years.
For now, it appears that some of the main gains of the truce, such as the increase in fuel shipments to Hodeidah and the resumption of flights to Sanaa International airport, have thankfully held. The ability to move freely from Sanaa International airport is particularly important because it means that tens of thousands of Yemenis have been able to visit loved ones and receive vital medical treatment during the truce. It is estimated that the opening of the airport allowed almost 27,000 Yemenis to get medical treatment overseas, and to pursue educational or business opportunities abroad.
I am sure everyone here agrees that the protection of measures that so improve the lives of ordinary Yemenis must be a priority. Although it appears that there has been no immediate major uptick in violence since the truce expired, the fear is that it will begin again. Two weeks ago UN special envoy Hans Grundberg told the Security Council that a “new uncertainty” and a “heightened risk of war” now prevailed across Yemen. Meanwhile, all sides in the conflict are blaming each other for the failure of the truce, but it is the ordinary people of Yemen who will suffer most if the violence begins again. However, UN special envoy Hans Grundberg has signalled that there is still cause for hope, telling the UN Security Council:
“It is important to remember that the truce was never intended as an end in itself, but as a building block to enhance trust between the parties”.
A truce is necessary in order to establish the kind of environment in which a political solution to the conflict can be reached. I have therefore been heartened that the special envoy has stated that he believes there is still a possibility for the parties to come to an agreement. It is vital that the UK Government and the whole international community do everything in their power to try to facilitate that. Re-establishing the truce would be a first step towards a durable peace. There is no doubt that it will take compromises and leadership from all sides.
To conclude, what specific steps are the Government taking to make the most of the UK’s penholder role in the UN in relation to re-establishing the truce in Yemen? Will the Minister tell us what the UK Government are doing to support the ongoing UN-led process to establish peace, and to encourage the negotiation of an enduring political settlement? It is vital that the Government do all they can to help end this brutal conflict and stop the suffering of the Yemeni people. For the people of Yemen, the stakes could not be higher.
Geraint Davies (in the Chair)
Now over to the Minister. Please leave two minutes at the end for Flick Drummond to sum up.
The Parliamentary Under-Secretary of State for Foreign, Commonwealth and Development Affairs (David Rutley)
It is a pleasure to serve with you in the Chair, Mr Davies, and I congratulate my hon. Friend the Member for Meon Valley (Mrs Drummond) on securing the debate. She was an amazing Parliamentary Private Secretary when I served in the Department for Work and Pensions, and we worked well together. It is great to see her passion on this subject, just as it is to see the passion of my right hon. Friend the Member for Walsall South (Valerie Vaz)—I call her my right hon. Friend because she is a friend, not an enemy—and my right hon. and gallant Friend the Member for Beckenham (Bob Stewart).
This is a really important debate, and it is good to hear about people’s family links. Indeed, it is wonderful to have received a bit of a history lesson from my right hon. and gallant Friend the Member for Beckenham, who spoke about his experience. He was very quick to talk about other people’s nappies, but he did not talk about his own, which I thought I would just mention gently. He talked about the complexities of the situation, and the hon. Member for Stirling (Alyn Smith) clearly set out that there are real challenges to deal with.
I pay tribute to my hon. Friend the Member for Meon Valley and the right hon. Member for Walsall South for securing the debate, for their incredible work in this area and for their keen interest in this subject. I also recognise the important comments made by my good friend, the hon. Member for Strangford (Jim Shannon). He and I share a real passion for freedom of religion or belief with many other people in this room. He is a beacon on the subject and we treasure him greatly. For peace to be achieved Yemen, it needs all members of minority religions to be involved in the peace process, and the UN special envoy has been taking steps to ensure that the process is inclusive. No doubt the hon. Gentleman and I will speak more on that subject, as we always do.
Yesterday marked seven months since the UN successfully brokered a truce between the warring parties in Yemen. The truce has allowed Yemenis to live more safely and travel more freely than at any time since the war began, and has delivered many tangible benefits for the Yemeni people. As Members have mentioned, the reopening of Sanaa airport has enabled 60 commercial flights, allowing Yemenis to reunite with loved ones and seek urgent medical treatment abroad. The reopening of Hodeidah port has enabled oil to flow into the country, allowing public services to restart and bringing down the towering oil prices that made it entirely unaffordable for most people. Cross-border attacks, such as those on the United Arab Emirates and Saudi Arabia in January, have ceased.
It is therefore deeply disappointing that the Houthis refused to agree to an extension to the truce on 2 October. By introducing new demands at the last minute and maintaining a maximalist negotiating stance, the Houthis jeopardised the progress enjoyed by the Yemeni people under the truce. They have also threatened to dismantle what has been built over the past seven months. The Houthi attack on the Nissos Kea tanker in the southern port of Ash Shihr a fortnight ago posed a serious threat to stability, and the UK Government condemned the attack and the way it threatened the peace process. It will push up the price of essentials for Yemenis. However, we are encouraged that, at least for now, the door for extending the truce remains open, and the parties have not returned to full conflict.
Valerie Vaz
I was remiss in not welcoming the Minister to his place. He has been a great colleague; I worked with him when I was shadow Leader of the House and he was a Whip, and he is amazing. I will speak about freedom of religion. My first communion and confirmation were all held in a church in Maala, and we had all of our confirmations at Steamer Point. My mother used to sing in the church choir, so my whole life was filled with music and going to church early in the morning. The Minister mentioned the peace process and said that there is room for hope. As the penholder, is he prepared to host a peace conference, as we did previously, to try to get aid to Yemen? Is he prepared to host that peace conference here, to bring all the parties together?
David Rutley
I thank the right hon. Member for her comments and her sincerity. This is not my brief, but Lord Ahmad’s, so he will respond to that point in due course. Without going as far as committing to what she suggested, I will come to what we are doing to facilitate and move forward with a political settlement.
The UK Government remain one of the principal supporters of UN-led efforts to end the conflict, and continue to play a leading role in moving the peace process forward. The Foreign Secretary, in his previous role as Middle East Minister, met UN special envoy Hans Grundberg in January. He offered the UK’s continued support for the work to bring the parties to the negotiating table, and to extend and expand the truce to convert it to a longer-term ceasefire agreement, which the right hon. Member for Walsall South included in her asks. We are working on those issues. Our excellent diplomats and experts continue to deliver on that pledge, working with countries in the region and the wider international community to bring about peace and alleviate humanitarian suffering. In January and July we convened Quint meetings relating to Yemen with the US and regional partners, to back the UN plan.
The hon. Member for Stirling mentioned the importance of the Stockholm agreement and its three main components, and we agree with him. It sets a solid foundation, covering key areas. The UN is taking forward a comprehensive political settlement that addresses the full suite of issues that are important to the parties and to the Yemeni people. We continue to use our role as penholder on Yemen in the UN Security Council to push for a lasting political resolution to the conflict. Resolution 2216 should be replaced when there is real consensus on a political settlement, and the UK stands ready to support the negotiation of a new resolution on ending Yemen’s war when the time is right. We have provided expert advice to underpin the technical aspects of the truce, and to support the longer-term economic, security and political vision for the country.
The UK has long upheld the position that any peace process and subsequent settlement should be Yemeni led, which was an important point made by my hon. Friend the Member for Meon Valley. We recognise the need for that process to be inclusive and involve marginalised groups, which we talked about under the auspices of freedom of religion and belief. We commend the UN special envoy’s approach to his consultations with the parties in March 2022, which involved a wide range of Yemenis.
To support the UN’s efforts to deliver a durable and sustainable peace deal, we have backed a range of grassroots initiatives that engage civil society and local groups through our conflict, stability and security fund. In April, we welcomed the establishment of the Presidential Leadership Council in Yemen. Along with my hon. Friend the Member for Meon Valley, I reiterate the UK’s strong support for the council and its eight members: President Rashad al-Alimi, Sultan Ali al-Arada, Faraj Salmin al-Buhsani, Abdullah al-Alimi Bawazeer, Othman Hussein Megali, Tariq Saleh, Abed al-Rahman Abu Zara’a, and Aidarous al-Zubaidi. We praise the strong and magnanimous leadership of the PLC. That leadership sustained the truce for six months and, since its expiry, has kept the door open for an extension. United, they will play a vital role in a Yemeni-led path to a political settlement—the outcome that all Members present actively strive for.
A number of points have been raised during the debate; I will answer those that I can. Concerns were raised by the right hon. Member for Warley (John Spellar) and the hon. Member for Birmingham, Perry Barr (Mr Mahmood) about the Iranian involvement in Yemen. The UK is deeply concerned by Iran’s destabilising interference in Yemen and the region. We know that Iran’s sustained material support for the Houthis has stoked further conflict and undermined the UN-led peace efforts. It is vital that Yemen is not used as a theatre in which to escalate the conflict in the region. The right hon. Member for Warley and the hon. Member for Birmingham, Perry Barr also talked about the issue of southern Yemen. The governance arrangements for southern Yemen are ultimately a question for the people of Yemen themselves; the UK position, and that of the UN Security Council, is to support the unity, sovereignty and independence of Yemen. That is why the UK supports an inclusive peace process.
My hon. Friend the Member for Meon Valley talked about external influences from China and Russia in Yemen. I note, though, that the five permanent members of the Security Council have remained relatively united on Yemen—more so than in other conflict areas. We know well that Chinese and Russian support for the peace process is highly valued by the UN special envoy. Ultimately, we share the goal of sustainable peace in Yemen and will continue to work together to that end.
The right hon. Member for Walsall South characteristically made some demands and asks—she is a demanding person, but in a nice way and for good reason. We regret that the mandate of the group of eminent experts on Yemen has not been renewed. The UK voted in favour of that resolution, and spoke in support of it during the voting. We are concerned about reports of serious and wide-ranging human rights violations and abuses by parties to the conflict. That group had a crucial role to play in providing ongoing reporting on the actions of parties, and we continue to urge the parties involved to investigate those allegations, and take action to promote and protect human rights. We advocate for the establishment of an equivalent mechanism—Lord Ahmad will give further detail in writing to the right hon. Member.
Questions were raised about arms sales. I reassure Members that the UK takes its export responsibilities extremely seriously, and assesses all export licences in accordance with strict licensing criteria. We will not issue any export licence if to do so would be inconsistent with our export licensing criteria, including respect for human rights and international humanitarian law. In response to concerns raised by the hon. Member for Leicester East (Claudia Webbe), I highlight that the UK regularly raises with Saudi Arabia, including at senior levels, the importance of international humanitarian law, and conducting thorough and conclusive investigations into alleged violations.
Political progress is essential for the permanent alleviation of the immense humanitarian suffering of the Yemeni people. We continue to be a major donor to the UN-led response, and have contributed over £1 billion since the conflict began. Yemen is a clear humanitarian priority for the UK. We have supported millions of vulnerable Yemenis with food, clean water and healthcare, and will continue to do so. Our support to UNICEF has already provided 182,000 children and caregivers with mental health and psychosocial support, and we intend to reach another 30,000 by March 2023.
It is worth mentioning that the British Council continues to have a positive impact on thousands of Yemenis. Since 2015, close to 1,000 teachers and over 300 school leaders have taken part in British Council core transferable skills training, which has enhanced the learning experience of over 160,000 students in Yemen.
My hon. Friend the Member for Meon Valley raised the issue of the Safer tanker. This year, UK financial and technical support also went towards addressing the threat posed by the tanker, which she clearly highlighted. The decaying vessel is at imminent risk of a major leak, which would be four times larger than the Exxon Valdez spill, and would devastate Red sea marine life, destroy livelihoods dependent on fisheries, and worsen an already critical humanitarian situation in Yemen. UK expertise brought the issue to international attention, and British firms are working with the UN on mitigation. Our £6 million contribution helped the UN to reach the threshold to begin the operation. That demonstrates how the UK is supporting Yemen in achieving the economic and environmental security that is critical for its future prosperity.
In conclusion, it is good to see that the situation in Yemen is more positive than in February. There has been considerable progress, which has delivered a truce and has the potential to lead to a permanent resolution to the conflict. However, we must also recognise that this opportunity is fragile and must be grasped by all involved. An inclusive and comprehensive political settlement under the auspices of the UN is the only way to secure enduring peace for Yemeni people and the region. The UK Government will continue to do all we can to bring about peace and a brighter future for all the people in Yemen. The Yemeni people deserve nothing less.
Mrs Drummond
Thank you very much for chairing the debate, Mr Davies. I thank the Minister for his encouraging remarks, and all hon. Members for their contributions.
The war started as an internal civil war. It has gone on far too long and has brought in other state actors. We need every party to get together, in a bottom-up, not top-down, way that encourages every community and tribe to get involved. We need a new peace process, and we need it fast. I thank everybody, but I especially thank my friend, the right hon. Member for Walsall South (Valerie Vaz), for securing the debate with me; shukran.
Question put and agreed to.
Resolved,
That this House has considered the peace process in Yemen.
Written Statements
(2 years, 1 month ago)
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Chagos Archipelago
(2 years, 1 month ago)
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The Secretary of State for Foreign, Commonwealth and Development Affairs (James Cleverly)
Following the meeting between the then Prime Minister, my right hon. Friend the Member for South West Norfolk (Elizabeth Truss), and Prime Minister Jugnauth at the UN General Assembly, the UK and Mauritius have decided to begin negotiations on the exercise of sovereignty over the British Indian Ocean Territory (BIOT)/Chagos archipelago.
Through negotiations, taking into account relevant legal proceedings, it is our intention to secure an agreement on the basis of international law to resolve all outstanding issues, including those relating to the former inhabitants of the Chagos archipelago. This will allow the UK and Mauritius, as close Commonwealth partners, to work even more closely together to tackle the regional and global security challenges that face us all. We will seek to strengthen significantly our co-operation on Indian ocean security, maritime security and marine protection, conservation of the environment, climate change and respect for human rights, and on tackling illegal migration, illegal fishing, drugs and arms trafficking, as well as bilateral co-operation on a range of other issues. We will work to do this in co-operation with key allies and partners in the region.
The UK and Mauritius have reiterated that any agreement between our two countries will ensure the continued effective operation of the joint UK/US military base on Diego Garcia, which plays a vital role in regional and global security. We recognise the US’s and India’s interests and will keep them informed of progress.
The UK and Mauritius have agreed to engage in constructive negotiations, with a view to arriving at an agreement by early next year.
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Manchester Arena Inquiry Report
(2 years, 1 month ago)
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The Secretary of State for the Home Department (Suella Braverman)
Today the Manchester Arena inquiry has published volume 2 of its report, which has been laid before the House. The report can be found at www.manchesterarenainquiry.org.uk and on gov.uk. The third and final volume of the inquiry’s report will be published at a later date.
This report relates to the emergency response into the Manchester Arena attack. I am grateful for the strength and courage of the victims’ families and the survivors, and the engagement of all those who have shared their experiences to ensure the inquiry can deliver its vital work. I am grateful too for the bravery of the emergency services who responded to the attack.
Steps have already been taken to implement learning from the attack to improve joint working between the emergency services when responding to terrorist attacks. The Government will review this report and consider where further improvements can be made and will respond to its content in due course.
I would also like to thank Sir John Saunders for his continued and considerable efforts in ensuring that the inquiry is a success and that lessons are learned for the future from this tragic attack.
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Cabinet Committees
(2 years, 1 month ago)
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The Prime Minister (Rishi Sunak)
Today I am publishing an updated Cabinet Committee list. I have placed a copy of the new list in the Libraries of both Houses.
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Office for Nuclear Regulation Annual Report and Accounts 2021-22
(2 years, 1 month ago)
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The Parliamentary Under-Secretary of State for Work and Pensions (Laura Trott)
My hon. Friend, the Under-Secretary of State, Department for Work and Pensions (the Baroness Stedman-Scott), has made the following written statement.
Later today I will lay before this House the Office for Nuclear Regulation annual report and accounts 2021-22. These documents will also be published on the ONR website.
I can confirm, in accordance with schedule 7, section 25(3) of the Energy Act 2013, that there have been no exclusions to the published documents on the grounds of national security.
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